**Exhibit 10.5**

**UNITEDONLINE, INC.2001 SUPPLEMENTAL STOCK INCENTIVE PLAN**

**(AsAmended and Restated Effective September 26, 2001)**

# **ARTICLE ONEGENERAL PROVISIONS**

## **I.              PURPOSEOF THE PLAN**

This Plan is intended to supplement the United Online,Inc. 2001 Stock Incentive Plan thereby promoting the interests of theCorporation, by providing eligible persons in the Corporation’s service withthe opportunity to acquire a proprietary interest, or otherwise increase theirproprietary interest, in the Corporation as an incentive for them to remain insuch service.

Capitalized terms shall have the meanings assigned tosuch terms in the attached Appendix.

## **II.            STRUCTUREOF THE PLAN**

### A.    ThePlan shall be divided into two separate equity incentive programs:

#### ·      theDiscretionary Option Grant Program under which eligible persons may, at thediscretion of the Plan Administrator, be granted options to purchase shares ofCommon Stock; and

#### ·      theStock Issuance Program under which eligible persons may, at the discretion ofthe Plan Administrator, be issued shares of Common Stock directly, eitherthrough the immediate purchase of such shares or as a bonus for servicesrendered the Corporation (or any Parent or Subsidiary).

### B.    Theprovisions of Articles One and Four shall apply to all equity programs underthe Plan and shall govern the interests of all persons under the Plan.

## **III.           ADMINISTRATIONOF THE PLAN**

### A.    ThePrimary Committee and the Board shall have concurrent authority to administerthe Discretionary Option Grant and Stock Issuance Programs with respect toSection 16 Insiders.  Administration ofthe Discretionary Option Grant and Stock Issuance Programs with respect to allother persons eligible to participate in those programs may, at the Board’sdiscretion, be vested in the Primary Committee or a Secondary Committee, or theBoard may retain the power to administer those programs with respect to allsuch persons.  Members of the PrimaryCommittee or any Secondary Committee shall serve for such period of time as theBoard may determine and may be removed by the Board at any time.  The Board may also at any time terminate thefunctions of any Secondary Committee and reassume all powers and authoritypreviously delegated to such committee.

----

### B.    EachPlan Administrator shall, within the scope of its administrative functionsunder the Plan, have full power and authority (subject to the provisions of thePlan) to establish such rules and regulations as it may deem appropriate forproper administration of the Discretionary Option Grant and Stock IssuancePrograms and to make such determinations under, and issue such interpretationsof, the provisions of those programs and any outstanding options or stockissuances thereunder as it may deem necessary or advisable.  Decisions of the Plan Administrator withinthe scope of its administrative functions under the Plan shall be final andbinding on all parties who have an interest in the Discretionary Option Grantand Stock Issuance Programs under its jurisdiction or any option or stockissuance thereunder.

### C.    Serviceon the Primary Committee or the Secondary Committee shall constitute service asa Board member, and members of each such committee shall accordingly beentitled to full indemnification and reimbursement as Board members for theirservice on such committee.  No member ofthe Primary Committee or the Secondary Committee shall be liable for any act oromission made in good faith with respect to the Plan or any option grants orstock issuances under the Plan.

## **IV.           ELIGIBILITY**

### A.    Thepersons eligible to participate in the Discretionary Option Grant and StockIssuance Programs are as follows:

#### 1.     Employees*other than*Section 16 Insiders;

#### 2.     independentcontractors who provide services to the Corporation (or any Parent orSubsidiary); and

#### 3.     anyother individuals (including Section 16 Insiders) who are to receive optiongrants under this Plan solely in connection with their commencement of Employeestatus, whether as a result of an acquisition of their former employer by theCorporation or any Parent or Subsidiary or by reason of their initial hire bythe Corporation or such Parent or Subsidiary.

### B.    EachPlan Administrator shall, within the scope of its administrative jurisdictionunder the Plan, have full authority to determine, (i) with respect to the optiongrants under the Discretionary Option Grant Program, which eligible persons areto receive such grants, the time or times when those grants are to be made, thenumber of shares to be covered by each such grant, the time or times when eachoption is to become exercisable, the vesting schedule (if any) applicable tothe option shares and the maximum term for which the option is to remainoutstanding and (ii) with respect to stock issuances under the StockIssuance Program, which eligible persons are to receive such issuances, thetime or times when the issuances are to be made, the number of shares to beissued to each Participant, the vesting schedule (if any) applicable to theissued shares and the consideration for such shares.

### C.    ThePlan Administrator shall have the absolute discretion either to grant optionsin accordance with the Discretionary Option Grant Program or to effect stockissuances in accordance with the Stock Issuance Program.

