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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April 30, 2012

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 June 20, 2012, at 10:00 a.m. local time, at DealerTrack Holdings, Inc. 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:		June 20, 2012
Time:		10:00 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 the three nominees named in the attached Proxy Statement as directors on the board of directors for three-year terms as Class I directors to serve until our 2015 Annual Meeting of Stockholders or until their successors are elected;
		(2)  To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2012;
		(3)  To approve on an advisory basis the compensation of our executive officers;
		(4)  To amend and restate our Third Amended and Restated 2005 Incentive Award Plan to provide for an increase in the number of shares of common stock we may issue under the 2005 Plan by 2.3 million to a total of 13.2 million shares; and
		(5)  To amend our Fifth Amended and Restated Certificate of Incorporation to change our name from “DealerTrack Holdings, Inc.” to “Dealertrack Technologies, Inc.”
Record Date:		April 23, 2012. 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 ensure 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 April 30, 2012

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Table of Contents

General Information			1
The Annual Meeting			1
Purpose of the Meeting			1
Information Concerning Voting and Solicitation of Proxies			1
Who Can Vote?			1
How You Can Vote			1
How You Can Access the Proxy Materials for the Annual Meeting			2
How To Revoke Your Proxy or Change Your Vote			2
How Many Votes You Have			3
Quorum			3
Votes Required			3
Attending the Annual Meeting			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 I 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 2011			7
Board Independence			7
Board Leadership Structure			7
Board Oversight of Risk			7
Stockholder Communications with the Board of Directors			7
Director Attendance at Annual Meeting			7
Code of Business Conduct and Ethics			8
Committees			8
Non-Management Directors’ Compensation for Fiscal Year 2011			11
Audit Committee Report			14
Principal Accountant Fees and Services			15
Proposal Two: Ratification of Selection of Independent Registered Public Accounting Firm			16
Proposal Three: Advisory Vote on Compensation of Executive Officers			17
Proposal Four: Proposal to Amend and Restate Our Third Amended and Restated 2005 Incentive Award Plan			19
Proposal Five: Proposal to Amend our Fifth Amended and Restated Certificate of Incorporation			25
Executive Officers			26
Compensation Discussion and Analysis			28
Compensation Committee Report			37
Executive Compensation			38

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Summary Compensation Table			38
All Other Compensation Table			40
Grants of Plan-Based Awards in 2011			41
Outstanding Equity Awards at 2011 Fiscal Year End			42
Option Exercises and Stock Vested in Fiscal 2011			44
Non-Qualified Deferred Compensation			44
Potential Payments upon Termination or Change in Control			45
Compensation Committee Interlocks and Insider Participation			47
Employment Agreements with Named Executive Officers			47
Equity Compensation Plan Information			50
Security Ownership of Certain Beneficial Owners and Management			51
Section 16(a) Beneficial Ownership Reporting Compliance			52
Certain Relationships and Transactions			53
Miscellaneous			54
Solicitation of Proxies			54
Deadline for Receipt of Stockholder Proposals for our 2013 Annual Meeting			54
Annual Report			55
Annex A: Fourth Amended and Restated DealerTrack Holdings, Inc. 2005 Incentive Award Plan			A-1

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

 

PROXY STATEMENT

 

For the Annual Meeting of Stockholders
to be held June 20, 2012
  
GENERAL INFORMATION

INFORMATION ABOUT THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS

As was started last year, we are providing access to our proxy materials, including our Proxy Statement and Annual Report on Form 10-K, via the Internet rather than mailing a printed copy to each stockholder. 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 April 30, 2012 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/2012proxy.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 June 20, 2012. 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 April 30, 2012.

PURPOSE OF THE 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 April 23, 2012 may vote at the Annual Meeting. As of April 20, 2012, there were 42,435,963 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 Notice or 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 Notice or 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.

You may vote using one of the following methods:

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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, executive compensation and amendment of our Certificate of Incorporation.

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, 2011, 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/2012proxy.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.

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:

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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.

Advisory Vote on Compensation of Our Executive Officers.  The affirmative vote of a majority of the votes present and entitled to vote in person or by proxy at the Annual Meeting is required to adopt this advisory resolution. Since this proposal is advisory in nature, the results of this vote are not binding on the board of directors. However, the board will consider the results of this advisory vote when considering future executive compensation decisions. Abstentions will have the effect of a vote against adoption of the advisory resolution. Broker non-votes will have no effect on this proposal.

Amendment and Restatement of our Third Amended and Restated 2005 Incentive Award Plan.  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 this proposal and broker non-votes will not be counted as present with respect to this proposal.

Amendment and Restatement of our Fifth Amended and Restated Certificate of Incorporation to Change our Name to “Dealertrack Technologies, Inc.”  To pass, this proposal must receive a “for” vote of a majority of the outstanding shares of Common Stock in person or by proxy at the Annual Meeting. Abstentions and broker non-votes will have the effect of a vote against this proposal.

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 and valid photo identification with you in order to be admitted to the Annual 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 and valid 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 2013 and every three years thereafter		Ms. Lane and Messrs. McDonnell and Zwarenstein
Class III: Term expires 2014 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 2015 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 election of each nominee 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 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 I DIRECTORS

James Foy, 65, 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. Our board has determined that 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, 80, 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 served as a director of IMPCO

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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 at the University of Pennsylvania. Our board has determined that 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, 58, 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. Our board has determined that 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.

INFORMATION ABOUT THE MEMBERS OF OUR BOARD OF DIRECTORS WHOSE TERMS OF OFFICE DO NOT EXPIRE AT THE ANNUAL MEETING

Class II Directors (terms expire at the 2013 Annual Meeting)

Ann B. Lane, 57, 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. Our board has determined that 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., 74, has served on our board of directors since July 2005. Mr. McDonnell has been Chief Executive Officer and a Director of Phoenix Managed Networks, a privately held payments company, since February 2010. Prior to joining Phoenix, he served as Chief Executive Officer and a Director of ExaDigm, Inc., a leading innovator of modular IP-based technology, from October 2008 until February 2010. 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 November 1999 until it was sold to CyberSource Corp. in September 2000. He remained a director of CyberSource until its sale to VISA in 2010. 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

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College, a MSEE from Renssalaer Polytechnic Institute and an Honorary Doctorate of Humane Letters from Marymount University. Our board has determined that 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, 63, has served on our board of directors since November 2007. Since January 2012, Mr. Zwarenstein has been Chief Financial Officer of Five9, Inc., a provider of virtual call center software. From September 2008 through November 2011, Mr. Zwarenstein served as Senior Vice President and Chief Financial Officer of SMART Modular Technologies, Inc. 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 at the University of Pennsylvania. He is qualified as a Chartered Accountant (South Africa). Our board has determined that 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.

Class III Directors (terms expire at the 2014 Annual Meeting)

Mary Cirillo-Goldberg, 64, 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. Our board has determined that 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, 53, 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. Mr. O’Neil serves as a director of TrueCar, Inc. He became a director of TrueCar in conjunction with the sale of ALG by our DealerTrack Data Systems subsidiary in consideration for a 15% ownership interest in TrueCar. Mr. O’Neil is Chairman of the Board of Chrome Data Solutions LP, Chrome Data Operating, LLC and AutoChrome Company, of each of which Chrome Systems, Inc., a wholly-owned subsidiary of DealerTrack Holdings, Inc., owns 50%. Mr. O’Neil 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. Our board has determined that Mr. O’Neil’s experience as our Chairman of the Board, President and Chief Executive Officer as well as his experience in the automotive retail industry provide him with extensive insight into our operations and qualify him to serve as Chairman of the Board.

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BOARD MEETINGS HELD DURING 2011

Our board of directors held six meetings during 2011 and acted one time by written consent. During 2011, each director attended at least 80% 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.

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) 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 of directors 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. Mr. O’Neil’s employment agreement provides that he shall serve as the Chairman of the Board during the term of his agreement. The board believes that the appointment of an independent Lead Director to lead 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 non-financial business risk, as well as risks associated with corporate governance, board organization, membership and structure. In addition, members of management may 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 2011 Annual Meeting.

