Exhibit 10.1

EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”), dated and effective March 9, 2020
(the “Effective Date”), is entered into by and between KAR Auction Services,
Inc. (“Employer”) and John C. Hammer (“Employee”).
RECITALS
A. Employer desires to continue to employ Employee, and Employee desires to
accept such continued employment, on the terms and conditions set forth in this
Agreement.
B.  This Agreement shall be effective immediately and shall govern the
employment relationship between Employee and Employer from and after the
Effective Date, and, as of the Effective Date, supersedes and negates all
previous agreements and understandings with respect to such relationship
(including, without limitation, the Employment Agreement by and between Employer
and Employee dated January 25, 2018 (the “Prior Employment Agreement”)).
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1.  Employment Period. The period of employment of Employee by Employer
hereunder shall commence on the Effective Date and continue thereafter until
terminated pursuant to Section 4 of this Agreement (the “Employment Period”).
2.  Title and Duties. During the Employment Period, Employee shall serve as the
Chief Commercial Officer of Employer and President of ADESA, Inc. and shall
perform the duties and responsibilities inherent in such position and any other
duties consistent with such position as may be reasonably assigned to Employee
from time to time by Employer’s Chief Executive Officer, President or Board of
Directors of Employer (“Board”). Employee shall perform the duties of this
position in a diligent and competent manner and on a full-time basis during the
Employment Period.
3.  Compensation and Benefits.
(a) Base Salary. During the Employment Period, Employee shall be paid an annual
base salary of $546,000 (“Base Salary”), less withholdings and deductions
required by law or requested by Employee. Employee’s Base Salary may be adjusted
but may not be adjusted downward except in connection with across-the-board base
salary reductions, by the Board from time to time.
(b) Business Expenses. Employer shall reimburse Employee for all reasonable
business expenses incurred in performing services pursuant to this Agreement
upon Employee’s presentation to Employer, on a timely basis, of satisfactory

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documentation of such expenditures. Such expenses shall be reimbursed as soon as
administratively feasible, but in no event later than the end of the calendar
year following the calendar year in which the applicable expense was incurred.
Notwithstanding the foregoing, all such expenses shall be reimbursed upon any
termination of Employee’s employment under this Agreement, including without
limitation a termination for Cause.
(c) Annual Bonuses. In addition to Base Salary, Employee shall be eligible to
participate in the KAR Auction Services, Inc. Annual Incentive Plan (the “Bonus
Plan”) (as in effect from time to time). Except as provided in Section 4 and
Section 5 below, payment to Employee of any amounts under the Bonus Plan shall
be subject to Employee’s continued employment with Employer through December 31
of the calendar year to which such bonus relates. Payment of any bonus pursuant
to the Bonus Plan shall be made as soon as practicable but in no event later
than March 15 of the year following the calendar year to which such bonus
relates.
(d) Equity.  Employee shall be eligible to participate in all Employer incentive
programs extended to executive-level employees of Employer generally at levels
commensurate with Employee’s position, including without limitation the KAR
Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan.
(e) Employee Benefits. Employee shall be eligible to participate in Employer’s
health and welfare benefit programs, 401(k) benefit program, life and disability
insurance programs, and any other employee benefits, benefit plans, policies or
programs Employer provides to its executive-level employees, in each case, as
they may exist from time to time and subject to the terms and conditions
thereof. Nothing in this Agreement shall require Employer to maintain any
benefit plan, or shall preclude Employer from terminating or amending any
benefit plan from time to time.
(f) Vacation and Holidays. During the Employment Period, Employee shall be
entitled to annual paid vacation in accordance with Employer’s policy applicable
to executive-level employees, but in no event less than four (4) weeks of paid
vacation during each full calendar year of employment. Employee shall receive a
pro-rated portion of such vacation during Employee’s initial and final partial
calendar years of employment under this Agreement. Unused, earned vacation shall
not carry over from one calendar year to the next, unless Employer’s written
policies otherwise provide for such carry over. Upon termination of Employee’s
employment for any reason, Employer shall pay Employee for any unused, earned
vacation days based upon Employee’s then current Base Salary. Employee shall
also be entitled to all of the paid holidays recognized by Employer generally.