2

----

## **V.            STOCKSUBJECT TO THE PLAN**

### A.    Thestock issuable under the Plan shall be shares of authorized but unissued orreacquired Common Stock, including shares repurchased by the Corporation on theopen market.  The number of shares ofCommon Stock reserved for issuance over the term of the Plan shall not exceed2,235,322 shares.  Such reserve shallconsist of (1) 1,135,322 shares, the number of shares that remain available forissuance immediately prior to the Plan Effective Date pursuant to thePredecessor Plans, including the shares subject to outstanding options underthose plans and (2) an 1,100,000 share increase approved by the Board onSeptember 26, 2001.

### B.    Thenumber of shares of Common Stock available for issuance under the Plan shallautomatically increase on the first trading day of January each calendar yearduring the term of the Plan, beginning with calendar year 2002, by an amountequal to one-half percent (0.5%) of the total number of shares of Common Stockoutstanding on the last trading day in December of the immediately precedingcalendar year, but in no event shall any such annual increase exceed 142,800shares.

### C.    Officersof the Corporation may not receive options, separately exercisable stockappreciation rights and direct stock issuances under the Plan for more than671,000 shares of Common Stock in the aggregate.

### D.    Sharesof Common Stock subject to outstanding options (including options transferredto this Plan from the Predecessor Plans) shall be available for subsequentissuance under the Plan to the extent (1) those options expire orterminate for any reason prior to exercise in full or (2) the options arecancelled in accordance with the cancellation-regrant provisions ofArticle Two.  Unvested shares issuedunder the Plan and subsequently cancelled or repurchased by the Corporation atthe original issue price paid per share, pursuant to the Corporation’srepurchase rights under the Plan shall be added back to the number of shares ofCommon Stock reserved for issuance under the Plan and shall accordingly beavailable for reissuance through one or more subsequent option grants or directstock issuances under the Plan.  However,should the exercise price of an option under the Plan be paid with shares ofCommon Stock or should shares of Common Stock otherwise issuable under the Planbe withheld by the Corporation in satisfaction of the withholding taxesincurred in connection with the exercise of an option or the vesting of a stockissuance under the Plan, then the number of shares of Common Stock availablefor issuance under the Plan shall be reduced by the gross number of shares forwhich the option is exercised or which vest under the stock issuance, and notby the net number of shares of Common Stock issued to the holder of such optionor stock issuance.  Shares of CommonStock underlying one or more stock appreciation rights granted pursuant to thePlan shall *not* be available for subsequent issuanceunder the Plan if the stock appreciation right is exercised.

### E.     Ifany change is made to the Common Stock by reason of any stock split, stockdividend, recapitalization, combination of shares, exchange of shares or otherchange affecting the outstanding Common Stock as a class without theCorporation’s receipt of consideration, appropriate adjustments shall be madeby the Plan Administrator to (1) the maximum number and/or class ofsecurities issuable under the Plan, (2) the number and/or class ofsecurities and the exercise price per share in effect under each outstandingoption under the Plan (including options transferred to this Plan from thePredecessor Plans), (3) the maximum

3

----

### number and/or class of securities for which officers of the Corporationmay be granted stock options, separately exercisable stock appreciation rightsand direct stock issuances under the Plan in the aggregate and (4) the maximumnumber and/or class of securities by which the share reserve is to increaseautomatically each calendar year pursuant to the provisions of Section V.B ofthis Article One.  Such adjustments tothe outstanding options are to be effected in a manner which shall preclude theenlargement or dilution of rights and benefits under such options.  The adjustments determined by the PlanAdministrator shall be final, binding and conclusive.

### F.     Outstandingawards granted pursuant to the Plan shall in no way affect the right of theCorporation to adjust, reclassify, reorganize or otherwise change its capitalor business structure or to merge, consolidate, dissolve, liquidate or sell ortransfer all or any part of its business or assets.

4

----

**ARTICLETWODISCRETIONARY OPTION GRANT PROGRAM**

## **I.              OPTIONTERMS**

Each option shall be evidenced by one or moredocuments in the form approved by the Plan Administrator; *provided,however*, that each such document shall comply with the termsspecified below.  All options grantedunder the Plan shall be Non-Statutory Options.

### A.    **Exercise Price.**

#### 1.     Theexercise price per share shall be fixed by the Plan Administrator.

#### 2.     Theexercise price shall become immediately due upon exercise of the option andshall, subject to the provisions of this Plan and the documents evidencing theoption, be payable in one or more of the forms specified below:

##### (a)   cash or check made payableto the Corporation,

##### (b)   shares of Common Stock heldfor the requisite period necessary to avoid a charge to the Corporation’searnings for financial reporting purposes and valued at Fair Market Value onthe Exercise Date, or

##### (c)   if the option is exercisedfor vested shares, through a special sale and remittance procedure pursuant towhich the Optionee shall concurrently provide irrevocable instructions to(i) a Corporation-designated brokerage firm to effect the immediate saleof the purchased shares and remit to the Corporation, out of the sale proceedsavailable on the settlement date, sufficient funds to cover the aggregateexercise price payable for the purchased shares plus all applicable Federal,state and local income and employment taxes required to be withheld by theCorporation by reason of such exercise and (ii) the Corporation to deliverthe certificates for the purchased shares directly to such brokerage firm inorder to complete the sale.

