DealerTrack Holdings, Inc. Performance Stock Unit Agreement
 
THIS AGREEMENT, dated ____________, 2010 (the “Award Date”), is made between
DealerTrack Holdings, Inc., a Delaware corporation hereinafter referred to as
the “Company,” and ______________, an employee of the Company or a Subsidiary of
the Company, hereinafter referred to as the “Participant.”

 
1.
Definitions.  All capitalized terms used in this Agreement but not defined in
this Agreement shall have the meanings ascribed to them in the Company’s 2005
Incentive Award Plan, as amended from time to time (the “Plan”).

 
2.
Award of Performance Stock Units.

 
(a)           Award.  Subject to the terms of this Agreement, the Company hereby
grants to the Participant an Award (as defined below) with respect to a “target”
of [______] Performance Stock Units (subject to adjustment as provided in
Section 11.1 of the Plan) (the “Award”).  The actual number of Performance Stock
Units to be delivered, if any, will depend upon the achievement of certain
performance targets and other vesting conditions as described in Section 3.  As
used herein, the term “Performance Stock Unit” shall mean a non-voting unit of
measurement which is deemed for bookkeeping purposes to be equivalent to one
outstanding share of the Company’s Stock (subject to adjustment as provided in
Section 11.1 of the Plan) solely for purposes of the Plan and this
Agreement.  The Performance Stock Units shall not be treated as property or a
trust fund of any kind.  The number of Performance Stock Units may be increased
by additional Performance Stock Units created by "reinvestment" of dividend
equivalents as provided in Section 6(b).
 
(b)           Plan.  The Award granted hereunder is subject to the terms and
provisions of the Plan, including without limitation, Article 11 thereof.
 
3.
Vesting of Performance Stock Units.  The Performance Stock Units will vest and
become payable to the extent earned on January 31, 2013 (the “Vesting Date”);
provided, the Participant remains continuously employed in active service by the
Company or its Subsidiaries from the Award Date through the Vesting
Date.  Except as otherwise expressly provided herein, in the event that the
Participant is not employed on the Vesting Date, the Award will be forfeited and
terminate on the Participant’s termination of employment. Employment for only a
portion of the vesting period, even if a substantial portion, will not entitle
the Participant to any proportionate vesting or avoid or mitigate a termination
of rights and benefits related to the Performance Stock Units upon or following
a termination of employment as provided in this Agreement. In addition, the
Participant’s Performance Stock Units are subject to forfeiture if the Company's
performance goals are not achieved, as described below.

 
(a)           Adjusted Net Income Performance.  One-half (50%) of the
Performance Stock Units (the “Adjusted Net Income Units”) will be eligible for
vesting only to the extent the relevant Adjusted Net Income (as defined below)
targets are met.  If the target Adjusted Net Income measurement is achieved, the
Participant will be eligible to vest in the Adjusted Net Income Units (the
“Target Net Income Award”).  The number of actual Adjusted Net Income Units that
will be eligible to be paid to the Participant, subject to his/her continued
employment (the “Actual Net Income Payout”), if any, will be determined based on
the Company’s achievement of Adjusted Net Income for the 2010 calendar year (the
"Net Income Performance Period").  The Actual Net Income Payout, if any, will be
subject to increases pursuant to the re-investment of dividends described in
Section 6(b) below.
 
 

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The Participant’s Actual Net Income Payout will be determined as follows:
 
 
Ø
The Actual Net Income Payout will be 125% of the Target Net Income Award in the
event that the Company’s Adjusted Net Income is $26,700,000 or greater.

 
 
Ø
The Actual Net Income Payout will be 100% of the Target Net Income Award in the
event that the Company’s Adjusted Net Income $24,300,000.

 
 
Ø
The Actual Net Income Payout will be 25% of the Target Net Income Award in the
event that the Company’s Adjusted Net Income is $20,700,000.

 
 
Ø
In the event that the Company’s Adjusted Net Income is less than $20,700,000 the
Adjusted Net Income Unit portion of the Award will be forfeited and terminate.

 
 
Ø
The payment percentage is interpolated for performance between the points
indicated in the first three bullet points above on a straight-line basis.

 
For purposes of this Agreement, "Adjusted Net Income" shall be the Adjusted Net
Income number as reported in the Company’s full earnings release related to
2010.  If prior to December 31, 2010, the Company acquires a new business from a
third party (a “New Business”), then the each of the Adjusted Net Income Metrics
above shall be increased by the Pro-Rata New Business Additional Adjusted Net
Income.  “New Business Additional Adjusted Net Income” shall mean the Adjusted
Net Income for the New Business for the trailing 4 complete calendar quarters
immediately preceding the acquisition.  “Pro-Rata New Business Additional
Adjusted Net Income” shall mean New Business Adjusted Net Income multiplied by a
fraction, the numerator of which is the number of whole months remaining in the
calendar year subsequent to the date the New Business is acquired and the
denominator of which is 12.
 
