Document:

magnum_8k-ex1003.htm

 

Exhibit 10.3

 

STOCK APPRECIATION RIGHT AGREEMENT

 

MAGNUM HUNTER RESOURCES CORPORATION

STOCK INCENTIVE PLAN

 

THIS STOCK APPRECIATION RIGHT AGREEMENT (this “Agreement”) is made by and between MAGNUM HUNTER RESOURCES CORPORATION, a Delaware corporation (the “Company”), and [__________] (“Grantee”) as of [__________], pursuant to the Magnum Hunter Resources Corporation Amended and Restated Stock Incentive Plan (the “Plan”), which is incorporated by reference herein in its entirety.

 

RECITALS

 

The Committee, acting on behalf of the Company, wishes to grant Grantee a Stock Appreciation Right on [__________] shares of the Company’s $0.01 par value common stock (“Common Stock”) on the terms and subject to the conditions set forth below and in the Plan.

 

Capitalized terms used in this Agreement and not otherwise defined in this Agreement will have the meaning assigned to them in the Plan.

 

AGREEMENT

 

It is hereby agreed as follows:

 

1.           Grant of Stock Appreciation Right.  Effective [__________] (the “Grant Date”), the Company hereby grants to Grantee a Stock Appreciation Right on [__________] shares of Common Stock (the “Shares”) at a base price per share of $[____] upon the terms and conditions set forth in this Agreement and the Plan.

 

2.           Term.  Unless terminated sooner, the Stock Appreciation Right will expire if and to the extent it is not exercised five years from the date of this Agreement.

 

3.           Vesting.  The Stock Appreciation Right will partially vest upon the later of the successful achievement of each of the hereinafter defined events (“Vesting Event”) and Grantee’s continuous employment through the vesting dates described in accordance with the vesting schedule below, subject to termination or forfeiture in accordance with the terms of the Plan:

 

 

  

  

  

 

[INSERT PERFORMANCE-BASED VESTING CONDITIONS AS PERMITTED BY SECTION 2.19 OF THE PLAN]

[INSERT TIME-BASED VESTING CONDITIONS]

 

4.           Method of Exercise.  The Stock Appreciation Right may be exercised in whole or in part by Grantee by giving written notice to the Company of the election and the number of whole Shares subject to the exercise.  Grantee must also pay the amount, if any, deemed by the Committee sufficient to enable the Company to satisfy any withholding or employment-tax obligations attributable to the exercise.  A partial exercise of the Stock Appreciation Right may not be for less than 100 Shares.  Any required amount must be paid in cash or by certified or bank cashier’s check payable to the Company or pursuant to any other method permitted by the Committee in accordance with the Plan.

 

5.           Settlement of Stock Appreciation Right.  This Stock Appreciation Right will be settled by the issuance of shares of Common Stock (or, in the sole discretion of the Committee, in cash or a combination of cash and shares of Common Stock) in accordance with Section 10.3 of the Plan.  The settlement of a Stock Appreciation Right will be subject to satisfaction of applicable withholding tax (the “Required Withholding”).  By execution of this Agreement, Grantee authorizes the Company, to the extent permissible, to withhold shares of Common Stock (or cash if the Committee elects to settle any Stock Appreciation Rights with such consideration) with respect to the settlement of any Stock Appreciation Rights as may be necessary to satisfy Grantee’s Required Withholding, if any.  Notwithstanding the foregoing, the Committee may require that Grantee satisfy Grantee’s Required Withholding, if any, by paying cash or by any other means the Committee, in its sole discretion, considers reasonable.  The obligations of the Company under this Agreement are conditioned on the satisfaction of the Required Withholding, if any.

 

6.           Effect of Termination of Employment or Other Service.  If Grantee’s employment and other service with the Company and all of its Subsidiaries terminate, the effect of the termination on Grantee’s Stock Appreciation Rights under this Agreement will be as set forth in Section 11 of the Plan.

 

7.           Restrictions on Transfer.  The Stock Appreciation Right will not be transferable, either voluntarily or by operation of law, except as provided in Section 14.3 of the Plan.

 

8.           Rights as a Stockholder.  Grantee will not be entitled to the privileges of stock ownership as to any Shares not actually issued and delivered to Grantee.  No Shares may be purchased upon the exercise of the Stock Appreciation Right unless and until, in the opinion of the Company’s counsel, any then-applicable requirements of the Plan, this Agreement, any laws, any governmental or regulatory agencies having jurisdiction, and of any exchanges upon which the stock of the Company may be listed have been fully complied with.

 

9.           No Right to Employment.  Nothing contained in this Agreement obligates the Company to employ or have another relationship with Grantee for any period or interfere in any way with the right of the Company to reduce Grantee’s compensation or to terminate the employment of or relationship with Grantee at any time.

 

  

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10.           Miscellaneous.

 

10.1           Binding Effect, Successors.  This Agreement shall bind and inure to the benefit of the successors, assigns, transferees, agents, personal representatives, heirs and legatees of the respective parties.

 

10.2           Further Acts.  Each party will perform any further acts and execute and deliver any documents which may be necessary to carry out the provisions of this Agreement and to comply with applicable law.

 

10.3           Amendment.  This Agreement may be amended at any time by the written agreement of the Company and Grantee.

