Document:

Exhibit
10.27

    

    SELECTIVE
INSURANCE GROUP, INC.

    NON-EMPLOYEE
DIRECTORS’ DEFERRED COMPENSATION PLAN

    

    
      	
              1.

            	
              Establishment.

            

    

     

    Selective
Insurance Group, Inc. (the “Company”) has established this Selective Insurance
Group, Inc. Non-Employee Directors’ Deferred Compensation Plan (the “Plan”)
effective as of May 1, 2010.  The Plan is designed to permit
non-employee directors of the Company to elect from year to year: (i) to receive
their annual retainer in the forms of cash or Company stock; and/or (ii) to
defer receipt of all or a portion of their compensation received as a
non-employee director, whether payable in cash or Company stock.  This
Plan is intended to amend and restate those provisions of the Selective
Insurance Group Inc. 2005 Omnibus Stock Plan, as amended through to December 31,
2008, which relate to the compensation of non-employee directors of the Company,
effective as of as May 1, 2010.

     

    
      	
              2.

            	
              Definitions.

            

    

     

    As used
in the Plan, the following definitions apply to the terms indicated
below:

    

    (a)           “Account” shall mean
the bookkeeping Account established by the Company in the name of each
Participant who has elected to defer receipt of all or a portion of his Director
Compensation, and which reflects the interest of the Participant under the
Plan.

     

    (b)           “Administrator” shall
mean the Company’s Salary and Employee Benefits Committee, which shall consist
of two or more persons appointed by the Board, each of whom shall qualify as a
“nonemployee director” within the meaning of Rule 16b-3 the promulgated under
the Securities Exchange Act of 1934, as amended.

     

    (c)           “Annual Retainer”
shall mean the annual retainer fees payable to a Non-Employee Director for a
particular calendar year.

     

    (d)           “Beneficiary” shall
mean the person or persons last designated by a Participant in writing in
accordance with procedures established by the Administrator to receive the
Participant’s benefits under the Plan in the event of the Participant’s
death.  If no designated beneficiary survives the Participant, the
Participant’s Beneficiary shall be the Participant’s estate.

     

    (e)           “Board” shall mean the
Board of Directors of the Company.

     

    (f)           “Change in Control”
shall have the meaning set forth in the Stock Plan; provided, however, that no Change in
Control shall be deemed to have occurred under this Plan unless such Change in
Control also constitutes a change in the ownership or effective control of the
Company or a change in the ownership of a substantial portion of the assets of
the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code and the
regulations thereunder.

     

    (g)           “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time, and any regulations
promulgated thereunder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (h)     
     “Company” shall mean
Selective Insurance Group, Inc., a New Jersey corporation.

     

    (i)      
     “Company Stock” shall
mean the common stock of the Company, par value $2.00 per share.

     

    (j)       
    “Deferral Period”
shall have the meaning set forth in Section 9.

     

    (k)       
   “Director
Compensation” shall mean all compensation payable to a Non-Employee
Director for his services as a member of the Board, including, but not limited
to, the Annual Retainer, committee fees and committee chairperson fees, but
excluding any awards (other than Stock Grants issued in settlement of all or a
portion of a Director’s Annual Retainer) issued under the Stock
Plan.

     

    (l)         
  “Director
Payment Date” shall mean each January 1, April 1, July 1 and October 1,
or, if such day is not a business day, the next succeeding business
day.

     

    (m)          “Fair Market Value”
shall have the meaning set forth in the Stock Plan.

     

    (n)       
   “Participant” shall
mean a Non-Employee Director who elects to defer any portion of his Director
Compensation pursuant to the Plan, and any Non-Employee Director on whose behalf
an Account balance is maintained under this Plan.

     

    (o)          “Non-Employee
Director” or “Director” shall mean
a member of the Board who is not an employee of the Company or any Subsidiary of
the Company.

     

    (p)          “Separation from
Service” shall mean a Participant’s “separation from service,” as that
term is defined in Section 409A(a)(2)(A)(i) of the Code and regulations of the
Treasury thereunder, from the Company.  For the avoidance of doubt, a
Non-Employee Director who ceases to provide services as a Director of the
Company and who immediately thereafter becomes an employee of the Company may
incur a Separation from Service for purposes of this Plan, to the extent set
forth in Section 409A and the regulations thereunder.

     

    (q)          “Stock Plan” shall
mean the Selective Insurance Group Inc. 2005 Omnibus Stock Plan, as amended from
time to time.

     

    (r)           “Subsidiary” shall
mean a “subsidiary corporation” of the Company within the meaning of Section
424(f) of the Code.

     

    (s)           “Plan” shall mean this
Selective Insurance Group, Inc. Non-Employee Directors’ Deferred Compensation
Plan, as it may be amended from time to time.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
              3.

            	
              Election
      of Form of Payment of Annual
Retainer.

            

    

     

    (a)           Annual
Election.  Each Non-Employee Director’s Annual Retainer shall
be paid, at the election of the Non-Employee Director, in: (i) shares of Company
Stock; (ii) cash; or (iii) a combination thereof; provided, however that the Administrator may
limit, with respect to any year, the percentage of the Annual Retainer that a
Director may elect to be paid in Company Stock or in cash.  Each
Non-Employee Director may elect, on or before December 20 of each year, to
receive his Annual Retainer payable during the next succeeding calendar year in
cash or shares of Company Stock.  The election made pursuant to this
Section 3(a) shall be irrevocable for the calendar year for which the election
is made, and shall apply to each calendar year thereafter until the Non-Employee
Director, on or before December 20 of the immediately preceding calendar year,
makes a different election for the next succeeding calendar year, which election
shall continue in effect until a different election is made in the manner
provided in the Plan; provided, however, that any
such election shall be subject to any limit imposed by the Administrator on the
maximum percentage of a Director’s Annual Retainer that is payable in shares of
Company Stock or in cash in any year.

