Exhibit 10.17


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


This
Amended and Restated Employment Agreement (the “Agreement”) is made and entered
into effective as of the 13th day of August 2007, by and between United
Online, Inc., a Delaware corporation (“United Online”), with principal
corporate offices at 21301 Burbank Boulevard, Woodland Hills, California 91367,
and Frederic A. Randall, Jr. (“Employee”).


 


WHEREAS,
the Employee had previously entered into an employment agreement effective March 20,
1999 with NetZero, Inc., a wholly-owned subsidiary of United Online which
was subsequently amended and restated as an employment agreement effective January 27,
2004 with United Online (the “Prior 2004 Agreement”); and


 


WHEREAS,
effective as of the date hereof (the “Effective Date”), the Employee and United
Online desire to further amend the Prior 2004 Agreement.


 


NOW
THEREFORE, the Employee and United Online hereby agree as follows:


 


For purposes of this
Agreement, the term “Company” shall mean (i) United Online or (ii) in
the event 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 Classmates Media Corporation (which entity shall
hereinafter be referred to as “CMC,” and such initial public offering shall be
hereinafter referred to as the “CMC IPO”) and the assignment of this Agreement
to CMC pursuant to Section 7 hereof, CMC.


 


1.                                       Employment.


 


1.1           The Company hereby agrees to employ Employee, and Employee hereby
accepts such employment, on the terms and conditions set forth herein,
commencing the date hereof, and continuing through February 15, 2011 (the “Term”),
unless such employment is terminated earlier as provided in Section 4
below.  Employee’s place of employment
shall be in the greater Los Angeles metropolitan area.


 


2.                                       Duties of Employee.


 


2.1           Employee shall serve as Executive Vice President and General Counsel of
the Company.  In this capacity, Employee
shall perform such customary, appropriate and reasonable executive duties as
are usually performed by the General Counsel, including such duties as are
delegated to him from


 


1

















 


time
to time by the Board of Directors of the Company or a committee thereof (the “Board”).  Employee shall report directly to the Company’s
Chief Executive Officer.


 


2.2           Employee agrees to devote Employee’s full time, attention, skill and
efforts to the performance of his duties for the Company during the Term.  This Agreement shall not be interpreted to
prohibit Employee from making passive personal investments or engaging in
charitable and public service activities if those activities do not materially
interfere with the services required under this Agreement.


 


3.                                       Compensation and Other Benefits.


 


3.1           Base Salary.  During the Term, the Company
shall pay to Employee a base salary per fiscal year equal to Employee’s current
base salary (the “Base Salary”), with payments to be made in accordance with
the Company’s standard payment policy and subject to such withholding as may be
required by law.  Employee’s Base Salary
shall be increased to include any increases in Employee’s base salary as
approved by the Board.


 


3.2           Bonus.  During the Term, the Employee
shall also be eligible to receive an annual cash bonus of up to 100% of
Employee’s base salary for each fiscal year (the “Annual Bonus”), less
withholding required by law, based on performance criteria established by the
Board.  Employee’s Annual Bonus shall be
increased to include any increases in Employee’s annual bonus as approved by
the Board.  Employee shall not be
eligible to receive any unpaid Annual Bonus if his employment hereunder is
terminated pursuant to either Section 4.1, or if Employee voluntarily
resigns.


 


3.3           Restricted Stock Units.


 


(a)                                  On August 15, 2007, the Employee will be
awarded restricted stock units covering 210,000 shares of United Online’s
common stock (the “UOL Restricted Stock Units”).  The UOL Restricted Stock Units will vest
according to the following three (3)-year vesting schedule subject to
Employee’s continued employment with United Online (as determined in accordance
with terms of the applicable stock plan and the restricted unit agreement):
one-third of the UOL Restricted Stock Units will vest on February 15,
2009; one-third of the UOL Restricted Stock Units will vest of February 15,
2010; and the remaining on-third of the UOL Restricted Stock Units will vest on
February 15, 2011.  In all other
respects, except as set forth herein, the UOL Restricted Stock Units will be
subject to the terms and conditions set forth in the applicable stock plan and
the restricted stock unit agreement between United Online and the Employee.


 


(b)                                 [Intentionally omitted.]