 

10.4           Choice of Law and Severability.  This Agreement shall be construed, enforced and governed by the laws of the State of Delaware.  The invalidity of any provision of this Agreement will not affect any other provision of this Agreement, which will remain in full force and effect.

 

10.5           Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission if the notice or communication is delivered prior to 3:30 p.m. (Houston time) on any day except Saturday, Sunday and any day that is a federal legal holiday in the United States (“Business Day”) via facsimile at the facsimile number set forth below or via electronic mail at the address set forth below, (b) the next Business Day after the date of transmission if the notice or communication is delivered on a day that is not a Business Day or later than 3:30 p.m. (Houston time) on any Business Day via facsimile at the facsimile number set forth below or via electronic mail at the address set forth below, (c) the 2nd Business Day following the date transmitted if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom the notice is required to be given.  All notices and demands to Grantee or the Company may be given to them at the following addresses:

 

	 	
If to Grantee:

	
[___________]

__________________________

__________________________

Fax:  ______________________

Electronic Mail: ______________

  

  

 

	 	
If to Company:

	
Magnum Hunter Resources Corporation

777 Post Oak Blvd.

Suite 910

Houston, Texas 77056

Attention: Paul M. Johnston, Senior Vice President and General Counsel

Fax: (832) 369-6992

Electronic Mail: pjohnston@magnumhunterresources.com

 

  

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The parties may designate in writing from time to time such other place or places that notices and demands may be given.

 

10.6           Entire Agreement.  This Agreement, as governed by and interpreted in accordance with the Plan, constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof, this Agreement supersedes all prior and contemporaneous agreements and understandings of the parties, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as set forth or referred to herein.  No supplement, modification or waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby.  No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

10.7           Grant Subject to Terms of Plan and this Agreement.  Grantee acknowledges and agrees that the grant of the Stock Appreciation Right is made pursuant to and governed by the terms of the Plan and this Agreement.  Grantee, by execution of this Agreement, acknowledges having received a copy of the Plan.  The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan.  In the case of a conflict between the terms of the Plan and this Agreement, the terms of the Plan will control.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first set forth above.

 

 

	 	

“COMPANY”

 

MAGNUM HUNTER RESOURCES CORPORATION,

a Delaware corporation

 

By: _______________________________________

[__________], Chairman, Compensation and Nominating Committee

“GRANTEE”

 

 

__________________________________________

[__________]

 

 

 

 

 

 

 

 

 

 

5ex10_1.htm

Exhibit 10.1

 

 

 

STANDSTILL AND VOTING AGREEMENT

 

This Standstill and Voting Agreement (“Agreement”) is made and entered into on and as of November 30, 2010 (“Effective Date”), by and between Autobytel Inc., a Delaware corporation (“Company”), and the undersigned direct or beneficial holders of Common Stock (as hereinafter defined) of the Company (“Stockholders”).

 

Background Facts

 

Effective as of May 26, 2010, the Company has adopted a Tax Benefit Preservation Plan (“Plan”). The Board of Directors of the Company (“Board”) adopted the Plan to protect stockholder value by preserving important tax assets. The Company has generated substantial net operating loss carryovers and other tax attributes for United States federal income tax purposes (“Tax Benefits”) that can generally be used to offset future taxable income and therefore reduce federal income tax obligations. However, the Company’s ability to use the Tax Benefits will be adversely affected if there is an “ownership change” of the Company as defined under Section 382 of the Internal Revenue Code (“Section 382”). In general, an ownership change will occur if the Company’s “5% shareholders” (as defined under Section 382) collectively increase their ownership in the Company by more than 50% over a rolling three-year period. The Plan was adopted to reduce the likelihood that the Company’s use of its Tax Benefits could be substantially limited under Section 382. The Plan is intended to deter any “Person” (as defined in the Plan) from becoming an “Acquiring Person” (as defined in the Plan) and thereby jeopardizing the Company’s Tax Benefits. In general, an Acquiring Person is any Person, itself or together with all “Affiliates” (as defined in the Plan) of such Person, that becomes the “Beneficial Owner” (as defined in the Plan) of 4.90% or more of the Company’s outstanding “Common Stock” (as defined in the Plan). Under the Plan, the Board may, in its sole discretion, exempt any person from being deemed an Acquiring Person for purposes of the Plan if the Board determines that such person’s ownership of Common Stock will not be likely to directly or indirectly limit the availability of the Company’s Tax Benefits or is otherwise in the best interests of the Company.  The Board shall not have any obligation, implied or otherwise, to grant such an exemption.

On November 15, 2010, Artis Capital Management, LP (“Artis Capital”) filed a Form 13F with the Securities and Exchange Commission reporting, among other things, that as of September 30, 2010, various investment funds managed by Artis Capital (“Artis Funds”) held, in the aggregate, 2,496,825, shares of Common Stock in the Company, or approximately 5.5% of the Company’s outstanding Common Stock. The Company first became aware of this filing on November 16, 2010. Since September 30, 2010, the Artis Funds have continued to acquire shares of Common Stock. As of the Effective Date, the holdings of Common Stock by the Artis Funds are as set forth on the signature page hereto. As a result of such holdings, Artis Capital and its Affiliates, including the Artis Funds, Beneficially Own approximately 7% of the Company’s outstanding Common Stock as of the Effective Date and are deemed to be an Acquiring Person for purposes of the Plan.

