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EXHIBIT 10.3


 



AUTOBYTEL INC. AMENDED AND RESTATED 2014 EQUITY INCENTIVE
PLAN


 


Employee
Stock Option Award Agreement


 


(Non-Qualified
Stock Option)


(VARGAS)


 


This
Employee Stock Option Award Agreement (“Agreement”) is entered into
effective as of the Grant Date set forth on the signature page to
this Agreement (“Grant
Date”), by and between Autobytel Inc., a Delaware
corporation (“Company”), and the person set
forth as Participant on the signature page hereto
(“Participant”).


 


This
Agreement and the stock options granted hereby are subject to the
provisions of the Autobytel Inc. Amended and Restated 2014 Equity
Incentive Plan (“Plan”) and that certain Second
Amended and Restated Stockholder Agreement dated as of October 19,
2016, by and between Company and the parties set forth on the
signature pages thereto (“Stockholder Agreement”). In the
event of a conflict between the provisions of the Plan and this
Agreement, the Plan shall control. Capitalized terms used but not
defined in this Agreement shall have the meanings assigned to such
terms in the Plan. Participant hereby agrees to comply with the
terms and conditions of the Stockholder Agreement as they relate to
the stock options granted hereby.


 


1.            Grant
of Options. Company hereby grants to Participant
non-qualified stock options (“Options”) to purchase the number
of shares of common stock of Company, par value $0.001 per share,
set forth on the signature page to this Agreement
(“Shares”), at
the exercise price per Share set forth on the signature page to
this Agreement (“Exercise
Price”). The Options are not intended to qualify as
incentive stock options under Section 422 of the Code.


 


2.            Term
of Options. Unless the Options terminate earlier pursuant to
the provisions of this Agreement or the Plan, the Options shall
expire on the seventh (7th) anniversary of the
Grant Date (“Option
Expiration Date”).


 


3.            Vesting.
The Options shall become vested and exercisable in accordance with
the following vesting schedule: (i) thirty-three and one-third
percent (33 1/3%) shall vest and become exercisable on the first
anniversary after the Grant Date; and (ii) one thirty-sixth
(1/36th) shall vest and become exercisable on each successive
monthly anniversary thereafter for the following twenty-four (24)
months ending on the third anniversary of such vesting commencement
date. No installments of the Options shall vest after
Participant’s termination of employment for any
reason.


 


4.            Exercise
of Options.


 


   
          (a)    
      Manner of Exercise. To the
extent vested, the Options may be exercised, in whole or in part,
by delivering written notice to Company in accordance with Section
6(f) of this Agreement in such form as Company may require from
time to time, or at the direction of Company, through the
procedures established with Company’s third party option
administration service. Such notice shall specify the number of
Shares, subject to the Options that are being exercised and shall
be accompanied by full payment of the Exercise Price of such Shares
in a manner permitted under the terms of Section 5.5 of the Plan
(including same-day sales through a broker), except that payment in
whole or in part in a manner set forth in clauses (ii), (iii) or
(iv) of Section 5.5(b) of the Plan may only be made with the
consent of the Committee. The Options may be exercised only in
multiples of whole Shares, and no fractional Shares shall be
issued.


 



 

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   (b)
          Issuance of Shares. Upon
exercise of the Options and payment of the Exercise Price for the
Shares as to which the Options are exercised and satisfaction of
all applicable tax withholding requirements, if any, the Company
shall issue to Participant the applicable number of Shares in the
form of fully paid and nonassessable Shares.


 


   (c)    
     Withholding. No Shares will be
issued on exercise of the Options unless and until Participant pays
to Company, or makes satisfactory arrangements with Company for
payment of, any federal, state, local or foreign taxes required by
law to be withheld in respect of the exercise of the Options.
Participant hereby agrees that, if applicable, Company may withhold
from Participant’s wages or other remuneration the applicable
taxes. At the discretion of Company, the applicable taxes may be
withheld in kind from the Shares otherwise deliverable to
Participant on exercise of the Options, up to Participant’s
minimum required withholding rate or such other rate determined by
the Committee that will not trigger a negative accounting
impact.


 


5.           Termination
of Options.


 


(a)           Termination
Upon Expiration of Option Term. The Options shall terminate
and expire in their entirety on the Option Expiration Date. In no
event may Participant exercise the Options after the Option
Expiration Date, even if the application of another provision of
this Section 5 may result in an extension of the exercise period
for the Options beyond the Option Expiration Date.


 


(b)           Termination
of Employment.