     

    (b)           Payment of Annual Retainer
in Common Stock.  The number of shares of Company Stock to be
issued to each Non-Employee Director pursuant to this Section 3 shall be
determined on each Director Payment Date.  On each Director Payment
Date, each Non-Employee Director shall become entitled to receive that number of
shares of Company Stock that is determined by dividing one fourth of the amount
of the Director’s Annual Retainer for the calendar year that the Non-Employee
Director has elected to be paid in Company Stock by the Fair Market Value of one
share of Company Stock as of the Director Payment Date.  Any
fractional shares resulting from such calculation shall be rounded up to the
nearest whole number of shares.  Except to the extent the Non-Employee
Director has elected to defer receipt of any portion of the Annual Retainer to
be paid in Company Stock, such shares of Common Stock shall be issued to the
Non-Employee Director within 90 days following the applicable Director Payment
Date.

     

    (c)           Payment of Annual Retainer
in Cash.  On each Director Payment Date, each Non-Employee
Director shall become entitled to receive a cash payment equal to one fourth of
the amount of the Director’s Annual Retainer for the calendar year that the
Non-Employee Director has elected to be paid in cash.  Except to the
extent the Non-Employee Director has elected to defer receipt of any portion of
the Annual Retainer to be paid in cash, such cash shall be paid to the
Non-Employee Director within 90 days following the applicable Director Payment
Date.

     

    (d)           New Non-Employee
Directors.  Any person who becomes a Non-Employee Director
after a Director Payment Date and before the next succeeding Director Payment
Date in any year, whether by appointment or election as a member of the Board or
by ceasing to be an employee of the Company or a Subsidiary, shall receive, in
shares of Company Stock, a pro-rata amount of such Non-Employee Director’s
Annual Retainer until the next Director Payment Date.  Such pro rata
amount of the Annual Retainer shall be determined by multiplying the amount of
the Non-Employee Director’s annualized Annual Retainer for the year by a
fraction, the numerator of which shall be the number of days remaining from the
date of election or appointment until the next succeeding Director Payment Date,
and the denominator of which shall be 365.  Within thirty (30) days of
becoming a Non-Employee Director, such person may make an election under Section
3(a) to receive the remainder of the year’s Annual Retainer in cash or in shares
of Company Stock.

    
      
         

      

      
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    (e)           Book
Entry.  Shares of Company Stock issued hereunder shall be
issued in book entry form in the name of or for the account of the Participant
or other person entitled to receive such shares in accordance with the terms of
the Stock Plan.

     

    (f)           Non-Employee Director
Compensation Other Than Annual Retainer.  Any Director
Compensation to be received by a Non-Employee Director with respect to his
services on the Board other than the Annual Retainer shall be paid in
cash.

     

    
      	
              4.

            	
              Deferral
      of Receipt of Director
Compensation.

            

    

     

    (a)           Initial Election to
Defer.  A Non-Employee Director may irrevocably elect, on or
before December 20 of the year prior to the year in which Director Compensation
will be earned, to defer the issuance and receipt of shares of Company Stock and
cash (if any) payable in respect of such Director Compensation.  Any
such election shall be irrevocable for the calendar year for which the election
is made and shall apply to each calendar year thereafter unless the Non-Employee
Director, on or before December 20 of the immediately preceding calendar year,
makes a different election for the next succeeding calendar year, which election
shall continue in effect until a different election is made in the manner
provided in the Plan.

     

    (b)           Deferral
Period.  A Non-Employee Director who makes a deferral election
under paragraph (a) may elect to defer issuance of shares of Company Stock
and/or payment of cash until: (i) a specified date or dates in the future; (ii)
the Non-Employee Director’s attainment of age 70; or (iii) the Non-Employee
Director’s Separation from Service.  To the extent a Non-Employee
Director has an outstanding deferral election subject to Section 409A of the
Code made pursuant to the Non-Employee Director provisions of the Stock Plan
prior to the effective date of this Plan, and which defers Director Compensation
until the termination of such Director’s services as a Non-Employee Director,
the deferral election shall be deemed to defer the Non-Employee Director’s
Director Compensation until such Director’s Separation from
Service.

     

    (c)           First Year of
Eligibility.  Notwithstanding anything in this Section 4 to the
contrary, an individual who first becomes a Non-Employee Director on or after
the first day of a calendar year may, on or before the thirtieth (30th) day
after the date on which he first becomes a Non-Employee Director, make an
election under this Section 4 with respect to Director Compensation earned in
the same calendar year for services performed after the date of the
election.  Any such election with respect to the Director’s Annual
Retainer or other Director Compensation that is earned based upon a performance
period of a year may apply only to that pro rata portion of such Annual Retainer
or other such Director Compensation that is determined by multiplying the
Director’s total Annual Retainer or other such Director Compensation payable for
the year by a fraction, the numerator of which is the number of days in the year
remaining after the election, and the denominator of which is the number of days
in the year following the date on which he first become a Non-Employee
Director.

    
      
         

      

      
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              5.

            	
              Form
      of Payment.

            

    

     

    At the
time of making an initial deferral election pursuant to Section 4 with respect
to Director Compensation to be earned in a calendar year, a Participant may
elect to receive shares of Company Stock and cash, the issuance of which is
deferred hereunder, and any cash dividends on shares of Company Stock, the
issuance of which is deferred hereunder, in either: (i) a lump sum; or (ii)
subject to Section 6, up to five (5) equal (or as nearly equal as possible)
annual installments, on, or commencing on, the selected date(s) set forth in
Section 4(b).  Payments from a Participant’s Account shall be made in
accordance with any administrative rules established by the Administrator from
time to time.

     

    
      	
              6.

            	
              Effect
      of Change in Control.

            

    

     

    In the
event of a Change in Control, notwithstanding a Participant’s deferral election
under Sections 4, 5 and 7, if the Participant incurs a Separation from Service
within two (2) years after the Change in Control, then all shares of Company
Stock and cash (if any) deferred under the Plan, plus any cash dividend
equivalents and accrued interest, shall be issued on the first day of the month
following the Participant’s Separation from Service.

