Classmates.com 2010 Annual Report Download

Download and view the complete annual report

Please find the complete 2010 Classmates.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 333

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255
  • 256
  • 257
  • 258
  • 259
  • 260
  • 261
  • 262
  • 263
  • 264
  • 265
  • 266
  • 267
  • 268
  • 269
  • 270
  • 271
  • 272
  • 273
  • 274
  • 275
  • 276
  • 277
  • 278
  • 279
  • 280
  • 281
  • 282
  • 283
  • 284
  • 285
  • 286
  • 287
  • 288
  • 289
  • 290
  • 291
  • 292
  • 293
  • 294
  • 295
  • 296
  • 297
  • 298
  • 299
  • 300
  • 301
  • 302
  • 303
  • 304
  • 305
  • 306
  • 307
  • 308
  • 309
  • 310
  • 311
  • 312
  • 313
  • 314
  • 315
  • 316
  • 317
  • 318
  • 319
  • 320
  • 321
  • 322
  • 323
  • 324
  • 325
  • 326
  • 327
  • 328
  • 329
  • 330
  • 331
  • 332
  • 333

UNITED ONLINE INC
FORM 10-K
(Annual Report)
Filed 02/28/11 for the Period Ending 12/31/10
Address 21301 BURBANK BOULEVARD
WOODLAND HILLS, CA 91367
Telephone 8182873000
CIK 0001142701
Symbol UNTD
SIC Code 7370 - Computer Programming, Data Processing, And
Industry Computer Services
Sector Technology
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2011, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    UNITED ONLINE INC FORM 10-K (Annual Report) Filed 02/28/11 for the Period Ending 12/31/10 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal..., Data Processing, And Computer Services Technology 12/31 http://www.edgar-online.com © Copyright 2011, EDGAR Online, Inc. All Rights Reserved....

  • Page 2
    ...Securities registered pursuant to Section 12(g) of the Act: Title of Each Class Name of Exchange on Which Registered Common Stock, par value $0.0001 per share Preferred Stock Purchase Rights The Nasdaq Stock Market LLC (Nasdaq Global Select Market) No 3 No Indicate by check mark if the Registrant...

  • Page 3
    ... by check mark whether the Registrant is a shell company (as defined in Rule 12b-2) of the Act). Yes 1 At June 30, 2010, the aggregate market value of voting stock held by non-affiliates of the Registrant, based on the last reported sales price of the Registrant's common stock on such date reported...

  • Page 4
    ...Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accounting Fees and Services...

  • Page 5
    ...this Annual Report on Form 10-K and our other filings with the Securities ...future performance. Except as required by law, we undertake no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date...

  • Page 6
    ... new growth opportunities for the Company. In November 2004, we acquired Classmates Online, Inc. (whose name was recently changed to Memory Lane, Inc.), a provider of online nostalgia services, and in April 2006, we acquired MyPoints.com, Inc. ("MyPoints"), a provider of online loyalty marketing...

  • Page 7
    ... receive payment from consumers before paying florists or other third parties to fulfill product orders. Our Communications segment does not generate products revenues and our Content & Media segment does not currently generate products revenues. • Advertising revenues. Advertising revenues are...

  • Page 8
    ... first social networking services, was originally designed to assist members in finding friends and acquaintances primarily from high school. Consumers could register for free accounts or pay for premium accounts that gave the members access to more information. As the Internet has matured, a number...

  • Page 9
    ... advertisers may prefer to work with online loyalty marketing programs that offer performance-based pricing, which helps the advertisers achieve their specific performance objectives within budget. Communications Segment The U.S. market for consumer Internet access services has evolved significantly...

  • Page 10
    ... although a small number of national providers account for a significant majority of the U.S. dial-up market. AOL, EarthLink and our Internet access businesses, NetZero and Juno, on a combined basis reported approximately 5.5 million dial-up Internet access pay accounts at December 31, 2010. As the...

  • Page 11
    ... provides point-of-sale and related technology services and systems that enable its floral network members to transmit and receive orders and manage several back office functions of a floral retailer's business, including accounting, customer relationship management, direct marketing campaigns, and...

  • Page 12
    ...to Memory Lane, pay accounts of the historical Classmates website received access to new premium features, such as viewing high school yearbooks, at no additional cost. The first category of nostalgic content added to the website in June 2010 was the high school yearbook. As of December 31, 2010, we...

  • Page 13
    ... All-Access Pass holder's high school or other community affiliation. International. In addition to our Memory Lane website that includes the Classmates service, we operate five international websites that offer nostalgia services, primarily as a social networking platform to reconnect friends and...

  • Page 14
    ... access services to the general public, we have experienced limited adoption of our broadband services. Sources of Revenue We generate revenue from the sale of services, products and online advertising. Services Revenues FTD FTD services revenues consist of fees charged to its floral network members...

  • Page 15
    ... Our online nostalgia services generate advertising revenues primarily from display advertisements on our websites. Prior to 2010, advertising revenues were generated primarily from post-transaction sales occurring after members completed the pay account registration process. Advertising inventory...

  • Page 16
    ... almost entirely of Internet advertising designed to increase our free member base, with most payments to third parties determined based on fees per free member registration acquired through the campaign. Going forward, we plan to market our new Memory Lane services through various media, including...

  • Page 17
    ... principal customers for memberships and subscriptions to our various floral network services, including access to the FTD and Interflora brands and the Mercury Man logo, access to the floral networks, credit card processing services, e-commerce website services, online advertising tools, telephone...

  • Page 18
    ...but not limited to, speed and, in certain cases, price. Online Loyalty Marketing The market for online loyalty marketing services is highly competitive, and we expect competition to significantly increase in the future as online loyalty marketing programs continue to grow in popularity. Our MyPoints...

  • Page 19
    ... the pay accounts for our Content & Media and Communications segments pay us in advance with a credit card. Other payment options for some of our pay services include automated clearing-house ("ACH"), personal check, money order, or via a customer's local telephone bill. Internet access pay accounts...

  • Page 20
    ... components of our services, including connectivity, web services, billing, email, customer support, customer loyalty applications, and targeted advertising. We maintain data centers in multiple locations in the U.S. and Europe. In some cases, we have redundant systems to provide high levels of...

  • Page 21
    ... the Registrant. Available Information Our corporate website is www.unitedonline.com . On this website, we make available, free of charge, our annual, quarterly and current reports (including all amendments to such reports), changes in the stock ownership of our directors and executive officers, our...

  • Page 22
    ... economic conditions have adversely impacted certain aspects of our businesses in a number of ways including reduced demand, more aggressive pricing for similar products and services by our competitors, decreased spending by advertisers, increased credit risks, increased credit card failures...

  • Page 23
    ... decrease in our dial-up Internet access pay accounts. In addition, prior to 2010, our Content & Media and FTD segments collectively derived significant advertising revenues from domestic post-transaction sales agreements. Post-transaction sales involve the online presentation of a third-party offer...

  • Page 24
    ... the necessary range of customer support functions in the event that this vendor unexpectedly becomes unable or unwilling to provide these services to us. Legal actions or investigations could subject us to substantial liability, require us to change our business practices, and adversely affect...

  • Page 25
    ... or inappropriate access to, or use of, our networks, computer systems or services, whether intentional, unintentional or as a result of criminal activity, could potentially jeopardize the security of confidential information, including credit card information, of our customers and of third...

  • Page 26
    ..., each month, a significant number of email addresses for members of our online nostalgia and online loyalty marketing services become invalid. This disrupts our ability to email these members and also prevents our online nostalgia members from being able to contact these members, which is one of...

  • Page 27
    ... employees of the acquired business; potential impairment of relationships with users, customers or vendors as a result of changes in management of the acquired business or other factors; large write-offs either at the time of the acquisition or in the future, the incurrence of restructuring charges...

  • Page 28
    ... record a significant charge to earnings if we are required to expense certain costs or impair our assets. We have capitalized goodwill and identifiable intangible assets in connection with our acquisitions and certain business initiatives such as the content archives on the Memory Lane website. We...

  • Page 29
    ... is largely dependent on the efforts and abilities of our senior management, particularly Mark R. Goldston, our chairman, president and chief executive officer, and other key personnel. Any of our officers or employees can terminate his or her employment relationship at any time. The loss of any of...

  • Page 30
    ...our international operations, our key business metrics, and our financial results. We may stop paying, or reduce, quarterly cash dividends on our common stock. The payment of future dividends is discretionary and is subject to determination by our Board of Directors each quarter following its review...

  • Page 31
    ... our customers for direct sales of floral products and gifts through our websites and telephone numbers. In the floral network services market, retail florists and supermarkets are our principal customers for memberships and subscriptions to our various floral network services, including access to...

  • Page 32
    ..., may devote significantly greater resources to marketing campaigns or other aspects of their business or may respond more quickly and effectively than we can to new or changing opportunities or customer requirements. We expect competition in the floral network services market to continue to...

  • Page 33
    ...significant number of floral network members, or if we are not able to maintain or increase revenues from our floral network members, our business, financial condition... in certain cases greater, discount or other associated costs. We also offer discounts on our floral network service fees from time ...

