Exhibit 10.1

 

EXECUTION COPY

SEPARATION AGREEMENT AND RELEASE

THIS SEPARATION AGREEMENT AND RELEASE (this “Agreement”) is entered into as of
August 8, 2014 by and between Gregory R. Liberman (“Employee”), and SPARK
NETWORKS, INC., a Delaware corporation (the “Company”).

RECITALS

WHEREAS, Employee has been employed by the Company as President and Chief
Executive Officer (and formerly Chairman of the Board) pursuant to the terms and
conditions of that certain Employment Agreement, dated as of February 11, 2014
between the Company and Employee (such agreement, the “Employment Agreement”);

WHEREAS, Employee and the Company wish to enter into an agreement concerning his
separation from employment with the Company.

PLEASE READ CAREFULLY. THIS SEPARATION AGREEMENT AND RELEASE INCLUDES A GENERAL
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS THAT CAN BE RELEASED.

AGREEMENTS

NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, Employee and the Company acknowledge and agree as follows:

1.        TERMINATION OF EMPLOYMENT. The parties hereto agree that Employee’s
employment with the Company is terminated effective as of August 11, 2014 (the
“Separation Date”), and that Employee shall continue to receive his salary,
health and other benefits through such date. Employee will not after such date
perform any further duties or render services as an employee or in any other
service capacity to the Company or any of its affiliates, subsidiaries or parent
corporations, and Employee agrees to tender a resignation in respect of any such
positions. In exchange for the payments, benefits, and other agreements of the
Company set forth in this Agreement, Employee hereby (i) waives any advance
notice requirement set forth in the Employment Agreement and (ii) agrees that he
will not be entitled to receive any additional payments or benefits after the
Separation Date from the Company other than as specifically set forth in this
Agreement.

2.        ACKNOWLEDGMENT OF PRIOR PAYMENTS. Employee represents he has the full
power and authority to enter into this Agreement and agrees and acknowledges he
has been paid all amounts due and owing as of the execution of this Agreement,
including all wages, earned vacation, paid time off, bonuses, and Company
benefits, less appropriate withholdings, through the date of the execution of
this Agreement, except for (i) Base Salary for the period ending on the
Separation Date (in the amount of $10,906.24), (ii) accrued but unused vacation
for the period ending on the Separation Date (in the amount of $31,250), and
(iii) reimbursement of unreimbursed

 

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business expenses and reasonable legal fees for the period ending on the
Separation Date. The Company shall pay the amounts set forth in clauses (i) and
(ii) above on the Separation Date. The Company shall pay the amounts set forth
in clause (iii) promptly after presentation to the Company of documentation
reasonably supporting such fees and expenses, which documentation shall be
submitted to the Company within thirty (30) days after the Separation Date
(notwithstanding any provision of the Employment Agreement purporting to provide
a longer period in which to submit such fees and expenses).

3.        CONSIDERATION TO EMPLOYEE. The Company shall make the following
payments and provide the following additional benefits and consideration to
Employee:

 

   a.   SEVERANCE BENEFIT.  The Company will pay to Employee a single cash
lump-sum payment of $1,031,250 (the “Severance Payment”). Such Severance Payment
will be paid on the Effective Date (as defined in Section 22 of this Agreement).

 

   b.   OPTIONS. All of Employee’s currently outstanding options to acquire
Company stock that are scheduled to vest after the date of this Agreement and on
or prior to the twelve (12) month anniversary of the Separation Date (consisting
of 122,225 stock options) shall become immediately vested on the Effective Date
and, together with Employee’s currently outstanding vested stock options
(consisting of 936,108 stock options), shall remain exercisable for a period of
one year following the Separation Date and otherwise in accordance with the
terms of the applicable stock option agreements dated January 5, 2009, April 11,
2011, March 12, 2012, and December 17, 2012 (the “Stock Option Agreements”).

