EMPLOYMENT AGREEMENT

 

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                                                                   EXHIBIT 10.15

 

                      SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

 

            This Senior Executive Employment Agreement (the "Agreement") is

entered into as of this 26th day of May, 2005 (the "Effective Date") by and

between Mark F. O'Neil ("Executive") and DealerTrack Holdings, Inc., a Delaware

corporation ("Employer") with principal offices at 1111 Marcus Avenue, Suite

M04, Lake Success, NY 11042.

 

            Section 1. Term

 

            Employer shall continue to employ Executive and Executive agrees to

continue such employment, upon the terms and conditions hereinafter set forth,

from the Effective Date through and including June 30, 2007 (the "Initial

Term"). This Agreement shall renew automatically for successive one year periods

(each, a "Renewal Term") unless one party gives notice to the other party, in

writing, at least sixty (60) days prior to the expiration of this Agreement (or

any renewal) of its desire to terminate the Agreement. The term of this

Agreement, including the Initial Term and any Renewal Term, shall be referred to

herein as the "Term".

 

            Section 2. Executive's Duties

 

            (a) Executive shall be Chairman and Chief Executive Officer and

shall report directly to the Board of Directors of Employer (the "Board").

Executive shall faithfully and diligently perform his duties at the direction of

the Board, or a committee of the Board, to the best of Executive's ability.

Executive shall (i) devote his best efforts, skill, and ability and full

business time and attention to the performance of the services customarily

incident to such office, subject to vacations and sick leave as provided herein

and in accordance with Employer policy, (ii) carry out his duties in a competent

and professional manner; and (iii) generally promote the interests of Employer.

Subject to applicable law, Executive shall not knowingly participate in any

activity that is detrimental to the interests of Employer or any of its

affiliates, including, without limitation, any public criticism or disparagement

of any type by Executive, through the media or otherwise, of Employer or any of

its affiliates or employees, except in connection with the exercise of

Executive's rights against Employer or any of its affiliates.

 

            (b) Executive agrees to abide by all policies applicable to senior

executive officers of Employer promulgated from time to time by Employer, which

policies are enforced uniformly and applicable to all similar executives of

Employer.

 

            (c) Except for such business travel as may be incident to his duties

hereunder, Executive shall perform his duties at Employer's offices at the

address set forth in the preamble to this Agreement or at such other location as

may be approved by Employer.

 

            Section 3. Compensation for Executive's Services

 

            In consideration of the duties and services to be performed by

Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

 

            (a) Salary. Executive shall earn salary (the "Salary") at the annual

rate of Four Hundred Seventy-Six Thousand Dollars ($476,000.00) (the "Minimum

Salary"), less all

 

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applicable federal, state, and local tax withholdings. Such Salary shall be

earned and shall be payable in periodic installments in accordance with

Employer's payroll practices. During the Term, the Board or the Compensation

Committee of the Board (the "Compensation Committee") will review the Salary

annually and may in its discretion increase the Salary, but may not reduce it

during the Term unless Employer institutes salary reductions across the board;

provided, however, that in no event shall the Salary be reduced below the

Minimum Salary without Executive's written consent.

 

            (b) Bonus. For each fiscal year of Employer (each, a "Fiscal Year"),

Executive shall be entitled to receive a cash performance bonus (a "Bonus")

which shall be based on the achievement of certain performance benchmarks by

Employer during such Fiscal Year which shall be determined by the Board. The

Board shall review the target Bonus on an annual basis and, in its sole

discretion, may increase such target Bonus for any Fiscal Year. The target Bonus

shall not be decreased except in connection with company-wide bonus reductions.

The target Bonus for any Fiscal Year shall be at least Seventy percent (70%)

percent of the Salary for such Fiscal Year. The Bonus for each Fiscal Year shall

be paid, if at all, to Executive on a schedule consistent with Employer's bonus

payments to its other similarly situated senior executive officers by no later

than two and one half (2-1/2) months following the end of such Fiscal Year.

