Exhibit 10.21


 


FIRST AMENDMENT

TO

EMPLOYMENT AGREEMENT


 


This amendment
dated and effective January 1, 2009 (this “Amendment”), amends that
certain Employment Agreement dated as of August 15, 2007 (the “Original
Agreement”) by and between United Online, Inc. (the “Company”) and Jeremy
E. Helfand.  Capitalized terms used and
not otherwise defined herein shall have the respective meanings set forth in
the Original Agreement.


 


RECITALS


 


WHEREAS, Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), places certain restrictions,
among other things, as to the timing of distributions from nonqualified
deferred compensation plans and arrangements; and


 


WHEREAS, the parties desire to amend the Original
Agreement to comply with Section 409A of the Code.


 


NOW, THEREFORE, in consideration of the mutual
promises set forth herein, the parties hereto hereby agree as follows:


 


1.             Two
new sentences are hereby added to the end of Section 2(c) of the
Original Agreement, as follows:


 


“In no event shall any expense be reimbursed later than the end of the calendar year
following the calendar year in which that expense was incurred, and the amounts
reimbursed in any one calendar year shall not affect the amounts reimbursable
in any other calendar year.  Your right
to receive such reimbursements may not be exchanged or liquidated for any other
benefit.”


 


2.             A
new sentence is hereby added to the end of Section 3 of the Original
Agreement, as follows:


 


“Your annual bonus award shall in no event be paid
later than the 15th day of the third month following the end of your taxable
year or, if later, the end of the Company’s taxable year  in which such bonus award is earned.”


 


3.             A
new sentence is hereby added to the end of each of Section 4(b) and 4(c) of
the Original Agreement, as follows:


 


“Except
as otherwise expressly provided in the agreement evidencing a particular restricted
stock unit award, the shares of common stock underlying the restricted stock
units that vest on such an accelerated basis will be issued to you on the first
business day, within the sixty (60)-day period following the date of your cessation
from service as a result of your termination “without cause” (as defined below)
or your resignation for “good reason” (as defined below), on which the executed
Release required of you pursuant to Section 7(b) is effective and
enforceable in accordance with its terms following any applicable revocation
period, or as soon thereafter as administratively practicable, but in no event
later than the last business day of that sixty (60)-day period on which such
Release is effective and enforceable.”


 

















 


4.             The
first paragraph of Section 7(b) of the Original Agreement is hereby
amended  in its entirety to read as
follows:


 


“If (i) your employment is terminated by the Company
“without cause” (as defined below) prior to November 15, 2010, (ii) you
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
your termination of employment, a comprehensive agreement releasing 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”)
and (iii) such Release becomes effective and enforceable after the
expiration of any applicable revocation period under federal or state law, then
the Company will pay you a separation payment (the “Separation
Payment”) equal to the sum of (i) twelve (12) months of
your then current monthly 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 fourth sentence of Section 3 above but
contingent upon your delivery of an effective and enforceable Release in
accordance with the foregoing provisions of this Section 7(b), if the date
of such 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 that 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 that fiscal
year is paid in the following fiscal year, with that amount to be paid at the
same time and manner that such payment would have paid to you had you remained
employed through such date, but in no event later than the last day of the
fiscal year immediately following fiscal year for which such bonus is earned.


 


Payment
of this Separation Payment and the additional bonus amount (if any) under this Section 7(b) and
the accelerated vesting of your equity awards under Section 4, will each be
contingent upon the satisfaction of the following requirements: (i) you
execute and deliver to the Company on a timely basis your required Release in
accordance with this Section 7(b), (ii) such Release becomes effective and enforceable after the
expiration of any applicable revocation period under federal or state law and
(iii) you continue to comply with the Proprietary Information and
Inventions Agreement and the restricted covenants set forth in Section 9
below.


 


The Separation Payment under this Section 7(b) 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 your “separation from
service” (as such term is defined in Treasury Regulations issued under Code Section 409A)
as a result of your termination “without cause” (as defined below), on which your
executed Release is effective and enforceable in accordance with its terms
following any applicable revocation period, or as soon thereafter as
administratively practicable, but in no event later than the last day of that
sixty (60)-day period on which such Release is effective and enforceable.  Your right to each such monthly
installment of the Separation Payment shall be deemed, for purposes of Section 409A
of the Code, to be a right to a series of separate payments.”


