Exhibit 10.32

 

TRANSITION AND SEPARATION AGREEMENT

 

This Transition and Separation Agreement (the “Agreement”) is made as of
January 24, 2014 by and between United Online, Inc., a Delaware corporation (the
“Company”), and Neil P. Edwards (“Executive”).  The Company and Executive are
collectively referred to herein as the “Parties”.  Capitalized terms not defined
herein will have the meanings ascribed to them in the Employment Agreement (as
defined below).

 

WHEREAS, the Company and Executive are parties to that certain employment
agreement dated as of October 21, 2011, as amended as of January 25, 2013 and
July 29, 2013 (the “Employment Agreement”), pursuant to which Executive
currently serves as Executive Vice President and Chief Financial Officer of the
Company;

 

WHEREAS, the Parties desire to terminate their employment relationship and to
terminate the Employment Agreement (except as otherwise explicitly provided
herein);

 

WHEREAS, the Company desires to engage the services of Executive as a consultant
to the Company pursuant to the terms of the Consulting Agreement entered into as
of the date hereof, the form of which is attached hereto as Exhibit A (the
“Consulting Agreement”) following termination of Executive’s employment with the
Company, and Executive desires to accept such engagement pursuant to the
Consulting Agreement.

 

NOW, THEREFORE, for and in consideration of the promises and the consideration
more fully set forth herein, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the Company and
Executive mutually agree as follows:

 

1.                                      Resignation as Officer and Separation
Date.  Executive’s separation from the Company will be effective as of March 7,
2014 or, if later, the day after the date on which the Company’s Form    10-K
with respect to 2013 is filed (the “Separation Date”).  Executive shall resign
from his position as an officer of the Company and any other positions he may
hold with the Company or any of its affiliates as of the Separation Date, and
Executive agrees that he will execute any and all documents necessary to effect
such resignations.   The Parties acknowledge and agree that Executive’s
separation shall not be deemed “for cause” or “without cause” or for “Good
Reason” as defined in the Employment Agreement.

 

2.                                      Employment Through Separation Date. 
During the period from the date of this Agreement through the Separation Date,
Executive will continue to be employed by the Company as Executive Vice
President and Chief Financial Officer of the Company in accordance with terms of
his Employment Agreement and in a manner consistent with past services in such
roles.

 

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3.                                      Payment of Accrued Obligations; Cash
Payments; Equity Treatment.

 

(a)                                 Accrued Obligations.  Upon the Separation
Date, the Company will pay Executive the Accrued Obligations pursuant to the
Employment Agreement.

 

(b)                                 Benefit Plans.  All of Executive’s benefits
under the Company’s or its affiliates’ employee benefit plans and arrangements
shall terminate effective as of the Separation Date, except as provided herein
and except for any benefits under such plans or arrangements that may provide
for later termination in accordance with the provisions of such plan or
arrangement.

 

(c)                                  COBRA.  Executive shall retain any rights
he may have under the federal Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”), or any similar state law, to elect continuation of
certain healthcare coverage after the Separation Date.

 

(d)                                 Cash Payments. In consideration of
Executive’s agreements and covenants contained herein, the Company shall pay
Executive a cash bonus equal to the greater of (i) Executive’s target annual
bonus for 2013 (i.e., not less than 85% of $420,000, or $357,000) or (ii) the
annual bonus for 2013 which would be due to Executive based on actual
performance, which amount shall be paid no later than the date on which bonuses
with respect to 2013 are paid to the Company’s executives.  On the Separation
Date, the Company shall reimburse Executive for up to $25,000 in legal fees and
expenses incurred in connection with this Agreement.   In consideration of
Executive’s agreements and covenants contained herein, and provided that
Executive has executed within twenty-one (21) days following, but not before,
the Separation Date, and does not revoke within seven (7) days after such
execution, the General Release and Agreement in the form attached hereto as
Exhibit B (the “Release”; and the date on which the Release becomes irrevocable,
the “Release Effectiveness Date”), and so long as Executive is not in violation
of the terms of the Employment Agreement which survive as set forth herein and
listed in Section 4 below, this Agreement or the Consulting Agreement as of the
Release Effectiveness Date, the Company shall pay to Executive, on the Release
Effectiveness Date, a lump sum cash severance payment equal to ten (10) months
of his annual base salary, or $350,000 (the “Severance Payment”).

