Exhibit 10.21

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and entered into as of the
date the last party hereto signs the Agreement but is made effective as of the
Effective Date (as defined below in Section 1(a)) by and between United
Online, Inc., a Delaware corporation (the “Company”), with principal corporate
offices at 21301 Burbank Blvd., Woodland Hills, CA 91367, and Francis Lobo
(“Employee”).

 

WHEREAS, effective as of the date hereof, Employee and the Company desire to
enter into an employment agreement.

 

NOW THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Term; Position.

 

(a)           The term of this Agreement will commence on November 5, 2013 (the
“Effective Date”) and extend through the third anniversary of the Effective
Date, unless this Agreement is earlier terminated as provided herein (the
“Term”).

 

(b)           Employee will serve as President and Chief Executive Officer of
the Company and report to the Board of Directors of the Company. Employee agrees
to devote Employee’s full-time attention, skill and efforts to the performance
of Employee’s duties for the Company.

 

2.                                      Salary and Benefits.

 

(a)           Employee will be paid a salary at an annualized rate of $700,000
payable in successive bi-weekly 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 Board of Directors. As used in this Agreement, the term “Board of
Directors” shall refer to the Board of Directors of the Company or other
governing body or committee to which the authority of the Board of Directors of
the Company with respect to executive compensation matters has been delegated,
including (without limitation) the Compensation Committee of the Board of
Directors of the Company.

 

(b)           Employee will be eligible to participate in each of the Company’s
employee benefit plans that is made generally available either to the Company’s
employees or to the Company’s senior executives and for which Employee satisfies
the applicable eligibility requirements. Employee will be entitled to a minimum
of four (4) weeks of paid vacation each year or such greater amount as
determined in accordance with the Company’s standard vacation policy.

 

(c)           The Company will promptly reimburse Employee for all reasonable
and necessary business expenses Employee incurs in connection with the business
of the Company and the performance of Employee’s duties hereunder upon
Employee’s submission of reasonable and timely documentation of those expenses.
In no event shall any expense be reimbursed later than the end of the calendar
year following the calendar year in which that expense is incurred, and the
amounts reimbursed in any one calendar year shall not affect the amounts
reimbursable in any other calendar year.  Employee’s right to receive such
reimbursements may not be exchanged or liquidated for any other benefit.

 

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(d)           At the next regularly scheduled grant of equity awards to
executive officers following the Effective Date, which grant is currently
expected to occur in March 2014, the Board of Directors shall grant to Employee
(i) a number of restricted stock units relating to the Company’s common stock
(“Common Stock”) with an aggregate value of $1,500,000, determined based on the
closing price of the Common Stock on the date of grant; and (ii) a number of
options to purchase Common Stock equal to 1.33 multiplied by the number of
restricted stock units granted pursuant to Section 2(d)(i), with an exercise
price equal to the per-share closing price on the date of grant.  The restricted
stock units and options shall vest at the rate of one-third on each of the first
three anniversaries of the Effective Date, and shall be subject to such other
terms and conditions as may be determined by the Board of Directors (or an
appropriate committee thereof). The options shall be exercisable by the methods
permitted under the Company’s form of option agreement for officers and the
post-termination of employment exercisability periods and term of the option
shall also be as set forth in such form.  The options shall be “incentive stock
options” within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”), to the extent allowed under applicable law (if so
requested by Employee within thirty (30) days following the Effective Date), and
are intended to be exempt from Section 409A of the Code.  The grants described
in this Section 2(d) shall be referred to herein as the “Initial Grants.”

 

(e)           In order to compensate Employee for potential payments which he is
forfeiting from his prior employer by virtue of his termination of employment
with that employer, he shall be (i) paid, within thirty (30) days following the
Effective Date, a lump sum cash payment of $1,100,000; and (ii) granted, as soon
as practicable following the Effective Date, restricted stock units with an
aggregate value of $500,000, determined based on the average per-share closing
price of the Common Stock for the five (5) trading days prior to the date of
grant, which restricted stock units shall vest on the first anniversary of the
date of grant.  If Employee’s employment with the Company is terminated by the
Company for “cause” or by Employee without “good reason” (each as defined
below), in each case on or prior to October 31, 2014, then Employee shall be
obligated to repay to the Company an amount equal to the after-tax value of
$1,100,000 multiplied by a fraction, the numerator of which is the number of
days remaining between the date of termination and October 31, 2014 and the
denominator of which is 365, within thirty (30) days following the date of
termination.

 

(f)            In order to assist Employee with the costs associated with
relocation (including but not limited to travel for him and for his family,
temporary housing and other associated expenses), the Company shall provide
Employee with a lump sum payment of $150,000 (the “Relocation Payment”) within
thirty (30) days following the Effective Date.  If Employee’s employment with
the Company is terminated by the Company for “cause” or by Employee without
“good reason” (each as defined below), in each case on or prior to October 31,
2014, then Employee shall be obligated to repay the Relocation Payment to the
Company within thirty (30) days following the date of termination.

 

3.                                      Bonus.

 

For 2013, Employee’s bonus shall be $175,000.  For each subsequent fiscal year
of the Company during the Term of this Agreement, Employee will be eligible to
participate in a bonus program with a target bonus set by the Board of Directors
in an amount of up to 100% of Employee’s annual rate of base salary.  The
performance criteria for purposes of determining Employee’s actual bonus for
each fiscal year will be established by the Board of Directors, and Employee’s
annual bonus for one or more of those fiscal years may 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 at the time such bonus payment is paid. 
Employee’s bonus payment for each fiscal year shall in no event be paid later
than the 15th day of the third month following the end of the Company’s fiscal
year for which such bonus is earned.

 

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4.                                      Restricted Stock Units and Other Equity
Awards.

 

(a)           If Employee’s employment is terminated by the Company “without
cause” or by Employee for “good reason” (as each term is defined below) during
the Term, then upon Employee’s satisfaction of the Release Condition set forth
in Section 7(b) below, any and all equity awards Employee holds on the date of
such termination (other than any equity award granted after the Initial Grants
that expressly provides to the contrary) 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 the equity award
agreement for any equity award granted after the Initial Grants.  Except as
otherwise 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 to comply with any applicable requirements of Section 409A of the Code,
the shares of Common Stock underlying the equity awards that vest on an
accelerated basis in accordance with this Section 4(a) will be issued to
Employee within the sixty (60)-day period following the date of Employee’s
“separation from service” (as defined below) as a result of Employee’s
termination “without cause” (as defined below) or Employee’s resignation for
“good reason” (as defined below), provided the Release required of Employee
pursuant to Section 7(b) has become effective and enforceable in accordance with
its terms following the expiration of the applicable revocation period in effect
for that Release.  However, should such sixty (60)-day period span two taxable
years, the issuance shall be effected during the portion of that period that
occurs in the second taxable year.