 

   c.   COBRA BENEFITS. Conditioned upon Employee’s timely election of COBRA
coverage, Employee will be entitled to reimbursement of 100% of the COBRA
premiums paid by Employee for himself and his eligible dependents for a period
of twelve (12) months after Employee’s Separation Date. If the Company is
otherwise unable to continue to cover Employee under its group health plans
without substantial adverse tax consequences, or if any plan pursuant to which
such benefits are provided is not, or ceases prior to the expiration of such
twelve (12) month period to be, exempt from the application of Section 409A
under Treasury Regulation Section 1.409A-1(a)(5), then an amount equal to each
remaining premium payment shall thereafter be paid to Employee as currently
taxable compensation in substantially equal monthly installments over the
remaining portion of such twelve (12) month period.

Employee acknowledges that, pursuant to the terms of the Employment Agreement,
his entitlement to the benefits outlined above are conditioned on his execution
of this Agreement, including the release provisions of Section 6 of this
Agreement.

4.        BENEFIT PLANS.  Employee’s rights to benefits under any benefit plans
other than the Company’s group health plans (e.g., deferred compensation,
401(k)) shall be determined and paid in accordance with the terms of such plans.

 

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5.        INDEMNIFICATION; D&O INSURANCE. Notwithstanding his termination of
employment with the Company, Employee (i) shall continue to be entitled to the
indemnification rights afforded under the Company’s Amended and Restated
Certificate of Incorporation and Second Amended and Restated Bylaws,
Section 12.2 of the Employment Agreement and that certain Indemnification
Agreement between him and the Company dated as of July 9, 2007 (the
“Indemnification Agreement”), and (ii) shall remain covered under the Company’s
Directors’ and Officers’ Insurance (“D&O Insurance”) policy on no less favorable
terms than are required by Section 12.2 of the Employment Agreement.

6.        MUTUAL GENERAL RELEASE.  Subject to this Agreement becoming effective,
Employee, on behalf of himself, his spouse, successors, heirs, and assigns,
hereby forever releases and discharges the “Company Parties” (as defined below)
from all claims of any kind, whatsoever, that can be released. Accordingly,
Employee forever releases and discharges the Company Parties with respect to,
any and all claims, debts, liabilities, demands, obligations, liens, promises,
acts, agreements, costs and expenses (including but not limited to attorneys’
fees), damages, actions, and causes of action, of whatever kind or nature,
whether known or unknown, fixed or contingent, arising out of any act or
omission occurring before Employee’s execution of this Agreement. For example,
as a result of the general release in this Section 6, Employee is releasing all
claims of any kind that can be released, arising out of, or related to
Employee’s employment and involvement with, or the ending of employment with the
Company, any claims arising from rights under his Employment Agreement, federal,
state and/or local laws, including but not limited to those related to tax
payments or accounting, ownership in the Company, rights to ongoing profits of
the Company, claims of ownership of the Company’s intellectual property, or any
form of retaliation, harassment or discrimination on any basis, or any related
cause of action, and any labor code provisions, or any other claim of any kind
whatsoever, including but not limited to any claim for damages or declaratory or
injunctive relief of any kind that can be released. Employee understands that
the claims he is releasing might arise under many different laws (including
statutes, regulations, other administrative guidance, and common law doctrines),
such as the following:

(a) Anti-discrimination statutes, such as Title VII of the Civil Rights Act of
1964, Sections 1981 and 1983 of the Civil Rights Act of 1866, and Executive
Order 11,246, which prohibit discrimination based on race, color, national
origin, religion, or sex; the Equal Pay Act, which prohibits paying men and
women unequal pay for equal work; the Americans With Disabilities Act and
Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit
discrimination based on disability; and any other federal, state, or local laws
prohibiting discrimination such as such as the California Fair Employment and
Housing Act, which prohibits discrimination in employment based on race, color,
national origin, ancestry, physical or mental disability, medical condition,
marital status, sex, or age employment discrimination.

