Document:

Exhibit 10.17

 

U.S. EMPLOYEES

 

UNITED ONLINE, INC.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT

 

RECITALS

 

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

 

B.                                    Participant is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s issuance of shares of Common Stock to the Participant under the Plan.

 

C.                                    All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A; provided, however, that any capitalized terms not defined in this Agreement shall have the meaning set forth in the Plan.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

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

 

AWARD SUMMARY

 

	
Award   Date:
    	
 
    	
<Award   Date>
    
	
 
    	
 
    	
 
    
	
Number   of Shares Subject to Award:
    	
 
    	
<#   of Shares Awarded> shares of Common Stock (the “Shares”)
    
	
 
    	
 
    	
 
    
	
Vesting   Commencement Date: 
    	
 
    	
                      ,   20     
    
	
 
    	
 
    	
 
    
	
Vesting   Schedule:
    	
 
    	
The   Shares shall vest in a series of                    (      ) successive installments as   follows:                         upon the Participant’s continuation in Service through each such annual   vesting date. Such vesting schedule is hereby designated the “Normal Vesting   Schedule” for the Shares. Should any scheduled vesting date under the Normal   Vesting Schedule otherwise occur on a date on which the Common Stock is not   traded on the Stock Exchange serving as the primary market for the Common   Stock, then that vesting date shall instead be deemed to occur on the last   day prior to such scheduled vesting date on which the Common Stock is so   traded. The Shares shall also be subject to accelerated vesting, in whole or   in part, in accordance with the provisions of Paragraph 5 of this 
    

 

 

	
 
    	
 
    	
Agreement.
    
	
 
    	
 
    	
 
    
	
Issuance   Schedule
    	
 
    	
Each   Share in which the Participant vests in accordance with the terms of this   Agreement shall be issued, subject to the Corporation’s collection of all   applicable Withholding Taxes, on the applicable vesting date for that Share   or as soon thereafter as administratively practicable, but in no event later   than the close of the calendar year in which such vesting date occurs or (if   later) the fifteenth day of the third calendar month following such vesting date   (the “Issuance Date”). The Shares which vest pursuant to Paragraph 5 of this   Agreement shall be issued in accordance with the provisions of such   Paragraph. The applicable Withholding Taxes are to be collected pursuant to   the procedures set forth in Paragraph 7 of this Agreement.
    

 

2.                                      Limited Transferability.  Prior to actual receipt of the Shares which vest hereunder, the Participant may not transfer any interest in the Award or the underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will or the laws of inheritance or to the Participant’s designated beneficiary or beneficiaries of this Award. The Participant may also direct the Corporation to re-issue the stock certificates for any Shares which in fact vest and become issuable under the Award during his or her lifetime to one or more designated family members or a trust established for the Participant and/or his or her family members. The Participant may make such a beneficiary designation or certificate directive at any time by filing the appropriate form with the Plan Administrator or its designee.

 

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

 

4.                                      Stockholder Rights and Dividend Equivalents.

 

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

 

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

 

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

 

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subject to the Corporation’s collection of all applicable federal, state and local income and employment withholding taxes.

 

(ii)                                  For any other dividend or distribution, a special book account shall be established for the Participant and credited with a phantom dividend equivalent to the actual dividend or distribution which would have been paid on the Shares at the time subject to this Award had they been issued and outstanding and entitled to that dividend or distribution; provided, however, that no such crediting shall occur if it would result in the Participant receiving credit for the same dividend or distribution more than once, as determined in the sole discretion of the Plan Administrator.  As the Shares subsequently vest hereunder, the phantom dividend equivalents so credited to those Shares in the book account shall also vest, and those vested dividend equivalents shall be distributed to the Participant (in the same form the actual dividend or distribution was paid to the holders of the Common Stock entitled to that dividend or distribution) concurrently with the issuance of the vested Shares to which those phantom dividend equivalents relate.  However, each such distribution shall be subject to the Corporation’s collection of the Withholding Taxes applicable to that distribution. In no event shall any such phantom dividend equivalents vest or become distributable unless the Shares to which they relate vest in accordance with the terms of this Agreement.

 

5.                                      Change of Control; Acceleration of Vesting

 

(a)                                 Any Restricted Stock Units subject to this Award at the time of a Change in Control may be assumed by the successor entity (or parent thereof) or otherwise continued in full force and effect or may be replaced with a cash retention program of the successor entity (or parent thereof) which preserves the Fair Market Value of the unvested shares of Common Stock subject to the Award at the time of the Change in Control and provides for the subsequent vesting and concurrent payout of that value in accordance with the same vesting and issuance schedule that would otherwise be in effect for those shares in the absence of such Change in Control.  In the event of such assumption or continuation of the Award or such replacement of the Award with a cash retention program, no accelerated vesting of the Restricted Stock Units shall occur at the time of the Change in Control. Notwithstanding the foregoing, no such cash retention program shall be established for the Restricted Stock Units subject to this Award to the extent such program would otherwise be deemed to constitute a deferred compensation arrangement subject to the requirements of Code Section 409A and the Treasury Regulations thereunder.

