Document:

Exhibit 10.5

 

UNITED ONLINE, INC.
  2010 EMPLOYEE STOCK PURCHASE PLAN

 

I.                                   PURPOSE OF THE PLAN

 

This Employee Stock Purchase Plan is intended to promote the interests of United Online, Inc., a Delaware corporation, by providing eligible employees with the opportunity to acquire a proprietary interest in the Corporation through participation in an employee stock purchase plan designed to qualify under Section 423 of the Code.  The Plan shall be effective upon the consummation of the transactions contemplated by the Separation and Distribution Agreement between the Corporation and FTD Companies, Inc., a Delaware corporation (“FTD”), whereby the Corporation and FTD will be separated into two independent, publicly-traded companies (the date of such transaction, the “Spin-Off Date”), subject to the provisions of Section IV(E) of the Plan.

 

Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix.

 

II.                              ADMINISTRATION OF THE PLAN

 

The Plan Administrator shall have full authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to comply with the requirements of Code Section 423. Decisions of the Plan Administrator shall be final and binding on all parties having an interest in the Plan.

 

III.                         STOCK SUBJECT TO PLAN

 

A.                                         The stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares of Common Stock purchased on the open market. The number of shares of Common Stock reserved for issuance over the term of the Plan shall be limited to 1,309,244 shares.

 

B.                                    Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration or should the value of outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, then equitable adjustments shall be made by the Plan Administrator to (i) the maximum number and class of securities issuable under the Plan, (ii) the maximum number and class of securities purchasable per Participant during any offering period and on any one Purchase Date during that offering period, (iii) the maximum number and class of securities purchasable in total by all Participants under the Plan on any one Purchase Date and (iv) the number and class of securities and the price per share in effect under each outstanding purchase right. The adjustments shall be made in such manner as the Plan Administrator deems appropriate, and such adjustments shall be final, binding and conclusive.

 

 

IV.                          OFFERING PERIODS

 

A.                                         Shares of Common Stock shall be offered for purchase under the Plan through a series of successive offering periods until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated.

 

B.                                         Unless otherwise specified by the Plan Administrator prior to the start of the applicable offering period:

 

(i)                                     each offering period shall have a duration of twenty-four (24) months, and

 

(ii)                                  offering periods shall commence on the first business day of May and the first business day of November each year.

 

C.                                         The terms and conditions of each offering period may vary, and two or more offerings periods may run concurrently under the Plan, each with its own terms and conditions. In addition, special offering periods may be established with respect to entities that are acquired by the Corporation (or any subsidiary of the Corporation) or under such other circumstances as the Plan Administrator deems appropriate. In no event, however, shall the terms and conditions of any offering period contravene the express limitations and restrictions of the Plan, and the participants in each separate offering period shall have equal rights and privileges under that offering in accordance with the requirements of Section 423(b)(5) of the Code and the applicable Treasury Regulations thereunder.

 

D.                                         Unless otherwise specified by the Plan Administrator prior to the start of the applicable offering period, each offering period shall be comprised of four successive Purchase Intervals. Purchase Intervals shall run from the first business day in May to the last business day in October each year and from the first business day in November each year to the last business day in April in the following year, unless otherwise specified by the Plan Administrator prior to the start of the applicable offering period.

 

E.                                          Notwithstanding the foregoing, the initial offering period under the Plan shall commence on the day immediately following the Spin-Off Date.  If the Spin-Off Date is prior to October 31, 2013, the initial offering period shall have a duration equal to 24 months plus the number of whole months between the Spin-Off Date through and including October 31, 2013, with the first Purchase Interval equal to the number of months in the initial offering period minus 18 months, and then three successive six-month Purchase Intervals.  If the Spin-Off Date is on October 31, 2013, the initial offering period shall have a duration equal to 24 months, with four successive six-month Purchase Intervals. If the Spin-Off Date is after October 31, 2013, the initial offering period shall have a duration equal to 24 months minus the number of whole months between November 1, 2013 and the Spin-Off Date, with the first Purchase Interval equal to the number of months in the initial offering period minus 18 months, and then three successive six-month Purchase Intervals.  Notwithstanding any other provision of the Plan, purchase rights granted to Participants in the initial offering period shall be subject to (a) stockholder approval of the Plan at the 2013 Special Stockholders Meeting and (b) the consummation of the transactions

 

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contemplated by the Separation and Distribution Agreement between the Corporation and FTD Companies, Inc., a Delaware corporation (“FTD”), whereby the Corporation and FTD will be separated into two independent publicly-traded companies. If such stockholder approval is not obtained and/or if such transactions are not consummated, then (i) the initial offering period, together with the Plan, shall immediately terminate, (ii) all payroll deductions collected from Participants in that offering period shall be promptly refunded, and (iii) no further offering periods shall commence under the terminated Plan.

 

F.                                           Should the Fair Market Value per share of Common Stock on any Purchase Date within an offering period be less than the Fair Market Value per share of Common Stock on the start date of that offering period, then the individuals participating in that offering period shall, immediately after the purchase of shares of Common Stock on their behalf on such Purchase Date, be transferred from that offering period and automatically enrolled in the offering period commencing on the next business day following such Purchase Date, provided and only if the Fair Market Value per share of Common Stock on the start date of that new offering period is lower than the Fair Market Value per share of Common Stock on the start date of the offering period in which they were currently enrolled.