Executive understands and agrees that the Bonus is established in part as an

inducement for Executive to remain employed by Employer and except as provided

in Section 5(c) of this Agreement, or in the Employer's sole discretion, in the

event that Executive's employment is terminated prior to the end of any Fiscal

Year during the Term, then Executive shall not receive payment of any Bonus for

such year.

 

            (c) Equity. In connection with Executive's employment, Executive has

been and may continue to be granted stock options ("Stock Options") to purchase

equity securities of Employer pursuant to the terms of DealerTrack Holdings,

Inc. 2001 Stock Option Plan, effective as of August 10, 2001, as amended ("Stock

Option Plan") or may be granted Stock Options or other equity based awards

pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive Award

Plan, effective as of May 26, 2005, as amended (the "2005 Incentive Award

Plan"), or any other successor equity incentive plans (collectively, the "Stock

Incentive Plans"). Except as otherwise provided herein, the terms of the Stock

Options shall be governed by the Stock Incentive Plans. Executive shall be

credited with twenty-four (24) months accelerated vesting of his Stock Options

upon termination of Executive's employment by: (1) Employer without Cause (as

defined below); or (2) Executive for Good Reason (as defined below). Executive

shall be credited with thirty-six (36) months accelerated vesting of his Stock

Options upon a Change of Control (defined below). Executive shall be credited

with full acceleration and vesting of his Stock Options upon the earlier of: (1)

the elimination of Executive's position or a termination of Executive's

employment, in either event, within twelve (12) months after a Change of

Control; (2) a material negative change in Executive's compensation or

responsibilities within twelve (12) months after a Change of Control; or (3) the

requirement that Executive be based at a location which is more than fifty (50)

miles from Employer's offices at the address set forth in the preamble to this

Agreement within twelve (12) months after a Change of Control. Anything in the

Stock Incentive Plans to the contrary notwithstanding, if Executive's employment

is terminated by Executive with Good Reason or by Employer without Cause, or

under circumstances described above which would result in certain accelerated

vesting of any unvested Stock Options held by Executive, the unexercised portion

of any Stock Options held by

 

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Executive will not terminate until the twelve (12) month anniversary of the date

of termination of Executive's employment. In the event Employer elects to grant

equity based awards other than Options, such grants shall, where appropriate, be

subject to equivalent acceleration provisions as set forth in this Section 3(c).

For purposes hereof, a "Change of Control" shall mean and includes each of the

following:

 

            (i) A transaction or series of transactions (other than an offering

      of shares of Employer to the general public through a registration

      statement filed with the Securities and Exchange Commission) whereby any

      "person" or related "group" of "persons" (as such terms are used in

      Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as

      amended) (other than the Employer, any of its subsidiaries, an employee

      benefit plan maintained by the Employer or any of its subsidiaries or a

      "person" that, prior to such transaction, directly or indirectly controls,

      is controlled by, or is under common control with, the Employer) directly

      or indirectly acquires beneficial ownership (within the meaning of Rule

      13d-3 under the Securities Exchange Act of 1934, as amended) of securities

      of the Employer possessing more than 50% of the total combined voting

      power of the Employer's securities outstanding immediately after such

      acquisition; or

 

            (ii) During any period of two consecutive years, individuals who, at

      the beginning of such period, constitute the Board together with any new

      director(s) (other than a director designated by a person who shall have

      entered into an agreement with the Company to effect a transaction

      described in Section 3(c)(i) or Section 3(c)(iii)) whose election by the

      Board or nomination for election by the Employer's stockholders was

      approved by a vote of at least two-thirds of the directors then still in

      office who either were directors at the beginning of the two-year period

      or whose election or nomination for election was previously so approved,

      cease for any reason to constitute a majority thereof; or

 

