Exhibit 10.3

SEPARATION AGREEMENT AND RELEASE

It is hereby agreed by and between you, James E. Riesenbach (for yourself, your
spouse, family, agents and attorneys) (jointly, “You”), and Autobytel Inc., its
predecessors, successors, affiliates, directors, officers, shareholders,
fiduciaries, insurers, employees and agents (jointly, the “Company”), as
follows:

1. You acknowledge that your employment with the Company ended effective
December 10, 2008, and that you will perform no further duties, functions or
services for the Company subsequent to that date.

2. You acknowledge and agree that you have received all vacation pay and other
compensation due you from the Company as a result of your employment with the
Company and your separation from employment, including, but not limited to, all
amounts required under your Employment Agreement with the Company dated March 1,
2006, as amended on December 10, 2008 (the “Employment Agreement”), other than
those amounts payable pursuant to Paragraph 3 below and those amounts, if any,
payable pursuant to Sections 3.5, 5.1, 5.2 and 5.3 or Article 7 of the
Employment Agreement if required by the terms of such sections or article. You
acknowledge and agree that the Company owes you no additional wages,
commissions, bonuses, vacation pay, severance pay, expenses, fees, or other
compensation or payments of any kind or nature, other than as provided in this
Agreement and those amounts, if any, payable pursuant to Sections 3.5, 5.1, 5.2
and 5.3 or Article 7 of the Employment Agreement if required by the terms of
such sections or article. All benefits for which you are eligible pursuant to
the Employment Agreement will remain in effect for the periods set forth
therein.

3. In exchange for your promises in this Agreement and the Employment Agreement,
including the release of claims set forth below, if you (A) sign and do not
revoke this Agreement and (B) you resign effective immediately from the Board of
Directors of the Company, the Company will pay you all cash severance payments
due to you under Section 6.2 of the Employment Agreement, minus legally required
state and federal payroll deductions, within three (3) business days of the date
all applicable revocation periods that you may have relating to this Separation
Agreement and Release expire without you revoking this Separation Agreement and
Release. All other payments due to you under Section 6.2 of the Employment
Agreement, minus legally required state and federal payroll deductions, shall be
paid to you in the time periods required by the Employment Agreement. You and
the Company have and will continue to take consistent positions in each party’s
reasonable tax reporting in respect of Section 409A of the Internal Revenue Code
of 1986 (the “Code”) as applied to payments to be made to you under the
Employment Agreement. You are still liable for all taxes and penalties arising
under Section 409A of the Code, if any, that may result from any payments or
benefits that you receive pursuant to the Employment Agreement. Accordingly, if
there is any liability for tax pursuant to Section 409A of the Code, it shall be
your sole responsibility and liability for all such taxes and penalties and you
agree to indemnify and hold the Company harmless from any liability the Company
may incur for not reporting or withholding taxes under Section 409A of the Code
or any similar state or local law in connection with the payments and benefits
under this Separation Agreement and Release or the Employment Agreement. In
connection with entering into the Employment Agreement you were represented by
independent counsel and tax advisors. The Company has not and is not now
advising you in respect of any tax applicable to payment due to you under the
Employment Agreement.

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4. You represent and warrant that you have returned to the Company any and all
documents, software, equipment (including, but not limited to, computers and
computer-related items), and all other materials or other things in your
possession, custody, or control which are the property of the Company,
including, but not limited to, Company identification, keys, and the like,
wherever such items may have been located; as well as all copies (in whatever
form thereof) of all materials relating to your employment, or obtained or
created in the course of your employment with the Company.

5. You hereby represent that, other than those materials you have returned to
the Company pursuant to Paragraph 4 of this Agreement, you have not copied or
caused to be copied, and have not printed-out or caused to be printed-out, any
software, computer disks, or other documents other than those documents
generally available to the public, or retained any other materials originating
with or belonging to the Company. You further represent that you have not
retained in your possession, custody or control, any software, documents or
other materials in machine or other readable form, which are the property of the
Company, originated with the Company, or were obtained or created in the course
of or relate to your employment with the Company.

6. You shall keep confidential, and shall not hereafter use or disclose to any
person, firm, corporation, governmental agency, or other entity, in whole or in
part, at any time in the future, any trade secret, proprietary information, or
confidential information of the Company, including, but not limited to,
information relating to trade secrets, processes, methods, pricing strategies,
customer lists, marketing plans, product introductions, advertising or
promotional programs, sales, financial results, financial records and reports,
regulatory matters and compliance, and other confidential matters, except as
required by law and as necessary for compliance purposes. These obligations are
in addition to the obligations set forth in Article 8 of the Employment
Agreement which shall remain binding on you.

7. You agree that you have not and will not at any time reveal to anyone,
including any former, present or future employee of the Company, the fact,
amount, or the terms of this Agreement, except to your immediate family, legal
counsel and financial advisor, or as required by law and as necessary for
compliance purposes. The Company may disclose the terms of this Agreement and
file this Agreement as an exhibit to its public filings if it is required to due
so under applicable law or as necessary for compliance purposes.