 

V.                               ELIGIBILITY

 

A.                                         Each individual who is an Eligible Employee on the start date of an offering period under the Plan may enter that offering period only on such start date. However, an Eligible Employee may participate in only one offering period at a time.

 

B.                                         The date an individual enters an offering period shall be designated his or her Entry Date for purposes of that offering period.

 

C.                                         Each corporation that becomes a Corporate Affiliate after the Spin-Off Date shall automatically become a Participating Corporation effective as of the start date of the first offering date coincident with or next following the date on which it becomes such an affiliate, unless the Plan Administrator determines otherwise prior to the start date of that offering period.

 

D.                                         To participate in the Plan for a particular offering period, the Eligible Employee must complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase agreement and a payroll deduction authorization or other authorized form of contribution allowable for that offering period) and file such forms with the Plan Administrator (or its designate) on or before his or her scheduled Entry Date.

 

VI.                          PAYROLL DEDUCTIONS

 

A.                                         For each offering period, the Plan Administrator may allow contributions to the Plan to be effected in the form of periodic payroll deductions or one or more other forms specified by the Plan Administrator prior to the start date of the applicable offering period. However, all contributions, whether in the form of payroll deductions or other mode, shall be made solely on the basis of the Participant’s Cash Earnings for the offering period. Unless the Plan Administrator determines otherwise prior to the start of the applicable offering period:

 

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(i)                                     Participant contributions for each offering period shall be solely in the form of payroll deductions, and

 

(ii)                                  the payroll deductions that each Participant may authorize for purposes of acquiring shares of Common Stock during an offering period may be in any multiple of one percent (1%) of the Cash Earnings paid to that Participant during each Purchase Interval within such offering period, up to a maximum of fifteen percent (15%), unless the Plan Administrator establishes a different maximum percentage prior to the start date of the applicable offering period.

 

B.                                         The rate of payroll deduction or other permitted form of contribution so authorized shall continue in effect throughout the offering period, except to the extent such rate is changed in accordance with the following guidelines:

 

(i)                                     The Participant may, at any time during the offering period, reduce the rate of his or her payroll deduction or other permitted form of contribution to become effective as soon as administratively possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such reduction per Purchase Interval.

 

(ii)                                  The Participant may, at any time during the offering period, increase the rate of his or her payroll deduction or other permitted form of contribution (up to the maximum percentage limit for that offering period) to become effective as soon as administratively possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such increase per Purchase Interval.

 

(iii)                               The Participant may at any time reduce his or her rate of payroll deduction under the ESPP or other form of permitted contribution to 0%. Such reduction shall become effective as soon as administratively practicable following the filing of the appropriate form with the Plan Administrator. The Participant’s existing payroll deductions or other permitted contribution for the Purchase Interval in which such reduction occurs shall be applied to the purchase of shares of Common Stock on the next scheduled Purchase Date.

 

C.                                         Payroll deductions shall begin on the first pay day administratively feasible following the Participant’s Entry Date into the offering period and shall (unless sooner terminated by the Participant) continue through the pay day ending with or immediately prior to the last day of that offering period. To the extent the Plan Administrator authorizes other forms of contributions for an offering period, those permitted contributions shall be collected in the manner specified by the Plan Administrator for that offering period. The payroll deductions or other permitted forms of contribution so collected shall be credited to the Participant’s book account under the Plan, but no interest shall be paid on the balance from time to time outstanding in such account, unless otherwise required by the terms of that offering period. Unless the Plan Administrator determines otherwise prior to the start of the applicable offering period, the amounts collected from the Participant shall not be required to be held in any segregated account or trust fund and may be commingled with the general assets of the Corporation and used for any corporate purpose.

 

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D.                                         Payroll deductions or other permitted form of contribution shall automatically cease upon the termination of the Participant’s purchase right in accordance with the provisions of the Plan. The Participant’s acquisition of Common Stock under the Plan on any Purchase Date shall neither limit nor require the Participant’s acquisition of Common Stock on any subsequent Purchase Date, whether within the same or a different offering period.

 

VII.                     PURCHASE RIGHTS

 

A.                                    Grant of Purchase Right. A Participant shall be granted a separate purchase right for each offering period in which he or she participates. The purchase right shall be granted on the Participant’s Entry Date into the offering period. Unless the Plan Administrator determines otherwise prior to the start date of the applicable offering period and subject to the limitations of Article VIII below, each purchase right granted for an offering period shall provide the Participant with the right to purchase up to 1,963 shares of Common Stock on each Purchase Date within that offering period for a maximum of 7,852 shares of Common Stock for an offering period comprised of four Purchase Intervals. The Participant shall execute a stock purchase agreement embodying such terms and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable.

 

Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Corporation or any Corporate Affiliate.

 

B.                                    Exercise of the Purchase Right. Each purchase right shall be automatically exercised in installments on each successive Purchase Date within the offering period, and shares of Common Stock shall accordingly be purchased on behalf of each Participant (other than Participants whose payroll deductions or other contributions have previously been refunded pursuant to the Termination of Purchase Right provisions below) on each such Purchase Date. The purchase shall be effected by applying the Participant’s payroll deductions or other form of contribution for the Purchase Interval ending on such Purchase Date to the purchase of whole shares of Common Stock at the purchase price in effect for the Participant for that Purchase Date.

