UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A
(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

 

Check the appropriate box:

DEALERTRACK HOLDINGS, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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March 31, 2010

Dear Stockholder:

On behalf of the board of directors and management of DealerTrack Holdings, Inc., I invite you to attend our Annual Meeting of Stockholders. The meeting will be held on May 24, 2010, at 11:00 a.m. local time, at DealerTrack Corporate Headquarters, 1111 Marcus Avenue, Suite M04, Lake Success, New York 11042.

The details of the business to be conducted at the Annual Meeting are provided in the attached Notice of the Annual Meeting of Stockholders and in the attached Proxy Statement.

It is important that your stock is represented, regardless of the number of shares you hold. After reading the enclosed Proxy Statement, please vote your proxy in accordance with the instructions provided.

If you have any questions about the meeting, please contact our Investor Relations Department at (888) 450-0478.

We look forward to seeing you at the Annual Meeting.

Sincerely,
  
  
Mark F. O’Neil
Chairman of the Board,
President and Chief Executive Officer

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NOTICE OF ANNUAL MEETING OF THE STOCKHOLDERS

Date:		May 24, 2010
Time:		11:00 a.m. local time
Location :		DealerTrack Holdings, Inc. 1111 Marcus Ave, Suite M04 Lake Success, New York 11042
Matters To Be Voted On:		(1) To elect three members of the board of directors for three-year terms as Class II directors to serve until our 2013 Annual Meeting of Stockholders or until their successors are elected; and
		(2) To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2010.
Record Date:		March 30, 2010. You are eligible to vote if you were a stockholder of record at the close of business on this date.
Voting Methods:		By Mail In Person Via the Internet
Importance Of Vote :		Submit a proxy as soon as possible to ensure that your shares are represented.
		Voting promptly will insure that we have a quorum at the Annual Meeting and will save us proxy solicitation expenses.

By Order of the Board of Directors,
  
  
  
Gary N. Papilsky
Secretary

Lake Success, New York
March 31, 2010

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DEALERTRACK HOLDINGS, INC.
  
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		Page
General Information			1
The Annual Meeting			1
Purpose of Meeting			1
Information Concerning Voting and Solicitation of Proxies			1
Who Can Vote?			1
How You Can Vote			1
How to Revoke Your Proxy or Change Your Vote			3
How Many Votes You Have			3
Quorum			3
Votes Required			3
Proposal One: Election of Directors			4
General Information About Our Board of Directors			4
Nominees			4
Recommendation of Our Board of Directors			4
Information About Nominees for Election as Class II Directors			4
Information About the Members of Our Board of Directors Whose Terms of Office Do Not Expire at the Annual Meeting			5
Board Meetings Held During 2009			6
Board Independence			7
Stockholder Communications With the Board of Directors			7
Director Attendance at Annual Meeting			7
Code of Business Conduct and Ethics			7
Committees			8
Non-Management Directors’ Compensation for Fiscal Year 2009			10
Audit Committee Report			13
Principal Accountant Fees and Services			14
Proposal Two: Ratification of Selection of Independent Registered Public Accounting Firm			14
Executive Officers			15
Compensation Discussion and Analysis			16
Compensation Committee Report			23
Executive Compensation			24
Summary Compensation Table			24
All Other Compensation Table			26
Grants of Plan-Based Awards in 2009			27
Outstanding Equity Awards at 2009 Fiscal Year End			27
Option Exercises and Stock Vested in Fiscal 2009			29
Nonqualified Deferred Compensation			30

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		Page
Potential Payments Upon Termination			31
Compensation Committee Interlocks and Insider Participation			32
Employment Agreements With Named Executive Officers			33
Security Ownership of Certain Beneficial Owners and Management			35
Section 16(a) Beneficial Ownership Reporting Compliance			36
Certain Relationships and Transactions			37
Miscellaneous			38
Solicitation of Proxies			38
Deadline for Receipt of Stockholder Proposals for Our 2011 Annual Meeting			38
Annual Report			38

DEALERTRACK HOLDINGS, INC.
1111 Marcus Ave., Suite M04
Lake Success, New York 11042

 

PROXY STATEMENT

 

FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2010

GENERAL INFORMATION

Information About the Notice of Internet Availability of Proxy Materials

This year, instead of mailing a printed copy of our proxy materials, including our Proxy Statement and Annual Report on Form 10-K, to each stockholder, we have decided to provide access to these materials to our stockholders in a fast and efficient manner via the Internet. This reduces the amount of paper necessary to produce these materials, as well as the costs associated with mailing these materials to all stockholders. Accordingly, on or about March 31, 2010, we began mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to some of our stockholders and posted our proxy materials on the website referenced in the Notice (http://ir.dealertrack.com/2010proxy.cfm). As more fully described in the Notice, stockholders may choose to access our proxy materials on the website referred to in the Notice or may request to receive a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

The Annual Meeting

Our board of directors is soliciting proxies to be used at our Annual Meeting of Stockholders to be held on May 24, 2010. This Proxy Statement, the accompanying Notice of Annual Meeting of Stockholders and form of proxy are being made available to our stockholders on or about March 31, 2010.

Purpose of Meeting

The specific proposals to be considered and acted upon at the Annual Meeting are summarized in the accompanying Notice of Annual Meeting. The proposals are described in more detail in this Proxy Statement.

Information Concerning Voting and Solicitation of Proxies

Who Can Vote?

Only stockholders of record at the close of business on March 30, 2010 may vote at the Annual Meeting. As of March 29, 2010, there were 40,262,773 shares of our common stock outstanding.

How You Can Vote

Stockholders of Record.  If your shares are registered directly in your name with our transfer agent, American Stock and Transfer & Trust Company, LLC, you are considered a stockholder of record with respect to those shares, and the proxy materials, including the Proxy Statement and proxy card, were sent directly to you by the Company.

Street Name Holders.  If you hold your shares in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name.” The proxy materials, including the Proxy Statement and voting instruction card, were forwarded to you by the bank or broker holding your account, which is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that bank or broker on how to vote the shares held in your account.

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You may vote using one of the following methods:

If the bank or broker that holds your shares does not have discretion to vote shares held in street name on a particular proposal and does not receive voting instructions on how to vote those shares, the bank or broker may return the proxy card without voting on that proposal. This is generally referred to as a “broker non-vote.” Your bank or broker generally may vote without instructions on routine matters such as the ratification of our independent registered public accounting firm. Your bank or broker generally may not vote without instructions on non-routine matters such as the election of directors.

All shares that have been voted properly by an unrevoked proxy will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy card or vote via the Internet, but do not give voting instructions, the shares represented by that proxy will be voted as our board of directors recommends.

If any other matters are brought properly before the Annual Meeting, the persons named as proxies in the proxy card materials will have the discretion to vote on those matters for you. As of the date of this Proxy Statement, we did not know of any other matter to be raised at the Annual Meeting.

How You Can Access the Proxy Materials for the Annual Meeting

Stockholders may access the proxy materials, which include the Notice of Annual Meeting, Proxy Statement (including a form of proxy card) and Annual Report on Form 10-K for the year ended December 31, 2009, on the Internet at http://ir.dealertrack.com/annual-proxy.cfm. We will also provide a hard copy of any of these documents free of charge upon request, which may be sent to Investor Relations, DealerTrack Holdings, Inc., 1111 Marcus Ave., Suite M04, Lake Success, NY 11042, submitted via the form set forth on our Investor Relations site at http://ir.dealertrack.com/contactus.cfm or submitted by calling our Investor Relations department at (888) 450-0478.

Instead of receiving future copies of our proxy materials by mail, you can elect to receive an e-mail that will provide electronic links to these documents. Opting to receive your proxy materials online will save the cost of producing and mailing documents to your home or business, will give you an electronic link to the proxy voting site and will help preserve environmental resources.

Stockholders of Record.  If you vote on the Internet at www.proxyvote.com, simply follow the prompts for enrolling in the electronic proxy delivery service. You also may enroll in the electronic proxy delivery service at any time by going directly to http://ir.dealertrack.com/2010proxy.cfm and following the enrollment instructions.

Street Name Holders.  If you hold your shares in a bank or brokerage account, you also may have the opportunity to receive the proxy materials electronically. Please check the information provided in the proxy materials you receive from your bank or broker regarding the availability of this service.

Your election to receive proxy materials by email will remain in effect until you terminate it.

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How to Revoke Your Proxy or Change Your Vote

You can revoke your proxy or change your vote before your proxy is voted at the Annual Meeting by:

How Many Votes You Have

Each stockholder has one vote for each share of common stock that he or she owned on the record date for all matters being voted on.

Quorum

A quorum is constituted by the presence, in person or by proxy, of holders of our common stock representing a majority of the aggregate number of shares of common stock entitled to vote. Abstentions and broker non-votes will be considered present to determine the presence of a quorum. If a quorum is not present, the Annual Meeting will be adjourned until a quorum is obtained.

Votes Required

Election of Directors.  The three nominees for director receiving the highest vote totals will be elected. Abstentions and broker non-votes will have no effect on the election of directors.

Ratification of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm.  To pass, this proposal must receive a “for” vote of a majority of the votes present and entitled to vote in person or by proxy at the Annual Meeting. Abstentions will have the effect of a vote against the ratification of our independent registered public accounting firm.

Attending the Annual Meeting

Stockholders of Record.  If you are a stockholder of record and received a Notice, the Notice is your admission ticket. If you are a stockholder of record and received proxy materials by mail, your admission ticket is attached to your proxy card. You will need to bring the Notice or the admission ticket along with photo identification with you to the Annual Meeting in order to be admitted to the meeting.