  • Page 34
    .... In addition, future changes in the operation of our online and telephonic sales channels could result in the imposition of additional sales and use tax or other tax obligations. Additionally, in accordance with current industry practice by international floral and gift direct marketers and our...

  • Page 35
    ...our historical Classmates business to the new Memory Lane business may not be successful. In 2010, we made the strategic decision to expand upon the historical value proposition of our Classmates service and transition the website to be the premier U.S. website to access, acquire, interact with, and...

  • Page 36
    ... to suffer. Pay accounts are critical to our business model. Only a small percentage of users initially registering for our online nostalgia services sign up for a paid subscription at the time of registration. As a result, our ability to generate subscription revenue is highly dependent on our...

  • Page 37
    ... in the activity of those members, could result in decreased pay accounts, decreased content on our websites and decreased advertising revenues. A decline in the number of registered or active online loyalty marketing service members could result in decreased advertising revenues. We have been...

  • Page 38
    ... our Communications services revenues, advertising revenues, and the profitability of this segment will continue to decline over time. The number of dial-up Internet access pay accounts has been adversely impacted by both a decrease in the number of new pay accounts signing up for our services as...

  • Page 39
    ... than 300 issuers that conducted their initial public offerings between 1998 and 2000, their underwriters and an unspecified number of their individual corporate officers and directors. The parties in the approximately 300 coordinated class actions, including NetZero, the underwriter defendants in...

  • Page 40
    ... 16, 2010, the court conducted a final approval hearing on the settlement. On February 22, 2011, the court issued an Order formally denying final approval of the settlement. Discovery has not recommenced and no trial date has been set. In 2009, Classmates Online, Inc., now known as Memory Lane, Inc...

  • Page 41
    ...share of common stock. The record date was February 14, 2011 and the dividend will be paid on February 28, 2011. The payment of future dividends is discretionary and is subject to determination by United Online, Inc.'s Board of Directors each quarter following its review of our financial performance...

  • Page 42
    ...restricted stock units that vest and from the stock awards that are issued, the portion of those shares with a fair market value equal to the amount of the employee withholding taxes due, which is accounted for as a repurchase of common stock. We then pay the applicable required employee withholding...

  • Page 43
    ...any filing of United Online, Inc. under the Securities Act of 1933, as amended, or the Exchange Act. The following graph compares, for the five-year period ended December 31, 2010, the cumulative total stockholder return for the Company's common stock, The Nasdaq Global Select Market (U.S. companies...

  • Page 44
    ...assets related to our Communications segment. In August 2008, we acquired FTD. The results of FTD are included in our consolidated statements of operations from the date of acquisition. For additional information regarding our acquisitions, see Note 12-"Acquisitions" of the Notes to the Consolidated...

  • Page 45
    ...and online loyalty marketing. Our primary Communications segment service is Internet access. On a combined basis, our web properties attract a significant number of Internet users, and we offer a broad range of Internet marketing services for advertisers. Segment Definitions We report our businesses...

  • Page 46
    ... exchange rates; product mix; changes in merchandise pricing, shipping and service fees; levels of certain refunds issued; and discounts, among other factors. Content & Media and Communications Segment Metrics Pay Accounts. We generate a significant portion of our revenues from our pay accounts and...

  • Page 47
    ... online loyalty marketing members who have earned or redeemed points during such period. Communications segment active accounts include all Communications segment pay accounts as of the date presented combined with the number of free Internet access and email accounts that logged on to our services...

  • Page 48
    ...-priced subscription plans compared to U.S. pay accounts, and the churn rate. Quarter Ended June 30, 2010 December 31, 2010 September 30, 2010 March 31, 2010 December 31, 2009 Consolidated: Revenues (in thousands) FTD: Segment revenues (in thousands) % of consolidated revenues Consumer orders...

  • Page 49
    .... Services revenues for our online nostalgia services and Communications services are recognized in the period in which fees are fixed or determinable and the related services are provided to the customer. Our pay accounts generally pay in advance for their service by credit card, and revenue is...

  • Page 50
    ... primarily of fees generated when emails are transmitted to members, when members respond to emails and when members complete online transactions. Each of these activities is a discrete, independent activity, which generally is specified in the sales agreement for each advertising customer. As the...

  • Page 51
    ... Online, MyPoints, and Communications-for purposes of evaluating goodwill. These reporting units each constitute a business or group of businesses for which discrete financial information is available and is regularly reviewed by segment management. The goodwill related to our acquired businesses...

  • Page 52
    ... models based on our internal forecasts and projections. The estimated fair values for our FTD, Interflora and MyPoints reporting units were determined using a combination of the income approach and the market approach. The estimated fair values of our Classmates Online and Communications reporting...

  • Page 53
    ... may redeem points for third-party gift cards and other rewards. Members earn points when they respond to direct marketing offers delivered by MyPoints, purchase goods or services from advertisers, engage in certain promotional campaigns of advertisers, or engage in other specified activities. The...

  • Page 54
    ... Services Revenues FTD FTD services revenues consist of fees charged to its floral network members for access to the FTD and Interflora brands and the Mercury Man logo, access to the floral networks, credit card processing services, e-commerce website services, online advertising tools, telephone...

  • Page 55
    ..., Internet searches and market research surveys. Communications Our Communications services generate advertising revenues from search placements, display advertisements and online market research associated with our Internet access and email services. Advertising revenues also include intercompany...

  • Page 56
    ... billing support for our pay accounts; fees associated with the storage and processing of customer credit cards and associated bank fees; and domain name registration fees. Sales and Marketing Sales and marketing expenses include expenses associated with promoting our brands, products and services...

  • Page 57
    ... are tested for impairment at a reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would indicate the fair value of a reporting unit is below its carrying value. Restructuring Charges Restructuring charges consist of costs associated with...

  • Page 58
    ...2008 (date of acquisition) to December 31, 2008 Content & Media Year Ended December 31, 2010 2009 2008 Communications Year Ended December 31, 2010 2009 2008 Year Ended December 31, 2010 Revenues: Services $ Products Advertising Total revenues Operating expenses: Cost of revenues Sales and marketing...

  • Page 59
    56

  • Page 60
    ... was as follows for each period presented (in thousands): Year Ended December 31, 2009 2008 2010 Segment revenues: FTD Content & Media Communications Intersegment eliminations Consolidated revenues $ 554,576 $ 545,845 $ 201,644 236,022 167,153 211,233 (2,820) (2,968) $ 920,553 $ 990,132 $ 181...

  • Page 61
    ...for the years ended December 31, 2010 and 2009. Year Ended December 31, 2010 2009 Revenues Operating expenses: Cost of revenues Sales and marketing Technology and development General and administrative Amortization of intangible assets Restructuring charges Total operating expenses Operating income...

  • Page 62
    ... was primarily due to certain intangible assets related to our acquisition of Classmates Online, Inc. and its subsidiaries in 2004 becoming fully amortized in 2009 and 2010. Restructuring Charges. Consolidated restructuring charges decreased by $0.7 million, or 19%, to $2.8 million for the year...

  • Page 63
    ... ended December 31, 2010, our FTD segment recorded $1.6 million of restructuring charges primarily related to the closure of certain call center facilities in the U.S. and the U.K. These restructuring charges primarily included lease termination costs and employee termination benefits. In the year...

  • Page 64
    ... was primarily due to higher marketing expenditures related to television advertising for the Valentine's Day and U.S. Mother's Day holidays in 2010 and higher customer service costs, partially offset by a decrease in print and other advertising expenses. FTD Technology and Development Expenses...

  • Page 65
    ... of total pay accounts being represented by domestic discounted pricing plans and lower-priced international subscription plans. At December 31, 2010, the number of pay accounts decreased by 296,000 when compared to September 30, 2010. In addition, Content & Media advertising revenues decreased by...

  • Page 66
    ...to $167.2 million for the year ended December 31, 2010, compared to $211.2 million for the year ended December 31, 2009. The decrease was primarily due to a $39.9 million decrease in services revenues as a result of a 27% decrease in our average number of dial-up Internet access pay accounts from 63

  • Page 67
    ... the number of dial-up Internet access pay accounts and a decrease in hourly usage per pay account and a $3.1 million decrease in customer support and billing-related costs due to a decrease in the number of dial-up Internet access pay accounts. In addition, Communications cost of revenues decreased...

  • Page 68
    ... to continued declines in revenues due to continuing declines in the number of dial-up Internet access pay accounts. Communications Restructuring Charges. Communications restructuring charges decreased by $41,000, or 3%, to $1.3 million for the year ended December 31, 2010, compared to $1.4 million...

  • Page 69
    ... expenses associated with our FTD segment as a result of including FTD sales and marketing expenses for the entire period for the year ended December 31, 2009 whereas such expenses were included only from August 26, 2008 (date of acquisition) in the prior-year period. The increase was also due to...

