Exihibit 10.7
 SEVERANCE PAYMENT AGREEMENT
(Amended and Restated as of November 3, 2009)

        This Severance Agreement was entered into as of November 4, 2008 between
Internet Brands, Inc. (the “Company”) and Scott A. Friedman (the “Employee”) and
is hereby amended and restated as of November 3, 2009.

        WHEREAS, Employee is a senior executive of the Company in the capacity
of Chief Financial Officer;

        WHEREAS, the Company desires to recognize Employee’s continued
contribution to the growth and stability of the Company and provide an
additional incentive for Employee to remain at the Company;

        NOW, THEREFORE, in consideration of the covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties agree as follows:
 
    1. Severance Payment.    If the Company terminates Employee’s employment
without Cause, as defined in paragraph 2 below, and for reasons other than death
or disability, and such termination constitutes a “separation from service”
within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended, and the applicable guidance issued thereunder (“Section 409A”), the
Company will make a lump sum payment to Employee which payment shall be equal to
nine months of Employee’s base salary plus 75% of Employee’s annual stated cash
bonus target.  Notwithstanding the foregoing, it shall be a condition to
Employee’s right to receive such payment that Employee executes and delivers to
the Company a full general release of claims within twenty-one (21) days
following the date of such termination and the statutory period for rescission
of such release elapses without revocation of such release.  Such payment shall
be made on the date following the termination date on which statutory period has
lapsed, but in all cases, no later than sixty (60) days following the
termination date.  In addition, Employee shall receive nine months of continued
health, dental and life insurance benefits under COBRA on the same premium
copayment terms as Employee had while employed at the Company provided that
Employee was enrolled in such plans on the date of termination, subject to
Employee’s timely election and maintenance of  COBRA coverage. Notwithstanding
the foregoing sentence, if Employee retains alternative employment during the
nine month severance period and the new employer offers such benefits,
Employee’s health, dental and/or life insurance benefits shall terminate on the
date that such benefits commence at the new employer.
   
    2. Acceleration of Vesting of Equity Grants Upon a Change of Control.  On
the occurrence of a Change of Control (defined below) (i) each of Employee’s
equity grants that are not otherwise fully vested shall automatically vest on a
daily prorata basis over the period starting from the most recent vesting date
of each such grant prior to the Change of Control through immediately prior to
the closing date of the Change of Control; (ii) the remaining unvested  portion
of each of Employee’s equity grants shall automatically vest 50% immediately
prior to the closing date of the Change of Control. Immediately prior to the
closing of the Change of Control transaction, the Company or the successor
entity will reserve amounts sufficient to pay Employee for the remaining 50% of
unvested equity grants (in cash and/or publicly traded stock of the successor
entity on the same terms as provided to Company stockholders on the closing
date). Such remaining 50% shall continue to vest under the terms of such equity
grant agreements through the earlier of the first anniversary of the closing
date of the Change of Control transaction or a termination of Employee under
this subsection (c), upon which date all remaining unvested equity grants shall
automatically vest and Employee shall be paid all amounts reserved for such
purpose to Employee. “Change of Control” shall mean (i) the consummation of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (ii) the
consummation of the sale or disposition by the Company of all or substantially
all the Company’s assets,

    3. Cause.    For purposes of paragraph 1 above, “Cause” shall be defined as
(i) termination for any act of personal dishonesty taken by Employee in
connection with Employee’s responsibilities to the Company after repeated
written warnings, (ii) a felony conviction, (iii) termination due to a willful
act that constitutes misconduct and is injurious to the Company after repeated
written warnings, or (iv) gross negligence, recklessness, or willful misconduct
or malfeasance in the performance by Employee of her duties after repeated
written warnings.
 
    4. Taxes.    All payments made pursuant to this Agreement shall be subject
to withholding of applicable income and employment taxes.

    5. Section 409A.  To the extent applicable, this Agreement shall be
interpreted in a manner that satisfies, or qualifies for exemption from, the
requirements of Section 409A.  Notwithstanding any provision of this Agreement
to the contrary, if the Company determines that any payments or benefits payable
under this Agreement may be subject to Section 409A, the Company may, with
Employee’s prior written consent, adopt such amendments to this Agreement or
adopt other policies or procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions, that the Company
determines are necessary or appropriate to comply with, or exempt such payments
and benefits from, the requirements of Section 409A.

 
 
 
 

--------------------------------------------------------------------------------

 

        IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of November 3, 2009.

                                 

INTERNET BRANDS, INC.              By:  /s/ Robert N.
Brisco                               Robert N. Brisco        Chief Executive
Officer             EMPLOYEE:               By:   /s/ Scott A.
Friedman                                Scott A. Friedman    

 

 

 
 
 
 

--------------------------------------------------------------------------------