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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 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 2011, the Audit Committee held thirteen 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 14).

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 2011, the Compensation Committee held eight meetings. 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 37).

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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 2011, the Nominating and Corporate Governance Committee held four meetings. The responsibilities of the Nominating and Corporate Governance Committee include:

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. Our Secretary will forward all recommendations to the committee. Stockholders must submit their recommendations on or before January 1, 2013 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:

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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 2011, the Investment Committee held five meetings.

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NON-MANAGEMENT DIRECTORS’ COMPENSATION FOR FISCAL YEAR 2011

Directors who are also employees receive no fees for their services as directors. During 2011, 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 2011 because no new directors were appointed.
Annual Equity Grant:		Restricted stock units equal to a fixed dollar value of $135,000 are 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.

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 2011.

Name		Fees Earned or Paid in Cash				Restricted Stock Unit Awards (RSU’s)(1)				Option Awards(2)				Total
Mary Cirillo-Goldberg		$	50,000			$	135,005			$	—			$	185,005
James Foy			50,000				135,005				—				185,005
Ann B. Lane			50,000				135,005				—				185,005
John J. McDonnell, Jr.			50,000				135,005				—				185,005
James David Power III			50,000				135,005				—				185,005
Howard L. Tischler			50,000				135,005				—				185,005
Barry Zwarenstein			50,000				135,005				—				185,005

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Name		Restricted Common Stock Grant Date				Number Granted				Grant Date Fair Value				Outstanding Restricted Common Stock /RSU’s
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				—
			5/24/2010				8,610				15.68				—
			5/23/2011				6,139				21.99				6,139
James Foy			9/19/2008				4,888				20.71				—
			6/17/2009				8,749				15.43				—
			5/24/2010				8,610				15.68				—
			5/23/2011				6,139				21.99				6,139
Ann B. Lane			7/11/2007				3,500				39.05				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				—
			5/24/2010				8,610				15.68				—
			5/23/2011				6,139				21.99				6,139
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				—
			5/24/2010				8,610				15.68				—
			5/23/2011				6,139				21.99				6,139
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				—
			5/24/2010				8,610				15.68				—
			5/23/2011				6,139				21.99				6,139
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				—
			5/24/2010				8,610				15.68				—
			5/23/2011				6,139				21.99				6,139
Barry Zwarenstein			11/06/2007				2,625				47.98				—
			6/03/2008				6,828				19.77				—
			6/17/2009				8,749				15.43				—
			5/24/2010				8,610				15.68				—
			5/23/2011				6,139				21.99				6,139

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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				30,000
Mary Cirillo-Goldberg			1/30/2003				6,250				2.80				—				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				30,000
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				—				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				30,000

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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 with the company’s independent registered public accounting firm the overall scope of and plans for its audit. 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 Public Company Accounting Oversight Board standards.

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.  All audit and non-audit services, other than de minimus non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our 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 (4) above, the Audit Committee recommended to the board of directors of DealerTrack Holdings, Inc. and the board of directors has approved, 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, 2011 for filing with the Securities and Exchange Commission.

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 sets forth the fees billed by PwC for 2011 and 2010:

		2011				2010
Audit fees(1):		$	1,149,400			$	967,549
Audit-related fees(2):			397,850				608,680
All other fees(3):			1,500				1,500
Total:		$	1,548,750			$	1,577,729

All of the audit-related and other services that provided PwC to us in 2011 and 2010 were approved by the Audit Committee by means of specific preapprovals or pursuant to the procedures contained in the pre-approval policies and procedures established by the Audit Committee.

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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 2012 fiscal year. Additional information concerning the Audit Committee and its activities with PwC can be found in the “Audit Committee Report” on page 14 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 ratification of the selection of PwC as our independent registered public accounting firm for the fiscal year ending December 31, 2012.

PROPOSAL THREE:
ADVISORY VOTE ON THE COMPENSATION OF EXECUTIVE OFFICERS

General

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, enables stockholders to vote to approve on an advisory, nonbinding basis, the compensation of our named executive officers, as we have described it in the “Executive Compensation” section of this proxy statement, beginning on page 38. This vote, commonly known as a “say-on-pay” vote, provides stockholders with the opportunity to express their views on our named executive officers’ compensation. The vote is not intended to address any specific item of our executive compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. The board of directors has adopted a policy providing for annual say-on-pay votes. Unless the board modifies this policy, the next say-on-pay vote will be held at our 2013 Annual Meeting of Stockholders.

Compensation Philosophy

As described in the section of this proxy statement entitled “Compensation Discussion and Analysis”, our executive compensation program is designed to:

We seek to provide executive compensation that is competitive with a peer group of companies similar in size to ours. The Compensation Committee uses the peer group compensation data primarily to ensure that salary is targeted at the median percentile and performance based compensation is targeted at the 75^th percentile, providing an opportunity for the annual cash bonus and equity value to attain the 75^th percentile when targeted performance levels are met. While the peer group market data provide 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 plans, and annual grants of equity awards. 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.

Please see our “Compensation Discussion and Analysis” (beginning on page 28), the compensation tables and related narrative disclosures for detailed information about our executive compensation programs, including information about the fiscal 2011 compensation of our named executive officers.

Compensation Adjustments

In an effort to align executive compensation with Company performance, the performance metrics in our executive compensation plans include revenue, adjusted EBITDA, adjusted net income and total stockholder return. The objective of these programs is to focus our named executive officers on achieving both short and long-term financial results. At least 33% of our executives’ incentive awards are performance-based.

2011 was anticipated to be a year of recovery for the economy and our business. The Compensation Committee considered our Company’s 2011 budget and financial performance expectations in designing the 2011 named executive officer compensation program.

DealerTrack’s financial performance for 2011 exceeded expectations, and consequently each of our executive officers received total direct annual compensation (base salary, target incentive award opportunity and awarded value of stock options and restricted stock units) greater than his or her target amount in alignment with the Committee’s pay-for performance philosophy. Specifically, each named executive officer

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received a bonus for 2011 over his or her bonus target but less than his or her maximum bonus. The bonuses ranged from 155% of bonus target to 204% of bonus target.

Accordingly, we are requesting your nonbinding vote on the following resolution:

“RESOLVED, that the stockholders of DealerTrack Holdings, Inc. approve, on an advisory basis, the compensation of the named executive officers, as disclosed in this proxy statement for the 2012 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosures.”

This say-on-pay vote is advisory and, therefore, not binding on DealerTrack, our Board, or the Compensation Committee of the Board. Our Board and Compensation Committee value the opinions of our stockholders and will take into account the outcome of the vote when considering future executive compensation decisions and arrangements.

Our Board of Directors recommends that you vote FOR the approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC.

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PROPOSAL FOUR:
PROPOSAL TO AMEND AND RESTATE OUR THIRD AMENDED AND
RESTATED 2005 INCENTIVE AWARD PLAN

On March 28, 2012, our board of directors provided their written consent for us to amend and restate the Third Amended and Restated DealerTrack Holdings, Inc. 2005 Incentive Award Plan, or the Third Restated 2005 Plan, and to rename it the Fourth Amended and Restated DealerTrack Holdings, Inc. 2005 Incentive Award Plan, or the Fourth Restated 2005 Plan. Accordingly, the board of directors is recommending this proposal to our stockholders for approval.

As of February 29, 2012, there were 1,753,668 shares of common stock available for grant under the Third Restated 2005 Plan. The Fourth Restated 2005 Plan would increase the reserved shares of our common stock under the plan by 2,300,000 shares. The addition of these shares of common stock would allow the Compensation Committee to continue to use stock-based awards to attract and retain employees and directors, further align employee and stockholder interests, continue to link employee compensation with Company performance and maintain a culture of ownership.