 

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

 

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

 

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·                                           If an Involuntary Termination of the Participant’s Service occurs within twelve (12) months after the Change in Control event, then the Participant shall immediately vest in an additional number of Shares equal to the additional number of Shares in which the Participant would have been vested at the time of such Involuntary Termination if the Shares subject to this Award had vested in a series of successive equal monthly installments over the duration of the Normal Vesting Schedule. In no event, however, shall the number of Shares which vest on such an accelerated basis exceed the number of Shares unvested immediately prior to the date of the Participant’s Involuntary Termination.  The Shares that vest upon such Involuntary Termination of Service shall be issued to the Participant, subject to the Corporation’s collection of all applicable Withholding Taxes, on the date of such Involuntary Termination or as soon thereafter as administratively practicable, but in no event later than the close of the calendar year in which the date of such Involuntary Termination occurs or (if later) the fifteenth day of the third calendar month following such date. In the event of a replacement cash retention program under Paragraph 5(a), the foregoing provisions shall be applied to the proceeds of such replacement program attributable to the portion of Shares that would have otherwise vested on an accelerated basis in accordance herewith upon such Involuntary Termination had the Award been assumed or otherwise continued in effect.

 

(d)                                 If the Restricted Stock Units subject to this Award at the time of the Change in Control are not assumed or otherwise continued in effect or replaced with a cash retention program in accordance with Paragraph 5(a), then those units shall vest immediately prior to the closing of the Change in Control. The Shares subject to those vested units shall be converted into the right to receive for each such Share the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of that Change in Control, and such consideration shall be distributed to Participant on the effective date of such Change in Control or as soon as administratively practicable thereafter, but in no event later than three (3) business days following such effective date.  Such distribution shall be subject to the Corporation’s collection of the applicable Withholding Taxes pursuant to the provisions of Paragraph 7.

 

(e)                                  Upon the Participant’s Separation from Service as a result of the Participant’s death or Disability, this Award will vest on an accelerated basis as to that number of additional Shares in which the Participant would have otherwise been vested on the date of such Separation from Service had the Participant completed an additional twelve (12) months of employment with the Corporation and had this Award been structured so as to vest in successive equal monthly installments over the vesting schedule.  Except to the extent that another issuance date may be required in order to comply with any applicable requirements of Code Section 409A, the Shares underlying the Award that vests on an accelerated basis in accordance with this Paragraph 5(e) will be issued, subject to the Corporation’s collection of all applicable Withholding Taxes, on the date of such Separation from Service or as soon as thereafter as administratively practicable, but in no event later than the close of the calendar year in which the date of such Separation from Service occurs or (if later) the fifteenth day of the third calendar month following the date of such Separation from Service.

 

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

 

6.                                      Adjustment in Shares.  The total number and/or class of securities issuable pursuant to this Award shall be subject to adjustment upon certain corporate events as set forth in Article One, Section V(H) of the Plan.  The adjustments shall be made in such manner as the Plan Administrator deems appropriate, and those adjustments shall be final, binding and conclusive.

 

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7.                                      Issuance of Shares of Common Stock.

 

(a)                                 On each applicable Issuance Date for the Shares which vest in accordance with the provisions of this Agreement, the Corporation shall issue to or on behalf of the Participant the vested shares of Common Stock (which may be in electronic form) to be issued on such date, subject to the Corporation’s collection of the applicable Withholding Taxes.

 

(b)                                 Until such time as the Corporation provides the Participant with notice to the contrary, the Corporation shall collect the applicable Withholding Taxes through an automatic Share withholding procedure pursuant to which the Corporation will withhold, on the applicable Issuance Date for the Shares that vest under the Award, a portion of those vested Shares with a Fair Market Value (measured as of the applicable tax date for such Shares) equal to the amount of such Withholding Taxes (the “Share Withholding Method”); provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the Corporation’s required tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to supplemental taxable income. Participant shall be notified in writing in the event such Share Withholding Method is no longer available.

 

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

 

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

 

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

 

(d)                                 The Corporation shall concurrently, with each issuance of vested Shares in accordance with the foregoing provisions of this Paragraph 7, distribute to the Participant any outstanding phantom dividend equivalents credited with respect to those Shares. The Corporation shall collect the Withholding Taxes with respect to each distribution of phantom dividend equivalents by withholding a portion of that distribution equal to the amount of the applicable Withholding Taxes, with the cash portion of the distribution to be the first portion so withheld, or through such other tax withholding arrangement as the Corporation deems appropriate.

 

(e)                                  Except as otherwise provided in Paragraph 5 or Paragraph 7(b), the settlement of all Restricted Stock Units which vest under the Award shall be made solely in shares of Common Stock.  No fractional share of Common Stock shall be issued pursuant to this Award, and any fractional share resulting from any calculation made in accordance with the terms of this Agreement shall be rounded down to the next whole share of Common Stock.

 

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8.                                      Compliance with Laws and Regulations.  The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with all applicable requirements of law relating thereto and with all applicable regulations of the Stock Exchange on which the Common Stock is listed for trading at the time of such issuance.