 

C.                                    Purchase Price. The purchase price per share at which Common Stock will be purchased on the Participant’s behalf on each Purchase Date within the offering period will be established by the Plan Administrator prior to the start of that offering period, but in no event shall such purchase price be less than eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Common Stock on the Participant’s Entry Date into that offering period or (ii) the Fair Market Value per share of Common Stock on that Purchase Date.

 

D.                                    Number of Purchasable Shares. The number of shares of Common Stock purchasable by a Participant on each Purchase Date during the offering period shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions or other permitted form of contribution during the Purchase

 

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Interval ending with that Purchase Date by the purchase price in effect for the Participant for that Purchase Date. However, the maximum number of shares of Common Stock purchasable per Participant on any one Purchase Date shall not exceed 1,963 shares, subject to periodic adjustments in the event of certain changes in the Corporation’s capitalization. In addition, the maximum number of shares of Common Stock purchasable in total by all Participants on any one Purchase Date shall not exceed 471,328 shares, subject to periodic adjustments in the event of certain changes in the Corporation’s capitalization. However, the Plan Administrator shall have the discretionary authority, exercisable prior to the start of any offering period under the Plan, to increase or decrease the limitations to be in effect for the number of shares purchasable per Participant (and the corresponding maximum number of shares purchasable per Participant for that offering period) and in total by all Participants on each Purchase Date within that offering period.

 

E.                                    Excess Payroll Deductions/Contributions. Any payroll deductions or other permitted form of contribution not applied to the purchase of shares of Common Stock on any Purchase Date because they are not sufficient to purchase a whole share of Common Stock shall be held for the purchase of Common Stock on the next Purchase Date. However, any payroll deductions or other permitted form of contribution not applied to the purchase of Common Stock by reason of the limitation on the maximum number of shares purchasable per Participant or in the aggregate on the Purchase Date shall be promptly refunded.

 

F.                                     Suspension of Payroll Deductions/Contributions. In the event that a Participant is, by reason of the accrual limitations in Article VIII, precluded from purchasing additional shares of Common Stock on one or more Purchase Dates during the offering period in which he or she is enrolled, then no further payroll deductions or other form of contribution permitted for that offering period shall be collected from such Participant with respect to those Purchase Dates. The suspension of such deductions or contributions shall not terminate the Participant’s purchase right for the offering period in which he or she is enrolled, and payroll deductions or other permitted form of contribution shall automatically resume on behalf of such Participant once he or she is again able to purchase shares during that offering period in compliance with the accrual limitations of Article VIII.

 

G.                                   Termination of Purchase Right. The following provisions shall govern the termination of outstanding purchase rights:

 

(i)                                     A Participant may withdraw from the offering period in which he or she is enrolled by filing the appropriate form with the Plan Administrator (or its designate) at any time prior to the next scheduled Purchase Date in that offering period, and no further payroll deductions or other permitted form of contribution shall be collected from the Participant with respect to the offering period. Any payroll deductions or other permitted contributions collected during the Purchase Interval in which such withdrawal occurs shall, at the Participant’s election, be immediately refunded or held for the purchase of shares on the next Purchase Date. If no such election is made at the time of such withdrawal, then the payroll deductions or other permitted form of contribution collected with respect to the Purchase Interval in which such withdrawal occurs shall be refunded as soon as possible.

 

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(ii)                                  The Participant’s withdrawal from the offering period shall be irrevocable, and the Participant may not subsequently rejoin that offering period. In order to resume participation in any subsequent offering period, such individual must re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into that offering period.

 

(iii)                               Should the Participant cease to remain an Eligible Employee for any reason (including death, disability or change in status) while his or her purchase right remains outstanding, then that purchase right shall immediately terminate, and all of the Participant’s payroll deductions or other permitted contributions for the Purchase Interval in which the purchase right so terminates shall be immediately refunded. However, should the Participant cease to remain in active service by reason of an approved unpaid leave of absence, then the Participant shall have the right, exercisable up until the last business day of the Purchase Interval in which such leave commences, to (a) withdraw all the payroll deductions or other permitted contributions collected to date on his or her behalf for that Purchase Interval or (b) have such funds held for the purchase of shares on his or her behalf on the next scheduled Purchase Date. In no event, however, shall any further payroll deductions or other permitted form of contribution be collected on the Participant’s behalf during such leave. Upon the Participant’s return to active service (x) within three (3) months following the commencement of such leave or (y) prior to the expiration of any longer period for which such Participant is provided with reemployment rights by statute or contract, his or her payroll deductions or other permitted form of contribution under the Plan shall automatically resume at the rate in effect at the time the leave began, unless the Participant withdraws from the Plan prior to his or her return. An individual who returns to active employment following a leave of absence which exceeds in duration the applicable (x) or (y) time period will be treated as a new Employee for purposes of subsequent participation in the Plan and must accordingly re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into the offering period.

 

H.                                   Change in Control. Each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the payroll deductions or other permitted contributions of each Participant for the Purchase Interval in which such Change in Control occurs to the purchase of whole shares of Common Stock at the purchase price per share in effect for that Purchase Internal pursuant to the Purchase Price provisions of Paragraph C of this Article VII. However, the applicable limitation on the number of shares of Common Stock purchasable per Participant shall continue to apply to any such purchase, but not the limitation applicable to the maximum number of shares of Common Stock purchasable in total by all Participants.