 

(b)           If Employee’s employment is terminated by the Company “without
cause” or by Employee for “good reason” (as each term is defined below) at any
time during the Term and within the period commencing with the execution by the
Company of a definitive agreement for a Change in Control (as defined below) and
ending with the earlier of (i) the termination of that agreement without the
consummation of such Change in Control or (ii) the expiration of the twenty-four
(24)-month period measured from the date such Change in Control occurs, then
upon Employee’s satisfaction of the 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 the equity award agreement for any equity award
granted after the Initial Grants.  Except as otherwise 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 Common Stock
(or any replacement securities) underlying the equity awards that fully vest on
an accelerated basis in accordance with this Section 4(b), or the proceeds of
any cash retention program established in replacement of those shares pursuant
to the terms of the applicable award agreement, will be issued or distributed to
Employee within the sixty (60)-day period following the date of Employee’s
“separation from service” (as defined below) as a result of Employee’s
termination “without cause” (as defined below) or Employee’s resignation for
“good reason” (as defined below), provided the Release required of Employee
pursuant to Section 7(b) has become effective and enforceable in accordance with
its terms following the expiration of the applicable revocation period in effect
for that Release.  However, should such sixty (60)-day period span two taxable
years, the issuance shall be effected during the portion of that period that
occurs in the second taxable year.

 

(c)           Upon Employee’s “separation from service” (as defined below) as a
result of Employee’s death or Disability (as defined below), any and all equity
awards Employee holds on the date of such separation from service will vest on
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

 

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equity award been structured so as to vest in successive equal monthly
installments over the vesting schedule for that award. Except as otherwise
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 Common Stock underlying the equity awards that vest on
an accelerated basis in accordance with this Section 4(c) will be issued on the
date of such separation from service or as soon as administratively practicable
thereafter, but in no event later than the later of (i) the end of the calendar
year in which such separation from service occurs or (ii) the 15th day of the
third calendar month following the date of such separation from service. For
purposes of this Agreement, “Disability” means Employee’s inability to engage in
any substantial activity necessary to perform Employee’s duties and
responsibilities hereunder by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted,
or can be expected to last, for a continuous period of not less than twelve (12)
months.

 

(d)           The vesting acceleration provisions of this Section 4 and
Section 7 will apply to all equity awards made after the Effective Date of this
Agreement except to the extent specifically stated in the applicable award
agreement or in a resolution of the Board of Directors covering those future
awards.  The shares subject to each equity award that vests pursuant to the
vesting acceleration provisions of this Section 4 shall be issued in accordance
with the applicable issuance date provisions of this Section 4, except to the
extent the agreement evidencing such award provides otherwise or to the extent
another issuance date may be required in order to comply with any applicable
requirements of Section 409A of the Code.

 

5.                                      Policies; Procedures.

 

As an employee of the Company, Employee will be expected to abide by all of the
Company’s policies and procedures, including (without limitation) the terms of
any Company handbook, insider trading policy and code of ethics in effect from
time to time.

 

6.                                      At Will Employment.

 

Notwithstanding anything to the contrary contained herein, Employee’s employment
with the Company is “at will” and will not be for any specified term, meaning
that either Employee or the Company will be entitled to terminate Employee’s
employment at any time and for any reason, with or without cause or advance
notice.  Any contrary representations that may have been made to Employee are
hereby superseded by the terms set forth in this Agreement.  This is the full
and complete agreement between Employee and the Company on this subject.
Although Employee’s job duties, title, compensation and benefits, as well as the
Company’s personnel policies and 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 Chairman of the Board of the
Company and approved by the Board of Directors.

 

7.                                      Separation from Service.

 

(a)           Termination by Employee.  If Employee terminates his or her
employment with the Company for any reason other than as a result of his or her
death or Disability or his or her resignation for “good reason” (as defined
below), then all the obligations of the Company set forth in this Agreement will
cease, other than the obligation to pay Employee, on his or her employment
termination date, any earned but unpaid compensation for services rendered
through that termination date and any accrued but unused vacation days as of
that termination date (collectively, the “Accrued Obligations”).  If Employee
terminates his or her employment with the Company for “good reason” (as defined
below) during the Term, then in addition to Employee’s right to receive the
Accrued Obligations, Employee will, upon

 

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Employee’s satisfaction of the Release Condition set forth in
Section 7(b) below, become entitled to the Separation Payment (as defined below)
and the Additional Payments (as defined below), to the same extent as if
Employee’s employment had been terminated by the Company “without cause” (as
defined below) during the Term, and Employee will also be entitled, in
accordance with the applicable provisions of Section 4 above, to the accelerated
vesting of any equity awards Employee holds at the time of such termination.
Following Employee’s termination of his or her employment with the Company under
this Section 7(a), Employee will continue to be obligated to comply with the
terms of Section 9 below.

 

(b)           Termination by the Company.  If Employee’s employment is
terminated by the Company “without cause” (as defined below) during the Term,
then in addition to Employee’s right to receive the Accrued Obligations,
Employee will, upon Employee’s satisfaction of the Release Condition set forth
below in this Section 7(b), become entitled to a cash separation payment (the
“Separation Payment”) in an aggregate amount equal to two (2) times the base
salary at the annual rate in effect for Employee at the time.  In addition,
contingent upon Employee’s satisfaction of the Release Condition, Employee will
be eligible for the following additional separation payments (the “Additional
Payments”):

 

