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Item 9A. Controls and Procedures

2024-02-22 compared with 2023-02-23 · 87 added, 60 removed, 229 unchanged (39% of the section changed)

7 unchanged sentences

Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the Company's financial statements.

We have excluded from our assessment the internal control over financial reporting at Uni-Select, which was acquired in 2023.

The financial statements of Uni-Select constitute 16% of total assets (inclusive of goodwill and acquired intangible assets) and 4% of revenue of the consolidated financial statement amounts as of and for the year ended December 31, 2023.

Internal control over financial reporting includes the controls themselves, monitoring and internal auditing practices, and actions taken to correct deficiencies as identified.

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Management based this assessment on criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Management's assessment included an evaluation of the design of the Company's internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting.

Management reviewed the results of its assessment with the Audit Committee of the Company's Board of Directors.

LKQ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Management's assessment included an evaluation of the design of the Company's internal control over financial reporting and

testing of the operational effectiveness of its internal control over financial reporting.

Management reviewed the results of its assessment with the Audit Committee of the Company's Board.

Based on this assessment, management determined that, as of December 31, 2023, the Company maintained effective internal control over financial reporting.

3 unchanged sentences

OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the fiscal year ended December 31, 2023, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Executive Officers

Our executive officers, their ages at December 31, 2022, and their positions with us are set forth below.

Our executive officers are elected by and serve at the discretion of our Board of Directors.

Our executive officers, their ages at January 1, 2024, and their positions with us are set forth below.

Our executive officers are elected by and serve at the discretion of our Board.

Name Age Position

Dominick Zarcone 65 President, Chief Executive Officer and Director

Brooks 54 Senior Vice President and Chief Information Officer

Clark 49 Vice President - Finance and Controller

Dombrowski 47 Senior Vice President - Human Resources

Rick Galloway 45 Senior Vice President and Chief Financial Officer

Varun Laroyia 51 Chief Executive Officer and Managing Director, LKQ Europe

Andy Hamilton (1)

49 Senior Vice President & President and Managing Director of LKQ Europe

Hanley 57 Senior Vice President - Development

Jude 47 Senior Vice President of Operations - Wholesale Parts Division

Brooks 53 Senior Vice President and Chief Information Officer

48 Executive Vice President and Chief Operating Officer

McKay 46 Senior Vice President - General Counsel & Corporate Secretary

Dombrowski 46 Senior Vice President - Human Resources

Clark 48 Vice President - Finance and Controller

63 Senior Vice President & President of Wholesale - North America

Hamilton was appointed to this role effective January 1, 2024.

Jude served as Senior Vice President of Operations - Wholesale Parts Division in 2023 and was appointed to this role effective January 1, 2024.

Meyne was appointed to this role effective January 1, 2024.

Dominick Zarcone became our President and Chief Executive Officer in May 2017.

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From February 1986 to February 1995, he was with the investment banking company Kidder, Peabody & Co., Incorporated, most recently as Senior Vice President of Investment Banking.

In November 2023, our Board approved a leadership succession plan pursuant to which Mr.

Zarcone will retire as our President and Chief Executive Officer effective June 30, 2024.

At that time, Mr.

Zarcone will transition to a position as an executive officer of the Company with the title of Executive Advisor in order to facilitate an orderly chief executive officer transition and will serve in such capacity from July 1, 2024 through December 31, 2024.

Zarcone is a member of the Board of Directors of Generac Power Systems, Inc., a designer and manufacturer of power generation equipment and engine-powered products.

Brooks joined LKQ as Senior Vice President – Chief Information Officer in February 2020.

Prior to joining us, Mr.

Brooks held various senior management positions with GATX Corporation, a global railcar leasing company, from 2008 to 2020, including Chief Information Officer and Chief Operations Officer.

Prior to GATX, he served as Chief Information Officer for Constellation NewEnergy, a retail energy company, from 2003 to 2008.

Brooks also spent over ten years in consulting focusing on process improvement and systems implementations with firms including Accenture and Oracle.

Clark has been our Vice President – Finance and Controller since February 2011.

Prior thereto, he served as our Assistant Controller since May 2008.

Prior to joining our Company, he was the SEC Reporting Manager of FMC Technologies, Inc., a global provider of technology solutions for the energy industry, from December 2004 to May 2008.

Before joining FMC Technologies, Mr.

Clark, a certified public accountant (inactive), worked in public accounting for more than eight years, leaving as a Senior Manager in the audit practice of Deloitte & Touche.

