Document:

Exhibit 10.1

 

UNITED ONLINE, INC.

2014 MANAGEMENT BONUS PLAN

 

I.                                             PURPOSES OF THE PLAN

 

1.01                        The United Online, Inc. (the “Company”) 2014 Management Bonus Plan (the “Plan”) is hereby established under the Incentive Bonus Program of the Company’s stockholder-approved 2010 Incentive Compensation Plan, as amended and restated as of June 13, 2013 (the “2010 ICP”) and is intended to promote the interests of the Company by creating an incentive program to (i) attract and retain employees who will strive for excellence and (ii) motivate those individuals to achieve above-average objectives by providing them with rewards for contributions to the financial performance of one or more business segments or business units of the Company.

 

1.02                        For purposes of the Plan, the financial performance for the 2014 fiscal year of one or more business segments or business units of the Company shall be measured to determine the bonus amounts (if any) payable for such fiscal year to the participants in the Plan.  The applicable business segments (the “Business Segments”) shall be as follows:

 

(i)                                     Content & Media Segment

 

(ii)                                  Communications Segment

 

The applicable business unit shall be comprised of Classmates, Inc., a wholly-owned subsidiary of the Company, and the subsidiaries of Classmates, Inc.  Such consolidated business unit shall be hereinafter referred to as the Classmates Business Unit.

 

The bonus potential under the Plan for participants may be allocated to (a) the combined performance of the Content & Media Segment and the Communications Segment (also collectively referred to as the “Combined Businesses”), (b) the separate performance of a single Business Segment and/or (c) the separate performance of the Classmates Business Unit.

 

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 thereunder.

 

 

2.02                        The bonuses that may be earned under the Plan shall be tied to (a) the financial performance of the Combined Businesses, (b) the separate financial performance of the designated Business Segment or (c) the separate financial performance of the Classmates Business Unit, for the Company’s 2014 fiscal year ending December 31, 2014 (the “2014 Fiscal Year”), as set forth below.  The Committee shall establish the applicable performance goals for each such Business Segment, the Combined Businesses and the Classmates Business Unit in writing not later than ninety (90) days after the commencement of the 2014 Fiscal Year, provided that the outcome of the applicable goals must be substantially uncertain at the time of their establishment (the “Performance Goals Schedule”).  The Performance Goals Schedule shall be attached to the minutes of the meeting or the consent resolutions at or by which such performance goals were established.

 

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.                                                 DETERMINATION OF PARTICIPANTS

 

3.01                        The following individuals (each, a “Participant”) will participate in the Plan on the following basis:

 

(i)                                     The bonus potential for Francis Lobo and Gail Shulman shall be allocated seventy-five percent (75%) to the financial results of the Combined Businesses and twenty-five percent (25%) to the Participant’s individual performance as described in Section 4.04 below.

 

(ii)                                  The bonus potential for Robert J. Taragan shall be allocated thirty percent (30%) to the financial results of the Combined Businesses, forty-five percent (45%) to the separate financial results of the Communications Segment, and twenty-five percent (25%) to the Participant’s individual performance as described in Section 4.04 below.

 

(iii)                               The bonus potential for Harold A. Zeitz shall be allocated thirty percent (30%) to the financial results of the Combined Businesses, thirty-five percent (35%) to the separate financial results of the Classmates Business Unit, and thirty-five percent (35%) to the Participant’s individual performance as described in Section 4.04 below.

 

3.02                        Except as provided below and except as otherwise provided in any employment agreement or severance agreement between the Company (or a subsidiary thereof) and a Participant, if a Participant does not continue in the employ of the Company or one of its subsidiaries through the Bonus Payment Date (as defined in Section 5.01), then such Participant will not be eligible to receive a bonus under the Plan.  However, 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 that individual or his/her estate shall be entitled to a pro-rated portion of the

 

2

 

bonus such individual would have earned, based on the Company’s actual performance for the 2014 Fiscal Year in the Combined Businesses, the designated Business Segment or the Classmates Business Unit, as applicable, had the individual continued in the Company’s employ through the Bonus Payment Date.  Any such payment shall be made on the Bonus Payment Date.