 


2

















 


(c)                                  Contingent on the effectiveness of the CMC
IPO prior to April 30, 2008, on the effective date of such CMC IPO, you
will be awarded restricted stock units covering that number of shares of common
stock of CMC equal to $2,800,000 divided by the initial offering price of a
share of common stock in such initial public offering (the “CMC Restricted
Stock Units”).  For purposes of this
Agreement, all references to common stock of CMC 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, CMC will not be obligated to award the
CMC Restricted Stock Units described in the preceding sentence.  The CMC Restricted Stock Units will vest
according to the following schedule subject to your continued employment
with CMC: 50% of CMC Restricted Stock Units will vest on February 15, 2009
and the remaining 50% of CMC Restricted Stock Units will vest on February 15,
2010.  Except as otherwise set forth
herein, in all other respects, the CMC Restricted Stock Units will be subject
to the terms and conditions set forth in the applicable stock plan and the
restricted stock unit agreement.


 


(d)                                 If, following a CMC IPO, United Online ceases
to own more than fifty percent (50%) of the total combined voting power of all
of CMC’s outstanding securities, and at that time the Employee is employed by
CMC or its subsidiaries and not by United Online or any of its 50% or more
owned subsidiaries, then the vesting of all outstanding United Online equity-based
awards held by Employee will be accelerated in full and any Company repurchase
options applicable to any such awards will lapse.  For the avoidance of doubt, unless otherwise
specifically provided in this Agreement, applicable stock plan or award
agreement, the sale of CMC prior to a CMC IPO shall not cause or otherwise give
rise to such acceleration of vesting or such lapse of repurchase rights.


 


3.4           Vacation.  Employee shall be entitled to
five (5) weeks paid vacation per year in accordance with the Company’s
vacation policies.


 


3.5           Other Benefits. 
Employee shall be eligible to participate, as of the date of Employee’s
employment, in all group life, health, medical, dental or disability insurance
or other employee, health and welfare benefits made available generally to
other similarly situated executives of the Company or that have been made
available to you by the Board or any affiliate of the Company.  If Employee elects to participate in any of
such plans, Employee’s portion of the premium(s) will be deducted from Employee’s
paycheck.


 


3.6           Business Expenses.  The
Company shall promptly reimburse Employee for all reasonable and necessary
business expenses incurred by Employee in connection with the business of the
Company and the performance of his duties under this Agreement, subject to
Employee providing the


 


3

















 


Company
with reasonable documentation thereof.


 


3.7           Telecommuting. 
Employee shall be entitled to telecommute for a portion of the work week
consistent with past practices or otherwise as agreed by Employee and the Chief
Executive Officer.


 


4.                                       Termination.


 


4.1           Termination for Cause.


 


(a)                                  Termination “for cause” is defined as
follows: the Company terminates Employee’s employment with the Company (1) if Employee
is convicted of a felony, including any act of moral turpitude, which adversely
impacts the Company, or (2) if Employee fails, after receipt of detailed
written notice and after receiving a period of at least thirty (30) days following
such notice to cure such failure, to use his reasonable good faith efforts to
follow the direction of the Company’s Board of Directors and to perform his
obligations hereunder.


 


(b)                                 The Company may terminate this Agreement for
any of the reasons stated in Section 4.1(a) by giving written notice
to Employee without prejudice to any other remedy to which the Company may be
entitled.  The notice of termination
shall specify the grounds for termination. 
If Employee’s employment hereunder is terminated “for cause” pursuant to
this Section 4.1, Employee shall be entitled to receive hereunder his
accrued but unpaid Base Salary and vacation pay through the date of
termination, and reimbursement for any expenses as set forth in Section 3.6,
through the date of termination, but shall not be entitled to receive any
unpaid portion of the Annual Bonus or any other amount.