 

9.                                      Notices.  Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices and directed to the attention of Stock Plan Administrator.  Any notice required to be given or delivered to Participant shall be in writing and addressed to Participant at the most current address then indicated for Participant on the Corporation’s employee records or delivered electronically to Participant through the Corporation’s electronic mail system.  All notices shall be deemed effective upon personal delivery or delivery through the Corporation’s electronic mail system or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

 

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

 

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

 

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

 

13.                               Employment at Will.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Participant) or of Participant, which rights are hereby expressly reserved by each, to terminate Participant’s Service at any time for any reason, with or without cause.

 

14.                               Code Section 409A.  (a) It is the intention of the parties that the provisions of this Agreement comply with the requirements of the short-term deferral exception of Section 409A of the Code and Treasury Regulations Section 1.409A-1(b)(4).  Accordingly, to the extent there is any ambiguity as to whether one or more provisions of this Agreement would otherwise contravene the requirements or limitations of Code Section 409A applicable to such short-term deferral exception, then those provisions shall be interpreted and applied in a manner that does not result in a violation of the requirements or limitations of Code Section 409A and the Treasury Regulations thereunder that apply to such exception.

 

(b)  If and to the extent this Agreement may be deemed to create an arrangement subject to the requirements of Code Section 409A, then the following provisions shall apply:

 

·                                           No Shares or other amounts which become issuable or distributable under this Agreement by reason of Participant’s cessation of Service shall actually be issued or distributed to Participant until the date of the Participant’s Separation from Service due to such cessation of Service or as soon thereafter as administratively practicable, but in no event later than the later of (i) the close of the 

 

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calendar year in which such Separation from Service occurs or (ii) the fifteenth day of the third calendar month following the date of such Separation from Service.

 

·                             No Shares or other amounts which become issuable or distributable under this Agreement by reason of Participant’s cessation of Service shall actually be issued or distributed to Participant prior to the earlier of (i) the first day of the seventh (7th) month following the date of the Participant’s Separation from Service or (ii) the date of Participant’s death, if Participant is deemed at the time of such Separation from Service to be a specified employee under Section 1.409A-1(i) of the Treasury Regulations issued under Code Section 409A, as determined by the Plan Administrator in accordance with consistent and uniform standards applied to all other Code Section 409A arrangements of the Corporation, and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). The deferred Shares or other distributable amount shall be issued or distributed in a lump sum on the first day of the seventh (7th) month following the date of Participant’s Separation from Service or, if earlier, the first day of the month immediately following the date the Corporation receives proof of Participant’s death.

 

·                             No amounts that vest and become payable under Paragraph 5 of this Agreement by reason of a Change in Control shall be distributed to the Participant at the time of such Change in Control, unless that transaction also qualifies as a change in control event under Code Section 409A and the Treasury Regulations thereunder.  In the absence of such a qualifying change in control, the distribution shall not be made until the date or dates on which those amounts are to be distributed pursuant to the Normal Vesting Schedule or (to the extent applicable) the provisions of Paragraph 5(c) of this Agreement.

 

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

 

	
 
    	
UNITED   ONLINE, INC.
    
	
 
    	
 
    
	
 
    	
By:   
    	
Francis   Lobo
    
	
 
    	
 
    	
 
    
	
 
    	
Title:   
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
PARTICIPANT
    
	
 
    	
 
    
	
 
    	
Name:   <Participant Name>
    
	
 
    	
 
    
	
 
    	
Signature:   <Signed Electronically>
    

 

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APPENDIX A

 

DEFINITIONS

 

The following definitions shall be in effect under the Agreement:

 

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

 

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

 

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

 

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

 

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

 

F.                                      Change in Control shall have the meaning set forth in the Plan.

 

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

 

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

 

I.                                        Corporation shall mean United Online, Inc., a Delaware corporation, and any successor entity to all or substantially all of the assets or voting stock of United Online, Inc. which shall by appropriate action adopt the Plan.

 

J.                                        Disability shall mean the Participant’s inability to engage in any substantial activity necessary to perform his or her duties and responsibilities 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.

 

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

 

L.                                     Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading hours (i.e.,

 

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before after-hours trading begins) on the date in question on the Stock Exchange serving as the primary market for the Common Stock, as such price is reported by the National Association of Securities Dealers (if primarily traded on the Nasdaq Global or Global Select Market) or as officially quoted in the composite tape of transactions on any other Stock Exchange on which the Common Stock is then primarily traded.  If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

 

M.                                 Involuntary Termination shall mean the termination of the Participant’s Service which occurs by reason of:

 

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

 

(ii)                                  Participant’s resignation following (A) a material reduction in the scope of the duties, responsibilities and authority of his or her position with the Corporation (or any Parent or Subsidiary), it being understood that a change in Participant’s title or Participant’s reporting responsibilities or requirements shall not, in and of itself, be deemed a material reduction, (B) a material reduction in Participant’s base salary, or (C) a relocation of Participant’s place of employment by more than fifty (50) miles; provided and only if such reduction or relocation is effected by the Corporation (or any Parent or Subsidiary) without Participant’s consent. In no event, however, shall Participant’s resignation for any of the foregoing reasons constitute an Involuntary Termination unless each of the following requirements is satisfied: (x) Participant provides written notice of the clause (A), (B) or (C) event to the Corporation (or the Parent or Subsidiary employer) within thirty (30) days after the occurrence of that event, (y) the Corporation (or the Parent or Subsidiary employer) fails to take appropriate remedial action to remedy such event within thirty (30) days after receipt of such notice and (z) Participant resigns from his or her employment with the Corporation (or the Parent or Subsidiary employer) within ninety (90) days following the initial occurrence of the clause (A), (B) or (C) event.