  

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Artis has requested that the Board consider whether the Board would exercise its discretionary authority under the Plan to deem Artis and its Affiliates not to be an Acquiring Person because the acquisition of Beneficial Ownership of shares of Common Stock by Artis and its Affiliates will not be likely to directly or indirectly limit the availability to the Company of the Tax Benefits or otherwise is in the best interests of the Company (“Plan Exemption”). The Board has considered Artis’ request and is prepared to grant Artis and its Affiliates a Plan Exemption, subject to and in reliance upon the Stockholders entering into and remaining in compliance with the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

In consideration of the representations, warranties, covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows:

 

1. Definitions.

 

1.1 For purposes of this Agreement, the following terms shall have the meanings set forth in this Section 1.

 

1.1.1 The term "Associate" shall be as defined in the Plan.

 

1.1.2 “Beneficial Ownership” shall be as defined in the Plan.

 

1.1.3 “Company Acquisition Transaction” means (i) the commencement (within the meaning of Rule 14d-2 of the General Rules and Regulations under the Exchange Act) of a tender or exchange offer by a third party for at least 4.9% of the then outstanding capital stock of the Company or any direct or indirect Subsidiary of the Company, (ii) the commencement by a third party of a proxy solicitation with respect to the election of any directors of the Company or with respect to any transaction under clauses (iii) or (iv) of this Section 1.1.3, (iii) any sale, license, lease, exchange, transfer, disposition or acquisition of any portion of the business or assets of the Company or any direct or indirect Subsidiary of the Company (other than in the ordinary course of business), or (iv) any merger, consolidation, business combination, share exchange, reorganization, recapitalization, restructuring, liquidation, dissolution or similar transaction or series of related transactions involving the Company or any direct or indirect Subsidiary of the Company.

 

1.1.4 “Exchange Act” means the Securities Exchange Act of 1934, as amended

 

1.1.5 “Group” shall have the meaning set forth in Section 13(d)(3) of the Exchange Act and Rule 13d-5 of the General Rules and Regulations under the Exchange Act.

 

1.1.6 The term “Shares” means all issued and outstanding shares of Common Stock that the Stockholders or any of their Affiliates or Associates are collectively deemed to Beneficially Own (as defined in the Plan). In the event of any change in the number of issued and outstanding shares of Common Stock by reason of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Shares),

 

  

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combination, reorganization, recapitalization or other like change, conversion or exchange of shares, or any other change in the corporate or capital structure of the Company, the term “Shares” shall be deemed to refer to and include the Shares as well as all such stock dividends and distributions and any shares of capital stock into which or for which any or all of the Shares may be changed or exchanged. The Stockholders agree that any shares of Common Stock that any of them or their Affiliates or Associates purchase or that any of them or their Affiliates or Associates are deemed to Beneficially Own after the Effective Date and before the termination of this Agreement pursuant to Section 6 shall be subject to the terms and conditions of this Agreement to the same extent as if they constituted Shares as of the Effective Date.  Whether any of the Stockholders or any of their Affiliates or Associates are deemed to Beneficially Own shares of Common Stock for purposes of this Section 1.1.2 shall be determined by the Board in its sole discretion in the context of the terms of the Plan (as such may be amended from time to time).

 

1.1.7  “Subsidiary” of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.

 

1.1.8 The term “Voting Shares” shall mean any Shares which, as of any particular date after the date of this Agreement and before the termination of this Agreement pursuant to Section 6, the Stockholders and any of their Affiliates or Associates are deemed to Beneficially Own that are greater than the amount of Shares equal to 4.90% of the outstanding shares of Common Stock on such date.  For example, if the Company has outstanding 45,515,671 shares of Common Stock as of a particular date and the Stockholders (together with their Affiliates and Associates) are collectively deemed to Beneficially Own 3,226,595 shares as of that date, then the Voting Shares would equal 996,327 shares (3,226,595 – (45,515,671 x 4.90%) =996,327) as of that date.

 

2. Voting of Voting Shares.

 

2.1 Agreement to Vote Shares.

 

2.1.1 Each Stockholder hereby covenants and agrees, jointly and severally, that during the period commencing on the date hereof and continuing until this Agreement terminates pursuant to Section 6, at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the stockholders of the Company, and in any action by written consent of the stockholders of the Company, the Stockholder shall (a) appear at the meeting or otherwise cause any and all Voting Shares to be counted as present thereat for purposes of establishing a quorum, and (b) vote (or cause to be voted) any and all Voting Shares in accordance with the recommendations of, or instructions provided by, the Board.  Each Stockholder hereby further agrees not to enter into any proxy, agreement or understanding with any person or entity the effect of which would be materially inconsistent with or violative of any provision contained in this Section 2.1.

 

2.1.2 The parties acknowledge that a Stockholder may grant a proxy or enter into an agreement or understanding with another Stockholder for the purposes of voting Voting Shares as long as (i) the Voting Shares that are the subject of any such proxy, agreement or understanding are voted in compliance with the provisions of this Section 2.1 and 2.2; (ii) any

 

  

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such proxy, agreement or understanding will not have the effect of superseding or revoking the Proxy granted by the Stockholders under Section 2.2 and shall be subject and subordinate to the exercise of such Proxy pursuant to Section 2.2; and (iii) the granting of such proxy or entering into such an agreement or understanding would not result in any Stockholder being a “5% shareholder” of the Company for purposes of Section 382.

