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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
    ... 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 Year 21301 BURBANK BOULEVARD WOODLAND HILLS, CA 91367 8182873000 0001142701 UNTD 7370 - Computer Programming, Data Processing, And Computer Services...

  • Page 2
    ... SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2010 Or 1 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-33367 UNITED ONLINE, INC. (Exact name of Registrant as specified...

  • Page 3
    ... 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 by The Nasdaq Global Select Market, was $483,097,369 (calculated by excluding shares directly or indirectly held by directors and officers...

  • Page 4
    ..., and Director Independence Item 14. Principal Accounting Fees and Services PART IV. Item 15. Exhibits, Financial Statement Schedules Signatures In this document, "United Online," "UOL," the "Company," "we," "us" and "our" refer to United Online, Inc. and its subsidiaries. This Annual Report on...

  • Page 5
    ... accompany the related forward-looking statements in this Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as the date hereof...

  • Page 6
    ...-up Internet access providers NetZero, Inc. ("NetZero") and Juno Online Services, Inc. ("Juno"). In 2004, our Internet access revenues began to decline and we began diversifying our business to include other consumer Internet offerings in an effort to provide new growth opportunities for the Company...

  • Page 7
    ... dependent on floral network services to provide incoming order volume to offset business lost to the Internet, supermarket and mass merchant channels; and Traditional retail florists and floral mass marketers have expanded their product offerings to include a larger selection of gift items...

  • Page 8
    ...'s business, including the ability to send, receive and deliver floral orders. Additional products and services offered by providers of floral network services include: point-of-sale and related technology systems and services, credit card processing services, e-commerce website services, online...

  • Page 9
    ... The U.S. market for consumer Internet access services has evolved significantly, primarily due to increased availability and consumer adoption of high-speed, or broadband, connections. As a result, the percentage of Americans who access the Internet via dial-up has declined each year since 2002...

  • 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
    ... logo, supported by various marketing campaigns; access to the floral networks; credit card processing services; e-commerce website services; online advertising tools; and telephone answering, order taking, order transmission, and clearing-house services. FTD also provides point-of-sale and related...

  • Page 12
    ... premium features. We expect the features available to free users and All-Access Pass holders to continue to change from time to time. Premium features currently include, among others Unlimited viewing of the largest online collection of digitized high school yearbooks. Unlimited viewing of premium...

  • Page 13
    ... the NetZero and Juno brands. We also offer broadband services, email, Internet security services, and web hosting services. In total, we had 1.0 million Communications pay accounts at December 31, 2010, of which 0.7 million were dial-up Internet access accounts. Most of our Communications revenues...

  • Page 14
    ...services. Our dial-up Internet access services are provided on both a free and pay basis, with the free services subject to hourly and other limitations. Basic pay dial-up Internet access services include Internet access and an email account. In addition, we offer accelerated dial-up Internet access...

  • Page 15
    ... integrations in order to provide effective solutions for advertisers. Communications Our Communications services generate advertising revenues from search placements, display advertisements and online market research associated with our Internet access and email services. We host and customize the...

  • Page 16
    ... for our online loyalty marketing service are primarily based on co-registration with third-party services. Communications Our Communications segment's marketing efforts are focused primarily on attracting pay accounts, primarily dial-up Internet access accounts; building our NetZero brand; and...

  • Page 17
    ... factors in this market are price, order volume, customer service, services offered, strength of brand, number of members in the network, and fulfillment capabilities. In the U.S., our key competitors in the consumer market include 1-800-FLOWERS.COM, Inc., Proflowers.com and Teleflora, and...

  • Page 18
    .... Our dial-up Internet access services do not compete favorably with broadband services with respect to certain of these factors, including, but not limited to, speed and, in certain cases, price. Online Loyalty Marketing The market for online loyalty marketing services is highly competitive...

  • Page 19
    ...account information. In addition, we offer traditional email support and certain of our services provide live telephone support as well. Our customer relationship management and support infrastructure includes employees at our facilities in Woodland Hills, California; Hyderabad, India; Fort Lee, New...

  • Page 20
    ... systems which provide communication to our floral network members and third-party suppliers. We also have developed software to enhance the functionality of certain components of our services, including connectivity, web services, billing, email, customer support, customer loyalty applications, and...

  • 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
    ...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, a loss of customers, and increased use of discounted pricing plans for...

  • Page 23
    ... 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 immediately...

  • Page 24
    ... 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 our business, financial...

  • Page 25
    .... To the extent that our services and business practices change as a result of claims or actions by governmental agencies or private parties, or we are required to pay significant sums, including damages, fines, penalties, or assessments, our business, financial condition, results of operations, and...

  • Page 26
    ...third parties include our marketing offers in the emails they send. An increase in the number of members or customers who elect to not receive, or are unable to receive, our emails could adversely affect our business and results of operations. From time to time, Internet service providers block bulk...

  • Page 27
    ...integration attempts will be successful. Acquiring a business, service or technology involves many operational and financial risks, including risks relating to disruption of our ongoing business and significant diversion of resources and management time from day-to-day responsibilities; acquisition...

  • Page 28
    ...operating results, financial condition and liquidity; we will experience increased vulnerability to, and limited flexibility in planning for, changes to our businesses and adverse economic and industry conditions; we could be placed at a competitive disadvantage relative to other companies with less...

  • Page 29
    ... income taxes, sales and use taxes, value-added taxes or other taxes on our business activities and Internet-based transactions, including our past sales, which could decrease our ability to compete, reduce our sales, or have a material adverse effect on our business, financial condition, results...

  • Page 30
    ...per share of common stock. A decline in our cash flows, changes in our business needs, including working capital and funding for business initiatives or acquisitions, or a change in tax laws relating to dividends, among other factors, could cause our Board of Directors to decide to cease the payment...

  • Page 31
    ... voted to terminate such stockholder rights plan as of February 28, 2011. However, there are no assurances that our Board of Directors will not implement a new stockholder rights plan in the future. Our stock price has been highly volatile and may continue to be volatile. The market price of our...