(b)           TSR Performance.  One-half (50%) of the Performance Stock Units
(the “TSR Units”) will be eligible for vesting only to the extent the relevant
TSR (as defined below) targets are met.  If the target TSR measurement is
achieved, the Participant will be eligible to vest in the TSR Units (the “Target
TSR Award”).  The number of actual TSR Units that will be eligible to be paid to
the Participant, subject to his/her continued employment (the “Actual TSR
Payout”), if any, is determined based on the Company’s Total Shareholder Return
for the calendar years 2010, 2011 and 2012, in the aggregate (the "TSR
Performance Period").  The Actual TSR Payout, if any, will be subject to
increases pursuant to the re-investment of dividends described in Section 6(b)
below.
 
The Participant’s Actual TSR Payout will be determined as follows:
 
 
Ø
If the Company’s TSR is equal to or greater than the 75th percentile, the Actual
TSR Payout will be 150% of the Target TSR Award.

 
 
Ø
If the Company’s TSR is equal to the 50th percentile, the Actual TSR Payout will
be 100% of the Target TSR Award.

 
 
Ø
If the Company’s TSR is equal to or less than the 25th percentile, the TSR Unit
portion of the Award will be forfeited and terminate.

 
 
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Ø
The payment percentage is interpolated for performance between the points
indicated in the first three bullet points above on a straight-line basis.

 
For purposes of this Agreement, "Total Shareholder Return" or “TSR” is
calculated by comparing the Company’s three-year TSR to those of individual
companies that comprise the NASDAQ Internet Index using (i) the average closing
stock price for the relevant stock for the 20-trading-day period ending with the
last day on which the NASDAQ is open for trading preceding the first day of the
TSR Performance Period, and (ii) the average closing stock price for the
relevant stock for the 20-trading-day period ending with the last day of the TSR
Performance Period.  For this purpose, any company that is a member of the
NASDAQ Internet Index for purposes of clause (i) but is no longer a member at
the measurement time for clause (ii) shall not be included in the TSR
calculation.  In the sole discretion of the Committee, the TSR calculation will
assume reinvestment of dividends.
 
(c)           Determination of Company Performance.  The determination as to
whether the Company has attained the performance goals with respect to the Net
Income Performance Period and the TSR Performance Period shall be made by the
Committee acting in good faith.  The Committee's determination regarding whether
the Company has attained the performance goals (the "Committee Determination")
shall be made as soon as reasonably practicable following the end of the
applicable performance period.  The Performance Stock Units shall not be deemed
vested pursuant to any other provision of this Agreement earlier than the date
that the Committee makes such determination, as required by Section 162(m) of
the Code and the regulations promulgated thereunder.  Any Performance Stock
Units forfeited pursuant to this Section 3, Section 4 or Section 7 shall be
deemed to have been forfeited as of the last day of the applicable performance
period, or vesting period, as applicable.
 
4.
Termination of Employment due to Death or Disability. Notwithstanding anything
to the contrary herein, if, prior to the Vesting Date, the Participant’s
employment with the Company is terminated as a result of his/her death or
Disability (as defined below), the Performance Stock Units will remain
outstanding during the remainder of the Net Income Performance Period and the
TSR Performance Period and the payout will be the Target Net Income Award and
the Target TSR Award, regardless of the actual performance of the Company;
provided, however, any Performance Stock Units that become payable following the
Participant’s death or Disability shall be prorated by multiplying the sum of
(i) the Actual EBTDA Payout and (ii) the Actual TSR Payout by a fraction, the
numerator of which shall be the number of whole months in the TSR Performance
Period that the Participant was employed by the Company and the denominator of
which shall be thirty-six (36).  For purposes of this Agreement, “Disability”
shall be defined as such term is defined for purposes of Section 409A of the
Code, notwithstanding anything to the contrary in the Plan.

 
5.
Timing and Manner of Payment of Performance Stock Units.  The Company shall
deliver to the Participant a number of shares of Stock (either by delivering one
or more certificates for such Stock or by entering such Stock in book entry
form, as determined by the Company in its discretion) equal to the number of
Performance Stock Units subject to the Award that are vested pursuant to
Sections 3, 4 and 7 on January 31, 2013 (the “Payment Date”), unless (i) the
Participant dies or becomes Disabled during the Net Income Performance Period or
the TSR Performance Period, in which case, the Payment Date shall be no later
than 60 days following the Participant’s death or Disability or (ii) the
provisions of Section 7(d) apply.  The Company’s obligation to deliver Stock is
subject to the condition precedent that the Participant or other person entitled
under the Plan to receive any Stock with respect to the vested Performance Stock
Units deliver to the Company any representations or other documents or
assurances required pursuant to Section 10.5 of the Plan.