 

(e)                                  Equity Treatment.  In consideration of
Executive’s agreements and covenants contained herein, and so long as Executive
is not in violation of the terms of the Employment Agreement which survive as
set forth herein and listed in Section 4 below, this Agreement or the Consulting
Agreement as of the Release Effectiveness Date, Executive’s outstanding equity
awards shall be treated as follows:

 

(i)                                     29,677 restricted stock units which
would have vested on February 15, 2015 shall vest and be settled as of the
Release Effectiveness Date; and

 

(ii)                                  19,202 restricted stock units which would
have vested on February 15, 2016 shall vest and be settled as of the Release
Effectiveness Date.

 

As of the Separation Date, assuming no prior option exercise, Executive will
hold a vested option to acquire 26,185 shares of Company stock, which option was
granted as of February 15, 2011 (the “Option”).  The Option shall remain
exercisable until the earlier of (i) the date which is 90 days following the
termination of the Consulting Period (as defined in the Consulting Agreement) or
(ii) the final date of the term of such option.  Executive acknowledges that the
Option, together with the restricted stock units set forth above, represent the
only equity awards with respect to Company stock held by Executive.

 

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(g)                                  Consulting Agreement.  In further
consideration of Executive’s agreements and covenants contained herein, the
Company and Executive are entering into the Consulting Agreement, which
Consulting Agreement shall become effective as of the Separation Date.

 

(h)                                 Taxes.  Tax withholding upon the vesting and
settlement of restricted stock units pursuant to Section 3(e) hereof shall be
accomplished via the “Share Withholding Method,” as defined in the agreements
evidencing the grant of such restricted stock units, which the Company agrees to
keep available to Executive unless prohibited by law, and on the assumption that
the Company has withholding obligations with respect to such settlement even
though Executive will no longer be an employee of the Company at such time.  All
cash payments hereunder shall be subject to any required tax withholdings.

 

(i)                                     Section 409A of the Internal Revenue
Code.  This Agreement is intended to comply with, or otherwise be exempt from,
Section 409A of the Internal Revenue Code of 1986, as amended and the Treasury
Regulations promulgated thereunder (“Section 409A”). Notwithstanding any
provision to the contrary in this Agreement, no payment or distribution under
this Agreement that constitutes an item of deferred compensation under
Section 409A, and becomes payable by reason of Executive’s termination of
employment with the Company will be made to Executive unless Executive’s
termination of employment constitutes a “separation from service” (as the term
is defined Section 409A) solely to the extent required to avoid accelerated
taxation or tax penalties in respect of such amounts.  The parties acknowledge
that the level of services which are required under the Consulting Agreement are
such that the date of Executive’s separation from service for purposes of
Section 409A shall be the Separation Date.  For purposes of this Agreement, each
amount to be paid or benefit to be provided shall be construed as a separate
identified payment for purposes of Section 409A.  It is intended that this
Agreement shall comply with the provisions of Section 409A so as not to subject
Executive to the payment of additional taxes and interest under Section 409A. 
In furtherance of this intent, the Agreement shall be interpreted, operated, and
administered, and payments hereunder reported, in a manner consistent with these
intentions.  To the extent that any reimbursable expenses hereunder are deemed
to constitute compensation to Executive, such expenses shall be paid or
reimbursed promptly, but not later than by December 31 of the year following the
year in which such expenses were incurred.  The amount of such expenses eligible
for reimbursement in one calendar year shall not affect the amount of expenses
eligible for reimbursement in any other calendar year, and Executive’s right to
reimbursement of any such expenses shall not be subject to liquidation or
exchange for any other benefit.

 

4.                                      Termination of Employment Agreement;
Survival of Certain Provisions.   The Parties agree that the Employment
Agreement shall terminate and be of no further effect, effective as of the
Separation Date, except as to Sections 5, 8, 9, 10, 11, 12(a), 12(b), 12(c), 13
and 14 thereof.

 

5.                                      No Additional Obligations.  The Company
shall not be obligated to pay any other sums to Executive or to provide any
other benefits to Executive after the Separation Date, except (i) as set forth
in this Agreement, the Consulting Agreement or the Release; and (ii) for
reimbursement of business expenses in accordance with Company policy and for
claims or rights to indemnification arising under the charter or by-laws of the
Company (and/or its affiliates) or under that certain Indemnification Agreement
dated July 23, 2002 between the Company and the Executive, or any rights arising
from the director and officer insurance policy or policies of the Company, or
any claims that, as a matter of applicable law, are not waivable or otherwise
subject to release, all of which shall survive the termination of Executive’s
employment with the Company, the expiration or termination of the Employment
Agreement, this Agreement and/or the Consulting Agreement, and the effectiveness
of the Release.