Street Name Holders.  If you hold your shares in street name, bring your most recent brokerage statement or a letter from your broker or other nominee along with photo identification with you to the Annual Meeting. We will use that statement or letter to verify your ownership of common stock and admit you to the Annual Meeting; however, you will not be able to vote your shares at the Annual Meeting without a legal proxy from your bank or broker.

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PROPOSAL ONE: ELECTION OF DIRECTORS

General Information About Our Board of Directors

Each of our directors is elected for a three-year staggered term. The eight members of our board of directors are divided into three classes: Class I, Class II and Class III. One class of directors is elected at each Annual Meeting. The following table shows our current directors, when the term of each class of directors expires and how each director is classified:

Class		Directors
Class I: Term expires 2012 and every three years thereafter		Messrs. Foy, Power and Tischler
Class II: Term expires 2010 and every three years thereafter		Ms. Lane and Messrs. McDonnell and Zwarenstein
Class III: Term expires 2011 and every three years thereafter		Ms. Cirillo-Goldberg and Mr. O’Neil

Nominees

The three nominees are listed below. If any nominee is unable or declines unexpectedly to stand for election as a director at the Annual Meeting, proxies will be voted for a nominee designated by the present board of directors to fill the vacancy. Each person elected as a director will continue to be a director until the 2013 Annual Meeting or until a successor has been elected.

Recommendation of Our Board of Directors

Our board of directors recommends that you vote FOR the nominees listed below:

None of our directors or executive officers is related to another director or executive officer by blood, marriage or adoption. Mr. O’Neil’s employment agreement provides that he shall serve as Chairman of the board of directors during the term of his agreement. Mr. Tischler was initially appointed to our board of directors pursuant to a stockholders’ agreement, which terminated on our initial public offering and is no longer in effect. There are no other arrangements between any director or nominee and any other person pursuant to which the director or nominee was selected.

Information About Nominees for Election as Class II Directors.

Ann B. Lane, 55, has served on our board of directors since July 2007. From April 2000 to January 2005, Ms. Lane was Managing Director, Co-Head of Syndicated & Leveraged Finance and Head of Bank Loan Capital Markets at JPMorgan. From 1997 to 2000, Ms. Lane was Managing Director and Global Co-Head of Bank Loan Syndications at Citigroup Inc. From 1995 to 1997, Ms. Lane was Global Industry Head, Aviation and Defense at Citigroup Inc., and from 1982 to 1995, Ms. Lane held a number of senior level positions at Citigroup, including Global Head of Corporate Debt Restructuring. Ms. Lane has been a Board Member of Musical Masterworks in Old Lyme, Connecticut since 2005 and was an Advisory Board Member of the New York City Ballet from 2005 to 2008. Ms. Lane holds a BS in Economics from the University of California at Berkeley. Ms. Lane’s independence, qualification as an audit committee financial expert and extensive experience as a banking executive, qualify her to serve as a member of our Board of Directors.

John J. McDonnell Jr., 72, has served on our board of directors since July 2005. Mr. McDonnell has been Chief Executive Officer and a Director of ExaDigm, Inc., a leading innovator of modular IP-based technology, since October 2008. Mr. McDonnell is the founder of TNS, Inc., a leading provider of data communications services to processors of credit card, debit card and ATM transactions worldwide. Mr. McDonnell served as Chairman and Chief Executive Officer of TNS, Inc. from April 2001 to September 2006. Previously, he served as chairman and CEO of PaylinX Corp., a software provider for transaction processing, from

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November 1999 until it was sold to CyberSource Corp. in September 2000. He remains a director of CyberSource, a publicly held company. Prior to that, Mr. McDonnell was President, Chief Executive Officer and a director of Transaction Network Services, Inc. from the time he founded the company in 1990. Mr. McDonnell is also a founder and director of the Electronic Funds Transfer Association. He was the recipient of KPMG Peat Marwick LLP’s 1997 High Tech Entrepreneur Award and the Rensselaer Polytechnic Institute 2002 Entrepreneur of the Year Award. Mr. McDonnell holds a BS in Electrical Engineering from Manhattan College, a MSEE from Renssalaer Polytechnic Institute and an Honorary Doctorate of Humane Letters from Marymount University. Mr. McDonnell’s independence, experience as a chairman and chief executive officer of a public company and experience with companies providing transaction processing services and network services, qualify him to serve as a member of our Board of Directors.

Barry Zwarenstein, 61, has served on our board of directors since November 2007. Since September 2008, Mr. Zwarenstein has been employed by SMART Modular Technologies, Inc., where he serves as Senior Vice President and Chief Financial Officer. From June 2004 through August 2008, Mr. Zwarenstein served as Executive Vice President and Chief Financial Officer for VeriFone Holdings, Inc. Prior to joining VeriFone, Mr. Zwarenstein served as Chief Financial Officer of Iomega Corporation from November 2001 to June 2004, of Mellanox Technologies Limited from January 2001 to June 2001, of Acuson Corporation from October 1998 to December 2000 and of Logitech S.A. from July 1996 to September 1998. Mr. Zwarenstein started his career at FMC Corporation, where he held a variety of financial positions, including, at the time of his departure, Chief Financial Officer for FMC Europe in Brussels, Belgium. Mr. Zwarenstein received a Bachelor of Commerce degree from the University of Natal, South Africa and an M.B.A. from the Wharton School of Business at the University of Pennsylvania. He is qualified as a Chartered Accountant (South Africa). Mr. Zwarenstein’s independence, qualification as an audit committee financial expert and experience as a chief financial officer of various public companies, qualify him to serve as a member of our Board of Directors.

Information About the Members of Our Board of Directors Whose Terms of Office Do Not Expire at the Annual Meeting

Class III Directors (Term Expires at the 2011 Annual Meeting)

Mary Cirillo-Goldberg, 62, has served on our board of directors since December 2002, and served as lead director from May 2005 to April 2006. Since September 2003, Ms. Cirillo-Goldberg has served as an advisor to Hudson Venture Partners, L.P., a venture capital fund. Ms. Cirillo-Goldberg served as the Chairman and Chief Executive Officer of OPCENTER, LLC, a privately held company that provides help desk, e-commerce and network operations services, from March 2000 to September 2003. From June 1997 through March 2000, she served as Executive Vice President and Managing Director of Bankers Trust Corporation. Ms. Cirillo-Goldberg currently serves as a director of two other public companies: ACE Limited (since 2006) and Thomson Reuters Corporation (since 2005), and served as a director of Health Care Property Investors from 2004 through 2007, Cisco Systems, Inc. from 1998 through 2001, Quest Diagnostics, Inc. from 1996 through 2004 and GlobalServe Corporation, a private company, from 2003-2006. Ms. Cirillo-Goldberg’s independence and experience as a director of various public companies, as well as her prior experience as a chief executive officer, qualify her to serve as a member of our Board of Directors.

Mark F. O’Neil, 51, has served as our Chairman of the Board, President and Chief Executive Officer since May 2005 and has served as a member of the board of directors since August 2001. From August 2001 to May 2005, Mr. O’Neil served as our Chief Executive Officer and President. Mr. O’Neil began his career at Intel Corporation, where he first developed knowledge of the technology industry. He subsequently worked for McKinsey & Co. before moving to the automotive industry in the late 1980s. His experience in the automotive industry includes serving as President of Ertley MotorWorld, a dealer group based in Pennsylvania. From this traditional retail dealer group, Mr. O’Neil went on to co-found and lead the development and rollout of CarMax, Inc., a publicly-held used automobile retailer. From June 2000 through January 2001, Mr. O’Neil was President and Chief Operating Officer of Greenlight.com, an online automotive sales website. He also serves as a director of DealerTire LLC, a privately held company. Mr. O’Neil holds a BS in Industrial Engineering from Worcester Polytechnic Institute and an MBA from Harvard Business School. Mr. O’Neil’s experience as our Chairman of the Board, President and Chief Executive Officer as well as his experience in

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the automotive retail industry provide him with extensive insight into our operations and qualify him to serve as Chairman of our Board of Directors.

Class I Directors (Term Expires at the 2012 Annual Meeting)

James Foy, 63, has served on our board of directors since September 2008. Mr. Foy has been President and Chief Executive Officer of privately held Aspect Software, Inc. and two predecessor companies (Concerto Software, Inc. and Davox Corporation) since 2001. In 1991, he founded Constellation Software, Inc., a technology company, and served as its President and Chief Executive Officer for three years. In 1994, Constellation was acquired by VMark Software, Inc. a predecessor company of Ardent Software, which was subsequently acquired by Informix Corp. Mr. Foy remained with the surviving companies in a variety of senior executive positions including President of Informix until IBM acquired Informix in 2001. Earlier in his career, he was with Prime Computer, Inc. and International Computers Limited (ICL). Mr. Foy serves on the boards of both Aspect Software and privately held Kalido, Inc., an enterprise software company. From 2006 through 2008 Mr. Foy served on the board of Plant/CML, a privately held company that provides crisis communications and response technologies. Mr. Foy’s independence and experience as the chief executive officer of numerous software companies qualify him to serve as a member of our Board of Directors.

James David Power III, 78, has served on our board of directors since June 2002. Mr. Power has spent more than 35 years at, is a founder of and, from 1996 until April 2005, served as the Chairman of the Board of J.D. Power and Associates, a marketing information firm. Mr. Power also is a director of Cobalt Group, Inc. Mr. Power served as a director of IMPCO Technologies, Inc., a public company, which supplies alternative fuel products to the transportation, industrial and power generation industries, from 2000 to 2008. In 1992, Mr. Power was a recipient of the Automotive Hall of Fame’s Distinguished Service Citation, awarded each year to seven of the industry’s most accomplished leaders. Mr. Power holds honorary doctorate degrees from College of the Holy Cross, California Lutheran University, California State University, Northridge and College Misericordia. He also serves as an adjunct professor of marketing at California State University, Northridge. Mr. Power holds a BA from the College of the Holy Cross and an MBA from The Wharton School of Finance at the University of Pennsylvania. Mr. Power’s independence and experience founding and building the marketing information firm, J.D. Power and Associates, as well as his extensive experience in the automotive industry, qualify him to serve as a member of our Board of Directors.