Except to the extent such sale and remittanceprocedure is utilized, payment of the exercise price for the purchased sharesmust be made on the Exercise Date.

### B.    **Exercise and Term ofOptions. **Each option shall beexercisable at such time or times, during such period and for such number ofshares as shall be determined by the Plan Administrator and set forth in thedocuments evidencing the option.  However,no option shall have a term in excess of ten (10) years measured from theoption grant date.

### C.    **Effect of Termination ofService.**

#### 1.     The following provisions shall govern the exercise of anyoptions granted pursuant to the Discretionary Option Grant Program that areoutstanding at the time of the Optionee’s cessation of Service:

5

----

##### (a)   Anyoption outstanding at the time of the Optionee’s cessation of Service shallremain exercisable for such period of time thereafter as shall be determined bythe Plan Administrator and set forth in the documents evidencing the option,but no such option shall be exercisable after the expiration of the optionterm.

##### (b)   Anyoption outstanding at the time of the Optionee’s death and exercisable in wholeor in part at that time may be subsequently exercised by the personalrepresentative of the Optionee’s estate or by the person or persons to whom theoption is transferred pursuant to the Optionee’s will or the laws ofinheritance or by the Optionee’s designated beneficiary or beneficiaries ofthat option.

##### (c)   Shouldthe Optionee’s Service be terminated for Misconduct or should the Optioneeotherwise engage in Misconduct while options granted pursuant to thisArticle Two are outstanding, then all of those options shall terminateimmediately and cease to be outstanding.

##### (d)   Duringthe applicable post-Service exercise period, the option may not be exercised inthe aggregate for more than the number of vested shares for which the option isexercisable on the date of the Optionee’s cessation of Service.  Upon the expiration of the applicableexercise period or (if earlier) upon the expiration of the option term, theoption shall terminate and cease to be outstanding for any vested shares forwhich the option has not been exercised. However, the option shall, immediately upon the Optionee’s cessation ofService, terminate and cease to be outstanding to the extent the option is nototherwise at that time exercisable for vested shares.

#### 2.     The Plan Administrator shall have complete discretion,exercisable either at the time an option is granted or at any time while theoption remains outstanding, to:

##### (a)   extendthe period of time for which the option is to remain exercisable following theOptionee’s cessation of Service from the limited exercise period otherwise in effectfor that option to such greater period of time as the Plan Administrator shalldeem appropriate, but in no event beyond the expiration of the option term,and/or

##### (b)   permitthe option to be exercised, during the applicable post-Service exercise period,not only with respect to the number of vested shares of Common Stock for whichsuch option is exercisable at the time of the Optionee’s cessation of Servicebut also with respect to one or more additional installments in which theOptionee would have vested had the Optionee continued in Service.

### D.    **Stockholder Rights. **The holder of an option shall haveno stockholder rights with respect to the shares subject to the option untilsuch person shall have exercised the option, paid the exercise price and becomea holder of record of the purchased shares.

### E.     **Repurchase Rights. **The Plan Administrator shall havethe discretion to grant options which are exercisable for unvested shares ofCommon Stock.  Should the Optionee ceaseService while such shares are unvested, the Corporation shall have the right torepurchase, at the exercise price paid per share, any or all of those unvestedshares.  The terms upon which

6

----

### such repurchase right shall be exercisable(including the period and procedure for exercise and the appropriate vestingschedule for the purchased shares) shall be established by the PlanAdministrator and set forth in the document evidencing such repurchase right.

### F.     **Limited Transferability ofOptions. **During the lifetimeof the Optionee, Non-Statutory Options shall be exercisable only by theOptionee and shall not be assignable or transferable other than by will or bythe laws of inheritance following the Optionee’s death.  However, the Plan Administrator may permit anassignment, in whole or in part, during the Optionee’s lifetime, of aNon-Statutory Option, if such assignment is in connection with the Optionee’sestate plan and is to one or more members of the Optionee’s immediate family orto a trust established exclusively for one or more such family members.  The assigned portion may only be exercised bythe person or persons who acquire a proprietary interest in the option pursuantto the assignment.  The terms applicableto the assigned portion shall be the same as those in effect for the option immediatelyprior to such assignment and shall be set forth in such documents issued to theassignee as the Plan Administrator may deem appropriate.  Notwithstanding the foregoing, the Optioneemay also designate one or more persons as the beneficiary or beneficiaries ofhis or her outstanding options under this Article Two, and any outstandingoptions shall, in accordance with such designation, automatically betransferred to such beneficiary or beneficiaries upon the Optionee’sdeath.  Such beneficiary or beneficiariesshall take the transferred options subject to all the terms and conditions ofthe applicable agreement evidencing each such transferred option, including(without limitation) the limited time period during which the option may beexercised following the Optionee’s death.

