Exhibit 10.20


 


August 12,
2007


 


Mr. Layton
Han


c/o
Mypoints.com, Inc.


100
California Street, Suite 1200


San
Francisco, California 94111


 


Dear
Layton,


 


This letter sets forth the terms and conditions of
your employment with MyPoints.com, Inc. (the “Company”), effective as of August 12,
2007 (the “Effective Date”).


 


1.                                       Position.  You will serve as Co-President of
the Company and shall have such duties and responsibilities consistent with
your position or such other duties and responsibilities as may from time to
time be determined by the board of directors of the Company or any committee
thereof, or such board of directors or committee of any affiliated entity to
which the authority of the board of directors of the Company has been delegated
or assigned (the “Board of Directors”) or the Chief Executive Officer of the
Company to the extent such authority has been delegated or assigned to such
Chief Executive Officer.  You will report
to the Chief Executive Officer of the Company or to such other senior executive
officer as may be designated by the Board of Directors or the Chief Executive
Officer of the Company.  You agree to
devote your full-time attention, skill and efforts to the performance of your
duties for the Company; provided, however, that as we discussed, you have
terminated your employment with LSC, Inc. and any other companies with
which you may be employed and the Company agrees that you can continue to
pursue the outside activities set forth in Appendix A hereto.  Subject to the foregoing, additional outside
activities will require the approval of the Chief Executive Officer of the
Company.


 


2.                                       Salary and Benefits. 
You will be paid a salary at the annual rate of $288,750, payable in
bi-weekly installments in accordance with the Company’s standard payroll
practices, subject to any increases as determined by the Board of Directors
from time to time.  You will be eligible
to participate in the employee benefits plans, including a 401(k) plan, that
are provided to similarly situated executives of the Company or that are made
available to you by the Board of Directors or any affiliate of the Company. You
will be entitled to a minimum of 4 weeks of paid vacation each year, or such
greater amount as determined in accordance with the standard vacation policy applicable
to similarly situated executives of the Company.


 


3.                                       Bonus.  You will also be eligible to receive an annual cash
bonus of up to 100% of your annual base salary for each fiscal year (the “Annual
Bonus”), less withholding required by law, based on performance criteria
established by the Board of Directors.


 


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Your Annual Bonus will be increased to include any increases in your
annual bonus as approved by the Board of Directors.  Except as otherwise determined by the Board
of Directors or set forth herein, your bonus awards will be paid only if you
are employed by and in good standing with the Company at the time of bonus
payments.


 


4.                                       Restricted Stock Units. 
Contingent on the effectiveness of an initial public offering of
securities of Classmates Media Corporation, a Delaware corporation, or
securities issued by an entity that is a direct or indirect parent of the
Company (Classmates Media Corporation or such entity being the “IPO entity,”
and such initial public offering being the “CMC IPO”) prior to April 30,
2008, and subject to the appropriate action taken by the board of directors of
the IPO entity, on the effective date of such CMC IPO, you will be awarded
restricted stock units covering that number of shares of common stock of the
IPO entity equal to $1,250,000 (the “CMC Restricted Stock Units”)  based on the initial offering price of such
share of common stock in such initial public offering.  For purposes of this agreement, all
references to common stock of the IPO entity shall be deemed to refer to Class A
common stock of CMC.  In the event that
the CMC IPO does not become effective prior to April 30, 2008, subject to
the appropriate action taken by the board of directors of United Online, Inc.
(“United Online”), on the earlier of (i) April 30, 2008, or (ii) immediately
prior to the date of a Change in Control of United Online (as defined in
Appendix B attached hereto), you will be awarded restricted stock units
covering that number of shares of common stock of United Online equal to
$1,250,000 divided by (i), if a Change in Control of United Online
occurs prior to or on December 31, 2007, the average of the closing
selling prices of a share of United Online common stock during the 10 trading
day period ending immediately prior to the announcement of such Change in
Control or (ii), if either (x) a Change in Control of United Online occurs
after December 31, 2007 but prior to April 30, 2008 or (y) no Change
in Control of United Online occurs prior to April 30, 2008, the average of
the closing selling prices of a share of United Online common stock during the
month of December 2007, such closing selling prices as reported by the
National Association of Securities Dealers on the Nasdaq Stock Market (the “UOL
Restricted Stock Units”).  The CMC
Restricted Stock Units and the UOL Restricted Stock Units (collectively,
referred to as the “Restricted Stock Units”) will vest on August 15, 2010
subject to your continued employment with the Company.  Except as otherwise set forth herein, in all
other respects, the Restricted Stock Units will be subject to the terms and
conditions set forth in the applicable stock plan and the restricted stock unit
agreement.