 

(ii)                                  A Participant who is on a leave of absence or whose employment terminates after the start of the 2014 Fiscal Year but recommences prior to the Bonus Payment Date may remain eligible at the discretion of the Committee, and the Committee may provide that individual with a pro-rated portion (based on period or periods of active employment during such year) of the bonus such individual would have earned, based on the Company’s actual performance for the 2014 Fiscal Year in the Combined Businesses, the designated Business Segment or the Classmates Business Unit, as applicable, had he remained continuously in the Company’s employ through the Bonus Payment Date.  Any such payment shall be made on the Bonus Payment Date.

 

3.03                        For purposes of the Plan:

 

A.                                    A Participant shall be considered an employee for so long as such individual remains employed by the Company or one or more corporations that are subsidiary corporations of the Company at all times during the 2014 Fiscal Year.

 

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 any subsidiary thereof) and a Participant that provides such individual with a stated bonus or bonus formula for a particular year or includes an annual bonus payment as part of a severance pay formula thereunder.  Accordingly, in order to avoid any such potential duplication, such Participant shall only be entitled to receive the annual bonus amount to which he may otherwise be entitled under his employment or severance agreement based on the terms and conditions set forth therein and shall not be entitled to any bonus payment under the Plan.  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.

 

3

 

IV.                                                  BONUS AWARDS

 

4.01                        The following provisions shall govern the calculation and payment of the individual bonus awards that become payable under the Plan.

 

(a)                                 The individual bonus award payable under the Plan to each Participant for the 2014 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 Combined Businesses, the designated Business Segment and/or the Classmates Business Unit, as applicable, to which the bonus potential for that Participant has been allocated in accordance with Section 3.01.

 

(b)                                 The performance of the Combined Businesses shall be measured in terms of (i) the combined revenue for the Content & Media Segment and the Communications Segment and (ii) the 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 Content & Media Segment and the Communications Segment; provided, however, that the calculation of Adjusted OIBDA for the Combined Businesses 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 allocated to the performance of the Combined Businesses shall be based upon the achievement of the combined revenue targets (“Combined Businesses Revenue Targets”) specified for the Combined Businesses in the Performance Goals Schedule, and the remaining fifty percent (50%) of the bonus potential allocated to the performance of the Combined Businesses shall be based upon the achievement of the combined Adjusted OIBDA targets (“Combined Businesses Adjusted OIBDA Targets”) specified for the Combined Businesses in the Performance Goals Schedule.

 

(c)                                  The performance of a single 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 the 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.

 

(d)                                 The performance of the Classmates Business Unit shall be measured in terms of the revenue and Adjusted OIBDA of the Classmates Business Unit.  Accordingly, fifty (50%) of the portion of the bonus potential allocated to the Classmates Business Unit shall be based upon the achievement of the revenue targets (“Classmates Business Unit Revenue Targets”) specified for the Classmates Business Unit in the Performance Goals Schedule, and the remaining fifty percent (50%) of the bonus potential allocated to the Classmates Business Unit shall be based upon the achievement of the Adjusted OIBDA targets (“Classmates Business Unit Adjusted OIBDA Targets”) specified for the Classmates Business Unit 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 Businesses, Business Segment, or Classmates Business Unit basis) are attained for the 2014 Fiscal Year and the determination of the bonus amounts based on those calculations:

 

4

 

(a)                                 The actual level at which revenues for the Combined Businesses, a  Business Segment or the Classmates Business Unit have been attained for the 2014 Fiscal Year will be determined on the basis of the revenues to be reported in the Company’s Financial Statements (as defined in Section 4.03) for such fiscal year and will be calculated, for purposes of the Plan, in a manner consistent with the methodology utilized by the Committee in establishing the Combined Businesses, Business Segment and Classmates Business Unit Revenue Targets.  For the sake of clarity, it is hereby acknowledged that under the Company’s current financial reporting methodology, (i) the Classmates Business Unit’s revenues will be included within the total segment revenues reported for the Content & Media Business Segment in the Financial Statements, but the revenues for such Business Unit will not otherwise be separately reported in the Financial Statements and (ii) the methodology utilized by the Committee in establishing the various Business Segment and Classmates Business Unit Revenue Targets under the Plan results in the elimination of intersegment revenues at the Business Segment or business unit level, which is an adjustment that will not be reflected at the Business Segment or business unit level in the Financial Statements.

