Exhibit
10.15


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (the “Agreement”)
is made and entered into effective as of this 22nd day of August, 2007 by and
between Classmates Media Corporation, a Delaware corporation (“Classmates”),
with principal corporate offices at 21301 Burbank Boulevard, Woodland Hills,
California 91367, and Mark R. Goldston, whose business address is 21301 Burbank
Boulevard, Woodland Hills California 91367 (“Mr. Goldston”).


 


RECITALS


 


Classmates has been formed to assume and
continue certain business activities of United Online, Inc. (“Parent”), and
intends to register an initial public offering (“IPO”) of shares to
the public with the Securities and Exchange Commission (“SEC”). The date
the underwriting agreement with respect to the IPO is executed is referred to
herein as the “Effective Date.”


 


Mr. Goldston is willing to become
employed by Classmates upon the terms and conditions hereinafter set forth in
this Agreement and Classmates desires to employ him upon such terms and conditions.


 


NOW THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:


 


1.                                      EMPLOYMENT


 


1.1           Classmates
hereby agrees to employ Mr. Goldston, and Mr. Goldston hereby accepts
such employment, on the terms and conditions set forth herein, commencing the
Effective Date and continuing for three years (the “Term”), unless terminated
earlier as provided in Section 4 below. Mr. Goldston’s place of employment
shall be the in the greater Los Angeles metropolitan area.


 


2.                                      DUTIES OF
EXECUTIVE


 


2.1           Mr. Goldston
shall serve as the Chief Executive Officer and Chairman of Classmates. In this
capacity, Mr. Goldston shall be responsible for the general management of
Classmates and shall perform such customary, appropriate and reasonable
executive duties as are 


 

















 


usually performed by the Chief Executive
Officer and Chairman, including such specific executive duties consistent with
such position as are delegated to him from time to time by the Board of
Directors of Classmates or a committee thereof (the “Board”). Mr. Goldston
shall report directly to Classmates’ Board. Classmates agrees that
Mr. Goldston will also continue to serve as Chief Executive Officer and
Chairman of Parent and will in good faith allocate his time between Classmates
and Parent in accordance with the goals and objectives established by the Board.


 


2.2           Mr. Goldston
agrees to devote his good faith, attention, skill and efforts to the
performance of his duties for Classmates during the Term. This Agreement shall
not preclude Mr. Goldston from writing and promoting books or other
published materials, engaging in civic, charitable or religious activities, or
from serving on boards of directors of companies or organizations that do not
present any conflict with the interests of Classmates or otherwise adversely
affect Mr. Goldston’s performance of the services required under this
Agreement. This Agreement shall not be interpreted to prohibit
Mr. Goldston from making and monitoring personal investments (including
the purchase of interests in professional sports teams) if such activities do
not materially interfere with the services required under this Agreement.


 


3.                                      COMPENSATION AND
OTHER BENEFITS


 


3.1           Base
Salary. During the Term, Classmates shall pay to Mr. Goldston a Base Salary
per fiscal year equal to One Dollar ($1.00) on the Effective Date and each
annual anniversary of the Effective Date. Classmates may, but has no obligation
to, increase the Base Salary.


 


3.2           Initial
Grant of Stock Options. Classmates hereby agrees to grant to
Mr. Goldston as of the Effective Date options (the “Options”) to purchase
that number of shares which represents, on the Effective Date, 4.2857% of
Classmates’ fully diluted Class A common stock (the “Option Shares”) at an
exercise price equal to the price per share of such Class A common stock
offered to the public on the Effective Date pursuant to the terms and
conditions contained herein. The Options shall vest as provided below. On the
Effective Date, the number of Options and Option Shares shall be computed to
represent 4.2857% of the fully diluted shares of Class A common stock, and the
Options shall be issued, subject to adjustment in the number of covered shares
as provided below. The Options shall be subject to customary adjustments for
stock splits, stock dividends and similar events, shall be exercisable for ten
years from their date of grant, and shall be evidenced by a separate option
agreement or certificate.