The material features of the Fourth Restated 2005 Plan are:

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Proposed Increase in Authorized Shares

As of April 15, 2012, stock options covering 4,145,961 shares of our common stock with a weighted average exercise price of $18.12 and a weighted average remaining term of 4.26 years, 923,577 restricted stock units and 282,105 performance stock units were outstanding under our Third Restated 2005 Plan. As of such date 1,765,259 shares were available for grant under the Third Restated 2005 Plan. Based on the closing market price of our common stock on April 15, 2012, the additional 2,300,000 shares proposed to be added to the Third Restated 2005 Plan would have a market value of approximately $67.6 million. The shares we issue under the Fourth Restated 2005 Plan will be authorized by unissued shares. Since we do not have any other equity incentive award plans in place under which shares are eligible to be awarded, the amounts set forth above constitute all of our shares eligible for grant.

Summary of the Fourth Restated 2005 Plan

The following description of certain features of the Fourth Restated 2005 Plan is intended to be a summary only. The summary is qualified in its entirety by the full text of the Fourth Restated 2005 Plan that is attached hereto as Annex A.

Administration

The Compensation Committee of the board of directors is authorized to administer the Fourth Restated 2005 Plan. The Compensation Committee has the power, subject to the provisions of the Fourth Restated 2005 Plan, to designate participants to receive awards, determine the type or types of awards to be granted to each participant, determine the number of awards to granted and the number of shares of stock to which an award will relate, determine the terms and conditions of any award, including the exercise price, grant price, purchase price, any restrictions or limitations on the award, any schedule for lapse of forfeiture restrictions or restrictions on exercisability, and provisions dealing with non-competition and recapture of gain on an award, to determine whether, and to what extent and pursuant to what circumstances an award may be settled in or the exercise price may be paid in cash, stock other awards or other property, determine when an award may be canceled, forfeited or surrendered, prescribe the form of each award agreement, establish adapt or revise any rules and regulations necessary or advisable to administer the plan, interpret the terms of the plan or any award agreement and make all other decisions and determinations that may be required pursuant to the plan or in the determination of the Compensation Committee. The Compensation Committee may also delegate to one or more of our officers the power to designate which of our non-officer employees shall receive stock awards and the number of shares of common stock that will be subject to each award, subject to a maximum aggregate number of shares specified by the Compensation Committee at the time the delegation to the officers is made.

Eligibility

Persons eligible to participate in the Fourth Restated 2005 Plan will be officers, employees, non-employee directors and consultants of the Company. As of March 15, 2012, approximately 626 individuals were eligible to participate in the Fourth Restated 2005 Plan.

Types of Equity-Based Awards

Stock Options.  The Compensation Committee may grant stock options to eligible persons under the Fourth Restated 2005 Plan. Each option granted pursuant to the Fourth Restated 2005 Plan is designated at the time of grant as either an incentive stock option or as a non-qualified stock option. Non-qualified stock options may be granted to all eligible persons, but incentive stock options may be granted only to employees of the Company and its related entities. The option term of new option grants is limited to seven years. All options must have a per share option exercise price that is not less than the fair market value of shares of our common stock on the grant date.

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Restricted Common Stock.  Participants’ rights with respect to grants of restricted common stock awarded under the Fourth Restated 2005 Plan are subject to transferability and forfeiture restrictions during a restricted period. While the restrictions are in place, the participant generally has the rights and privileges of a stockholder, including the right to vote the restricted common stock and to receive dividends.

Restricted Stock Units and Deferred Stock Units.  Each restricted stock unit and deferred stock unit awarded by the Compensation Committee entitles the participant to receive one share of common stock for each unit at the end of the vesting or deferral periods. A holder of restricted stock units or deferred stock units has no voting rights, rights to receive cash distributions or other rights as a stockholder until shares of common stock are issued to the holder in settlement of the stock units.

Stock Appreciation Rights.  SARs are awards that give the recipient the right to receive an amount equal to (1) the number of shares exercised under the right, multiplied by (2) the amount by which our stock price exceeds the fair market value of shares of our common stock on the grant date. Payment may be in shares of our common stock with equivalent value. The term of SARs is limited to seven years. SARs expire under the same rules that apply to stock options.

Performance Awards.  Holders of performance shares or units will be entitled to receive payment in shares of our common stock if the performance goals established by the Compensation Committee are achieved. The Compensation Committee may also award incentive bonuses in the form of cash upon the attainment of performance goals established by the Compensation Committee.

Change of Control

In connection with any change of control, except as may otherwise be provided in any applicable award or employment agreement, unless awards granted pursuant to the Fourth Restated 2005 Plan are converted, assumed or replaced by the successor entity, the awards will automatically become fully vested and exercisable and all forfeiture restrictions with respect to such awards shall lapse prior to the consummation of the change in control. In addition, with respect to any awards, in connection with any change in control (or other unusual or nonrecurring transaction affecting us or our consolidated financial statements), the Compensation Committee, in its sole discretion, may:

Any such action may be effected by the Compensation Committee either by the terms of the applicable award agreement or by action of the Compensation Committee taken prior to the change of control.

Adjustments for Stock Dividends, Stock Splits, Etc.

The Compensation Committee shall make appropriate adjustments to the number of shares of common stock that are subject to the Fourth Restated 2005 Plan and to any outstanding awards to reflect stock dividends, stock splits, extraordinary cash dividends and similar events.

Tax Withholding

Participants in the Fourth Restated 2005 Plan are responsible for the payment of any federal, state or local taxes that the Company is required by law to withhold upon any option exercise or vesting of other awards. Subject to approval by the Compensation Committee, participants may elect to have the minimum tax

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withholding obligations satisfied by authorizing us to withhold shares of common stock to be issued pursuant to an option exercise or vesting of other awards.

Amendments, Suspension and Termination; Repricings Prohibited

The Compensation Committee is generally authorized to adopt, amend and rescind rules relating to the administration of the Fourth Restated 2005 Plan, and to amend, suspend and terminate the Fourth Restated 2005 Plan. However, we must generally obtain approval of our stockholders: (i) to increase the number of shares of our common stock that may be issued under the Fourth Restated 2005 Plan; (ii) to permit the Compensation Committee to grant options with an exercise price below fair market value on the date of grant, (iii) to permit the Compensation Committee to extend the exercise period for an option or an SAR beyond seven years from the date of grant, or (iv) that results in a material increase in benefits or a change in eligibility requirements.

In addition, but without reducing the prohibitions in the provisions above, absent approval of the stockholders of the Company, (i) no option or SAR may be amended to reduce the per share exercise price of the shares subject to such option or SAR below the per share exercise price as of the date the option or SAR is granted, (ii) except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization, or other distribution (other than normal cash dividends)), no option or SAR may be granted in exchange for, or in connection with, the cancellation or surrender of an option or SAR having a higher per share exercise price, and (iii) no option or SAR may be cancelled, exchanged or surrendered in exchange for cash or other awards for the purpose of repricing the award.

New Plan Benefits

As described under “Non-Management Directors’ Compensation for Fiscal Year 2011”, each of our outside directors receives an annual equity grant of a fixed amount of restricted stock units equal to $135,000 on the date of our Annual Meeting of Stockholders. All other awards granted under the Fourth Restated 2005 Plan will be made at the discretion of our Compensation Committee. Set forth below are awards granted in 2011 under the Third Restated 2005 Plan. Information regarding 2011 equity grants to the named executive officers is detailed under “Executive Compensation” below.

		Restricted Common Stock								Stock Options								Restricted Stock Units
Name and Position		Dollar Value ($)				Number (#)				Dollar Value ($)				Number (#)				Dollar Value ($)				Number (#)
All current executive officers, as a group			—				—			$	2,041,435				289,523			$	2,185,922				122,776
All current directors who are not executive officers, as a group(1)			—				—				—				—			$	945,035				42,973
All current employees who are not executive officers, as a group			—				—			$	4,278,829				488,890			$	6,807,882				332,880

Tax Aspects Under the Code

The following is a summary of the principal federal income tax consequences of certain transactions under the Fourth Restated 2005 Plan. It does not describe all federal tax consequences under the Fourth Restated 2005 Plan, nor does it describe state or local tax consequences.