 

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6.                                      Cooperation Following Separation Date. 
Following the Separation Date, in addition to the obligations set forth in the
Consulting Agreement, Executive agrees to cooperate and assist the Company so as
to aid the Company in connection with de minimis informational requests relating
to Executive’s employment by the Company or about which Executive is
knowledgeable; provided that the Company will make reasonable efforts not to
furnish Executive with material non-public information which would preclude
Executive from trading in the stock of the Company without advance notice and
discussion with Executive.

 

7.                                      Successors and Assigns.  This Agreement
shall inure to the benefit of and be binding upon the respective successors and
(in the case of the Company) assigns of the Parties to this Agreement, and each
of them.

 

8.                                      Choice of Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of California
without regard to its conflicts of laws rules.

 

9.                                      Severability.  If any provision of this
Agreement shall be held invalid, void or unenforceable by a court of competent
jurisdiction, the remaining provisions shall not be affected thereby and shall
remain in full force and effect.  In the event that any covenant contained
herein is not enforceable in accordance with its terms, Executive and the
Company agree that such provision shall be modified to make it enforceable in a
manner that provides as nearly as possible the result intended by this
Agreement.

 

10.                               Entire Agreement.  This Agreement, along with
the Employment Agreement, Consulting Agreement and any other documents
incorporated by reference herein or therein (such Agreements, the “Executive
Agreements”), contains the entire agreement between the Parties pertaining to
the subject matter hereof, and shall be considered and understood to be a
contractual commitment and not a mere recital.  No covenants, agreements,
representations, or warranties of any kind whatsoever, whether express or
implied in law or fact, have been made by the Parties, except as specifically
set forth in the Executive Agreements.  The Executive Agreements supersede any
and all prior and contemporaneous agreements, term sheets, negotiations and
understandings, whether written or oral, pertaining to the subject matter
hereof.

 

11.                               Modifications.  No modification, amendment, or
waiver of any of the provisions contained in this Agreement, or any future
representations, promise, or condition in connection with the subject matter of
this Agreement, shall be binding upon any party to this Agreement unless made in
writing and signed by such party.  In the case of the Company, any such writing
shall bind the Company only if signed by the Chief Executive Officer of the
Company.

 

12.                               Voluntary Agreement.  EXECUTIVE ACKNOWLEDGES
THAT HE HAS READ AND UNDERSTANDS THE FOREGOING PROVISIONS AND THOSE SUCH
PROVISIONS ARE REASONABLE AND ENFORCEABLE.  EXECUTIVE FURTHER ACKNOWLEDGES THAT
HE HAS SIGNED THIS AGREEMENT AS HIS OWN AND VOLUNTARY ACT.  EXECUTIVE
UNDERSTANDS AND ACKNOWLEDGES THAT THE COMPANY HAS ADVISED HIM TO OBTAIN ADVICE
CONCERNING THIS AGREEMENT FROM AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS
AGREEMENT.

 

13.                               Notice.  All notices or other communications
required or permitted by this Agreement: (a) must be in writing; (b) must be
delivered to each party at the address set forth below, or any other address
that a party may designate by notice to the other party; and (c) are considered
delivered on the earlier of: (i) on the date of delivery if delivered personally
or (ii) on the first business day following the date of dispatch if sent by a
nationally recognized overnight courier (providing proof of

 

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delivery), in each case to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):

 

if to Executive, at his current address on file with the Company or such
different address as Executive may provide the Company in writing, to his email
address at neil.p.edwards@gmail.com and to Christopher Rudd at

 

C2 Law Group, P.C.
16255 Ventura Blvd., Suite 925

Encino, CA  91436
clrudd@c2lawgroup.com

 

if to the Company:

 

United Online, Inc.
21301 Burbank Blvd

Woodland Hills, CA  91367
Attention: Chief Executive Officer

 

14.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original,
and such counterparts when taken together shall constitute but one instrument.

 

[Signatures appear on the following page]

 

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the Parties hereby
execute this Agreement as of the first date set forth below.

 

 

 

 

 

NEIL P. EDWARDS

 

 

 

 

 

 

 

 

DATED:

1/24/14

 

/s/ Neil P. Edwards

 

 

 

 

 

 

 

 

 

 

 

UNITED ONLINE, INC.

 

 

 

 

 

 

 

 

DATED:

January 24, 2014

 

By:

/s/ Francis Lobo

 

 

 

Name:

Francis Lobo

 

 

 

Title:

President and Chief Executive Officer

 

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EXHIBIT A

 

CONSULTING AGREEMENT

 

This Consulting Agreement (this “Agreement”), is made and entered into as of
January 24, 2014, by and between United Online, Inc., a Delaware corporation
(the “Company”), and Neil P. Edwards (“Consultant”).