(I)            Employee will be eligible for an additional separation payment in
an amount equal to a pro-rated bonus for the fiscal year in which such
involuntary termination occurs. Such pro-rated bonus will be determined by
multiplying (A) the actual bonus (if any) Employee would have earned for that
fiscal year, based on the level at which the applicable performance goals for
such fiscal year are in fact attained, had Employee continued in the Company’s
employ through the date that bonus award becomes due and payable by (B) a
fraction the numerator of which is the number of whole months (rounded to the
next highest whole month) Employee remained in the Company’s employ during that
fiscal year and the denominator of which is twelve (12), with such pro-rated
bonus (if any) to be paid at the same time and in same form that the bonus
payment for such fiscal year would have been made following the completion of
that fiscal year had Employee remained in the Company’s employ through the
payment date.  However, if such involuntary termination occurs in the same
fiscal year of the Company in which a Change in Control occurs, then such
pro-rated bonus will instead be determined by (1) multiplying (A) Employee’s
target bonus for that fiscal year by (B) a fraction the numerator of which is
the number of whole months (rounded to the next highest whole month) Employee
remained in the Company’s employ during that fiscal year and the denominator of
which is twelve (12) and (2) reducing such amount by any bonus earned by
Employee for the same fiscal year under Section 3 of this Agreement, with such
pro-rated bonus to be paid (in the same form in which the bonus payment for 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 the Separation Payment (or, in the case of a
termination following a Qualifying Change in Control (as defined below), the
lump sum Separation Payment) is paid; or

 

(ii)           if such Change in Control occurs after the date of such
involuntary termination, then such payment shall be made on the later of (x) the
third (3rd) business day following the effective date of such Change in Control
or (y) the sixtieth (60th) day following the date of Employee’s separation from
service (as defined below) or, if such sixtieth (60th) day is not otherwise a
business day, then the immediately preceding business day.

 

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(II)          In addition, if the date of such involuntary termination occurs
after the end of a fiscal year of the Company but prior to the date in the
subsequent fiscal year on which Employee’s bonus for that fiscal year would have
otherwise become due and payable on the basis of the applicable performance
goals attained for that year had Employee continued in employment with the
Company, then the Company will pay Employee an additional separation payment
equal to the bonus that Employee would have received on the basis of the
attained performance goals had Employee remained employed by, and in good
standing with, the Company through the payment date for such bonus, with that
amount to be paid in a lump sum (in the same form in which such bonus payment
would have been paid had Employee remained in the Company’s employ through the
payment date) on the later of (i) the date on which the first monthly
installment of the Separation Payment (or, in the case of a termination
following a Qualifying Change in Control, the lump sum Separation Payment) is
paid to Employee as set forth below in this Section 7(b) or (ii) the date such
bonus would have been paid to Employee pursuant to Section 3 of this Agreement
had Employee continued in the Company’s employ through such payment date.

 

(III)        In no event shall any such Additional Payment be made later than
the last day of the applicable period necessary to qualify such Additional
Payment for the short-term deferral exception under Code Section 409A.

 

Payment of the Separation Payment and the Additional Payments (if any) and the
accelerated vesting of Employee’s equity awards under Section 4 will each be
contingent upon the satisfaction of the following requirements (collectively the
“Release Condition”): (i) Employee must execute and deliver to the Company,
within twenty-one (21) days (or forty-five (45) days to the extent such longer
period is required under applicable law) after the effective date of Employee’s
termination of employment, a comprehensive agreement releasing the Company and
its officers, directors, employees, stockholders, subsidiaries, affiliates,
representatives and other related parties from all claims that Employee may have
with respect to such parties relating to Employee’s employment with the Company
and the termination of that employment relationship and containing such other
and additional terms as the Company deems satisfactory (the “Release”) and
(ii) such Release must become effective and enforceable after the expiration of
any applicable revocation period under federal or state law.

 

Except as provided in the following paragraph, the Separation Payment to which
Employee becomes entitled under this Section 7(b) or under Section 7(a) above
will be payable in a series of twelve (12) successive equal monthly
installments, beginning on the first regular payday for the Company’s salaried
employees, within the sixty (60)-day period following the date of Employee’s
“separation from service” (as defined below) as a result of Employee’s
termination “without cause” (as defined below) or Employee’s resignation for
“good reason” (as defined below), on which Employee’s executed Release is
effective and enforceable in accordance with its terms following the expiration
of the applicable revocation period in effect for that Release.  However, should
such sixty (60)-day period span two taxable years, the first such monthly
installment shall be paid during the portion of that period that occurs in the
second taxable year.  The remaining monthly installments shall be paid on
successive monthly anniversaries of the initial monthly installment hereunder. 
For purposes of Section 409A of the Code, Employee’s right to receive such
Separation Payment shall be deemed a right to receive a series of separate
individual payments and not a right to single payment.

 

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If Employee’s employment is terminated by the Company “without cause” (as
defined below) or if Employee terminates his or her 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
entitled under this Section 7(b) or under Section 7(a) above upon Employee’s
satisfaction of the Release Condition will be payable in a single lump-sum
payment on the first regular payday for the Company’s salaried employees, within
the sixty (60)-day period following the date of Employee’s “separation from
service” (as defined below) as a result of Employee’s termination “without
cause” (as defined below) or Employee’s resignation for “good reason” (as
defined below), on which Employee’s executed Release is effective and
enforceable in accordance with its terms following the expiration of the
applicable revocation period in effect for that Release. However, should such
sixty (60)-day period span two taxable years, then such payment shall be made
during the portion of that 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 of this Section 7(b).  For purposes of this Agreement, a
“Change in Control” shall have the meaning assigned to such term in the
Company’s most recently-adopted equity compensation plan, and a “Qualifying
Change in Control” shall mean the date on which there occurs a “Change in
Control” (as defined above) that also qualifies as: (i) a change in the
ownership of the Company, as determined in accordance with
Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the
effective control of the Company, as determined in accordance with
Section 1.409A-3(i)(5)(vi) of the Treasury Regulations, or (iii) a change in the
ownership of a substantial portion of the assets of the Company, as determined
in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury Regulations.  For
the avoidance of doubt, the spin-off of FTD Companies, Inc. from United
Online, Inc. shall not constitute a Change in Control or a Qualifying Change in
Control for purposes of this Agreement.

 

If Employee’s employment is terminated by the Company “without cause” (as
defined below), the Company will have no further obligation to Employee pursuant
to this Agreement other than the Accrued Obligations, the vesting of Employee’s
outstanding equity awards in accordance with the applicable vesting acceleration
provisions of Section 4 above and the obligations of the Company pursuant to
this Section 7(b).

 

If Employee’s employment is terminated by the Company “with cause” (as defined
below), the Company will have no further obligation to Employee under the terms
of this Agreement, other than the Accrued Obligations.

