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Exhibit 10.18    
    


August 15,
2007 


Gerald
J. Popek

[Address] 


Dear
Jerry, 


This
letter agreement sets forth the terms and conditions of your continued employment with United Online, Inc. (the "Company"), effective as of August 15, 2007 (the
"Effective Date"). 


1.    Position.    You will serve as Executive Vice President and Chief Technology Officer of the Company
and report to the Chief Executive Officer of the Company. You will agree to devote your full-time attention, skill and efforts to the performance of your duties for the Company. 



2.    Salary and Benefits.    


        (a)   You will be paid a salary at your current annualized rate of $427,000.00, payable in bi-weekly installments
in accordance with the Company's standard payroll practices, subject to such increases as may be determined from time to time by the Company's Board of Directors. As used in this letter agreement, the
term "Board of Directors" shall refer to the Company's Board of Directors or other governing body or committee to which the authority of the Board of Directors has been delegated. 



        (b)   You will be eligible to participate in the Company's employee benefit plans, including its 401(k) plan. In addition, you
will be entitled to participate in the Company's Exec-U-Care Medical Reimbursement Insurance Plan so long as such plan is made generally available to the Company's senior
executives. You 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 you for all reasonable and necessary business expenses you incur in connection with
the business of the Company and the performance of your duties hereunder upon your submission of reasonable and timely documentation of the expenses. 


3.    Bonus.    For each fiscal year during your period of employment, you will be eligible to participate
in a bonus program with eligibility for up to 100% of your annual base salary. The performance criteria for purposes of determining you actual bonus for each fiscal year will be established by the
Company's Board of Directors. Your annual bonus will be increased to include any increases in your annual bonus as approved by the Board of Directors. Except as otherwise determined by the Board of
Directors or set forth herein, your bonus awards will be paid only if you are employed by and in good standing with the Company at the time of such bonus payments. 


4.    Restricted Stock Unit andOther Equity Awards.    


        (a)   Effective August 15, 2007, you will be awarded restricted stock units covering 100,000 shares of the Company's
common stock (the "RSU Award"). The RSU Award will be granted under the Company's 2001 Stock Incentive Plan (the
"Plan") and will be subject to the standard terms and conditions set forth in the Plan and the Company's standard form restricted stock unit agreement
for employee awards under such Plan. Your RSU Award will vest, and the underlying shares will be issued, on August 15, 2010, subject to your continued employment with the Company through that
date. 


        (b)   If your employment is terminated by the Company "without cause" or by you for "good reason" (as each term is defined
below) prior to August 15, 2010, the vesting of your RSU Award and any other equity awards you hold as of the date of such termination will be accelerated by the additional number of shares in
which you would have otherwise been vested at the time of such termination had you completed an additional twelve (12) months of employment with the Company, calculated as if such RSU Award and
any such other equity awards vested on a monthly basis. Such vesting acceleration will occur upon the expiration of all applicable review and revocation periods applicable to the Release referred to 







 



in
Section 7(b) as statutorily required by law and in no event later than the later of (i) the 15th day of the third month following the end of your taxable year in which such
termination of employment occurs or (ii) the 15th day of the third month following the end of the Company's taxable year in which such termination of employment occurs. In no event will the
number of shares which vest on such an accelerated basis with respect to any particular equity grant exceed the number of shares unvested immediately prior to the date of such termination with respect
to such grant. 


        (c)   If your employment is terminated by the Company "without cause" or by you for "good reason" (as each term is defined
below) prior to August 15, 2010 in connection with, or within twelve (12) months after, a change in control of the Company (as defined in
the applicable stock plan, stock option agreement or restricted stock unit agreement), the vesting of your RSU Award and any other equity awards you hold as of the date of such termination will be
accelerated by the additional number of shares in which you would have otherwise been vested at the time of such termination had you completed an additional twelve (12) months of employment
with the Company or, if greater, an additional period of service equal in duration to the actual period of service you completed between
August 15, 2007 (or, with respect to any such other equity awards you hold outstanding as of the date of such termination, the date of the commencement of vesting with respect to such equity
awards) and the date of such termination, in all cases calculated as if such RSU Award and such other equity awards vested on a monthly basis. Such vesting acceleration will occur upon the expiration
of all applicable review and revocation periods applicable to the Release referred to in Section 7(b) as statutorily required by law and in no event later than the later of (i) the 15th
day of the third month following the end of your taxable year in which such termination of employment occurs or (ii) the 15th day of the third month following the end of the Company's taxable
year in which such termination of employment occurs. In no event will the number of shares which vest on such an accelerated basis with respect to any particular equity grant exceed the number of
shares unvested immediately prior to the date of such termination with respect to such grant. 


