EXHIBIT 10.37
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This Amendment No. 1 to Employment Agreement ("Amendment") is made and
entered into, at Irvine, California, as of the 30th day of January, 2002, by and
between AUTOBYTEL INC. (FORMERLY XXXXXXXXX.XXX INC.), a corporation duly
organized under the laws of the State of Delaware (the "Company"), with offices
at 00000 XxxXxxxxx Xxxxxxxxx. Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx, 00000-0000, and
XXXX XXXXXXX (hereinafter referred to as the "Employee"), who resides at 00
Xxxxx Xxxx #X, Xxxxxx xxx Xxx, Xxxxxxxxxx 00000.
RECITALS
WHEREAS: The Company currently employs and desires to continue to employ
the Employee as Vice President and Corporate Controller of the Company.
WHEREAS: The Employee is currently employed and desires to continue to
be so employed by the Company.
WHEREAS: The Company and Employee desire to amend that certain
Employment Agreement, dated as of August 30, 1999, between the Company and
Employee (the "Employment Agreement") as set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and with reference to the above recitals, the parties hereby
agree as follows:
ARTICLE 1
TERM OF EMPLOYMENT
1. Section 1.1 of the Employment Agreement is hereby amended in its
entirety as set forth below:
"Section 1.1 The Company hereby employs the Employee as Vice President
and Corporate Controller of the Company and the Employee hereby accepts such
employment by the Company for a period of one (1) year (the "Term") commencing
from January 30, 2002 (the "Commencement Date") and expiring on the first
anniversary of the Commencement Date (the "Termination Date"), which term shall
automatically renew for one year periods unless either party notifies the other
of its election not to renew at least sixty (60) days prior to the Termination
Date or any applicable anniversary of the Termination Date."
ARTICLE 2
COMPENSATION
2.1 Section 4.1 of the Employment Agreement is herby amended in its
entirety as set forth below:
"Section 4.1 As compensation for the services to be rendered by the
Employee pursuant to this Agreement, the Company hereby agrees to pay the
Employee a base salary equal to at least One Hundred Seventy Five Thousand
Dollars ($175,000.00) per year during the Term of this Agreement, which rate may
be increased (but not reduced) in such amounts as the Board deems appropriate.
The base salary shall be paid in substantially equal bimonthly installments, in
accordance with the normal payroll practices of the Company."
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2.2 Section 4.3 of the Employment Agreement is hereby amended in its
entirety as set forth below:
"Section 4.3 The Company shall provide the Employee with the opportunity
to earn an annual bonus for each fiscal year of the Company, occurring in whole
or in part during the Term. The annual bonus payable to the Employee shall be in
such amount and based on such criteria for the award as may be established by
the Board from time to time."
2.3 Section 4.4 of the Employment Agreement is hereby amended in its
entirety as set forth below:
"Section 4.4 The Employee shall participate in all other short term and
long term bonus or incentive plans or arrangements in which other employees of
the Company are eligible to participate from time to time. The Company may
provide for shareholder approval of any performance based compensation and may
provide for the compensation committee to establish any applicable performance
goals and determine whether such performance goals have been met."
ARTICLE 3
TERMINATION OF EMPLOYMENT
3. Article 7 is hereby amended in its entirety to read as set forth
below:
"ARTICLE 7 TERMINATION OF EMPLOYMENT
7.1 TERMINATION FOR CAUSE. The Company may, during the Term, without
notice to the Employee, terminate this Agreement and discharge the Employee for
Cause, whereupon the respective rights and obligations of the parties hereunder
shall terminate; provided, however, that the Company shall immediately pay the
Employee any amount due and owing pursuant to Articles 4, 5 and 6, prorated to
the date of termination. As used herein, the term "for Cause" shall refer to the
termination of the Employee's employment as a result of any one or more of the
following: (i) any conviction of, or pleading of nolo contendre by, the Employee
for any crime or felony; (ii) any willful misconduct of the Employee which has a
materially injurious effect on the business or reputation of the Company; (iii)
the gross dishonesty of the Employee which has a materially injurious effect on
the business or reputation of the Company; or (iv) failure to consistently
discharge his duties under this Agreement which failure continues for thirty
(30) days following written notice from the Company detailing the area or areas
of such failure. For purposes of this Section 7.1, 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
his action or omission was in the best interest of the Company. The Employee
shall have the opportunity to cure any such acts or omissions (other than item
(i) above) within fifteen (15) days of the Employee's receipt of a notice from
the Company finding that, in the good faith opinion of the Company, the Employee
is guilty of acts or omissions constituting "Cause".
7.2 TERMINATION WITHOUT CAUSE. Anything in this Agreement to the
contrary notwithstanding, the Company shall have the right, at any time in its
sole and subjective discretion, to terminate this Agreement without Cause upon
not less than thirty (30) days prior written notice to the Employee. The term
"termination without Cause" shall mean the termination of the Employee's
employment for any reason other than those expressly set forth in Section 7.1,
or no reason at all, and shall also mean the Employee's decision to terminate
this Agreement by reason of any act, decision or omission by the Company or the
Board that: (A) materially adversely modifies, reduces, changes, or restricts
the Employee's salary, bonus opportunities, options or other compensation
benefits or perquisites, or the Employee's authority, functions, services,
duties,
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rights, and privileges as, or commensurate with the Employee's position as, Vice
President and Corporate Controller of the Company as described in Section 2.1
hereof or; (B) relocates the Employee without his consent from the Company's
offices located at 00000 XxxXxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx, 00000-0000 to
any other location in excess of fifty (50) miles beyond the geographic limits of
Irvine, California; (C) deprives the Employee of his titles and positions of
Vice President and Corporate Controller of the Company, it being understood that
this applies only to reduction in title and position; or (D) involves or results
in any failure by the Company to comply with any provision of this Agreement,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Employee (each a "Good Reason"). In the event the Company
or the Employee shall exercise the termination right granted pursuant to this
Section 7.2, the Company shall, within thirty (30) days of notice of termination
to or from the Employee (as the case may be), pay to the Employee in a single
lump-sum payment the base salary that would have been received by the Employee
if he had remained employed by the Company for an additional six months;
provided, however, that for purposes of calculating the payment pursuant to this
sentence, the Employee's base salary per year shall be the highest rate in
effect during the Term. The Company also shall continue to provide to the
Employee and his beneficiaries, at its sole cost, the insurance coverages
provided by the Company as of the date of termination to the extent he would
have received such insurance coverages had he remained employed by the Company
for an additional six months.
