Exhibit 10.4


 


UNITED
ONLINE, INC.




RESTRICTED STOCK UNIT ISSUANCE AGREEMENT


 


RECITALS


 


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


 


B.            Participant 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 issuance of shares of Common Stock to the
Participant under the Stock Issuance Program.


 


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


 


NOW, THEREFORE,
it is hereby agreed as follows:


 


1.     Grant
of Restricted Stock Units. 
The Corporation hereby awards to the Participant, as of the Award Date,
Restricted Stock Units under the Plan. Each Restricted Stock Unit represents
the right to receive one share of Common Stock on the vesting date of that
unit. The number of shares of Common Stock subject to the awarded Restricted
Stock Units, the applicable vesting schedule for those shares, the dates on
which those vested shares shall become issuable to Participant and the
remaining terms and conditions governing the award (the “Award”) shall be as
set forth in this Agreement.


 


AWARD SUMMARY


 


	
  Award Date:

  	
   

  	
                                                    ,
  200    

  
	
   

  	
   

  	
   

  
	
  Number of Shares
  Subject to Award:

  	
   

  	
                                  shares
  of Common Stock (the “Shares”)

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  The Shares shall vest in a series of one or more installments as
  follows:
                                                           
  . However, one or more Shares may be subject to accelerated vesting in
  accordance with the provisions of Paragraph 5 [ALTERNATIVE: Paragraphs 4 and
  6] of this Agreement.

  
	
   

  	
   

  	
   

  
	
  Issuance Schedule

  	
   

  	
  The Shares in which the Participant vests in accordance with the
  foregoing Vesting Schedule will be issuable immediately upon vesting, subject
  to the Corporation’s collection of the applicable Withholding Taxes. The
  procedures pursuant to which the applicable Withholding Taxes are to be
  collected are set forth in Paragraph 8 of this Agreement.

  



 


2.     Limited
Transferability.  Prior to
actual receipt of the Shares which vest hereunder, the Participant may not
transfer any interest in the Award or the underlying Shares. Any Shares which
vest hereunder but which otherwise remain unissued at the time of the
Participant’s death may be transferred pursuant to the provisions of the
Participant’s will or the laws of inheritance or to the Participant’s
designated beneficiary or beneficiaries of this Award. The Participant may also
direct the


 





















 


Corporation to issue the stock certificates for any
Shares which in fact vest and become issuable under the Award during his or her
lifetime to one or more designated family members or a trust established for
the Participant and/or his or her family members. The Participant may make such
a beneficiary designation or certificate directive at any time by filing the
appropriate form with the Plan Administrator or its designee.


 


3.     Cessation
of Service.  Except as
otherwise provided in Paragraph 5 [ALTERNATIVE: Paragraphs 4 and 6] below,
should the Participant cease Service for any reason prior to vesting in one or
more Shares subject to this Award, then the Award will be immediately cancelled
with respect to those unvested Shares, and the number of Restricted Stock Units
will be reduced accordingly.  The
Participant shall thereupon cease to have any right or entitlement to receive
any Shares under those cancelled units.


 


ALTERNATIVE 1 (Paragraphs 4-8):


 


4.               Stockholder Rights and Dividend Equivalents


 


(a)           The holder of this Award shall not
have any stockholder rights, including voting or dividend rights, with respect
to the Shares subject to the Award until the Participant becomes the record
holder of those Shares following their actual issuance upon the Corporation’s
collection of the applicable Withholding Taxes.


 


(b)           Notwithstanding the foregoing, should
any dividend or other distribution, whether regular or extraordinary and
whether payable in cash, shares of Common Stock or other property, be declared
and paid on the outstanding Common Stock while one or more Shares remain
subject to this Award (i.e., those Shares are not otherwise issued and
outstanding for purposes of entitlement to the dividend or distribution), then
the following provisions shall govern the Participant’s interest in that
dividend or distribution:


 


(i)            If the dividend is a
regularly-scheduled cash dividend on the Common Stock, then the Participant
shall be entitled to a current cash distribution from the Corporation equal to
the cash dividend the Participant would have received with respect to the
Shares at the time subject to this Award had those Shares actually been issued
and outstanding and entitled to that cash dividend. Each cash dividend
equivalent payment under this subparagraph (i) shall be paid within five (5)
business day following the payment of the actual cash dividend on the
outstanding Common Stock, subject to the Corporation’s collection of all
applicable federal, state and local income and employment withholding taxes.