Stock Options.  The grant of stock options under the Plan will not result in taxable income at the time of the grant for either the Company or the optionee. Upon exercising an incentive stock option, the optionee will have no taxable income (except for the alternative minimum tax, if applicable) and the Company will receive

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no deduction. Upon exercising a non-qualified stock option, the optionee will recognize ordinary income in the amount by which the fair market value of the common stock at the time of exercise exceeds the option exercise price, and the Company will be entitled to a deduction for the same amount. The optionee’s income is subject to withholding tax as wages. The tax treatment of the optionee upon a disposition of shares of common stock acquired through the exercise of a stock option is dependent upon the length of time that the shares have been held and whether such shares were acquired by exercising an incentive stock option or a non-qualified stock option. If an employee exercises an incentive stock option and holds the shares for two years from the date of grant and one year after exercise, then any gain or loss upon the sale of the underlying shares will be treated as long-term capital gain or loss. Shares obtained upon exercise of an incentive stock option that are sold without satisfying these holding periods will be treated as shares received from the exercise of a non-qualified stock option. Generally, upon the sale of shares obtained by exercising a non-qualified stock option, the optionee will treat the gain realized on the sale as a short-term or long-term capital gain, depending on the length of the holding period. Generally, there will be no tax consequence to the Company in connection with the disposition of shares of common stock acquired under an option, except that the Company may be entitled to a deduction in the case of a disposition of shares acquired upon exercise of an incentive stock option before the applicable holding periods have been satisfied.

Restricted Common Stock.  An award of restricted common stock will not result in taxable income to the participant at the time of grant. Upon the lapse of the restrictions, the participant will recognize ordinary income in the amount of the fair market value of the shares of common stock at the time that the restriction lapses. Alternatively, within 30 days after receipt of the restricted common stock, a participant may make an election under Section 83(b) of the Code, which would allow the participant to include in income in the year that the restricted common stock is awarded an amount equal to the fair market value of the restricted common stock on the date of such award determined without regard to the restrictions.

The Company will be entitled to a deduction for the year in which the participant recognizes ordinary income with respect to the restricted common stock in an amount equal to such income.

Other Awards.  The current federal income tax consequences of other awards authorized under the Fourth Restated 2005 Plan generally follow certain basic patterns: SARs are taxed and deductible in substantially the same manner as non-qualified stock options. Restricted stock units and deferred stock units are taxed and deductible when the recipient receives shares of common stock in settlement of such units. Stock-based or cash-based performance awards, and other types of awards are generally subject to tax at the time of payment. In each of the foregoing cases, the Company will generally have a corresponding deduction at the time the participant recognizes income.

Parachute Payments

The vesting of any portion of an option or other award that is accelerated due to the occurrence of a change of control may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be non-deductible to us, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).

Limitation on Deductions

Under Section 162(m) of the Code, our deduction for certain awards under the Fourth Restated 2005 Plan may be limited to the extent that the Chief Executive Officer or other executive officer whose compensation is required to be reported in the Summary Compensation Table receives compensation in excess of $1 million a year (other than performance-based compensation that otherwise meets the requirements of Section 162(m) of the Code). The Fourth Restated 2005 Plan is structured to allow grants to qualify as performance-based compensation.

Vote Required

Under our bylaws, the affirmative vote of a majority of shares of common stock present in person or represented by proxy at the meeting and entitled to vote on this proposal is required for the approval of the Fourth Restated 2005 Plan. Abstentions shall be included in determining the number of shares present and

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entitled to vote on the proposal, thus having the effect of a vote against the proposal. Broker non-votes are not counted in determining the number of shares present and entitled to vote and will therefore have no effect on the outcome.

Recommendation of our Board of Directors

Our Board of Directors recommends that you vote FOR the approval of the Fourth Amended and Restated DealerTrack Holdings, Inc. 2005 Incentive Award Plan.

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PROPOSAL FIVE:
PROPOSAL TO AMEND OUR FIFTH AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE NAME OF THE CORPORATION TO
“DEALERTRACK TECHNOLOGIES, INC.”

The Corporation proposes to amend the Corporation’s Fifth Amended and Restated Certificate of Incorporation to change the name of the Corporation from “DealerTrack Holdings, Inc.” to “Dealertrack Technologies, Inc.” The Board of Directors has determined that it would be in the best interests of the Corporation and its stockholders to seek approval for this name change, including the corresponding amendment to the Corporation’s Fifth Amended and Restated Certificate of Incorporation.

In 2012, our management team decided to update our brand name by replacing the uppercase ‘T’ in ‘DealerTrack’ with a lowercase ‘t’ and replacing ‘Holdings’ with ‘Technologies’. We believe that these changes highlight the expansion of our product offerings to include a wide range of software and solutions for various participants in the automotive retail industry, including dealers, lenders, OEMs, and others. We also believe that the addition of ‘Technologies’ provides more information to the public regarding what kind of businesses we participate in. Adopting this new corporate name, which will correlate with a new visual brand identity, is part of a strategic plan to create an enhanced brand experience for our customers.

If the proposal to amend the Corporation’s Fifth Amended and Restated Certificate of Incorporation to change its name to “Dealertrack Technologies, Inc.” is approved by our stockholders at the Annual Meeting of Stockholders, a Certificate of Amendment to the Corporation’s Fifth Amended and Restated Certificate of Incorporation will be filed with the Secretary of State of the State of Delaware to effect the name change as soon as practicable after the Annual Meeting of Stockholders. The Certificate of Amendment would specify that Article First and Article Third of the Corporation’s Fifth Amended and Restated Certificate of Incorporation shall be amended to read, respectively, as follows:

FIRST.  The name of the corporation is Dealertrack Technologies, Inc. (the “Corporation”).

THIRD.  The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

The affirmative vote of the holders of a majority of the outstanding shares of Common Stock on the record date is required to approve the amendment of the Corporation’s Fifth Amended and Restated Certificate of Incorporation. Abstentions and broker non-votes will have the effect of a vote against this proposal.

Recommendation of our Board of Directors

Our Board of Directors recommends that you vote FOR the approval to amend our Fifth Amended and Restated Certificate of Incorporation to change our name to “Dealertrack Technologies, Inc.”

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EXECUTIVE OFFICERS

The following individuals serve as our executive officers:

Name		Age		Title
Mark F. O’Neil		53		Chairman of the Board, President and Chief Executive Officer
Mark Furcolo		50		Senior Vice President, Processing Solutions Group
Ana M. Herrera		55		Senior Vice President, Human Resources
Eric D. Jacobs		45		Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer
Richard McLeer		47		Senior Vice President and Chief Information Officer
Raj Sundaram		45		Senior Vice President, Solutions and Services Group
Rick G. Von Pusch		50		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.

Mark Furcolo has served as Senior Vice President, Processing Solutions Group, since February 2011. From December 2008 through its acquisition by us in February 2011, Mr. Furcolo served as the Chief Executive Officer of triVIN, Inc. Mr. Furcolo also held the position of President and Chief Operating Officer of General Systems Solutions, Inc. (GSS), a subsidiary of triVIN, from March of 2007 through the acquisition. Mr. Furcolo served as Vice President and Chief Financial Officer of triVIN from June 1998 through March 2007, and as the Chief Financial Officer of GSS from November 1995 through March 2007. Mr. Furcolo joined GSS in June 1992 as its Controller and Finance Manager. Before joining GSS, Mr. Furcolo served as a commercial loan officer of Fleet Bank from June 1989 to June 1992. Before joining Fleet Bank, Mr. Furcolo was an adjunct faculty member at the University of Rhode Island where he instructed courses on software development. Mr. Furcolo holds a BA and MBA from the University of Rhode Island.

Ana M. Herrera has served as Senior Vice President, Human Resources from February 2007 through August 2011, and from September 2011 to the present. From August 2011 to September 2011, she served as Chief Human Resources Officer at FX Alliance, LLC. 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

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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 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.

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.

