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EXHIBIT 10.19
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 Vincent Passione ("Executive") and
DealerTrack, 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 President and shall report directly to
Employer's Chief Executive Officer or his
designee. Executive shall faithfully
and diligently perform his duties at the
direction of Employer's Chief Executive
Officer, or his designee, 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, DealerTrack Holdings, Inc. (the
"Parent") or any of their 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 Parent or
Employer, as applicable, 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:
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(a) Salary. Executive shall earn salary (the "Salary") at the
annual
rate of Three Hundred Seventy Thousand
Dollars ($370,000.00) (the "Minimum
Salary"), less all 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 of
Directors of Parent (the "Parent Board") or
the Compensation Committee of the
Parent 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 Parent 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 Parent (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
Parent and/or Employer during such Fiscal
Year which shall be determined by the
Parent Board. The Parent 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
Fifty-Five percent (55%) 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 Parent 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
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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 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 Parent 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
Parent, any of its subsidiaries, an employee benefit plan
maintained
by the
Parent 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 Parent) 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
or Parent
possessing more than 50% of the total combined voting power of
the
Employer's or Parent'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 Parent 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 Parent Board or nomination for election by the Parent'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 or Parent (whether
directly
involving
the Employer or Parent or indirectly involving the Employer or
Parent
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 or Parent'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 or Parent'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 Parent or the person that, as a
result of
the transaction, controls, directly or indirectly, the Employer
or Parent
or owns, directly or indirectly, all or substantially all of
the
Employer's
or Parent's assets or otherwise succeeds to the business of the
Employer
or Parent (the Employer or Parent 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
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(B) After which no person or group beneficially owns voting
securities
representing 50% or more of the combined voting power of the
Successor
Entity; 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 or Parent prior to the
consummation of the transaction; or
(iv) The Employer's or Parent's stockholders approve a
liquidation
or
dissolution of the Employer or Parent.
The Parent 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 or Parent 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.
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(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
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 of
Directors of Employer ("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,
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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.
(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 Parent Board and
reimb