 

(b)                                 In determining the actual level at which Adjusted OIBDA for the Combined Businesses, a Business Segment or the Classmates Business Unit 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 and other exit costs; 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 this Plan; (3) any adjustments to Adjusted OIBDA attributable to a change in accounting principles that occurs after the start of the 2014 Fiscal Year; (4) all items of gain, loss or expense determined to be extraordinary or non-recurring (including, without limitation, legal fees and costs related to governmental investigations, claims or 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 Business Segment or Classmates Business Unit 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 or the Classmates Business Unit exceeds the aggregate budgeted amount therefor that was included in the respective Business Segment’s or the Classmates Business Unit’s Adjusted OIBDA Targets set forth in the Performance Goals Schedule and (ii) in determining the actual level at which Combined Businesses 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 Businesses exceeds the aggregate budgeted amount therefor that was included in the Combined Businesses 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 Euro:U.S. Dollar for the 2014 Fiscal Year is lower than 1:1.32 (the “Euro Floor”), the final revenue and Adjusted OIBDA calculations for the Classmates Business Unit and the Combined Businesses will be adjusted using the Euro Floor.  For the purpose of clarity, the Euro

 

5

 

Floor will not be used to adjust the final revenues and Adjusted OIBDA calculations in the event the actual foreign currency exchange rate for the Euro:U.S. Dollar for such financial measures for the 2014 Fiscal Year is higher than the Euro Floor.  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 (Euro) year-end revenues or Adjusted OIBDA amount, as applicable.

 

(d)                                 In the event the Company acquires other companies or businesses during the 2014 Fiscal Year, the financial performance of those acquired entities shall not be taken into account in determining whether the Revenue Targets or Adjusted OIBDA Targets for the Combined Businesses, a Business Segment or the Classmates Business Unit for the 2014 Fiscal Year have been achieved.

 

(e)                                  Should  the Company sell, divest or spin off a business during the 2014 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 Revenue Targets or Adjusted OIBDA Targets for the Combined Businesses, a Business Segment or the Classmates Business Unit for the 2014 Fiscal Year have been attained, the revenue and Adjusted OIBDA calculations for the Combined Businesses and the applicable Business Segment or the Classmates Business Unit, as applicable, shall be made (1) by taking into account the actual revenue and Adjusted OIBDA performance of the divested business during the portion of the 2014 Fiscal Year preceding the closing of such sale, divestiture or spin off and (2) for the post-closing portion of the 2014 Fiscal Year, by assuming that the sold, divested or spun business attained the level of revenue and Adjusted OIBDA performance that was projected for that period by the Committee for purposes of establishing the “Target” bonus payout levels (i.e., payout level 5) for the Revenue Targets and Adjusted OIBDA Targets for the Combined Businesses and the Business Segment or the Classmates Business Unit, as applicable, of which that particular business comprised the whole or a part.

 

4.03                        With respect to the financial results component of each Participant’s bonus potential, the Committee shall, within sixty (60) days following the close of the 2014 Fiscal Year, determine and certify on the basis of the Company’s financial statements for such fiscal year as publicly reported by the Company in connection with its earnings release related to the 2014 Fiscal Year (the “Financial Statements”), the actual level of attainment for revenue and Adjusted OIBDA (measured on a Combined Businesses, Business Segment and Classmates Business Unit basis) for the 2014 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 for each Participant the portion of such Participant’s actual bonus award that is allocated to the financial results of the Combined Businesses, Business Segment and/or Classmates Business Unit.  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 Businesses, Business Segment and/or Classmates Business Unit, as applicable to each Participant) for the 2014 Fiscal Year are in fact attained.  In the event that revenue or Adjusted OIBDA (whether on a Combined Businesses, Business Segment

 

6

 

or Classmates Business Unit 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.

