AUTOBYTEL INC. SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Exhibit 99.1

 

AUTOBYTEL INC.
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Second Amended and Restated Employment Agreement (“Agreement”) entered into effective as of April 3, 2014 (“Effective Date”), between Autobytel Inc., a Delaware corporation (“Autobytel” or “Company”), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (“Employee”).

Background

Autobytel has determined that it is in its best interests to encourage Employee’s continued employment with, and dedication to the business of, Autobytel, and the Employee desires to continue Employee’s employment according to the terms and conditions set forth below.  As a result thereof, Autobytel and the Employee have agreed that it is in their mutual best interests to enter into this Agreement, and thereby to amend, restate, and supersede the Prior Employment Agreement (as defined below).

In consideration of the foregoing and other good and valuable consideration, receipt of which is hereby acknowledged, the Parties hereby agree as follows.

 

 

 

            (c)            “Benefits” means all Company medical, dental, vision, life and disability plans in which Employee participates under Section

 

 

 

 

 

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For purposes of this definition of Cause, no act or failure to act, on the part of the Employee, shall be considered “willful” if it is done, or omitted to be done, by the Employee in good faith or with reasonable belief that Employee’s action or omission was in the best interest of the Company.  Employee shall have the opportunity to cure any such acts or omissions (other than clauses (i)  and (iii) above) within thirty (30) days of the Employee’s receipt of a written notice from the Company finding that, in the good faith opinion of the Company, the Employee is guilty of acts or omissions constituting “Cause.”

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(B) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation ("Parent Corporation"), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board's approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above is deemed to be a "Non-Qualifying Transaction"); or

Notwithstanding the foregoing, a Change in Control will not be deemed to occur solely because any person acquires beneficial ownership of more than 50% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the

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number of Company Voting Securities outstanding; provided, that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control of the Company will then occur. For purposes of this definition of Change in Control, the term “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the relevant time each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.  For purposes of this definition, the term "corporation" has the meaning prescribed in Section 7701(a)(3) of the Code and the regulations thereunder.

 

 

(i)            “Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

(j)            “Company” means Autobytel, and upon any assignment to and assumption of this Agreement by any Successor Company, shall mean such Successor Company.

 

(k)            “Disability” means the inability of the Employee to perform Employee’s duties to the Company on account of physical or mental illness or incapacity for a period of one-hundred twenty (120) consecutive calendar days, or for a period of one hundred eighty (180) calendar days, whether or not consecutive, during any three hundred sixty-five (365) day period.

(l)            “Employee Confidentiality Agreement” means that certain Employee Confidentiality Agreement dated as of December 12, 2008.

(m)            “Employee’s Primary Location” means Autobytel’s headquarters located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.

(n)            “Expiration Date” means April 3, 2017.

(o)            “Good Reason” means any act, decision or omission by the Company without the Employee’s consent that: (A) materially reduces Employee’s Base Annual Salary as in existence as of the date hereof or as of the date prior to any such change, whichever is more beneficial for Employee at the time of the act, decision, or omission by the Company; (B) materially diminishes the Employee’s authority, duties, or

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responsibilities from the authority, duties or responsibilities Employee has as the Company’s chief executive officer, including, post a Change in Control, a material diminution in the budget over which Employee retains authority; (C) on or within 18 months following a Change in Control, either relocates the Employee’s place of employment from Employee’s Primary Location to any other location in excess of a forty (40) mile radius from the Employee’s Primary Location or requires any such relocation as a condition to continued employment by Company or Successor Company; or (D) involves or results in any material breach  of this Agreement by the Company or Successor Company, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by the Employee.  Notwithstanding the foregoing, no event shall constitute “Good Reason” unless (i) the Employee first provides written notice to the Company within ninety (90) days of the event(s) alleged to constitute Good Reason, with such notice specifying the grounds that are alleged to constitute Good Reason, and (ii) the Company fails to cure such event(s) within thirty (30) days after Company’s receipt of such written notice.

(p)            “Prior Employment Agreement” means that certain Amended and Restated Employment Agreement dated as of April 3, 2009, as amended by Amendment No. 1 and Amendment No. 2 thereto dated as of December 17, 2010 and December 14, 2012, respectively, by and between the Company and Employee.

