Document:

Exhibit 10.2

 

2011 SPECIAL BONUS PLAN

 

I.               PURPOSES OF THE PLAN

 

1.01         The 2011 Special Bonus Plan (the “Plan”) is hereby established under the Incentive Bonus Program of the stockholder-approved United Online, Inc. 2010 Incentive Compensation Plan (the “2010 ICP”) and is intended to promote the interests of United Online, Inc. (the “Company”) by creating a special incentive program for Neil P. Edwards (the “Participant”) in connection with his appointment as the Company’s Acting Chief Financial Officer.

 

1.02         The financial performance for the 2011 fiscal year of the three (3) business segments of the Company identified below shall be measured to determine the bonus amount (if any) payable under the Plan to the Participant for such fiscal year.  The applicable business segments (the “Business Segments”) shall be as follows:

 

(i)            FTD Segment

 

(ii)                                  Content & Media Segment; and

 

(iii)                               Communications Segment

 

The bonus potential for the Participant under the Plan shall be allocated in part to (a) the combined performance of all three (3) Business Segments (also referred to as “Combined Business Segments”) and in part to (b) the separate performance of each of the individual Business Segments.

 

II.                ADMINISTRATION OF THE PLAN

 

2.01         The Plan is hereby adopted by the Compensation Committee of the Company’s Board of Directors (the “Committee”) as a special cash bonus program under the Incentive Bonus Program of the 2010 ICP and shall be administered by the Committee pursuant to the administrative authority provided the Committee under the 2010 ICP and the Incentive Bonus Program.

 

 

2.02         The bonus that may be earned by the Participant under the Plan shall be tied to both the separate financial performance of the three (3) individual Business Segments and the financial performance of the Combined Business Segments for the Company’s 2011 fiscal year ending December 31, 2011 (the “2011 Fiscal Year”).  The applicable performance goals for each such Business Segment and for the Combined Business Segments shall be the same performance goals that were previously established by the Committee for the United Online, Inc. 2011 Management Bonus Plan (the “Performance Goals Schedule”).

 

2.03         The interpretation and construction of the Plan and the adoption of rules and regulations for administering the Plan shall be made by the Committee in its sole discretion.  Decisions of the Committee shall be final and binding on all parties who have an interest in the Plan.

 

III.               BONUS DETERMINATION

 

3.01         The bonus potential for the Participant shall be allocated fifty-five percent (55%) to the financial results of the Combined Business Segments, fifteen percent (15%) to the separate financial results of the FTD Segment, fifteen percent (15%) to the separate financial results of the Content & Media Segment, and the remaining fifteen percent (15%) to the separate financial results of the Communications Segment.

 

3.02         The Participant shall be eligible to receive a bonus under the Plan if employed by the Company or any of its subsidiaries on the date such bonus is paid in accordance with Section 5.01 of the Plan (the “Bonus Payment Date”). If the Participant is not employed by the Company or one of its subsidiaries on the Bonus Payment Date, then such individual will not be eligible to receive a bonus under the Plan; provided, however, that the following special partial payment provisions shall be in effect:

 

(i)            Should the Participant’s employment terminate prior to the Bonus Payment Date as a result of death or permanent disability (as defined below), then the Committee shall provide him or his estate with a pro-rated portion of the bonus he would have earned, based on the Company’s actual performance for the 2011 Fiscal Year in the applicable Business Segments and the Combined Business Segments, had he continued in the Company’s employ through the Bonus Payment Date.

 

(ii)           If the Participant is on a leave of absence or his employment terminates after the start of the 2011 Fiscal Year but recommences prior to the Bonus Payment Date, he may remain eligible at the discretion of the Committee, and the Committee may provide him with a pro-rated portion (based on period or periods of employment during such year) of the bonus he would have earned, based on the Company’s actual performance for the 2011 Fiscal Year in the three (3) individual Business Segments and the Combined Business Segments, had he remained continuously in the Company’s employ through the Bonus Payment Date.

 

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3.03         For purposes of the Plan:

 

A.            The Participant shall be considered an employee for so long as he remains employed by the Company or one or more subsidiary corporations.

 

B.            Each corporation (other than the Company) in an unbroken chain of corporations beginning with the Company shall be considered to be a subsidiary of the Company, provided each such corporation (other than the last corporation in the unbroken chain) owns, at the time of determination, stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

C.            Unless defined otherwise in any employment or severance agreement entitling the Participant to a full or pro-rated bonus upon a disability termination, permanent disability shall mean the Participant’s inability to engage in any substantial activity necessary to perform the duties and responsibilities of his position with the Company (or any subsidiary thereof) by reason of any medically-determinable physical or mental impairment which can be expected to result in such individual’s death or which has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months.

 

D.            In no event shall there be any duplication of bonus payments under this Plan and any employment agreement or severance agreement between the Company (or a subsidiary thereof) and the Participant that provides him with a stated bonus or bonus formula for a particular year or includes an annual bonus as part of a severance pay formula thereunder.  Accordingly, in order to avoid any such potential duplication, the Participant shall only be entitled to receive the annual bonus amount to which he may otherwise be entitled under his employment or severance agreement. However, the accelerated vesting of any outstanding equity awards held by the Participant under any of the Company’s stock plans, including any outstanding stock options, restricted stock or restricted stock unit awards, or the extension of any exercise periods for such stock options, shall not be deemed to constitute a bonus payment for purposes of this Section 3.03D.

 

IV.                BONUS AWARDS

 

4.01         The bonus award payable under the Plan to the Participant for the 2011 Fiscal Year shall be payable in cash on the Bonus Payment Date, with the cash bonus amount to be determined on the basis of the performance of the Business Segments and the Combined Business Segments to which the bonus potential for that Participant has been allocated in accordance with Section 3.01. The performance of the Combined Business Segments shall be measured in terms of the combined revenue and operating income before depreciation, amortization and certain other expenses and subject to certain adjustments, all as specified in Section 4.02 (“Adjusted OIBDA”), for the three (3) Business Segments; provided, however, that the calculation of Adjusted OIBDA for the Combined Business Segments shall also take into account any unallocated corporate expenses that were not included in the calculation of Adjusted OIBDA for the separate Business Segments.  Accordingly, fifty percent (50%) of the portion of the bonus potential for the Participant allocated to the performance of the Combined Business Segments shall be based upon the achievement of the combined revenue targets (“Combined Revenue Targets”) specified for the Combined Business Segments in the Performance Goals Schedule, and the remaining fifty percent (50%) of the bonus potential for the Participant allocated to the performance of the Combined

 

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Business Segments shall be based upon the achievement of the combined Adjusted OIBDA targets (“Combined Adjusted OIBDA Targets”) specified for the Combined Business Segments in the Performance Goals Schedule.  The performance of each individual Business Segment shall be measured in terms of the revenue and Adjusted OIBDA of that particular Business Segment. Accordingly, fifty percent (50%) of the portion of the bonus potential allocated to that Business Segment shall be based upon the achievement of the revenue targets (“Segment Revenue Targets”) specified for that Business Segment in the Performance Goals Schedule, and the remaining fifty percent (50%) of his bonus potential allocated to that Business Segment shall be based upon the achievement of the Adjusted OIBDA targets (“Segment Adjusted OIBDA Targets”) specified for that Business Segment in the Performance Goals Schedule.