Howard L. Tischler, 56, has served as lead director since April 2006 and on our board of directors since March 2003. Since January 2009, Mr. Tischler has been employed as Chairman and CEO of Enfocel, LLC, a management and online marketing consulting firm. From September 2005 through December 2008, Mr. Tischler was employed by First Advantage Corporation, where he served as Group President of First Advantage Dealer Services. From 2001 until September 2005, Mr. Tischler was President and Chief Executive Officer of First American Credit Management Solutions, Inc., or CMSI, which was a subsidiary of The First American Corporation, as well as Teletrack, Inc. From 1999 until our acquisition of Credit Online, Inc. from CMSI in 2003, Mr. Tischler was President and Chief Executive Officer of Credit Online. Mr. Tischler currently serves on the Engineering Advisory Board at George Washington University. He holds a BS in Mathematics from the University of Maryland and an MS in Engineering and Operations Research from The George Washington University. Mr. Tischler’s independence, experience as President and Chief Executive Officer of Credit Online, Inc., an early entrant into DealerTrack’s industry, as well as his extensive experience with First Advantage Dealer Services and CMSI, have provided him with wide knowledge of our industry and qualify him to serve as a member of our Board of Directors.

Board Meetings Held During 2009

Our board of directors held nine meetings during 2009 and acted two times by written consent. During 2009, each director attended at least 75% of the board of directors and committee meetings held while such director served as a director and committee member. At each regular meeting of the board of directors, the non-management directors met in executive session with our lead director presiding.

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Board Independence

The Nominating and Corporate Governance Committee and our board of directors annually assess the independence of the non-management directors by reviewing the financial and other relationships between the directors and us. This review is designed to determine whether these directors are independent under the criteria established by the NASDAQ Stock Market (“NASDAQ”) for independent board members. The Nominating and Governance Committee and our board of directors have determined that all of our non-management directors (i.e., directors other than Mr. O’Neil) and our director nominees qualify as independent under those standards.

Board Leadership Structure

Mark O’Neil serves as both Chairman of the Board and Chief Executive Officer. The Board believes that having Mr. O’Neil serve in both capacities is in the best interests of the company and its stockholders because it enhances communication between the Board and management and allows Mr. O’Neil to more effectively execute the company’s strategic initiatives and business plans and confront its challenges. Mr. O’Neil possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the company and is best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most critical matters. The Board believes that the appointment of an independent Lead Director and the use of regular executive sessions of the non-management directors, along with the Board’s strong committee system and substantial majority of independent directors, allow it to maintain effective oversight of management. The Board of Directors has designated Mr. Tischler as the Lead Director.

Board Oversight of Risk

Our Board of Directors oversees our management, which is responsible for the day-to-day issues of risk management. Our board's committees assist the board in fulfilling its oversight responsibilities in certain areas of risk. The audit committee focuses on financial risk, such as including the areas of financial reporting, internal controls, and compliance with legal and regulatory requirements. The compensation committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The nominating and governance committee manages risks associated with corporate governance, board organization, membership and structure. In addition, members of management may also report directly to the Board of Directors on significant risk management issues.

Stockholder Communications With the Board of Directors

Stockholders and other interested parties may communicate with any of our directors, including our non-management directors, by writing to them c/o Secretary, DealerTrack Holdings, Inc., 1111 Marcus Ave., Suite M04, Lake Success, NY 11042. Our Secretary will forward all correspondence to the board of directors, except for spam, junk mail, mass mailings, product complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material. Our Secretary may forward certain correspondence, such as product-related inquiries, elsewhere within DealerTrack for review and possible response.

Director Attendance at Annual Meeting

Our board of directors’ policy regarding director attendance at the Annual Meeting is that they are welcome to attend, and that we will make all appropriate arrangements for directors who choose to attend. Mr. O’Neil attended our 2009 Annual Meeting.

Code of Business Conduct and Ethics

We have adopted a “code of ethics,” as defined by regulations promulgated under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, that applies to all of our directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A current copy of our Code of Business Conduct and Ethics is available on our website at www.dealertrack.com. A copy of our Code of Business Conduct and Ethics may also be obtained, free of charge, from us upon request directed to: DealerTrack Holdings, Inc., 1111 Marcus Avenue, Suite M04, Lake Success, NY 11042, Attention: Investor Relations. We intend to disclose any amendment to or waiver of a provision of the Code of Business Conduct and Ethics that applies to

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our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, by posting such information on our website at www.dealertrack.com.

Committees

Our board of directors has four standing committees: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Investment Committee. All committee members are non-management directors who, in the opinion of our board of directors, are independent as defined under applicable NASDAQ listing standards. Our board of directors has approved a written charter for each committee which is available at www.dealertrack.com.

Audit Committee.  Our Audit Committee consists of Ms. Lane and Messrs. Zwarenstein and McDonnell. Mr. Zwarenstein serves as chairperson of the Audit Committee. Our board of directors has determined that each member of the Audit Committee is independent and that Ms. Lane and Mr. Zwarenstein are each audit committee financial experts, as defined by SEC rules, and have financial sophistication, in accordance with the applicable NASDAQ listing standards. During 2009, the Audit Committee held nine meetings. The purpose of the Audit Committee is to oversee our accounting and financial reporting processes and the audits of our financial statements. The Audit Committee’s responsibilities include assisting our board of directors in its oversight and evaluation of:

The Audit Committee has the sole and direct responsibility for appointing, evaluating and retaining our independent registered public accounting firm and for overseeing their work. All audit and non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our Audit Committee. The Audit Committee also reports to stockholders as required by the SEC (please see page 13).

Compensation Committee.  We have a Compensation Committee consisting of Ms. Cirillo-Goldberg and Messrs. Foy and McDonnell. Mr. McDonnell serves as chairperson of the Compensation Committee. During 2009, the Compensation Committee held seven meetings and acted two times by written consent. The purpose of our Compensation Committee is to discharge the responsibilities of our board of directors relating to compensation of our executive officers. Specific responsibilities of our Compensation Committee include:

Our board of directors has determined that each member of the Compensation Committee is independent in accordance with the applicable NASDAQ listing standards. The Compensation Committee also reports to stockholders on executive compensation items as required by the SEC (please see page 23).

Nominating and Corporate Governance Committee.  We have a Nominating and Corporate Governance Committee consisting of Ms. Cirillo-Goldberg and Messrs. Power and Tischler. Mr. Tischler serves as chairperson of the Nominating and Corporate Governance Committee. During 2009, the Nominating and Corporate Governance Committee held four meetings. The responsibilities of the Nominating and Corporate Governance Committee include:

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The board of directors has determined that each member of the Nominating and Corporate Governance Committee is independent in accordance with the applicable NASDAQ listing standards.

Candidates may come to the attention of the Nominating and Corporate Governance Committee through current members of the board of directors, stockholders or other persons. These candidates are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee. Stockholders wishing to recommend director candidates for consideration by the committee may do so by writing to the Secretary at 1111 Marcus Avenue, Suite M04, Lake Success, NY 11042 who will forward all recommendations to the committee. Stockholders must submit their recommendations on or before January 1, 2011 and provide the following information:

The Nominating and Corporate Governance Committee may consider the following criteria in recommending candidates for election to the board of directors:

The Nominating and Corporate Governance Committee seeks to recommend candidates that further the objective of having a board that encompasses a broad range of talents and expertise and reflects a diversity of background, experience and viewpoints. The Nominating and Corporate Governance Committee does not, however, have a formal policy with regard to the consideration of diversity in identifying board candidates.

Investment Committee.  We have an Investment Committee consisting of Ms. Lane and Messrs. Foy and Tischler. Ms. Lane serves as chairperson of the Investment Committee. The Investment Committee was formed in January 2006. The purpose of our Investment Committee is to review investment and acquisition opportunities, approve certain acquisition and investment transactions and also make recommendations to our board of directors. During 2009, the Investment Committee held six meetings and acted once by written consent.

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Non-Management Directors’ Compensation for Fiscal Year 2009

Directors who are also employees receive no fees for their services as directors. During 2009, all other directors received the following compensation for their services:

Annual Fee:		$50,000 per director.
Initial Equity Grant:		Options to purchase 30,000 shares of our common stock upon becoming a director. The grant vests in three equal annual installments commencing on the first anniversary of the grant date, subject to the director’s continued service on the board. No Initial Equity Grants were granted in 2009 because no new directors were appointed.
Annual Equity Grant:		Restricted common stock equal to a fixed dollar value of $135,000 is granted each year on the date of our Annual Meeting. This grant vests on the day of the following Annual Meeting, subject to the director’s continued service on the board.

For 2010, the annual equity grant will be in restricted stock units, rather than restricted common stock. Directors are eligible to participate in the Directors’ Deferred Compensation Plan, a non-qualified retirement plan. The Directors’ Deferred Compensation Plan allows our non-employee directors to elect to defer between zero and 100% of the fees they would otherwise be entitled to receive in cash for services rendered as directors. Amounts deferred under the Directors’ Deferred Compensation Plan are general liabilities of ours and are represented by bookkeeping accounts maintained on behalf of the participants. Such accounts are deemed to be invested in share units that track the value of our common stock. Distributions will generally be made to a participant either following the end of the participant’s service on our board of directors, following a change of control if so elected, or at a specified time elected by the participant prior to the deferral. Distributions will generally be made in the form of shares of our common stock. Our Directors’ Deferred Compensation Plan is intended to comply with Section 409A of the Internal Revenue Code.