  • Page 32
    ...on third parties who fulfill orders and deliver goods and services to our customers and their failure to provide our customers with high-quality products and customer service may harm our brands and could have a material adverse effect on our business, financial condition, results of operations, and...

  • Page 33
    ... an adverse effect on our business, financial condition, results of operations, and cash flows. Many factors, such as weather conditions, agricultural limitations and restrictions relating to the management of pests and disease, affect the supply of flowers and the price of our floral products. If...

  • Page 34
    ... attempt to impose additional sales and use taxes, value-added taxes or other taxes on our business activities, including our past sales, which could decrease our ability to compete, reduce our sales, and have a material adverse effect on our business, financial condition, results of operations, and...

  • Page 35
    ...and their failure to provide our customers with high-quality customer service may cause our customers not to return, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. We utilize and rely on a significant number of outsourced staff...

  • Page 36
    ... and financial results 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...

  • Page 37
    ... its PeoplePC subsidiary. Dial-up Internet access services do not compete favorably with broadband services with respect to connection speed and do not have a significant, if any, price advantage over certain broadband services. Many broadband providers, including cable companies and local exchange...

  • Page 38
    ...-up Internet access pay accounts and revenues have been declining and are expected to continue to decline due to the continued maturation of the market for dial-up Internet access. Consumers continue to migrate to broadband access, primarily due to the faster connection and download speeds provided...

  • Page 39
    ... Financial Statements included in this Annual Report on Form 10-K. ITEM 3. LEGAL PROCEEDINGS In April 2001 and in May 2001, lawsuits were filed in the United States District Court for the Southern District of New York against NetZero, Inc. ("NetZero"), certain officers and directors of NetZero...

  • Page 40
    ... 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 post-transaction sales practices. We have been cooperating with...

  • Page 41
    ...on the payment of dividends, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." Common Stock Repurchases United Online, Inc.'s Board of Directors authorized a common stock repurchase program (the "Program") that allowed us to repurchase shares of our...

  • Page 42
    ...the Board of Directors extended the Program through December 31, 2011 and increased the amount authorized to $80 million. Shares withheld upon the vesting of restricted stock units and restricted stock awards and upon the issuance of stock awards to pay applicable required employee withholding taxes...

  • Page 43
    ... 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) Index...

  • Page 44
    ... consolidated financial statements that are not included in this Annual Report on Form 10-K except for net income (loss) applicable to common stockholders and net income (loss) per common share information, which has been updated in connection with the adoption of Accounting Standards Codification...

  • 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
    ..., including, but not limited to, the extent to which promotional, discounted or retention pricing is used to attract new, or retain existing, paying subscribers; changes in the mix of pay services and the related pricing plans; increases or decreases in the price of our services; the timing of pay...

  • Page 47
    ...the monthly average for the period of all 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...

  • 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
    ... as deferred revenue. We offer alternative payment methods to credit cards for certain pay service plans. These alternative payment methods currently include use of ACH, payment by personal check or money order, or payment through a local telephone company. In circumstances where payment is not...

  • Page 50
    ...the provisions of Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations . Under the purchase method of accounting, the costs, including transaction costs, are allocated to the underlying net assets acquired, based on their respective estimated fair values. The excess of...

  • 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
    ... a number of factors, including projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions. Under the market approach, using the guideline company method, a reporting unit's fair value is estimated based on multiples of the cash-free market...

  • Page 53
    ... months or longer, less an estimated reactivation rate, plus an estimate of future inactive points. Changes in, among other factors, the net number of points issued, redemption activities and members' activity levels could materially impact the member redemption liability. A 100 basis point increase...

  • Page 54
    ..., order transmission, and clearing-house services. Content & Media and Communications Content & Media services revenues consist of amounts charged to pay accounts for online nostalgia services. Communications services revenues consist of amounts charged to pay accounts for Internet access, email...

  • Page 55
    ... orders; printing and postage costs; costs related to FTD's product quality guarantee; systems installation, training and support costs; data center costs; depreciation of network computers and equipment; license fees; costs related to providing customer support; costs related to customer billing...

  • Page 56
    ... to providing customer support; costs related to customer billing and 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...

  • Page 57
    ...Annual Report on Form 10-K. As a result of the FTD acquisition, the results of operations of FTD have been included in the consolidated statements of operations and cash flows from August 26, 2008, the date of acquisition. Combined information for FTD for the full-year ended December 31, 2008 is set...

  • 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
    ... of Contents 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 Content & Media Communications Intersegment eliminations Consolidated revenues $ 554,576 $ 545,845 $ 201...

  • Page 61
    ... related to our FTD, Content & Media and Communications segments constituted 82.1%, 8.5% and 9.4%, respectively, of our total segment cost of revenues for the year ended December 31, 2010, compared to 79.5%, 8.6% and 12.0%, respectively, for the year ended December 31, 2009. Sales and Marketing...

  • Page 62
    ... and a $0.3 million increase in depreciation expense. Sales and marketing expenses related to our FTD, Content & Media and Communications segments constituted 53.1%, 35.2% and 11.6%, respectively, of total segment sales and marketing expenses for the year ended December 31, 2010, compared to 43...

  • Page 63
    ... expenses and income from operations as a percentage of FTD revenues 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 Restructuring charges Total...

  • Page 64
    ... revenues increased to 16.9% for the year ended December 31, 2010, compared to 16.4% for the prior-year period. The increase 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...

  • Page 65
    ... partially due to a $17.8 million decrease in services revenues. Services revenues decreased, despite a 2% increase in our average number of pay accounts from 4.6 million for the year ended December 31, 2009 to 4.7 million for the year ended December 31, 2010, as a result of a 13% decrease in ARPU...

  • 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
    ...our dialup Internet access services due to a decrease in 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...

  • Page 68
    ... 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 for the year ended...

  • Page 69
    ....5 million increase in cost of revenues associated with our FTD segment as a result of including FTD cost of revenues for the entire period for the year ended December 31, 2009 whereas such costs were included only from August 26, 2008 (date of acquisition) in the prior-year period. The increase was...

