OPENLANE, Inc. (OPLN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I am Jim Hallett, Executive Chairman and Chairman of the Board of KAR Global. It is my pleasure on behalf of the Board of Directors and the officers of KAR to extend to you a warm welcome and to express our appreciation to you for attending our 2021 Annual Meeting of Stockholders. We're excited to be hosting a virtual meeting again this year, which allows us to reach a greater number of our stockholders and keep everyone safe during the pandemic. I will preside as Chairman of the meeting; and Chuck Coleman, Chief Legal Officer and Secretary, will serve as Secretary of the meeting. Copies of our proxy statement and the annual report are available on the annual meeting web portal. At this time, I would like to call the meeting to order. Before we move on to official business, I would like to introduce our nominees to the Board of Directors, each in attendance today. In addition to myself, we have Roy Mackenzie, Carmel Galvin, Mark Hill, Mark Howell, Stefan Jacoby, Peter Kelly, Mike Kestner and Mary Ellen Smith. Before I introduce a few more individuals, I just want to take a moment to thank our Board for their support and their guidance during the past year as we transformed our business and accelerated the digital transformation of KAR Global, all while navigating a global pandemic. The Board of Directors has worked very diligently on behalf of all stockholders of this company, and I want to express my appreciation to each of them. So thank you very much. I would also like to welcome our executive leadership team and other employees who are attending today. In particular, I would like to welcome Peter Kelly, who transitioned into the role of CEO of KAR Global beginning April 1 and also joined KAR's Board of Directors at that time. Peter has been an inspirational leader in our company for over a decade and is the architect of our digital transformation.

Thank you, Jim. I'm delighted to be here this morning. I would like to take a moment to thank our employees for their efforts during the past year, keeping our business and our customers moving forward. They're focused despite the many distractions and the uncertainty, and their unrelenting dedication to our customers and our company was truly extraordinary. With their grit and determination, we continue to extend KAR's leadership position, building the world's [ first ] digital marketplaces for used vehicles.

Thank you, Peter. Now I would like to introduce representatives of KPMG, who are present at today's meeting and available to answer questions from stockholders. Please welcome Clint Meeks and Mark Shaffer. Also with us today is [ Jim Raitt ] of Broadridge Financial Solutions. The Board of Directors has appointed [ Mr. Raitt ] to act as our inspector of elections. [ Mr. Raitt ] has taken the oath of office as inspector as required by Delaware Corporate Law. The oath of office will be filed with the minutes of this meeting. I understand that the majority of stockholders have submitted their proxies. Stockholders who haven't yet voted may do so by clicking on the Voting button on the web portal. If you have voted by proxy, you do not need to take any further action. [Operator Instructions] We will address the questions following adjournment of the formal meeting. Mr. Coleman, has the notice of this meeting been sent to all stockholders entitled to vote at this meeting?

Yes, it has, Mr. Chairman. I have the sworn affidavit from Broadridge Financial Solutions stating that the notice and proxy materials were timely mailed to stockholders of record as of the record date. A copy of the affidavit will be filed with the minutes of this meeting. In addition, the list of the stockholders of record who are entitled to vote is present and available for inspection by any stockholder. Mr. Chairman, I've been advised by the inspector of election that there are 118,969,131 shares of the company's common stock or more than 95% of KAR's outstanding common shares entitled to vote and 581,608 shares of the Series A Convertible Preferred Stock or 100% of KAR's outstanding Series A Convertible Preferred Stock entitled to vote, represented in person or by proxy at today's meeting. Therefore, a quorum is present, the meeting is duly constituted and organized, and the business of the meeting may proceed.

Thank you, Mr. Coleman. The principal business of this meeting is to elect 9 directors to the Board of Directors; to approve on an advisory basis executive compensation; to approve an amendment and restatement to KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan, which we will refer to as the revised Omnibus Plan; and to ratify the appointment of KPMG as KAR's independent registered public accounting firm for 2021. The polls are hereby open for voting at this time. Stockholders who haven't yet voted or wish to change their vote may do so by clicking on the Voting button on the web portal. Mr. Coleman, were there any stockholder nominations or proposals for business for this meeting timely filed with you as secretary?

No, Mr. Chairman.

Thank you. I declare the nominations closed, and the business of this meeting will be limited to 5 matters on the agenda. Please note that we will give stockholders an opportunity to comment on the proposals themselves after all proposals have been presented. The first and second proposals we will consider are the election of 9 directors to the Board of Directors. The Board has nominated 9 directors to serve as directors until the 2022 Annual Meeting of Stockholders. The holders of shares of our Series A Convertible Preferred Stock voting as a separate class are being asked to vote on the election of Roy Mackenzie. The holders of our preferred stock and common stock voting together as a single class are being asked to vote on the other 8 director nominees. Information regarding each nominee is contained in the proxy statement. The third item of business we will consider is an advisory vote on executive compensation. The fourth item of business we will consider is the revised Omnibus Plan. The fifth item of business we will consider is the ratification of the appointment of KPMG as our independent registered public accounting firm for 2021. At this time, if any stockholder would like to make a comment or ask a question regarding any of the 5 proposals, please submit your comment or question through the web portal. We will pause now for any questions or comments.

Mr. Chairman, we did not receive any questions or comments regarding the 5 proposals.

Since there are no questions or comments, I believe that concludes the consideration of these matters. I now call for a vote on these 5 proposals. If you have already voted, there is no need for you to recast your vote. If you have not voted yet or wish to change your vote previously made by proxy, please click on the Voting button on the web portal. [Voting]

Now that everyone has had an opportunity to vote, the polls for voting on the matters before this meeting are closed. Mr. Coleman, have you received the results of the election from the inspector of election?

Mr. Chairman, the inspector of election reports that each director nominee has received the affirmative vote of a majority of the votes cast in the election of directors at this meeting. Accordingly, all 9 director nominees listed in the proxy statement have been duly elected directors of KAR to serve for the term expiring on the date of KAR's 2022 annual meeting and until his or her successor has been elected and qualified. Further, the inspector of election reports that a majority of the shares present and entitled to vote at this meeting have voted in favor of the approval of the executive compensation. The inspector of election also reports that a majority of the shares present and entitled to vote at this meeting have voted in favor of the approval of the revised Omnibus Plan. Accordingly, the revised Omnibus Plan has been approved by the stockholders. Lastly, the inspector of election reports that a majority of the shares present and entitled to vote at this meeting have voted in favor of the ratification of the appointment of KPMG to act as KAR's independent registered public accounting firm for 2021. Accordingly, the ratification of the appointment of KPMG as KAR's independent registered public accounting firm for 2021 has been approved by the stockholders.