 

4.04                        With respect to the individual performance component of each Participant’s bonus potential, the Committee shall, within sixty (60) days following the close of the 2014 Fiscal Year, determine in its sole discretion for each Participant the level of attainment of such Participant’s individual performance goals.  Such determination shall be included in the formal minutes of the meeting at which such determinations are made.

 

4.05                        Except as otherwise provided in Section 3.02, no Participant shall earn or accrue any right to any portion of a bonus award hereunder until the Bonus Payment Date.

 

4.06                        In no event shall the actual bonus amount payable under this Plan to any individual Participant for the 2014 Fiscal Year exceed the dollar amount of Three Million Five Hundred Thousand dollars ($3,500,000).

 

V.                                                PAYMENT OF BONUS AWARDS

 

5.01                        The actual bonus to which each Participant becomes entitled based on the certified level at which the Revenue and Adjusted OIBDA Targets (whether measured on a Combined, Segment or Classmates Business Unit basis) are actually attained for the 2014 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 amounts payable to each Participant based on the level at which such Revenue and Adjusted OIBDA Targets are attained.   The bonus payments shall be made in the 2014 calendar year but not later than March 7, 2015, 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 amounts awarded or accrued under this Plan shall actually be funded, set aside or otherwise segregated prior to payment.  The obligation to pay the bonuses awarded hereunder shall at all times be an unfunded and unsecured obligation of the Company.  Plan participants shall have the status of general creditors and shall look solely to the general assets of the Company for the payment of their bonus awards.

 

6.03                        No Participant shall have the right to alienate, pledge or encumber his/her interest in this Plan or any bonus payable hereunder, and such interest shall not (to the extent permitted by law) be subject in any way to the claims of the employee’s 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

 

7

 

grant any person the right to remain in the employ of the Company or its subsidiaries for any period of specific duration.  Rather, each employee will be employed “at-will,” which means that either such employee 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 such person 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 Participants and the Company with respect to their incentive bonus compensation for the 2014 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 any of the Participants in this Plan may be a party.

 

8

 

SCHEDULE I

 

CORPORATE

 

SUMMARY OF PAYOUTS (% OF SALARY)

 

	
LOBO:
    	
 
    	
Combined
   Revenues
    	
 
    	
Combined
   Adj. OIBDA
    	
 
    	
Individual
   Performance
   (Assuming
   Maximum
   Payout)
    	
 
    	
Total
    	
 
    
	
Threshold
    	
 
    	
0.000
    	
%
    	
0.000
    	
%
    	
25.000
    	
%
    	
25.000
    	
%
    
	
Target
    	
 
    	
37.500
    	
%
    	
37.500
    	
%
    	
25.000
    	
%
    	
100.000
    	
%
    
	
Maximum
    	
 
    	
60.000
    	
%
    	
60.000
    	
%
    	
25.000
    	
%
    	
145.000
    	
%
    

 

	
SHULMAN:
    	
 
    	
Combined
   Revenues
    	
 
    	
Combined
   Adj. OIBDA
    	
 
    	
Individual
   Performance
   (Assuming
   Maximum
   Payout)
    	
 
    	
Total
    	
 
    
	
Threshold
    	
 
    	
0.000
    	
%
    	
0.000
    	
%
    	
13.750
    	
%
    	
13.750
    	
%
    
	
Target
    	
 
    	
20.625
    	
%
    	
20.625
    	
%
    	
13.750
    	
%
    	
55.000
    	
%
    
	
Maximum
    	
 
    	
33.000
    	
%
    	
33.000
    	
%
    	
13.750
    	
%
    	
79.750
    	
%
    

 

	
Payout Level
    for
    	
 
    	
LOBO
    PAYOUTS
    	
 
    	
SHULMAN
    PAYOUTS
    	
 
    