(q)            “Separation from Service” or “Separates from Service” shall mean Employee’s termination of employment, as determined in accordance with Treas. Reg. § 1.409A-1(h).  Employee shall be considered to have experienced a termination of employment when the facts and circumstances indicate that Employee and the Company reasonably anticipate that either (i) no further services will be performed for the Company after a certain date, or (ii) that the level of bona fide services Employee will perform for the Company after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed by Employee (whether as an employee or independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Company if Employee has been providing services to the Company for less than thirty six (36) months).  If Employee is on military leave, sick leave, or other bona fide leave of absence, the employment relationship between Employee and the Company shall be treated as continuing intact, provided that the period of such leave does not exceed six months, or if longer, so long as Employee retains a right to reemployment with the Company under an applicable statute or by contract.  If the period of a military leave, sick leave, or other bona fide leave of absence exceeds six months and Employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship shall be considered to be terminated for purposes of this Agreement as of the first day immediately following the end of such six-month period.  In applying the provisions of this paragraph, a leave of absence shall be considered a bona fide leave of absence only if there is a reasonable expectation that Employee will return to perform services for the Company.  For purposes of determining whether Employee has incurred a Separation from Service, the

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Company shall include the Company and any entity that would be considered a single employer with the Company under Code Section 414(b) or 414(c).

(r)            “Successor Company” means any successor to Autobytel or substantially all of its assets by reason of any Change in Control.

(s)            “Term” The term of this Agreement is the period commencing with the Effective Date and ending on the Expiration Date, or such earlier date on which Employee’s employment terminates in accordance with this Agreement or otherwise.

(t)            “Termination Without Cause” means termination of Employee’s employment with the Company (i) by the Company (a) for any reason other than those reasons expressly set forth in the definition of “Cause,” or (b) for no reason at all; or (ii) by Employee for Good Reason within thirty (30) days following the Company’s failure to cure the event or events that constitute Good Reason; provided, however, that Employee’s Separation from Service in connection with a Change in Control shall not constitute a Termination Without Cause if Employee is offered employment with the Successor Company under terms and conditions, including position, salary and other compensation, and benefits, that would not otherwise provide Employee the right to terminate Employee’s employment for Good Reason under this Agreement.

2.            Term of Employment. This Agreement shall govern Employee’s employment for the Term. Upon the Expiration Date, this Agreement shall expire and terminate unless extended by mutual written agreement of the Company and Employee prior to the Expiration Date.  Notwithstanding the foregoing governing period, Employee’s employment is at will and not for a specified term and may be terminated by the Company or you at any time, with or without Cause or Good Reason and with or without prior, advance notice. This “at-will” employment status will remain in effect throughout the Term and cannot be modified except by a written amendment to this Agreement that is executed by both parties (which in the case of the Company, must be executed by the Company’s Chairman of the Board or Chief Legal Officer) and that expressly negates the “at-will” employment status.

 

3.            Nature of Duties.  During Employee’s employment under this Agreement, Employee shall be the Company’s President and Chief Executive Officer.  Employee shall have all of the customary powers and duties associated with such positions, and shall be subject to the Company’s policies, procedures, and approval practices, including without limitation hiring and employment policies, as in effect from time to time for executives of the Company. Employee shall devote substantially all of Employee’s full business time and effort to the performance of Employee’s duties for the Company, which Employee shall perform faithfully and to the best of Employee’s ability. The Company acknowledges that Employee may serve as a director of third party companies and that such service shall not constitute a breach of this Agreement as long as (i) such service does not interfere with Employee’s performance of Employee’s duties and responsibilities as the Company’s President and Chief Executive Officer; and (ii) any such service has been pre-approved by the Board (with Employee’s service on the boards of directors which predate this Agreement being pre-approved).

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4.            Compensation, Benefits and Expenses.