 


(ii)           For any other dividend or
distribution, a special book account shall be established for the Participant
and credited with a phantom dividend equivalent to the actual dividend or
distribution which would have been paid on the Shares at the time subject to
this Award had they been issued and outstanding and entitled to that dividend
or distribution.  As the Shares
subsequently vest hereunder, the phantom dividend equivalents so credited to
those Shares in the book account shall be distributed to the Participant (in
the same form the actual dividend or distribution was paid to the holders of
the Common Stock entitled to that dividend or distribution) concurrently with
the issuance of the vested Shares to which those phantom dividend equivalents
relate.  However, each such distribution
shall be subject to the Corporation’s collection of the Withholding Taxes
applicable to that distribution.


 


5.               Change of Control.


 


(a)           Any Restricted Stock Units subject to
this Award at the time of a Change in Control may be assumed by the successor
entity or otherwise continued in full force and effect or may


 


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be replaced with a cash incentive program of the
successor entity which preserves the Fair Market Value of the unvested shares
of Common Stock subject to the Award at the time of the Change in Control and
provides for subsequent payout of that value in accordance with the vesting
schedule applicable to the Award. In the event of such assumption or
continuation of the Award or such replacement of the Award with a cash incentive
program, no accelerated vesting of the Restricted Stock Units shall occur at
the time of the Change in Control.


 


(b)           In the event the Award is assumed or
otherwise continued in effect, the Restricted Stock Units subject to the Award
shall be adjusted immediately after the consummation of the Change in Control
so as to apply to the number and class of securities into which the Shares
subject to those units immediately prior to the Change in Control would have
been converted in consummation of that Change in Control had those Shares
actually been issued and outstanding at that time.  To the extent the actual holders of the
outstanding Common Stock receive cash consideration for their Common Stock in
consummation of the Change in Control, the successor corporation (or parent
entity) may, in connection with the assumption or continuation of the
Restricted Stock Units subject to the Award at that time, 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 the Change in Control
transaction, provided the substituted common stock is readily tradable on an
established U.S. securities exchange or market.


 


(c)           Any Restricted Stock Units which are
assumed or otherwise continued in effect in connection with a Change in Control
or replaced with a cash incentive program under Paragraph 5(a) shall be subject
to accelerated vesting in accordance with the following provisions:


 


If
an Involuntary Termination of the Participant’s Service occurs within twelve
(12) months after the Change in Control event, then the Participant shall
immediately vest in an additional number of Shares equal to the greater of (i) twenty-five percent
(25%) of the total number of Shares subject to the Award or (ii) the additional
number of Shares in which the Participant would have been vested at the time of
such Involuntary Termination if (A) he or she had completed an additional
period of Service equal in duration to the actual period of Service completed
by the Participant between the Award Date and the date of such Involuntary
Termination and (B) the Shares subject to this Award had vested in forty-eight
(48) successive equal monthly installments over the duration of the Vesting
Schedule.  In no event, however, shall
the number of Shares which vest on such an accelerated basis exceed the number
of Shares unvested immediately prior to the date of the Participant’s
Involuntary Termination.


 


(d)           If the Restricted Stock Units subject
to this Award at the time of the Change in Control are not assumed or otherwise
continued in effect or replaced with a cash incentive program in accordance
with Paragraph 5(a), then those units will vest immediately prior to the
closing of the Change in Control.  The
Shares subject to those vested units will be issued immediately upon such
vesting (or otherwise converted into the right to receive the same
consideration per share of Common Stock payable to the other stockholders of
the Corporation in consummation of that Change in Control), subject to the
Corporation’s collection of the applicable Withholding Taxes pursuant to the
provisions of Paragraph 7.


 


(e)           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.


