Exhibit 10.9


 


CLASSMATES ONLINE, INC.


2004 STOCK PLAN


STOCK OPTION AGREEMENT


 


A.            The Board has adopted the Plan for
the purpose of retaining the services of selected Employees and independent
contractors who provide services to the Corporation (or any Parent or
Subsidiary).


 


B.            Optionee is to render valuable
services to the Corporation (or a Parent or Subsidiary), and this Agreement is
executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation’s grant of an option to Optionee.


 


C.            All capitalized terms in this
Agreement shall have the meaning assigned to them in the attached Appendix.


 


NOW, THEREFORE, it is hereby
agreed as follows:


 


1.             Grant of
Option.  The Corporation hereby grants to Optionee, as
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice.  The
Option Shares shall be purchasable from time to time during the option term
specified in Paragraph 2 at the Exercise Price.


 


2.             Option
Term.  This option shall expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.


 


3.             Limited
Transferability.


 


(a)           Except as otherwise provided in this Paragraph 3, this
option shall be neither transferable nor assignable by Optionee other than by
will or the laws of inheritance following Optionee’s death and may be
exercised, during Optionee’s lifetime, only by Optionee.


 


(b)           With the Plan Administrator’s consent, this option may
be assigned in whole or in part during Optionee’s lifetime to one or more
members of Optionee’s family or to a trust established for the exclusive
benefit of one or more such family members, to the extent such assignment is in
connection with the Optionee’s estate plan. 
The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such
assignment.  The terms applicable to the
assigned portion shall be the same as those in effect for this option
immediately prior to such assignment.


 


(c)           Optionee may designate one or more persons as the
beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee’s death while holding this
option.  Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee’s death.


 





















 


4.             Dates of
Exercise.  This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant
Notice.  As the option becomes
exercisable for such installments, those installments shall accumulate, and the
option shall remain exercisable for the accumulated installments until the
close of business on the Expiration Date or sooner termination of the option
term under Paragraph 5 or 6.


 


5.             Cessation
of Service.  The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:


 


(a)           Should Optionee cease to remain in Service for any
reason (other than death, Permanent Disability, Misconduct or Involuntary
Termination following a Corporate Transaction or Change in Control) while this
option is outstanding, then this option shall terminate upon the earlier of (i) the expiration of the three (3) month
period measured from the date of such cessation of Service or (ii) the
close of business on the Expiration Date.


 


(b)           Should Optionee die while this option is outstanding,
then the personal representative of Optionee’s estate or the person or persons
to whom the option is transferred pursuant to Optionee’s will or the laws of
inheritance shall have the right to exercise this option.  However, if Optionee has designated one or
more beneficiaries of this option, then those persons shall have the exclusive
right to exercise this option following Optionee’s death.  Any such right to exercise this option shall
lapse, and this option shall terminate, upon the earlier
of (i) the expiration of the twelve (12)-month period measured from the
date of Optionee’s death or (ii) the close of business on the Expiration
Date.


 


(c)           Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then this option shall terminate
upon the earlier of (i) the expiration of
the twelve (12) month period measured from the date of such cessation of
Service or (ii) the close of business on the Expiration Date.


 


(d)           Should Optionee’s Service terminate by reason of an
Involuntary Termination within twelve (12) months following a Corporate Transaction
or Change in Control while this option is outstanding, then this option shall
terminate upon the earlier of (i) the
expiration of the twelve (12) month period measured from the date of the
Optionee’s Involuntary Termination or (ii) the close of business on the
Expiration Date.


 


(e)           During the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for more than
the number of Option Shares for which the option is exercisable at the time of
Optionee’s cessation of Service.  Upon
the expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding for
any exercisable Option Shares for which the option has not been exercised.  However, this option shall, immediately upon
Optionee’s cessation of Service for any reason, terminate and cease to be
outstanding with respect to any Option Shares for which this option is not
otherwise at that time exercisable.


 


(f)            Should Optionee’s Service be terminated for Misconduct
or should Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to remain
outstanding.


