ADESA, INC. CHANGE IN CONTROL AGREEMENT

Exhibit 10.7

ADESA, INC.

CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (this " Agreement "), entered into this 21 st  day of December, 2006 (the " Effective Date "), by and between ADESA, INC., a Delaware corporation (the " Company "), and [                        ] (the " Executive ").

W I T N E S S E T H:

WHEREAS, the Company desires to (i) enable the Executive to devote the Executive’s full attention to management responsibilities and, when faced with a possible Change in Control, to help the Board assess options and advise as to the best interest of the Company and its stockholders without being influenced by the uncertainties of the Executive’s own situation, and (ii) demonstrate to the Executive the interest of the Company in the Executive’s well-being and fair treatment in the event of a Change in Control; and

WHEREAS, the Company desires to assure the Executive that the Executive will receive certain benefits following a Change in Control of the Company, subject to the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and of the mutual promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive agree as follows:

• • 1.              Definitions .  As used herein, the following words and phrases shall have the following meanings:

    • • (a)            Affiliate .  The term "Affiliate" shall have the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended, or any successor law.

        (b)            Annual Bonus .  The term "Annual Bonus" shall mean an amount equal to the Executive’s annual cash bonus which would have been payable under the Company’s annual incentive program in which the Executive participates (i) immediately prior to the Change in Control had the Executive continued in employment until the end of the fiscal year of the Employer in which the Change in Control occurs and had cash bonuses been payable at "target" levels for such year, or (ii) if greater, as of the Termination Date had the Executive continued in employment until the end of the fiscal year of the Employer in which the Termination Date occurs and had bonuses been payable at "target" levels for such year.

        (c)            Base Salary .  The term "Base Salary" shall mean the amount the Executive is entitled to receive as base wages on an annualized basis as in effect immediately prior to a Change in Control or, if greater, at any time thereafter, in each case without reduction for any pre-tax contributions to benefit plans.  Base Salary does not include bonuses, commissions, cost of living allowances, cash value of perquisites or income from stock options, stock grants or other

         

         

        incentives.

        (d)            Board .  The term "Board" means the board of directors of the Company; provided, that, if following a Change in Control the Company is not the ultimate parent corporation and is not publicly traded, the "Board" shall be the board of directors of the ultimate parent which directly or indirectly owns or controls all of the voting securities of the Company.

        (e)            Cause .  "Cause" for termination by the Employer of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties on behalf of the Employer (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive) for a period of at least 30 consecutive days after a written demand for substantial performance has been delivered to the Executive by the Executive’s supervisor and/or a member of the Board, which demand specifically identifies the manner in which the Company believes that the Executive has not substantially performed his duties, (ii) willful misconduct or gross negligence by the Executive which is demonstrably and materially injurious to the Company or any of its subsidiaries, monetarily or otherwise, (iii) material violation of the Company’s published Standards of Business Conduct (or any successor or similar standard thereto) that warrants termination, or (iv) the Executive is convicted of, or has entered a plea of nolo contendere to a felony or any crime (whether or not a felony) involving dishonesty, fraud, embezzlement or breach of trust.  For purposes of clauses (i) and (ii) of this definition, an act, or failure to act, on the Executive’s part shall not be deemed "willful" if done, or omitted to be done, by the Executive in good faith and with reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company.

        (f)             Code .  The term "Code" shall mean the Internal Revenue Code of 1986, as amended.

        (g)            Employer .  The term "Employer" shall mean, as applicable to the Executive, the Company or a subsidiary of the Company that employs the Executive.

        (h)            Good Reason .  "Good Reason" for termination by the Executive of his employment shall mean the occurrence (without the Executive’s express written consent) of any one of the following acts by the Employer, or failures by the Employer to act, following the occurrence of a Change in Control:

        • • (i)               A substantive adverse alteration in the Executive’s authority, duties, responsibilities or position from those in effect immediately prior to the Change in Control; provided that, notwithstanding the foregoing, the following is not "Good Reason:" (A) an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the

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• • • • • • Employer promptly after receipt of notice thereof given by the Executive, or (B) a change in the person to whom (but not the position to which) the Executive reports;

            (ii)              A reduction in the Executive’s Base Salary or target Annual Bonus opportunity that is below the amount of such Base Salary or target Annual Bonus opportunity in effect immediately preceding the Change in Control;

            (iii)             A reduction in the Executive’s benefits or fringe benefits, other than pursuant to an across-the-board reduction similarly affecting the benefits of all of the Company’s executive officers;

            (iv)             The Employer requires the Executive to be based at any location other than within a 50-mile radius of the location at which the Executive was based prior to the Change in Control, except for required travel pertaining to Employer’s business in accordance with the Employer’s management practices in effect prior to a Change in Control or with the prior written consent of the Executive;

            (v)              The Company fails to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 10(a) below, if required to do so; or

            (vi)             The Company or an Employer purports to terminate the Executive’s employment without supplying a Notice of Termination which satisfies the requirements of Section 6 below (and for purposes of this Agreement, no such purported termination shall be effective).