 

(a)            As compensation for the services to be rendered by Employee pursuant to this Agreement, the Company hereby agrees to pay Employee a base annual salary (“Base Annual Salary”) at a rate equal to Four Hundred Ninety-Five Thousand Dollars ($495,000.00) during the Term.  Employee’s Base Annual Salary shall be reviewed by the Board (or the Compensation Committee thereof) at least annually and may be increased by an amount approved by the Board (or the Compensation Committee thereof) in its sole discretion, and Employee agrees that the Company has not made any promises or guaranty of any increase in Base Annual Salary during the Term.  The Company may not reduce Employee’s Base Annual Salary during the Term without Employee’s prior written consent.  The Base Annual Salary shall be paid in substantially equal bimonthly installments, in accordance with the normal payroll practices of the Company.  While employed by the Company, the Employee will not receive any compensation for Employee’s service as a member of the Company’s Board or any of its committees.

 

(b)            Employee shall be entitled to all ordinary and customary benefits afforded generally to executive employees of the Company (except to the extent employee contribution may be required under the Company’s benefit plans as they may now or hereafter exist), which shall in no event be less than the benefits generally afforded to the other executive employees of the Company as of the date hereof or from time to time, but in any event shall include any qualified or non-qualified pension, profit sharing and savings plans, any death benefit and disability benefit plans, life insurance coverages, any medical, dental, health and welfare plans or insurance coverages, and any stock purchase programs that are adopted or maintained by the Company generally for executives employees of the Company.

 

(c)            For each calendar year beginning with 2014 and ending before this Agreement expires or terminates, Employee shall be eligible to receive, at the time and in the form provided for in the Company’s annual incentive compensation plan, an annual incentive bonus opportunity targeted at eighty-five percent (85%) of Employee’s Base Annual Salary based upon annual performance goals and the achievement of those goals, as established and determined at least annually (and consistently with the Company’s most recent proxy statement disclosure of the standards for providing cash-based incentive compensation) by the Board or the Compensation Committee of the Board.  Such performance goals may include Company-wide performance objectives, divisional or departmental performance objectives, and/or individual performance objectives, as the Board or the Compensation Committee may determine in its discretion.

 

(d)            The Company shall pay or reimburse Employee for all reasonable and authorized business expenses incurred by Employee while employed under this Agreement; such payment or reimbursement shall not be unreasonably withheld so long as said business expenses have been incurred for and promote the business of the Company and are normally and customarily incurred by employees in comparable positions at other comparable businesses in the same or similar market. As a condition to reimbursement under this Section 4(d), Employee shall furnish to the Company adequate records and other documentary evidence required by federal and state statutes and regulations for the substantiation of each expenditure.  Employee must submit proper documentation for each such expense within 30 days after the date that

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Employee incurs such expense, and the Company will reimburse Employee for all eligible expenses within 30 days thereafter, and in no event later than the last day of the calendar year following the calendar year in which the expense is incurred.  Employee acknowledges and agrees that failure to furnish the required documentation may result in the Company denying all or part of the expense for which reimbursement is sought.

 

(e)            Employee shall be covered by the Company’s directors and officers insurance policies on the same basis as the Company’s other senior executive officers, as such insurance policies and coverage limits and conditions may exist from time to time.

 

5.            Severance Benefits and Conditions.  All amounts payable hereunder shall be subject to reduction for any employment and withholding taxes that the Company determines are applicable, and shall be subject to any applicable terms and conditions set forth in this Section 5, and this Agreement generally, including without limitation Section 8.

 

(a)            Termination Other Than Without Cause.  In the event of Employee’s Termination for Cause, resignation without Good Reason, death, Disability, or any  reason other than Termination Without Cause, Employee shall be entitled to receive only the following (“Accrued Amounts”): (i) any amounts due and owing to Employee as of Employee’s employment termination date with respect to any Base Annual Salary, or vested and payable bonuses or incentive payments; and (ii) any other payments required by applicable law (including payments with respect to accrued and unused vacation, personal, sick and other days).  If Employee’s employment is terminated by reason of the death or Disability of Employee, in addition to the foregoing payments, Employee or Employee’s heirs or representatives, as applicable, shall also receive a payment equal to one-twelfth (1/12) of Employee’s Base Annual Salary.