Our stock ownership and retention program requires non-employee members of our board of directors to own shares equal in value to four times their annual retainer. Directors are expected to attain the required share ownership level within five years from joining our board of directors.

The following table sets forth our non-management directors’ compensation for 2009.

Name		Fees Earned or Paid in Cash(1)				Stock Awards(2)				Option Awards(3)				Total
Mary Cirillo-Goldberg		$	50,000			$	134,997			$	—			$	184,997
James Foy			50,000				134,997				—				184,997
Ann B. Lane			50,000				134,997				—				184,997
John J. McDonnell, Jr.			50,000				134,997				—				184,997
James David Power III			50,000				134,997				—				184,997
Howard L. Tischler			50,000				134,997				—				184,997
Barry Zwarenstein			50,000				134,997				—				184,997

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Name		Compensation Deferred				Number of Deferred Stock Units
Mary Cirillo-Goldberg		$	50,000				3,016
James Foy			50,000				3,016
Ann B. Lane			50,000				3,016
James David Power III			50,000				3,016
Howard L. Tischler			50,000				3,016
Barry Zwarenstein			50,000				3,016

Name		Restricted Common Stock Grant Date				Number Granted				Grant Date Fair Value				Outstanding Restricted Common Stock
Mary Cirillo-Goldberg			5/26/2005				3,500			$	17.10				—
			6/14/2006				3,500				21.94				—
			7/11/2007				3,500				39.05				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				8,749
James Foy			9/19/2008				4,888				20.71				—
			6/17/2009				8,749				15.43				8,749
Ann B. Lane			7/11/2007				3,500				39.05				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				8,749
John J. McDonnell, Jr.			7/28/2005				3,500				18.00				—
			6/14/2006				3,500				21.94				—
			7/11/2007				3,500				39.05				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				8,749
James David Power III			5/26/2005				3,500				17.10				—
			6/14/2006				3,500				21.94				—
			7/11/2007				3,500				39.05				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				8,749
Howard L. Tischler			5/26/2005				3,500				17.10				—
			6/14/2006				3,500				21.94				—
			7/11/2007				3,500				39.05				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				8,749
Barry Zwarenstein			11/06/2007				2,625				47.98				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				8,749

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Name		Option Grant Date				Number Granted				Exercise Price				Grant Date Fair Value				Outstanding Stock Options (Exercisable)
James Foy			9/19/2008				30,000			$	20.71			$	8.60				10,000
Mary Cirillo-Goldberg			1/30/2003				6,250				2.80				0.00				6,250
			5/26/2005				50,000				12.92				4.18				50,000
Ann B. Lane			7/11/2007				30,000				39.05				17.88				20,000
John J. McDonnell, Jr.			7/28/2005				30,000				17.08				0.92				10,000
James David Power III			6/18/2002				6,250				2.80				0.00				6,250
			5/26/2005				50,000				12.92				4.18				50,000
Howard L. Tischler			5/26/2005				40,000				12.92				4.18				40,000
Barry Zwarenstein			11/06/2007				30,000				47.98				21.44				20,000

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AUDIT COMMITTEE REPORT

The Audit Committee of DealerTrack Holdings, Inc. hereby reports as follows:

1. Management has the primary responsibility for the consolidated financial statements and the reporting process, including the system of internal accounting controls. The Audit Committee, in its oversight role, has reviewed and discussed the audited consolidated financial statements with the Company’s management.

2. The Audit Committee has discussed the overall scope of and plans for its audit with the company’s independent registered public accounting firm. The Audit Committee has met with the independent registered public accounting firm, with and without management present, to discuss the Company’s financial reporting process and internal accounting controls in addition to other matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

3. The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP, or PwC, required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and has discussed with PwC its independence.

4. The Audit Committee has policies and procedures that require the pre-approval by the Audit Committee of all fees paid to, and all services performed by, the Company’s independent registered public accounting firm, unless entered into pursuant to the pre-approval policies and procedures established by the Audit Committee. At the beginning of each year, the Audit Committee approves the proposed services, including the nature, type and scope of service contemplated and the related fees, to be rendered by the firm during the year. In addition, Audit Committee pre-approval is also required for those engagements that may arise during the course of the year that are outside the scope of the initial services and fees approved by the Audit Committee. For each category of proposed service, the independent registered public accounting firm is required to confirm that the provision of such services does not impair their independence.

5. Based on the review and discussions referred to in paragraphs (1) through (3) above, the Audit Committee recommended to the board of directors of DealerTrack Holdings, Inc. that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, for filing with the SEC.

Respectfully Submitted by the Audit Committee,
  
Barry Zwarenstein (chairperson)
Ann B. Lane
John J. McDonnell, Jr.

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table represents the fees billed by PwC for 2009 and 2008:

		2009				2008
Audit fees(1):		$	1,035,700			$	1,098,565
Audit-related fees(2):			507,500				288,102
All other fees(3):			1,500				1,500
Total:		$	1,544,700			$	1,388,167

All of the audit-related and other services provided by PwC to us in 2009 and 2008 were approved by the Audit Committee by means of specific pre-approvals or pursuant to the procedures contained in the pre-approval policies and procedures established by the Audit Committee.

PROPOSAL TWO: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

The Audit Committee of our board of directors has selected, subject to ratification by our stockholders, PwC to serve as our independent registered public accounting firm for the 2010 fiscal year. Additional information concerning the Audit Committee and its activities with PwC can be found in the “Audit Committee Report” on page 13 and the section titled “Principal Accountant Fees and Services.”

The Sarbanes-Oxley Act of 2002 and Section 10A of the Securities Exchange Act of 1934 require that the Audit Committee of the board of directors be directly responsible for the appointment, compensation and oversight of the audit work of our independent registered public accounting firm. Ratification by the stockholders of the selection of PwC is not required by law, our bylaws or otherwise. However, the board of directors is submitting the selection of PwC for stockholder ratification to ascertain stockholders’ views on the matter.

A representative of PwC will attend the Annual Meeting to respond to appropriate questions and to make a statement if he or she desires to do so.

Our board of directors recommends that you vote FOR the Proposal to ratify the selection of PwC as our independent registered public accounting firm for fiscal 2010.

EXECUTIVE OFFICERS

The following individuals serve as our executive officers:

Name		Age		Title
Mark F. O’Neil		51		Chairman of the Board, President and Chief Executive Officer
Ana M. Herrera		53		Senior Vice President, Human Resources
Eric D. Jacobs		42		Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer
Richard McLeer		44		Senior Vice President and Chief Information Officer
Raj Sundaram		43		Senior Vice President, Solutions and Services Group
Rick G. Von Pusch		48		Senior Vice President, Sales, Marketing and International

Mark F. O’Neil has served as our Chairman of the Board, President and Chief Executive Officer since May 2005 and has served as a member of the board of directors since August 2001. From August 2001 to May 2005, Mr. O’Neil served as our Chief Executive Officer and President. Mr. O’Neil began his career at Intel Corporation, where he first developed knowledge of the technology industry. He subsequently worked for McKinsey & Co. before moving to the automotive industry in the late 1980’s. His experience in the automotive industry includes serving as President of Ertley MotorWorld, a dealer group based in Pennsylvania. From this traditional retail dealer group, Mr. O’Neil went on to co-found and lead the development and rollout of CarMax, Inc., a publicly-held used automobile retailer. From June 2000 through January 2001, Mr. O’Neil was President and Chief Operating Officer of Greenlight.com, an online automotive sales website. He also serves as a director of DealerTire LLC, a privately held company. Mr. O’Neil holds a BS in Industrial Engineering from Worcester Polytechnic Institute and an MBA from Harvard Business School.

Ana M. Herrera has served as Senior Vice President, Human Resources since February 2007. From May 2005 to January 2007, Ms. Herrera served as Vice President, Human Resources, of DealerTrack, Inc. From September 2002 to May 2005, Ms. Herrera was Vice President of Human Resources at MeadWestvaco Corporation, where she led the global human resources function for the company’s Consumer Packaging Group. Prior to this, Ms. Herrera spent two years as a consultant, working on a wide range of human resources assignments for a diverse group of clients. Other previous experience includes having served as Vice President of Human Resources for Revlon Consumer Products Corporation’s International Division, and as, first, Director and later Vice President of Human Resources for Duracell Corporation. Ms. Herrera holds a BS in Business Administration from California State Polytechnic University.

Eric D. Jacobs has served as Senior Vice President and Chief Financial Officer since March 2009 and has also served as Chief Administrative Officer and Treasurer since January 2009. From January 2004 through January 2009 Mr. Jacobs served as our Senior Vice President, General Counsel and Secretary. From August 2006 through January 2009 Mr. Jacobs also served as President of DealerTrack Canada, Inc., our Canadian subsidiary, formerly known as dealerAccess Canada, Inc. From April 2002 to December 2003, Mr. Jacobs served as our Vice President, General Counsel and Secretary. Mr. Jacobs was an associate at the international law firm of O’Melveny & Myers LLP where he specialized in general corporate and securities law from August 1998 to April 2002. He also serves as a director of Garden State Consumer Credit Counseling, Inc., a non-profit financial management social service agency. Prior to becoming an attorney, Mr. Jacobs was an audit manager and CPA at KPMG LLP. Mr. Jacobs holds a BS in Business Administration with a major in Accounting, magna cum laude, from Rider University and a JD, with honors, from the Rutgers School of Law-Newark.

