As filed with the Securities and Exchange Commission on December 4, 2009
Registration No. 333-161907
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KAR Auction Services, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 5010 | 20-8744739 | ||
|
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032
(800) 923-3725
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Rebecca C. Polak
Executive Vice President and General Counsel
KAR Auction Services, Inc.
13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032
(317) 815-9135
(317) 249-4518 (facsimile)
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
|
Gregory A. Fernicola, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 (212) 735-3000 (212) 735-2000 (facsimile) |
Peter J. Loughran, Esq. Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 (212) 909-6000 (212) 909-6836 (facsimile) |
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ¨ |
Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | |||
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(Do not check if a smaller reporting company) |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
KAR Auction Services, Inc. is filing this Amendment No. 4 to the Registration Statement on Form S-1 (File No. 333-161907) solely for the purpose of filing with the Securities and Exchange Commission certain exhibits to the Registration Statement. No changes or additions are being made hereby to the prospectus that forms a part of the Registration Statement. Accordingly, the prospectus has not been included in this filing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 13. | Other Expenses of Issuance and Distribution |
The following table shows the fees and expenses, other than underwriting discounts and commissions, to be paid by us in connection with the sale and distribution of the securities being registered hereby. All amounts except the SEC registration fee are estimated.
|
SEC registration fee |
$ | 27,900 | |
|
FINRA filing fee |
50,500 | ||
|
NYSE listing fee |
200,000 | ||
|
Printing and engraving costs |
750,000 | ||
|
Legal fees and expenses |
2,000,000 | ||
|
Accountants’ fees and expenses |
500,000 | ||
|
Transfer agent fees |
50,000 | ||
|
Miscellaneous |
1,421,600 | ||
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Total |
$ | 5,000,000 | |
| * | To be furnished by amendment. |
| Item 14. | Indemnification of Directors and Officers |
Section 145 of the Delaware General Corporation Law, or the DGCL, grants each corporation organized thereunder the power to indemnify any person who is or was a director, officer, employee or agent of a corporation or enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the corporation, by reason of being or having been in any such capacity, if he acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 102(b)(7) of the DGCL enables a corporation in its certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director to the corporation or its stockholders of monetary damages for violations of the directors’ fiduciary duty of care, except (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper personal benefit.
Our amended and restated bylaws provide for indemnification of the directors and officers, so long as such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action, had no reason to believe his or her conduct was unlawful. The corporation may also indemnify its other employees and agents to the same extent that it indemnifies its officers and directors, unless otherwise determined by its board of directors. The corporation must advance expenses (including attorneys’ fees), as incurred, to its directors and officers in connection with a legal proceeding so as long as the directors or officers undertake to repay the funds if they are ultimately determined not to be entitled to indemnification. Our amended and restated certificate of incorporation includes a provision that eliminates the personal liability of the directors for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may be hereafter amended.
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Prior to the completion of this offering, we intend to enter into separate indemnification agreements with each of our directors and executive officers. Each indemnification agreement will provide, among other things, for indemnification to the fullest extent permitted by law and our amended and restated certificate of incorporation against (i) any and all expenses and liabilities, including judgments, fines, penalties and amounts paid in settlement of any claim with our approval and counsel fees and disbursements, (ii) any liability pursuant to a loan guarantee, or otherwise, for any of our indebtedness, and (iii) any liabilities incurred as a result of acting on our behalf (as a fiduciary or otherwise) in connection with an employee benefit plan. The indemnification agreements will provide for the advancement or payment of all expenses to the indemnitee and for reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law and our amended and restated certificate of incorporation. These provisions and agreements may have the practical effect in some cases of eliminating our stockholders’ ability to collect monetary damages from our directors and executive officers.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
| Item 15. | Recent Sales of Unregistered Securities |
On April 20, 2007, we issued 106,243,520 shares of our common stock to KAR Holdings II, LLC in exchange for approximately $1.1 billion in equity, consisting of approximately $790.0 million in cash and ADESA, Inc. stock and approximately $272.4 million of equity interest in Insurance Auto Auctions, Inc. Such issuance did not involve a public offering and accordingly was exempt from registration under the Securities Act pursuant to the exemption provided by Section 4(2) of the Securities Act because we did not offer or sell the securities by any form of general solicitation or general advertising, informed each purchaser that the securities had not been registered under the Securities Act and were subject to restrictions on transfer, and made offers only to “accredited investors” within the meaning of Rule 501 of Regulation D and a limited number of sophisticated investors, each of whom we believed had the knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the securities and had access to the kind of information registration would provide.
| Item 16. | Exhibits and Financial Statement Schedules |
a) Exhibits
The agreements included or incorporated by reference as exhibits to this registration statement contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties were made solely for the benefit of the other parties to the applicable agreement and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified in such agreement by disclosures that were made to the other party in connection with the negotiation of the applicable agreement; (iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement.
The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this registration statement not misleading. Additional information about KAR Auction Services may be found elsewhere in this registration statement and KAR Auction Services’ other public filings, which are available without charge through the SEC’s website at http://www.sec.gov. See “Where You Can Find More Information.”
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Incorporated by Reference |
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Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 1.1 ** | Form of Underwriting Agreement | S-1/A | 333-161907 | 1.1 | 11/30/09 | |||||
| 3.1a * | Form of Amended and Restated Certificate of Incorporation of KAR Auction Services, Inc. | |||||||||
| 3.1b | Certificate of Amendment to the Certificate of Incorporation of KAR Auction Services, Inc. | 8-K | 333-148847 | 3.1 | 11/4/09 | |||||
| 3.2 * | Form of Amended and Restated By-Laws of KAR Auction Services, Inc. | |||||||||
| 4.1 | Indenture, dated April 20, 2007 (the “Floating Rate Senior Notes Indenture”), among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as Trustee, for $150,000,000 Floating Rate Senior Notes due 2014 | S-4 | 333-148847 | 4.1 | 1/25/08 | |||||
| 4.2 | Indenture, dated April 20, 2007 (the “Fixed Rate Senior Notes Indenture”), among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as Trustee, for $450,000,000 8 3 / 4 % Senior Notes due 2014 | S-4 | 333-148847 | 4.2 | 1/25/08 | |||||
| 4.3 | Indenture, dated April 20, 2007 (the “Senior Subordinated Notes Indenture”), among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as Trustee, for $425,000,000 10% Senior Subordinated Notes due 2015 | S-4 | 333-148847 | 4.3 | 1/25/08 | |||||
| 4.4 | Supplemental Indenture, dated December 26, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-4 | 333-148847 | 4.4 | 1/25/08 | |||||
| 4.5 | Supplemental Indenture, dated December 26, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-4 | 333-148847 | 4.5 | 1/25/08 | |||||
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Incorporated by Reference |
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Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
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| 4.6 | Supplemental Indenture, dated December 26, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-4 | 333-148847 | 4.6 | 1/25/08 | |||||
| 4.7 | Exchange and Registration Rights Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors as named in the respective Floating Rate Senior Notes Indenture, the Fixed Rate Senior Notes Indenture and Senior Subordinated Notes Indenture, and Goldman, Sachs & Co., Bear, Stearns & Co. Inc., UBS Securities LLC, and Deutsche Bank Securities Inc., as representatives of the several Initial Purchasers, for $150,000,000 Floating Rate Senior Notes due 2014, $450,000,000 8 3 / 4 % Senior Notes due 2014 and $425,000,000 10% Senior Subordinated Notes due 2015 | S-4 | 333-148847 | 4.7 | 1/25/08 | |||||
| 4.8 | Registration Rights Agreement, dated April 20, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), KAR Holdings II, LLC, certain employees of KAR Auction Services, Inc. or its subsidiaries and each of their respective Permitted Transferees | S-4 | 333-148847 | 4.8 | 1/25/08 | |||||
| 4.9 | Second Supplemental Indenture, dated January 22, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), Axle Holdings, Inc., the other guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-4 | 333-148847 | 4.9 | 1/25/08 | |||||
| 4.10 | Second Supplemental Indenture, dated January 22, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), Axle Holdings, Inc., the other guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-4 | 333-148847 | 4.10 | 1/25/08 | |||||
| 4.11 | Second Supplemental Indenture, dated January 22, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), Axle Holdings, Inc., the other guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-4 | 333-148847 | 4.11 | 1/25/08 | |||||
| 4.12a | Third Supplemental Indenture, dated May 6, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.12a | 7/2/09 | |||||
II-4
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Incorporated by Reference |
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Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
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| 4.12b | Third Supplemental Indenture, dated May 6, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.12b | 7/2/09 | |||||
| 4.12c | Third Supplemental Indenture, dated May 6, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-1/A | 333-158666 | 4.12c | 7/2/09 | |||||
| 4.13a | Fourth Supplemental Indenture, dated September 30, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.13a | 7/2/09 | |||||
| 4.13b | Fourth Supplemental Indenture, dated September 30, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.13b | 7/2/09 | |||||
| 4.13c | Fourth Supplemental Indenture, dated September 30, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-1/A | 333-158666 | 4.13c | 7/2/09 | |||||
| 4.14a | Fifth Supplemental Indenture, dated March 26, 2009, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.14a | 7/2/09 | |||||
| 4.14b | Fifth Supplemental Indenture, dated March 26, 2009, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.14b | 7/2/09 | |||||
| 4.14c | Fifth Supplemental Indenture, dated March 26, 2009, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-1/A | 333-158666 | 4.14c | 7/2/09 | |||||
| 5.1 * | Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP (with respect to the shares being registered hereby) | |||||||||
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Incorporated by Reference |
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Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
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| 10.1 ^ | Guarantee and Collateral Agreement, dated April 20, 2007, made by KAR Holdings II, LLC, KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and the subsidiary guarantors party thereto and certain of its subsidiaries in favor of Bear Stearns Corporate Lending Inc., as administrative agent under the Credit Agreement | S-1/A | 333-158666 | 10.1 | 7/2/09 | |||||
| 10.2 ^ | Credit Agreement, dated April 20, 2007 (the “Credit Agreement”), among KAR Holdings II, LLC, as guarantor, KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), as borrower, the several lenders from time to time parties thereto, Bear, Stearns & Co. Inc. and UBS Securities LLC, as joint lead arrangers, UBS Securities LLC, as syndication agent, Goldman Sachs Credit Partners L.P. and Deutsche Bank Securities Inc., as co-documentation agents, Bear, Stearns & Co. Inc., UBS Securities LLC and Goldman Sachs Credit Partners L.P., as joint bookrunners, and Bear Stearns Corporate Lending Inc., as administrative agent | S-1/A | 333-158666 | 10.2 | 7/2/09 | |||||
| 10.3 | Assumption Agreement, dated December 26, 2007, among ADESA Dealer Services, LLC, Automotive Finance Consumer Division, LLC, ADESA Pennsylvania, LLC, Dent Demon, LLC, Zabel & Associates, Inc., Sioux Falls Auto Auction, Inc., and Tri-State Auction Co., Inc. in favor of Bear Stearns Corporate Lending, Inc., as administrative agent | S-4 | 333-148847 | 10.3 | 1/25/08 | |||||
| 10.4 | Intellectual Property Security Agreement, dated April 20, 2007, made by KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of the grantors listed on Schedule I thereto in favor of Bear Stearns Corporate Lending Inc. as administrative agent for the secured parties (as defined in the Credit Agreement) | S-4 | 333-148847 | 10.4 | 1/25/08 | |||||
| 10.5 | Shareholders Agreement, dated April 20, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), KAR LLC and the IAAI continuing investors | S-4 | 333-148847 | 10.5 | 1/25/08 | |||||
| 10.8a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and Kelso & Company, L.P. | S-4 | 333-148847 | 10.8 | 1/25/08 | |||||
| 10.8b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and Kelso & Company, L.P. | |||||||||
| 10.9 † | Conversion Option Plan of KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) | S-1/A | 333-158666 | 10.9 | 7/2/09 | |||||
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Incorporated by Reference |
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Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
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| 10.10 † | Form of Conversion Stock Option Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of Thomas C. O’Brien, David R. Montgomery, Donald J. Hermanek, Scott P. Pettit, John Kett, John Nordin and Sidney Kerley | S-4 | 333-148847 | 10.10 | 1/25/08 | |||||
| 10.11 † | Form of Amendment to Conversion Stock Option Agreement, dated October 30, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of Thomas C. O’Brien, David R. Montgomery, Donald J. Hermanek and Scott P. Pettit | S-4 | 333-148847 | 10.11 | 1/25/08 | |||||
| 10.12 † | Form of Rollover Stock Option Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and certain executive officers and employees of IAAI | S-4 | 333-148847 | 10.12 | 1/25/08 | |||||
| 10.13 † | Form of Conversion Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and certain executive officers and employees of IAAI | S-1/A | 333-158666 | 10.13 | 7/2/09 | |||||
| 10.14 † | Stock Incentive Plan of KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) | S-1/A | 333-158666 | 10.14 | 7/2/09 | |||||
| 10.15 † | Form of Nonqualified Stock Option Agreement of KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) pursuant to the Stock Incentive Plan | S-4 | 333-148847 | 10.15 | 1/25/08 | |||||
| 10.16 † | Employment Agreement, dated July 13, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and John Nordin | S-4 | 333-148847 | 10.16 | 1/25/08 | |||||
| 10.17 † | Amendment to Employment Agreement, dated August 14, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and John Nordin | S-4 | 333-148847 | 10.17 | 1/25/08 | |||||
| 10.18a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and Goldman, Sachs & Co. | S-4 | 333-148847 | 10.18 | 1/25/08 | |||||
| 10.18b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and Goldman, Sachs & Co. | |||||||||
| 10.19a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and ValueAct Capital Master Fund, L.P. | S-4 | 333-148847 | 10.19 | 1/25/08 | |||||
| 10.19b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and ValueAct Capital Master Fund, L.P. | |||||||||
| 10.20a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and PCap, L.P. | S-4 | 333-148847 | 10.20 | 1/25/08 | |||||
| 10.20b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and PCap, L.P. | |||||||||
| 10.21 † | 2007 Incentive Plan Executive Management of Insurance Auto Auctions, Inc. | S-4 | 333-148847 | 10.21 | 1/25/08 | |||||
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Incorporated by Reference |
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Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
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| 10.22 † | Amended and Restated Employment Agreement, dated April 2, 2001, between Thomas C. O’Brien and Insurance Auto Auctions, Inc. | S-4 | 333-148847 | 10.22 | 1/25/08 | |||||
| 10.23 ^ | Second Amended and Restated Limited Liability Company Agreement of KAR Holdings II, LLC, dated April 20, 2007 | S-1/A | 333-158666 | 10.23 | 7/2/09 | |||||
| 10.23a* | Amendment to Second Amended and Restated Limited Liability Company Agreement of KAR Holdings II, LLC | |||||||||
| 10.24 | Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, dated May 25, 2005 | S-1/A | 333-158666 | 10.24 | 7/2/09 | |||||
| 10.25 | Amendment to the Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, dated November 2, 2006 | S-4 | 333-148847 | 10.25 | 1/25/08 | |||||
| 10.26 | First Amendment to the Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, dated April 20, 2007. | S-4 | 333-148847 | 10.26 | 1/25/08 | |||||
| 10.27 † | 2007 Annual Incentive Program for KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) | S-4 | 333-148847 | 10.27 | 1/25/08 | |||||
| 10.28 | Tax Sharing Agreement between ALLETE, Inc. and ADESA, Inc., dated June 4, 2004 | S-4 | 333-148847 | 10.28 | 1/25/08 | |||||
| 10.29 † | KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) Annual Incentive Program | 10-K | 333-148847 | 10.29 | 3/11/09 | |||||
| 10.30 † | Amendment to Thomas C. O’Brien Amended and Restated Employment Agreement, dated December 1, 2008, between Thomas C. O’Brien and Insurance Auto Auctions, Inc. | 10-K | 333-148847 | 10.31 | 3/11/09 | |||||
| 10.31 † | Form of Amendment to Conversion Stock Option Agreements, dated February 19, 2009, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of Thomas C. O’Brien, David R. Montgomery, Donald J. Hermanek and Scott P. Pettit | 10-K | 333-148847 | 10.10 | 3/11/09 | |||||
| 10.32 ^ | Amended and Restated Purchase and Sale Agreement, dated May 31, 2002, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.32 | 1/25/08 | |||||
| 10.33 | Amendment No. 1 to Amended and Restated Purchase and Sale Agreement, dated June 15, 2004, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.33 | 1/25/08 | |||||
| 10.34 | Amendment No. 2 to Amended and Restated Purchase and Sale Agreement, dated January 18, 2007, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.34 | 1/25/08 | |||||
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Incorporated by Reference |
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Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
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| 10.35 ^ | Amendment No. 3 to Amended and Restated Purchase and Sale Agreement, dated April 20, 2007, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.35 | 1/25/08 | |||||
| 10.36 ^ | Third Amended and Restated Receivables Purchase Agreement, dated April 20, 2007, among AFC Funding Corporation, Automotive Finance Corporation, Fairway Finance Company, LLC, Monterey Funding LLC, Deutsche Bank AG, New York Branch and BMO Capital Markets Corp. | S-1/A | 333-158666 | 10.36 | 7/2/09 | |||||
| 10.37 † | 2008 Annual Incentive Program for KAR Auction Services, Inc. | POS AM | 333-149137 | 10.37 | 8/1/08 | |||||
| 10.38 † | 2008 Incentive Plan Corporate Management of Insurance Auto Auctions, Inc. | POS AM | 333-149137 | 10.38 | 8/1/08 | |||||
| 10.39 † | Severance, Release and Waiver Agreement, dated September 12, 2008, between Curtis Phillips and Automotive Finance Corporation. | S-1/A | 333-158666 | 10.39 | 7/2/09 | |||||
| 10.40 | First Amendment to Credit Agreement, dated as of June 10, 2009, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), as borrower, and the lenders and other parties signatory thereto | 8-K | 333-148847 | 10.1 | 6/11/09 | |||||
| 10.41 | Ground Lease, dated as of September 4, 2008, by and between ADESA San Diego, LLC and First Industrial L.P. (East 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.3 | 9/9/08 | |||||
| 10.42 | Ground Lease, dated as of September 4, 2008, by and between ADESA San Diego, LLC and First Industrial L.P. (West 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.4 | 9/9/08 | |||||
| 10.43 | Ground Lease, dated as of September 4, 2008, by and between ADESA California, LLC and ADESA San Diego, LLC and First Industrial Pennsylvania, L.P. (Sacramento, California) | 8-K | 333-148847 | 10.5 | 9/9/08 | |||||
| 10.44 | Ground Lease, dated as of September 4, 2008, by and between ADESA California, LLC and First Industrial Pennsylvania, L.P. (Tracy, California) | 8-K | 333-148847 | 10.6 | 9/9/08 | |||||
| 10.45 | Ground Lease, dated as of September 4, 2008, by and between ADESA Washington, LLC and First Industrial, L.P. (Auburn, Washington) | 8-K | 333-148847 | 10.7 | 9/9/08 | |||||
| 10.46 | Ground Lease, dated as of September 4, 2008, by and between ADESA Texas, Inc. and First Industrial, L.P. (Houston, Texas) | 8-K | 333-148847 | 10.8 | 9/9/08 | |||||
II-9
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 10.47 | Ground Lease, dated as of September 4, 2008, by and between ADESA California, LLC and First Industrial, L.P. (Mira Loma, California) | 8-K | 333-148847 | 10.9 |
9/9/08 |
|||||
| 10.48 | Ground Lease, dated as of September 4, 2008, by and between ADESA Florida, LLC and First Industrial Financing Partnership, L.P. (Bradenton, Florida) | 8-K | 333-148847 | 10.10 |
9/9/08 |
|||||
| 10.49 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial L.P. (East 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.11 |
9/9/08 |
|||||
| 10.50 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial L.P. (West 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.12 |
9/9/08 |
|||||
| 10.51 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Pennsylvania, L.P. (Sacramento, California) | 8-K | 333-148847 | 10.13 |
9/9/08 |
|||||
| 10.52 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Pennsylvania, L.P. (Tracy, California) | 8-K | 333-148847 | 10.14 |
9/9/08 |
|||||
| 10.53 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Auburn, Washington) | 8-K | 333-148847 | 10.15 |
9/9/08 |
|||||
| 10.54 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Houston, Texas) | 8-K | 333-148847 | 10.16 |
9/9/08 |
|||||
| 10.55 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Mira Loma, California) | 8-K | 333-148847 | 10.17 |
9/9/08 |
|||||
| 10.56 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Financing Partnership, L.P. (Bradenton, Florida) | 8-K | 333-148847 | 10.18 |
9/9/08 |
|||||
| 10.57 | Ground Sublease, dated as of October 3, 2008, by and between ADESA Atlanta, LLC and First Industrial, L.P. (Fairburn, Georgia) | 10-Q | 333-148847 | 10.21 |
11/13/08 |
|||||
| 10.58 | Guaranty of Lease, dated as of October 3, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Fairburn, Georgia) | 10-Q | 333-148847 | 10.22 | 11/13/08 | |||||
II-10
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 10.59 ^ | Amendment No. 3 to the Third Amended and Restated Receivables Purchase Agreement, dated as of January 30, 2009, by and among Automotive Finance Corporation, AFC Funding Corporation, Fairway Finance Company, LLC, Monterey Funding LLC, Deutsche Bank AG, New York Branch and BMO Capital Markets Corp. | 10-K | 333-148847 | 10.59 | 3/11/09 | |||||
| 10.60 | Second Amendment, dated October 23, 2009, to Credit Agreement, dated April 20, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), as borrower, KAR Holdings II, LLC, as guarantor, the several lenders from time to time parties thereto, and the other parties named therein | 8-K | 333-148847 | 10.1 | 10/28/09 | |||||
| 10.61 ** | Form of Director Designation Agreement | S-1/A | 333-161907 | 10.61 | 11/30/09 | |||||
| 10.62 * † | Form of KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | |||||||||
| 10.63 * † | Form of KAR Auction Services, Inc. Employee Stock Purchase Plan | |||||||||
| 10.64 * † | Form of KAR Auction Services, Inc. Non-Employee Director Deferred Compensation Plan | |||||||||
| 10.65 * † | Form of Nonqualified Stock Option Agreement | |||||||||
| 10.66 * † | Form of Restricted Share Agreement | |||||||||
| 21.1 | Subsidiaries of KAR Auction Services, Inc. | 10-K | 333-148847 | 21.1 | 3/11/09 | |||||
| 23.1 ** | Consent of KPMG LLP, Independent Registered Public Accounting Firm | S-1/A | 333-161907 | 23.1 | 11/30/09 | |||||
| 23.2 * | Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1) | |||||||||
| 23.3 ** | Consent of Robert M. Finlayson | S-1/A | 333-161907 | 23.3 | 11/10/09 | |||||
| 23.4 ** | Consent of Peter R. Formanek | S-1/A | 333-161907 | 23.4 | 11/10/09 | |||||
| 23.5 ** | Consent of Jonathan P. Ward | S-1/A | 333-161907 | 23.5 | 11/10/09 | |||||
| 24.1 ** | Powers of Attorney | |||||||||
| * |
Filed herewith. |
| ** |
Previously filed. |
| ^ |
Portions of this exhibit have been redacted pursuant to a request for confidential treatment filed separately with the Secretary of the Securities and Exchange Commission pursuant to Rule 406 under the Securities Act of 1933, as amended. |
| † |
Denotes management contract or compensation plan, contract or arrangement. |
b) Financial Statement Schedules
Financial Statement Schedules—all schedules have been omitted because the matter or conditions are not present or the information required to be set forth therein is included in the Consolidated Financial Statements and related Notes thereto.