 

2.2 Proxy. Concurrently with the execution of this Agreement, each Stockholder agrees to deliver to the Company a proxy in the form attached hereto as Exhibit A (“Proxy”), which shall be irrevocable to the fullest extent permissible by law, with respect to the Voting Shares, subject to the other terms of this Agreement.  The Proxyholders (as defined in the Proxy) shall be entitled to exercise the rights granted to them in the Proxy in order to vote the Voting Shares in the event and to the extent that the Stockholders fail to vote the Voting Shares in accordance with Section 2.1. Each Stockholder represents, covenants and agrees that, except for (i) the Proxy granted pursuant to the foregoing provisions of this Section 2.2; (ii) any proxy granted by the Stockholder to another Stockholder in compliance with Section 2.1.2; (iii) any proxy or other voting agreement or understanding granted or entered into by the Stockholder to or with the Company's Board, the Company or any officer thereof; (iii) any proxy or other voting agreement or understanding granted or entered into by the Stockholder with the approval of the Board; or (iv) as contemplated by this Agreement: (a) Stockholder shall not, during the period commencing on the date hereof and continuing until this Agreement terminates pursuant to Section 6, grant any proxy or power of attorney, or deposit any Voting Shares into a voting trust or enter into a voting agreement or other voting arrangement, with respect to the voting of the Voting Shares (each a “Voting Proxy”), and (b) Stockholder has not granted, entered into or otherwise created any Voting Proxy which is currently (or which will hereafter become) effective, and if any Voting Proxy has been created, such Voting Proxy is hereby revoked.

 

	
3.  

	
Standstill.

 

3.1 Standstill Provisions. Unless and until this Agreement is terminated pursuant to Section 6, none of the Persons comprising the Stockholders will, in any manner, directly or indirectly (except (i) pursuant to a negotiated transaction approved by the Board; or (ii) as may otherwise be approved by the Board), and Artis Capital will cause the Artis Funds to not:

 

(a) make, effect, initiate, cause or participate in (i) any acquisition of Beneficial Ownership of any securities of the Company or any securities of any Subsidiary or other Affiliate or Associate of the Company (except such transfers between Stockholders in compliance with Section 3.2), (ii) any Company Acquisition Transaction, or (iii) any “solicitation” of “proxies” (as those terms are defined in Rule 14a-1 of the General Rules and Regulations under the Exchange Act) or consents with respect to any securities of the Company; the parties acknowledge that (1) a Stockholder shall not be deemed to make, effect, initiate, cause or participate in any acquisition of Beneficial Ownership under clause (i) of this Subsection 3.1(a) solely by reason of engaging in the sale of Shares in open market transactions in compliance with Section 3.3(a); (2) a Stockholder shall not be deemed to make, effect, initiate, cause or participate in any Company Acquisition Transaction under clause (ii) of this Subsection 3.1(a) or any solicitation of proxies under clause (iii) of this Subsection 3.1(a) solely by reason of a Stockholder voting its Voting Shares in compliance with Section 2.1.1; and (3) a Stockholder shall not be deemed to make, effect, initiate, cause or participate in any solicitation of proxies

 

  

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under clause (iii) of this Subsection 3.1(a) solely by reason of any solicitation of a proxy, agreement or understanding from another Stockholder regarding the voting of the Voting Shares in compliance with Sections 2,1,1 and  2.1.2;

 

(b) nominate or seek to nominate any person to the Board or otherwise act, alone or in concert with others, to seek to control or influence the management, Board or policies of the Company;

 

(c) take any action which might force the Company to make a public announcement regarding any of the types of matters set forth in subsection (a) of this Section 3.1;

 

(d) request or propose that the Company (or its directors, officers, employees or agents), directly or indirectly, amend or waive any provision of this Section 3.1, including this subsection 3.1(d);

 

(e) agree or offer to take, or encourage or propose (publicly or otherwise) the taking of, any action referred to in subsections (a), (b), (c) or (d) of this Section 3.1;

 

(f) assist, induce or encourage any other Person to take any action referred to in subsections (a), (b), (c) or (d) of this Section 3.1; or

 

(g) enter into any discussions or arrangements with any third party with respect to the taking of any action referred to in subsections (a), (b), (c) or (d) of this Section 3.1.

 

Notwithstanding the foregoing provisions of this Section 3.1, the Stockholders as a group may acquire Beneficial Ownership of additional shares of Common Stock (“Additional Shares”) as long as (i) the Beneficial Ownership of the Stockholders as a group does not exceed 9.9% of the Company’s outstanding Common Stock at the time of the acquisition of Beneficial Ownership of the Additional Shares; (ii) the Stockholders have complied with and are in compliance with all of the provisions of this Agreement at all times prior to and as of the acquisition of any Additional Shares; and (iii) the acquisition of Additional Shares would not result in any one Stockholder, its Affiliates or any investors in the Artis Funds or the Stockholders, their Affiliates or an investors in the Artis Funds, as a group being a “5% shareholder” of the Company for purposes of Section 382.

Notwithstanding the provisions of Section 3.1(a)(ii), in the event any Person other than a Stockholder or any Affiliate or Associate of any Stockholder shall have commenced any tender offer constituting a Company Acquisition Transaction independent of any action of or participation by any Stockholder or any Affiliate or Associate of any Stockholder, a Stockholder shall not be deemed to participate in such tender offer under clause (ii) of Subsection 3.1(a) by tendering the Stockholder’s Shares in such tender offer as long as (i) no Stockholder nor any Affiliate or Associate of any Stockholder has otherwise engaged in any actions prohibited by Section 3.1 and (ii) no Stockholder nor any Affiliate or Associate of any Stockholder is at such time otherwise in breach of this Agreement.

