Juno 2015 Annual Report Download

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Table of Contents

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

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xx 
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
(Exact name of Registrant as specified in its charter)

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)


(Address of principal executive office)

(Zip Code)

(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
 
Common Stock, par value $0.0001 per share The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Securities registered pursuant to Section 12(g) of the Act: 
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T 232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. x
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See definitions of large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer oAccelerated filer xNon-accelerated filer oSmaller reporting company o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2) of the Act. Yes o No x
At June 30, 2015, the aggregate market value of voting stock held by non-affiliates of the Registrant, based on the last reported sales price of the
Registrant’s common stock on such date reported by The Nasdaq Global Select Market, was $228,181,573 (calculated by excluding shares directly or
indirectly held by directors and officers).
At February 26, 2016, there were 14,942,456 shares of the Registrant’s common stock outstanding.
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Table of contents

  • Page 1
    ...filer o Smaller reporting company o Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2) of the Act. Yes o No x At June 30, 2015, the aggregate market value of voting stock held by non-affiliates of the Registrant, based on the last reported sales price of the...

  • Page 2
    None.

  • Page 3
    ...-K/A") to the Annual Report on Form 10-K of United Online, Inc. for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission (the "SEC") on March 3, 2016 (the "Original 10-K") is being filed solely for the purpose of including the information required by Part III of...

  • Page 4
    Table of Contents UNITED ONLINE, INC. INDEX TO TNNUTL REPORT ON FORM 10-K/T For the Year Ended December 31, 2015 Page PTRT III. Item 10. Item 11. Item 12. Item 13. Item 14. PTRT IV. Item 15. SIGNTTURES Exhibits, Financial Statements and Schedules 45 46 3 Directors, Executives Officers and Corporate...

  • Page 5
    ... of the Board; Member of Audit Committee and Nominating and Corporate Governance Committee Director; Chair of Nominating and Corporate Governance Committee; Member of Compensation Committee The following sets forth biographical information with respect to our directors: James Armstrong has served...

  • Page 6
    ... and Chief Accounting Officer for Autodesk, an enterprise software company. Prior to joining Autodesk, Mr. Miller held senior level finance positions at MarketFirst Software, Inc., Cadence Design Systems, Adaptive Broadband Corporation, and Silicon Graphics, Inc. Mr. Miller started his career as an...

  • Page 7
    ... School of Citizenship and Public Affairs of Syracuse University. Having served as Chairman and Chief Executive Officer at one of the nation's largest health care companies, Mr. Phanstiel brings to our Board of Directors a wealth of knowledge of organizational and operational management, board...

  • Page 8
    ... our review of these reports or written representations from certain reporting persons, we believe that during the fiscal year ended December 31, 2015, our officers, directors, greater-than-10% beneficial owners, and other persons subject to Section 16(a) of the Exchange Act filed on a timely basis...

  • Page 9
    ... and the Code of Ethics and any changes thereto, as well as considering and making any other recommendations related to corporate governance issues. The Nominating and Corporate Governance Committee operates under a written charter adopted by our Board of Directors, which is reviewed annually by the...

  • Page 10
    ... stock units in connection with the hiring of new employees and promotion or performance-related awards to employees who are not executive officers. There are prescribed limits on the subcommittee's authority, including annual share limits. Secondary Compensation Committee. The Board of Directors...

  • Page 11
    ... the independent directors are fully informed, able to discuss and debate the issues that they deem important, and able to provide effective oversight of management. Until November 1, 2013, Mark Goldston served as our Chairman, President and Chief Executive Officer. The Board previously determined...

  • Page 12
    ... for reviewing with management the Company's policies and procedures with respect to risk assessment and risk management, including reviewing certain risks associated with our financial and accounting systems, accounting policies, investment strategies, regulatory compliance, insurance programs, and...

  • Page 13
    ... each year; (ii) an annual bonus opportunity with the target level set at a specified percentage of base salary and with the actual payment based on attainment of certain specified corporate performance goals and individual performance goals; and (iii) longterm equity incentive awards designed to...

  • Page 14
    ... common stock. For 2015, given the importance of transforming United Online, Inc. into a technology growth company, the Compensation Committee determined to award long-term equity incentives in the form of both restricted stock units and stock options to our named executive officers as an employment...

  • Page 15
    ... officers for 2015. General Philosophy The Compensation Committee targets the total direct compensation (base salary, annual target bonus and the grant-date fair value of equity awards) of our executive officers at a level designed to attract outstanding talent capable of managing and operating...