 


5.             The
last paragraph of Section 7(b) of the Original Agreement is hereby deleted
and replaced in its entirety as follows:


 


“If any payment or benefit received or to be received
by you (including any payment or benefit received pursuant to this letter agreement
or otherwise) would be (in whole or part) subject 


 

















 


to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (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 you under this letter 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
to be the first such cash payments so reduced, and then, if necessary, the
accelerated vesting of your equity awards pursuant to the provisions of this letter
agreement shall be reduced in the same chronological order in which those
awards were made, but only to the extent necessary to assure that you receive
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
you the greatest after-tax amount of benefits after taking into account any Excise
Tax imposed on the payments and benefits provided you hereunder (or on any
other payments or benefits to which your may become entitled in connection with
any change in control or ownership of the Company or the subsequent termination
of your employment with the Company).”


 


6.             The first sentence of Section 7(c) is
hereby deleted and replaced with the following:


 


“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) on your termination date or as soon as
administratively practicable thereafter, but in no event later than sixty (60)
days after the date of such termination.”


 


7.             The
definition of “good reason” as set forth in Section 7(d) of the
Original Agreement is hereby deleted and
replaced in its entirety as follows:


 


“‘good reason’ means:


 


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


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


(iii)                   a material change in the geographic location at which you must perform
services (the parties acknowledge that you are currently required to perform
services at 21301 Burbank Boulevard, Woodland Hills, CA 91367) without your
prior consent; or


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


 


8.             Section 7(e) of
the Original Agreement is hereby deleted and replaced in its entirety as
follows:


 


“(e)         Notwithstanding any provision in this letter
agreement to the contrary (other than Section 7(f) below), no payment
or distribution under this letter agreement which constitutes an item of
deferred compensation under Section 409A of the Code and becomes payable
by reason of 


 

















 


your termination of employment with the Company will
be made to you until you incur a “separation from service” (as such term is
defined in Treasury Regulations issued under Section 409A of the Code) in
connection with such  termination of
employment.  For purposes of this letter
agreement, each amount to be paid or benefit to be provided you 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 your  separation from service will be made to you
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 your 
death, if you are 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 you in a lump sum on
the first day of the seventh (7th) month after the date of your separation from
service or, if earlier, the first day of the month immediately following the
date the Company receives proof of your death. Any remaining payments or
benefits due under this letter agreement will be paid in accordance with the
normal payment dates specified herein.”


 


7.             A
new Section 7(f) is hereby added as follows:


 


“(f)          Notwithstanding
Section 7(e) above, the following provisions shall also be applicable
to you if you are a specified employee at the time of your separation of
service:


 


(i)          Any payments or benefits which become
due and payable to you during the period beginning with the date of your
separation from service and ending on March 15 of the following calendar
year 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 letter
agreement in accordance with the short-term deferral exception to Code Section 409A.


 


(ii)         The remaining portion of the payments
and benefits to which you become entitled under this letter 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 your  separation from service occurs, shall not be
subject to any deferred commencement date under Section 7(e) and
shall be paid to you as they become due and payable under this letter agreement.  For purposes of this subparagraph (ii), the
applicable dollar limitation will be equal to two times the lesser of (i) your annualized
compensation (based on your annual rate of pay for the calendar year preceding
the calendar year of your 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 you would otherwise be entitled under this
letter 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.             Except as modified by this Amendment, all the terms and
provisions of the Original Agreement shall continue in full force and effect.


 


(Signature Page Follows)


 

















 


IN
WITNESS WHEREOF, each of the parties hereto has executed this Amendment on the
date specified therefor below.


 


 


	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  
	
   

  	
   

  	
  Mark R. Goldston

  
	
   

  	
   

  	
  Chairman, President and Chief Executive

  
	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:  December 19,
  2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeremy E. Helfand

  
	
   

  	
   

  	
  Jeremy E. Helfand

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:  December 22,
  2008