EXHIBIT 10.3


 


SEVERANCE
PAYMENT AGREEMENT


(Amended
and Restated as of November 4, 2008)


 


This
Severance Agreement was entered into as of June 30, 2006 between Internet
Brands, Inc. (the “Company”) and Chuck Hoover (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 Chief
Marketing Officer;


 


WHEREAS,
the Company entered into a Severance Payment Agreement with Employee dated January 30,
2002 and desires to replace such agreement with this Agreement 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 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 


 


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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 his 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 November 4, 2008.


 


 


	
  INTERNET BRANDS, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert N. Brisco

  	
   

  
	
   

  	
  Robert
  N. Brisco

  	
   

  
	
   

  	
  Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE:

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Chuck Hoover

  	
   

  
	
   

  	
  Chuck
  Hoover

  	
   

  



 


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