Exhibit 10.1


 


UNITED ONLINE, INC.


2010 MANAGEMENT BONUS PLAN


 


I.                  PURPOSES OF THE PLAN


 


1.01         The United Online, Inc.
(the “Company”) 2010 Management
Bonus Plan (the “Plan”) is hereby established
to promote the interests of the Company by creating an incentive program to (i) attract
and retain employees who will strive for excellence and (ii) motivate
those individuals to set and achieve above-average objectives by providing them
with rewards for contributions to the financial performance of one or more
business segments of the Company.


 


1.02         For purposes of the Plan,
the financial performance of one or all of the following business segments of
the Company (the “Business Segments”) for the
2010 fiscal year shall be measured to determine the bonus amounts (if any) payable
for such fiscal year to the participants in the Plan:


 


(i)            Communications Segment


 


(ii)           Classmates Media Segment


 


(iii)          FTD Segment


 


Accordingly, some participants
may earn their bonuses based on the combined performance of the three Business
Segments (also referred to as “Combined Business Segments”),
and other participants may earn their bonuses based on the performance of a
single Business Segment.


 


II.                ADMINISTRATION OF THE PLAN


 


2.01         The Plan is hereby adopted
by the Compensation Committee of the Company’s Board of Directors (the “Committee”) and shall be
administered by the Committee pursuant to the powers provided to the Committee
by the Company’s Board of Directors.


 


2.02         The bonuses that may be
earned under the Plan shall be tied to the financial performance of the
applicable Business Segment or Segments for the Company’s 2010 fiscal year
ending December 31, 2010 (the “2010 Year”).


 


2.03         The interpretation and
construction of the Plan and the adoption of rules and regulations for
administering the Plan shall be made by the Committee in its sole
discretion.  Decisions of the Committee
shall be final and binding on all parties who have an interest in the Plan.


 


	
  2010 Management Bonus
  Plan

  	
  February 24,
  2010

  



 

















 


III.                 DETERMINATION OF PARTICIPANTS


 


3.01         The following individuals (each
a “Participant”) will participate in
the Plan on the following basis:


 


(i)            Mark R. Goldston, Charles B.
Ammann,  Scott H. Ray, Frederic A.
Randall, Jr., Jeremy E. Helfand and Paul E. Jordan shall each participate
on the basis of the combined financial results of the three Business Segments.


 


(ii)           Robert J. Taragan shall
participate on the basis of the financial results for the Communications
Segment.


 


(iv)          Steven B. McArthur shall participate
on the basis of the financial results for the Classmates Media Segment.


 


(v)           Robert S. Apatoff shall
participate on the basis of the financial results for the FTD Segment.


 


3.02         A Participant shall be
eligible to receive a bonus under the Plan if employed by the Company or any of
its subsidiaries on the date such bonus is paid in accordance with Section 5.01
of the Plan (the “Bonus Payment Date’). If a
Participant is not employed by the Company or one of its subsidiaries on the
Bonus Payment Date, then such individual will not be eligible to receive a
bonus under the Plan; provided, however,
that the following special partial payment provisions shall be in effect:


 


(i)            Should the Participant’s employment
terminate prior to the Bonus Payment Date as a result of death or permanent disability,
then the Committee shall provide that individual or his estate with a pro-rated
portion of the bonus such individual would have earned, based on the Company’s
actual performance for the 2010 Year in the applicable Business Segment or
Segments, had he continued in the Company’s employ through the Bonus Payment
Date.


 


(ii)           A Participant who is on a
leave of absence or whose employment terminates after the start of the 2010
Year and recommences prior to the Bonus Payment Date may remain eligible at the
discretion of the Committee, and the Committee may provide that individual with
a pro-rated portion of the bonus such individual would have earned, based on
the Company’s actual performance for the 2010 Year in the applicable Business
Segment or Segments, had he remained continuously in the Company’s employ
through the Bonus Payment Date.


 


3.03         For purposes of the Plan:


 


A.            A Participant shall be
considered an employee for so long as such individual remains employed by the
Company or one or more subsidiary corporations.


 

















 


B.            Each corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company
shall be considered to be a subsidiary of the Company, provided each such
corporation (other than the last corporation in the unbroken chain) owns, at
the time of determination, stock possessing more than fifty percent of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.


