Exhibit 10.2

 

KAR Auction Services, Inc.

 

2009 OMNIBUS STOCK AND INCENTIVE PLAN

 

PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT

2013 AWARD

 

THIS AGREEMENT (the “Agreement”) is made between KAR Auction Services, Inc., a
Delaware corporation (the “Company”), and [NAME] (the “Recipient”) pursuant to
the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan, as amended
(the “Plan”).  Capitalized terms used but not otherwise defined herein shall
have the meanings assigned to such terms in the Plan.  The parties hereto agree
as follows:

 

1.             Grant of Restricted Stock Units.  The Company hereby grants to
the Recipient a target number of [              ] Restricted Stock Units (the
“Award”) as of December 13, 2013 (the “Grant Date”), subject to the terms and
conditions of the Plan and this Agreement.  The Restricted Stock Units shall
vest based on the Company’s performance during the “Period of Restriction,” as
specified in Section 4 and pursuant to the terms of this Agreement. A
“Restricted Stock Unit” is an “Other Share-Based Award” under the Plan and each
Restricted Stock Unit entitles the Recipient to a share of Common Stock upon
vesting subject to the terms of this Agreement.

 

2.             Restrictions.  The Restricted Stock Units may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, whether
voluntarily or involuntarily or by operation of law.  The Recipient shall have
no rights in the Common Stock underlying the Restricted Stock Units until the
termination of the Period of Restriction specified in Section 4 below or as
otherwise provided in the Plan or this Agreement.  The Recipient shall not have
any voting rights with respect to the Restricted Stock Units, nor shall the
Recipient receive or be entitled to receive any dividends or dividend
equivalents with respect to the Restricted Stock Units.

 

3.             Restricted Stock Unit Account.  The Company shall maintain an
account (the “Restricted Stock Unit Account” or “Account”) on its books in the
name of the Recipient, which shall reflect the number of Restricted Stock Units
awarded to the Recipient.

 

4.             Period of Restriction.  Subject to the provisions of the Plan and
this Agreement, unless vested or forfeited earlier as described in Section 5, 6,
or 7 of this Agreement, as applicable, the number of Restricted Stock Units that
shall become vested shall be calculated in accordance with the chart below,
based on the percentile rank of the Company’s “Total Shareholder Return”
relative to the Total Shareholder Return of the “S&P 500 Companies” for the
“Measurement Period,” calculated as of the “Measurement Date” (each as defined
below).  If the Total Shareholder Return percentile rank falls between Threshold
and Target or between Target and Maximum levels of performance, the number of
Restricted Stock Units that vest shall

 

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be calculated using straight-line interpolation.  Such vesting shall occur upon
certification by the Committee that the applicable performance criteria have
been met.

 

Total Shareholder Return Percentile Rank
vs. S&P 500 During the Measurement
Period

 

Number of Restricted Stock Units Vesting

Below Threshold:

 

 

Below 40th percentile

 

0

Threshold:

 

 

40th percentile

 

[0.5x]

Target:

 

 

65th percentile

 

[x]

Maximum:

 

 

Greater than or equal to 85th percentile

 

[2x]

 

x = [Target number of Restricted Stock Units]

 

“Total Shareholder Return” shall mean the percentage change in the Fair Market
Value of a share of Common Stock (plus reinvested dividends and other
distributions paid on the Common Stock and adjusted to offset any changes in
capitalization affecting the value of a share of Common Stock, including stock
dividends, stock splits, reverse stock splits and similar events that occur
prior to the end of the Measurement Period) during the Measurement Period.
 Twenty (20) trading day average closing values of the Common Stock and the
stock of the S&P 500 Companies, as applicable (i.e., average closing values over
the period of 20 trading days ending on the Grant Date and the final 20 trading
days ending on the Measurement Date), shall be used to value the Common Stock
and the stock of the S&P 500 Companies, as applicable, at the beginning and end
of the Measurement Period.

 

“S&P 500 Companies” shall mean all companies in the S&P 500 Index as of the
Grant Date which remain publicly traded throughout the entire Measurement
Period.  Companies which were part of the S&P 500 Index as of the Grant Date but
are no longer publicly traded as of the Measurement Date shall be excluded
except that companies which were part of the S&P 500 Index as of the Grant Date
but are not longer publicly traded due to filing for bankruptcy prior to the
Measurement Date shall be assigned a Total Shareholder Return of -100% for the
Measurement Period.

 

“Measurement Period” shall mean the period commencing on Grant Date and ending
on the Measurement Date.