 

4.02         The following provisions shall govern the calculation of the levels at which the Revenue Targets and Adjusted OIBDA Targets (whether measured on a Combined or Segment basis) are attained for the 2011 Fiscal Year and the determination of the bonus amounts based on those calculations:

 

(a)           In determining the actual level at which Combined or Segment revenues has been attained for the 2011 Fiscal Year, revenues will be calculated in a manner consistent with the methodology utilized by the Committee in establishing the Combined and Segment Revenue Targets.

 

(b)           In determining the actual level at which Combined or Segment Adjusted OIBDA has been attained, Adjusted OIBDA will be determined consistent with the Company’s methodology for calculating Adjusted OIBDA for financial reporting purposes.  For financial reporting purposes, Adjusted OIBDA is defined as operating income before depreciation; amortization; stock-based compensation; restructuring charges; litigation or dispute settlement charges or gains; transaction-related costs; and impairment of goodwill, intangible assets and long-lived assets.  In addition, to the extent the following are not otherwise taken into account in calculating Adjusted OIBDA for financial reporting purposes, Adjusted OIBDA shall be calculated before, and expenses for the purpose of calculating Adjusted OIBDA shall exclude: (1) any expenses associated with the relocation of the Company’s or any of its subsidiaries’ offices; (2) any bonus amounts which accrue under (x) this Plan or (y) the 2011 Management Bonus Plan; (3) any adjustments to Adjusted OIBDA attributable to a change in accounting principles; (4) all items of gain, loss or expense determined to be extraordinary or non-recurring (including, without limitation, legal fees and costs related to (A) the Company’s historical post-transaction marketing/sales practices, such as those resulting from governmental investigations, claims or litigation related thereto, or (B) any class action litigation involving the Company or any of its subsidiaries; and (5) all items of gain, loss or expense related to the sale or divestiture of a business; provided, however, that (i) in determining the actual level at which Segment Adjusted OIBDA has been attained, the associated amount under clause (1) or clause (4) shall be excluded from the calculation of Adjusted OIBDA only to the extent the actual aggregate amount under clause (1) or clause (4) for such Business Segment exceeds the aggregate budgeted amount therefor that was included in the Segment Adjusted OIBDA Targets set forth in the Performance Goals Schedule; (ii) in determining the actual level at which Combined Adjusted OIBDA has been attained, the associated amount under clause (1) or clause (4) shall be excluded from the calculation of Adjusted OIBDA only to the extent the actual aggregate amount under clause (1) or clause (4) for the Combined Business Segments exceeds the aggregate budgeted amount therefor that was included in the Combined Adjusted OIBDA Targets set forth in the Performance Schedule; and (iii) in determining the actual

 

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level at which the Combined Segments Adjusted OIBDA has been attained, the associated amount under clause (2)(x) shall be excluded from the calculation of Adjusted OIBDA only if and to the extent the actual amount under clause (2)(x) for the Combined Segments exceeds the aggregate budgeted amount therefor that was included in the Combined Segments Adjusted OIBDA Targets set forth in the Performance Goals Schedule.

 

(c)           In the event the actual foreign currency exchange rate (determined as set forth below) for the GBP:U.S. Dollar for the 2011 Fiscal Year is lower than 1:1.55 (the “GBP Floor”), the final revenue and/or Adjusted OIBDA calculations for the FTD Business Segment and the Combined Business Segments will be adjusted using the GBP Floor.  In the event the actual foreign currency exchange rate (determined as set forth below) for the Euro:U.S. Dollar for the 2011 Fiscal Year is lower than 1:1.30 (the “Euro Floor”), the final revenue and Adjusted OIBDA calculations for the Content & Media Business Segment and the Combined Business Segments will be adjusted using the Euro Floor.  For the purpose of clarity, the GBP Floor and/or the Euro Floor will not be used to adjust the final revenue and Adjusted OIBDA calculations in the event the actual foreign currency exchange rates for the GBP:U.S. Dollar and/or the Euro:U.S. Dollar for such financial measures for the 2011 Fiscal Year are higher than the GBP Floor or the Euro Floor, respectively.  For the purposes of this paragraph, an “actual foreign currency exchange rate” will be determined for each of year-end revenues and Adjusted OIBDA and calculated by (i) translating into U.S. Dollars the year-end revenues and Adjusted OIBDA amounts for the applicable non-U.S. subsidiaries in a manner consistent with the Company’s historical methodology for financial reporting purposes and (ii) dividing each such U.S. Dollars amount by its pre-translation (GBP or Euro) year-end revenues or Adjusted OIBDA amount, as applicable.

 

(d)           In the event the Company acquires other companies or businesses during the 2011 Fiscal Year, the financial performance of those acquired entities shall not be taken into account in determining whether the Combined or Segment Revenue Targets and Combined or Segment Adjusted OIBDA Targets for the 2011 Fiscal Year have been achieved.

 

(e)           Should the Company sell or divest a business during the 2011 Fiscal Year and the financial performance of such business was taken into account in establishing the Revenue Targets and Adjusted OIBDA Targets set forth in the Performance Goals Schedule, then for the purpose of determining whether the Combined and/or Segment Revenue Targets and Combined and/or Segment Adjusted OIBDA Targets for the 2011 Fiscal Year have been attained, the revenue and Adjusted OIBDA calculations for the applicable Business Segment(s) shall be made (1) by taking into account the actual revenue and Adjusted OIBDA performance of the divested business during the portion of the 2011 Fiscal Year preceding the closing of such sale or divestiture and (2) for the post-closing portion of the 2011 Fiscal Year, by assuming that the sold or divested business attained the level of revenue and Adjusted OIBDA performance that was projected for that period by the Committee in establishing the “target” level of the Revenue Targets and Adjusted OIBDA Targets for the applicable Business Segment(s) for the 2011 Fiscal Year.

