AUTOBYTEL INC (Form: 8-K, Received: 09/26/2016 06:03:41)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 21, 2016

Autobytel Inc.

(Exact name of registrant as specified in its charter)

Delaware		1-34761		33-0711569
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

18872 MacArthur Boulevard, Suite 200, Irvine, California		92612-1400
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (949) 225-4500

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Amendment to Mr. Jeffrey H. Coats’ Employment Agreement

On September 21, 2016, the Compensation Committee of the Board of Directors (“ Compensation Committee ”) of Autobytel Inc., a Delaware corporation (“ Autobytel ” or the “ Company ”), recommended to the Company’s Board of Directors (“ Board” ), and the Board approved, amendments to the Second Amended and Restated Employment Agreement dated as of April 3, 2014 (as amended, “ Coats Employment Agreement ”) by and between the Company and Mr. Jeffrey H. Coats, the Company’s Chief Executive Officer and President.

The amendments to the Coats Employment Agreement: (i) extend the expiration date of the Coats Employment Agreement to April 3, 2020; (ii) provide that Mr. Coats’ annual incentive compensation opportunity target percentage cannot be reduced without Mr. Coats’ prior written consent; (iii) adds that in the case of a termination of Mr. Coats’ employment, not in connection with a change in control, by the Company without “cause” (as defined in the Coats Employment Agreement) or by Mr. Coats with “good reason” (as defined in the Coats Employment Agreement), Mr. Coats will receive his annual incentive compensation payout based on actual performance for the entire performance period, prorated for the amount of time Mr. Coats was employed by the Company prior to the date of termination during such performance period; (iv) adds that in the case of a termination of Mr. Coats’ employment, in connection with a change in control, by the Company without cause or by Mr. Coats with good reason, Mr. Coats will receive his annual incentive compensation payout based on his target annual incentive compensation, prorated for the amount of time Mr. Coats was employed by the Company prior to the date of termination during such performance period; and (v) eliminates the earned incentive compensation offset to Mr. Coats’ severance payments in the case of a termination of Mr. Coats’ employment, in connection with a change in control, by the Company without cause or by Mr. Coats for good reason.

The severance provisions of the Coats Employment Agreement now provide that if Mr. Coats’ employment is terminated by the Company without cause or by Mr. Coats with good reason, Mr. Coats is entitled to: (i) continued monthly payments of his annual base salary for a period of twelve months after the employment termination date; (ii) reimbursement or payment of the premiums for continuation of his medical, dental and vision insurance benefits under the Consolidated Omnibus Budget Reconciliation Act (“ COBRA ”) for a period of twelve months after the employment termination date; and (iii) his annual incentive compensation payout based on actual performance for the entire performance period, prorated for the amount of time Mr. Coats was employed by the Company prior to the date of termination during such performance period. If Mr. Coats’ employment is terminated by the Company without cause or by Mr. Coats with good reason upon, or within eighteen months following, a change in control of the Company, Mr. Coats is entitled to: (i) a lump sum payment equal to 1.75 times his annual base salary plus his annual incentive compensation opportunity target; (ii) reimbursement or payment of the premiums for continuation of his medical, dental and vision insurance benefits under COBRA for a period of eighteen months after the employment termination date; and (iii) his annual incentive compensation payout based on his target annual incentive compensation, prorated for the amount of time Mr. Coats was employed by the Company prior to the date of termination during such performance period. The Company is not obligated to make additional payments to Mr. Coats to compensate for his additional tax obligations if Mr. Coats’ compensation is deemed to be excess parachute payments under the Internal Revenue Code. Payment of the severance benefits under the Coats Employment Agreement is conditioned on Mr. Coats’ execution of a general release of claims in favor of Autobytel.

The foregoing description of the amendments to the Coats Employment Agreement is not complete and is qualified in its entirety by reference to: (i) the Second Amended and Restated Employment Agreement effective as of April 3, 2014 by and between Autobytel and Mr. Coats, which is incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission (“ SEC ”) on April 8, 2014; (ii) Amendment No. 1 to Second Amended and Restated Employment Agreement effective as of January 21, 2016 by and between Autobytel and Mr. Coats, which is incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC January 27, 2016; and (iii) Amendment No. 2 to Second Amended and Restated Employment Agreement, a copy of which is filed herewith as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.

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Promotion of Ms. Kimberly S. Boren to Executive Vice President, Chief Financial Officer

By action taken as of September 21, 2016, the Board promoted Ms. Kimberly S. Boren to the position of Executive Vice President, Chief Financial Officer. Ms. Boren previously served as Autobytel’s Senior Vice President, Chief Financial Officer.

In connection with Ms. Boren’s promotion, the Compensation Committee approved amendments to the Letter Agreement dated as of March 9, 2010, by and between Autobytel and Ms. Boren (as amended, “ Boren Employment Agreement ”). The amendments to the Boren Employment Agreement provide for: (i) an increase of $35,000 in Ms. Boren’s annual base salary from $265,000 to $300,000; and (ii) an increase in Ms. Boren’s annual incentive compensation opportunity target percentage from 55% to 60% of her base annual salary.

