Document:

Exhibit 10.24

 

October 14, 2008

 

Robert Apatoff

[address]

 

Dear Rob,

 

This letter sets forth the terms and
conditions of your employment with FTD Group, Inc. (the “Company”).

 

1.                                       Position.  Your employment with the Company will commence on November 3, 2008
(the “Commencement Date”).  You
will serve as President of the Company and shall have such duties and
responsibilities consistent with your position or such other duties and
responsibilities as may from time to time be determined by the board of
directors of the Company (the “Board of Directors”)
or the Chairman and Chief Executive Officer of the Company.  You will report to me as the Chairman and
Chief Executive Officer of the Company. You agree to devote your full-time
attention, skill and efforts to the performance of your duties for the Company.

 

2.                                       Salary and Benefits. 
You will be paid a salary at the annual rate of $600,000, payable in
semi-monthly installments in accordance with the Company’s standard payroll
practices, subject to any increases as determined by the Board of Directors
from time to time.  You will be eligible
to participate in the employee benefits plans, including a 401(k) plan,
that are provided to similarly situated executives of the Company or that have
been made available to you by the Board of Directors. You will be entitled to a
minimum of 4 weeks of paid vacation each year, or such greater amount as
determined in accordance with the standard vacation policy applicable to
similarly situated executives of the Company.

 

3.                                       Bonus.

 

(a)                                  Within fourteen (14) days following
the Commencement Date, you will receive a signing bonus equal to $200,000 (the “Signing Bonus”).

 

(b)                                 You will also be eligible to receive
an annual bonus of up to 100% of your annual base salary for each fiscal year
in the form of cash or stock as determined by the Company in its sole
discretion (the “Annual Bonus”), less
withholding required by law, based on performance criteria established by the
Board of Directors; provided, however,
that your bonus for the year ending December 31, 2008 will not be
discretionary and will be fixed at $200,000. 
Except as otherwise determined by the Board of Directors or as set forth
herein, your bonus awards will be paid only if you are employed by and in good
standing with the Company at the time of bonus payments.   Your bonus awards shall be paid in no event
later than the 15th day of the third 

 

 

month following the end of the taxable year
(of the Company or you, whichever is later) in which such bonus award is
earned.

 

4.                                       Restricted Stock Units.

 

(a)                                  Effective as of November 15,
2008, subject to your continued employment with the Company through such date,
you shall be granted restricted stock units covering 485,000 shares of common
stock of United Online (the “UOL Restricted Stock Units”),
twenty-five percent (25%) of which units will vest on each of November 15,
2009, 2010, 2011, and 2012, subject to your continued employment with the
Company through each such date.  The UOL
Restricted Stock Units will be subject to the terms and conditions set forth in
the applicable stock plan and corresponding restricted stock unit agreement;
provided that, in the event of any inconsistency between the terms of the
restricted stock unit agreement and this letter, the terms of this letter shall
control.

 

(b)                                 Upon the termination of your
employment by the Company “without cause” or by you for “good reason” (each
such term as defined below) prior to November 15, 2012, and in connection
with or within twenty-four (24) months after a change in control of United
Online (as defined in the applicable stock plan or restricted stock unit
agreement), you shall fully vest in all your UOL Restricted Stock Units.

 

(c)                                  Upon the termination of your
employment by the Company “without cause” or by you for “good reason” prior to November 15,
2012, and prior to and not in connection with, or more than twenty-four (24)
months after a change in control of United Online (as defined in the applicable
stock plan or restricted stock unit agreement ), or as a result of your death
or Disability (as defined below), the vesting of your outstanding UOL
Restricted Stock Units will be accelerated by the additional number of shares
in which you would have been vested at the time of such termination if you had
completed an additional twelve (12) months of service, calculated as if such
units vest on a monthly basis; provided however,
that in no event will the number of shares which vest on such an accelerated
basis exceed the number of shares unvested immediately prior to the date of
such termination.

 

(d)                                 For purposes of this letter, “Disability” means your inability to
engage in any substantial gainful activity necessary to perform your duties
hereunder by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted, or can be
expected to last, for a continuous period of not less than twelve (12) months.

 

5.                                       Policies;
Procedures; Confidentiality and Non-Competition Agreement. 
As an employee of the Company, you will be expected to abide by all of
the policies and procedures applicable to employees of the Company, including,
without limitation the terms of:  the
Insider Trading Policy; the Code of Ethics; and the Employee Handbook.  You will also be bound by the Confidentiality
and Non-Competition Agreement between you and the Company (or any successor
thereto or affiliate thereof), a copy of which is attached hereto as Appendix
A and is incorporated herein by reference.

 

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

 

7.                                      Termination of Employment

 

(a)                                  Termination by
You.  If you terminate your employment
with the Company for any reason other than for “good reason” (as defined
below), all obligations of the Company as set forth in this letter will cease,
other than the obligation to pay you any accrued base salary for services
rendered through the date of termination, to pay you for any accrued but unused
vacation days as of the date of termination, and to fulfill its obligations in
accordance with the terms of the applicable stock plan or restricted stock unit
agreement.  If you terminate your
employment with the Company for “good reason,” in addition to the foregoing,
the Company will pay you the Separation Payment (as defined below) subject to
the conditions set forth in Section 7(b) below.  However, and notwithstanding the termination
of your employment by you, you will continue to be obligated to comply with the
terms of the Confidentiality and Non-Competition Agreement referenced in Section 5
above.

 

(b)                                 Termination by the
Company.  If your employment is terminated by
the Company “without cause” (as defined below), and subject to your execution
(without revoking) and delivery to the Company of a comprehensive agreement
releasing the Company and its officers, directors, employees, stockholders,
parents, subsidiaries, affiliates, representatives and other parties and
containing such other and additional terms as the Company deems satisfactory (“Release”), which becomes effective
after the expiration of any applicable revocation period, the Company will pay
you a separation payment (the “Separation Payment”)
equal to the sum of (i) twenty-four (24) months of your then current
annual base salary, (ii) your Annual Bonus and (iii) your Annual
Bonus, prorated through your termination date. 
For purposes of Section 7(b)(ii) and Section 7(b)(iii) above,
“Annual Bonus” shall mean the lesser of
100% of your then current annual base salary or the Annual Bonus paid to you
for the preceding fiscal year.  This
Separation Payment will be payable monthly on a pro rata basis over twenty-four
(24) months after such termination with the first such payment commencing upon
the expiration of all applicable review and revocation periods applicable to
the Release as statutorily required by law. 
Upon termination of your employment by the Company “without cause,”
other than the obligations set forth in the first sentence of Section 7(a) above
and the acceleration of vesting provided in Section 4 above, the Company
will have no further obligation to you except pursuant to this paragraph.

 

If your employment is terminated by the
Company “with cause” (as defined below), the Company will have no further
obligation to you under the terms of this letter, other than the obligations
set forth in the first sentence of Section 7(a) above.  However, and notwithstanding 

 

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the termination of your employment by the
Company “with cause” or “without cause,” or by you for “good reason,” you will
continue to be obligated to comply with the terms of the Confidentiality and
Non-Competition Agreement referenced in Section 5 above.