 


6.     Adjustment in 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


 


3





















 


consideration, appropriate adjustments shall be made
to the total number and/or class of securities issuable pursuant to this Award
in order to reflect such change and thereby preclude a dilution or enlargement
of benefits hereunder.


 


7.               Issuance of
Shares of Common Stock.


 


(a)           As soon as administratively
practicable following each date one or more Shares vest in accordance with the
provisions of this Agreement, the Corporation shall issue to or on behalf of
the Participant a certificate (which may be in electronic form) for the shares
of Common Stock which vest on that date under the Award and shall concurrently
distribute to the Participant any phantom dividend equivalents with respect to
those Shares, subject in each instance to the Corporation’s collection of the
applicable Withholding Taxes. The Corporation shall collect the Withholding
Taxes with respect to the distributed phantom dividend equivalents by
withholding a portion of that distribution equal to the amount of the
applicable Withholding Taxes, with the cash portion of the distribution to be
the first portion so withheld.  Until
such time as the Corporation provides the Participant with notice to the
contrary, the Corporation shall collect the Withholding Taxes with respect to
the vested Shares through an automatic Share withholding procedure pursuant to
which the Corporation will withhold, immediately as the Shares vest under the
Award, a portion of those vested Shares with a Fair Market Value (measured as
of the vesting date) equal to the amount of such Withholding Taxes  (the “Share Withholding Method”); provided, however, that the amount of any Shares so
withheld shall not exceed the amount necessary to satisfy the Corporation’s
required tax withholding obligations using the minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes, that are
applicable to supplemental taxable income. Participant shall be notified in
writing in the event such Share Withholding Method is no longer available.


 


(b)           Should any Shares vest under the
Award at time the Share Withholding Method is not available, then the
Withholding Taxes shall be collected from the Participant through either of the
following alternatives:


 


•        the
Participant’s delivery of his or her separate check payable to the Corporation
in the amount of such Withholding Taxes, or


 


•        the use of
the proceeds from a next-day sale of the Shares issued to the Participant,
provided and only if (i) such a sale is permissible under the Corporation’s
trading policies governing the sale of Common Stock, (ii) the Participant makes
an irrevocable commitment, on or before the vesting date for those Shares, to
effect such sale of the Shares and (iii) the transaction is not otherwise
deemed to constitute a prohibited loan under Section 402 of the Sarbanes-Oxley
Act of 2002.


 


(c)           Except
as otherwise provided in Paragraph 5 or Paragraph 7(a), the settlement of all
Restricted Stock Units which vest under the Award shall be made solely in
shares of Common Stock.  In no event,
however, shall any fractional shares be issued. 
Accordingly, the total number of shares of Common Stock to be issued at
the time the Award vests shall, to the extent necessary, be rounded down to the
next whole share in order to avoid the issuance of a fractional share.


 


8.               (Intentionally Omitted)


 


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ALTERNATIVE 2 (Paragraphs 4-8):


 


4.     Accelerated Vesting.   The following special vesting acceleration
provisions shall be in effect for the Award and shall be in addition to the
vesting acceleration provisions of Paragraph 6(c) of this Agreement:


 


(a)           Should the Participant’s Service
terminate by reason of death or permanent disability, then all the Shares at
the time subject to this Award shall immediately vest.


 


(b)           Should the Participant’s Service be
terminated by the Corporation (or any Parent or Subsidiary) other than for
Cause under circumstances which would not otherwise trigger the vesting
acceleration provisions of Paragraph 6(c), then the Participant shall
immediately vest in the additional number of Shares in which the Participant
would have been vested at the time of such termination if  (i) the Participant had completed an
additional twelve (12) months of Service and (ii) the Shares subject to this
Award had vested in successive equal monthly installments over the duration of
the Vesting Schedule.


 


ALTERNATIVE:


 


(b)           Should the Participant’s Service be
terminated at any time by the Corporation (or any Parent or Subsidiary) other
than for Cause, then all the Shares at the time subject to this Award shall
immediately vest.


 


5.               Stockholder Rights and Dividend Equivalents


 


(a)           The holder of this Award shall not
have any stockholder rights, including voting or dividend rights, with respect
to the Shares subject to the Award until the Participant becomes the record
holder of those Shares following their actual issuance upon the Corporation’s
collection of the applicable Withholding Taxes.