(g) Automobile Allowance. During the Employment Period, Employer shall pay
Employee an annual automobile allowance of at least Eighteen Thousand Dollars
($18,000). Such allowance shall be paid in accordance with Employer’s regular
payroll practices, as may be in effect from time to time, but in no event less
frequently than monthly.
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4.  Termination.
(a) Termination by Employer for Cause. Employer may terminate Employee’s
employment under this Agreement at any time for Cause after the Board, by the
majority vote of its members (excluding, for this purpose, any employee member
of the Board, if applicable) determines that the actions or inactions of
Employee constitute Cause, and Employee’s employment should accordingly be
terminated for Cause. In the event of a termination of Employee by Employer for
Cause, Employee or Employee’s estate, if applicable, shall be entitled to
receive: (i) Employee’s accrued Base Salary through the termination date, paid
within 30 days of the termination date or such earlier date as is required by
applicable law; (ii) an amount for reimbursement, paid within 30 days following
submission by Employee to Employer of appropriate supporting documentation for
any unreimbursed business expenses properly incurred prior to the termination
date by Employee pursuant to Section 3(b) and in accordance with Employer’s
policy; (iii) any accrued and unpaid vacation pay, paid within 30 days of the
termination date or such earlier date as is required by applicable law; and (iv)
such employee benefits, if any, to which Employee or Employee’s dependents may
be entitled under the employee benefit plans or programs of Employer, paid in
accordance with the terms of the applicable plans or programs (the amounts
described in clauses (i) through (iv) hereof being referred to as “Employee’s
Accrued Obligations”).
For purposes of this Agreement, “Cause” means (A) Employee’s willful, continued
and uncured failure to perform substantially Employee’s duties under this
Agreement (other than any such failure resulting from incapacity due to
medically documented illness or injury) for a period of fourteen (14) days
following written notice by Employer to Employee of such failure, (B) Employee
engaging in illegal conduct or gross misconduct that is demonstrably likely to
lead to material injury to Employer, monetarily or otherwise, (C) Employee’s
indictment or conviction of, or plea of nolo contendere to, a crime constituting
a felony or any other crime involving moral turpitude, (D) Employee’s material
breach of Employer’s Code of Business Conduct and Ethics, as amended by Employer
from time to time, or (E) Employee’s violation of Section 7 of this Agreement or
any other covenants owed to Employer by Employee.
(b) Termination by Employer without Cause. Employer may terminate Employee’s
employment under this Agreement without Cause at any time upon thirty (30) days’
prior written notice to Employee. In addition to the severance benefits provided
in Section 5, in the event of Employee’s termination by Employer without Cause,
Employer shall pay to Employee all of Employee’s Accrued Obligations.
(c) Termination by Employee for Good Reason. Employee may terminate Employee’s
employment under this Agreement for Good Reason. For purposes of this Agreement,
“Good Reason” means the occurrence of any of the following:
(i) Any material reduction of Employee’s authority, duties and responsibilities;
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(ii) Any material failure by Employer to comply with any of the terms and
conditions of this Agreement;
(iii) Any failure to timely pay or provide Employee’s Base Salary, or any
reduction in Employee’s Base Salary, excluding any Base Salary reduction made in
connection with across the board salary reductions;
(iv) The requirement by Employer that Employee relocate Employee’s principal
business location to a location more than fifty (50) miles from Employee’s
principal base of operation as of the Effective Date; or
(v) A Change of Control occurs and, if applicable, Employer fails to cause its
successor (whether by purchase, merger, consolidation or otherwise) to assume or
reaffirm Employer’s obligations under this Agreement without change. For
purposes of this Agreement, “Change of Control” shall have the meaning assigned
to such term under the KAR Auction Services, Inc. 2009 Omnibus Stock and
Incentive Plan.
Within ninety (90) days of the occurrence of a Good Reason event, Employee may
provide Employer with written notice of Employee’s termination of employment to
be effective thirty (30) days after delivery of such notice, during which
Employer shall have the opportunity to cure such Good Reason event. In the event
of a termination for Good Reason, in addition to the severance benefits provided
in Section 5, Employer shall pay to Employee all of Employee’s Accrued
Obligations.
(d) Termination by Employee without Good Reason. Employee may terminate
Employee’s employment under this Agreement at any time without Good Reason, upon
thirty (30) days’ prior written notice to Employer. In the event of a
termination described in this Section 4(d), Employer shall pay to Employee all
of Employee’s Accrued Obligations.