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COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION DISCUSSION AND ANALYSIS

Overview

In this section, we discuss and analyze our compensation programs and the specific amounts of compensation paid to our Chief Executive Officer (CEO), Chief Financial Officer (CFO) and the other four most highly compensated executive officers for fiscal 2011. Collectively, we refer to these individuals as the “named executive officers”. They are:

Our executive compensation program is designed and directed by the Compensation Committee of the board of directors. The Compensation Committee is responsible for establishing with our management DealerTrack’s compensation philosophy. The Company’s compensation philosophy is designed to create value for the stockholders by growing Company revenue and adjusted EBITDA, as well as increasing 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 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 objectives and goals.

DealerTrack’s compensation program is designed and administered by the Compensation Committee, which is composed entirely of independent directors, and carefully considers many different factors, as described below in this Compensation Discussion and Analysis, or CD&A, in order to provide appropriate compensation for our named executive officers. The Compensation Committee has designed our compensation program to be competitive with the compensation offered by a peer group of companies identified later in this CD&A. Targets for base salaries, annual cash incentive and long-term incentive awards for our named executive officers are based on competitive data. A large proportion of the compensation for the named executive officers is performance-based and is intended to align their interests with those of our stockholders, place more of their compensation at risk and emphasize a long-term strategic view.

2011 was anticipated to be a year of recovery for the economy and our business. The Compensation Committee considered our company’s 2011 budget and financial performance expectations in designing the 2011 named executive officer compensation program.

DealerTrack’s actual financial performance for 2011 exceeded expectations, and consequently each of our executive officers received total direct annual compensation (base salary, target incentive award opportunity and awarded value of stock options and restricted stock units) greater than his or her target amount in alignment with the Committee’s pay-for performance philosophy. Specifically, our named executive officers received bonuses ranging from 155% to 204% of their bonus targets.

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In order to focus our named executive officers on key milestones in the Company’s long-term strategic growth plan, the Compensation Committee in January 2011 implemented a three year performance-based long-term equity incentive program, with vesting of the target award tied to the achievement of the following key strategic goals:

As described later in this CD&A, in 2011, based on actual performance, the adjusted net income component of the program achieved a vesting percentage of 125%. The measurement period for the TSR Performance Award does not end until December 31, 2013 and, as such, no awards vested as of December 31, 2011.

The performance metrics in our executive compensation plans are revenue, adjusted EBITDA, adjusted net income and TSR. The objective of these programs is to focus our executive officers on achieving both short and long-term financial results.

In January 2011, the Compensation Committee engaged Frederic W. Cook, or FWC, an independent compensation consultant, to conduct a review of the Company’s compensation programs. FWC does not perform any other services for us. For our 2011 annual stock option grant, in order to greater connect total direct annual compensation with the general performance of the Company, we added a performance measure requiring that the Company improve its adjusted EBITDA performance between the year issued and the following year in order for stock options to vest. Following implementation of these year over year performance based vesting terms, 67% of our named executive officers’ equity grants, including the 2011 annual grant, are now based on Company performance.

Response to 2011 Advisory “Say-on-Pay” Vote

At our 2011 Annual Meeting, the ballot included our first advisory vote on executive compensation, commonly known as “Say-on-Pay.” The vote was not binding upon the Company, the Board of Directors or the Compensation Committee. Of the votes cast, including abstentions, 72% were “FOR” the approval of the compensation of the executive officers as disclosed in the “Executive Compensation” section of the proxy statement. The Compensation Committee was cognizant of this result in its considerations to continue the key components, design, implementation and amounts of our compensation programs, and believes that several actions taken by the Compensation Committee during 2011 have improved the pay-for-performance alignment of our compensation program. Significant actions taken by the Compensation Committee during 2011 include:

Frequency of “Say-on-Pay” Vote

At our 2011 Annual Meeting, the Board of Directors recommended that stockholders vote to have a “Say-on-Pay” vote every three years so that stockholders and the Board of Directors would have appropriate time to evaluate the effectiveness of our executive compensation program. However, in response to DealerTrack’s stockholders’ non-binding recommendation in 2011 that DealerTrack provide its stockholders with the ability to cast a “Say-on-Pay” vote on an annual basis, the Board of Directors is providing stockholders with the opportunity to cast a “Say-on-Pay” vote again this year. This year’s “Say-on-Pay” proposal provides stockholders with the opportunity to endorse or choose not to endorse our fiscal 2012 executive compensation programs and policies and the compensation we pay our named executive officers.

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Although the vote is non-binding, similar to last year, the Board of Directors and the Compensation Committee will take into account the outcome of the vote when making future decisions about DealerTrack’s executive compensation policies and procedures.

Compensation Discussion and Analysis

The Compensation Committee has established the following objectives in determining the compensation of the executive officers:

Peer Group and Benchmarking

In connection with its compensation decisions for 2011, the Compensation Committee reviewed the market compensation data of the following group of 16 peer companies recommended by FWC: ACI Worldwide, Inc., Art Technology Group, Inc., BlackBaud, Inc., Blackboard, Inc., Bottomline Technologies, Inc., Digital River, Inc., Liquidity Services, Inc., NetSuite, Inc., Radiant Systems, Inc., RightNow Technologies, Inc., S1 Corporation, Synchronnoss Technologies, Inc., TNS, Inc., Tyler Technologies, Inc., Websense, Inc., and Wright Express Corporation.

For 2012, the Compensation Committee, based on input from FWC, has modified this peer group to ensure that it continues to accurately represent DealerTrack’s size and type of business. Our revised peer group consists of 16 companies, with levels of revenue and market capitalization comparable to DealerTrack.

The Compensation Committee uses the peer group compensation data primarily to structure executive total direct compensation to target the median upon meeting, but not exceeding, our targeted performance levels, and to target up to the 75^th percentile upon exceeding our targeted performance levels. While the peer group market data provide 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. Executive compensation consists of the following elements: base salary; annual and long term incentive plans; and annual grants of equity awards. Executive compensation has a high proportion of total direct compensation that is at risk delivered through pay-for-performance incentive and long-term equity compensation.

Assessment of Company and Individual Performance

Annually, the Compensation Committee, in collaboration with management, establishes the specific revenue and adjusted EBITDA targets that will be used to determine the size of the bonus pool under the Company’s annual incentive bonus plan. Both Company and individual performance are factored into the determination of total direct compensation levels for the named executive officers.

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The Compensation Committee meets with the Company’s CEO at the beginning of the year to establish his performance objectives. At the end of the year, the Compensation Committee reviews the CEO’s achievement of these objectives. In setting the CEO’s compensation, the Compensation Committee considers the Company’s overall performance along with the chief executive officer’s individual performance.

For all other executive officers, the CEO provides our Compensation Committee with a performance assessment and compensation recommendation based on the achievement of objectives that the chief executive officer establishes after consulting with each named executive officer. The Compensation Committee then utilizes the CEO’s recommendation and its own assessment of each named executive officer’s performance to set each other named executive officer’s compensation. The Compensation Committee also considers the respective performances of the business units with which each other named executive officer is involved, and the benchmark survey data described above.

Total Compensation Review

Annually, the Compensation Committee reviews each named 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 also reviews the long-term incentive program, the deferred compensation program and the payments that would be required to be paid to the named executive officers under various termination and change in control scenarios.

In making compensation decisions, the Compensation Committee considers all elements of executive compensation, including forms of indirect compensation such as severance and change in control provisions. The Compensation Committee uses market information to ensure that the compensation program for our named executive officers is competitive in our industry and the areas in which we compete for talent, and reflects the scope and responsibilities of each executive’s role.

Components of Executive Compensation for 2011

Base Salary

The Compensation Committee believes that payment of competitive base salaries is an important element in attracting, retaining and motivating our executive officers. The Compensation Committee also believes that having a certain level of fixed compensation allows our executive officers to dedicate their full time business attention to our Company. Each executive officer’s base salary is designed to provide the executive with a fixed amount of annual compensation that is competitive within the marketplace. Base salaries, however, represent less than 26% of the total direct compensation opportunity for each named executive officer.