II-11
| Item 17. | Undertakings |
The undersigned registrant hereby undertakes:
1. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
2. For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
3. For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
4. For the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
i. any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
ii. any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
iii. the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
iv. any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Carmel, State of Indiana, on December 4, 2009.
|
KAR AUCTION SERVICES, INC. |
||
| By: |
/s/ E RIC M. L OUGHMILLER |
|
| Name: | Eric M. Loughmiller | |
| Title: |
Executive Vice President and Chief Financial Officer |
|
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
Signature |
Title |
Date |
||
|
* |
Chief Executive Officer (Principal Executive Officer) | December 4, 2009 | ||
| James P. Hallett | ||||
|
/ S / E RIC M. L OUGHMILLER Eric M. Loughmiller |
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | December 4, 2009 | ||
|
* |
Director | December 4, 2009 | ||
| David J. Ament | ||||
|
* |
Director | December 4, 2009 | ||
| Thomas J. Carella | ||||
|
* |
Chairman of the Board | December 4, 2009 | ||
| Brian T. Clingen | ||||
|
* |
Director | December 4, 2009 | ||
| Michael B. Goldberg | ||||
|
* |
Director | December 4, 2009 | ||
| Peter H. Kamin | ||||
|
* |
Director | December 4, 2009 | ||
| Sanjeev Mehra | ||||
II-13
|
Signature |
Title |
Date |
||
|
* |
Director | December 4, 2009 | ||
| Church M. Moore | ||||
|
* |
Director | December 4, 2009 | ||
| Thomas C. O’Brien | ||||
|
* |
Director | December 4, 2009 | ||
| Gregory P. Spivy | ||||
| *By: |
/s/ E RIC M. L OUGHMILLER |
|
| Eric M. Loughmiller | ||
| Attorney-in-fact | ||
II-14
INDEX TO EXHIBITS
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 1.1 ** | Form of Underwriting Agreement | S-1/A | 333-161907 | 1.1 | 11/30/09 | |||||
| 3.1a * | Form of Amended and Restated Certificate of Incorporation of KAR Auction Services, Inc. | |||||||||
| 3.1b | Certificate of Amendment to the Certificate of Incorporation of KAR Auction Services, Inc. | 8-K | 333-148847 | 3.1 | 11/4/09 | |||||
| 3.2 * | Form of Amended and Restated By-Laws of KAR Auction Services, Inc. | |||||||||
| 4.1 | Indenture, dated April 20, 2007 (the “Floating Rate Senior Notes Indenture”), among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as Trustee, for $150,000,000 Floating Rate Senior Notes due 2014 | S-4 | 333-148847 | 4.1 | 1/25/08 | |||||
| 4.2 | Indenture, dated April 20, 2007 (the “Fixed Rate Senior Notes Indenture”), among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as Trustee, for $450,000,000 8 3 / 4 % Senior Notes due 2014 | S-4 | 333-148847 | 4.2 | 1/25/08 | |||||
| 4.3 | Indenture, dated April 20, 2007 (the “Senior Subordinated Notes Indenture”), among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as Trustee, for $425,000,000 10% Senior Subordinated Notes due 2015 | S-4 | 333-148847 | 4.3 | 1/25/08 | |||||
| 4.4 | Supplemental Indenture, dated December 26, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-4 | 333-148847 | 4.4 | 1/25/08 | |||||
| 4.5 | Supplemental Indenture, dated December 26, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-4 | 333-148847 | 4.5 | 1/25/08 | |||||
| 4.6 | Supplemental Indenture, dated December 26, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-4 | 333-148847 | 4.6 | 1/25/08 | |||||
| 4.7 | Exchange and Registration Rights Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the Guarantors as named in the respective Floating Rate Senior Notes Indenture, the Fixed Rate Senior | S-4 | 333-148847 | 4.7 | 1/25/08 | |||||
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| Notes Indenture and Senior Subordinated Notes Indenture, and Goldman, Sachs & Co., Bear, Stearns & Co. Inc., UBS Securities LLC, and Deutsche Bank Securities Inc., as representatives of the several Initial Purchasers, for $150,000,000 Floating Rate Senior Notes due 2014, $450,000,000 8 3 / 4 % Senior Notes due 2014 and $425,000,000 10% Senior Subordinated Notes due 2015 | S-4 | 333-148847 | 4.7 | 1/25/08 | ||||||
| 4.8 | Registration Rights Agreement, dated April 20, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), KAR Holdings II, LLC, certain employees of KAR Auction Services, Inc. or its subsidiaries and each of their respective Permitted Transferees | S-4 | 333-148847 | 4.8 | 1/25/08 | |||||
| 4.9 | Second Supplemental Indenture, dated January 22, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), Axle Holdings, Inc., the other guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-4 | 333-148847 | 4.9 | 1/25/08 | |||||
| 4.10 | Second Supplemental Indenture, dated January 22, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), Axle Holdings, Inc., the other guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-4 | 333-148847 | 4.10 | 1/25/08 | |||||
| 4.11 | Second Supplemental Indenture, dated January 22, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), Axle Holdings, Inc., the other guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-4 | 333-148847 | 4.11 | 1/25/08 | |||||
| 4.12a | Third Supplemental Indenture, dated May 6, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.12a | 7/2/09 | |||||
| 4.12b | Third Supplemental Indenture, dated May 6, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.12b | 7/2/09 | |||||
| 4.12c | Third Supplemental Indenture, dated May 6, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-1/A | 333-158666 | 4.12c | 7/2/09 | |||||
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 4.13a | Fourth Supplemental Indenture, dated September 30, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.13a | 7/2/09 | |||||
| 4.13b | Fourth Supplemental Indenture, dated September 30, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.13b | 7/2/09 | |||||
| 4.13c | Fourth Supplemental Indenture, dated September 30, 2008, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-1/A | 333-158666 | 4.13c | 7/2/09 | |||||
| 4.14a | Fifth Supplemental Indenture, dated March 26, 2009, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Floating Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.14a | 7/2/09 | |||||
| 4.14b | Fifth Supplemental Indenture, dated March 26, 2009, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Fixed Rate Senior Notes Indenture | S-1/A | 333-158666 | 4.14b | 7/2/09 | |||||
| 4.14c | Fifth Supplemental Indenture, dated March 26, 2009, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), the guarantors listed therein and Wells Fargo Bank, National Association, as Trustee, to the Senior Subordinated Notes Indenture | S-1/A | 333-158666 | 4.14c | 7/2/09 | |||||
| 5.1 * | Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP (with respect to the shares being registered hereby) | |||||||||
| 10.1 ^ | Guarantee and Collateral Agreement, dated April 20, 2007, made by KAR Holdings II, LLC, KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and the subsidiary guarantors party thereto and certain of its subsidiaries in favor of Bear Stearns Corporate Lending Inc., as administrative agent under the Credit Agreement | S-1/A | 333-158666 | 10.1 | 7/2/09 | |||||
| 10.2 ^ | Credit Agreement, dated April 20, 2007 (the “Credit Agreement”), among KAR Holdings II, LLC, as guarantor, KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), as borrower, the several | S-1/A | 333-158666 | 10.2 | 7/2/09 | |||||
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| lenders from time to time parties thereto, Bear, Stearns & Co. Inc. and UBS Securities LLC, as joint lead arrangers, UBS Securities LLC, as syndication agent, Goldman Sachs Credit Partners L.P. and Deutsche Bank Securities Inc., as co-documentation agents, Bear, Stearns & Co. Inc., UBS Securities LLC and Goldman Sachs Credit Partners L.P., as joint bookrunners, and Bear Stearns Corporate Lending Inc., as administrative agent | S-1/A | 333-158666 | 10.2 | 7/2/09 | ||||||
| 10.3 | Assumption Agreement, dated December 26, 2007, among ADESA Dealer Services, LLC, Automotive Finance Consumer Division, LLC, ADESA Pennsylvania, LLC, Dent Demon, LLC, Zabel & Associates, Inc., Sioux Falls Auto Auction, Inc., and Tri-State Auction Co., Inc. in favor of Bear Stearns Corporate Lending, Inc., as administrative agent | S-4 | 333-148847 | 10.3 | 1/ 25/08 | |||||
| 10.4 | Intellectual Property Security Agreement, dated April 20, 2007, made by KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of the grantors listed on Schedule I thereto in favor of Bear Stearns Corporate Lending Inc. as administrative agent for the secured parties (as defined in the Credit Agreement) | S-4 | 333-148847 | 10.4 | 1/25/08 | |||||
| 10.5 | Shareholders Agreement, dated April 20, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), KAR LLC and the IAAI continuing investors | S-4 | 333-148847 | 10.5 | 1/25/08 | |||||
| 10.8a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and Kelso & Company, L.P. | S-4 | 333-148847 | 10.8 | 1/25/08 | |||||
| 10.8b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and Kelso & Company, L.P. | |||||||||
| 10.9 † | Conversion Option Plan of KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) | S-1/A | 333-158666 | 10.9 | 7/2/09 | |||||
| 10.10 † | Form of Conversion Stock Option Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of Thomas C. O’Brien, David R. Montgomery, Donald J. Hermanek, Scott P. Pettit, John Kett, John Nordin and Sidney Kerley | S-4 | 333-148847 | 10.10 | 1/25/08 | |||||
| 10.11 † | Form of Amendment to Conversion Stock Option Agreement, dated October 30, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of Thomas C. O’Brien, David R. Montgomery, Donald J. Hermanek and Scott P. Pettit | S-4 | 333-148847 | 10.11 | 1/25/08 | |||||
| 10.12 † | Form of Rollover Stock Option Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and certain executive officers and employees of IAAI | S-4 | 333-148847 | 10.12 | 1/25/08 | |||||
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 10.13 † | Form of Conversion Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and certain executive officers and employees of IAAI | S-1/A | 333-158666 | 10.13 | 7/2/09 | |||||
| 10.14 † | Stock Incentive Plan of KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) | S-1/A | 333-158666 | 10.14 | 7/2/09 | |||||
| 10.15 † | Form of Nonqualified Stock Option Agreement of KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) pursuant to the Stock Incentive Plan | S-4 | 333-148847 | 10.15 | 1/25/08 | |||||
| 10.16 † | Employment Agreement, dated July 13, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and John Nordin | S-4 | 333-148847 | 10.16 | 1/25/08 | |||||
| 10.17 † | Amendment to Employment Agreement, dated August 14, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and John Nordin | S-4 | 333-148847 | 10.17 | 1/25/08 | |||||
| 10.18a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and Goldman, Sachs & Co. | S-4 | 333-148847 | 10.18 | 1/25/08 | |||||
| 10.18b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and Goldman, Sachs & Co. | |||||||||
| 10.19a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and ValueAct Capital Master Fund, L.P. | S-4 | 333-148847 | 10.19 | 1/25/08 | |||||
| 10.19b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and ValueAct Capital Master Fund, L.P. | |||||||||
| 10.20a | Financial Advisory Agreement, dated April 20, 2007, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and PCap, L.P. | S-4 | 333-148847 | 10.20 | 1/25/08 | |||||
| 10.20b * | Form of Annual Advisory Fee Termination, between KAR Auction Services, Inc. and PCap, L.P. | |||||||||
| 10.21 † | 2007 Incentive Plan Executive Management of Insurance Auto Auctions, Inc. | S-4 | 333-148847 | 10.21 | 1/25/08 | |||||
| 10.22 † | Amended and Restated Employment Agreement, dated April 2, 2001, between Thomas C. O’Brien and Insurance Auto Auctions, Inc. | S-4 | 333-148847 | 10.22 | 1/25/08 | |||||
| 10.23 ^ | Second Amended and Restated Limited Liability Company Agreement of KAR Holdings II, LLC, dated April 20, 2007 | S-1/A | 333-158666 | 10.23 | 7/2/09 | |||||
| 10.23a * | Amendment to Second Amended and Restated Limited Liability Company Agreement of KAR Holdings II, LLC | |||||||||
| 10.24 | Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, dated May 25, 2005 | S-1/A | 333-158666 | 10.24 | 7/2/09 | |||||
| 10.25 | Amendment to the Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, dated November 2, 2006 | S-4 | 333-148847 | 10.25 | 1/25/08 | |||||
| 10.26 | First Amendment to the Amended and Restated Limited Liability Company Agreement of Axle Holdings II, LLC, dated April 20, 2007. | S-4 | 333-148847 | 10.26 | 1/25/08 | |||||
|
Incorporated by Reference |
||||||||||
|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 10.27 † | 2007 Annual Incentive Program for KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) | S-4 | 333-148847 | 10.27 | 1/25/08 | |||||
| 10.28 | Tax Sharing Agreement between ALLETE, Inc. and ADESA, Inc., dated June 4, 2004 | S-4 | 333-148847 | 10.28 | 1/25/08 | |||||
| 10.29 † | KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) Annual Incentive Program | 10-K | 333-148847 | 10.29 | 3/11/09 | |||||
| 10.30 † | Amendment to Thomas C. O’Brien Amended and Restated Employment Agreement, dated December 1, 2008, between Thomas C. O’Brien and Insurance Auto Auctions, Inc. | 10-K | 333-148847 | 10.31 | 3/11/09 | |||||
| 10.31 † | Form of Amendment to Conversion Stock Option Agreements, dated February 19, 2009, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and each of Thomas C. O’Brien, David R. Montgomery, Donald J. Hermanek and Scott P. Pettit | 10-K | 333-148847 | 10.10 | 3/11/09 | |||||
| 10.32 ^ | Amended and Restated Purchase and Sale Agreement, dated May 31, 2002, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.32 | 1/25/08 | |||||
| 10.33 | Amendment No. 1 to Amended and Restated Purchase and Sale Agreement, dated June 15, 2004, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.33 | 1/25/08 | |||||
| 10.34 | Amendment No. 2 to Amended and Restated Purchase and Sale Agreement, dated January 18, 2007, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.34 | 1/25/08 | |||||
| 10.35 ^ | Amendment No. 3 to Amended and Restated Purchase and Sale Agreement, dated April 20, 2007, between AFC Funding Corporation and Automotive Finance Corporation | S-4 | 333-148847 | 10.35 | 1/25/08 | |||||
| 10.36 ^ | Third Amended and Restated Receivables Purchase Agreement, dated April 20, 2007, among AFC Funding Corporation, Automotive Finance Corporation, Fairway Finance Company, LLC, Monterey Funding LLC, Deutsche Bank AG, New York Branch and BMO Capital Markets Corp. | S-1/A | 333-158666 | 10.36 | 7/2/09 | |||||
| 10.37 † | 2008 Annual Incentive Program for KAR Auction Services, Inc. |
POS AM |
333-149137 | 10.37 |
8/1/08 |
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| 10.38 † | 2008 Incentive Plan Corporate Management of Insurance Auto Auctions, Inc. |
POS AM |
333-149137 | 10.38 |
8/1/08 |
|||||
| 10.39 † | Severance, Release and Waiver Agreement, dated September 12, 2008, between Curtis Phillips and Automotive Finance Corporation. | S-1/A | 333-158666 | 10.39 | 7/2/09 | |||||
|
Incorporated by Reference |
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|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 10.40 | First Amendment to Credit Agreement, dated as of June 10, 2009, between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), as borrower, and the lenders and other parties signatory thereto | 8-K | 333-148847 | 10.1 | 6/11/09 | |||||
| 10.41 | Ground Lease, dated as of September 4, 2008, by and between ADESA San Diego, LLC and First Industrial L.P. (East 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.3 |
9/9/08 |
|||||
| 10.42 | Ground Lease, dated as of September 4, 2008, by and between ADESA San Diego, LLC and First Industrial L.P. (West 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.4 |
9/9/08 |
|||||
| 10.43 | Ground Lease, dated as of September 4, 2008, by and between ADESA California, LLC and ADESA San Diego, LLC and First Industrial Pennsylvania, L.P. (Sacramento, California) | 8-K | 333-148847 | 10.5 |
9/9/08 |
|||||
| 10.44 | Ground Lease, dated as of September 4, 2008, by and between ADESA California, LLC and First Industrial Pennsylvania, L.P. (Tracy, California) | 8-K | 333-148847 | 10.6 |
9/9/08 |
|||||
| 10.45 | Ground Lease, dated as of September 4, 2008, by and between ADESA Washington, LLC and First Industrial, L.P. (Auburn, Washington) | 8-K | 333-148847 | 10.7 |
9/9/08 |
|||||
| 10.46 | Ground Lease, dated as of September 4, 2008, by and between ADESA Texas, Inc. and First Industrial, L.P. (Houston, Texas) | 8-K | 333-148847 | 10.8 |
9/9/08 |
|||||
| 10.47 | Ground Lease, dated as of September 4, 2008, by and between ADESA California, LLC and First Industrial, L.P. (Mira Loma, California) | 8-K | 333-148847 | 10.9 |
9/9/08 |
|||||
| 10.48 | Ground Lease, dated as of September 4, 2008, by and between ADESA Florida, LLC and First Industrial Financing Partnership, L.P. (Bradenton, Florida) | 8-K | 333-148847 | 10.10 |
9/9/08 |
|||||
| 10.49 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial L.P. (East 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.11 |
9/9/08 |
|||||
| 10.50 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial L.P. (West 39 Acres at Otay Mesa, California) | 8-K | 333-148847 | 10.12 | 9/9/08 | |||||
| 10.51 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Pennsylvania, L.P. (Sacramento, California) | 8-K | 333-148847 | 10.13 |
9/9/08 |
|||||
| 10.52 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Pennsylvania, L.P. (Tracy, California) | 8-K | 333-148847 | 10.14 |
9/9/08 |
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|
Incorporated by Reference |
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|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 10.53 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Auburn, Washington) | 8-K | 333-148847 | 10.15 |
9/9/08 |
|||||
| 10.54 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Houston, Texas) | 8-K | 333-148847 | 10.16 |
9/9/08 |
|||||
| 10.55 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Mira Loma, California) | 8-K | 333-148847 | 10.17 |
9/9/08 |
|||||
| 10.56 | Guaranty of Lease, dated as of September 4, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial Financing Partnership, L.P. (Bradenton, Florida) | 8-K | 333-148847 | 10.18 |
9/9/08 |
|||||
| 10.57 | Ground Sublease, dated as of October 3, 2008, by and between ADESA Atlanta, LLC and First Industrial, L.P. (Fairburn, Georgia) | 10-Q | 333-148847 | 10.21 |
11/13/08 |
|||||
| 10.58 | Guaranty of Lease, dated as of October 3, 2008, by and between KAR Auction Services, Inc. (formerly KAR Holdings, Inc.) and First Industrial, L.P. (Fairburn, Georgia) | 10-Q | 333-148847 | 10.22 | 11/13/08 | |||||
| 10.59 ^ | Amendment No. 3 to the Third Amended and Restated Receivables Purchase Agreement, dated as of January 30, 2009, by and among Automotive Finance Corporation, AFC Funding Corporation, Fairway Finance Company, LLC, Monterey Funding LLC, Deutsche Bank AG, New York Branch and BMO Capital Markets Corp. | 10-K | 333-148847 | 10.59 | 3/11/09 | |||||
| 10.60 | Second Amendment, dated October 23, 2009, to Credit Agreement, dated April 20, 2007, among KAR Auction Services, Inc. (formerly KAR Holdings, Inc.), as borrower, KAR Holdings II, LLC, as guarantor, the several lenders from time to time parties thereto, and the other parties named therein | 8-K | 333-148847 | 10.1 | 10/28/09 | |||||
| 10.61 ** | Form of Director Designation Agreement | S-1/A | 333-161907 | 10.61 | 11/30/09 | |||||
| 10.62 * † | Form of KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan | |||||||||
| 10.63 * † | Form of KAR Auction Services, Inc. Employee Stock Purchase Plan | |||||||||
| 10.64 * † | Form of KAR Auction Services, Inc. Non-Employee Director Deferred Compensation Plan | |||||||||
| 10.65 * † | Form of Nonqualified Stock Option Agreement | |||||||||
| 10.66 * † | Form of Restricted Share Agreement | |||||||||
| 21.1 | Subsidiaries of KAR Auction Services, Inc. | 10-K | 333-148847 | 21.1 | 3/11/09 | |||||
|
Incorporated by Reference |
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|
Exhibit No. |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
|||||
| 23.1 ** | Consent of KPMG LLP, Independent Registered Public Accounting Firm | S-1/A | 333-161907 | 23.1 | 11/30/09 | |||||
| 23.2 * | Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1) | |||||||||
| 23.3 ** | Consent of Robert M. Finlayson | S-1/A | 333-161907 | 23.3 | 11/10/09 | |||||
| 23.4 ** | Consent of Peter R. Formanek | S-1/A | 333-161907 | 23.4 | 11/10/09 | |||||
| 23.5 ** | Consent of Jonathan P. Ward | S-1/A | 333-161907 | 23.5 | 11/10/09 | |||||
| 24.1 ** | Powers of Attorney (included on the signature pages hereto) | |||||||||
| * |
Filed herewith. |
| ** |
Previously filed. |
| ^ |
Portions of this exhibit have been redacted pursuant to a request for confidential treatment filed separately with the Secretary of the Securities and Exchange Commission pursuant to Rule 406 under the Securities Act of 1933, as amended. |
| † |
Denotes management contract or compensation plan, contract or arrangement. |
Exhibit 3.1a
FORM OF AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
KAR AUCTION SERVICES, INC.
The undersigned, Rebecca C. Polak, certifies that she is the Executive Vice President and General Counsel of KAR Auction Services, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), and does hereby further certify as follows:
(1) The name of the Corporation is KAR Auction Services, Inc.
(2) The name under which the Corporation was originally incorporated was KAR Holdings, Inc. and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on November 9, 2006 and amended pursuant to that certificate of amendment filed with the Secretary of State of the State of Delaware on December 19, 2006 (the “Original Certificate of Incorporation”). Pursuant to a certificate of amendment filed with the Secretary of State of the State of Delaware on November 3, 2009 the Corporation changed its name to KAR Auction Services, Inc.
(3) At a meeting duly held on [•], 2009, the Board of Directors of the Corporation (the “Board of Directors”) adopted a resolution authorizing the amendment and restatement of the Corporation’s Original Certificate of Incorporation as set forth herein in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. In lieu of a meeting and vote of the stockholders of the Corporation, the Corporation’s sole stockholder has, by unanimous written consent dated [•], 2009, approved the amendment and restatement of the Corporation’s Original Certificate of Incorporation as set forth herein in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, and such consent has been filed with the minutes of the proceedings of stockholders of the Corporation.
(4) This Amended and Restated Certificate of Incorporation restates and integrates and further amends the Original Certificate of Incorporation of the Corporation, as heretofore amended or supplemented.
The text of the Original Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety, as follows:
FIRST : The name of the Corporation is KAR Auction Services, Inc. (hereinafter, the “Corporation”).
SECOND : The address of the registered office of the Corporation in the State of Delaware is 160 Greentree Drive, Suite 101, in the City of Dover, County of Kent. The name of its registered agent at that address is National Registered Agents, Inc.
THIRD : The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the “GCL”).
FOURTH :
| (a) | Authorized Capital Stock . The total number of shares of stock which the Corporation shall have authority to issue is 500,000,000 of which the Corporation shall have authority to issue 400,000,000 shares of common stock, each having a par value of one cent per share ($0.01) (the “Common Stock”), and 100,000,000 shares of preferred stock, each having a par value of one cent per share ($0.01) (the “Preferred Stock”). The number of authorized shares of Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the GCL (or any successor provision thereto), and no vote of the holders of any of the Common Stock or the Preferred Stock voting separately as a class shall be required therefor. |
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| (b) | Common Stock . The powers, preferences and rights, and the qualifications, limitations and restrictions, of the Common Stock are as follows: |
(1) Each holder of record of shares of Common Stock shall be entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders of the Corporation on which holders of Common Stock are entitled to vote.
(2) The holders of shares of Common Stock shall not have cumulative voting rights (as defined in Section 214 of the GCL).
(3) Subject to the rights of the holders of Preferred Stock, and subject to any other provisions of this Amended and Restated Certificate of Incorporation, as it may be amended from time to time, holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation if, as and when declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor.
(4) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for the payment of the debt and liabilities of the Corporation and subject to the prior payment in full of the preferential amounts, if any, to which any series of Preferred Stock may be entitled, the holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation remaining for distribution in proportion to the number of shares held by them, respectively.
(5) No holder of shares of Common Stock shall be entitled to preemptive or subscription rights.
| (c) |
Preferred Stock . The Board of Directors is expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such distinctive designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the |
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resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series and as may be permitted by the GCL, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions. |
| (d) | Power to Sell and Purchase Shares . Subject to the requirements of applicable law, the Corporation shall have the power to issue and sell all or any part of any shares of any class of stock herein or hereafter authorized to such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class, and as otherwise permitted by law. Subject to the requirements of applicable law, the Corporation shall have the power to purchase any shares of any class of stock herein or hereafter authorized from such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not less consideration could be paid upon the purchase of the same number of shares of another class, and as otherwise permitted by law. |
| (e) |
Stock Split . Effective upon the filing of this Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, a 10-for-1 stock split of the Corporation’s Common Stock shall become effective, pursuant to which 10,685,366 shares of Common Stock outstanding or held in treasury immediately prior to such time shall automatically and without any action on the part of the holders thereof be reclassified and split into and thereafter |
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represent 106,853,660 shares of Common Stock (the “Stock Split”). All certificates representing shares of Common Stock outstanding immediately prior to the filing of this Amended and Restated Certificate of Incorporation shall immediately after the filing of this Amended and Restated Certificate of Incorporation represent instead the number of shares of Common Stock as provided above. Notwithstanding the foregoing, any holder of Common Stock shall surrender his, her or its stock certificate or certificates to the Corporation, and upon such surrender the Corporation will issue a certificate for the correct number of shares of Common Stock to which the holder is entitled under the provisions of this Amended and Restated Certificate of Incorporation. |
FIFTH : The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
| (a) | The business and affairs of the Corporation shall be managed by, or under the direction of, the Board of Directors. In addition to the powers and authority expressly conferred upon the Board of Directors by applicable law, this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the GCL and this Amended and Restated Certificate of Incorporation. |
| (b) | The Board of Directors shall consist of not less than two or more than fifteen members, the exact number of which shall be fixed from time to time by resolution adopted by the affirmative vote of a majority of the entire Board of Directors. |
| (c) |
Subject to the terms of any one or more classes or series of Preferred Stock, any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be |
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filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. The right of stockholders to fill vacancies on the Board of Directors is hereby specifically denied. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor. |
| (d) | Except as otherwise required by applicable law and subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any director or the entire Board of Directors may be removed from office at any time, but only for cause, and only by the affirmative vote of the holders of shares representing a majority of the votes entitled to be cast by the Voting Stock; provided , however , that prior to the Trigger Date, a director may be removed with or without cause, such removal to be by the affirmative vote of the holders of shares representing a majority of the votes entitled to be cast by the Voting Stock. |
| (e) | Notwithstanding the foregoing, the election, term, removal and filling of vacancies with respect to directors, if any, elected separately by the holders of one or more series of Preferred Stock shall not be governed by this Article FIFTH, but rather shall be as provided for in the resolutions adopted by the Board of Directors creating and establishing such series of Preferred Stock. |
| (f) | In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL and this Amended and Restated Certificate of Incorporation. |
| (g) | For the purposes of this Amended and Restated Certificate of Incorporation: |
(1) “Trigger Date” shall mean the first date on which (x) KAR Holdings II, LLC (or its successor) ceases, or (y) in the event of a liquidation of KAR Holdings II, LLC, the Equity Sponsors (as defined
6
below) and their affiliates, collectively, cease, to beneficially own (directly or indirectly) shares representing thirty-five percent (35%) or more of the Voting Stock (it being understood that the retention of either direct or indirect beneficial ownership of thirty-five percent (35%) or more of the Voting Stock by KAR Holdings II, LLC (or its successor) or the Equity Sponsors and their affiliates, as applicable, shall mean that the Trigger Date has not occurred); and
(2) “Voting Stock” shall mean the shares of the then outstanding capital stock of the Corporation entitled to vote generally in the election of directors.