(e) Termination due to Employee’s death or Disability. Employee’s employment
under this Agreement shall terminate upon Employee’s (i) death, or
(ii) “Disability,” which for purposes of this Agreement means a “Total
Disability” (or equivalent) as defined under Employer’s Long Term Disability
Plan in effect at the time of the Disability. In the event of a termination
described in this Section 4(e), Employer shall pay to Employee all of Employee’s
Accrued Obligations. In addition, (i) Employer shall provide Employee with the
Continued Benefits (as defined below), (ii) Employer shall pay to Employee (or
Employee’s estate and/or beneficiaries), in a lump sum following effectiveness
of the release described in Section 6 and at the same time Employer pays annual
bonuses for such calendar year to its other executives, an amount equal to (x)
the actual bonus Employee would have received under the Bonus Plan had Employee
remained employed by Employer through the remainder of the calendar year in
which termination occurred, multiplied by (y) a fraction, the numerator of which
is the number of days Employee was employed in the calendar year in which
termination occurred and the denominator of which is 365 (the “Pro Rata Bonus”)
and (iii) Employer
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shall pay to Employee (or Employee’s estate and/or beneficiaries) an amount
equal to any annual bonus for a prior completed calendar year that is yet to be
calculated and/or paid to Employee, paid as soon as practicable following
effectiveness of the release described in Section 6 but in no event later than
March 15 of the year following the calendar year to which such bonus relates
(the “Earned But Unpaid Bonus”).
For purposes of this Agreement, “Continued Benefits” means continued coverage
for Employee (and Employee’s qualified beneficiaries’), at no cost to Employee,
under any medical plan or policy in which Employee was participating as of the
time of Employee’s termination of employment (as may be amended by Employer from
time to time in the ordinary course), to the extent that Employee timely elects
such continued coverage, until the earlier of: (A) eighteen (18) months
following the date of termination and (B) the date Employee is or becomes
eligible for comparable coverage under health plans of another employer, which
period shall run concurrently with the continuation period required to be
provided under the Consolidated Omnibus Budget Reconciliation Act; provided,
however, to the extent that Employer determines that such the provision of the
Continued Benefits would result in adverse tax consequences to Employer,
Employer may instead, in its discretion, provide substantially similar benefits
or payment outside of Employer’s benefit plans if Employer reasonably determines
that providing such alternative benefits or payment is appropriate to minimize
such potential adverse tax consequences and penalties.
(f) Resignation as Officer or Director. Upon a termination of Employee’s
employment hereunder for any reason, unless requested otherwise by Employer,
Employee shall resign each position (if any) that Employee then holds as an
officer or director of Employer or any of its Affiliates. For purposes of this
Agreement, “Affiliate” means an Affiliate of Employer within the meaning of Rule
12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as
amended.
5.  Severance Benefits.
(a) Qualifying Termination. In the event of a termination of Employee’s
employment under Section 4(b) or 4(c) of this Agreement that is not a COC
Qualifying Termination (as defined below), Employer shall provide Employee with
the following severance benefits:
(i) Employer shall pay to Employee an amount equal to one and a half (1.5) times
the sum of (x) Employee’s annual Base Salary and (y) Employee’s bonus at target
for the year in which termination occurs, which shall be paid by Employer to
Employee in a lump sum as soon as practicable following (and subject to)
effectiveness of the release described in Section 6 but in no event later than
sixty (60) days following the date of termination, provided that if such sixty
(60) day period covers two taxable years, payment shall be made in the second
taxable year.
(ii) The Continued Benefits;
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(iii) The Pro Rata Bonus; and
(iv) The Earned But Unpaid Bonus.
(b) COC Qualifying Termination. In the event of a termination of Employee’s
employment under Section 4(b) or 4(c) of this Agreement that occurs within two
(2) years following a Change of Control (a “COC Qualifying Termination”),
Employer shall provide Employee with the following severance benefits:
(i) Employer shall pay to Employee an amount equal to two (2) times the sum of
(x) Employee’s annual Base Salary and (y) Employee’s bonus at target for the
year in which termination occurs, which shall be paid by Employer to Employee in
a lump sum as soon as practicable following (and subject to) effectiveness of
the release described in Section 6 but in no event later than sixty (60) days
following the date of termination, provided that if such sixty (60) day period
covers two taxable years, payment shall be made in the second taxable year.
