8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 17, 2010

Autobytel Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-22239	33-0711569
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

18872 MacArthur Boulevard, Suite 200, Irvine, California	92612-1400
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (949) 225-4500

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Amendment to Employment Agreement for Mr. Jeffrey H. Coats, President and Chief Executive Officer

On December 17, 2010, the Compensation Committee of the Board of Directors of Autobytel Inc. (“Company”) recommended to the Company’s Board of Directors, and the Board of Directors approved, amendments to the Amended and Restated Employment Agreement dated as of April 3, 2009 (“Coats Employment Agreement”) for Mr. Jeffrey H. Coats, the Company’s Chief Executive Officer and President. The Board of Directors determined that it was in the Company’s best interests to extend Mr. Coats’ employment as the Company’s Chief Executive Officer and President until April 3, 2014, reflecting a two-year extension beyond the current April 3, 2012 expiration date.

In connection with the extension of Mr. Coats’ employment, the Board also evaluated the terms of the Coats Employment Agreement related to the payments due Mr. Coats upon a change in control of the Company. The Coats Employment Agreement previously provided that in the event of a termination of Mr. Coats’ employment in connection with, or within eighteen months following, a change in control of the Company that occured during the term of Mr. Coats’ employment, Mr. Coats would have been entitled to a lump sum payment equal to 1.3 times his annual base salary in effect immediately before the termination date of Mr. Coats’ employment – a payment equal to $546,000 based on Mr. Coats’ current annual base salary of $420,000. The Board considered Mr. Coats’ service to the Company and his achieve ments during the past three years and the consolidation taking place in the Company’s industry. In light of the foregoing, and after consultation by the Compensation Committee with the Committee’s compensation consultant, the Board approved increasing the foregoing payment to 1.72 times the sum of Mr. Coats’ annual base salary and his target annual incentive compensation, each as in effect immediately prior to the date of termination of Mr. Coats’ employment – a payment equal to $1,300,320 based on Mr. Coats’ current annual base salary and his target annual incentive compensation of $336,000 (80% of annual base salary). As set forth in the Coats Employment Agreement and accompanying Consulting Agreement dated April 3, 2009, Mr. Coats will also provide consulting services to the Company or its successor for a period of one year after the date of the change in control and will receive compensation equal to 50% of his base annual salary for those consulting services. The Comp any is not obligated to make additional payments to Mr. Coats to compensate for his additional tax obligations if Mr. Coats’ compensation is deemed to be excess parachute payments under the Internal Revenue Code.  Payment of the severance benefits under the Coats Employment Agreement is conditioned on Mr. Coats’ execution of a general release of claims in favor of the Company.

The Board also considered the status of Mr. Coats’ relocation allowances under the Coats Employment Agreement in light of the continuing depressed market for home sales in New Jersey (where Mr. Coats’ prior residence is located) and the reluctance on the part of the Company to purchase Mr. Coats’ prior residence.  In connection with his employment by the Company, Mr. Coats had relocated to Orange County, California.  The Coats Employment Agreement provided for the payment or reimbursement of reasonable and customary relocation expenses related to Mr. Coats’ relocation, including a miscellaneous moving expense allowance

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of up to $30,000 and a temporary housing allowance of $5,600 per month. The Board determined that effective January 1, 2011, Mr. Coats’ temporary housing allowance would be increased to $7,000 per month and extended through June 30, 2011 and that Mr. Coats’ miscellaneous moving expense allowance would be increased to up to $53,000, with the additional $13,000 allowance to cover additional moving expenses for Mr. Coats’ furniture now in storage in New Jersey. Mr. Coats’ temporary housing allowance of $5,600 per month had previously been extended through December 31, 2010, and his miscellaneous moving expense allowance had been increased from $30,000 to $40,000.

The foregoing description of the amendments to the Coats Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment No. 1 to the Coats Employment Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.

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Item 9.01 Financial Statements and Exhibits.

 (d)           Exhibits

10.1 Amendment No. 1 to Amended and Restated Employment Agreement between Autobytel Inc. and Jeffrey H. Coats effective as of December 17, 2010.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Autobytel Inc.
By:	/s/ Glenn E. Fuller
	Glenn E. Fuller, Executive Vice President, Chief Legal and Administrative Officer and Secretary

Date:  December 23, 2010

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EXHIBIT INDEX

Exhibit No.	Description                                                                                                         &# 160;
10.1	Amendment No. 1 to Amended and Restated Employment Agreement between Autobytel Inc. and Jeffrey H. Coats effective as of December 17, 2010

EX-10.1

Exhibit 10.1

AMENDMENT NO. 1

TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amendment No. 1 to Amended and Restated Employment Agreement (“Amendment”) is made and entered into as of December 17, 2010, by and between Autobytel Inc., a Delaware corporation (“Company”), and Jeffrey H. Coats (“Employee”).

