Classmates.com 2006 Annual Report Download - page 127

RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 15, 2001 (the “Agreement”), by and between United Online, Inc., a Delaware corporation
(the “Company”), and U.S. Stock Transfer Corporation, a California corporation (the “Rights Agent”).
WHEREAS, effective November 15, 2001 (the “Rights Dividend Declaration Date”), the board of directors of the Company authorized and
declared a distribution of one Right (each, a “Right”)
for each share of Common Stock (as hereinafter defined) of the Company outstanding as of
the Close of Business (as hereinafter defined) on November 26, 2001 (the “Record Date”), each Right initially representing the right to purchase
one one-thousandth of a share (a “Unit”) of Preferred Stock (as hereinafter defined) upon the terms and subject to the conditions herein set forth,
and has further authorized and directed the issuance of one Right with respect to each share of Common Stock of the Company that shall become
outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms
are hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements herein set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:
”Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as
such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
shares of Common Stock of the Company then outstanding, but shall not include the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding shares of
Common Stock of the Company for or pursuant to the terms of any such plan. Notwithstanding the foregoing:
(i) no Person shall become an “Acquiring Person”
as the result of an acquisition of shares of Common Stock by the Company which,
by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15%
or more of the shares of Common Stock of the Company then outstanding; provided, however , that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock of the Company then outstanding as a result of any such acquisition
of shares of Common Stock by the Company and shall, after such acquisition of shares by the Company, become the Beneficial Owner
of any additional shares of Common Stock of the Company (other than as a result of a stock dividend, stock split or similar transaction
effected by the Company in which all holders of Common Stock of the Company are treated equally), then such Person shall be deemed
to be an “Acquiring Person” hereunder;
(ii) no Person who, alone or together with all Affiliates and Associates of such Person, was, at the time of the public announcement
by the Company of the declaration by its Board of Directors on November 15, 2001 of the dividend distribution of the Rights, the
Beneficial Owner of 15% or more of the Common Stock of the Company then outstanding shall be deemed to have become an
Acquiring Person unless and until such time as such Person or any Affiliate or Associate of such Person thereafter becomes the
Beneficial Owner of any additional Common Stock of the Company (other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Common Stock of the Company are treated equally); and
(iii) if the board of directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person”
as defined pursuant to the provisions of subparagraph (i), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock of the Company so that such Person would no longer be an
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