## **II.            CORPORATE TRANSACTION/CHANGE INCONTROL**

### A.    In the event of any Corporate Transaction, the shares of CommonStock at the time subject to each outstanding option shall automatically vestin full so that each such option shall, immediately prior to the effective dateof the Corporate Transaction, become exercisable for all the shares of CommonStock at the time subject to such option and may be exercised for any or all ofthose shares as fully vested shares of Common Stock.  However, an outstanding option shall *not* become vested on such an accelerated basis if and to theextent:  (1) such option is, inconnection with the Corporate Transaction, to be assumed by the successorcorporation (or parent thereof) or (2) such option is to be replaced witha cash incentive program of the successor corporation which preserves thespread existing at the time of the Corporate Transaction on any shares forwhich the option is not otherwise at that time exercisable and provides forsubsequent payout in accordance with the same exercise/vesting scheduleapplicable to those option shares or (3) the acceleration of such optionis subject to other limitations imposed by the Plan Administrator at the timeof the option grant.

### B.    All outstanding repurchase rights shall automatically terminate,and the shares of Common Stock subject to those terminated rights shallimmediately vest in full, in the event of any Corporate Transaction, except tothe extent:  (1) those repurchaserights are to be assigned to the successor corporation (or parent thereof) inconnection with such Corporate Transaction or (2) such accelerated vestingis precluded by other limitations imposed by the Plan Administrator at the timethe repurchase right is issued.

7

----

### C.    Immediately following the consummation of the CorporateTransaction, all outstanding options shall terminate and cease to beoutstanding, except to the extent assumed by the successor corporation (orparent thereof).

### D.    Each option which is assumed in connection with a CorporateTransaction shall be appropriately adjusted, immediately after such CorporateTransaction, to apply to the number and class of securities which would havebeen issuable to the Optionee in consummation of such Corporate Transaction hadthe option been exercised immediately prior to such Corporate Transaction.  Appropriate adjustments to reflect suchCorporate Transaction shall also be made to (1) the exercise price payableper share under each outstanding option, provided the aggregate exercise pricepayable for such securities shall remain the same, (2) the maximum numberand/or class of securities available for issuance over the remaining term ofthe Plan, (3) the maximum number and/or class of securities for which anyone person may be granted stock options, separately exercisable stockappreciation rights and direct stock issuances under the Plan per calendar yearand (4) the maximum number and/or class of securities by which the sharereserve is to increase automatically each calendar year.  To the extent the holders of Common Stockreceive cash consideration for their Common Stock in consummation of theCorporate Transaction, with the Plan Administrator’s consent the successorcorporation may, in connection with the assumption of the outstanding options,substitute one or more shares of its own common stock with a fair market valueequivalent to the cash consideration paid per share of Common Stock in suchCorporate Transaction.

### E.     Among its discretionary powers, the Plan Administrator shall havethe ability to structure an option (either at the time the option is granted orat any time while the option remains outstanding) so that the option shallbecome immediately exercisable and some or all of the shares subject to thatoption shall automatically become vested (and some or all of the repurchaserights of the Corporation with respect to the unvested shares subject to thatoption shall immediately terminate) upon the occurrence of a CorporateTransaction, a Change in Control, any other event or the Optionee’s InvoluntaryTermination within a designated period of time following any of these events.

## **III.           CANCELLATION AND REGRANT OF OPTIONS**

The Plan Administrator shall have the authority toeffect, at any time and from time to time, with the consent of the affectedoption holders, the cancellation of any or all outstanding options under theDiscretionary Option Grant Program (including outstanding options incorporatedfrom the Predecessor Plans) and to grant in substitution new options covering thesame or different number of shares of Common Stock.

## **IV.           STOCK APPRECIATION RIGHTS**

### A.    The Plan Administrator shall have full power and authority togrant to selected Optionees tandem stock appreciation rights.

### B.    The following terms shall govern the grant and exercise of tandemstock appreciation rights:

8

----

#### 1.     One or more Optionees may be granted the right, exercisable uponsuch terms as the Plan Administrator may establish, to elect between theexercise of the underlying option for shares of Common Stock and the surrenderof that option in exchange for a distribution from the Corporation in an amountequal to the excess of (a) the Fair Market Value (on the option surrender date)of the number of shares in which the Optionee is at the time vested under the surrenderedoption (or surrendered portion thereof) over (b) the aggregate exercise pricepayable for such shares.

#### 2.     No such option surrender shall be effective unless it isapproved by the Plan Administrator, either at the time of the actual optionsurrender or at any earlier time.  If thesurrender is so approved, then the distribution to which the Optionee shall beentitled may be made in shares of Common Stock valued at Fair Market Value onthe option surrender date, in cash, or partly in shares and partly in cash, asthe Plan Administrator shall in its sole discretion deem appropriate.