 


C.            Unless defined otherwise in
any employment or severance agreement entitling the Participant to a full or
pro-rated bonus upon a disability termination, permanent disability shall mean
the Participant’s inability, with or without reasonable accommodation, to
perform the essential duties and responsibilities of his position with the
Company by reason of any medically-determinable physical or mental injury that
is expected to result in such individual’s death or that has continued, or is
expected to continue, for a period of twelve (12) consecutive months or more.


 


D.            In no event shall there be any
duplication of bonus payments under this Plan and any employment agreement or
severance agreement between the Company and a Participant that provides such
individual with a stated bonus or bonus formula for a particular year or
includes a bonus component as part of a severance pay formula thereunder.  To avoid any such potential duplication, such
Participant shall only be entitled to receive the greater of the bonus amount earned
by him under this Plan and the bonus amount to which he may otherwise be
entitled under his employment or severance agreement. The accelerated vesting
of any outstanding equity awards held by the Participant under any of the
Company’s stock plans, including any outstanding stock options, restricted
stock or restricted stock unit awards, or the extension of any exercise periods
for such stock options shall not be deemed to constitute a bonus payment for
purposes of this Section 3.03D.


 


IV.                BONUS AWARDS


 


4.01         The individual bonus award
payable under the Plan to each Participant for the 2010 Year shall be in the
form of a stock bonus payable in shares of the Company’s common stock (“Common Stock”), with the number of
such shares to be based on the performance of the Business Segment or Segments
to which that Participant has been assigned in accordance with Section 3.01.
For Participants assigned to the Communications, Classmates Media and FTD
Business Segments, performance shall be measured in terms of the combined
revenue and operating income before depreciation, amortization and certain
other expenses (“Adjusted OIBDA”) for those Business
Segments. Accordingly, 50% of their bonus entitlement shall be based upon the
achievement of the combined revenue targets (“Combined
Revenue Targets”) specified for those three Business Segments in
a schedule approved by the Committee, and the remaining 50% of their bonus
entitlement shall be based upon the achievement of the combined Adjusted OIBDA
targets (“Combined Adjusted OIBDA Targets”)
specified for those three Business Segments in a schedule approved by the
Committee. For participants assigned to the Communications Business Segment, the
Classmates Media Business Segment or the FTD Business Segment, performance
shall be measured in terms of the revenue and Adjusted OIBDA for the particular
Business Segment to which each such Participant has been assigned.  Accordingly, 50% of the bonus entitlement of
each such Participant shall be based upon the achievement of the revenue
targets (“Segment Revenue Targets”) specified
for his assigned Business Segment in a schedule approved by the Committee, and
the remaining 50% of his bonus entitlement shall be based upon the achievement
of the


 

















 


Adjusted OIBDA targets (“Segment
Adjusted OIBDA Targets”) specified for that Business Segment in a
schedule approved by the Committee.


 


4.02         The following provisions
shall govern the calculation of the levels at which the Revenue Targets and Adjusted
OIBDA Targets (whether measured on a Combined or Segment basis) are attained
for the 2010 Year and the determination of the bonus amounts based on those calculations:


 


(a)           In determining the actual
level at which Adjusted Combined or Adjusted Segment OIBDA has been attained,
Adjusted OIBDA will be determined consistent with the Company’s historical methodology
for calculating Adjusted OIBDA for financial reporting purposes; provided, however, (1) Adjusted
OIBDA shall be calculated before restructuring expenses, merger-related
expenses, stock-based compensation expenses and other expenses associated with
the relocation of the Company’s or any of its subsidiaries’ offices, (2) any
bonus amounts which accrue under this Plan shall not be included as an expense
in computing Adjusted OIBDA, (3) any adjustments to Adjusted OIBDA
attributable to a change in accounting principles shall be excluded, and (4) all
items of gain, loss or expense for such fiscal year determined to be
extraordinary or unusual in nature or infrequent in occurrence, or related to
the disposal of a segment of a business, shall be excluded from Adjusted OIBDA.