 

Notwithstanding the termination of Employee’s employment by the Company “with
cause” or “without cause,” or by Employee for “good reason” or without “good
reason”, Employee will continue to be subject to the restrictive covenants set
forth in Section 9, whether or not Employee becomes entitled to any severance or
separation payments or benefits pursuant to Section 4 or Section 7 of this
Agreement.

 

If any payment or benefit received or to be received by Employee (including any
payment or benefit received pursuant to this Agreement or otherwise) would be
(in whole or part) subject to the excise tax imposed by Section 4999 of the
Code, or any successor provision thereto, or any similar tax imposed by state or
local law, or any interest or penalties with respect to such excise tax (such
tax or taxes, together with any such interest and penalties, are hereafter
collectively referred to as the “Excise Tax”), then the cash payments provided
to Employee under this Agreement shall first be reduced, with each such payment
to be reduced pro-rata but without any change in the payment date and with the
monthly installments of the Separation Payment (or the lump sum Separation
Payment in the event of a Qualifying Change in Control) to be the first such
cash payments so reduced, and then, if necessary, the accelerated vesting of
Employee’s equity awards pursuant to the provisions of this Agreement shall be
reduced in the

 

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same chronological order in which those awards were made, but only to the extent
necessary to assure that Employee receives only the greater of (i) the amount of
those payments and benefits which would not constitute a parachute payment under
Code Section 280G or (ii) the amount which yields Employee the greatest
after-tax amount of benefits 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’s employment with the Company).  Calculations required by this
paragraph shall be performed by a national accounting firm mutually acceptable
to Employee and the Company.

 

(c)           Termination by Death or Disability.

 

If Employee incurs a “separation from service” (as defined below) as a result of
his or her death or Disability, the Company will be obligated to pay the Accrued
Obligations to Employee, Employee’s estate or beneficiaries (as the case may be)
on the date of such separation from service or as soon as administratively
practicable thereafter, but in no event later than sixty (60) days after the
date of such separation from service.  In the event of such separation from
service due to Employee’s death or Disability, Employee or Employee’s estate or
beneficiaries, as the case may be, will also be entitled to the accelerated
vesting of Employee’s equity awards as set forth in Section 4(c) above.  The
provisions of this Section 7(c) will not affect or change the rights or benefits
to which Employee is otherwise entitled under the Company’s employee benefit
plans or otherwise.

 

(d)           Definitions.

 

For purposes of this Agreement, the following definitions will be in effect:

 

“good reason” means:

 

(i)                                     a material reduction in Employee’s base
salary without Employee’s prior written consent;

 

(ii)                                  a material reduction in Employee’s
authority, duties, reporting relationship or responsibilities, without
Employee’s prior written consent;

 

(iii)                               a material change in the geographic location
at which Employee must perform services (the parties acknowledge that Employee
is currently required to perform services at 21301 Burbank Boulevard, Woodland
Hills, California 91367) without Employee’s prior written consent; or

 

(iv)                              any material un-waived breach by the Company
of the terms of this Agreement; provided however, that with respect to any of
the clause (i) — (iv) events above, Employee will not be deemed to have resigned
for good reason unless (A) Employee provides written notice to the Company of
the existence of the good reason event within ninety (90) days after its initial
occurrence, (B) the Company is provided with thirty (30) days after receipt of
such notice in which to cure such good reason event and (C) Employee effectively
terminates Employee’s employment within one hundred eighty (180) days following
the occurrence of the non-cured clause (i) — (iv) event.

 

“with cause” means Employee’s termination of employment by the Company for any
of the following reasons:

 

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(i)                                     if Employee is convicted of, or enters a
plea of nolo contendere to, a felony or a misdemeanor involving any act of moral
turpitude;

 

(ii)                                  if Employee commits an act of actual
fraud, embezzlement, theft or similar dishonesty against the Company or any of
its subsidiaries or affiliates;

 

(iii)                               if Employee commits any willful misconduct
or gross negligence resulting in material harm to the Company or any of its
subsidiaries or affiliates; or

 

(iv)                              if Employee fails, after receipt of detailed
written notice and after receiving a period of at least thirty (30) days
following such notice to cure such failure, to use his or her reasonable good
faith efforts to follow the reasonable and lawful direction of the Board of
Directors.

 

“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’s death, resignation, dismissal or other
termination event and shall be deemed to occur at such time as the level of bona
fide services Employee is to render as such an employee (or as a non-employee
consultant) permanently decreases to a level that is not more than twenty
percent (20%) of the average level of services Employee rendered as an employee
during the immediately preceding thirty-six (36) months (or such shorter period
of time in which Employee has actually been in employee status with the
Company). Any such determination of Employee’s separation from service shall,
however, be made in accordance with the applicable standards of the Treasury
Regulations issued under Section 409A of the Code.

 

(e)           Code Section 409A Deferral Period.  Notwithstanding any provision
in this Agreement to the contrary (other than Section 7(f) below), no payment or
distribution under this Agreement which constitutes an item of deferred
compensation under Section 409A of the Code and becomes payable by reason of
Employee’s termination of employment with the Company will be made to Employee
until Employee incurs a separation from service (as such term is defined above
and determined in accordance with Treasury Regulations issued under Section 409A
of the Code) in connection with such termination of employment.  For purposes of
this Agreement, each amount to be paid or benefit to be provided Employee shall
be treated as a separate identified payment or benefit for purposes of
Section 409A of the Code.  In addition, no payment or benefit which constitutes
an item of deferred compensation under Section 409A of the Code and becomes
payable by reason of Employee’s separation from service will be made to Employee
prior to the earlier of (i) the first day of the seventh (7th) month measured
from the date of such separation from service or (ii) the date of Employee’s
death, if Employee is deemed at the time of such separation from service to be a
“specified employee” (as determined pursuant to Code Section 409A and the
Treasury Regulations thereunder) and such delayed commencement is otherwise
required in order to avoid a prohibited distribution under Code
Section 409A(a)(2).  Upon the expiration of the applicable deferral period, all
payments and benefits deferred pursuant to this Section 7(e) (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 month immediately following the
date the Company receives proof of Employee’s death.  Any remaining payments or
benefits due under this Agreement will be paid in accordance with the normal
payment dates specified herein.