	
Revenue
    	
 
    	
Combined
    	
 
    	
Combined
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    	
0.000
    	
%
    
	
2
    	
 
    	
9.375
    	
%
    	
5.156
    	
%
    
	
3
    	
 
    	
18.750
    	
%
    	
10.313
    	
%
    
	
4
    	
 
    	
28.125
    	
%
    	
15.469
    	
%
    
	
5 (Target)
    	
 
    	
37.500
    	
%
    	
20.625
    	
%
    
	
6
    	
 
    	
43.125
    	
%
    	
23.719
    	
%
    
	
7
    	
 
    	
48.750
    	
%
    	
26.813
    	
%
    
	
8
    	
 
    	
54.375
    	
%
    	
29.906
    	
%
    
	
9   (Maximum)
    	
 
    	
60.000
    	
%
    	
33.000
    	
%
    

 

	
Payout Level
    for
   Adjusted
    	
 
    	
LOBO
    PAYOUTS
    	
 
    	
SHULMAN
    PAYOUTS
    	
 
    
	
OIBDA
    	
 
    	
Combined
    	
 
    	
Combined
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    	
0.000
    	
%
    
	
2
    	
 
    	
9.375
    	
%
    	
5.156
    	
%
    
	
3
    	
 
    	
18.750
    	
%
    	
10.313
    	
%
    
	
4
    	
 
    	
28.125
    	
%
    	
15.469
    	
%
    
	
5   (Target)
    	
 
    	
37.500
    	
%
    	
20.625
    	
%
    
	
6
    	
 
    	
43.125
    	
%
    	
23.719
    	
%
    
	
7
    	
 
    	
48.750
    	
%
    	
26.813
    	
%
    
	
8
    	
 
    	
54.375
    	
%
    	
29.906
    	
%
    
	
9   (Maximum)
    	
 
    	
60.000
    	
%
    	
33.000
    	
%
    

 

2014 SALARIES:

 

	
Lobo, Francis
    	
 
    	
$
    	
700,000.08
    	
 
    
	
Shulman, Gail
    	
 
    	
$
    	
315,000.14
    	
 
    

 

[Continues on Next Page]

 

 

COMMUNICATIONS SEGMENT

 

SUMMARY OF PAYOUTS (% OF SALARY)

 

	
TARAGAN:
    	
 
    	
Combined
   Revenues
    	
 
    	
Combined
   Adj. OIBDA
    	
 
    	
Communications
   Revenues
    	
 
    	
Communications
   Adj. OIBDA
    	
 
    	
Individual
   Performance
   (Assuming
   Maximum
   Payout)
    	
 
    	
Total
    	
 
    
	
Threshold
    	
 
    	
0.000
    	
%
    	
0.000
    	
%
    	
9.000
    	
%
    	
9.000
    	
%
    	
20.000
    	
%
    	
38.000
    	
%
    
	
Target
    	
 
    	
12.000
    	
%
    	
12.000
    	
%
    	
18.000
    	
%
    	
18.000
    	
%
    	
20.000
    	
%
    	
80.000
    	
%
    
	
Maximum
    	
 
    	
19.200
    	
%
    	
19.200
    	
%
    	
28.800
    	
%
    	
28.800
    	
%
    	
20.000
    	
%
    	
116.000
    	
%
    

 

	
Payout Level
    for
    	
 
    	
TARAGAN
    PAYOUTS
    	
 
    
	
Revenue
    	
 
    	
Combined
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    
	
2
    	
 
    	
3.000
    	
%
    
	
3
    	
 
    	
6.000
    	
%
    
	
4
    	
 
    	
9.000
    	
%
    
	
5   (Target)
    	
 
    	
12.000
    	
%
    
	
6
    	
 
    	
13.800
    	
%
    
	
7
    	
 
    	
15.600
    	
%
    
	
8
    	
 
    	
17.400
    	
%
    
	
9   (Maximum)
    	
 
    	
19.200
    	
%
    

 

	
Payout Level
    for
   Adjusted
    	
 
    	