 


(i)           Termination
of Employment Other Than Due to Death, Disability or
Cause.


 


(1)           Participant
may exercise the vested portion of the Options for a period of
ninety (90) days (but in no event later than the Option Expiration
Date) following any termination of Participant’s employment
with Company, either by Participant or Company, other than in the
event of a termination of Participant’s employment by Company
for Cause (as defined below), voluntary termination by Participant
without Good Reason (as defined below) or by reason of
Participant’s death or Disability (as defined below). In the
event the termination of Participant’s employment is by
Company without Cause or by Participant for Good Reason, any
unvested portion of the Options shall become immediately and fully
vested as of the date of such termination.


 


(2)           In
the event of a voluntary termination of employment with the Company
by Participant without Good Reason, (i) unvested Options as of the
date of termination shall immediately terminate in their entirety
and shall thereafter not be exercisable to any extent whatsoever;
and (ii) Participant may exercise any portion of the Options that
are vested as of the date of termination for a period of ninety
(90) days (but in no event later than the Option Expiration Date)
following the date of termination.


 


(3)           For
purposes of this
Agreement, the terms “Cause” and “Good Reason” shall have the meanings ascribed
to in the Appendix to this Agreement. To the extent Participant is
not entitled to exercise the Options at the date of termination of
Service, or if Participant does not exercise the Options within the
time specified in the Plan or this Agreement for post-termination
of employment exercises of the Options, the Options shall
terminate.


 


 (ii)           Termination
of Employment for Cause. Upon the termination of
Participant’s employment by Company for Cause, unless the
Options have earlier terminated, the Options (whether vested or
not) shall immediately terminate in their entirety and shall
thereafter not be exercisable to any extent whatsoever; provided
that Company, in its discretion, may, by written notice to
Participant given as of the date of termination, authorize
Participant to exercise any vested portion of the Options for a
period of up to thirty (30) days following Participant’s
termination of employment for Cause, provided that in no event may
Participant exercise the Options beyond the Option Expiration
Date.


 



 

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(iii)           Termination
of Participant’s Employment By Reason of Participant’s
Death. In the event Participant’s employment is
terminated by reason of Participant’s death, the Options, to
the extent vested as of the date of termination, may be exercised
at any time within twelve (12) months following the date of
termination (but in no event later than the Option Expiration Date)
by Participant’s executor or personal representative or the
person to whom the Options shall have been transferred by will or
the laws of descent and distribution, but only to the extent
Participant could exercise the Options at the date of
termination.


 


(iv)           Termination
of Participant’s Employment By Reason of Participant’s
Disability. In the event that Participant ceases to be an
Employee by reason of Participant’s Disability, unless the
Options have earlier terminated, Participant (or
Participant’s attorney-in-fact, conservator or other
representative on behalf of Participant) may, but only within
twelve (12) months from the date of such termination of employment
(and in no event later than the Option Expiration Date), exercise
the Options to the extent Participant was otherwise entitled to
exercise the Options at the date of such termination of employment.
For purposes of this Agreement, “Disability” shall mean
Participant’s becoming “permanently and totally
disabled” within the meaning of Section 22(e)(3) of the Code
or as otherwise determined by the Committee in its discretion. The
Committee may require such proof of Disability as the Committee in
its sole and absolute discretion deems appropriate, and the
Committee’s determination as to whether Participant has
incurred a Disability shall be final and binding on all parties
concerned.


 


(c)           Change
in Control. In the event of a Change in Control, the effect
of the Change in Control on the Options shall be determined by the
applicable provisions of the Plan (including, without limitation,
Article 11 of the Plan), provided that (i) to the extent the
Options are assumed or substituted by the successor company in
connection with the Change in Control (or the Options are continued
by Company if it is the ultimate parent entity after the Change in
Control), the Options will vest and become fully exercisable in
accordance with clause (i) of Section 11.2(a) of the Plan if within
twenty-four (24) months following the date of the Change in Control
Participant’s employment is terminated by Company or a
Subsidiary (or the successor company or a subsidiary or parent
thereof) without Cause or by Participant for Good Reason, and any
vested Options (either vested prior to the Change in Control or
accelerated by reason of this Section 5(c)) may be exercised for a
period of twenty-four (24) months after the date of such
termination of employment (but in no event later than the Option
Expiration Date); and (ii) any portion of the Options which vests
and becomes exercisable pursuant to Section 11.2(b) of the Plan as
a result of such Change in Control will (1) vest and become
exercisable on the day prior to the date of the Change in Control
if Participant is then employed by Company or a Subsidiary and (2)
terminate on the date of the Change in Control. For purposes of
Section 11(a) of the Plan, the Options shall not be deemed assumed
or substituted by a successor company (or continued by Company if
it is the ultimate parent entity after the Change in Control) if
the Options are not assumed, substituted or continued with equity
securities of the successor company or Company, as applicable, that
are publicly-traded and listed on an exchange in the United States
and that have voting, dividend and other rights, preferences and
privileges substantially equivalent to the Shares. If the Options
are not deemed assumed, substituted or continued for purposes of
Section 11.2(a) of the Plan, the Options shall be deemed not
assumed, substituted or continued and governed by Section 11.2(b)
of the Plan. Notwithstanding the foregoing, if on the date of the
Change in Control the Fair Market Value of one Share is less than
the Exercise Price per Share, then the Options shall terminate as
of the date of the Change in Control except as otherwise determined
by the Committee.