  • Page 70
    ...31, 2008. Impairment charges for the year ended December 31, 2008 were primarily due to a reduction in the fair value of the FTD reporting unit compared to its carrying value and lower fair values in the FTD and Interflora trademarks and trade names compared to their carrying values. Interest Income...

  • Page 71
    ... of the indebtedness incurred in connection with the FTD acquisition, which closed on August 26, 2008. Interest expense was primarily related to interest on our credit facilities, including accretion of discounts and amortization of debt issue costs. Other Income (Expense), net. Other income, net...

  • Page 72
    ... volume and a decrease in sales of products and services to our floral network members. In the fourth quarter of 2009, the FTD segment achieved a year-over-year increase in revenues for the first time since the acquisition. FTD Cost of Revenues. FTD cost of revenues decreased by $50.7 million, or...

  • Page 73
    ... foreign currency exchange rates of $2.8 million, sales and marketing expenses decreased by $10.5 million, or 10%, compared to the prior-year period. The decrease was due to reduced marketing expenditures for online marketing and print advertising, a decrease in floral network member incentives, and...

  • Page 74
    ... plans, with a significant number of the new pay accounts generated during the period under this promotional pricing, resulting in a decrease in the churn rate. The increase in Content & Media services revenues was partially offset by a $6.7 million decrease in advertising revenues due to a decrease...

  • Page 75
    ... to acquiring new online nostalgia services members and online loyalty marketing members. The decrease was also due to a $1.2 million decrease in personnel-and overhead-related expenses. The decrease in Content & Media sales and marketing expenses as a percentage of Content & Media revenues was...

  • Page 76
    ... access services primarily due to a decrease in the number of pay accounts, a decrease in hourly usage per pay account and lower average hourly telecommunications costs. In addition, Communications cost of revenues decreased as a result of a $2.8 million decrease in customer supportand billing...

  • Page 77
    ... to the payment of cash in lieu of fractional shares of United Online, Inc. common stock. The FTD acquisition was funded, in part, with the net proceeds from (i) a $60 million senior secured credit agreement with Silicon Valley Bank (the "UOL Credit Agreement") and (ii) $375 million of term loan...

  • Page 78
    ... expenditures, investments, dividends, asset sales, and the incurrence of additional debt and liens. On the date of the FTD acquisition, term loan A and term loan B under the FTD Credit Agreement were fully funded. In connection with the closing of the FTD acquisition, all of the approximately $122...

  • Page 79
    ...on February 28, 2011. The payment of future dividends is discretionary and is subject to determination by United Online, Inc.'s Board of Directors each quarter following its review of our financial performance and other factors. In accordance with the terms of the FTD Credit Agreement, cash flows at...

  • Page 80
    ... the FTD Credit Agreement; dividend payments, if declared by United Online, Inc.'s Board of Directors; the development and/or acquisition of other services, businesses or technologies; the repurchase of our common stock underlying restricted stock units and stock awards to pay the required employee...

  • Page 81
    ...-year period, resulting from an increase in the number of pay accounts with discounted promotional pricing plans in our Content & Media segment as well as a reduction in the number of pay accounts with longer-term plans in our Communications segment. Net cash used for investing activities decreased...

  • Page 82
    ... issued Accounting Standards Update ("ASU") No. 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations , as codified in ASC 805. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue...

  • Page 83
    ... issued ASU No. 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20 , as codified in ASC 310. The amendments in this update temporarily delay the effective date of the disclosures about troubled debt restructurings in ASU 2010-20 for public...

  • Page 84
    ...flow hedge against expected future cash flows attributable to future LIBOR interest payments on the outstanding borrowings under the FTD Credit Agreement. However, in January 2009, as economic and capital market conditions continued to deteriorate, we determined that prime rate-based borrowings were...

  • Page 85
    ... accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management's Report on Internal Control Over Financial Reporting The Company's management is...

  • Page 86
    ... control over financial reporting at December 31, 2010 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein. Changes in Internal Control Over Financial Reporting There have not been any changes in the Company...

  • Page 87
    ..."; "Option Exercises and Stock Vested"; "Director Summary Compensation Table"; "Compensation Committee Interlocks and Insider Participation"; and "Compensation Committee Report". ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information...

  • Page 88
    ...are required to make the statements in this Annual Report on Form 10-K not misleading. Additional information about the Company may be found elsewhere in this Annual Report on Form 10-K and in the Company's other public filings, which are available without charge through the SEC's website at www.sec...

  • Page 89
    ... this Form 10-K Incorporated by Reference to Form File No. Date Filed 2.1 Stock Purchase Agreement, dated as of April 9, 2006, by and between United Online, Inc. and UAL Corporation 2.2 Agreement and Plan of Merger, dated April 30, 2008, among United Online, Inc., UNOLA Corp. and FTD Group, Inc...

  • Page 90
    ... Form of Stock Option Agreement for 2010 Incentive Compensation Plan (officers version II) 10.16 Amended and Restated United Online, Inc. Severance Benefit Plan 10.17 Employment Agreement between the Registrant and Mark R. Goldston 10.18 Employment Agreement between the Registrant and Paul E. Jordan...

  • Page 91
    the Registrant and Frederic A. Randall, Jr. 87

  • Page 92
    ... the Registrant and Charles B. Ammann 10.24 Employment Agreement between Memory Lane, Inc. (f/k/a Classmates Online, Inc.) and Harold A. Zeitz 10.25 Restricted Stock Unit Issuance Agreement(s) Amendment Agreement between United Online, Inc. and Mark R. Goldston 10.26 Restricted Stock Unit Issuance...

  • Page 93
    manager and administrative agent 88

  • Page 94
    ...by Reference to Form File No. Date Filed 10.34 Credit Agreement, dated as of August 11, 2008, among United Online, Inc., the lenders party thereto ... Public Accounting Firm 24.1 Power of Attorney (see signature page of this Annual Report on Form 10-K) 31.1 Certification of the Chief Executive Officer...

  • Page 95

  • Page 96
    ...13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 28, 2011. UNITED ONLINE, INC. By: /s/ MARK R. GOLDSTON Mark R. Goldston Chairman, President and Chief Executive Officer POWER OF...

  • Page 97
    Table of Contents Signature Title Date /s/ DENNIS HOLT Director Dennis Holt /s/ HOWARD G. PHANSTIEL Director Howard G. Phanstiel /s/ CAROL A. SCOTT Director Carol A. Scott 91 February 28, 2011 February 28, 2011 February 28, 2011

  • Page 98
    ...are required to make the statements in this Annual Report on Form 10-K not misleading. Additional information about the Company may be found elsewhere in this Annual Report on Form 10-K and in the Company's other public filings, which are available without charge through the SEC's website at www.sec...

  • Page 99
    ..., 2008 10.8 Form of Restricted Stock Unit Issuance Agreement for 2001 Stock Incentive Plan 10.9 Form of Option Agreement for 2001 Stock Incentive Plan 10.10 Form of Restricted Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan (nonemployee directors-initial grant) X 10-K 000-33367...

  • Page 100
    ... Form of Stock Option Agreement for 2010 Incentive Compensation Plan (officers version II) 10.16 Amended and Restated United Online, Inc. Severance Benefit Plan 10.17 Employment Agreement between the Registrant and Mark R. Goldston 10.18 Employment Agreement between the Registrant and Paul E. Jordan...

  • Page 101
    Agreement Amendment Agreement between United Online, Inc. and Mark R. Goldston 94

  • Page 102
    ... Jordan 10.30 Restricted Stock Unit Issuance Agreement(s) Amendment Agreement between United Online, Inc. and Robert J. Taragan 10.31 United Online, Inc. 2010 Management Bonus Plan 10.32 Office Lease between LNR Warner Center, LLC and NetZero, Inc. 10.33 Credit Agreement, dated as of August 4, 2008...

  • Page 103
    95

  • Page 104
    Table of Contents No. Exhibit Description Filed with this Form 10-K Incorporated by Reference to Form File No. Date Filed 32.2 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension ...

  • Page 105
    ...Contents UNITED ONLINE, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting ... Cash Flows Notes to Consolidated Financial Statements Schedule I-Condensed Financial Information of Registrant Schedule II-Valuation and Qualifying Accounts F-1 F-2 ...

  • Page 106
    Table of Contents Report of Independent Registered Public Accounting Firm To Board of Directors and Stockholders of United Online, Inc.: In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial ...

  • Page 107
    ... Deferred revenue Long-term debt, net of discounts Deferred tax liabilities, net Other liabilities Total liabilities Commitments and contingencies (see Note 14) Stockholders' equity: Preferred stock, $0.0001 par value; 5,000 shares authorized; no shares issued or outstanding at December 31, 2010 and...

  • Page 108
    ...UNITED ONLINE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended December 31, 2009 2008 2010 Revenues: Services Products Total revenues Operating expenses: Cost of revenues-services Cost of revenues-products Sales and marketing...participating securities ...

  • Page 109
    Table of Contents UNITED ONLINE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Year Ended December 31, 2009 2008 2010 Net income (loss) Change in unrealized loss on short-term investments, net of tax of $0, $0 and $(102) for the years ended December 31, 2010, 2009 and...