 

(b)            Termination Without Cause.  In the event of Employee’s Termination Without Cause either before a Change in Control or more than eighteen (18) months after a Change in Control, Employee shall be entitled to (i) the Accrued Amounts; (ii) continued monthly Base Annual Salary for twelve (12) months following the date of Employee’s Termination Without Cause, at the rate of monthly Base Annual Salary in effect immediately beforehand, and (iii) for the same twelve (12) month period, subject to Section 5(d) of this Agreement, Benefits at the levels in effect before employment terminates, including Company-paid COBRA premiums for any insurance that is in effect for Employee and/or Employee’s dependents before termination of Employee’s employment, and that Employee elects to continue in accordance with COBRA.

 

(c)            Termination Without Cause related to Change in Control.  In the event of Employee’s Termination Without Cause upon or within eighteen (18) months after a Change in Control, Employee shall be entitled to (i) the Accrued Amounts; (ii) a lump sum payment, paid in cash, equal to one and seventy-five one-hundredths (1.75) times the sum of (1) Employee’s Base Annual Salary and (2) Employee’s target annual incentive compensation opportunity under Section 4(c), at the rate of Base Annual Salary and the target annual incentive compensation opportunity in effect immediately before such termination; provided, however that he amount of the foregoing lump sum cash payout related to Employee’s targeted annual incentive compensation opportunity prior to payout of awards under the annual incentive compensation plan for the year in which the termination of employment occurs will be reduced by the sum of (1) the cash payout, if

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any, under the annual incentive compensation plan as of the Change in Control and (2) if performance-based stock options are a component of such annual incentive compensation plan, the option spread (based on the difference between the per share transaction price of the Company's Common Stock for such Change in Control transaction and the option exercise price), if any, on Employee’s performance-based options granted under such annual incentive compensation plan (this option-related reduction not to exceed the amount of Employee’s target annual incentive compensation opportunity multiplied by the percentage of Employee’s target annual incentive compensation opportunity represented by the performance-based options), and (iii) for the eighteen (18) month period following Employee’s Termination Without Cause, subject to Section 5(d) of this Agreement, Benefits at the levels in effect before employment terminates, including Company-paid COBRA premiums for any insurance that is in effect for Employee and/or Employee’s dependents before termination of Employee’s employment, and that Employee elects to continue in accordance with COBRA.

 

(d)            Special Benefits Provisions.

 

(i)            With respect to Benefits that are eligible for continuation coverage under COBRA, in the event the Company is unable to continue Employee’s and Employee’s eligible dependents’ (assuming such dependents were covered by Company at the time of termination) participation under the Company’s then existing insurance policies for such Benefits, Employee may elect to obtain coverage for such Benefits either by (1) electing COBRA continuation benefits for Employee and Employee’s eligible dependents; (2) obtaining individual coverage for Employee and Employee’s eligible dependents (if Employee and Employee’s eligible dependents qualify for individual coverage); or (3) electing coverage as eligible dependents under another person’s coverage (if Employee and Employee’s eligible dependents qualify for such dependent coverage), or any combination of the foregoing alternatives. Employee may also initially elect COBRA continuation benefits and later change to individual coverage or dependent coverage for Employee or any eligible dependent of Employee, but Employee understands that if continuation of Benefits under COBRA is not initially selected by Employee or is later terminated by Employee, Employee will not be able to return to continuation coverage under COBRA. The Company shall pay directly or reimburse to Employee the monthly premiums for the benefits or coverage selected by Employee, with such payment or reimbursement not to exceed the monthly premiums the Company would pay assuming Employee timely elected continuation of benefits under COBRA.  The Company’s obligation to pay or reimburse for the Benefits covered by this Section 5(d) shall terminate upon the earlier of (i) the end of the applicable Company-paid COBRA Continuation Period; and (ii) Employee’s employment by an employer that provides Employee and Employee’s eligible dependents with coverage substantially similar to such Benefits as provided to Employee and Employee’s eligible dependents at the time of the termination of Employee’s employment with the Company, provided that Employee and Employee’s eligible dependents are eligible for participation in such coverage.