(ii) The Continued Benefits;
(iii) The Pro Rata Bonus; and
(iv) The Earned But Unpaid Bonus.
6.  Release of Claims. As a condition to the receipt of any payments or benefits
described in Section 5 of this Agreement, subsequent to the termination of the
employment of Employee (other than any Accrued Benefits or any payment or
benefits payable on account of Employee’s death), Employee shall be required to
execute, and not subsequently revoke, within fifty-five (55) days following the
termination of Employee’s employment a release and separation agreement, in a
form reasonably satisfactory to Employer, of all claims arising out of or
related to Employee’s employment or the termination thereof.
7.  Restricted Activities.
(a) Acknowledgements. Employee understands and acknowledges that Employer has
invested, and continues to invest, substantial time, money and specialized
knowledge into developing its resources, creating a customer base, generating
customer and potential customer lists, training its employees, and improving its
offerings in the vehicle remarketing industry and other applicable industries.
Employee understands and acknowledges that as a result of these efforts,
Employer has created, and continues to use and create, Confidential Information
(as defined below) and that such Confidential Information is integral to
providing Employer with a competitive advantage over others in the marketplace.
Employee further understands and acknowledges that the nature of Employee’s
position gives him access to and knowledge of Confidential Information and
places him in a position of trust and confidence with Employer.
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(b) Confidential Information. Employee acknowledges and agrees that Confidential
Information is the property of Employer, and that Employee shall not acquire any
ownership rights in Confidential Information. Employee (i) shall use
Confidential Information solely in connection with Employee’s employment with
Employer; (ii) shall not directly or indirectly disclose, use or exploit any
Confidential Information for Employee’s own benefit or for the benefit of any
person or entity, other than Employer, both during and after Employee’s
employment with Employer; and (iii) shall hold Confidential Information in trust
and confidence, and use all reasonable means to assure that it is not directly
or indirectly disclosed to or copied by unauthorized persons or used in an
unauthorized manner, both during and after Employee’s employment with Employer.
To the extent that Employee creates or develops any Confidential Information
during the course of Employee’s employment with Employer, it shall be the sole
and exclusive property of Employer. For purposes of this Agreement,
“Confidential Information” shall mean any proprietary, confidential and
competitively-sensitive information and materials which are the property of
Employer or its Affiliates, excluding information and materials generally known
or available to the public, other than as a result of Employee’s breach of this
Section 7, and including without limitation (A) trade secrets, inventions,
ideas, innovations, developments, methods, processes, systems and technologies,
(B) business and technical information that gives Employer or its Affiliates a
competitive advantage, and (C) information concerning Employer’s or any of its
Affiliates’ customers, suppliers, vendors, licensors, affiliates, financing
sources, profits, revenues, financial condition, pricing, training programs,
service techniques, service processes, business processes, marketing plans, and
business strategies.
(c) Defend Trade Secrets Act.  Pursuant to 18 U.S.C. § 1833(b), Employee will
not be held criminally or civilly liable under any Federal or State trade secret
law for the disclosure of a trade secret of Employer that (i) is made (A) in
confidence to a Federal, State, or local government official, either directly or
indirectly, or to Employee’s attorney and (B) solely for the purpose of
reporting or investigating a suspected violation of law; or (ii) is made in a
complaint or other document that is filed under seal in a lawsuit or other
proceeding.  If Employee files a lawsuit for retaliation by Employer for
reporting a suspected violation of law, Employee may disclose the trade secret
to Employee’s attorney and use the trade secret information in the court
proceeding, if Employee (i) files any document containing the trade secret under
seal, and (ii) does not disclose the trade secret, except pursuant to court
order.  Nothing in this Agreement is intended to conflict with 18 U.S.C. §
1833(b) or create liability for disclosures of trade secrets that are expressly
allowed by such section. Further, nothing in any agreement Employee has with
Employer shall prohibit or restrict Employee from making any voluntary
disclosure of information or documents to any governmental agency or legislative
body, or any self-regulatory organization, in each case, without advance notice
to Employer. Nothing in this Agreement shall prohibit or restrict Employee from
(i) making any disclosure of information required by law or (ii) providing
information to, testifying or otherwise assisting in any investigation or
proceeding brought by any Federal or State regulatory or law enforcement agency
or legislative body, or any self-regulatory organization.