TARAGAN
    PAYOUTS
    	
 
    
	
OIBDA
    	
 
    	
Combined
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    
	
2
    	
 
    	
3.000
    	
%
    
	
3
    	
 
    	
6.000
    	
%
    
	
4
    	
 
    	
9.000
    	
%
    
	
5   (Target)
    	
 
    	
12.000
    	
%
    
	
6
    	
 
    	
13.800
    	
%
    
	
7
    	
 
    	
15.600
    	
%
    
	
8
    	
 
    	
17.400
    	
%
    
	
9   (Maximum)
    	
 
    	
19.200
    	
%
    

 

	
Payout Level
    for
    	
 
    	
TARAGAN
    PAYOUTS
    	
 
    
	
Revenue
    	
 
    	
Communications Segment
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
9.000
    	
%
    
	
2
    	
 
    	
11.250
    	
%
    
	
3
    	
 
    	
13.500
    	
%
    
	
4
    	
 
    	
15.750
    	
%
    
	
5   (Target)
    	
 
    	
18.000
    	
%
    
	
6
    	
 
    	
20.700
    	
%
    
	
7
    	
 
    	
23.400
    	
%
    
	
8
    	
 
    	
26.100
    	
%
    
	
9   (Maximum)
    	
 
    	
28.800
    	
%
    

 

	
Payout Level
    for
   Adjusted
    	
 
    	
TARAGAN
    PAYOUTS
    	
 
    
	
OIBDA
    	
 
    	
Communications Segment
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
9.000
    	
%
    
	
2
    	
 
    	
11.250
    	
%
    
	
3
    	
 
    	
13.500
    	
%
    
	
4
    	
 
    	
15.750
    	
%
    
	
5   (Target)
    	
 
    	
18.000
    	
%
    
	
6
    	
 
    	
20.700
    	
%
    
	
7
    	
 
    	
23.400
    	
%
    
	
8
    	
 
    	
26.100
    	
%
    
	
9   (Maximum)
    	
 
    	
28.800
    	
%
    

 

2014 SALARY:

 

	
Taragan, Robert J.
    	
 
    	
$
    	
435,000.02
    	
 
    

 

[Continues on Next Page]

 

 

CLASSMATES BUSINESS UNIT

 

SUMMARY OF PAYOUTS (% OF SALARY)

 

	
ZEITZ:
    	
 
    	
Combined
   Revenues
    	
 
    	
Combined
   Adj. OIBDA
    	
 
    	
Classmates
   Revenues
    	
 
    	
Classmates
   Adj. OIBDA
    	
 
    	
Individual
   Performance
   (Assuming
   Maximum
   Payout)
    	
 
    	
Total
    	
 
    
	
Threshold
    	
 
    	
0.000
    	
%
    	
0.000
    	
%
    	
0.000
    	
%
    	
0.000
    	
%
    	
28.000
    	
%
    	
28.000
    	
%
    
	
Target
    	
 
    	
12.000
    	
%
    	
12.000
    	
%
    	
14.000
    	
%
    	
14.000
    	
%
    	
28.000
    	
%
    	
80.000
    	
%
    
	
Maximum
    	
 
    	
19.200
    	
%
    	
19.200
    	
%
    	
22.400
    	
%
    	
22.400
    	
%
    	
28.000
    	
%
    	
111.200
    	
%
    

 

	
Payout Level
    for
    	
 
    	
ZEITZ
    PAYOUTS
    	
 
    
	
Revenue
    	
 
    	
Combined
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    
	
2
    	
 
    	
3.000
    	
%
    
	
3
    	
 
    	
6.000
    	
%
    
	
4
    	
 
    	
9.000
    	
%
    
	
5   (Target)
    	
 
    	
12.000
    	
%
    
	
6
    	
 
    	
13.800
    	
%
    
	
7
    	
 
    	
15.600
    	
%
    
	
8
    	
 
    	
17.400
    	
%
    
	
9   (Maximum)
    	
 
    	
19.200
    	
%
    

 