#### 3.     If the surrender of an option is not approved by the PlanAdministrator, then the Optionee shall retain whatever rights the Optionee hadunder the surrendered option (or surrendered portion thereof) on the optionsurrender date and may exercise such rights at any time prior to the *later* of (a) five (5) business days after the receipt of therejection notice or (b) the last day on which the option is otherwiseexercisable in accordance with the terms of the documents evidencing suchoption, but in no event may such rights be exercised more than ten (10) yearsafter the option grant date.

 

9

----

# **ARTICLETHREESTOCK ISSUANCE PROGRAM**

## **I.              STOCK ISSUANCE TERMS**

Shares of Common Stock may be issued under the StockIssuance Program through direct and immediate issuances without any interveningoption grants.  Each such stock issuanceshall be evidenced by a Stock Issuance Agreement which complies with the termsspecified below.  Shares of Common Stockmay also be issued under the Stock Issuance Program pursuant to share rightawards which entitle the recipients to receive those shares upon the attainmentof designated performance goals or the satisfaction of specified Servicerequirements.

### A.    **Purchase Price.**

#### 1.     The purchase price per share shall be fixed by the PlanAdministrator.

#### 2.     Subject to the provisions of Section I ofArticle Four, shares of Common Stock may be issued under the StockIssuance Program for any of the following items of consideration which the PlanAdministrator may deem appropriate in each individual instance:

##### (a)   cashor check made payable to the Corporation, or

##### (b)   pastservices rendered to the Corporation (or any Parent or Subsidiary).

### B.    **Vesting Provisions.**

#### 1.     Shares of Common Stock issued under the Stock Issuance Programmay, in the discretion of the Plan Administrator, be fully and immediatelyvested upon issuance or may vest in one or more installments over theParticipant’s period of Service or upon attainment of specified performanceobjectives.  The elements of the vestingschedule applicable to any unvested shares of Common Stock issued under theStock Issuance Program shall be determined by the Plan Administrator andincorporated into the Stock Issuance Agreement. Shares of Common Stock may also be issued under the Stock IssuanceProgram pursuant to share right awards which entitle the recipients to receivethose shares upon the attainment of designated performance goals or thesatisfaction of specified Service requirements.

#### 2.     Any new, substituted or additional securities or other property(including money paid other than as a regular cash dividend) which theParticipant may have the right to receive with respect to the Participant’sunvested shares of Common Stock by reason of any stock dividend, stock split,recapitalization, combination of shares, exchange of shares or other changeaffecting the outstanding Common Stock as a class without the Corporation’sreceipt of consideration shall be issued subject to (a) the same vestingrequirements applicable to the Participant’s unvested shares of Common Stockand (b) such escrow arrangements as the Plan Administrator shall deem appropriate.

#### 3.     The Participant shall have full stockholder rights with respectto any shares of Common Stock issued to the Participant under the StockIssuance Program, whether or

10

----

#### not the Participant’s interest in thoseshares is vested.  Accordingly, the Participantshall have the right to vote such shares and to receive any regular cashdividends paid on such shares.

#### 4.     Should the Participant cease to remain in Service while one ormore shares of Common Stock issued under the Stock Issuance Program are unvestedor should the performance objectives not be attained with respect to one ormore such unvested shares of Common Stock, then those shares shall beimmediately surrendered to the Corporation for cancellation, and theParticipant shall have no further stockholder rights with respect to thoseshares.  To the extent the surrenderedshares were previously issued to the Participant for consideration paid in cashor cash equivalent (including the Participant’s purchase-money indebtedness),the Corporation shall repay to the Participant the cash consideration paid forthe surrendered shares and shall cancel the unpaid principal balance of anyoutstanding purchase money note of the Participant attributable to thesurrendered shares.

#### 5.     The Plan Administrator may in its discretion waive the surrenderand cancellation of one or more unvested shares of Common Stock which wouldotherwise occur upon the cessation of the Participant’s Service or thenon-attainment of the performance objectives applicable to those shares.  Such waiver shall result in the immediatevesting of the Participant’s interest in the shares of Common Stock as to whichthe waiver applies.  Such waiver may beeffected at any time, whether before or after the Participant’s cessation ofService or the attainment or non-attainment of the applicable performanceobjectives.

#### 6.     Outstanding share right awards under the Stock Issuance Programshall automatically terminate, and no shares of Common Stock shall actually beissued in satisfaction of those awards, if the performance goals or Servicerequirements established for such awards are not attained or satisfied.  The Plan Administrator, however, shall havethe discretionary authority to issue shares of Common Stock under one or moreoutstanding share right awards as to which the designated performance goals orService requirements have not been attained or satisfied.

## **II.            CORPORATE TRANSACTION/CHANGE INCONTROL**

### A.    All of the Corporation’s outstanding repurchase rights under theStock Issuance Program shall terminate automatically, and all the shares ofCommon Stock subject to those terminated rights shall immediately vest in full,in the event of any Corporate Transaction, except to the extent (i) thoserepurchase rights are to be assigned to the successor corporation (or parentthereof) in connection with such Corporate Transaction or (ii) suchaccelerated vesting is precluded by other limitations imposed in the StockIssuance Agreement.