 

“Measurement Date” shall mean December 13, 2016 (or earlier in accordance with
Section 7).

 

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Upon vesting, all vested Restricted Stock Units shall cease to be considered
Restricted Stock Units, subject to the terms and conditions of the Plan and this
Agreement, and the Recipient shall be entitled to receive one share of Common
Stock for each vested Restricted Stock Unit in the Recipient’s Restricted Stock
Unit Account.

 

5.             Vesting upon Termination by the Company without Cause, by the
Recipient for Good Reason or due to Retirement, Disability or Death.  If, from
the Grant Date until the “Payment Date” (as defined in Section 9), the Recipient
experiences a termination of employment by the Company without Cause, by the
Recipient due to “Good Reason” (as defined in the Recipient’s employment
agreement with the Company, to the extent applicable) or by reason of
Retirement, Disability or death, then the Recipient shall be entitled to
receive, on the Payment Date, a number of shares of Common Stock the Recipient
would have been entitled to under Section 4 if he or she had remained employed
until the last day of the Period of Restriction (based on actual performance
during the Period of Restriction, as described in Section 4) multiplied by a
fraction, the numerator of which shall be the number of full calendar months
during the period of the Grant Date through the date the Recipient’s employment
terminated and the denominator of which shall be 36, the total number of months
in the Period of Restriction.

 

6.             Forfeiture upon Termination by the Company for Cause or upon
Recipient’s Resignation Without Good Reason.  If, from the Grant Date until the
“Payment Date” (as defined in Section 9), the Recipient experiences a
termination of employment by the Company for Cause or by the Recipient other
than for “Good Reason” (as defined in the Recipient’s employment agreement with
the Company, to the extent applicable), then the Recipient shall forfeit any
Restricted Stock Units that are subject to the Period of Restriction on the date
of such termination of employment.

 

7.             Vesting upon Change in Control.  Upon a Change in Control
occurring during the Measurement Period, the Measurement Date shall be the date
of the consummation of such Change in Control.  The number of Restricted Stock
Units earned during the Measurement Period, if any, shall become vested on
December 13, 2016, subject to the Recipient’s continued employment with the
Company or its successor through such date, and be paid in accordance with
Section 9. Notwithstanding the foregoing, if the Recipient is terminated by the
Company without Cause or the Recipient resigns due to “Good Reason” (as defined
in the Recipient’s employment agreement with the Company, to the extent
applicable) after the consummation of the Change in Control but before
December 13, 2016, the number of Restricted Stock Units earned during the
Measurement Period, if any, shall become immediately vested on the date of such
termination of employment and be paid as soon as administratively feasible
thereafter (but in no event later than March 15 of the year following the year
in which such termination of employment occurs).

 

8.             Adjustment in Capitalization.  In the event of any change in the
Common Stock through stock dividends or stock splits, a corporate split-off or
split-up, or recapitalization, merger, consolidation, exchange of shares, or a
similar event, the number of Restricted Stock Units subject to this Agreement
shall be equitably adjusted by the Committee.

 

9.             Delivery of Stock Certificates.  Subject to the requirements of
Sections 10 and 11 below, as promptly as practicable after the Committee
certifies that Restricted Stock Units

 

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ceased to be subject to the Period of Restriction in accordance with this
Agreement, but in no event later than March 15 of the year following the year in
which the shares became vested (the “Payment Date”), the Company may, if
applicable, cause to be issued and delivered to a brokerage account for the
benefit of the Recipient certificates or electronic book entry credit for the
shares of Common Stock that correspond to the vested Restricted Stock Units.

 

10.          Tax Withholding.  Whenever Common Stock is to be issued or any
payment is to be made under this Agreement, the Company or any Subsidiary shall
have the power to withhold, or require the Recipient 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 any payment or issuance of Common Stock
until such requirements are satisfied.

 

11.          Securities Laws.  This Award is a private offer that may be
accepted only by a Recipient who satisfies the eligibility requirements outlined
in the Plan and the Committee’s administrative procedures.  The future value of
Common Stock acquired under the Plan is unknown and could increase or decrease.

 

Neither the Plan nor any offering materials related to the Plan may be
distributed to the public.  The Common Stock should be resold only on the New
York Stock Exchange and should not be resold to the public except in full
compliance with local securities laws.

 

12.          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 Recipient’s employment at any time, or confer upon the Recipient
any right to continue in the employ of the Company or any Subsidiary.