 


4.2           Termination Without Cause or Involuntary
Termination.


 


(a)                                  If Employee’s employment is terminated
without “cause” as defined in Section 4.1(a), or if Employee is
Involuntarily Terminated (as defined below), the Company (or its successor, as
the case may be) shall pay to Employee (i) any accrued but unpaid Base
Salary and vacation through the date of termination, (ii) reimbursement
for any expenses as set forth in Section 3.6, through the date of
termination, (iii) Employee’s Annual Bonus, prorated through the date of
termination, and (iv), subject to Employee’s 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”), a


 


4

















 


severance
payment in an amount equal to three times Employee’s Base Salary and Annual
Bonus, payable in one lump sum on the date of termination, subject to
withholding as may be required by law, and such severance payment will be paid
upon the expiration of all applicable review and revocation periods applicable
to the Release as statutorily required by law. 
For the purposes of Section 4.2(a)(iii) and Section 4.2(a)(iv) above,
Annual Bonus shall mean the greater of 75% of Employee’s then current Base
Salary or the Annual Bonus paid to Employee for the preceding fiscal year in
the event of Involuntary Termination, or 75% of Employee’s then current Base
Salary in the event of termination without cause.


 


(b)                                 In addition, if Employee’s employment is
terminated without cause (other than if Employee is Involuntarily Terminated)
and if Employee executes and does not revoke a Release, (i) the vesting of
all outstanding restricted stock units held by the Employee will be immediately
accelerated by the additional number of units in which the Employee would have
been vested at the time of such termination if he had completed an additional
twelve (12) months of service (calculated as if such units vest on a monthly
basis) and (ii) the Company repurchase option will lapse with respect to a
number of outstanding restricted shares equal to (x) the sum of the number of
full months that have elapsed between the grant date and the date of
termination, plus twelve (12) additional months, divided by (y) 48 months,
multiplied by (z) the total number of such outstanding restricted
shares.  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.


 


(c)                                  If Employee’s employment is terminated due to
death or permanent disability, the vesting of all outstanding equity-based
awards will be accelerated in full and any Company repurchase options
applicable to any such awards will lapse.


 


(d)                                 If Employee is Involuntarily Terminated, and
if Employee executes and does not revoke a Release (i) all outstanding options
shall remain in effect for a one (1) year period following the date of
termination but not beyond the expiration date of such option as set forth in
the applicable stock plan or award agreement, (ii) the vesting of all
outstanding restricted stock units will be accelerated


 


5

















 


in
full and (iii) any Company repurchase options applicable to restricted
shares will lapse.  The acceleration
described above 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.


 


(e)                                  As used in this Section 4.2, Employee
shall be deemed terminated without cause if Employee resigns following a breach
by the Company of its obligations hereunder; provided, however, in the event of
an unintentional and un-waived breach by the Company, Employee shall provide
the Company with written notice of such breach and the Company shall have
fifteen days following such notice to cure such breach.


 


As
used in this Section 4.2, Employee shall be deemed “Involuntarily
Terminated” if (i) the Company or any successor to the Company terminates
Employee’s employment without cause in connection with or following a Change in
Control (as defined in Appendix A attached hereto); or (ii) in connection
with or following a Change in Control there is (a) a decrease in Employee’s
title or responsibilities without Employee’s consent (it being deemed to be a
decrease in title and/or responsibilities if Employee is not offered the
position of Executive Vice President and General Counsel of the Company or its
successor as well as the acquiring and ultimate parent entity, if any,
following the Change in Control), (b) a decrease in base compensation from
those provided by the Company immediately prior to the Change in Control
without Employee’s consent or (c) a requirement that Employee re-locate
out of the greater Los Angeles metropolitan area without Employee’s consent;
provided however that with respect to any of (a) — (c) Employee shall
provide written notice to the Company of the existence of the aforementioned
condition within ninety (90) days of its initial existence and the Company
shall have thirty (30) days to cure such condition.


 


5.                                       Noncompetition.  For
the eighteen (18) month period following the termination of Employee’s
employment with the Company (but only if Employee has received the severance
payments specified in Section 4.2 above) (the “Noncompetition Period”),
Employee shall not directly engage in, or manage or direct persons engaged in,
a Competitive Business Activity (as defined below) anywhere in the Restricted
Territory (as defined below); provided, that the Noncompetition Period


 