### B.    The Plan Administrator shall have the discretionary authority tostructure one or more of the Corporation’s repurchase rights under the StockIssuance Program so that those rights shall automatically terminate in whole orin part, and the shares of Common Stock subject to those terminated rightsshall immediately vest, upon the occurrence of a Corporate Transaction, aChange in Control, any other event or the Participant’s Involuntary Terminationwithin a designated period of time following any of these events.

11

----

### **ARTICLEFOURMISCELLANEOUS**

## **I.              FINANCING**

The Plan Administrator may permit any Optionee orParticipant to pay the option exercise price under the Discretionary OptionGrant Program or the purchase price of shares issued under the Stock IssuanceProgram by delivering a full-recourse, interest bearing promissory note payablein one or more installments.  The termsof any such promissory note (including the interest rate and the terms ofrepayment) shall be established by the Plan Administrator in its solediscretion.  In no event may the maximumcredit available to the Optionee or Participant exceed the sum of (A) theaggregate option exercise price or purchase price payable for the purchasedshares (less the par value of those shares) plus (B) any Federal, stateand local income and employment tax liability incurred by the Optionee or theParticipant in connection with the option exercise or share purchase.

## **II.            TAX WITHHOLDING**

### A.    The Corporation’s obligation to deliver shares of Common Stockupon the exercise of options or the issuance or vesting of such shares underthe Plan shall be subject to the satisfaction of all applicable Federal, stateand local income and employment tax withholding requirements.

### B.    The Plan Administrator may, in its discretion, provide any or allholders (other than independent contractors) of Non-Statutory Options orunvested shares of Common Stock under the Plan with the right to use shares ofCommon Stock in satisfaction of all or part of the Withholding Taxes to whichsuch holders may become subject in connection with the exercise of theiroptions or the vesting of their shares. Such right may be provided to any such holder in either or both of thefollowing formats:

#### 1.     *Stock Withholding: *The election to have theCorporation withhold, from the shares of Common Stock otherwise issuable uponthe exercise of such Non-Statutory Option or the vesting of such shares, aportion of those shares with an aggregate Fair Market Value equal to thepercentage of the Withholding Taxes (not to exceed one hundred percent (100%))designated by the holder.

#### 2.     *Stock Delivery: *The election to deliver to theCorporation, at the time the Non-Statutory Option is exercised or the sharesvest, one or more shares of Common Stock previously acquired by such holder(other than in connection with the option exercise or share vesting triggeringthe Withholding Taxes) with an aggregate Fair Market Value equal to thepercentage of the Withholding Taxes (not to exceed one hundred percent (100%))designated by the holder.

## **III.           SHARE ESCROW/LEGENDS**

Unvested shares may, in the Plan Administrator’sdiscretion, be held in escrow by the Corporation until the Participant’s or theOptionee’s interest in such shares vests or may be

12

----

issued directly to the Participant or the Optioneewith restrictive legends on the certificates evidencing those unvested shares.

## **IV.           EFFECTIVE DATE AND TERM OF THE PLAN**

### A.    The Plan shall become effective immediately on the Plan EffectiveDate.

### B.    The Plan shall serve as the successor to the Predecessor Plans,and no further option grants or direct stock issuances shall be made underthose Predecessor Plans after the Plan Effective Date.  All options outstanding under the PredecessorPlans on the Plan Effective Date shall be transferred to the Plan at that timeand shall be treated as outstanding options under the Plan.  However, each outstanding option soincorporated shall continue to be governed solely by the terms of the documentsevidencing such option, and no provision of the Plan shall be deemed to affector otherwise modify the rights or obligations of the holders of suchincorporated options with respect to their acquisition of shares of CommonStock.

### C.    One or more provisions of the Plan, including (withoutlimitation) the option/vesting acceleration provisions of Article Two relatingto Corporate Transactions and Changes in Control, may, in the PlanAdministrator’s discretion, be extended to one or more options incorporatedfrom the Predecessor Plans which do not otherwise contain such provisions.

### D.    Unless terminated by the Board prior to such time, the Plan shallterminate upon the tenth anniversary of the Plan’s adoption by the Board.  Should the Plan terminate when options and/orunvested shares are outstanding, such awards shall continue in effect inaccordance with the provisions of the documents evidencing such grants orissuances.

## **V.            AMENDMENT OF THE PLAN**

### A.    The Board shall have complete and exclusive power and authorityto amend or modify the Plan in any or all respects.  However, no such amendment or modificationshall adversely affect the rights and obligations with respect to stock optionsor unvested stock issuances at the time outstanding under the Plan unless theOptionee or the Participant consents to such amendment or modification.

### B.    The Board amended and restated the Plan on September 26, 2001 toreflect a 1,100,000-share increase in the share reserve.

## **VI.           USE OF PROCEEDS**

Any cash proceeds received by the Corporation from thesale of shares of Common Stock under the Plan shall be used for any corporatepurpose.