 

4.03         The Committee shall, within sixty (60) days following the close of the 2011 Fiscal Year, determine and certify on the basis of the Company’s audited financial statements for such fiscal year, the actual level of attainment for revenue and Adjusted OIBDA (measured on a Combined or Segment basis) for the 2011 Fiscal Year. Such certification shall be included as part of the formal minutes of the meeting at which such determinations are made.  On the basis of such certification, the Committee shall determine the actual bonus award for the

 

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Participant.  However, the Committee, in making such determination, shall not award a bonus in excess of the dollar amount determined for the Participant on the basis of the bonus potential established for the particular levels at which revenue and Adjusted OIBDA (Combined or Segment, as applicable to the Participant) for the 2011 Fiscal Year are attained.  In the event that revenue or Adjusted OIBDA (whether on a Combined or Segment basis) falls between two specified levels set forth in the schedule approved by the Committee, the resulting bonus amount shall be interpolated on a straight-line basis between those two points.  In no event shall the bonus awarded to the Participant exceed the maximum dollar limitation of Section 4.05.

 

4.04         The Participant shall not earn or accrue any right to any portion of a bonus award hereunder until the Bonus Payment Date.

 

4.05         In no event shall the actual bonus amount payable to the Participant for the 2011 Fiscal Year exceed the dollar amount of [Eight Hundred Thousand dollars ($800,000)].

 

V.                PAYMENT OF BONUS AWARDS

 

5.01         The actual bonus to which the Participant becomes entitled based on the certified level at which the Revenue and Adjusted OIBDA Targets (whether measured on a Combined Business Segments or individual Business Segment basis) are actually attained for the 2011 Fiscal Year shall be paid in cash, subject to the Company’s collection of all applicable federal, state and local income, employment and payroll withholding taxes.  Schedule I attached hereto sets forth the bonus amount payable to the Participant based on each specified level at which the Revenue and Adjusted OIBDA Targets on both an individual Business Segment and Combined Business Segment basis are attained.   The bonus payment shall be made in the 2012 calendar year but not later than March 5, 2012, with the actual payment date to constitute the Bonus Payment Date.

 

VI.                GENERAL PROVISIONS

 

6.01         The Committee may at any time amend, suspend or terminate the Plan, provided such action is effected by written resolution and is subject to stockholder approval to the extent required under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).  Moreover, the Committee reserves the right to amend this Plan as may be necessary or appropriate to avoid adverse tax consequences under Section 409A of the Code.

 

6.02         No amount awarded or accrued under this Plan shall actually be funded, set aside or otherwise segregated prior to payment.  The obligation to pay the bonus awarded to the Participant hereunder shall at all times be an unfunded and unsecured obligation of the Company.  The Participant shall have the status of a general creditor and shall look solely to the general assets of the Company for the payment of his bonus award.

 

6.03         The Participant shall not have the right to alienate, pledge or encumber his interest in this Plan, and such interest shall not (to the extent permitted by law) be subject in any way to the claims of his creditors or to attachment, execution or other process of law.

 

6.04         Neither the action of the Company in establishing the Plan, nor any action taken under the Plan by the Committee, nor any provision of the Plan, shall be construed so as to

 

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grant the Participant the right to remain in the employ of the Company or its subsidiaries for any period of specific duration.  Rather, the Participant will be employed “at-will,” which means that either he or the Company may terminate the employment relationship at any time for any reason, with or without cause, subject in each case to any applicable benefits that may become payable under any employment agreement between the Participant and the Company or any of its subsidiaries.

 

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

 

6.06         This is the full and complete agreement between the Participant and the Company with respect to his incentive bonus compensation for the 2011 Fiscal Year and the related service period through the Bonus Payment Date. This Plan does not supersede, but is supplemental to, any provisions of any employment agreement to which the Participant in this Plan may be party.

 

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SCHEDULE I

 

POTENTIAL BONUS AWARD

TIED TO INDIVIDUAL BUSINESS SEGMENT AND COMBINED BUSINESS SEGMENT

FINANCIAL PERFORMANCE LEVELS

 

	
Payout
    Level
    	
 
    	
 
    	
 
    
	
for
    	
 
    	
EDWARDS PAYOUTS
    	
 
    
	
Revenue
    	
 
    	
 
    	
 
    	
Content &
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Targets
    	
 
    	
FTD
    	
 
    	
Media
    	
 
    	
Communications
    	
 
    	
Combined
    	
 
    
	
 
    	
 
    	
(% of Salary)
    	
 
    
	
1
    	
 
    	
3.75%
    	
 
    	
3.75%
    	
 
    	
3.75%
    	
 
    	
13.75%
    	
 
    
	
2
    	
 
    	
4.50%
    	
 
    	
4.50%
    	
 
    	
4.50%
    	
 
    	
16.50%
    	
 
    
	
3
    	
 
    	
7.50%
    	
 
    	
7.50%
    	
 
    	
7.50%
    	
 
    	
27.50%
    	
 
    
	
4
    	
 
    	
8.25%
    	
 
    	
8.25%
    	
 
    	
8.25%
    	
 
    	
30.25%
    	
 
    
	
5
    	
 
    	
9.75%
    	
 
    	
9.75%
    	
 
    	
9.75%
    	
 
    	
35.75%
    	
 
    
	
6
    	
 
    	
11.25%
    	
 
    	
11.25%
    	
 
    	
11.25%
    	
 
    	
41.25%
    	
 
    

 

	
Payout
    Level
    	
 
    	
 
    	
 
    
	
for
    	
 
    	
 
    	
 
    
	
Adjusted
    	
 
    	
EDWARDS PAYOUTS
    	
 
    
	
OIBDA
    	
 
    	
 
    	
 
    	
Content &
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Targets
    	
 
    	
FTD
    	
 
    	
Media
    	
 
    	
Communications
    	
 
    	
Combined
    	
 
    
	
 
    	
 
    	
(% of Salary)
    	
 
    
	
1
    	
 
    	
3.75%
    	
 
    	
3.75%
    	
 
    	
3.75%
    	
 
    	
13.75%
    	
 
    
	
2
    	
 
    	
4.50%
    	
 
    	
4.50%
    	
 
    	
4.50%
    	
 
    	
16.50%
    	
 
    
	
3
    	
 
    	
7.50%
    	
 
    	
7.50%
    	
 
    	
7.50%
    	
 
    	
27.50%
    	
 
    
	
4
    	
 
    	
8.25%
    	
 
    	
8.25%
    	
 
    	
8.25%
    	
 
    	
30.25%
    	
 
    
	
5
    	
 
    	
9.75%
    	
 
    	
9.75%
    	
 
    	
9.75%
    	
 
    	
35.75%
    	
 
    
	
6
    	
 
    	
10.50%
    	
 
    	
10.50%
    	
 
    	
10.50%
    	
 
    	
38.50%
    	
 
    
	
7
    	
 
    	
11.25%
    	
 
    	
11.25%
    	
 
    	
11.25%
    	
 
    	
41.25%
    	
 
    

 

	
SALARY:
    	
 
    	
 
    	
 
    
	
Edwards, Neil P.
    	