 

The Corporation shall use reasonable efforts to provide at least ten (10)-days prior written notice of the occurrence of any Change in Control, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights prior to the effective date of the Change in Control.

 

I.                                        Proration of Purchase Rights. Should the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the Plan, the Plan Administrator

 

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shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions or other permitted form of contribution of each Participant, to the extent in excess of the aggregate purchase price payable for the Common Stock pro-rated to such individual, shall be refunded.

 

J.                                      ESPP Broker Account. The shares purchased on behalf of each Participant shall be deposited directly into a brokerage account which the Corporation shall establish for the Participant at a Corporation-designated brokerage firm. The account will be known as the ESPP Broker Account. Except as otherwise provided below, the deposited shares may not be transferred (either electronically or in certificate form) from the ESPP Broker Account until the later of the following two periods: (i) the end of the two (2)-year period measured from the Participant’s Entry Date into the offering period in which the shares were purchased and (ii) the end of the one (1)-year measured from the actual purchase date of those shares. Such limitation shall apply both to transfers to different accounts with the same ESPP broker and to transfers to other brokerage firms. Any shares held for the required holding period may be transferred (either electronically or in certificate form) to other accounts or to other brokerage firms.

 

The foregoing procedures shall not in any way limit when the Participant may sell his or her shares. Those procedures are designed solely to assure that any sale of shares prior to the satisfaction of the required holding period is made through the ESPP Broker Account. In addition, the Participant may request a stock certificate or share transfer from his or her ESPP Broker Account prior to the satisfaction of the required holding period should the Participant wish to make a gift of any shares held in that account. However, shares may not be transferred (either electronically or in certificate form) from the ESPP Broker Account for use as collateral for a loan, unless those shares have been held for the required holding period.

 

The foregoing procedures shall apply to all shares purchased by the Participant under the Plan, whether or not the Participant continues in Employee status.

 

K.                                   Assignability. The purchase right shall be exercisable only by the Participant and shall not be assignable or transferable by the Participant.

 

L.                                    Stockholder Rights. A Participant shall have no stockholder rights with respect to the shares subject to his or her outstanding purchase right until the shares are purchased on the Participant’s behalf in accordance with the provisions of the Plan and the Participant has become a holder of record of the purchased shares.

 

VIII.                ACCRUAL LIMITATIONS

 

A.                                         No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under the Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Common Stock accrued under any other purchase right granted under the Plan and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars ($25,000.00) worth of stock of the Corporation or any Corporate Affiliate (determined on the

 

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basis of the Fair Market Value per share on the date or dates such rights are granted) for each calendar year such rights are at any time outstanding.

 

B.                                         For purposes of applying such accrual limitations to the purchase rights granted under the Plan, the following provisions shall be in effect:

 

(i)                                     The right to acquire Common Stock under each outstanding purchase right shall accrue in a series of installments on each successive Purchase Date during the offering period on which such right remains outstanding.

 

(ii)                                  No right to acquire Common Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock under one or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000.00) worth of Common Stock (determined on the basis of the Fair Market Value per share on the date or dates of grant) for each calendar year such rights were at any time outstanding.

 

C.                                         If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a particular Purchase Interval, then the payroll deductions or other permitted form of contribution which the Participant made during that Purchase Interval with respect to such purchase right shall be promptly refunded.

 

D.                                         In the event there is any conflict between the provisions of this Article VIII and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article VIII shall be controlling.

 

IX.                         EFFECTIVE DATE AND TERM OF THE PLAN

 

A.                                         The Plan shall become effective for the offering period commencing on the Effective Date; provided, however, that (i) the purchase rights for that initial offering period shall be subject to the provisions of Paragraph E of Article IV and (ii) no purchase rights granted under the Plan shall be exercised, and no shares of Common Stock shall be issued hereunder, until the Corporation shall have complied with all applicable requirements of the 1933 Act (including the registration of the shares of Common Stock issuable under the Plan on a Form S-8 registration statement filed with the Securities and Exchange Commission), all applicable listing requirements of any Stock Exchange (or the Nasdaq Stock Market, if applicable) on which the Common Stock is listed for trading and all other applicable requirements established by law or regulation.

 

B.                                         Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i) the last business day in April 2020, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which all purchase rights are exercised in connection with a Change in Control. No further purchase rights shall be granted or exercised, and no further payroll deductions or other forms of contribution shall be collected, under the Plan following such termination.

 

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X.                              AMENDMENT OF THE PLAN

 

A.                                         The Board may alter or amend the Plan at any time to become effective as of the start date of the next offering period thereafter under the Plan. In addition, the Board may suspend or terminate the Plan at any time to become effective immediately following the close of any subsequent Purchase Interval.

 

B.                                         In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Corporation’s stockholders: (i) increase the number of shares of Common Stock issuable under the Plan, except for permissible adjustments in the event of certain changes in the Corporation’s capitalization or (ii) modify the eligibility requirements for participation in the Plan.

 

XI. GENERAL PROVISIONS

 

A.                                         All costs and expenses incurred in the administration of the Plan shall be paid by the Corporation; however, each Plan Participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of any shares purchased under the Plan.

 

B.                                         Nothing in the Plan shall confer upon the Participant any right to continue in the employ of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Corporate Affiliate employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person’s employment at any time for any reason, with or without cause.

 

C.                                         The provisions of the Plan shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules.

 

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Schedule A

 

Corporations Participating in
 the United Online, Inc.