  • Page 110
    ... of stock options Issuance of common stock through employee stock purchase plan Vesting of restricted stock units Repurchases of common stock Issuance of common stock in connection with acquisition Dividends and dividend equivalents paid on shares outstanding and restricted stock units Change in...

  • Page 111
    ... stock options Issuance of common stock through employee stock purchase plans Vesting of restricted stock units Repurchases of common stock Dividends and dividend equivalents paid on shares outstanding and restricted stock units Change in dividend equivalents payable on restricted stock units Stock...

  • Page 112
    ... Payments on term loans and revolver Payments on capital leases Payments for debt issue costs Proceeds from exercises of stock options Proceeds from employee stock purchase plans Repurchases of common stock Dividends and dividend equivalents paid on outstanding shares and restricted stock units...

  • Page 113
    restricted stock units Reduction in goodwill in connection with a release of a portion of the valuation allowance for deferred tax assets Issuance of common stock in connection with the acquisition of FTD (see Note 12) $ $ $ (138) $ - $ - $ 207 $ - $ 385 128 - $ 126,151 The accompanying notes ...

  • Page 114
    ...'s primary Communications service is Internet access. On a combined basis, the Company's web properties attract a significant number of Internet users and the Company offers a broad array of Internet marketing services for advertisers. The Company's corporate headquarters are located in Woodland...

  • Page 115
    ... receivable are derived primarily from revenue earned from advertising customers and floral network members located in the U.S. and the U.K., and pay accounts. The Company extends credit based upon an evaluation of the customer's financial condition and, generally, collateral is not required. The...

  • Page 116
    ...available, the Company uses quoted market prices to measure fair value. If market prices are not available, fair value measurement is based upon models that use primarily market-based or independently-sourced market parameters. If market observable inputs for model-based valuation techniques are not...

  • Page 117
    ...excess of the purchase price of an acquired entity over the fair value of the net tangible and intangible assets acquired. Indefinite-lived intangible assets acquired in a business combination are initially recorded at management's estimate of their fair values. The Company accounts for goodwill and...

  • Page 118
    ... might be impaired. Events or circumstances which could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key management or other...

  • Page 119
    ... may redeem points for third-party gift cards and other rewards. Members earn points when they respond to direct marketing offers delivered by MyPoints, purchase goods or services from advertisers, engage in certain promotional campaigns of advertisers, or engage in other specified activities. The...

  • Page 120
    ... Company's online nostalgia services and for its Communications services are recognized in the period in which fees are fixed or determinable and the related services are provided to the customer. The Company's pay accounts generally pay in advance for their services by credit card, and revenue is...

  • Page 121
    ... support; costs related to customer billing and billing support for the Company's pay accounts and floral network members; fees associated with the storage and processing of customer credit cards and associated bank fees; and domain name registration fees. Sales and Marketing -Sales and marketing...

  • Page 122
    .... General and Administrative -General and administrative expenses include personnel-related expenses for executive, finance, legal, human resources, facilities, internal audit, investor relations, internal customer support personnel, and personnel associated with operating our corporate network F-16

  • Page 123
    ... to employees and directors including restricted stock units, stock awards, stock options, and employee stock purchases. ASC 718 requires companies to estimate the fair value of share-based payment awards on the grant date using an option-pricing model. The Company values its restricted stock units...

  • Page 124
    ... issued Accounting Standards Updates ("ASU") No. 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations , as codified in ASC 805. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue...

  • Page 125
    ...of additional updates. 2. SEGMENT INFORMATION Segment revenues and segment income (loss) from operations were as follows (in thousands): Year Ended December 31, 2010 Content & Media Communications FTD Total Services Products Advertising Total segment revenues Segment income from operations $ 119...

  • Page 126
    ... UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2. SEGMENT INFORMATION (Continued) A reconciliation of segment revenues to consolidated revenues was as follows for each period presented (in thousands): Year Ended December 31, 2009 2008 2010 Segment revenues: FTD...

  • Page 127
    ... ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2. SEGMENT INFORMATION (Continued) International revenues are generated by the Company's operations in Europe. International revenues totaled $180.0 million, $171.2 million and $66.6 million for the years ended December 31, 2010...

  • Page 128
    ... Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2010 2009 Employee compensation and related expenses Income taxes payable Non-income taxes payable Customer deposits Reserve for pending lawsuit Other Total $ 23,411 $ 22,475 5,987 8,565 5,527 5,325 2,608...

  • Page 129
    ... and/or adjustments to acquired deferred tax assets within one year of acquisition. Intangible Assets Intangible assets consisted of the following (in thousands): December 31, 2010 Accumulated Amortization Gross Value Net Pay accounts and free accounts Customer contracts and relationships...

  • Page 130
    ...a $60 million senior secured credit agreement with Silicon Valley Bank (the "UOL Credit Agreement") and borrowed $60 million thereunder. The net proceeds of the term loan under the UOL Credit Agreement were used to finance, in part, the acquisition of FTD. In April 2010, United Online, Inc. paid $14...

  • Page 131
    ...such guarantors (provided that no more than 66% of the capital stock of any foreign subsidiary is pledged or otherwise secures the FTD Credit Agreement). On the date of the FTD acquisition, term loan A and term loan B under the FTD Credit Agreement were funded and FTD Group, Inc. and such guarantors...

  • Page 132
    ... excess cash flow debt prepayments in the next twelve months. Under the terms of the FTD Credit Agreement, FTD Group, Inc. is significantly restricted from making dividend payments, loans or advances to United Online, Inc. and its subsidiaries. These restrictions have resulted in the restricted net...

  • Page 133
    ... 31, 2010 and 2009, the Company had no preferred shares issued or outstanding. Common Stock Repurchases United Online, Inc.'s Board of Directors authorized a common stock repurchase program (the "Program") that allowed the Company to repurchase shares of its common stock through open market or...

  • Page 134
    ... that were issued. For information regarding the common stock repurchases consummated during the year ended December 31, 2010, see "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities," which appears elsewhere in this Annual Report on...

  • Page 135
    ... a variety of vesting schedules and are canceled upon termination of employment. Restricted stock units granted to non-employee members of United Online, Inc.'s Board of Directors generally vest annually over a one-year period. Stock options granted to employees generally vest over a three- or four...

  • Page 136
    ... thousands): Year Ended December 31, 2010 2009 2008 Operating expenses: Cost of revenues-services Cost of revenues-products Sales and marketing Technology and development General and administrative Total stock-based compensation Tax benefit recognized Restricted Stock Units $ 502 $ 943 $ 1,049 41...

  • Page 137
    ...of the Board of Directors of United Online, Inc. approved grants of 1.3 million restricted stock units with a grant-date fair value equal to $9.3 million to certain of the Company's non-executive officer employees. The restricted stock units will vest as to twenty-five percent of the total number of...

  • Page 138
    ... Compensation Committee of the Board of Directors of United Online, Inc. (the "Compensation Committee") approved grants of 2.4 million stock options with a grant-date fair value equal to $4.7 million to certain members of the Company's senior management. Each stock option entitles the recipient to...

  • Page 139
    ... annual dividend by the closing market price of United Online, Inc. common stock at the date of grant. For the years ended December 31, 2010, 2009 and 2008, the Company recognized $1.4 million, $2.8 million and $1.1 million, respectively, of stock-based compensation related to the employee stock...

  • Page 140
    ... Ended December 31, 2009 2008 2010 Federal taxes at statutory rate of 35% State taxes, net Nondeductible executive compensation Goodwill impairment Effects of foreign income Foreign distribution Foreign tax credit Changes in uncertain tax positions Benefits of tax exempt income Other differences...

  • Page 141
    ... UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. INCOME TAXES (Continued) The significant components of net deferred tax balances were as follows (in thousands): December 31, 2010 2009 Deferred tax assets: Net operating loss and foreign tax credit carryforwards Stock...

  • Page 142
    ...UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. INCOME TAXES (Continued) At December 31, 2010 and 2009, the Company had gross unrecognized tax benefits... income tax rate. The changes in gross unrecognized tax benefits for the years ended December 31, 2010, 2009 and...

  • Page 143
    ...ended December 31, 2010, the Company recorded restructuring charges totaling $2.8 million. In the December 2010 quarter, the Communications segment eliminated 22 positions and the Company recorded restructuring charges totaling $1.3 million related to employee termination benefits. All costs related...

  • Page 144
    ...changes in the business climate had occurred and subsequently determined that an impairment charge was necessary (see Note 13). Each share of common stock of FTD Group, Inc., par value $0.01 per share, issued and outstanding immediately prior to the effective time of the FTD acquisition was canceled...

  • Page 145
    ..., United Online, Inc.'s election to substitute additional cash in lieu of seller notes as merger consideration. The purchase price for the acquisition was allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the Closing Date. The...

  • Page 146
    ... at Communications segment Total impairment of goodwill, intangible assets and long-lived assets 14. COMMITMENTS AND CONTINGENCIES Leases $ 114,000 61,867 283 176,150 $ Future minimum lease payments at December 31, 2010 under noncancelable operating leases with initial lease terms in excess...