In addition, the Compensation Committee approved a grant of stock options to purchase 12,000 shares of Company common stock at an exercise price of $16.82 per share and a date of grant of September 21, 2016. The stock options were granted pursuant to the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan (“ Plan ”) and will vest over a three (3) year period, with one-third (1/3) vesting on the first anniversary of the date of grant and thereafter in equal one thirty-sixth (1/36) installments of the original number of shares subject to the option on each monthly anniversary of the date of grant for the following twenty-four (24) months. The stock options expire seven (7) years from the date of grant.

The foregoing description of the amendments to the Boren Employment Agreement and stock option awards are not complete and are qualified in their entirety by reference to: (i) Amendment to Letter Agreement dated September 21, 2016 by and between Autobytel and Ms. Boren, a copy of which is filed herewith as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated herein by reference; and (ii) the Form of Employee Stock Option Award Agreement (Non-Qualified Stock Option) (Executive) under the Plan, which is incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016.

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Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits

10.1	Second Amended and Restated Employment Agreement effective as of April 3, 2014, between Autobytel Inc. and Jeffrey H. Coats (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC on April 8, 2014)

10.2	Amendment No. 1 to Second Amended and Restated Employment Agreement effective as of January 21, 2016, between Autobytel Inc. and Jeffrey H. Coats (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC January 27, 2016)

10.3	Amendment No. 2 to Second Amended and Restated Employment Agreement, made and entered into as of September 21, 2016, by and between Autobytel Inc. and Jeffrey H. Coats

10.4	Amendment to Letter Agreement dated September 21, 2016, by and between Autobytel Inc. and Kimberly Boren

10.5	Form of Employee Stock Option Award Agreement (Non-Qualified Stock Option) (Executive) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 23, 2016	AUTOBYTEL INC.
	By:	/s/ Glenn E. Fuller
		Glenn E. Fuller, Executive Vice President, Chief Legal and Administrative Officer and Secretary

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INDEX OF EXHIBITS

Exhibit No.

Description of Document

10.1	Second Amended and Restated Employment Agreement effective as of April 3, 2014, between Autobytel Inc. and Jeffrey H. Coats (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC on April 8, 2014)

10.2	Amendment No. 1 to Second Amended and Restated Employment Agreement effective as of January 21, 2016, between Autobytel Inc. and Jeffrey H. Coats (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC January 27, 2016)

10.3	Amendment No. 2 to Second Amended and Restated Employment Agreement made and entered into as of September 21, 2016, by and between Autobytel Inc. and Jeffrey H. Coats

10.4	Amendment to Letter Agreement dated September 21, 2016, by and between Autobytel Inc. and Kimberly Boren

10.5	Form of Employee Stock Option Award Agreement (Non-Qualified Stock Option) (Executive) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed with the SEC on August 4, 2016)

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SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amendment No. 2 to Second Amended and Restated Employment Agreement (“ Amendment ”) is made and entered effective as of September 21, 2016, by and between Autobytel Inc., a Delaware corporation (“ Company ”), and Jeffrey H. Coats (“ Employee ”).

The Company and the Employee have entered into that certain Second Amended and Restated Employment Agreement dated as of April 3, 2014, as amended by Amendment No. 1 to Second Amended and Restated Employment Agreement dated as of January 21, 2016 (collectively, the “ Employment Agreement ”). The parties desire to amend the Employment Agreement as set forth in this Amendment.

In consideration of the mutual covenants and agreements contained herein, and with reference to the above recitals, the parties hereby agree as follows:

Amendments to Employment Agreement

1.1 Expiration Date . The definition of “Expiration Date” in Section 1(n) of the Employment Agreement is hereby amended in its entirety to read as follows:

“ Expiration Date ” means April 3, 2020.

1.2 Annual Incentive Compensation Target Opportunity . Section 4(c) of the Employment Agreement is hereby amended in its entirety to read as follows:

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 compensation opportunity targeted at one hundred percent (100%) 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. The Company may not reduce Employee’s targeted annual incentive compensation opportunity percentage during the Term without Employee’s prior written consent.

1.3 Severance Benefits and Conditions .

(a) Section 5(b) of the Employment Agreement is hereby amended in its entirety to read as follows:

(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; (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; and (iv) the amount of Employee’s annual incentive compensation plan payout under Section 4(c) for the annual incentive compensation plan year in which Employee’s date of termination occurred, based on actual performance for the entire performance period and prorated for the amount of time Employee was employed by the Company prior to the date of termination during such plan year.

(b) Section 5(c) of the Employment Agreement is hereby amended in its entirety to read as follows:

(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; (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; and (iv) 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, prorated for the amount of time Employee was employed by the Company prior to the date of termination during such plan year.