Richard McLeer has served as Senior Vice President and Chief Information Officer since January 2009. From August 2006 through January 2009, Mr. McLeer served as Senior Vice President, Strategy & Development. From April 2005 to August 2006, Mr. McLeer served as Vice President, Credit and Contract Solutions for DealerTrack, Inc., and served as our National Lender Development Manager from February 2001 to April 2005. From 1996 to 2001, Mr. McLeer was Senior Vice President and National Product Director for the Bank of America Auto Group, and previously held a variety of marketing, sales and business development positions at Bank of America. Prior to that, Mr. McLeer worked at Trans Union Corporation from 1993 to

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1996. Other previous experience includes two years serving as controller of Ellesse, U.S.A., a division of Reebok, and four years in public accounting. Mr. McLeer holds a BS in Accounting from Hofstra University and is a CPA.

Rajesh (Raj) Sundaram has served as Senior Vice President, Solutions and Services Group, since January 2009. From August 2006 through January 2009, Mr. Sundaram served as Senior Vice President, Dealer Solutions. Mr. Sundaram served as President of Automotive Lease Guide (alg), Inc. and President of Automotive Lease Guide (alg), LLC, from 2002 until its acquisition by us in May 2005, and continued to hold those positions from May 2005 to August 2006. Prior to joining ALG as Vice President and General Manager in 1999, Mr. Sundaram served as Senior Manager, Strategic Planning and Pricing at Nissan North America, Inc. from 1997 to 1999, and held various positions in financial planning including Finance Manager, Infiniti division at Nissan North America, Inc. from 1994 to 1997. Mr. Sundaram previously held roles in the controller’s office of the Ford division of Ford Motor Company from 1991 to 1994. Mr. Sundaram holds a BS and MS in Accounting from the University of Mumbai in India and an MBA in Finance from Lehigh University.

Rick G. Von Pusch has served as Senior Vice President, Sales, Marketing and International, since January 2009. Mr. Von Pusch served as Senior Vice President, Customer Development from August 2006 through January 2009. From April 2006 to August 2006, Mr. Von Pusch served as President of Sales and Marketing at 5Square Systems, a provider of CRM, desking and menu products. Mr. Von Pusch served as Vice President of U.S. Retail Sales at Reynolds and Reynolds Corporation from April 2005 to October 2005, Area Vice President from October 2001 to April 2005 and held various positions in sales and sales management at Reynolds and Reynolds from 1988 to 2001. Mr. Von Pusch also was a sales representative for NCR Corporation from 1985-1987. Mr. Von Pusch holds a BA in Management Information Systems from the University of South Florida.

COMPENSATION DISCUSSION AND ANALYSIS

This section contains a discussion of the material elements of DealerTrack’s compensation awarded to, earned by or paid to its named executive officers. DealerTrack’s named executive officers for fiscal 2009 are the Chief Executive Officer, Chief Financial Officer and the three most highly compensated executive officers at the end of fiscal 2009, plus our former Chief Financial Officer, Robert Cox, whose employment terminated effective March 2, 2009.

Overview

The Compensation Committee of the board of directors is responsible for establishing with our management the compensation philosophy of DealerTrack. The company’s compensation philosophy is designed to support the key objective of creating value for the stockholders by growing revenue and Adjusted EBITDA, as well as increasing the company’s total market capitalization and stock price. A significant portion of each named executive officer’s total compensation opportunity is directly related to DealerTrack’s stock price performance, as well as other performance factors that measure our progress against the goals of our strategic plan. The Compensation Committee is responsible for overseeing the design and administration of our compensation programs for our executive officers, certain other key employees designated by our Compensation Committee, and the board of directors.

DealerTrack believes that a sound compensation philosophy and strategy serve to align team members and focus the executive team and the entire company on the vision and the achievement of our stated strategic plan.

The company has established the following principles in determining the compensation of the named executive officers:

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Peer Group and Benchmarking

In connection with compensation decisions for 2009, the Compensation Committee reviewed market compensation data of a peer group of companies established by Ernst & Young, an independent compensation consultant that was retained by and reported to the Compensation Committee. On November 12, 2008, the Compensation Committee evaluated the thirteen peer group companies that comprised the peer group for 2008 and elected to remove two companies that were acquired: Choicepoint, Inc. and Witness Systems, Inc. The following companies from the 2008 peer group remained as part of the 2009 peer group: Digital River, Inc., f5 Networks Inc., Radiant Systems, Inc., Salesforce.com, Inc., Tier Technologies, Inc., Websense, Inc., Blackbaud, Inc., Blackboard Inc., Heartland Payment Systems, Jack Henry & Associates and TNS, Inc.

The Compensation Committee uses the peer group compensation data primarily to ensure that the total direct compensation for executives is within 15% above or below the peer group median, while providing an opportunity for the annual cash bonus to attain the 75th percentile of the peer group median when targeted performance levels are exceeded. While the peer group market data provides a useful starting point for compensation decisions, the Compensation Committee also takes into account factors such as level of responsibility, prior experience, individual performance and internal pay relationships in arriving at final compensation decisions. The elements of executive compensation are base salary, annual and long term incentive compensation, and annual grants of equity awards. Our executive compensation has a high proportion of total direct compensation delivered through pay-for-performance incentive and long-term equity compensation, equating to a greater proportion of at-risk compensation.

In September 2009, the Compensation Committee re-evaluated the 2009 peer group companies to determine if any revisions should be made in connection with compensation decisions for 2010. At that time, the Compensation Committee elected to remove Heartland Payment Systems., whose level of revenues made it no longer an appropriate peer for the company. The Compensation Committee replaced Heartland Payment Systems in the 2010 peer group with Ariba Inc., whose level of revenue and business model are closer to the company’s.

Role of Compensation Consultant

The Compensation Committee, with our management, establishes our compensation philosophy and approves our compensation programs with input from our outside compensation consultants. The Compensation Committee is responsible for selecting any consultant they may use, negotiating the fees that are paid to the consultant and determining the scope of the engagement. The Compensation Committee retained Ernst & Young, an outside consulting firm, to provide independent, third-party advice to assist it in the evaluation and design of the company’s policies and programs on executive compensation and with other compensation decisions for 2009. E&Y has provided compensation information on an annual basis to the Compensation Committee and management on market compensation trends, but has not had a material additional relationship outside of the services that it provided to the Compensation Committee. The Compensation Committee decided in the fourth quarter of 2009 to retain a new compensation consultant, Frederic W. Cook, to assist with compensation matters for 2010. The Compensation Committee is responsible for making all compensation decisions, incorporating feedback from our outside consultants and our Chief Executive Officer.

Assessment of Company and Individual Performance

Annually, the Compensation Committee, in collaboration with the executive team, establishes the specific revenue and adjusted EBITDA targets that will be used to determine the size of the bonus pool under the annual incentive bonus plan. Both company and individual performance are factored into the determination of total direct compensation levels (consisting of annual salary, annual bonus awards and long-term incentives) for the Chief Executive Officer and other named executive officers.

The Compensation Committee meets with the Chief Executive Officer at the beginning of the year to establish the Chief Executive Officer’s individual and company performance objectives. At the end of the year, the Compensation Committee conducts a performance review of the Chief Executive Officer based on his level of achievement of these objectives. In setting the Chief Executive Officer’s compensation, the Compensation Committee considers the overall performance of the Chief Executive Officer and the company.

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For all other executive officers, the Compensation Committee receives a performance assessment and compensation recommendation from the Chief Executive Officer. The performance evaluation of the other executive officers is based on achievement of pre-established corporate and individual objectives that have been established by the Chief Executive Officer after consulting with each executive officer.

Total Compensation Review

Annually, the Compensation Committee reviews each executive officer’s base pay, bonus and equity incentive awards with the guidance of the Compensation Committee’s independent consultant. In addition to these compensation elements, the Compensation Committee reviews the long-term incentive program, the deferred compensation program, as well as the payments that would be required to be paid to the executive officers under various severance and change in control scenarios.

In making compensation decisions, the Compensation Committee considers all elements of compensation, including both direct, and indirect and current and deferred compensation. This consideration includes severance and change in control provisions, perquisites and employee benefits. The Compensation Committee uses market information to ensure that compensation programs for our executive officers are competitive in our industry and in the areas in which we compete for talent, and reflect the scope and responsibilities of each executive’s role.

Risk Considerations

The Compensation Committee believes the elements of the company’s executive compensation program effectively link performance-based compensation to financial goals and shareholder interests without encouraging executives to take unnecessary or excessive risks in the pursuit of those objectives The Compensation Committee believes that the overall mix of compensation elements is appropriately balanced and does not encourage the taking of short-term risks at the expense of long-term results. Long-term incentives for our executives are awarded in the form of equity instruments reflecting, or valued by reference to, our common stock. Long-term incentive awards are generally made on an annual basis and are subject to a multi-year vesting schedule which helps ensure that award recipients always have significant value tied to long-term stock price performance. The Compensation Committee believes that the combination of granting 100% of long-term incentives in the form of stock awards, together with the company stock actually owned by our executives, appropriately links the long-term interests of executives and shareholders, and balances the short-term nature of annual incentive cash bonuses and any incentives for undue risk-taking in our other compensation arrangements.

Components of Executive Compensation for 2009

Base Salary

The Compensation Committee believes that payment of competitive base salaries is an important element in attracting, retaining and motivating our executive officers. In addition, the Compensation Committee believes that having a certain level of fixed compensation allows our executive officers to dedicate their full time business attention to our company. Each named executive officer’s base salary is designed to provide the executive with a fixed amount of annual compensation that is competitive with the marketplace. Base salaries represent less than 25% of the total direct compensation opportunity for each named executive officer.

