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Exhibit 10.2
INDUCEMENT STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 30th day of January, 2007 (the
"Grant Date"), by and between Autobytel Inc. ("Autobytel" or the
"Company") and Monty Houdeshell ("Optionee").
RECITALS
WHEREAS , the Board has determined to offer employment to
Optionee pursuant to an employment agreement between the Company
and the Optionee, dated as of January 30, 2007 (the
"Employment Agreement").
WHEREAS , as an inducement to accept such employment
offer, the Board has determined to offer Optionee an option (the
"Option") to purchase 300,000 shares of Common Stock (the shares
subject to this award being referred to below as the "Shares")
under the terms and conditions set forth herein.
WHEREAS , the exercise price for the Shares subject to
this Option shall be equal to the Fair Market Value (as defined in
the Appendix hereto) of the underlying Shares on the Grant
Date.
WHEREAS , all capitalized terms in this Agreement, to the
extent not otherwise defined herein, shall have the meaning
assigned to them in the attached Appendix.
NOW THEREFORE , it is hereby agreed as follows:
1. Grant of Option . Autobytel hereby grants to
Optionee, as of the Grant Date, an Option to purchase up to 300,000
Shares at the Exercise Price per Share. The Shares shall be
purchasable from time to time in accordance with the Vesting
Schedule in Paragraph 3.
2. Option Term . The Option shall have a maximum
term of ten (10) years measured from the Grant Date and shall
accordingly expire at the close of business on the tenth
anniversary of the Grant Date, unless sooner terminated in
accordance with Paragraph 4 or 5.
3. Exercisability/Vesting . The right to exercise
the Option shall vest in the Optionee, and the Option shall become
exercisable in accordance with the Vesting Schedule set forth
herein. The Option shall remain exercisable to the extent vested
until the Expiration Date or the sooner termination of the Option
term under Paragraph 4 or 5. The right to exercise the Option shall
vest in the Optionee as follows:
(i) 100,000 of the Options shall vest on the first anniversary
of the Commencement Date (as defined in the Employment Agreement)
provided the Optionee is actively employed by the Company on such
anniversary date;
(ii) 6,250 of the Options shall vest on each monthly anniversary
of the Commencement Date over the period beginning on the
thirteenth (13th) monthly anniversary of the
Commencement Date and ending on the thirty-sixth
(36th) monthly anniversary of the Commencement Date; provided
the Optionee is actively employed by the Company on the respective
vesting dates; and
(iii) on the date the Company files with the Securities and
Exchange Commission under the Securities and Exchange Act of 1934,
as amended, its Annual Report on Form 10-K (each a "Form 10-K") for
each of the fiscal years ending on December 31,
2007, December 31, 2008 and December 31, 2009,
16,667, 16,667 and 16,666 of the Options shall vest, respectively,
but only if (I) the Optionee is actively employed by the
Company on the respective vesting dates, and (II) the Company and
the Optionee have satisfied reasonable performance criteria
established as described below in this clause (iii).
Notwithstanding the foregoing, if any such filing of a Form 10-K by
the Company is delayed beyond the expiration of the Term (as
defined in the Employment Agreement), the Options shall be subject
to vesting (whether or not the Executive is still employed by the
Company) if and when such Form 10-K is filed provided that the
performance criteria established by the Board or such committee in
respect of such respective fiscal year are met. The performance
criteria shall include, among other factors, revenue and EBITDA
targets for the Company and shall be set by the Board or a
committee thereof in its sole discretion within 90 days of the
Board adopting the operating plan of the Company for such
respective year.
Vesting in the Shares may be accelerated pursuant to the
provisions of Paragraph 4 or 5 below. Unless otherwise specifically
provided herein, no Shares shall vest following the
Optionee’s cessation of Service.
4. Cessation of Service .
(a) Termination due to Death or Disability . As of the
date of the Optionee’s termination due to death or Disability
(as defined below), any unexercised portion of any Option shall be
exercisable (to the extent previously vested) from the date of such
termination of the Optionee’s Service until two
(2) years following such termination date, but in no event
later than ten (10) years following the Grant Date. As to
unvested Options at the date of the Optionee’s termination
due to death or Disability, all unvested performance-based Options
shall terminate and all time-based Options that have not yet vested
shall vest and shall be exercisable from the date of such
termination of the Optionee’s Service until ninety
(90) days following such termination date, but in no event
later than ten (10) years following the Grant Date. For
purposes hereof, "Disability" shall have the same meaning and be
determined in the same manner as set forth in the Employment
Agreement.
(b) Termination for Cause. As of the date of the
Optionee’s termination of Service for Cause (as defined
below), any unvested or unexercised portion of any Option shall
terminate immediately and shall be of no further force or effect.
For purposes hereof, "Cause" shall have the same meaning and be
determined in the same manner as set forth in the Employment
Agreement.
(c) Termination Without Cause or for Good Reason . As of
the date of the Optionee’s termination of Service by
Autobytel without Cause or by the Optionee for Good Reason (as
defined below), any unexercised portion of any
Option shall (to the extent previously vested) be exercisable from
such termination of the Optionee’s Service until the date
that is two (2) years following the termination date, but in
no event later than ten (10) years following the Grant Date.
As to unvested Options at the date of the Optionee’s
termination of Service by Autobytel without Cause or by Optionee
for Good Reason, all unvested performance-based Options shall
terminate and all time-based Options that have not yet vested shall
vest and shall be exercisable from the date of such termination of
the Optionee’s Service until ninety (90) days following
such termination date, but in no such event later than ten
(10) years following the Grant Date. The term "without Cause"
shall mean the termination of the Optionee’s Service for any
reason other than those expressly set forth in the definition "for
Cause" above, or no reason at all, or for Good Reason. For purposes
hereof, "Good Reason" shall have the same meaning and be determined
in the same manner as set forth in the Employment
Agreement.
(d) Termination Without Good Reason . As of the date of
any voluntary termination of Service with the Company by the
Optionee other than due to death or Disability, and other than for
Good Reason, any unvested portion of any Option shall terminate
immediately and shall be of no further force or effect. Any
previously vested but unexercised portion of any Option shall
remain exercisable from the date of such termination of employment
until the second anniversary of the termination date, but in no
event later than ten (10) years following the Grant Date.
(e) Termination upon Expiration of Employment Agreement .
As of the date of any termination of Optionee’s Service with
the Company at the time of, or subsequent to, the expiration of the
Employment Agreement by lapse of time and for no other reason, then
any previously vested but unexercised portion of any Option shall
remain exercisable from the date of such termination of employment
until the second anniversary of such termination date, but in no
event later than ten (10) years following the Grant Date.
5. Change in Control .
In the event of a Change of Control (as defined below) while the
Optionee is employed by the Company, any unvested installment of
any Option shall immediately vest and become exercisable from the
date of such Change of Control until the second anniversary of the
Change of Control, but in no event later than ten (10) years
following the Grant Date provided , however, that
notwithstanding the foregoing, any such stock options shall remain
exercisable beyond such dates so long as Executive is an employee
of the Company or any successor thereto or affiliate thereof, but
in no ev
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