Dombrowski became our Senior Vice President of Human Resources in March 2021.

Dombrowski joined us from Republic Services where she held various leadership positions within the HR function from May 2011 to February 2021, most recently serving as Vice President of Talent.

Prior to Republic Services, Ms.

Dombrowski worked as an HR leader for six years with Aramark in its Sports and Entertainment line of business from February 2005 to May 2011.

Rick Galloway became our Senior Vice President and Chief Financial Officer in September 2022.

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Galloway began his career in public accounting with Grant Thornton as an auditor with clients in various industries, including manufacturing, oil and gas, non-profit, and government.

Varun Laroyia became our Chief Executive Officer and Managing Director of LKQ Europe in September 2022.

Previously, Mr.

Laroyia was our Executive Vice President and Chief Financial Officer from October 2017 to September 2022.

Prior to joining us, he was the Chief Financial Officer of CBRE’s Global Workplace Solutions (GWS) business since 2015, following CBRE’s acquisition of the GWS business from Johnson Controls Inc.

(“JCI”), where he was the Chief Financial Officer and Vice President of Information Technology since 2013.

From 2006 to 2013, Mr.

Laroyia held various positions of increasing responsibility at JCI including Group Vice President of Global Audit and Vice President of Finance and Administration for its Building Efficiency business across Europe and Africa.

From 2000 to 2006, Mr.

Laroyia held various positions at Gateway, Inc., including Vice President and Controller based in the U.S.

and Finance Director for the United Kingdom and Ireland.

Prior to Gateway, he was with General Electric in the U.S.

and then GE Capital in London, U.K..

Laroyia started his career at KPMG in London.

Laroyia is a member of the Board of Directors of Univar Solutions, Inc., a global distributor of chemical products and related services.

Andy Hamilton became Senior Vice President of LKQ Corporation and President and Managing Director of LKQ Europe in January 2024.

Hamilton joined Euro Car Parts, which was acquired by LKQ in 2011.

During his tenure at Euro Car Parts, Mr.

Hamilton held several executive roles through the end of 2015, the last of which was Chief Operating Officer.

Hamilton was appointed Chief Commercial Officer of LKQ Europe, where he was responsible for several key pan-European projects related to digital strategy, revenue optimization, and category and product management.

From 2019 through 2023, Mr.

Hamilton served as the Chief Executive Officer of LKQ Euro Car Parts.

Prior to joining our Company, Mr.

Hamilton held a variety of management roles for Halfords Group, the UK’s leading automotive and leisure retailer.

Hanley joined us in December 2002 as our Vice President of Development, Associate General Counsel and Assistant Secretary.

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Hanley practiced corporate and securities law with the law firm of Bell, Boyd & Lloyd LLP (now known as K&L Gates LLP) in Chicago, Illinois.

Jude became our Senior Vice President of Operations – Wholesale Parts Division in July 2015.

Jude became Executive Vice President and Chief Operating Officer in January 2024.

Prior to this role, Mr.

Jude was our Senior Vice President of Operations – Wholesale Parts Division since July 2015.

Jude has been with us since February 2004 in various roles, including from March 2008 to February 2011 as Vice President - Supply Chain, from February 2011 to May 2014 as Vice President – Information Systems (North America), and from June 2014 to July 2015 as President of Keystone Automotive Operations, Inc., our specialty automotive business.

Jude has been in the Company’s industry for over 20 years.

Brooks joined LKQ as Senior Vice President – Chief Information Officer in February 2020.

Prior to joining us, Mr.

Brooks held various senior management positions with GATX Corporation, a global railcar leasing company, from 2008 to 2020, including Chief Information Officer and Chief Operations Officer.

Prior to GATX, he served as Chief Information Officer for Constellation NewEnergy, a retail energy company, from 2003 to 2008.

Brooks also spent over ten years in consulting focusing on process improvement and systems implementations with firms including Accenture and Oracle.

In November 2023, our Board approved a leadership succession plan pursuant to which Mr.

Jude will be appointed President and Chief Executive Officer of the Company effective July 1, 2024.

Jude is a member of the Board of Directors of MEKO AB, an automotive spare parts chain in the Nordic region, of which we own approximately 26.6%.

McKay became our Senior Vice President, General Counsel and Corporate Secretary in March 2021.

2 unchanged sentences

McKay served as a law clerk for Judge William Bauer at the United States Court of Appeals for the Seventh Circuit.

Dombrowski became our Senior Vice President of Human Resources in March 2021.