(iii) Subject to Section 8, the satisfaction of the conditions set forth in Section 5(f), and the last sentence of this Section 5(e)(iii), the lump sum cash payments under Section 5(c)(ii) and Section 5(c)(iv) shall be made to Employee within five (5) business days after the Release (as defined in Section 5(f)(ii)) becomes effective and non-revocable in accordance with its terms. In any case, the lump sum cash payments under Section 5(c)(ii) and Section 5(c)(iv) 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 payments under Section 5(c)(ii) and Section 5(c)(iv) 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.

(d) Section 5(e) of the Employment Agreement is hereby amended to add the following subsection (v) at the end of the section:

(v) Subject to Section 8, the satisfaction of the conditions set forth in Section 5(f), and the last sentence of this Section 5(e)(iii), the lump sum cash payment under Section 5(b), clause (iv) shall be made once the Company’s board of directors has determined and approved the payouts, if any, under the Company’s annual incentive compensation plan for the applicable year and at the same time as payouts are made to other executive officers of the Company who are actively employed by the Company at the time. In any case, the lump sum cash payment under Section 5(b), clause (iv) 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(b), clause (iv) 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.

2.1 C apitalized Terms . All capitalized terms in this Amendment, to the extent not otherwise defined herein, shall have the meaning assigned to them in the Employment Agreement.

2.2 Continuing Effectiveness . Except as modified by this Amendment, the Employment Agreement shall remain in full force and effect and neither party by virtue of entering into this Amendment is waiving any rights it has under the Employment Agreement, and once this Amendment is executed by the parties hereto, all references in the Employment Agreement to “the Agreement” or “this Agreement,” as applicable, shall refer to the Employment Agreement as modified by this Amendment.

2.3 Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one instrument.

[ Remainder of Page Intentionally Left Blank; Signature Page Follows ]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

	Autobytel Inc.
	By:	/s/ Glenn E. Fuller
		Glenn E. Fuller, Executive Vice President, Chief Legal and Administrative Officer and Secretary

	Employee
	/s/ Jeffrey H. Coats
	Jeffrey H. Coats

[ Signature Page to Amendment No. 2 to Second Amended and Restated Employment Agreement ]

Exhibit 10.4

Autobytel Inc.

Human Resources Department

18872 MacArthur Blvd, Suite 200

Irvine, CA 92612-1400

Voice: (949) 225-4572

TO:	Kimberly Boren
FROM:	Glenn Fuller – EVP, Chief Legal and Administrative Officer and Secretary
CC:	Jeff Coats – President and CEO

RE: Promotion and Amendment of Offer Letter

It is a pleasure to inform you of your promotion to EVP, Chief Financial Officer at Autobytel Inc. In this position you will continue to report to Jeff Coats, President and CEO. Below is a summary of your promotion and your offer letter dated as of March 9, 2010 is hereby amended as follows.

New Position:	EVP, Chief Financial Officer
Semi-monthly Rate:	$12,500 ($300,000 Approximate Annually)
Effective Date:	September 21, 2016

Opportunity:

You shall be entitled to participate in annual incentive compensation plans, if any, that may be adopted by the Company from time to time and that are afforded generally to persons employed by the Company at your position level (subject to the terms and conditions of any such annual incentive compensation plans). Should such an annual incentive compensation plan be adopted for any annual period, your target annual incentive compensation opportunity will be as established by the Company for each annual period, which may be up to 60% of your annualized rate (i.e., 24 X Semi-monthly Rate) based on achievement of objectives specified by the Company each annual incentive compensation period (which may include Company-wide performance objectives, divisional or department performance objectives and/or individual performance objectives, allocated between and among such performance objectives as the Company may determine). Specific annual incentive compensation plan details, target incentive compensation opportunity and objectives for each annual compensation plan period will be established each year. Awards under annual incentive plans may be prorated for a variety of factors, including time employed by the Company during the year, adjustments in base compensation or target award percentage changes during the year, and unpaid leaves. You understand that the Company’s annual incentive compensation plans, their structure and components, specific target incentive compensation opportunities and objectives, the achievement of objectives and the determination of actual awards and payouts, if any, thereunder are subject to the sole discretion of the Company’s Board of Directors, or a committee thereof.

Your promotion is conditioned upon your acceptance of the foregoing modifications to the terms and conditions of your employment with Autobytel Inc. If you accept these modifications to the terms of your employment, please acknowledge your acceptance in the space provided below.

As a reminder, your 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 of your employment by the Company and cannot be modified except by a written amendment to this promotion letter that is executed by both parties (which in the case of the Company, must be executed by the Company’s Chief Legal Officer) and that expressly negates the “at-will” employment status.

Please feel free to call if you have any questions.

By:	/s/ Glenn E. Fuller
Glenn E. Fuller EVP, Chief Legal and Administrative Officer and Secretary

Accepted and Agreed:

/s/ Kimberly S. Boren