 

(ii)            With respect to Benefits that are not eligible for continuation coverage under COBRA, in the event the Company is unable to continue Employee’s participation under the Company’s then existing insurance policies for such Benefits, Employee may elect to obtain coverage for such Benefits either by (1) obtaining

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individual coverage for Employee (if Employee qualifies for individual coverage); or (2) electing coverage as an eligible dependent under another person’s coverage (if Employee qualifies for such dependent coverage), or any combination of the foregoing alternatives; provided that any alternative shall be available and implemented only (I) in a manner that neither accelerates nor delays the year in which taxable income arises from the Benefits, and (II) in accordance with Section 409A of the Code. The Company shall pay directly or reimburse to Employee the monthly premiums for the benefits or coverage selected by Employee, with such payment or reimbursement not to exceed the monthly premiums the Company paid for such Benefits at the time of termination of Employee’s employment with the Company.  The Company’s obligation to pay or reimburse for the Benefits covered by this Section 5(d)(ii) shall terminate upon the earlier of (i) the end of the applicable COBRA Continuation Period; and (ii) Employee’s employment by an employer that provides Employee with coverage substantially similar to such Benefits as provided to Employee at the time of the termination of Employee’s employment with the Company, provided that Employee is eligible for participation in such coverage. Employee acknowledges and agrees that the Company shall not be obligated to provide any Benefits covered by this Section 5(d)(ii) for Employee if Employee does not qualify for coverage under the Company’s existing insurance policies for such Benefits, for individual coverage, or for dependent coverage.

(e)            Timing of Cash Severance Payments.

(i)            Payments of Accrued Amounts under Sections 5(a), 5(b) and 5(c) shall be made no later than the payment date required by applicable law.

(ii)            Subject to Section 8, the satisfaction of the conditions set forth in Section 5(f), and the following sentences of this Section 5(e)(ii), the cash monthly Base Annual Salary continuation payments under Section 5(b) shall be made to Employee in substantially equal bimonthly installments, in accordance with the normal payroll practices of the Company, as provided in Section 4(a).  If the period of time covered by the entire allowed Release Consideration Period (as defined in Section 5(f)(ii)) and the entire Release Revocation Period (as defined in Section 5(f)(ii)) (considering such periods consecutively) begins in one calendar year and ends in the following calendar year, the cash monthly Base Annual Salary continuation payments under Section 5(b)(ii) shall commence with the first Company payroll payment date of such following calendar year which is after the date on which the Release became effective and non-revocable in accordance with its terms.  In the event commencement of the cash monthly Base Annual Salary continuation payments is delayed as a result of the immediately preceding sentence, then any cash monthly Base Annual Salary continuation payments that would otherwise have been payable before the second tax year but for the immediately preceding sentence, will be deferred and paid in a lump sum along with the first payment made in that second tax year.

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(as defined in Section 5(f)(ii)) becomes effective and non-revocable in accordance with its terms. In any case, the lump sum cash payment under Section 5(c)(ii) shall be made no later than two and one-half months after the end of the calendar year in which Employee’s Separation from Service occurs, provided that the Release shall have become effective and non-revocable in compliance with its terms prior to expiration of such two and one-half month period. If the period of time covered by the entire allowed Release Consideration Period (as defined in Section 5(f)(ii)), the entire Release Revocation Period (as defined in Section 5(f)(ii)) and the entire five business day period described above in this Section 5(e)(iii) (considering such periods consecutively) begins in one calendar year and ends in the following calendar year, the lump sum cash payment under Section 5(c)(ii) shall be made to Employee on the first business day of such following calendar year which is five (5) or more business days after the date on which the Release became effective and non-revocable in accordance with its terms.

(iv)            Subject to Section 8 and the satisfaction of the conditions set forth in Section 5(f), cash payments or reimbursements for Benefits under Section 5(d), if applicable, shall be made to or on behalf of Employee in monthly installments as provided in Section 5(d).

(f)            Conditions on Severance and Benefits. The amounts and benefits (other than Accrued Amounts) that are payable pursuant to Sections 5(b), 5(c) and 5(d) of this Agreement shall be provided only if :

(i)            Employee is compliant, at all times prior to the due date for any payment, with the terms and conditions set forth in Section 6; and

 

(ii)            (A) Employee has executed and delivered to the Company the Separation Agreement and Release substantially in the form attached hereto as Exhibit A (“Release”) no later than the expiration of the applicable period of time allowed for Employee to consider the Release as set forth in Section 13 of the Release (“Release Consideration Period”); (B) Employee has not revoked the Release prior to the expiration of the applicable revocation period set forth in Section 13 of the Release (“Release Revocation Period”); and (C) the Release has become effective and non-revocable no later than the cumulative period of time represented by the sum of the maximum Release Consideration Period and the maximum Release Revocation Period. No payments or benefits set forth in Sections 5(b), 5(c) or 5(d) shall be due or payable to, or provided to, Employee if the Release has not become effective and non-revocable in accordance with the requirements of this Section 5(f)(ii).

