EXHIBIT 10.7


 


AMENDMENT
NO. 2 TO THE EMPLOYMENT AGREEMENT


BETWEEN
DAVID NORRIS AND TREE.COM, INC.


 


May 10,
2010


 


This
Amendment No. 2 (“Amendment”) to
that certain Employment Agreement, dated as of June 30, 2008 between David
Norris (“Executive”) and Tree.com, Inc.
(the “Company”), for itself and on behalf of
its subsidiaries, as applicable, as subsequently amended by Amendment No. 1,
dated December 3, 2009 (collectively, the “Agreement”)
is effective as of February 25, 2010. 
All capitalized terms used herein without definition shall have the
meanings given to them in the Agreement.


 


WHEREAS, subject to the terms and conditions set forth
herein, Executive and the Company wish to make certain amendments to the
Agreement to provide Executive with enhanced severance in the event that his
employment terminates under certain circumstances following a change in control
of the Company;


 


WHEREAS, Executive and the Company also wish to make
certain clarifications to the Agreement with respect to severance payments consistent
with recent guidance promulgated by the Internal Revenue Service;


 


WHEREAS, the Compensation Committee of the Board of
Directors of Tree.com has met and previously approved the amendments set forth
herein.


 


NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency is hereby acknowledged, the
parties hereby agree as follows:


 


1.             Section 3(b) of
the Agreement is hereby amended by adding the following sentence to the end
thereof:


 


“Notwithstanding the foregoing and anything
to the contrary in this Agreement or any other agreement pursuant to which
Executive has received or shall receive in the future awards of equity from the
Company, Executive shall become immediately 100% vested in such equity awards
upon the occurrence of a “Change in Control” (as such term is defined by
Amendment No. 1 to the Agreement).”


 


2.             Section 8 of the
Agreement is hereby amended by deleting the first sentence and replacing it
with the following:


 


“It is intended that this Agreement comply
with Section 409A of the Internal Revenue Code of 1986, as amended, and
the rules and regulations issued thereunder (“Section 409A”)
and shall be interpreted and operated consistently with that intent.”


 

















 


3.             Section 8 of the
Agreement is hereby amended by adding the following sentence to the end
thereof:


 


“For purposes of this Agreement, the terms “termination,” “termination of employment”
and “resignation” (and variations thereof)
shall mean Executive’s “separation from service” within the meaning of Section 1.409A-1(h) of
the Treasury Regulations promulgated under Section 409A, applying the
default terms thereof.”


 


4.             Section 1A (d) of
the Executive Standard Terms and Conditions is hereby deleted and replaced in
its entirety as follows:


 


“(d)         TERMINATION OR BREACH BY THE COMPANY OTHER THAN FOR
DEATH, DISABILITY OR CAUSE; RESIGNATION BY EXECUTIVE FOR GOOD REASON.              Upon (i) termination of
Executive’s employment with the Company prior to the expiration of the Term by
the Company without Cause (other than for death or Disability) or (ii) upon
Executive’s resignation prior to the expiration of the Term for “Good Reason” (as defined herein) (either such termination or
resignation, a “Qualifying Termination”), the
Company shall pay Executive the amounts described in subparagraphs (A) and
(B) below.  The Company shall pay
Executive the amount described in subparagraph (A) within thirty (30) days
following Executive’s Qualifying Termination. 
The Company shall pay Executive the amount described in subparagraph (B) on
the 60th day following Executive’s Qualifying
Termination date (the “Payment Date”);
provided that, payment of the amount described in subparagraph (B) shall
be conditioned on Executive’s execution and non-revocation before the Payment
Date of a general release of the Company and its affiliates in a form
substantially similar to that used for similarly situated executives of the
Company and its affiliates (a “Release of Claims”),
and Executive’s compliance with the restrictive covenants set forth in Section 2A
of these Executive Terms and Conditions.


 


(A)          An amount equal to all “Other
Accrued Obligations” (as defined herein).


 


(B)           An amount equal to Executive’s then-current Base
Salary, payable in installments on the Company’s regularly scheduled paydays
over the one (1) year period following the date of such Qualifying
Termination (the “Salary Continuation
Payments”).