Background

The Company and the Employee have entered into that certain Amended and Restated Employment Agreement dated as of April 3, 2009 (“Employment Agreement”).  The original term of the Employment Agreement is set to expire April 3, 2012.  The Company and Employee desire to extend the Term of the Employment Agreement and provide for other amendments to the Employment Agreement as set forth in this Amendment.

In consideration of the mutual covenants and agreements contained herein, and with reference to the above recitals, the parties hereby agree as follows:

ARTICLE 1

Amendments to Employment Agreement

1.1Extension of Term.  Section 2 of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

“Employee’s employment under this Agreement shall commence on the Effective Date and shall end on the fifth anniversary of the Effective Date, or such earlier date on which Employee’s employment terminates in accordance with this Agreement (“Term”).  The parties may extend the Term only by mutual written agreement before its expiration date.”

1.2Temporary Housing and Relocation Allowance.  Section 4(e) of the Employment Agreement is amended and restated in its entirety to read as follows:

“(i)           Employee shall be entitled to relocation expenses incurred in connection with Employee’s employment under this Agreement.  Such expenses include (1) a broker’s sales commission and closing costs (other than points) for either (a) Employee’s purchase of a new residence in California (or a broker commission for leasing such a residence) or (b) the sale of Employee’s residence in New Jersey; (2) shipping two automobiles from New Jersey to California; and (3) other reasonable and customary miscellaneous moving expenses, which other miscellaneous expenses shall not exceed $30,000.00.  The Company shall reimburse Employee for temporary housing for up to approximately thirteen months following the Effecti ve Date until May 31, 2010 (“Temporary Housing Term”), such temporary housing not to exceed (i) $4,100 per month until July 31, 2009 and (ii) $5,600 per month thereafter until such temporary housing allowance ceases.  In the event Employee leases a residence in California, the

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Company shall pay the amount of any reasonable and customary deposits required to be paid by the lessor upon entering into the lease.  If at the end of the Temporary Housing Term Employee continues to remain in the leased residence, Employee shall reimburse the Company for the amount of the deposits.  The reimbursements to Employee provided pursuant to this Section 4(e) of this Agreement shall be made in accordance with the processes, timing and conditions set forth in Section 4(d) of this Agreement.  Employee shall receive an additional payment to cover all federal, state or local income taxes Employee incurs as a result of any of the foregoing relocation costs paid or reimbursed by the Company.

(ii)           Effective January 1, 2011, Employee’s temporary housing allowance under Section 4(e)(i) is increased to $7,000 per month and extended through June 30, 2011 and Employee’s miscellaneous moving expense allowance under Section 4(e)(i) is increased to up to $53,000, with the additional $13,000 allowance to cover additional moving expenses for Employee’s furniture now stored in New Jersey.  The parties acknowledge that Employee’s temporary housing allowance of $5,600 per month had previously been extended through December 31, 2010, and Employee’s miscellaneous moving expense allowance had been increased from $30,000 to $40,000.”

1.3Termination Without Cause In Connection with Change in Control.  Section 5(c) of the Employment Agreement is amended and restated in its entirety to read as follows:

“In the event of Employee’s Termination Without Cause upon or within eighteen (18) months after a Change in Control, Employee shall be entitled to (i) the Accrued Amounts; (ii) a lump sum payment, paid in cash, equal to one and seventy-two one-hundredths (1.72) times the sum of  (1) Employee’s annual Salary and (2) Employee’s target annual incentive compensation opportunity under Section 4(c), at the rate of Salary and the target annual incentive compensation opportunity in effect immediately before such termination (iii) and the Consulting Agreement, which has been executed by the Company and Employee concurrently with the execution and delivery of this Agreement, shall become effective, and (iv) for the eighteen (18) month period following Employee’s Termination Without Cause , subject to Section 5(d) of this Agreement, Benefits at the levels in effect before employment terminates, including Company-paid COBRA premiums for any insurance that is in effect for Employee and/or Employee’s dependents before termination of Employee’s employment, and that Employee elects to continue in accordance with COBRA.”

ARTICLE 2

General Provisions

2.1Capitalized Terms.  All capitalized terms in this Amendment, to the extent not otherwise defined herein, shall have the meaning assigned to them in the Employment Agreement.

2.2Continuing Effectiveness.  Except as modified by this Amendment, the Employment Agreement shall remain in full force and effect and neither party by virtue of entering into this Amendment is waiving any rights it has under the Employment Agreement,

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and once this Amendment is executed by the parties hereto, all references in the Employment Agreement to “the Agreement” or “this Agreement,” as applicable, shall refer to the Employment Agreement as modified by this Amendment.

2.3Counterparts.  This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one instrument.

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

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

Autobytel Inc.

By: __/s/ Janet M. Thompson___________________

 Janet M. Thompson

 Chairperson of the Compensation Committee

  &# 160;     of the Board of Directors

Employee

____/s/ Jeffrey H. Coats_______________________

Jeffrey H. Coats