 

(f)            Provisions Applicable to “Specified Employee”.  Notwithstanding
Section 7(e) above, the following provisions shall also be applicable to
Employee if Employee is a “specified employee” at the time of Employee’s
separation of service:

 

9

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(i)            Any payments or benefits which become due and payable to Employee
during the period beginning with the date of Employee’s separation from service
and ending on March 15 of the following calendar year and otherwise qualify for
the short-term deferral exception to Code Section 409A shall not be subject to
the holdback provisions of Section 7(e) and shall accordingly be paid as and
when they become due and payable under this Agreement in accordance with such
short-term deferral exception to Code Section 409A.

 

(ii)           The remaining portion of the payments and benefits to which
Employee becomes entitled under this Agreement, to the extent they do not in the
aggregate exceed the dollar limit described below and are otherwise scheduled to
be paid no later than the last day of the second calendar year following the
calendar year in which Employee’s separation from service occurs, shall not be
subject to the holdback provisions of Section 7(e) and shall be 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 calendar year of Employee’s
separation from service, adjusted to reflect any increase during that calendar
year which was expected to continue indefinitely had such separation from
service not occurred) or (ii) the compensation limit under Section 401(a)(17) of
the Code as in effect in the year of such separation from service.  To the
extent the portion of the severance payments and benefits to which Employee
would otherwise be entitled under this Agreement during the deferral period
under Section 7(e) exceeds the foregoing dollar limitation, such excess shall be
paid in a lump sum upon the expiration of that deferral period, in accordance
with the deferred payment provisions of Section 7(e), and the remaining
severance payments and benefits (if any) shall be paid in accordance with the
normal payment dates specified for them herein.

 

8.                                      Withholding Taxes.

 

All forms of compensation payable pursuant to the terms this Agreement, whether
payable in cash, shares of Common Stock or other property, are subject to
reduction to reflect the applicable withholding and payroll taxes.

 

9.                                      Restrictive Covenants.

 

Until one (1) year after the termination of Employee’s employment with the
Company, Employee will not, directly or indirectly, solicit or recruit for
employment, any person or persons who are employed by Company or any of its
subsidiaries or affiliates, or who were so employed at any time within a period
of twelve (12) months immediately prior to the date Employee’s employment
terminated, or otherwise interfere with the relationship between any such person
and the Company; nor will Employee assist anyone else in recruiting any such
employee to work for another company or business or discuss with any such person
his or her leaving the employ of the Company or engaging in a business activity
in competition with the Company.  Notwithstanding the foregoing, if Employee and
the Company enter into any restrictive covenant agreement, the terms of which
conflict with this Section 9, the terms of such agreement shall govern. 
Employee hereby agrees to enter into an Employee Proprietary Information and
Inventions Agreement with the Company on or prior to the Effective Date, which
agreement shall be in substantially the form attached hereto as Appendix A.

 

10

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10.                               Deferred Compensation Programs

 

Any compensation deferred by Employee pursuant to one or more non-qualified
deferred compensation plans or arrangements of the Company subject to
Section 409A of the Code and not otherwise expressly addressed by the terms of
this Agreement, shall be paid at such time and in such form of payment as set
forth in each applicable plan or arrangement governing the payment of any such
deferred amounts.

 

11.                               Clawback.

 

Any amounts paid or payable to Employee pursuant to this Agreement or the
Company’s equity or compensation plans shall be subject to recovery or clawback
to the extent required by any applicable law or any applicable securities
exchange listing standards.

 

12.                               Entire Agreement/Construction of Terms.

 

(a)           This Agreement, together with any Company handbooks and policies
in effect from time to time and the applicable stock plans and agreements
evidencing the equity awards made to Employee from time to time during
Employee’s period of employment, contains all of the terms of Employee’s
employment with the Company and supersedes any prior understandings or
agreements, whether oral or written, between Employee and the Company.  The
Company shall reimburse Employee’s attorney for up to $20,000 in fees associated
with the negotiation of this Agreement.

 

(b)           If any provision of this Agreement is held by an arbitrator or a
court of competent jurisdiction to conflict with any federal, state or local
law, or to be otherwise invalid or unenforceable, such provision shall be
construed or modified in a manner so as to maximize its enforceability while
giving the greatest effect as possible to the intent of the parties.  To the
extent any provision cannot be construed or modified to be enforceable, such
provision will be deemed to be eliminated from this Agreement and of no force or
effect, and the remainder of this Agreement will otherwise remain in full force
and effect and be construed as if such portion had not been included in this
Agreement.

 

(c)           This Agreement is not assignable by Employee.  This Agreement may
be assigned by the Company to its subsidiaries or affiliates or to successors in
interest to the Company or its lines of business.

 

(d)           The severance payments and benefits under this Agreement are
intended, where possible, to comply with the “short term deferral exception” and
the “involuntary separation pay exception” to Code Section 409A.  Accordingly,
the provisions of this Agreement applicable to the Separation Payment and the
accelerated vesting of Employee’s equity awards and the issuance of shares of
Common Stock thereunder and the determination of Employee’s separation from
service due to termination of Employee’s employment without cause or Employee’s
resignation for good reason shall be applied, construed and administered so that
those payments and benefits qualify for one or both of those exceptions, to the
maximum extent allowable. However, to the extent any payment or benefit to which
Employee becomes entitled under this Agreement is deemed to constitute an item
of deferred compensation subject to the requirements of Code Section 409A, the
provisions of this Agreement applicable to that payment or benefit shall be
applied, construed and administered so that such payment or benefit is made or
provided in compliance with the applicable requirements of Code Section 409A. 
In addition, should there arise any ambiguity as to whether any other provisions
of this Agreement would contravene one or more applicable requirements or
limitations of Code Section 409A and the Treasury Regulations thereunder, such
provisions shall be interpreted, administered and applied in a manner that
complies with the applicable requirements of Code Section 409A and the Treasury
Regulations thereunder.

 

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13.                               Amendment and Governing Law.

 

This Agreement may not be amended or modified except by an express written
agreement sign by Employee and the Chairman of the Board of Directors of the
Company and approved by the Board of Directors.  Employee agrees that any
dispute in the meaning, effect or validity of this Agreement shall be resolved
in accordance with the laws of the State of California without regard to the
conflict of laws provisions thereof.  Employee hereby irrevocably submits to the
jurisdiction (including without limitation in personam jurisdiction), process
and venue of the courts of the State of California and the Federal courts of the
United States located in Los Angeles, California, and hereby agrees that any
action, suit or proceeding initiated by California for the interpretation or
enforcement of the provisions of this Agreement shall, and that any action, suit
or proceeding initiated by Company for the interpretation or enforcement of the
provisions of this Agreement may, be heard and determined exclusively in a
Federal court, or, if not permitted by applicable law, then in a State court,
situated in Los Angeles, California.