(b) Federal employment statutes, such as the WARN Act, which requires that
advance notice be given of certain work force reductions; the Employee
Retirement Income Security Act of 1974, which, among other things, protects
employee benefits; the

 

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Family and Medical Leave Act of 1993, which requires employers to provide leaves
of absence under certain circumstances; Age Discrimination in Employment Act
(including the Older Workers Benefit Protection Act), which prohibits age
discrimination; and any other federal laws relating to employment, such as
veterans’ reemployment rights laws.

(c) Other laws, such as any federal, state, or local laws providing workers’
compensation benefits, restricting an employer’s right to terminate employees,
or otherwise regulating employment; any federal, state, or local law enforcing
express or implied employment contracts or requiring an employer to deal with
employees fairly or in good faith; any other federal, state, or local laws
providing recourse for alleged wrongful discharge, tort, physical or personal
injury, emotional distress, fraud, negligent misrepresentation, defamation, and
similar or related claims as well as California Labor Code Section 200 et seq.,
relating to salary, commission, compensation, benefits, and other matters; the
California Workers’ Compensation Act; or any applicable California Industrial
Welfare Commission order.

Notwithstanding the foregoing, nothing in this Section is intended to release or
otherwise affect or impair (i) any rights, responsibilities or obligations
arising from, relating to or otherwise concerning this Agreement or the Stock
Option Agreements, (ii) any rights Employee has to vested benefits or
entitlements under any benefit plan of the Company in accordance with the terms
of such plan or arrangement, (iii) any rights Employee has to indemnification
and advancement of expenses in accordance with the Company’s governing
documents, Section 5 of this Agreement, Section 12.2 of the Employment Agreement
and the Indemnification Agreement, (iv) any rights Employee has to D&O Insurance
under Section 5 of this Agreement and Section 12.2 of the Employment Agreement
and (v) any rights Employee has a stockholder of the Company.

“Company Parties” means the Company, and its past and present officers,
directors, owners, employees, administrators, members, shareholders, agents,
successors, subsidiaries, insurers, parents, partners, associates, assigns,
representatives, attorneys and all other affiliated or related entities as well
as their predecessors, their affiliates, and each of their respective past and
present officers, owners, directors, employees, administrators, members,
shareholders, agents, successors, subsidiaries, insurers, parents, partners,
associates, assigns, representatives, and attorneys, in any and all capacities
(including, but not limited to the fiduciary, representative, or individual
capacity of any released person or entity), and any entity owned by or
affiliated with any of the foregoing. Any and all of the Company Parties may
exercise the right to enforce this Agreement If any claim is not subject to
release, to the extent permitted by law, Employee waives any right or ability to
be a class or collective action representative or to otherwise participate in
any putative or certified class, collective or multi-party action or proceeding
based on such a claim in which the Company or any Company Parties identified in
this Agreement is a party.

Subject to this Agreement becoming effective, the Company, on behalf of itself
and the Company Parties, irrevocably and unconditionally releases and forever
discharges Employee from any and all claims, including without limitation, any
claims based upon contract, tort, or under any federal, state, local or foreign
law, that the Company Parties

 

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may have, or in the future may possess, arising out of any aspect of Employee’s
employment relationship with and service as an employee, officer, director,
manager or agent of the Company or any of its subsidiaries, or the termination
of such relationship or service, that occurred, existed or arose on or prior to
the Company’s execution of this Agreement. The Company represents and warrants
that it has not assigned any of the claims being released under this Agreement
and that it has not filed any proceeding relating to Employee’s employment or
the termination thereof.

7.        SECTION 1542. It is Employee’s intention that his execution of this
Agreement will forever bar every claim, demand, cause of action, charge and
grievance against the Company and Company Parties existing at any time prior to
and through the date of execution of this Agreement. Because of Employee’s
intention, Employee expressly waives any and all rights or benefits which he may
have under the provisions of California Civil Code Section 1542, which provides
as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

Employee further waives and relinquishes all rights and benefits he may have
under any other statutes or common law principles of similar effect that can be
waived.