SIXTH : No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the GCL as the same exists or may hereafter be amended. If the GCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the GCL, as so amended. Any repeal or modification of this Article SIXTH shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
SEVENTH . The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article SEVENTH shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.
The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the
7
advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article SEVENTH to directors and officers of the Corporation.
The rights to indemnification and to the advance of expenses conferred in this Article SEVENTH shall not be exclusive of any other right which any person may have or hereafter acquire under this Amended and Restated Certificate of Incorporation, the By-Laws of the Corporation, any statute or other law, by agreement, vote of stockholders or approval of the directors of the Corporation or otherwise.
Any repeal or modification of this Article SEVENTH shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
EIGHTH . Any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of the stockholders of the Corporation; provided that , prior to the Trigger Date, any action required or permitted to be taken by the stockholders of the Corporation may be effected by a consent in writing signed by the holders of shares representing the lowest requisite number of votes entitled to be cast by the Voting Stock that are permitted to approve any action by written consent under the GCL (provided that, prior to the Trigger Date, in no event shall stockholders holding less than a majority of the shares of Voting Stock be permitted to act by written consent). The ability of stockholders of the Corporation to consent in writing to the taking of any action is hereby specifically denied from and after the Trigger Date.
NINTH . Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
TENTH . Except as otherwise required by law, special meetings of stockholders of the Corporation for any purpose or purposes may be called at any time only by (i) the Chief Executive Officer of the Corporation, (ii) the Board of Directors pursuant to a resolution duly adopted by a majority of the total number of authorized directors then in office which states the purpose or purposes thereof, or
8
(iii) any stockholders who beneficially own thirty-five percent (35%) or more of the Voting Stock. Other than as set forth in clause (iii) of the preceding sentence, any power of the stockholders to call a special meeting of stockholders is hereby specifically denied. No business other than that stated in the notice of such meeting (or any supplement thereto) shall be transacted at any special meeting.
ELEVENTH :
| (a) |
To the fullest extent permitted by applicable law (including, without limitation, Section 122(17) of the GCL (or any successor provision), the Corporation, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to any of the Equity Sponsors or any of their respective officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries (other than the Corporation and its subsidiaries), even if the opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and, except as set forth in the exception at the end of this sentence, even if the opportunity is presented to any such person in part or in whole in his capacity as an officer or director of the Corporation, and none of the foregoing persons shall have any duty to communicate or offer such corporate opportunity to the Corporation and, to the fullest extent permitted by applicable law, shall be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such person pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries unless, in the case of any such person who is a director or officer of the Corporation, such business opportunity is expressly offered to such director or officer in writing solely in his or her capacity as a director or officer of the Corporation. Any person purchasing or otherwise acquiring any interest in any shares of stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article ELEVENTH. Neither the alteration, amendment or repeal of this Article ELEVENTH nor the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent |
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with this Article ELEVENTH shall eliminate or reduce the effect of this Article ELEVENTH in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article ELEVENTH, would accrue or arise, prior to such alteration, amendment, repeal or adoption. Nothing in this Article ELEVENTH shall in any way alter, modify or otherwise amend any of the provisions of Section 3.8 of the Second Amended and Restated Limited Liability Company Agreement of KAR Holdings II, LLC. |
| (b) | For purposes of this Article ELEVENTH only: |
(1)The term “Corporation” shall mean the Corporation and its subsidiaries; and
(2) The term “the Equity Sponsors” shall mean each of GS Capital Partners VI Fund, L.P., GS Capital Partners VI Parallel, L.P., GS Capital Partners VI GmbH & Co. KG, GS Capital Partners VI Offshore Fund, L.P., Kelso Investment Associates VII, L.P., KEP VI, LLC, Axle Holdings II, LLC, ValueAct Capital Master Fund, L.P. and PCap KAR LLC and their respective affiliates and subsidiaries (other than the Corporation and its subsidiaries).
TWELFTH . The Corporation expressly elects not to be governed by Section 203 of the GCL.
THIRTEENTH . In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power without the assent or vote of the stockholders to adopt, amend, alter or repeal the By-Laws of the Corporation. The affirmative vote of at least a majority of the entire Board of Directors shall be required to adopt, amend, alter or repeal the By-Laws of the Corporation.
FOURTEENTH . If any provision or provisions of this Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate of
10
Incorporation (including, without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law).
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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed on its behalf this [Day] day of [Month], 2009.
| KAR AUCTION SERVICES, INC. | ||
| By: |
|
|
| Name: | ||
| Title: | ||
Exhibit 3.2
FORM OF AMENDED AND RESTATED
BY-LAWS
OF
KAR AUCTION SERVICES, INC.
A Delaware Corporation
Effective [ ], 2009
TABLE OF CONTENTS
| Page | ||||
|
ARTICLE I
OFFICES |
||||
| Section 1. |
Registered Office |
1 | ||
| Section 2. |
Other Offices |
1 | ||
|
ARTICLE II
MEETINGS OF STOCKHOLDERS |
||||
| Section 1. |
Place of Meetings |
1 | ||
| Section 2. |
Annual Meetings |
1 | ||
| Section 3. |
Special Meetings |
2 | ||
| Section 4. |
Nature of Business at Meetings of Stockholders |
2 | ||
| Section 5. |
Nomination of Directors |
5 | ||
| Section 6. |
Notice |
10 | ||
| Section 7. |
Adjournments |
11 | ||
| Section 8. |
Quorum |
11 | ||
| Section 9. |
Voting |
12 | ||
| Section 10. |
Proxies |
12 | ||
| Section 11. |
Consent of Stockholders in Lieu of Meeting |
14 | ||
| Section 12. |
List of Stockholders Entitled to Vote |
16 | ||
| Section 13. |
Record Date |
17 | ||
| Section 14. |
Stock Ledger |
19 | ||
| Section 15. |
Conduct of Meetings |
19 | ||
| Section 16. |
Inspectors of Election |
20 | ||
|
ARTICLE III
DIRECTORS |
||||
| Section 1. |
Number and Election of Directors |
20 | ||
| Section 2. |
Vacancies |
20 | ||
| Section 3. |
Duties and Powers |
21 | ||
| Section 4. |
Meetings |
21 | ||
| Section 5. |
Organization |
21 | ||
| Section 6. |
Resignations and Removals of Directors |
22 | ||
| Section 7. |
Quorum |
22 | ||
| Section 8. |
Actions of the Board by Written Consent |
23 | ||
| Section 9. |
Meetings by Means of Conference Telephone |
23 | ||
| Section 10. |
Committees |
23 | ||
| Section 11. |
Compensation |
25 | ||
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| Section 12. |
Interested Directors |
25 | ||
| ARTICLE IV | ||||
| OFFICERS | ||||
| Section 1. |
General |
26 | ||
| Section 2. |
Election |
26 | ||
| Section 3. |
Voting Securities Owned by the Corporation |
27 | ||
| Section 4. |
Chairman of the Board of Directors |
27 | ||
| Section 5. |
President |
28 | ||
| Section 6. |
Vice Presidents |
28 | ||
| Section 7. |
Secretary |
29 | ||
| Section 8. |
Treasurer |
29 | ||
| Section 9. |
Assistant Secretaries |
30 | ||
| Section 10. |
Assistant Treasurers |
30 | ||
| Section 11. |
Other Officers |
31 | ||
| ARTICLE V | ||||
| STOCK | ||||
| Section 1. |
Shares of Stock |
31 | ||
| Section 2. |
Signatures |
32 | ||
| Section 3. |
Lost Certificates |
32 | ||
| Section 4. |
Transfers |
32 | ||
| Section 5. |
Dividend Record Date |
33 | ||
| Section 6. |
Record Owners |
33 | ||
| Section 7. |
Transfer and Registry Agents |
34 | ||
| ARTICLE VI | ||||
| NOTICES | ||||
| Section 1. |
Notices |
34 | ||
| Section 2. |
Waivers of Notice |
35 | ||
| ARTICLE VII | ||||
| GENERAL PROVISIONS | ||||
| Section 1. |
Dividends |
36 | ||
| Section 2. |
Disbursements |
36 | ||
| Section 3. |
Fiscal Year |
36 | ||
| Section 4. |
Corporate Seal |
36 | ||
ii
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BY-LAWS
OF
KAR AUCTION SERVICES, INC.
(hereinafter called the “Corporation”)
ARTICLE I
OFFICES
Section 1. Registered Office . The registered office of the Corporation shall be in the City of Dover, County of Kent, State of Delaware.
Section 2. Other Offices . The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings . Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that a meeting of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication in the manner authorized by the General Corporation Law of the State of Delaware (the “DGCL”).
Section 2. Annual Meetings . The Annual Meeting of Stockholders for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the Annual Meeting of Stockholders.
Section 3. Special Meetings . Unless otherwise required by law, Special Meetings of Stockholders, for any purpose or purposes, shall be called in the manner provided by the Amended and Restated Certificate of Incorporation of the Corporation, as may be amended and restated from time to time (the “Certificate of Incorporation”). At a Special Meeting of Stockholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto).
Section 4. Nature of Business at Meetings of Stockholders . Only such business (other than nominations for election to the Board of Directors, which must comply with the provisions of Section 5 of this Article II) may be transacted at an Annual Meeting of Stockholders as is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (c) otherwise properly brought before the Annual Meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 4 of this Article II and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting and (ii) who complies with the notice procedures set forth in this Section 4 of this Article II.
In addition to any other applicable requirements, for business to be properly brought before an Annual Meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.
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To be timely, a stockholder’s notice to the Secretary must be delivered to or be mailed and received at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of Stockholders; provided , however , that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (a) as to each matter such stockholder proposes to bring before the Annual Meeting, a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting, and (b) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is being made, (i) the name and address of such person, (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of all stock of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap,
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option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; (iii) a description of all agreements, arrangements, or understandings (whether written or oral) between or among such person, or any affiliates or associates of such person, and any other person or persons (including their names) in connection with the proposal of such business and any material interest of such person or any affiliates or associates of such person, in such business, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person, (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting; and (v) any other information relating to such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies by such person with respect to the proposed business to be brought by such person before the Annual Meeting pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder.
A stockholder providing notice of business proposed to be brought before an Annual Meeting shall further update and supplement such notice, if necessary, so that the
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information provided or required to be provided in such notice pursuant to this Section 4 of this Article II shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of the Annual Meeting.
No business shall be conducted at the Annual Meeting of Stockholders except business brought before the Annual Meeting in accordance with the procedures set forth in this Section 4 of this Article II; provided , however , that, once business has been properly brought before the Annual Meeting in accordance with such procedures, nothing in this Section 4 of this Article II shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an Annual Meeting determines that business was not properly brought before the Annual Meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.
Nothing contained in this Section 4 of this Article II shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor provision of law).
Section 5. Nomination of Directors . Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation with respect to the right of holders of preferred stock of the Corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board
5
of Directors may be made at any Annual Meeting of Stockholders, or at any Special Meeting of Stockholders called for the purpose of electing directors, in either case, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 5 of this Article II and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting or Special Meeting and (ii) who complies with the notice procedures set forth in this Section 5 of this Article II.
In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.
To be timely, a stockholder’s notice to the Secretary must be delivered to or be mailed and received at the principal executive offices of the Corporation (a) in the case of an Annual Meeting, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of Stockholders; provided , however , that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs; and (b) in the case of a Special Meeting of Stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the Special Meeting was mailed or public disclosure of the date of the Special Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an
6
Annual Meeting or a Special Meeting called for the purpose of electing directors, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of all stock of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; and (iv) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made
7
in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice, and the beneficial owner, if any, on whose behalf the nomination is being made, (i) the name and record address of such person; (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; (iii) a description of all agreements, arrangements, or understandings (whether written or oral) between such person, or any affiliates or associates of such person, and any proposed nominee or any other person or persons (including their names) pursuant to which the nomination(s) are being made by such person, and any material interest of such person, or any affiliates or associates of such person, in such nomination, including any anticipated benefit
8
therefrom to such person, or any affiliates or associates of such person; (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting or Special Meeting to nominate the persons named in its notice; and (v) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
A stockholder providing notice of any nomination proposed to be made at an Annual Meeting or Special Meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 5 of this Article II shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting or Special Meeting, and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of such Annual Meeting or Special Meeting.
No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 5 of this Article II. If the Chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.
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Notwithstanding any provision of this Section 5 of this Article II to the contrary, a nomination of persons for election to the Board of Directors may be submitted for inclusion in the Corporation’s proxy materials pursuant to the final rules adopted by the Securities and Exchange Commission (the “SEC”) providing for such nominations and inclusion (“final proxy access rules”), and, if such nomination is submitted under the final proxy access rules, such submission (a) in order to be timely, must be delivered to, or be mailed and received by, the Secretary at the principal executive offices of the Corporation no later than 120 calendar days before the date that the Corporation mailed (or otherwise disseminated) its proxy materials for the prior year’s Annual Meeting (or such other date as may be set forth in the final proxy access rules for companies without advance notice bylaws); (b) in all other respects, must be made pursuant to, and in accordance with, the terms of the final proxy access rules, as in effect at the time of the nomination, or any successor rules or regulations of the SEC then in effect; and (c) must provide the Corporation with any other information required by this Section 5 of this Article II for nominations not made under the final proxy access rules except to the extent that requiring such information to be furnished is prohibited by the final proxy access rules. The provisions of this paragraph of this Section 5 of this Article II do not provide stockholders of the Corporation with any rights, nor impose upon the Corporation any obligations, other than the rights and obligations set forth in the final proxy access rules.
Section 6. Notice . Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting,
10
and, in the case of a Special Meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law, written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to notice of and to vote at such meeting.
Section 7. Adjournments . Any meeting of the stockholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place, if any, thereof and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting in accordance with the requirements of Section 6 hereof shall be given to each stockholder of record entitled to notice of and to vote at the meeting.
Section 8. Quorum . Unless otherwise required by applicable law or the Certificate of Incorporation, the holders of a majority of the Corporation’s capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 7 hereof, until a quorum shall be present or represented.
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Section 9. Voting . Unless otherwise required by law, the Certificate of Incorporation or these By-Laws, or permitted by the rules of any stock exchange on which the Corporation’s shares are listed and traded, any question brought before any meeting of the stockholders, other than the election of directors, shall be decided by the vote of the holders of a majority of the total number of votes of the Corporation’s capital stock represented at the meeting and entitled to vote on such question, voting as a single class. Unless otherwise provided in the Certificate of Incorporation, and subject to Section 13(a) of this Article II, each stockholder represented at a meeting of the stockholders shall be entitled to cast one (1) vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy as provided in Section 10 of this Article II. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of the stockholders, in such officer’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.
Section 10. Proxies . Each stockholder entitled to vote at a meeting of the stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder as proxy, but no such proxy shall be voted upon after three years from its date, unless such proxy provides for a longer period. Except as otherwise provided by law, a proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute a valid means by which a stockholder may grant such authority:
(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
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(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information on which they relied.
Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder
13
may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
Section 11. Consent of Stockholders in Lieu of Meeting . Prior to the Trigger Date, any action required or permitted to be taken at any Annual or Special Meeting of Stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Following the Trigger Date, any action required or permitted to be taken at any Annual or Special Meeting of the stockholders of the Corporation may be taken only upon the vote of the stockholders at an Annual or Special Meeting duly called and may not be taken by written consent of the stockholders. For purposes of these By-laws, (i) “Trigger Date” shall mean the first date on which (x) KAR Holdings II, LLC (or its successor) ceases, or (y) in the event of a liquidation of KAR Holdings II, LLC, the Equity Sponsors (as defined below) and their affiliates, collectively, cease, to beneficially own (directly or indirectly) shares representing thirty-five percent (35%) or more of the Voting Stock (it being understood that the retention of either direct or indirect beneficial ownership of thirty-five percent (35%) or more of the Voting Stock by KAR Holdings II, LLC (or its successor) or the Equity Sponsors and their affiliates, as
14
applicable, shall mean that the Trigger Date has not occurred) and (ii) “the Equity Sponsors” shall mean each of GS Capital Partners VI Fund, L.P., GS Capital Partners VI Parallel, L.P., GS Capital Partners VI GmbH & Co. KG, GS Capital Partners VI Offshore Fund, L.P., Kelso Investment Associates VII, L.P., KEP VI, LLC, Axle Holdings II, LLC, ValueAct Capital Master Fund, L.P. and PCap KAR LLC and their respective affiliates and subsidiaries (other than the Corporation and its subsidiaries).
Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section 11 to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this Section 11 and Section 13(b), provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (i) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission.
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The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided above in this Section 11.
Section 12. List of Stockholders Entitled to Vote . The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during
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ordinary business hours, for a period of at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
Section 13. Record Date .
(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
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(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Prior to the Trigger Date, any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary of the Corporation, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded, to the attention of the Secretary of the Corporation. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.
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Section 14. Stock Ledger . The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 12 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.
Section 15. Conduct of Meetings . The Board of Directors of the Corporation may adopt by resolution such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.
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Section 16. Inspectors of Election . In advance of any meeting of the stockholders, the Board of Directors, by resolution, the Chairman or the President shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors . The Board of Directors shall consist of the number of directors as set forth in the Certificate of Incorporation. Each director elected in accordance with the Certificate of Incorporation shall hold office until the next Annual Meeting of Stockholders and until such director’s successor is duly elected and qualified, or until such director’s earlier death, resignation or removal. Directors need not be stockholders.
Section 2. Vacancies . Any vacancy in the Board of Directors, however resulting, may be filled in the manner provided in and to the extent permitted under the Certificate of Incorporation.
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Section 3. Duties and Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation required to be exercised or done by the stockholders.
Section 4. Meetings . The Board of Directors and any committee thereof may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors or any committee thereof may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors or such committee, respectively. Special meetings of the Board of Directors may be called by the Chairman, if there be one, or the President, or, prior to the Trigger Date, by any director. Special meetings of any committee of the Board of Directors may be called by the chairman of such committee, if there be one, the President, or any director serving on such committee. Notice thereof stating the place, date and hour of the meeting shall be given to each director (or, in the case of a committee, to each member of such committee) either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, telegram or electronic means on twenty-four (24) hours’ notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.
Section 5. Organization . At each meeting of the Board of Directors or any committee thereof, the Chairman of the Board of Directors or the chairman of such committee, as the case may be, or, in his or her absence or if there be none, a director chosen by a majority of the directors present, shall act as chairman. Except as provided below, the Secretary of the Corporation shall act as secretary at each meeting of the Board of Directors and of each committee thereof. In case the Secretary shall be absent from any meeting of the Board of
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Directors or of any committee thereof, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all the Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting. Notwithstanding the foregoing, the members of each committee of the Board of Directors may appoint any person to act as secretary of any meeting of such committee and the Secretary or any Assistant Secretary of the Corporation may, but need not if such committee so elects, serve in such capacity.
Section 6. Resignations and Removals of Directors . Any director of the Corporation may resign from the Board of Directors or any committee thereof at any time, by giving notice in writing or by electronic transmission to the Chairman of the Board of Directors, if there be one, the President or the Secretary of the Corporation and, in the case of a committee, to the chairman of such committee, if there be one. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Any director may be removed in the manner provided in and to the extent permitted under the Certificate of Incorporation. Any director serving on a committee of the Board of Directors may be removed from such committee at any time by the Board of Directors.
Section 7. Quorum . Except as otherwise required by law, or the Certificate of Incorporation or the rules and regulations of any securities exchange or quotation system on which the Corporation’s securities are listed or quoted for trading, at all meetings of the Board of Directors or any committee thereof, a majority of the entire Board of Directors or a majority of the directors constituting such committee, as the case may be, shall constitute a quorum for the transaction of business and the act of a majority of the directors or committee members present at
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any meeting at which there is a quorum shall be the act of the Board of Directors or such committee, as applicable. If a quorum shall not be present at any meeting of the Board of Directors or any committee thereof, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.
Section 8. Actions of the Board by Written Consent . Unless otherwise provided in the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 9. Meetings by Means of Conference Telephone . Unless otherwise provided in the Certificate of Incorporation or these By-Laws, members of the Board of Directors of the Corporation, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 9 shall constitute presence in person at such meeting.
Section 10. Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each member of a committee must meet the requirements for membership, if any, imposed by
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applicable law and the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. Subject to the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading, in the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another qualified member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required. Notwithstanding anything to the contrary contained in this Article III, the resolution of the Board of Directors establishing any committee of the Board of Directors and/or the charter of any such committee may establish requirements or procedures relating to the governance and/or operation of such committee that are different from, or in addition to, those set forth in these By-Laws and, to the extent that there is any inconsistency between these By-Laws and any such resolution or charter, the terms of such resolution or charter shall be controlling.
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Section 11. Compensation . The directors shall be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary for service as director, payable in cash or securities. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.
Section 12. Interested Directors . No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because any such director’s or officer’s vote is counted for such purpose if: (i) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
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ARTICLE IV
OFFICERS
Section 1. General . The officers of the Corporation shall be chosen by the Board of Directors and shall be the Chief Executive Officer (also referred to herein as the “President”), a Secretary and a Treasurer. The Board of Directors, in its discretion, also may choose a Chairman of the Board of Directors (who must be a director) and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.
Section 2. Election . The Board of Directors, at its first meeting held after each Annual Meeting of Stockholders (or action by written consent of stockholders in lieu of the Annual Meeting of Stockholders if applicable), shall elect the officers of the Corporation who shall hold such titles, and their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and each officer of the Corporation shall hold office until such officer’s successor is elected and qualified, or until such officer’s earlier death, resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.
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Section 3. Voting Securities Owned by the Corporation . Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President or any other officer authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.
Section 4. Chairman of the Board of Directors . The Chairman of the Board of Directors, if there be one, shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman of the Board of Directors shall be the President of the Corporation, unless the Board of Directors designates another director to serve as the Chairman of the Board of Directors, and, except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. During the absence or disability of the President, the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties of the President. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as may from time to time be assigned by these By-Laws or by the Board of Directors.
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Section 5. President . The President shall, subject to the control of the Board of Directors and, if there be one, the Chairman of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the President. In the absence or disability of the Chairman of the Board of Directors, or if there be none, the President shall preside at all meetings of the stockholders and, provided the President is also a director, the Board of Directors. If there be no Chairman of the Board of Directors, or if the Board of Directors shall otherwise designate, the President shall be the Chief Executive Officer of the Corporation and references herein to the “President” shall be deemed to refer to the Chief Executive Officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these By-Laws or by the Board of Directors.
Section 6. Vice Presidents . At the request of the President or in the President’s absence or in the event of the President’s inability or refusal to act (and if there be no Chairman of the Board of Directors), the Vice President, or the Vice Presidents if there are more than one (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairman of the Board of Directors and no Vice President, the Board of Directors shall designate the officer
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of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.
Section 7. Secretary . The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for committees of the Board of Directors when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors or the President, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest to the affixing by such officer’s signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.
Section 8. Treasurer . The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in
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books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of the Treasurer and for the restoration to the Corporation, in case of the Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer’s possession or under the Treasurer’s control belonging to the Corporation.
Section 9. Assistant Secretaries . Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.
Section 10. Assistant Treasurers . Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all
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the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Assistant Treasurer and for the restoration to the Corporation, in case of the Assistant Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Assistant Treasurer’s possession or under the Assistant Treasurer’s control belonging to the Corporation.
Section 11. Other Officers . Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Shares of Stock . The shares of capital stock of the Corporation shall be represented by a certificate, unless and until the Board of Directors of the Corporation adopts a resolution permitting shares to be uncertificated. Notwithstanding the adoption of any such resolution providing for uncertificated shares, every holder of capital stock of the Corporation theretofore represented by certificates and, upon request, every holder of uncertificated shares, shall be entitled to have a certificate for shares of capital stock of the Corporation signed by, or in the name of the Corporation by, (a) the Chairman of the Board, the Vice Chairman of the Board, the Chief Executive Officer, the President or any Executive Vice President, and (b) the Chief Financial Officer, the Secretary or an Assistant Secretary, certifying the number of shares owned by such stockholder in the Corporation.
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Section 2. Signatures . Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates . The Board of Directors may direct a new certificate or uncertificated shares be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issuance of a new certificate or uncertificated shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner’s legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate or uncertificated shares.
Section 4. Transfers . Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these By-Laws. Transfers of stock shall be made on the books of the Corporation, and in the case of certificated shares of stock, only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary
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transfer taxes; or, in the case of uncertificated shares of stock, upon receipt of proper transfer instructions from the registered holder of the shares or by such person’s attorney lawfully constituted in writing, and upon payment of all necessary transfer taxes and compliance with appropriate procedures for transferring shares in uncertificated form; provided, however, that such surrender and endorsement, compliance or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. With respect to certificated shares of stock, every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.
Section 5. Dividend Record Date . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 6. Record Owners . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its
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books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.
Section 7. Transfer and Registry Agents . The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.
ARTICLE VI
NOTICES
Section 1. Notices . Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person’s address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under applicable law, the Certificate of Incorporation or these By-Laws shall be effective if given by a form of electronic transmission if consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed to be revoked if (i) the Corporation is unable to deliver by electronic transmission two (2) consecutive notices by the Corporation in accordance with such consent and (ii) such inability becomes known to the Secretary or Assistant Secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, that the inadvertent failure to treat such inability as a revocation shall
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not invalidate any meeting or other action. Notice given by electronic transmission, as described above, shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (iii) if by a posting on an electronic network, together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (iv) if by any other form of electronic transmission, when directed to the stockholder. Notice to directors or committee members may be given personally or by telegram, telex, cable or by means of electronic transmission.