2010 Employee Stock Purchase Plan

 

Juno Internet Services, Inc.
 NetZero, Inc.
 United Online Advertising Network, Inc.
 Memory Lane, Inc.
 MyPoints.com, Inc.
 CMC Services, Inc.

 

 

APPENDIX

 

The following definitions shall be in effect under the Plan:

 

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

 

B.                                    Cash Earnings shall mean (i) the regular base salary paid to a Participant by one or more Participating Companies during such individual’s period of participation in one or more offering periods under the Plan and (ii) any overtime payments, bonuses, commissions, profit-sharing distributions and other incentive-type payments received during such period. Cash Earnings shall be calculated before deduction of (A) any income or employment tax withholdings or (B) any contributions made by the Participant to any Code Section 401(k) salary deferral plan or Code Section 125 cafeteria benefit program now or hereafter established by the Corporation or any Corporate Affiliate. Cash Earnings shall not include any contributions made on the Participant’s behalf by the Corporation or any Corporate Affiliate to any employee benefit or welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125 contributions deducted from such Cash Earnings).

 

C.                                    Change in Control shall mean a change in ownership of the Corporation pursuant to any of the following transactions:

 

(i)                                     a merger, consolidation or other reorganization approved by the Corporation’s stockholders in which a change in ownership or control of the Corporation is effected through the acquisition by any person or group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation or a person that, prior to such transaction, directly or indirectly controls, is controlled by or is under common control with, the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities (as measured in terms of the power to vote with respect to the election of Board members),

 

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

 

(iii)                               the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Corporation) acquires 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) beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Corporation or the acquisition of outstanding securities held by one or more of the Corporation’s existing stockholders,

 

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(iv)                              a merger, recapitalization, consolidation, or other transaction to which the Corporation is a party or the sale, transfer or other disposition of all or substantially all of the Corporation’s assets if, in either case, the members of the Board immediately prior to consummation of the transaction do not, upon consummation of the transaction, constitute at least a majority of the board of directors of the surviving entity or the entity acquiring the Corporation’s assets, as the case may be, or a parent thereof, or

 

(v)                                 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 for any reason 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, but excluding for purposes of both clauses (A) and (B) any person appointed or elected to the Board in connection with an actual or threatened proxy contest for Board membership or any other actual or threatened solicitation of proxies for the election of Board members.

 

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

 

E.                                    Common Stock shall mean the Corporation’s common stock.

 

F.                                     Corporate Affiliate shall mean any parent or subsidiary corporation of the Corporation (as determined in accordance with Code Section 424), whether now existing or subsequently established.

 

G.                                   Corporation shall mean United Online, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of United Online, Inc., which shall assume the Plan.

 

H.                                   Effective Date shall be the Spin-Off Date, subject to the provisions of Section IV(E) of the Plan.  Any Corporate Affiliate that becomes a Participating Corporation after such Effective Date shall designate a subsequent Effective Date with respect to its employee-Participants.

 

I.                                        Eligible Employee shall mean any person who is employed by a Participating Corporation on a basis under which he or she is regularly expected to render more than twenty (20) hours of service per week for more than five (5) months per calendar year for earnings that are considered wages under Code Section 3401 (a); provided, however, that the Plan Administrator may, prior to the start of the applicable offering period, waive one or both of the twenty (20) hour and five (5) month service requirements.

 

J.                                      Entry Date shall mean the date an Eligible Employee first commences participation in the offering period in effect under the Plan. The earliest Entry Date under the Plan shall be the Effective Date.

 

K.                                   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

 

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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.

 

L.                                    1933 Act shall mean the Securities Act of 1933, as amended.

 

M.                                 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

 

N.                                    Participant shall mean any Eligible Employee of a Participating Corporation who is actively participating in the Plan.

 

O.                                   Participating Corporation shall mean the Corporation and such Corporate Affiliate or Affiliates as may be authorized from time to time by the Board to extend the benefits of the Plan to their Eligible Employees. The Participating Corporations in the Plan are listed in attached Schedule A.

 

P.                                     Plan shall mean the United Online, Inc. 2010 Employee Stock Purchase Plan, as set forth in this document.

 

Q.                                   Plan Administrator shall mean the committee of two (2) or more Board members appointed by the Board to administer the Plan.

 

R.                                    Purchase Date shall mean the last business day of each Purchase Interval.

 

S.                                      Purchase Interval shall mean each successive six (6)-month period within the offering period at the end of which there shall be purchased shares of Common Stock on behalf of each Participant; provided, however, that the Plan Administrator may, prior to the start of the applicable offering period, designate a different duration for the Purchase Intervals within that offering period.

 

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

 

A-3Exhibit 10.23

 

GENERAL RELEASE AND AGREEMENT

 

I, Robert J. Taragan, acknowledge that my employment with United Online, Inc. (the “Company”) terminates on February 16, 2015 (the “Separation Date”) and that I will not perform any further employee duties or render services in any other capacity to the Company or its affiliates after such date and my employment agreement with the Company dated effective as of February 7, 2011, as amended January 25, 2013 and July 29, 2013, and any other prior employment agreements between me and the Company, (as amended, the “Employment Agreement”) is terminated as of the Separation Date, subject to the surviving provisions contained therein.  Effective on the Separation Date, I shall resign from my position as an officer of the Company and any other positions I may hold with the Company or any of its affiliates, and I agree that I will execute any and all documents necessary to effect such resignations.