Our Compensation Committee reviews base salary levels annually, but only makes adjustments based on performance, market trends and surveys of peer group compensation levels. As noted above, the Compensation Committee generally targets base salary at the median of comparable positions within the Company’s peer group.

The annual base salary for each named executive officer is the primary form of fixed (not at-risk) compensation. The base salary is generally set at the market median and is competitive with similar positions at our peer group companies, as described above. Base salary may be adjusted during the year if a change in the scope of the executive officer’s responsibilities justifies such consideration.

The Compensation Committee, based on the chief executive officer’s recommendation, did not grant the named executive officers salary increases for 2011, due to the overall financial performance of the Company in 2010.

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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 variable incentive pay should be the primary portion of each named executive officer’s annual target cash compensation. The Company targets annual cash compensation for each named executive officer at the 50^th percentile of the peer group described above, with the opportunity for each to earn additional cash compensation upon superior performance. If the Company exceeds its target goals, the annual incentive bonus amount for each executive officer is targeted at an amount at which the executive officer’s total compensation may reach up to the 75^th percentile of the peer group’s annual bonus compensation.

The annual incentive bonus targets are established for the named executive officers each year. In 2011 the named executive officers’ target bonuses ranged from 50% to 85% of their respective base salaries, and their maximum bonuses ranged from 165% to 210% of their respective target bonuses.

Each named executive officer’s bonus award is calculated by multiplying the officer’s annual base salary by the officer’s target award percentage, and multiplying the product by a factor based on the extent to which the Company achieved its (a) pre-bonus adjusted EBITDA target and (b) total Company revenue target for the year, as described below. The pre-bonus adjusted EBITDA and total Company revenue goals are weighted equally in this determination. This approach is intended to balance the named executives’ focus on growth in both revenues and earnings. The Compensation Committee may then decrease this result based on overall Company and individual performance.

The Compensation Committee uses pre-bonus adjusted EBITDA as a key metric to review and assess the Company’s operating performance and the management team’s performance because it provides useful information with respect to the performance of the Company’s fundamental business activities and adjusted EBITDA is frequently used by equity research analysts and others in evaluating the Company. Our pre-bonus adjusted EBITDA target for 2011 for purposes of calculating named executive compensation was $71.1 million. The Company was required to achieve a threshold of at least 80% of this target in order for our executive officers to be eligible to receive any credit toward their annual incentive bonuses from adjusted EBITDA.

The pre-bonus adjusted EBITDA bonus pool contribution, which constituted 50% of the total bonus pool contribution, was determined as follows:

2011 Company Pre-Bonus Adjusted EBITDA		Pre-Bonus Adjusted EBITDA Bonus Pool Contribution
Less than $49.2 million		None
$49.2 million		25% of the target bonus pool contribution
Between $49.2 million and $71.1 million		Straight line interpolation between 25% and 100% of the target bonus pool contribution
$71.1 million (target)		100% of the target bonus pool contribution
Between $71.1 million and $80.6 million (above target)		Straight line interpolation between 100% and 127% of the target bonus pool contribution
Over $80.6 million (maximum)		127% of the target bonus pool contribution

The Compensation Committee uses total Company revenue as the other key metric to review and assess the Company’s operating performance and the management team’s performance because our total revenue reflects the extent to which we have been able to grow our businesses and increase our presence in the markets we serve. The total Company revenue target for 2011 for purposes of calculating named executive compensation was $334.8 million. The Company was required to achieve a threshold of at least 90% of this target in order for our executive officers to be eligible to receive any credit toward their annual incentive bonuses from total Company revenue.

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The total Company revenue bonus pool contribution, which constituted the other 50% of the bonus pool contribution, was determined as follows:

2011 Total Company Revenue		Total Company Revenue Bonus Pool Contribution
Less than $301.3 million (below 90% of target)		None
$301.3 million (90% of target)		25% of the target Company bonus pool contribution
Between $301.3 million and $334.8 million		Straight line interpolation between 25% and 100% of the target bonus pool contribution
$334.8 million (target)		100% of the target Company bonus pool contribution
Between $334.8 million and $351.5 (above target)		Straight line interpolation between 100% and 127% of the target bonus pool contribution
Over $351.5 million (maximum)		127% of the target Company bonus pool contribution

For fiscal 2011, our total Company revenue was $353.3 million and our pre-bonus adjusted EBITDA was $91.9 million. Based on the formula set forth in the preceding paragraph and these results, the Company bonus pool was funded at approximately 127% of target.

Our Compensation Committee has the ability to reduce the bonus awarded to each executive officer depending on its assessment of performance. In making this assessment for executive officers other than our CEO, the Compensation Committee also considers input from our CEO. For 2011, the Compensation Committee awarded our named executive officers, including our CEO, bonus awards ranging from 91% to 97% of their respective maximum target.

Annual Equity Grants

In order to align the executive officers’ interests with our stockholders’, each executive officer receives an annual equity grant. Our Compensation Committee reviewed and considered competitive market information at or near the 75^th percentile for total target direct compensation. 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 2011, approximately 34% of the named executive officers’ equity incentive award value was granted in the form of restricted stock units, approximately 34% in the form of performance based stock options and approximately 32% in the form of performance based stock units. In 2011, the Company introduced a performance based vesting component to the stock option grants, under which the grants vest only in the event that the Company’s adjusted EBITDA grows from year to year.

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

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The Compensation Committee typically approves the Company’s annual equity grants at its first regularly scheduled meeting of a given year. Option grants to new hires are generally approved at the first regularly scheduled Compensation Committee meeting that follows the date of hire. In 2010 the Compensation Committee adopted an equity grant policy still in effect under which equity grants are granted on the fifth business day each quarter after earnings are released.

All equity grants to our named executive officers in 2011 were made pursuant to our Third Restated 2005 Plan.

Long-Term Equity Incentive Program

In February 2010, the Compensation Committee implemented a performance-based long-term equity incentive program. This program is in addition to the annual equity grants described above. Under the program, the Company granted performance stock units to the named executive officers that vest only upon the achievement of certain corporate objectives, described below. These grants were targeted to deliver total direct compensation (annual base salary, annual bonus awards and long-term incentives) reaching up to the 75th percentile of our peer group if the Company exceeds its annual targets. These grants will vest fully only to the extent that during the three fiscal year measurement period: (i) we achieve our annual Adjusted Net Income Performance targets; and (ii) we achieve the Total Stockholder Return targets set forth below. Additionally, each executive officer must remain continuously employed with the Company through January 31, 2013 to qualify to receive this award.

Adjusted Net Income Performance

50% of the performance stock units (the Adjusted Net Income Units) relate to the performance of the Company with respect to certain Adjusted Net Income targets, and will be eligible for vesting only to the extent the relevant Adjusted Net Income targets are met.

The number of actual Adjusted Net Income Units that will be eligible to be paid to the executive (the Actual Net Income Payout), if any, will be determined as follows:

2011 Company Adjusted Net Income		Actual Net Income Payout
$31,700,000 or greater		125% of the target adjusted net income award
Between $28,800,000 and $31,700,000		Straight line interpolation between 100% and 125% of the target adjusted net income award
$28,800,000		100% of the target adjusted net income award
Between $24,500,000 and $28,800,000		Straight line interpolation between 25% and 100% of the target adjusted net income award
$24,500,000		25% of the target adjusted net income award
Below $24,500,000		None

Based on the Company’s adjusted net income for fiscal year 2011, the Actual Net Income Payout will be 125% of the target payout.

Total Stockholder Return

The other 50% of the performance stock units (the TSR Units) will be eligible for vesting only to the extent the Company meets its relevant total stockholder return (TSR) targets during the periods from 2010 through 2012 and 2011 through 2013. The number of actual TSR Units that will be eligible to be paid to the executive (the Actual TSR Payout), if any, is determined based on the Company’s TSR for the three year period ending December 31, 2013 (the TSR Performance Period) compared with the TSR of the individual companies that comprise the NASDAQ Internet Index.