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(d) Intellectual Property. Employee agrees to promptly disclose to Employer and
hereby assigns and agrees to assign, without further compensation, to Employer,
Employee’s entire right, title and interest in each and every invention (whether
or not patentable), innovation, technical information and copyrightable work, in
which Employee participates during Employee’s employment with Employer whether
or not during working hours, that pertains to Employer’s or any of its
Affiliates’ business or is aided by the use of time, material, or facilities of
Employer or its Affiliates. Employee further agrees to perform all reasonable
acts, including executing necessary documents, requested by Employer to assist
it, without further compensation, in obtaining and enforcing its property rights
in the above.
(e) Non-Competition. During Employee’s employment with Employer and for a period
of one (1) year immediately following the termination of Employee’s employment
for any reason, Employee shall not, directly or indirectly, on his or her behalf
or on behalf of any other person or entity, provide any labor, work, services,
assistance or advice for or on behalf of any Competitor (as defined below), in
any geographic market in which Employer or any of its Affiliates conduct
business (the “Territory”). In addition, Employee shall not, during Employee’s
employment with Employer and for a period of one (1) year immediately following
the termination of Employee’s employment for any reason, directly or indirectly,
either alone or in conjunction with any other person, engage or invest in, own,
manage, operate, finance, control or participate in the ownership, management,
operation, financing or control of any Competitor within the Territory. Nothing
herein shall prohibit Employee from purchasing or owning less than five percent
(5%) of the publicly traded securities of any corporation, provided that such
ownership represents a passive investment and that Employee is not a controlling
person of, or a member of a group that controls, such corporation. For purposes
of this Agreement, “Competitor” means any person or entity engaged in the
business of wholesale, retail or consumer vehicle remarketing activities,
including but not limited to vehicle auctions (including physical, electronic,
mobile app and/or digital auctions), dealer floor plan financing and other
products, services and technologies relating to vehicle remarketing within the
Territory, provided that Employer or any of its Affiliates is engaged in such
businesses.
(f) Non-Solicitation/Non-Interference. During Employee’s employment with
Employer and for a period of one (1) year immediately following the termination
of Employee’s employment for any reason, Employee shall not (i) induce or
attempt to induce any employee of Employer or any of its Affiliates to leave the
employ of Employer or its Affiliates, or in any way interfere with the
relationship between Employer and its Affiliates and any of their respective
employees, or (ii) induce or attempt to induce any customer, client, member,
supplier, licensee, licensor or other business relation of Employer or its
Affiliates to cease doing business with Employer or its Affiliates, or otherwise
interfere with the business relationship between Employer or its Affiliates and
any such customer, client, member, supplier, licensee, licensor or business
relation.
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(g) Cooperation. Employee agrees that at all times following the termination of
Employee’s employment for any reason, Employee will cooperate in all reasonable
respects (after taking into account Employee’s personal and professional
schedule) with Employer and in connection with any and all existing or future
litigation, actions or proceedings arising with respect to the period of
Employee’s employment with Employer (whether civil, criminal, administrative,
regulatory or otherwise) brought by or against Employer, to the extent Employer
reasonably deems Employee’s cooperation necessary, provided that Employer shall
use reasonable efforts to limit Employee’s need to travel in connection with
providing such cooperation. Employee shall be reimbursed for all reasonable
out-of-pocket expenses incurred by Employee as a result of such cooperation.
With respect to any and all existing or future litigation, actions or
proceedings (whether civil, criminal, administrative, regulatory or otherwise)
brought against Employee in connection with Employee’s employment by Employer,
Employer will honor, and proceed in accordance with, its bylaws as in effect
from time to time and any indemnification agreement, plan or policy in effect
and applicable to Employee as of the date of Employee’s termination of
employment with Employer.
8.  Section 409A. The payments and benefits under this Agreement and the terms
of any release agreement are intended to be exempt from Section 409A of the
Internal Revenue Code of 1986, as amended (“Code”), and the regulations
promulgated thereunder (“Section 409A”) and, accordingly, to the maximum extent
permitted, this Agreement and any release agreement shall be interpreted and
administered consistent with such intent. If under this Agreement, an amount is
to be paid in two or more installments, for purposes of Section 409A, each
installment shall be treated as a separate payments. Without limiting the
foregoing, solely to the extent required to avoid the imposition of any
additional tax or interest to Employee under Section 409A, any payments,
benefits and other obligations under this Agreement that arise in connection
with Employee’s “termination of employment,” “termination” or similar reference
in this Agreement shall be triggered only if such termination of employment
qualifies as a “separation from service” within the meaning under Section 409A.
