EXHIBIT 10.1


 


INTERNET
BRANDS, INC.


 


 ROBERT BRISCO SEVERANCE PAYMENT AGREEMENT


 


This
Agreement is entered into by and among Internet Brands, Inc. (the “Company”)
and Robert Brisco (the “Employee”) on the 4th day of November, 2008.


 


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


 


WHEREAS,
this Agreement replaces the Robert Brisco Employment Agreement entered into by
and among the Company and Employee on the 8th day of November, 1999
and as previously amended on November 12, 1999, July 1, 2000, January 30,
2002 and July 11, 2007;


 


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.   
Employee shall be entitled to the following severance benefits described
in this Section 1:


 


(a)    Upon Involuntary Termination Without Cause
or a Voluntary Resignation Within 60 Days of a Constructive Termination (Except
During the 6 Month Period Preceding or the 12 Month Period Following a Change
of Control).  In the event that Employee’s employment is
terminated by the Company for reasons other than “Cause” (as defined in Section 2)
or by Employee within 60 days following the occurrence of a “Constructive
Termination” (as defined in Section 2) (except during the 6 month period
preceding or the 12 month period following a “Change of Control,” as such term
is defined in Section 2), then Employee shall be entitled to receive (i) a
lump sum payment on the termination date, or as soon as practicable thereafter
(but in no event later than 60 days thereafter), equal to 9 times Employee’s
monthly Base Salary in effect immediately preceding the termination date plus 9/12 times Employee’s maximum annual
stated cash bonus target (“Annual Bonus Target”) for the year of termination
and (ii) 9 Months’ COBRA Benefits. 
Employee will become entitled to additional payments and benefits under Section 1(c) below
if a Change of Control occurs within 6 months following the date of termination
of employment.


 


(b)    Other Termination (Except During the 6 Month
Period Preceding or the 12 Month 


 


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Period Following a Change of Control).    If,
during the term of this Agreement (except during the 6 month period preceding
and the 12 month period following a Change of Control, which is covered in
Sections 1(c) and (d) hereof), Employee’s employment is terminated by
the Company for Cause, or by Employee for any reason, including death or
disability, other than within 60 days following a Constructive Termination,
then Employee shall not be entitled to receive severance or other benefits
pursuant to Section 1(a).


 


(c)    Within the 6 Month Period Preceding or the
12 MonthPeriod Following a Change of Control, Upon Involuntary Termination
Without Cause or a Voluntary Resignation Within 60 days of a Constructive
Termination.     In the event that Employee’s employment is
terminated by the Company for reasons other than Cause or by Employee within 60
days following the occurrence of a “Constructive Termination” during the period
commencing 6 months before a Change of Control and ending 12 months after the
Change of Control, then Employee shall be entitled to receive the payments and
benefits described in Section 1(a), as well as (i) a lump sum payment
on the later of the date of such Change of Control or the termination date, or
as soon as practicable thereafter (but in no event later than 60 days
thereafter), equal to 9 times Employee’s monthly Base Salary in effect
immediately preceding the termination date plus
9/12 times Employee’s Annual Bonus Target for the year of
termination, and (ii) continuation of the 9 Months’ COBRA Benefits
provided in Section 1(a) for an additional 9 months. On the
occurrence of a Change of Control (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.


 


(d)    Other Termination During the 6 Month Period
Preceding or the 12 Month Period Following a Change of Control.    If,
during the 6 month period preceding or the 12 month period following a Change
of Control, Employee’s employment is terminated by the Company for Cause, or by
Employee for any reason, other than within 60 days following a Constructive
Termination, or by virtue of Employee’s death or disability, then Employee
shall not be entitled to receive severance or other benefits pursuant to Section 1(c).  However, Employee shall be entitled to vesting
of all equity related to a Change of Control as described in Section 1(c).


 


(e)    No Mitigation.   
Employee shall not be required to mitigate the value of any severance
payments or benefits contemplated by Section 1 of this Agreement, nor
shall any such payments or benefits be reduced by any earnings or benefits that
the Employee may receive from any other source.


 


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2.    Definitions.


 


(a)    Base Salary.    “Base
Salary” shall mean Employee’s annual Company salary at the rate in effect
immediately preceding Employee’s date of termination with the Company.