  • Page 70
    ... and administrative expenses for the entire period in the year ended December 31, 2009 whereas such expenses were included only from August 26, 2008 (date of acquisition) in the prior-year period and, to a lesser extent, an increase in general and administrative expenses associated with our Content...

  • Page 71
    ... 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, increased by...

  • Page 72
    ... reduced consumer order 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...

  • Page 73
    ...charges related to acquisition opportunities that were abandoned in light of the then-pending acquisition of FTD by the Company. The decrease was largely offset by an increase in allocated stock-based compensation and allocated corporate costs as well as increased bad debt expense for the year ended...

  • Page 74
    ...compared to U.S. pay accounts. Although we experienced a net increase in Content & Media pay accounts in the year ended December 31, 2009, this increase was largely due to an increase in our offerings of discounted pricing plans, with a significant number of the new pay accounts generated during the...

  • Page 75
    ... revenues from our international online nostalgia services without a corresponding increase in related sales and marketing costs. Content & Media Technology and Development Expenses. Content & Media technology and development expenses increased by $3.6 million, or 16%, to $25.5 million, for the year...

  • Page 76
    ... costs. In addition, Communications cost of revenues decreased as a result of a $2.8 million decrease in customer supportand billing-related costs due to a decrease in the number of dial-up Internet access pay accounts, a $0.7 million decrease in costs associated with our web hosting business...

  • Page 77
    ... services and consulting fees, partially offset by a $0.9 million increase in bad debt expense. The increase as a percentage of revenues was largely attributable to continued declines in revenues as a result of continuing declines in the number of dial-up Internet access pay accounts. Communications...

  • Page 78
    ...for the year ended December 31, 2010, compared to the year ended December 31, 2009. Net cash provided by operating activities is driven by our net income adjusted for changes in working capital and non-cash items, including, but not limited to, depreciation and amortization, stock-based compensation...

  • Page 79
    ... restricted stock units that vest and the stock awards that are issued, the portion of those shares with a fair market value equal to the amount of the required employee withholding taxes due. We then pay the applicable withholding taxes in cash. The withholding of these shares, although accounted...

  • Page 80
    ...; 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 withholding taxes due on...

  • Page 81
    ... revenue in 2009, compared to the prior-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...

  • Page 82
    ... of varying scope and terms to customers, vendors, lessors, sureties and insurance companies, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by us, or from...

  • Page 83
    ... and will evaluate the impact on our consolidated financial statements upon the issuance of additional updates. Inflation Inflation did not have a material impact on our consolidated revenues and results of operations during the years ended December 31, 2010, 2009 and 2008, and we do not currently...

  • Page 84
    ...than the U.S. Dollar, which increases or decreases the related U.S. Dollar-reported revenues and expenses depending on the trend in currencies. Therefore, changes in foreign currency exchange rates may negatively affect our consolidated revenues and net income. A 1% adverse change in overall foreign...

  • Page 85
    ... that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is 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...

  • Page 86
    ...because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company's internal control over financial reporting at December 31, 2010. In making this assessment, management used the criteria set forth...

  • Page 87
    ...10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 10 is included under the following captions in our definitive proxy statement relating to our 2011 annual meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year and...

  • Page 88
    ... have been omitted because the information required to be set forth therein is not applicable, not required or is shown in the consolidated financial statements or notes related thereto. 3. Exhibits: The agreements included as exhibits to this Annual Report on Form 10-K contain representations...

  • Page 89
    ... Bylaws 3.3 Certificate of Designation for Series A Junior Participating Preferred Stock (included in Exhibit 4.1 below) 4.1 Rights Agreement, dated as of November 15, 2001, between the Company and U.S. Stock Transfer Corporation, which includes the form of Certificate of Designation for the Series...

  • Page 90
    ... Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan (nonemployee directors-annual grant) 10.12 Form of Restricted Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan (officers) 10.13 Form of Restricted Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan...

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

  • Page 92
    ...Agreement between United Online, Inc. and Paul E. 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...

  • Page 93
    manager and administrative agent 88

  • Page 94
    ... 11, 2008, among United Online, Inc., the lenders party thereto from time to time and Silicon Valley Bank, as administrative agent 21.1 List of Subsidiaries 23.1 Consent of Independent Registered Public Accounting Firm 24.1 Power of Attorney (see signature page of this Annual Report on Form 10-K) 31...

  • Page 95

  • Page 96
    ...this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated below. Signature Title Date /s/ MARK R. GOLDSTON Mark R. Goldston Chairman, President, Chief Executive Officer and Director (Principal Executive Officer and Director...

  • 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
    ...provisions 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...

  • Page 99
    ... Filed with this Form 10-K Incorporated by Reference to Form File No. Date Filed 4.1 Rights Agreement, dated as of November 15, 2001, between the Company and U.S. Stock Transfer Corporation, which includes the form of Certificate of Designation for the Series A junior participating preferred...

  • Page 100
    ... Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan (nonemployee directors-annual grant) 10.12 Form of Restricted Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan (officers) 10.13 Form of Restricted Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan...

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

  • Page 102
    ...Agreement between United Online, Inc. and Paul E. 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...

  • 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
    ... of Contents UNITED ONLINE, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Stockholders...

  • Page 106
    ... of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations...

  • Page 107
    ... liabilities Member redemption liability 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...

  • Page 108
    ... of Contents 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 Technology...

  • 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 common stock in connection with acquisition Dividends and dividend equivalents paid on shares outstanding and restricted stock units Change in dividend equivalents payable on restricted stock units Stock-based compensation Change in unrealized loss on short-term investments, net of tax Foreign...

  • Page 111
    ...shares outstanding and restricted stock units Change in dividend equivalents payable on restricted stock units Stock-based compensation Foreign currency translation Tax shortfalls from equity awards Net income Balance at December 31, 2010... integral part of these consolidated financial statements. F-6

  • Page 112
    ... 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 Excess tax benefits from equity awards Net cash provided by...