 

RECITALS

 

WHEREAS, Consultant has served as the Executive Vice President and Chief
Financial Officer of the Company;

 

WHEREAS, pursuant to the terms of the Transition and Separation Agreement, dated
as of January 24, 2014 (the “Separation Agreement”) Consultant’s employment is
terminating as of the Separation Date, as defined in the Separation Agreement
(the “Effective Date”); and

 

WHEREAS, the Company desires to retain the services of Consultant following the
Effective Date, subject to the terms and provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the above recitals and for and in
consideration of the mutual promises set forth below, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                      Consulting Period.  The Company hereby
engages Consultant as a consultant, subject to the terms and provisions of this
Agreement, for the period commencing from the Effective Date and continuing
through the date which is two (2) months following the Effective Date (the
“Consulting Period”).  Notwithstanding the foregoing, the Consulting Period
shall be subject to earlier termination pursuant to Sections 3 and 6 hereof.

 

2.                                      Consulting Services.  Consultant shall
cooperate and provide his assistance in effectuating a smooth transition of his
duties and responsibilities to his successor (or other person or persons as may
be requested by the Chief Executive Officer of the Company) by providing advice
and assistance as to general transitional matters relating to the areas in which
Consultant provided services while he was an employee of the Company (such
advice and assistance, the “Consulting Services”).  During the Consulting
Period, Consultant shall devote his efforts and attention to the business of the
Company on an as needed basis as reasonably requested by the Company, with such
services not to exceed thirty-two (32) hours monthly, and not to exceed two
(2) hours per day unless there has been prior written notice to and written
agreement from Consultant (which written notice and agreement may be conducted
via email correspondence between Consultant and Company).  The parties
acknowledge that the level of services which are required under the Consulting
Agreement are such that the date of Executive’s “separation from

 

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service” for purposes of Section 409A shall be the Effective Date.  In
structuring the level and timing of the services to be provided hereunder, the
Company shall be mindful of, and coordinate with, the requirements of
Consultant’s travel and/or Consultant’s then-current employment, if any, so as
to permit Consultant to fulfill the requirements of and not interfere with any
such travel or employment, and Consultant may reasonably postpone the time for
rendering services requested by the Company when necessary in order to
accommodate the needs of Consultant’s travel and/or Consultant’s new employer,
if any; provided, however, that Consultant has provided reasonable notice of
such travel and/or employment to the Company.  Absent extraordinary
circumstances, the Company acknowledges that the services rendered by Consultant
need not be rendered on Company premises.  During the Consulting Period,
Consultant shall comply with all applicable policies of the Company with which
he has been provided, including but not limited to any policies relating to
insider trading, conduct/ethics and finance operations.

 

3.                                      Consulting Payments.  As compensation
for his services hereunder, and subject to the terms of this Agreement,
Consultant shall be paid, during the Consulting Period, an aggregate amount
equal to two (2) months of his annual base salary in effect as of the date
hereof, which amounts shall be paid in equal monthly installments; provided,
however, that if he shall be in material breach of the terms of this Agreement
or the Separation Agreement (as determined by a three-member arbitration panel
comprised of two party-appointed arbitrators who will then select the third
member of the panel (collectively, the “Panel”)) after Consultant is provided
written notice of such breach and a twenty-one (21) day period to cure such
breach, if such breach is amenable to cure), then effective as of the date the
Panel specifies in its written determination that such breach occurred and was
not timely cured (such uncured material breach, a “Breach”): (a) no further
payments shall be made under this Section 3; and (b) the Consulting Period shall
terminate.  Between the date of written notice of alleged breach and the date on
which the Panel issues its written determination as to whether there was a
Breach (the “Determination Date”), amounts which would otherwise have been paid
pursuant to this Section 3 during such period shall instead be deposited with
the neutral arbitrator described above, to be paid to Consultant or returned to
the Company, as the case may be, within seven (7) days following the
Determination Date.  Upon termination of the Consulting Period due to death or
Disability (as defined below), then so long as Consultant is not then in Breach
of this Agreement or the Separation Agreement (as determined in accordance with
the process set forth in the foregoing provisions of this Section 3), Consultant
(or Consultant’s estate, as the case may be) shall be entitled to continue to
receive any remaining payments under this Section 3 as if the Consulting Period
had continued through the date which is two months following the Effective Date.