Dombrowski joined us from Republic Services where she held various leadership positions within the HR function from May 2011 to February 2021, most recently serving as Vice President of Talent.

Prior to Republic Services, Ms.

Dombrowski worked as an HR leader for six years with Aramark in its Sports and Entertainment line of business from February 2005 to May 2011.

Clark has been our Vice President – Finance and Controller since February 2011.

Prior thereto, he served as our Assistant Controller since May 2008.

Prior to joining our Company, he was the SEC Reporting Manager of FMC Technologies, Inc., a global provider of technology solutions for the energy industry, from December 2004 to May 2008.

Before joining FMC Technologies, Mr.

Clark, a certified public accountant (inactive), worked in public accounting for more than eight years, leaving as a Senior Manager in the audit practice of Deloitte & Touche.

Meyne became Senior Vice President of LKQ Corporation and President of Wholesale – North America in January 2024.

Meyne has been an LKQ team member since 2009.

During his tenure, he has held various operational leadership roles.

Meyne began his career in our industry with Keystone Automotive Industries.

In 2006, he started his own aftermarket collision parts company, which was acquired by LKQ in 2009.

From 2011 through 2021, he served as Regional Vice President for the Southeast Region of the Company’s Wholesale – North America segment.

From 2022 through 2023, Mr.

Meyne served as the East Division Vice President of Wholesale – North America.

Code of Ethics

21 unchanged sentences

Information appearing under the captions "Ratification of Appointment of Our Independent Registered Public Accounting Firm—Audit Fees and Non-Audit Fees" and "Ratification of Appointment of Our Independent Registered Public Accounting Firm—Policy on Audit Committee Approval of Audit and Non-Audit Services" in the Proxy Statement is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

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Form of LKQ Corporation Restricted Stock Unit Agreement for Non-Employee Directors.

Form of LKQ Corporation Deferred Restricted Stock Unit Agreement for Non-Employee Directors.

Form of LKQ Corporation Restricted Stock Unit Agreement for Employees.

4 unchanged sentences

Form of LKQ Corporation Long-Term Cash Incentive Award Memorandum.

Form of LKQ Corporation Performance-Based Restricted Stock Unit Agreement.

Form of Indemnification Agreement between directors and officers of LKQ Corporation and LKQ Corporation.

9 unchanged sentences

McKay dated as of June 1, 2016.

Change of Control Agreement between LKQ Corporation and Varun Laroyia dated as of October 1, 2017.

Change of Control Agreement between LKQ Corporation and Michael T.

3 unchanged sentences

Change of Control Agreement between LKQ Corporation and Rick Galloway dated as of September 15, 2022.

Change of Control Agreement between LKQ Corporation and Andy Hamilton dated as of January 1, 2024.

Change of Control Agreement between LKQ Corporation and John R.

Meyne dated as of January 1, 2024.

LKQ Severance Policy for Key Executives.

3 unchanged sentences

Holsten to Dominick P.

Offer Letter dated as of September 14, 2022 from Dominick Zarcone to Varun Laroyia.

Memorandum dated as of September 14, 2022 from Dominick Zarcone to Rick Galloway.

LKQ Corporation Nonqualified Deferred Compensation Plan for Non-Employee Directors.

LKQ Corporation Policy for Recoupment of Incentive Compensation.

Exhibit Number Description

Arrangement Agreement, dated as of February 26, 2023, by and among LKQ Corporation, Uni-Select Inc.

and 9485-4692 Québec Inc.

(incorporated herein by reference to Exhibit 2.1 to the Company’s report on Form 8-K filed with the SEC on February 28, 2023).

Restated Certificate of Incorporation of LKQ Corporation (incorporated herein by reference to Exhibit 3.1 to the Company’s report on Form 10-Q filed with the SEC on October 31, 2014).

Amended and Restated Bylaws of LKQ Corporation, as amended as of May 7, 2019 (incorporated herein by reference to Exhibit 3.1 to the Company's report on Form 8-K filed with the SEC on May 8, 2019).

Amended and Restated Bylaws of LKQ Corporation, as amended as of November 6, 2023 (incorporated herein by reference to Exhibit 3.1 to the Company's report on Form 8-K filed with the SEC on November 9, 2023).

Specimen of common stock certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A, Registration No.

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Description of the Company's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated herein by reference to Exhibit 4.21 to the Company's report on Form 10-K filed with the SEC on February 26, 2021).