 
 
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6.
Limitations on Rights Associated with Performance Stock Units.

 
(a)           Rights as a Stockholder.  Except as set forth in Section 6(b)
below, the Participant shall have no rights as a stockholder of the Company and
no voting rights with respect to the Performance Stock Units and any Stock
underlying or issuable in respect of such Performance Stock Units until such
Stock is actually issued to and held of record by the Participant.
 
(b)           Dividend Equivalent Reinvestment.  As of any date that the Company
pays an ordinary cash dividend on its Stock, the Company shall increase the
number of Performance Stock Units hereunder by the number of shares that
represent an amount equal to the per share cash dividend paid by the Company on
its Stock on such date multiplied by the number of Performance Stock Units
remaining subject to this Award as of the related dividend payment record
date.  For this purpose, fractional interests will be disregarded.  Any
Performance Units added pursuant to the foregoing provisions of this
Section 4(b) will be subject to the same vesting, forfeiture, payment,
termination and other terms, conditions and restrictions as the original target
Performance Stock Units to which they relate.  No such payment shall be made
with respect to any Performance Stock Units which, as of such record date, have
either been paid pursuant to Section 5 or terminated.
 
7.
Change in Control.

 
(a)           If a Change of Control occurs during the 2010 calendar year and
the Performance Stock Units are converted, assumed, or replaced by a successor
entity, the Performance Stock Units will be subject to time based vesting so
that the number of Performance Share Units set forth in Section 2(a) will be
delivered to the Participant (the “Change in Control 2010 Payout”) provided the
Participant remains continuously employed in active service by the Company or
its Subsidiaries from the Award Date through the Vesting Date.  Any such Award
will be paid on the Payment Date in accordance with Section 5.  Subject to
subclause (c) below, in the event that the Participant is not employed on the
Vesting Date, his/her Award will be forfeited and terminate; provided, however
that if such Participant dies or incurs a Disability, he/she will he/she will
receive the 2010 Change in Control Payout on or no later than 60 days following
his/her death or Disability and such payout will be prorated by multiplying such
payout by a fraction, the numerator of which is the number of whole months in
the TSR Performance Period that the Participant was employed by the Company and
the denominator of which shall be thirty-six (36).
 
(b)           If a Change of Control occurs following the 2010 calendar year and
the Performance Stock Units are converted, assumed, or replaced by a successor
entity, the number of Adjusted Net Income Units eligible for delivery will be
the Actual Net Income Payout and the number of TSR Units eligible for delivery
will be the Target TSR Award (the “Post 2010 Change in Control Payout”), and,
provided the Participant remains continuously employed in active service by the
Company or its Subsidiaries from the Award Date through the Vesting Date, any
such Award will be paid on January 31, 2013, in accordance with Section
5.  Subject to subclause (c) below, in the event that the Participant is not
employed on the Vesting Date, his/her Award will be forfeited and terminate;
provided, however that if such Participant dies or incurs a Disability, he/she
will receive the Post 2010 Change in Control Payout on or no later than 60 days
following his/her death or Disability and such payout will be prorated by
multiplying such payout by a fraction, the numerator of which is the number of
whole months in the TSR Performance Period that the Participant was employed by
the Company and the denominator of which shall be thirty-six (36).
 
 
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(c)           Notwithstanding anything to the contrary herein, in the event that
a Change in Control occurs and the Performance Stock Units are converted,
assumed, or replaced by a successor entity, if the Participant (i) is terminated
by the Company’s successor without Cause or (ii) is then bound by an employment
agreement, and such agreement contemplates a resignation for “Good Reason”, the
Participant’s resignation with “Good Reason” (as such term is defined in the
Participant’s employment agreement), in each case, during the one-year period
following the Change in Control, the Performance Stock Units will immediately
vest and become non-forfeitable.  Any such Performance Stock Units shall be
delivered on January 31, 2013 in accordance with Section 5.
 
(d)           Notwithstanding anything to the contrary herein, in the event a
Change in Control occurs and the Performance Stock Units are not converted,
assumed or replaced by a successor entity, the Performance Stock Units
(determined at “target”) shall vest in full in accordance with Section 11.3 of
the Plan and shall be paid in accordance with the terms of the Plan no later
than 60 days following such Change in Control, provided, however, that if such
Change in Control occurs following the 2010 calendar year, the number of
Adjusted Net Income Units eligible for delivery will be the Actual Net Income
Payout and the number of TSR Units eligible for delivery will be the Target TSR
Award.  Notwithstanding anything to the contrary herein or in the Plan, for
purposes of this Section 7(d), a Change in Control shall only occur if such
Change in Control meets the requirements of Treasury Regulation Section
1.409A-3(i)(5).
 