 


(b)           Notwithstanding the foregoing, should
any dividend or other distribution, whether regular or extraordinary and
whether payable in cash, shares of Common Stock 
or other property, be declared and paid on the outstanding Common Stock
while one or more Shares remain subject to this Award (i.e., those Shares are
not otherwise issued and outstanding for purposes of entitlement to the
dividend or distribution), then the following provisions shall govern the
Participant’s interest in that dividend or distribution:


 


(i)            If the dividend is a
regularly-scheduled cash dividend on the Common Stock, then the Participant shall
be entitled to a current cash distribution from the Corporation equal to the
cash dividend the Participant would have received with respect to the Shares at
the time subject to this Award had those Shares actually been issued and
outstanding and entitled to that cash dividend. Each cash dividend equivalent
payment under this subparagraph (i) shall be paid within five (5) business day
following the payment of the actual cash dividend on the outstanding Common
Stock, subject to the Corporation’s collection of all applicable federal, state
and local income and employment withholding taxes.


 


(ii)           For any other dividend or
distribution, a special book account shall be established for the Participant
and credited with a phantom  dividend
equivalent to the actual dividend or distribution which would have been paid on
the Shares at the time subject to this Award 
had they been issued and outstanding and entitled to that dividend or
distribution.  As the Shares subsequently
vest hereunder, the phantom dividend equivalents so credited to those Shares in
the book account shall be


 


5





















 


distributed to the Participant (in the same form the actual dividend or
distribution was paid to the holders of the Common Stock entitled to that
dividend or distribution) concurrently with the issuance of the vested Shares
to which those phantom dividend equivalents relate.  However, each such distribution shall be
subject to the Corporation’s collection of the Withholding Taxes applicable to
that distribution.


 


6.               Change of Control.


 


(a)           Any Restricted Stock Units subject to
this Award at the time of a Change in Control may be assumed by the successor
entity or otherwise continued in full force and effect or may be replaced with
a cash incentive program of the successor entity which preserves the Fair
Market Value of the unvested shares of Common Stock subject to the Award at the
time of the Change in Control and provides for subsequent payout of that value
in accordance with the vesting schedule applicable to the Award. In the event
of such assumption or continuation of the Award or such replacement of the
Award with a cash incentive program, no accelerated vesting of the Restricted
Stock Units shall occur at the time of the Change in Control.


 


(b)           If the Award is assumed or otherwise
continued in effect, the Restricted Stock Units subject to the Award shall be
adjusted immediately after the consummation of the Change in Control so as to
apply to the number and class of securities into which the Shares subject to
those units immediately prior to the Change in Control would have been
converted in consummation of that Change in Control had those Shares actually
been issued and outstanding at that time. 
To the extent the actual holders of the outstanding Common Stock receive
cash consideration for their Common Stock in consummation of the Change in
Control, the successor corporation (or parent entity) may, in connection with
the assumption or continuation of the Restricted Stock Units subject to the
Award at that time and with the Participant’s prior written consent, 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 the Change in
Control transaction, provided the substituted common stock is readily tradable
on an established U.S. securities exchange or market.


 


(c)           Any Restricted Stock Units which are
assumed or otherwise continued in effect in connection with a Change in Control
or replaced with a cash incentive program in accordance with Paragraph 6(a)
shall be subject to accelerated vesting in accordance with the following
provision:


 


Should
the Participant’s Service be Involuntarily Terminated in connection with or
following the Change in Control event, then the Participant shall immediately
vest in all of the unvested Shares at the time subject to the Award.


 


(d)           If the Restricted Stock Units subject
to this Award at the time of the Change in Control are not assumed or otherwise
continued in effect or replaced with a cash incentive program in accordance
with Paragraph 6(a), then those units will vest immediately prior to the
closing of the Change in Control.  The
Shares subject to those vested units will be issued immediately upon such
vesting (or otherwise converted into the right to receive the same
consideration per share of Common Stock payable to the other stockholders of
the Corporation in consummation of that Change in Control), subject to the
Corporation’s collection of the applicable Withholding Taxes pursuant to the
provisions of Paragraph 8.