     

    
      	
              7.

            	
              Election
      Changes.

            

    

     

    A
Participant may change the time of a lump sum payment or the time of an
installment payment of Director Compensation that has been deferred pursuant to
Section 4 by written notice to the Administrator, provided that: (i) the notice
is received not later than one (1) year prior to the date the payment is
scheduled to be made; (ii) the notice must defer the time that payment is made
for at least five (5) years from the originally scheduled payment date; and
(iii) the change may not take effect until at least twelve (12) months after the
date on which the election is made.

    

    
      	
              8.

            	
              Accounts.

            

    

     

    An
Account shall be established on the books and records of the Company for each
Participant who elects to defer the receipt of shares of Company Stock and/or
cash under the Plan, and all shares of Company Stock and cash so deferred shall
be credited to such Participant's Account.

     

    
      	
              9.

            	
              Dividends
      and Interest.

            

    

     

    (a)           Dividend
Equivalents.  In the event that cash dividends on shares of
Company Stock, the issuance of which is deferred by a Participant hereunder, are
declared and paid during the period commencing on the date such shares would
have been issued but for such deferral and terminating on the date of issuance
of such shares of Company Stock (the “Deferral Period”), an
amount equal to the amount of such dividends shall be credited to the
Participant's Account as and when such dividends are paid by the Company as if
such shares of Company Stock had been issued and outstanding during the Deferral
Period.  The Company shall pay the Participant on the date such
Participant's deferred shares of Company Stock are actually issued an amount in
cash equal to the amount of cash dividends paid on such shares of Company Stock,
on a cumulative basis, plus interest thereon, if any, pursuant to paragraph (b)
of this Section 9.

    
      
         

      

      
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    (b)           Crediting of Notional
Interest.  The cash portion of each Participant’s Account,
including any Director Compensation that is paid in cash, and any dividend
equivalents credited to the Participant’s Account pursuant to paragraph (a),
shall be credited with notional interest on December 31 of each year (if on such
date there is a balance in the Account).  With respect to Director
Compensation earned in 2010 and prior years and credited to an Account, such
notional interest shall be equal to the amount of interest, if any, which would
have been earned on the average cash balance in the Participant's Account for
the year at an annual rate of interest equal to the average two-year United
States Treasury Note rate for the year.  With respect to Director
Compensation earned in 2011 and subsequent years and credited to an Account,
such notional interest shall be equal to the amount of interest, if any, which
would have been earned on the average cash balance in the Participant's Account
for the year at such annual rate of interest as may be determined by the
Administrator from time to time.  If amounts credited to a
Participant's Account are distributed prior to any such December 31, notional
interest on such distributed amounts shall be credited to such Account
calculated from the beginning of the year to the date of the
distribution.

     

    (c)           Payment of
Cash.  All cash dividends paid on deferred shares of Company
Stock and interest thereon, and all interest on deferred Director Compensation
that is paid in cash, shall be paid to the Participant at the same time and in
the same form as the underlying deferred Director Compensation.

     

    
      	
              10.

            	
              Account
      Statements.

            

    

     

    An annual
statement will be furnished to each Participant stating the number of shares of
Company Stock and the cash balance credited to the Participant's Account as of
the preceding December 31.

     

    
      	
              11.

            	
              Administration.

            

    

     

    (a)           Powers of
Administrator.  The Administrator shall be charged with the
general administration of the Plan and shall have all powers necessary or
appropriate to accomplish its duties under the Plan.  The
Administrator shall administer the Plan in accordance with its
terms.  Any determination by the Administrator shall be made in its
sole and absolute discretion and shall be conclusive and binding upon all
persons.  The powers and responsibilities of the Administrator shall
include, without limitation, the following:

     

    (i)         determining
all questions relating to the eligibility of a Non-Employee Director to
participate in the Plan or to remain a Participant;

     

    (ii)        determining
the maximum percentage of a Non-Employee Director’s Annual Retainer for a year
that may be payable in shares of Company Stock or in cash;

     

    (iii)       determining
the notional interest rate for adjustment of Account balances;

     

    (iv)       computing
and certifying the amount and the kind of benefits to which any Participant may
be entitled;

     

    
      
         

      

      
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    (v)        establishing
procedures, correcting defects, supplying information, and reconciling
inconsistencies in any manner and to whatever extent is deemed necessary or
advisable to carry out the purpose of this Plan;

     

    (vi)       authorizing
and directing payments under the Plan;

     

    (vii)      determining
all questions arising in connection with the administration, interpretation and
application of the Plan;

     

    (viii)     maintaining
all necessary records for the administration of the Plan;

     

    (ix)        making
and publishing rules and regulations that are consistent with the terms hereof,
including administrative rules with respect to payments from Participant
Accounts;

     

    (x)         determining
the short and long-term liquidity needs of the Plan; and

     

    (xi)        assisting
any Participant regarding his rights, benefits, or elections available under the
Plan.

     

    (b)           Limitation of
Liability.  The Administrator shall be entitled to, in good
faith, rely or act upon any report or other information furnished to it by any
officer or other employee of the Company or any Subsidiary or affiliated entity,
the Company’s independent certified public accountants, or any executive
compensation consultant, legal counsel, or other professional retained by the
Company to assist in the administration of the Plan.  To the maximum
extent permitted by law, no individual or member of any committee appointed as
Administrator and no person to whom ministerial duties have been delegated shall
be liable to any person for any action taken or omitted in connection with the
interpretation and administration of the Plan.  The Company agrees to
indemnify and hold harmless each person who serves as the Administrator or as a
member of any committee acting as Administrator to the fullest extent permitted
by law for all acts done in good faith and without gross negligence, including
defense of all litigation, including legal fees.

     

    
      	
              12.

            	
              Amendment
      and Termination of the Plan.