 

14.                               Surviving Provisions.

 

Following any termination or expiration of this Agreement, Sections 5, 6, 7(e),
7(f), 8, 9, 10, 11, 12, 13 and 14 will survive, and, if Employee’s employment
with the Company continues thereafter, Employee’s employment with the Company
will continue to be “at will”.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date stated in the opening paragraph.

 

 

/s/ Francis Lobo

 

Francis Lobo

 

 

 

Date signed:

October 1, 2013

 

 

 

 

 

UNITED ONLINE, INC.

 

 

 

By:

/s/ Mark R. Goldston

 

Name:

Mark R. Goldston

 

Title:

Chairman, President and CEO

 

 

United Online, Inc.

 

 

October 2, 2013

 

 

 

 

Date signed:

 

 

 

 

 

 

 

 

By:

/s/ Robert Berglass

 

Name:

Robert Berglass

 

Title:

Lead Director

 

 

 

 

 

 

 

Date signed:

October 2, 2013

 

 

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Appendix A

 

EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

(to be attached)

 

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EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT

 

In consideration of my employment or continued employment by NetZero, Inc. (my
“Employer”), the compensation I receive, and any other consideration I have been
provided that was conditioned on my execution of this Employee Proprietary
Information and Inventions Agreement (the “Agreement”), I agree as follows:

 

1.  PROPRIETARY INFORMATION.

 

(a) Parties.  I understand and agree that this Agreement is intended to benefit 
Employer and all of its affiliates  including , but not limited to, United
Online, Inc. (“United Online”) and all of its current and future direct and
indirect parents and subsidiaries and their successors (collectively, the
“Company”).

 

(b) Confidential Restrictions.  I understand that, during the course of my work
as an employee of Employer, I have had and will have access to Proprietary
Information (as defined below) concerning the Company and parties with which the
Company has a business relationship. I acknowledge that the Company has
developed, compiled, and otherwise obtained, at great expense, such Proprietary
Information.  I agree to hold in strict confidence all Proprietary Information
and will not disclose any Proprietary Information to anyone outside of the
Company and will not use, copy, publish, summarize, or remove from Company
premises Proprietary Information except during my employment to the extent
necessary to carry out my responsibilities as an employee of Employer.  I
further agree that the publication of any Proprietary Information through
literature or speeches must be approved in advance in writing in accordance with
the Company’s applicable policies and procedures.  I understand that my
employment creates a relationship of confidence and trust between me and the
Company with respect to Proprietary Information, and I voluntarily accept this
trust and confidence.

 

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(c) Proprietary Information Defined.  I understand that the term “Proprietary
Information” in this Agreement means all information and any idea, in whatever
form, tangible or intangible, whether disclosed to or learned or developed by
me, pertaining in any manner to the current or proposed business of the Company
unless the information (i) is publicly known through lawful means; (ii) was
rightfully in my possession prior to my employment with the Company as
demonstrated by written documents currently in existence; (iii) is disclosed to
me without restriction by a third party who rightfully possesses and discloses
the information and who did not learn of it directly from the Company; or
(iv) is reasonably known to people in the trade or industry.  Without limiting
the scope of  the definition, I understand that the Company considers the
following to be included in the definition of Proprietary Information:  (i) all
client/customer lists and all lists or other compilations containing client,
customer or vendor information; (ii) information about products, proposed
products, research, product development, techniques, processes, costs, profits,
product pricing, markets, marketing plans, strategies, forecasts, sales and
commissions; (iii) plans for the future development and new product concepts;
(iv) all information regarding the Company’s subscribers and all information
regarding the Company’s subscribers compiled by or derived from the Company’s
database; (v) the compensation and terms of employment of other employees;
(vi) all other information that has been or will be given to me in confidence by
the Company; and (vii) software in various stages of development, designs,
drawings, specifications, techniques, models, data, source code, algorithms,
object code, documentation, diagrams, flow charts, computer programs, databases,
and other data of any kind and description, including electronic data recorded
or retrieved by any means.  Proprietary Information also includes any
information described above which the Company obtains from another party and
which the Company treats as proprietary or designates as Proprietary Information
whether or not owned or developed by the Company or the other party.

 

(d) Company Materials.  I understand that I will be entrusted with “Company
Materials” (as defined below) which are important to the Company’s business or
the business of Company customers or clients.  I agree that during my
employment, I will not deliver any Company Materials to any person or entity
outside the Company, except as I am required to do in connection with performing
my duties for the Company.  For purposes of this Agreement, “Company Materials”
are documents, electronic files or any other tangible or electronic items that
contain information concerning the business, operations or plans of the Company
or its customers, whether the documents have been prepared by me or others. 
Company Materials include, but are not limited to, computers, computer disk
drives, computer files, computer disks, documents, code, flowcharts, schematics,
designs, graphics, customer lists, drawings, photographs, customer
information, etc.

 

(e) Information Use Return and Acknowledgement.  I agree that I will not retain
and I will return all Proprietary Information and all copies of it in whatever
form, as well as all Company Materials, apparatus, equipment and other Company
property along with all reproductions, to Employer after my employment
terminates.  The only exceptions are (i) my personal copies of records of my
compensation; (ii) any agreements between me and the Company that I have signed;
and (iii) my copy of this Agreement.  I agree to execute reasonable
documentation if requested by Employer upon the termination of my employment
reflecting such return and acknowledging my obligations under this Agreement.

 

16

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(f) Prior Actions and Knowledge.  I represent and warrant that from the time of
my first contact or communication with the Company, I have held in strict
confidence all Proprietary Information and have not disclosed any Proprietary
Information to anyone outside of the Company, or used, copied, published, or
summarized any Proprietary Information except to the extent necessary to carry
out my responsibilities as an employee of the Employer.