 

If any payment or benefit received or to be
received by you (including any payment or benefit received pursuant to this
letter or otherwise) would be (in whole or part) subject to the excise tax
imposed by Section 4999 of the 
Internal Revenue Code of 1986, or any successor provision thereto, or
any similar tax imposed by state or local law, or any interest or penalties
with respect to such excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred to as the “Excise Tax”), then, the cash
payments provided to you under this Agreement shall first be reduced (and
thereafter, if necessary, the acceleration of 
vesting provided to you under this Agreement shall be reduced) to the
extent necessary to make such payments and benefits not subject to such Excise
Tax, but only if such reduction results in a higher after-tax payment to you
after taking into account the Excise Tax and any additional taxes  you would pay if such payments and benefits
were not reduced.

 

(c)                                  Definitions.

 

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

 

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

 

(ii)                                  a material reduction in your
authority, duties or responsibilities in a manner inconsistent with the terms
of this agreement, without your prior written consent; or

 

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

 

(iv)                              provided however, that with respect
to any of (i) – (iii) above, you shall provide written notice to the
Company of the existence of the good reason condition within ninety (90) days
of its initial existence and the Company shall have 30 days to cure such
condition, and your termination of employment must occur within 180 days
following the initial existence of any of (i) – (iii) above.

 

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

 

(i)                                     willfully damaging of the property,
business, business relationships, reputation or goodwill of the Company or any
direct or indirect parent, subsidiary or other affiliate thereof (an “Affiliate”);

 

(ii)                                  commission of a felony or a
misdemeanor involving moral turpitude;

 

(iii)                               theft, dishonesty, fraud or
embezzlement;

 

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(iv)                              willfully violating any rules or
regulations of any governmental or regulatory body that is or is reasonably
expected to be injurious to the Company or any Affiliate thereof;

 

(v)                                 the use of alcohol, narcotics or
other controlled substances to the extent that it prevents you from efficiently
performing services for the Company or any Affiliate  thereof;

 

(vi)                              willfully injuring any other
employee of the Company or any Affiliate thereof;

 

(vii)                           willfully injuring any person in the
course of performance of services for the Company or any Affiliate thereof;

 

(viii)                        disclosing to a competitor or other
unauthorized persons confidential or proprietary information or secrets of the
Company or any Affiliate thereof;

 

(ix)                                solicitation of business on behalf
of a competitor or a potential competitor of the Company or any Affiliate
thereof;

 

(x)                                   harassment of any other employee of
the Company or any Affiliate thereof or the commission of any act which
otherwise creates an offensive work environment for other employees of the
Company or any Affiliate thereof;

 

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

 

(xii)                             breach of any material term of this
letter; or

 

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

 

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

 

(d)                                 Code Section 409A
Deferral Period.  Notwithstanding any provision to the contrary
in this letter, no payment or distribution under this letter which constitutes
an item of deferred compensation under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and
becomes payable by reason of your termination of employment with the Company
will be made to you unless your termination of employment constitutes a “separation
from service” (as such term is defined in Treasury Regulations issued under Section 409A
of the Code).  For purposes of this
letter, each amount to be paid or benefit to be provided shall be construed as
a separate identified payment for purposes of Section 409A of the
Code.  If you are a “specified employee”
as defined in Section 409A of the Code and, as a result of that status,
any 

 

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portion of the payments under this letter
would otherwise be subject to taxation pursuant to Section 409A of the
Code, you shall not be entitled to any payments upon a termination of your
employment until the earlier of (i) the expiration of the six (6)-month
period measured from the date of your “separation from service” (as such term
is defined in Treasury Regulations issued under Section 409A of the Code)
or (ii) the date of your death. 
Upon the expiration of the applicable Section 409A deferral period,
all payments and benefits deferred pursuant to this Section 7(d) (whether
they would have otherwise been payable in a single sum or in installments in
the absence of such deferral) shall be paid or reimbursed to you in a lump sum,
and any remaining payments due under this letter will be paid in accordance
with the normal payment dates specified for them herein.

 

(e)                                  Withholding Taxes. 
All forms of compensation referred to in this letter are subject to
reduction to reflect applicable withholding and payroll taxes.  Shares may be withheld on the vesting of your
Restricted Stock Units to cover taxes on the terms set forth in the restricted
stock unit agreement.

 

8.                                       Entire Agreement. 
This letter (including any appendices thereto), together with the
Confidentiality and Non-Competition Agreement referenced in Section 5
above, any handbooks and policies applicable to similarly situated executives
of the Company in effect from time to time and the applicable stock plan and
restricted stock unit agreement, contains all of the terms of your employment
with the Company and supersedes any prior understandings or agreements, whether
oral or written, between you and the Company. 
If any provision of this letter is held by an arbitrator or a court of
competent jurisdiction to conflict with any federal, state or local law, or to
be otherwise invalid or unenforceable, such provision shall be construed in a
manner so as to maximize its enforceability while giving the greatest effect as
possible to the parties’ intent.  To the
extent any provision cannot be construed to be enforceable, such provision will
be deemed to be eliminated from this letter and of no force or effect and the
remainder of this letter will otherwise remain in full force and effect and be
construed as if such portion had not been included in this letter.  This letter is not assignable by you.  This letter may be assigned by the Company to
any Affiliate or to successors in interest to the Company or its lines of
business.

 

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

 

10.                                 Term. 
This letter will expire on November 15, 2012, except Sections 5, 6,
7(d) and (e), 8, 9 and 10 will survive such expiration.  Following the expiration of this letter, your
employment with the Company will continue to be “at will.”

 

[Signature Page Follows]

 

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

 

If you have any questions, please call the
undersigned.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  FTD GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  
	
   

  	
  Name:

  	
  Mark R. Goldston

  	
   

  
	
   

  	
  Title:

  	
  Chairman

  	
   

  
							

 

 

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

 

 

	
  /s/ Robert Apatoff

  	
   

  
	
  Robert Apatoff

  
	
   

  
	
   

  
	
  Dated: October 14, 2008

  

 

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Appendix
A

 

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

 

CONFIDENTIALITY
AND NON-COMPETITION AGREEMENT (the “Agreement”)
dated and made effective as of October 14, 2008 between FTD Group, Inc.
(the “Company”) and Robert Apatoff
(the “Executive”).

 

R E C
I T A L S:

 

A.                                   The
Company and the Executive have entered into that certain letter agreement of
even date with this Agreement pursuant to which the Executive will serve as
President of the Company; and

 

B.                                     In
connection therewith, the Company and the Executive desire to provide for
certain additional obligations.

 

NOW,
THEREFORE, in consideration of the offer to and acceptance by the Executive of
employment as President of the Company and of other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto additionally agree as follows:

 

Section 1.                    Secrecy,
Non-Competition, No Interference and Non-Solicitation.