 


(b)           In the event the actual foreign
currency exchange rate (determined as set forth below) for the GBP:U.S. Dollar
for the 2010 Year is lower than 1:1.60 (the “GBP
Floor”), the final revenue and/or Adjusted OIBDA calculations
for the FTD Business Segment and the Combined Business Segments will be
adjusted using the GBP Floor.  In the
event the actual foreign currency exchange rate (determined as set forth below)
for the Euro:U.S. Dollar for the 2010 Year is lower than 1:1.40 (the “Euro Floor”), the final revenue and
Adjusted OIBDA calculations for the Classmates Media Business Segment and the
Combined Business Segments will be adjusted using the Euro Floor.  For the purpose of clarity, the GBP Floor and/or
the Euro Floor will not be used to adjust the final revenue and Adjusted OIBDA
calculations in the event the actual foreign currency exchange rates for the
GBP:U.S. Dollar and/or the Euro:U.S. Dollar for such financial measures for the
2010 Year are higher than the GBP Floor or the Euro Floor, respectively.  For the purposes of this paragraph, an “actual
foreign currency exchange rate” will be determined for each of year-end revenues
and Adjusted OIBDA and calculated by (i) translating into U.S. Dollars the
year-end revenues and Adjusted OIBDA amounts for the applicable non-U.S.
subsidiaries in a manner consistent with the Company’s historical methodology
for financial reporting purposes and (ii) dividing each such U.S. Dollars
amount by its pre-translation (GBP or Euro) year-end revenues or Adjusted OIBDA
amount, as applicable.


 


(c)           In the event the Company
acquires other companies or businesses during the 2010 Year, the financial
performance of those acquired entities shall not be taken into account in
determining whether the Combined or Segment Revenue Targets and Combined or
Segment Adjusted OIBDA Targets for the 2010 Year have been achieved.


 


(d)           In the event that revenue or
Adjusted OIBDA (whether on a Combined or Segment basis) falls between two specified
targets on a schedule approved by the Committee, the resulting stock bonus
shall be interpolated on a straight-line basis between those two points.


 

















 


4.03         The
Committee shall determine the actual level at which each applicable performance
target for the 2010 Year has been attained and make the stock bonus
calculations required under the Plan. The Committee’s determinations shall be
included as part of the formal minutes of the meeting at which such
determinations are made.


 


4.04         No Participant shall earn or
accrue any right to any portion of a bonus award hereunder until the Bonus
Payment Date.


 


V.                PAYMENT OF BONUS AWARDS


 


5.01         The actual bonus to which
each Participant becomes entitled based on the level at which the Revenue and
Adjusted OIBDA Targets (whether measured on a Combined or Segment basis) are actually
attained for the 2010 Year shall be paid in shares of Common Stock drawn from
the Company’s 2001 Stock Incentive Plan or any successor thereto (the “Stock Plan”).  The actual number of shares of Common Stock payable
to each Participant based on the attained level of such Revenue and Adjusted
OIBDA Targets shall be determined in accordance with the schedule set forth on Schedule
I attached hereto.  The bonus
payments shall be distributed on the February 15, 2011 Bonus Payment Date.


 


5.02         The number of bonus shares allocated
to each Participant in attached Schedule I at each level of performance
attainment has been determined by dividing a percentage of the Participant’s
base salary for the 2010 Year (ranging from 75% to 150% of Mr. Goldston’s
base salary per performance target and from 30% to 70% of base salary per performance
target for all other Participants) by $6.21. 
Solely for purposes of applying any severance benefit formula based on
the bonus paid under this Plan to any Participant for the 2010 Year, the amount
of such bonus shall be deemed equal to the cash amount obtained by multiplying (i) the
number of shares of Common Stock to which the Participant becomes entitled
under this Plan on the basis of the levels at which the applicable Revenue and
Adjusted OIBDA targets for the 2010 Year are attained by (ii) $6.21, as
adjusted to reflect any stock splits, stock dividends or other similar events
affecting the outstanding number of shares of Common Stock without the Company’s
receipt of consideration, and shall not be deemed equal to the Fair Market
Value (as defined in Section 5.04) of the bonus shares issued to the
Participant on the Bonus Payment Date.