            

    

     

    (a)           Amendment.  The
Company, or its delegee, may at any time make such modifications of the Plan as
it shall deem advisable.  All such amendments shall be in
writing.  Except for amendments which the Company reasonably believes
necessary or appropriate to avoid adverse tax consequences to Participants,
including amendments designed to avoid the penalties and interest imposed by
Section 409A of the Code, no amendment of the Plan may adversely affect the
rights of a Participant with an Account balance under the Plan without the
consent of the Participant.

     

    (b)           Termination.  Notwithstanding
anything in the Plan to the contrary, subject to the terms of Section 409A of
the Code, the Company may suspend, freeze or terminate the Plan at any time in
its sole discretion by written action of the Company or its
delegee.

    
      
         

      

      
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              13.

            	
              General
      Provisions.

            

    

     

    (a)           Issuance of Shares of Common
Stock under the Stock Plan.  All shares of Company Stock
issuable under the Plan shall be issued under the Stock Plan as Stock Grants, as
such term is defined in the Stock Plan.

     

    (b)           Nontransferability.  The
right to receive the shares of Company Stock and cash deferred hereunder,
amounts of cash dividends, and interest thereon, if any, described in this Plan
shall not be transferable, except by will or the laws of descent and
distribution.

     

    (c)           Unfunded Status of Plan and
Accounts.  Nothing contained in this Plan shall be deemed to
create a trust of any kind or create any fiduciary relationship between any
Participant and the Company.  All Account balances and all funds
payable in respect of cash, dividends on shares of Company Stock, and interest
thereon, if any, under this Plan shall continue for all purposes to be a part of
the general funds of the Company and shall not be specifically set aside or
otherwise segregated.  The obligation of the Company to issue and
deliver shares of Company Stock under this Plan shall be a general unfunded
contractual obligation of the Company.  To the extent that a
Participant acquires a right to receive payments from the Company and shares of
Company Stock from the Company under the Plan, such rights shall be no greater
than the rights of any unsecured general creditor of the Company and such rights
shall be an unsecured claim against the general assets of the
Company.

     

    (d)           Effective
Date.  This Plan shall be effective as of May 1, 2010, and
shall apply to all Non-Employee Directors who provide services to the Company on
or after May 1, 2010, or who, as of May 1, 2010, have any balance standing to
their credit in a Director Compensation deferred compensation account under the
Stock Plan.

     

    (e)           Code Section
409A.  All payments of Director Compensation under this Plan,
whether or not deferred hereunder, are intended to be exempt from, or to comply
with, the provisions of Section 409A of the Code, and the Plan shall be
administered and interpreted in accordance with such intention.  For
purposes of Code Section 409A, each installment payment made pursuant to a
Participant’s election under Sections 4, 5 or 7 shall be deemed a separate
payment, as described in Treas. Reg. Section 1.409A-2(b)(2).

     

    (f)           Receipt and
Release.  Payments (in any form) to any Participant or
Beneficiary in accordance with the provisions of the Plan shall be in full
satisfaction of all claims for the compensation deferred and relating to the
Participant’s Account against the Company, all of its affiliates, their
respective boards of directors, officers, employees, and the Administrator, and
the Administrator may require such Participant or Beneficiary, as a condition to
such payments, to execute a receipt and release to such effect.

     

    (g)           Compliance.  A
Participant in the Plan shall have no right to receive payment (in any form)
with respect to his Account until legal and contractual obligations of the
Company relating to establishment and maintenance of the Plan and the making of
such payments shall have been complied with in full.  In addition, the
Company shall impose such restrictions on any interest constituting a security
as it may deem advisable in order to comply with the Securities Act of 1933, as
amended, the requirements of NASDAQ or any applicable stock exchange or
automated quotation system, any state securities laws applicable to such a
transfer, any provision of the Company’s Certificate of Incorporation or
By-laws, as amended, or any other law, regulation, or binding contract to which
the Company is a party.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (h)          Expenses and
Receipts.  The expenses of the Plan shall be paid by the
Company.

     

    (i)           Governing
Law.  Except to the extent preempted by any applicable federal
law, the Plan shall be construed, administered and enforced in accordance with
the laws of the State of New Jersey without reference to its principles of
conflict law.

     

    (j)           Tax
Withholding.  The Company shall have the right to deduct from
amounts otherwise payable in settlement of a Participant’s Account under the
Plan any sums that federal, state, local, social security or foreign tax law
requires to be withheld with respect to such payment.

     

    (k)           Limitation.  A
Participant and his Beneficiary shall assume all risk in connection with any
decrease in value of the Participant’s Account, and neither the Company nor the
Administrator shall be liable or responsible therefor.

     

    (l)           Gender and
Number.  Where the context admits, words in the masculine
gender shall include the feminine and the neuter genders, the singular shall
include the plural, and the plural shall include the singular.

     

    (m)          Severability.  In
the event that any provision of the Plan shall be declared illegal or invalid
for any reason, such illegality or invalidity shall not affect the remaining
provisions of the Plan but shall be fully severable, and the Plan shall be
construed and enforced as if such illegal or invalid provision had never been a
part of the Plan.

     

    (n)           Required Notification to
Administrator.  Each Participant or his Beneficiary entitled to
payments hereunder shall file with the Administrator from time to time in
writing his post office address and each change of post office
address.  Any check representing payment hereunder and any
communication addressed to a Participant or his Beneficiary at the last address
filed with the Administrator, or, if no such address has been filed, then at his
last address as indicated on the records of the Company, shall be binding on
such person for all purposes of the Plan.

     

    (o)           Facility of
Payment.  Whenever and as often as any person entitled to
payments hereunder shall be under a legal disability, or in the sole judgment of
the Administrator shall otherwise be unable to apply such payments to his own
best interest and advantage, the Administrator, in the exercise of its
discretion, may, but is not required to, direct all or any portion of such
payments to be made in any one or more of the following ways:

     

    
      	
               
      

            	
              (i)

            	
              directly
      to such person;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              to
      his legal curator, guardian, or conservator, or other court-appointed or
      court-recognized representatives;
or

            

    

     

    
      
         

      

      
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              (iii)

            	
              to
      his spouse, to another member of his family, or to any other person, to be
      expended for his benefit.