 

(a)                                  No
Competing Employment.  The Executive
acknowledges that (i) the agreements and covenants contained in this Section 1
are essential to protect the value of the Company’s business and assets and (ii) by
virtue of his employment with the Company, the Executive will obtain such
knowledge, know-how, training and experience of such a character that there is
a substantial probability that such knowledge, know-how, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company’s substantial detriment.  Therefore, the Executive agrees that, for the
period (the “Restricted Period”)
commencing on the date of this Agreement and ending on the date that is
twenty-four (24) months after the date on which the Executive is no longer
employed by the Company for any reason, the Executive shall not participate,
operate, manage, consult, join, control or engage, directly or indirectly, for
the benefit of the Executive or on behalf of or in conjunction with any person,
partnership, corporation or other entity, whether as an employee, consultant,
agent, officer, stockholder, member, investor, agent or otherwise, in any
business activity if such activity constitutes the sale or provision of floral
products or services that are similar to, or competitive with, floral products
or services then being sold or provided by the Company or any of its
subsidiaries or affiliated companies, including, without limitation, retail
florists’ business services, floral order transmission and related network
services, development and distribution of branded floral products on the
Internet or other consumer direct segment of the floral industry (including,
without limitation, Interflora, Inc., Teleflora LLC., 1-800-FLOWERS.COM, Inc.,
Proflowers.com, Floral Source, (a “Competitive Activity”),
in any of:  the City of Downers Grove,
Illinois, the County of DuPage, Illinois or any other city or county in the
State of Illinois; the District of Columbia or any other state, territory,
district or commonwealth of the United States or any county, parish, city or
similar political subdivision in 

 

 

any other state,
territory, district or commonwealth of the United States; any other country or
territory anywhere in the world or in any city, canton, county, district,
parish, province or any other political subdivision in any such country or
territory; or anywhere in the world (each city, canton, commonwealth, county,
district, parish, province, state, country, territory or other political
subdivision or other location in the world shall be referred to as a “Non-competition Area”).  The parties to this Agreement intend that the
covenant contained in the preceding sentence of this Section 1(a) shall
be construed as a series of separate covenants, one for each city, canton,
commonwealth, county, district, parish, state, province, country, territory, or
other political subdivision or other area of the world specified.  Except for geographic coverage, each separate
covenant shall be considered identical in terms to the covenant contained in
the preceding sentence.  The parties
further acknowledge the breadth of the covenants, but agree that such broad
covenants are necessary and appropriate in the light of the global nature of
the Competitive Activity.  If, in any
judicial or other proceeding, a court or other body declines to enforce any of
the separate covenants included in this Section 1(a), the unenforceable
covenant shall be considered eliminated from these provisions for the purpose
of those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced.  Notwithstanding
the foregoing, the Executive may maintain or undertake purely passive
investments on behalf of the Executive, the Executive’s immediate family or any
trust on behalf of the Executive or the Exective’s immediate family in
companies engaged in a Competitive Activity so long as the aggregate interest
represented by such investments does not exceed 1% of any class of the
outstanding publicly traded debt or equity securities of any company engaged in
a Competitive Activity.

 

(b)                                 Nondisclosure
of Confidential Information.  The
Executive, except in connection with his employment hereunder, shall not
disclose to any person or entity or use, either during the Executive’s
employment with the Company or at any time thereafter, any information not in
the public domain, in any form, acquired by the Executive while employed by the
Company or, if acquired following the Executive’s employment with the Company,
such information that, to the Executive’s knowledge, has been acquired,
directly or indirectly, from any person or entity owing a duty of
confidentiality to the Company or any of its affiliates, relating to the
Company, United Online, Inc., a Delaware corporation and the parent
corporation of the Company (“UOL”), or
any of its successors or their subsidiaries or affiliated companies
(collectively, the “UOL Group”), including but
not limited to trade secrets, technical information, systems, procedures, test
data, price lists, financial or other data (including the revenues, costs or
profits associated with any of the Company’s products or services), business
and product plans, code books, invoices and other financial statements,
computer programs, discs and printouts, customer and supplier lists or names,
personnel files, sales and advertising material, telephone numbers, names,
addresses or any other compilation of information, written or unwritten, that
is or was used in the business of the Company, UOL, any predecessor of the
Company, UOL or any of the Company’s, or UOL’s subsidiaries, affiliates,
successors or assigns.  The Executive
agrees and acknowledges that all of such information, in any form, and copies
and extracts thereof are and shall remain the sole and exclusive property of
the Company or other UOL Group entity, and upon termination of his employment
with the Company, the Executive shall return to the Company the originals and
all copies (and shall delete all such items in electronic format) of any such
information provided to or acquired by the Executive in connection with the
performance of the Executive’s duties for the Company, and shall return to the
Company all files, correspondence, computer equipment and disks or other
communications 

 

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(including any such
materials in electronic format) received, maintained or originated by the
Executive during the course of the Executive’s employment.

 

(c)                                  No
Interference and Non-Solicitation. 
During the Restricted Period, the Executive shall not, whether for the
Executive’s own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than the
Company), solicit, endeavor to entice away from the Company, UOL, or any of the
Company’s or UOL’s subsidiaries or affiliated companies, or otherwise interfere
with the relationship of the Company or 
UOL or any of its or their subsidiaries or affiliated companies with,
any person who, to the knowledge of the Executive, is (or has at any time
within the preceding three months been) employed by or otherwise engaged to
perform services for the Company, UOL or any of the Company’s or UOL’s
subsidiaries or affiliated companies (including, but not limited to, any
independent sales representatives or organizations) or any entity who is, or
was within the then most recent 12-month period, a customer or client of the
Company, UOL, any predecessor of the Company or UOL or any of the Company’s or
UOL’s subsidiaries or affiliated companies (a “Customer”)
or a supplier or vendor of the Company or UOL or any of the Company’s or UOL’s
subsidiaries or affiliated companies (a “Supplier”);
provided, however, that this Section 1(c) shall not
prohibit the Executive from employing, for the Executive’s own account,
following a termination of the employment of the Executive, any person employed
by a Customer or Supplier, if such employment is not in connection with a
Competitive Activity.

 

Section 2.                                            Calculation
of Time Period.  The Executive agrees
that if the Executive violates the provisions of Section 1(a) of this
Agreement, the running of the Restricted Period shall be tolled for the period
in which the Executive is in violation of such non-competition provisions.  The Executive understands that the foregoing
restrictions may limit the Executive’s ability to earn a livelihood in a
business engaged in a Competitive Activity, but the Executive nevertheless
believes that the Executive has received and will receive sufficient
consideration and other benefits as an employee of the Company and as otherwise
provided in connection with the Merger to clearly justify restrictions that, in
any event, given his education, skills and ability, the Executive does not
believe would prevent the Executive from earning a living.

 

Section 3.                                            Inventions.

 

(a)                                  Defined.  The Executive understands that during the
period the Executive previously served as a member of the Company’s Board of
Directors and during term of the Executive’s employment, there have been and
are certain restrictions on the Executive’s development of technology, ideas,
and inventions, referred to in this Agreement as “Invention
Ideas.”  The term
Invention Ideas means all ideas, processes, trademarks, service marks,
inventions, technology, computer programs, original works of authorship,
designs, formulas, discoveries, patents and copyrights relating to any existing
or planned service or product of the Company, and all improvements, rights, and
claims related to the foregoing, that are conceived, developed, or reduced to
practice by the Executive alone or with others.  The Executive agrees that all
original works of authorship which were or are made by the Executive (solely or
jointly with others) as a former member of the Company’s Board of Directors or
within the scope of the 

 

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Executive’s
employment and which are protectable by copyright are “works made for hire,” as
the term is defined in the United States Copyright Act (17 USCA, Section 101).