Section 2. Waivers of Notice . Whenever any notice is required by applicable law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to notice, or a waiver by electronic transmission by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any Annual or Special Meeting of Stockholders or any regular or special meeting of the directors or members of a committee of directors need be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these By-Laws.
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ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends . Dividends upon the capital stock of the Corporation, subject to the requirements of the DGCL and the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with Section 8 of Article III hereof), and may be paid in cash, in property, or in shares of the Corporation’s capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements . All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year . The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal . The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
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ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation . Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation . Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation,
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or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 3. Authorization of Indemnification . Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former
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directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.
Section 4. Good Faith Defined . For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court . Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of
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Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Section 1 or Section 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance . Expenses (including attorneys’ fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.
Section 7. Nonexclusivity of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this
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Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, these By-Laws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 1 and Section 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or Section 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.
Section 8. Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.
Section 9. Certain Definitions . For purposes of this Article VIII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent
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corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. The term “another enterprise” as used in this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
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Section 11. Limitation on Indemnification . Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 of this Article VIII), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.
Section 12. Indemnification of Employees and Agents . The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. Amendments . These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by the stockholders or by the Board of Directors; provided, however, that notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such meeting of the stockholders or Board of Directors, as the case may be. All such amendments must be approved by either the holders of a majority of the outstanding capital stock entitled to vote thereon or by a majority of the entire Board of Directors then in office. Notwithstanding anything to the contrary contained in these By-Laws, any repeal or modification of Article VIII of these By-Laws shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
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Section 2. Entire Board of Directors . As used in this Article IX and in these By-Laws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.
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Exhibit 5.1
FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
[Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]
December [ — ], 2009
KAR Auction Services, Inc.
13085 Hamilton Crossing Blvd.
Carmel, IN 46032
| Re: | KAR Auction Services, Inc. |
Registration Statement on Form S-1
(File No. 333-161907)
Ladies and Gentlemen:
We have acted as special counsel to KAR Auction Services, Inc., a Delaware corporation (the “Company”), in connection with the initial public offering by the Company of up to [ — ] shares (including [ — ] shares subject to the underwriters’ option to purchase additional shares) (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”).
This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the “Act”).
In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement on Form S-1 (File No. 333-161907) of the Company as filed on September 14, 2009 with the Securities and Exchange Commission (the “Commission”) under the Act; (ii) Pre-Effective Amendments No. 1 through No. [ — ] thereto (such Registration Statement, as so amended, being hereinafter referred to as the “Registration Statement”); (iii) the form of Underwriting Agreement (the “Underwriting Agreement”) proposed to be entered into by and between the Company, as issuer, and Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named therein (the “Underwriters”), as filed as Exhibit 1.1 to the Registration Statement; (iv) a specimen certificate representing the Common Stock; (v) the Certificate of Incorporation of the Company, as amended to date and currently in effect (the “Charter”); (vi) the Amended and Restated Bylaws of the Company, as amended to date and currently in effect; (vii) certain resolutions of the Board of Directors of the Company, relating to the issuance and sale of the Shares, the Charter and related matters; and (viii) certain resolutions of the sole stockholder of the Company relating to the Charter. We have also examined originals or copies, certified or
KAR Auction Services, Inc.
December [ — ], 2009
Page 2
otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinions set forth below.
In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies. In making our examination of executed documents, we have assumed that the parties thereto, other than the Company, had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents and the validity and binding effect thereof on such parties. As to any facts material to the opinion expressed herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials.
Members of our firm are admitted to the bar in the State of New York and we do not express any opinion as to the laws of any jurisdiction other than the corporate laws of the State of Delaware, and we do not express any opinion as to the effect of any other laws on the opinion stated herein.
Based upon and subject to the foregoing, we are of the opinion that when (i) the Registration Statement becomes effective under the Act; (ii) a duly appointed committee of the Board of Directors of the Company determines the price per share of the Shares; (iii) the Underwriting Agreement has been duly executed and delivered; and (iv) certificates representing the Shares in the form of the specimen certificate examined by us have been manually signed by an authorized officer of the transfer agent and registrar for the Common Stock and registered by such transfer agent and registrar, and have been delivered to and paid for by the Underwriters as contemplated by the Underwriting Agreement at a price per share not less than the per share par value of the Common Stock, the issuance and sale of the Shares will have been duly authorized, and the Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.
| Very truly yours, |
Exhibit 10.8b
Form of Annual Advisory Fee Termination
[KAR Auction Services, Inc. Letterhead]
December [ ], 2009
Kelso & Company, L.P.
320 Park Avenue, 24 th Floor
New York, New York 10022
Ladies and Gentlemen:
Reference is made to the Financial Advisory Agreement (the “ Advisory Agreement ”), dated as of April 20, 2007 and attached hereto as Annex A, whereby KAR Auction Services, Inc. (formerly, KAR Holdings, Inc.) (the “ Company ”) agreed to retain you, Kelso & Company, L.P. (“ Kelso ”), and any of your affiliates or designees, among other things, to provide consulting and advisory services to the Company commencing on the date thereof for a term ending on the date on which Kelso and its affiliates (including Axle Holdings II, LLC) cease to own, directly or indirectly, any equity interests of the Company.
In connection with the settlement of the initial public offering (the “ Offering ”) of [23,000,000] shares of the Company’s common stock, par value $0.01 per share, on the date hereof, the Company and Kelso hereby agree that the annual advisory fee (the “ Annual Advisory Fee ”) described in the Advisory Agreement [and the obligations of Kelso to provide services under the Advisory Agreement shall, in each case,] be terminated, effective upon payment referenced in the following sentence. In consideration for the termination of the Annual Advisory Fee, the Company agrees to pay Kelso a one-time fee of $3,947,988.96 concurrent with the settlement of the Offering.
All other obligations of the Company set forth in the Advisory Agreement shall survive the termination of the Annual Advisory Fee.
This letter agreement shall be governed by the laws of the State of New York.
[Remainder of the page intentionally left blank]
If you are in agreement with the foregoing, kindly so indicate by signing a counterpart of this letter, whereupon it will become a binding agreement between us.
| Very truly yours, | ||
| KAR AUCTION SERVICES, INC. | ||
| By: |
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| Name: | ||
| Title: | ||
Agreed and accepted:
KELSO & COMPANY, L.P.
| By: | Kelso & Companies, Inc., |
| its general partner |
| By: |
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| Name: | ||||
| Title: |
Annex A
Financial Advisory Agreement
Exhibit 10.18b
Form of Annual Advisory Fee Termination
[KAR Auction Services, Inc. Letterhead]
December [ ], 2009
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Reference is made to the Financial Advisory Agreement (the “ Advisory Agreement ”), dated as of April 20, 2007 and attached hereto as Annex A, whereby KAR Auction Services, Inc. (formerly, KAR Holdings, Inc.) (the “ Company ”) agreed to retain you, Goldman, Sachs & Co. (“ Goldman ”), and any of your affiliates or designees (collectively, with Goldman, the “ Goldman Group ”), among other things, to provide consulting and advisory services to the Company commencing on the date thereof for a term ending on the date on which Goldman and its affiliates or any private equity funds managed by Goldman cease to own, directly or indirectly, any equity interests of the Company.
In connection with the settlement of the initial public offering (the “ Offering ”) of [23,000,000] shares of the Company’s common stock, par value $0.01 per share, on the date hereof, the Company and the Goldman Group hereby agree that the annual advisory fee (the “ Annual Advisory Fee ”) described in the Advisory Agreement [and the obligations of the Goldman Group to provide services under the Advisory Agreement shall, in each case,] be terminated, effective upon payment referenced in the following sentence. In consideration for the termination of the Annual Advisory Fee, the Company agrees to pay Goldman a one-time fee of $3,103,584.18 concurrent with the settlement of the Offering.
All other obligations of the Company set forth in the Advisory Agreement shall survive the termination of the Annual Advisory Fee.
This letter agreement shall be governed by the laws of the State of New York.
[Remainder of the page intentionally left blank]
If you are in agreement with the foregoing, kindly so indicate by signing a counterpart of this letter, whereupon it will become a binding agreement between us.
| Very truly yours, | ||
| KAR AUCTION SERVICES, INC. | ||
| By: |
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| Name: | ||
| Title: | ||
Agreed and accepted:
Goldman, Sachs & Co.
| By: |
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| Name: | ||||
| Title: |
Annex A
Financial Advisory Agreement
Exhibit 10.19b
Form of Annual Advisory Fee Termination
[KAR Auction Services, Inc. Letterhead]
December [ ], 2009
ValueAct Capital Master Fund, L.P.
c/o ValueAct Capital
435 Pacific Avenue, 4th Floor
San Francisco, CA 94133
Ladies and Gentlemen:
Reference is made to the Financial Advisory Agreement (the “ Advisory Agreement ”), dated as of April 20, 2007 and attached hereto as Annex A, whereby KAR Auction Services, Inc. (formerly, KAR Holdings, Inc.) (the “ Company ”) agreed to retain you, ValueAct Capital Master Fund, L.P. (“ValueAct”), and any of your affiliates or designees (collectively, with ValueAct, the “ValueAct Group”), among other things, to provide consulting and advisory services to the Company commencing on the date thereof for a term ending on the date on which ValueAct and its affiliates cease to own, directly or indirectly, any equity interests of the Company.
In connection with the settlement of the initial public offering (the “ Offering ”) of [23,000,000] shares of the Company’s common stock, par value $0.01 per share, on the date hereof, the Company and ValueAct Group hereby agree that the annual advisory fee (the “ Annual Advisory Fee ”) described in the Advisory Agreement [and the obligations of the ValueAct Group to provide services under the Advisory Agreement shall, in each case,] be terminated, effective upon payment referenced in the following sentence. In consideration for the termination of the Annual Advisory Fee, the Company agrees to pay ValueAct a one-time fee of $2,586,320.16 concurrent with the settlement of the Offering.
All other obligations of the Company set forth in the Advisory Agreement shall survive the termination of the Annual Advisory Fee.
This letter agreement shall be governed by the laws of the State of New York.
[Remainder of the page intentionally left blank]
If you are in agreement with the foregoing, kindly so indicate by signing a counterpart of this letter, whereupon it will become a binding agreement between us.
| Very truly yours, | ||
| KAR AUCTION SERVICES, INC. | ||
| By: |
|
|
| Name: | ||
| Title: | ||
Agreed and accepted:
VALUEACT CAPITAL MASTER FUND, L.P.
By: VA Partners I, LLC, its General Partner
| By: |
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| Name: | ||||
| Title: |
Annex A
Financial Advisory Agreement
Exhibit 10.20b
Form of Annual Advisory Fee Termination
[KAR Auction Services, Inc. Letterhead]
December [ ], 2009
PCap, L.P.
75 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
Reference is made to the Financial Advisory Agreement (the “ Advisory Agreement ”), dated as of April 20, 2007 and attached hereto as Annex A, whereby KAR Auction Services, Inc. (formerly, KAR Holdings, Inc.) (the “ Company ”) agreed to retain you, PCap, LP (“ PCap ”), and any of your affiliates or designees (collectively, with PCap, the “ Parthenon Capital Group ”), among other things, to provide consulting and advisory services to the Company commencing on the date thereof for a term ending on the date on which PCap and its affiliates (including Axle Holdings II, LLC and PCap KAR LLC) cease to own, directly or indirectly, any equity interests of the Company.
In connection with the settlement of the initial public offering (the “ Offering ”) of [23,000,000] shares of the Company’s common stock, par value $0.01 per share, on the date hereof, the Company and the Parthenon Capital Group hereby agree that the annual advisory fee (the “ Annual Advisory Fee ”) described in the Advisory Agreement [and the obligations of the Parthenon Capital Group to provide services under the Advisory Agreement shall, in each case,] be terminated, effective upon payment referenced in the following sentence. In consideration for the termination of the Annual Advisory Fee, the Company agrees to pay PCap a one-time fee of $862,106.73 concurrent with the settlement of the Offering.
All other obligations of the Company set forth in the Advisory Agreement shall survive the termination of the Annual Advisory Fee.
This letter agreement shall be governed by the laws of the State of New York.
[Remainder of the page intentionally left blank]
If you are in agreement with the foregoing, kindly so indicate by signing a counterpart of this letter, whereupon it will become a binding agreement between us.
| Very truly yours, | ||
| KAR AUCTION SERVICES, INC. | ||
| By: |
|
|
| Name: | ||
| Title: | ||
Agreed and accepted:
PCAP, LP
| By: | PCap Managers, LLC |
| Its: | General Partner |
| By: |
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| Name: | ||||
| Title: |
Annex A
Financial Advisory Agreement
Exhibit 10.23a
FIRST AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
KAR Holdings II, LLC
This First Amendment to the Second Amended and Restated Limited Liability Company Agreement of KAR Holdings II, LLC (this “Amendment”), effective as of December [ — ], 2009, amends the Second Amended and Restated Limited Liability Company Agreement of KAR Holdings II, LLC, dated April 20, 2007 (the “Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given such terms in the Agreement.
WHEREAS, in connection with an Initial Public Offering, the Company entered into a director designation agreement with KAR Auction Services, Inc. (formerly known as KAR Holdings, Inc.) pursuant to which the Company received certain rights with respect to the designation of directors on the Board of Directors of KAR Auction Services, Inc.; and
WHEREAS, the undersigned, constituting all of the Investor Members of the Company, desire to amend the Agreement to include provisions whereby the Investor Members agree upon the allocation among the Investor Members of the director designation rights of the Company under such director designation agreement with KAR Auction Services, Inc. entered into in connection with the Initial Public Offering.
NOW THEREFORE, in accordance with Section 14.10 of the Agreement and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the undersigned, constituting all of the hereby agree as follows:
1. Amendment .
(a) Section 4.1 of the Agreement is hereby amended by adding new sub-section (e) to Section 4.1 of the Agreement which new subsection shall read in its entirety as follows:
“(e) Director Designation Rights for KAR Auction Services .
(i) For so long as the Company has the right, pursuant to the Director Designation Agreement, dated as of December [ — ], 2009, by and between the Company and KAR Auction Services (the “ Director Designation Agreement ”), to designate seven individuals to the board of directors of KAR Auction Services (each such individual designated by the Company, a “ Director Nominee ”), (A) each of Kelso, GSCP and VAC shall have the right, in their sole discretion, to each designate two of such Director Nominees, and (B) Parthenon shall have the right, in its sole discretion, to designate one of such Director Nominees.
(ii) For so long as the Company has the right, pursuant to the Director Designation Agreement, to designate six Director Nominees, (A) each of Kelso, GSCP and VAC shall have the right, in their sole discretion, to each designate two of such Director Nominees, and (B) Parthenon shall no longer have the right to designate any Director Nominees but Parthenon shall have the right, pursuant to the Director Designation Agreement, to designate a non-voting observer to attend any meetings of the board of directors of KAR Auction Services (which right may be waived by such party in its sole discretion). In the event that the board of directors of KAR Auction Services fails to make a determination that all of the Director Nominees designated by GSCP and VAC pursuant to this Section 4.1(e)(ii) are “independent” (as contemplated by the applicable rules of the New York Stock Exchange), then (i) each of GSCP and VAC agree to substitute one of their respective designees for Director Nominees with an individual that the board of directors of KAR Auction Services affirmatively determines qualifies as “independent” (as contemplated by the applicable rules of the New York Stock Exchange); and (ii) GSCP and VAC shall each have the right, pursuant to the Director Designation Agreement, to designate one non-voting observer to attend any meetings of the board of directors of KAR Auction Services (which right may be waived by such party in its sole discretion).
(iii) For so long as the Company has the right, pursuant to the Director Designation Agreement, to designate four Director Nominees, (A) Kelso shall have the right, in its sole discretion, to designate two of such Director Nominees, and (B) each of GSCP and VAC shall have the right, in their sole discretion, to designate one of such Director Nominees.
(iv) For so long as the Company has the right, pursuant to the Director Designation Agreement, to designate three Director Nominees, each of Kelso, GSCP and VAC shall have the right, in their sole discretion, to designate one of such Director Nominees.
(v) For so long as the Company has the right, pursuant to the Director Designation Agreement, to designate one Director Nominee, (A) Kelso shall have the right, in its sole discretion, to designate such Director Nominee, and (B) each GSCP and VAC shall have the right, pursuant to the Director Designation Agreement, to designate one non-voting observer to attend any meetings of the board of directors of KAR Auction Services (which right may be waived by such party in its sole discretion); it being understood that such right shall not apply to the extent an observer has already been designated by GSCP or VAC pursuant to the Director Designation Agreement and Section 4.1(e)(ii) above and is continuing to serve as an observer.
(vi) In the event the Company ceases to hold, in the aggregate, at least 50.0% of the total number of shares of common stock of KAR Auction Services outstanding at any time, without limiting the generality of Section 4.1(e)(ii) above, the Investor Members agree to cooperate to take actions that they mutually agree are necessary or advisable to ensure that the board of directors of KAR Auction Services is comprised of a majority of independent directors (as such term is defined by the rules governing the New York Stock Exchange), including, without limitation, cooperating to remove directors (other than Director Nominees) that are not independent directors (as such term is defined by the rules governing the New York Stock Exchange).
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(vii) Vacancies arising through the death, resignation or removal of a Director Nominee designated by any of Kelso, GSCP, VAC or Parthenon pursuant to this Section 4.1(e) may be filled by the Company only with a Director Nominee designated by the applicable Investor Member whose original designated Director Nominee has vacated his or her position, and the Director Nominee so chosen shall hold office until the next election and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal.”
(b) Section 15.1 of the Agreement is hereby amended by deleting the following definition:
“ KAR Holdings ” means KAR Holdings, Inc., a Delaware corporation.
(c) Section 15.1 of the Agreement is hereby amended to include the following defined terms, in the appropriate alphabetical order:
“ Director Designation Agreement ” has the meaning given in Section 4.1(e)(i).
“ Director Nominee ” has the meaning given in Section 4.1(e)(i).
“ KAR Auction Services ” means KAR Auction Services, Inc., a Delaware corporation (formerly known as KAR Holdings, Inc.).
(d) Each instance the term “KAR Holdings” is used in the Agreement shall be replaced with the term “KAR Auction Services.”
(e) Section 12.10(b) of the Agreement is hereby amended and restated in its entirety to read in its entirety as follows:
“(b) Holdings IPO . In order to implement any Holdings IPO, this Agreement shall continue to remain in full force and effect with any amendments or modifications thereto as shall be effectuated by the Investor Members requesting such Holdings IPO in accordance with Section 12.10(a) above; provided that, following such Holdings IPO (A) the governance provisions herein (including the provisions of Article IV (but excluding Section 4.1(e), which shall apply to the Subsidiary that effects the Holdings IPO) shall apply only with respect to the Company and the Subsidiaries of the Company (other than the Subsidiary that effects the Holdings IPO and its Subsidiaries), and (B) the Company shall not vote any shares of the Subsidiary that effects the Holdings IPO in favor of any action without the prior written consent of the Majority Sponsors.
2. Headings . Headings in this Amendment are for convenience of reference only, and shall neither limit nor amplify the provisions of this Amendment.
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3. Continuation of Agreement . Except as otherwise expressly provided herein, all of the terms and provisions of the Agreement shall remain in full force and effect and this Amendment shall not amend or modify any other rights, powers, duties, or obligations of any party to the Agreement.
4. Complete Agreement . This Amendment contains the entire agreement between the parties hereto with respect to the matters contained herein and supersedes and replaces any prior agreement between the parties with respect to the matters set forth in this Amendment.
5. Counterparts . This Amendment may be executed in any number of counterparts and any such counterparts may be transmitted by facsimile transmission, and each of such counterparts, whether an original or a facsimile of an original, shall be deemed to be an original and all of such counterparts together shall constitute a single agreement.
[Signatures appear on the following page.]
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IN WITNESS WHEREOF , the parties have hereunto executed this Amendment as of the date first above written.
| GS CAPITAL PARTNERS VI PARALLEL, L.P. | ||
| By: | GS ADVISORS VI, L.L.C., its General Partner | |
| By: |
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| Name: | ||
| Title: | ||
| GS CAPITAL PARTNERS VI GMBH & CO. KG | ||
| By: | GS ADVISORS VI, L.L.C., its Managing Limited Partner | |
| By: |
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| Title: | ||
| GS CAPITAL PARTNERS VI FUND, L.P. | ||
| By: | GSCP VI ADVISORS, L.L.C., its General Partner | |
| By: |
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| Name: | ||
| Title: | ||
| GS CAPITAL PARTNERS VI OFFSHORE FUND, L.P. | ||
| By: | GSCP VI OFFSHORE ADVISORS, L.L.C. its General Partner | |
| By: |
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| Name: | ||
| Title: | ||
| KELSO INVESTMENT ASSOCIATES VII, L.P. | ||
| By: | Kelso GP VII, L.P., its General Partner | |
| By: | Kelso GP VII, LLC, its General Partner | |
| By: |
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| Name: | ||
| Title: | ||
| KEP VI, LLC | ||
| By: |
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| Name: | ||
| Title: | ||
| AXLE HOLDINGS II, LLC | ||
| By: |
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| Name: | ||
| Title: | ||
| VALUEACT CAPITAL MASTER FUND, L.P. | ||
| By: | VA Partners I, LLC, its General Partner | |
| By: |
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| Name: | ||
| Title: | ||
| PCAP KAR LLC | ||
| By: |
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| Title: | ||
Exhibit 10.62
FORM OF KAR AUCTION SERVICES, INC.
2009 OMNIBUS STOCK AND INCENTIVE PLAN
| Section 1. | Purpose of Plan. |
The name of the Plan is the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan (the “ Plan ”). The purpose of the Plan is to provide an additional incentive to selected management employees, directors, independent contractors, and consultants of the Company or its Affiliates (as hereinafter defined) whose contributions are essential to the growth and success of the Company’s business, in order to strengthen the commitment of such persons to the Company and its Subsidiaries, motivate such persons to faithfully and diligently perform their responsibilities and attract and retain competent and dedicated persons whose efforts will result in the long-term growth and profitability of the Company. To accomplish such purposes, the Plan provides that the Company may grant Options, Share Appreciation Rights, Restricted Shares, Other Share-Based Awards, Other Cash-Based Awards or any combination of the foregoing.
| Section 2. | Definitions. |
For purposes of the Plan, the following terms shall be defined as set forth below:
(a) “ Administrator ” means the Board, or, if and to the extent the Board does not administer the Plan, the Committee in accordance with Section 3 hereof.
(b) “ Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. An entity shall be deemed an Affiliate of the Company for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained.
(c) “ Award ” means any Option, Share Appreciation Right, Restricted Share, Other Share-Based Award or Other Cash-Based Award granted under the Plan.
(d) “ Award Agreement ” means any written agreement, contract or other instrument or document evidencing an Award.
(e) “ Bylaws ” mean the amended and restated bylaws of the Company, as may be amended and/or restated from time to time.
(f) “ Beneficial Owner ” (or any variant thereof) has the meaning defined in Rule 13d-3 under the Exchange Act.
(g) “ Board ” means the Board of Directors of the Company.
(h) “ Cause ” shall have the meaning assigned to such term in any individual employment or severance agreement or Award Agreement with the Participant or, if no such agreement exists or the agreement does not define “Cause,” Cause shall mean ( i ) the refusal or neglect of the Participant to perform substantially his or her employment-related duties, ( ii ) the Participant’s personal dishonesty, incompetence, willful misconduct or breach of fiduciary duty, ( iii ) the Participant’s indictment for, conviction of or entering a plea of guilty or nolo contendere to a crime constituting a felony or his or her willful violation of any applicable law (other than a traffic violation or other offense or violation outside of the course of employment which in no way adversely affects the Company and its Subsidiaries or their reputation or the ability of the Participant to perform his or her employment-related duties or to represent the Company or any Subsidiary of the Company that employs such Participant), ( iv ) the Participant’s failure to reasonably cooperate, following a request to do so by the Company, in any internal or governmental investigation of the Company or any of its Subsidiaries or ( v ) the Participant’s material breach of any written covenant or agreement with the Company or any of its Subsidiaries not to disclose any information pertaining to the Company or such Subsidiary or not to compete or interfere with the Company or such Subsidiary.
(i) “ Change in Capitalization ” means any ( i ) merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event, ( ii ) dividend (whether in the form of cash, Common Stock or other property), stock split or reverse stock split, ( iii ) combination or exchange of shares, ( iv ) other change in corporate structure or ( v ) declaration of a special dividend (including a cash dividend) or other distribution, which, in any such case, the Administrator determines, in its sole discretion, affects the Shares such that an adjustment pursuant to Section 5 hereof is appropriate.
(j) “ Change in Control ” shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
(1) any Person, other than the Investor or its Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or any Affiliate thereof) representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; or
(2) the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or
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(3) there is consummated a merger or consolidation of the Company or any Subsidiary thereof with any other corporation, other than a merger or consolidation immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the Board of the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof; or
(4) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than ( A ) a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or ( B ) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.
For each Award that constitutes deferred compensation under Code Section 409A, a Change in Control shall be deemed to have occurred under the Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Code Section 409A.
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
(k) “ Code ” means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.
(l) “ Committee ” means any committee or subcommittee the Board may appoint to administer the Plan. Subject to the discretion of the Board, the Committee shall be composed entirely of individuals who meet the qualifications of an “outside director” within the meaning of Code Section 162(m), a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act and any other qualifications required by the applicable stock exchange on which the Common Stock is traded. If at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall be exercised by the Committee. Except as otherwise provided in the Articles of Incorporation or Bylaws, any action of the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly constituted or unanimous written consent of the Committee’s members.