  

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Notwithstanding the provisions of Sections 3.1(a) and 3.1(b), a Stockholder shall not be deemed to be in breach of Section 3.1 solely by reason of a Stockholder voting its non-Voting Shares (or soliciting a proxy, agreement or understanding from another Stockholder regarding the voting of its non-Voting Shares) as long as (i) no Stockholder nor any Affiliate or Associate of any Stockholder has otherwise engaged in any actions prohibited by Section 3.1 and (ii) no Stockholder nor any Affiliate or Associate of any Stockholder is at such time otherwise in breach of this Agreement.

 

3.2 Section 382 Compliance. Unless and until this Agreement is terminated pursuant to Section 6, no transfers of shares of Common Stock between and among Stockholders shall be permitted if, as a result of any such transfer, any Stockholder shall become the Beneficial Owner of Shares in an amount that would result in such Stockholder being a “5% shareholder” of the Company for purposes of Section 382. Unless and until this Agreement is terminated pursuant to Section 6, no Stockholder will permit any investor in an Artis Fund to acquire interests in any other Artis Fund if as a result of such acquisition such investor would become a “5% shareholder” of the Company for purposes of Section 382.

 

3.3 Sales of Common Stock. Unless and until this Agreement is terminated pursuant to Section 6, no Stockholder will sell or otherwise transfer any Beneficial Ownership in any shares of Common Stock to any Person not a party to this Agreement except:

 

(a) in open market transactions on the NASDAQ Global Stock Market or on such principal stock exchange as the Common Stock is then listed for trading; or if the Common Stock is not listed on any stock exchange at the time, then in transactions effected through  trading on an inter-dealer quotation system if the Common Stock is then quoted on such a system, and if not, then through trading on over-the-counter bulletin boards or “pink sheets”; or

 

(b) in private transactions and only if any such private transaction is not to any Person or Group who the Stockholder reasonably believes after due inquiry Beneficially Owns or as a result of such transaction would Beneficially Own more than 4.9% of the then outstanding Common Stock.

 

3.4 Grant of Plan Exemption. Subject to and in reliance upon the representations, warranties and obligations of the Stockholder under this Agreement, the Board has granted the Stockholders a Plan Exemption. As long as the Stockholders remain in full compliance with this Agreement, the Company shall maintain the Plan Exemption in effect.

 

4.  Representations and Warranties of the Stockholders.  Each Stockholder hereby makes the following representations and warranties, severally and not jointly (except in the case of Section 4.4, Section 4.5 and Section 4.6, which representations and warranties are made jointly and severally by all of the Stockholders):

 

4.1 Authority; Validity.  The Stockholder has all requisite capacity, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, including, with respect to Artis Capital, the power to direct and control the Artis Funds in order to comply with the terms of this Agreement.  The execution and delivery of this Agreement by the Stockholder and the consummation by the Stockholder of the transactions contemplated

 

  

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hereby have been duly and validly authorized by all necessary action on the part of the Stockholder.  This Agreement has been duly executed and delivered by the Stockholder.  If this Agreement is being executed in a representative or fiduciary capacity with respect to the Stockholder, the person signing this Agreement has full power and authority to enter into and perform this Agreement.

 

4.2 Non-Contravention.  The execution, delivery and performance of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, contravene, conflict with, or result in any violation of, breach of, or default by (with or without notice or lapse of time, or both) the Stockholder under, or give rise to a right of termination, cancellation or acceleration of any obligation under, or result in the creation of any encumbrance upon any of the properties or assets of the Stockholder under, any provision of (a) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to the Stockholder or to which the Stockholder is a party, or (b) any judgment, order, decree, statute, law, ordinance, injunction, rule or regulation applicable to the Stockholder or any of the Stockholder’s properties or assets, other than any such conflicts, violations, defaults, rights, or encumbrances that, individually or in the aggregate, would not impair the ability of the Stockholder to perform the Stockholder’s obligations hereunder or prevent, limit or restrict in any respect the consummation of any of the transactions contemplated hereby.

 

4.3 Litigation.  As of the date hereof, there is no action pending, or to the knowledge of the Stockholder, threatened with respect to the Stockholder's ownership of the Shares, nor is there any judgment, decree, injunction or order of any applicable Governmental Entity or arbitrator outstanding which would prevent the carrying out by the Stockholder of his, her or its obligations under this Agreement or any of the transactions contemplated hereby, declare unlawful the transactions contemplated hereby or cause such transactions to be rescinded.