 

(b)                                 Disclosure.  The Executive agrees to maintain adequate and
current written records on the development of all Invention Ideas and to
disclose promptly to the Company all Invention Ideas and relevant records,
which records will remain the sole property of the Company.  The Executive further agrees that all
information and records pertaining to any idea, process, trademark, service
mark, invention, technology, computer program, original work of authorship,
design formula, discovery, patent, or copyright that might reasonably be
construed to be an Invention Idea, but was, during the period that the
Executive served as a member of the Company’s Board of Directors, or is
conceived, developed, or reduced to practice by the Executive (alone or with
others) during the Executive’s employment or during the one-year period
following termination of the Executive’s employment, shall be promptly
disclosed to the Company (such disclosure to be received in confidence).  Any disclosure pursuant to this Section 3(b) will
be received by the Company in confidence so that the Company may examine such
information to determine if in fact it constitutes Invention Ideas subject to
this Agreement.

 

(c)                                  Assignment.  The Executive agrees to, and does hereby
continuously, assign to the Company, without further consideration, all right,
title, and interest that the Executive may presently have or acquire
(throughout the United States and in all foreign countries), free and clear of
all liens and encumbrances, in and to each Invention Idea, which shall be the
sole property of the Company, whether or not patentable.  In the event any Invention Idea shall be
deemed by the Company to be patentable or otherwise registrable, the Executive
shall assist the Company (at its expense) in obtaining patent or other
applicable registrations, and the Executive shall execute all documents and do
all other things (including testifying at the Company’s expense) necessary or
proper to obtain patent or other applicable registrations and to vest the
Company with full title to them.  The
Executive’s obligation to assist the Company in obtaining and enforcing
patents, registrations or other rights for such inventions in any and all
countries, shall continue beyond the termination of my employment, but the
Company shall compensate the Executive at a reasonable rate after such
termination for the time actually spent by the Executive at the Company’s
request for such assistance.  Should the
Company be unable to secure the Executive’s signature on any document necessary
to apply for, prosecute, obtain, or enforce any patent, copyright, or other
right or protection relating to any Invention Idea, whether due to the
Executive’s mental or physical incapacity or any other cause, the Executive
hereby irrevocably designates and appoints the Company and each of its duly
authorized officers and agents as the Executive’s agent and attorney-in-fact,
to act for and on the Executive’s behalf, to execute and file any such document
and to do all other lawfully permitted acts to further the prosecution,
issuance, and enforcement of patents, copyrights, or other rights of protections
with the same force and effect as if executed and delivered by the
Executive.  Notwithstanding
the foregoing provisions of this Section 3:

 

This provisions of this Section 3(c) do
not apply to any invention for which no equipment, supplies, facility, or trade
secret information of the Company was used and which was developed entirely on
the Executive’s own time, unless (a) the invention relates (i) to the
business of the Company or (ii) to the Executive’s actual or demonstrably
anticipated research or development, or (b) the invention results from any
work performed by the Executive for the Company.

 

4

 

(d)                                 Exclusions.  Except as disclosed in Exhibit A
attached hereto, there are no ideas, processes, trademarks, service marks,
inventions, technology, computer programs, original works of authorship,
designs, formulas, discoveries, patents, copyrights, or improvements to the
foregoing that the Executive wishes to exclude from this Agreement.  If nothing is listed on Exhibit A,
the Executive represents that the Executive has no such inventions or
improvements at the time of signing this Agreement, and that the Executive is
not aware of any existing contract in conflict with this Agreement.

 

(e)                                  Post-Termination
Period.  The Executive understands and acknowledges
that because of the difficulty of establishing when any idea, process,
invention, etc., is first conceived or developed by the Executive, or whether
it results from access to confidential, trade secret or proprietary information
or the Company’s equipment, facilities, and data, the Executive agrees that any
idea, process, trademark, service mark, invention, technology, computer
program, original work of authorship, design, formula, discovery, patent,
copyright, or any improvement, rights, or claims related to the foregoing shall
be presumed to be an Invention Idea if it relates to any existing or planned
service or product of the Company, subsidiaries or affiliates, and if it is
conceived, developed, used, sold, exploited, or reduced to practice by the
Executive or with the Executive’s aid within six months after the Executive’s
termination of employment with the Company. 
The Executive may rebut the above presumption if the Executive proves
that the invention, idea, process, etc., is not an Invention Idea as defined in
Section 3(a).

 

(f)                                    Illinois
Statute.  The Executive understands
that nothing in this Agreement is intended to expand the scope of protection
provided the Executive by Illinois Statute 765 ILCS 1060.

 

Section 4.                                            Irreparable
Injury.  It is further expressly
agreed that the Company will or would suffer irreparable injury if the
Executive were to compete with the Company, UOL or any of its or their
subsidiaries or affiliated companies in violation of this Agreement or the
Executive were to otherwise breach this Agreement.  Any such violation or breach will cause the
Company irreparable harm, the amount of which may be extremely difficult to
estimate, thus, making any remedy at law or in damages inadequate.
Consequently, the Company shall have the right to apply to a court of
appropriate jurisdiction for, and the Executive consents and stipulates to the
entry of, an order of  injunctive relief
in prohibiting the Executive from competing with the Company or UOL, its
successors or any of its or their subsidiaries or affiliated companies in
violation of this Agreement, an order restraining any other breach or
threatened breach of this Agreement, and any other relief the Company and such
court deems appropriate.  This right
shall be in addition to any other remedy available to the Company in law or
equity.  The parties hereby agree that
the  attorneys’ fees of the prevailing
party in any such proceeding or action shall be paid by the non-prevailing party.

 

Section 5.                                            Representation
and Warranties of the Executive.  The
Executive represents and warrants that the execution of this Agreement and
subsequent employment with the Company does not and will not conflict with any
obligations that the Executive has to any former employers or any other
entity.  The Executive further represents
and warrants that the Executive 

 

5

 

has not brought to the
Company, and will not at any time bring to the Company, any materials,
documents or other property of any nature of a former employer.

 

Section 6.                                            Miscellaneous.

 

(a)                                  Jurisdiction,
Choice of Law and Venue.  The
validity and construction of this Agreement shall be governed by the internal
laws of the State of Illinois, excluding the conflicts-of-laws principles
thereof.  Each party hereto consents to
the jurisdiction of, and venue in, any federal or state court of competent
jurisdiction located in Chicago, Illinois.

 

(b)                                 Entire
Agreement.  This Agreement and any
other agreement or document delivered in connection with this Agreement,
including the letter agreement dated as of the date hereof, between the Company
and the Executive, state the entire agreement and understanding of the parties
on the subject matter of this Agreement, and supersede all previous agreements,
arrangements, communications and understandings relating to that subject
matter.

 

(c)                                  Counterparts.  This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original, with the same effect
as if all signatures were on the same document.

 

(d)                                 Amendment;
Waiver; etc.  This Agreement, and
each other agreement or document delivered in connection with this Agreement,
may be amended, modified, superseded or canceled, and any of the terms thereof
may be waived, only by a written document signed by each party to this
Agreement or, in the case of waiver, by the party or parties waiving
compliance.  The delay or failure of any
party at any time or times to exercise any right or require the performance of
any duty under this Agreement or any other agreement or document delivered in
connection with this Agreement shall in no way affect the right of that party
at a later time to exercise that right or enforce that duty or any other right
or duty.  No waiver by any party of any
condition or of any breach of this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed or construed to be a further or
continuing waiver of any such condition or breach or of the breach of any other
term of this Agreement.  A single or
partial exercise of any right shall not preclude any other or further exercise
of the same right or of any other right. 
The rights and remedies provided by this Agreement shall be cumulative
and not exclusive of each other or of any other rights or remedies provided by
law.