 

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

 

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

 

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

 

Q.                                    Plan shall mean the Corporation’s 2010 Incentive Compensation Plan, as amended and restated from time to time.

 

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

 

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S.                                      Separation from Service means the Participant’s cessation of Employee status and shall be deemed to occur at such time as the level of bona fide services the Participant is to render as an Employee (or non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services the Participant rendered as an Employee during the immediately preceding thirty-six (36) months (or such shorter period of time in which the Participant has been in Employee status). Any such determination, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Code Section 409A.

 

T.                                     Service shall mean the Participant’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. For purposes of this Agreement, Participant shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) Participant no longer performs services in any of the foregoing capacities for the Corporation (or any Parent or Subsidiary) or (ii) the entity for which Participant performs such services ceases to remain a Parent or Subsidiary of the Corporation, even though Participant may subsequently continue to perform services for that entity. Except to the extent otherwise required by law or expressly authorized by the Plan Administrator or by the Corporation’s written policy on leaves of absence in effect at the time of such leave, no Service credit shall be given for vesting purposes for any period the Participant is on a leave of absence.

 

U.                                    Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.

 

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

 

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

 

A-3Exhibit 10.18

 

OFFICER WITH EMPLOYMENT AGREEMENT

 

UNITED ONLINE, INC.

NOTICE OF GRANT OF STOCK OPTION

 

Notice is hereby given of the following option grant (the “Option”) to purchase shares of the Common Stock of United Online, Inc. (the “Corporation”):

 

	
Optionee:
    	
 
    	
                                                              
    
	
 
    	
 
    	
 
    
	
Grant   Date:
    	
 
    	
                                     ,   201    
    
	
 
    	
 
    	
 
    
	
Exercise   Price:
    	
 
    	
$             per   share
    
	
 
    	
 
    	
 
    
	
Number   of
    	
 
    	
 
    
	
Option   Shares:
    	
 
    	
                                                     shares
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
                          , 202
    
	
 
    	
 
    	
 
    
	
Type of Option:
    	
        
    	
Incentive   Stock Option
    
	
 
    	
 
    	
 
    
	
 
    	
        
    	
Non-Statutory   Stock Option
    

 

Exercise Schedule:   The Option shall become exercisable in a series of                (      ) successive installments as follows:                        upon Optionee’s continuation in Service through each such vesting date.  Except as otherwise provided in Paragraph 6 of the attached Stock Option Agreement, the Option shall not become exercisable for any additional Option Shares after Optionee’s cessation of Service.

 

Optionee understands and agrees that the Option is granted subject to and in accordance with the terms of the United Online, Inc. 2010 Incentive Compensation Plan, as amended and restated as of June 13, 2013 (the “Plan”).  Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set forth in the Stock Option Agreement attached hereto as Exhibit A.  A copy of the Plan is available upon request made to the Stock Plan Administrator at the Corporation’s principal offices at 21301 Burbank Boulevard, Woodland Hills, CA 91367.

 

Optionee may obtain a copy of the official prospectus for the Plan by accessing Optionee’s portfolio on Fidelity’s website (www.fidelity.com).  Optionee may also obtain a printed copy of the prospectus by contacting the Stock Plan Administrator by telephoning (818) 287-3000.

 

Employment at Will.  Nothing in this Notice or in the attached Stock Option Agreement or in the Plan shall confer upon Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with Cause or without Cause.

 

Definitions.  All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the Stock Option Agreement attached as Exhibit A.

 

 

DATED:                                 , 201    

 

 

	
 
    	
UNITED   ONLINE, INC. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
OPTIONEE
    

 

 

ATTACHMENTS

 

EXHIBIT A — STOCK OPTION AGREEMENT

 

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EXHIBIT A

 

UNITED ONLINE, INC.

STOCK OPTION AGREEMENT

 

RECITALS

 

A.                                    The Corporation has implemented the Plan for the purpose of providing eligible persons in the Corporation’s service with the opportunity to participate in one or more cash or equity incentive compensation programs designed to encourage them to continue their service relationship with the Corporation.

 

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

 

C.                                    All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix; provided, however, that any capitalized terms not defined in this Agreement shall have the meaning set forth in the Plan.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

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

 

2.                                      Option Term.  The term of this option shall commence on the Grant Date and continue in effect until the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6.