 


In the event that the CMC IPO does not become
effective prior to April 30, 2008 and a Change in Control of Classmates
Media Corporation (as defined in Paragraph B of Appendix B attached
hereto) occurs prior to April 30, 2008, subject to the appropriate action
taken by the board of directors of United Online, immediately prior to or in
connection with the closing of such Change in Control, you will be awarded
$1,250,000 in the form of the consideration received by United Online in
connection with such Change of Control with the value of securities or other property
to be received determined as of the date of the closing of such transaction,
provided that, if agreed to by United Online, the acquiring entity may
substitute $1,250,000 in cash or securities, or a combination thereof, of the
acquiring entity valued at $1,250,000 as of the date of closing


 


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of
such transaction.  The consideration
received in such transaction, whether cash, securities or otherwise, will be
subject to the same vesting schedule and treatment upon terminations of
employment as applicable to the Restricted Stock Units, which are set forth in
this Section 4.


 


Upon the termination of your employment by the
Company “without cause” or by you for “good reason” (each term as defined
below) prior to the third anniversary of the Effective Date, and subject to
your execution (without revocation) of a general waiver and release of all
claims against the Company, its affiliates and successors, in a form
satisfactory to the Company (a “Release”), the vesting of your outstanding
Restricted Stock Units and any additional restricted stock units you hold as of
the Effective Date will be accelerated by the additional number of shares in
which you would have been vested at the time of such termination if you had
completed an additional twelve (12) months of service (calculated as if such
units vest on a monthly basis); provided, however, that in no event will the
number of shares which vest on such an accelerated basis exceed the number of
shares unvested immediately prior to the date of such termination.  Such vesting acceleration will occur upon the
expiration of all applicable review and revocation periods applicable to the
Release as statutorily required by law, and in no event later than the later of
(i) the 15th day of the third month following the end of your taxable year
in which such termination of employment occurs or (ii) the 15th day of the
third month following the end of the Company’s taxable year in which such
termination of employment occurs.


 


Upon the termination of your employment by the
Company “without cause” or by you for “good reason,” prior to the third
anniversary of the Effective Date in connection with, or within twelve (12)
months after, a Change in Control (as defined in Appendix B attached hereto),
and subject to your execution (without revocation) of a Release, the vesting of
your outstanding Restricted Stock Units and any additional restricted stock
units you hold as of the Effective Date will be accelerated by the additional
number of shares in which you would have been vested at the time of such
termination if you had completed an additional twelve (12) months of service,
or, if greater, an additional period of service equal in duration to the actual
period of service you completed between August 15, 2007 (or, with respect
to any other restricted stock units you hold outstanding as of the Effective
Date, the date of the commencement of vesting with respect to such restricted
stock units) and the date of such termination, in all cases calculated as if
such units vest on a monthly basis; provided however, that in no event will the
number of shares which vest on such an accelerated basis exceed the number of
shares unvested immediately prior to the date of such termination.  Such acceleration will occur upon the
expiration of all applicable review and revocation periods applicable to the
Release as statutorily required by law, and in no event later than the later of
(i) the 15th day of the third month following the end of your taxable year
in which such termination of employment occurs or (ii) the 15th day of the
third month following the end of the Company’s taxable year in which such
termination of employment occurs.