8.        NO LAWSUITS. Employee warrants and represents that he has not filed
any claims, charges, complaints or actions against any Company, Company Parties,
or assigned or transferred or purported to assign or transfer to any person or
entity all or any part of or any interest in any claim released under this
Agreement. Employee also agrees that if any claim is prosecuted in his name
before any court or administrative agency that he waives and agrees not to take
any award or other damages from such suit with the exception of any claim for
unemployment insurance benefits.

9.        RETURN OF PROPERTY. Except as otherwise agreed to by the Company in
writing, Employee expressly agrees that, promptly after the Separation Date, he
will deliver to the Company all records, files, computer disks, memoranda,
documents, lists and other information regarding or containing any Confidential
Company Information (as defined in Section 10 of the Employment Agreement),
including all copies and reproductions thereof, then in Employee’s possession or
control, whether prepared by Employee or others. Employee also agrees that,
promptly after the Separation Date, he will return any and all Company property
issued to Employee, including but not limited to computers, cellular phones,
keys and credit cards. Notwithstanding the foregoing, Employee shall not be
required to return his rolodexes, personal diaries, calendars or correspondence
or other documents or property that was given to him with the intention that it
would become his property.

 

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10.      POST-TERMINATION COVENANTS. Employee agrees that he will comply with
the terms of Section 11 of the Employment Agreement.

11.      NO ADMISSION. Nothing in this Agreement shall be deemed to constitute
an admission or evidence of any wrongdoing or liability on the part of the
Company or Employee and the parties agree that neither this Agreement nor any of
the terms or conditions contained herein may be used in any future dispute or
proceeding between the parties except one to enforce the terms of this
Agreement. The foregoing sentence shall not apply in any proceeding to enforce
this Agreement.

12.      CONFIDENTIALITY. Employee agrees that he will comply with all
confidentiality and non-disclosure agreements and policies of the Company
applicable to Employee, including the terms of the Employment Agreement.

13.      TAX AND WITHHOLDING. The parties hereto agree and acknowledge that the
Company shall have the right to withhold from any payments made to Employee such
federal, state or local taxes as may be required to be withheld pursuant to
applicable law or regulations.

The Company hereby informs Employee that the federal, state, local, and/or
foreign tax consequences (including without limitation those tax consequences
implicated by Section 409A) of this Agreement are complex and subject to change.
Employee acknowledges and understands that Employee should consult with his or
her own personal tax or financial advisor in connection with this Agreement and
its tax consequences. Employee understands and agrees that the Company has no
obligation and no responsibility to provide Employee with any tax or other legal
advice in connection with this Agreement and its tax consequences. Employee
agrees that Employee shall bear sole and exclusive responsibility for any and
all adverse federal, state, local, and/or foreign tax consequences (including
without limitation any and all tax liability under Section 409A) of this
Agreement to which he may be subject under applicable law. The Company shall
bear sole and exclusive responsibility for any and all adverse federal, state,
local, and/or foreign tax consequences (including without limitation any and all
tax liability under Section 409A) of this Agreement to which the Company may be
subject under applicable law.

14.      NO ORAL MODIFICATION. This Agreement may not be changed orally and no
modification, amendment or waiver of any provision contained in this Agreement,
or any future representation, promise or condition in connection with the
subject matter of this Agreement shall be binding upon any party hereto unless
made in writing and signed by both parties.

15.      RESOLUTION OF DISPUTES. Any disputes under or in connection with this
Agreement shall, at the election of either party, be resolved by arbitration, to
be held in Los Angeles, California in accordance with the JAMS Employment
Arbitration Rules & Procedures. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction.

 

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16.      ATTORNEYS FEES AND COSTS.  In any action or proceeding brought in
connection with this Agreement, the successful party shall be entitled to
recover reasonable attorneys’ fees in addition to its costs and expenses.