 

(e)                                  Severability.  If any provision of this Agreement or any
other agreement or document delivered in connection with this Agreement, if
any, is partially or completely invalid or unenforceable in any jurisdiction,
then that provision shall be ineffective in that jurisdiction to the extent of
its invalidity or unenforceability, but the invalidity or unenforceability of
that provision shall not affect the validity or enforceability of any other
provision of this Agreement, all of which shall be construed and enforced as if
that invalid or unenforceable provision were omitted, nor shall the invalidity
or unenforceability of that provision in one jurisdiction affect its validity
or enforceability in any other jurisdiction. 
The Company and the Executive agree that the period of time and the
geographical area described in Section 1 are reasonable in view of the
nature of the business in which the Company is engaged and proposes to be
engaged, and the Executive’s understanding of his prospective future 

 

6

 

employment
opportunities.  However, if the time
period or the geographical area, or both, described in Section 1 should be
judged unreasonable in any judicial proceeding, then the period of time shall
be reduced by that number of months and the geographical area shall be reduced
by elimination of that portion, or both, as are deemed unreasonable, so that
the restriction covenant of Section 1 may be enforced during the longest
period of time and in the fullest geographical area as is adjudged to be
reasonable.

 

(f)                                    Employment
“At-Will”

 

Both the Executive and the Company acknowledge that nothing in this
Agreement creates a contract for employment for any specific duration.  The Executive’s employment shall be “at-will”,
meaning both the Company and the Executive can terminate the relationship at
any time, with or without reason or notice.

 

(g)                                 Survival
of Obligations.  The obligations of
the Executive set forth in this Agreement shall survive the termination of
Employee’s employment with the Company and the termination of this Agreement.

 

(h)                                 Assignment.  This Agreement may be freely assigned by the
Company, but may not be assigned by the Executive without the prior written
consent of the Company which may be withheld at the Company’s sole discretion.

 

(i)                                     Binding
Effect.  This Agreement shall inure
to the benefit of the Company and its successors and assigns, and shall be
binding upon the Executive and the Executive’s heirs, personal representatives
and any permitted assigns.

 

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

 

 

	
   

  	
  FTD GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  
	
   

  	
   

  	
  Mark R. Goldston

  
	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
  /s/ Robert Apatoff

  
	
   

  	
  Robert Apatoff

  

 

7

 

APPENDIX A

 

EXHIBIT
A

EXECUTIVE’S DISCLOSURE

 

Except as set forth below, there are no ideas,
processes, trademarks, service marks, inventions, technology, computer
programs, original works of authorship, designs, formulas, discoveries,
patents, copyrights, or any claims, rights, or improvements to the foregoing
that I wish to exclude from the operation of this Agreement:

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Robert
  ApatoffExhibit 10.32

 

INDEMNIFICATION AGREEMENT

 

INDEMNIFICATION AGREEMENT, dated
as of
                        (the “Agreement”), by and between United
Online, Inc., a Delaware corporation (the “Company”), and
                    
(“Indemnitee”).

 

A.                                   Indemnitee,
as a member of the Company’s board of directors (the “Board”) or as an officer
of the Company, or both, performs valuable services for the Company.

 

B.                                     The
Company and Indemnitee recognize the continued difficulty in obtaining
liability insurance for corporate directors, officers, employees, controlling
persons, agents and fiduciaries, the significant increases in the cost of such
insurance and the general reductions in the coverage of such insurance.

 

C.                                     The
Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees, controlling
persons, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited.

 

D.                                    The
Company has adopted bylaws (as amended from time to time, the “Bylaws”)
providing for the indemnification of the officers, directors, agents and
employees of the Company to the maximum extent authorized by Section 145
of the General Corporation Law of the State of Delaware, (as amended from time
to time, the “DGCL”).

 

E.                                      The
Bylaws and the DGCL, by their non-exclusive nature, permit contracts between
the Company and its directors, officers, employees, controlling persons, agents
or fiduciaries with respect to indemnification of such directors, officers,
employees, controlling persons, agents or fiduciaries.

 

F.                                      The
Company desires to attract and retain the involvement of highly qualified
individuals, such as Indemnitee, to serve the Company and, therefore, wishes to
provide for the indemnification and advancement of expenses to Indemnitee to
the maximum extent permitted by law.

 

G.                                     Indemnitee
is willing to serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that he or she be so indemnified.

 

H.                                    In
view of the considerations set forth above, the Company desires that Indemnitee
be indemnified by the Company as set forth herein.

 

NOW, THEREFORE, in
consideration of Indemnitee’s service to the Company, the parties hereto,
intending to be legally bound, agree as follows:

 

1.                                      Scope
of Indemnity.

 

(a)                                  Indemnification
of Expenses.  The Company shall
indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was,
is, becomes or is threatened to become a 

 

 

party to or witness or other participant in
any threatened, pending or completed action, suit, arbitration, alternative
dispute resolution mechanism, administrative hearing, inquiry, investigation or
any other actual, threatened or completed proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), against any and all expenses
actually and reasonably incurred by or on behalf of Indemnitee (including
attorneys’ fees and all other costs in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any such Proceeding),
judgments, fines, penalties and amounts paid in settlement of such Proceeding and
any federal, state, local or foreign taxes imposed on Indemnitee as a result of
the actual or deemed receipt of any payments under this Agreement
(collectively, “Expenses”), including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses, by
reason of (or arising in part out of) any action taken by Indemnitee or of any
inaction of Indemnitee while acting as a director, officer, employee,
controlling person, agent or fiduciary of the Company or any subsidiary of the
Company, or by reason of the fact that Indemnitee was serving at the request of
the Company as a director, officer, employee, controlling person, agent or
fiduciary of another corporation, partnership, joint venture, trust or other
person or group (an “Indemnification Event”).

 

(b)                                 Partial
Indemnification.  Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of an Indemnification Event, a party to or a participant in a Proceeding and is
successful, on the merits or otherwise, in defense of such Proceeding,
Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by or on behalf of Indemnitee in connection therewith.  If Indemnitee is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such Proceeding, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by or on behalf of Indemnitee in connection
with each successfully resolved claim, issue or matter.  For purposes of this Section and without
limitation, the termination of any claim, issue or matter in a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.  If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for any portion of Expenses incurred in connection with any
Proceeding, but not, however, for the total amount of Expenses, the Company
shall nevertheless indemnify Indemnitee for the portion of such Expenses to
which Indemnitee is entitled.

 

2.                                      Method
for Requesting Indemnity.

 

(a)                                  Notice/Cooperation
by Indemnitee.  Indemnitee shall give
the Company written notice as soon as practicable of any Proceeding commenced
or threatened against Indemnitee for which indemnification will or could be
sought under this Agreement.

 

(b)                                 Notice
to Insurers.  If, at the time of the
receipt by the Company of notice of a Proceeding pursuant to Section 2(a) above,
the Company has liability insurance in effect which may cover such Proceeding,
the Company shall give prompt notice of the commencement of such Proceeding to
the insurers in accordance with the procedures set forth in each of the Company’s
applicable policies.  The Company shall
thereafter take all necessary or desirable action to cause such insurers to
pay, on behalf of Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.

