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EXHIBIT 10.5
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 David Trinder ("Executive") and DealerTrack Aftermarket
Services, 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
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:
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(a) Salary. Executive shall earn salary (the "Salary") at the
annual
rate of Two Hundred Fifty Thousand Dollars ($250,000.00) (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 Forty
(40%) 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 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 reimbursable expenses