 


6.             Special
Acceleration of Option.


 


(a)           This option, to the extent outstanding at the time of
a Corporate Transaction but not otherwise fully exercisable, shall
automatically accelerate so that this option shall,


 


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immediately
prior to the effective date of such Corporate Transaction, become exercisable
for all of the Option Shares at the time subject to this option and may be
exercised for any or all of those Option Shares as fully vested shares of
Common Stock.  No such acceleration of
this option shall occur, however, if and to the extent: (i) this option
is, in connection with the Corporate Transaction, to be assumed by the
successor corporation (or parent thereof) or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate Transaction on the
Option Shares for which this option is not otherwise at that time exercisable
(the excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout in
accordance with the same option exercise/vesting schedule set forth in the
Grant Notice.


 


(b)           Immediately following the Corporate Transaction, this
option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) in connection with the
Corporate Transaction.


 


(c)           If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the
same.  To the extent the holders of
Common Stock receive cash consideration for their Common Stock in consummation
of the Corporate Transaction, with the Plan Administrator’s consent prior to
the consummation of the Corporate Transaction, the successor corporation may,
in connection with the assumption or continuation of this option, substitute
one or more shares of its own common stock with a fair market value equivalent
to the cash consideration paid per share of Common Stock in such Corporate
Transaction.


 


(d)           This option shall continue, over Optionee’s period of
Service following a Corporate Transaction in which this option is assumed, to
become exercisable for the Option Shares in one or more installments in
accordance with the provisions of this Agreement and the Grant Notice.  However, immediately upon an Involuntary
Termination of Optionee’s Service within twelve (12) months following the
effective date of that Corporate Transaction, this option, to the extent
outstanding at the time but not otherwise fully exercisable, shall
automatically accelerate as to a part of the Option Shares so that the total
number of Option Shares for which this option shall be exercisable, after
taking such acceleration into account, shall be equal to the greater of (i) the
number of Option Shares for which this option could have, in accordance with
the normal Exercise Schedule (after taking into account any prior
exercises), been exercised at the time of the Optionee’s Involuntary
Termination had Optionee completed twice the amount of Service actually
completed by him or her at the time of such Involuntary Termination (but in no
event shall the number of Option Shares for which this option becomes
exercisable on such an accelerated basis exceed the number of Option Shares for
which this option would not have otherwise been exercisable at the time of such
Involuntary Termination in accordance with the normal Exercise Schedule) or (ii) the
number of Option Shares for which the Option would have become exercisable
under the normal Exercise Schedule had the Optionee actually completed
twelve (12) months of Service prior to his or her Involuntary Termination.


 


(e)           This option shall not accelerate upon the occurrence
of a Change in Control, and this option shall accordingly, over Optionee’s
period of Service following such Change in Control, continue to become
exercisable for the Option Shares in one or more installments in accordance
with the provisions of this Agreement and the Grant Notice.  However, immediately upon an Involuntary
Termination of Optionee’s Service within twelve (12) months following that
Change in Control, this option, to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically


 


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accelerate
as to a part of the Option Shares so that the total number of Option Shares for
which this option shall be exercisable, after taking such acceleration into
account, shall be equal to the greater of (i) the
number of Option Shares for which this option could have, in accordance with
the normal Exercise Schedule (after taking into account any prior
exercises), been exercised at the time of the Optionee’s Involuntary
Termination had Optionee completed twice the amount of Service actually
completed by him or her at the time of such Involuntary Termination (but in no
event shall the number of Option Shares for which this option becomes
exercisable on such an accelerated basis exceed the number of Option Shares for
which this option would not have otherwise been exercisable at the time of such
Involuntary Termination in accordance with the normal Exercise Schedule) or (ii) the
number of Option Shares for which the Option would have become exercisable
under the normal Exercise Schedule had the Optionee actually completed
twelve (12) months of Service prior to his or her Involuntary Termination.


 


(f)            This Agreement shall not in any way affect the right
of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.


 


7.             Adjustment
in Option Shares.  Should any change be made to the Common Stock
by reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation’s receipt of consideration,
appropriate adjustments shall be made to (a) the total number and/or class
of securities subject to this option and (b) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.


 


8.             Stockholder
Rights.  The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.


 


9.             Manner of
Exercising Option.


 


(a)           In order to exercise this option with respect to all
or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or any other person or persons exercising the option)
must take the following actions:


 


(i)            Execute
and deliver to the Corporation a Notice of Exercise (attached hereto as Exhibit I)
for the Option Shares for which the option is exercised.


