SEVERANCE AGREEMENT AND GENERAL RELEASE
Exhibit 99.1
SEVERANCE AGREEMENT AND GENERAL RELEASE
(PLEASE READ CAREFULLY. THIS AGREEMENT AND GENERAL RELEASE HAS IMPORTANT LEGAL CONSEQUENCES.)
This Severance Agreement and General Release (the “Agreement”) is between DealerTrack
Holdings, Inc. (the “Company” or “we”) and Xxxxx Xxxxxxx (“Employee” or “you”). The term “Company”
includes parents, subsidiaries or related companies, as well as their directors, officers,
shareholders, employees, agents, attorneys, and successors.
1. Employee’s last date of employment with the Company is January 5, 2009 (the “Termination
Date”).
2. Employee’s employment by the Company terminated on the Termination Date. Employee hereby
resigns as an officer, director, employee, member, manager and in any other capacity with the
Company and each of its affiliates effective as of the Termination Date and confirms that he
currently holds no such position with the Company or any of its affiliates. The Company hereby
confirms that it and each of its affiliates acceptes such resignation effective as of the
Termination Date. Employee agrees that he has no consulting relationship with the Company or any
of its affiliates. Employee waives any right or claim to reinstatement as an employee of the
Company and any affiliate of the Company (if any) by which he was previously employed. Employee
acknowledges and agrees that he has received all amounts owed for his regular and usual salary
(including, but not limited to, any severance (other than the Severance Benefits expressly provided
for in, and subject to the terms of, this Agreement), overtime, bonus, accrued vacation,
commissions, or other wages), reimbursement of expenses, and usual benefits, and that all payments
due to Employee from the Company and its affiliates after the Termination Date shall be determined
under this Separation Agreement.
3. Subject to the effective execution of this Agreement, the Company will pay Employee the
following (the “Severance Benefits”):
| (a) | On the first regular Company payday that is at least six months following the date of Employees’ Termination Date (or, the Employee’s death, if earlier), the Company will pay you the sum of (i) a one-time cash lump sum severance payment, in the amount of Two Hundred Seventy Eight Thousand Five Hundred ($278,500.00) Dollars, representing one year of your base salary; and (ii) an additional one-time cash severance payment in the amount of One Hundred Fifty Three Thousand One Hundred Seventy Five ($153,175) Dollars, representing your target bonus for 2008, each less applicable federal, state, and local legally required deductions (collectively, the “Payments”); and | ||
| (b) | the reimbursement of premiums in the amount of One Thousand Four Hundred Eighty Seven ($1,487.00) Dollars per month otherwise payable by Employee pursuant to COBRA for a period of up to twelve (12) months, or until Employee no longer is eligible for COBRA continuation coverage, whichever is earlier, which shall be paid following the Employee’s submission of proof of his payment of such premiums. |
4. The Company and the Employee agree that as of the Termination Date Employee’s options to
purchase the Company’s common stock will be vested and exercisable to the extent set forth on
Schedule A attached hereto (the “Vested Stock Options”). The Vested Stock Options shall remain
exercisable in accordance with their terms until the close of business on January 4, 2011.
Additionally, all restrictions shall lapse on the number of shares of restricted common stock set
forth on Schedule A attached hereto. Any and all other outstanding equity-based awards, shall be,
and hereby are, terminated and Employee shall have no further rights with respect thereto or in
respect thereof.
5. Employee agrees that the execution of this Agreement is required by Section 5(d) of the
Employment Agreement and that Employee would not otherwise be entitled to the Severance Payments
except by executing this Agreement. Employee agrees and acknowledges that he is entitled to no
other payments or benefits beyond the Termination Date.
6. Employee acknowledges and agrees that the provisions of Sections 7, 8, 9 and 10 of the
Employment Agreement shall survive termination of Employee’s Agreement and are hereby incorporated
herein.
7. The parties agree that, other than the sections of the Employment Agreement specifically
referred to in this Agreement, they shall have no further obligations under the Employment
Agreement.