Credit Agreement, dated as of January 5, 2023, by and among LKQ Corporation and certain additional subsidiaries of LKQ Corporation, as borrowers, certain financial institutions, as lenders, and Wells Fargo Bank, National Association, as administrative agent (incorporated herein by reference to Exhibit 4.1 to the Company’s report on Form 8-K filed with the SEC on January 6, 2023).

Term Loan Credit Agreement, dated as of March 27, 2023, by and among LKQ Corporation as borrower, certain financial institutions, as lenders, and Wells Fargo Bank, National Association, as administrative agent (incorporated herein by reference to Exhibit 4.1 to the Company’s report on Form 8-K filed with the SEC on March 28, 2023).

Indenture dated as of May 24, 2023 among LKQ Corporation, as Issuer, the Guarantors, and U.S.

Bank Trust Company, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Company’s report on Form 8-K filed with the SEC on May 26, 2023).

Supplemental Indenture dated as of February 15, 2024 among LKQ Corporation, as Issuer, certain subsidiaries of LKQ Corporation, as Guarantors, and U.S.

Bank National Association, as Trustee.

LKQ Corporation 401(k) Plus Plan dated August 1, 1999 (incorporated herein by reference to Exhibit 10.23 to the Company’s Registration Statement on Form S-1, Registration No.

7 unchanged sentences

Form of LKQ Corporation Restricted Stock Unit Agreement for Non-Employee Directors (incorporated herein by reference to Exhibit 10.6 to the Company's report on Form 10-K filed with the SEC on February 26, 2021).

Form of LKQ Corporation Deferred Restricted Stock Unit Agreement for Non-Employee Directors.

Form of LKQ Corporation Restricted Stock Unit Agreement for Employees (incorporated herein by reference to Exhibit 10.7 to the Company’s report on Form 10-K filed with the SEC on February 25, 2022).

4 unchanged sentences

Form of LKQ Corporation Long-Term Cash Incentive Award Memorandum (incorporated herein by reference to Exhibit 10.11 to the Company's report on Form 10-K filed with the SEC on February 26, 2021).

Form of LKQ Corporation Performance-Based Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10.9 to the Company's report on Form 10-K filed with the SEC on February 28, 2018).

Form of Indemnification Agreement between directors and officers of LKQ Corporation and LKQ Corporation (incorporated herein by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1, Registration No.

2 unchanged sentences

Hanley dated as of July 24, 2014 (incorporated herein by reference to Exhibit 10.4 to the Company’s report on Form 8-K filed with the SEC on July 28, 2014).

Exhibit Number Description

Change of Control Agreement between LKQ Corporation and Michael S.

6 unchanged sentences

McKay dated as of June 1, 2016 (incorporated herein by reference to Exhibit 10.34 to the Company's report on Form 10-K filed with the SEC on February 27, 2017).

Exhibit Number Description

Change of Control Agreement between LKQ Corporation and Varun Laroyia dated as of October 1, 2017 (incorporated herein by reference to Exhibit 10.26 to the Company's report on Form 10-K filed with the SEC on February 28, 2018).

Change of Control Agreement between LKQ Corporation and Michael T.

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Zarcone (incorporated herein by reference to Exhibit 10.1 to the Company's report on Form 8-K filed with the SEC on June 5, 2017).

Offer Letter dated as of September 14, 2022 from Dominick Zarcone to Varun Laroyia (incorporated herein by reference to Exhibit 10.1 to the Company's report on Form 8-K filed with the SEC on September 20, 2022).

Memorandum dated as of September 14, 2022 from Dominick Zarcone to Rick Galloway (incorporated herein by reference to Exhibit 10.2 to the Company's report on Form 8-K filed with the SEC on September 20, 2022).

LKQ Corporation Nonqualified Deferred Compensation Plan for Non-Employee Directors

LKQ Corporation Nonqualified Deferred Compensation Plan for Non-Employee Directors (incorporated herein by reference to Exhibit 10.29 to the Company's report on Form 10-K filed with the SEC on February 23, 2023).

List of subsidiaries, jurisdictions and assumed names.

Subsidiary Guarantor of Guaranteed Securities (incorporated herein by reference to Exhibit 22.1 to the Company's report on Form S-4 filed with the SEC on September 1, 2023).

Consent of Independent Registered Public Accounting Firm.

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

LKQ Corporation Policy for Recoupment of Incentive Compensation.

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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Meg Ann Divitto

/s/ ROBERT M.

HANSER Director

/s/ JOSEPH M.

8 unchanged sentences

Xavier Urbain

/s/ JACOB WELCH Director

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures