Exhibit 10.23


 


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 Paul E.
Jordan.  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 August 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.”


 


9.             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.”


 

















 


10.           Except as modified by this Amendment Agreement,
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/ Paul E. Jordan

  
	
   

  	
   

  	
  Paul E. Jordan

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated: December 22,
  2008