 

(g) Former Employer Information; Consents.  I agree that I will not, during my
employment, improperly use or disclose any confidential information, proprietary
information or trade secrets of my former or any concurrent employers.  I agree
that I will not bring onto the premises of the Company any document or any
property belonging to my former or any concurrent employers unless consented to
in writing by them.  I represent and warrant that I have returned all property
and confidential information belonging to all prior employers.  I also represent
and warrant that my performance of services for Employer will not require any
authorization, consent, exemption or other action by any other party and will
not conflict with, violate or breach any agreement, instrument, order, judgment
or decree to which I am subject.

 

(h) Conflicting Employment.  I agree that, during the term of my employment, I
will not engage in any other employment, occupation, consulting or other
business activity directly related to the business in which the Company is now
involved or may become involved during the term of my employment, nor will I
engage in any other business activities that conflict with my obligations to the
Company.

 

17

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(i) Non-Solicitation of Customers.  I understand and agree that as a result of
my employment and the position that I hold, the Company has entrusted and will
in the future entrust me with Proprietary Information that is maintained by the
Company in confidence and that, if known, would have economic value to a
competitor.  Such Proprietary Information includes, but is not limited to,
customer identities, requirements, purchasing volumes, demographic needs, and
other individualized customer information, source and object code, future
technology plans, product strategies, business strategies, software
architectures, and the like.  I understand and agree that for a period of one
(1) year after termination of my employment with Employer, I will not, without
the specific written consent of the Company’s Chief Executive Officer, or his or
her designee, for myself or on behalf of any third party: (i) solicit, directly
or indirectly, any customer of the Company who was a Company customer during my
employment for the purpose of offering products or services that compete in the
same market with the Company’s products or services by using Proprietary
Information or by otherwise engaging in unfair competition or unfair business
practices; (ii) cause a Company customer to terminate its relationship with the
Company through unfair competition or business practices, including through the
unauthorized use of Proprietary Information; or (iii) solicit, directly or
indirectly, any potential customer of the Company with whom the Company was
engaged in substantial negotiations during my employment by using Proprietary
Information or by otherwise engaging in unfair competition or unfair business
practices.  I understand and agree that my solicitation of Company customers on
behalf of an entity other than the Company would involve the use of such
Proprietary Information.  I understand and agree that pursuit of the activities
forbidden by this paragraph would cause the Company significant harm, but that
proof of actual damages from such breach would be difficult to ascertain. 
Accordingly, I agree that if I breach this provision, I will owe the Company an
amount equal to two times the amount collected by the Company from the
customer(s) at issue in the one-year period prior to my breach, or in the event
I breach this agreement with respect to a prospective customer, one and one half
times the anticipated collections from that prospective customer for the
one-year period after my breach. None of my activities will be prohibited under
this Paragraph if I can prove that the action was taken without the use in any
way of Proprietary Information.

 

(j) Non-Solicitation of Employees.  I agree that for the term of this Agreement
and for a period of one (1) year following the termination of my employment with
Employer or any other affiliate of the Company, I will not, on behalf of myself
or any other person or entity, either directly or indirectly, solicit the
services of any person who was employed by the Company on or prior to the date
of my termination of employment.

 

2.  INVENTIONS.

 

(a) Defined; Statutory Notice.  I understand that during the term of my
employment, there have been and are certain restrictions on my development of
technology, ideas, and inventions.  The term Invention Ideas means all ideas,
processes, trademarks, service marks, inventions, technology, computer programs,
original works of authorship, designs, formulas, discoveries, patents,
copyrights, data and databases and all applications, improvements, rights, and
claims related to the foregoing.  I acknowledge and agree that all Invention
Ideas that (i) relate to, result from or are suggested by any existing or
planned service or product of the Company, (ii) are aided by the use of time,
material, Proprietary Information or

 

18

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facilities of the Company, whether or not during working hours, or (iii) relate
to any work I perform for Employer, whether or not during normal working hours,
that are conceived, developed, or reduced to practice by me alone or with others
belong solely to the Company, except to the extent that, to the extent
applicable, California Labor Code Section 2870 lawfully prohibits the assignment
of these rights (“Company Invention Ideas”).  California Labor Code Section 2870
provides:

 

Any provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

 

(1)  Relate at the time of conception or reduction to practice of the invention
to the employer’s business, or actual or demonstrably anticipated research or
development of the employer; or

 

(2)  Result from any work performed by the employee for the employer.

 

I agree that all original works of authorship which are made by me (solely or
jointly with others) within the scope of my employment and which are protectable
by copyright are “works made for hire,” as the term is defined in the United
States Copyright Act (17 USC, Section 101).

 

(b) Disclosure.  I agree to maintain adequate and current written records on the
development of all Invention Ideas and to disclose promptly to Employer all
Invention Ideas and relevant records, which records will remain the sole
property of the Employer (except as limited by Cal. Lab. Code Section 2870).  I
further agree that all information and records pertaining to any Invention Idea
that might reasonably be construed to be a Company Invention Idea, but is
conceived, developed, or reduced to practice by me (alone or with others) during
my employment or during the one (1) year period following termination of my
employment, shall be promptly disclosed to Employer.  If I inform Employer
before making a specific disclosure pursuant to this Paragraph that I contend
the subject matter being disclosed is not subject to this Agreement, then the
disclosure will be received by Employer in confidence so that Employer may
examine such information to determine if in fact it constitutes Company
Invention Ideas subject to this Agreement.

 

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(c) Assignment.  I agree to assign, and hereby do assign to Employer, without
further consideration, all right, title, and interest that I may presently have
or may acquire in the future (throughout the United States and in all foreign
countries), free and clear of all liens and encumbrances, in and to each Company
Invention Idea, which shall be the sole property of Employer, whether or not
patentable.  The rights I have assigned, and will assign, include all
copyrights, patent rights, trademarks, trade secret rights and any rights of
publicity or personality (including usage of my name, voice, image, likeness and
performance in any and all media), vested and contingent, and include extensions
and renewals thereof and the right to license and assign.  I will waive and
hereby do waive any moral rights I have or may have in any Company Invention
Idea.  In the event any Company Invention Idea shall be deemed by Employer to be
patentable or otherwise registrable, I will assist Employer or the Company, as
Employer may direct, (at its expense) in obtaining letters patent or other
applicable registrations, and I will execute all documents and do all other
things (including testifying at Employer’s expense) necessary or proper to
obtain letters patent or other applicable registrations and to vest Employer or
the Company, as Employer may direct, with full title to them.  My obligation to
assist Employer in obtaining and enforcing patents, registrations or other
rights for such inventions in any and all countries shall continue beyond the
termination of my employment, but Employer or the Company shall compensate me at
a reasonable rate after such termination for the time actually spent by me at
Employer’s request for such assistance.  Should Employer be unable to secure my
signature on any document necessary to apply for, prosecute, obtain, or enforce
any patent, copyright, trademark, or other right or protection relating to any
Company Invention Idea, whether due to my mental or physical incapacity or any
other cause, I irrevocably designate and appoint Employer and each of its duly
authorized officers and agents as my agent and attorney-in-fact, to act for and
on my behalf, to execute and file any such document and to do all other lawfully
permitted acts to further the prosecution, issuance, and enforcement of patents,
copyrights, trademarks, or other rights of protections with the same force and
effect as if executed and delivered by me.