 

4.                                      Other Compensation and Benefits.  Other
than as specifically set forth in Section 3 of this Agreement, Consultant shall
not be entitled during the Consulting Period to, and shall make no claim to,
rights or fringe benefits afforded generally to the Company’s employees,
including health insurance, disability or unemployment insurance, workers’
compensation insurance, pension and retirement, profit-sharing, or any other
policy or plan applicable to employees of the Company; provided, however, that
nothing herein shall adversely affect Consultant’s right to (a) receive his
vested benefits under any such plan maintained by the Company in respect of his
prior services as an employee of the Company; or (b) elect

 

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continuation of certain healthcare benefits coverage after the Effective Date
under the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), or any similar state law.

 

5.                                      Expenses.  Upon presentation of
documentation reasonably and typically acceptable to the Company, with a copy to
the Company officer charged with expense review for the Company, the Company
shall reimburse Consultant for all reasonable expenses incurred by Consultant in
connection with the performance of the Consulting Services (“Expenses”) in
accordance with the Company’s expense reimbursement policy in effect from time
to time.  Consultant agrees to obtain Company’s prior written approval for
travel expenses or out of pocket expense items expected to exceed $250.00.

 

6.                                      Termination of Consulting Period.

 

6.1                               Termination of Consulting Period. 
Notwithstanding any other provision hereof, the Consulting Period and
Consultant’s services as a consultant hereunder shall terminate, and, except as
otherwise specifically provided herein, this Agreement shall terminate on the
earliest to occur of the following dates:

 

(a)                                 the date of Consultant’s death;

 

(b)                                 the date Consultant is determined to be
Disabled;

 

(c)                                  the date the Panel specifies in its
determination pursuant to Section 3 hereof that a Breach has occurred and the
Consulting Period is terminated; or

 

(d)                                 the expiration date of the Consulting
Period.

 

For purposes of this Agreement, “Disability” shall mean Consultant’s inability
to engage in any substantial activity necessary to perform his 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 three
(3) months, as determined in the reasonable discretion of the Company in
consultation with a physician of Consultant’s choice, if such consultation is
requested by Consultant.

 

6.2                               Payment of Expenses Upon Termination.  Upon
termination of the Consulting Period for any reason, the Company shall pay or
provide to Consultant (or his estate, as the case may be), within ten (10) days
after the Date of Termination, any incurred but unpaid or unreimbursed Expenses.

 

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7.                                      Independent Contractor Status.  The
Company and Consultant each acknowledge and agree that, following the Effective
Date, Consultant shall serve as an independent contractor and not as an employee
of the Company.  The Company and Consultant hereby covenant with one another to
treat the engagement of Consultant as that of an independent contractor, and not
an employee, for all purposes.

 

7.1                               Exercise of Independent Judgment.  Consultant
is engaged by the Company to exercise his own independent and professional
judgment in performing the services pursuant to this Agreement.  Consultant, in
his sole discretion, will determine the manner, means, details and methods used
in performing the services.

 

7.2                               Inability to Bind the Company.  Consultant
shall not have any right or authority to assume or create any obligation or
responsibility, express or implied, on behalf of or in the name of the Company,
or to bind the Company in any manner, except as may be authorized in writing by
a duly authorized officer or manager of the Company, and shall not make any
contrary representation to any third party.

 

7.3                               Responsibility for Taxes.  Consultant shall be
issued a tax form 1099 by the Company, which reflects the applicable amount of
any taxable payments received by Consultant in respect of his consulting
services hereunder.  There shall be no withholding or deduction from any amounts
payable for such services, and Consultant shall be solely responsible for the
payment of any federal, state, local or other taxes.  Furthermore, Consultant
agrees, upon the request of the Company, to provide any reasonable assistance to
the Company required to demonstrate that Consultant’s services under this
Agreement qualified as services by an independent contractor and that all
appropriate taxes with respect to any amounts paid hereunder have been paid.

 

8.                                      Section 409A of the Internal Revenue
Code; Delay of Payments.  The terms of this Agreement have been designed to
comply with or be exempt from the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended and the Treasury Regulations promulgated
thereunder (“Section 409A”), where applicable, and shall be interpreted and
administered in a manner consistent with such intent.  To the extent required to
avoid an accelerated or additional tax under Section 409A, amounts reimbursable
to Consultant under this Agreement shall be paid to Consultant on or before the
last day of the year following the year in which the expense was incurred and
the amount of expenses eligible for reimbursement during any one year may not
affect amounts reimbursable or provided in any subsequent year.

 

9.                                      Notices.  All notices, requests, demands
and other communications required or permitted to be given under this Agreement
shall be in accordance with the notice provisions of the Separation Agreement.

 

10.                               Assignment; Binding Effect.  Consultant may
not assign his rights or delegate his

 

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duties or obligations hereunder without the written consent of the Company. 
This Agreement may be assigned to any successor of the Company.