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(m) “ Common Stock ” means the common stock, par value $.01 per share, of the Company.
(n) “ Company ” means KAR Auction Services, Inc., a Delaware corporation (or any successor corporation, except as the term “Company” is used in the definition of “Change in Control” above).
(o) “ Covered Employee ” shall have the meaning set forth in Code Section 162(m).
(p) “ Disability ” shall have the meaning assigned to such term in any individual employment or severance agreement or Award Agreement with the Participant or, if no such agreement exists or the agreement does not define “Disability,” Disability means, with respect to any Participant, that such Participant ( i ) as determined by the Administrator in its sole discretion, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, or ( ii ) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or an Affiliate thereof.
(q) “ Eligible Recipient ” means an employee, director, independent contractor or consultant of the Company or any Affiliate of the Company who has been selected as an eligible participant by the Administrator; provided, however, to the extent required to avoid the imposition of additional taxes under Code Section 409A, an Eligible Recipient means an employee, director, independent contractor or consultant of the Company or any Subsidiary of the Company who has been selected as an eligible participant by the Administrator.
(r) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended from time to time.
(s) “ Exercise Price ” means, with respect to any Award under which the holder may purchase Shares, the per share price at which a holder of such Award granted hereunder may purchase Shares issuable upon exercise of such Award.
(t) “ Fair Market Value ” as of a particular date shall mean the fair market value of a share of Common Stock as determined by the Administrator in its sole discretion; provided , however , that ( i ) if the Common Stock is admitted to trading on a national securities exchange, the fair market value of a share of Common Stock on any date shall be the closing sale price reported for such share on such exchange on such date or, if no sale was reported on such date, on the last day preceding such date on which a sale was reported, or ( ii ) if the shares of Common Stock are not then listed on the New
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York Stock Exchange, the average of the highest reported bid and lowest reported asked prices for the shares of Common Stock as reported by the National Association of Securities Dealers, Inc. Automated Quotations System for the last preceding date on which there was a sale of such stock in such market, or (3) if the shares of Common Stock are not then listed on a national securities exchange or traded in an over-the-counter market or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith and in accordance with Code Section 409A.
(u) “ Investor ” means KAR Holdings II, LLC, a Delaware limited liability company.
(v) “ Option ” means an option to purchase shares of Common Stock granted pursuant to Section 7 hereof.
(w) “ Other Cash-Based Award ” means a cash Award granted to a Participant under Section 10 hereof, including cash awarded as a bonus or upon the attainment of Performance Goals or otherwise as permitted under the Plan.
(x) “ Other Share-Based Award ” means a right or other interest granted to a Participant under the Plan that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Stock, including, but not limited to, unrestricted Shares, restricted stock units, dividend equivalents or performance units, each of which may be subject to the attainment of Performance Goals or a period of continued employment or other terms or conditions as permitted under the Plan.
(y) “ Participant ” means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority provided for in Section 3 below, to receive grants of Options, Share Appreciation Rights, Restricted Shares, Other Share-Based Awards, Other Cash-Based Awards or any combination of the foregoing, and, upon his or her death, his or her successors, heirs, executors and administrators, as the case may be.
(z) “ Performance Goals ” means performance goals based on one or more of the following criteria: ( i ) earnings, including one or more of operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary or special items or book value per share (which may exclude nonrecurring items); ( ii ) pre-tax income or after-tax income; ( iii ) earnings per Share (basic or diluted); ( iv ) operating profit; ( v ) revenue, revenue growth or rate of revenue growth; ( vi ) return on assets (gross or net), return on investment, return on capital, or return on equity; ( vii ) returns on sales or revenues; ( viii ) operating expenses; ( ix ) stock price appreciation; ( x ) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; ( xi ) implementation or completion of critical projects or processes; ( xii ) cumulative earnings per share growth; ( xiii ) operating margin or profit margin; ( xiv ) cost targets, reductions and savings, productivity and efficiencies; ( xv ) strategic business criteria, consisting of one or more objectives based on meeting
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specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; ( xvi ) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; and ( xvii ) any combination of, or a specified increase in, any of the foregoing. Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company or Affiliate thereof, or a division or strategic business unit of the Company, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. The Performance Goals may include a threshold level of performance below which no payment shall be made (or no vesting shall occur), levels of performance at which specified payments shall be made (or specified vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full vesting shall occur). Each of the foregoing Performance Goals shall be subject to certification by the Committee; provided , that the Committee shall have the authority to make equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Company or any Affiliate thereof or the financial statements of the Company or any Affiliate thereof, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles (in each case, to the extent not inconsistent with Section 162(m) of the Code, if applicable).
(aa) “ Person ” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include ( i ) the Company or any Subsidiary thereof, ( ii ) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary thereof, ( iii ) an underwriter temporarily holding securities pursuant to an offering of such securities, or ( iv ) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(bb) “ Restricted Shares ” means Shares granted pursuant to Section 9 below subject to certain restrictions that lapse at the end of a specified period or periods.
(cc) “ Retirement ” means a termination of a Participant’s employment, other than for Cause, on or after the attainment of age 65.
(dd) “ Section 162(m) Grandfathering Period ” shall mean the period beginning on the Effective Date and ending on the earliest to occur of ( i ) the expiration of the Plan; ( ii ) an amendment of the Plan that results in a material modification; ( iii ) the issuance of all Common Stock that has been allocated under the Plan; or ( iv ) the first
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meeting of shareholders at which directors of the Company are to be elected that occurs after the close of the third calendar year following the calendar year in which the Effective Date occurs.
(ee) “ Shares ” means shares of Common Stock reserved for issuance under the Plan, as adjusted pursuant to the Plan, and any successor (pursuant to a merger, consolidation or other reorganization) security.
(ff) “ Share Appreciation Right ” means the right pursuant to an Award granted under Section 8 below to receive an amount equal to the excess, if any, of ( i ) the aggregate Fair Market Value, as of the date such Award or portion thereof is surrendered, of the Shares covered by such Award or such portion thereof, over ( ii ) the aggregate Exercise Price of such Award or such portion thereof.
(gg) “ Subsidiary ” means, with respect to any Person, as of any date of determination, any other Person as to which such first Person owns or otherwise controls, directly or indirectly, more than 50% of the voting shares or other similar interests or a sole general partner interest or managing member or similar interest of such other Person. An entity shall be deemed a Subsidiary of the Company for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained.
| Section 3. | Administration. |
(a) The Plan shall be administered by the Administrator and shall be administered in accordance with the requirements of Code Section 162(m) (but only to the extent necessary and desirable to maintain qualification of awards under the Plan under Code Section 162(m)) and, to the extent applicable, Rule 16b-3 under the Exchange Act (“ Rule 16b-3 ”). The Plan is intended to comply, and shall be administered in a manner that is intended to comply, with Code Section 409A and shall be construed and interpreted in accordance with such intent. To the extent that an Award, issuance and/or payment is subject to Code Section 409A, it shall be awarded and/or issued or paid in a manner that will comply with Code Section 409A, including any applicable regulations or guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto.
(b) Pursuant to the terms of the Plan, the Administrator, subject, in the case of any Committee, to any restrictions on the authority delegated to it by the Board, shall have the power and authority, without limitation:
(1) to select those Eligible Recipients who shall be Participants;
(2) to determine whether and to what extent Options, Share Appreciation Rights, Restricted Shares, Other Share-Based Awards, Other Cash-Based Awards or a combination of any of the foregoing, are to be granted hereunder to Participants;
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(3) to determine the number of Shares to be covered by each Award granted hereunder;
(4) to determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder (including, but not limited to, ( i ) the restrictions applicable to Restricted Shares and the conditions under which restrictions applicable to such Restricted Shares shall lapse, ( ii ) the Performance Goals and periods applicable to Awards (if any), ( iii ) the Exercise Price of each Award, ( iv ) the vesting schedule applicable to each Award, ( v ) the number of Shares subject to each Award and ( vi ) subject to the requirements of Code Section 409A (to the extent applicable), any amendments to the terms and conditions of outstanding Awards, including, but not limited to, extending the exercise period of such Awards and accelerating the vesting schedule of such Awards;
(5) to determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instruments evidencing Options, Share Appreciation Rights, Restricted Shares or Other Share-Based Awards, Other Cash-Based Awards or any combination of the foregoing granted hereunder;
(6) to determine the Fair Market Value;
(7) to determine the duration and purpose of leaves of absence which may be granted to a Participant without constituting termination of the Participant’s employment for purposes of Awards granted under the Plan;
(8) to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; and
(9) to construe and interpret the terms and provisions of the Plan and any award issued under the Plan (and any Award Agreement relating thereto), and to otherwise supervise the administration of the Plan and to exercise all powers and authorities either specifically granted under the Plan or necessary and advisable in the administration of the Plan.
(c) All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, including the Company and the Participants. No member of the Board or the Committee, nor any officer or employee of the Company or any Subsidiary thereof acting on behalf of the Board or the Committee, shall be personally liable for any action, omission, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each and any officer or employee of the Company and of any Subsidiary thereof acting on their behalf shall, to the maximum extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, omission, determination or interpretation.
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| Section 4. | Shares Reserved for Issuance Under the Plan. |
(a) Subject to Section 5 hereof, the number of shares of Common Stock that are reserved and available for issuance pursuant to Awards granted under the Plan is 6,492,683 shares. Following expiration of the Section 162(m) Grandfathering Period, the aggregate Awards granted during any fiscal year to any single individual shall not exceed ( i ) 600,000 shares subject to Options or Share Appreciation Rights and ( ii ) 300,000 shares subject to Restricted Shares or Other Share-Based Awards (other than Stock Appreciation Rights), in each case subject to adjustment as provided in Section 5 herein.
(b) Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise. If any Shares subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award otherwise terminates or expires without a distribution of shares to the Participant, the Shares with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for Awards under the Plan. Notwithstanding the foregoing, Shares surrendered or withheld as payment of either the exercise price of an Award (including Shares otherwise underlying an Award of a Share Appreciation Right that are retained by the Company to account for the grant price of such Share Appreciation Right) and/or withholding taxes in respect of an Award shall no longer be available for grant under the Plan.
| Section 5. | Equitable Adjustments. |
In the event of any Change in Capitalization, an equitable substitution or proportionate adjustment shall be made, in each case, as may be determined by the Administrator, in its sole discretion, in ( i ) the aggregate number of shares of Common Stock reserved for issuance under the Plan and the maximum number of Shares that may be subject to Awards granted to any Participant in any calendar or fiscal year, ( ii ) the kind, number and Exercise Price subject to outstanding Options and Share Appreciation Rights granted under the Plan, and ( iii ) the kind, number and purchase price of Shares subject to outstanding Restricted Shares or Other Share-Based Awards granted under the Plan, in each case as may be determined by the Administrator, in its sole discretion, provided , however , that any fractional shares resulting from the adjustment shall be eliminated. Such other equitable substitutions or adjustments shall be made as may be determined by the Administrator, in its sole discretion. Without limiting the generality of the foregoing, in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, for the cancellation of any outstanding Award granted hereunder in exchange for payment in cash or other property having an aggregate Fair Market Value of the Shares covered by such award, reduced by the aggregate Exercise Price or purchase price thereof, if any. The Administrator’s determinations pursuant to this Section 5 shall be final, binding and conclusive.
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| Section 6. | Eligibility. |
The Participants under the Plan shall be selected from time to time by the Administrator, in its sole discretion, from among Eligible Recipients.
| Section 7. | Options. |
(a) General . Each Participant who is granted an Option shall enter into an Award Agreement with the Company, containing such terms and conditions as the Administrator shall determine, in its sole discretion, which Award Agreement shall set forth, among other things, the Exercise Price of the Option, the term of the Option and provisions regarding exercisability of the Option granted thereunder. The provisions of each Option need not be the same with respect to each Participant. More than one Option may be granted to the same Participant and be outstanding concurrently hereunder. Options granted under the Plan shall be subject to the terms and conditions set forth in this Section 7 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable and set forth in the applicable Award Agreement. Each Option granted hereunder is intended to be a non-qualified Option and is not intended to qualify as an “incentive stock option” within the meaning of Code Section 422.
(b) Exercise Price . The Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant, but in no event shall the exercise price of an Option be less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of grant.
(c) Option Term . The maximum term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten (10) years after the date such Option is granted. Each Option’s term is subject to earlier expiration pursuant to the applicable provisions in the Plan and the Award Agreement. Notwithstanding the foregoing, the Administrator shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as the Administrator, in its sole discretion, deems appropriate.
(d) Exercisability . Each Option shall be exercisable at such time or times and subject to such terms and conditions, including the attainment of preestablished Performance Goals, as shall be determined by the Administrator in the applicable Award Agreement. The Administrator may also provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole or in part, based on such factors as the Administrator may determine in its sole discretion. Notwithstanding anything to the contrary contained herein, an Option may not be exercised for a fraction of a share.
(e) Method of Exercise . Options may be exercised in whole or in part by giving written notice of exercise to the Company specifying the number of Shares to be purchased, accompanied by payment in full of the aggregate Exercise Price of the Shares so purchased in cash or its equivalent, as determined by the Administrator. As
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determined by the Administrator, in its sole discretion, with respect to any Option or category of Options, payment in whole or in part may also be made ( i ) by means of consideration received under any cashless exercise procedure approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise), ( ii ) in the form of unrestricted Shares already owned by the Participant which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, ( iii ) any other form of consideration approved by the Administrator and permitted by applicable law or ( iv ) any combination of the foregoing.
(f) Rights as Shareholder . A Participant shall have no rights to dividends or any other rights of a shareholder with respect to the Shares subject to an Option until the Participant has given written notice of the exercise thereof, has paid in full for such Shares and has satisfied the requirements of Section 14 hereof.
(g) Termination of Employment or Service .
(1) Unless the applicable Award Agreement provides otherwise, in the event that the employment or service of a Participant with the Company and all Affiliates thereof shall terminate for any reason other than Cause, Retirement, Disability, or death, ( A ) Options granted to such Participant, to the extent that they are exercisable at the time of such termination, shall remain exercisable until the date that is ninety (90) days after such termination, on which date they shall expire, and ( B ) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. The ninety (90) day period described in this Section 7(g)(1) shall be extended to one (1) year after the date of such termination in the event of the Participant’s death during such ninety (90) day period. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.
(2) Unless the applicable Award Agreement provides otherwise, in the event that the employment or service of a Participant with the Company and all Affiliates thereof shall terminate on account of Retirement, Disability or the death of the Participant, ( A ) Options granted to such Participant, to the extent that they were exercisable at the time of such termination, shall remain exercisable until the date that is one (1) year after such termination, on which date they shall expire and ( B ) Options granted to such Participant, to the extent that they were not exercisable at the time of such termination, shall expire at the close of business on the date of such termination. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term.
(3) In the event of the termination of a Participant’s employment or service for Cause, all outstanding Options granted to such Participant shall expire at the commencement of business on the date of such termination.
(h) Other Change in Employment Status . An Option shall be affected, both with regard to vesting schedule and termination, by leaves of absence, changes from full-time to part-time employment, partial disability or other changes in the employment status of an Participant, in the discretion of the Administrator.
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| Section 8. | Share Appreciation Rights. |
(a) General . Share Appreciation Rights may be granted either alone (“ Free Standing Rights ”) or in conjunction with all or part of any Option granted under the Plan (“ Related Rights ”). Related Rights may be granted either at or after the time of the grant of such Option. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, grants of Share Appreciation Rights shall be made, the number of Shares to be awarded, the price per Share, and all other conditions of Share Appreciation Rights. Notwithstanding the foregoing, no Related Right may be granted for more Shares than are subject to the Option to which it relates and any Share Appreciation Right must be granted with an Exercise Price not less than the Fair Market Value of Common Stock on the date of grant. The provisions of Share Appreciation Rights need not be the same with respect to each Participant. Share Appreciation Rights granted under the Plan shall be subject to the following terms and conditions set forth in this Section 8 and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable, as set forth in the applicable Award Agreement.
(b) Awards; Rights as Shareholder . The prospective recipient of a Share Appreciation Right shall not have any rights with respect to such Award, unless and until such recipient has executed an Award Agreement and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Participants who are granted Share Appreciation Rights shall have no rights as shareholders of the Company with respect to the grant or exercise of such rights.
(c) Exercisability .
(1) Share Appreciation Rights that are Free Standing Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.
(2) Share Appreciation Rights that are Related Rights shall be exercisable only at such time or times and to the extent that the Options to which they relate shall be exercisable in accordance with the provisions of Section 7 above and this Section 8 of the Plan.
(d) Payment Upon Exercise .
(1) Upon the exercise of a Free Standing Right, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to the excess of the Fair Market Value as of the date of exercise over the price per share specified in the Free Standing Right multiplied by the number of Shares in respect of which the Free Standing Right is being exercised, with the Administrator having the right to determine the form of payment.
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(2) A Related Right may be exercised by a Participant by surrendering the applicable portion of the related Option. Upon such exercise and surrender, the Participant shall be entitled to receive up to, but not more than, that number of Shares equal in value to the excess of the Fair Market Value as of the date of exercise over the Exercise Price specified in the related Option multiplied by the number of Shares in respect of which the Related Right is being exercised, with the Administrator having the right to determine the form of payment. Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the Related Rights have been so exercised.
(3) Notwithstanding the foregoing, the Administrator may determine to settle the exercise of a Share Appreciation Right in cash (or in any combination of Shares and cash).
(e) Termination of Employment or Service .
(1) In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Free Standing Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator in the applicable Award Agreement.
(2) In the event of the termination of employment or service with the Company and all Affiliates thereof of a Participant who has been granted one or more Related Rights, such rights shall be exercisable at such time or times and subject to such terms and conditions as set forth in the related Options.
(f) Term .
(1) The term of each Free Standing Right shall be fixed by the Administrator, but no Free Standing Right shall be exercisable more than ten (10) years after the date such right is granted.
(2) The term of each Related Right shall be the term of the Option to which it relates, but no Related Right shall be exercisable more than ten (10) years after the date such right is granted.
| Section 9. | Restricted Shares. |
(a) General . Restricted Shares may be issued either alone or in addition to other awards granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, Restricted Shares shall be made; the number of Shares to be awarded; the price, if any, to be paid by the Participant for the acquisition of Restricted Shares; the Restricted Period (as defined in paragraph (c) of this Section 9), if any, applicable to Restricted Shares; the Performance Goals (if any) applicable to Restricted Shares; and all other conditions of the Restricted Shares. If the restrictions, Performance Goals and/or conditions established by the Administrator are not attained, a Participant shall forfeit his or her Restricted Shares in accordance with the terms of the grant. The provisions of the Restricted Shares need not be the same with respect to each Participant.
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(b) Awards and Certificates . The prospective recipient of Restricted Shares shall not have any rights with respect to any such award, unless and until such recipient has executed an Award Agreement and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Except as otherwise provided below in Section 9(c), ( i ) each Participant who is granted an award of Restricted Shares may, in the Company’s sole discretion, be issued a stock certificate in respect of such Restricted Shares; and ( ii ) any such certificate so issued shall be registered in the name of the Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to any such Award.
The Company may require that the stock certificates, if any, evidencing Restricted Shares granted hereunder be held in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition of any award of Restricted Shares, the Participant shall have delivered a stock power, endorsed in blank, relating to the Shares covered by such Award.
Notwithstanding anything in the Plan to the contrary, any Restricted Shares (whether before or after any vesting conditions have been satisfied) may, in the Company’s sole discretion, be issued in uncertificated form pursuant to the customary arrangements for issuing shares in such form.
(c) Restrictions and Conditions . The Restricted Shares granted pursuant to this Section 9 shall be subject to the following restrictions and conditions and any additional restrictions or conditions as determined by the Administrator at the time of grant or, subject to Code Section 409A, thereafter:
(1) The Administrator may, in its sole discretion, provide for the lapse of restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion, including, but not limited to, the attainment of certain Performance Goals, the Participant’s termination of employment or service as a director, independent contractor or consultant to the Company or any Affiliate thereof, or the Participant’s death or Disability; provided , however , that this sentence shall not apply to any Award which is intended to qualify as “performance-based compensation” under Code Section 162(m). Notwithstanding the foregoing, upon a Change in Control, the outstanding Awards shall be subject to Section 11 hereof.
(2) Except as provided in Section 15 or in the Award Agreement, the Participant shall generally have the rights of a shareholder of the Company with respect to Restricted Shares during the Restricted Period. Certificates for Shares of unrestricted Common Stock may, in the Company’s sole discretion, be delivered to the Participant only after the Restricted Period has expired without forfeiture in respect of such Restricted Shares, except as the Administrator, in its sole discretion, shall otherwise determine.
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(3) The rights of Participants granted Restricted Shares upon termination of employment or service as a director, independent contractor, or consultant to the Company or to any Affiliate thereof terminates for any reason during the Restricted Period shall be set forth in the Award Agreement.
| Section 10. | Other Share-Based or Cash-Based Awards. |
(a) The Administrator is authorized to grant Awards to Participants in the form of Other Share-Based Awards or Other Cash-Based Awards, as deemed by the Administrator to be consistent with the purposes of the Plan and as evidenced by an Award Agreement. The Administrator shall determine the terms and conditions of such Awards, consistent with the terms of the Plan, at the date of grant or thereafter, including any Performance Goals and performance periods. Common Stock or other securities or property delivered pursuant to an Award in the nature of a purchase right granted under this Section 10 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, Shares, other Awards, notes or other property, as the Administrator shall determine, subject to any required corporate action.
(b) To the extent that the Plan is subject to Code Section 162(m), no payment shall be made to a Participant that is or is likely to become a Covered Employee prior to the certification by the Committee that the Performance Goals have been attained. The Committee may establish other rules applicable to the Other Share-Based Awards and the Other Cash-Based Awards, provided , however , that in the event that the Plan is subject to Code Section 162(m), such rules shall be in compliance with Code Section 162(m) to the extent applicable to any Covered Employee.
| Section 11. | Accelerated Vesting In Connection With a Change in Control. |
Unless otherwise determined by the Administrator or as evidenced in an Award Agreement, in the event that a Change in Control occurs, then:
(1) any unvested or unexercisable portion of any Award carrying a right to exercise shall become fully vested and exercisable; and
(2) the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to an Award granted under the Plan shall lapse and such Awards shall be deemed fully vested and any performance conditions imposed with respect to such Awards shall be deemed to be fully achieved.
Upon a Change in Control, the Committee may provide for the cancellation of all Awards then outstanding. Upon such cancellation, the Company shall make, in exchange for each such Award, a payment either in ( i ) cash, ( ii ) shares of the successor entity, or ( iii ) a combination of cash or shares, at the discretion of the Committee, and in each case as the Committee shall, in its sole discretion determine, in
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an amount per share subject to such Award equal to the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control over the per share exercise price, if any, of such Award.
| Section 12. | Amendment and Termination. |
The Board may amend, alter or terminate the Plan, but no amendment, alteration, or termination shall be made that would impair the rights of a Participant under any award theretofore granted without such Participant’s consent. Unless the Board determines otherwise, the Board shall obtain approval of the Company’s shareholders for any amendment that would require such approval in order to satisfy the requirements of Code Section 162(m), any rules of the stock exchange on which the Common Stock is traded or other applicable law. The Administrator may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Section 5 of the Plan and the immediately preceding sentence, no such amendment shall impair the rights of any Participant without his or her consent.
| Section 13. | Unfunded Status of Plan. |
The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.
| Section 14. | Withholding Taxes. |
Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant for federal and/or state income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any federal, state, or local taxes of any kind required by law to be withheld with respect to the Award. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant. Whenever cash is to be paid pursuant to an award granted hereunder, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto. Whenever Shares are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any related federal, state and local taxes to be withheld and applied to the tax obligations. With the approval of the Administrator, a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery of Shares or by delivering already owned unrestricted shares of Common Stock, in each case, having a value not exceeding the federal, state and local taxes to be withheld and applied to the tax obligations. Such Shares shall be valued at their Fair Market Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an award.
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The Company may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding obligation with respect to any Option or other Award.
| Section 15. | Transfer of Awards. |
Until such time as the Awards are fully vested and/or exercisable in accordance with the Plan or an Award Agreement, no purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any Award or any agreement or commitment to do any of the foregoing (each, a “ Transfer ”) by any holder thereof in violation of the provisions of the Plan or an Award Agreement will be valid, except with the prior written consent of the Administrator, which consent may be granted or withheld in the sole discretion of the Administrator. Any purported Transfer of an Award or any economic benefit or interest therein in violation of the Plan or an Award Agreement shall be null and void ab initio , and shall not create any obligation or liability of the Company, and any person purportedly acquiring any Award or any economic benefit or interest therein transferred in violation of the Plan or an Award Agreement shall not be entitled to be recognized as a holder of such Shares. Unless otherwise determined by the Administrator in accordance with the provisions of the immediately preceding sentence, an Option may be exercised, during the lifetime of the Participant, only by the Participant or, during any period during which the Participant is under a legal disability, by the Participant’s guardian or legal representative.
| Section 16. | Continued Employment. |
The adoption of the Plan shall not confer upon any Eligible Recipient any right to continued employment or service with the Company or any Affiliate thereof, as the case may be, nor shall it interfere in any way with the right of the Company or any Affiliate thereof to terminate the employment or service of any of its Eligible Recipients at any time.
| Section 17. | Effective Date. |
The Plan was adopted by the Board on [ ] , 2009, and shall become effective without further action as of the later of ( a ) the effectiveness of the Company’s registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission on September 14, 2009, as amended, and ( b ) the Common Stock being listed or approved for listing upon notice of issuance on the New York Stock Exchange (the date of such effectiveness, the “ Effective Date ”).
| Section 18. | Term of Plan. |
No award shall be granted pursuant to the Plan on or after the tenth anniversary of the Effective Date, but awards theretofore granted may extend beyond that date.