Our Compensation Committee reviews base salary levels annually, but only makes adjustments when warranted based on performance, market trends or surveys of peer group compensation levels.

The annual base salary for each named executive officer is the primary form of fixed compensation. The base salary is set at the market median and is competitive with similar positions at the peer group companies. Base salary may be adjusted during the year if a change in the scope of the executive officer’s responsibilities justifies such consideration.

For 2009, the Compensation Committee, based on the recommendation of the Chief Executive Officer, determined that due to the downturn of the automotive industry and its negative financial impact on our business, the base salaries for the executive officers would not be increased (other than Mr. McLeer, whose scope of responsibility changed when he became the company’s Senior Vice President and Chief Information

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Officer). Then, DealerTrack instituted a company-wide decrease as of April 16, 2009, of 5.29% in base salary for the remainder of 2009 for all employees, including executive officers. In November 2009, the company decided to pay the amount of the 2009 salary reduction as lump sum bonuses to all employees (including all executive officers with the approval of the Compensation Committee). Base salaries, however, remained at the decreased level.

Annual Incentive Bonus Plan

Annual incentive bonuses are paid to reward achievement of critical shorter term operating, financial, strategic and individual performance objectives that are expected to contribute to stockholder value creation over time.

The Compensation Committee believes that the primary portion of the annual target cash compensation of each named executive officer should be in the form of variable incentive pay. The pay philosophy is to target annual cash compensation at the 50^th percentile of the peer group, with the opportunity to earn annual cash compensation in excess of that level based on superior performance. Under the annual incentive plan, if the company’s achievement level is superior to the target goals, the annual incentive bonus amount for each executive officer is then targeted at the 75^th percentile of the peer group’s annual bonus compensation.

For fiscal year 2009 corporate performance targets were: adjusted EBITDA before the payment of bonuses to the company’s employees and officers of $42.9 million and revenue of $250.0 million.

For each named executive officer, the bonus awards are calculated by multiplying the individual’s annual base salary by the individual’s target award percentage, and multiplying the result by a company performance factor. The result is then increased or decreased based on the performance related to individual goals.

Adjusted EBITDA is a key metric used to review and assess the operating performance and the performance of the management team because adjusted EBITDA provides useful information with respect to the performance of the company’s fundamental business activities and is also frequently used by equity research analysts and others in the evaluation of the company. For all executive officers, equal weight is given to total company revenue and adjusted EBITDA targets. This approach is intended to drive a balanced focus on growth in revenues and earnings.

The annual incentive bonus target amounts, expressed as a percentage of base salary, are established for the executive officers each year, with a target range of 50% to 85% of base salary for 2009 and a maximum range of 170% to 210% of base salary for 2009. For fiscal 2009, we achieved revenues of $225.6 million and pre-bonus adjusted EBITDA of $43.8 million. The Compensation Committee may positively or negatively adjust the actual award to each executive officer (other than the chief executive officer) depending on its assessment of each individual’s performance. In making this assessment, the Compensation Committee also considers the input of the Chief Executive Officer with respect to awards to the other executive officers. In the case of the chief executive officer, unlike the rest of the named executive officers, the Compensation Committee may negatively adjust, but may not positively adjust, the actual incentive bonus award depending on its assessment of his performance, considering additional non-financial factors such as leadership development, talent management and succession planning. The Compensation Committee may adjust the financial metrics in appropriate circumstances, such as the acquisition or divestiture of a business or the impact of foreign exchange rates.

In 2009, the company’s revenue declined 7% from 2008 due to the unprecedented decline in the number of vehicles financed and the closing of auto dealerships. However, despite the challenging economic environment for our business, the company achieved 21% growth in revenue in its subscription business. Growing the subscription business is a key focus in reducing our dependency on our transaction business, which declined 29%. In addition, through aggressive cost saving efforts, the company exceeded its pre-bonus adjusted EBITDA targets by $0.9 million. Based on fiscal 2009 financial performance, the Compensation Committee approved a payout of 83% to 93% of target bonus amounts for our named executive officers. These bonus payments, which were calculated based on the reduced base salary of each executive officer, were paid to the named executive officers in February 2010, and were in addition to the payout of the 5.29% salary reduction amounts that were paid to all employees in November 2009.

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Annual Equity Grants

In order to align the executive officers’ interests with those of the stockholders, the Compensation Committee makes an annual equity grant each year to each executive officer. The Compensation Committee reviewed and considered competitive market information at or near the 75^th percentile for total direct compensation and the impact to the value of historical equity grants due to the economic downturn. The following factors were also considered in determining the level of long-term incentives awarded to the executive officers:

The Compensation Committee uses non-qualified stock options instead of incentive stock options in order to preserve the company’s compensation expense tax deduction. For 2009, approximately 50% of the named executive officers’ equity incentive award value was granted in the form of restricted stock units and approximately 50% in the form of stock options.

The annual equity grants also serve as a retention tool because they become vested and earned through service with the company over a four-year period, and have a seven-year life. These equity grants further the long-term perspective necessary for continued success of the business. The equal split between award types balances the objectives of retention (i.e., time vested restricted stock units) and stock price appreciation (i.e., stock options, which only have value to the extent that the stock price appreciates from the date of grant).

The Compensation Committee typically makes the annual equity grants at its first regularly scheduled meeting of the year. Option grants to new hires are generally made at the first regularly scheduled Compensation Committee meeting that follows the date of hire. The Compensation Committee adopted an equity grant policy that commences in 2010 under which equity grants will be granted on the fifth business day each quarter after earnings are released.

All equity grants to our named executive officers in 2009 were made pursuant to our Third Amended and Restated 2005 Incentive Award Plan.

Stock Ownership Requirements

In 2005, the Compensation Committee implemented stock ownership requirements for members of the senior management team that required these individuals to hold shares equal to defined multiples of their base salaries. The senior management team includes all vice presidents and executive officers of the Company. In September 2009, the Compensation Committee approved a revision to the policy. The new requirements employ a combination approach whereby covered individuals are required to maintain the lesser of (a) a multiple of base salary and (b) a fixed number of shares. The Chief Executive Officer is required to hold shares with a value equal to six times his base salary, and the other named executive officers are required to hold shares with a value equal to two times their respective base salaries.

Each executive officer is expected to attain his or her stock ownership level within five years of becoming an executive officer. Stock options are not included in determining compliance with the share ownership requirement. Named executive officers are expected to retain 25% of the net after-tax shares acquired pursuant to the exercise of a stock option until they achieve the minimum share ownership position. The Compensation Committee reviews compliance with the stock ownership requirements annually. Shares acquired through the company’s Employee Stock Purchase Plan are counted toward the stock ownership requirement.

As of the end of 2009, the Chief Executive Officer and the other named executive officers each met the stock ownership requirements.

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Long-Term Equity Incentive Program

In August 2006, the Compensation Committee implemented a performance-based long-term equity incentive program and made significant grants of restricted common stock to the named executive officers. These grants were targeted to deliver total direct compensation (annual base salary, annual bonus awards and long-term incentives) at the 75th percentile of the peer group upon the achievement of exceptional performance. These grants would be fully earned and vested only if during the three fiscal year measurement period: (i) we achieved annual growth for the EBITDA and market capitalization metrics as set forth below; and (ii) the executive officers remained continuously employed with us through January 31, 2010. As provided in the award agreements, the EBITDA goals could be adjusted by the Compensation Committee from time to time to reflect both the positive and negative impact of acquisitions, in order to neutralize their impact. The performance-based long-term equity incentive awards were granted pursuant to the Amended and Restated 2005 Incentive Award Plan.

Performance Goals		EBITDA				Market Cap
December 31, 2007		$	54.1 million			$	928 million
December 31, 2008		$	66.9 million			$	1,136 million
December 31, 2009		$	82.9 million			$	1,400 million

The company met its performance goals for fiscal year 2007 for both EBITDA and market capitalization but did not meet its performance goals for fiscal year 2008 and 2009 for either EBITDA or market capitalization. Accordingly 1/3 of each executive’s initial long-term equity incentive program grant vested on January 31, 2010 and the remaining 2/3 were cancelled.

Employment Agreements

The company has entered into employment agreements with each of the named executive officers. These agreements provide for severance equal to twelve months base salary in the event of termination without cause or for resignation for good reason, payable on the sixtieth day following the severance commencement date. However, in the event that the executive’s termination of employment is within twelve months after a change in control, the severance amount is increased to twenty-four months of base salary.

In November 2009, the employment agreements were amended to comply with Section 162(m) of the Internal Revenue Code by changing the calculation of the annual cash incentive payout upon termination from a pro-rata calculation based on the officer’s bonus target for the year to a pro-rata calculation determined by multiplying the actual incentive achievement for the fiscal year, as though the executive’s employment had not terminated, by the fraction of the year the executive is employed in the fiscal year, payable at the time the company pays bonuses for such fiscal year.

Additionally, these agreements provide for limited accelerated vesting of equity grants (other than performance-based restricted common stock) in the event of a termination of employment by us without cause or by the named executive officer for good reason. Furthermore, these agreements contain restrictive covenants requiring that the executive not compete with the company or solicit the company’s employees for two years from the date of termination.

The employment agreements also provide change in control benefits. In the event we were to undergo a change of control, the employment agreements provide for 36 months of accelerated vesting for time-based stock option and restricted common stock grants and full vesting of such grants in the event of termination within twelve months of the change of control. The performance-based restricted common stock grants provide for full acceleration upon a change in control. We believe that it is important to provide for accelerated vesting because equity grants provide such a high proportion of the named executive officers’ total compensation. Very often, members of senior management lose their jobs in connection with a change of control. By agreeing up front to protect the named executive officers from losing their equity in the event of a change in control, we believe we can reinforce and encourage the continued attention and dedication of the executive officers to their assigned duties without distraction in the face of an actual or threatened change of control. This protection also aligns the named executive officers’ interests with the stockholders’ interests. The employment agreements also provide for a tax gross-up payment to the named executive officers should they become subject to the 20% golden parachute excise tax.