 


(e)           Should the accelerated vesting of the
Shares pursuant to the provisions of this Paragraph 6 result in a parachute
payment under Code Section 280G, then the 
Participant shall be entitled to the Code Section 4999 tax gross-up
payment provided under his Employment Agreement, whether or not that Employment
Agreement with such gross-up payment provision is in effect at the time of such
accelerated vesting.  Accordingly, the
Code Section 4999 tax gross-up payment provisions of the


 


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Participant’s Employment Agreement are hereby
incorporated by reference into this Agreement and shall form part of the terms
and provisions of this Agreement as if expressly set forth herein.


 


(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 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 the total number and/or class of
securities issuable pursuant to this Award in order to reflect such change and
thereby preclude a dilution or enlargement of benefits hereunder.


 


8.               Issuance of
Shares of Common Stock.


 


(a)           As soon as administratively
practicable following each date one or more Shares vest in accordance with the
provisions of this Agreement, the Corporation shall issue to or on behalf of
the Participant a certificate (which may be in electronic form) for the shares
of Common Stock which vest on that date under the Award and shall concurrently
distribute to the Participant any phantom dividend equivalents with respect to
those Shares, subject in each instance to the Corporation’s collection of the
applicable Withholding Taxes. The Corporation shall collect the Withholding
Taxes with respect to the distributed phantom dividend equivalents by
withholding a portion of that distribution equal to the amount of the
applicable Withholding Taxes, with the cash portion of the distribution to be
the first portion so withheld.  Until
such time as the Corporation provides the Participant with notice to the
contrary, the Corporation shall collect the Withholding Taxes with respect to
the vested Shares through an automatic Share withholding procedure pursuant to
which the Corporation will withhold, immediately as the Shares vest under the
Award, a portion of those vested Shares with a Fair Market Value (measured as
of the vesting date) equal to the amount of such Withholding Taxes  (the “Share Withholding Method”); provided, however, that the amount of any Shares so
withheld shall not exceed the amount necessary to satisfy the Corporation’s
required tax withholding obligations using the minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes, that are
applicable to supplemental taxable income. Participant shall be notified in
writing in the event such Share Withholding Method is no longer available.


 


(b)           Should any Shares vest under the
Award at time the Share Withholding Method is not available, then the
Withholding Taxes shall be collected from the Participant through either of the
following alternatives:


 


•              the Participant’s delivery of his
or her separate check payable to the Corporation in the amount of such
Withholding Taxes, or


 


•              the use of the proceeds from a
next-day sale of the Shares issued to the Participant, provided and only if (i)
such a sale is permissible under the Corporation’s trading policies governing
the sale of Common Stock, (ii) the Participant makes an irrevocable commitment,
on or before the vesting date for those Shares, to effect such sale of the
Shares and (iii) the transaction is not otherwise deemed to constitute a
prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002.


 


(c)           Except
as otherwise provided in Paragraph 6 and Paragraph 8(a), the settlement of all
Restricted Stock Units which vest under the Award shall be made solely in
shares of


 


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Common Stock.  In no event,
however, shall any fractional shares be issued. 
Accordingly, the total number of shares of Common Stock to be issued at
the time the Award vests shall, to the extent necessary, be rounded down to the
next whole share in order to avoid the issuance of a fractional share.


 


9.     Compliance with Laws and Regulations.
The issuance of shares of Common Stock pursuant to the Award shall be subject
to compliance by the Corporation and Participant with all applicable
requirements of law relating thereto and with all applicable regulations of any
stock exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock may be listed for trading at the time of such issuance.


 


10.   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 Participant shall be in writing and addressed to Participant at the address
indicated below Participant’s signature line on this Agreement.  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.


 


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


 


12.   Construction.  This Agreement and the Award 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 the Award.


 


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


 


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IN WITNESS WHEREOF,
the parties have executed this Agreement on the day and year first indicated
above.


 


	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


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APPENDIX
A



DEFINITIONS


 


The following
definitions shall be in effect under the Agreement:


 


A.           Agreement
shall mean this Restricted Stock Unit Issuance Agreement.


 


B.    Award
shall mean the award of restricted stock units made to the Participant pursuant
to the terms of this Agreement.