 

4.4 Title.  As of the Effective Date, the Stockholders (together with their Affiliates and Associates) collectively are deemed to Beneficially Own the Shares set forth on the signature page hereto.  On and as of the date hereof, the Shares are free and clear of any encumbrances that, individually or in the aggregate, would impair the ability of the Stockholders to perform the Stockholders' obligations hereunder or prevent, limit or restrict in any respect the consummation of any of the transactions contemplated hereby.  As of the date hereof, the number of Shares set forth on the signature page hereto are the only Shares beneficially owned by the Stockholders (together with their Affiliates and Associates) or over which the Stockholders (together with their Affiliates and Associates) exercise sole or shared voting power. The Shares are held by the several Stockholders, as set forth on the signature page hereto, no Affiliate of Artis Capital Beneficially Owns any Common Stock other than a Stockholder, and no one Stockholder owns 4.9% or more of the outstanding Common Stock of the Company for purposes of Section 382.  No investor in any Artis Fund, on a look-through basis for purposes of Section 382, owns 4.9% or more of the outstanding Common Stock of the Company.  The Stockholders have in the past and will continue to disclaim ownership, of the Shares, as a "group" on any SEC filings made by Artis Capital or any of the Artis Funds or Stockholders.

 

4.5 Acquisition of Shares.  The Stockholders collectively represent that the Shares were not acquired for the purpose or with the intention of causing the Stockholders (whether collectively or individually) to become an Acquiring Person.  The Stockholders further

 

  

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collectively represent that their acquisition (together with their Affiliates and Associates) of the beneficial ownership of a sufficient number of Shares that could cause them (whether collectively or individually) to be an Acquiring Person, was done so inadvertently, including because the Stockholders were unaware that they collectively beneficially owned a sufficient number of Shares that would cause them to be an Acquiring Person, or the Stockholders were aware of the extent of their beneficial ownership of Shares but had no actual knowledge of the consequences of such beneficial ownership for purposes of the Plan.

 

4.6 Reliance. The Stockholders acknowledge that the Company is relying on the representations and covenants contained herein for purposes of granting the Plan Exemption under the Plan.

 

4.7 No Influence or Control.  As of the Effective Date, and at all times while this Agreement is in effect, the Stockholders collectively represent that the Stockholders (together with their Affiliates and Associates): (a) have acquired the Shares set forth on the signature page hereto in the ordinary course of their respective businesses, (b) have not acquired the Shares with the purpose or the effect of changing or influencing the control of the Company, and (c) have not acquired the Shares in connection with or as a participant in any transaction having such purpose or effect. As of the Effective Date, the Stockholders collectively represent that the Stockholders (together with their Affiliates and Associates) do not have any actual knowledge that any third party is currently engaged in undertaking a Company Acquisition Transaction. To the extent this Agreement permits any additional acquisition of shares of Common Stock by a Stockholder, the Stockholders further collectively represent that if they (or any of them individually) acquire any additional Shares on the Effective Date or at any time following the Effective Date until this Agreement terminates pursuant to Section 6, such acquisition of Shares (x) will not be made with the purpose or the effect of changing or influencing the control of the Company, and (y) will not be made in connection with (and none of the Stockholders will be a participant in) any transaction having such purpose or effect.

 

5. Representations and Warranties of the Company. The Company represents and warrants to each Stockholder that:

 

5.1 Authority; Validity.  The Company has all requisite capacity, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Company.  This Agreement has been duly executed and delivered by the Company.  If this Agreement is being executed in a representative or fiduciary capacity with respect to the Company, the person signing this Agreement has full power and authority to enter into and perform this Agreement.

 

5.2 Non-Contravention.  The execution, delivery and performance of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, (a) require the Company to obtain the consent or approval of any governmental entity, (b) require the consent or approval of any other person pursuant to any agreement, obligation or instrument binding on the Company or its properties and assets, (c) conflict with or violate any organizational document or law, rule, regulation, order, judgment or decree applicable to the Company or pursuant to which any of its assets are

 

  

8

  

bound, or (d) violate any other material agreement to which the Company or any of its subsidiaries is a party.

 

6.  Effectiveness; Termination; Survival.

 

6.1 Effectiveness.  This Agreement shall become effective upon its execution by each of the Stockholders and the Company.

 

6.2 Termination.  This Agreement, and the obligations of the Stockholders hereunder, including, without limitation, the Stockholders’ obligations under Section 2 and Section 3 shall terminate: (a) at any time by written consent of each of the Stockholders and the Company, (b) automatically upon the termination of the Plan whether by the Board or upon its own terms, unless a substitute or successor tax benefit preservation or other stockholder rights plan is implemented, in which case this Agreement shall not terminate, and (c) upon the delivery to the Company of a certification executed by an authorized officer of each of the Stockholders, certifying that the Stockholders (together with their Affiliates and Associates) collectively Beneficially Own less than 4.9% of the then-outstanding shares of Common Stock. The Plan Exemption granted by the Board shall continue for only so long as the Stockholders are in compliance with the terms of this Agreement.  If the Stockholders violate any provision herein, then the Board shall have the right, in its sole discretion, to revoke the Plan Exemption, upon which the Stockholders shall be an Acquiring Person as defined in and for purposes of the Plan if any Stockholder otherwise meets the requirements to be deemed an Acquiring Person at such time.

 

6.3 Survival.  Section 8, Section 9 and Section 10 shall survive the termination of this Agreement for any reason.

 

7.  Additional Stockholders.  If, during the period commencing on the Effective Date and continuing until this Agreement terminates pursuant to Section 6, any Affiliate or Associate of any of the Stockholders that is not already a party hereto becomes the Beneficial Owner of any shares of the Common Stock, or otherwise acquires the ability to exercise sole or shared voting power with respect to any shares of the Common Stock or obtain an economic interest in any shares of Common Stock, then Artis Capital or the Stockholder of which the person is an Affiliate or Associate shall cause the person to become a party to this Agreement by executing and delivering a counterpart signature page hereto and agree to be bound by and subject to the terms and conditions of this Agreement as a “Stockholder,” and the shares of Common Stock acquired by such person shall be deemed Shares for all purposes of this Agreement.