  • Page 113
    ... 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 are an integral part of these consolidated financial statements. F-7

  • Page 114
    ... 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 Hills, California, and the Company also maintains offices in Fort Lee, New Jersey; Seattle, Washington...

  • Page 115
    ... Receivables -The Company's accounts 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...

  • Page 116
    ...straight-line method over the shorter of the lease term or up to ten years. Upon the sale or retirement of property or equipment, the cost and related accumulated depreciation or amortization is removed from the Company's consolidated financial statements with the resulting gain or loss reflected in...

  • Page 117
    Table of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued) However, the Company is required to estimate the fair value of long-term debt under ...

  • Page 118
    Table of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued) circumstances change that would more likely than not indicate that the goodwill and/...

  • Page 119
    Table of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued) carrying amount of the assets exceeds the fair market value of the assets. Definite-...

  • Page 120
    ... provided to the customer. The Company's pay accounts generally pay in advance for their services by credit card, and revenue is then recognized ratably over the service period. Advance payments from pay accounts are recorded on the consolidated balance sheets as deferred revenue. The Company offers...

  • Page 121
    ...merchandising, customer service and sales personnel; and telemarketing costs incurred to acquire and retain pay accounts and up-sell pay accounts to additional services. Expenses associated with generating advertising revenues include sales commissions and personnel-related expenses. The Company has...

  • Page 122
    ...of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued) expenses include media, agency and promotion expenses. Media production costs are expensed...

  • Page 123
    ... 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 based...

  • 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
    ... UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued) No. 2010-29 will impact pro forma disclosures presented in the Company's consolidated financial...

  • 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
    ... of Contents UNITED 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...

  • Page 128
    Table of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. BALANCE SHEET COMPONENTS (Continued) Property and Equipment Property and equipment consisted of the following (in thousands): December 31, 2010 2009 Computer software and equipment Land and buildings ...

  • Page 129
    Table of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS Goodwill The changes in goodwill by reportable segment for the years ended December 31, 2009 and 2010 were as follows (in thousands): FTD Content &...

  • Page 130
    Table of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS (Continued) Gross Value December 31, 2009 Accumulated Amortization Net Pay accounts and free accounts Customer contracts and relationships ...

  • Page 131
    ... Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 5. CREDIT AGREEMENTS (Continued) interest rate depending on FTD's leverage ratio. The interest rate set forth in the FTD Credit Agreement for loans made under the term loan B facility is either the prime rate plus...

  • Page 132
    ... 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 assets (as defined in...

  • Page 133
    ... Fair Value Long-term debt, net of discounts 7. STOCKHOLDERS' EQUITY Stockholder Rights Plan $ 258,084 $ 284,682 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...

  • Page 134
    ... 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 required employee withholding taxes due, which is accounted for as a repurchase of common stock. The Company then pays the applicable withholding taxes...

  • Page 135
    ... under 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...

  • Page 136
    ... (in 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...

  • Page 137
    ...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...

  • Page 138
    ... 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 receive one share of United...

  • Page 139
    ...in effect at the time of grant for the expected term. The Company determines the expected dividend yield percentage by dividing the expected 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...

  • Page 140
    ... tax rate to the Company's effective income tax rate (in thousands): Year 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...

  • 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
    ...of which is included in income taxes payable. The Company recognized net interest and penalties totaling $0.1 million, $(0.7) million and $2.5 million for the years ended December 31, 2010, 2009 and 2008, respectively. At December 31, 2010, U.S. income taxes have not been provided on $4.3 million of...

  • Page 143
    ... 73,236 - 73,236 (1.33) (1.33) The diluted net income (loss) per common share computations exclude stock options and restricted stock units which are antidilutive. Weighted-average antidilutive shares for the years ended December 31, 2010, 2009 and 2008 were 2.5 million, 5.2 million and 7.1 million...

  • Page 144
    ... million, including expenses incurred in connection with the transaction. The following table summarizes the components of the purchase price (in thousands): Cash consideration, net Stock consideration (12.3 million shares of United Online common stock valued at $10.29) Transaction costs Total F-38...

  • Page 145
    ...of Contents UNITED ONLINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. ACQUISITIONS (Continued) United Online, Inc.'s common stock was valued at $10.29 for purposes of determining the total purchase price, based on the average of United Online, Inc.'s closing stock price for the...

  • Page 146
    ... related party, and Blackrock Realty Advisors, Inc., whereby MyPoints will rent approximately 18,000 square feet of office space in San Francisco, California. In connection with the sublease agreement, United Online, Inc. entered into a parent guaranty of all obligations under the sublease. The term...

  • Page 147
    ... scope and terms to customers, vendors, lessors, sureties and insurance companies, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of such agreements, services to be provided by the Company, or from...

  • Page 148
    ... in May 2001, lawsuits were filed in the United States District Court for the Southern District of New York against NetZero, Inc. ("NetZero"), certain officers and directors of NetZero and the underwriters of NetZero's initial public offering, Goldman Sachs Group, Inc., BancBoston Robertson Stephens...

  • Page 149
    .... 15. QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per share data) Quarter Ended September 30, June 30, December 31, March 31, Year ended December 31, 2010: Revenues Cost of revenues Operating income Net income Net income applicable to common stockholders Basic net income per common...

  • 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 assets: Cash and ... 1,188,540 $ 1,133,848 The accompanying notes are an integral part of these financial statements. F-44

  • Page 151
    ... UNITED ONLINE, INC. PARENT COMPANY STATEMENTS OF OPERATIONS (in thousands) Year Ended December 31, 2009 2008 2010 Revenues Operating expenses: General and administrative Total operating expenses Operating loss Interest income Intercompany interest income Interest expense Other expense, net...

  • Page 152
    ... of Contents UNITED ONLINE, INC. PARENT COMPANY STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2009 2008 2010 Net cash provided by operating activities Cash flows from investing activities: Purchases of short-term investments Proceeds from maturities of short-term investments...