 


(d)           Extension
of Post-Termination Exercise Period. Notwithstanding any
provisions of this Section 5 to the contrary, if following
termination of employment or service the exercise of the Options
or, if in conjunction with the exercise of the Options, the sale of
the Shares acquired on exercise of the Options, during the
post-termination of service time period set forth in the paragraph
of this Section 5 applicable to the reason for termination of
service would, in the determination of the Company, violate any
applicable federal or state securities laws, rules, regulations or
orders (or any Company policy related thereto), including its
securities trading policy), the running of the applicable period to
exercise the Options shall be tolled for the number of days during
the period that the exercise of the Options or sale of the Shares
acquired on exercise would in the Company’s determination
constitute such a violation; provided, however, that in no event
shall the exercisability of the Options be extended beyond the
Option Expiration Date.


 



 

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(e)           Other
Governing Agreements or Plans. To the extent not prohibited
by the Plan, the provisions of this Section 5 regarding the
acceleration of vesting of Options and the extension of the
exercise period for Options following a Change in Control or a
termination of Participant’s employment with Company shall be
superseded and governed by the provisions, if any, of a written
employment or severance agreement between Participant and Company
or a severance plan of Company covering Participant, including a
change in control severance agreement or plan, to the extent such a
provision (i) is specifically applicable to option awards or grants
made to Participant and (ii) provides for the acceleration of
Options vesting or for a longer extension period for the exercise
of the Options in the case of a Change in Control or a particular
event of termination of Participant’s employment with Company
(e.g., an event of termination governed by Section 5(b)(i)) to this
Agreement than is provided in the provision of this Section 5
applicable to a Change in Control or to the same event of
employment termination; provided,
however, that in no event shall the exercisability of the
Options be extended beyond the Option Expiration Date.


 


(f)           Forfeiture
upon Engaging in Detrimental Activities.  If, at any
time within the twelve (12) months after (i) Participant exercises
any portion of the Options; or (ii) the effective date of any
termination of Participant’s employment by Company or by
Participant for any reason, Participant engages in, or is
determined by the Committee in its sole discretion to have engaged
in, any (i) material breach of any non-competition,
non-solicitation, non-disclosure or settlement or release covenant
or agreement with Company or any Subsidiary; (ii) activities during
the course of Participant’s employment with Company or any
Subsidiary constituting fraud, embezzlement, theft or dishonesty;
or (iii) activity that is otherwise in conflict with, or adverse or
detrimental to the interests of Company or any Subsidiary, then (x)
the Options shall terminate effective as of the date on which
Participant engaged in or engages in that activity or conduct,
unless terminated sooner pursuant to the provisions of this
Agreement, and (y) the amount of any gain realized by Participant
from exercising all or a portion of the Options at any time
following the date that Participant engaged in any such activity or
conduct, as determined as of the time of exercise, shall be
forfeited by Participant and shall be paid by Participant to
Company, and recoverable by Company, within sixty (60) days
following such termination date of the Options.  For purposes
of the foregoing, the following will be deemed to be activities in
conflict with or adverse or detrimental to the interests of Company
or any Subsidiary: (i) Participant’s conviction of, or
pleading guilty or nolo contendere to any misdemeanor involving
moral turpitude or any felony, the underlying events of which
related to Participant’s employment with Company; (ii)
knowingly engaged or aided in any act or transaction by Company or
a Subsidiary that results in the imposition of criminal, civil or
administrative penalties against Company or any Subsidiary; or
(iii) misconduct during the course of Participant’s
employment by Company or any Subsidiary that results in an
accounting restatement by Company due to material noncompliance
with any financial reporting requirement under applicable
securities laws, whether such restatement occurs during or after
Participant’s employment by Company or any
Subsidiary.