 


(b)    Cause.    “Cause”
shall mean (i) Employee’s commission of an act of fraud or embezzlement
upon the Company; (ii) Employee’s being convicted of or pleading guilty or nolo contendere  to a felony involving fraud, dishonesty or
moral turpitude, (iii) Employee’s willful and continued failure to perform
substantially Employee’s material duties with the Company (other than failure
resulting from incapacity due to physical or mental illness) which is not
remedied in a reasonable period of time after written demand for substantial
performance is delivered to Employee by the Board of Directors which
specifically identifies the manner in which the Board of Directors believes
Employee has not substantially performed his duties; provided, however, that
with respect to clause (iii), such failure shall not constitute Cause if it is
cured by Employee within thirty (30) days following delivery to Employee of a
written explanation specifying the basis for the Company’s beliefs with respect
to such clause.


 


(c)    Change of Control.    “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;


 


(ii) the
consummation of the sale or disposition by the Company of all or substantially
all the Company’s assets,


 


(d)    Constructive Termination.    “Constructive
Termination” shall mean (i) the assignment to Employee of duties not
commensurate with his status as Chief Executive Officer, or any material
reduction of the Employee’s duties, authority, responsibilities or title,
relative to the Employee’s duties, authority, responsibilities or title as in
effect immediately prior to such reduction, except if agreed to in writing by
the Employee; provided, however, that a reduction in duties, title, authority
or responsibilities solely by virtue of the consummation of a “Change of
Control,” shall not by itself constitute a Constructive Termination (for
example, if the Company becomes a division of the acquiring company in a Change
of Control and Employee remains Chief Executive Officer of the division of and
is not made Chief Executive Officer of the Acquirer and does not sit on the
board of directors of the Acquirer shall not by itself constitute a “Constructive
Termination” unless, notwithstanding the title of divisional Chief Executive
Officer, there is a material reduction of Employee’s duties, authority or
responsibilities with respect to the division relative to Employees duties,
authority and responsibilities as in effect prior to such reduction), (ii) any
material breach by the Company of the terms of this Agreement, (iii) any
reduction in Employee’s compensation, including, without limitation, a
reduction in 


 


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Base
Salary or a reduction in the Annual Bonus Target, or (iv) the relocation
of the Employee to a facility or a location more than fifty (50) miles from the
Employee’s then present location, without the Employee’s written consent;
provided, however, that such actions shall not constitute Constructive
Termination unless the Company fails to cure such condition within thirty (30)
days following delivery to the Company of a written explanation specifying the
basis for the Employee’s beliefs with respect to such Constructive Termination
events, which written explanation must be provided by the Employee within
thirty (30) days of the initial existence of the condition.


 


3.    Arbitration.    


 


(a)   Employee agrees that any
dispute or controversy arising out of, relating to, or in connection with this
Agreement, or the interpretation, validity, construction, performance, breach,
or termination thereof, shall be settled by expedited, binding arbitration to
be held in Los Angeles, California in accordance with the National Rules for
the Resolution of Employment Disputes then in effect of the American
Arbitration Association (the “Rules”). The arbitrator may grant injunctions or
other relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator’s decision in any court having
jurisdiction. The Company agrees to advance Employee all costs, including
attorney’s fees, relating to such arbitration. Employee agrees to reimburse the
Company for such costs in the event the arbitrator determines that the Company
has not breached this Agreement in such a manner as to give rise to financial
damages to the Employee in an amount greater than $5,000.


 


(b)   The arbitrator(s) shall
apply California law to the merits of any dispute or claim, without reference
to rules of conflicts of law. The arbitration proceedings shall be
governed by federal arbitration law and by the Rules, without reference to
state arbitration law. The Employee hereby consents to the personal
jurisdiction of the state and federal courts located in California for any
action or proceeding arising from or relating to this Agreement or relating to
any arbitration in which the parties are participants.


 


(c)   EMPLOYEE HAS READ AND
UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS
THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING
OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE’S
RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO
ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED
TO, DISCRIMINATION CLAIMS.


 


4.    Right to Advice of Counsel.   
Employee acknowledges that he has had the right to consult with counsel
and is fully aware of his rights and obligations under this Agreement.


 


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5.    Successors.


 


(a)    Company’s Successors.  Any
successor to the Company (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) to all or substantially
all of the Company’s business and/or assets shall assume the obligations under
this Agreement and agree expressly to perform the obligations under this
Agreement in the same manner and to the same extent as the Company would be
required to perform such obligations in the absence of a succession. For all
purposes under this Agreement, the term “Company,” as applicable, shall include
any successor to the Company’s business and/or assets which executes and
delivers the assumption agreement described in this subsection (a) or
which becomes bound by the terms of this Agreement by operation of law.