8.
Adjustments upon Specified Events.  Upon the occurrence of certain events
relating to the Company’s stock contemplated by Section 11.1 of the Plan
(including, without limitation, an extraordinary cash dividend on such stock),
the Committee shall make adjustments in accordance with such section in the
number of stock units then outstanding and the number and kind of securities
that may be issued in respect of the Award.

 
9.
Restrictions on Transfer.  Neither the Award, nor any interest therein or amount
or shares payable in respect thereof may be sold, assigned, transferred, pledged
or otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily.  The transfer restrictions in the preceding sentence shall not
apply to (a) transfers to the Company, or (b) transfers by will or the laws of
descent and distribution.

 
10.
No Right to Continued Employment.  Nothing contained in this Agreement or the
Plan constitutes an employment or service commitment by the Company, affects the
Participant’s status as an employee at will who is subject to termination
without Cause, confers upon the Participant any right to remain employed by or
in service to the Company or any Subsidiary, interferes in any way with the
right of the Company or any Subsidiary at any time to terminate such employment
or services, or affects the right of the Company or any Subsidiary to increase
or decrease the Participant’s other compensation or benefits.   Nothing in this
paragraph, however, is intended to adversely affect any independent contractual
right of the Participant without his consent thereto.

 
11.
Tax Withholding.  Subject to Section 15.3 of the Plan, upon any distribution of
Stock in respect of the Performance Stock Units, the Committee may in its
discretion reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of whole shares, valued at their then Fair
Market Value, to satisfy any withholding obligations of the Company or its
Subsidiaries with respect to such distribution of shares at the minimum
applicable withholding rates.  In the event that the Company does not satisfy
such withholding obligations by such reduction of shares, or in the event of a
cash payment or any other withholding event in respect of the Performance Stock
Units, the Company (or a Subsidiary) shall be entitled to require a cash payment
by or on behalf of the Participant and/or to deduct from any compensation
payable to the Participant any sums required by federal, state or local tax law
to be withheld with respect to such distribution or payment.

 
 
 
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12.
Governing Law.  The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

 
13.
Conformity to Securities Laws.  The Participant acknowledges that the Plan and
this Agreement are intended to conform to the extent necessary with all
provisions the Securities Act, the Exchange Act, and any and all regulations and
rules promulgated thereunder by the Securities and Exchange Commission,
including without limitation Rule 16b-3 under the Exchange Act.  Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Awards
are granted, only in such a manner as to conform to such laws, rules and
regulations.  To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.

 
14.
Amendment, Suspension and Termination.  The Awards may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Committee or the Board, provided, that, except as may otherwise
be provided by the Plan, neither the amendment, suspension nor termination of
this Agreement shall, without the consent of the Participant, alter or impair
any rights or obligations under any Award.

 
15.
Notices.  Notices required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the
United States mail by certified mail, with postage and fees prepaid, addressed
to the Participant to his address shown in the Company records, and to the
Company at its principal executive office.

 
16.
Award Not Funded.  The Participant will have no right or claim to any specific
funds, property or assets of the Company as to this Award.

 
17.
Force and Effect.  The various provisions herein are severable in their
entirety. Any determination of invalidity or unenforceability of any one
provision will have no effect on the continuing force and effect of the
remaining provisions.

 
18.
Entire Agreement.  This Agreement and the Plan contains the entire understanding
of the parties in respect of the Performance Stock Units and supersedes all
other prior agreements and understandings between the parties with respect to
the Performance Stock Units.

 
19.
Construction.  This Agreement shall be construed and interpreted to comply with
Section 409A of the Code.  The Company reserves the right to amend this
Agreement to the extent it reasonably determines is necessary in order to
preserve the intended tax consequences of the Performance Stock Units in light
of Section 409A of the Code and any regulations or other guidance promulgated
thereunder.  

 
 
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* * * * *
 
The Participant represents that he/she has read this Agreement and the Plan and
is familiar with the terms and provisions of each.  The Participant acknowledges
that the Award is issued pursuant to, and is subject to the terms and conditions
of, the Plan, and the Participant will be bound by the terms of the Plan as if
it were set forth verbatim in this Agreement.  The Participant agrees to comply
with all rules the Company may establish with respect to the Plan.  The
Participant further acknowledges and agrees that this Agreement (and the Plan)
constitutes the entire agreement between the parties with respect to the Award
and that this Agreement (and the Plan) supersedes any and all prior agreements,
whether written or oral, between the parties with respect to the Award.
 
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first set forth above.
 
DEALERTRACK HOLDINGS, INC.
 
PARTICIPANT
 
By:___________________________
  ___________________________________
Name:
   
Title:
   
 
 
Residence Address:
         
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