            

    

     

    (p)          Notices and Other
Communications.  Except as determined by the Administrator with
respect to elections, any notice or other communication to be provided under any
provision of the Plan shall be in writing and shall be personally delivered,
sent by overnight courier, sent by facsimile transmission, or mailed by first
class, registered or certified mail, postage prepaid, return receipt
requested.  Any such notice shall be deemed to have been duly given if
personally delivered when delivered, if mailed five days after mailing, if sent
by facsimile when confirmed, and if sent by overnight courier one business day
after delivery to such courier.  All notices to be given to the
Company or to the Administrator shall be addressed to the Company or
Administrator at the Company’s principal office in care of the Company’s
Corporate Secretary, or at such other address(es) as the Company or the
Administrator may designate by like notice.  All notices to be given
to a Participant (or a Beneficiary) shall be addressed to the Participant at the
most recent address filed by the Participant with the Administrator, or, if no
such address has been filed, then at his last address as indicated on the
records of the Company.

     

    IN
WITNESS WHEREOF, this Selective Insurance Group, Inc. Non-Employee Directors’
Deferred Compensation Plan has been duly executed on this 23rd day of February,
2010.

     

    
      
        
          	
                  SELECTIVE
      INSURANCE GROUP, INC.

                
	 
      	 
      
	
                  By:

                	
                   

                
	
                  Name:  Robyn
      P. Turner

                
	
                  Title:  Corporate
      Secretary

                

        

      

    

     

    
      
         

      

      
        10EXHIBIT
10.6

     

    AMENDED AND RESTATED SENIOR
EXECUTIVE EMPLOYMENT AGREEMENT

     

    This
Amended and Restated Senior Executive Employment Agreement (the “Agreement”) is
entered into as of this 8th day of August, 2007 (the “Effective Date”) by
and between Richard McLeer (“Executive”) and
DealerTrack Holdings, Inc, a Delaware corporation (“Employer”) with
principal offices at 1111 Marcus Avenue, Suite M04, Lake Success, NY
11042.

     

    WHEREAS,
Executive and DealerTrack, Inc. are parties to a senior executive employment
agreement, dated as of February 7, 2007 (the “Existing Employment Agreement”);
and

     

    WHEREAS,
the parties hereto wish to amend and restate the Existing Employment Agreement
pursuant to this Agreement to, among other things, change employer from
DealerTrack, Inc. to DealerTrack Holdings, Inc. and amend certain severance and
non-compete terms;

     

    NOW,
THEREFORE, in consideration of the promises and the agreements hereinafter set
forth, the parties hereto hereby agree that, upon the effectiveness of this
Agreement, the Existing Employment Agreement is hereby amended and restated in
its entirety as follows:

     

    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 August 8, 2008 (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 Senior Vice President, Strategy and Development 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 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 Two Hundred Twenty Five Thousand Dollars ($225,000) (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 Employer (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
forty five (45%) 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 (21⁄2) 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.

    
      
         

      

      
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    (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 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

    
      
         

      

      
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    (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; 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.

    
      
         

      

      
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    (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 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

            

    

     

    
      
         

      

      
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              (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.

            

    

     

    (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.

     

    
      
        
        

      

      
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    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 shall be paid to Executive or Executive’s estate or beneficiary within
thirty (30) days of the date of termination.  If Executive voluntarily
terminates his employment without Good Reason and within (30) days of such
termination, Employer determines that it would have had Cause to terminate
Executive pursuant to Section 4(d), Executive shall be deemed to have been
terminated for Cause and the terms of Section 5(b) shall apply.

     

    (b)           Cause.  If
Executive’s employment is terminated by Employer for Cause, this Agreement shall
terminate without further obligations to Executive other than for the timely
payment of Accrued Obligations.  If it is subsequently determined by
an arbitrator, pursuant to Section 19 hereof, that Employer did not have Cause
for termination, then Employer’s decision to terminate shall be deemed to have
been made without Cause and the terms of Section 5(c) shall apply.

     

    (c)           By Employer Other than for
Cause; Death or Disability; By
Executive for Good Reason.

     

    (1)           If
(A) Employer terminates Executive’s employment for (x) a reason other than
Cause, or (y) due to Executive’s death or Disability, or (B) Executive
terminates his employment for Good Reason, Employer shall have no further
obligations to Executive other than for (i) the payment of Accrued
Obligations, (ii) severance pay in an amount equal to twelve (12) months of
Salary and payable within thirty (30) days of the Severance Commencement
Date; provided, however, that in the event that Executive’s termination of
employment is within twelve (12) months after a Change of Control, such
severance pay shall be increased to an amount equal to twenty four (24) months
of Salary, (iii) a pro rata bonus calculated based on multiplying the
percentage of the year Executive worked for Employer during the year of his
termination by Executive’s target Bonus for such year and payable within thirty
(30) days of the Severance Commencement Date, and (iv) the reimbursement of
premiums otherwise payable by Executive pursuant to COBRA for a period of up to
12 months, or until Executive no longer is eligible for COBRA continuation
coverage, whichever is earlier. For purposes of this Section 5, “Severance Commencement
Date” shall mean (x) if any stock of Employer or its affiliates is
publicly traded on an established securities market or otherwise and the Board
(or its delegate) determines that as of the date of termination of Executive’s
employment that the Executive is a “key employee” (within the meaning of Section
416(i) of the Internal Revenue Code of 1986, as amended (the “Code”), as
interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder) and that
Section 409A of the Code applies with respect to payments to Executive pursuant
to Section 5(c)(1)(ii) and (iii), the six-month anniversary of the date of the
Executive’s “separation from service” (within the meaning of section 409A of the
Code); or (y) if the Board (or its delegate) determines that Executive is not
such a “key employee” as of date of Executive’s termination of employment (or
that Section 409A of the Internal Revenue Code does not apply with respect to
payments to the Executive pursuant to Section 5(c)(1)(ii) and (iii)), the date
of Executive’s termination of employment. The payments described in this Section
5(c)(1)(i) shall be made within thirty (30) days of the date of Executive’s
termination of employment.

