Exhibit 10.14

 

[Officer Version I]

 

UNITED ONLINE, INC.

NOTICE OF GRANT OF STOCK OPTION

 

Notice is hereby given of the following option grant (the “Option”) to purchase
shares of the Common Stock of United Online, Inc. (the “Corporation”):

 

Optionee:

 

 

 

Grant Date:

                            , 201       

 

 

Exercise Price:

$             per share

 

 

Number of Option Shares:

                                shares

 

 

Expiration Date:

                , 202       

 

 

Type of Option:

o  Incentive Stock Option

 

 

 

o  Non-Statutory Stock Option

 

Exercise Schedule:   The Option shall become exercisable in a series of
               (      ) successive equal [annual] installments on each of the
first          (    ) [one-year] anniversaries of the Award Date upon Optionee’s
continuation in Service through each such [annual] vesting date.  Except as
otherwise provided in Paragraph 4(b) of the attached Stock Option Agreement, the
Option shall not become exercisable for any additional Option Shares after
Optionee’s cessation of Service.

 

Optionee understands and agrees that the Option is granted subject to and in
accordance with the terms of the United Online, Inc. 2010 Incentive Compensation
Plan (the “Plan”).  Optionee further agrees to be bound by the terms of the Plan
and the terms of the Option as set forth in the Stock Option Agreement attached
hereto as Exhibit A.  A copy of the Plan is available upon request made to the
Stock Plan Administrator at the Corporation’s principal offices at
                              .

 

Optionee may obtain a copy of the official prospectus for the Plan by accessing
Optionee’s portfolio on Fidelity’s website (www.fidelity.com).  Optionee may
also obtain a printed copy of the prospectus by contacting the Stock Plan
Administrator by telephoning                           .

 

Employment at Will.  Nothing in this Notice or in the attached Stock Option
Agreement or in the Plan shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee’s Service at any time for any
reason, With Cause or Without Cause.

 

Definitions.  All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the Stock Option Agreement attached as
Exhibit A.

 

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DATED:                              , 2011

 

 

 

UNITED ONLINE, INC.

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

OPTIONEE

 

ATTACHMENTS

 

EXHIBIT A — STOCK OPTION AGREEMENT

 

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EXHIBIT A

 

UNITED ONLINE, INC.

STOCK OPTION AGREEMENT

 

RECITALS

 

A.            The Corporation has implemented the Plan for the purpose of
providing eligible persons in the Corporation’s service with the opportunity to
participate in one or more cash or equity incentive compensation programs
designed to encourage them to continue their service relationship with the
Corporation.

 

B.            Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation’s grant of an option to Optionee.

 

C.            All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.             Grant of Option.  The Corporation hereby grants to Optionee, as
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice.  The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

 

2.             Option Term.  The term of this option shall commence on the Grant
Date and continue in effect until the close of business on the Expiration Date,
unless sooner terminated in accordance with Paragraph 5 or 6.

 

3.             Limited Transferability.

 

(a)          Except to the limited extent provided in Paragraph 3(b), this
option shall be neither transferable nor assignable by Optionee other than by
will or the laws of inheritance following Optionee’s death and may be exercised,
during Optionee’s lifetime, only by Optionee.  However, Optionee may designate
one or more persons as the beneficiary or beneficiaries of this option, and this
option shall, in accordance with such designation, automatically be transferred
to such beneficiary or beneficiaries upon the Optionee’s death while holding
this option.  Such beneficiary or beneficiaries shall take the transferred
option subject to all the terms and conditions of this Agreement, including
(without limitation) the limited time period during which this option may,
pursuant to Paragraph 5, be exercised following Optionee’s death.

 

(b)           If this option is designated a Non-Statutory Option in the Grant
Notice, then this option may, with the Plan Administrator’s consent, be assigned
in whole or in part during Optionee’s lifetime through a gratuitous transfer to
one or more of Optionee’s Family Members or to a trust established for the
exclusive benefit of Optionee and/or one or more such

 

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Family Members.  The assigned portion shall be exercisable only by the person or
persons who acquire a proprietary interest in the option pursuant to such
assignment.  The terms applicable to the assigned portion shall be the same as
those in effect for this option immediately prior to such assignment.

 

4.             Dates of Exercise.

 

(a)           This option shall become exercisable for the Option Shares in one
or more installments in accordance with the Exercise Schedule set forth in the
Grant Notice.  As the option becomes exercisable for such installments, those
installments shall accumulate, and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner termination of the
option term under Paragraph 5 or 6.