 


2

















 


For purposes hereof, “fully diluted shares of
Class A common stock” means, at the Effective Date, the total number of
outstanding shares of Classmates’ Class A common stock assuming exercise of all
options (including, the Options), warrants and similar securities exercisable
for Class A common stock  that are
outstanding or issuable pursuant to then existing agreements,  the conversion or exchange of all other
securities of Classmates convertible into or exchangeable for shares of Class A
common stock (including Classmates’ Class B common stock), treating all shares
of Class A common stock covered by restricted stock units and similar
instruments that are outstanding or issuable pursuant to then existing
agreements as outstanding, and assuming the underwriters in the IPO sell all of
the “firm shares” set forth in the IPO underwriting agreement and fully
exercise the over-allotment option given them to purchase additional Class A
common stock within the time provided in the IPO underwriting agreement. In the
event the over-allotment option is not exercised in full by the underwriters
within the time provided in the IPO underwriting agreement, an appropriate
number of Options shall be cancelled and the Option agreement shall be amended,
to achieve the intended percentage. For the avoidance of doubt, fully diluted
shares of Class A common stock do not include any securities held in treasury.


 


3.3           Vesting
of Options.


 


(a)           Release
Date. Subject to the remaining provisions of this Section 3.3, thirty-three
and one-third percent (331/3%) of the Options shall be
vested on each annual anniversary of the Effective Date provided that
Mr. Goldston has remained continuously employed by Classmates and/or
Parent until such date.


 


(b)           Vesting
Upon Termination without Cause or Involuntary Termination. In the event of
termination by Classmates of Mr. Goldston’s employment without “Cause” (as
defined in Section 4.1(a) below) or by 
Involuntary Termination (as defined in Section 4.1(c) below) prior to
the date all Options vest, any previously unvested Options shall be fully
vested in Mr. Goldston as of such termination date. In addition, if Mr.
Goldston is employed by Parent, in the event of termination by Parent of Mr.
Goldston’s employment without “Cause” (as defined in the Employment Agreement
by and between Parent and Mr. Goldston effective April 3, 2007, as may be
amended from time to time (the “UOL Agreement”)) or if Mr. Goldston is Involuntarily
Terminated (as defined in the UOL Agreement) prior to the date all Options vest
and he is not employed by Classmates immediately following such termination,
any previously unvested Options shall be fully vested in Mr. Goldston as
of such termination date.


 


(c)           Termination
Due to Death or Disability. In the event of termination of employment from
Classmates due to Mr. Goldston’s death or Disability (as defined in
Section 4 below) prior to the third anniversary of the Effective Date, all Options
shall be immediately vested in Mr. Goldston or his estate as of the date
of death or Disability. In addition, if Mr. Goldston’s employment with
Classmates is terminated for any reason other than a reason that would give
rise to the acceleration of vesting or cancellation of unvested Options under
this 


 


3

















 


Agreement and following such termination he remains
employed by Parent, in the event of a subsequent termination of employment from
Parent due to Mr. Goldston’s death or permanent disability prior to the third
anniversary of the Effective Date, all Options shall be immediately vested in
Mr. Goldston or his estate as of the date of death or permanent disability.


 


(d)           [Intentionally
Omitted]


 


(e)           Resignation
Following a Corporate Transaction. In the event there is a “Corporate
Transaction” as described below and, following such Corporate Transaction, (i)
Mr. Goldston resigns from Classmates under circumstances constituting an
Involuntary Termination (as defined in Section 4.1(c)) or (ii) if Mr. Goldston
is then employed by Parent and Mr. Goldston resigns from Parent such that he is
Involuntarily Terminated (as defined in the UOL Agreement) and he is not
employed by Classmates immediately following such resignation, all Options shall
immediately be vested in Mr. Goldston.


 


(f)            Voluntary
Resignation. If Mr. Goldston resigns his employment with Classmates under
circumstances not deemed under this Agreement to constitute an Involuntary
Termination and he is not employed by Parent immediately following such
resignation, or if Mr. Goldston is employed by Parent and Mr. Goldston resigns
his employment with Parent under circumstances not deemed to constitute him
being Involuntarily Terminated under the UOL Agreement and he is not employed
by Classmates immediately following such resignation, all unvested Options shall
never vest and shall be cancelled.