 

(iii)            If requested by the Company, Employee shall have participated in an exit interview with the Company’s Board of Directors or a committee thereof.

(e)            Other than the payments and benefits provided for in this Section 5, Employee shall not be entitled to any additional amounts from the Company resulting from a termination of Employee’s employment with the Company.

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6.            Unauthorized Disclosure; Non-Solicitation; Proprietary Rights.

 

(a)            Unauthorized Disclosure.  Employee agrees and understands that in Employee’s position with the Company, Employee will be exposed to and will receive non-public information relating to the confidential affairs of the Company and its affiliates, including, without limitation, employee lists and compensation, technical information, intellectual property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing and expansion plans, business policies and practices of the Company and other non-public forms of information considered by the Company to be confidential and in the nature of trade secrets (including, without limitation, ideas, research and development, know-how, technical data, customer and supplier lists, pricing and cost information and business and marketing plans and proposals) (collectively, the “Confidential Information”).  Employee agrees that at all times during Employee’s employment with the Company, except as may be required for Employee to discharge Employee’s duties as an officer of the Company, and thereafter, Employee shall not disclose such Confidential Information, either directly or indirectly, to any Person without the prior written consent of the Company and shall not use or attempt to use any such information in any manner other than in connection with Employee’s employment with the Company, unless (i) required by law or court order to disclose such information, in which case Employee shall provide the Company with written notice of such requirement as far in advance of such anticipated disclosure as possible and use Employee’s best efforts to consult with the Board prior to such anticipated disclosure; (ii) during the course of or in connection with any actual or potential litigation, arbitration, or other proceeding based upon or in connection with the subject matter of this Agreement; (iii) as may be necessary or appropriate to conduct Employee’s duties hereunder, provided Employee is acting, in good faith and in the best interest of the Company; (iv) such information has become public other than by reason of a breach by Employee of this Section 6(a); or (v) the information is generally known to persons involved in the Company’s trade or business.  This confidentiality covenant has no temporal, geographical or territorial restriction.  Upon termination of Employee’s employment with the Company for any reason, Employee shall promptly deliver to the Company (or, at the Company’s option, destroy (and provide a certification of such destruction)) all property, keys, notes, electronic storage media, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other tangible product or document which has been produced by, received by or otherwise submitted to Employee during or prior to Employee’s employment with the Company, and any copies thereof in Employee’s (or capable of being reduced to Employee’s ) possession, as well as all computers of the Company provided to Employee; provided that nothing in this Agreement or elsewhere shall prevent Employee from retaining and utilizing copies of :  documents relating to Employee’s employment or personal benefits, entitlements and obligations (including employment agreements, confidentiality agreements, stock options award agreements and severance agreements); documents relating to Employee’s personal tax obligations; the data and entries from Employee’s Outlook contacts and calendar; Employee’s personal emails; and such other records and documents as may reasonably be approved by the Company.

 

(b)            Non-Solicitation of Employees.  During Employee’s employment with the Company (whether during the term or thereafter) and for a period of twelve (12) months after Employee’s termination of employment, Employee shall not (other than in connection with

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carrying out Employee’s responsibilities for the Company) directly or indirectly contact, induce or solicit (or assist any person to contact, induce or solicit) for employment any person who is then or was an employee of the Company within the six (6) month period prior to the date of such contact, inducement or solicitation.