  • Page 153
    ... Company's share of net income (loss) of its subsidiaries is included in net income (loss) using the equity method. The Parent Company financial statements should be read in conjunction with the consolidated financial statements of United Online, Inc. for the corresponding years. Under the terms...

  • Page 154
    ... for deferred tax assets: Year ended December 31, 2010 Year ended December 31, 2009 Year ended December 31, 2008 $ $ $ 6,541 $ 5,485 $ 2,946 $ 1,194(a) $ 2,475(a) $ - $ - - $ $ 2,752(c) $ ) (225(b) $ ) (1,419(b) $ ) (213(b) $ 7,510 6,541 5,485 (a) (b) (c) Includes the increase in valuation...

  • Page 155

  • Page 156
    ...-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 provide services to...

  • 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
    ... phantom dividend equivalents vest or become distributable unless the Shares to which they relate vest in accordance with the terms of this Agreement. 6. Change in Control . Any Restricted Stock Units subject to this Award at the time of a Change in Control shall vest in full immediately prior to...

  • Page 159
    ...issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with all applicable requirements of law relating thereto and with all applicable regulations of the Stock Exchange on which the Common Stock is listed for trading at the time of...

  • Page 160
    ... or limitations of Code Section 409A applicable to such short-term deferral ...limitations of Code Section 409A and the Treasury Regulations thereunder that apply to such exception. IN WITNESS WHEREOF , the parties have executed this Agreement on the day and year first indicated above. UNITED ONLINE...

  • Page 161
    ...'s Board of Directors. Change in Control shall mean a change in ownership or control of the Corporation effected through any of the 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...

  • 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
    ...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 provide services to...

  • Page 164
    .... 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 165
    ... phantom dividend equivalents vest or become distributable unless the Shares to which they relate vest in accordance with the terms of this Agreement. 6. Change in Control . Any Restricted Stock Units subject to this Award at the time of a Change in Control shall vest in full immediately prior to...

  • Page 166
    ... 5(b) in connection with the transaction, and the determination of the Plan Administrator shall be final, binding and conclusive. In the event of a Change in Control, the provisions of Paragraph 6 shall be controlling. 8. Issuance of Shares of Common Stock . (a) On the applicable Issuance Date for...

  • Page 167
    ... of its business or assets. In addition, this Agreement shall not in any way be construed or interpreted so as to affect adversely or otherwise impair the right of the Corporation or the stockholders to remove Participant from the Board at any time in accordance with the provisions of applicable law...

  • Page 168
    ...'s Board of Directors. Change in Control shall mean a change in ownership or control of the Corporation effected through any of the 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...

  • 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
    ... cancelled units. (b) The Participant's Employment Agreement sets forth certain terms and conditions under which Participant's equity or equity-based awards from the Corporation, including this Award, may vest in whole or in part on an accelerated basis in connection with his cessation of Service...

  • Page 172
    ... applicable to that distribution. In no event shall any such phantom dividend equivalents vest or become distributable unless the Shares to which they relate vest in accordance with the terms of this Agreement. 5. Change of Control . (a) Any Restricted Stock Units subject to this Award at the time...

  • Page 173
    ...) may, in connection with the assumption or continuation of the Restricted Stock Units subject to the Award at that time, but subject to the Plan Administrator's approval prior to the Change in Control, substitute one or more shares of its own common stock with a fair market value equivalent to the...

  • Page 174
    ... Participant a certificate (which may be in electronic form) for the vested shares of Common Stock to be issued on such date, subject to the Corporation's collection of the applicable Withholding Taxes. (b) Until such time as the Corporation provides the Participant with notice to the contrary, the...

  • Page 175
    ...issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with all applicable requirements of law relating thereto and with all applicable regulations of the Stock Exchange on which the Common Stock is listed for trading at the time of...

  • Page 176
    ...later than the later of (i) the close of the calendar year in which such Separation from Service occurs or (ii) the fifteenth day of the third calendar month following the date of such Separation from Service. • No Shares or other amounts which become issuable or distributable under this Agreement...

  • Page 177
    ... 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 Control shall have the...

  • Page 178
    ... 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 179
    .... 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 Compensation Plan, as amended and restated from time to time. Plan Administrator shall mean either the Board or...

  • 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
    ... Service . Except as otherwise provided in Paragraph 5 below, should the Participant cease Service for any reason prior to vesting in one or more Shares subject to this Award, then the Award will be immediately cancelled with respect to those unvested Shares, and the number of Restricted Stock Units...

  • Page 182
    ...) may, in connection with the assumption or continuation of the Restricted Stock Units subject to the Award at that time, but subject to the Plan Administrator's approval prior to the Change in Control, substitute one or more shares of its own common stock with a fair market value equivalent to the...

  • Page 183
    ... the number of Shares unvested immediately prior to the date of the Participant's Involuntary Termination. The Shares that vest 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...

  • Page 184
    ... a Fair Market Value (measured as of the applicable tax date for such Shares) equal to the amount of such Withholding Taxes (the "Share Withholding Method"); provided, however , that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the Corporation's required tax...

  • Page 185
    ... the requirements or limitations of Code Section 409A applicable to such short-term deferral exception, then...year first indicated above. UNITED ONLINE, INC. By: Title: Mark R. Goldston Chairman, President and Chief Executive Officer PARTICIPANT Name: Signature:

  • Page 186
    ...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. Cause shall mean the...

  • Page 187
    ... members described in clause (A) who were still in office at the time the Board approved such appointment or nomination. G. H. Code shall mean the Internal Revenue Code of 1986, as amended. Common Stock shall mean shares of the Corporation's common stock. I. Corporation shall mean United Online...

  • Page 188
    ...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 or...

  • Page 189
    S. York Stock Exchange. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New T. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (...

  • Page 190
    Exhibit 10.14 [Officer Version I] UNITED ONLINE, INC. NOTICE OF GRANT OF STOCK OPTION Notice is hereby given 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 ...