 


3.4           Eligibility
for Awards and Bonuses. Mr. Goldston shall be eligible to receive, and
Classmates intends to consider him for annual bonuses (“Annual Bonuses”) and
equity awards with respect to Classmates stock (“Equity Awards”). However, the
Board or the Compensation Committee may, but is not obligated to, grant such
Annual Bonuses or Equity Awards. Any such Annual Bonuses may be in
(a) shares of Classmates stock, (b) cash or (c) any combination thereof. For
the avoidance of doubt, Mr. Goldston shall be entitled to participate in all
incentive plans generally available to Classmates’ senior management, including
without limitation any option or stock incentive plan (the “Stock Incentive
Plans”). Classmates agrees that, unless required by applicable law, no
amendment to any Stock Incentive Plan will eliminate the ability of
Mr. Goldston to satisfy income tax withholding obligations by the
surrender of shares or options to Classmates.


 


3.5           Withholding for Taxes. Classmates recognizes that
Mr. Goldston will incur obligations for withholding of income and social
security taxes with respect to any bonus paid in the form of shares of Classmates
stock and any other award based on shares of Classmates stock. To satisfy such
obligations Classmates agrees, at Mr. Goldston’s request, to treat as sold
to Classmates, or to take other appropriate actions  to reduce the number of shares of Classmates
stock delivered to Mr. Goldston, with the result that such number of shares
of 


 


4

















 


Classmates stock, multiplied by the
applicable price, is sufficient to satisfy Mr. Goldston’s withholding
obligations, to the extent permitted by applicable law.


 


3.6           Other
Benefits. During the Term, Mr. Goldston shall be entitled to
participate in all group life, health, medical, dental or disability insurance
or other employee, health and welfare benefits made available generally to
other executives of Classmates.


 


3.7           Vacation.
Mr. Goldston shall be entitled to five (5) weeks vacation per
year in accordance with Classmates’ vacation policies. Until a Corporate
Transaction, such vacation shall be taken concurrently with vacation as an
officer of Parent.


 


3.8           Business
Expenses. Classmates shall promptly (and in no event more than two and
one-half months after receiving documentation from Mr. Goldston) reimburse
Mr. Goldston for all reasonable and necessary business expenses incurred
by Mr. Goldston in connection with the business of Classmates and the
performance of his duties under this Agreement, subject to Mr. Goldston requesting
such reimbursement and providing Classmates with reasonable documentation
thereof within one year of incurring any expense.


 


3.9           Board
of Directors. Mr. Goldston shall be Chairman of Classmates and also a
member and chairman of the Classmates Board of Directors. Mr. Goldston’s
appointments as Chairman and as a member of the Board will automatically terminate
upon the termination of Mr. Goldston’s employment with Classmates for any
reason.


 


4.                                      TERMINATION


 


4.1           Termination
for Cause; Certain Definitions.


 


(a)           Termination
“for Cause” is defined as follows: 
(1) if Mr. Goldston is convicted of, or enters a plea of nolo contendere to, a felony, including any act of moral
turpitude that adversely impacts Classmates or any of its subsidiaries,
(2) if Mr. Goldston commits an act of actual fraud, embezzlement,
theft or similar dishonesty against Classmates or any of its subsidiaries that
adversely and materially impacts Classmates or any of its subsidiaries,
(3) if Mr. Goldston commits any willful misconduct resulting in
material harm to Classmates or any of its subsidiaries, or (4) if
Mr. Goldston fails, after receipt of detailed written notice and after
receiving a period of at least thirty (30) days following such notice to
cure such failure, to use his reasonable good faith efforts to follow the
reasonable and lawful direction of Classmates’ Board of Directors and to
perform his obligations hereunder.


 


5

















 


(b)           Classmates
may terminate this Agreement immediately (except as required by clause
4.1(a)(4) above) for any of the reasons stated in Section 4.1(a) by
giving written notice to Mr. Goldston without prejudice to any other
remedy to which Classmates may be entitled. The notice of termination shall
specify the grounds for termination or shall state that Classmates is
exercising its rights to terminate Mr. Goldston without Cause. If
Mr. Goldston’s employment hereunder is terminated “for Cause” pursuant to
this Section 4.1, Mr. Goldston shall be entitled to receive reimbursement
for any expenses, as set forth in Section 3.8, through the date of termination,
but shall not be entitled to retain any unvested Options, unvested Equity Awards
or any other amount except for amounts earned under any plan but not yet paid
as of the date of termination.