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| Section 19. | Code Section 409A. |
The intent of the parties is that payments and benefits under the Plan comply with Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and be administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Code Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required in order to avoid accelerated taxation and/or tax penalties under Code Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant’s termination of employment shall instead be paid on the first business day after the date that is six (6) months following the Participant’s separation from service (or upon the Participant’s death, if earlier). In addition, for purposes of the Plan, each amount to be paid or benefit to be provided to the Participant pursuant to the Plan, which constitute deferred compensation subject to Code Section 409A, shall be construed as a separate identified payment for purposes of Code Section 409A.
| Section 20. | Governing Law. |
The Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law of such state.
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Exhibit 10.63
FORM OF KAR AUCTION SERVICES, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
| 1.1 | Purpose |
The KAR Auction Services, Inc. Employee Stock Purchase Plan is intended to encourage employee participation in the ownership and economic progress of the Company.
| 1.2 | Definitions |
Unless the context clearly indicates otherwise, the following terms have the meaning set forth below:
Board of Directors or Board shall mean the Board of Directors of the Company.
Code shall mean the Internal Revenue Code of 1986, as amended from time to time, together with any applicable regulations issued thereunder.
Committee shall mean the committee of officers established by the Board to administer the Plan, which Committee shall administer the Plan as provided in Section 1.3 hereof.
Common Stock shall mean shares of the common stock, par value $0.01 per share, of the Company.
Company shall mean KAR Auction Services, Inc., a corporation organized under the laws of the State of Delaware, or any successor corporation.
Compensation shall mean the fixed salary or base wage paid by the Company to an Employee as reported by the Company to the United States government (or other applicable government) for income tax purposes, including an Employee’s portion of salary deferral contributions pursuant to Code Section 401(k) and any amount excludable pursuant to Code Section 125, but excluding any bonus, fee, overtime pay, severance pay, expenses, stock option or other equity incentive income, or other special emolument or any credit or benefit under any employee plan maintained by the Company.
Continuous Service shall mean the period of time, uninterrupted by a termination of employment (other than a termination as a result of a transfer of employment among the Parent, the Company or a Designated Subsidiary), that an Employee has been employed by the Company, a Designated Subsidiary or the Parent (or any combination of the foregoing) immediately preceding an Offering Date. Such period of time shall include any approved leave of absence.
Designated Subsidiary shall mean any subsidiary of the Company that has been designated by the Committee to participate in the Plan.
Employee shall mean any person who is employed by the Company or a Designated Subsidiary as a common law employee. Any individual who performs services for the Company or a Designated Subsidiary solely through a leasing or employment agency shall not be considered an Employee.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
Exercise Date shall mean the last business day of each calendar month of each Plan Year, or such other date(s) as determined by the Committee.
Fair Market Value as of a particular date shall mean the fair market value of a share of Common Stock as determined by the Administrator in its sole discretion; provided, however, that (i) if the Common Stock is admitted to trading on a national securities exchange, the fair market value of a share of Common Stock on any date shall be the closing sale price reported for such share on such exchange on such date or, if no sale was reported on such date, on the last day preceding such date on which a sale was reported, or (ii) if the shares of Common Stock are not then listed on the New York Stock Exchange, the average of the highest reported bid and lowest reported asked prices for the shares of Common Stock as reported by the National Association of Securities Dealers, Inc. Automated Quotations System for the last preceding date on which there was a sale of such stock in such market, or (3) if the shares of Common Stock are not then listed on a national securities exchange or traded in an over-the-counter market or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith and in accordance with Code Section 409A.
Offering Date shall mean the first business day of each calendar month of each Plan Year, or such other date(s) as determined by the Committee.
Option Period or Period shall mean each calendar month commencing on the Effective Date as specified by the Committee in accordance with Section 1.4.
Option Price shall mean the purchase price of a share of Common Stock hereunder as provided in Section 3.1 hereof.
Parent shall mean any corporation in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock of one of the other corporations in such chain.
Participant shall mean any Employee who (i) is eligible to participate in the Plan under Section 2.1 hereof and (ii) elects to participate.
Plan shall mean the Company’s Employee Stock Purchase Plan, as the same may be amended from time to time.
Plan Account or Account shall mean an account established and maintained in the name of each Participant.
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Plan Manager shall mean any Employee appointed pursuant to Section 1.3 hereof.
Plan Year shall mean the twelve (12) month period beginning January 1 and ending on the following December 31.
Stock Purchase Agreement shall mean the form prescribed by the Committee or the Company which must be completed and executed by an Employee who elects to participate in the Plan.
| 1.3 | Administration of Plan |
Subject to oversight by the Board of Directors or the Board’s Compensation Committee, the Committee shall have the authority to administer the Plan and to make and adopt rules and regulations not inconsistent with the provisions of the Plan or the Code. The Committee shall adopt the form of Stock Purchase Agreement and all notices required hereunder. Its interpretations and decisions in respect to the Plan shall, subject as aforesaid, be final and conclusive. The Committee shall have the authority to appoint an Employee as Plan Manager and to delegate to the Plan Manager such authority with respect to the administration of the Plan as the Committee, in its sole discretion, deems advisable from time to time.
| 1.4 | Effective Date of Plan |
The Plan shall become effective on the date established for that purpose by the Committee, if, prior to that date, the Plan (i) has been adopted by the Board of Directors of the Company and (ii) has been approved by an affirmative vote of a majority of votes cast by the holders of the Company’s common stock in person or by proxy and entitled to vote on the proposal, at a meeting at which a quorum is present; provided that the Committee shall select the first day of a calendar month as the Effective Date.
| 1.5 | Extension or Termination of Plan |
The Plan shall continue in effect through and including December 31, 2018, unless terminated prior thereto pursuant to Section 4.3 hereof, or by the Board of Directors or the Compensation Committee of the Board, each of which shall have the right to extend the term of or terminate the Plan at any time. Upon any such termination, the balance, if any, in each Participant’s Account shall be refunded to him, or otherwise disposed of in accordance with policies and procedures prescribed by the Committee in cases where such a refund may not be possible.
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ARTICLE II
PARTICIPATION
| 2.1 | Eligibility |
Each Employee who is customarily employed as a full time employee of the Company or a Designated Subsidiary shall be eligible to participate in the Plan beginning on the later of the Effective Date or the date that he or she completed six (6) months of Continuous Service. Each Employee who is customarily employed as a part-time Employee of the Company or a Designated Subsidiary shall be eligible to participate in the Plan beginning on the later of the Effective Date or the date as of which he or she has completed one year of Continuous Service and been credited with at least one thousand (1,000) “hours of service” (as that term is defined in the KAR Auction Services, Inc. 401(k) Plan). All employment with the Company and/or a Designated Subsidiary prior to the Effective Date shall be counted for purposes of determining eligibility to participate in the Plan. For purposes of this Section 2.1, whether an Employee is “customarily employed” shall be determined by the Committee based on the Company’s or Designated Subsidiary’s policies and procedures in effect from time to time. No Employee may participate in the Plan if said Employee, immediately after an Offering Date, would be deemed for purposes of Code Section 423(b)(3) to possess 5% or more of the total combined voting power or value of all classes of stock of the Company, its Parent or any subsidiary.
| 2.2 | Ineligible Employees |
Notwithstanding any provisions of the Plan to the contrary, no Employee shall be granted a right to purchase shares of Common Stock under the Plan to the extent that:
(a) immediately after the grant, such Employee would own stock, and/or hold or own options, possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company, the Parent or any subsidiary corporation (determined under the rules of Sections 423(b)(3) and 424(d) of the Code);
(b) immediately after the grant, such Employee’s right to purchase Company Stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company and any related company would accrue at a rate which exceeds $25,000 in Fair Market Value of such Company Stock (determined at the time such purchase right is granted) for each calendar year in which such purchase right would be outstanding at any time; or
(c) such Employee is an officer or director who is subject to the reporting requirements under Section 16(a) of the Exchange Act.
| 2.3 | Payroll Deductions |
Payment for shares of Common Stock purchased hereunder shall be made by authorized payroll deductions from each payment of Compensation in accordance with instructions received from a Participant. Said deductions shall be expressed as a whole number percentage which shall be at least one percent (1%) but not more than fifteen percent (15%). A Participant may not increase or decrease the deduction during an Option Period. However, a Participant may change the percentage deduction for any subsequent Option Period by filing notice thereof with the
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Company prior to the Offering Date on which such Period commences. During an Option Period, a Participant may discontinue payroll deductions but have the payroll deductions previously made during that Option Period remain in the Participant’s Account to purchase Common Stock on the next Exercise Date, provided that he or she is an Employee as of that Exercise Date. Any amount remaining in the Participant’s Account after the purchase of Common Stock shall be refunded without interest upon the written request of the Participant. Any Participant who discontinues payroll deductions during an Option Period may again become a Participant for a subsequent Option Period by executing and filing another Stock Purchase Agreement in accordance with Section 2.1. Amounts deducted from a Participant’s Compensation pursuant to this Section 2.3 shall be credited to said Participant’s Account.
An eligible Employee may also elect to participate in the Plan solely through optional cash payments in whole dollars (and no payroll deductions) in accordance with such procedures as the Committee shall prescribe. Optional cash payments by a Participant cannot be less than twenty-five dollars ($25 U.S.) per payment. A Participant who elects to participate in the optional cash payment only feature may at any time elect to enroll also in the payroll deduction feature by notifying the Company in accordance with such procedures as the Committee shall prescribe. In the case of Participants whose Compensation is not paid in the currency of the United States, the Committee shall periodically determine, not less frequently than once per calendar year, a minimum payroll deduction that is comparable to ten dollars ($10 U.S.), and a minimum optional cash payment that is comparable to twenty-five dollars ($25 U.S.), based on applicable currency exchange rates as determined by the Committee.
ARTICLE III
PURCHASE OF SHARES
| 3.1 | Option Price |
The Option Price per share of the Common Stock sold to Participants hereunder shall be eighty-five percent (85%) of the Fair Market Value of such share on the Exercise Date of an Option Period, but in no event shall the Option Price per share be less than the par value of the Common Stock.
| 3.2 | Purchase of Shares |
On each Exercise Date, the amount in a Participant’s Account shall be charged with the aggregate Option Price of the largest number of shares of Common Stock, including fractional shares, which can be purchased with said amount. The balance, if any, in such account shall be carried forward to the next succeeding Option Period.
| 3.3 | Limitations on Purchase |
Notwithstanding any provisions of the Plan to the contrary, no Employee shall be granted an option under the Plan if, immediately after the grant, such Employee’s right to purchase Common Stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company and any related company would accrue at a rate which exceeds $25,000 in Market Value of such Common Stock (determined at the time such purchase right is granted) for each calendar year in which such purchase right would be outstanding at any time.
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To the extent necessary to comply with Code Section 423(b)(8) and the limitations on purchase in this Section 3.3, a Participant’s payroll deductions may be decreased to 0% during any Option Period which is scheduled to end during any calendar year, such that the aggregate of all payroll deductions accumulated with respect to such Option Period and any other Option Period ending within the same calendar year is no greater than twenty-five thousand dollars ($25,000). Payroll deductions shall re-commence at the rate provided in such Participant’s Stock Purchase Agreement at the beginning of the first Option Period which is scheduled to end in the following calendar year, unless suspended by the Participant pursuant to Section 2.3 of the Plan.
| 3.4 | Transferability of Rights |
Rights to purchase shares hereunder shall be exercisable only by the Participant. Such rights shall not be transferable.
ARTICLE IV
PROVISIONS RELATING TO COMMON STOCK
| 4.1 | Common Stock Reserved |
There shall be a maximum of 1,000,000 shares of Common Stock reserved for the Plan, subject to adjustment in accordance with Section 4.2 hereof. The aggregate number of shares which may be purchased under the Plan shall not exceed the number of shares reserved for the Plan.
| 4.2 | Adjustment for Changes in Common Stock |
In the event that adjustments are made in the number of outstanding shares of Common Stock or said shares are exchanged for a different class of stock of the Company or for shares of stock of any other corporation by reason of merger, consolidation, stock dividend, stock split or otherwise, the Committee shall make appropriate adjustments in (i) the number and class of shares or other securities that may be reserved for purchase, or purchased, hereunder, and (ii) the Option Price. All such adjustments shall be made in the sole discretion of the Committee, and its decision shall be binding and conclusive.
| 4.3 | Insufficient Shares |
If the aggregate funds available for purchase of Common Stock on any Exercise Date would cause an issuance of shares in excess of the number provided for in Section 4.1 hereof, (i) the Committee shall proportionately reduce the number of shares which would otherwise be purchased by each Participant in order to eliminate such excess and (ii) the Plan shall automatically terminate immediately after such Exercise Date.
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| 4.4 | Confirmation |
Confirmation of each purchase of Common Stock hereunder shall be made available to the Participant in either written or electronic format. A record of purchases shall be maintained by appropriate entries on the books of the Company. Participants may obtain a certificate or certificates for all or part of the shares of Common Stock purchased hereunder upon making a written request. Unless otherwise determined by the Committee, shares of Common Stock delivered to a Participant hereunder may not be assigned, transferred, pledged or otherwise disposed of in any way by the Participant during the six (6) month period following such delivery to the Participant (other than by will, the laws of descent and distribution) and the shares of Common Stock shall bear a legend denoting such restrictions as may be determined by the Committee to be appropriate.
| 4.5 | Rights as Shareholders |
The shares of Common Stock purchased by a Participant on an Exercise Date shall, for all purposes, be deemed to have been issued and sold as of the close of business on such Exercise Date. Prior to that time, none of the rights or privileges of a shareholder of the Company shall exist with respect to such shares.
ARTICLE V
TERMINATION OF PARTICIPATION
| 5.1 | Voluntary Withdrawal |
A Participant may withdraw from the Plan at any time by filing notice of withdrawal prior to the close of business on an Exercise Date. Upon withdrawal, the entire amount, if any, in a Participant’s Account shall be refunded to him without interest. Any Participant who withdraws from the Plan may again become a Participant in accordance with Section 2.1 hereof.
| 5.2 | Termination of Eligibility |
If a Participant Retires, he may elect to (i) withdraw the entire amount, if any, in his Plan Account, or (ii) have said amount used to purchase whole shares of Common Stock pursuant to Section 3.2 hereof on the next succeeding Exercise Date and have any remaining balance refunded without interest.
If a Participant ceases to be eligible under Section 2.1 hereof for any reason other than retirement, the dollar amount and the number of unissued shares in such Participant’s Account will be refunded or distributed to the Participant, or, in the case of death, the Participant’s designated beneficiary or estate, or otherwise disposed of in accordance with policies and procedures prescribed by the Committee in cases where such a refund or distribution may not be possible.
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ARTICLE VI
GENERAL PROVISIONS
| 6.1 | Notices |
Any notice which a Participant files pursuant to the Plan shall be made on forms prescribed by the Committee and shall be effective only when received by the Company.
| 6.2 | Condition of Employment |
Neither the creation of the Plan nor participation therein shall be deemed to create any right of continued employment or in any way affect the right of the Company or a Designated Subsidiary to terminate an Employee.
| 6.3 | Withholding of Taxes; Other Charges |
Each Participant shall, no later than the date as of which the value of an option under the Plan and/or shares of Common Stock first becomes includible in the income of the Participant for income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any taxes of any kind required by law to be withheld with respect to such option or shares of Common Stock. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.
In particular, to the extent a Participant is subject to taxation under U.S. Federal income tax law, if the Participant makes a disposition, within the meaning of Code Section 424(c) of any share or shares of Common Stock issued to Participant pursuant to Participant’s exercise of an option, and such disposition occurs within the two-year period commencing on the day after the Offering or within the one-year period commencing on the day after the Exercise Date, Participant shall, within ten (10) days of such disposition, notify the Company thereof and thereafter immediately deliver to the Company any amount of federal, state or local income taxes and other amounts which the Company informs the Participant the Company may be required to withhold.
Participants shall be solely responsible for any commissions or other charges imposed with respect to the purchase or sale of shares of Common Stock pursuant to the terms of this Plan.
| 6.4 | Amendment of the Plan |
The Board of Directors or the Board’s Compensation Committee may at any time, or from time to time, amend the Plan in any respect, except that, without approval of the shareholders, no amendment may increase the aggregate number of shares reserved under the Plan other than as provided in Section 4.2 hereof, materially increase the benefits accruing to Participants or materially modify the requirements as to eligibility for participation in the Plan. Any amendment of the Plan must be made in accordance with applicable provisions of the Code and/or any regulations issued thereunder, any other applicable law or regulations, and the requirements of the principal exchange upon which the Common Stock is listed.
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| 6.5 | Application of Funds |
All funds received by the Company by reason of purchases of Common Stock hereunder may be used for any corporate purpose.
| 6.6 | Legal Restrictions |
The Company shall not be obligated to sell shares of Common Stock hereunder if counsel to the Company determines that such sale would violate any applicable law or regulation.
| 6.7 | Gender |
Whenever used herein, use of any gender shall be applicable to both genders.
| 6.8 | Governing Law |
The Plan and all rights and obligations thereunder shall be constructed and enforced in accordance with the laws of the State of Delaware and any applicable provisions of the Code and the related regulations.
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Exhibit 10.64
FORM OF KAR AUCTION SERVICES, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
(Effective [DATE], 2009)
FORM OF KAR AUCTION SERVICES, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
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Page |
||||
| ARTICLE I INTRODUCTION | 1 | |||
|
1.1. |
Purpose | 1 | ||
|
1.2. |
Effective Date | 1 | ||
|
1.3. |
Type of Plan | 1 | ||
| ARTICLE II DEFINITIONS | 1 | |||
|
2.1. |
“Account” | 1 | ||
|
2.2. |
“Administrator” | 1 | ||
|
2.3. |
“Affiliate” | 1 | ||
|
2.4. |
“Beneficiary” | 1 | ||
|
2.5. |
“Board” | 1 | ||
|
2.6. |
“Change in Control” | 1 | ||
|
2.7. |
“Code” | 2 | ||
|
2.8. |
“Committee” | 2 | ||
|
2.9. |
“Company” | 2 | ||
|
2.10. |
“Company Stock” | 2 | ||
|
2.11. |
“Deferrable Compensation” | 2 | ||
|
2.12. |
“Director” | 3 | ||
|
2.13. |
“Election Form” | 3 | ||
|
2.14. |
“Employee” | 3 | ||
|
2.15. |
“ERISA” | 3 | ||
|
2.16. |
“Fair Market Value” | 3 | ||
|
2.17. |
“Fees” | 3 | ||
|
2.18. |
“Installment Payment” | 3 | ||
|
2.19. |
“Lump Sum Payment” | 3 | ||
|
2.20. |
“Participant” | 3 | ||
|
2.21. |
“Plan” | 3 | ||
|
2.22. |
“Plan Year” | 4 | ||
|
2.23. |
“Specified Employee” | 4 | ||
|
2.24. |
“Termination from Service” | 4 | ||
|
2.25. |
“Unforeseeable Emergency” | 4 | ||
| ARTICLE III PARTICIPATION BY DIRECTORS | 4 | |||
|
3.1. |
Participation | 4 | ||
|
3.2. |
Cessation of Participation | 4 | ||
|
3.3. |
Ineligible Status | 4 | ||
| ARTICLE IV PARTICIPANT DEFERRALS | 5 | |||
|
4.1. |
Deferral Elections – General | 5 | ||
|
4.2. |
First Year of Eligibility | 5 | ||
|
4.3. |
Deferral of Cash Fees and Stock Payment Fees | 5 | ||
|
4.4. |
Cessation of Deferral Elections | 5 | ||
|
4.5. |
Changes to Deferral Elections | 5 | ||
| ARTICLE V DISTRIBUTIONS | 6 | |||
|
5.1. |
Time of Payment | 6 | ||
|
5.2. |
Form of Payment | 6 | ||
|
5.3. |
Permissible Distributions | 6 | ||
|
5.4. |
Permissible Acceleration of Payments | 7 | ||
|
5.5. |
Permissible Delay of Payment | 7 | ||
|
5.6. |
Payment Deemed Timely | 8 | ||
|
5.7. |
Valuation of Distributions | 8 | ||
| ARTICLE VI ACCOUNTS | 8 | |||
|
6.1. |
Account | 8 | ||
|
6.2. |
Crediting of Earnings on Non-Stock Compensation | 9 | ||
|
6.3. |
Crediting of Earnings on Deferred Stock Payments | 9 | ||
|
6.4. |
Statement of Account | 9 | ||
|
6.5. |
Vesting | 9 | ||
| ARTICLE VII FUNDING AND PARTICIPANTS’ INTEREST | 10 | |||
|
7.1. |
Plan Unfunded | 10 | ||
|
7.2. |
Establishment of Grantor Trust | 10 | ||
|
7.3. |
Participants’ Interest in Plan | 10 | ||
| ARTICLE VIII ADMINISTRATION AND INTERPRETATION | 10 | |||
|
8.1. |
Administration | 10 | ||
|
8.2. |
Interpretation | 10 | ||
|
8.3. |
Records and Reports | 11 | ||
|
8.4. |
Payment of Expenses | 11 | ||
|
8.5. |
Indemnification for Liability | 11 | ||
|
8.6. |
Claims Procedure | 11 | ||
|
8.7. |
Review Procedure | 11 | ||
|
8.8. |
Legal Claims | 11 | ||
|
8.9. |
Participant and Beneficiary Information | 12 | ||
| ARTICLE IX AMENDMENT AND TERMINATION | 12 | |||
|
9.1. |
Amendment | 12 | ||
|
9.2. |
Termination of Plan | 12 | ||
| ARTICLE X MISCELLANEOUS PROVISIONS | 13 | |||
|
10.1. |
Right of Company to Take Actions | 13 | ||
|
10.2. |
Alienation or Assignment of Benefits | 14 | ||
|
10.3. |
Company’s Protection | 14 | ||
|
10.4. |
Construction | 14 | ||
|
10.5. |
Headings | 14 | ||
|
10.6. |
Number and Gender | 14 | ||
|
10.7. |
Right to Withhold | 14 | ||
FORM OF KAR AUCTION SERVICES, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
(Effective [DATE], 2009)
ARTICLE I
INTRODUCTION
1.1. Purpose . The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing non-employee Directors the opportunity to defer retainer fees and stock payments.
1.2. Effective Date . The effective date of the Plan is [DATE], 2009.
1.3. Type of Plan . The Plan is intended to be an unfunded plan of non-qualified deferred compensation that meets the requirements of Code Section 409A. In the event that any provision of the Plan is inconsistent with Code Section 409A, the applicable provisions of Code Section 409A shall be deemed to automatically supersede such inconsistent provision and the Plan shall be administered to comply with Code Section 409A.
ARTICLE II
DEFINITIONS
Where used in the Plan, the following initially capitalized words and terms shall have the meanings specified below, unless the context clearly indicates to the contrary:
2.1. “ Account ” means the recordkeeping account established by the Administrator for each Participant to which Deferrable Compensation, and earnings thereon, are credited in accordance with Article VI of the Plan. An Account may consist of one or more sub-accounts established by the Administrator, as deemed necessary for efficient operation of the Plan.
2.2. “ Administrator ” means the Committee or such individuals or entity designated by the Committee to administer the Plan.
2.3. “ Affiliate ” means an entity, more than fifty percent (50%) of the total voting power of which is owned, directly or indirectly, by the Company.
2.4. “ Beneficiary ” means such person(s) or legal entity that is designated by a Participant under Section 8.9 to receive benefits hereunder after such Participant’s death.
2.5. “ Board ” means the board of directors of the Company.
2.6. “ Change in Control ” means and shall be deemed to occur upon a Change in Ownership, a Change in Effective Control, or a Change in Ownership of Substantial Assets. For this purpose:
(i) A “Change in Ownership” means that a person or group (other than KAR Holdings II, LLC or its affiliates) acquires more than fifty percent (50%) of the aggregate fair market value or voting power of the capital stock of the Company, including for this purpose capital stock previously acquired by such person or group; provided , however , that a Change in Ownership shall not be deemed to occur hereunder if, at the time of any such acquisition, such person or group owns more than fifty percent (50%) of the aggregate fair market value or voting power of the Company’s capital stock.
(ii) A “Change in Effective Control” means that (a) a person or group (other than KAR Holdings II, LLC or its affiliates) acquires (or has acquired during the immediately preceding twelve (12) month period ending on the date of the most recent acquisition by such person or group) ownership of the capital stock of the Company possessing thirty percent (30%) or more of the total voting power of the Company, or (b) a majority of the members of the Board of the Company is replaced during any twelve (12) month period, whether by appointment or election, without endorsement by a majority of the members of the Board prior to the date of such appointment or election.
(iii) A “Change in Ownership of Substantial Assets” means that any person or group (other than KAR Holdings II, LLC or its affiliates) acquires (or has acquired during the immediately preceding twelve (12) month period ending on the date of the most recent acquisition) assets of the Company with an aggregate gross fair market value of not less than forty percent (40%) of the aggregate gross fair market value of the assets of the Company immediately prior to such acquisition. For this purpose, gross fair market value shall mean the fair value of the affected assets determined without regard to any liabilities associated with such assets.
The Board shall determine whether a Change in Control has occurred hereunder in a manner consistent with the provisions of Code Section 409A and the regulations and applicable guidance promulgated thereunder.
2.7. “ Code ” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations and applicable guidance promulgated thereunder. References in the Plan to specific sections of the Code shall be deemed to include any successor provisions thereto.
