EXHIBIT 10.2
AUTO-BY-TEL CORPORATION
18872 MACARTHUR BLVD.
IRVINE, CALIFORNIA 92612-1400
as of October 24, 1996
Mark W. Lorimer
20 Ridgewood Terrace
Maplewood, New Jersey 07040
Dear Mark:
You have asked us to confirm the agreement we made on October 23, 1996
concerning your employment by Auto-By-Tel Corporation ("ABT"). We agreed,
subject only to the commencement of your employment, to the terms set forth in
this letter. You will be employed for 42 months (subject to extension as we may
agree) as General Counsel of ABT with the responsibilities customarily
associated with such position and your position will not diminish during your
employment. You will be paid an annual base salary of no less than $200,000
(plus any bonuses awarded by the board in their discretion). You will be granted
10-year stock options, under ABT's 1996 Stock Incentive Plan, to purchase
300,000 shares of ABT common stock at an exercise price of $5.00 per share (the
"Options") -- which will become exercisable as follows: 100,000 on the six month
anniversary of this letter, 66,666 at the end of each of the two successive
twelve-month periods thereafter and 66,668 at the end of the following twelve
month period (resulting in full exercisability at the end of 42 months). The
Options will not preclude you from consideration for other equity grants in the
discretion of the board. You will be entitled to participation in all of the
employee benefit plans, programs and policies in effect while employed which are
generally available to senior executives of ABT, including health insurance
coverage for you (and availability of health insurance coverage for your
immediate family through the plan at your cost) (none of which shall be
diminished during your employment). ABT will promptly reimburse you for all
business expenses you incur while employed.
If you are terminated due to willful fraud in connection with your job, or
the deliberate or intentional repeated failure to substantially perform your
duties that materially harms ABT, or are convicted for, or plead nolo contendere
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to, a charge of commission of a felony (such items are called "Cause"), you will
receive no severance and all non-exercisable Options will be forfeit. If you
are terminated without Cause, or if you die, or become permanently disabled, all
of the Options shall automatically be exercisable, and you will receive one
year's base salary (payable monthly) as "Severance Pay," but your salary at any
new job shall reduce, or eliminate, ABT's obligation to pay further Severance
Pay. If you quit after ABT breaches this Agreement, or there is an agreement
made to sell or merge or consolidate ABT with another entity which changes the
ownership of ABT by more than 50%, or ABT insists you relocate, it will be
treated as though you were terminated without Cause. You may make and manage
passive personal business investments of your choice and serve on the board of
directors of other companies and serve in any capacity with any civic,
educational or charitable organization, or any trade association, without
seeking or obtaining approval by the board, so long as such activities don't
prevent
you from doing your job. ABT will indemnify and hold you harmless as much as it
can for any good faith act you take in performance of your job.
ABT will pay your reasonable out-of-pocket moving expenses, including the
cost of no more than three househunting trips with your wife and kids to Orange
County, moving your belongings and selves and the brokerage commission you incur
in selling your house. ABT will also make up any tax consequences you suffer,
at the time they become due, because of the costs paid by ABT pursuant to this
paragraph. Until you move to California, which you promise to do as soon as you
reasonably can, we will work out the arrangements for your working out of your
house, and/or working for a couple of weeks in the office here, or commuting;
and your expenses will be reimbursed.
I have received all of the approvals I need to bind ABT to this letter
agreement, so, if you believe this correctly describes our agreement, please
confirm by signing below.
Very truly yours,
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Peter Ellis, President and CEO
Auto-By-Tel Corporation
Confirmed:
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Mark W. Lorimer
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