 

11.                               Amendment; Waiver.  No provisions of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by Consultant or his legal
representative and such officer(s) as may be specifically designated by the
Company.  No waiver by a party hereto at any time of any breach by another party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

 

12.                               Invalid Provisions.  Should any portion of
this Agreement be adjudged or held to be invalid, unenforceable or void, such
holding shall not have the effect of invalidating or voiding the remainder of
this Agreement and the parties hereby agree that the portion so held invalid,
unenforceable or void shall, if possible, be deemed amended or reduced in scope,
or otherwise be stricken from this Agreement to the extent required for the
purposes of validity and enforcement thereof.

 

13.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.

 

14.                               Governing Law; Indemnification.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of California without giving effect to the principles of conflicts of laws
thereof.  The Company shall indemnify Consultant for expenses (reasonable
attorneys’ fees and expenses) relating to claims by third parties arising from
or in connection with his performance of services hereunder during the
Consulting Period.  Such indemnification shall be on terms and conditions at
least as favorable as the terms and conditions applicable to the Company’s
officers and directors.

 

15.                               Captions.  The use of captions and section
headings herein is for purposes of convenience only and shall not affect the
interpretation or substance of any provisions contained herein.

 

16.                               Entire Agreement.  Except as otherwise
provided herein, this Agreement constitutes the entire agreement between the
parties hereto with respect to the consulting relationship between the parties.

 

17.                               Survival of Certain Provisions. 
Notwithstanding any other provision of this Agreement to the contrary, the
provisions of this Agreement that by their nature or by their content or as
specified under this Agreement are intended to continue beyond the termination
or

 

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expiration of this Agreement, including without limitation the provisions of
Sections 7 through 17 hereof, shall survive the termination or expiration of the
Consulting Period or this Agreement.

 

[Signatures appear on the following page]

 

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IN WITNESS WHEREOF, the Company and Consultant have executed and delivered this
Agreement as of the date written above.

 

 

 

UNITED ONLINE, INC.

 

 

 

 

 

By:

 

 

 

Name: Francis Lobo

 

 

Title: President and Chief Executive Officer

 

 

 

 

 

CONSULTANT:

 

 

 

 

 

 

 

Neil P. Edwards

 

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EXHIBIT B

 

GENERAL RELEASE AND AGREEMENT

 

I, Neil P. Edwards, acknowledge that my employment with United Online, Inc. (the
“Company”) terminates on the Separation Date, as defined in the Transition and
Separation Agreement dated as of January 24, 2014  (the “Separation Agreement”),
and that I will not perform any further employee duties or render services in
any other capacity to the Company (as defined below) after such date, except as
provided in the Consulting Agreement with the Company dated as of the date
hereof and attached to the Separation Agreement as Exhibit A (the “Consulting
Agreement”).

 

The Company is offering me the Severance Payment set forth in Section 3(d) of
the Separation Agreement, the equity vesting set forth in Section 3(e) of the
Separation Agreement and the payments set forth in Section 3 of the Consulting
Agreement (the “Separation Benefits”), contingent upon the effectiveness of the
release set forth herein (the “Release”).

 

In consideration of the Separation Benefits, I hereby agree to the following
Release:

 

1.              On behalf of myself, my heirs, executors, administrators,
successors, and assigns, I hereby fully and forever release and discharge
(a) United Online, Inc. (the “Company”), and each of its past or present
parents, subsidiaries, affiliates, insurers, insurance policies and benefit
plans, (b) each of the past and present shareholders, officers, directors,
agents, employees, representatives, administrators, fiduciaries and attorneys of
the foregoing entities and plans, and (c) the predecessors, successors,
transferees and assigns of each of the persons and entities described in this
sentence (collectively, the “Company Released Parties”) from any and all claims,
causes of action, and liabilities arising out of or relating in any way to my
employment with the Company, including, but not limited to, the offer and
termination of my employment as well as the terms and conditions of my
employment and good faith disputes regarding my wages and hours of work.