  • Page 16
    ...the Peer Group was reviewed and changes were made to remove companies that were acquired or outside the objective size criteria, and to add similarly-sized publicly-traded internet software and services companies in order to more closely align the peer group companies with the revenue and market cap...

  • Page 17
    ... each named executive officer for 2015 that was "at risk" as a result of being either (i) an annual target cash bonus opportunity, which results in compensation only upon the attainment of specific financial goals and individual performance goals, or (ii) long-term equity incentive awards, the value...

  • Page 18
    ... of employment in August 2015; however, his bonus was calculated as if he participated in the 2015 Bonus Plan. His actual bonus award was prorated for hire date. Percentages shown reflect the award earned prior to proration. (4) Represents the grant-date fair value of equity incentive awards in...

  • Page 19
    ... management bonus plan under which specific annual goals are set and guidelines are established for calculating the incentive compensation payable upon the achievement of those goals at various designated levels. The bonus earned under such plan may be paid in cash and/or shares of our common stock...

  • Page 20
    ... ability to meet the Company's goals. The following tables set forth the 2015 Bonus Plan's financial performance goals and the related potential bonus amounts (as a percentage of base salary) each such named executive officer would have been eligible to earn if the performance goals were attained at...

  • Page 21
    ...206.5 93.8% $ 37.3 103.9% The following table sets forth the cash bonuses based on actual performance goal attainment that were paid to each of the named executive officers who were participants under the 2015 Bonus Plan and who qualified to earn a bonus thereunder. These bonuses were determined...

  • Page 22
    ... under that plan due to annual contribution limitations imposed under the federal tax laws. The long-term equity incentive awards granted to our executive officers in 2015 were designed to retain them during our efforts to transform United Online, Inc. into a technology growth company. In addition...

  • Page 23
    ...service with us thereafter. Mr. Harrington's 2015 equity awards were special new hire awards, intended to induce him to join our company and to motivate him to continue to grow our business over the long-term. Named Executive Officer Restricted Stock Unit Tward (# shares) Grant-Date Fair Value Stock...

  • Page 24
    ... potential sale of the Company by mitigating any personal disincentive to pursue transactions that may result in loss of employment. Our amended and restated severance benefit plan applies to all eligible full-time U.S. employees. However, our offer letters and employment agreements with the named...

  • Page 25
    ...plan and our executive officers' offer letters and employment agreements do not currently provide for any tax "gross-up" or other reimbursement obligation in respect of "golden parachute" taxes under Sections 280G and 4999 of the Code. The benefits and payments for which the named executive officers...

  • Page 26
    ... and forward sale contracts that are designed to hedge or offset any decrease in the market value of the Company's securities. In April 2015, the Board adopted stock ownership guidelines for the Chief Executive Officer, our other executive officers and our non-employee directors. The stock ownership...

  • Page 27
    ... fund the grant-date fair value of the award. However, the Compensation Committee retains complete discretion to grant stock options, from time to time, depending on the circumstances, as it has done in recent years. In 2015, our Compensation Committee approved grants to our named executive officers...

  • Page 28
    ... stock unit awards, are generally made on an annual basis and, as a result, our senior-level employees, including our executive officers, typically have unvested awards outstanding at any given time that could decrease significantly in value if our business is not managed to achieve its long...

  • Page 29
    ... certain summary information concerning the compensation earned, for services rendered in all capacities to us and our subsidiaries for the fiscal years ended December 31, 2015, 2014 and 2013, by our named executive officers: Stock Option Twards(11) 515,199 963,890 N/A - Non-Equity Incentive Plan...

  • Page 30
    ... in 2015, see Notes 1 and 8 of the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Represents performance-based cash bonus awards that were earned in the specified year and paid in the following year. See "Compensation Discussion and...

  • Page 31
    ... heading "Director Summary Compensation Table" below. (19) GRTNTS OF PLTN-BTSED TWTRDS The following table provides certain summary information concerning each grant of an award made to a named executive officer in the 2015 fiscal year under any incentive compensation plan: Tll Other Stock Twards...

  • Page 32
    ... or service based vesting conditions. For information regarding the assumptions applied in the calculation of the ASC 718 valuation of such equity awards, see Notes 1 and 8 of the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Mr...

  • Page 33
    ...of Contents OUTSTTNDING EQUITY TWTRDS TT FISCTL YETR-END The following table provides certain summary information concerning outstanding equity awards held by the named executive officers as of December 31, 2015: Number of Securities Underlying Unexercised Options Exercisable(1) Option Twards Number...

  • Page 34
    ... table sets forth, for each of the named executive officers, certain summary information concerning the exercise of stock options and the vesting of restricted stock or restricted stock unit awards that occurred during the year ended December 31, 2015: Option Twards Number of Shares Tcquired Value...