 


Upon the termination of your employment as a result
of death or Disability (as defined below), the vesting of your outstanding
Restricted Stock Units and any additional


 


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restricted
stock units you hold as of the Effective Date will be accelerated by the
additional number of shares in which you would have been vested at the time of
such termination if you had completed an additional twelve (12) months of
service (calculated as if such units vest on a monthly basis); provided
however, that in no event will the number of shares which vest on such an
accelerated basis exceed the number of shares unvested immediately prior to the
date of such termination.  For purposes
of this letter, “Disability” means your inability to engage in any substantial
gainful activity necessary to perform your duties hereunder by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted, or can be expected to last, for a
continuous period of not less than twelve (12) months.


 


5.                                       Policies; Procedures;
Proprietary Information and Inventions Agreement.  As an
employee of the Company, you will be expected to abide by all of the policies
and procedures applicable to similarly situated executives of the Company,
including, without limitation, the terms of: the Proprietary Information and
Inventions Agreement between you and United Online (or any successor thereto or
affiliate thereof), a copy of which is attached hereto as Appendix C and is
incorporated herein by reference; the Insider Trading Policy; the Code of
Ethics; and the Employee Handbook, and you agree to execute the foregoing upon
commencement of your employment.


 


6.                                       At Will Employment. 
Notwithstanding anything to the contrary contained herein, your
employment with the Company will be “at will” and will not be for any specified
term, meaning that either you or the Company will be entitled to terminate your
employment at any time and for any reason, with or without cause.  Any contrary representations that may have
been made to you are superseded by the terms set forth in this paragraph.  This is the full and complete agreement
between you and the Company on this subject. 
Although your job duties, title, compensation and benefits, as well as
the personnel policies and procedures applicable to you, may change from time
to time, the “at will” nature of your employment may only be changed in an
express written agreement signed by you and the Chief Executive Officer of the
Company and approved by the Board of Directors or committee thereof.


 


7.                                       Termination of
Employment


 


a.                                       Termination by You.  If you terminate your employment with the Company for
any reason other than for “good reason” as defined below, all obligations of
the Company as set forth in this letter will cease, other than the obligation
to pay you any accrued base salary for services rendered through the date of
termination, to pay you for any accrued but unused vacation days as of the date
of termination, and to fulfill its obligations in accordance with the terms of
the applicable stock plan and award agreement. 
If you terminate your employment with the Company for “good reason,” as
defined below, in addition to the foregoing, the Company will pay you the
Separation Payment (as defined below) and the bonus payment (described in the
second sentence of Section 7(b) below) subject to the conditions set
forth in Section 7(b) below. 
However, and notwithstanding the termination of your employment by you,
you will continue to be


 


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obligated to comply with
the terms of the Proprietary Information and Inventions Agreement and the
restrictive covenants set forth in Section 9 below.


 


b.                                       Termination by the
Company.  If your employment is terminated by the Company “without
cause” as defined below, and subject to your execution (without revocation) of
a Release (as defined in Section 4), the Company will pay you a separation
payment (the “Separation Payment”) equal to the sum of (i) twelve (12)
months of your then current annual base salary, (ii) your Annual Bonus,
and (iii) a prorated portion of your Annual Bonus based upon the time
elapsed between December 31 of the preceding year and your date of
termination In addition, notwithstanding the last sentence of Section 3
hereof, if your date of termination occurs following the end of a fiscal year
and prior to the date that you would have otherwise been entitled to be paid
your annual bonus for such fiscal year, the Company will pay you an amount
equal to the annual bonus that you would have received had you remained
employed by and in good standing with the Company through the date the annual
bonus for such fiscal year is paid, which amount shall be paid at the same time
and manner that such payment would have been paid to you had you remained employed
through such date.  Solely for purposes
of the first sentence hereof, “Annual Bonus” shall mean the lesser of (1) 100%
of your then current annual base salary and (2) the most recent annual
bonus paid to you.  Payment of this
Separation Payment and bonus payment will be contingent on your signing
(without revocation) the Release and your continued compliance with the
Proprietary Information and Inventions Agreement and the restrictive covenants
set forth in Section 9 below.  This
Separation Payment will be payable monthly on a pro rata basis over twelve (12)
months with the first such payment commencing upon the expiration of all
applicable review and revocation periods applicable to the Release as
statutorily required by law.  Upon
termination of your employment by the Company “without cause,” other than the
obligations set forth in the first sentence of Section 7(a) above and
the acceleration of vesting provided in Section 4 above, the Company will
have no further obligation to you except pursuant to this paragraph.


