Classmates.com 2010 Annual Report Download - page 137

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. STOCK-BASED COMPENSATION PLANS (Continued)
At December 31, 2009, the intrinsic value of nonvested restricted stock units was approximately $49.5 million. The fair value of restricted
stock units that vested during the year ended December 31, 2009 was approximately $18.5 million. Total unrecognized compensation cost
related to nonvested restricted stock units at December 31, 2009, net of expected forfeitures, was approximately $35.6 million and was expected
to be recognized over a weighted-average period of one year.
Recent Awards
Effective February 15, 2011, the Secondary Compensation Committee 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 shares awarded annually over a four-year period beginning
February 15, 2011.
Stock Option Exchange Program for Three Executive Officers
In March 2009, the Compensation Committee implemented a stock option exchange program pursuant to which three executive officers
were given the opportunity to exchange certain "out-of-the-money," or "underwater," stock options previously granted to them under the
Company's 2001 Stock Incentive Plan, for an award of restricted stock units pursuant to which the executive officers were entitled to receive one
share of common stock of United Online, Inc. for each restricted stock unit that is granted under the award on the date that each such unit vests
in accordance with its terms and the designated vesting schedule.
The number of restricted stock units issued for each exchanged underwater stock option was determined in accordance with a 1-for-3
exchange ratio. All 2.0 million of underwater stock options eligible for the exchange program were exchanged for 0.6 million restricted stock
units. All underwater stock options were canceled upon exchange for restricted stock units pursuant to the Company's 2001 Stock Incentive Plan.
The restricted stock units vested in quarterly increments over the two-year period measured from February 15, 2009. Upon vesting, the
Company issued shares of common stock corresponding to the number of vested restricted stock units awarded to the officer, less the number of
shares having an aggregate value equal to the Company's statutory withholding obligations with respect to applicable employee withholding
taxes (all as consistent with the Company's current practices with respect to restricted stock units). The grant-date fair value of the 0.6 million
restricted stock units totaled $2.5 million.
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