        (d)   Upon the termination of your employment as a result of death or Disability (as defined below), the vesting of your
outstanding RSU Award and any other equity awards you hold as of the date of such termination will be accelerated by the additional number of shares in which you would have been vested at the time of
such termination if you had completed an additional twelve (12) months of service, calculated as if such RSU Award and any other such equity awards vested on a monthly basis; provided however,
that in no event will the number of shares which vest on such an accelerated basis with respect to any particular equity grant exceed the number of shares unvested immediately prior to the date of
such termination with respect to such grant. For purposes of this letter agreement, "Disability" means your inability to engage in any substantial gainful activity necessary to perform your duties
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. 


        (e)   In the event of any inconsistency between the terms set forth in this Section 4 and the terms set forth in the
agreement evidencing your RSU Award, the terms set forth in this letter agreement will control. The provisions of this Section 4 and Section 7 will apply to the RSU Award and prior
equity awards referred to herein, and will also apply to future equity awards, except to the extent specifically stated in the applicable award agreement or in a resolution of the Board of Directors. 


5.    Policies; Procedures; Proprietary Information and Inventions Agreement.    As an employee of the
Company, you will be expected to abide by all of the Company's policies and procedures, including (without limitation) the terms of the Proprietary Information and Inventions Agreement between you and
the Company (a copy of which is attached hereto as Appendix A and 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, your employment with
the Company will be "at will" and will not be for any specified term, meaning that 


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either
you or the Company will be entitled to terminate your employment at any time and for any reason, with or without cause or advance notice. Any contrary representations that may have been made to
you are superseded by the terms set forth in this letter agreement. This is the full and complete agreement between you and the Company on this subject. Although your 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 your employment may only be changed in an express written agreement
signed by you and the Chief Executive Officer of the Company and approved by the Board of Directors. 


7.    Separation from Service.    


        (a)    Termination by You.    If you terminate your employment with the Company for any reason other than as a result
of your death or Disability or your resignation for "good reason" (as defined below), then all obligations of the Company as set forth in this letter agreement will cease, other than the obligation to
pay you, on your termination date, any earned but unpaid compensation for services rendered through that date and any accrued but unused vacation days as of your termination date (collectively, the
"Accrued Obligations"). If you terminate your employment with the Company for "good reason", (as defined below) prior to August 15, 2010, then in
addition to the foregoing, the Company will pay you the Separation Payment (as defined below) and the bonus payment (described in the second sentence of Section 7(b) below), subject to the
conditions set forth and your compliance with the requirements in Section 7(b) below for a Separation Payment made in connection a termination "without cause", and you will also be entitled to
the accelerated vesting of your RSU Award and any other equity awards you hold as of the Effective Date in accordance with Section 4 above. Notwithstanding your Separation from Service pursuant
to this Section 7(a), you will continue to be obligated to comply with the terms of the Proprietary Information and Inventions Agreement and if applicable, the restrictive covenants set forth
in Section 9 below. 


        (b)    Termination by the Company.    If your employment is terminated by the Company "without cause" (as defined
below) prior to August 15, 2010, and subject to your execution and delivery to the Company of a comprehensive agreement releasing of the Company
and its officers, directors, employees, stockholders, subsidiaries, affiliates, representatives and other parties and containing such other and additional terms as the Company deems satisfactory (the
"Release"), which becomes effective after the
expiration of any applicable revocation period, the Company will pay you a separation payment (the "Separation Payment") equal to the sum of
(i) twelve (12) months of your then current annual base salary, (ii) your Annual Bonus (as defined below), and (iii) a prorated portion of your Annual Bonus (as defined
below) based upon the time elapsed between December 31 of the preceding year and your date of termination. In addition, notwithstanding the last sentence of Section 3 hereof, if your
date of termination occurs following the end of a fiscal year and prior to the date that you would have otherwise been entitled to be paid your annual bonus for such fiscal year, the Company will pay
you an amount equal to the annual bonus that you would have received had you remained employed by and in good standing with the Company through the date the annual bonus for such fiscal year is paid,
which amount shall be paid at the same time and manner that such payment would have been paid to you had you remained employed through such date. Solely for purposes of the first sentence hereof,
"Annual Bonus" shall mean the lesser of (1) 100% of your then current annual base salary and (2) the most recent annual bonus paid to you.
Payment of this Separation Payment and bonus payment will be contingent on your signing (without revocation) the Release and your continued compliance with the Proprietary Information and Inventions
Agreement and the restrictive covenants set forth in Section 9 below. This Separation Payment will be payable monthly on a pro rata basis over twelve (12) months with the first such
payment commencing upon the expiration of all applicable review and revocation periods applicable to the Release as statutorily required by law. 