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The Actual TSR Payout will be determined as follows:

Total Stockholder Return During TSR Performance Period (2010 – 2013)		Actual TSR Payout
75th percentile or greater		150% of Target TSR
Between 50th and 75th percentile		Straight line interpolation between 100% and 150% of Target TSR
50th percentile		100% of Target TSR
Between 25th and 50th percentile		Straight line interpolation between 25% and 100% of Target TSR
25th percentile or below		None

Other Awards

From time to time, the Compensation Committee may make one-time cash or equity awards in connection with the hiring of new executive officers. As discussed above, Ms. Herrera received awards of (a) 61,983 stock options to purchase Company common stock with an aggregate grant date fair value of $421,024; (b) 30,186 Restricted Stock Units with an aggregate grant date fair value of $545,461; and (c) 14,585 Performance Stock Units with an aggregate grant date fair value of $274,686. These rewards approximate the unvested portion of awards forfeited when Ms. Herrera left the Company.

Stock Ownership Requirements

The Compensation Committee has implemented stock ownership requirements for members of the senior management team, including all vice presidents and executive officers. Our CEO is required to hold shares with a value equal to six times his base salary. The other named executive officers are required to hold shares with a value equal to two times their respective base salaries. Vice Presidents and other executive officers are required to hold shares equal to the lesser of (a) a multiple of their respective base salaries and (b) a fixed number of shares.

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 this share ownership requirement. Named executive officers are expected to retain 25% of the net after-tax shares acquired through the exercise of stock options until they achieve their minimum share ownership positions. The Compensation Committee annually reviews compliance with the stock ownership requirements. Shares acquired through the Company’s Employee Stock Purchase Plan are credited toward the stock ownership requirement.

As of the end of 2011, our CEO and the other named executive officers each met the stock ownership requirements.

Employment Agreements

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

The Company’s employment agreements provide for limited accelerated vesting of equity grants (other than performance-based restricted common stock units) in the event of a termination of employment by the Company without cause or by the named executive officer for good reason. In return, each executive covenants not to compete or solicit the Company’s employees for one year from the date of termination.

The employment agreements also provide change in control protections for the named executive officers’ equity grants. In the event we undergo a change of control, the employment agreements provide for 36 months of accelerated vesting for time-based stock option and restricted common stock unit grants and full vesting of such grants in the event of termination within twelve months of the change of control. The

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performance-based restricted common stock unit 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 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.

The employment agreements entered into by the Company with its named executive officers prior to 2010: Mr. O’Neil, Mr. Jacobs, Mr. McLeer, Mr. Sundaram and Mr. Von Pusch, provide for a tax gross-up payment to the named executive officers in the event they become subject to the 20% golden parachute excise tax. In 2010 the Compensation Committee approved a change for all future executives providing that such executives would not receive this tax gross-up payment. Consequently, Mr. Furcolo, who entered into his employment agreement in 2011, is not entitled to the gross-up. Additionally, although Ms. Herrera was entitled to the gross-up pursuant to her employment agreement with the Company prior to her departure from the Company in 2011, her new employment agreement with the Company upon her return does not include the gross-up.

Please see page 47 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 generally do not provide any perquisites other than relocation expenses. For 2011 no relocation expenses were paid on behalf of our named executive officers.

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 deferred any portion of their 2011 bonuses.

401(k) Plan

We maintain a 401(k) plan that covers substantially all of our employees. The 401(k) plan is an essential part of the retirement package needed to attract and retain employees in our industry. The 401(k) plan permits employees to contribute up to the lesser of 60% of earnings or the annual dollar limit prescribed by law. The Company provides a matching contribution, the amount of which is determined at our discretion. For 2011, the matching contribution was 25% of each employee’s contribution up to 3% of eligible pay, subject to Internal Revenue Code limitations. In addition, an additional Company match may be earned based solely on the overall financial performance of the Company. For 2011 the Company provided an additional discretionary match equal to 127% of the matching contribution that was already provided, subject to Internal Revenue Code limitations.

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 certain of their 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’ performances.

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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

While typically we would include five individuals in the group of ‘named executive officers’, for this year’s proxy we have included six. In August 2011, Ms. Herrera departed from the Company to seek other opportunities. In September 2011, she returned to the Company. In conjunction with her return she was granted a level of equity incentives to approximate the level she forfeited upon her departure. Due to the additional compensation expenses related to this unusual event, Ms. Herrera is a named executive officer pursuant to SEC rules. We also have included Mr. McLeer as a named executive officer because he would have been one but for the equity incentive grant to Ms. Herrera. Since Ms. Herrera was not one of our five highest paid executives last year, and likely will not be next year, in order to enhance our disclosures and make them more useful for our stockholders, we have elected to include our six, rather than five, most highly compensated executive officers in this year’s proxy statement. We believe the inclusion of Mr. McLeer provides additional meaningful information to our stockholders about our executive compensation practices and will provide continuity in our disclosures as we expect Mr. McLeer to be a named executive officer in 2012.

SUMMARY COMPENSATION TABLE

Name and Principal Position		Fiscal Year				Salary				Bonus(1)				Stock Awards(2)				Stock Options(3)				Non-Equity Incentive Comp(4)				All Other Compensation(5)				Total
Mark F. O’Neil Chairman and Chief Executive Officer			2011			$	522,100				—			$	1,182,282			$	597,592			$	907,540			$	8,889			$	3,218,403
			2010			$	522,100				—			$	1,799,994			$	760,840			$	266,271			$	6,657			$	3,355,862
			2009			$	505,328			$	19,672			$	940,800			$	877,743			$	350,800			$	4,419			$	2,698,762
Eric D. Jacobs Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer(6)			2011			$	300,000				—			$	540,288			$	273,208			$	310,050			$	9,364			$	1,432,910
			2010			$	300,000				—			$	544,671			$	230,573			$	108,000			$	7,012			$	1,190,256
			2009			$	268,064			$	10,436			$	352,800			$	316,963			$	147,200			$	4,539			$	1,100,002
Raj Sundaram Senior Vice President, Product Management & Customer Support			2011			$	300,000				—			$	540,288			$	273,208			$	317,700			$	7,094			$	1,438,290
			2010			$	300,000				—			$	544,671			$	230,573			$	108,000			$	30,602			$	1,213,846
			2009			$	268,064			$	10,436			$	352,800			$	365,726			$	131,400			$	77,931			$	1,206,357
Rick Von Pusch Senior Vice President, Sales, Marketing and International			2011			$	256,100				—			$	439,788			$	221,951			$	218,677			$	8,334			$	1,144,850
			2010			$	256,000				—			$	508,662			$	230,573			$	84,513			$	6,105			$	1,085,853
			2009			$	247,851			$	9,649			$	352,800			$	365,726			$	111,300			$	4,381			$	1,091,70
Richard McLeer Senior Vice President, Chief Information Officer			2011			$	260,417				—			$	405,618			$	204,230			$	246,538			$	5,746			$	1,122,549
			2010			$	250,000				—			$	436,064			$	192,165			$	82,500			$	4,250			$	964,979
			2009			$	240,632			$	9,368			$	294,000			$	316,963			$	110,100			$	4,262			$	975,325
Ana Herrera Senior Vice President, Human Resources			2011			$	228,370				—			$	1,192,399	(7)		$	608,805	(7)		$	195,710			$	14,496			$	2,239,780
			2010			$	253,000				—			$	399,396			$	176,768			$	75,900			$	6,027			$	911,091
			2009			$	244,964			$	9,536			$	176,400			$	219,425			$	112,100			$	1,909			$	764,334