 


(c)           As
used in this Agreement, Mr. Goldston shall be deemed “Involuntarily Terminated”
if: (i) Mr. Goldston resigns following a breach by Classmates of its
obligations hereunder; provided, however, Mr. Goldston shall provide
Classmates with written notice of such breach within ninety days after the
conduct occurs giving rise to it, and Classmates shall have thirty (30)
days following such notice to cure such breach; (ii) Classmates or any
successor to Classmates terminates Mr. Goldston’s employment without Cause
in connection with or following a Corporate Transaction; or (iii) in connection
with or  after a Corporate Transaction
there is both (A) (a) a material decrease in Mr. Goldston’s duties or
responsibilities (it being deemed to be a decrease in duties and/or
responsibilities if Mr. Goldston is not offered and provided the position
of Chairman of the Board of Directors and Chief Executive Officer of Classmates
or its successor as well as the position of Chairman of the Board of Directors
and Chief Executive Officer of the acquiring and ultimate parent entity, if
any, following a Corporate Transaction), (b) a material decrease in compensation
from that provided by Classmates immediately prior to the Corporate
Transaction, (c) a requirement that Mr. Goldston re-locate out of the
greater Los Angeles metropolitan area, or (d) a failure by any successor
to Classmates to confirm in writing that this Agreement remains in full force
and effect and (B) Mr. Goldston terminates his employment with Classmates
within 180 days following any such event. A resignation or termination under
circumstances described above shall be deemed an “Involuntary Termination.”


 


(d)           “Corporate
Transaction” shall mean:  (x) a
change in ownership or control of Classmates effected through the acquisition,
directly or indirectly, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities Exchange Act of 1934) of securities such that Parent
(or a person that directly or indirectly controls, is controlled by, or is
under common control with, Parent) no longer has the voting power to elect a
majority of the Classmates Board of Directors; (y) a merger, consolidation
or reorganization approved by Classmates’ stockholders, unless securities
representing the voting power to elect a majority of the Classmates Board of
Directors are thereafter held by Parent; or (z) any stockholder-approved
transfer or other disposition of a majority of Classmates’ assets. In addition
any of the following transactions shall be deemed a Corporate Transaction with
respect to Classmates: (i) a change in ownership or control of Parent effected
through the acquisition, directly or indirectly, by any person or related group
of persons, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934) of securities possessing more than fifty percent (50%) of



 


6

















 


the total combined voting power of the Parent’s
outstanding securities; (ii) a change in the composition of the Parent’s Board
over a period of thirty-six (36) consecutive months or less such that a
majority of the Parent’s Board members ceases, by reason of one or more
contested elections for Board membership, to be comprised of individuals who
either (A) have been Parent Board members continuously since the beginning of
such period or (B) have been elected or nominated for election as Parent Board
members during such period by at least a majority of the Parent’s Board members
described in clause (A) who were still in office at the time the Parent Board
approved such election or nomination; (iii) a merger, consolidation or
reorganization approved by the Parent’s stockholders, unless securities
representing more than fifty percent (50%) of the total combined voting power
of the voting securities of the successor corporation are immediately
thereafter beneficially owned, directly or indirectly and in substantially the
same proportion, by the persons who beneficially owned the Parent’s outstanding
voting securities immediately prior to such transaction; or (iv) any
stockholder-approved transfer or other disposition of all or substantially all
of the Parent ‘s assets.


 


(e)           Disability.
“Disability” shall mean that Mr. Goldston, due to physical or mental illness or
injury, is precluded from performing his duties under this Agreement for a
period of 120 days or more, and shall be evidenced by a resolution of the Board
following the recommendation of Mr. Goldston’s physician or an independent
physician selected by the Board (a “Doctor’s Report”). If Mr. Goldston refuses
to submit to an examination by such an independent physician reasonably
requested by the Board, the Board may declare him Disabled without a Doctor’s
Report.


 


4.2           Termination
Without Cause. If Mr. Goldston’s employment is terminated without “Cause”
as defined in Section 4.1(a) or if there is an Involuntary Termination, he
will be eligible for the severance benefits set forth in Section 4.3.