 
    	
$
    	
400,000
    	
 
    
					

 

8Exhibit 10.3

 

AMENDED AND RESTATED

 

UNITED ONLINE, INC.

 

SEVERANCE BENEFIT PLAN

 

AND

 

SUMMARY PLAN DESCRIPTION

 

 

Amended and Restated Effective January 1, 2010

and

Further Amended Effective April 11, 2011

 

 

UNITED ONLINE, INC. SEVERANCE BENEFIT PLAN

AND

SUMMARY PLAN DESCRIPTION

 

I.              INTRODUCTION

 

United Online, Inc. (the “Company”) grants severance pay to terminated full-time employees only under limited circumstances.  The Company retains the right to amend, modify or terminate its severance pay policy at any time, in whole or part, and to determine employee eligibility for severance pay and the amount of severance pay at its sole discretion; provided, however, that this Plan may not be amended, modified or terminated within eighteen (18) months following the consummation of a Transaction (as defined below) with respect to eligible employees as of the closing of that Transaction.

 

This Plan shall only apply to the Company and the subsidiaries of the Company listed in attached Schedule A.  The Plan shall not apply to any other subsidiary, parent or affiliated company unless the Chief Executive Officer of the Company so extends the application of this Plan in a written addendum to attached Schedule A. This Plan shall not apply to any subsidiary listed in attached Schedule A following the time such subsidiary ceases to be a direct or indirect subsidiary of the Company.

 

This Severance Benefit Plan (the “Plan”) supersedes all obligations, agreements or policies regarding severance pay, except such terms as are set forth in a written agreement signed by an authorized officer of the Company or one of its subsidiaries and in effect at the time of the applicable termination of employment.  This Plan supplements any such written agreements to provide all terms that are not otherwise expressly incorporated into those written agreements.  The purpose of severance pay is to provide economic help to compensate for periods of unemployment due to job loss as provided herein.

 

This Plan is designed to be an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of the regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations, section 2510.3-2(b).  This document shall also serve as a Summary Plan Description.  Accordingly, the benefits paid by the Plan are not deferred compensation and no employee shall have a vested right to such benefits.

 

II.            DEFINITIONS

 

For purposes of this Plan, the following definitions shall be in effect:

 

“base pay” means: (a) in the case of a Layoff Termination (as defined herein): (i) if you are a salaried employee, your set weekly salary (“Weekly Salary”) in effect as of your termination date or (ii) if you are an employee paid on an hourly basis, your base hourly rate times 40 for a work week (“Weekly Rate”); or (b) in the case of an Involuntary Termination (as defined herein):  the greater of (i) your highest Weekly Salary or Weekly Rate, as applicable, at any time during the Transaction Protection Period (as defined herein), and (ii) your Weekly Salary or Weekly Rate, as applicable, at the time you received your notice of termination.  Base pay does not include any variable forms of compensation such as, but not limited to, overtime, shift differentials, bonuses, incentive compensation, commissions, expenses or expense allowances.

 

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“Change in Control” means the event of a change in ownership or control of United Online, Inc. affected through either of the following transactions:

 

(i)            the acquisition, directly or indirectly, by any person or related group of persons (other than United Online, Inc. or a person that directly or indirectly controls, is controlled by, or is under common control with, United Online, Inc.) of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing more than fifty percent (50%) of the total combined voting power of the outstanding securities of United Online, Inc. pursuant to a tender or exchange offer made directly to the stockholders of United Online, Inc., or

 

(ii)           a change in the composition of the Board of Directors of United Online, Inc. (“Board”) over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (a) have been Board members continuously since the beginning of such period or (b) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (a) who were still in office at the time the Board approved such election or nomination.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Corporate Transaction” means either of the following stockholder-approved transactions to which United Online, Inc. is a party:

 

(i)            a merger or consolidation in which the record and beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of the outstanding securities of United Online, Inc. are transferred, both beneficially and of record, to a person or persons different from the persons holding those securities immediately prior to such transaction (for example, it will not be a Corporate Transaction if following the transaction United Online, Inc. is directly or indirectly (including through a parent or one or more subsidiaries) controlled by the person or persons who controlled 50% of the outstanding securities of United Online, Inc. prior to such transaction), or

 

(ii)           the sale, transfer or other disposition of all or substantially all of the assets of United Online, Inc. resulting in the complete liquidation or dissolution of United Online, Inc.

 

“Covered Subsidiary” means any subsidiary listed in attached Schedule A, as such schedule may be revised from time to time, as a participating Employer in the Plan.

 

“Employer Group” means the Company and each member of the group of commonly controlled corporations or other businesses that include the Company, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) of the Code for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section 1.414(c)-2 of the Treasury Regulations.

 

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“Involuntary Termination” or “Involuntarily Terminated” means the following: (i) you are terminated by the Company or any successor to the Company or any Covered Subsidiary for reasons other than Misconduct (as defined below) during the Transaction Protection Period or (ii) your employment terminates as a result of a Resignation for Good Reason during the Transaction Protection Period.  Unless otherwise determined by the Chief Executive Officer of United Online, Inc., the Involuntary Termination provisions of the Plan shall only apply in the event of a Change in Control or Corporate Transaction with respect to United Online, Inc.

 

“Misconduct” means the (i) commission of any act of fraud, embezzlement or dishonesty, (ii) any unauthorized use or disclosure of confidential information or trade secrets of the Company (or any other member of the Employer Group), (iii) any intentional misconduct adversely affecting the business or affairs of the Company (or any other member of the Employer Group), or (iv) failure to use reasonable efforts to follow reasonable directives or instructions of a manager or supervisor after written notice of such failure that specifies in detail the reasons for such failure and a chance to remedy such failure.