 

(b)           Optionee’s Employment Agreement sets forth certain terms and
conditions under which Optionee’s equity or equity-based awards from the
Corporation, including this option, may vest in whole or in part on an
accelerated basis in connection with his cessation of Service under various
specified circumstances. To the extent this option vests in accordance with the
terms and conditions of those vesting acceleration provisions of the Employment
Agreement, this option shall become immediately exercisable for the Option
Shares as to which the vesting acceleration pertains and may be exercised for
any or all of those Option Shares until this option terminates in accordance
with the provisions of Paragraph 5. The terms and provisions of the Employment
Agreement (including any conditions, restrictions or limitations governing the
accelerated vesting of this option, including (without limitation) the execution
and delivery of an effective general release), as they apply to this option, are
hereby incorporated by reference into this Agreement and shall have the same
force and effect as if expressly set forth in this Agreement.  Such vesting
acceleration provisions and the conditions relating thereto shall also apply to
any cash retention program established pursuant to Paragraph 6(a).

 

5.             Cessation of Service.  The option term specified in Paragraph 2
above shall terminate (and this option shall cease to be outstanding) prior to
the Expiration Date should any of the following provisions become applicable:

 

(a)           Except as otherwise expressly provided in subparagraphs
(b) through (f) of this Paragraph 5, should Optionee cease to remain in Service
for any reason while this option is outstanding, then Optionee shall have until
the close of business on the last business day coincident with or immediately
preceding the expiration of the three (3)-month period measured from the date of
such cessation of Service during which to exercise this option for any or all of
the Option Shares for which this option is vested and exercisable at the time of
Optionee’s cessation of Service, but in no event shall this option be
exercisable at any time after the close of business on the last business day
coincident with or immediately preceding the Expiration Date.

 

(b)           In the event Optionee ceases Service by reason of his or her death
while this option is outstanding, then this option may be exercised, for any or
all of the Option Shares for which this option is vested and exercisable at the
time of Optionee’s cessation of Service, by (i) the personal representative of
Optionee’s estate or (ii) the person or

 

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persons to whom the option is transferred pursuant to Optionee’s will or the
laws of inheritance following Optionee’s death. However, if Optionee dies while
holding this option and has an effective beneficiary designation in effect for
this option at the time of his or her death, then the designated beneficiary or
beneficiaries shall have the exclusive right to exercise this option following
Optionee’s death.  Any such right to exercise this option shall lapse, and this
option shall cease to be outstanding, upon the close of business on the last
business day coincident with or immediately preceding the earlier of (i) the
expiration of the twelve (12)-month period measured from the date of Optionee’s
death or (ii) the Expiration Date.  Upon the expiration of such limited exercise
period, this option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not otherwise been exercised.

 

(c)           Should Optionee cease Service by reason of Disability while this
option is outstanding, then Optionee shall have until the close of business on
the last business day coincident with or immediately preceding the expiration of
the twelve (12)-month period measured from the date of such cessation of Service
during which to exercise this option for any or all of the Option Shares for
which this option is vested and exercisable at the time of such cessation of
Service.  In no event, however, shall this option be exercisable at any time
after the close of business on the last business day coincident with or
immediately preceding the Expiration Date.

 

Note:  Unless such Disability also constitutes Permanent Disability, the
exercise of this option more than three (3) months after the Optionee’s
cessation of Employee status by reason of Disability will result in the taxation
of the option as a Non-Statutory Option even if the option is designated an
Incentive Stock Option in the Grant Notice.

 

(d)           The applicable period of post-Service exercisability in effect
pursuant to the foregoing provisions of this Paragraph 5 shall automatically be
extended by an additional period of time equal in duration to any interval
within such post-Service exercise period during which the exercise of this
option or the immediate sale of the Option Shares acquired under this option
cannot be effected in compliance with applicable federal and state securities
laws, but in no event shall such an extension result in the continuation of this
option beyond the close of business on the last business day coincident with or
immediately preceding the Expiration Date.

 

(e)           Should Optionee’s Service be terminated With Cause, or should
Optionee engage in any other conduct, while in Service or following cessation of
Service, that is materially detrimental to the business or affairs of the
Corporation, as determined in the sole discretion of the Plan Administrator,
then this option, whether or not vested and exercisable at the time, shall
terminate immediately and cease to be outstanding.