7.3 TERMINATION FOR DEATH OR DISABILITY. The Employee's employment shall
terminate automatically upon the Employee's death during the Term. If the
Company determines in good faith that the Disability (as defined below) of the
Employee has occurred during the Term, it shall give written notice to the
Employee of its intention to terminate his employment. In such event, the
Employee's employment with the Company shall terminate effective on the 30th day
after receipt of such notice by the Employee, provided that, within the thirty
(30) days after such receipt, the Employee shall not have returned to full-time
performance of his duties.
For purposes of this Agreement, "Disability" shall mean the inability of
the Employee to perform his 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.
7.4 TERMINATION WITHOUT GOOD REASON. Anything in this Agreement to the
contrary notwithstanding, the Employee shall have the right, at any time in his
sole and subjective discretion, to terminate this Agreement without Good Reason
upon not less than thirty (30) days prior written notice to the Company. In the
event the Employee voluntarily terminates his employment hereunder other than
for Good Reason, the respective rights and obligations of the parties hereunder
shall terminate; provided, however, that the Company shall immediately pay the
Employee any amount due and owing pursuant to Articles 4, 5 and 6, prorated to
the date of termination.
7.5 OPTIONS.
(a) As of the date of the Employee's termination for Cause, any unvested or
unexercised portion of any option shall terminate immediately and shall
be of no further force or effect.
(b) As of the date of the Employee's termination by the Company without
Cause, other than for Disability or death, or by the Employee for Good
Reason, any unvested portion of any option shall become immediately and
fully vested.
(c) As of the date of any voluntary termination of employment with the
Company by the Employee,
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including due to death or Disability but excluding for Good Reason, or
termination of employment by the Company for Disability or death, any
unvested portion of any option shall terminate immediately and shall be
of no further force or effect."
ARTICLE 4
NO MITIGATION OR OFFSET; INSURANCE
4. Article 9 of the Employment Agreement is hereby amended by adding the
following sections 9.13 and 9.14:
"Section 9.13 MITIGATION. The Employee shall not be required to seek other
employment or to reduce any severance benefit payable to him under Article 7
hereof, and no severance benefit shall be reduced on account of any compensation
received by the Employee from other employment. The Company's obligation to pay
severance benefits under this Agreement shall not be reduced by any amount owed
by the Employee to the Company.
Section 9.14 INDEMNIFICATION; INSURANCE.
(a) If the Employee is a party or is threatened to be made a party
to any threatened, pending or completed claim, action, suit or proceeding, or
appeal therefrom, whether civil, criminal, administrative, investigative or
otherwise, because he is or was an officer of the Company, or at the express
request of the Company is or was serving, for purposes reasonably understood by
him to be for the Company, as a director, officer, partner, employee, agent or
trustee (or in any other capacity of an association, corporation, general or
limited partnership, joint venture, trust or other entity), the Company shall
indemnify the Employee against any reasonable expenses (including attorneys'
fees and disbursements), and any judgments, fines and amounts paid in settlement
incurred by him in connection with such claim, action, suit, proceeding or
appeal therefrom to the extent such expenses, judgments, fines and amounts paid
in settlement were not advanced by the Company on his behalf pursuant to
subsection (b) below, to the fullest extent permitted under Delaware law. The
Company shall provide Employee with D&O insurance coverage as the Company may
maintain from time to time.
(b) Provided that the Employee shall first have agreed to in writing
to repay such amounts advanced if it is determined by an arbitrator or court of
competent jurisdiction that the Employee was not entitled to indemnification,
upon the written request of the Employee specifying the amount of a requested
advance and the intended use thereof, the Company shall indemnify Employee for
his expenses (including attorneys' fees and disbursements), judgments, fines and
amounts paid in settlement incurred by him in connection with such claim,
action, suit, proceeding or appeal whether civil, criminal, administrative,
investigative or otherwise, in advance of the final disposition of any such
claim, action, suit, proceeding or appeal therefrom to the fullest extent
permitted under Delaware law."
ARTICLE 5
MISCELLANEOUS
5. The terms and conditions of this Amendment shall inure to the benefit
of and be binding upon the successors and assigns of the parties hereto.
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6. This Amendment shall be construed and enforced in accordance with the
laws of the State of California, without giving effect to the principles of
conflict of laws thereof, except that the indemnification provisions of Section
9.14 of the Employment Agreement, as amended hereby, shall be governed by
Delaware law without regard to conflict of laws principles.
7. 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.
8. Except as amended hereby, the Employment Agreement shall remain in
full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AUTOBYTEL INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Chief Executive Officer and President
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
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