## **VII.         REGULATORY APPROVALS**

### A.    The implementation of the Plan, the granting of any stock optionunder the Plan and the issuance of any shares of Common Stock (1) upon theexercise of any granted option or (2) under the Stock Issuance Programshall be subject to the Corporation’s procurement

13

----

### of all approvals and permits required byregulatory authorities having jurisdiction over the Plan, the stock optionsgranted under it and the shares of Common Stock issued pursuant to it.

### B.    No shares of Common Stock or other assets shall be issued ordelivered under the Plan unless and until there shall have been compliance withall applicable requirements of Federal and state securities laws, including thefiling and effectiveness of the Form S-8 registration statement for the sharesof Common Stock issuable under the Plan, and all applicable listingrequirements of any Stock Exchange (or the Nasdaq Stock Market, if applicable)on which Common Stock is then listed for trading.

## **VIII.        NO EMPLOYMENT/SERVICE RIGHTS**

Nothing in the Plan shall confer upon the Optionee orthe Participant any right to continue in Service for any period of specificduration or interfere with or otherwise restrict in any way the rights of theCorporation (or any Parent or Subsidiary employing or retaining such person) orof the Optionee or the Participant, which rights are hereby expressly reservedby each, to terminate such person’s Service at any time for any reason, with orwithout cause.

######  

14

----

**APPENDIX**

The following definitions shall be in effect under thePlan:

###### A.            **Board** shall mean the Corporation’s Board ofDirectors.

###### B.            **Change in Control** shall mean a change inownership or control of the Corporation effected through either of thefollowing transactions:

(i)            the acquisition, directly orindirectly by any person or related group of persons (other than theCorporation or a person that directly or indirectly controls, is controlled by,or is under common control with, the Corporation), of beneficial ownership(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessingmore than fifty percent (50%) of the total combined voting power of theCorporation’s outstanding securities pursuant to a tender or exchange offermade directly to the Corporation’s stockholders, or

(ii)           a change in the composition of theBoard over a period of thirty-six (36) consecutive months or less such that amajority of the Board members ceases, by reason of one or more contestedelections for Board membership, to be comprised of individuals who either(A) have been Board members continuously since the beginning of suchperiod or (B) have been elected or nominated for election as Board membersduring such period by at least a majority of the Board members described inclause (A) who were still in office at the time the Board approved suchelection or nomination.

###### C.            **Code** shall mean the Internal Revenue Codeof 1986, as amended.

###### D.            **Common Stock** shall mean the Corporation’scommon stock.

###### E.             **Corporate Transaction** shall mean either ofthe following stockholder approved transactions to which the Corporation is aparty:

#### (i)            a merger, consolidation orreorganization approved by the Corporation’s stockholders, unlesssecurities representing more than fifty percent (50%) of the total combinedvoting power of the voting securities of the successor corporation areimmediately thereafter beneficially owned, directly or indirectly and insubstantially the same proportion, by the persons who beneficially owned theCorporation’s outstanding voting securities immediately prior to suchtransaction, or

(ii)           anystockholder-approved transfer or other disposition of all or substantially allof the Corporation’s assets.

###### F.             **Corporation** shall mean United Online, Inc.,a Delaware corporation, and any corporate successor to all or substantially allof the assets or voting stock of United Online, Inc.  which has assumed the Plan.

----

###### G.            **Discretionary Option Grant Program** shallmean the discretionary option grant program in effect under Article Two ofthe Plan.

###### H.            **Employee** shall mean an individual who is inthe employ of the Corporation (or any Parent or Subsidiary), subject to thecontrol and direction of the employer entity as to both the work to beperformed and the manner and method of performance.

###### I.              **Exercise Date** shall mean the date on whichthe Corporation shall have received written notice of the option exercise.

###### J.             **Fair Market Value** per share of Common Stockon any relevant date shall be determined in accordance with the followingprovisions:

(i)            If the Common Stock is at the timetraded on the Nasdaq Stock Market, then the Fair Market Value shall be theclosing selling price per share of Common Stock on the date in question, assuch price is reported by the National Association of Securities Dealers on theNasdaq Stock Market.  If there is noclosing selling price for the Common Stock on the date in question, then theFair Market Value shall be the closing selling price on the last preceding datefor which such quotation exists.

(ii)           If the Common Stock is at the timelisted on any Stock Exchange, then the Fair Market Value shall be the closingselling price per share of Common Stock on the date in question on the StockExchange determined by the Plan Administrator to be the primary market for theCommon Stock, as such price is officially quoted in the composite tape oftransactions on such exchange.  If thereis no closing selling price for the Common Stock on the date in question, thenthe Fair Market Value shall be the closing selling price on the last precedingdate for which such quotation exists.