 


If your employment is terminated by the Company “with
cause” as defined below, the Company will have no further obligation to you
under the terms of this letter, other than the obligations set forth in the
first sentence of Section 7(a) above. 
However, and notwithstanding the termination of your employment by the
Company “with cause” or “without cause,” or by you for “good reason,” you will
continue to be obligated to comply with the terms of the Proprietary
Information and Inventions Agreement and the restrictive covenants set forth in
Section 9 below.


 


You have the right decline to receive a portion of
the benefits set forth under Sections 4 and 7 in the event that you determine
that the provision of such benefits to you would result in a “parachute payment”
as such term is defined in Section 280(G)(b)(2) of the Internal
Revenue Code of 1986.


 


c.                                       Definitions.


 


For purposes of this letter, “good reason” means:


 


(i)                   a reduction in your base salary without your
prior written consent;


 


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  (ii)

  	
   

  	
  a material reduction in your position, duties or responsibilities in
  a manner inconsistent with the terms of this agreement, without your prior
  written consent, unless such reduction is effected at the request of Mark R.
  Goldston; or

  
	
  (iii)

  	
   

  	
  any material un-waived breach by the Company of the terms of this
  letter;

  
	
  (iv)

  	
   

  	
  provided however, that with respect to any of (i) –
  (iii) above, you shall provide written notice to the Company of the
  existence of the good reason condition within ninety (90) days of its initial
  existence and the Company shall have 30 days to cure such condition.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For purposes of this letter, “with cause” means your commission of
  any one or more of the following acts:

  
	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  willfully damaging of the property, business, business relationships,
  reputation or goodwill of the Company or its parent or any subsidiary
  thereof;

  
	
  (ii)

  	
   

  	
  commission of a felony or a misdemeanor involving moral turpitude;

  
	
  (iii)

  	
   

  	
  theft, dishonesty, fraud or embezzlement;

  
	
  (iv)

  	
   

  	
  willfully violating any rules or regulations of any governmental
  or regulatory body that is or is reasonably expected to be injurious to the
  Company or its parent or any subsidiary thereof;

  
	
  (v)

  	
   

  	
  the use of alcohol, narcotics or other controlled substances to the
  extent that it prevents you from efficiently performing services for the
  Company or its parent or any subsidiary thereof;

  
	
  (vi)

  	
   

  	
  willfully injuring any other employee of the Company or its parent or
  any subsidiary thereof;

  
	
  (vii)

  	
   

  	
  willfully injuring any person in the course of performance of
  services for the Company or its parent or any subsidiary thereof;

  
	
  (viii)

  	
   

  	
  disclosing to a competitor or other unauthorized persons confidential
  or proprietary information or secrets of the Company or its parent or any
  subsidiary thereof;

  
	
  (ix)

  	
   

  	
  solicitation of business on behalf of a competitor or a potential
  competitor of the Company or its parent or any subsidiary thereof;

  
	
  (x)

  	
   

  	
  harassment of any other employee of the Company or its parent or any
  subsidiary thereof or the commission of any act which otherwise creates an
  offensive work environment for other employees of the Company or its parent
  or any subsidiary thereof;

  
	
  (xi)

  	
   

  	
  failure for any reason within five (5) days after receipt by you
  of written notice thereof from the Company, to correct, cease or otherwise
  alter any insubordination, failure to comply with instructions, inattention
  to or neglect of the duties to be performed by you or other act or omission
  to act that in the opinion of the Company does or may adversely affect the
  business or operations of the Company or its parent or any subsidiary
  thereof;

  
	
  (xii)

  	
   

  	
  breach of any material term of this letter; or

  
	
  (xiii)

  	
   

  	
  any other act or omission that is determined to constitute “cause” in
  the good faith discretion of the Board of Directors.

  



 


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For purposes of this letter, “without cause” means
any reason not within the scope of the definition of the term “with cause.”