2.8. “ Committee ” means any committee or subcommittee the Board may appoint to administer the Plan, which, in the discretion of the Board, may consist of two or more persons, each of whom is an “outside director” within the meaning of Code Section 162(m) and a “non-employee director” within the meaning of Rule 16b-3.
2.9. “ Company ” means KAR Auction Services, Inc., a Delaware corporation.
2.10. “ Company Stock ” means the common stock of the Company, par value $.01 per share.
2.11. “ Deferrable Compensation ” means one hundred percent (100%) of Fees that would be payable to a Director during a Plan Year but for the Director’s election to defer such Deferrable Compensation on his or her Election Form in accordance with Article IV of this Plan.
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2.12. “ Director ” means a director on the Board who is not an Employee.
2.13. “ Election Form ” means such document(s) or form(s), which may be electronic, as prescribed and made available from time to time by the Administrator, whereby a Director enrolls in the Plan as a Participant, elects to defer Deferrable Compensation pursuant to Article IV of this Plan, and/or makes investment elections pursuant to Section 6.2 of the Plan.
2.14. “ Employee ” means a common law employee of the Company or an Affiliate.
2.15. “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
2.16. “ Fair Market Value ” as of a particular date shall mean the fair market value of a share of Company Stock as determined by the Administrator in its sole discretion; provided , however , that (i) if the Company Stock is admitted to trading on a national securities exchange, the fair market value of a share of Company Stock on any date shall be the closing sale price reported for such share on such exchange on such date or, if no sale was reported on such date, on the last day preceding such date on which a sale was reported, or (ii) if the shares of Company Stock are not then listed on the New York Stock Exchange, the average of the highest reported bid and lowest reported asked prices for the shares of Company Stock as reported by the National Association of Securities Dealers, Inc. Automated Quotations System for the last preceding date on which there was a sale of such stock in such market, or (iii) if the shares of Company Stock are not then listed on a national securities exchange or traded in an over-the-counter market or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith and in accordance with Code Section 409A.
2.17. “ Fees ” means the retainer fees payable by the Company to the Director with respect to his or her service on the Board, including both fees payable in cash and fees payable in shares of Company Stock (“ Stock Payments ”).
2.18. “ Installment Payment ” means a series of substantially equal annual payments of the Participant’s Account paid over a period ranging from two (2) whole years to ten (10) whole years, as elected by the Participant, commencing as of the applicable payment date under the plan. For purposes of Section 4.6, an Installment Payment is treated as a single payment.
2.19. “ Lump Sum Payment ” means a single sum distribution of the entire value of a Participant’s Account.
2.20. “ Participant ” means any eligible Director who defers Deferrable Compensation to this Plan by filing an Election Form and for whom an Account is maintained under the Plan.
2.21. “ Plan ” means the KAR Auction Services, Inc. Non-Employee Director Deferred Compensation Plan.
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2.22. “ Plan Year ” means the calendar year.
2.23. “ Specified Employee ” means a Participant who is determined to be a “specified employee” within the meaning of Code Section 409A with respect to a Termination from Service occurring in any twelve (12) month period commencing on April 1 based on the Participant’s compensation with the Employer, as defined in Code Section 416(i)(1)(D), and his or her status at the end of the immediately preceding Plan Year. For purposes of the determining whether a Participant is classified as a Specified Employee, compensation from a nonresident alien’s gross income under Section 1.415(c)-2(g)(5)(ii) on account of the location of the services or the identify of an Employer that is not effectively connected with the conduct of a trade or business within the United States shall be excluded.
2.24. “ Termination from Service ” means the date the Participant ceases to be a Director on account of a voluntary or involuntary separation from service, within the meaning of Code Section 409A, with the Board for any reason.
2.25. “ Unforeseeable Emergency ” means with respect to a Participant, his or her spouse, dependents (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)) or Beneficiary, a non-reimbursable severe financial hardship attributable to (i) a sudden and unexpected illness or accident or (ii) funeral expenses, and also means with respect to the Participant (i) a property loss due to casualty that is not otherwise covered by insurance, (ii) imminent foreclosure or eviction from the Participant’s primary residence, or (iii) a similar extraordinary and unforeseeable circumstance beyond the control of the Participant, as determined by the Administrator. For purposes of this Plan, the purchase of a home and the payment of college tuition are not Unforeseeable Emergencies.
ARTICLE III
PARTICIPATION BY DIRECTORS
3.1. Participation . Participation in this Plan is voluntary and is limited to eligible Directors who file Election Forms in accordance with Article IV.
3.2. Cessation of Participation . A Director shall remain eligible to file deferral elections under the Plan until the earlier of (i) the date the Administrator informs the Director that he or she is no longer eligible to participate in the Plan, i.e., “Ineligible Status,” or (ii) the date such Director incurs a Termination from Service.
3.3. Ineligible Status . If the Administrator determines that a Director has “Ineligible Status,” effective as of the date of such determination, said ineligible Director shall no longer be eligible to file deferral elections under the Plan. The Account of an ineligible Director shall be paid in accordance with Sections 5.1 and 5.2 of the Plan, except to the extent all or part of such Account is eligible for distribution of accelerated payment as permitted in Sections 5.3 and 5.4.
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ARTICLE IV
PARTICIPANT DEFERRALS
4.1. Deferral Elections – General . A Participant’s deferral election for a Plan Year is irrevocable for such Plan Year except to the extent a cessation of deferrals hereunder is required under Section 4.5. Amounts deferred under the Plan shall not be distributed to a Participant except as expressly provided in Article V or as otherwise permitted under Code Section 409A. A deferral election hereunder shall be made on an Election Form and comply with the applicable requirements of this Article IV. A Participant’s initial deferral election under the Plan shall designate the amount of Deferrable Compensation that is being deferred and the form of distribution (as permitted in Section 5.2(a)). Once effective under the Plan, a Participant’s deferral election shall remain in effect under the Plan until it is terminated by operation of the Plan or changed by the Participant in accordance with Section 4.6 herein. The Administrator may establish procedures for deferral elections as it deems necessary to comply with the requirements of this Article IV and Code Section 409A.
4.2. First Year of Eligibility . Notwithstanding the timing requirements of Sections 4.3 and 4.4, a Director may elect to defer Deferrable Compensation by completing and executing an Election Form that specifies the amount or percentage of compensation to be deferred within the thirty (30) day period immediately following the date he or she first becomes a Director; provided that the compensation being deferred relates to services performed after the date of such election.
4.3. Deferral of Cash Fees and Stock Payment Fees . A Director may elect to defer Fees payable for services performed during a subsequent Plan Year by completing and executing an Election Form that specifies the amount or percentage of Fees to be deferred and filing it with the Administrator before expiration of the election period established by the Administrator, which period shall end no later than December 31 of the calendar year immediately preceding such Plan Year.
4.4. Cessation of Deferral Elections . To the extent provided for under Code Section 409A, a Participant’s deferral election(s) in effect under the Plan for a Plan Year in which a Participant is granted an Unforeseeable Emergency distribution in accordance with Section 5.3(b) hereof may be terminated by the Administrator, effective as soon as practicable following the grant of such emergency distribution. If a Participant’s deferral elections under the Plan are terminated in accordance with the foregoing sentence, such Participant shall be ineligible to make deferrals of compensation to the Plan for the six (6) month period following his or her receipt of the emergency distribution. Subject to the foregoing six (6) month limitation, the Participant may make new deferral elections for Deferrable Compensation payable in subsequent Plan Years in accordance with this Article IV.
4.5. Changes to Deferral Elections . A Participant shall be permitted a one-time election to change the form of payment relating to the distribution of his or her Account to the extent permitted by the Administrator and in accordance with the requirements of Code Section 409A(a)(4)(C), including the requirements that such redeferral election (a) may not take effect until at least twelve (12) months after such redeferral election is filed with the Administrator; (b) must result in the first distribution subject to the redeferral election being made at least five (5) years after the Termination from Service; and (c) must be filed with the Administrator at least twelve (12) months before such Termination from Service.
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ARTICLE V
DISTRIBUTIONS
5.1. Time of Payment .
(a) A Participant’s Account shall be distributed on the first (1st) day of the calendar month next following the Participant’s Termination from Service.
(b) Notwithstanding the foregoing, with respect to a Specified Employee, a payment upon Termination from Service shall not be made earlier than the date that is at least six (6) months after the date of such Specified Employee’s Termination from Service.
5.2. Form of Payment .
(a) Except as otherwise provided under the Plan, a Participant’s Account shall be paid as a Lump Sum Payment or an Installment Payment, as elected by the Participant on his or her Election Form.
(b) In the absence of Participant’s election as to the form of payment, as permitted under subsection (a, above, a Participant’s Account shall be distributed in the form of a Lump Sum Payment.
(c) Deferral of Stock Payments shall be paid only in shares of Company Stock.
5.3. Permissible Distributions . No distribution under the Plan shall be permitted except as set forth in this Section 5.3 or as otherwise permitted under the Plan and Code Section 409A(a)(2).
(a) Change in Control . Notwithstanding any provision of the Plan or Participant Election Form to the contrary, a Participant who incurs a Termination from Service within the two (2) year period immediately following a Change in Control shall receive a Lump Sum Payment of his or her Account within thirty (30) days following the date of such Termination from Service.
(b) Unforeseeable Emergency . If a Participant experiences an Unforeseeable Emergency, such Participant shall be permitted to withdraw all or a portion of his or her Account in the form of an immediate single-sum payment, subject to the limitations set forth below:
(i) A request for withdrawal shall be made to the Administrator in writing and shall set forth the circumstances surrounding the Unforeseeable Emergency. As a condition of and part of such request, the Participant shall provide to the Administrator his or her written representation that (A) the emergency cannot be relieved by insurance or other reimbursement reasonably available
6
to the Participant, (B) the emergency can only be relieved by liquidation of the Participant’s assets and any such liquidation would itself result in severe damage or injury to the Participant, (C) the Participant has no reasonable borrowing capacity to relieve the emergency, and (D) the emergency cannot be relieved by cessation of the Participant’s deferrals under the Plan. The Administrator shall be entitled to request such additional information as may be reasonably required to determine whether an Unforeseeable Emergency exists or the amount of the emergency, and may establish additional conditions precedent to the review or granting of a request for a withdrawal on account of an Unforeseeable Emergency.
(ii) If the Administrator determines that an Unforeseeable Emergency exists, the Administrator shall authorize the immediate distribution of the amount required to meet the financial need created by such Unforeseeable Emergency, including any taxes payable on such amount, and, if required, the cessation of the Participant’s deferrals to the Plan as permitted in Section 4.5.
(c) Death Distribution . Notwithstanding any provision of the Plan or Participant Election Form to the contrary, in the event of a Participant’s death before the complete distribution of his or her Account, the distribution of such Participant’s Account shall be made in a Lump Sum Payment to the Participant’s Beneficiary within sixty (60) days after the date of death.
5.4. Permissible Acceleration of Payments . No acceleration of time or schedule of payments under the Plan shall be permitted except as set forth in Section 5.4 or as otherwise permitted under the Plan and Code Section 409A(a)(3).
(a) Distribution for Taxes . The Plan may accelerate payment of all or part of a Participant’s Account to pay or withhold state, local, or foreign tax obligations; taxes imposed under the Federal Insurance Contributions Act or the Railroad Retirement Act; and any related federal income tax thereon, arising from a Participant’s participation in the Plan. Such payment of withholding must be limited to the amount necessary to fulfill such tax obligation.
(b) Small Payment . Notwithstanding any provision of the Plan to the contrary, if the total value of a Participant’s Account or death benefit payable hereunder is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), and the Participant is not entitled to a benefit from any other plan that is required to be aggregated with this Plan pursuant to Treasury Regulation Section 1.409A-1(c)(2), the Administrator may distribute such amount to the Participant or Beneficiary in the form of a Lump Sum Payment.
(c) Income Inclusion under 409A . Notwithstanding any provision of the Plan to the contrary, in the event that the plan fails to meet the requirements of Code Section 409A, the Administrator may distribute to Participants the portion of their Accounts that is required to be included in income as a result of such failure.
5.5. Permissible Delay of Payment . The Administrator may delay payment to a date after the designated payment date pursuant to any of the following circumstances; provided that payments to similarly situated Participants are made on a reasonably consistent basis.
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(a) Payments That Would Violate Federal Securities Laws or Other Applicable Law . A payment may be delayed where the Administrator reasonably anticipates that the making of the payment will violate federal securities laws or other applicable law; provided that the payment is made at the earliest date at which the Administrator reasonably anticipates that the making of the payment will not cause such violation. For purposes of this Section 5.5(a), the making of a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not treated as a violation of applicable law.
5.6. Payment Deemed Timely . A payment shall be treated as made upon the date specified under the Plan under the following circumstances:
(a) If the payment is made at such date or a later date within the same calendar year or, if later, by the fifteenth (15th) day of the third calendar month following the date specified under the Plan.
(b) If calculation of the amount of the payment is not administratively practicable due to events “beyond the control” of the Participant, or the Participant’s Beneficiary (as such phrase is defined under Code Section 409A), the payment will be treated as made upon the date specified under the Plan if the payment is made during the first calendar year in which the calculation of the amount of the payment is administratively practicable.
(c) If the Company fails to make a payment, in whole or in part, as of the date specified under the Plan, either intentionally or unintentionally, the payment will be treated as made upon the date specified under the Plan if (i) the Participant accepts the portion (if any) of the payment that the Company is willing to make (unless such acceptance will result in a relinquishment of the claim to all or part of the remaining amount), (ii) if the Participant files claims pursuant to Sections 8.6 and 8.7 herein to collect the unpaid portion of the payment, and (iii) any further payment (including payment of a lesser amount that satisfies the Company’s obligation to make the entire payment) is made no later than the end of the first calendar year in which the Company and the Participant enter into a legally binding settlement of such dispute, the Company concedes that the amount is payable, or the Company is required to make such payment pursuant to a final and nonappealable judgment or other binding decision.
5.7. Valuation of Distributions . All distributions under this Plan shall be based upon a daily valuation of the Participant’s Account or, where applicable, the Fair Market Value of the shares of Company Stock that relate to the Stock Payments deferred under the Participant’s Account, as determined by the Administrator.
ARTICLE VI
ACCOUNTS
6.1. Account . The Administrator shall establish and maintain, or cause to be established and maintained, a separate Account for each Participant hereunder who executes an election pursuant to Article IV. Each such Participant’s Deferrable Compensation deferred
8
pursuant to an Election Form under Article IV shall be separately accounted for and credited with earnings or dividends, as applicable, for recordkeeping purposes only, to his or her Account. A Participant’s Account shall be solely for the purposes of measuring the amounts to be paid under the Plan. Except as provided in Article VII, the Company shall not be required to fund or secure a Participant’s Account in any way, the Company’s obligation to Participants hereunder being purely contractual.
6.2. Crediting of Earnings on Non-Stock Compensation . Except as provided in Section 6.3, a Participant may hypothetically invest his Account in one or more investment alternatives made available by the Administrator, and earnings or losses thereon shall be credited to the Participant’s Account in accordance with the valuation procedures under such investment alternatives. The Participant shall make his or her investment elections, and changes thereto, on an Election Form in accordance with procedures established by the Administrator. Unless the Administrator determines otherwise, the investment alternatives available under the Plan shall mirror the alternatives that are made available under the Code Section 401(k) plan sponsored by the Company.
6.3. Crediting of Earnings on Deferred Stock Payments . The portion of a Participant’s Account attributable to deferral of Stock Payments shall be deemed invested solely in stock equivalent units of Company Stock, shall be denominated in numbers of stock units, and shall be valued at any time as the stock equivalent units are credited to such Account multiplied by the then-Fair Market Value of the Company Stock. Whenever a dividend is declared and payable on Company Stock, the number of such stock equivalent units in the Participant’s Account shall be increased by the following calculations:
(i) the number of units in the Participant’s Account multiplied by any cash dividend declared by the Company on a share of Company Stock, divided by the Fair Market Value determined as of the related dividend payment date; and/or
(ii) the number of units in the Participant’s Account on the related dividend payment date multiplied by any stock dividend declared by the Company on a share of Company Stock.
In the event of any change in the number or kind of outstanding shares of Company Stock, including a stock split or splits (other than a stock dividend as provided above), an appropriate adjustment shall be made in the number of units credited to the Participant’s Account.
6.4. Statement of Account . As soon as practicable after the end of each Plan Year (and at such additional times as the Administrator may determine), the Administrator shall furnish each Participant with a statement of the balance credited to the Participant’s Account.
6.5. Vesting . A Participant is always one hundred percent (100%) vested in his or her Account.
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ARTICLE VII
FUNDING AND PARTICIPANTS’ INTEREST
7.1. Plan Unfunded . This Plan shall at all times be considered entirely unfunded for both federal and state income tax purposes and for purposes of Title I of ERISA, and no trust shall be created by or for the Plan. The crediting to each Participant’s Account shall be made through recordkeeping entries. No actual funds shall be set aside; provided , however , that nothing herein shall prevent the Company from establishing one or more grantor trusts that meet the requirements of IRS Revenue Procedure 92-64 from which benefits due under this Plan may be paid in certain instances.
7.2. Establishment of Grantor Trust . Within fifteen (15) days following a Change in Control, the Company shall establish under the Plan a grantor trust that meets the requirements of IRS Revenue Procedure 92-64, and shall transfer assets to such trust in amounts sufficient to fully fund the Plan’s aggregate liability with respect to the Accounts under the Plan on and after the date of the Change in Control.
7.3. Participants’ Interest in Plan . Notwithstanding Section 7.2 or any other provision of the Plan, a Participant has an interest only in the value of the amount credited to his or her Account and has no rights or interests in the specific investment funds, stock, or securities in which his or her Account is hypothetically invested under the Plan. All distributions shall be paid by the Company from its general assets and a Participant (or his or her Beneficiary) shall have the rights of a general, unsecured creditor against the Company for any distributions due hereunder. The Plan constitutes a mere promise by the Company to make benefit payments in the future.
ARTICLE VIII
ADMINISTRATION AND INTERPRETATION
8.1. Administration . The Administrator shall be in charge of the overall operation and administration of this Plan. The Administrator has, to the extent appropriate and in addition to the powers described elsewhere in this Plan, full discretionary authority to construe and interpret the terms and provisions of the Plan; to adopt, alter and repeal administrative rules, guidelines and practices governing the Plan; to perform all acts, including the delegation of its administrative responsibilities to advisors or other persons who may or may not be Employees; and to rely upon the information or opinions of legal counselor experts selected to render advice with respect to the Plan, as it shall deem advisable, with respect to the administration of the Plan.
8.2. Interpretation . The Administrator may take any action, correct any defect, supply any omission or reconcile any inconsistency in the Plan, or in any election hereunder, in the manner and to the extent it shall deem necessary to carry the Plan into effect or to carry out the Company’s purposes in adopting the Plan. Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company or the Administrator arising out of or in connection with the Plan, shall be within the absolute discretion of each of them, and shall be final, binding and conclusive on the Company, and all Participants and Beneficiaries and their respective heirs, executors, administrators, successors and assigns. The Administrator’s determinations hereunder need not be uniform, and may be made selectively among Directors, whether or not they are similarly situated.
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8.3. Records and Reports . The Administrator shall keep a record of proceedings and actions and shall maintain or cause to be maintained all such books of account, records, and other data as shall be necessary for the proper administration of the Plan. Such records shall contain all relevant data pertaining to individual Participants and their rights under this Plan. The Administrator shall have the duty to carry into effect all rights or benefits provided hereunder to the extent assets of the Company are properly available.
8.4. Payment of Expenses . The Company shall bear all expenses incurred by the Administrator in administering this Plan.
8.5. Indemnification for Liability . The Company shall indemnify the Committee, the Administrator and the Employees to whom administrative duties have been delegated under this Plan, against any and all claims, losses, damages, expenses and liabilities arising from their responsibilities in connection with this Plan, unless the same is determined to be due to gross negligence or willful misconduct.
8.6. Claims Procedure . Within ninety (90) days following the date payment was due in accordance with the terms of the Plan, the Participant or the Participant’s duly authorized representative (hereinafter, the “ claimant ”) may file a written request for payment with the Administrator. If a claim for benefits under the Plan is denied in whole or in part, the claimant will receive written notification within forty-five (45) days following the date of such written request. The notification will include specific reasons for the denial, specific reference to pertinent provisions of this Plan, a description of any additional material or information necessary to process the claim and why such material or information is necessary, and an explanation of the claims review procedure. To the extent a Participant hereunder is a claimant and serves as an Administrator, he or she shall not participate in any determination relating to his or her claim, and the Administrator or the Company may appoint an independent individual to take the place of such Participant for purposes of making such determination.
8.7. Review Procedure . No later than one hundred and eighty (180) days following the date payment was due under the Plan, the claimant may file a written request with the Administrator for a review of his denied claim. The claimant may review pertinent documents that were used in processing his claim, submit pertinent documents, and address issues and comments in writing to the Administrator. The Administrator will notify the claimant of his or her final decision in writing. In his or her response, the Administrator will explain the reason for the decision, with specific references to pertinent Plan provisions on which the decision was based. To the extent a Participant hereunder is a claimant requesting a review and serves as an Administrator, he or she shall not participate in any determination relating to the review, and the Administrator or the Company may appoint an independent individual to take the place of such Participant for purposes of making such determination.
8.8. Legal Claims . In no event may a claimant commence legal action for benefits the claimant believes are due the claimant until the claimant has exhausted all of the remedies and procedures afforded the claimant by this Article VIII. No such legal action may be commenced more than two (2) years after the date of the Administrator’s final review decision, described in Section 8.7 above.
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8.9. Participant and Beneficiary Information . Each Participant shall keep the Administrator informed of his or her current address and the current address of his or her designated beneficiary or beneficiaries. A Participant may from time to time change his designated Beneficiary without the consent of such Beneficiary by filing a new designation in writing with the Administrator. If no Beneficiary designation is in effect at the time of the Participant’s death, or if the designated Beneficiary is missing or has predeceased the Participant, distribution shall be made to the Participant’s surviving spouse, or if none, to his surviving children per stirpes, and if none, to his estate. The Administrator shall not be obligated to search for any person. If such person is not located within one (1) year after the date on which payment of the Participant’s death benefit is payable under the Plan, payment shall be made to the Participant’s estate.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1. Amendment . The Board shall have the right, at any time, to amend the Plan or discontinue deferrals under the Plan in whole or in part; provided that such amendment or termination complies with Code Section 409A and does not adversely affect the right of any Participant or Beneficiary to a benefit or payment due under the Plan. The Administrator has the authority, without Board approval, to amend the Plan to comply with the requirements of Code Section 409A, modify the amount or type of compensation that qualifies as Deferrable Compensation, modify the classes of individuals eligible to participate in the Plan, and to change the investment alternatives offered under the Plan. In addition, the Administrator may make such changes to the Plan’s operation and administration as it deems to be in the best interest of the Plan.
9.2. Termination of Plan . The Board may take action to provide for the acceleration of the time and form of a payment, or a payment hereunder, where the acceleration of the payment is made pursuant to a termination and liquidation of the Plan in accordance with one of the following:
(a) The termination and liquidation of the Plan pursuant to an irrevocable action taken within the thirty (30) days preceding or the twelve (12) months following a Change in Control; provided that all agreements, methods, programs, and other arrangements sponsored by the Company or a participating Affiliate immediately after the Change in Control event with respect to which deferrals of compensation that, together with the Plan, are treated as a single plan for purposes of Treasury Regulation Section 1.409A-1(c)(2) (the “ Aggregated Plans ”) are terminated and liquidated with respect to each Participant that experienced the Change in Control event, so that under the terms of the termination and liquidation, all such Participants are required to receive all amounts of compensation deferred under the terminated Aggregated Plans within twelve (12) months of the date of the irrevocable action taken to terminate and liquidate such Aggregated Plans.
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(b) The termination and liquidation of the Plan within twelve (12) months of a corporate dissolution of the Company that is taxed under Code Section 331, or approved by a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A); provided that the amounts deferred under the Plan are included in the Participants’ gross incomes in the latest of the following years (or, if earlier, the taxable year in which the amount is actually or constructively received):
(i) The calendar year in which Plan termination and liquidation occurs;
(ii) The first calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or
(iii) The first calendar year in which the payment is administratively practicable.
(c) The termination and liquidation of the Plan, where:
(i) Such termination and liquidation does not occur proximate to a downturn in the financial health of the Company or the Affiliate, as applicable;
(ii) To the extent the same Participant had deferrals of thereunder, all Aggregated Plans are likewise terminated and liquidated;
(iii) No payments in liquidation of the Plan are made within twelve (12) months of the date the irrevocable action is taken to terminate and liquidate the Plan, other than payments that would be payable under the terms of the Plan if the action to terminate and liquidate the Plan had not occurred;
(iv) All payments are made within twenty-four (24) months of the date the irrevocable action is taken to terminate and liquidate the Plan; and
(v) The Company and Affiliate, as applicable, does not adopt a new plan that would be aggregated with the Plan if the Participant participated in both plans, at any time within three (3) years following the date the irrevocable action is taken to terminate and liquidate the Plan.
(d) Any other termination and liquidation event that is permissible under Code Section 409A.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Right of Company to Take Actions . The adoption and maintenance of this Plan shall not be deemed to constitute a contract between the Company and a Director, or to be a consideration for, nor an inducement or condition of, the employment of any person. Nothing herein contained, or any action taken hereunder, shall be deemed to give a Director the right to be retained in the service of the Board or to interfere with the right of the Board to discharge the
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Director at any time, nor shall it be deemed to give to the Board the right to require the Director to remain in its employ, nor shall it interfere with the Director’s right to terminate his or her service at any time. Nothing in this Plan shall prevent the Company from amending, modifying, or terminating any other benefit plan.