 

(f)            Should Optionee’s Service terminate by reason of an Involuntary
Termination within the period commencing with the Corporation’s execution of a
definitive agreement for a Change in Control transaction  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 effective date of such Change in Control  and while
this option is outstanding, then this option shall remain so outstanding until
the close

 

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of business on the last business day coincident with or immediately preceding
the earliest to occur of (i) the expiration of the twelve (12)-month period
measured from the date of such Involuntary Termination, (ii) the termination of
the option in accordance with Paragraph 6(b) or (iii) the  Expiration Date.

 

(g)           During the limited period of post-Service exercisability provided
under this Paragraph 5, this option may not be exercised in the aggregate for
more than the number of Option Shares for which this option is at the time
vested and exercisable.  Except to the extent otherwise provided in the
Employment Agreement or as specifically authorized by the Plan Administrator
pursuant to the terms of any other express written agreement with the Optionee,
this option shall not vest or become exercisable for any additional Option
Shares, whether pursuant to the normal Exercise Schedule set forth in the Grant
Notice or the special vesting acceleration provisions of Paragraph 6 below,
following Optionee’s cessation of Service.  Upon the expiration of such limited
exercise period or (if earlier) upon the close of business on the last business
day coincident with or immediately preceding the Expiration Date, this option
shall terminate and cease to be outstanding for any exercisable Option Shares
for which the option has not otherwise been exercised.

 

6.             Special Acceleration of Option.

 

(a)           This option, to the extent outstanding at the time of an actual
Change in Control but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the effective date of
such Change in Control, become exercisable for all of the Option Shares at the
time subject to this option and may be exercised for any or all of those Option
Shares as fully vested shares of Common Stock.  However, this option shall not
become exercisable on such an accelerated basis if and to the extent: (i) this
option is to be assumed by the successor entity (or parent thereof) or is
otherwise to continue in full force and effect pursuant to the terms of the
Change in Control transaction, (ii) this option is to be replaced with an
economically-equivalent substitute equity award or (iii) this option is to be
replaced with a cash retention program of the successor entity (or parent
thereof) which preserves the spread existing at the time of the Change in
Control on any Option Shares for which this option is not otherwise at that time
vested and exercisable (the excess of the Fair Market Value of those Option
Shares over the aggregate Exercise Price payable for such shares) and provides
for the subsequent vesting and concurrent payout of that spread in accordance
with the same Exercise Schedule for those Option Shares set forth in the Grant
Notice or the special vesting acceleration provisions of the Employment
Agreement applicable to this option. Notwithstanding the foregoing, no such cash
retention program shall be established for this option (or any other option
granted to Optionee under the Plan) to the extent such program would otherwise
be deemed to constitute a deferred compensation arrangement subject to the
requirements of Code Section 409A and the Treasury Regulations thereunder.

 

(b)           Immediately following the consummation of the Change in Control,
this option shall terminate and cease to be outstanding, except to the extent
assumed by the successor entity (or parent thereof) or otherwise continued in
effect pursuant to the terms of the Change in Control transaction.

 

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(c)           If this option is assumed in connection with a Change in Control
or otherwise continued in effect, then this option shall be appropriately
adjusted, immediately after such Change in Control, to apply to the number and
class of securities into which the shares of Common Stock subject to this option
would have been converted in consummation of such Change in Control had those
shares actually been outstanding at the time. Appropriate adjustments shall also
be made to the Exercise Price, provided the aggregate Exercise Price shall
remain the same.  To the extent the actual holders of the Corporation’s
outstanding Common Stock receive cash consideration for their Common Stock in
consummation of the Change in Control, the successor entity (or parent thereof)
may, in connection with the assumption or continuation of this option, but
subject to the Plan Administrator’s approval prior to the Change in Control,
substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such
Change in Control, provided such common stock is readily tradable on an
established U.S. securities exchange.

 

(d)           This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

 

7.             Adjustment in Option Shares.  Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares, spin-off transaction, or other change
affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, or should the value of outstanding shares of Common
Stock be substantially reduced as a result of a spin-off transaction or an
extraordinary dividend or distribution, or should there occur any merger,
consolidation or other reorganization, then equitable and proportional
adjustments shall be made by the Plan Administrator to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price.
The adjustments shall be made in such manner as the Plan Administrator deems
appropriate, and those adjustments shall be final, binding and conclusive upon
Optionee and any other person or persons having an interest in the option. In
the event of any Change in Control transaction, the adjustment provisions of
Paragraph 6(c) above shall be controlling.