Notwithstanding any other provision of this Agreement, if at the time of the
termination of Employee’s employment, Employee is a “specified employee,” for
purposes of Section 409A, and any payments or benefits upon such termination
including but not limited to payments or benefits under this Agreement would
otherwise result in additional tax or interest to Employee under Section 409A,
Employee will not be entitled to receive such payments or benefits until the
date that is six (6) months after the termination of Employee’s employment for
any reason, subject to earlier immediate payment if Employee dies during such
six (6) month period. To the extent required to avoid the imposition of any
additional tax or interest under Section 409A, amounts reimbursable to under
this Agreement shall be paid to Employee on or before the last day of the year
following the year in which the expense was incurred and the amount of expenses
eligible for reimbursement (and in-kind benefits provided to Employee) during
any one year may not affect amounts reimbursable or provided in any subsequent
year. If any provision of this Agreement would subject Employee to any
additional tax or interest under Section 409A, then Employer shall use its best
efforts to amend such provision; provided that Employer shall not incur any
additional expense as a result of such amendment. Notwithstanding any other
provision hereof,
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in no event shall Employer be liable for, or be required to indemnify Employee
for, any liability of Employee for taxes or penalties under Section 409A.
9. Section 280G.
(a) Notwithstanding anything in this Agreement to the contrary, in the event
that any payment or benefit received or to be received by Employee (including
any payment or benefit received in connection with a Change of Control or the
termination of Employee’s employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement) (all such payments and
benefits being hereinafter referred to as the “Total Payments”) would not be
deductible (in whole or part) by Employer or any of its Affiliates making such
payment or providing such benefit as a result of Section 280G of the Code
(“Section 280G”), then, to the extent necessary to make such portion of the
Total Payments deductible (and after taking into account any reduction in the
Total Payments provided by reason of Section 280G in such other plan,
arrangement or agreement), the Total Payments shall be reduced (if necessary, to
zero) in the manner specified in Section 9(b) hereof; provided, however, that
such reduction shall only be made if (i) the amount of such Total Payments, as
so reduced (and after subtracting the net amount of federal, state and local
income taxes on such reduced Total Payments) is greater than or equal to
(ii) the amount of such Total Payments without such reduction (but after
subtracting the net amount of federal, state and local income taxes on such
Total Payments and the amount of the excise tax imposed under Section 4999 of
the Code (the “Excise Tax”) on such unreduced Total Payments).
(b) If it is determined that the Total Payments should be reduced in accordance
with the Section 9(a) hereof, then such reduction shall be applied in the
following order: (i) payments that are payable in cash that are valued at full
value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if
necessary, to zero), with amounts that are payable last reduced first;
(ii) payments due in respect of any equity valued at full value under Treasury
Regulation Section 1.280G-1, Q&A 24(a) will be reduced next (if necessary, to
zero), with amounts that are payable or deliverable last reduced first;
(iii) payments that are payable in cash that are valued at less than full value
under Treasury Regulation Section 1.280G-1, Q&A 24 will be reduced next (if
necessary, to zero), with the highest values reduced first (as such values are
determined under Treasury Regulation Section 1.280G-1, Q&A 24); (iv) payments
due in respect of any equity valued at less than full value under Treasury
Regulation Section 1.280G-1, Q&A 24 will be reduced next (if necessary, to
zero), with the highest values reduced first (as such values are determined
under Treasury Regulation Section 1.280G-1, Q&A 24); and (v) all other non-cash
benefits not otherwise described in clauses (ii) or (iv) of this Section 9(b)
will be next reduced pro-rata.