  • Page 147
    ... of their status or service as directors, officers or employees. The Company has also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. The Company maintains director and officer insurance, which may cover...

  • Page 148
    ... 16, 2010, the court conducted a final approval hearing on the settlement. On February 22, 2011, the court issued an Order formally denying final approval of the settlement. Discovery has not recommenced and no trial date has been set. In 2009, Classmates Online, Inc., now known as Memory Lane, Inc...

  • Page 149
    ... third-party vendors. In addition, in 2010, Classmates Online, Inc. received a subpoena from the Attorney General for the District of Columbia regarding its marketing, billing, and renewal practices, including, without limitation, its posttransaction sales practices. The Company has been cooperating...

  • Page 150
    Table of Contents UNITED ONLINE, INC. SCHEDULE I-CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY BALANCE SHEETS (in thousands) December 31, 2010 2009 Assets Current... 454,481 524,786 $ 1,188,540 $ 1,133,848 The accompanying notes are an integral part of these financial statements. F-44

  • Page 151
    ... of Contents UNITED ONLINE, INC. PARENT COMPANY STATEMENTS OF OPERATIONS (in thousands) Year Ended December 31, 2009 2008 2010 Revenues Operating expenses:...3,655 51,313 69,456 (98,312) $ 53,687 $ 70,085 $ (94,657) The accompanying notes are an integral part of these financial statements. F-45

  • Page 152
    ... sales of short-term investments Cash paid for acquisitions, net of cash acquired Net cash used for investing activities Cash flows from financing activities: Proceeds from term loan Payments on term loan Payments for debt issue costs Proceeds from exercises of stock options Proceeds from employee...

  • Page 153
    ...Inc. for the corresponding years. Under the terms of agreements governing indebtedness of FTD Group, Inc., a subsidiary of United Online, Inc., such subsidiary is significantly restricted from making dividend payments, loans or advances to United Online, Inc. and its subsidiaries. These restrictions...

  • Page 154
    ...UNITED ONLINE, INC. SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (in thousands) Charged (Credited) to Other Accounts Balance at Beginning of Period Additions Charged to Expense Charges Utilized (Write-offs) Balance at End of Period Allowance for doubtful accounts: Year ended December 31, 2010...

  • Page 155

  • Page 156
    Exhibit 10.10 [NON-EMPLOYEE DIRECTORS-INITIAL GRANT] UNITED ONLINE, INC. RESTRICTED STOCK UNIT ISSUANCE AGREEMENT RECITALS A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees and consultants, nonemployee Board members and other independent advisors who ...

  • Page 157
    .... 3. Cessation of Service . Except as otherwise provided in Paragraphs 4 and 6 below, should the Participant cease to serve as a Board member for any reason prior to vesting in the Shares subject to this Award, then the awarded Restricted Stock Units will be immediately cancelled with respect to...

  • Page 158
    ... to the total number and/or class of securities issuable pursuant to this Award in order to reflect such change. In making such equitable and proportional adjustments, the Plan Administrator shall take into account any amounts to be credited to Participant's book account under Paragraph 5(b) in...

  • Page 159
    ...Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices, and directed to the attention of Stock...right of the Corporation to adjust, reclassify, reorganize or otherwise make changes in its capital or business structure or to...

  • Page 160
    ...of this Agreement comply with the requirements of the short-term deferral exception of Section 409A of the Code and ...executed this Agreement on the day and year first indicated above. UNITED ONLINE, INC. By: Title: Mark R. Goldston Chairman, President and Chief Executive Officer PARTICIPANT Name...

  • Page 161
    ...award of restricted stock units made to the Participant pursuant to the terms of this (i) the closing of a merger, consolidation or other reorganization approved by the Corporation's stockholders in which a change in ownership or control of the Corporation is effected through the acquisition by any...

  • Page 162
    ... Board members described in clause (A) who were still in office at the time the Board approved such appointment or nomination. F. G. Code shall mean the Internal Revenue Code of 1986, as amended. Common Stock shall mean shares of the Corporation's common stock. Corporation shall mean United Online...

  • Page 163
    Exhibit 10.11 [NON-EMPLOYEE DIRECTORS - ANNUAL GRANT] UNITED ONLINE, INC. RESTRICTED STOCK UNIT ISSUANCE AGREEMENT RECITALS A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees and consultants, nonemployee Board members and other independent advisors who ...

  • Page 164
    ... of Paragraph 4 of this Agreement shall be issued on the earlier of (i) the date of the Participant's cessation of service as a Board member or (ii) the Vesting Date specified above or as soon after such applicable date as administratively practicable, but in no event later than March 1, 201 . The...

  • Page 165
    ... of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, or should the value of the outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or...

  • Page 166
    ... to the total number and/or class of securities issuable pursuant to this Award in order to reflect such change. In making such equitable and proportional adjustments, the Plan Administrator shall take into account any amounts to be credited to Participant's book account under Paragraph 5(b) in...

  • Page 167
    ...Corporation to adjust, reclassify, reorganize or otherwise make changes in its capital or business...short-term deferral ...executed this Agreement on the day and year first indicated above. UNITED ONLINE, INC. By: Title: Mark R. Goldston Chairman, President and Chief Executive Officer PARTICIPANT Name...

  • Page 168
    ...award of restricted stock units made to the Participant pursuant to the terms of this (i) the closing of a merger, consolidation or other reorganization approved by the Corporation's stockholders in which a change in ownership or control of the Corporation is effected through the acquisition by any...

  • Page 169
    ... members described in clause (A) who were still in office at the time the Board approved such appointment or nomination. F. G. Code shall mean the Internal Revenue Code of 1986, as amended. Common Stock shall mean shares of the Corporation's common stock. H. Corporation shall mean United Online...

  • Page 170
    Exhibit 10.12 [OFFICER] UNITED ONLINE, INC. RESTRICTED STOCK UNIT ISSUANCE AGREEMENT RECITALS A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees and consultants and other independent advisors who provide services to the Corporation (or any Parent or ...

  • Page 171
    ..., and the number of Restricted Stock Units will be reduced accordingly. The Participant shall thereupon cease to have any right or entitlement to receive any Shares under those cancelled units. (b) The Participant's Employment Agreement sets forth certain terms and conditions under which Participant...

  • Page 172
    ... been issued and outstanding and entitled to that cash dividend. Each cash dividend equivalent payment under this subparagraph (i) shall be paid within five (5) business days following the payment of the actual cash dividend on the outstanding Common Stock, subject to the Corporation's collection...

  • Page 173
    ... Restricted Stock Units (or the proceeds of any replacement cash retention program) which vest on an accelerated basis in accordance with those provisions shall be issued or distributed on the applicable date or dates determined for those securities or proceeds pursuant to terms of the Employment...

  • Page 174
    ... to the total number and/or class of securities issuable pursuant to this Award in order to reflect such change. In making such equitable and proportional adjustments, the Plan Administrator shall take into account any amounts to be credited to Participant's book account under Paragraph 4(b) in...

  • Page 175
    ... Notices. Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices and directed to the attention of Stock Plan Administrator. Any notice required to be given or delivered...

  • Page 176
    ... the provisions of Paragraph 5(c) of this Agreement. IN WITNESS WHEREOF , the parties have executed this Agreement on the day and year first indicated above. UNITED ONLINE, INC. By: Title: Mark R. Goldston Chairman, President and Chief Executive Officer PARTICIPANT Name: Signature: 7

  • Page 177
    ... the date indicated in Paragraph 1 of the Agreement. D. Board shall mean the Corporation's Board of Directors. Agreement shall mean this Restricted Stock Unit Issuance Agreement. Award shall mean the award of restricted stock units made to the Participant pursuant to the terms of this E. Change in...

  • Page 178
    ... shall mean the Employment Agreement between the Participant and the Corporation (or any Parent or Subsidiary) in effect on the Award Date. K. Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading...

  • Page 179
    ... leave, no Service credit shall be given for vesting purposes for any period the Participant is on a leave of absence. S. York Stock Exchange. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New Plan shall mean the Corporation's 2010 Incentive...

  • Page 180
    Exhibit 10.13 [EMPLOYEES] UNITED ONLINE, INC. RESTRICTED STOCK UNIT ISSUANCE AGREEMENT RECITALS A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees and consultants and other independent advisors who provide services to the Corporation (or any Parent or ...

  • Page 181
    ... in accordance with the terms of this Agreement shall be issued, subject to the Corporation's collection of all applicable Withholding Taxes, on the applicable vesting date for that Share or as soon thereafter as administratively practicable, but in no event later than the close of the calendar year...

  • Page 182
    ... Regulations thereunder. (b) In the event the Award is assumed or otherwise continued in effect, the Restricted Stock Units subject to the Award shall be adjusted immediately after the consummation of the Change in Control so as to apply to the number and class of securities into which the Shares...