 


(b)    Employee’s Successors.  
Without the written consent of the Company, Employee shall not assign or
transfer this Agreement or any right or obligation under this Agreement to any
other person or entity. Notwithstanding the foregoing, the terms of this
Agreement and all rights of Employee hereunder shall inure to the benefit of,
and be enforceable by, Employee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.


 


6.    Notice Clause.    All
notices, requests, demands and other communications called for hereunder shall
be in writing and shall be deemed given if (i) delivered personally or by
facsimile, (ii) one (1) day after being sent by Federal Express or a
similar commercial overnight service, or (iii) three (3) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successors in interest.


 


7.    Governing Law.   
This Agreement shall be governed by and construed in accordance with the
internal substantive laws, but not the choice of law rules, of the state of
California.


 


8.    Severability.    The
invalidity or unenforceability of any provision of this Agreement, or any terms
hereof, shall not affect the validity or enforceability of any other provision
or term of this Agreement.


 


9.    Taxes.    All
payments made pursuant to this Agreement shall be subject to withholding of
applicable income and employment taxes.


 


10.     Golden Parachute Tax.     In
the event that the severance and other benefits provided for in this Agreement
or otherwise payable to Employee constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”) and will be subject to the excise tax imposed by Section 4999
of the Code, then Employee shall receive (i) a payment from the Company
sufficient to pay such excise tax, and (ii) an additional payment from the
Company sufficient to pay the income, employment, excise and any other taxes
arising from the payments made by the Company pursuant to the immediately
preceding clause, so that Employee shall be fully reimbursed for any such
excise tax and any taxes associated with the payments to reimburse Employee for
such excise tax. Unless the Company and Employee otherwise agree in writing,
the determination of Employee’s excise tax liability and the amount required to
be paid under this Section shall be made in writing by a nationally
recognized accounting firm satisfactory to both parties (the “Accountants”). In
the event that the 


 


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excise
tax incurred by Employee is determined by the Internal Revenue Service to be
greater or lesser than the amount so determined by the Accountants, the Company
and Employee agree to promptly make payment to the other party of an amount
such that the net economic effect to Employee under this Section, on an
after-tax basis, is the same as if the Code Section 4999 excise tax did
not apply to Employee. For purposes of making the calculations required by this
Section, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on interpretations of the Code for
which there is a “substantial authority” tax reporting position. The Company
and Employee shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section. The Company shall bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section 
Any payment pursuant to this Section 10 shall be made no later than the
end of the calendar year following the calendar year in which Employee remits
the taxes to which such payment relates.


 


11.     Section 409A.


 


(a)    General.   
This Agreement shall be interpreted, construed and administered in a
manner that satisfies the requirements of Section 409A of the Code and the
Department of Treasury Regulations and other guidance promulgated thereunder (“Section 409A”).


 


(b)    Six-Month Delay for Specified Employees.   
Each of the payments under this Agreement shall be considered a separate
payment for purposes of Section 409A. 
Notwithstanding any provision to the contrary in this Agreement, if (a) Employee
is a “specified employee” within the meaning of Section 409A for the
period in which any payment or benefits under this Agreement would otherwise
commence and (b) such payment or benefit under this Agreement would
otherwise subject Employee to any tax, interest or penalty imposed under Section 409A
if the payment or benefit were to commence within six months of a termination
of Employee’s employment with the Company, then all such payments or benefits
that would otherwise be paid during the first six months after Employee’s
separation from service within the meaning of Section 409A shall be
accumulated and shall be paid (together with, in the case of any cash payment,
interest credited at the Applicable Federal Rate in effect as of the date of
Employee’s separation from service) on the earlier of (1) the first day
which is at least six (6) months after Employee’s separation from service
within the meaning of Section 409A or (2) the date of Employee’s
death.


 


(c)    No Obligation to Indemnify.   
Nothing in this Agreement shall create any obligation on the part of the
Company to indemnify, reimburse, or otherwise compensate Employee for any
taxes, interest, penalties, costs, losses, damages, or expenses arising out of
any violation of Section 409A or any corresponding provision of state,
local, or foreign law.


 


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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 officers, as of the day and year first
above written.


 


	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Howard E. Morgan

  
	
   

  	
   

  	
  Howard
  E. Morgan

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman
  of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert N. Brisco

  
	
   

  	
  Robert
  N. Brisco

  



 


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