 

8.  Additional Agreements.  In the event that this Agreement is terminated in accordance with Section 6.2(c), and any of the Stockholders or any of their Affiliates or Associates (whether collectively or individually) are again deemed to Beneficially Own 4.9% or more of the outstanding shares of Common Stock, then, should the Board again exercise its discretionary authority under the Plan to grant the Stockholders another Plan Exemption (which the Board is not obligated to grant), the Stockholders (to the extent they Beneficially Own Shares at that time) agree (and agree to compel their Affiliates and Associates, as applicable) to enter into a standstill and voting agreement with the Company on substantially the same terms as set forth herein.  In addition, to the extent that the Plan is terminated (whether by the Board or upon its own terms) and replaced by a new tax benefit preservation or stockholder rights plan, then, at the request of

 

  

9

  

 the Company, the Stockholders agree (and agree to compel their Affiliates and Associates, as applicable) to enter into a new standstill and voting agreement on substantially the same terms as this Agreement should the Board again exercise its discretionary authority under the Plan to grant the Stockholders another Plan Exemption (which the Board is not obligated to grant).

 

9.  Further Assurances. Subject to the terms of this Agreement, from time to time, the Stockholders shall execute and deliver such additional documents and use commercially reasonable efforts to take, or cause to be taken, all such further actions, and to do or cause to be done, all things reasonably necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement.

 

10.  Miscellaneous.

 

10.1 Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

10.2 Binding Effect and Assignment.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by either of the parties without the prior written consent of the other parties.

 

10.3 Amendments and Modification.  This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto.

 

10.4 Specific Performance; Injunctive Relief.  The parties hereto acknowledge that parties will be irreparably harmed and that there will be no adequate remedy at law for a violation of any of the covenants or agreements of the other parties set forth herein.  Therefore, it is agreed that, in addition to any other remedies that may be available upon any such violation, each party shall have the right to enforce such covenants and agreements by specific performance, injunctive relief or by any other means available to such party at law or in equity and each party hereby irrevocably and unconditionally waives any objection to the other parties seeking so to enforce such covenants and agreements by specific performance, injunctive relief and other means.

 

10.5 Attorney’s Fees.  If any action, suit or other proceeding (whether at law, in equity or otherwise) is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover, in addition to any other remedy granted to such party therein, all such party’s costs and attorneys fees incurred in connection with the prosecution or defense of such action, suit or other proceeding.

 

10.6 Notices.  Unless otherwise specified herein, all notices or other communications required or permitted hereunder shall be in writing and shall be deemed effectively given, (a) on the date received, if personally delivered or sent by facsimile during normal business hours, (b) on the business day after being received if sent by facsimile other than during normal business hours, (c) one (1) business day after being sent by Federal Express, DHL or UPS or other

 

  

10

  

comparably reputable delivery service, or (d) five (5) business days after being sent by registered or certified mail.  All communications shall be sent to the address as set forth on the signature pages hereof or at such other address for a party as shall be specified by like notice.

 

10.7 Governing Law; Submission to Jurisdiction.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.  The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the United States of America located in the State of Delaware (or, if such courts lack jurisdiction, the appropriate Delaware state courts) for any actions, suits or proceedings arising out of or relating to this Agreement (and the parties agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, notice or document by U.S. certified mail shall be effective service of process for any action, suit or proceeding brought against the parties in any such court.  The parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement in the courts of the United States of America located in the State of Delaware (or, if such courts lack jurisdiction, the appropriate Delaware state courts) and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

10.8 Entire Agreement.  This Agreement and the Proxy granted hereunder constitute and contain the entire agreement and understanding of the parties with respect to the subject matter hereof and supersede any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting the subject matter hereof.

 

10.9 Counterparts.  This Agreement may be executed in counterparts and may be delivered by email, each of which counterparts shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

10.10 Captions.  The captions to sections of this Agreement have been inserted only for identification and reference purposes and shall not be used to construe or interpret this Agreement.

 

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

 

  

11

  

In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the Effective Date.

 

Autobytel Inc.

 

 

By:  /s/ Glenn E. Fuller            

	
  

	
Glenn E. Fuller, Executive Vice

	
  

	
President, Chief Legal and

	
  

	 	
Administrative Officer and Secretary

 

Notice Address:

Autobytel Inc.

18872 MacArthur Blvd.

Suite 200

Irvine, California 92612

Facsimile No.: 949.862.1323

Attn: Chief Legal Officer

 

 

        [Remainder of Page Intentionally Left Blank; Signature Pages, Addresses, and Beneficial Ownership For Stockholders Follows]

 

  

12

  

 Artis Capital Management, Inc.

By: /s/ Todd Moodey         

Date:   11-30-2010           

Name:   Todd Moodey

Its:         Chief Operating Officer

 Artis Capital Management, L.P.

By: /s/ Todd Moodey         

Date:   11-30-2010           

Name:   Todd Moodey

Its:         Chief Operating Officer

 

 

  /s/ Stuart L. Peterson                                                                             

 Stuart L. Peterson

 

 

Artis Partners, L.P.