###### K.            **Involuntary Termination** shall mean, exceptas otherwise determined by the Plan Administrator, the termination of theService of any individual which occurs by reason of:

(i)            such individual’s involuntarydismissal or discharge by the Corporation (or any Parent or Subsidiary) forreasons other than Misconduct, or

(ii)           such individual’s voluntaryresignation following (A) a material reduction in the scope of his or herday-to-day responsibilities at the Corporation (or any Parent or Subsidiary),it being understood that a change in such individual’s title shall not, in andof itself, be deemed a material reduction, (B) a reduction in his or herbase salary or (C) a relocation of such individual’s place of employmentby more than fifty (50) miles, provided and only if such change, reduction orrelocation is effected by the Corporation (or any Parent or Subsidiary) withoutthe individual’s consent.

###### L.             **Misconduct** shall mean the commission of anyact of fraud, embezzlement or dishonesty by the Optionee or Participant, anyunauthorized use or disclosure by such person of confidential information ortrade secrets of the Corporation (or any Parent or Subsidiary), or any otherintentional misconduct by such person adversely affecting the business oraffairs of the Corporation (or any Parent or Subsidiary) in a materialmanner.  The foregoing definition shallnot be deemed to be inclusive of all the acts or omissions which theCorporation (or any Parent 

A-2

----

###### or Subsidiary) may consider as grounds for the dismissal or dischargeof any Optionee, Participant or other person in the Service of the Corporation(or any Parent or Subsidiary).

###### M.           **1934 Act** shall mean the Securities ExchangeAct of 1934, as amended.

###### N.            **Non-Statutory Option** shall mean an optionnot intended to satisfy the requirements of Code Section 422.

###### O.            **Optionee** shall mean any person to whom anoption is granted under the Discretionary Option Grant Program.

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

###### Q.            **Participant** shall mean any person who isissued shares of Common Stock under the Stock Issuance Program.

###### R.            **Permanent Disability or Permanently Disabled**shall mean the inability of the Optionee or the Participant to engage in anysubstantial gainful activity by reason of any medically determinable physicalor mental impairment which can be expected to result in death or has lasted orcan be expected to last for a continuous period of twelve (12) months or more.

###### S.             **Plan** shall mean the United Online, Inc.2001 Supplemental Stock Incentive Plan, as set forth in this document.

###### T.            **Plan Administrator** shall mean theparticular entity, whether the Primary Committee, the Board or the SecondaryCommittee, which is authorized to administer the Discretionary Option Grant andStock Issuance Programs with respect to one or more classes of eligiblepersons, to the extent such entity is carrying out its administrative functionsunder those programs with respect to the persons under its jurisdiction.

###### U.            **Plan Effective Date**shall mean the date themerger of NetZero, Inc. and NZ Acquisition Corp. and the merger of Juno OnlineServices, Inc. and JO Acquisition Corp. become effective as contemplated by theAgreement and Plan of Merger, by and among NetZero, Inc., Juno Online Services,Inc., United Online, Inc. and the other parties thereto, dated as of June 7,2001.

###### V.            **Predecessor Plans** shall mean the JunoOnline Services, Inc. 2001 Supplemental Stock Incentive Plan and the NetZero,Inc. 2001 Non-Executive Stock Incentive Plan.

###### W.           **Primary Committee** shall mean the committeeof two or more non-employee Board members appointed by the Board to administerthe Discretionary Option Grant and Stock Issuance Programs with respect toSection 16 Insiders.

A-3

----

###### X.            **Secondary Committee** shall mean a committeeof one or more Board members appointed by the Board to administer theDiscretionary Option Grant and Stock Issuance Programs with respect to eligiblepersons other than Section 16 Insiders.

###### Y.            **Section 16 Insider** shall mean anofficer or director of the Corporation subject to the short-swing profitliabilities of Section 16 of the 1934 Act.

###### Z.            **Service** shall mean the performance ofservices for the Corporation (or any Parent or Subsidiary) by a person in thecapacity of an Employee, a non-employee member of the board of directors, or anindependent contractor, except to the extent otherwise specifically provided inthe documents evidencing the option grant or stock issuance.

###### AA.        **Stock Exchange** shall mean either theAmerican Stock Exchange or the New York Stock Exchange.

###### BB.          **Stock Issuance Agreement** shall mean theagreement entered into by the Corporation and the Participant at the time ofissuance of shares of Common Stock under the Stock Issuance Program.

###### CC.          **Stock Issuance Program** shall mean the stockissuance program in effect under Article Three of the Plan.

###### DD.         **Subsidiary** shall mean any corporation(other than the Corporation) in an unbroken chain of corporations beginningwith the Corporation, provided each corporation (other than the lastcorporation) in the unbroken chain owns, at the time of the determination,stock possessing fifty percent (50%) or more of the total combined voting powerof all classes of stock in one of the other corporations in such chain.

###### EE.          **Withholding Taxes** shall mean the Federal,state and local income and employment withholding taxes to which the holder ofNon-Statutory Options or unvested shares of Common Stock may become subject inconnection with the exercise of those options or the vesting of those shares.

A-4

----