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

  • Page 192
    ... Exercise Price. 2. Option Term . The term of this option shall commence on the Grant Date and continue in effect until the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6. 3. Limited Transferability . (a) Except to the limited extent provided...

  • Page 193
    ... for the accumulated 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...

  • Page 194
    ... Expiration Date. (e) Should Optionee's Service be terminated With Cause, or should Optionee engage in any other conduct, while in Service or following cessation of Service, that is materially detrimental to the business or affairs of the Corporation, as determined in the sole discretion of the Plan...

  • Page 195
    ... 6(b) or (iii) the Expiration Date. (g) During the limited period of post-Service exercisability provided under this Paragraph 5, this option may not be exercised in the aggregate for more than the number of Option Shares for which this option is at the time vested and exercisable. Except to the...

  • Page 196
    ... with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control, provided such common stock is readily tradable on an established U.S. securities exchange. (d) This Agreement shall not in any way affect the right of the Corporation to adjust...

  • Page 197
    ... Price payable for all the purchased shares plus all applicable Withholding Taxes 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...

  • Page 198
    ... this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without stockholder approval be issued under the Plan, then this option shall be void with respect to those excess shares, unless stockholder approval of an amendment sufficiently increasing the number of 9

  • Page 199
    ... prospectus for the Plan by accessing Optionee's portfolio on Fidelity's website (www.fidelity.com). Optionee may also obtain a printed copy of the prospectus by contacting the Stock Plan Administrator by telephoning . 19. Optionee Acceptance . Optionee must accept the terms and conditions of this...

  • Page 200
    ...Stock Option Agreement. Board shall mean the Corporation's Board of Directors. C. Change in Control shall have the meaning assigned to such term ...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 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
    ...more installments over the Optionee's period of Service. M. Expiration Date shall mean the date specified in the Grant Notice for 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...

  • Page 203
    ...acting in its capacity as administrator of the Plan. DD. Service shall mean the Optionee'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 or independent advisor. For purposes of...

  • Page 204
    ... 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 the meaning assigned...

  • Page 205
    Exhibit 10.15 [Officer Version II] UNITED ONLINE, INC. NOTICE OF GRANT OF STOCK OPTION Notice is hereby given 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 ...

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

  • Page 207
    ... Exercise Price. 2. Option Term . The term of this option shall commence on the Grant Date and continue in effect until the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6. 3. Limited Transferability . (a) Except to the limited extent provided...

  • Page 208
    ... term under Paragraph 5 or 6. 5. Cessation of Service . The option term specified in Paragraph 2 above shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable: (a) Except as otherwise expressly provided...

  • Page 209
    ... 6(b) or (iii) the Expiration Date. (g) During the limited period of post-Service exercisability provided under this Paragraph 5, this option may not be exercised in the aggregate for more than the number of Option Shares for which this option is at the time vested and exercisable. Except to the...

  • Page 210
    ... 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 subsequent...

  • Page 211
    ...at the time of his or her Involuntary Termination within twelve (12) months following a Change in Control shall also vest and become immediately payable on a partially-accelerated basis in accordance with the same vesting-acceleration formula set forth above for the Option Shares. (e) This Agreement...

  • Page 212
    ... Price payable for all the purchased shares plus all applicable Withholding Taxes 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...

  • Page 213
    ... the Grant Date, the number of shares of Common Stock which may without stockholder approval be issued under the Plan, then this option shall be void with respect to those excess shares, unless stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable...

  • Page 214
    ... prospectus for the Plan by accessing Optionee's portfolio on Fidelity's website (www.fidelity.com). Optionee may also obtain a printed copy of the prospectus by contacting the Stock Plan Administrator by telephoning . 19. Optionee Acceptance . Optionee must accept the terms and conditions of this...

  • Page 215
    ... more than fifty percent (50%) of the total combined voting power of the 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, transfer or other disposition of all or substantially all of the...

  • Page 216
    ... members described in clause (A) who were still in office at the time the Board approved such appointment or nomination. E. F. Code shall mean the Internal Revenue Code of 1986, as amended. Common Stock shall mean shares of the Corporation's common stock. G. Corporation shall mean United Online...

  • Page 217
    ... specified in the Grant Notice for 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...

  • Page 218
    ...acting in its capacity as administrator of the Plan. AA. Service shall mean the Optionee'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 or independent advisor. For purposes of...

  • Page 219
    ... 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 the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation...

  • 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
    ... severance pay, except such terms as are set forth in a written agreement signed by an authorized officer of the Company or one of its subsidiaries and in effect at the time of the applicable termination of employment. This Plan supplements any such written agreements to provide all terms that...

  • Page 222
    ... a tender or exchange offer made directly to the stockholders 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...

  • Page 223
    ...of a Change in Control or Corporate Transaction with respect to United Online, Inc. " Misconduct " means the (i) commission of any act of fraud, embezzlement or dishonesty, (ii) any unauthorized use or disclosure of confidential information or trade secrets of the Company (or any other member of the...

  • Page 224
    ... 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 provided your manager with all passwords and passcodes you have created for documents, email and electronic files...

  • Page 225
    8. On or before your employment termination date, you have returned to the Company all items of property received by you for your use during employment with your Employer, including, but not limited to, any laptops, computer equipment, software programs, cell phones, keys and passes, and credit and ...

  • Page 226
    ... or by an employment or other agreement with the Company or any subsidiary of the Company that provides for severance or separation pay/benefits in a lump sum or in installment payments following termination of your employment. 11. The Plan Administrator determines, in its sole discretion, that your...

  • Page 227
    ... prior notice of your termination under the terms of the Worker Adjustment and Retraining Notification Act (" WARN Act "). No Severance Payment Benefit will be paid to you if you fail to comply with or meet the eligibility conditions stated above, including (without limitation) the execution and...

  • Page 228
    ... vacation. As of the effective date of your Layoff Termination, except as otherwise provided through COBRA, you will cease participation in all employee benefits and benefit plans the Company makes available to its employees, in accordance with the terms and conditions of such benefits and benefit...

  • Page 229
    ... than the benefit you receive under the Plan, 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...