(c) It is possible that, after the determinations and selections made pursuant
to Section 9(a) hereof, Employee will receive Total Payments that are, in the
aggregate, either more or less than the amount determined under Section 9(a)
hereof (hereafter referred to as an “Excess Payment” or “Underpayment”, as
applicable). If it is
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established, pursuant to a final determination of a court or an Internal Revenue
Service proceeding that has been finally and conclusively resolved, that an
Excess Payment has been made, then Employee shall, except to the extent that it
would cause a violation of the Sarbanes-Oxley Act of 2002, promptly repay the
Excess Payment to Employer, together with interest on the Excess Payment at the
applicable federal rate (as defined in Section 1274(d) of the Code) from the
date of Employee’s receipt of such Excess Payment until the date of such
repayment. In the event that it is determined (i) by arbitration pursuant to
Section 10 hereof, (ii) by a court or (iii) by the accounting firm which was,
immediately prior to a Change of Control, Employer’s independent auditor, upon
request of either party, that an Underpayment has occurred, Employer shall
promptly pay an amount equal to the Underpayment to Employee (but in any event
within ten (10) days of such determination), together with interest on such
amount at the applicable federal rate from the date such amount would have been
paid to Employee had the provisions of Section 9(a) hereof not been applied
until the date of payment.
10.  Arbitration. Any dispute, controversy or claim arising out of or relating
to this Agreement, the breach, termination, enforcement, interpretation, or
validity thereof (including the determination of the scope or applicability of
this arbitration agreement), or its subject matter shall be subject and resolved
by binding arbitration administered by a single arbitrator from the American
Arbitration Association. The parties acknowledge and agree that Employer is
involved in transactions involving interstate commerce and that the Federal
Arbitration Act shall govern any arbitration pursuant to this Agreement. Such
arbitration shall be conducted in accordance with the commercial rules and
regulations promulgated by the American Arbitration Association applying the
laws of the State of Indiana. The arbitration shall be conducted in
Indianapolis, Indiana. Discovery shall be completed within ninety (90) days of
the filing of the complaint and the arbitration shall be held no later than one
hundred twenty (120) days after the filing of the complaint. A record of the
proceedings shall be kept by a qualified court reporter. The decision of the
arbitrator shall contain findings of fact and conclusions of law, and shall be
made within thirty (30) days of the arbitration and shall be final and binding
on the parties, and shall be unappealable. The decision may be enforced in any
court having jurisdiction over the parties and the subject matter. Costs of the
arbitrator shall be split equally between Employer and Employee.
11. Miscellaneous Provisions.
(a) Notices. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or by email or mailed by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below:
         To Employer:  KAR Auction Services, Inc.
            11299 North Illinois Street
            Carmel, IN 46032
            Attention: James P. Hallett
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            Email: jim.hallett@karglobal.com

         To Employee:  At Employee’s address on file with Employer
            

(b) Entire Agreement. This Agreement sets forth the entire agreement between
Employer and Employee with respect to the subject matter of this Agreement and
fully supersedes all prior negotiations, representations and agreements, whether
written or oral, between Employer and Employee with respect to the subject
matter of this Agreement (including, without limitation, the Prior Employment
Agreement).
(c) Severability. The provisions of this Agreement are severable and shall be
separately construed. If any of them is determined to be unenforceable by any
court, that determination shall not invalidate any other provision of this
Agreement.
(d) Amendment and Waiver. This Agreement may not be modified, amended or waived
in any manner except by a written document executed by Employer and Employee.
The waiver by either party of compliance with any provision of this Agreement by
the other party shall not operate or be construed as a waiver of any other
provision of this Agreement (whether or not similar), or a continuing waiver or
a waiver of any subsequent breach by such party of a provision of this
Agreement.
(e) No Mitigation. In no event shall Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Employee under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not Employee obtains other employment.
(f) Successors and Assigns. This Agreement and the covenants herein shall extend
to and inure to the benefit of the successors and assigns of Employer. Employer
shall require any successor (whether by purchase, merger, consolidation or
otherwise) to assume or reaffirm, as applicable, Employer’s obligations under
this Agreement without change. Failure of Employer to obtain such an assumption
shall entitle Employee to terminate Employee’s employment under this Agreement
for Good Reason.
(g) Headings. Numbers and titles to Sections hereof are for information purposes
only and, where inconsistent with the text, are to be disregarded.
(h) Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which when taken together,
shall be and constitute one and the same instrument.
(i) Governing Law and Forum. This Agreement shall be governed by and construed
according to the internal laws of the State of Indiana, without regard to
conflict of law principles.
[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.

“Employer”“Employee”KAR AUCTION SERVICES, INC.
By: /s/ James P. Hallett
        /s/ John C. Hammer
Printed: James P. Hallett
Title: Chief Executive Officer