  • Page 183
    ...upon such Involuntary Termination of Service shall be issued to the Participant, subject to the Corporation's collection of all applicable Withholding Taxes, on the date of such Involuntary Termination or as soon thereafter as administratively practicable, but in no event later than the close of the...

  • Page 184
    ... from a next-day sale of the Shares issued to the Participant, provided and only if (i) such a sale is permissible under the Corporation's trading policies governing the sale of Common Stock, (ii) the Participant makes an irrevocable commitment, on or before the vesting date for those Shares, to...

  • Page 185
    ... to such exception. IN WITNESS WHEREOF , the parties have executed this Agreement on the day and year first indicated above. UNITED ONLINE, INC. By: Title: Mark R. Goldston Chairman, President and Chief Executive Officer PARTICIPANT Name: Signature: 6

  • Page 186
    ... and shall be the date indicated in Paragraph 1 of the Agreement. D. Board shall mean the Corporation's Board of Directors. Agreement shall mean this Restricted Stock Unit Issuance Agreement. Award shall mean the award of restricted stock units made to the Participant pursuant to the terms of this...

  • Page 187
    ...of the employer entity as to both the work to be performed and the manner and method of performance. K. Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading hours (i.e., before after-hours trading begins...

  • Page 188
    ...of all classes of stock in one of the other corporations in such chain. P. Q. of the Plan. R. Service shall mean the Participant's performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or a consultant...

  • Page 189
    ... (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. U. Withholding Taxes shall mean the federal, state and local income taxes and the employee portion of the federal, state and local employment taxes required to be withheld by the...

  • Page 190
    ... of the following option grant (the "Option") to purchase shares of the Common Stock of United Online, Inc. (the "Corporation"): Optionee : Grant Date : Exercise Price : Number of Option Shares: Expiration Date: Type of Option : 1 1 , 202 Incentive Stock Option Non-Statutory Stock Option $ , 201 per...

  • Page 191
    DATED: , 2011 UNITED ONLINE, INC. By: Title: OPTIONEE ATTACHMENTS EXHIBIT A - STOCK OPTION AGREEMENT

  • Page 192
    EXHIBIT A UNITED ONLINE, INC. STOCK OPTION AGREEMENT RECITALS A. The Corporation has implemented the Plan for the purpose of providing eligible persons in the Corporation's service with the opportunity to participate in one or more cash or equity incentive compensation programs designed to encourage...

  • Page 193
    ... installments until the Expiration Date or sooner termination of the option term under Paragraph 5 or 6. (b) Optionee's Employment Agreement sets forth certain terms and conditions under which Optionee's equity or equity-based awards from the Corporation, including this option, may vest in whole...

  • Page 194
    ... at the time of such cessation of Service. In no event, however, shall this option be exercisable at any time after the close of business on the last business day coincident with or immediately preceding the Expiration Date. Note: Unless such Disability also constitutes Permanent Disability...

  • Page 195
    ... the spread existing at the time of the Change in Control on any Option Shares for which this option is not otherwise at that time vested and exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such shares) and provides for the...

  • Page 196
    ... to the number and class of securities into which the shares of Common Stock subject to this option would have been converted in consummation of such Change in Control had those shares actually been outstanding at the time. Appropriate adjustments shall also be made to the Exercise Price, provided...

  • Page 197
    ...and (ii) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm on such settlement date. Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Notice...

  • Page 198
    ...of this option designated by Optionee. 12. Notices . Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices and directed to the attention of the Stock Plan Administrator...

  • Page 199
    ... to the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or other securities for which this option or any other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent...

  • Page 200
    ... shall be in effect under the Agreement: A. B. Agreement shall mean this Stock Option Agreement. Board shall mean the Corporation's Board of Directors. C. Change in Control shall have the meaning assigned to such term in the Employment Agreement. However, in the absence of such definition in the...

  • Page 201
    ... members described in clause (A) who were still in office at the time the Board approved such appointment or nomination. D. E. Code shall mean the Internal Revenue Code of 1986, as amended. Common Stock shall mean shares of the Corporation's common stock. F. Corporation shall mean United Online...

  • Page 202
    ... measuring the maximum term for which the option may remain outstanding. N. Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading hours (i.e., before after-hours trading begins) on the date in question on...

  • Page 203
    ...) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. For purposes of this Agreement, Optionee shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) Optionee no longer performs...

  • Page 204
    ...local income taxes and the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the exercise of the option. HH. II. With Cause shall have the meaning assigned to such term in the Employment Agreement. Without Cause shall have...

  • Page 205
    ... of the following option grant (the "Option") to purchase shares of the Common Stock of United Online, Inc. (the "Corporation"): Optionee : Grant Date : Exercise Price : Number of Option Shares: Expiration Date: Type of Option : 1 1 , 202 Incentive Stock Option Non-Statutory Stock Option $ , 201 per...

  • Page 206
    DATED: , 2011 UNITED ONLINE, INC. By: Title: OPTIONEE ATTACHMENTS EXHIBIT A - STOCK OPTION AGREEMENT

  • Page 207
    EXHIBIT A UNITED ONLINE, INC. STOCK OPTION AGREEMENT RECITALS A. The Corporation has implemented the Plan for the purpose of providing eligible persons in the Corporation's service with the opportunity to participate in one or more cash or equity incentive compensation programs designed to encourage...

  • Page 208
    ... at the time of Optionee's cessation of Service, but in no event shall this option be exercisable at any time after the close of business on the last business day coincident with or immediately preceding the Expiration Date. (b) In the event Optionee ceases Service by reason of his or her death...

  • Page 209
    ... federal and state securities laws, but in no event shall such an extension result in the continuation of this option beyond the close of business on the last business day coincident with or immediately preceding the Expiration Date. (e) Should Optionee's Service be terminated for Cause, or...

  • Page 210
    ... to the number and class of securities into which the shares of Common Stock subject to this option would have been converted in consummation of such Change in Control had those shares actually been outstanding at the time. Appropriate adjustments shall also be made to the Exercise Price, provided...

  • Page 211
    ...change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, or should the value of outstanding shares of Common Stock... to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price. The adjustments shall be...

  • Page 212
    ...and (ii) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm on such settlement date. Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Notice...

  • Page 213
    ...of this option designated by Optionee. 12. Notices . Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices and directed to the attention of the Stock Plan Administrator...

  • Page 214
    ... to the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or other securities for which this option or any other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent...

  • Page 215
    ...A. B. Agreement shall mean this Stock Option Agreement. Board shall mean the Corporation's Board of Directors. C. Cause shall mean Optionee's... Corporation's outstanding securities (as measured in terms of the power to vote with respect to the election of Board members), (ii) the closing of a sale,...

  • Page 216
    ... assets or voting stock of United Online, Inc. which shall by appropriate action adopt the Plan. H. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary) subject to the control and direction of the employer entity as to both the work to be performed...

  • Page 217
    ... measuring the maximum term for which the option may remain outstanding. M. Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading hours (i.e., before after-hours trading begins) on the date in question on...

  • Page 218
    ...) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. For purposes of this Agreement, Optionee shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) Optionee no longer performs...

  • Page 219
    ... leave, no Service credit shall be given for vesting purposes for any period Optionee is on a leave of absence. BB. York Stock Exchange. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New CC. Subsidiary shall mean any corporation (other than...

  • Page 220
    Exhibit 10.16 AMENDED AND RESTATED UNITED ONLINE, INC. SEVERANCE BENEFIT PLAN AND SUMMARY PLAN DESCRIPTION Amended and Restated Effective January 1, 2010

  • Page 221
    ..." base pay " means: (a) in the case of a Layoff Termination (as defined herein): (i) if you are a salaried employee, your set weekly salary (" Weekly Salary ") in effect as of your termination date or (ii) if you are an employee paid on an hourly basis, your base hourly rate times 40 for a work week...

  • Page 222
    ... of United Online, Inc., or (ii) a change in the composition of the Board of Directors of United Online, Inc. ("Board") over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to...

  • Page 223
    ... for Good Reason during the Transaction Protection Period. Unless otherwise determined by the Chief Executive Officer of United Online, Inc., the Involuntary Termination provisions of the Plan shall only apply in the event of a Change in Control or Corporate Transaction with respect to United Online...

  • Page 224
    ...that fifteen (15)day period (via check payable to "United Online, Inc.") any amount advanced but not used. 7. On or before your employment termination date, you have met with your manager and: (i) you have transitioned your work and information concerning your work to your manager; and (ii) you have...

  • Page 225
    ...and failure to work through the termination date may render you ineligible for severance benefits. Vacation may be taken between the date you receive notice of termination and your termination date only with the prior written approval of senior management. 5. You are terminated for reasons unrelated...

  • Page 226
    ... of the maximum applicable delivery/review and revocation periods and you have otherwise complied with all the other terms and conditions of Section III.A, or on such subsequent date as the Company may determine in its sole discretion, but in no event later the last business day of such sixty (60...

  • Page 227
    B. Severance Benefits Guidelines The Severance Payment Benefit for which you are eligible under the Plan depends on your position, your base pay, your length of service, the type of termination, and whether you are entitled to receive prior notice of your termination under the terms of the Worker ...