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Mr. Sundaram’s employment agreement contains an additional term that resulted from his joining the company upon the acquisition of certain assets of Automotive Lease Guide (alg), LLC. We agreed to honor an existing arrangement that he had with respect to a promissory note owed to his former employer in order to encourage Mr. Sundaram to remain with the company after the acquisition. This arrangement terminated on December 31, 2009.

Please see page 33 for more information regarding the material terms of the named executive officers’ employment agreements.

Perquisites

We believe that cash and equity compensation are the two key components in attracting and retaining management talent and therefore do not provide any perquisites other than relocation expenses.

Deferred Compensation Plan

We have a deferred compensation plan that allows the named executive officers to defer bonus compensation by investing it in deferred stock units based on the fair market value of the common stock on the date the bonuses would otherwise be paid. This plan provides a tax effective means of allowing the executive officers to invest in the stock and fulfills the objective of encouraging equity ownership. None of our named executive officers elected to have any portion of their 2009 bonuses deferred.

401(k) Plan

We maintain a 401(k) plan which covers substantially all employees. The 401(k) plan is an essential part of the retirement package needed to attract and retain employees in the industry. The 401(k) plan permits employees to contribute up to the lesser of 20% of earnings or the annual dollar limit prescribed by the tax laws. The company provides a matching contribution, the amount of which is determined at our discretion. For the first quarter of 2009, the matching contribution was 50% of each employee’s contribution up to 6% of eligible pay, subject to Internal Revenue Code limitations. As part of cost reduction initiatives described previously, the company match was eliminated for all employees, including the named executive officers, for the period of April 1, 2009 through December 31, 2009. However, the company later made a discretionary contribution of 1% of base salary and commissions for all employees, including all named executive officers, for 2009.

Section 162(m) Policy

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation over $1,000,000 paid to their chief executive officers and the four other most highly compensated executive officers unless certain tests are met. The Compensation Committee’s general intent is to design and administer our executive compensation programs to preserve the deductibility of compensation payments to named executive officers. However, our goal of preserving the deductibility of compensation is secondary in importance to achievement of the company’s compensation objectives. We believe that the potential increased tax liability is of insufficient magnitude to warrant alteration of our current executive compensation programs, which we believe are achieving our desired compensation objectives while retaining our flexibility to exercise judgment in assessing our named executive officers’ performance.

Actions Taken After the 2009 Fiscal Year

On March 9, 2010, the Compensation Committee approved long-term performance equity awards consisting of performance stock units (“PSUs”) for certain of the company’s named executive officers. Subject to adjustment as described below, the PSUs vest in full on January 31, 2013, provided that the executive officer remain employed at the company on such date. The target number of PSUs (100%) awarded is subject to adjustment ranging from 0% (threshold) to 137.5% (maximum) based solely upon achievement of certain pre-established performance goals. These performance goals are equally based on both the company’s Adjusted Net Income for calendar year 2010 and the total shareholder return of the company’s common stock as compared to other companies in the NASDAQ Internet Index in the aggregate for calendar years 2010, 2011 and 2012. The awards will accelerate in full if an executive is terminated without cause, or resigns for good reason, in each case, within 12 months of a change of control.

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Compensation Committee Report

This report is submitted by the Compensation Committee of the Board of Directors. The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed that Analysis with management. Based on its review and discussion with management, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for filing with the Securities and Exchange Commission.

No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be considered soliciting material or deemed filed under either the Securities Act or the Exchange Act.

Respectfully submitted by the Compensation Committee,
  
  
Mary Cirillo-Goldberg
James D. Foy
John J. McDonnell, Jr. (chairperson)

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EXECUTIVE COMPENSATION

Summary Compensation Table

Name and Principal Position		Fiscal Year				Salary				Bonus(1)				Stock Awards(2)				Stock Options(3)				Non-Equity Incentive Comp(4)(5)				All Other Compensation(6)				Total
Mark F. O'Neil Chairman and Chief Executive Officer			2009			$	505,328			$	19,672			$	940,800			$	877,743			$	350,800			$	4,419			$	2,698,762
			2008			$	525,000				—				—			$	998,400				—			$	6,750			$	1,530,150
			2007			$	510,000				—			$	1,539,000			$	783,064			$	525,000			$	10,669			$	3,367,733
Eric D. Jacobs Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer(7)			2009			$	268,064			$	10,436			$	352,800			$	316,963			$	147,200			$	4,539			$	1,100,002
			2008			$	278,500				—				—			$	449,280			$	68,900			$	6,750			$	803,430
			2007			$	270,000				—			$	453,470			$	225,414			$	222,500			$	6,750			$	1,178,134
Raj Sundaram Senior Vice President, Product Management & Customer Support			2009			$	268,064			$	10,436			$	352,800			$	365,726			$	131,400			$	77,931			$	1,206,357
			2008			$	278,500				—				—			$	399,360			$	61,300			$	116,937			$	856,097
			2007			$	268,000				—			$	453,470			$	225,414			$	180,400			$	510,307			$	1,637,591
Rick Von Pusch Senior Vice President, Sales, Marketing and International			2009			$	247,851			$	9,649			$	352,800			$	365,726			$	111,300			$	4,381			$	1,091,707
			2008			$	257,500				—				—			$	399,360			$	42,500			$	6,750			$	706,110
			2007			$	235,000				—			$	424,740			$	210,313			$	151,250			$	6,750			$	1,028,053
Richard McLeer Senior Vice President, Chief Information Officer			2009			$	240,632			$	9,368			$	294,000			$	316,963			$	110,100			$	4,262			$	975,325
			2008			$	235,000				—				—			$	269,568			$	35,250			$	4,700			$	544,518
			2007			$	225,000				—			$	367,280			$	180,110			$	119,250			$	4,750			$	896,390
Former Executive Robert J. Cox(8) Senior Vice President, Chief Financial Officer and Treasurer			2009			$	56,960				—				—				—				—			$	453,147			$	510,107
			2008			$	288,500				—				—			$	449,280			$	43,300			$	6,750			$	787,830
			2007			$	280,000				—			$	539,660			$	270,719			$	212,000			$	6,750			$	1,309,129

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All Other Compensation Table

The following table describes each component of the All Other Compensation column in the Summary Compensation Table.

Name		Year				401(k) Match/ Contribution(1)				Tax Gross-Up				Relocation				Other				Total
Mark F. O’Neil			2009			$	1,969			$	—				—			$	2,450			$	4,419
			2008				6,750				—				—				—				6,750
			2007				6,750				—				—				3,919	(4)			10,669
Eric D. Jacobs			2009				2,089				—				—				2,450				4,539
			2008				6,750				—				—				—				6,750
			2007				6,750				—				—				—				6,750
Raj Sundaram			2009				2,089				8,392	(2)			14,000	(3)			53,450	(5)			77,931
			2008				5,893				13,815	(2)			24,000	(3)			73,229	(5)			116,937
			2007				5,852				144,305	(2)			276,150	(3)			84,000	(5)			510,307
Rick Von Pusch			2009				1,931				—				—				2,450				4,381
			2008				6,750				—				—				—				6,750
			2007				6,750				—				—				—				6,750
Richard McLeer			2009				1,875				—				—				2,387				4,262
			2008				4,700				—				—				—				4,700
			2007				4,750				—				—				—				4,750
Former Executive Robert J. Cox			2009				1,424				—				—				451,723	(6)			453,147
			2008				6,750				—				—				—				6,750
			2007				6,750				—				—				—				6,750

Please see the discussions under “Components of Executive Compensation for 2009”, above, and “Employment Agreements With Named Executive Officers”, below, for a discussion of the material factors necessary to an understanding of the information disclosed in this table.

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Grants of Plan-Based Awards in 2009

The following table provides information about equity and non-equity awards granted to the named executive officers in 2009:

										Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)												All Other Stock Awards or Units(2)				All Other Option Awards(3)				Exercise or Base Price of Option Awards(4)				Grant Date Fair Value of Stock and Option Awards(5)
Name		Award Description				Grant Date				Threshold ($)				Target ($)				Maximum ($)
Mark F. O'Neil			2005 Plan				1/27/2009			$	316,981			$	422,642			$	887,550				80,000				180,000			$	11.76			$	1,818,543
Eric D. Jacobs			Corporate Incentive Plan				1/27/2009			$	118,695			$	158,260			$	292,781				30,000				65,000			$	11.76			$	669,763
Raj Sundaram			Corporate Incentive Plan				1/27/2009			$	118,695			$	158,260			$	292,781				30,000				75,000			$	11.76			$	718,526
Rick Von Pusch			Corporate Incentive Plan				1/27/2009			$	100,599			$	134,132			$	221,319				30,000				75,000			$	11.76			$	718,526
Richard McLeer			Corporate Incentive Plan				1/27/2009			$	88,790			$	118,387			$	201,258				25,000				65,000			$	11.76			$	610,963

Please see the discussions under “Components of Executive Compensation for 2009”, above, and “Employment Agreements With Named Executive Officers”, below, for a discussion of the material factors necessary to an understanding of the information disclosed in this table.

Outstanding Equity Awards at 2009 Fiscal Year End

The following table provides information on the current holdings of equity awards by the named executive officers. This table includes unexercised and unvested option awards; unvested restricted common stock; unvested restricted stock units and restricted common stock with performance conditions that have not yet been satisfied. Each equity grant is shown separately for each named executive officer. The vesting schedule for each grant is shown following this table, based on the award grant date.