    
      
         

      

      
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    (2)           If
Executive terminates his employment for Good Reason and it is subsequently
determined by an arbitrator, pursuant to Section 20 hereof, that Executive did
not have Good Reason for termination, then Executive’s decision to terminate for
Good Reason shall be deemed to have been a voluntary resignation, the terms of
Section 5(a) shall apply, and all monies paid to Executive pursuant to this
Section 5(c)(1), except for those monies paid pursuant to Section 5(c)(1)(i),
shall be immediately returned to Employer.

     

    (3)           The
amounts payable pursuant to Section 5(c)(1) shall be the only amounts Executive
shall receive for termination in accordance with this Section 5(c); provided,
however, that no amounts shall be payable pursuant to this section 5(c) on or
following the date Executive breaches any of Sections 7, 8 or 9 of this
Agreement.

     

    (d)           Release.  Notwithstanding
anything to the contrary contained herein, no severance payments required
hereunder shall be made by Employer until such time as Executive shall execute a
general release for the benefit of Employer and its affiliates in a form
satisfactory to Employer.  Such general release shall not apply to (i)
Executive’s rights under any Stock Incentive Plan award agreements or (ii)
Executive’s rights, as applicable, to indemnification under Employer’s charter
or bylaws, any indemnification agreement or applicable law.

     

    (e)           Equity Compensation
Awards.  Except
as expressly provided herein, except for the provisions of Section 3(c) of this
Agreement, the terms of the Stock Incentive Plans and any related award
agreements and/or notice of grant shall govern the termination, vesting, and/or
exercise of Executive’s stock options or other equity awards upon the
termination of Executive’s employment for any reason.

     

    (f)           Exclusive
Remedy.  Executive agrees that the payments set forth in this
Agreement shall constitute the exclusive and sole remedy for any termination of
Executive’s employment and Executive covenants not to assert or pursue any other
remedies, at law or in equity, with respect to this Agreement.

     

    (g)           Termination of
Executive’s
Office.  Following the termination of Executive’s employment
for any reason, Executive shall hold no further office or position with Employer
or any of its affiliates.

     

    Section
6.        Parachute
Payments.

     

    (a)           If
it is determined by a nationally recognized United States public accounting firm
selected by the Employer and approved in writing by the Executive (which
approval shall not be unreasonably withheld) (the “Auditors”) that any
payment or benefit made or provided to the Executive in connection with this
Agreement or otherwise (including without limitation any Stock Option or other
equity based award vesting) (collectively, a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then
the Employer shall pay to the Executive, prior to the time the Parachute Tax is
payable with respect to such Payment, an additional payment (a “Gross-Up Payment”) in
an amount such that, after payment by the Executive of all taxes (including any
Parachute Tax) imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Parachute Tax imposed upon the
Payment.  The amount of any Gross-Up Payment shall be determined by
the Auditors, subject to adjustment, as necessary, as a result of any Internal
Revenue Service position.  For purposes of making the calculations
required by this Agreement, the Auditors may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code, provided that the Auditors’ determinations must be made with
substantial authority (within the meaning of Section 6662 of the
Code).

    
      
         

      

      
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    (b)           The
federal tax returns filed by the Executive (and any filing made by a
consolidated tax group which includes the Employer) shall be prepared and filed
on a basis consistent with the determination of the Auditors with respect to the
Parachute Tax payable by the Executive.  The Executive shall make
proper payment of the amount of any Parachute Tax, and at the request of the
Employer, provide to the Employer true and correct copies (with any amendments)
of his federal income tax return as filed with the Internal Revenue Service, and
such other documents reasonably requested by the Employer, evidencing such
payment.  If, after the Employer’s payment to the Executive of the
Gross-Up Payment, the Auditors determine in good faith that the amount of the
Gross-Up Payment should be reduced or increased, or such determination is made
by the Internal Revenue Service, then within ten (10) business days of such
determination, the Executive shall pay to the Employer the amount of any such
reduction, or the Employer shall pay to the Executive the amount of any such
increase; provided, however, that in no event
shall the Executive have any such refund obligation if it is determined by the
Employer that to do so would be a violation
of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and
provided, further, that if the Executive
has prior thereto paid such amounts to the Internal Revenue Service, such refund
shall be due only to the extent that a refund of such amount is received by the
Executive; and provided, further, that (i)
the fees and expenses of the Auditors (and any other legal and accounting fees)
incurred for services rendered in connection with the Auditor’s
determination of the Parachute Tax or any challenge by the Internal Revenue
Service or other taxing authority relating to such determination shall be paid
by the Employer and (ii) the Employer shall indemnify and hold the Executive
harmless on an after-tax basis for any interest and penalties imposed upon the
Executive to the extent that such interest and penalties are related to the
Auditor’s determination of the Parachute Tax or the Gross-Up
Payment.  Notwithstanding anything to the contrary herein, the
Executive’s rights under this Section 6 shall survive the termination of his
employment for any reason and the termination or expiration of this Agreement
for any reason.