 

3.                                      Limited Transferability.

 

(a)                                 Except to the limited extent provided in Paragraph 3(b), this option shall be neither transferable nor assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and may be exercised, during Optionee’s lifetime, only by Optionee.  However, Optionee may designate one or more persons as the beneficiary or beneficiaries of this option, and this option shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding this option.  Such beneficiary or beneficiaries shall take the transferred option subject to all the terms and conditions of this Agreement, including (without limitation) the limited time period during which this option may, pursuant to Paragraph 5, be exercised following Optionee’s death.

 

(b)                                 If this option is designated a Non-Statutory Option in the Grant Notice, then this option may, with the Plan Administrator’s consent, be assigned in whole or in part during Optionee’s lifetime through a gratuitous transfer to one or more of Optionee’s Family Members or to a trust established for the exclusive benefit of Optionee and/or one or more such

 

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Family Members.  The assigned portion shall be exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such assignment.  The terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such assignment.

 

4.                                      Dates of Exercise.

 

(a)                                 (a)                                 This option shall become exercisable for the Option Shares in one or more installments in accordance with the Exercise Schedule set forth in the Grant Notice.  As the option becomes exercisable for such installments, those installments shall accumulate, and the option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the option term under Paragraph 5 or 6.

 

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

 

(a)                                 Except as otherwise expressly provided in subparagraphs (b) through (f) of this Paragraph 5, should Optionee cease to remain in Service for any reason while this option is outstanding, then Optionee shall have until the close of business on the last business day coincident with or immediately preceding the expiration of the twelve (12)-month period measured from the date of such cessation of Service during which to exercise this option for any or all of the Option Shares for which this option is vested and exercisable at the time of Optionee’s cessation of Service, but in no event shall this option be exercisable at any time after the close of business on the last business day coincident with or immediately preceding the Expiration Date.

 

(b)                                 In the event Optionee ceases Service by reason of his or her death while this option is outstanding, then this option may be exercised, for any or all of the Option Shares for which this option is vested and exercisable at the time of Optionee’s cessation of Service, by (i) the personal representative of Optionee’s estate or (ii) the person or

 

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persons to whom the option is transferred pursuant to Optionee’s will or the laws of inheritance following Optionee’s death. However, if Optionee dies while holding this option and has an effective beneficiary designation in effect for this option at the time of his or her death, then the designated beneficiary or beneficiaries shall have the exclusive right to exercise this option following Optionee’s death.  Any such right to exercise this option shall lapse, and this option shall cease to be outstanding, upon the close of business on the last business day coincident with or immediately preceding the earlier of (i) the expiration of the twelve (12)-month period measured from the date of Optionee’s death or (ii) the Expiration Date.  Upon the expiration of such limited exercise period, this option shall terminate and cease to be outstanding for any exercisable Option Shares for which the option has not otherwise been exercised.

 

(c)                                  Should Optionee cease Service by reason of Disability while this option is outstanding, then Optionee shall have until the close of business on the last business day coincident with or immediately preceding the expiration of the twelve (12)-month period measured from the date of such cessation of Service during which to exercise this option for any or all of the Option Shares for which this option is vested and exercisable at the time of such cessation of Service.  In no event, however, shall this option be exercisable at any time after the close of business on the last business day coincident with or immediately preceding the Expiration Date.

 

Note:  Unless such Disability also constitutes Permanent Disability, the exercise of this option more than three (3) months after the Optionee’s cessation of Employee status by reason of Disability will result in the taxation of the option as a Non-Statutory Option even if the option is designated an Incentive Stock Option in the Grant Notice.

 

(d)                                 The applicable period of post-Service exercisability in effect pursuant to the foregoing provisions of this Paragraph 5 shall automatically be extended by an additional period of time equal in duration to any interval within such post-Service exercise period during which the exercise of this option or the immediate sale of the Option Shares acquired under this option cannot be effected in compliance with applicable federal and state securities laws, but in no event shall such an extension result in the continuation of this option beyond the close of business on the last business day coincident with or immediately preceding the Expiration Date.

 

(e)                                  Should Optionee’s Service be terminated With Cause, or should Optionee engage in any other conduct, while in Service or following cessation of Service, that is materially detrimental to the business or affairs of the Corporation, as determined in the sole discretion of the Plan Administrator, then this option, whether or not vested and exercisable at the time, shall terminate immediately and cease to be outstanding.

 

(f)                                   Should Optionee’s Service terminate by reason of an Involuntary Termination within the period commencing with the Corporation’s execution of a definitive agreement for a Change in Control transaction and ending with the earlier of (i) the termination of that agreement without the consummation of such Change in Control or (ii) the expiration of the twenty-four (24)-month period measured from the effective date of such Change in Control and while this option is outstanding, then this option shall remain so outstanding until the close

 

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of business on the last business day coincident with or immediately preceding the earliest to occur of (i) the expiration of the twelve (12)-month period measured from the date of such Involuntary Termination, (ii) the termination of the option in accordance with Paragraph 6(b) or (iii) the Expiration Date.

