Exhibit 10.22

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made and entered into effective
the 7th day of February, 2011 (the “Effective Date”) by and between FTD
Group, Inc., a Delaware corporation (the “Company”), with principal corporate
offices at 3113 Woodcreek Drive, Downers Grove, Illinois 60515, and Robert S.
Apatoff, whose address is 3113 Woodcreek Drive, Downers Grove, Illinois 60515
(“Employee”).

 

WHEREAS, Employee and the Company had previously entered into an employment
agreement (the “Prior Agreement”) dated October 14, 2008, as amended from time
to time;

 

WHEREAS, effective as of the date hereof, Employee and the Company desire to
enter into a new employment agreement to replace the Prior 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 original term of this Agreement will commence on the Effective
Date and extend through February 15, 2014, unless this Agreement is earlier
terminated as provided herein (the “Term”).

 

(b)           Employee will continue to serve as President of the Company and
report to the Chief Executive Officer 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 Employee’s current annualized
rate of $600,000, 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 United
Online, Inc. or other governing body or committee to which the authority of the
Board of Directors of United Online, Inc. with respect to executive compensation
matters has been delegated, including (without limitation) the Compensation
Committee of the Board of Directors of United Online, Inc.

 

(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

 

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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.

 

3.                                       Bonus.  For each 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.

 

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 Effective Date
that expressly provides to the contrary) will vest on an accelerated basis as to
that number of additional shares in which Employee would have otherwise been
vested at the time of such termination had Employee completed an additional
twelve (12) months of employment with the Company and had each applicable equity
award been structured so as to vest in successive equal monthly installments
over the vesting schedule for that award.  In no event will the number of
additional shares which vest on such an accelerated basis with respect to any
particular equity award exceed the number of shares unvested under that award
immediately prior to the date of such termination.  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
Internal Revenue Code of 1986, as amended (the “Code”), the shares of the common
stock of United Online, Inc. (“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
United Online, Inc. 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 Effective Date of this
Agreement.  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

 

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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 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 outstanding equity awards held by Employee on the Effective
Date, whether or not the agreements evidencing those awards provide for such
acceleration, and those agreements, to the extent they provide for a lesser
amount of acceleration, are hereby amended to incorporate the acceleration
provisions of Section 4 and Section 7 of this Agreement for the period this
Agreement remains in effect, and such vesting acceleration provisions will also
apply to 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; Confidentiality
and Non-Competition Agreement.  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 Employee’s existing Confidentiality and
Non-Competition Agreement with the Company (which is incorporated herein by
reference), the Insider Trading Policy, the Code of Ethics and the Employee
Handbook.

 

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

 

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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 Chief Executive Officer of the Company and approved by the
Board of Directors.

 

7.                                       Separation from Service.

 

(a)                                  Termination by Employee.  If Employee
terminates his employment with the Company for any reason other than as a result
of his death or Disability or his 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 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
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 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 employment with the Company under this
Section 7(a), Employee will continue to be obligated to comply with the terms of
Employee’s Confidentiality and Non-Competition Agreement and the restrictive
covenants set forth therein.

 

(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
three (3) 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

 

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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.

 

(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

 

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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.

 

If Employee’s employment is terminated by the Company “without cause” (as
defined below) or if Employee terminates his employment with the Company for
“good reason” (as defined below) during the Term and within the twenty-four (24)
month period beginning on the effective date of a Qualifying Change in Control
(as defined below), the Separation Payment to which Employee becomes 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 United Online, Inc. 2010 Incentive
Compensation Plan (or successor thereto), 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 United Online,
Inc., as determined in accordance with Section 1.409A-3(i)(5)(v) of the Treasury
Regulations, (ii) a change in the effective control of United Online, Inc., 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 United Online, Inc., as determined in accordance with Section
1.409A-3(i)(5)(vii) of the Treasury Regulations.

 

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.

 

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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 obligated to comply with the terms of the
Confidentiality and Non-Competition Agreement and will be subject to the
restrictive covenants set forth therein, 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 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).

 

(c)           Termination by Death or Disability.  If Employee incurs a
“separation from service” (as defined below) as a result of his 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 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 3113 Woodcreek Drive, Downers Grove, Illinois 60515) 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

 

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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:

 

(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 reasonable good faith efforts to follow the reasonable
and lawful direction of the Board of Directors and to perform his obligations
hereunder.

 

“without cause” means any reason not within the scope of the definition of the
term “with cause.”

 

“separation from service” means Employee’s cessation of employee status with the
Company by reason of Employee’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

 

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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:

 

(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.                                       Amendment to Confidentiality and
Non-Competition Agreement.  The parties hereby agree to amend the definition of
“Restricted Period” as set forth in Section 1(a) of the Confidentiality and
Non-Competition Agreement between the parties by deleting the reference therein
to “twenty-four (24) months” and replacing it with the words “twelve (12)
months”.  Except as modified by this Section 9, the terms and provisions of the
Confidentiality and Non-Competition Agreement will continue in full force and
effect.

 

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.

 

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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 the Confidentiality and
Non-Competition Agreement between Employee and the Company, any Company
handbooks and policies in effect from time to time and the applicable stock
plans and agreements evidencing the equity 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.

 

(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.

 

13.                                 Amendment and Governing Law.  This Agreement
may not be amended or modified except by an express written agreement signed by
Employee and the Chief Executive Officer of the Company and approved by the
Board of Directors.  The terms of this Agreement and the resolution of any
disputes will be governed by Illinois law, and venue for any disputes will be in
Chicago, Illinois.

 

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/ Robert S. Apatoff

 

ROBERT S. APATOFF

 

 

 

 

 

Date signed: January 21, 2011

 

 

 

 

 

FTD GROUP, INC.

 

 

 

 

 

By:

/s/ Mark R. Goldston

 

 

Mark R. Goldston

 

 

Chairman and Chief Executive Officer

 

 

 

 

 

Date signed: February 07, 2011

 

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