 


(g)           Reservation
of Committee Discretion to Accelerate Option Vesting and Extend
Option Exercise Window. The Committee reserves the right, in
its sole and absolute discretion, to accelerate the vesting of the
Options and to extend the exercise window for Options that have
vested (either in accordance with the terms of this Agreement or by
discretionary acceleration by the Committee) under circumstances
not otherwise covered by the foregoing provisions of this Section
5; provided that in no event may the Committee extend the exercise
window for Options beyond the Option Expiration Date. The Committee
is under no obligation to exercise any such discretion and may or
may not exercise such discretion on a case-by-case
basis.


 


(h)           
Reversion of Expired,
Cancelled and Forfeited Options to Plan. Any Options that do
not vest or that are cancelled, terminated or expire unexercised
are forfeited and revert to the Plan and shall again be available
for Awards under the Plan.


 


6.           Stock
Legend. The Options and the
Shares shall be subject to and bear the legends set forth below
together with (i) any other legends required by the securities laws
of any state or other jurisdiction to the extent such laws are
applicable to the Options or the Shares; and (ii) such other
legends and restrictions as are applicable to the common stock of
Company generally. Further, in order to ensure the required legends
are borne on the Options and the Shares, the Participant is
required to hold all Options and Shares in an account with
Company’s equity plan administrator or transfer agent of
record, as applicable.


 



 

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“THE
SECURITIES EVIDENCED HEREBY ARE SUBJECT TO A SECOND AMENDED AND
RESTATED STOCKHOLDER AGREEMENT DATED AS OF OCTOBER 19, 2016, AND AS
FURTHER AMENDED FROM TIME TO TIME (A COPY OF WHICH MAY BE OBTAINED
UPON WRITTEN REQUEST FROM THE COMPANY), AND BY ACCEPTING ANY
INTEREST IN SUCH SECURITIES THE PERSON ACCEPTING SUCH INTEREST
SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF THAT SECOND AMENDED AND RESTATED STOCKHOLDER
AGREEMENT, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER, REPURCHASE
RIGHTS, STANDSTILL PROVISIONS AND VOTING ARRANGEMENTS, INCLUDING AN
IRREVOCABLE PROXY, SET FORTH THEREIN.”


7.    
        Miscellaneous.


(a)   
       No Rights of Stockholder.
Participant shall not have any of the rights of a stockholder with
respect to the Shares subject to this Agreement until such Shares
have been issued upon the due exercise of the Options.


(b)
          Nontransferability of Options.
The Options shall be nontransferable or assignable except to the
extent expressly provided in the Plan. Notwithstanding the
foregoing, Participant may by delivering written notice to Company
in a form provided by or otherwise satisfactory to Company,
designate a third party who, in the event of Participant’s
death, shall thereafter be entitled to exercise the Options.
This Agreement is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder.


(c)   
       Severability. If any provision
of this Agreement shall be held unlawful or otherwise invalid or
unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (i) be deemed limited to the
extent that such court of competent jurisdiction deems it lawful,
valid and/or enforceable and as so limited shall remain in full
force and effect, and (ii) not affect any other provision of this
Agreement or part thereof, each of which shall remain in full force
and effect.


 


(d)   
       Governing Law, Jurisdiction and
Venue. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware other than its
conflict of laws principles. The parties agree that in the event
that any suit or proceeding is brought in connection with this
Agreement, such suit or proceeding shall be brought in the state or
federal courts located in New Castle County, Delaware, and the
parties shall submit to the exclusive jurisdiction of such courts
and waive any and all jurisdictional, venue and inconvenient forum
objections to such courts.


 


(e)   
       Headings. The headings in this
Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.


 


(f)   
       Notices. All notices required
or permitted under this Agreement shall be in writing and shall be
sufficiently made or given if hand delivered or mailed by
registered or certified mail, postage prepaid. Notice by mail shall
be deemed delivered on the date on which it is postmarked.
Notices
to Company should be addressed to:


Autobytel
Inc.


18872
MacArthur Blvd., Suite 200


Irvine,
CA 92612-1400


Attention: Chief
Legal Officer


 


Notice
to Participant should be addressed to Participant at
Participant’s address as it appears on Company’s
records.