 

8.             Stockholder Rights.  The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

 

9.             Manner of Exercising Option.

 

(a)           In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or any other person or persons exercising the option) must take the following
actions:

 

(i)            Execute and deliver to the Corporation a Notice of Exercise as to
the Option Shares for which the option is exercised or comply with such other
procedures as the Corporation may establish for notifying the Corporation,
either directly or through an on-line internet transaction with a

 

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brokerage firm authorized by the Corporation to effect such option exercises, of
the exercise of this option for one or more Option Shares.

 

(ii)           Pay the aggregate Exercise Price for the purchased shares in one
or more of the following forms:

 

(A)          cash or check made payable to the Corporation; or

 

(B)           shares of Common Stock (whether delivered in the form of actual
stock certificates or through attestation of ownership in a manner reasonably
satisfactory to the Corporation) held for the requisite period (if any)
necessary to avoid any resulting charge to the Corporation’s earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date; or

 

(C)           through a special sale and remittance procedure pursuant to which
Optionee (or any other person or persons exercising the option) shall
concurrently provide irrevocable instructions (i) to a brokerage firm
(reasonably satisfactory to the Corporation for purposes of administering such
procedure in accordance with the Corporation’s pre-clearance/pre-notification
policies) to effect the immediate sale of all or a sufficient portion of the
purchased shares so that such brokerage firm can remit to the Corporation, on
the settlement date, sufficient funds out of the resulting sale proceeds to
cover the aggregate Exercise Price payable for all the purchased shares plus all
applicable Withholding Taxes and (ii) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm on such
settlement date.

 

Except to the extent the sale and remittance procedure is utilized in connection
with the option exercise, payment of the Exercise Price must accompany the
Notice of Exercise (or other notification procedure) delivered to the
Corporation in connection with the option exercise.

 

(iii)          Furnish to the Corporation appropriate documentation that the
person or persons exercising the option (if other than Optionee) have the right
to exercise this option.

 

(iv)          Make appropriate arrangements with the Corporation (or Parent or
Subsidiary employing or retaining Optionee) for the satisfaction of all
applicable Withholding Taxes.

 

(b)           As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares (either in
paper or electronic form), with the appropriate legends affixed thereto.

 

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(c)           In no event may this option be exercised for any fractional
shares.

 

10.           Compliance with Laws and Regulations.

 

(a)           The exercise of this option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any Stock Exchange on which the Common Stock is listed
for trading at the time of such exercise and issuance.

 

(b)           The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been
obtained.  The Corporation, however, shall use its best efforts to obtain all
such approvals.

 

11.           Successors and Assigns.  Except to the extent otherwise provided
in Paragraphs 3 and 6 above, the provisions of this Agreement shall inure to the
benefit of and be binding upon the Corporation and its successors and assigns
and Optionee, Optionee’s assigns, the legal representatives, heirs and legatees
of Optionee’s estate and any beneficiaries of this option designated by
Optionee.

 

12.           Notices.  Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices and directed to the
attention of the Stock Plan Administrator.  Any notice required to be given or
delivered to Optionee shall be in writing and addressed to Optionee at the most
current address then indicated for Optionee on the Corporation’s employee
records or shall be delivered electronically to Optionee through the
Corporation’s electronic mail system.  All notices shall be deemed effective
upon personal delivery or delivery through the Corporation’s electronic mail
system or upon deposit in the U.S. mail, postage prepaid and properly addressed
to the party to be notified.

 

13.           Construction.  This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan.  In the event of any conflict between the
provisions of this Agreement and the terms of the Plan, the terms of the Plan
shall be controlling. All decisions of the Plan Administrator with respect to
any question or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this option.

 

14.           Governing Law.  The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to California’s conflict-of-laws rules.

 

15.           Excess Shares.  If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of

 

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shares of Common Stock issuable under the Plan is obtained in accordance with
the provisions of the Plan.  In no event shall the option be exercisable with
respect to any of the excess Option Shares unless and until such stockholder
approval is obtained.

 

16.           Additional Terms Applicable to an Incentive Option.  In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

 

(a)           This option shall cease to qualify for favorable tax treatment as
an Incentive Option if (and to the extent) this option is exercised for one or
more Option Shares: (A) more than three (3) months after the date Optionee
ceases to be an Employee for any reason other than death or Permanent Disability
or (B) more than twelve (12) months after the date Optionee ceases to be an
Employee by reason of Permanent Disability.