 

The Company is offering me the following separation payment, less any applicable tax withholdings, contingent upon the initial effectiveness of the release set forth herein following my first execution of this document (the “Release”) on or within twenty-one (21) days after it is initially provided to me, as set forth in Section 15 below:

 

(i)                                     $435,000.00 (the “Severance Payment”), to be paid in a lump sum the later of:  (a) within fourteen (14) days following the Separation Date; and (b)  within thirty (30) days following the First Release Effective Date (as defined below).

 

The Company is offering me the following additional separation benefits, less any applicable tax withholdings, contingent upon the effectiveness of my second signature on this Release on the Separation Date as set forth in Section 16 below:

 

(i)                                     an additional separation payment equal to the annual bonus for the 2014 fiscal year that I would have received under the 2014 Management Bonus Plan (“2014 MBP”) on the basis of: (i) achieving 100% attainment of my individual performance goals under the 2014 MBP (which component constitutes 25% of my potential bonus), and (ii) the actual attainment of the Company’s and the Communications segment’s financial performance goals under the 2014 MBP, as determined by the Board of Directors of the Company or authorized committee thereof in accordance with the terms of the 2014 MBP (which component constitutes 75% of my potential bonus), had I remained employed by, and in good standing with, the Company through the payment date of such bonus (the “2014 Bonus Payment”), with such amount to be paid in a lump sum cash payment on the later of:  (a) the same time that the bonus payments under the 2014 MBP are paid to the other executive officers of the Company in 2015, which shall in no event be later than March 15, 2015, and (b) the Second Release Effective Date; and

 

(ii)                                  the premium for COBRA health benefits coverage for three (3) months to be paid in a lump sum within thirty (30) days following the Second Release Effective Date (“COBRA Payment”).

 

For purposes of clarification, all my outstanding stock option awards and restricted stock unit awards that are scheduled to vest on February 15, 2015, shall vest in accordance with their terms.

 

For the purposes of this Release, the Severance Payment is referred to as the “Main Separation Benefits”.  The Main Separation Benefits, the 2014 Bonus Payment, and the COBRA Payment are collectively referred to as the “Separation Benefits”.

 

 

In consideration of the Separation Benefits, I hereby agree to the following Release:

 

1.              On behalf of myself, my heirs, executors, administrators, successors, and assigns, I hereby fully and forever release and discharge (a) United Online, Inc. and each of its past or present parents, subsidiaries, affiliates, insurers, insurance policies and benefit plans, (b) each of the past and present shareholders, officers, directors, agents, employees, representatives, administrators, fiduciaries and attorneys of the foregoing entities and plans, and (c) the predecessors, successors, transferees and assigns of each of the persons and entities described in this sentence (collectively, the “Company Released Parties”) from any and all claims, causes of action, and liabilities arising out of or relating in any way to my employment with the Company, including, but not limited to, the offer and termination of my employment, the Employment Agreement, as well as the terms and conditions of my employment and good faith disputes regarding my wages and hours of work.

 

I understand and agree that this Release is a full and complete waiver and release of all claims, including, but not limited to, claims of wrongful discharge, breach of contract, breach of the covenant of good faith and fair dealing, wrongful termination, violation of public policy, defamation, personal injury, emotional distress, claims under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,  the Employee Retirement Income Security Act (except for claims for vested benefits under a pension or retirement plan), the Family and Medical Leave Act, the California Fair Employment and Housing Act, the Equal Pay Act of 1963,  the provisions of the California Labor Code, and any and all other federal, state, or local constitutional, statutory, regulatory, or common law causes of action now or hereafter recognized, and any claims for attorneys’ fees and costs.  Nothing in this Release shall waive any of the following: (i) rights or claims that arise after the date on which I execute this Release, (ii) claims I may have for unemployment compensation and workers’ compensation, and, subject to paragraph 6, below, to reimbursement for business expenses, (iii) claims for health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), (iv) claims with respect to vested benefits under a pension or retirement plan governed by the Employee Retirement Income Security Act, (v) claims for the Separation Benefits, (vi) claims or rights to indemnification arising under the charter or by-laws of the Company (and/or its affiliates) or any rights arising from the director and officer insurance policy or policies of the Company and (vii) any claims that, as a matter of applicable law, are not waivable or otherwise subject to release.

 

2.              I do not presently believe I have suffered any work-related injury or illness.

 

3.              I understand and agree that the Company will not provide me with the Separation Benefits unless I execute and deliver this Release under the terms and conditions set forth herein and such Release becomes enforceable and irrevocable under applicable law.  I further understand that I have received or will receive, regardless of the execution of this Release, all undisputed wages owed to me, together with any accrued but unused vacation pay, less deductions, in my final paycheck.  I acknowledge and understand that I am waiving and releasing all claims for disputed wages or other forms of compensation.  I acknowledge and understand that: (1) except for the Separation Benefits, I am waiving and releasing all claims for severance payments or benefits, including any payment or benefit payable under the Employment Agreement and any applicable severance benefit plan (including the Company’s Severance Benefit Plan and Summary Plan Description, amended effective May 1, 2014), and (2) all of my outstanding stock option, restricted stock unit and/or other equity awards that are unvested as of February 16, 2015 (after giving effect to the awards regularly scheduled to vest on February 16, 2015) shall immediately be cancelled and terminated without any further vesting or acceleration and all of my outstanding stock options that are vested shall remain exercisable for the period of time following my Separation Date in accordance with their terms.