 


C.    Award
Date shall mean the date the restricted stock units are awarded
to Participant pursuant to the Agreement and shall be the date indicated in
Paragraph 1 of the Agreement.


 


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


 


E.     [Alternative: Cause  shall
have the meaning assigned to such term in the Employment Agreement.]


 


F.     Change
in Control shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:


 


(i)            a merger or consolidation approved
by the Corporation’s stockholders, unless securities possessing 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 substantially in the same proportion, by the persons
who beneficially owned the Corporation’s outstanding voting securities immediately
prior to such transaction,


 


(ii)           the sale, transfer or other
disposition of all or substantially all of the Corporation’s assets  approved by the Corporation’s stockholders,


 


(iii)          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 1934 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


 


(iv)          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.


 


A-1





















 


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


 


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


 


I.      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 shall by appropriate action adopt the Plan.


 


J.     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.


 


K.    [Alternative: Employment
Agreement  shall mean the Amended and Restated Employment Agreement
between the Participant and the Corporation dated as of January 27, 2004 and as
in effect on the date of the Award.]


 


L.     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 National Market, then the Fair
Market Value shall be the closing selling price per share of Common Stock, as
such price is reported by the National Association of Securities Dealers. 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.


 


(ii)     If the
Common Stock is at the time listed on any Stock Exchange, then the Fair Market
Value shall be 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.


 


M.   Involuntary Termination  shall
mean the termination of the Service of any individual which occurs by reason
of:


 


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


 


(ii)     such
individual’s voluntary resignation following (A) a material reduction in the
scope of his or her day-to-day responsibilities with the Corporation (or any
Parent or Subsidiary) it being understood that a change in such individual’s
title shall not, in and of itself, be deemed a material reduction, (B) a
reduction in his or her base salary by more than fifteen percent (15%) or (C) a
relocation of such individual’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
the individual’s consent.


 


[Alternative: Involuntarily Terminated  shall
have the meaning assigned to that term in the Employment Agreement.]


 


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N.    Misconduct  shall mean the
commission of any act of fraud, embezzlement or dishonesty by the Optionee or
Participant, any unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary),
or any other intentional misconduct by such person adversely affecting the
business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner.  The foregoing definition
shall not in any way preclude or restrict the right of the Corporation (or any
Parent or Subsidiary) to discharge or dismiss the Participant or any other
person in the Service of the Corporation (or any Parent or Subsidiary) for any
other acts or omissions, but such other acts or omissions shall not be deemed,
for purposes of this Agreement, to constitute grounds for termination for
Misconduct.


 


[Alternative: No definition for “Misconduct”.]


 


O.    1934 Act shall mean the
Securities Exchange Act of 1934, as amended from time to time.


 


P.     Participant
shall mean the person to whom the Award is made pursuant to the Agreement.


 


Q.    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.


 


R.    Plan
shall mean the Corporation’s 2001 Stock Incentive Plan, as amended and
restated.


 


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


 


T.    Service
shall mean the Participant’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 a consultant or independent advisor. For purposes
of this Agreement, Participant shall be deemed to cease Service immediately
upon the occurrence of the either of the following events: (i) Participant no
longer performs services in any of the foregoing capacities for the Corporation
(or any Parent or Subsidiary) or (ii) the entity for which Participant performs
such services ceases to remain a Parent or Subsidiary of the Corporation, even
though Participant may subsequently continue to perform services for that
entity. Service shall not be deemed to cease during a period of military leave,
sick leave or other personal leave approved by the Corporation; provided, however, that except to the extent otherwise
required by law or expressly authorized by the Plan Administrator, no Service
credit shall be given for vesting purposes for any period the Participant is on
a leave of absence.


 


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


 


V.    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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W.   Withholding
Taxes shall mean the federal, state and local income taxes and
the employee portion of the federal, state and local employment taxes required
to be withheld by the Corporation in connection with the issuance of the shares
of Common Stock which vest under of the Award and any phantom dividend
equivalents distributed with respect to those shares.


 


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