 

I understand and agree that this Release is a full and complete waiver and
release of all claims, including, but not limited to, claims of wrongful
discharge, breach of contract, breach of the covenant of good faith and fair
dealing, wrongful termination, violation of public policy, defamation, personal
injury, emotional distress, claims under the Age Discrimination in Employment
Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act,  the Employee Retirement Income Security Act (except for claims for vested
benefits under a pension or retirement plan), the Family and Medical Leave Act,
the California Fair Employment and Housing Act, the Equal Pay Act of 1963,  the
provisions of the California Labor Code, and any and all other federal, state,
or local constitutional, statutory, regulatory, or common law causes of action
now or hereafter recognized, and any claims for attorneys’ fees and costs. 
Nothing in this Release shall waive any of the following: (i) rights or claims
that arise after the date on which I execute this Release, (ii) claims I may
have for unemployment compensation and workers’ compensation, and, subject to
paragraph 6, below, to reimbursement for business expenses, (iii) claims for
health insurance benefits under the Consolidated Omnibus Budget Reconciliation
Act (COBRA), (iv) claims with respect to vested benefits under a pension or
retirement plan governed by the Employee Retirement Income Security Act,
(v) claims for the Separation Benefits, (vi) claims or rights to indemnification
arising under the charter or by-laws of the Company (and/or its affiliates) or
under the Indemnification Agreement between me and the Company dated July 23,
2002 or any rights arising from the director and officer insurance policy or
policies of the Company and (vii) any claims that, as a matter of applicable
law, are not waivable or otherwise subject to release.

 

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2.              I do not presently believe I have suffered any work-related
injury or illness.

 

3.              I understand and agree that the Company will not provide me with
the Separation Benefits unless I execute and deliver this Release and such
Release becomes enforceable and irrevocable under applicable law.  I further
understand that I have received or will receive, regardless of the execution of
this Release, all undisputed wages owed to me, together with any accrued but
unused vacation pay, less deductions, in my final paycheck.  I acknowledge and
understand that I am waiving and releasing all claims for disputed wages or
other forms of compensation.

 

4.              I understand that I am releasing potentially unknown claims, and
that I have limited knowledge with respect to some of the claims being
released.  I acknowledge that there is a risk that, after signing this
Release, I may learn information that might have affected my decision to enter
into this Release.  I acknowledge, for example, that I may learn that I have
suffered injuries of which I am not presently aware.  I assume this risk and all
other risks of any mistake in entering into this Release.  I agree that this
Release is fairly and knowingly made.  I expressly waive all rights and benefits
conferred upon me by the provisions of Section 1542 of the California Civil Code
and/or any analogous law of any other state, which states as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

I consciously intend these consequences even as to claims for damages that may
exist as of the date I execute this Release that I do not know exist, and which,
if known, would materially affect my decision to execute this Release,
regardless of whether the lack of knowledge is the result of ignorance,
oversight, error, negligence or any other cause.

 

5.              As part of my existing and continuing obligation to the Company,
except for such Company Property and Company Information that the Company
permits me to keep during the Consulting Period in order to carry out my
obligations thereunder, which I will return at the conclusion of the Consulting
Period, I have returned, or within seven (7) days after the Separation Date will
return, to the Company all Company documents, information, and property,
including files, records, computer access codes, and instruction manuals, as
well as any Company assets or equipment that I have in my possession or under my
control (collectively, the “Company Property”).  I further agree not to keep any
copies of the Company Property or any other Company documents or information.  I
understand that the return of such Company Property within the applicable seven
(7) day period is an additional express condition to my entitlement to the
Separation Benefits.  I affirm my obligation to keep all Company Information
confidential and not to disclose it to any third party in the future.  I
understand that the term “Company Information” includes, but is not limited to,
the following:  (a) confidential information, including information received
from third parties under confidential conditions; and (b) information concerning
customers (including customer lists), as well as other technical, scientific,
marketing, business, product development, or financial information, the use or
disclosure of which might reasonably be determined to be contrary to the
interests of the Company.

 

6.              I agree that, within thirty (30) days after the Separation
Date, I will submit, if applicable, my final documented expense reimbursement
statement reflecting all business expenses I incurred through the Separation
Date for which I seek reimbursement. I acknowledge that my failure to submit
such a statement within this time period may result in my waiver of any right to
be reimbursed by the Company

 

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for any such expenses.  The Company will reimburse me for any such expenses for
which I submit such timely documentation within seven (7) business days after
such submission.

 

7.              I represent and warrant that I am the sole owner of all claims
relating to my employment with the Company, and that I have not assigned or
transferred any claims relating to my employment to any other person or entity.

 

8.              I understand and agree that this Release shall not be construed
at any time as an admission of liability or wrongdoing by either myself or the
Company.

 

9.              If any one or more of the provisions contained in this Release
is, for any reason, held to be unenforceable, that holding will not affect any
other provision of this Release, and this Release shall then be construed as if
the unenforceable provisions had never been contained in the Release.

 

10.       I acknowledge that I have obtained sufficient information to
intelligently exercise my own judgment regarding the terms of this Release
before executing this Release.  I understand that I may discuss this Release
with an attorney of my choosing before signing this Release.