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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			2011			$	8,889			$	—			$	—			$	—			$	8,889
			2010				6,657				—				—				—				6,657
			2009				1,969				—				—				2,450				4,419
Eric D. Jacobs			2011				9,364				—				—				—				9,364
			2010				7,012				—				—				—				7,012
			2009				2,089				—				—				2,450				4,539
Raj Sundaram			2011				7,094				—				—				—				7,094
			2010				5,312				—				—				25,290	(4)			30,602
			2009				2,089				8,392	(2)			14,000	(3)			53,450	(4)			77,931
Rick Von Pusch			2011				8,334				—				—				—				8,334
			2010				6,105				—				—				—				6,105
			2009				1,931				—				—				2,450				4,381
Richard McLeer			2011				5,746				—				—				—				5,746
			2010				4,250				—				—				—				4,250
			2009				1,875				—				—				2,387				4,262
Ana Herrera			2011				6,225				—				—				8,271	(5)			14,496
			2010				6,027				—				—				—				6,027
			2009				1,909				—				—				—				1,909

Please see the discussions under “Components of Executive Compensation for 2011”, 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 2011

The following table provides information about equity and non-equity awards granted to the named executive officers in 2011:

Name		Award Description				Grant Date				Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)												Estimated Possible Payouts Under Equity Incentive Plan Awards(2)												All Other Stock Awards Or Units(3)				All Other Option Awards(4)				Exercise or Base Price of Option Awards(5)				Grant Date Fair Value of Stock and Option Awards and RSU’s(6)
										Threshold ($)				Target ($)				Maximum ($)				Threshold				Target				Maximum
Mark F. O’Neil			Corporate Incentive Plan				2/24/11			$	332,839			$	443,785			$	931,949				3,676				29,410				40,439				29,410				75,200			$	19.65			$	1,779,874
Eric D. Jacobs			Corporate Incentive Plan				2/24/11			$	135,000			$	180,000			$	333,000				1,680				13,440				18,480				13,440				34,380			$	19.65			$	813,496
Raj Sundaram			Corporate Incentive Plan				2/24/11			$	135,000			$	180,000			$	333,000				1,680				13,440				18,480				13,440				34,380			$	19.65			$	813,496
Rick Von Pusch			Corporate Incentive Plan				2/24/11			$	105,641			$	140,855			$	232,411				1,368				10,940				15,043				10,940				27,930			$	19.65			$	661,739
Richard McLeer			Corporate Incentive Plan				2/24/11			$	113,438			$	151,250			$	257,125				1,261				10,090				13,874				10,090				25,700			$	19.65			$	609,848
Ana Herrera(7)			Corporate Incentive Plan				9/19/11			$	94,943			$	126,591			$	215,205				1,158				9,260				12,733				30,186				34,978			$	18.07			$	1,241,171	(8)
							9/19/11				—				—				—				—				—				—				—				3,375			$	24.50				—
							9/19/11				—				—				—				—				—				—				—				23,630			$	19.65				—

Please see the discussions under “Components of Executive Compensation for 2011”, 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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OUTSTANDING EQUITY AWARDS AT 2011 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.

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 Inventive Plan Awards: Number of Unearned Shares, Units or Other Rights That have Not Vested(3)(4)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(5)
Mark F. O’Neil			05/03/2004				189,953				—			$	2.80				05/02/2014				1/27/2009				40,000			$	1,090,400
			08/18/2004				167,000				—			$	2.80				08/17/2014				3/2/2010				39,262			$	1,070,282
			05/26/2005				125,000				—			$	12.92				05/25/2015				3/9/2010												44,205			$	1,205,035
			01/27/2006				90,000				—			$	20.68				01/26/2016				2/24/2011												33,086			$	901,931
			02/06/2007				40,000				—			$	28.73				02/05/2017				2/24/2011				29,410			$	801,717
			08/08/2007				10,000				—			$	38.98				08/07/2014
			01/24/2008				95,839				4,161			$	24.50				01/23/2015
			01/27/2009				131,250				48,750			$	11.76				01/26/2016
			03/02/2010				52,780				67,860			$	15.13				03/01/2017
			02/24/2011				—				75,200			$	19.65				02/23/2018
Eric D. Jacobs			1/30/2004				9,000				—			$	2.80				01/29/2014				1/27/2009				15,000			$	408,900
			8/18/2004				50,000				—			$	2.80				08/17/2014				3/2/2010				13,380			$	364,739
			5/26/2005				50,000				—			$	12.92				05/25/2015				3/9/2010												12,050			$	328,478
			1/27/2006				20,000				—			$	20.68				01/26/2016				2/24/2011												15,120			$	412,171
			2/6/2007				9,000				—			$	28.73				02/05/2017				2/24/2011				13,440			$	366,374
			8/8/2007				5,000				—			$	38.98				08/07/2014
			1/24/2008				43,125				1,875			$	24.50				01/23/2015
			1/27/2009				47,395				17,605			$	11.76				01/26/2016
			3/2/2010				15,995				20,565			$	15.13				03/01/2017
			2/24/2011				—				34,380			$	19.65				02/23/2018
Raj Sundaram			05/26/2005				25,000				—			$	12.92				05/25/2015				1/27/2009				15,000			$	408,900
			01/27/2006				10,000				—			$	20.68				01/26/2016				3/2/2010				13,380			$	364,739
			11/02/2006				20,000				—			$	25.39				11/01/2016				3/9/2010												12,050			$	328,478
			02/06/2007				9,000				—			$	28.73				02/05/2017				2/24/2011												15,120			$	412,171
			08/08/2007				5,000				—			$	38.98				08/07/2014				2/24/2011				13,440			$	366,374
			01/24/2008				38,339				1,661			$	24.50				01/23/2015
			01/27/2009				41,809				20,313			$	11.76				01/26/2016
			03/02/2010				15,995				20,565			$	15.13				03/01/2017
			2/24/2011				—				34,380			$	19.65				02/23/2018
Rick Von Pusch			11/02/2006				20,000				—			$	25.39				11/01/2016				1/27/2009				15,000			$	408,900
			02/06/2007				8,000				—			$	28.73				02/05/2017				3/2/2010				11,595			$	316,080
			08/08/2007				5,000				—			$	38.98				08/07/2014				3/9/2010												12,050			$	328,478
			01/24/2008				38,339				1,661			$	24.50				01/23/2015				2/24/2011												12,308			$	335,502
			01/27/2009				54,687				20,313			$	11.76				01/26/2016				2/24/2011				10,940			$	298,224
			03/02/2010				15,995				20,565			$	15.13				03/01/2017
			2/24/2011				—				27,930			$	19.65				02/23/2018
Richard McLeer			08/18/2004				3,973				—			$	2.80				08/17/2014				1/27/2009				12,500			$	340,750
			05/26/2005				5,000				—			$	12.92				05/25/2015				3/2/2010				10,710			$	291,955
			01/27/2006				8,000				—			$	20.68				01/26/2016				3/9/2010												9,649			$	263,029
			02/06/2007				6,000				—			$	28.73				02/05/2017				2/24/2011												11,351			$	309,435
			08/08/2007				5,000				—			$	38.98				08/07/2014				2/24/2011				10,090			$	275,053
			01/24/2008				25,875				1,125			$	24.50				01/23/2015
			01/27/2009				47,395				17,605			$	11.76				01/26/2016
			03/02/2010				13,330				17,140			$	15.13				03/01/2017
			2/24/2011				—				25,700			$	19.65				02/23/2018
Ana Herrera			9/19/2011				—				34,978			$	18.07				9/18/2018				9/19/2011				30,186			$	822,870
			9/19/2011				—				3,375			$	24.50				9/18/2018				9/19/2011												5,325	(4)		$	145,160
			9/19/2011				—				23,630			$	19.65				9/18/2018				9/19/2011												10,418			$	283,981

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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.

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OPTION EXERCISES AND STOCK VESTED IN FISCAL 2011

		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
Mark F. O’Neil			164,941	(1)		$	3,297,092				45,588	(5)		$	902,459
Eric D. Jacobs			50,003	(2)		$	1,016,048				15,460	(6)		$	304,311
Raj Sundaram			12,878	(3)		$	202,700				15,460	(7)		$	304,311
Rick Von Pusch			—				—				14,615	(8)		$	287,573
Richard McLeer			—				—				12,570	(9)		$	246,615
Ana Herrera			44,634	(4)		$	336,157				10,070	(10)		$	196,690