 


(ii)           Pay the
aggregate Exercise Price for the purchased shares in one or more of the
following forms:


 


(A)          cash or
check made payable to the Corporation;


 


(B)           shares of
Common Stock held by Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge to the Corporation’s
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date; or


 


(C)           if the
option is exercised for vested shares, through a special sale and remittance
procedure pursuant to which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable instructions (1) to a
brokerage firm (reasonably satisfactory to the Corporation for the purposes of
administering such procedure in compliance with the Corporation’s
pre-notification/pre-


 


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clearance policies) to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state and local income
and employment taxes required to be withheld by the Corporation by reason of
such exercise and (2) to the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm on such settlement date in
order to complete the sale.


 


Except to the extent the sale and remittance procedure
is utilized in connection with the option exercise, payment of the Exercise
Price must accompany the Notice of Exercise delivered to the Corporation in
connection with the option exercise.


 


(iii)          Furnish
to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this
option.


 


(iv)          Make
appropriate arrangements with the Corporation (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all Federal, state and
local income and employment tax withholding requirements applicable to the
option exercise.


 


(b)           As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.


 


(c)           In no event may this option be exercised for any
fractional shares.


 


10.           Compliance
with Laws and Regulations.


 


(a)           The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any applicable Stock Exchange or
the Nasdaq Stock Market on which the Common Stock may be listed for trading at
the time of such exercise and issuance.


 


(b)           The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to this
option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained.


 


11.           Successors
and Assigns.  Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee’s assigns, the legal representatives, heirs and legatees of
Optionee’s estate and any beneficiaries of this option designated by Optionee.


 


12.           Notices. 
Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the
Corporation at its principal corporate offices. 
Any notice required to be given or delivered to Optionee shall be in
writing and addressed to Optionee at the address indicated on the Corporation’s
records.  All notices shall be deemed
effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.


 


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13.           Construction. 
This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the
terms of the Plan.  All decisions of the
Plan Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option.


 


14.           Governing
Law.  The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of Delaware
without resort to that State’s conflict-of-laws rules.


 


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EXHIBIT I


NOTICE OF EXERCISE


 


FOR EXERCISES EXECUTED
THROUGH THE CORPORATION’S STOCK PLAN ADMINISTRATOR, PLEASE SEE INSTRUCTIONS AND
FORMS POSTED ON SUCH ADMINISTRATOR’S WEB SITE


 


I hereby notify United Online, Inc. (the “Corporation”)
that I elect to purchase                           
shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option
exercise price of $                      
per share (the “Exercise Price”) pursuant to that certain option (the “Option”)
granted to me under the Classmates Online, Inc. 2004 Stock Plan on                          ,
                 .


 


Concurrently with the delivery of this Exercise Notice
to the Corporation, I shall hereby pay to the Corporation the Exercise Price
for the Purchased Shares in accordance with the provisions of my agreement with
the Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise.  Alternatively, I may
utilize the special broker-dealer sale and remittance procedure specified in my
agreement to effect payment of the Exercise Price.


 


                              ,


Date


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Optionee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print name in
  exact manner it is to

  	
   

  	
   

  
	
  appear on the
  stock certificate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address to which
  certificate is to be

  sent, if different from address above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security
  Number:

  	
   

  	
   

  



 





















 


APPENDIX


 


The following definitions shall be in effect under the
Agreement:


 


A.            Agreement shall mean this Stock Option
Agreement.


 


B.            Board shall mean the Corporation’s Board of
Directors.


 


C.            Change in
Control
means a change in ownership or control of the Corporation effected through
either of the following transactions:


 


(i)            the
acquisition, directly or indirectly by any person or related group of persons
(other than the Corporation 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 Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation’s outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation’s stockholders, or


 


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


 


D.            Code shall mean the Internal Revenue
Code of 1986, as amended.


 


E.             Common
Stock
shall mean shares of the Corporation’s common stock.


 


F.             Corporate
Transaction shall
mean either of the following stockholder approved transactions to which the
Corporation is a party:


 


(i)            a merger,
consolidation or reorganization approved by the Corporation’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
Corporation’s outstanding voting securities immediately prior to such
transaction, or


 


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


 


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


 


H.            Employee shall mean an individual who is in
the employ of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work to be
performed and the manner and method of performance.