     

    Section
7.        Restrictions Respecting
Confidential Information

     

    Executive
hereby covenants and agrees that, during his employment and thereafter,
Executive will not, under any circumstance, disclose in any way any Confidential
Information (as defined below) to any other person other than (i) at the
direction of and for the benefit of Employer, (ii) to his attorney or other
advisers in connection with Executive’s enforcement of his rights hereunder,
provided such individuals or entities agree to be bound by the confidentiality
restrictions herein contained, and if such Confidential Information is relevant
to such enforcement action, to the court or arbitrator, as applicable, subject
to a protective order.  For the purposes of the foregoing, “Confidential
Information” means any information pertaining to the assets, business,
creditors, vendors, manufacturers, customers, data, employees, financial
condition or affairs, formulae, licenses, methods, operations, procedures,
reports, suppliers, systems and technologies of Employer and its affiliates,
including (without limitation) the contracts, patents, trade secrets and
customer lists developed or otherwise acquired by Employer and its affiliates;
provided, however, that Confidential Information shall exclude any information
that was, is, or becomes publicly available other than through disclosure by
Executive or any other person known to Executive to be subject to
confidentiality obligations to Employer.  All Confidential Information
is and will remain the sole and exclusive property of Employer and its
affiliates.  Following the termination of his employment, Executive
shall return all documents and other tangible items containing Confidential
Information to Employer, without retaining any copies, notes or excerpts
thereof.

    
      
         

      

      
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    Section
8.        Proprietary
Matters

     

    Executive
expressly understands and agrees that any and all improvements, inventions,
discoveries, processes, or know-how that are generated or conceived by Executive
during the Term (collectively, the “Inventions”) will be
the sole and exclusive property of Employer, and Executive will, whenever
requested to do so by Employer (either during the Term or thereafter), execute
and assign any and all applications, assignments and/or other instruments and do
all things which Employer may deem necessary or appropriate in order to apply
for, obtain, maintain, enforce and defend patents, copyrights, trade names or
trademarks of the United States or of foreign countries for said Inventions, or
in order to assign and convey or otherwise make available to Employer the sole
and exclusive right, title, and interest in and to said Inventions,
applications, patents, copyrights, trade names or trademarks; provided, however,
that the provisions of this Section 8 shall not apply to an Invention that
Executive developed entirely on his own time without using Employer’s
Confidential Information except for those Inventions that either
(i) directly and materially relate, at the time of conception or reduction
to practice of the invention, to Employer’s business, or actual or demonstrably
anticipated research or development of Employer, or (ii) directly and
materially result from any work performed by Executive for
Employer.  Executive shall promptly communicate and disclose to
Employer all Inventions conceived, developed or made by him during his
employment by Employer, whether solely or jointly with others, and whether or
not patentable or copyrightable, (a) which relate to any matters or
business of the type carried on or being developed by Employer, or
(b) which result from or are suggested by any work done by him in the
course of his employment by Employer.  Executive shall also promptly
communicate and disclose to Employer all material other data obtained by him
concerning the business or affairs of Employer in the course of his employment
by Employer.

     

    Section
9.        Nonsolicitation/Non-Compete

     

    (a)           Executive
agrees that throughout his employment and for a period of two (2) years
following the termination of his employment for any reason, he will not directly
or indirectly, own, manage, operate, control, or participate in the ownership,
management, operation, or control of, or be connected with, or have any
financial interest in, any Competitor.  Ownership, for personal
investment purposes only, of not to exceed (i) individually, two (2%)
percent of the outstanding capital stock of any privately held entity, or
(ii) voting stock of any publicly held corporation shall not constitute a
violation hereof.  For purposes of this Agreement, the term “Competitor” shall
mean any individual or entity, present or future, then providing any of the
following products or services:  (1) a multi-finance source automotive
finance portal, (2) electronic contracting for automotive finance or lease
transactions, other than at a financing source entity that purchases electronic
contracts or leases from automotive dealers, (3) automotive lease, retail and/or
balloon payment comparison or desking tools, (4) dealer management systems
(DMS), (5) any other sales or finance and insurance-related products or services
for automotive dealerships similar to any products or services offered by
Employer or any of its affiliates, or (6) any other products or services similar
to any products or services offered by Employer or any of its affiliates and
which product or service category accounts for at least 15% of the consolidated
revenues for the last fiscal quarter of Employer.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (b)           Executive
agrees that during his employment with Employer and for a period of two (2)
years following the termination of his employment for any reason, he will not
actively solicit for employment, consulting or any other arrangement any
employee of Employer or any of its present or future affiliates (while an
affiliate).

     

    (c)           Executive
agrees that during his employment with Employer and for a period of two (2)
years following the termination of his employment for any reason, he will not
influence or attempt to influence customers of Employer or any of its present or
future affiliates, either directly or indirectly, to divert their business to
any Competitor.

     

    (d)           The
restrictions contained in this Section 9 are necessary for the protection of the
business and goodwill of Employer and are considered by Executive to be
reasonable for such purpose.  Further, Executive represents that these
restrictions will not prevent him from earning a livelihood during the
restricted period.

     

    (e)           This
Section 9 shall survive the termination or expiration of this
Agreement.

     

    Section
10.      Equitable
Relief

     

    Executive
acknowledges and agrees that Employer will suffer irreparable damage which
cannot be adequately compensated by money damages in the event of a breach, or
threatened breach, of any of the terms and provisions of Sections 7, 8 and 9 of
this Agreement, and that, in the event of any such breach, or threatened breach,
Employer will not have an adequate remedy at law.  It is therefore
agreed that Employer, in addition to all other such rights, powers, privileges
and remedies that it may have, shall be entitled to injunctive relief, specific
performance or such other equitable relief as Employer may request to enforce
any of those terms and provisions and to enjoin or otherwise restrain any act
prohibited thereby, and Executive will not raise and hereby waives any objection
or defense that there is an adequate remedy available at
law.  Notwithstanding the provisions of Section 20 of this Agreement,
Executive agrees that Employer shall be entitled to seek such injunctive relief,
without bond, in a court of competent jurisdiction and Executive hereby consents
to the jurisdiction of the state and federal courts of New York for purposes of
such an action.  Executive agrees that any claim he may have against
Employer or any of its affiliates shall not constitute a defense against the
issuance of any such equitable relief.  The foregoing shall not
constitute a waiver of any of Employer’s rights, powers, privileges and remedies
against or in respect of a breaching party or any other person or thing under
this Agreement, or applicable law.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
11.      Notice

     

    Any
notice, request, demand or other communication hereunder shall be in writing,
shall be delivered by hand or sent by registered or certified mail or by
reputable overnight delivery service, postage prepaid, to the addressee at the
address set forth below (or at such other address as shall be designated
hereunder by written notice to the other party hereto) and shall be deemed
conclusively to have been given when actually received by the
addressee.