        If
your employment is terminated by the Company "without cause," the Company will have no further obligation to you pursuant to this letter agreement other than the Accrued Obligations,
the 


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acceleration
of vesting provided in Section 4 above and the obligations of the Company pursuant to this Section 7(b). 



        If
your employment is terminated by the Company "with cause" as defined below, the Company will have no further obligation to you under the terms of this letter agreement, other than the
Accrued Obligations. 


        Notwithstanding
the termination of your employment by the Company "with cause" or "without cause," or by you for "good reason", you will continue to be obligated to comply with the terms
of the Proprietary Information and Inventions Agreement and the restrictive covenants set forth in Section 9 below. 


        You
have the right to decline to receive a portion of the benefits set forth under Sections 4 and 7 in the event that you determine that the provision of such benefits to you
would result in a "parachute payment" as such term is defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended from time to time. 


        c.    Termination by Death or Disability.    If your employment is terminated as a result of your death or Disability,
the Company will be obligated to pay the Accrued Obligations to you, your estate or beneficiaries (as the case may be). In the event of a termination of your employment due to death or Disability, you
or your estate or beneficiaries, as the case may be, will be entitled to the accelerated vesting of your equity awards as set forth in Section 4(d) above. The provisions of this
Section 7(c) will not affect or change the rights or benefits to which you are otherwise entitled under the Company's employee benefit plans or otherwise. 


        d.    Definitions.    


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



        "good reason" means: 


	(i)
	a
reduction in your base salary without your prior written consent;



	(ii)
	a
material reduction in your position, duties or responsibilities, without your prior written consent, unless such reduction is effected at the request of Mark R.
Goldston;



	(iii)
	a
change in your place of employment which is not within a 50-mile radius of the following address, without your prior written consent: 21301 Burbank
Boulevard, Woodland Hills, CA 91367;



	(iv)
	any
material un-waived breach by the Company of the terms of this letter; or



	(v)
	provided
however, that with respect to any of (i) - (iv) above, you shall provide written notice to the Company of the existence of the good reason condition
within ninety (90) days of its initial existence and the Company shall have thirty (30) days to cure such condition. 




        "with cause" means your commission of any one or more of the following acts: 


	(i)
	willfully
damaging of the property, business, business relationships, reputation or goodwill of the Company or its subsidiaries;



	(ii)
	commission
of a felony or a misdemeanor involving moral turpitude;



	(iii)
	theft,
dishonesty, fraud or embezzlement;



	(iv)
	willfully
violating any rules or regulations of any governmental or regulatory body that is or is reasonably expected to be injurious to the Company or its
subsidiaries;



	(v)
	the
use of alcohol, narcotics or other controlled substances to the extent that it prevents you from efficiently performing services for the Company or its subsidiaries; 



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	(vi)
	willfully
injuring any other employee of the Company or its subsidiaries;



	(vii)
	willfully
injuring any person in the course of performance of services for the Company or its subsidiaries;



	(viii)
	disclosing
to a competitor or other unauthorized persons confidential or proprietary information or secrets of the Company or its subsidiaries;



	(ix)
	solicitation
of business on behalf of a competitor or a potential competitor of the Company or its subsidiaries;



	(x)
	harassment
of any other employee of the Company or its subsidiaries or the commission of any act which otherwise creates an offensive work environment for other
employees of the Company or its subsidiaries;



	(xi)
	failure
for any reason within five (5) days after receipt by you of written notice thereof from the Company, to correct, cease or otherwise alter any
insubordination, failure to comply with instructions, inattention to or neglect of the duties to be performed by you or other act or omission to act that in the opinion of the Company does or may
adversely affect the business or operations of the Company or its subsidiaries;



	(xii)
	breach
of any material term of this letter; or



	(xiii)
	any
other act or omission that is determined to constitute "cause" in the good faith discretion of the Board of Directors. 