 

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4.              I understand that I am releasing potentially unknown claims, and that I have limited knowledge with respect to some of the claims being released.  I acknowledge that there is a risk that, after signing this Release, I may learn information that might have affected my decision to enter into this Release.  I acknowledge, for example, that I may learn that I have suffered injuries of which I am not presently aware.  I assume this risk and all other risks of any mistake in entering into this Release.  I agree that this Release is fairly and knowingly made.  I expressly waive all rights and benefits conferred upon me by the provisions of Section 1542 of the California Civil Code and/or any analogous law of any other state, which states as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

I consciously intend these consequences even as to claims for damages that may exist as of the date I execute this Release that I do not know exist, and which, if known, would materially affect my decision to execute this Release, regardless of whether the lack of knowledge is the result of ignorance, oversight, error, negligence or any other cause.

 

5.              As part of my existing and continuing obligation to the Company, within seven (7) days after the Separation Date, I must return to the Company all Company documents, information, and property, including files, records, computer access codes, and instruction manuals, as well as any Company assets or equipment that I have in my possession or under my control (collectively, the “Company Property”).  I further agree not to keep any copies of the Company Property or any other Company documents or information.  I understand that the return of such Company Property within the applicable seven (7) day period is an additional express condition to my entitlement to the Separation Benefits.  I affirm my obligation to keep all Company Information confidential and not to disclose it to any third party in the future.  I understand that the term “Company Information” includes, but is not limited to, the following:  (a) confidential information, including information received from third parties under confidential conditions; and (b) information concerning customers (including customer lists), as well as other technical, scientific, marketing, business, product development, or financial information, the use or disclosure of which might reasonably be determined to be contrary to the interests of the Company.

 

6.              I agree that, within thirty (30) days after the Separation Date, I will submit, if applicable, my final documented expense reimbursement statement reflecting all business expenses I incurred through the Separation Date for which I seek reimbursement. I acknowledge that my failure to submit such a statement within this time period may result in my waiver of any right to be reimbursed by the Company for any such expenses.  The Company will reimburse me (pursuant to the Company’s standard expense reimbursement policies) for any such expenses for which I submit such timely documentation within seven (7) business days after such submission.

 

7.              I represent and warrant that I am the sole owner of all claims relating to my employment with the Company, and that I have not assigned or transferred any claims relating to my employment to any other person or entity.  If requested by the Company, I agree to cooperate with the Company and provide the necessary or appropriate information: (a)  in connection with the preparation of any Securities and Exchange Commission filing related to my employment, compensation or separation, including the completion of a directors and officers questionnaire; and (b) in connection with requests relating to the transition of my job responsibilities to others within the Company.

 

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8.              I understand and agree that this Release shall not be construed at any time as an admission of liability or wrongdoing by either myself or the Company.

 

9.              I agree not to disparage the Company, any of its officers, directors and employees, and any shareholders and agents who I know to be shareholders or agents of the Company, in any manner likely to be harmful to its or their business, business reputation, or personal reputation;  and the current Chief Executive Officer shall not disparage me in any manner likely to be harmful to my business or personal reputations; provided, however, that either party will respond accurately and fully to any question, inquiry or request for information when required by legal process.

 

10.       If any one or more of the provisions contained in this Release is, for any reason, held to be unenforceable, that holding will not affect any other provision of this Release, and this Release shall then be construed as if the unenforceable provisions had never been contained in the Release.

 

11.       I acknowledge that I have obtained sufficient information to intelligently exercise my own judgment regarding the terms of this Release before executing this Release.  I understand that I may discuss this Release with an attorney of my choosing before signing this Release.

 

12.       I acknowledge that this Release was delivered to me in final form on January 5—, 2015 (the “Release Delivery Date”) and that I have been given a minimum of twenty-one (21) days from the Release Delivery Date in which to review and consider it.  I understand and acknowledge that the Company has advised me to obtain advice concerning this Release from an attorney of my choice before signing this Release. I further represent that I have had sufficient time to review and consider the terms of this Release.  I represent that if I execute this Release before the twenty-one (21)-day review/consideration period has elapsed, I do so voluntarily, and that I voluntarily waive any remaining review/consideration period.

 

13.       I understand that the Separation Benefits are intended to satisfy the exemptions from application of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) provided under Treasury Regulations Section 1.409A-1(b)(4)  and 1.409A-1(b)(5) and this Release will be construed to the greatest extent possible as consistent with those provisions (and any ambiguities herein shall be interpreted accordingly).  To the extent not so exempt, this Release will be construed in a manner that complies with Section 409A, and incorporates by reference all required definitions and payment terms.  However, if such exemptions are not available and I am, upon my Separation Date, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, I understand that the timing of the payment of the Separation Benefit shall be delayed until the earlier of (i) six (6) months and one day after my separation from service under Section 409A, or (ii) my death.  If the Separation Benefits are not covered by one or more exemptions from the application of Section 409A and the First Release Effective Date or the Second Release Effective Date, as applicable, could become effective in the calendar year following the calendar year in which my separation from service under Section 409A occurs, this Release will not be deemed effective until the calendar year following the calendar year in which my separation from service occurs.