     

    All
notices and other communications hereunder shall be addressed as
follows:

     

    If to
Executive at the address set forth in the Employer’s payroll
records.

     

    If to
Employer:

     

    DealerTrack
Holdings, Inc.

    1111
Marcus Avenue, Suite M04

    Lake
Success, NY 11042

     

    With a
copy to:

     

    General
Counsel

    DealerTrack
Holdings, Inc.

    1111
Marcus Avenue, Suite M04

    Lake
Success, NY 11042

     

    or to
such other address as either party shall have furnished to the other in writing
in accordance herewith.

     

    Section
12.      Legal
Counsel

     

    In
entering into this Agreement, the parties represent that they have relied upon
the advice of their attorneys, who are attorneys of their own choice, and that
the terms of this Agreement have been completely read and explained to them by
their attorneys, and that those terms are fully understood and voluntarily
accepted by them.

     

    Section
13.      Section and Other
Headings

     

    The
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

     

    Section
14.      Governing
Law

     

    This
Agreement has been executed and delivered, and shall be governed by and
construed in accordance with the applicable laws pertaining, in the State of New
York, without regard to conflicts of laws principles.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
15.      Severability

     

    In the
event that any term or provision of this Agreement shall be finally determined
to be superseded, invalid, illegal or otherwise unenforceable pursuant to
applicable law by a governmental authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability, to the maximum extent permissible by law, (a) by or before
that authority of the remaining terms and provisions of this Agreement, which
shall be enforced as if the unenforceable term or provision were deleted, or
(b) by or before any other authority of any of the terms and provisions of
this Agreement.

     

    Section
16.      Counterparts

     

    Section
17.      This Agreement may be executed in two
counterpart copies of the entire document or of signature pages to the document,
each of which may be executed by one of the parties hereto, but all of which,
when taken together, shall constitute a single agreement binding upon both of
the parties hereto.

     

    Section
18.      Benefit

     

    This
Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their legal representatives, successors and
assigns.  Insofar as Executive is concerned, this Agreement, being
personal, cannot be assigned; provided, however, that should Executive become
entitled to payment pursuant to Section 5 hereof, he may assign his rights to
such payment to his legal representatives, successors, and
assigns.  Without limiting the generality of the foregoing, all
representations, warranties, covenants and other agreements made by or on behalf
of Executive in this Agreement shall inure to the benefit of the successors and
assigns of Employer.

     

    Section
19.      Modification

     

    This
Agreement may not be amended or modified other than by a written agreement
executed by all parties hereto.

     

    Section
20.      Entire
Agreement

     

    Except as
provided in Section 5(e) hereof, this Agreement contains the entire agreement of
the parties and supersedes all other representations, warranties, agreements and
understandings, oral or otherwise, among the parties with respect to the matters
contained herein, including any prior employment agreements between Executive
and Employer or any affiliate of Employer.

     

    Section
21.      Arbitration

     

    (a)           Executive
agrees that any dispute or controversy arising out of, relating to, or in
connection with this Agreement or the termination thereof, or the
interpretation, validity, construction, performance, breach, or termination
thereof, shall be settled by expedited, binding arbitration to be held in New
York, New York in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
“Rules”).  The
arbitrator may grant injunctions or other relief in such dispute or
controversy.  The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration.  Judgment
may be entered on the arbitrator’s decision in any court having
jurisdiction.  The arbitrator may award the prevailing party its
reasonable attorney’s fees.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (b)           The
arbitrator shall apply New York law to the merits of any dispute or claim,
without reference to rules of conflicts of law.  The arbitration
proceedings shall be governed by federal arbitration law and by the Rules,
without reference to state arbitration law.

     

    (c)           EXECUTIVE
HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF
THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, STATUTORY
DISCRIMINATION CLAIMS.

     

    Section
22.      Representations and
Warranties of Executive

     

    In order
to induce Employer to enter into this Agreement, Executive represents and
warrants to Employer, to the best of his knowledge after the review of his
personnel files, that: (a) the execution and delivery of this Agreement by
Executive and the performance of his obligations hereunder will not violate or
be in conflict with any fiduciary or other duty, instrument, agreement,
document, arrangement or other understanding to which Executive is a party or by
which he is or may be bound or subject; and (b) Executive is not a party to
any instrument, agreement, document, arrangement or other understanding with any
person (other than Employer) requiring or restricting the use or disclosure of
any confidential information or the provision of any employment, consulting or
other services.

     

    Section
23.      Waiver of
Breach

     

    Except as
may specifically provided herein, the failure of a party to insist on strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement.  Any waiver
hereto must be in writing.

    

    [signature
page follows]

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  EXECUTIVE:

                                
	 
      	 
      
	 
      	 
      
	 
      	
                                  Richard
      McLeer

                                
	 
      	 
      
	 
      	
                                  EMPLOYER:

                                
	 
      	 
      
	 
      	
                                  By:

                                	 
      
	 
      	
                                  Name: 

                                	 
      
	 
      	
                                  Title:

                                	 
      
	 
      	
                                  Date:

                                	 
      
	 
      	 
      
	 
      	
                                  Agreed
      to and acknowledged

                                
	 
      	 
      
	 
      	
                                  DealerTrack,
      Inc.

                                
	 
      	 
      	 
      
	 
      	
                                  By:

                                	 
      
	 
      	
                                  Name: 

                                	 
      
	 
      	
                                  Title:

                                	 
      
	 
      	
                                  Date:

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