 

(b)           No installment under this option shall qualify for favorable tax
treatment as an Incentive Option if (and to the extent) the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or any other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate.  Should such One Hundred Thousand Dollar
($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.

 

(c)           Should the exercisability of this option be accelerated upon a
Change in Control, then this option shall qualify for favorable tax treatment as
an Incentive Option only to the extent the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which this option first
becomes exercisable in the calendar year in which the Change in Control
transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate.  Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Change in Control, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

 

(d)           Should Optionee hold, in addition to this option, one or more
other options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this option, then for purposes of the
foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become
first exercisable in that calendar year, on the basis of the chronological order
in which such options were granted, except to the extent otherwise provided
under applicable law or regulation.

 

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17.        Employment at Will.  Nothing in this Agreement or in the Plan shall
confer upon Optionee any right to remain in Employee status for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Corporation (or any Parent or Subsidiary employing Optionee) or of
Optionee, which rights are hereby expressly reserved by each, to terminate
Optionee’s Employee status at any time for any reason, With Cause or Without
Cause.

 

18.        Plan Prospectus.  Optionee may obtain a copy of the official
prospectus for the Plan by accessing Optionee’s portfolio on Fidelity’s website
(www.fidelity.com).  Optionee may also obtain a printed copy of the prospectus
by contacting the Stock Plan Administrator by telephoning
                        .

 

19.        Optionee Acceptance.  Optionee must accept the terms and conditions
of this Agreement either electronically through the electronic acceptance
procedure established by the Corporation or through a written acceptance
delivered to the Corporation in a form satisfactory to the Corporation.  In no
event shall this option be exercised in the absence of such acceptance.

 

IN WITNESS WHEREOF, United Online, Inc. has caused this Agreement to be executed
on its behalf by its duly-authorized officer on the day and year first indicated
in the Grant Notice.

 

 

UNITED ONLINE, INC.

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

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APPENDIX

 

The following definitions shall be in effect under the Agreement:

 

A.         Agreement shall mean this Stock Option Agreement.

 

B.         Board shall mean the Corporation’s Board of Directors.

 

C.         Change in Control shall have the meaning assigned to such term in the
Employment Agreement.  However, in the absence of such definition in the
Employment Agreement, a Change in Control shall mean a change in ownership or
control of the Corporation effected through any of the following transactions:

 

(i)       the closing of a merger, consolidation or other reorganization
approved by the Corporation’s stockholders in which a change in ownership or
control of the Corporation is effected through the acquisition by any person or
group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of
the 1934 Act (other than the Corporation or a person that, prior to such
transaction, directly or indirectly controls, is controlled by or is under
common control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation’s
outstanding securities (as measured in terms of the power to vote with respect
to the election of Board members),

 

(ii)      the closing of a sale, transfer or other disposition of all or
substantially all of the Corporation’s assets,

 

(iii)     the closing of any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a “group” within
the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation or a
person that, prior to such transaction or series of related transactions,
directly or indirectly controls, is controlled by or is under common control
with, the Corporation) acquires directly or indirectly (whether as a result of a
single acquisition or by reason of one or more acquisitions within the twelve
(12)-month period ending with the most recent acquisition) beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation’s
securities (as measured in terms of the power to vote with respect to the
election of Board members) outstanding immediately after the consummation of
such transaction or series of related transactions, whether such transaction
involves a direct issuance from the Corporation or the acquisition of
outstanding securities held by one or more of the Corporation’s existing
stockholders,

 

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(iv)     a merger, recapitalization, consolidation, or other transaction to
which the Corporation is a party or a sale, transfer or other disposition of all
or substantially all of the Corporation’s assets if, in either case, the members
of the Board immediately prior to consummation of the transaction do not, upon
consummation of the transaction, constitute at least a majority of the board of
directors of the surviving entity or the entity acquiring the Corporation’s
assets, as the case may be, or a parent thereof, or

 

(v)      a change in the composition of the Board over a period of thirty-six
(36) consecutive months or less such that a majority of the Board members ceases
by reason of one or more contested elections for Board membership to be
comprised of individuals who either (A) have been Board members continuously
since the beginning of such period or (B) have been appointed or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (A) who were still in office at the time the Board
approved such appointment or nomination.