 

“Plan Administrator” means the Compensation Committee of the Board of Directors of the Company or any other committee appointed by the Board of Directors to perform the functions of the Compensation Committee (the “Committee”) or any person, committee or entity to whom or which the Committee delegates any of its power or duties under the Plan from time to time.

 

“Resignation for Good Reason” means the termination of your employment during the Transaction Protection Period as a result of your resignation for either of the following reasons: (A) a material reduction in the amount of base salary in effect for you immediately prior to the commencement of the Transaction Protection Period or (B) a relocation of your primary place of employment by more than fifty (50) miles; provided, however, that your resignation for either of the foregoing reasons shall constitute a Resignation for Good Reason only if the following requirements are satisfied: (i) you provide written notice of the clause (A) or (B) event to your Employer within thirty (30) days after the occurrence of that event, (ii) your Employer fails to take appropriate remedial action to remedy such event within thirty (30) days after receipt of such notice and (iii) you resign from your employment with such Employer within ninety (90) days following the initial occurrence of the clause (A) or (B) event.

 

“Separation from Service” means your cessation of employment with your Employer (as defined herein) and all other members of the Employer Group and shall be deemed to occur at such time as the level of bona fide services you are render as such an employee (or non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services you rendered as an employee of the Company or any other member of the Employer Group during the immediately preceding thirty-six (36) months (or such shorter period of time in which your have been in such employee status). Any such determination, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Internal Revenue Code Section 409A.

 

“Transaction” means a Change in Control or a Corporate Transaction, as such terms are defined herein.

 

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“Transaction Protection Period” means the period beginning with the closing date of the Transaction and ending upon the expiration date of the eighteen (18)-month period measured from such closing date.

 

III.           ELIGIBILITY

 

A.      Eligibility Criteria.

 

You generally  are  eligible for benefits under the Plan if you satisfy all of the following conditions:

 

1.             You are a full-time U.S. employee of the Company or any subsidiary thereof listed in attached Schedule A, with the company for which you are such a full-time employee to be designated your “Employer” for purposes of the Plan.

 

2.             You are either (i) notified while the Plan is in effect that, as a result of a reduction-in-force decision by your Employer that eliminates your position, your employment is terminated (“Layoff Termination”), or (ii) Involuntarily Terminated during the Transaction Protection Period.

 

3.             You are not offered an alternate position with the Company or other Employer within fifty (50) miles of either your residence or your most recent work place; provided, however, that this condition will not be required during the Transaction Protection Period.

 

4.             Prior to your employment termination date, you have signed a form of confidential/proprietary/trade secret information, non-disclosure and inventions assignment agreement(s) with the Company, a predecessor of the Company, or your Employer that covers the period of your employment with the Company (and/or with a predecessor of the Company) or any other member of the Employer Group and which also may include post-employment obligations concerning the confidential information of the Company and its subsidiaries.

 

5.             You have returned, on or within five (5) business days after your employment termination date, to your Employer all Company and Employer documents created and received by you during your employment (electronic and paper) with the exception only of your personal copies of documents evidencing your hire, termination, compensation, benefits and stock options, and any other documents you have received as a shareholder of the Company or any parent or subsidiary of the Company.

 

6.             If you previously received an advance(s) for business travel and entertainment expenses, (i) you have properly completed and submitted an expense reimbursement form(s) and supporting receipts to your manager within fifteen (15) days after your Layoff Termination or Involuntary Termination, (ii) your manager has approved your expenses, and (iii) you have repaid within that fifteen (15)-day period (via check payable to “United Online, Inc.”) any amount advanced but not used.

 

7.             On or before your employment termination date, you have met with your manager and: (i) you have transitioned your work and information concerning your work to your manager; and (ii) you have provided your manager with all passwords and passcodes you have created for documents, email and electronic files that you created or used on Company’s computers and computer systems.

 

5

 

8.             On or before your employment termination date, you have returned to the Company all items of property received by you for your use during employment with your Employer, including, but not limited to, any laptops, computer equipment, software programs, cell phones, keys and passes, and credit and calling cards.

 

9.             You have signed a general release of all claims in a form acceptable to the Company (the “Required Release”) and delivered it to your Employer in accordance with following requirements:

 

·      if you are under age forty (40), then (i) you must sign the Required Release and deliver it to your Employer within ten (10) business days (or such shorter period of time required by your Employer) after the date of your Layoff Termination or Involuntary Termination and (ii) such Required Release must become effective after the expiration of any revocation period applicable by law or regulation to that release.

 

·      If you are age forty (40) or older, then (i) you must sign the Required Release and deliver it to your Employer within twenty-one (21) days (or forty-five (45) days if required by applicable law) after the date of your Layoff Termination or Involuntary Termination and (ii) such Required Release must become effective after the expiration of any revocation period applicable by law or regulation to that release.

 

10.           You are not in one of the excluded categories listed below.

 

B.      Criteria for Exclusion from Eligibility.

 

You  are  not eligible for severance benefits under this Plan if any of the following apply:

 

1.             You are a temporary, leased or seasonal employee of the Company or any Covered Subsidiary.

 

2.             You work for the Company or any Covered Subsidiary as an independent contractor, consultant, or agent under a written contract or purchase order or you are otherwise classified as such by your Employer (whether or not such classification is upheld on governmental, judicial or other review.)

 

3.             You resign your employment with the Company or any Covered Subsidiary (other than a resignation constituting an Involuntary Termination).

 

4.             You terminate your employment prior to the date of termination set by your Employer in its notice of termination (other than in instances involving Involuntary Termination during the Transaction Protection Period). Your Employer has sole discretion to select your termination date in circumstances not involving an Involuntary Termination during the Transaction Protection Period, and failure to work through the termination date may render you ineligible for severance benefits.  Vacation may be taken between the date you receive notice of termination and your termination date only with the prior written approval of senior management.

 

5.             You are terminated for reasons unrelated to an economically motivated reduction in force and under circumstances that do not constitute an Involuntary Termination.

 

6

 

6.             In situations other than an Involuntary Termination during the Transaction Protection Period, you are terminated for unsatisfactory performance, negligence in performance of your duties, misconduct, or violation of a policy of the Company or any other of your Employers.