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Name		Option Grant Date				Number of Securities Underlying Unexercised Options Exercisable				Number of Securities Underlying Unexercised Options Unexercisable				Option Exercise Price				Option Expiration Date				Stock Award Grant Date				Number of Shares or Units of Stock That Have Not Vested(1)				Market Value of Shares or Units of Stock That Have Not Vested(2)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(3)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(4)
Mark F. O'Neil			01/16/2002				164,941				—			$	3.12				01/15/2012				01/27/2006				8,750			$	164,413
			05/03/2004				189,953				—			$	2.80				05/02/2014				08/02/2006												170,000			$	3,194,300
			08/18/2004				167,000				—			$	2.80				08/17/2014				02/06/2007				20,000			$	375,800
			05/26/2005				125,000				—			$	12.92				05/25/2015				08/08/2007				5,000			$	93,950
			01/27/2006				88,123				1,877			$	20.68				01/26/2016				01/27/2009				80,000			$	1,503,200
			02/06/2007				28,333				11,667			$	28.73				02/05/2017
			08/08/2007				5,833				4,167			$	38.98				08/07/2014
			01/24/2008				45,835				54,165			$	24.50				01/23/2015
			01/27/2009				—				180,000			$	11.76				01/26/2016
Eric D. Jacobs			05/15/2002				18,250				—			$	2.80				05/14/2012				01/27/2006				2,500			$	46,975
			01/30/2003				5,753				—			$	2.80				01/29/2013				08/02/2006												50,000			$	939,500
			01/30/2004				45,000				—			$	2.80				01/29/2014				02/06/2007				4,500			$	84,555
			08/18/2004				50,000				—			$	2.80				08/17/2014				08/08/2007				2,500			$	46,975
			05/26/2005				50,000				—			$	12.92				05/25/2015				01/27/2009				30,000			$	563,700
			01/27/2006				19,583				417			$	20.68				01/26/2016
			02/06/2007				6,374				2,626			$	28.73				02/05/2017
			08/08/2007				2,916				2,084			$	38.98				08/07/2014
			01/24/2008				20,625				24,375			$	24.50				01/23/2015
			01/27/2009				—				65,000			$	11.76				01/26/2016
Raj Sundaram			05/26/2005				25,000				—			$	12.92				05/25/2015				01/27/2006				1,250			$	23,488
			01/27/2006				9,791				209			$	20.68				01/26/2016				08/02/2006												35,000			$	657,650
			11/02/2006				15,416				4,584			$	25.39				11/01/2016				11/02/2006				2,500			$	46,975
			02/06/2007				6,374				2,626			$	28.73				02/05/2017				02/06/2007				4,500			$	84,555
			08/08/2007				2,916				2,084			$	38.98				08/07/2014				08/08/2007				2,500			$	46,975
			01/24/2008				18,335				21,665			$	24.50				01/23/2015				01/27/2009				30,000			$	563,700
			01/27/2009				—				75,000			$	11.76				01/26/2016
Rick Von Pusch			11/02/2006				15,416				4,584			$	25.39				11/01/2016				11/02/2006												20,000			$	375,800
			02/06/2007				5,666				2,334			$	28.73				02/05/2017				11/02/2006				2,500			$	46,975
			08/08/2007				2,916				2,084			$	38.98				08/07/2014				02/06/2007				4,000			$	75,160
			01/24/2008				18,335				21,665			$	24.50				01/23/2015				08/08/2007				2,500			$	46,975
			01/27/2009				—				75,000			$	11.76				01/26/2016				1/27/2009				30,000			$	563,700
Richard McLeer			08/18/2004				18,973				—			$	2.80				08/17/2014				01/27/2006				1,000			$	18,790
			05/26/2005				5,000				—			$	12.92				05/25/2015				8/2/2006												25,000			$	469,750
			01/27/2006				7,833				167			$	20.68				01/26/2016				02/06/2007				3,000			$	56,370
			02/06/2007				4,249				1,751			$	28.73				02/05/2017				08/08/2007				2,500			$	46,975
			08/08/2007				2,916				2,084			$	38.98				08/07/2014				1/27/2009				25,000			$	469,750
			01/24/2008				12,375				14,625			$	24.50				01/23/2015
			01/27/2009				—				65,000			$	11.76				01/26/2016
Former Executive
Robert J. Cox			08/18/2004				65,000				—			$	2.80				03/01/2011	(5)
			05/26/2005				50,000				—			$	12.92				03/01/2011	(5)
			01/27/2006				25,000				—			$	20.68				03/01/2011	(5)
			02/06/2007				12,000				—			$	28.73				03/01/2011	(5)
			08/08/2007				4,374				—			$	38.98				03/01/2011	(5)
			01/24/2008				34,687				—			$	24.50				03/01/2011	(5)

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Option Vesting Schedule

Except for grant dates set forth below, the vesting schedule for stock options is 25% of the shares subject to the option vest on the one year anniversary of the date of grant, and 1/36th of the remaining shares subject to the option vest each month thereafter, such that 100% of the shares subject to the option will be fully vested four years after the date of grant.

Stock Option Grant Date		Vesting Schedule
January 30, 2003		The vesting commencement date was January 1, 2003.
January 30, 2004		10,000 options vested immediately for Mr. Jacobs. The remaining options began vesting on January 1, 2004.

Option Exercises and Stock Vested in Fiscal 2009

		Option Awards								Stock Awards
Name		Number of Shares Acquired on Exercise				Value Realized on Exercise				Number of Shares Acquired on Vesting				Value Realized on Vesting(1)
Mark F. O’Neil			250,000	(1)		$	2,474,189				28,750	(5)		$	386,575
Eric D. Jacobs			12,000	(2)			134,744				8,500	(6)			118,058
Raj Sundaram			—				—				7,250	(7)			108,983
Rick Von Pusch			—				—				5,750	(8)			91,053
Richard McLeer			42,000	(3)			465,507				4,500	(9)			66,018
Former Executive: Robert J. Cox			91,098	(4)			1,098,178				40,000	(10)			389,560

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Nonqualified Deferred Compensation

We have a deferred compensation plan that allows the executive officers to defer up to 100% of annual bonus earnings by investing it in deferred stock units based on the fair market value of the common stock on the date the bonuses would otherwise be paid. None of our named executive officers elected to defer any portion of their 2007, 2008 or 2009 bonuses.

The table below sets forth information with respect to voluntary contributions, earnings and distributions for the named executive officers under our executive deferred compensation plan, or Executive Plan. Cash compensation voluntarily deferred by the executive under the Executive Plan is invested in DealerTrack deferred stock units.

		Executive Contribution in 2009				Registrant Contributions in 2009				Aggregate Earnings in 2009				Aggregate Withdrawals/ Distributions				Aggregate Balance at December 31, 2009
Mark F. O'Neil			—				—				—				—				—
Eric D. Jacobs			—				—				—				—				—
Raj Sundaram			—				—				—				—				—
Rick Von Pusch			—				—				—				—				—
Richard McLeer			—				—				—				—				—
Former Executive: Robert J. Cox			—				—			$	8,525	(1)			—				—

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POTENTIAL PAYMENTS UPON TERMINATION

The tables set forth below describe and quantify certain compensation that would become payable under existing plans and arrangements if the named executive officer’s employment had terminated on December 31, 2009, based on our closing stock price on that date, with the exception of Mr. Cox, whose employment terminated effective March 2, 2009. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event and our stock price. None of our named executive officers are entitled to any compensation in the event of a voluntary termination without good reason or an involuntary termination for cause.

		Compensation																				Benefits & Perquisites
		Base Salary(4)				Short-Term Incentives(5)				Performance Shares(6)				Stock Options(7)				Restricted Stock(8)				Health Care(9)				280G Tax Gross-Up				Total
Mark F. O’Neil
Involuntary or Good Reason Termination(1)		$	497,227			$	—				—				922,688				1,385,763				18,092				—			$	2,823,770
Death or Disability(2)			497,227				—				3,116,390				—				—				18,092				—				3,631,709
Change In Control(3)			994,455				—				3,194,300				1,265,400				2,137,363				18,092				—				7,609,610
Eric D. Jacobs
Involuntary or Good Reason Termination(1)			263,767				—				—				333,193				460,355				18,092				—				1,075,407
Death or Disability(2)			263,767				—				916,585				—				—				18,092				—				1,198,444
Change In Control(3)			527,535				—				939,500				456,950				742,205				18,092				—				2,684,282
Raj Sundaram
Involuntary or Good Reason Termination(1)			263,767				—				—				384,453				483,843				18,092				—				1,150,155
Death or Disability(2)			263,767				—				641,610				—				—				18,092				—				923,469
Change In Control(3)			527,535				—				657,650				527,250				765,693				18,092				—				2,496,220
Rick Von Pusch
Involuntary or Good Reason Termination(1)			243,878				—				—				384,453				450,960				—				—				1,079,291
Death or Disability(2)			243,878				—				339,137				—				—				—				—				583,015
Change In Control(3)			487,757				—				375,800				527,250				732,810				—				—				2,123,617
Richard McLeer
Involuntary or Good Reason Termination(1)			236,775				—				—				333,193				357,010				16,134				—				943,112
Death or Disability(2)			236,775				—				458,293				—				—				16,134				—				711,202
Change In Control(3)			473,550				—				469,750				456,950				591,885				16,134				—				2,008,269
Former Executive Robert J. Cox
Involuntary or Good Reason Termination			418,325	(10)			29,427	(11)			185,600	(12)			0	(13)			129,920	(14)			3,971	(15)			—				767,243
Death or Disability			—				—				—				—				—				—				—
Change In Control			—				—				—				—				—				—				—

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