EXHIBIT
10.4


 


SEVERANCE
PAYMENT AGREEMENT


(Amended
and Restated as of November 4, 2008)


 


This
Severance Agreement was entered into as of February 26, 2007 between
Internet Brands, Inc., (the “Company”) and Lisa Morita (the “Employee”)
and is hereby amended and restated as of November 4, 2008.


 


WHEREAS,
Employee is a senior executive of the Company in the capacity of Executive Vice
President and General Manager, Internet Brands;


 


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 date on which such 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


 


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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.


 


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IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the date first above
written.


 


 


	
  INTERNET
  BRANDS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Robert N. Brisco

  	
   

  	
   

  
	
   

  	
  Robert
  N. Brisco

  	
   

  	
   

  
	
   

  	
  Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EMPLOYEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Lisa Morita

  	
   

  	
   

  
	
   

  	
  Lisa
  Morita

  	
   

  	
   

  



 


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