Artis Partners 2X, L.P.

Artis Partners (Institutional), L.P.

Artis Partners 2X (Institutional), L.P.

Artis Aggressive Growth, L.P.

By:   Artis Capital Management, L.P.

   General Partner for Each Fund

By: /s/ Todd Moodey         

Date:   11-30-2010           

Name:  Todd Moodey

Its:        Chief Operating Officer

Artis Partners Ltd.

Artis Partners 2X Ltd.

Artis Aggressive Growth Master Fund, L.P.

By:    Artis Capital Management, L.P.

    Investment Adviser and Attorney-In-Fact for Each Fund

By: /s/ Todd Moodey         

Date:   11-30-2010           

Name:   Todd Moodey

Its:         Chief Operating Officer

Notice Addresses are on the following page.

  

13

  

Notice Address for Stockholders

	
Artis Partners, L.P.

Artis Partners 2X, L.P.

Artis Partners (Institutional), L.P.

Artis Partners 2X (Institutional), L.P.

Artis Aggressive Growth, L.P.

 

Notice Address

c/o Artis Capital Management, L.P.

One Market Plaza

Steuart Street Tower, Suite 2700

San Francisco, CA 94105

Tel:           415.344.6200

Fax:           415.977.1799

 

 

	
Artis Partners Ltd.

Artis Partners 2X Ltd.

 

Registered Address

c/o Goldman Sachs (Cayman) Trust, Ltd.

P.O. Box 896

Harbour Centre, 2nd Floor

North Church Street

George Town, Grand Cayman

Cayman Islands KY1-1108

 

Notice Address

c/o Artis Capital Management, L.P.

One Market Plaza

Steuart Street Tower, Suite 2700

San Francisco, CA 94105

Tel:           415.344.6200

Fax:           415.977.1799

 

	
Artis Aggressive Growth Master Fund, L.P.

 

Registered Address

c/o Walkers SPV Limited

P.O. Box 908GT

Walker House

Mary Street

George Town, Grand Cayman

Cayman Islands KY1-9002

 

Notice Address

c/o Artis Capital Management, L.P.

One Market Plaza

Steuart Street Tower, Suite 2700

San Francisco, CA 94105

Tel:           415.344.6200

Fax:           415.977.1799

	
Artis Capital Management, Inc.

Artis Capital Management, L.P.

Stuart L. Peterson

 

Notice Address

One Market Plaza

Steuart Street Tower, Suite 2700

San Francisco, CA 94105.

 

 

  

14

  

 

Number of Shares Beneficially Owned by the Stockholders:

 

	  	  	 
	
Artis Partners, L.P.

	
21,253

	 
	
Artis Partners (Institutional), L.P.

	
76,469

	 
	
Artis Partners Ltd.

	
209,970

	 
	
Artis Partners 2X, L.P.

	
91,548

	 
	
Artis Partners 2X (Institutional), L.P.

	
562,772

	 
	
Artis Partners 2X Ltd.

	
1,064,747

	 
	
Artis Aggressive Growth Partners LP

	
476,797

	 
	
Artis Aggressive Growth Master Fund LP

	
722,543

	 
	  	
3,225,135

	 
	  	  	 
	
Artis Capital Management, Inc.

	
3,225,135

	 
	
Artis Capital Management, L.P.

	
3,225,135

	 
	
Stuart L. Peterson

	
3,225,135

	 

 

  

15

  

Exhibit A

Irrevocable Proxy

The undersigned stockholder (“Stockholder”) of Autobytel Inc., a Delaware corporation (“Company”), hereby irrevocably appoints and constitutes Jeffrey H. Coats, Glenn E. Fuller and Curtis E. DeWalt (collectively, the “Proxyholders”), and each of them individually, the agents, attorneys-in-fact and proxies of the undersigned, with full power of substitution and resubstitution, to the full extent of the undersigned’s rights with respect to all Voting Shares (as defined in that certain Standstill and Voting Agreement dated as of November 30, 2010 (“Voting Agreement”))  beneficially owned by the Stockholder (including any Voting Shares acquired by Stockholder on or after the date hereof and before the date this proxy terminates) to vote the Voting Shares as follows:  the Proxyholders named above, or each of them individually, are empowered at any time before termination of this proxy to exercise all voting rights of the undersigned at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of stockholders of the Company, and in any action by written consent of the stockholders of the Company, in accordance with the recommendations of or instructions provided by the Board.

 

The proxy granted by Stockholder to the Proxyholders hereby is granted as of the date of this Irrevocable Proxy in order to secure the obligations of Stockholder set forth in Section 2.1 of the Voting Agreement and is irrevocable in accordance with subdivision (e) of Section 212 of the Delaware General Corporation Law.

 

This proxy will automatically terminate upon the termination of the Voting Agreement in accordance with its terms.

 

Except for any proxy granted by the Stockholder to the Board, the Company or any officer thereof, and except as contemplated by the Agreement, upon the execution hereof, all prior proxies given by the undersigned with respect to the Voting Shares are hereby revoked and no subsequent proxies will be given until such time as this proxy shall be terminated in accordance with its terms.  Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the undersigned.

 

This proxy is irrevocable (to the fullest extent permitted by law) and shall survive the insolvency, incapacity, death, liquidation or dissolution of the undersigned.

 

Dated:  November 30, 2010                                                                

  

16

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