            (iii) The consummation by the Employer (whether directly involving

      the Employer or indirectly involving the Employer through one or more

      intermediaries) of (x) a merger, consolidation, reorganization, or

      business combination or (y) a sale or other disposition of all or

      substantially all of the Employer's assets in any single transaction or

      series of related transactions or (z) the acquisition of assets or stock

      of another entity, in each case other than a transaction:

 

                  (A) Which results in the Employer's voting securities

            outstanding immediately before the transaction continuing to

            represent (either by remaining outstanding or by being converted

            into voting securities of the Employer or the person that, as a

            result of the transaction, controls, directly or indirectly, the

            Employer or owns, directly or indirectly, all or substantially all

            of the Employer's assets or otherwise succeeds to the business of

            the Employer (the Employer or such person, the "Successor Entity"))

            directly or indirectly, at least a majority of the combined voting

            power of the Successor Entity's outstanding voting securities

            immediately after the transaction, and

 

                  (B) After which no person or group beneficially owns voting

            securities representing 50% or more of the combined voting power of

            the Successor Entity;

 

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            provided, however, that no person or group shall be treated for

            purposes of this Section 3(c)(iii) as beneficially owning 50% or

            more of combined voting power of the Successor Entity solely as a

            result of the voting power held in the Employer prior to the

             consummation of the transaction; or

 

            (iv) The Employer's stockholders approve a liquidation or

      dissolution of the Employer.

 

The Board or its designee shall have full and final authority, which shall be

exercised in its discretion, to determine conclusively whether a Change of

Control of the Employer has occurred, and the date of the occurrence of such

Change of Control and any incidental matters relating thereto.

 

            (d) Benefits. Employer shall provide Executive with the right to

participate in and receive benefits from all life, accident, disability, medical

and pension plans, and all similar benefits as are from time to time in effect

and are generally made available to similar situated senior executive officers

of Employer. The amount and extent of benefits to which Executive is entitled

shall be governed by the specific benefit plan, as it may be amended from time

to time.

 

            (e) Expenses. Employer shall promptly reimburse Executive for

reasonable expenses for cellular telephone usage, entertainment, travel, meals,

lodging and similar items incurred in the conduct of Employer's business. Such

expenses shall be reimbursed in accordance with Employer's expense reimbursement

policies and guidelines.

 

             (f) Vacation; Sick Leave. During the Term, Executive shall be

entitled to four weeks (4) weeks vacation per year, paid holidays, sick leave,

and similar benefits, to be earned and used in accordance with Employer's policy

and procedure for other similarly situated senior executive officers.

 

            (g) Modification. Employer reserves the right to modify, suspend or

discontinue any and all of the above plans, practices, policies and programs

referenced in Sections 3(d) and (e) at any time in its discretion without

recourse by Executive so long as such action is taken generally with respect to

other similarly situated senior executive officers. Any such modification,

suspension or discontinuance of the plans, practices and policies referenced in

Section 3(e) will not apply to otherwise reimbursable expenses incurred by

Executive prior to any such modification, suspension or discontinuance.

 

            Section 4. Termination of Employment

 

            (a) Resignation. Executive may voluntarily terminate his employment

with Employer, at any time, with or without Good Reason, upon written notice to

Employer.

 

            (b) Termination. Employer may terminate Executive's employment at

any time, with or without Cause, upon written notice to Executive.

 

             (c) Death or Disability. Executive's employment shall terminate

immediately upon Executive's death. In the event Employer, in good faith,

determines that Executive is unable to perform the functions of his position due

to a Disability (as defined below), it may

 

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notify Executive in writing of its intention to terminate Executive's employment

and Executive's employment with Employer shall terminate effective on the

thirtieth (30th) day after receipt of such notice by Executive. For the purposes

of this Agreement, "Disability" shall mean a physical or mental impairment that

substantially limits a major life activity of Executive and renders Executive

unable to perform the essential functions of his position even with reasonable

accommodation (that does not impose an undue hardship on Employer), and which

has lasted at least (i) sixty (60) consecutive days, (ii) the balance of

Executive's entitlement to leave, if any, under the Family and Medical Leave

Act, or other similar statute or (iii) the balance of any election period under

the Employer's long term disability program (without regard to whether Executive

is awarded benefits under such program), whichever is longer.