 

(g)                                  During the limited period of post-Service exercisability provided under this Paragraph 5, this option may not be exercised in the aggregate for more than the number of Option Shares for which this option is at the time vested and exercisable.  Except to the extent specifically authorized by the Plan Administrator pursuant to the terms of any other express written agreement with the Optionee, this option shall not vest or become exercisable for any additional Option Shares, whether pursuant to the normal Exercise Schedule set forth in the Grant Notice or the special vesting acceleration provisions of Paragraph 6 below, following Optionee’s cessation of Service.  Upon the expiration of such limited exercise period or (if earlier) upon the close of business on the last business day coincident with or immediately preceding the Expiration Date, this option shall terminate and cease to be outstanding for any exercisable Option Shares for which the option has not otherwise been exercised.

 

6.                                      Special Acceleration of Option.

 

(a)                                 This option, to the extent outstanding at the time of an actual Change in Control but not otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately prior to the effective date of such Change in Control, become exercisable for all of the Option Shares at the time subject to this option and may be exercised for any or all of those Option Shares as fully vested shares of Common Stock.  However, this option shall not become exercisable on such an accelerated basis if and to the extent: (i) this option is to be assumed by the successor entity (or parent thereof) or is otherwise to continue in full force and effect pursuant to the terms of the Change in Control transaction, (ii) this option is to be replaced with an economically-equivalent substitute equity award or (iii) this option is to be replaced with a cash retention program of the successor entity (or parent thereof) which preserves the spread existing at the time of the Change in Control on any Option Shares for which this option is not otherwise at that time vested and exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such shares) and provides for the subsequent vesting and concurrent payout of that spread in accordance with the same Exercise Schedule for those Option Shares set forth in the Grant Notice. Notwithstanding the foregoing, no such cash retention program shall be established for this option (or any other option granted to Optionee under the Plan) to the extent such program would otherwise be deemed to constitute a deferred compensation arrangement subject to the requirements of Code Section 409A and the Treasury Regulations thereunder.

 

(b)                                 Immediately following the consummation of the Change in Control, this option shall terminate and cease to be outstanding, except to the extent assumed by the successor entity (or parent thereof) or otherwise continued in effect pursuant to the terms of the Change in Control transaction.

 

(c)                                  If this option is assumed in connection with a Change in Control or otherwise continued in effect, then this option shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities into which the shares of

 

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Common Stock subject to this option would have been converted in consummation of such Change in Control had those shares actually been outstanding at the time. Appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same.  To the extent the actual holders of the Corporation’s outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor entity (or parent thereof) may, in connection with the assumption or continuation of this option, but subject to the Plan Administrator’s approval prior to the Change in Control, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control, provided such common stock is readily tradable on an established U.S. securities exchange.

 

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

 

(e)                                  The following provisions shall apply to the Option with respect to the Optionee’s termination of employment:

 

(i)                                     If Optionee’s employment is terminated by the Corporation without Cause or by Optionee for Good Reason, then upon Optionee’s satisfaction of the Release Condition, the Option will vest on an accelerated basis as to that number of additional shares in which Optionee would have otherwise been vested at the time of such termination had Optionee completed an additional twelve (12) months of employment with the Corporation and had the Option been structured so as to vest in successive equal monthly installments over the vesting schedule. In no event will the number of additional Option Shares which vest on such an accelerated basis exceed the number of Option Shares unvested under the Option immediately prior to the date of such termination. Except to the extent another vesting date may be required to comply with any applicable requirements of Section 409A of the Code, such vesting shall occur within the sixty (60)-day period following the date of Optionee’s Separation from Service as a result of Optionee’s termination without Cause or Optionee’s resignation for Good Reason, provided that the Release required of Optionee has become effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release.  However, should such sixty (60)-day period span two taxable years, the vesting shall be effected during the portion of that period that occurs in the second taxable year if required in order to comply with Section 409A of the Code.

 

(ii)                                  If Optionee’s employment is terminated by the Corporation without Cause or by Optionee for Good Reason within the period commencing with the execution by the Corporation of a definitive agreement for a Change in Control and ending with the earlier of (i) the termination of that agreement without the consummation of such Change in Control or (ii) the expiration of the twenty-four (24)-month period measured from the date such Change in Control occurs, then upon Optionee’s satisfaction of the Release

 

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Condition, the Option (or replacement award, as the case may be) will fully vest on an accelerated basis to the extent then unvested.  Except to the extent another vesting date may be required to comply with any applicable requirements of Section 409A of the Code, such vesting shall occur within the sixty (60)-day period following the date of Optionee’s Separation from Service as a result of Optionee’s termination without Cause or Optionee’s resignation for Good Reason, provided that the Release required of Optionee has become effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release.  However, should such sixty (60)-day period span two taxable years, the vesting shall be effected during the portion of that period that occurs in the second taxable year if required in order to comply with Section 409A of the Code.

 

(iii)                               Upon Optionee’s Separation from Service as a result of Optionee’s death or Disability, the Option will immediately vest on an accelerated basis as to that number of additional Option Shares in which Optionee would have otherwise been vested on the date of such Separation from Service had Optionee completed an additional twelve (12) months of employment with the Corporation and had the Option been structured so as to vest in successive equal monthly installments over the vesting schedule.