8. In consideration for the payment provided for in Paragraph 3, you
unconditionally release and forever discharge the Company, and the Company’s
current, former, and future controlling shareholders, subsidiaries, affiliates,
related companies, predecessor companies, divisions, directors, trustees,
officers, employees, agents, attorneys, successors, and assigns (and the
current, former, and future controlling shareholders, directors, trustees,
officers, employees, agents, and attorneys of such subsidiaries, affiliates,
related companies, predecessor companies, and divisions) (referred to
collectively as “Releasees”), from any and all known and unknown claims,
demands, actions, suits, causes of action, obligations, damages and liabilities
of whatever

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kind or nature and regardless of whether the knowledge thereof would have
materially affected your agreement to release the Company hereunder, that arise
out of or are related to (a) the Company’s failure to make any payments required
under the Employment Agreement (other than those amounts, if any, payable
pursuant to Sections 3.5, 5.1, 5.2 and 5.3 and Article 7 of the Employment
Agreement if required by the terms of such sections), and (b) those arising
under the Age Discrimination in Employment Act (“ADEA”). The Release will not
waive the Executive’s rights to indemnification under the Company’s certificate
of incorporation or by-laws or any written agreement between the Company and the
Executive relating to the Executive’s service on the Board of the Company.

With respect to the various rights and claims under the ADEA being waived by you
in this Agreement, you specifically acknowledge that you have read and
understand the provisions of paragraphs 12, 13, and 14 below before signing this
Agreement. This general release does not cover rights or claims under the ADEA
arising after you sign this Agreement.

9. You represent and warrant that you have not filed, and agree that you will
not file, or cause to be filed, any complaint, charge, claim or action involving
any claims you have released in the foregoing paragraph. This promise not to sue
does not apply to claims for breach of this Agreement. You agree and acknowledge
that if you break this promise not to sue (other than with respect to a claim
under the ADEA that you have released), then you will be liable for all
consequential damages, including the legal expenses and fees incurred by the
Company or any of the Releasees, in defending such a claim.

10. The Company hereby represents and warrants that concurrently with your
execution and delivery of this Agreement, the Company has paid to you any and
all amounts under the Employment Agreement that are required to be paid to you
by the Company as of the date hereof, excluding, without limitation, any amounts
required to be paid under this Agreement and those amounts, if any, payable
pursuant to Sections 3.5, 5.1, 5.2 and 5.3 or Article 7 of the Employment
Agreement if and to the extent required by the terms of such sections.

11. Excluded from this Agreement are any claims or rights that cannot be waived
by law, including the right to file a charge of discrimination with an
administrative agency. You agree, however, to waive your right to any monetary
recovery in connection with such a charge.

12. You are advised to consult with an attorney before you sign this Agreement.
You understand that you have twenty-one (21) days within which to decide whether
to sign this Agreement, although you may sign this Agreement at any time within
the twenty-one (21) day period. If you do sign it, you also understand that you
will have an additional 7 days after you sign to change your mind and revoke the
Agreement, in which case a written notice of revocation must be delivered to
Vice President Human Resources or comparable title, Autobytel Inc., 18872
MacArthur Blvd., Irvine, California 92612-1400, on or before the seventh
(7th) day after your execution of the Agreement. You understand that the
Agreement will not become effective until after that seven (7) day period has
passed.

13. You acknowledge that you are signing this Agreement knowingly and
voluntarily and intend to be bound legally by its terms.

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14. You hereby acknowledge that no promise or inducement has been offered to
you, except as expressly stated above and in the Employment Agreement, and you
are relying upon none. This Agreement and the Employment Agreement represent the
entire agreement between you and the Company with respect to the subject matter
hereof, and supersede any other written or oral understandings between the
parties pertaining to the subject matter hereof and may only be amended or
modified with the prior written consent of you and the Company.

15. You certify that you have not experienced a job-related illness or injury
for which you have not already filed a claim.

16. If any provision of this Agreement is held to be invalid, the remainder of
the Agreement, nevertheless, shall remain in full force and effect in all other
circumstances.

17. This Agreement does not constitute an admission that the Company or any
other Releasee has violated any law, rule, regulation, contractual right or any
other duty or obligation.

18. This Agreement is made and entered into in the State of California and shall
in all respects be interpreted, enforced, and governed under the law of that
state, without reference to conflict of law provisions thereof. The language of
all parts in this Agreement shall be construed as a whole, according to fair
meaning, and not strictly for or against any party.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES THE RELEASE OF CERTAIN CLAIMS.

 

    Dated: December 11, 2008     By:   /s/ James E. Riesenbach         Name:
James E. Riesenbach Dated: December 11, 2008     AUTOBYTEL INC.     By:   /s/
Glenn E. Fuller         Name: Glenn E. Fuller         Title: Senior Vice
President and Chief Legal Officer

[Signature Page to Separation Agreement and Release (Riesenbach)]