  • Page 230
    ... plans which were previously offered by the Company to eligible employees of this Plan, except such terms as are set forth in a written agreement signed by an authorized officer of the Company or any subsidiary of the Company. This policy supplements any such written agreements to provide all terms...

  • Page 231
    ...interest of the Company's employees who are covered by the Plan. No one, including your Employer or any other person, may terminate your employment ...court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the ...

  • Page 232
    ...the party you have sued to pay your legal costs, including attorney fees. However, if you lose, the court 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...

  • 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
    ... WHEREOF, UNITED ONLINE, 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...

  • 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
    ...Officer and Chairman, including such executive duties as are delegated to him from time to time by the Board or a committee thereof. 2.2 Employee agrees to devote Employee's good faith, full time, attention, skill and efforts to the performance of his duties for the Company during the Term; provided...

  • Page 237
    ...in accordance with the Company's standard payment policy and subject to such withholding as may be required by law. Employee's Base Salary shall be increased to include any increases in Employee's base salary as approved by the Board, but may not be reduced during the Term without Employee's written...

  • Page 238
    ... the preceding fiscal year. The release required as a condition to Employee's entitlement to such Severance Payment shall be a comprehensive agreement releasing the Company and its officers, directors, employees, stockholders, subsidiaries, affiliates, representatives and other related parties from...

  • Page 239
    ... if Employee is not offered and provided 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...

  • 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
    ... after taking 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...

  • Page 242
    ... sum or in installments in the absence of such deferral) shall be credited with interest at a rate equal to the Company's cost of funds and shall be paid provided to Employee in a lump sum on the first day of the seventh (7th) month after the date of Employee's separation from service or, if earlier...

  • Page 243
    ... hereto has executed this Agreement on the date specified therefor below. UNITED ONLINE, INC. By: /s/ Robert Berglass 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...

  • Page 244
    ... or other installments in accordance with the Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Company's Board of Directors. As used in this Agreement, the term " Board of Directors...

  • Page 245
    ...be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company...

  • Page 246
    ... expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of the Company's common stock underlying...

  • Page 247
    ... procedures, may change from time to time, the "at will" 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...

  • Page 248
    ...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 sum Separation Payment) is paid to Employee as set forth below...

  • Page 249
    ... 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 a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes...

  • Page 250
    ... after taking 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...

  • Page 251
    ...whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid or provided to Employee in a lump sum on the first day of the seventh (7th) month after the date of Employee's separation from service or, if earlier, the first day of the...

  • Page 252
    ... (ii), the applicable dollar limitation will be equal to two times the lesser of (i) Employee's annualized compensation (based on Employee's annual rate of pay for the calendar year preceding the calendar year of Employee's separation from service, adjusted to reflect any increase during that...

  • Page 253
    .... 12. Entire Agreement/Construction of Terms . (a) This Agreement, together with the Proprietary Information and Inventions Agreement between Employee and the Company, any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity...

  • 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
    ... or other installments in accordance with the Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Company's Board of Directors. As used in this Agreement, the term " Board of Directors...

  • Page 256
    ...be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company...

  • Page 257
    ... expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of the Company's common stock underlying...

  • Page 258
    ..., may change from time to time, the "at will" 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...

  • Page 259
    ...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 sum Separation Payment) is paid to Employee as set forth below...

  • Page 260
    ... 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 a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes...

  • Page 261
    ... after taking 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...

  • Page 262
    ... lawful direction of the Board of Directors and to perform his obligations hereunder. " without cause " means any reason not within the scope of the definition of the term "with cause." " separation from service " means Employee's cessation of employee status with the Company by reason of Employee...

  • Page 263
    ... (ii), the applicable dollar limitation will be equal to two times the lesser of (i) Employee's annualized compensation (based on Employee's annual rate of pay for the calendar year preceding the calendar year of Employee's separation from service, adjusted to reflect any increase during that...

  • Page 264
    .... 12. Entire Agreement/Construction of Terms . This Agreement, together with the Proprietary Information and Inventions Agreement between Employee and the Company, (a) any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity...

  • Page 265
    ... 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 7, 2011 11

  • Page 266
    ... or other installments in accordance with the Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Company's Board of Directors. As used in this Agreement, the term " Board of Directors...

  • Page 267
    ...be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company...

  • Page 268
    ... expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of the Company's common stock underlying...

  • Page 269
    ..., may change from time to time, the "at will" 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...

  • Page 270
    ...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 sum Separation Payment) is paid to Employee as set forth below...

  • Page 271
    ... 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 a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes...

  • Page 272
    ... after taking 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...

  • Page 273
    ... lawful direction of the Board of Directors and to perform his obligations hereunder. " without cause " means any reason not within the scope of the definition of the term "with cause." " separation from service " means Employee's cessation of employee status with the Company by reason of Employee...

  • Page 274
    ... (ii), the applicable dollar limitation will be equal to two times the lesser of (i) Employee's annualized compensation (based on Employee's annual rate of pay for the calendar year preceding the calendar year of Employee's separation from service, adjusted to reflect any increase during that...

  • Page 275
    .... 12. Entire Agreement/Construction of Terms . This Agreement, together with the Proprietary Information and Inventions Agreement between Employee and the Company, (a) any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity...

  • Page 276
    ... 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 R. Goldston Chairman, President and Chief Executive Officer Date signed: February 7, 2011 11

  • Page 277
    ... or other installments in accordance with the Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Company's Board of Directors. As used in this Agreement, the term " Board of Directors...

  • Page 278
    ...be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company...

  • Page 279
    ... expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of the Company's common stock underlying...

  • Page 280
    ... procedures, may change from time to time, the "at will" 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...

  • Page 281
    ...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 sum Separation Payment) is paid to Employee as set forth below...

  • Page 282
    ... 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 a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes...

  • Page 283
    ... after taking 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...

  • Page 284
    ...whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid or provided to Employee in a lump sum on the first day of the seventh (7th) month after the date of Employee's separation from service or, if earlier, the first day of the...

