Lead Independent Director Charter

I. Introduction

If the Chairman of the Board of Directors (the “Board”) of KAR Auction Services, Inc. (the “Company”) is not qualified as an independent director under the listing standards of the New York Stock Exchange (“Independent Director”), the Board will designate one of the Independent Directors to serve as a lead Independent Director (the “Lead Independent Director”). If the Chairman of the Board (“Chairman”) is an Independent Director then the duties of the Lead Independent Director described herein shall be a part of the duties of the Chairman.

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II. Responsibilities

The specific responsibilities of the Lead Independent Director are as follows:

Presides at Executive Sessions

Calls, develops the agenda for and presides at executive sessions of the Independent Directors. Presides at all meetings of the Board at which the Chairman and CEO is not present.

Functions as Interim Chairman, if Necessary

In the event that the Chairman is unable to perform his duties, the Lead Independent Director shall serve as the interim Chairman until the Board can convene and appoint a permanent Chairman.

Calls Meetings of Independent Directors

Has the authority to call meetings of the Independent Directors.

Functions as Liaison with the Chairman and CEO

Serves as principal liaison on Board-wide issues between the Independent Directors and the Chairman and CEO and facilitates communication generally between directors.

Provides prompt and candid feedback to the Chairman and CEO, when appropriate.

Reviews appropriate provision of information to the Board such as board meeting agendas and schedules

Reviews, in consultation with the Chairman and CEO, the meeting schedules to assure there is sufficient time for discussion of all agenda items.
Reviews, in consultation with the Chairman and CEO, the agenda for Board meetings.
Reviews, in consultation with the Chairman and CEO, information sent to the Board, including the quality, quantity, appropriateness and timeliness of such information.

Conducts Evaluation of Chairman and CEO

Together with the Compensation Committee of the Board, conducts an annual evaluation of the Chairman and CEO, including an annual evaluation of his or her interactions with the Independent Directors.

Authorizes Retention of Outside Advisors and Consultants

Recommend to the Independent Directors the retention of advisors and consultants who report directly to the Board and, upon approval by the Independent Directors, retain such advisors and consultants.

Stockholder Communication

If requested by stockholders, ensures that he/she is available, when appropriate, for consultation and direct communication.

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III. Appointment and Compensation

The Lead Independent Director shall be elected by a majority of the Independent Directors annually until the Lead Independent Director’s successor is duly elected, or until the Lead Independent Director’s earlier death, resignation as a director of the Company or as the Lead Independent Director, replacement as Lead Independent Director by a majority of the Independent Directors, or the Board elects a Chairman of the Board that qualifies as an Independent Director. A majority of the Independent Directors may rotate the designation of the Lead Independent Director at any time.

The Lead Independent Director shall receive an annual cash retainer in an amount to be determined annually by a majority of the Independent Directors and as recommended by the Nominating and Corporate Governance Committee.

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IV. Qualifications

The Lead Independent Director must:

  1. Qualify as an Independent Director;
  2. Be able to effectively work closely with and in an advisory capacity to the Chairman;
  3. Demonstrates knowledge and expertise of the Company’s core business, strategy and operating issues;
  4. Be available to effectively discuss with other directors any concerns about the Board or the Company and to relay those concerns, where appropriate to the Chairman;
  5. Help optimize the effectiveness of the Board and ensure that it operates independently of management;
  6. Be familiar with Board governance and related procedures through experience as an Independent Director of the Company or at another company engaged in business activities of a breadth and level of complexity comparable to those of the Company.
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V. Absence of Lead Independent Director

If the Lead Independent Director is not present a meeting of the Board, a majority of the Independent Directors present shall select an Independent Director to act as Lead Independent Director for the duration of the meeting.

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