17.      INTEGRATION. This Agreement is entered into without reliance upon any
statement, representation, promise, inducement or agreement not expressly
contained within the terms hereof. This Agreement (together with the Employment
Agreement, the Indemnification Agreement and the Stock Option Agreements)
constitutes the entire agreement between the parties relating to the termination
of Employee’s employment and supersedes and cancels any and all other and prior
agreements, written or oral, between the Parties regarding the subject matter of
this Agreement.

18.      SEVERABILITY. If any court of competent jurisdiction holds any
provision of this Agreement invalid or unenforceable, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree shall remain in
full force and effect to the extent not held invalid or unenforceable.

19.      GOVERNING LAW. This Agreement is made and entered into, and shall be
subject to, governed by, and interpreted in accordance with the laws of the
State of California and shall be fully enforceable in the courts of that state,
without regard to principles of conflict of laws.

20.      SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their respective heirs,
administrators, representatives, executors, successors and permitted assigns,
including but not limited to (i) with respect to the Company, any entity with
which the Company may merge or consolidate or to which the Company may sell all
or substantially all of its assets, and (ii) with respect to Employee, his
executors, administrators, heirs and legal representatives.

21.      COUNTERPARTS. This Agreement may be executed in counterparts, and each
counterpart, when executed, shall have the effect of a signed original.
Facsimile signatures shall have the same force and effect as original
signatures.

22.      REVOCATION. Employee acknowledges that he has been given twenty-one
(21) days to review and consider this agreement before signing it. Employee
understands that he may use as much or as little of this period as he wishes
prior to signing the Agreement. Additionally, in order to comply with the Older
Workers Benefits Protections Act and effectuate the release by Employee of any
potential claims under the Federal Age Discrimination in Employment Act of 1967
(“ADEA”), Employee agrees that: (1) he is waiving and releasing any rights he
may have under the ADEA in exchange for consideration paid; (2) he acknowledges
that the consideration given for this waiver and release is in addition to
anything of value to which he was already entitled; (3) he has carefully
reviewed this Agreement understands the terms and conditions it contains; (4) by
entering into this Agreement, he is giving up potentially valuable legal rights
and he intends to be bound by all the terms and conditions set forth in this
Agreement; (5) he is entering into this Agreement freely, knowingly and
voluntarily; (6) he has been advised

 

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to consult with his legal counsel before executing this Agreement and has
actually consulted legal counsel before executing this Agreement; and (7) he may
revoke the release of any ADEA claims, within seven (7) days of the date of
Employee’s signature to this Agreement. Revocation must be made by delivering a
written notice of revocation to Company, which must be received no later than
the close of business on the seventh (7th) calendar day (or the next business
day thereafter, if the seventh (7th) calendar day is not a business day) (the
“Effective Date”). If Employee revokes this Agreement in any way, the Company
shall have no obligation to provide Employee the Severance Payment or any other
benefits under this Agreement.

23.      ACKNOWLEDGMENT OF KNOWING AND VOLUNTARY RELEASE. Employee acknowledges
that he has read and understood the terms of this Agreement and that he is
executing it voluntarily. Employee acknowledges that he has been encouraged, and
has had the opportunity, to consult with counsel of his choice regarding this
Agreement.

24.      NOTICES. Any notice required to be given under this Agreement shall be
deemed sufficient, if in writing, and sent by certified mail, return receipt
requested, via overnight courier, or hand delivered to the Company at 11150
Santa Monica Boulevard, Suite 600, Los Angeles, CA 90025, and to Employee at the
address on file with the Company.

25.      ANNOUNCEMENT.  As soon as practical following the execution of this
Agreement, the Parties will issue a press release mutually agreed to by the
Parties.

IN WITNESS WHEREOF, the parties have executed this Separation Agreement and
Release as of the date first above written.

[Signature Page Follows]

 

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   SPARK NETWORKS, INC.    /s/ Michael J. McConnell    Name: Michael J.
McConnell    Title:   Chairman    GREGORY R. LIBERMAN    /s/ Gregory R. Liberman