  • Page 228
    ...one or more employees or classes of employees, the eligibility requirements for Severance Payment Benefits or modify the amount of Severance Payment Benefits. The foregoing shall not apply during the Transaction Protection Period. In no event, however, shall any Severance Payment Benefit payments be...

  • Page 229
    ..., you may submit a signed, written application to the Chief Personnel Officer of the Company within ninety (90) days after the effective date of your Layoff Termination or Involuntary Termination. 2. Denial of Application for Benefits . In the event that your application for benefits is denied in...

  • Page 230
    ... eligible employees as of the closing of that Transaction, the provisions of the Plan are intended to serve as mere guidelines for the payment of benefits under certain prescribed circumstances and are not intended to provide any employee with a vested right to benefits. Accordingly, any termination...

  • Page 231
    ...employees who are covered by the Plan. No one, including your Employer or any other person, may terminate your employment or otherwise discriminate against you in any way to prevent you from obtaining a benefit... a case, the court may require the Plan Administrator to provide the materials and pay you...

  • Page 232
    ... may order you to pay these costs and fees, for example, if it finds that your claim or suit is frivolous. If you have any questions about the Plan, this statement or your rights under ERISA, you should contact the Plan Administrator or the nearest Area Office of the Pension and Welfare Benefits...

  • Page 233
    ...PLAN INFORMATION Plan Sponsor: Plan Name: Employer Identification Number Plan Number: Plan Effective Date: Plan Administrator: United Online, Inc. The United Online, Inc. Severance Benefit Plan 77-0575839 5 01 January 1, 2010 United Online, Inc. 21301 Burbank Blvd. Woodland Hills, CA 91367 Telephone...

  • Page 234
    ..., INC. HAS CAUSED THIS AMENDED AND RESTATED SEVERANCE BENEFIT PLAN AND SUMMARY PLAN DESCRIPTION TO BE EXECUTED ON ITS BEHALF BY ITS DULY AUTHORIZED OFFICER ON THE DATE AND YEAR INDICATED BELOW. UNITED ONLINE, INC. By: Title: /s/ Mark R. Goldston Chief Executive Officer Dated: November 22, 2010 15

  • Page 235
    SCHEDULE A LIST OF COVERED SUBSIDIARIES PARTICIPATING IN THE PLAN AS OF JANUARY 1, 2010 NetZero, Inc. Juno Internet Services, Inc. United Online Advertising Network, Inc. Classmates Online, Inc. MyPoints.com, Inc. FTD.COM, Inc. Florists' Transworld Delivery, Inc. 16

  • Page 236
    ... Employment Agreement (the " Agreement ") is made and entered into effective the 6th day of December, 2010 by and between United Online, Inc., a Delaware corporation (the " Company "), with principal corporate offices at 21301 Burbank Boulevard, Woodland Hills, California 91367, and Mark R. Goldston...

  • Page 237
    ... liquidated for any other benefit. 3.6 Board of Directors . If Employee is elected to the Board, Employee shall serve as Chairman of the Board. Employee's appointments as Chairman and as a member of the Board will automatically terminate upon the termination of Employee's employment with the Company...

  • Page 238
    ... practicable thereafter, but in no event later than the sixtieth (60 th ) day following the date of Employee's termination of employment. With respect to Employee's outstanding options to purchase shares of the Company's Common Stock (" Option Awards "), restricted unit awards covering shares of the...

  • Page 239
    ... the position of Chairman of the Board of Directors and Chief Executive Officer of the Company or its successor as well as the acquiring and ultimate parent entity, if any, following a Change in Control), (b) a material decrease in pay and/or benefits from those provided by the Company immediately...

  • Page 240
    ...members described in clause (A) who were still in office at the time the Board approved such appointment or nomination. 5. NON-SOLICITATION For the eighteen (18) month period following the termination of Employee's employment with the Company (but only if Employee has received the Severance Payment...

  • Page 241
    ... into account any Excise Tax imposed on the payments and benefits provided Employee hereunder (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of Employee's employment with...

  • Page 242
    ...Employee's termination of employment constitutes a " separation from service " (as such term is defined in Treasury Regulations issued under Section 409A of the Code). For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment...

  • Page 243
    ... Name: Robert Berglass Title: Lead Independent Director, Compensation Committee Chair of United Online, Inc. Dated: December 6, 2010 By: /s/ Charles B. Ammann Name: Charles B. Ammann Title: EVP and General Counsel Dated: December 6, 2010 MARK R. GOLDSTON /s/ Mark R. Goldston Dated: December 6, 2010...

  • Page 244
    ... corporate offices at 21301 Burbank Boulevard, Woodland Hills, California 91367, and Paul E. Jordan , whose address is 21301 Burbank Boulevard, Woodland Hills, California 91367 (" Employee "). WHEREAS, effective as of the date hereof, Employee and the Company desire to enter into a new employment...

  • Page 245
    ... is earned. 4. Restricted Stock Units and Other Equity Awards. If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is (a) defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section...

  • Page 246
    ... award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined...

  • Page 247
    ... nature of Employee's employment may only be changed in an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. 7. Separation from Service . Termination by Employee. If Employee terminates his employment with the Company...

  • Page 248
    ... execute and deliver to the Company, within twenty-one (21) days (or forty-five (45) days to the extent such longer period is required under applicable law) after the effective date of Employee's termination of employment, a comprehensive agreement releasing the Company and its officers, directors...

  • Page 249
    ... to single payment. If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of...

  • Page 250
    ... into account any Excise Tax imposed on the payments and benefits provided Employee hereunder (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of Employee's employment with...

  • Page 251
    ...a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be...

  • Page 252
    ... the time of Employee's separation of service: (i) Any payments or benefits which become due and payable to Employee during the period beginning with the date of Employee's separation from service and ending on March 15 of the following calendar year and otherwise qualify for the short-term deferral...

  • Page 253
    ...of the Company's common stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or...

  • Page 254
    ... parties hereto have executed this Agreement as of the date stated in the opening paragraph. /s/ Paul E. Jordan PAUL E. JORDAN Date signed: January 21, 2011 UNITED ONLINE, INC. By: /s/ Mark R. Goldston Mark R. Goldston Chairman, President and Chief Executive Officer Date signed: February 7, 2011 11

  • Page 255
    ...Board of Directors. (b) Employee will be eligible to participate in each of the Company's employee benefit plans that is made generally available either to the Company's employees or to the Company's senior executives and for which Employee satisfies the applicable eligibility requirements. Employee...

  • Page 256
    ... is earned. 4. Restricted Stock Units and Other Equity Awards. If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is (a) defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section...

  • Page 257
    ... award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined...

  • Page 258
    ..." nature of Employee's employment may only be changed in an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. 7. Separation from Service . (a) Termination by Employee. If Employee terminates his employment with the...

  • Page 259
    ... in which such bonus payment would have been paid had Employee remained in the Company's employ through the payment date) on the later of (i) the date on which the first monthly installment of the Separation Payment (or, in the case of a termination following a Qualifying Change in Control, the lump...

  • Page 260
    ... to single payment. If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of...

  • Page 261
    ... into account any Excise Tax imposed on the payments and benefits provided Employee hereunder (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of Employee's employment with...

  • Page 262
    ...a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be...

  • Page 263
    ... the time of Employee's separation of service: (i) Any payments or benefits which become due and payable to Employee during the period beginning with the date of Employee's separation from service and ending on March 15 of the following calendar year and otherwise qualify for the short-term deferral...

  • Page 264
    ...of the Company's common stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or...

  • Page 265
    ...hereto have executed this Agreement as of the date stated in the opening paragraph. /s/ Frederic A. Randall, Jr. FREDERIC A. RANDALL, JR. Date signed: January 31, 2011 UNITED ONLINE, INC. By: /s/ Mark R. Goldston Mark R. Goldston Chairman, President and Chief Executive Officer Date signed: February...

  • Page 266
    ...Board of Directors. (b) Employee will be eligible to participate in each of the Company's employee benefit plans that is made generally available either to the Company's employees or to the Company's senior executives and for which Employee satisfies the applicable eligibility requirements. Employee...

  • Page 267
    ... is earned. 4. Restricted Stock Units and Other Equity Awards. (a) If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section...

  • Page 268
    ... award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined...

  • Page 269
    ..." nature of Employee's employment may only be changed in an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. 7. Separation from Service . (a) Termination by Employee. If Employee terminates his employment with the...

  • Page 270
    ... in which such bonus payment would have been paid had Employee remained in the Company's employ through the payment date) on the later of (i) the date on which the first monthly installment of the Separation Payment (or, in the case of a termination following a Qualifying Change in Control, the lump...

  • Page 271
    ... to single payment. If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of...

  • Page 272
    ... into account any Excise Tax imposed on the payments and benefits provided Employee hereunder (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of Employee's employment with...

  • Page 273
    ...a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be...

  • Page 274
    ... the time of Employee's separation of service: (i) Any payments or benefits which become due and payable to Employee during the period beginning with the date of Employee's separation from service and ending on March 15 of the following calendar year and otherwise qualify for the short-term deferral...