 

2

 

3.                                      Advancement
of Expenses/Undertaking.

 

(a)                                  Advancement.  The Company shall advance all Expenses
actually and reasonably incurred by or on behalf of Indemnitee in connection
with any Proceeding within ten business days after receipt by the Company of a
written demand by Indemnitee requesting such advance, whether prior to or after
final disposition of the Proceeding. 
Such written demand shall reasonably evidence the Expenses incurred by
Indemnitee and shall include an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it is ultimately determined that Indemnitee is
not entitled to be indemnified against such Expenses.

 

(b)                                 Repayment
of Expenses.  Notwithstanding the
provisions of Section 3(a), the obligation of the Company to advance
Expenses shall be subject to the condition that, if, when and to the extent
that the Company determines that Indemnitee is not entitled to be indemnified
under applicable law, Indemnitee shall reimburse the Company within thirty days
of such determination all such amounts previously paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction or arbitration proceedings as set forth in Section 6(a) to
secure a determination that Indemnitee is entitled to be indemnified under
applicable law, any determination made by the Company that Indemnitee is not
entitled to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any advance of
Expenses until a final judicial determination is made with respect thereto (as
to which all rights of appeal therefrom have been exhausted and lapsed).

 

4.                                      Determining
Right to Indemnity.

 

(a)                                  Procedure.  Upon written request by Indemnitee for
indemnification pursuant to Section 2(a), a determination, if required by
applicable law, with respect to Indemnitee’s entitlement to indemnification
shall be made as follows:  (i) if a
Change of Control (as defined in Section 14) has occurred, by Independent
Counsel (as defined in Section 14) in a written opinion to the Board, a
copy of which shall be delivered to Indemnitee; or (ii) if a Change of
Control has not occurred by one of the following, which shall be at the
election of Indemnitee, (A) a majority vote of the directors of the
Company who are not and were not a party to the Proceeding in respect of which
Indemnitee seeks indemnification (the “Disinterested Directors”); or (B) a
majority vote of a quorum of the outstanding shares of stock of all classes
entitled to vote for directors, voting as a single class, which quorum shall
consist of stockholders who are not at the time parties to the Proceeding (the “Disinterested
Stockholders”); or (C) Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee (each individually, the
“Determining Party”).  If it is so
determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within seven days after such determination.  Indemnitee shall cooperate with the
Determining Party with respect to Indemnitee’s entitlement to indemnification,
including providing to the Determining Party upon request any documentation or
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such
determination.  Any costs or expenses
(including attorneys’ fees and disbursements) actually and reasonably incurred
by Indemnitee in so cooperating with the Determining Party shall be borne by
the Company (irrespective of the determination as to Indemnitee’s entitlement
to 

 

3

 

indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(b)                                 Independent
Counsel.  In the event the
determination of entitlement to indemnification is to be made by an Independent
Counsel pursuant to Section 4(a), the Independent Counsel shall be
selected as follows.  If a Change of
Control has not occurred, the Independent Counsel shall be selected by the
Board, and the Company shall give written notice to Indemnitee of the identity
of the Independent Counsel selected.  If
a Change of Control has occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the
Board, in which event the preceding sentence shall apply), and the Indemnitee
shall give written notice to the Company of the identity of the Independent
Counsel selected.  In either event,
Indemnitee or the Company, as the case may be, may, within ten days after
written notice of the selection is given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to the selection; provided, however, that such objection may
be asserted only on the ground that the Independent Counsel selected does not
meet the requirements of an Independent Counsel, and the objection shall set
forth with particularity the factual basis of such assertion.  If a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. 
If, within twenty days after submission by Indemnitee of a written
request for indemnification pursuant to Section 2(a), no Independent
Counsel has been selected and not objected to, either the Company or Indemnitee
may petition the Court of Chancery of the State of Delaware for resolution of any
objection which has been made by the Company or Indemnitee to the other’s
selection of  Independent Counsel and/or
for the appointment of an Independent Counsel by the court, and the person with
respect to whom all objections are so resolved or appointed by the court shall
act as Independent Counsel under Section 4(b).  The Company shall pay all reasonable fees and
expenses incurred by the Independent Counsel in connection with acting pursuant
to Section 4(a), and the Company shall pay all reasonable fees and
expenses incident to the procedures of this Section 4(b), regardless of
the manner in which the Independent Counsel was selected or appointed.

 

(c)                                  Settlement.  The Company is not required to obtain the
consent of the Indemnitee to the settlement of any Proceeding that the Company
has undertaken to defend if the Company assumes full and sole responsibility
for such settlement and the settlement grants the Indemnitee a complete and
unqualified release in respect of the potential liability.  The Company shall not be liable for any
amount paid by the Indemnitee in settlement of any Proceeding that is not
defended by the Company, unless the Company has consented to such settlement in
writing, which consent shall not be unreasonably withheld.

 

(d)                                 Selection
of Counsel.  In the event the Company
shall be obligated hereunder to pay the Expenses of any Proceeding, the Company
shall be entitled to assume the defense of such Proceeding, with counsel
approved by Indemnitee (which approval shall not be unreasonably withheld,
delayed or conditioned) upon the delivery to Indemnitee of written notice of
its election to do so.  After delivery of
notice, approval of counsel by Indemnitee and retention of  counsel by the Company, the Company will not
be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding; provided that Indemnitee shall have the
right to employ Indemnitee’s counsel in any 

 

4

 

such Proceeding at Indemnitee’s expense and
if (i) the employment of counsel by Indemnitee has been previously
authorized by the Company, (ii) Indemnitee shall have reasonably concluded
that there is a conflict of interest between the Company and Indemnitee in the
conduct of any such defense, or (iii) the Company shall not continue to
retain such counsel to defend such Proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.

 

5.                                      Presumptions.

 

(a)                                  Presumptions;
Burden of Proof.  In making a
determination with respect to entitlement to indemnification or the advancement
of Expenses, the Determining Party shall presume that Indemnitee is entitled to
indemnification or advancement of Expenses under this Agreement if Indemnitee
has submitted a request for indemnification or the advancement of Expenses in
accordance with Sections 2(a) and 3(a), and the Company shall have the
burden of proof in connection with any determination contrary to that
presumption.  For purposes of this
Agreement, the termination of any Proceeding by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall
not create a presumption that Indemnitee did not meet any particular standard
of conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.  In addition, neither the failure of the
Determining Party to have made a determination as to whether Indemnitee has met
any particular standard of conduct or had any particular belief, nor an actual
determination by the Determining Party that Indemnitee has not met such
standard of conduct or did not have such belief, prior to the commencement of
legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under applicable law, shall be a defense to
Indemnitee’s claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief. In
connection with any determination by the Determining Party or otherwise as to
whether Indemnitee is entitled to be indemnified hereunder, the burden of proof
shall be on the Company to establish that Indemnitee is not so entitled.