 

D.         Code shall mean the Internal Revenue Code of 1986, as amended.

 

E.          Common Stock shall mean shares of the Corporation’s common stock.

 

F.          Corporation shall mean United Online, Inc., a Delaware corporation,
and any successor entity to all or substantially all of the assets or voting
stock of United Online, Inc. which shall by appropriate action adopt the Plan.

 

G.         Disability shall mean the Optionee’s inability to engage in any
substantial activity necessary to perform his or her duties and responsibilities
under his or her Employment Agreement 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.

 

H.         Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary) subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

 

I.           Employment Agreement shall mean the Employment Agreement between
Optionee and the Corporation (or any Parent or Subsidiary) in effect on the
Award Date.

 

J.          Exercise Date shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

 

K.         Exercise Price shall mean the exercise price payable per Option Share
as specified in the Grant Notice.

 

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L.          Exercise Schedule shall mean the schedule set forth in the Grant
Notice pursuant to which the option is to become exercisable for the Option
Shares in one or more installments over the Optionee’s period of Service.

 

M.        Expiration Date shall mean the date specified in the Grant Notice for
measuring the maximum term for which the option may remain outstanding.

 

N.         Fair Market Value per share of Common Stock on any relevant date
shall be the closing price per share of Common Stock at the close of regular
trading hours (i.e., before after-hours trading begins) on the date in question
on the Stock Exchange serving as the primary market for the Common Stock, as
such price is reported by the National Association of Securities Dealers (if
primarily traded on the Nasdaq Global or Global Select Market) or as officially
quoted in the composite tape of transactions on any other Stock Exchange on
which the Common Stock is then primarily traded.  If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such
quotation exists.

 

O.         Family Member shall mean any of the following members of Optionee’s
family: any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law.

 

P.          Good Reason shall have the meaning assigned to such term in the
Employment Agreement.

 

Q.         Grant Date shall mean the date of grant of the option as specified in
the Grant Notice.

 

R.         Grant Notice shall mean the Notice of Grant of Stock Option informing
Optionee of the basic terms of the option subject to this Agreement.

 

S.          Incentive Stock Option shall mean an option intended to satisfy the
requirements of Code Section 422.

 

T.         Involuntary Termination shall mean the termination of Optionee’s 
Service by reason of:

 

(i)           Optionee’s involuntary dismissal or discharge by the Corporation
Without Cause, or

 

(ii)          Optionee’s resignation for Good Reason.

 

U.         1934 Act shall mean the Securities Exchange Act of 1934, as amended
from time to time.

 

V.         Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.

 

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W.        Notice of Exercise shall mean the notice of option exercise in the
form authorized by the Corporation.

 

X.         Option Shares shall mean the number of shares of Common Stock subject
to the option as specified in the Grant Notice.

 

Y.         Optionee shall mean the person to whom the option is granted as
specified in the Grant Notice.

 

Z.         Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

AA.     Permanent Disability shall mean the inability of Optionee to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or to be of
continuous duration of twelve (12) months or more.

 

BB.       Plan shall mean the Corporation’s 2010 Incentive Compensation Plan, as
amended and restated from time to time.

 

CC.       Plan Administrator shall mean the Compensation Committee of the Board
(or a subcommittee thereof) acting in its capacity as administrator of the Plan.

 

DD.      Service shall mean the Optionee’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. For purposes of this Agreement, Optionee shall be deemed to cease
Service immediately upon the occurrence of the either of the following events:
(i) Optionee no longer performs services in any of the foregoing capacities for
the Corporation (or any Parent or Subsidiary) or (ii) the entity for which
Optionee performs such services ceases to remain a Parent or Subsidiary of the
Corporation, even though Optionee may subsequently continue to perform services
for that entity. Except to the extent otherwise required by law or expressly
authorized by the Plan Administrator or by the Corporation’s written policy on
leaves of absence in effect at the time of such leave, no Service credit shall
be given for vesting purposes for any period Optionee is on a leave of absence.

 

EE.       Stock Exchange shall mean the American Stock Exchange, the Nasdaq
Global or Global Select Market or the New York Stock Exchange.

 

FF.       Subsidiary shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

 

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GG.       Withholding Taxes shall mean the federal, state and local income taxes
and the employee portion of the federal, state and local employment taxes
required to be withheld by the Corporation in connection with the exercise of
the option.

 

HH.      With Cause shall have the meaning assigned to such term in the
Employment Agreement.

 

II.         Without Cause shall have the meaning assigned to such term in the
Employment Agreement.

 

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