 

7.                                      Adjustment in Option Shares.  Option Shares shall be subject to adjustment upon certain corporate events as set forth in Article One, Section V(H) of the Plan. The adjustments shall be made in such manner as the Plan Administrator deems appropriate, and those adjustments shall be final, binding and conclusive upon Optionee and any other person or persons having an interest in the option.

 

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

 

9.                                      Manner of Exercising Option.

 

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

 

(i)                                     Execute and deliver to the Corporation a Notice of Exercise as to the Option Shares for which the option is exercised or comply with such other procedures as the Corporation may establish for notifying the Corporation, either directly or through an on-line internet transaction with a brokerage firm authorized by the Corporation to effect such option exercises, of the exercise of this option for one or more Option Shares.

 

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

 

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

 

(B)                               shares of Common Stock (whether delivered in the form of actual stock certificates or through attestation of ownership in a manner reasonably satisfactory to the Corporation) held for the requisite period (if any) necessary to avoid any resulting charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date; or

 

(C)                               through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the option) shall concurrently provide irrevocable instructions (i) to a brokerage firm (reasonably satisfactory to the Corporation for purposes of administering such procedure in accordance with the Corporation’s pre-clearance/pre-notification policies) to effect the immediate sale of all or a sufficient portion of the purchased shares so that such brokerage firm can remit to the Corporation, on the settlement date, sufficient funds out of the resulting sale proceeds to cover the aggregate Exercise Price payable for all the purchased shares plus all applicable Withholding Taxes and (ii) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm on such settlement date.

 

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

 

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

 

(iv)                              Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all applicable Withholding Taxes.

 

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

 

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

 

10.                               Compliance with Laws and Regulations.

 

(a)                                 The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Corporation and Optionee with all

 

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applicable requirements of law relating thereto and with all applicable regulations of any Stock Exchange on which the Common Stock is listed for trading at the time of such exercise and issuance.

 

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

 

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

 

12.                               Notices.  Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices and directed to the attention of the Stock Plan Administrator.  Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the most current address then indicated for Optionee on the Corporation’s employee records or shall be delivered electronically to Optionee through the Corporation’s electronic mail system.  All notices shall be deemed effective upon personal delivery or delivery through the Corporation’s electronic mail system or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

 

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

 

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

 

15.                               Excess Shares.  If the Option Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without stockholder approval be issued under the Plan, then this option shall be void with respect to those excess shares, unless stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan.  In no event shall the option be exercisable with respect to any of the excess Option Shares unless and until such stockholder approval is obtained.

 

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16.                               Additional Terms Applicable to an Incentive Option.  In the event this option is designated an Incentive Option in the Grant Notice, the following terms and conditions shall also apply to the grant:

 

(a)                                 This option shall cease to qualify for favorable tax treatment as an Incentive Option if (and to the extent) this option is exercised for one or more Option Shares: (A) more than three (3) months after the date Optionee ceases to be an Employee for any reason other than death or Permanent Disability or (B) more than twelve (12) months after the date Optionee ceases to be an Employee by reason of Permanent Disability.

 

(b)                                 No installment under this option shall qualify for favorable tax treatment as an Incentive Option if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which such installment first becomes exercisable hereunder would, when added to the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or other securities for which this option or any other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate.  Should such One Hundred Thousand Dollar ($100,000) limitation be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess shares in such calendar year as a Non-Statutory Option.

 

(c)                                  Should the exercisability of this option be accelerated upon a Change in Control, then this option shall qualify for favorable tax treatment as an Incentive Option only to the extent the aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which this option first becomes exercisable in the calendar year in which the Change in Control transaction occurs does not, when added to the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or other securities for which this option or one or more other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate.  Should the applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the calendar year of such Change in Control, the option may nevertheless be exercised for the excess shares in such calendar year as a Non-Statutory Option.

 

(d)           Should Optionee hold, in addition to this option, one or more other options to purchase Common Stock which become exercisable for the first time in the same calendar year as this option, then for purposes of the foregoing limitations on the exercisability of such options as Incentive Options, this option and each of those other options shall be deemed to become first exercisable in that calendar year, on the basis of the chronological order in which such options were granted, except to the extent otherwise provided under applicable law or regulation.

 

17.                               Employment at Will.  Nothing in this Agreement or in the Plan shall confer upon Optionee any right to remain in Employee status for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing Optionee) or of Optionee, which rights are hereby expressly reserved by

 

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each, to terminate Optionee’s Employee status at any time for any reason, with Cause or without Cause.

 

18.                               Plan Prospectus.  Optionee may obtain a copy of the official prospectus for the Plan by accessing Optionee’s portfolio on Fidelity’s website (www.fidelity.com).  Optionee may also obtain a printed copy of the prospectus by contacting the Stock Plan Administrator by telephoning 818-287-3000.

 

19.                               Optionee Acceptance.  Optionee must accept the terms and conditions of this Agreement either electronically through the electronic acceptance procedure established by the Corporation or through a written acceptance delivered to the Corporation in a form satisfactory to the Corporation.  In no event shall this option be exercised in the absence of such acceptance.