 


I.              Exercise
Date
shall mean the date on which the option shall have been exercised in accordance
with Paragraph 9 of the Agreement.


 


J.             Exercise
Price
shall mean the exercise price per Option Share as specified in the Grant
Notice.


 


K.            Exercise Schedule shall mean the installment schedule specified
in the Grant Notice pursuant to which the option is to become exercisable for
the Option Shares in a series of installments over Optionee’s period of
Service.


 


L.             Expiration
Date
shall mean the date on which the option expires as specified in the Grant
Notice.


 


M.           Fair
Market Value
per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:


 


(i)            If the
Common Stock is at the time traded on the Nasdaq Stock Market, then the Fair
Market Value shall be deemed equal to the closing selling price per share of
Common Stock on the date in question, as the price is reported by the National
Association of Securities Dealers on the Nasdaq Stock Market.  If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists, or


 


(ii)           If the
Common Stock is at the time listed on any Stock Exchange, then the Fair Market
Value shall be deemed equal to the closing selling price per share of Common
Stock on the date in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such exchange.  If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.


 


N.            Grant
Date
shall mean the date of grant of the option as specified in the Grant Notice.


 


O.            Grant
Notice
shall mean the Notice of Grant of Stock Option or the Certificate of Stock
Option Grant accompanying the Agreement or posted on a Web site maintained by
the Corporation’s stock plan administrator containing the terms authorized by
the Corporation, pursuant to which Optionee has been informed of the basic
terms of the option evidenced hereby.


 


P.             Involuntary
Termination
shall mean the termination of Optionee’s Service by reason of:


 


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(i)            Optionee’s
involuntary dismissal or discharge by the Corporation (or any Parent or
Subsidiary) for reasons other than Misconduct, or


 


(ii)           Optionee’s
voluntary resignation following (A) a material reduction in the scope of
his or her day-to-day responsibilities at the Corporation (or any Parent or
Subsidiary), it being understood that a change in Optionee’s title shall not,
in and of itself, be deemed a material reduction, (B) a reduction in
Optionee’s base salary or (C) a relocation of Optionee’s place of
employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected by the Corporation (or any Parent or
Subsidiary) without Optionee’s consent.


 


Q.            Misconduct shall mean the commission of any
act of fraud, embezzlement or dishonesty by Optionee, any unauthorized use or
disclosure by Optionee of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by Optionee adversely affecting the business or affairs of the Corporation (or
any Parent or Subsidiary) in a material manner. 
The foregoing definition shall not be deemed to be inclusive of all the
acts or omissions which the Corporation (or any Parent or Subsidiary) may
consider as grounds for the dismissal or discharge of Optionee or any other individual
in the Service of the Corporation (or any Parent or Subsidiary).


 


R.            Non-Statutory
Option
shall mean an option not intended to satisfy the requirements of Code Section 422.


 


S.             Notice of
Exercise
shall mean the notice of exercise in the form attached hereto as Exhibit I.


 


T.            Option
Shares
shall mean the number of shares of Common Stock subject to the Option as
specified in the Grant Notice.


 


U.            Optionee shall mean the person to whom the
option is granted as specified in the Grant Notice.


 


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


 


W.           Permanent
Disability
shall mean the inability of Optionee to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or has lasted or can be expected to
last for a continuous period of twelve (12) months or more.


 


X.            Plan shall mean the Classmates Online, Inc.
2004 Stock Plan, as assumed and administered by United Online, Inc..


 


Y.            Plan
Administrator
shall mean either the Board or a committee of the Board acting in its capacity
as administrator of the Plan.


 


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Z.            Service shall mean the Optionee’s
performance of services for the Corporation (or any Parent or Subsidiary) in
the capacity of an Employee, a non-employee member of the board of directors or
an independent contractor.


 


AA.        Stock
Exchange
shall mean the American Stock Exchange or the New York Stock Exchange.


 


BB.          Subsidiary shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.


 


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