 


5.03         Unless the Participant is
notified to the contrary by the Company (in writing or by electronic mail) at
least thirty (30) days prior to the Bonus Payment, the Company shall withhold,
from the shares of Common Stock otherwise issuable to each Participant as his
bonus payment hereunder, a portion of those shares with a “Fair Market Value”
(as defined below) on the issuance date equal to the applicable federal, state
and local income and employment withholding taxes; provided,
however, that (i) the number of shares of Common Stock
which the Company shall be required to so withhold shall not exceed in Fair
Market Value the amount necessary to satisfy the Company’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 and (ii) the Company shall not withdraw the right
to such stock withholding from any Participant who has a contractual right to
such method of tax withholding in his employment agreement or any other
agreement in effect with the Company on the Bonus Payment Date.  Should the Company provide notice to one or
more Participants without such contractual rights that the stock withholding
procedure is not to be utilized by the Company, then those Participants must
deliver a check to the Company for the applicable withholding taxes on the
Bonus Payment Date.


 

















 


5.04         For purposes of the Plan,
the Fair Market Value per share of
Common Stock on any relevant date shall be equal to the closing selling price
per share on such date on the Nasdaq Global Select Market or, if such date is
not a date on which the Common Stock is traded, then the closing selling price
per share on the Nasdaq Global Select Market for the immediately preceding
trading date shall be determinative of Fair Market Value.


 


VI.                GENERAL PROVISIONS


 


6.01         The Committee may at any
time amend, suspend or terminate the Plan, provided such action is effected by
written resolution.  Moreover, the
Committee reserves the right to amend this Plan as may be necessary or
appropriate to avoid adverse tax consequences under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).


 


6.02         No amounts awarded or
accrued under this Plan shall actually be funded, set aside or otherwise
segregated prior to payment.  The
obligation to pay the bonuses awarded hereunder shall at all times be an
unfunded and unsecured obligation of the Company.  Plan participants shall have the status of general
creditors and shall look solely to the general assets of the Company for the
payment of their bonus awards.


 


6.03         No Participant shall have
the right to alienate, pledge or encumber his/her interest in this Plan, and
such interest shall not (to the extent permitted by law) be subject in any way
to the claims of the employee’s creditors or to attachment, execution or other
process of law.


 


6.04         Neither the action of the
Company in establishing the Plan, nor any action taken under the Plan by the
Committee, nor any provision of the Plan, shall be construed so as to grant any
person the right to remain in the employ of the Company or its subsidiaries for
any period of specific duration.  Rather,
each employee will be employed “at-will,” which means that either such employee
or the Company may terminate the employment relationship at any time for any
reason, with or without cause, subject in each case to any applicable benefits
that may become payable under any employment agreement between such person and
the Company or any of its subsidiaries.


 


6.05         This is the full and complete
agreement between the Participants and the Company with respect to their incentive
bonus compensation for the 2010 Year and the related service period through the
Bonus Payment Date. This Plan does not supersede, but is supplemental to, any
provisions of any employment agreement to which any of the Participants in this
Plan may be party.


 

















 


UNITED ONLINE, INC.


2010 MANAGEMENT BONUS PLAN


 


Schedule I - Stock Bonus Amounts


 


	
  Payout Level

  for Revenue

  Targets

  	
   

  	
  Goldston

  (# shares)

  	
   

  	
  Payout Level

  for Adjusted

  OIBDA

  Targets

  	
   

  	
  Goldston

  (# shares)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  115,066

  	
   

  	
  1

  	
   

  	
  115,066

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  138,079

  	
   

  	
  2

  	
   

  	
  138,079

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  153,421

  	
   

  	
  3

  	
   

  	
  153,421

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  199,448

  	
   

  	
  4

  	
   

  	
  195,612

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  214,790

  	
   

  	
  5

  	
   

  	
  207,119

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  230,132

  	
   

  	
  6

  	
   

  	
  218,626

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  7

  	
   

  	
  230,132

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payout Level

  for Revenue

  Targets

  	
   

  	
  Ammann

  (# shares)

  	
   

  	
  Ray

  (# shares)

  	
   

  	
  Randall

  (# shares)

  	
   

  	
  Helfand

  (# shares)

  	
   

  	
  Jordan

  (# shares)

  	
   

  	
  Taragan

  (# shares)

  	
   

  	
  McArthur

  (# shares)

  	
   

  	
  Apatoff

  (# shares)

  	
   

  
	
  1

  	
   

  	
  16,908

  	
   

  	
  24,154

  	
   

  	
  21,246

  	
   