 

(b)                                 Timing.  If the Determining Party shall not have made
a determination within sixty days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall
be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification,
or (ii) a prohibition of such indemnification under applicable law; provided, however, that the foregoing
provisions of this Section 5(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the Disinterested
Stockholders pursuant to Section 4(a) and if (A) within fifteen
days after receipt by the Company of the request for such determination the
Board has resolved to submit such determination to the Disinterested
Stockholders for their consideration at an annual meeting thereof to be held
within seventy-five days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within fifteen
days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty days after having been so called
and such determination is made thereat, or (ii) if the determination of
entitlement to indemnification is to be made by an Independent Counsel pursuant
to Section 4(b).

 

5

 

(c)                                  Reliance
as Safe Harbor.  For purposes of any
determination of good faith, Indemnitee shall be deemed to have acted in good
faith if Indemnitee’s actions are based on the records or books of account of
the Company, including financial statements, or on information supplied to
Indemnitee by the officers of the Company in the course of their duties, or on
the advice of legal counsel for the Company or on information or records given
or reports made to the Company by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by the
Company.  The provisions of this Section 5(c) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which the Indemnitee may be deemed to have met the applicable standard of
conduct set forth in this Agreement.

 

(d)                                 Actions
of Others.  The knowledge and/or
actions, or failure to act, of any director, officer, agent or employee of the
Company shall not be imputed to Indemnitee for purposes of determining the
right of indemnification under this Agreement.

 

6.                                      Remedies
of Indemnitee.

 

(a)                                  In
the event that (i) a determination is made pursuant to Section 4 that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 3, (iii) no
determination of entitlement to indemnification shall have been made pursuant
to Section 4(b) within sixty days after receipt by the Company of the
request for indemnification, or (iv) payment of indemnification is not
made within seven days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication by
the Court of Chancery of the State of Delaware of his or her entitlement to
such indemnification or advancement of Expenses.  Alternatively, Indemnitee, at his or her
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association.  Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within 180
days following the date on which Indemnitee first has the right to commence
such proceeding pursuant to this Section 6(a).

 

(b)                                 In
the event that a determination has been made pursuant to Section 4(a) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 6 shall be
conducted in all respects as a de novo trial
or arbitration, on the merits and Indemnitee shall not be prejudiced by reason
of that adverse determination.

 

(c)                                  If
a determination has been made pursuant to Section 4(a) that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 6, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement
not materially misleading, in connection with the request for indemnification,
or (ii) a prohibition on such indemnification under applicable law.

 

(d)                                 In
the event that Indemnitee, pursuant to this Section 6, seeks a judicial
adjudication of or an award in arbitration to enforce his or her rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all Expenses actually and 

 

6

 

reasonably incurred by him or her in such
judicial adjudication or arbitration, but only if he or she prevails
therein.  If it shall be determined in
said judicial adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of Expenses
sought, the Expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately prorated.  The Company shall indemnify Indemnitee
against any and all Expense and, if requested by Indemnitee, shall (within ten
days after receipt by the Company of a written request therefor) advance such
expenses to Indemnitee, which are incurred by Indemnitee in connection with any
action brought by Indemnitee for indemnification or advancement of Expenses
from the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of Expenses or insurance recovery, as the case may be.

 

(e)                                  The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 6 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any court or before any arbitrator that the Company is bound by
all provisions of this Agreement.

 

7.                                      Contribution.

 

(a)                                  If
the indemnification provided for in Section 1(a) for any reason is
held by a court of competent jurisdiction to be unavailable to Indemnitee in
respect of any Proceeding and/or in respect of any Expenses in connection
therewith, then the Company, in lieu of indemnifying Indemnitee, shall
contribute to the amount paid or payable by Indemnitee as a result of such
Proceeding (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and Indemnitee with respect to the
Indemnification Event, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and Indemnitee in connection with the
Indemnification Event, as well as any other relevant equitable
considerations.  In connection with the
registration of the Company’s securities, the relative benefits received by the
Company and Indemnitee shall be deemed to be in the same respective proportions
that the net proceeds from the offering (before deducting expenses) received by
the Company and the Indemnitee, in each case as set forth in the table on the
cover page of the applicable prospectus, bear to the aggregate public offering
price of the securities so offered.  The
relative fault of the Company and Indemnitee shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or Indemnitee and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

The Company and Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by
pro rata or per capita allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph.  In
connection with the registration of the Company’s securities, in no event shall
an Indemnitee be required to contribute any amount under this Section 7 in
excess of the lesser of (i) that proportion of the total of such losses,
claims, damages or liabilities indemnified against equal to the proportion of
the total securities sold under such 

 

7

 

registration statement which is
being sold by Indemnitee or (ii) the proceeds received by Indemnitee from
its sale of securities under such registration statement.  No person found guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the
Securities Act of 1933) shall be entitled to contribution from any person who
was not found guilty of such fraudulent misrepresentation.

 

8.                                      Nonexclusivity.  The indemnification provided by this
Agreement shall be in addition to any rights to which Indemnitee may be
entitled under the Company’s certificate of incorporation (as amended from time
to time, the “Certificate of Incorporation”), its Bylaws, any agreement, any
vote of stockholders or Disinterested Directors, the DGCL, or otherwise. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action Indemnitee took or did not take while serving in an indemnified
capacity even though Indemnitee may have ceased to serve in such capacity.

 

9.                                      No
Duplication of Payments.  The
Company shall not be liable under this Agreement to make any payment in
connection with any Proceeding commenced or threatened against Indemnitee to
the extent Indemnitee has otherwise actually received payment (under any
insurance policy, the Certificate of Incorporation, the Bylaws or otherwise) of
the amounts otherwise indemnifiable hereunder.

 

10.                               Mutual
Acknowledgement.  The Company and
Indemnitee acknowledge that in certain instances, federal law or applicable
public policy may prohibit the Company from indemnifying its directors,
officers, employees, controlling persons, agents or fiduciaries under this
Agreement or otherwise.  Each Indemnitee
understands and acknowledges that the Company has undertaken or may be required
in the future to undertake with the Securities and Exchange Commission to
submit the question of indemnification to a court in certain circumstances for
a determination of the Company’s rights under public policy to indemnify
Indemnitee.

 

11.                               Exceptions.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

 

(a)                                  Proceedings
Initiated by Indemnitee.  To
indemnify or advance Expenses to Indemnitee with respect to Proceedings
initiated or brought voluntarily by Indemnitee and not by way of defense,
except (i) with respect to actions or proceedings to establish or enforce
a right to indemnification under this Agreement or any other agreement or
insurance policy or under the Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Indemnification Events, (ii) in specific
cases if the Board has approved the initiation or bringing of such Proceeding,
or (iii) as otherwise required under Section 145 of the DGCL,
regardless of whether Indemnitee ultimately is determined to be entitled to
such indemnification, advance Expense payment or insurance recovery, as the
case may be; or

 

(b)                                 Proceedings
Under Section 16(b).  To
indemnify Indemnitee for Proceedings arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any
similar or successor statute; or

 

8

 

(c)                                  Proceedings
Excluded Under Section 145 of the DGCL.  To indemnify Indemnitee if (i) Indemnitee
did not act in good faith or in a manner reasonably believed by such Indemnitee
to be in or not opposed to the best interests of the Company, or (ii) with
respect to any criminal or civil enforcement action or proceeding, Indemnitee
had reasonable cause to believe Indemnitee’s conduct was unlawful, or (iii) Indemnitee
is adjudged to be liable to the Company unless and only to the extent the court
in such action permits indemnification as provided in Section 145(b) of
the DGCL.