  • Page 35
    ... stock unit awards and other equity incentives in connection with their service on the Board. Effective as of January 2, 2015, the Board made a restricted stock unit award with a grant-date fair value of $24,988 to Howard Phanstiel. This award constituted the equity award component of the annual...

  • Page 36
    ...the service-based vesting condition in effect for the award. For information regarding assumptions underlying the ASC 718 valuation of our equity awards, see Notes 1 and 8 of the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015...

  • Page 37
    .... Each offer letter or employment agreement establishes the annual rate of base salary paid to the named executive officer and also sets his or her target bonus amount at a specified percentage of base salary, subject to future adjustment by the Company. The following table includes the annual rate...

  • Page 38
    ... on November 1, 2015. (5) The following sets forth a description of certain severance benefits each named executive officer, other than Mr. Phanstiel, would have received under the offer letter or employment agreement which we had in place with him or her on December 31, 2015 in the event his or...

  • Page 39
    ..., the closing selling price per share of our common stock on December 31, 2015. For additional information regarding the terms and conditions relating to such payments and benefits, see our offer letters and employment agreements with the named executive officers, our 2015 Management Bonus Plan, and...

  • Page 40
    ... was employed by us at any time during 2015, and none has ever served or acted as one of our officers or employees or had any relationships requiring disclosure by the Company under the SEC's rules requiring disclosure of certain relationships and related party transactions. None of our current...

  • Page 41

  • Page 42
    ... named executive officer (as listed in the Summary Compensation Table, which appears earlier in this 10-K/A filing), (iii) each person who, to our knowledge, beneficially owns 5% or more of the outstanding shares of our common stock, and (iv) all current directors and executive officers as a group...

  • Page 43
    ... 11, 2016. Mr. Armstrong has shared voting and investment power over the shares of our common stock reflected in the table and disclaims beneficial interest of such shares of our common stock except to the extent of his beneficial ownership in Clearstone Venture Management Services. Includes (i) 16...

  • Page 44
    ... 2015. The Schedule 13D reported that, as of November 3, 2015, J. Carlo Cannell, the Managing Member of Cannell Capital LLC, had sole voting and dispositive power with respect to all of the reported shares. The address of the principal office of each of Cannell Capital and J. Carlo Cannell is PO Box...

  • Page 45
    ... the Board of Directors as may be designated by the Board of Directors with respect to any related-party transactions. A current copy of the Code of Ethics is available on our corporate website (www.unitedonline.com) under "Investors." In addition, each year, our directors and executive officers are...

  • Page 46
    ..., including, within limitation, the amount and type of transaction; the importance of the transaction to each party; the reasons for the Company entering into the transaction with the related person; whether the transaction would impair the judgment of a director or executive officer to act in the...

  • Page 47
    ... Committee in the event a need arises for specific pre-approval between Audit Committee meetings. All of the audit, audit-related, tax services, and all other fees for services provided by our independent registered public accounting firm for the 2014 and 2015 fiscal years were approved by the Audit...

  • Page 48
    ... 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UNITED ONLINE, INC. (Registrant) Date: April 28, 2016 By: /s/ JEFFREY GOLDSTEIN Jeffrey Goldstein Interim Chief Executive Officer 46

  • Page 49
    Table of Contents Pursuant to the requirements of the Securities Exchange Act of 1934, 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/ JEFFREY GOLDSTEIN Jeffrey Goldstein /s/ EDWARD ...

  • Page 50
    ... Unit Issuance Agreement for 2010 Incentive Compensation Plan (non-employee directors-annual grant) Form of Restricted Stock Unit Issuance Agreement for 2010 Incentive Compensation Plan (officers) 8-K 2.1 000-33367 11/6/2013 2.2 10-Q 2.1 000-33367 8/6/2015 2.3 10-Q 2.3 000-33367 11...

  • Page 51
    ... for Executives 2015 Management Bonus Plan Office Lease between LNR Warner Center, LLC and NetZero, Inc. Office Lease between LNR Warner Center IV, LLC and United Online, Inc., dated as of May 14, 2014 Transition Services Agreement by and between United Online, Inc. and FTD Companies, Inc., dated as...

  • Page 52
    ...FTD Companies, Inc., dated as of October 31, 2013 Tax Sharing Agreement by and between United Online, Inc. and FTD Companies, Inc., dated as of October 31, 2013 List of Subsidiaries Consent of Independent Registered Public Accounting Firm Power of Attorney (see signature page to the Annual Report on...

  • Page 53
    ... and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the...

  • Page 54
    ... and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the...