  • Page 285
    ... (ii), the applicable dollar limitation will be equal to two times the lesser of (i) Employee's annualized compensation (based on Employee's annual rate of pay for the calendar year preceding the calendar year of Employee's separation from service, adjusted to reflect any increase during that...

  • Page 286
    .... 12. Entire Agreement/Construction of Terms . (a) This Agreement, together with the Proprietary Information and Inventions Agreement between Employee and the Company, any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity...

  • 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 11

  • Page 288
    ...Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Board of Directors. As used in this Agreement, the term " Board of Directors " shall refer to the Board of Directors of United Online...

  • Page 289
    ...be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company...

  • Page 290
    ...an accelerated basis as to that number of additional shares in which Employee would have otherwise been vested on the date of such separation from service had Employee completed an additional twelve (12) months of employment with the Company and had each applicable equity award been structured so as...

  • Page 291
    ... procedures, may change from time to time, the "at will" 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...

  • Page 292
    ...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 sum Separation Payment) is paid to Employee as set forth below...

  • Page 293
    ... 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 a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes...

  • Page 294
    ... after taking 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...

  • Page 295
    ... lawful direction of the Board of Directors and to perform his obligations hereunder. " without cause " means any reason not within the scope of the definition of the term "with cause." " separation from service " means Employee's cessation of employee status with the Company by reason of Employee...

  • Page 296
    ... (ii), the applicable dollar limitation will be equal to two times the lesser of (i) Employee's annualized compensation (based on Employee's annual rate of pay for the calendar year preceding the calendar year of Employee's separation from service, adjusted to reflect any increase during that...

  • Page 297
    ... Law . This Agreement may not be amended or modified except by an express written agreement signed by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. The terms of this Agreement and the resolution of any disputes will be governed by Illinois law, and...

  • 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
    ... or other installments in accordance with the Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Company's Board of Directors. As used in this Agreement, the term " Board of Directors...

  • Page 300
    ...be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company...

  • Page 301
    ... expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of the Company's common stock underlying...

  • Page 302
    ..., may change from time to time, the "at will" 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...

  • Page 303
    ...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 sum Separation Payment) is paid to Employee as set forth below...

  • Page 304
    ... 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 a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes...

  • Page 305
    ... after taking 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...

  • Page 306
    ... lawful direction of the Board of Directors and to perform his obligations hereunder. " without cause " means any reason not within the scope of the definition of the term "with cause." " separation from service " means Employee's cessation of employee status with the Company by reason of Employee...

  • Page 307
    ... (ii), the applicable dollar limitation will be equal to two times the lesser of (i) Employee's annualized compensation (based on Employee's annual rate of pay for the calendar year preceding the calendar year of Employee's separation from service, adjusted to reflect any increase during that...

  • Page 308
    .... 12. Entire Agreement/Construction of Terms . (a) This Agreement, together with the Proprietary Information and Inventions Agreement between Employee and the Company, any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity...

  • Page 309
    ... 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 Mark R. Goldston Chairman, President and Chief Executive Officer Date signed: February 7, 2011 11

  • Page 310
    ...Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Board of Directors. As used in this Agreement, the term " Board of Directors " shall refer to the Board of Directors of United Online...

  • Page 311
    ...United Online, Inc. 2010 Incentive Compensation Plan (the " Plan ") and will be subject to the standard terms and conditions set forth in the Plan and the standard form restricted stock unit agreement for employee awards under such Plan, including dividendequivalent rights with respect to the shares...

  • Page 312
    ... Release Condition set forth in Section 7(b) below, any and all equity awards Employee holds on the date of such termination will fully vest on an accelerated basis with respect to all non-vested shares of Common Stock at the time subject to those awards, except to the extent otherwise provided in...

  • Page 313
    ..., may change from time to time, the "at will" 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...

  • Page 314
    ... such fiscal year would have been paid had Employee remained in the 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...

  • Page 315
    ...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 sum Separation Payment) is paid to Employee as set forth below...

  • Page 316
    ...period that occurs in the second taxable year. Any Separation Payment to which Employee becomes entitled hereunder in connection with a termination following a Change in Control other than a Qualifying Change in Control will be paid in installments as set forth in the immediately preceding paragraph...

  • Page 317
    ... 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 the Company). (c) Termination by Death or Disability. If Employee incurs a "separation from service" (as defined below) as a result of...

  • Page 318
    ...paid to Employee as they become due and payable under this Agreement. For purposes of this subparagraph (ii), the applicable dollar limitation will be equal to two times the lesser of (i) Employee's annualized compensation (based on Employee's annual rate of pay for the calendar year preceding the 9

  • Page 319
    ... 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 (ii) any subsidiary, subdivision, division or joint venture of any such person or entity; provided, however, that...

  • Page 320
    12. Entire Agreement/Construction of Terms . (a) This Agreement, together with the Proprietary Information and Inventions Agreement between Employee and the Company, any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity ...

  • Page 321
    ... 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 12

  • Page 322
    ...) MyPoints.com, Inc., a Delaware corporation NetZero, Inc., a Delaware corporation (also dba Bluelight Internet Service) NetZero Modecom, Inc., a Delaware corporation (also dba UOL Modecom, Inc.) Opobox, Inc., a Delaware corporation StayFriends GmbH Trombi Acquisition SARL United Online Advertising...

  • Page 323
    QuickLinks Exhibit 21.1 List of Subsidiaries

  • Page 324
    ...333-165030, 333-166114, and 333-168634) of United Online, Inc. of our report dated February 25, 2011 relating to the financial statements, financial statement schedules and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP...

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

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    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer...

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    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

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    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying 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

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    ...CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 ...Annual Report on Form 10-K of United Online, Inc. for the year ended December 31, 2010...information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company. (b) Date...

  • 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

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    ... Securities Exchange Act of 1934; and The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company. (b) Date: February 28, 2011 /s/ SCOTT H. RAY Scott H. Ray Executive Vice President and Chief Financial Officer

  • 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