8. Release. Employee, on behalf of himself, his descendants, dependents, heirs,
executors, administrators, assigns, and successors, and each of them, hereby covenants not to xxx
and fully releases and discharges the Company and each of its parents, subsidiaries and affiliates,
past and present, as well as its and their trustees, directors, officers, members, managers,
partners, agents, attorneys, insurers, employees, stockholders, representatives, assigns, and
successors, past and present, and each of them, hereinafter together and collectively referred to
as the “Releasees,” with respect to and from any and all claims, wages, demands, rights, liens,
agreements or contracts (written or oral), covenants, actions, suits, causes of action,
obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden (each, a “Claim”), which he now owns or holds
or he has at any time heretofore owned or held or may in the future hold as against any of said
Releasees (including, without limitation, any Claim arising out of or in any way connected with
Employee’s service as an officer, director, employee, member or manager of any Releasee, Employee’s
separation from her position as an officer, director, employee, manager and/or member, as
applicable, of any Releasee, or any other transactions, occurrences, acts or omissions or any loss,
damage or injury whatever), whether known or unknown, suspected or unsuspected, resulting from any
act or omission by or on the part of said Releasees, or any of them, committed or omitted prior to
the date of this Release Agreement including, without limiting the generality of the foregoing, any
Claim under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of
1967, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, or any other
federal, state or local law, regulation, or ordinance, or any Claim for severance pay, bonus, sick
leave, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe
benefit, workers’ compensation or disability (the “Release”); provided, however, that the foregoing
release does not apply to any obligation of the Company to Employee pursuant to any of the
following: (1) any equity-based awards previously granted by the Company to Employee, to the extent
that such awards continue after the termination of Employee’s employment with the Company in
accordance with the applicable terms of such awards (and subject to any limited period in which to
exercise such awards following such termination of employment); (2) any right to indemnification
that Employee may have pursuant to the Bylaws of the Company, its Articles of Incorporation or
under any written indemnification agreement with the Company (or any corresponding provision of any
subsidiary or affiliate of the Company) or applicable state law with respect to any loss, damages
or expenses (including but not limited to attorneys’ fees to the extent otherwise provided) that
Employee may in the future incur with respect to her service as an employee, officer or director of
the Company or any of its subsidiaries or affiliates; (3) with respect to any rights that Employee
may have to insurance coverage for such losses, damages or expenses under any Company (or
subsidiary or affiliate) directors and officers liability insurance policy; (4) any rights to
continued medical or dental coverage that Employee may have under COBRA; or (5) any rights to
payment of benefits that Employee may have under a retirement plan sponsored or maintained by the
Company that is intended to qualify under Section
401(a) of the Internal Revenue Code of 1986, as amended. In addition, this Release does not
cover any Claim that cannot be so released as a matter of applicable law. Employee acknowledges
and agrees that he has received any and all leave and other benefits that he has been and is
entitled to pursuant to the Family and Medical Leave Act of 1993.
9. ADEA Waiver. Employee expressly acknowledges and agrees that by entering into this
Agreement, he is waiving any and all rights or claims that he may have arising under the Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), which have arisen on or before the
date of execution of this Agreement. Employee further expressly acknowledges and agrees that:
(a) In return for this Agreement, he will receive consideration beyond that which he was
already entitled to receive before entering into this Agreement;
(b) He is hereby advised in writing by this Agreement to consult with an attorney before
signing this Agreement;
(c) He has voluntarily chosen to enter into this Agreement and has not been forced or
pressured in any way to sign it;
(d) He was given a copy of this Agreement on January 2, 2009 and informed that he had
forty-five (45) days within which to consider the Agreement and that if he wished to execute this
Agreement prior to expiration of such 45-day period, he should execute the Acknowledgement and
Waiver attached hereto as Exhibit A;
(e) Nothing in this Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs from doing so, unless specifically authorized by federal
law; and
(f) He was informed that he has seven (7) days following the date of execution of this
Agreement in which to revoke this Agreement, and this Agreement will become null and void if
Employee elects revocation during that time. Any revocation must be in writing and must be
received by the Company during the seven-day revocation period. In the event that Employee
exercises his right of revocation, neither the Company nor Employee will have any obligations under
this Agreement.
(g) He acknowledges that if he fails to return an executed copy of this Agreement within 45
days, the Company shall have no obligations under this Agreement.
10. Employee warrants and represents that Employee has not heretofore assigned or transferred
to any person not a party to this Agreement any released matter or any part or portion thereof and
he shall defend, indemnify and hold the Company and each of its affiliates harmless from and
against any claim (including the payment of attorneys’ fees and costs actually incurred whether or
not litigation is commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.
11. You agree that you will return to the Company any and all identification cards, files,
books, records, materials, equipment or documents in your possession that were provided to or
obtained by you in connection with your employment.
12. It is understood and agreed that the you will not talk about, discuss or communicate with
anyone, orally or in writing, concerning the matter which is the subject of this Agreement except
you may: (i) discuss this Agreement with Employee’s spouse and children, (ii) review this
Agreement with Employee’s accountant in connection with the filing of tax returns, (iii) review
this Agreement with attorney(s) of your choice, and (iv) truthfully testify under oath pursuant to
a subpoena (in which event the subpoenaed party will provide the other with prompt notice of the
subpoena).
13. You agree that you will not directly or indirectly interfere with the orderly business
operations of the Company and you will not directly or indirectly make any statement that will or
may have the effect of disparaging the Company, or which is or may be derogatory of the Company, or
which has or may have an adverse effect on the business or reputation of the Company.