 

(c)            Interference with Business Relationships.  During Employee’s employment with the Company (whether during the Term or thereafter) and for a period of twelve (12) months after Employee’s termination of employment, Employee shall not (other than in connection with carrying out Employee’s responsibilities for the Company) directly or indirectly contact, induce or solicit (or assist any person to contact, induce or solicit) any customer, client, partner, joint venturer, vendor or supplier of the Company, or any such person who was within six (6) months of the date of contact a customer, client, partner, joint venturer, vendor, or supplier of the Company, to terminate its relationship or otherwise cease doing business in whole or in part with the Company, or directly or indirectly interfere with (or assist any person to interfere with) any material relationship between the Company and any of its customers, clients, partners, joint venturers, vendors or suppliers.

 

(d)            No Other Post-Employment Restrictions.  There shall be no contractual or similar restrictions on Employee’s right to terminate Employee’s employment with the Company, or on Employee’s post-employment activities, other than as expressly set forth in this Agreement, the Release and the Employee Confidentiality Agreement.

 

(e)            Permitted Statements.  Nothing in this Agreement shall restrict any person from making truthful statements (provided any such statement does not include Confidential Information) (i) when required by law, subpoena, court order or the like; (ii) when requested by a governmental, regulatory, or similar body or entity; or (iii) in confidence to a professional advisor for the purpose of securing professional advice.

 

(f)            Injunctive Relief.  Without limiting the remedies available to the Company, Employee acknowledges that a breach of any of the covenants contained in this Section 6 may result in irreparable injury to the Company for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Company shall be entitled to seek a temporary restraining order and/or preliminary or permanent injunction, without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach of this Section 6.

 

7.            Representations.  Each party represents and warrants (i) that such party is not subject to any contract, arrangement, agreement, policy or understanding, or to any statute, governmental rule or regulation, that in any way limits such party’s ability to enter into and fully perform such party’s obligations under this Agreement (including the agreements the forms of which are appended hereto); (ii) that such party is able without restrictions to enter into and fully perform such party’s obligations under this Agreement (including the agreements of which forms are appended hereto); and (iii) that, upon the execution and delivery of this Agreement by both parties, this Agreement shall be such party’s valid and binding obligation, enforceable against such party in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.  The Company represents and warrants that it is fully authorized by action of the

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Board, and by actions of any other Person whose authorization is required, to enter into this Agreement and to perform its obligations under it.

 

8.            Taxes.

 

(a)            All payments made pursuant to this Agreement will be subject to withholding of applicable taxes. Notwithstanding the foregoing, and except as otherwise specifically provided elsewhere in this Agreement, Employee is solely responsible and liable for the satisfaction of any federal, state, province or local taxes that may arise with respect to this Agreement (including any taxes arising under Sections 280G and 409A of the Code).  Neither the Company nor any of its employees, officers, directors, or service providers shall have any obligation whatsoever to pay such taxes, to prevent Employee from incurring them, or to mitigate or protect Employee from any such tax liabilities.  Notwithstanding anything in this Agreement to the contrary, if any amounts that become due under this Agreement on account of Employee’s termination of employment constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code, payment of such amounts shall not commence until Employee incurs a Separation from Service.  If, at the time of Employee’s Separation from Service under this Agreement, Employee is a “specified employee” (within the meaning of Section 409A of the Code), any amounts that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code that become payable to Employee on account of Employee’s Separation from Service (including any amounts payable pursuant to the preceding sentence) will not be paid until after the end of the sixth calendar month beginning after Employee’s Separation from Service (“409A Suspension Period”).  Within 14 calendar days after the end of the 409A Suspension Period, Employee shall be paid a lump sum payment in cash equal to any payments delayed because of the preceding sentence.  Thereafter, Employee shall receive any remaining benefits as if there had not been an earlier delay. Each payment or benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 409A of the Code.

 

(b)            (i)            For purposes of this Section 8(b), the following terms shall have the following meanings:

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(iii)     Any determination required under this Section 8(b) shall be made in writing by an independent firms of certified public accountant selected by the Company (the "Accountants") and approved by Employee, which approval shall not be unreasonably withheld, delayed or conditioned.  The written determination of the Accountants so selected and approved shall be delivered promptly to the Company and Employee and, absent manifest mathematical errors, shall be conclusive and binding upon Employee and the Company for all purposes.  For purposes of making the calculations required by this Section 8(b), the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Employee shall promptly furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 8(b).  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 8(b).

	AUTOBYTEL INC.
	By:
		[Officer's Name] [Title]