 

(d) License.  In the case of any Invention Idea that I own or in which I have an
interest that is not owned by Employer pursuant to the other terms in this
Agreement, the following shall apply.  If I use the Invention Idea, or allow it
to be used, in the course of the Company’s business, or incorporate the
Invention Idea, or allow it to be incorporated, into any product or process
owned or developed in whole or in part by the Company, I will grant, and I
hereby do grant to Employer and/or one or more affiliates of the Company, as
Employer may direct, and their assigns a nonexclusive, perpetual, irrevocable,
fully paid-up, royalty-free, worldwide license of all of my interests in the
Invention Idea, including all rights to make, use, sell, reproduce, modify,
distribute, perform publicly, display publicly and transmit the Invention Idea,
without restriction.  At Employer’s direction and expense I will execute all
documents and take all actions necessary or convenient for Employer and the
Company to document, obtain, maintain or assign their license rights hereunder
of my interest in any such invention or work of authorship.

 

(e) Exclusions.  Except as disclosed in Exhibit A, there are no Invention Ideas
that I wish to exclude from this Agreement.  If nothing is listed on
Exhibit A, I represent that I have no such Inventions Ideas at the time of
signing this Agreement.  I am not aware of any existing contract in conflict
with this Agreement.

 

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(f) Post-Termination Period.  I acknowledge that because of the difficulty of
establishing when any Invention Idea is first conceived or developed by me, or
whether it results from access to Proprietary Information or the Company’s
equipment, facilities, or data, I agree that any Invention Idea related to the
foregoing shall be presumed to be a Company Invention Idea if it relates to any
existing or planned service or product of the Company, and if it is conceived,
developed, used, sold, exploited, or reduced to practice by me or with my aid
within six months after my termination of employment (voluntarily or
involuntarily) with Employer or any other affiliate of the Company, or the
Company.  I can rebut the above presumption if I prove that the Invention Idea
is not a Company Invention Idea as defined in Paragraph 2(a).

 

(g) California Labor Code.  I understand that nothing in this Agreement is
intended to expand the scope of protection provided me by Sections 2870 through
2872 of the California Labor Code.

 

3.  CONTRACTS.

 

I understand that the Company has or may enter into contracts with the
government or other companies under which certain intellectual property rights
will be required to be protected, assigned, licensed, or otherwise transferred
and I hereby agree to execute such other documents and agreements as are
necessary to enable the Company to meet its obligations under those contracts.

 

4.  REMEDIES.

 

I recognize that nothing in this Agreement is intended to limit any remedy of
the Company under the California Uniform Trade Secrets Act or any other relevant
state or federal law.  In addition, I recognize that my violation of this
Agreement could cause the Company irreparable harm, the amount of which may be
extremely difficult to estimate, thus, making any remedy at law or in damages
inadequate.  Therefore, I agree that the Company shall have the right to apply
to any court of competent jurisdiction for an order restraining any breach or
threatened breach of this Agreement and for any other relief the Company deems
appropriate.  This right shall be in addition to any other remedy available to
the Company in law or equity.

 

5.  MISCELLANEOUS PROVISIONS.

 

(a) Assignment/Successors and Assigns.  I agree that Employer may assign to
another person or entity any of its rights under this Agreement.  This Agreement
shall be binding upon me and my heirs, personal representatives and successors,
and shall inure to the benefit of the Employer’s successors and assigns.

 

(b) Jurisdiction, Choice of Law and Venue.  The validity and construction of
this Agreement shall be governed and construed in accordance with the laws of
the State of California, excluding the conflicts-of-laws principles thereof. 
Each party hereto consents to the exclusive jurisdiction of, and exclusive venue
in, any federal or state court of competent jurisdiction located in the County
of Los Angeles in the State of California.

 

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(c) Severability.  If any provision of this Agreement, or application thereof to
any person, place, or circumstances, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, such provision shall be
deemed to be modified to the maximum extent possible to give effect to the
intent of the language while still remaining enforceable under applicable law. 
The remainder of this Agreement and application thereof shall remain in full
force and effect.

 

(d) No Guarantee of Employment.  I understand this Agreement is not a guarantee
of continued employment.  My employment is terminable at any time by Employer or
me, with or without cause or prior notice, except as may be otherwise provided
in an express written employment agreement properly authorized by Employer.

 

(e) Entire Agreement.  The terms of this Agreement are the final expression of
my agreement with respect to these subjects and may not be contradicted by
evidence of any prior or contemporaneous agreement.  This Agreement shall
replace and supersede any similar agreement that currently is in effect between
me and Employer or the Company, provided that Employer shall retain all rights
that have arisen under that prior agreement up to the time I sign this new
Agreement.  This Agreement shall constitute the complete and exclusive statement
of its terms and no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding involving this Agreement. 
This Agreement can only be modified in writing signed by Employer’s President or
United Online’s General Counsel.

 

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE
COMPLETELY NOTED ON EXHIBIT A TO THIS AGREEMENT ANY PROPRIETARY INFORMATION OR
INVENTION IDEAS THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.

 

 

Date:

 

 

 

 

 

 

Employee Signature

 

 

 

 

 

 

 

 

 

 

 

Employee Name (Print)

 

22

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EXHIBIT A
EMPLOYEE’S DISCLOSURE

 

Prior Inventions.  Except as set forth below, there are no Invention Ideas that
I wish to exclude from the operation of this Agreement:

 

 

 

Date:

 

 

 

 

 

 

Employee Signature

 

 

 

 

 

 

 

 

 

 

 

Employee Name (Print)

 

23

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