14. You represent that you are not aware of any wrongdoing by the Company, or any liability
arising therefrom, and you expressly agree that this Agreement is not and shall not in any way be
deemed to constitute an admission or evidence of any breach of contract, wrongdoing or liability on
the part of the Company, nor of any violation of any federal, state or municipal statute,
regulation or principle of common law or equity.
15. This Agreement embodies the entire agreement of the parties hereto respecting the matters
within its scope. This Agreement supersedes all prior agreements of the parties hereto on the
subject matter hereof, including, without limitation, the Employment Agreement, except for those
portions of the Employment Agreement that are expressly referenced in this Agreement. Any prior
negotiations, correspondence, agreements, proposals, or understandings relating to the subject
matter hereof shall be deemed to be merged into this Agreement and to the extent inconsistent
herewith, such negotiations, correspondence, agreements, proposals, or understandings shall be
deemed to be of no force or effect. There are no representations, warranties, or agreements,
whether express or implied, or oral or written, with respect to the subject matter hereof, except
as set forth herein. Notwithstanding the foregoing, the Company’s rights under any
confidentiality, trade secret, proprietary information, inventions or similar agreement to which
Employee was a party or otherwise bound are not integrated into this Agreement and such rights of
the Company shall continue in effect.
16. In the event that Employee fails to abide by any of the terms of this Agreement following
notice of such failure by the Company and a reasonable opportunity to cure, the Company may, in
addition to any other remedies it may have, terminate any benefits or payments that are
subsequently due under this Agreement, without waiving the release granted herein.
17. Employee acknowledges and agrees that the remedy at law available to the Company for
breach by Employee of any of Employee’s obligations under this Agreement, including but not limited
to Employee’s obligations under paragraphs 6, 12, and 13 of this Agreement, would be inadequate and
that damages flowing from such a breach may not readily be susceptible to being measured in
monetary terms. Accordingly, Employee acknowledges consents and agrees that, in addition to any
other rights or remedies which the Company may have at law, in equity or under this Agreement, upon
adequate proof of Employee’s violation of any such provision of this Agreement, the Company shall
be entitled to immediate injunctive relief and may obtain a temporary order restraining any
threatened or further breach, without the necessity of proof of actual damage or the posting of a
bond.
18. In any action brought to enforce any of the provisions of this Agreement, the parties
irrevocably consent to the jurisdiction of the state and federal courts covering Nassau County, New
York.
19. This Agreement is made in the State of New York. This Agreement is to be interpreted
under the laws of the State of New York without regard to conflict of laws principles.
20. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS CAREFULLY READ THIS AGREEMENT AND THE ACCOMPANING
ATTACHMENT; THAT EMPLOYEE HAS HAD AT LEAST 45 DAYS IN WHICH TO CONSIDER AND RETURN THIS AGREEMENT;
THAT EMPLOYEE HAS CONSULTED WITH AN ATTORNEY OF EMPLOYEE’S CHOICE IN CONNECTION WITH THIS
AGREEMENT; THAT EMPLOYEE FULLY UNDERSTANDS THE TERMS, CONDITIONS, AND SIGNIFICANCE AND CONSEQUENCES
OF THIS AGREEMENT; AND THAT EMPLOYEE HAS EXECUTED THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, AND OF
EMPLOYEE’S OWN FREE WILL.
By:
|
/s/ Xxx Xxxxxxx | Dated: 2/6/09 | ||||
| /s/ Xxxxx Xxxxxxx | Dated: 2/6/09 | |||||
| XXXXX XXXXXXX |
Schedule A
Stock Options
| Outstanding | ||||||||
| Exercisable as | ||||||||
| Grant Date | Xxxxx Xxxxx | of 12/31/09 | ||||||
01/24/2008
|
$ | 24.500000 | 28,337 | |||||
08/08/2007
|
$ | 38.980000 | 4,166 | |||||
02/06/2007
|
$ | 28.730000 | 8,624 | |||||
01/27/2006
|
$ | 20.680000 | 18,000 | |||||
05/26/2005
|
$ | 12.920000 | 35,000 | |||||
08/18/2004
|
$ | 2.800000 | 10,000 | |||||
07/01/2004
|
$ | 2.800000 | 3,000 | |||||
01/30/2004
|
$ | 2.800000 | 8,334 | |||||
| 115,461 | ||||||||
Restricted Common Stock
| Grant Date | Shares Vest | |||
08/08/2007
|
2,500 | |||
02/06/2007
|
4,500 | |||
08/02/2006
|
11,667 | |||
01/27/2006
|
4,500 | |||
05/26/2005
|
1,250 | |||
| 24,417 | ||||