 

14.       I acknowledge that this Release shall be governed by and construed according to the laws of the State of California, without regard to its conflicts of law principles.  I also consent to the venue and jurisdiction of the state and federal courts located in Los Angeles, California in the event that the Company takes legal action to enforce any of the terms of this Release.

 

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15.       I understand that after executing this Release, I have the right to revoke it in writing within seven (7) days after I sign it.  I understand that any revocation of this Release must be made in writing and delivered to the Company at 21255 Burbank Boulevard, Suite 400, Woodland Hills, California 91367, Attention: Francis Lobo, within the seven (7) day revocation period.  I understand that I will not become entitled to the Main Separation Benefits unless and until (a) I have complied with my obligations under the Employment Agreement, (b) this Release has been executed by me and delivered to the Company prior to the expiration of the twenty-one (21) day review/consideration period measured from the Release Delivery Date, and (c) the seven (7) day revocation period has passed without my revoking the Release in writing (the date on which the Release becomes effective in accordance with such terms, “ First Release Effective Date”).  I understand that this Release may not be revoked after the seven (7) day revocation period has passed.  Provided and only if the foregoing conditions set forth in this Section 15 have been satisfied in accordance with the applicable time periods, I understand that I will be entitled to receive the Main Separation Benefits at the times set forth in this Release.

 

16.       I understand that, in order to receive the 2014 Bonus Payment and the COBRA Payment (as described above), I must sign this Release a second time after my employment with the Company has ended, on the Separation Date.  I acknowledge that the 2014 Bonus Payment and the COBRA Payment are additional amounts that I do not have a legal right to receive unless I sign this Release a second time on the Separation Date.  By signing this Release a second time, I will be reaffirming my agreement to all terms in this Release (including the release of claims in Section 1 of this Release) effective as of the time I sign that second time.  I understand that after I sign this Release a second time (if I do), that I will have the right to revoke that second signature in writing within seven (7) days after I sign.  I understand that any revocation of my second signature must be made in writing and delivered to the Company at 21255 Burbank Boulevard, Suite 400, Woodland Hills, California 91367, Attention: Francis Lobo, within the seven (7) day revocation period.  I understand that I will not become entitled to the 2014 Bonus Payment and the COBRA Payment unless and until (a) all the Company Property has been returned within the seven (7) day period measured from the Separation Date in accordance with Section 5 above, (b) I have complied with my obligations under my Employment Agreement, (c) this Release has been fully executed by me a second time on the Separation Date, and (d) the seven (7) day revocation period has passed without my revoking my second signature in writing (the date on which this Release becomes effective in accordance with such terms, “Second Release Effective Date”).  I understand that my second signature may not be revoked after the seven (7) day revocation period has passed.  Provided and only if the foregoing conditions set forth in this Section 16 have been satisfied in accordance with the applicable time periods, I understand that I will be entitled to receive the 2014 Bonus Payment and the COBRA Payment as provided above, following the Separation Date on which my second signature on this Release is effective and enforceable in accordance with its terms following the expiration of the revocation period.

 

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EMPLOYEE’S ACCEPTANCE OF RELEASE

 

BEFORE SIGNING MY NAME TO THIS RELEASE, I STATE THE FOLLOWING:  I HAVE READ IT; I UNDERSTAND IT AND I KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I HAVE OBTAINED SUFFICIENT INFORMATION TO INTELLIGENTLY EXERCISE MY OWN JUDGMENT; I HAVE BEEN ADVISED THAT I SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING IT; AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.

 

 

	
 
    	
Date   delivered to employee: January 5, 2015.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Executed   this 5th day of January, 2015.
    
	
 
    	
 
    
	
 
    	
Robert   J. Taragan
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Robert J. Taragan
    
	
 
    	
Employee’s   signature
    

 

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EMPLOYEE’S RE-ACCEPTANCE OF RELEASE (SECOND SIGNATURE)

 

NOTE:  THIS SECOND SIGNATURE MAY NOT BE GIVEN UNTIL ON THE SEPARATION DATE.

 

BEFORE SIGNING MY NAME TO THIS RELEASE A SECOND TIME, I STATE THE FOLLOWING:  I HAVE READ THE RELEASE; I UNDERSTAND IT AND I KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I HAVE OBTAINED SUFFICIENT INFORMATION TO INTELLIGENTLY EXERCISE MY OWN JUDGMENT; I HAVE BEEN ADVISED THAT I SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING IT; I HAVE SIGNED IT A SECOND TIME KNOWINGLY AND VOLUNTARILY; I HAVE SIGNED THIS SECOND TIME AFTER MY EMPLOYMENT HAS ENDED; AND I HAVE SIGNED THIS SECOND TIME IN ORDER TO RECEIVE THE 2014 BONUS PAYMENT AND COBRA PAYMENT AS SPECIFIED IN THE RELEASE.

 

 

	
 
    	
Executed   this 16th day of Feb, 2015.
    
	
 
    	
 
    
	
 
    	
Robert   J. Taragan
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Robert J. Taragan
    
	
 
    	
Employee’s   signature
    

 

 

ACCEPTED AND AGREED BY THE COMPANY

 

 

	
 
    	
UNITED   ONLINE, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
DATED:
    	
1/5/15
    	
 
    	
By:
    	
/s/   Francis Lobo
    
	
 
    	
Name:
    	
Francis   Lobo
    
	
 
    	
Title:
    	
President   and Chief Executive Officer
    
					

 

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