 

11.       I acknowledge that this Release was delivered to me in final form on
[                    ](1), 2014 (the “Release Delivery Date”) and that I have
been given a minimum of twenty-one (21) days from the Release Delivery Date in
which to review and consider it.  I understand and acknowledge that the Company
has advised me to obtain advice concerning this Release from an attorney of my
choice before signing this Release. I further represent that I have had
sufficient time to review and consider the terms of this Release.  I represent
that if I execute this Release before the twenty-one (21)-day
review/consideration period has elapsed, I do so voluntarily, and that I
voluntarily waive any remaining review/consideration period.

 

12.       I understand that after executing this Release, I have the right to
revoke it in writing within seven (7) days after I sign it.  I understand that
any revocation of this Release must be made in writing and delivered to the
Company at 21301 Burbank Boulevard, Woodland Hills, California 91367, Attention:
Francis Lobo, within the seven (7) day revocation period.  I understand that I
will not become entitled to the Separation Benefits unless and until (a) all the
Company Property has been returned within the seven (7) day period measured from
the Separation Date in accordance with Section 5 above, (b) I have complied with
my obligations under the Separation Agreement and the Employment Agreement,
(c) this Release has been fully executed by me and delivered to the Company
prior to the expiration of the twenty-one (21) day review/consideration period
measured from the Separation Date, and (d) the seven (7) day revocation period
has passed without my revoking the Release in writing.  I understand that this
Release may not be revoked after the seven (7) day revocation period has
passed.  Provided and only if the foregoing conditions set forth in this
Section 12 have been satisfied in accordance with the applicable time periods, I
understand that I will be entitled to receive the Separation Benefits at the
times set forth in the Separation Agreement and the Consulting Agreement.  In no
event will I have any control over the payment dates of the Separation Benefits,
and notwithstanding anything to the contrary in this Agreement, to the extent
any portion of the Separation Benefits is deemed to constitute deferred
compensation under Section 409A, I understand that the Company may delay the
payment of such Separation Benefits to the extent necessary in order to avoid a
prohibited distribution under Section 409A.

 

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(1)         To be completed prior to delivery of final version.

 

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13. I acknowledge that this Release shall be governed by and construed according
to the laws of the State of California, without regard to its conflicts of law
principles.  I also consent to the venue and jurisdiction of the state and
federal courts located in Los Angeles, California in the event that the Company
takes legal action to enforce any of the terms of this Release.

 

EMPLOYEE’S ACCEPTANCE OF RELEASE

 

BEFORE SIGNING MY NAME TO THIS RELEASE, I STATE THE FOLLOWING:  I HAVE READ IT;
I UNDERSTAND IT AND I KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I HAVE OBTAINED
SUFFICIENT INFORMATION TO INTELLIGENTLY EXERCISE MY OWN JUDGMENT; I HAVE BEEN
ADVISED THAT I SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING IT; AND I HAVE
SIGNED IT KNOWINGLY AND VOLUNTARILY.

 

 

Date delivered to employee:                         , 2014.

 

 

 

Executed this                        day of                       , 2014.

 

 

 

NEIL P. EDWARDS

 

 

 

 

 

 

Employee’s signature

 

 

RELEASE BY THE COMPANY

 

Contingent on the effectiveness of this Release, the Company, on its behalf and
on behalf of its past or present parents, subsidiaries, affiliates, insurers,
insurance policies and benefit plans, and  each of its and their past and
present shareholders, officers, directors, agents, employees, representatives,
administrators, fiduciaries and attorneys of the foregoing entities and plans,
and the predecessors, successors, transferees and assigns of each of the
foregoing persons and entities, does hereby fully and forever release and
discharge Neil P. Edwards, his heirs, executors, administrators, personal
representatives, successors, and assigns, from any and all claims, causes of
action, and liabilities arising out of or relating in any way to his notice of
his intention to terminate his employment or the timing of such notice (the
“Company Released Claims”).  With respect to the Company Released Claims, the
Company expressly waives all rights and benefits conferred upon the Company by
the provisions of Section 1542 of the California Civil Code and/or any analogous
law of any other state, which states as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

4

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The Company consciously intends these consequences even as to claims for damages
with respect to the Company Released Claims that may exist as of the date the
Company executes this Release that the Company does not know exist, and which,
if known, would materially affect the Company’s decision to execute this
Release, regardless of whether the lack of knowledge is the result of ignorance,
oversight, error, negligence or any other cause.

 

 

 

UNITED ONLINE, INC.

 

 

 

 

DATED:

 

 

By:

 

 

Name:

Francis Lobo

 

Title:

President and Chief Executive Officer

 

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