 

7.             In situations other than an Involuntary Termination during the Transaction Protection Period, you are dismissed prior to the effective date of your Layoff Termination for a reason other than your Layoff Termination (including, but not limited to, any reason such as unsatisfactory performance, violation of applicable company policy or procedures, insubordination, misconduct, or the unauthorized use or disclosure of confidential information or trade secrets of the Company or any parent or subsidiary of the Company), whether or not you already received notice of your Layoff Termination that would otherwise qualify you for severance benefits under this Plan.

 

8.             In situations other than an Involuntary Termination during the Transaction Protection Period, you are offered comparable employment by a company or entity that acquires, merges with, acquires some or all of the assets of, or otherwise carries on the business of the Company or other Employer relating to your employment.  For purposes of this provision “comparable employment” means employment within 50 miles of your prior employment site and at least 100% of your prior base pay.

 

9.             Your termination results from long-term or permanent disability that renders you unable to perform your essential job functions even with accommodation or your death.

 

10.           You are covered by any other written severance or separation pay plan or arrangement with the Company, or any subsidiary of the Company, or by an employment or other agreement with the Company or any subsidiary of the Company that provides for severance or separation pay/benefits in a lump sum or in installment payments following termination of your employment.

 

11.           The Plan Administrator determines, in its sole discretion, that your receipt of severance benefits would not under the circumstances further the purposes of the Plan or would otherwise be inappropriate and not in the best interests of the Company, provided, however, that this provision shall not apply during the Transaction Protection Period.

 

IV.           HOW THE PLAN WORKS

 

A.    Payment Date of Severance Benefits

 

If you satisfy all the eligibility criteria of Section III and are eligible for benefits under the Plan, you will receive your separation benefits (the “Severance Payment Benefit”), in the amount determined pursuant to Section IV.B. below, in a lump sum payment on the third business day, within the sixty (60)-day period measured from the date of your Separation from Service due to your Layoff Termination or Involuntary Termination, following the date on which your Required Release first becomes effective and enforceable following the expiration of the applicable revocation period and you have otherwise complied with all the other terms and conditions of Section III.A; provided, however, that should the sixty (60)-day period measured from the date of your Separation from Service span two (2) taxable years, then the Severance Payment Benefit shall not be paid until the first business day in the second taxable year on which your

 

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Required Release is effective and enforceable following the expiration of the applicable revocation period and you have otherwise complied with all the other terms and conditions of Section III.A, but in no event later the last business day of such sixty (60)-day period provided the foregoing requirements have been satisfied.  If the foregoing requirements are not satisfied prior to the expiration of such sixty (60)-day period, then you will not be entitled to any Severance Payment Benefit under the Plan.

 

B.      Severance Benefits Guidelines

 

The Severance Payment Benefit for which you are eligible under the Plan depends on your position, your base pay, your length of service, the type of termination, and whether you are entitled to receive prior notice of your termination under the terms of the Worker Adjustment and Retraining Notification Act (“WARN Act”).  No Severance Payment Benefit will be paid to you if you fail to comply with or meet the eligibility conditions stated above, including (without limitation) the execution and effectiveness of the Required Release on or before applicable date specified in Section III.A.9. above, but in no event after the expiration of the sixty (60)-day period measured from the date of your Separation from Service.

 

The actual Severance Payment Benefit for which you are eligible generally will be determined in accordance with the guidelines set forth below.

 

1.             Severance Payment Benefit Guideline for Employees Not Entitled to WARN Act Notice:  If you are not entitled to advance notice of your termination pursuant to the provisions of the WARN Act, this section will serve as your Severance Payment Benefit guideline.

 

(a)           For employees other than Presidents, Executive Vice Presidents, Senior Vice Presidents or Vice Presidents, the Severance Payment Benefit shall depend on whether you are terminated during the Transaction Protection Period as follows:

 

(i)            For a termination that does not occur during the Transaction Protection Period, the Severance Payment Benefit for employees who are not entitled to prior notice of layoff under the WARN Act is one week’s base pay for each full $20,000 of annual base pay, and an additional one week’s base pay for each full six (6) month period of employment completed prior to termination, up to a maximum of an additional five (5) weeks of base pay.  For example, an employee with a $40,000 per year base salary who has been employed continuously for four years would be eligible for a severance benefit equal to seven (7) weeks of base pay.

 

(ii)           For a termination that occurs during the Transaction Protection Period, the severance benefit for employees who are not entitled to prior notice of layoff under the WARN Act is one week’s base pay for each full $10,000 of annual base pay which the employee was receiving prior to the Transaction (or, if greater, the base pay such employee was receiving before the termination) and an additional one week’s base pay for each full six (6) month period of employment completed prior to termination, up to an additional five (5) weeks of base pay.  For example, an employee with a $40,000 per year base salary who has been employed continuously for four years would be eligible for a severance benefit equal to nine (9) weeks of base pay.

 

8

 

(b)                                 The Severance Payment Benefit amount for Presidents and Executive Vice Presidents shall be one year of base pay. The Severance Payment Benefit amount for Senior Vice Presidents and Vice Presidents shall be six (6) months of base pay.  The amounts for Presidents, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents shall apply whether or not the termination occurs during the Transaction Protection Period.  Whether an employee is a President, Executive Vice President, Senior Vice President or Vice President will be based upon such employee’s title as of the date of termination or, if during the Transaction Protection Period, the employee’s highest title at any time during that period. It shall be solely in the Company’s discretion to change employees’ titles.

 

2.                                       Severance Payment Benefit Guideline for Employees Entitled to Notice Under the WARN Act.  If you are entitled to prior notice of your termination pursuant to the provisions of the WARN Act, the Severance Payment Benefit guideline is as follows:  The Severance Payment Benefit amount is the greater of (a) the amount for which you would be eligible under Section IV.B.1. above (if you had not been entitled to WARN Act notice) minus eight weeks’ base pay, or (b) one week’s base pay.  For example, the benefit guideline for a person who has been employed for five years with a base salary of $100,000 who is not terminated during the Transaction Protection Period would be two weeks’ base pay.  The benefit guideline for a person who has been employed for three years with a base salary of $60,000 would be one week’s base pay.

 

3.                                       Payment of Benefits.  The lump sum payment of the Severance Payment Benefit determined in accordance with the provisions of this Section IV.B. will be subject to legally required tax withholdings and all other applicable payroll deductions.  Such withholdings and deductions may not include 401k Plan contributions or other elective benefit and benefit plan contributions as participation in such benefits and plans terminate upon termination of employment.