10.2. Alienation or Assignment of Benefits . Except as otherwise provided under the Plan, a Participant’s rights and interest under the Plan shall not be assigned or transferred except as otherwise provided herein, and the Participant’s rights to benefit payments under the Plan shall not be subject to alienation, pledge or garnishment by or on behalf of creditors (including heirs, beneficiaries, or dependents) of the Participant or of a Beneficiary.
10.3. Company’s Protection . By execution of an Election Form, each Participant shall be deemed to have agreed to cooperate with the Company by furnishing any and all information reasonably requested by the Administrator in order to facilitate the payment of benefits hereunder.
10.4. Construction . All legal questions pertaining to the Plan shall be determined in accordance with the laws of the State of Delaware, to the extent such laws are not superseded by ERISA or any other federal law.
10.5. Headings . The headings of the Articles and Sections of his Plan are for reference only. In the event of a conflict between a heading and the contents of an Article or Section, the contents of the Article or Section shall control.
10.6. Number and Gender . Whenever any words used herein are in the singular form, they shall be construed as though they were also used in the plural form in all cases where they would so apply, and references to the male gender shall be construed as applicable to the female gender where applicable, and vice versa.
10.7. Right to Withhold . To the extent required by law in effect at the time a distribution is made from the Plan, the Company or its agents shall have the right to withhold or deduct from any distributions or payments any taxes required to be withheld by federal, state or local governments.
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Exhibit 10.65
KAR AUCTION SERVICES, INC.
FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION AGREEMENT, dated as of , between KAR Auction Services, Inc., a Delaware corporation (the “ Company ”), and (the “ Employee ”), pursuant to the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan, as in effect and as amended from time to time (the “ Plan ”). Capitalized terms that are not defined herein shall have the meanings given to such terms in the Plan.
WHEREAS, the Company desires to grant options to purchase shares of its common stock, par value $.01 per share (the “ Common Stock ”) to certain key employees of the Company;
WHEREAS, the Company has adopted the Plan in order to effect such grants; and
WHEREAS, the Employee is a key employee as contemplated by the Plan, and the Committee has determined that it is in the interest of the Company to grant these options to the Employee.
NOW, THEREFORE, in consideration of the premises and subject to the terms and conditions set forth herein and in the Plan, the parties hereto agree as follows:
| 1. | Confirmation of Grant, Option Price . |
(a) Confirmation of Grant . The Company hereby evidences and confirms the grant to the Employee, effective as of the date hereof (the “ Grant Date ”), of options to purchase from the Company shares of Common Stock, which shall become exercisable, if at all, as provided in Section 2(a) (the “ Options ”).
(b) Option Price . The Options shall have an exercise price of $ per share (the “ Option Price ”), which is not less than the Fair Market Value per share of the Common Stock on the Grant Date.
(c) Options Subject to Plan . By signing this Agreement, the Employee acknowledges that he has been provided a copy of the Plan and has had the opportunity to review such Plan.
(d) Character of Options . The Options granted hereunder are not intended to be “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
| 2. | Exercisability and Expiration . |
(a) Exercisability . The Options shall become exercisable in equal installments on each of the first anniversaries of the Grant Date, subject to the Employee’s continuous employment with the Company or a Subsidiary from the Grant Date to such anniversary. Notwithstanding the foregoing, all or a portion of such Options shall also become exercisable at the time and under the circumstances described in Sections 4(a) and 5.
(b) Normal Expiration Date . Unless the Options earlier terminate in accordance with Sections 2 or 4, the Options shall terminate on the tenth anniversary of the Grant Date (the “ Normal Expiration Date ”). Once Options have become exercisable pursuant to this Section 2, such Options may be exercised, subject to the provisions hereof, at any time and from time to time until the Normal Expiration Date.
| 3. | Method of Exercise and Payment . |
All or part of the exercisable Options may be exercised by the Employee upon ( a ) the Employee’s written notice to the Company of exercise and ( b ) the Employee’s payment of the Option Price in full at the time of exercise ( i ) in cash or cash equivalents, ( ii ) with the consent of the Committee, in shares of Common Stock, valued at the Fair Market Value on the date of exercise, or (if permitted by the Committee and subject to such terms and conditions as it may determine) by surrender of outstanding Awards under the Plan, or (iii) in accordance with such procedures or in such other form as the Committee shall from time to time determine (including by permitting broker’s cashless exercise procedure). As soon as practicable after receipt of a written exercise notice and payment in full of the exercise price of any exercisable Options in accordance with this Section 3, but subject to Section 6 below, the Company shall deliver to the Employee (or such other person or entity) a certificate or certificates representing the shares of Common Stock acquired upon the exercise thereof, registered in the name of the Employee (or such other person or entity), provided that, if the Company, in its sole discretion, shall determine that, under applicable securities laws, any certificates issued under this Section 3 must bear a legend restricting the transfer of such Common Stock, such certificates shall bear the appropriate legend.
| 4. | Termination of Employment . |
(a) Special Termination . Subject to Section 4(d), in the event that the Employee’s employment with the Company or any Subsidiary terminates by reason of the Employee’s death, Disability or Retirement (each a “ Special Termination ”), then all Options held by the Employee that are exercisable as of the date of such Special Termination may be exercised by the Employee or the Employee’s beneficiary as designated in accordance with Section 9, or if no such beneficiary is named, by the
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Employee’s estate, at any time prior to one (1) year following the Employee’s termination of employment or the Normal Expiration Date of the Options, whichever period is shorter and shall terminate immediately thereafter. Upon a Special Termination, any Options that are not then exercisable shall terminate and be canceled immediately upon such termination of employment.
(b) Termination for Cause . Subject to Section 4(d), in the event that the Employee’s employment with the Company or any Subsidiary is terminated for Cause, all Options held by the Employee, whether or not then exercisable, shall terminate and be canceled immediately upon such termination of employment.
(c) Other Termination of Employment . Subject to Section 4(d), in the event that the Employee’s employment with the Company or any Subsidiary terminates for any reason other than ( i ) a Special Termination or ( ii ) for Cause, then any Options held by the Employee which are exercisable at the date of the Employee’s termination of employment shall be exercisable at any time up until the 90th day following the Employee’s termination of employment (or, in the event that the Employee dies after terminating his employment, but within the period during which the Options would otherwise be exercisable hereunder, such ninety (90) day period shall be extended to the date that is one (1) year after such termination) or the Normal Expiration Date of the Options, whichever period is shorter and shall terminate immediately thereafter, but any Options held by the Employee that are not then exercisable shall terminate and be canceled immediately upon such termination of employment.
(d) Committee Discretion . The Committee may at any time extend the post-termination exercise period of all or any portion of the Options up to and including, but not beyond, the Normal Expiration Date of such Options.
| 5. | Tax Withholding . |
Whenever Common Stock is to be issued pursuant to the exercise of an Option or any cash payment is to be made hereunder, the Company or any Subsidiary shall have the power to withhold, or require the Employee to remit to the Company or such Subsidiary, an amount sufficient to satisfy the statutory minimum federal, state, and local withholding tax requirements relating to such transaction, and the Company or such Subsidiary may defer payment of cash or issuance of Common Stock until such requirements are satisfied.
| 6. | Nontransferability of Awards . |
No Options granted hereby may be sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or, on such terms and conditions as the Committee shall
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establish, to a Permitted Transferee. All rights with respect to Options granted to the Employee hereunder shall be exercisable during his lifetime only by such Employee or, if permitted by the Committee, a Permitted Transferee. Following the Employee’s death, all rights with respect to Options that were exercisable at the time of the Employee’s death and have not terminated shall be exercised by his designated beneficiary, his estate or, if permitted by the Committee, a Permitted Transferee.
| 7. | Buyout and Settlement for Shares . |
Upon the purported exercise of any Option, in lieu of accepting payment of the exercise price therefor and delivering the number of shares of Common Stock for which the Option is being exercised, the Committee may cause the Company either ( a ) to pay the Employee an amount in cash equal to the amount, if any, by which the aggregate Fair Market Value of the shares of Common Stock as to which the Option is being exercised exceeds the aggregate Option Price, or ( b ) to deliver to the Employee a lesser number of shares of Common Stock, having a Fair Market Value on the date of exercise, equal to the amount, if any, by which the aggregate Fair Market Value of the shares of Common Stock as to which the Option is being exercised exceeds the aggregate Option Price for such shares. Upon payment of cash or distribution of shares of Common Stock pursuant to this Section 7, the Employee’s rights as to the portion of the Options which is the subject of such payment or distribution shall be deemed satisfied in full.
| 8. | Beneficiary Designation . |
The Employee may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) by whom any right under the Plan and this Agreement is to be exercised in case of his death. Each designation will revoke all prior designations by the Employee, shall be in a form reasonably prescribed by the Committee, and will be effective only when filed by the Employee in writing with the Committee during his lifetime.
| 9. | Adjustment in Capitalization . |
The aggregate number of shares of Common Stock subject to outstanding Option grants and the respective prices and/or vesting criteria applicable to outstanding Options, shall be proportionately adjusted to reflect, as deemed equitable and appropriate by the Committee, any stock dividend, stock split or share combination of, or extraordinary cash dividend on, the Common Stock, or any recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares affecting the Common Stock, or any issuance of any warrants or rights offering (other than any such offering under the Plan) to purchase Common Stock at a price materially below Fair Market Value, or any other similar event affecting the Common Stock. All determinations and calculations required under this Section 9 shall be made in the sole discretion of the Committee.
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| 10. | Requirements of Law . |
The issuance of shares of Common Stock pursuant to the Options shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. No shares of Common Stock shall be issued upon exercise of any Options granted hereunder, if such exercise would result in a violation of applicable law, including the U.S. federal securities laws and any applicable state or foreign securities laws.
| 11. | No Guarantee of Employment . |
Nothing in this Agreement shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate the Employee’s employment at any time, or confer upon the Employee any right to continue in the employ of the Company or any Subsidiary.
| 12. | No Rights as Stockholder . |
Except as otherwise required by law, the Employee shall not have any rights as a stockholder with respect to any shares of Common Stock covered by the Options granted hereby until such time as the shares of Common Stock issuable upon exercise of such Options have been so issued.
| 13. | Interpretation; Construction . |
Any determination or interpretation by the Committee under or pursuant to this Agreement shall be final and conclusive on all persons affected hereby. Except as otherwise expressly provided in the Plan, in the event of a conflict between any term of this Agreement and the terms of the Plan, the terms of the Plan shall control.
| 14. | Amendments . |
The Committee may, at its sole discretion, at any time and from time to time alter or amend this Agreement and the terms and conditions of any unvested Options (but not any previously granted vested Options) in whole or in part, including without limitation, amending the criteria for vesting and exercisability set forth in Section 2 hereof, substituting alternative vesting and exercisability criteria and imposing certain blackout periods on Options; provided, that such alteration, amendment, suspension or termination shall preserve the economic value, as determined by the Committee in its sole good faith discretion, of any previously granted Option. The Company shall give written notice to the Employee of any such alteration or amendment of this Agreement as promptly as practicable after the adoption thereof. This Agreement may also be amended by a writing signed by both the Company and the Employee.
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| 15. | Miscellaneous . |
(a) Notices . All notices, requests, demands, letters, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if ( i ) delivered personally, ( ii ) mailed, certified or registered mail with postage prepaid, ( iii ) sent by next-day or overnight mail or delivery, or ( iv ) sent by fax, as follows:
| (i) | If to the Company, to it at: |
KAR Auction Services, Inc.
13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032
Attention: General Counsel
Fax: (317) 249-4518
| (ii) | If to the Employee, to the Employee’s last known home address, |
or to such other person or address as any party shall specify by notice in writing to the Company. All such notices, requests, demands, letters, waivers and other communications shall be deemed to have been received ( w ) if by personal delivery on the day after such delivery, ( x ) if by certified or registered mail, on the fifth business day after the mailing thereof, ( y ) if by next-day or overnight mail or delivery, on the day delivered, or ( z ) if by fax, on the day delivered, provided that such delivery is confirmed.
(b) Binding Effect; Benefits . This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.
(c) Waiver . Either party hereto may by written notice to the other ( i ) extend the time for the performance of any of the obligations or other actions of the other under this Agreement, ( ii ) waive compliance with any of the conditions or covenants of the other contained in this Agreement and ( iii ) waive or modify performance of any of the obligations of the other under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of either party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by either party hereto of a breach of any
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provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.
(d) Code Section 409A Compliance . Notwithstanding any provision of this Agreement, to the extent that the Committee determines that any Option granted under this Agreement is subject to Section 409A of the Code and fails to comply with the requirements of Section 409A of the Code, notwithstanding anything to the contrary contained in the Plan or in this Agreement, the Committee reserves the right to amend, restructure, terminate or replace the Option in order to cause the Option to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.
(e) Applicable Law . This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, regardless of the law that might be applied under principles of conflict of laws.
(f) Section and Other Headings . The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
(g) Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.
— Signature page follows —
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IN WITNESS WHEREOF, the Company and the Employee have duly executed this Agreement as of the date first above written.
| KAR AUCTION SERVICES, INC. | ||
| By: |
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| Name: | ||
| Title: | ||
| EMPLOYEE | ||
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| Name | ||
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Exhibit 10.66
KAR AUCTION SERVICES, INC.
FORM OF RESTRICTED SHARE AGREEMENT
This Agreement (this “ Agreement ”) is entered into as of , , by and between KAR Auction Services, Inc., a Delaware corporation (the “ Company ”), and (the “ Participant ”), pursuant to the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan, as in effect and as amended from time to time (the “ Plan ”). Capitalized terms that are not defined herein shall have the meanings given to such terms in the Plan.
1. Grant of Restricted Shares . The Company hereby grants to the Participant Shares (such shares, the “ Restricted Shares ”), subject to all of the terms and conditions of this Agreement and the Plan.
2. Lapse of Restrictions .
(a) General . Subject to the provisions set forth below, the restrictions on Transfer set forth in Section 8 hereof shall lapse with respect to the number of Restricted Shares specified for each date set forth below under the column captioned “Vesting Date” (each such date, a “ Vesting Date ”) as follows:
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Vesting Date |
Number of Restricted Shares |
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subject in each case to the continued employment of the Participant by the Company or a Subsidiary from the date hereof through the relevant Vesting Date, and provided that the Participant has not given notice of resignation, as of each such Vesting Date, subject to Section 2(b).
(b) Following Certain Terminations of Employment . Subject to the next sentence, upon termination of the Participant’s employment with the Company or a Subsidiary for any reason (including the death or Disability of the Participant), any Restricted Shares in respect of which the restrictions described in this Section 2 shall not already have lapsed shall be immediately forfeited by the Participant and transferred to, and reacquired by, the Company without consideration of any kind and neither the Participant nor any of the Participant’s successors, heirs, assigns, or personal representatives shall thereafter have any further rights or interests in such Restricted Shares. Notwithstanding the foregoing, if (A) the Participant’s employment is terminated by the Company or a Subsidiary other than for Cause and (B) a waiver and general release in a form prescribed by the Company is executed by the Participant within thirty (30) days after the date of such termination and becomes effective in accordance with its terms, then the Restricted Shares which are due to vest at the next Vesting Date shall vest on the date of such termination of employment, and the restrictions on Transfer of such Restricted Shares set out in Section 2(b) hereof shall lapse.
3. Adjustments . Pursuant to Section 5 of the Plan, in the event of a Change in Capitalization, the Administrator shall make such equitable changes or adjustments as it deems necessary or appropriate to the number and kind of securities or other property (including cash) issued or issuable in respect of outstanding Restricted Shares.
4. Legend on Certificates . The Participant agrees that any certificate issued for Restricted Shares (or, if applicable, any book entry statement issued for Restricted Shares) prior to the lapse of any outstanding restrictions relating thereto shall bear the following legend (in addition to any other legend or legends required under applicable federal and state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE (THE “ RESTRICTIONS ”) AS SET FORTH IN THE KAR AUCTION SERVICES, INC. 2009 OMNIBUS STOCK AND INCENTIVE PLAN AND THE RESTRICTED SHARE AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND KAR AUCTION SERVICES, INC., COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF KAR AUCTION SERVICES, INC. ANY ATTEMPT TO DISPOSE OF THESE SHARES IN CONTRAVENTION OF SUCH RESTRICTIONS, INCLUDING BY WAY OF SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHERWISE, SHALL BE NULL AND VOID AND WITHOUT EFFECT AND SHALL RESULT IN THE FORFEITURE OF SUCH SHARES AS PROVIDED BY SUCH PLAN AND AGREEMENT.
5. Certain Changes . The Administrator may accelerate the date on which the restrictions on Transfer set forth in Section 8 hereof shall lapse or otherwise adjust any of the terms of the Restricted Shares; provided that, subject to Sections 5 and 12 of the Plan, no action under this Section 5 shall adversely affect the Participant’s rights under this Agreement.
6. Notices . All notices or other communications required or permitted under this Agreement shall be made in writing and shall be deemed given if delivered personally or sent by nationally recognized overnight courier service. Any notice or other communication shall be deemed given on the date of delivery, or on the date one (1) business day after it shall have been given to a nationally-recognized overnight courier service. All such notices or communications shall be delivered to the recipient at the addresses indicated below:
To the Company:
KAR Auction Services, Inc.
13085 Hamilton Crossing Boulevard
Carmel, Indiana 46032
Attention: General Counsel
Fax: (317) 249-4518
To the Participant:
at the address as it appears in the Company’s books and records or at such other place as the Participant shall have designated by notice as herein provided to the Company.
7. Securities Laws Requirements . The Company shall not be obligated to issue Shares to the Participant free of the restrictive legend described in Section 4 hereof or of any other restrictive legend, if such transfer, in the opinion of counsel for the Company, would violate the Securities Act of 1933, as amended, or any other federal or state statutes having similar requirements that may be in effect at the relevant time.
8. Protections Against Violations of Agreement . Until such time as the Restricted Shares are fully vested in accordance with Section 2 hereof, no purported sale, assignment, mortgage, hypothecation, transfer, charge, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any of the Restricted Shares or any agreement or commitment to do any of the foregoing (each, a “ Transfer ”) by any holder thereof in violation of the provisions of this Agreement will be valid, except with the prior written consent of the Board, which consent may be granted or withheld in the sole discretion of such Board. Any purported Transfer of Restricted Shares or any economic benefit or interest therein in violation of this Agreement shall be null and void ab initio , and shall not create any obligation or liability of the Company, and any person purportedly acquiring any Restricted Shares or any economic benefit or interest therein transferred in violation of this Agreement shall not be entitled to be recognized as a holder of such Shares. In addition, unless the Administrator determines otherwise, upon any attempted Transfer of Restricted Shares or any rights in respect of Restricted Shares, before the vesting thereof, such Restricted Shares, and all of the rights related thereto, shall be immediately forfeited by the Participant and transferred to, and reacquired by, the Company without consideration of any kind.
9. Taxes . The Participant understands that he (and not the Company) shall be responsible for any tax liability that may arise as a result of the transactions contemplated by this Agreement. The Participant shall pay to the Company promptly upon request, and in any event at the time the Participant recognizes taxable income in respect to the Restricted Shares (or, if the Participant makes an election under Section 83(b) of the Code in connection with such grant), an amount equal to the taxes the Company determines it is required to withhold at the lowest applicable rate determined by the Company under applicable tax laws with respect to the Restricted Shares. The Participant may satisfy the foregoing requirement by making a payment to the Company in cash or, with the approval of the Administrator, in its sole discretion, by electing to have the Company withhold Shares from delivery or by delivering already owned unrestricted Shares to the Company, in each case, Shares having a value equal to, or less
than, the minimum amount of tax required to be withheld, and paying any balance of the amount required to satisfy withholding requirements in cash. Such Shares shall be valued at their Fair Market Value on the date as of which the amount of tax to be withheld is determined. Any fractional share amounts remaining after the Company’s payments with respect to the Participant’s tax obligations shall be settled in cash. The Participant shall promptly notify the Company of any election made pursuant to Section 83(b) of the Code.
THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO ASSIST THE PARTICIPANT IN MAKING THIS FILING.
The Participant acknowledges that the tax laws and regulations applicable to the Restricted Shares and the disposition of the Restricted Shares following vesting are complex and subject to change, and it is the sole responsibility of the Participant to obtain the Participant’s own advice as to the tax treatment of the terms of this Agreement.
BY SIGNING THIS AGREEMENT, THE PARTICIPANT REPRESENTS THAT THE PARTICIPANT HAS REVIEWED WITH THE PARTICIPANT’S OWN TAX ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THAT THE PARTICIPANT IS RELYING SOLELY ON SUCH ADVISORS, AND NOT ON ANY STATEMENTS OR REPRESENTATIONS OF THE COMPANY, OR ANY AFFILIATE THEREOF, OR ANY AGENT OF THE COMPANY OR ANY AFFILIATE THEREOF. THE PARTICIPANT UNDERSTANDS AND AGREES THAT THE PARTICIPANT (AND NOT THE COMPANY) SHALL BE RESPONSIBLE FOR ANY TAX LIABILITY THAT MAY ARISE AS A RESULT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
10. Failure to Enforce Not a Waiver . The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.
11. Incorporation of Plan . The Plan is hereby incorporated by reference into, and made a part of, this Agreement, and the Restricted Shares and this Agreement shall be subject to all terms and conditions of the Plan.
12. Amendments; Construction . The Administrator may amend the terms of this Agreement prospectively or retroactively at any time, but no such amendment shall impair the rights of the Participant hereunder without the Participant’s consent, except as provided in Sections 5 and 12 of the Plan.
13. Survival of Terms . Except as otherwise expressly provided herein, this Agreement shall be binding upon and inure to the benefit of the Company and its
Affiliates, and their respective successors and assigns and the Participant and the Participant’s heirs, personal representatives, successors and assigns; provided, however, that nothing contained herein shall be construed as granting the Participant the right to Transfer any of the Restricted Shares, except in accordance with this Agreement and any transferee shall hold the Restricted Shares having only those rights, and being subject to the restrictions, provided for in this Agreement.
14. Rights as a Shareholder . Except as otherwise expressly provided in this Agreement, the Participant will have all of the rights of a shareholder with respect to all of the Restricted Shares (until and unless the Restricted Shares are forfeited), including, without limitation, the right to vote such shares and the right to receive all dividends or other distributions with respect to such Shares, both prior to and after the lapse and removal of the vesting restrictions set forth herein, and, if Shares are ultimately forfeited, prior to such forfeiture. In connection with the payment of any dividends, distributions or other type of payment to the Participant in respect of the Restricted Shares, the Company shall be entitled to deduct any taxes or other amounts required by any governmental authority to be withheld and paid over to such authority for the Participant’s account.
15. Agreement Not a Contract for Services . Neither the Plan, the granting of the Restricted Shares, this Agreement nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Participant has a right to continue to provide services as an officer, director, employee, consultant or advisor of the Company or any Affiliate thereof for any period of time or at any specific rate of compensation.
16. Authority of the Administrator; Disputes . The Administrator shall have full authority to interpret and construe the terms of the Plan and this Agreement. The determination of the Administrator as to any such matter of interpretation or construction shall be final, binding and conclusive.
17. Acceptance . The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions of the Plan and this Agreement, and accepts the Restricted Shares subject to all the terms and conditions of the Plan and this Agreement. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under this Agreement.
18. Miscellaneous .
(a) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified or amended except by a written agreement signed by the Company and the Participant. As of the date hereof, this Agreement shall supersede any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof, which have been made by either party or any Affiliate thereof.
(b) In the event any capital stock of the Company or any other corporation shall be distributed on, with respect to, or in exchange for shares of Stock of the Company as a stock (or share) dividend, stock (or share) split, spin-off, reclassification or recapitalization in connection with any merger, amalgamation, continuation into another jurisdiction or reorganization, the restrictions, rights and options set forth in this Agreement shall apply with respect to such other capital stock to the same extent as they are, or would have been applicable, to the Stock acquired hereunder on, or with respect to, which such other capital stock was distributed.
(c) No waiver of any breach or default hereunder shall be considered valid unless in writing, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. Anything in this Agreement to the contrary notwithstanding, any waiver, consent or other instrument under or pursuant to this Agreement signed by, or binding upon, the Participant shall be valid and binding upon any and all persons or entities (other than the Company and its Affiliates) who may, at any time, have or claim any rights under or pursuant to this Agreement in respect of the Restricted Shares.
(d) Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the fullest extent permitted by applicable law, the parties hereby waive any provision of law which may render any provision hereof prohibited or unenforceable in any respect.
(e) The obligations of the Company and the Participant under this Agreement which by their nature may require either partial or total performance after the Participant’s employment by the Company and its Subsidiaries is terminated shall survive such termination of employment.
(f) Should any party to this Agreement be required to commence any litigation concerning any provision of this Agreement or the rights and duties of the parties hereunder, the prevailing party in such proceeding shall be entitled, in addition to such other relief as may be granted, to the reasonable attorneys’ fees and court costs incurred by reason of such litigation.
(g) The Section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said Sections.
(h) Words in the singular shall be read and construed as though in the plural and words in the plural shall be read and construed as though in the singular in all cases where they would so apply. Words herein of any gender are deemed to include each other gender.
(i) This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same agreement, and all signatures need not appear on any one counterpart.
(j) This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, regardless of the law that might be applied under principles of conflict of laws.
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IN WITNESS WHEREOF, the Company and the Participant have duly executed this Agreement as of the date first above written.
| KAR AUCTION SERVICES, INC. | ||
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[Signature Page to Restricted Share Agreement]