 

IN WITNESS WHEREOF, United Online, Inc. has caused this Agreement to be executed on its behalf by its duly-authorized officer on the day and year first indicated in the Grant Notice.

 

	
 
    	
UNITED   ONLINE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

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APPENDIX

 

The following definitions shall be in effect under the Agreement:

 

A.                                    Agreement shall mean this Stock Option Agreement.

 

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

 

C.                                    Cause shall have the meaning assigned to such term in the Employment Agreement.

 

D.                                    Change in Control shall have the meaning set forth in the Plan.

 

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

 

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

 

G.                                    Corporation shall mean United Online, Inc., a Delaware corporation, and any successor entity to all or substantially all of the assets or voting stock of United Online, Inc. which shall by appropriate action adopt the Plan.

 

H.                                   Disability shall mean the Optionee’s inability to engage in any substantial activity necessary to perform his or her duties and responsibilities under his or her Employment Agreement 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.

 

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

 

J.                                        Employment Agreement shall mean the Employment Agreement or Offer Letter Agreement between Optionee and the Corporation (or any Parent or Subsidiary) in effect on the Award Date.

 

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

 

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

 

M.                                 Exercise Schedule shall mean the schedule set forth in the Grant Notice pursuant to which the option is to become exercisable for the Option Shares in one or more installments over the Optionee’s period of Service.

 

 

N.                                    Expiration Date shall mean the date specified in the Grant Notice for measuring the maximum term for which the option may remain outstanding.

 

O.                                    Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading hours (i.e., before after-hours trading begins) on the date in question on the Stock Exchange serving as the primary market for the Common Stock, as such price is reported by the National Association of Securities Dealers (if primarily traded on the Nasdaq Global or Global Select Market) or as officially quoted in the composite tape of transactions on any other Stock Exchange on which the Common Stock is then primarily traded.  If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

 

P.                                      Family Member shall mean any of the following members of Optionee’s family: any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

 

Q.                                    Good Reason shall have the meaning assigned to such term in the Employment Agreement.

 

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

 

S.                                      Grant Notice shall mean the Notice of Grant of Stock Option informing Optionee of the basic terms of the option subject to this Agreement.

 

T.                                     Incentive Stock Option shall mean an option intended to satisfy the requirements of Code Section 422.

 

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

 

(i)                                     Optionee’s involuntary dismissal or discharge by the Corporation without Cause, or

 

(ii)                                  Optionee’s resignation for Good Reason.

 

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

 

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

 

X.                                    Notice of Exercise shall mean the notice of option exercise in the form authorized by the Corporation.

 

 

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

 

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

 

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

 

BB.                           Permanent Disability shall mean the inability of Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death or to be of continuous duration of twelve (12) months or more.

 

CC.                           Plan shall mean the Corporation’s 2010 Incentive Compensation Plan, as amended and restated from time to time.

 

DD.                           Plan Administrator shall mean the Compensation Committee of the Board (or a subcommittee thereof) acting in its capacity as administrator of the Plan.

 

EE.                             Release shall mean the release agreement referred to in the definition of Release Condition.

 

FF.                               Release Condition shall mean the following requirements: (i) Optionee must execute and deliver to the Corporation, within twenty-one (21) days (or forty-five (45) days to the extent such longer period is required under applicable law) after the effective date of Optionee’s termination of employment, a comprehensive agreement releasing the Corporation and its officers, directors, employees, stockholders, subsidiaries, affiliates, representatives and other related parties from all claims that Optionee may have with respect to such parties relating to Optionee’s employment with the Corporation and the termination of that employment relationship and containing such other and additional terms as the Corporation deems satisfactory and (ii) such release must become effective and enforceable after the expiration of any applicable revocation period under federal or state law.

 

GG.                           Separation from Service means Optionee’s cessation of Employee status with the Corporation by reason of his or her death, resignation, dismissal or other termination event and shall be deemed to occur at such time as the level of bona fide services Optionee is to render as such an Employee (or as a non-Employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services Optionee rendered as an employee during the immediately preceding thirty-six (36) months (or such shorter period of time in which Optionee has actually been in employee status with the Corporation). Any such determination of Optionee’s Separation from Service shall, however, be made in accordance with the applicable standards of the treasury regulations issued under Section 409A of the Code.

 

 

HH.                         Service shall mean the Optionee’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. For purposes of this Agreement, Optionee shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) Optionee no longer performs services in any of the foregoing capacities for the Corporation (or any Parent or Subsidiary) or (ii) the entity for which Optionee performs such services ceases to remain a Parent or Subsidiary of the Corporation, even though Optionee may subsequently continue to perform services for that entity. Except to the extent otherwise required by law or expressly authorized by the Plan Administrator or by the Corporation’s written policy on leaves of absence in effect at the time of such leave, no Service credit shall be given for vesting purposes for any period Optionee is on a leave of absence.

 

II.                                   Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.

 

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

 

KK.                         Withholding Taxes shall mean the federal, state and local income taxes and the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the exercise of the option, in accordance with the terms of the Plan.

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