        Notwithstanding the foregoing, the occurrence of an event that would otherwise constitute Good Reason hereunder shall cease to be an event constituting Good Reason if (x) the Executive fails to provide the Company with notice of the occurrence of any of the foregoing within the six-month period immediately following the date on which he first becomes aware (or reasonably should have become aware) of the occurrence of such event, (y) the Executive fails to provide the Company with a period of at least 30 days from the date of such notice to cure such event prior to terminating his employment for Good Reason or (z) the Company does not provide the Notice of Termination to the Executive within 90 days following the day on which the 30-day period set forth in the preceding clause (y) expires; provided, that the 30-day notice period required by clause (y) shall end two days prior to the end of the Term in the event that the last day of the Term would occur during such 30-day period.

        Prior to terminating employment for Good Reason, the Executive may request in the Executive’s sole discretion (by written notice to the General Counsel of the Company) a determination by final and binding arbitration in accordance with Section 10(l) below of whether Good Reason exists.  If the

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• • • • arbitrator determines that Good Reason does not exist, the Executive may continue employment without prejudice.

        (i)             Notice of Termination .  The term "Notice of Termination" shall mean a notice that indicates the specific provisions in this Agreement relied upon as the basis for any termination of employment and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.  Except under circumstances in which the Executive elects to receive the payments and benefits set forth in Section 7 in which case his employment shall be deemed to have terminated upon the effective date of the Change in Control, no purported termination of employment shall be effective without a Notice of Termination.

        (j)             Plan .  The term "Plan" shall mean the ADESA, Inc. 2004 Equity and Incentive Plan.

        (k)            Pro-Rata Bonus .  The term "Pro-Rata Bonus" shall mean, with respect to the fiscal year in which the Termination Date occurs, an amount equal to the Annual Bonus multiplied by a fraction the numerator of which is the number of whole and partial months that have elapsed in such fiscal year through the Termination Date (counting any partial month as a whole month for this purpose) and the denominator of which is 12; provided, however, the amount of Pro-Rata Bonus as determined by the foregoing calculation shall be reduced by the amount of any bonus to which the Executive may become entitled to under the Plan.

        (l)             Term .  The term of this Agreement shall mean the period commencing on the Effective Date and expiring one year from such date (the "Initial Term"); provided that a Change in Control has not occurred.  At the end of the Initial Term and on each subsequent anniversary of such date, the term of this Agreement shall renew automatically for a one-year period (the "Initial Term and each such renewed term of the Agreement shall be the "Term") unless, at least 90 days prior to such renewal date, the Employer shall give written notice to the Executive that the Term shall not be extended or an event that is a Change in Control has occurred.  Upon the occurrence of a Change in Control, the Term shall automatically be extended such that the Term shall expire on the [third for Mr. Sales] [second for Messrs. Lawrence and Beaver] anniversary of the Change in Control; provided, however, if the Executive elects to receive the payments and benefits set forth in Section 7 and upon receipt of such payments and benefits, the Term shall be deemed to have expired on the effective date of the Change in Control.  In no event shall this Agreement terminate prior to the Employer’s satisfaction of all of the Employer’s obligations to the Executive hereunder.

        (m)           Termination Date .  The term "Termination Date" shall mean the date of the termination of the Executive’s employment with the Employer as determined in accordance with Sections 3, 4 and 7 below.

    2.              Change in Control .  For purposes of this Agreement and subject to the last

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• • sentence of Section 7 below, the term "Change in Control" shall mean the occurrence subsequent to the effective date of this Agreement of any of the following:

    • • (a)            Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35 percent or more of either (i) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this Section 2(a) , the following acquisitions shall not constitute a Change in Control:  (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate or (D) any acquisition by any corporation pursuant to a transaction that complies with Sections 2(c)(i), 2(c)(ii) and 2(c)(iii) ;

        (b)            Any time at which individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

        (c)            Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a "Business Combination"), in each case unless, following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50 percent of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their

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• • • • ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35 percent or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

        (d)            Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

    Notwithstanding the foregoing, in the event of any disposition of all or substantially all of the assets of the Company pursuant to a spin-off, split-up or similar transaction (a "Spin-off"), such Spin-off shall not be deemed a Change in Control if, immediately following the Spin-off, the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 100 percent of the outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the entities resulting from such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities; provided, that if another Business Combination involving any Resulting Entity occurs in connection with or following a Spin-off, such Business Combination shall be analyzed separately for purposes of determining whether a Change in Control has occurred.