  	
  18,161

  	
   

  	
  15,458

  	
   

  	
  19,323

  	
   

  	
  26,086

  	
   

  	
  28,985

  	
   

  
	
  2

  	
   

  	
  22,544

  	
   

  	
  32,206

  	
   

  	
  28,329

  	
   

  	
  24,215

  	
   

  	
  20,611

  	
   

  	
  25,764

  	
   

  	
  34,782

  	
   

  	
  38,647

  	
   

  
	
  3

  	
   

  	
  28,180

  	
   

  	
  40,257

  	
   

  	
  35,411

  	
   

  	
  30,269

  	
   

  	
  25,764

  	
   

  	
  32,206

  	
   

  	
  43,478

  	
   

  	
  48,309

  	
   

  
	
  4

  	
   

  	
  30,998

  	
   

  	
  44,283

  	
   

  	
  38,952

  	
   

  	
  33,296

  	
   

  	
  28,341

  	
   

  	
  35,426

  	
   

  	
  47,826

  	
   

  	
  53,140

  	
   

  
	
  5

  	
   

  	
  36,634

  	
   

  	
  52,334

  	
   

  	
  46,034

  	
   

  	
  39,350

  	
   

  	
  33,494

  	
   

  	
  41,867

  	
   

  	
  56,521

  	
   

  	
  62,801

  	
   

  
	
  6

  	
   

  	
  39,452

  	
   

  	
  56,360

  	
   

  	
  49,576

  	
   

  	
  42,377

  	
   

  	
  36,070

  	
   

  	
  45,088

  	
   

  	
  60,869

  	
   

  	
  67,632

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payout Level

  for Adjusted

  OIBDA Targets

  	
   

  	
  Ammann

  (# shares)

  	
   

  	
  Ray

  (# shares)

  	
   

  	
  Randall

  (# shares)

  	
   

  	
  Helfand

  (# shares)

  	
   

  	
  Jordan

  (# shares)

  	
   

  	
  Taragan

  (# shares)

  	
   

  	
  McArthur

  (# shares)

  	
   

  	
  Apatoff

  (# shares)

  	
   

  
	
  1

  	
   

  	
  16,908

  	
   

  	
  24,154

  	
   

  	
  21,246

  	
   

  	
  18,161

  	
   

  	
  15,458

  	
   

  	
  19,323

  	
   

  	
  26,086

  	
   

  	
  28,985

  	
   

  
	
  2

  	
   

  	
  22,544

  	
   

  	
  32,206

  	
   

  	
  28,329

  	
   

  	
  24,215

  	
   

  	
  20,611

  	
   

  	
  25,764

  	
   

  	
  34,782

  	
   

  	
  38,647

  	
   

  
	
  3

  	
   

  	
  28,180

  	
   

  	
  40,257

  	
   

  	
  35,411

  	
   

  	
  30,269

  	
   

  	
  25,764

  	
   

  	
  32,206

  	
   

  	
  43,478

  	
   

  	
  48,309

  	
   

  
	
  4

  	
   

  	
  30,998

  	
   

  	
  44,283

  	
   

  	
  38,952

  	
   

  	
  33,296

  	
   

  	
  28,341

  	
   

  	
  35,426

  	
   

  	
  47,826

  	
   

  	
  53,140

  	
   

  
	
  5

  	
   

  	
  33,816

  	
   

  	
  48,309

  	
   

  	
  42,493

  	
   

  	
  36,323

  	
   

  	
  30,917

  	
   

  	
  38,647

  	
   

  	
  52,173

  	
   

  	
  57,971

  	
   

  
	
  6

  	
   

  	
  36,634

  	
   

  	
  52,334

  	
   

  	
  46,034

  	
   

  	
  39,350

  	
   

  	
  33,494

  	
   

  	
  41,867

  	
   

  	
  56,521

  	
   

  	
  62,801

  	
   

  
	
  7

  	
   

  	
  39,452

  	
   

  	
  56,360

  	
   

  	
  49,576

  	
   

  	
  42,377

  	
   

  	
  36,070

  	
   

  	
  45,088

  	
   

  	
  60,869

  	
   

  	
  67,632

  	
   

  



 


	
  2010 Management Bonus
  Plan

  	
  February 24,
  2010