 


d.                                       Code Section 409A Deferral
Period.  Notwithstanding any provision to the contrary
in this letter, no payment or distribution under this letter which constitutes
an item of deferred compensation under Section 409A of the Internal
Revenue Code (the “Code”) and becomes payable by reason of your termination of
employment with the Company will be made to you prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of your “separation
from service” (as such term is defined in Treasury Regulations issued under
Code Section 409A) or (ii) the date of your death, if you are deemed
at the time of such separation from service to be a “key employee” within the
meaning of that term under Code Section 416(i) and such delayed
commencement is otherwise required in order to avoid a prohibited distribution
under Code Section 409A(a)(2).  Upon
the expiration of the applicable Code Section 409A(a)(2) deferral
period, all payments and benefits deferred pursuant to this Section 7(d) (whether
they would have otherwise been payable in a single sum or in installments in
the absence of such deferral) shall be paid or reimbursed to you in a lump sum,
and any remaining payments due under this letter will be paid in accordance
with the normal payment dates specified for them herein.


 


8.                                       Withholding Taxes. 
All forms of compensation referred to in this letter are subject to
reduction to reflect applicable withholding and payroll taxes.


 


9.                                       Restrictive Covenants. 
Until twelve (12) months after termination of your employment with the
Company for any reason, so long as you are receiving the Separation Payment,
you will not, at any place in any county, city or other political subdivision
of the United States in which the Company (or its parent or any subsidiary
thereof) is engaged in business or providing its services:


 


a.                                       directly or indirectly design, develop,
manufacture, market or sell any product or service which is in competition with
the products or services of the Company (or its parent or any subsidiary
thereof); or


 


b.                                      directly or indirectly own any interest in,
control, be employed by or associated with or render advisory, consulting or
other services (including but not limited to services in research) to any
person or entity, or subsidiary, subdivision, division or joint venture of such
entity in connection with the design, development, manufacture, marketing or
sale of a product or service which is in competition with the products or
services of the Company (or its parent or any subsidiary thereof); provided,
however, that nothing in this letter will prohibit you from owning less than
one percent (1%) of the equity interests of any publicly held entity.


 


10.                                 Entire Agreement. 
This letter (including any appendices thereto), together with the
Proprietary Information and Inventions Agreement, any handbooks and policies
applicable to similarly situated executives of the Company in effect from time
to time and the applicable stock option plan and restricted stock unit
agreement, contains all of the


 


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terms of your employment
with the Company and supersedes any prior understandings or agreements, whether
oral or written, between you and the Company; provided, however, nothing herein
is intended to modify, terminate or otherwise affect your continuing
obligations including, without limitation, those set forth in the
noncompetition provisions, under the Consulting Services Agreement dated
effective as of November 16, 2004, by and between Mypoints.com, Inc.,
Layton Han and King Ventures, as amended by the Amendments dated February 15,
2005 and November 30, 2005 and the letter dated February 15,
2006.  If any provision of this letter is
held by an arbitrator or a court of competent jurisdiction to conflict with any
federal, state or local law, or to be otherwise invalid or unenforceable, such
provision shall be construed in a manner so as to maximize its enforceability
while giving the greatest effect as possible to the parties’ intent.  To the extent any provision cannot be construed
to be enforceable, such provision will be deemed to be eliminated from this
letter and of no force or effect and the remainder of this letter will
otherwise remain in full force and effect and be construed as if such portion
had not been included in this letter. 
This letter is not assignable by you. 
This letter may be assigned by the Company to its parent or any
subsidiary or any affiliate thereof or to successors in interest to the Company
or its lines of business.


 


11.                                 Amendment and Governing
Law.  This letter may not be amended or modified
except by an express written agreement signed by you and the Chief Executive
Officer of the Company.  The terms of
this letter and the resolution of any disputes will be governed by California
law, and venue for any disputes will be in Los Angeles, California.


 


12.                                 Term.  This
letter will expire on the third anniversary of the Effective Date, except
Sections 6, 9, 10, 11, and 12 will survive such expiration.  Following the expiration of this letter, your
employment with the Company will continue to be “at will.”