 

4.                                       Administrator Discretion.  The Plan Administrator may, as it deems appropriate and in its sole discretion, authorize Severance Payment Benefits in an amount different from that set forth in the Severance Payment Benefit Guidelines.  Under certain circumstances, the Plan Administrator may, in its sole discretion, waive or modify, with respect to one or more employees or classes of employees, the eligibility requirements for Severance Payment Benefits or modify the amount of Severance Payment Benefits.  The foregoing shall not apply during the Transaction Protection Period.  In no event, however, shall any Severance Payment Benefit payments be structured in a manner, or shall the Plan Administrator take any other action, that would contravene the applicable requirements, restrictions and limitations of Code Section 409A and the Treasury Regulations thereunder or otherwise result in a prohibited acceleration, or impermissible deferral, of benefit payments under Code Section 409A and the Treasury Regulations thereunder.

 

6.                                       Miscellaneous.  Regardless of whether you meet the eligibility criteria of Section III and are eligible for benefits under the Plan, you will be subject to the following rights and obligations in connection with your Layoff Termination or Involuntary Termination:

 

·                  In your final paycheck, you will receive a lump sum payment for your salary or wages through your termination date, and all your accrued but unused vacation.

 

·                  As of the effective date of your Layoff Termination, except as otherwise provided through COBRA, you will cease participation in all employee benefits and benefit plans the Company makes available to its employees, in accordance with the terms and conditions of such benefits and benefit plans.

 

9

 

·                  In accordance with COBRA, you and/or your eligible dependents may elect temporary continuation coverage under the Company’s group health benefit plans (medical, dental and/or vision), provided that you timely elect such coverage and you timely pay the full amount of premiums due.  In connection with your Layoff Termination, you and your eligible dependents will be provided with COBRA election forms and a notice that describes your rights to, and the terms and conditions of, temporary continuation coverage under COBRA.  These documents will be provided separately.

 

·                  During the limited post-employment exercise period and pursuant to the procedures specified in the applicable stock option agreement(s), you may exercise any outstanding stock options that vested on or prior to the effective date of your Layoff Termination.

 

·                  You will receive information describing unemployment insurance benefits separately.

 

V.                                    OTHER IMPORTANT INFORMATION

 

A.                    Plan Administration.  The Plan Administrator has full discretionary authority to administer and interpret the Plan, including discretionary authority to determine eligibility for participation and for benefits under the Plan, the amount of benefits (if any) payable per participant, and to interpret terms of the Plan; provided, however, that the Plan Administrator shall not have discretion to change the severance amount or payment terms during the Transaction Protection Period.  The Plan Administrator may delegate any or all of its duties to Company personnel.  Any such delegation will carry with it the full discretionary authority of the Plan Administrator to carry out the delegated duties.  Any determination by the Plan Administrator or its delegate will be final and conclusive upon all persons.  The Company will indemnify and hold harmless any person to whom it delegates its responsibilities; provided, however, such person does not act with gross negligence or willful misconduct.

 

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

 

B.                   Benefits.  All benefits will be paid from the general assets of the Company.  The Company is not required to and will not establish a trust to fund the Plan.  The benefits provided under this Plan are not assignable and may be conditioned upon your compliance with any confidentiality agreement you have entered into with the Company or upon your compliance with any Company policy or program.  The payment of benefits under this Plan does not increase the benefits due to you under any other benefit plan or Company policy.

 

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C.                   Claims Procedure.

 

1.                                      Application for Benefits.  If you believe you are incorrectly denied a benefit or are entitled to a greater benefit than the benefit you receive under the Plan, you may submit a signed, written application to the Chief Personnel Officer of the Company within ninety (90) days after the effective date of your Layoff Termination or Involuntary Termination.

 

2.                                      Denial of Application for Benefits.  In the event that your application for benefits is denied in whole or in part, the Plan Administrator must notify you, in writing, of the denial of the application, and of your right to review the denial.  The written notice of denial will be set forth in a manner designed to be understood by you, and will include specific reasons for the denial, specific references to the Plan provision upon which the denial is based, a description of any information or material that the Plan Administrator needs to complete the review and an explanation of the Plan’s review procedure.  This written notice will be given to you within ninety (90) days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional ninety (90) days for processing the application.  If an extension of time for processing is required, written notice of the extension will be furnished to you before the end of the initial ninety (90) day period.  This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application.  If written notice of denial of the application for benefits is not furnished within the specified time, the application shall be deemed to be denied.  You will then be permitted to appeal the denial in accordance with the review procedure described below.

 

3.                                      Request for Review.  If your application for benefits is denied (or deemed denied), in whole or in part, you (or your authorized representative) may appeal the denial by submitting a request for a review to the Chief Personnel Officer of the Company within sixty (60) days after the application is denied (or deemed denied).  The Plan Administrator will give you (or your representative) an opportunity to review pertinent documents in preparing a request for a review.  A request for a review shall be in writing.  A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that you feel are pertinent.  The Plan Administrator may require you to submit additional facts, documents or other material as it may find necessary or appropriate in making its review.

 

4.                                      Decision on Review.  The Plan Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional 60 days) for processing the request for a review.  If an extension for review is required, written notice of the extension will be furnished to you within the initial sixty (60) day period.  The Plan Administrator will give prompt, written notice of its decision to you.  In the event that the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by you, the specific reasons for the decision and the Plan provisions upon which the decision is based.  If written notice of the Plan Administrator’s decision is not given to you within the time prescribed in this subsection (4), the application will be deemed denied on review.

 

5.                                      Exhaustion of Remedies.  No legal action for benefits under the Plan may be brought until: (i) you have submitted a written application for benefits in accordance with the procedures described by Section V.C.1., above; (ii) you have been notified by the Plan Administrator that the application is denied (or the application is deemed denied due to the Plan Administrator’s failure to act on it within the established time period);  (iii) you have filed a written request for a review of the application in accordance with the appeal procedure described in

 

11

 

Section V.C.3., above;  and (iv) you have been notified in writing that the Plan Administrator has denied the appeal (or the appeal is deemed to be denied due to the Plan Administrator’s failure to take any action on the claim within the time prescribed by Section V.C.4., above).

 

D.                   Plan Terms.  This Plan supersedes any and all prior separation, severance and salary continuation arrangements, programs and plans which were previously offered by the Company to eligible employees of this Plan, except such terms as are set forth in a written agreement signed by an authorized officer of the Company or any subsidiary of the Company.  This policy supplements any such written agreements to provide all terms that are not otherwise expressly set forth in those written agreement.