  • Page 275
    ...of the Company's common stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or...

  • Page 276
    ..., Employee's employment with the Company will continue to be "at will". IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date stated in the opening paragraph. /s/ Scott H. Ray SCOTT H. RAY Date signed: January 24, 2011 UNITED ONLINE, INC. By: /s/ Mark R. Goldston Mark...

  • Page 277
    ... corporate offices at 21301 Burbank Boulevard, Woodland Hills, California 91367, and Robert J. Taragan , whose address is 21301 Burbank Boulevard, Woodland Hills, California 91367 (" Employee "). WHEREAS, effective as of the date hereof, Employee and the Company desire to enter into a new employment...

  • Page 278
    ... is earned. 4. Restricted Stock Units and Other Equity Awards. (a) If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section...

  • Page 279
    ... award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined...

  • Page 280
    ... nature of Employee's employment may only be changed in an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. 7. Separation from Service . Termination by Employee. If Employee terminates his employment with the Company...

  • Page 281
    ... execute and deliver to the Company, within twenty-one (21) days (or forty-five (45) days to the extent such longer period is required under applicable law) after the effective date of Employee's termination of employment, a comprehensive agreement releasing the Company and its officers, directors...

  • Page 282
    ... to single payment. If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of...

  • Page 283
    ... into account any Excise Tax imposed on the payments and benefits provided Employee hereunder (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of Employee's employment with...

  • Page 284
    ...a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be...

  • Page 285
    ... the time of Employee's separation of service: (i) Any payments or benefits which become due and payable to Employee during the period beginning with the date of Employee's separation from service and ending on March 15 of the following calendar year and otherwise qualify for the short-term deferral...

  • Page 286
    ...of the Company's common stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or...

  • Page 287
    ... hereto have executed this Agreement as of the date stated in the opening paragraph. /s/ Robert J. Taragan ROBERT J. TARAGAN Date signed: January 17, 2011 UNITED ONLINE, INC. By: /s/ Mark R. Goldston Mark R. Goldston Chairman, President and Chief Executive Officer Date signed: February 7, 2011...

  • Page 288
    ... Board of Directors of United Online, Inc. (b) Employee will be eligible to participate in each of the Company's employee benefit plans that is made generally available either to the Company's employees or to the Company's senior executives and for which Employee satisfies the applicable eligibility...

  • Page 289
    ... is earned. 4. Restricted Stock Units and Other Equity Awards. (a) If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section...

  • Page 290
    ... award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined...

  • Page 291
    ... nature of Employee's employment may only be changed in an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. 7. Separation from Service . Termination by Employee. If Employee terminates his employment with the Company...

  • Page 292
    ... execute and deliver to the Company, within twenty-one (21) days (or forty-five (45) days to the extent such longer period is required under applicable law) after the effective date of Employee's termination of employment, a comprehensive agreement releasing the Company and its officers, directors...

  • Page 293
    ... to single payment. If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of...

  • Page 294
    ... into account any Excise Tax imposed on the payments and benefits provided Employee hereunder (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of Employee's employment with...

  • Page 295
    ...a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be...

  • Page 296
    ... the time of Employee's separation of service: (i) Any payments or benefits which become due and payable to Employee during the period beginning with the date of Employee's separation from service and ending on March 15 of the following calendar year and otherwise qualify for the short-term deferral...

  • Page 297
    ... of shares of Common Stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or...

  • Page 298
    ..., the parties hereto have executed this Agreement as of the date stated in the opening paragraph. /s/ Robert S. Apatoff ROBERT S. APATOFF Date signed: January 21, 2011 FTD GROUP, INC. By: /s/ Mark R. Goldston Mark R. Goldston Chairman and Chief Executive Officer Date signed: February 07, 2011 11

  • Page 299
    ...Board of Directors. (b) Employee will be eligible to participate in each of the Company's employee benefit plans that is made generally available either to the Company's employees or to the Company's senior executives and for which Employee satisfies the applicable eligibility requirements. Employee...

  • Page 300
    ... is earned. 4. Restricted Stock Units and Other Equity Awards. (a) If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section...

  • Page 301
    ... award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined...

  • Page 302
    ..." nature of Employee's employment may only be changed in an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. 7. Separation from Service . (a) Termination by Employee. If Employee terminates his employment with the...

  • Page 303
    ... in which such bonus payment would have been paid had Employee remained in the Company's employ through the payment date) on the later of (i) the date on which the first monthly installment of the Separation Payment (or, in the case of a termination following a Qualifying Change in Control, the lump...

  • Page 304
    ... to single payment. If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of...

  • Page 305
    ... into account any Excise Tax imposed on the payments and benefits provided Employee hereunder (or on any other payments or benefits to which Employee may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of Employee's employment with...

  • Page 306
    ...a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be...

  • Page 307
    ... the time of Employee's separation of service: (i) Any payments or benefits which become due and payable to Employee during the period beginning with the date of Employee's separation from service and ending on March 15 of the following calendar year and otherwise qualify for the short-term deferral...

  • Page 308
    ...of the Company's common stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or...

  • Page 309
    ...Employee's employment with the Company will continue to be "at will". IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date stated in the opening paragraph. /s/ Charles B. Ammann CHARLES B. AMMANN Date signed: January 21, 2011 UNITED ONLINE, INC. By: /s/ Mark R. Goldston...

  • Page 310
    ... Board of Directors of United Online, Inc. with respect to executive compensation matters has been delegated, including (without limitation) the Compensation Committee of the Board of Directors of United Online, Inc. Employee will be eligible to participate in each of the Company's employee benefit...

  • Page 311
    ... issued, in a series of successive equal annual installments over the Employee's period of continued employment with the Company or any majority or greater owned subsidiary of United Online, Inc. in accordance with following service-vesting schedule: (i) Twenty-five percent (25%) of the total number...

  • Page 312
    ... in the second taxable year. (c) If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) at any time during the Term and within the period commencing with the execution by United Online, Inc. of a definitive agreement for...

  • Page 313
    ..." nature of Employee's employment may only be changed in an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. 7. Separation from Service . (a) Termination by Employee. If Employee terminates his employment with the...

  • Page 314
    ... Company's employ through the payment date) as follows: (i) if such Change in Control occurs on or before the date of such involuntary termination, then such payment shall be made on the date on which the first monthly installment of the Separation Payment (or, in the case of a termination following...

  • Page 315
    ... to single payment. If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of...

  • Page 316
    ... the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), on which Employee's executed Release is effective and enforceable in accordance with its terms...

  • Page 317
    ...pay the Accrued Obligations to Employee, Employee's estate or beneficiaries (as the case may be) on the date of such separation from service or as soon as administratively practicable thereafter, but in no event... good reason event and (C) Employee effectively terminates Employee's employment within...

  • Page 318
    ...a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be...

  • Page 319
    ...in the design, development, manufacture, marketing or sale of a product or service which is in competition with the products or services of the Company including, but not limited to, online nostalgic content, online social networking and any other products or services then offered by the Company, or...

  • Page 320
    ... of shares of Common Stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or...

  • Page 321
    ..., the parties hereto have executed this Agreement as of the date stated in the opening paragraph. /s/ Harold Alan Zeitz Harold Alan Zeitz Date signed: January 13, 2011 CLASSMATES ONLINE, INC. By: /s/ Mark R. Goldston Mark R. Goldston Chairman and Chief Executive Officer Date signed: January 14, 2011...

  • Page 322
    ... GmbH Trombi Acquisition SARL United Online Advertising Network, Inc., a Delaware corporation (dba United Online Media Group) United Online Web Services, Inc., a Delaware corporation (dba 50 Megs, Bizhosting, Freeservers, GlobalServers, and MySite) United Online Software Development (India) Private...

  • Page 323
    QuickLinks Exhibit 21.1 List of Subsidiaries

  • Page 324
    ... PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-70532, 333-88766, 333-106003, 333-114919, 333-121217, 333-123392, 333-140999, 333-149324, 333-155261, 333-157599, 333-165030, 333-166114, and 333-168634) of United Online...

  • Page 325
    QuickLinks Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  • Page 326
    ...; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: February 28, 2011 /s/ MARK R. GOLDSTON Mark R. Goldston Chairman, President and Chief Executive Officer

  • Page 327
    QuickLinks Exhibit 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

  • Page 328
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: February 28, 2011 /s/ SCOTT H. RAY Scott H. Ray Executive Vice President and Chief Financial Officer

  • Page 329
    QuickLinks Exhibit 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

  • Page 330
    ... ACT OF 2002 I, Mark R. Goldston, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (a) The Annual Report on Form 10-K of United Online, Inc. for the year ended December 31, 2010, as filed with the Securities and...

  • Page 331
    QuickLinks Exhibit 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

  • Page 332
    ...pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (a) The Annual Report on Form 10-K of United Online, Inc. for the year ended December 31, 2010, as filed with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the...

  • Page 333
    QuickLinks Exhibit 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002