 


4.3           Severance
Payments and Other Benefits Upon Termination Without Cause or Involuntary
Termination. If Classmates terminates Mr. Goldston’s employment hereunder
without Cause, or if there is an Involuntary Termination, Classmates (or its
successor, as the case may be) shall (i) pay to Mr. Goldston any
accrued but unpaid Base Salary and paid time off under any benefit plan to the
extent required by law through the date of termination, (ii) reimburse Mr.
Goldston for any expenses, as set forth in Section 3.8, through the date of
termination and (iii) to the extent Mr. Goldston has not already received them
and to the extent the underlying shares have vested (including vesting related
to the termination), deliver to Mr. Goldston certificates representing Mr.
Goldston’s ownership of Classmates stock under any restricted share award. Additionally,
subject to Mr. Goldston entering into and not revoking a release of claims
in favor of Classmates and abiding by the non-competition and non-solicitation
provisions set forth in Section 5 below, (A) Classmates (or its successor, as
the case may be) shall pay to Mr. Goldston an amount in cash (the “Release
Amount”) equal to 3 times the sum of Mr. Goldston’s (a) Base Salary and
(b) Annual Bonus, if any, paid in the preceding twelve (12) months and (B) any outstanding
Equity Awards shall become fully vested and exercisable (as applicable). The
Release Amount shall be payable in one lump sum, subject to withholding as 


 


7

















 


may be required by law, and such Release
Amount shall be paid upon the expiration of all applicable review and
revocation periods applicable to the release as statutorily required by law.


 


If Mr. Goldston is Involuntarily Terminated
(as defined in Section 4.1(c) above) or is terminated due to death or
Disability, Mr. Goldston’s options to purchase Classmates’ Class A common
stock shall be exercisable by Mr. Goldston, or, upon Mr. Goldston’s death, his
estate, for a one (1) year period following the date of termination (or
until expiration of their term, if earlier). In addition, if Mr. Goldston
is employed by Parent and Mr. Goldston is Involuntarily Terminated (as defined
in the UOL Agreement) or is terminated from Parent due to death or permanent disability
and he is not employed by Classmates immediately following such termination,
Mr. Goldston’s options to purchase Classmates’ Class A common stock shall
be exercisable by Mr. Goldston, or, upon Mr. Goldston’s death, his estate, for
a one (1) year period following the date of termination (or until
expiration of their term, if earlier).


 


5.                                      NON-COMPETITION;
NON-SOLICITATION


 


5.1           For
the twelve (12) month period following the termination of Mr. Goldston’s
employment with Classmates (but in the case of a termination without Cause or
an Involuntary Termination only if Mr. Goldston has received the severance
payments specified in Section 4.3 above) (the “Restricted Period”),
Mr. Goldston shall not directly engage in, or manage or direct persons
engaged in, a Competitive Business Activity (as defined below) anywhere in the
Restricted Territory (as defined below); provided, that the Restricted Period
shall terminate if Classmates terminates operations or if Classmates no longer
engages in any Competitive Business Activity. The term “Competitive Business
Activity” shall mean  a business primarily
involved in online social networking or a business primarily involving online
loyalty rewards programs. The term “Restricted Territory” shall mean each and
every county, city or other political subdivision of the United States in which
Classmates is engaged in business or providing its services. Classmates agrees
that providing services to a company or entity that is involved in a
Competitive Business Activity but which services are unrelated to the
Competitive Business Activity shall not be deemed a violation of this
Agreement.


 


5.2           During
the Restricted Period (but in the case of a termination without Cause or an
Involuntary Termination only if Mr. Goldston has received the severance
payments specified in Section 4.3 above), Mr. Goldston shall not directly
or indirectly solicit or recruit for employment any person or persons who are
employed by Classmates or any of its subsidiaries or affiliates, or who were so
employed at any time within a period of twelve (12) months immediately prior to
the date Mr. Goldston’s employment terminated, or otherwise interfere with
the relationship between any such person and Classmates; nor will
Mr. Goldston assist anyone else in recruiting any such employee to work
for another company or business or discuss with any such person his or her
leaving the employ of Classmates or engaging in a business activity in
competition with Classmates.