 

E.                     Plan Amendment or Termination.  The Compensation Committee of the Company reserves the right to change, suspend, discontinue or terminate all or any part of this Plan at any time; provided, however, that the Plan may not be amended, modified or terminated during the Transaction Protection Period with respect to eligible employees under the Plan as of the closing of that Transaction.  Other than during the Transaction Protection Period with respect to eligible employees as of the closing of that Transaction, the provisions of the Plan are intended to serve as mere guidelines for the payment of benefits under certain prescribed circumstances and are not intended to provide any employee with a vested right to benefits.  Accordingly, any termination or amendment of the Plan may be made effective immediately with respect to any benefits not yet paid, whether or not prior notice of such amendment or termination has been given to affected employees.  This Plan terminates by its own terms when all benefits hereunder have been paid.

 

F.                          Taxes and Other Payroll Deductions.  Company will withhold taxes and all other applicable payroll deductions from any Severance Payment Benefit made under this Plan.  The Company may also offset from any Severance Payment Benefit any amounts owed to the Company, except to the extent such offset would contravene any applicable restrictions or limitations under Code Section 409A.

 

G.                   No Right to Employment.  No provision of this Plan is intended to provide you or any other employee with any right to continue employment with Company or any other member of the Employer Group or otherwise affect the right of the Company or any other member of the Employer Group, which right is hereby expressly reserved, to terminate the employment of any individual at any time for any reason, without cause.

 

VI.                                STATEMENT OF ERISA RIGHTS

 

As a participant in the United Online, Inc. Severance Benefit Plan (the “Plan”), you are entitled to certain rights and protections under the Employment Retirement Income Security Act of 1974, as amended (“ERISA”).  ERISA provides that all Plan participants shall be entitled to:

 

1.               Examine, without charge, at the Plan Administrator’s office, all Plan documents, including all documents filed by the Plan with the U.S. Department of Labor, such as plan descriptions.

 

2.               Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator.  The Plan Administrator may make a reasonable charge for the copies.

 

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In addition to creating rights for certain employees of the Company under the Plan, ERISA imposes obligations upon the people who are responsible for the operation of the Plan.  The people who operate the Plan (called “fiduciaries”) have a duty to do so prudently and in the interest of the Company’s employees who are covered by the Plan.

 

No one, including your Employer or any other person, may terminate your employment or otherwise discriminate against you in any way to prevent you from obtaining a benefit to which you are entitled under the Plan or from exercising your rights under ERISA.

 

If your claim for a benefit under this Plan is denied in whole or in part, you must receive a written explanation of the reason for the denial.  You have the right to have the Plan Administrator review and reconsider your claim.  Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request materials from the Plan and do not receive them within thirty (30) days, you may file suit in a federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.  If you have a claim for a benefit under this Plan that is denied or ignored, in whole or in part, you may file suit in a federal or a state court.  If it should happen that the Plan fiduciaries misuse the Plan’s assets (if any) or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court.  The court will decide who should pay court costs and legal fees.  If you are successful in your lawsuit, the court may order the party you have sued to pay your legal costs, including attorney fees.  However, if you lose, the court may order you to pay these costs and fees, for example, if it finds that your claim or suit is frivolous.

 

If you have any questions about the Plan, this statement or your rights under ERISA, you should contact the Plan Administrator or the nearest Area Office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your local telephone directory or contact the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.

 

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ADDITIONAL PLAN INFORMATION

 

	
Plan   Sponsor:
    	
 
    	
United   Online, Inc.
    
	
 
    	
 
    	
 
    
	
Plan   Name:
    	
 
    	
The   United Online, Inc. Severance Benefit Plan
    
	
 
    	
 
    	
 
    
	
Employer   Identification Number
    	
 
    	
77-0575839
    
	
 
    	
 
    	
 
    
	
Plan   Number:
    	
 
    	
5   01
    
	
 
    	
 
    	
 
    
	
Plan   Effective Date:
    	
 
    	
January 1,   2010
    
	
 
    	
 
    	
 
    
	
Plan   Administrator:
    	
 
    	
United   Online, Inc.
    
	
 
    	
 
    	
21301   Burbank Blvd.
    
	
 
    	
 
    	
Woodland   Hills, CA 91367
    
	
 
    	
 
    	
Telephone:   (818) 287-3000
    
	
 
    	
 
    	
 
    
	
Direct   Inquiries to:
    	
 
    	
Plan   Administrator
    
	
 
    	
 
    	
c/o   General Counsel
    
	
 
    	
 
    	
United   Online, Inc.
    
	
 
    	
 
    	
21301   Burbank Blvd.
    
	
 
    	
 
    	
Woodland   Hills, CA  91367
    
	
 
    	
 
    	
Telephone:   (818) 287-3000
    
	
 
    	
 
    	
 
    
	
Agent   for Service of Legal Process:
    	
 
    	
Plan   Administrator or
    
	
 
    	
 
    	
United   Online’s Executive Vice President and
    
	
 
    	
 
    	
General   Counsel
    
	
 
    	
 
    	
 
    
	
Type   of Plan:
    	
 
    	
Severance   Plan / Employee Welfare Benefit Plan
    
	
 
    	
 
    	
 
    
	
Plan   Costs:
    	
 
    	
The   cost of the plan is paid by United Online, Inc.
    

 

14

 

IN WITNESS WHEREOF, UNITED ONLINE, INC. HAS CAUSED THIS AMENDED AND RESTATED SEVERANCE BENEFIT PLAN AND SUMMARY PLAN DESCRIPTION TO BE EXECUTED ON ITS BEHALF BY ITS DULY AUTHORIZED OFFICER ON THE DATE AND YEAR INDICATED BELOW.

 

 

	
 
    	
UNITED   ONLINE, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Mark R. Goldston
    
	
 
    	
 
    
	
 
    	
Title:   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
Dated:   April 11, 2011
    

 

 

SCHEDULE A

 

LIST OF COVERED SUBSIDIARIES PARTICIPATING IN THE PLAN

AS OF JANUARY 1, 2010

 

NetZero, Inc.

Juno Internet Services, Inc.

United Online Advertising Network, Inc.

Memory Lane, Inc. (formerly known as Classmates Online, Inc.)

MyPoints.com, Inc.

FTD.COM Inc.

Florists’ Transworld Delivery, Inc.

 

16

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