 


Notwithstanding the foregoing, if Executive
obtains other employment or is otherwise compensated for services during the
period in which he is receiving Salary Continuation Payments (the “Severance Period”), the Company’s obligation to make future
payments to Executive under 


 


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subparagraph (B) above shall be offset
against any compensation earned by Executive as a result of employment with or
services provided to a third party. 
Executive agrees to inform the Company promptly of his employment status
and any amounts so earned during the Severance Period.  Executive acknowledges and agrees that the
payments described in subparagraph (B) above constitute good and valuable
consideration for such Release of Claims.


 


For purposes of this Agreement, the term “Good Reason” shall mean (i) a material breach by the
Company of this Agreement prior to the expiration of the Term or (ii) the
purchase of a mortgage company and placement by the Company of a person other
than Executive in charge of the combined mortgage company.”


 


5.             Section 1 of the
Executive Terms and Conditions of the Agreement is hereby amended by adding a
new subsection (f) to the end thereof:


 


“(f)          QUALIFYING TERMINATION WITHIN ONE YEAR FOLLOWING
CHANGE IN CONTROL.  If Executive
experiences a Qualifying Termination within the one-year period following a
Change in Control (as defined by Amendment No. 1 to the Agreement), the
Company shall pay Executive the amount described in subparagraph (i) below
within thirty (30) days following Executive’s Qualifying Termination date.  The Company shall also pay Executive the
amount described in subparagraph (ii) below on the 60th day following the date on which Executive
experiences a Qualifying Termination within a one-year period following a
Change in Control (the “Change in Control Payment
Date”); provided that, payment of the amount described in
subparagraph (ii) shall be conditioned on Executive’s execution and
non-revocation before the Change in Control Payment Date of a Release of
Claims, and Executive’s compliance with the restrictive covenants set forth in Section 2A
of these Executive Terms and Conditions.


 


(i)            An amount equal to all Other Accrued Obligations.


 


(ii)           An amount equal to two times Executive’s
then-current Base Salary, payable in installments on the Company’s regularly
scheduled paydays over the one (1) year period following the date of such
Qualifying Termination.


 


No amounts payable to Executive pursuant to
this paragraph (f) shall be subject to the mitigation or offset provisions
described in paragraph 1A (d) of these Executive Terms and Conditions.”


 


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6.             Section 1 of the
Executive Terms and Conditions of the Agreement is hereby amended by adding a
new subsection (h) to the end thereof


 


“(h)         NON-GOOD REASON RESIGNATION FOLLOWING CHANGE IN
CONTROL.  Notwithstanding anything to
the contrary in Amendment No. 1 to the Agreement, if Executive resigns his
employment within ninety (90) days following the consummation of any “Hostile
Change in Control” (as such term is defined in Amendment No.1 to the
Agreement), then the Company shall pay Executive the following amounts:


 


(i)            An amount equal to the Other Accrued Obligations,
within thirty (30) days following such resignation.


 


(ii)           An amount equal to one (1) year’s Base Salary,
payable in equal installments on the Company’s regularly scheduled paydays over
the one (1) year period following the date of such resignation.  Notwithstanding the foregoing, the Company
shall pay Executive the salary continuation payments described in this
subparagraph (ii) on the 60th day following
the date on which Executive resigns his employment pursuant to this paragraph
1A(h) (the “Resignation Payment Date”);
provided that payment of the such amount shall be conditioned on Executive’s
execution and non-revocation before the Resignation Payment Date of a Release
of Claims; and Executive’s compliance with the restrictive covenants set forth
in Section 2A of these Executive Terms and Conditions.”


 


7.             Paragraph three of Amendment
No. 1 to the Agreement is hereby deleted in its entirety.


 


8.             Except as explicitly set
forth herein, the remaining provisions of the Agreement will remain in full
force and effect.


 


IN WITNESS WHEREOF, the parties have executed
this Amendment No. 2 as of the date first written above.


 


	
  TREE.COM,
  INC.

  	
  DAVID
  NORRIS

  
	
   

  	
   

  
	
  By:

  	
  /s/ Claudette Hampton

  	
   

  	
  /s/ David Norris

  
	
  By:

  	
  Claudette Hampton

  	
   

  	
   

  
	
  Senior Vice
  President — Human Resources

  	
   

  



 


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