    3.              Termination Following a Change in Control .  After the occurrence of a Change in Control, the Executive shall be entitled to receive the severance benefits described in Section 5 of this Agreement, if after the occurrence of a Change in Control, the Executive’s employment terminates due to (i) termination by the Employer without Cause, or (ii) termination by the Executive for Good Reason.  No severance benefits shall be provided to the Executive under this Agreement unless he has properly executed and delivered to the Company an irrevocable release of claims.  A form of release of claims is attached to this Agreement as Exhibit A .  Prior to, but not following, the occurrence of a Change in Control, but subject to Section 10(b) , the release of claims may be revised by the Company.  The Company may in any event modify the release of claims to conform it to the laws of the local jurisdiction applicable to the Executive so long as such modification does not increase the obligations of the Executive thereunder.  For purposes

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• • of determining the Executive’s and the Company’s rights and obligations under this Agreement, the transfer of employment of the Executive from the Company to one of its Affiliates, or from such an Affiliate to the Company, in each case whether before or after the Change in Control, shall not (by itself) constitute a termination of employment for purposes of this Agreement.

    4.              Termination Prior to Change in Control .  Provided that a Change in Control actually occurs, if (i) the Executive’s employment is terminated by the Employer without Cause prior to the date of a Change in Control or (ii) the Executive terminates employment with the Employer prior to the date of a Change in Control due to any actions taken with respect to the Executive prior to the date of a Change in Control that would constitute termination by the Executive for Good Reason if such actions were taken after the date of a Change in Control, and the Executive reasonably demonstrates that such termination or action (A) was at the request of a third party that has indicated an intention or taken steps reasonably calculated to effect a Change in Control, or (B) otherwise arose in connection with, or in anticipation of, a Change in Control that has been threatened or proposed, then such termination or action shall be deemed to have occurred after such Change in Control for purposes of this Agreement.  For purposes of Section 4(i)(B), if any such termination or action occurs while this Agreement is in effect, then such termination or action shall conclusively be presumed to have occurred in connection with, or in anticipation of, a Change in Control.

    5.              Severance Pay and Benefits .  If the Executive’s employment is terminated in circumstances entitling him to severance benefits as provided in Sections 3 and 4 , the Executive shall be entitled to each of the following:

    • • (a)            A lump sum cash amount paid within the later of 30 days following (i) the Termination Date or (ii) a Change in Control and equal to the sum of (i) the Base Salary earned and unpaid through the Termination Date, (ii) any amounts earned and unpaid under the Company’s accrued vacation program, (iii) any unreimbursed expenses incurred and unpaid through the Termination Date, and (iv) any Pro-Rata Bonus earned and unpaid through the Termination Date;

        (b)            A lump sum cash amount paid within 30 days following the Termination Date equal to [three for Mr. Sales] [two for Messrs. Lawrence and Beaver] times the sum of (i) the Base Salary and (ii) the Annual Bonus;

        (c)            All amounts that are vested or accrued prior to the Termination Date under all incentive compensation, employee benefit plans or other agreements of the Company will be paid in accordance with the provisions of such plans;

        (d)            Whether or not the Executive is eligible for COBRA benefits and whether or not the Executive elects COBRA coverage, if then available, the Employer shall pay the Executive a lump sum cash payment equal to [$50,400 for Mr. Sales] [$33,600 for Messrs. Lawrence and Beaver] , representing an approximate cost of health insurance coverage, within 30 days following the Termination Date;

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• • • • (e)            All life insurance benefits will cease on the Termination Date under any applicable group life plan.  However, in order to allow the Executive to purchase life insurance benefits, the Employer shall pay the Executive a lump sum cash payment equal to [$15,000 for Mr. Sales] [$10,000 for Messrs. Lawrence and Beaver] within 30 days following the Termination Date; and

        (f)             Outplacement assistance services which are at a level appropriate for senior management of a public company; provided, however, that the total cost to the Company shall not exceed twelve thousand dollars ($12,000.00).  Outplacement benefits shall be provided in kind; cash shall not be paid in lieu thereof, nor will the cash severance benefits under this Section 5 be increased if the Executive declines or does not use the outplacement benefits.   The provision of outplacement assistance services shall cease after December 31st of the second year following December 31st of the year in which the Executive’s employment terminates.

    If the Executive receives any severance payments or benefits under this Agreement, he or she shall not be entitled to receive any other severance payments or benefits under any other employment, sev