 


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We look forward to continuing our successful
relationship.  You may indicate your
agreement with these terms by signing and dating this letter.


 


If you have any questions, please call the
undersigned.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  MYPOINTS.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  	
   

  
	
   

  	
  Name: Mark R. Goldston

  
	
   

  	
  Title: Chairman & Chief Executive Officer

  
	
   

  
	
  I have read the foregoing and accept the terms set forth in this
  letter:

  
	
   

  
	
  /s/ Layton Han

  	
   

  
	
  Layton Han

  
					



 


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Appendix A


 


Permitted
Outside Activities:


 


•                  you
may continue your equity holdings in, and Board membership with, LSC, Inc.
with the understanding that the agreement between the Company and LSC, Inc.
has terminated and your board membership represents a minimal time commitment.


 


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Appendix B


 


A
Change in Control shall be deemed to have occurred (i) if a Change in Control
of United Online, Inc. occurs as described in Paragraph A below or (ii) if
a Change in Control of Classmates Media Corporation occurs as described in
Paragraph B below.


 


A.           If CMC IPO Does Not Become
Effective or CMC IPO Becomes Effective and United Online Owns 33 1/3% or More:


 


In
the event a CMC IPO does not become effective, or a CMC IPO becomes effective
and United Online, Inc. owns 33-1/3% or more of the total combined voting
power of all of Classmates Media Corporation’s outstanding securities, “Change
in Control” shall mean a change in ownership or control effected through any of
the following transactions:


 


“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.


 


“Board”
shall mean the Corporation’s Board of Directors.


 


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


 


(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, 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


 


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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.


 


B.            Change in Control of
Classmates Media Corporation


 


“Change
in Control” of Classmates Media Corporation shall mean a change in ownership or
control of the Corporation effected through any of the following transactions:


 


“Corporation”
shall mean Classmates Media Corporation, a Delaware corporation, and any
successor corporation to all or substantially all of the assets or voting stock
of Classmates Media Corporation.


 


“Board”
shall mean the Corporation’s Board of Directors.


 


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


 


(i)                                                        a merger, consolidation or reorganization
approved by the Corporation’s stockholders, unless securities
representing more than 33-1/3 percent (33.33%) of the total combined voting
power of the voting securities of the successor corporation are immediately
thereafter beneficially owned, directly or indirectly, by the person or persons
who beneficially owned 33-1/3 percent (33.33%) or more of the Corporation’s
outstanding voting securities immediately prior to such transaction,


 


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


 


(iii)                                                  the closing of any transaction or series of
related transactions pursuant to which any person or any group of persons
comprising a “group” within the meaning of Rule 13d-5(b)(1) of the
1934 Act (other than the Corporation or a person that, prior to such transaction
or series of related transactions, directly or indirectly controls, is
controlled by or is under common control with, the Corporation) becomes
directly or indirectly (whether as a result of a single acquisition or by
reason of one or more acquisitions within the twelve (12)-month period ending
with the most recent acquisition) the beneficial owner (within the meaning of Rule 13d-3
of the 1934 Act) of (A) securities possessing (or convertible into or
exercisable for securities possessing) 33-1/3 percent (33.33%) or more of the
total combined voting power of all of the Corporation’s outstanding securities
(as measured in terms of the power to vote with respect to the election of
Board members) or (B) securities representing 33-1/3 percent (33.33%) or
more of the aggregate market value of all of the Corporation’s outstanding
capital stock, measured in each instance immediately after the consummation of
such transaction or series of related transactions and whether such transaction
or transactions involve a direct issuance from the Corporation or


 


12

















 


the acquisition of outstanding securities held by
one or more of the Corporation’s existing 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.


 


In no event, however, shall a Change in Control be
deemed to occur as a result of a spin-off distribution by United Online, Inc.
of all or any portion of the Corporation’s outstanding securities held by
United Online, Inc. to its existing stockholders in proportion to their
holdings of United Online, Inc. capital stock.


 


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Appendix C


 


[Proprietary
Information and Inventions Agreement]


 


[Intentionally Omitted]


 


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