 

12.                               Change
in Law.  In the event of any
change after the date of this Agreement in any applicable law, statute or rule which
expands the right of a Delaware corporation to indemnity a member of its Board
or an officer, employee, controlling person, agent or fiduciary, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits afforded by such change. 
In the event of any change in any applicable law, statute or rule which
narrows the right of a Delaware corporation to indemnify a member of its Board
or an officer, employee, agent or fiduciary, such change, to the extent not
otherwise required by such law, statute or rule to be applied to this
Agreement, shall have no effect on this Agreement or the parties’ rights and
obligations hereunder except as set forth in Section 11(a).

 

13.                               Period
of Limitations.  No legal action
shall be brought and no cause of action shall be asserted by or in the right of
the Company against any Indemnitee, any Indemnitee’s estate, spouse, heirs,
executors or personal or legal representatives after the expiration of five
years from the date of accrual of such cause of action, and any claim or cause
of action of the Company shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such five-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

 

14.                               Definitions.

 

(a)                                  For
purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent, control person, or
fiduciary of such constituent corporation, or is or was serving at the request
of such constituent corporation as a director, officer, employee, control
person, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to
such constituent corporation if its separate existence had continued.

 

(b)                                 For
purposes of this Agreement, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on  Indemnitee with respect to
an employee benefit plan; and references to “serving at the request of the
Company” shall include any service as a director, officer, employee, agent or
fiduciary of the Company which imposes duties on, or involves services by, such
director, officer, employee, agent or fiduciary with respect to an employee
benefit plan, its participants or its beneficiaries; and if Indemnitee acted in
good faith and in a manner reasonably believed to be in the interests 

 

9

 

of the participants and beneficiaries of an
employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not
opposed to the best interests of the Company” as referred to in this Agreement.

 

(c)                                  For
purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred if (i) any “person” (as such term is used in Sections 13(d)(3) and
14(d)(2) of the the Exchange Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company, (A) who
is or becomes the beneficial owner, directly or indirectly, of securities of
the Company representing 10% or more of the combined voting power of the
Company’s then outstanding Voting Securities, increases his or her beneficial
ownership of such securities by 5% or more over the percentage so owned by such
person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing more than 20% of the total voting power represented by the Company’s
then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of the Company and any new director whose election by the Board of
the Company or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation
other than a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 80% of the total voting power represented
by the Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series
of transactions) all or substantially all of the Company’s assets.

 

(d)                                 For
purposes of this Agreement, “Independent Counsel” shall mean an attorney or
firm of attorneys, selected in accordance with the provisions of Section 4(b),
that is experienced in matters of corporate law and who shall not have
otherwise performed services for the Company or Indemnitee within the last
three years (other than with respect to matters concerning the right of any
Indemnitee under this Agreement, or of other indemnitees under similar
indemnity agreements) and shall not have otherwise performed services for any
other party to the Proceeding giving rise to a claim for indemnification
hereunder.  Notwithstanding the foregoing,
the term “Independent Counsel” shall not include any person, who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.

 

(e)                                  For
purposes of this Agreement, “Voting Securities” shall mean any securities of
the Company that vote generally in the election of directors.

 

10

 

15.                               Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

 

16.                               Binding
Effect; Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, and personal and legal representatives. The Company
shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all, or a substantial
part, of the business and/or assets of the Company, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.
This Agreement shall continue in effect with respect to Proceedings relating to
Indemnification Events regardless of whether any Indemnitee continues to serve
as a director, officer, employee, agent, controlling person, or fiduciary of
the Company or of any other enterprise, including subsidiaries of the Company,
at the Company’s request.

 

17.                               Attorneys’
Fees.  In the event that any
action is instituted by Indemnitee under this Agreement or under any liability
insurance policies maintained by the Company to enforce or interpret any of the
terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee with respect to such action if Indemnitee is ultimately
successful in such action, and shall be entitled to the advancement of Expenses
with respect to such action, unless, as a part of such action, a court of competent
jurisdiction over such action determines that the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an action instituted by or in the name of the
Company under this Agreement to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee in defense of such action (including costs and expenses incurred
with respect to Indemnitee counterclaims and cross-claims made in such action),
and shall be entitled to the advancement of Expenses with respect to such
action, unless, as a part of such action, a court having jurisdiction over such
action determines that the Indemnitee’s material defenses to such action were
made in bad faith or were frivolous.

 

18.                               Notice.  All notices and other communications required
or permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given (a) five calendar days after
deposit with the U.S. Postal Service or other applicable postal service, if
delivered by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one business day after the business day of deposit
with Federal Express or similar overnight courier, freight prepaid, or (d) one
day after the business day of delivery by facsimile transmission, if
deliverable by facsimile transmission, with copy by first class mail, postage
prepaid, and shall be addressed if to Indemnitee, at Indemnitee’s address as
set forth beneath Indemnitee’s signature to this Agreement and if to the
Company at the address of its principal corporate offices (attention: Chief
Executive Officer) or at such other address as such party may designate by ten
calendar days’ advance written notice to the other party hereto.

 

19.                               Consent
to Jurisdiction.  Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 6,
the Company and Indemnitee irrevocably consent to the 

 

11

 

jurisdiction of the courts of the State of
Delaware for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be commenced, prosecuted and continued only in the
Court of Chancery of the State of Delaware in and for New Castle County, which
shall be the exclusive and only proper forum for adjudicating such a claim and
waive any objection to the laying of venue of any such action or proceeding in
a Delaware court and agree not to plead or to make any claim that any such
action or proceeding brought in a Delaware court has been brought in an
improper or otherwise inconvenient forum.

 

20.                               Severability.  The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court
of competent jurisdiction to be invalid, void or otherwise unenforceable, and
the remaining provisions shall remain enforceable to the fullest extent
permitted by law. Furthermore, to the fullest extent possible, the provisions
of this Agreement (including, without limitations, each portion of this
Agreement containing any provision held to be invalid, void or otherwise
unenforceable, that is not itself invalid, void or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.

 

21.                               Choice
of Law.  This Agreement shall be
governed by and its provisions construed and enforced in accordance with the
laws of the State of Delaware, as applied to contracts between Delaware
residents, entered into and to be performed entirely within the State of
Delaware, without regard to the conflict of laws principles thereof.

 

22.                               Subrogation.  In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.

 

23.                               Amendment
and Termination.  No amendment,
modification, termination or cancellation of this Agreement shall be effective
unless it is in writing signed by all parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

24.                               Integration
and Entire Agreement.  This
Agreement sets forth the entire understanding between the parties hereto and
supersedes and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof between the
parties hereto.

 

25.                               No
Construction as Employment Agreement. 
Nothing contained in this Agreement shall be construed as giving
Indemnitee any right to be retained in the employ or service of the Company or
any of its subsidiaries in Indemnitee’s current capacity or any other capacity.

 

26.                               Corporate
Authority.  The Board of the
Company has approved the terms of this Agreement.

 

12

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.

 

 

	
   

  	
   

  	
  INDEMNITEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UNITED ONLINE, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Mark R. Goldston

  
	
   

  	
   

  	
   

  	
  Chairman, President and Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  

 

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