Classmates.com 2010 Annual Report Download - page 133

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. FAIR VALUE MEASUREMENTS (Continued)
determining the market interest yield curve, the Company considered, among other factors, its estimate of its credit rating. The Company
estimated its credit rating as BBB/BB+ for the long-
term debt associated with the FTD Credit Agreement, resulting in a discount rate of 5%. The
table below summarizes the fair value estimates for long-term debt, net of discounts, including the current portion, at December 31, 2010, as
defined by ASC 825, Disclosures about Fair Value of Financial Instruments (in thousands):
7. STOCKHOLDERS' EQUITY
Stockholder Rights Plan
On November 15, 2001, United Online, Inc.'s Board of Directors declared a dividend of one preferred share purchase right for each
outstanding share of the Company's common stock. The dividend was paid on November 26, 2001 to the stockholders of record at the close of
business on that date. Each right entitles the registered holder to purchase from the Company one unit consisting of one one-thousandth of a
share of its Series A junior participating preferred stock at a price of $25 per unit. On April 29, 2003, the Board of Directors voted to amend the
purchase price per unit from $25 to $140. The rights generally will be exercisable only if a person or group acquires beneficial ownership of 15%
or more of the Company's common stock or announces a tender or exchange offer which would result in a person or group owning 15% or more
of the Company's common stock. The Company generally will be entitled to redeem the rights at $0.0007 per right at any time until 10 days after
a public announcement that a 15% position in the Company's common stock has been acquired or that a tender or exchange offer which would
result in a person or group owning 15% or more of the Company's common stock has commenced. In February 2011, the Board of Directors
voted to accelerate the expiration date of the stockholder rights plan described above to February 28, 2011. Accordingly, on February 28, 2011,
such stockholder rights plan shall expire.
Preferred Stock
The Company has 5.0 million shares of preferred stock authorized with a par value of $0.0001, of which 300,000 shares are designated as
Series A junior participating preferred stock. At December 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 privately negotiated transactions based on prevailing market conditions and other
factors through December 31, 2010. The Company repurchased 2.2 million shares of common stock under the Program for $11.0 million in the
year ended December 31, 2010. From August 2001 through December 31, 2010, the Company had repurchased $150.2 million of its common
stock under the Program, leaving $49.8 million of authorization remaining under the Program. In February 2011, the Board of Directors
extended the Program through December 31, 2011 and increased the amount authorized to $80 million.
F-27
Carrying
Amount
Estimated
Fair Value
Long
-
term debt, net of discounts
$
258,084
$
284,682