6

















 


shall
terminate if the Company terminates operations or if the Company no longer
engages in any Competitive Business Activity. 
The term “Competitive Business Activity” shall mean, prior to the
effectiveness of the CMC IPO, the business of providing consumers with dial-up
Internet access services (free or pay) and, as of the effectiveness of the CMC
IPO, a business primarily involved in online social networking or a business
primarily involving online loyalty rewards programs.  The term “Restricted Territory” shall mean
each and every county, city or other political subdivision of the United States
in which the Company is engaged in business or providing its services.  The Company agrees that providing services to
a company or entity that is involved in a Competitive Business Activity but
which services are unrelated to the Competitive Business Activity shall not be
deemed a violation of this Agreement. 
For the purposes of damages to the Company with respect to any breach of
this Section 5, the value of Employee’s obligations to the Company under
this Section 5 equals 37.5% of the cash severance payment in Section 4.2(a)(iv) above.


 


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 the Company (or any
successor thereto or affiliate thereof).


 


6.                                       Gross-Up Payment.  If
the aggregate of all payments or benefits made or provided to the Employee
under this Agreement, under all other plans and programs of the Company or
otherwise (the “Aggregate Payment”) is determined to constitute a “parachute
payment,” as such term is defined in Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the “Code”), the Company shall pay
to the Employee, prior to or coincident with the time any excise tax imposed by
Section 4999 of the Code (the “Excise Tax”) is payable with respect to
such Aggregate Payment, an additional amount that, after the imposition of all
penalties, income, excise and other federal, state and local taxes thereon, is
equal to the sum of the Excise Tax on the Aggregate Payment and interest and
penalties imposed with respect to the Excise Tax and such additional amount
(the “Gross-Up Payment”).  For example,
if the Excise Tax imposed with respect to the Aggregate Payment equals
$1,000,000 and all penalties, income, excise and other federal, state and local
taxes on the Gross-Up Payment equal $2,333,333, the Gross-Up Payment will be
$3,333,333.  The determination of whether
the Aggregate Payment constitutes a parachute payment and, if so, the amount to
be paid to the Employee and the time of payment pursuant to this Section 6
shall be made by an independent auditor (the “Auditor”) selected and paid by
the Company and reasonably acceptable to the Employee.  The Auditor shall be a nationally recognized
United States public accounting firm. 
For purposes of determining the amount of the Gross-Up Payment, the
Employee shall be deemed to pay income tax at the highest marginal rates of
federal, state and local income taxation in the calendar year in which the
Gross-Up Payment is


 


7

















 


to
be made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.


 


In
the event that the Excise Tax is finally determined to be less than the amount
taken into account hereunder in calculating the Gross-Up Payment, the Employee
shall repay to the Company, within five (5) business days following the
time that the amount of such reduction in the Excise Tax is finally determined,
the portion of the Gross-Up Payment attributable to such reduction plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income and employment taxes imposed on the Gross-Up Payment
being repaid by the Employee, to the extent that such repayment results in a
reduction in the Excise Tax and a dollar-for-dollar reduction in the Employee’s
taxable income and wages for purposes of federal, state and local income and
employment taxes, plus interest on the amount of such repayment at 120% of the
rate provided in section 1274(b)(2)(B) of the Code.  In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder in calculating the
Gross-Up Payment (including by reason of any payment the existence or amount of
which cannot be determined at the time of the payment of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the Employee with respect
to such excess) within five (5) business days following the time that the
amount of such excess is finally determined. 
The Employee and the Company shall cooperate with each other in
connection with any proceeding or claim relating to the existence or amount of
liability for Excise Tax, and all expenses incurred by the Employee in
connection therewith shall be paid by the Company promptly upon notice of
demand from the Employee.


 


7.                                       Assignment.  Except as provided herein,
neither the Company nor Employee may assign this Agreement or any rights or
obligations hereunder.  This Agreement
will be binding upon the Company and its successors and assigns.  In the event of a Change in Control (as
defined in Appendix A attached hereto), the Company shall cause this Agreement
to be assumed by the Company’s successor as well as any acquiring or ultimate
parent entity, if any, following any Corporate Transaction.


 


Upon
the effectiveness of the CMC IPO, the Company shall assign this agreement to
CMC.  Notwithstanding this assignment,
however, Employee’s Annual Bonus pursuant to Section 3.2 of this Agreement
for fiscal year 2007 shall be payable by United Online under its applicable
bonus plans and any bonuses for subsequent fiscal years during the Term shall
be payable by CMC.