 

            (d) Cause. Employer may immediately terminate Executive's employment

for "Cause" by giving written notice to Executive. For purposes of this

Agreement, "Cause" shall mean:

 

                  (1)    Executive's commission of an act of fraud or

                        embezzlement upon Employer or any of its affiliates; or

 

                  (2)    Executive's commission of any willful act intended to

                        injure the reputation, business, or any business

                        relationship of Employer or any of its affiliates; or

 

                  (3)    Executive is found by a court of competent jurisdiction

                        to have committed a felony; or

 

                  (4)    the refusal or failure of Executive to perform

                        Executive's duties with Employer in a competent and

                        professional manner that is not cured by Executive

                        within ten (10) business days after a written demand

                        therefor is delivered to Executive by the Board which

                        specifically identifies the manner in which the Board

                        believes that Executive has not substantially performed

                        Executive's duties; provided, further, however, that if

                        the Board, in good faith, determines that the refusal or

                        failure by Executive is egregious in nature or is not

                        susceptible of cure, then no cure period shall be

                         required hereunder; or

 

                  (5)    the refusal or failure of Executive to comply with any

                        of his material obligations under this Agreement

                        (including any exhibit hereto) that is not cured by

                         Executive within ten (10) business days after a written

                        demand therefor is delivered to Executive by the Board

                        which specifically identifies the manner in which the

                         Board believes Executive has materially breached this

                        Agreement; provided, further, however, that if the

                        Board, in good faith, determines that the refusal or

                        failure by Executive is egregious in nature or is not

                        susceptible of cure, then no cure period shall be

                        required hereunder.

 

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            (e) Good Reason. Executive may terminate his employment for "Good

Reason," by delivering written notice of such termination ("Employer Default

Notice") to Employer within sixty (60) days of the occurrence of any of the

following events, each of which shall constitute Good Reason: (i) Employer's

material breach of any provision of this Agreement, the Stock Incentive Plans or

any agreements thereunder, which has not been cured within the allotted time;

(ii) a material reduction of Executive's then current title, status, authority,

responsibility or duties or the assignment to Executive of any duties materially

inconsistent with Executive's then current position; (iii) any material

reduction in Executive's salary or benefits; (iv) the failure of any successor

entity to assume the terms of this Agreement upon any Change of Control; (v) the

relocation of Executive to a facility or location more than fifty (50) miles

from Employer's principal offices at the address set forth in the preamble to

this Agreement; or (vi) the failure of Employer to renew this Agreement upon the

expiration of the Initial Term or any Renewal Term. The Employer Default Notice

shall specify the reason for Executive's belief that an event constituting Good

Reason has occurred. Notwithstanding the foregoing, any material breach of this

Agreement by Employer, or other event constituting Good Reason, shall not

constitute Good Reason if any such breach or other event is cured or corrected

by Employer within thirty (30) days following delivery to Employer of the

Employer Default Notice.

 

             (f) Continuing Obligations. Executive acknowledges and agrees that

any termination under this Section 4 is not intended, and shall not be deemed or

construed, to affect in any way any of Executive's covenants and obligations

contained in Sections 6, 7, and 8 hereof, which shall continue in full force and

effect beyond such termination for any reason.

 

            Section 5. Termination Obligations

 

            (a) Resignation. If Executive's employment is terminated voluntarily

by Executive without Good Reason, Executive's employment shall terminate without

further obligations to Executive other than for payment of the sum of any unpaid

Salary determined by the Board and reimbursable expenses and vacation accrued

and owing to Executive prior to the termination. The sum of such amounts shall

hereinafter be referred to as the "Accrued Obligations," which