 



 

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Company
or Participant may by writing to the other party designate a
different address for notices. If the receiving party consents in
advance, notice may be transmitted and received via telecopy or via
such other electronic transmission mechanism as may be available to
the parties. Such notices shall be deemed delivered when
received.


 


(g)           Agreement
Not an Employment Contract. This Agreement is not an
employment or service contract, and nothing in this Agreement or in
the granting of the Options shall be deemed to create in any way
whatsoever any obligation on Participant’s part to continue
as an Employee of Company or any Subsidiary or on the part of
Company or any Subsidiary to continue Participant’s
employment or service as an Employee.


 


(h)           Counterparts.
This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original Agreement but all of which, taken
together, shall constitute one and the same Agreement binding on
the parties hereto. The signature of any party hereto to any
counterpart hereof shall be deemed a signature to, and may be
appended to, any other counterpart hereof.


 


(i)           Administration.
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration,
interpretation and application of the Plan and this Agreement as
are consistent with the Plan and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations
made by the Committee (including determinations as to the
calculation, satisfaction or achievement of performance-based
vesting requirements, if any, to which the Options are subject)
shall be final and binding upon Participant, Company and all other
interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement.


 


(j)          
Policies and
Procedures. Participant agrees that Company may impose, and
Participant agrees to be bound by, Company policies and procedures
with respect to the ownership, timing and manner of resales of
shares of Company's securities, including without limitation, (i)
restrictions on insider trading; (ii) restrictions designed to
delay and/or coordinate the timing and manner of sales by officers,
directors and affiliates of the Company following a public offering
of the Company's securities; (iii) stock ownership or holding
requirements applicable to officers and/or directors of Company;
and (iv) the required use of a specified brokerage firm for such
resales.


 


(k)           Entire
Agreement; Modification. This Agreement and the Plan contain
the entire agreement between the parties with respect to the
subject matter contained herein and may not be modified except as
provided in the Plan or in a written document signed by each of the
parties hereto and may be rescinded only by a written agreement
signed by both parties.

 






Remainder of Page Intentionally Left Blank; Signature Page
Follows


 



 

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IN
WITNESS WHEREOF, the parties have executed this Agreement effective
as of the Grant Date.


 


 


                                  
Grant
Date:                
        September 21, 2016
     



                                  
Total
Options Awarded:      65,000
    



                                  
Exercise Price Per
Share:    $16.82
          


 



 




	

“Company”      

	

Autobytel Inc., a
Delaware corporation  




	
	
 

	
	
 





	
	
 

	By:
	

/s/
Glenn E. Fuller


	
 

	
 

	
 

	


Glenn E. Fuller


	
 

	
 

	
 

	


Executive Vice President, Chief Legal


	
 

	
 

	
 

	


and Administrative Officer and


	
 

	
 

	
 

	


Secretary







“Participant”


 


	
	
 

	
By:

	

/s/
José Vargas


	
 

	
 

	
 

	

José
Vargas







 


 



 

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 Appendix


 


The
following definitions shall be in effect under the
Agreement:


 


(a)           “Cause”
shall mean the termination of the Participant’s service by
Company as a result of any one or more of the
following:


 


(i)
     any conviction of, or pleading of nolo
contendere by, the Participant for any felony;


 


(ii)
    any willful misconduct of the Participant which has a
materially injurious effect on the business or reputation of the
Company;


 


(iii)
   the gross dishonesty of the Participant in any way
that adversely affects the Company; or


 


(iv)   
a material failure to consistently discharge Participant’s
service and duties to the Company which failure continues for
thirty (30) days following written notice from the Company
detailing the area or areas of such failure, other than such
failure resulting from Participant’s Disability.


 


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


 


(b)           “Good
Reason” means
any act, decision or omission by the Company that: (A) materially
modifies, reduces, changes, or restricts the Participant’s
authority, duties, or responsibilities commensurate with the
Participant’s Position but excluding the effects of any
reductions in force other than the Participant’s own
termination; (B) constitutes a failure or refusal by any Company
Successor to assume this Agreement; or (C) involves or results in
any material 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 written notice
thereof given by the Participant. Notwithstanding the foregoing, no
event shall constitute “Good Reason” unless (i) the
Participant 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 a
material breach to the reasonable satisfaction of the Participant
within thirty (30) days after Company’s receipt of such
written notice.


 


(c)           “Participant’s
Position” means
Participant’s position as the Chief Revenue
Officer.


 


(d)           “Successor
Company” means any successor to Company or its assets
by reason of any Change of Control.


 




 


 

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