 


8

















 


6.                                      CERTAIN PAYMENTS


 


(a)           If
any payment or benefits received or to be received by Mr. Goldston in
connection with or contingent on a change in ownership or control, within the
meaning defined in Section 280G of the Internal Revenue Code (the “Code”) (or
any successor provision thereto), whether or not in connection with
Mr. Goldston’s termination of employment, and whether or not pursuant to
this Agreement (such payments or benefits, excluding the Gross-Up Payment, as
hereinafter defined, shall hereinafter be referred to as the “Total Payments”)
will be subject to an excise tax as provided for in Section 4999 of the Code
(the “Excise Tax”), Classmates shall pay to Mr. Goldston an additional
amount no later than the due date for Mr. Goldston’s tax return with
respect to such Excise Tax (the “Gross-Up Payment”) such that the net amount
retained by Mr. Goldston, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment taxes and
Excise Tax upon the Gross-Up Payment, shall be equal to the Total Payments.


 


(b)           For
purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments
shall be treated as “parachute payments” (within the meaning of Section
280G(b)(2) of the Code) unless, in the opinion of tax counsel (“Tax Counsel”)
reasonably acceptable to Mr. Goldston and selected by the accounting firm
acting as the “Auditor”, as defined below, such payments or benefits (in whole
or in part) do not constitute parachute payments, including by reason of
Section 280G(b)(4)(A) of the Code, (ii) all “excess parachute payments” within
the meaning of Section 280G(b)(1) of the Code shall be treated as subject to
the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in
excess of the Base Amount allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Auditor
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, Mr. Goldston
shall be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of Mr. Goldston’s residence or, if
higher, in the state and locality of Mr. Goldston’s principal place of
employment, on the date of termination (or if there is no date of termination,
then the date on which the Gross-Up Payment is calculated for purposes of this
Section 6), net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.


 


(c)           In
the event that the Excise Tax is finally determined to be less than the amount
taken into account hereunder in calculating the Gross-Up Payment,
Mr. Goldston shall repay to Classmates, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (including that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local 


 


9

















 


income and employment taxes imposed on the
Gross-Up Payment being repaid by Mr. Goldston to the extent that such
repayment results in a reduction in Excise Tax and/or a federal, state or local
income or employment tax deduction). In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder in calculating the
Gross-Up Payment (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), Classmates
shall make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by Mr. Goldston with respect to
such excess) at the time that the amount of such excess is finally determined. Mr. Goldston
and Classmates shall each reasonably cooperate with the other in connection
with any administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total Payments.


 


(d)           All
determinations under this Section 6 shall be made by a nationally recognized
accounting firm selected by Mr. Goldston (the “Auditor”), and Classmates
shall pay all costs and expenses of the Auditor. Classmates shall cooperate in
good faith in making such determinations and in providing the necessary
information for this purpose.


 


7.                                      INDEMNIFICATION


 


Classmates will indemnify Mr. Goldston
(and his legal representative or other successors) to the fullest extent
permitted (including a payment of expenses in advance of final disposition of a
proceeding) by applicable law, as in effect at the time of the subject act or
omission, or by the Certificate of Incorporation and By-Laws of Classmates, as
in effect at such time or on the Effective Date, or by the terms of any
indemnification agreement between Classmates and Mr. Goldston, whichever
affords or afforded greatest protection to Mr. Goldston, and
Mr. Goldston shall be entitled to the protection of any insurance policies
Classmates may elect to maintain generally for the benefit of its directors and
officers (and to the extent Classmates maintains such an insurance policy or
policies, Mr. Goldston shall be covered by such policy or policies, in
accordance with its or their terms to the maximum extent of the coverage
available for any Classmates officer or director), against all costs, charges
and expenses whatsoever incurred or sustained by him or his legal
representatives (including but not limited to any judgment entered by a court
of law) at the time such costs, charges and expenses are incurred or sustained,
in connection with any action, suit or proceeding to which Mr. Goldston
(or his legal representatives or other successors) may be made a party by
reason of his having accepted employment with Classmates or by reason of his
being or having been a director, officer or employee of Classmates, or any
subsidiary of Classmates, or his serving or having served any other enterprise
as a director, officer or employee at the request of Classmates. Mr. Goldston’s
rights under this Section 7 shall continue without time limit for so long as he
may be subject to any such liability, whether or not the Employment Term may
have ended, and the execution of a release of claims as required under this
Agreement shall in no way diminish or eliminate the right to indemnification
and protection under applicable insurance policies of Classmates as described
in this Section 7.


