Classmates.com 2007 Annual Report Download - page 132

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Exhibit 10.16
August 13, 2007
Mr. Steve McArthur
c/o Classmates Online, Inc.
2001 Lind Avenue SW, Suite 500 Renton, WA 98055
Dear Steve,
This letter sets forth the terms and conditions of your employment with Classmates Online, Inc. (the "Company"), effective as of August 20,
2007 (the "Effective Date").
1. Position. You will serve as President of the Company and shall have such duties and responsibilities consistent with your position or
such other duties and responsibilities as may from time to time be determined by the board of directors of the Company or any committee
thereof, or such board of directors or committee of any affiliated entity to which the authority of the board of directors of the Company has been
delegated or assigned (the "Board of Directors") or the Chief Executive Officer of Classmates Media Corporation, a Delaware corporation
("Classmates Media Corporation") to the extent such authority has been delegated or assigned to such Chief Executive Officer. You will report
to me as the Chief Executive Officer of Classmates Media Corporation, or to such other senior executive officer as may be designated by the
Board of Directors or the Chief Executive Officer of Classmates Media Corporation. You agree to devote your full-time attention, skill and
efforts to the performance of your duties for the Company.
2. Salary and Benefits. You will be paid a salary at the annual rate of $500,000, payable in semi-monthly installments in accordance with
the Company's standard payroll practices, subject to any increases as determined by the Board of Directors from time to time. You will be
eligible to participate in the employee benefits plans, including a 401(k) plan, that are provided to similarly situated executives of the Company
or that have been made available to you by the Board of Directors or any affiliate of the Company. You will be entitled to a minimum of 4 weeks
of paid vacation each year, or such greater amount as determined in accordance with the standard vacation policy applicable to similarly situated
executives of the Company.
3. Bonus. You will also be eligible to receive an annual cash bonus of up to 100% of your annual base salary for each fiscal year (the
"Annual Bonus"), less withholding required by law, based on performance criteria established by the Board of Directors. Your Annual Bonus
will be increased to include any increases in your annual bonus as approved by the Board of Directors. You will be entitled to a guaranteed
bonus payment for the 2007 fiscal year in the amount of $210,000, less withholding required by law, payable no later than March 15, 2008.
Except as otherwise determined by the Board of Directors or set forth herein, your bonus awards will be paid only if you are employed by and in
good standing with the Company at the time of bonus payments.
4. Restricted Stock Units. Contingent on the effectiveness of an initial public offering of securities of Classmates Media Corporation or
securities issued by an entity that is a direct or indirect parent of the Company (Classmates Media Corporation or such entity being the "IPO
entity," and such initial public offering being the "CMC IPO") prior to April 30, 2008 and subject to the appropriate action taken by the board of
directors the IPO entity, on the effective date of such CMC IPO, you will be awarded restricted stock units covering that number of shares of
common stock of the IPO entity equal to $5,500,000 (the "CMC Restricted Stock Units") based on the initial offering price of such share of
common stock in such initial public offering. For purposes of this agreement, all references to common stock of the IPO entity shall be deemed
to refer to Class A common stock of CMC. In the event that the CMC IPO does not become effective prior to April 30, 2008, subject to the
appropriate action taken by the board of directors of United Online, Inc. ("United Online"), on the earlier of (i) April 30,
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