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



        (e)    Code Section 409A Deferral Period.    Notwithstanding any provision to the contrary in this letter
agreement, no payment or distribution under this letter which constitutes an item of deferred compensation under Section 409A of the Internal Revenue Code (the "Code") and becomes payable by
reason of your termination of employment with the Company will be made to you prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of your "separation
from service" (as such term is defined in Treasury Regulations issued under Code Section 409A) or (ii) the date of your death, if you are deemed at the time of such separation from
service to be a "key employee" within the meaning of that term under Code Section 416(i) 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 Code Section 409A(a)(2) 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 reimbursed to you in a lump sum, and any remaining payments due
under this letter will 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 letter agreement,
whether payable in cash, shares of the Company's common stock or other property, are subject to reduction to reflect the applicable withholding and payroll taxes. 


9.    Restrictive Covenants.    Until one (1) year after the termination of your employment with the
Company for any reason, so long as you are receiving the Separation Payment, you will not, at any place in any county, city or other political subdivision of the United States in which the Company or
its subsidiaries is engaged in business or providing its services: 



        a.     directly
or indirectly design, develop, manufacture, market or sell any product or service which is in competition with the products or services of the Company or its
subsidiaries; or 


        b.     directly
or indirectly own any interest in, control, be employed by or associated with or render advisory, consulting or other services (including but not limited to
services in research) to any person or entity, or subsidiary, subdivision, division or joint venture of such entity in connection with the 


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design,
development, manufacture, marketing or sale of a product or service which is in competition with the products or services of the Company or its subsidiaries; provided, however, that nothing in
this letter agreement will prohibit you from owning less than one percent (1%) of the equity interests of any publicly held entity. 


10.    Entire Agreement.    This letter agreement, together with the Proprietary Information and Inventions
Agreement between you and the Company, any Company handbooks and policies in effect from time to time and the applicable stock plans and any stock option agreements, restricted stock unit agreements
or other agreement evidencing the equity awards made to you from time to time during your period of employment (including, without limitation, the RSU Award), contains all of the terms of your
employment with the Company and supersedes any prior understandings or agreements, whether oral or written, between you and the Company. If any provision of this letter 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 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 to be enforceable, such provision will be deemed
to be eliminated from this letter agreement and of no force or effect, and the remainder of this letter agreement will otherwise remain in full force and effect and be construed as if such portion had
not been included in this letter agreement. This letter agreement is not assignable by you. This letter agreement may be assigned by the Company to its subsidiaries or to successors in interest to the
Company or its lines of business. 


11.    Amendment and Governing Law.    This letter agreement may not be amended or modified except by an
express written agreement signed by you and the Chief Executive Officer of the Company. The terms of this letter agreement and the resolution of any disputes will be governed by California law, and
venue for any disputes will be in Los Angeles, California. 


12.    Term.    This letter agreement will expire on August 15, 2010, except Sections 6, 7(e),
8, 9, 10, 11 and 12 will survive such expiration. Following the expiration of this letter agreement, your employment with the Company will continue to be "at will". 


        We
look forward to continuing to work with you. Please indicate your agreement with the terms and provisions of this letter agreement by signing and dating the enclosed duplicate copy
and returning it to me by August 15, 2007. 


        If
you have any questions, please call the undersigned. 



	 	 	Very truly yours,
	

 	
 	
UNITED ONLINE, INC.
	

 	
 	

By:	

/s/  MARK R. GOLDSTON      
 Mark R. Goldston
 Chairman, President & Chief Executive
Officer





I
have read the foregoing and accept the terms and provisions set forth in this letter agreement as of the date shown at the top of this letter agreement: 



	/s/  GERALD J. POPEK      
Gerald J. Popek	 	 	 	 




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Exhibit A  


[Proprietary Information and Inventions Agreement]


[to be attached]


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Exhibit 10.18