 


10

















 


8.                                      ASSIGNMENT


 


Neither Classmates nor Mr. Goldston may
assign this Agreement or any rights or obligations hereunder. This Agreement
will be binding upon Classmates and its successors and assigns. In the event of
a Corporate Transaction, Classmates shall cause this Agreement to be assumed by
Classmates’ successor as well as any acquiring or ultimate parent entity, if
any, following any Corporate Transaction.


 


9.                                      MISCELLANEOUS


 


9.1           This
Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of Mr. Goldston
by Classmates and constitutes the entire agreement between Classmates and
Mr. Goldston with respect to its subject matter. For the avoidance of
doubt, any agreement between Mr. Goldston and Parent shall not be modified,
amended or superseded by this Agreement.


 


9.2           This
Agreement may not be amended, supplemented, modified or extended, except by
written agreement which expressly refers to this Agreement, which is signed by
of the parties hereto and which is authorized by Classmates’ Board.


 


9.3           This
Agreement is made in and shall be governed by the laws of California, without
giving effect to its conflicts-of-law principles.


 


9.4           If
any provision of this Agreement is held by an arbitrator or a court of
competent jurisdiction to conflict with any federal, state or local law, or to
be otherwise invalid or unenforceable, such provision shall be construed in a
manner so as to maximize its enforceability while giving the greatest effect as
possible to the parties’ intent. To the extent any provision cannot be
construed to be enforceable, such provision shall be deemed to be eliminated
from this Agreement and of no force or effect and the remainder of this
Agreement shall otherwise remain in full force and effect and be construed as
if such portion had not been included in this Agreement.


 


9.5           Mr. Goldston
represents and warrants to Classmates that there is no restriction or
limitation, by reason of any agreement or otherwise, upon Mr. Goldston’s
right or ability to enter into this Agreement and fulfill his obligations under
this Agreement. The parties acknowledge that the Parent has consented to this
Agreement.


 


9.6           All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by first-class mail, postage prepaid, registered or
certified, 


 


11

















 


or delivered either by hand, by messenger or
by overnight courier service, and addressed to the receiving party at the
respective address set forth in the heading of this Agreement, or at such other
address as such party shall have furnished to the other party in accordance
with this Section 9.6 prior to the giving of such notice or other
communication.


 


9.7           It
is intended that this Agreement shall comply with the provisions of section
409A of the Code and the Treasury Regulations relating thereto so as not to
subject Mr. Goldston to the payment of additional taxes and interest under
section 409A of the Code. In furtherance of this intent, this Agreement shall be
interpreted, operated, and administered in a manner consistent with these
intentions, and to the extent that any regulations or other guidance issued
under section 409A of the Code would result in Mr. Goldston being subject
to payment of additional income taxes or interest under section 409A of the
Code, Mr. Goldston and Classmates agree to amend this Agreement in order
to avoid the application of such taxes or interest under section 409A of the
Code. Notwithstanding any provision to the contrary in this agreement, no
payment or distribution under this agreement which constitutes an item of
deferred compensation under Section 409A of the Code and becomes payable by
reason of Mr. Goldston’s termination of employment with Classmates will be made
to Mr. Goldston prior to the earlier of (i) the expiration of the six (6)-month
period measured from the date of Mr. Goldston’s “separation from service” (as
such term is defined in Treasury Regulations issued under Code Section 409A) or
(ii) the date of Mr. Goldston’s death, if he is 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 9.7 (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 Mr. Goldston in a lump sum,
and any remaining payments due under this Agreement will be paid in accordance
with the normal payment dates specified for them herein.


 


(Signature
Page Follows)


 


12

















 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the first date written above.


 


 


	
   

  	
  CLASSMATES
  MEDIA CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  Berglass

  	
   

  
	
   

  	
  Name: Robert
  Berglass

  
	
   

  	
  Title: Lead
  Independent Director, 

  
	
   

  	
  Compensation
  Committee Chair

  
	
   

  	
  of United
  Online, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frederic
  A. Randall, Jr.

  	
   

  
	
   

  	
  Name:
  Frederic A. Randall, Jr.

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MARK R.
  GOLDSTON

  
	
   

  	
   

  
	
   

  	
  /s/ Mark R.
  Goldston