 

13.          Compliance with Code Section 409A.  Notwithstanding any provision
of the Plan or this Agreement to the contrary, the Award is intended to be
exempt from or, in the alternative, comply with Code Section 409A and the
interpretive guidance thereunder, including the exceptions for stock rights and
short-term deferrals.  The Plan and the Agreement will be construed and
interpreted in accordance with such intent.  References in the Plan and this
Agreement to “termination of employment” and similar terms shall mean a
“separation from service” within the meaning of that term under Code
Section 409A.  Any payment or distribution that is to be made to a Recipient who
is a “specified employee” of the Company within the meaning of that term under
Code Section 409A and as determined by the Committee, on account of a
“separation from service” under Code Section 409A, may not be made before the
date which is six months after the date of such “separation from service,”
unless the payment or distribution is exempt from the application of Code
Section 409A by reason of the short-term deferral exemption or otherwise.

 

14.          Dividend Equivalents. The Recipient will accrue dividend
equivalents with respect to the Award. Dividend equivalents represent the right
to receive additional shares of Common Stock in the future, subject to the terms
and conditions of this Agreement. Dividend equivalents will be determined based
on the dividends that the Recipient would have received, had the Recipient held
shares of Common Stock equal to the vested number of Restricted Stock Units from
the Grant Date until the Payment Date, and assuming that the dividends were

 

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reinvested in Common Stock (and any dividends on such shares were reinvested in
Common Stock). The dividend equivalents will be subject to the same transfer
restrictions and forfeiture and vesting conditions as specified in this
Agreement.

 

15.          No Fractional Shares.  No fractional shares of Common Stock shall
be issued or delivered under this Agreement.  The Committee shall determine
whether cash or other property shall be issued or paid in lieu of such
fractional shares of Common Stock or whether such fractional shares of Common
Stock or any rights thereto shall be forfeited or otherwise eliminated.

 

16.          Amendment.  The Committee may at any time amend, modify or
terminate this Agreement; provided, however, that no such action of the
Committee shall adversely affect the Recipient’s rights under this Agreement
without the consent of the Recipient.  The Committee, to the extent it deems
necessary or advisable in its sole discretion, reserves the right, but shall not
be required, to unilaterally amend or modify this Agreement so that the Award
qualifies for exemption from or complies with Code Section 409A; provided,
however, that the Committee and the Company make no representations that the
Award shall be exempt from or comply with Code Section 409A and make no
undertaking to preclude Code Section 409A from applying to the Award.

 

17.          Plan Terms and Committee Authority.  This Agreement and the rights
of the Recipient hereunder are subject to all of the terms and conditions of the
Plan, as it may be amended from time to time, as well as to such rules and
regulations as the Committee may adopt for administration of the Plan.  It is
expressly understood that the Committee is authorized to administer, construe
and make all determinations necessary or appropriate for the administration of
the Plan and this Agreement, all of which shall be binding upon the Recipient. 
Any inconsistency between this Agreement and the Plan shall be resolved in favor
of the Plan.  The Recipient hereby acknowledges receipt of a copy of the Plan
and this Agreement.

 

18.          Severability.  If any provision of this Agreement is determined to
be invalid, illegal or unenforceable in any jurisdiction, or as to any person,
or would disqualify the Plan or the Agreement under any law deemed applicable by
the Board, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Board’s determination, materially altering the intent of the Plan or the
Agreement, such provision shall be stricken as to such jurisdiction or person,
and the remainder of the Agreement shall remain in full force and effect.

 

19.          Governing Law and Jurisdiction.  The Plan and this Agreement shall
be construed in accordance with and governed by the laws of the State of
Delaware, United States of America.  The jurisdiction and venue for any disputes
arising under, or any action brought to enforce (or otherwise relating to), the
Plan will be exclusively in the courts in the State of Indiana, County of
Hamilton, United States of America, including the Federal Courts located therein
(should Federal jurisdiction exist).

 

20.          Successors.  All obligations of the Company under this Agreement
will be binding on any successor to the Company, whether the existence of the
successor results from a direct or indirect purchase of all or substantially all
of the business or assets of the Company or both, or a merger, consolidation or
otherwise.

 

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21.          Erroneously Awarded Compensation.  This Award shall be subject to
any compensation recovery policy adopted by the Company to comply with
applicable law, including, without limitation, the Dodd-Frank Wall Street Reform
and Consumer Protection Act, or to comport with good corporate governances
practices, as such policy may be amended from time to time.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the Recipient and the Company have executed this Agreement
as of this        day of                   ,           .

 

 

 

 

KAR AUCTION SERVICES, INC.

 

 

 

 

 

By:

 

 

 

 

 

[NAME]

 

Its:

 

 

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