 


8.                                       Miscellaneous.


 


8.1                                 This Agreement supersedes any and all other
agreements, either oral or in


 


8

















 


writing,
between the parties hereto with respect to the employment of Employee by the
Company, other than the Confidentiality and Proprietary Agreement, and constitutes
the entire agreement between the Company and the Employee with respect to its
subject matter.


 


8.2                                 This Agreement may not be amended,
supplemented, modified or extended, except by written agreement which expressly
refers to this Agreement, which is signed by each of the parties hereto and
which is authorized by the Company’s Board.


 


8.3                                 This Agreement is made in and shall be
governed by the laws of California, without giving effect to its
conflicts-of-law principles.


 


8.4                                 If any provision of this Agreement 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 shall be deemed to be eliminated
from this Agreement and of no force or effect and the remainder of this
Agreement shall otherwise remain in full force and effect and be construed as
if such portion had not been included in this Agreement.


 


8.5                                 Employee represents and warrants to the
Company that there is no restriction or limitation, by reason of any agreement
or otherwise, upon Employee’s right or ability to enter into this Agreement and
fulfill his obligations under this Agreement.


 


8.6                                 All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by first-class
mail, postage prepaid, registered or certified, or delivered either by hand, by
messenger or by overnight courier service, and addressed to the receiving party
at the respective address set forth in the heading of this Agreement, or at
such other address as such party shall have furnished to the other party in
accordance with this Section 8.6 prior to the giving of such notice or
other communication.


 


8.7                                 Notwithstanding any provision to the contrary
in this agreement, no payment or distribution under this agreement which
constitutes an item of deferred compensation under Section 409A of the
Code and becomes payable by reason of the Employee’s termination of employment
with the Company will be made to the Employee prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of the Employee’s
“separation from service” (as such term is defined in Treasury


 


9

















 


Regulations
issued under Code Section 409A) or (ii) the date of the Employee’s
death, if he is 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 8.7
(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
the Employee in a lump sum, and any remaining payments due under this Agreement
will be paid in accordance with the normal payment dates specified for them
herein.


 


 


(Signature Page Follows)


 


10

















 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
first date written above.


 


	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Berglass

  	
   

  
	
   

  	
   

  	
  Name: Robert Berglass

  
	
   

  	
   

  	
  Title: Legal Independent
  Director,

  
	
   

  	
   

  	
  Compensation Committee
  Chair of

  
	
   

  	
   

  	
  United Online, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  	
   

  
	
   

  	
   

  	
  Name: Mark R. Goldston

  
	
   

  	
   

  	
  Title: Chairman, President
  and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Frederic A. Randall, Jr.

  	
   

  
	
   

  	
  Frederic A. Randall, Jr.

  



 


11

















 


Appendix A


 


For purposes of this
Agreement, a Change in Control shall be deemed to have occurred (i) if a
Change in Control of United Online occurs as described in Paragraph A below or (ii) if
a Change in Control of CMC occurs as described in Paragraph B below following
the CMC IPO.


 


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


 


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


 


“United Online” 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 United
Online’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 United
Online’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 United Online’s outstanding voting securities immediately
prior to such transaction,


 


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


 


(iii)                                                  the acquisition, directly or indirectly by
any person or related group of persons (other than United Online or a person
that directly or indirectly controls, is controlled by, or is under common
control with, United Online), 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 United Online’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


 


12

















 


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.


 


B.            Change in Control of
Classmates Media Corporation


 


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


 


“CMC” 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 CMC’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 CMC’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 CMC’s outstanding voting securities
immediately prior to such transaction,


 


(ii)                                                     any stockholder-approved transfer or other
disposition of all or substantially all of CMC’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 CMC 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, CMC) 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 CMC’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 CMC’s
outstanding capital stock, measured in each instance immediately


 


13

















 


after
the consummation of such transaction or series of related transactions and
whether such transaction or transactions involve a direct issuance from the CMC
or the acquisition of outstanding securities held by one or more of the CMC’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
CMC’s outstanding securities held by United Online, Inc. to its existing
stockholders in proportion to their holdings of United Online, Inc.
capital stock.


 


14