	
Payout Level
    for
   Adjusted
    	
 
    	
ZEITZ
    PAYOUTS
    	
 
    
	
OIBDA
    	
 
    	
Combined
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    
	
2
    	
 
    	
3.000
    	
%
    
	
3
    	
 
    	
6.000
    	
%
    
	
4
    	
 
    	
9.000
    	
%
    
	
5   (Target)
    	
 
    	
12.000
    	
%
    
	
6
    	
 
    	
13.800
    	
%
    
	
7
    	
 
    	
15.600
    	
%
    
	
8
    	
 
    	
17.400
    	
%
    
	
9   (Maximum)
    	
 
    	
19.200
    	
%
    

 

	
Payout Level
    for
    	
 
    	
ZEITZ
    PAYOUTS
    	
 
    
	
Revenue
    	
 
    	
Classmates Business Unit
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    
	
2
    	
 
    	
3.500
    	
%
    
	
3
    	
 
    	
7.000
    	
%
    
	
4
    	
 
    	
10.500
    	
%
    
	
5   (Target)
    	
 
    	
14.000
    	
%
    
	
6
    	
 
    	
16.100
    	
%
    
	
7
    	
 
    	
18.200
    	
%
    
	
8
    	
 
    	
20.300
    	
%
    
	
9   (Maximum)
    	
 
    	
22.400
    	
%
    

 

	
Payout Level
    for
   Adjusted
    	
 
    	
ZEITZ
    PAYOUTS
    	
 
    
	
OIBDA
    	
 
    	
Classmates Business Unit
    	
 
    
	
Targets
    	
 
    	
(% of Salary)
    	
 
    
	
1   (Threshold)
    	
 
    	
0.000
    	
%
    
	
2
    	
 
    	
3.500
    	
%
    
	
3
    	
 
    	
7.000
    	
%
    
	
4
    	
 
    	
10.500
    	
%
    
	
5   (Target)
    	
 
    	
14.000
    	
%
    
	
6
    	
 
    	
16.100
    	
%
    
	
7
    	
 
    	
18.200
    	
%
    
	
8
    	
 
    	
20.300
    	
%
    
	
9   (Maximum)
    	
 
    	
22.400
    	
%
    

 

2014 SALARY:

 

	
Zeitz, Harold A.
    	
 
    	
$
    	
415,000.04Exhibit 10.2

 

AMENDED AND RESTATED

 

UNITED ONLINE, INC.

 

SEVERANCE BENEFIT PLAN

 

AND

 

SUMMARY PLAN DESCRIPTION

 

Amended and Restated Effective January 1, 2010

and

Further Amended Effective May 1, 2014

 

 

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.

 

2

 

“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.

 

3

 

“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 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.

 

4

 

“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 job or 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

 

7

 

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 than 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, Vice Presidents and Director-level employees, (i) if at least a full one (1) year period of employment has been completed prior to termination, the Severance Payment Benefit is four (4) weeks of Base Pay, plus an additional one (1) week of Base Pay for each full one (1) year period of employment completed prior to termination, up to a maximum of twelve (12) weeks of Base Pay in total, and (ii) if less than a full one (1) year period of employment has been completed prior to termination, then the Severance Payment Benefit is two (2) weeks of Base Pay.  For example, an employee who has been employed continuously for four (4) years would be eligible for a severance benefit equal to eight (8) weeks of Base Pay.

 

(b)                                 For Director-level employees and employees of MyPoints.com, Inc. with a title of Vice President of National Sales or Vice President of Business Development and Affiliate Sales, (i) if at least a full one (1) year period of employment has been completed prior to termination, the Severance Payment Benefit is four (4) weeks of Base Pay, plus an additional one (1) week of Base Pay for each full one (1) year period of employment completed prior to termination, up to a maximum of sixteen (16) weeks of Base Pay in total, and (ii) if less than a full one (1) year period of employment has been completed prior to termination, then the Severance Payment Benefit is two (2) weeks of Base Pay.  For example, a Director-level employee who has been employed continuously for four (4) years would be eligible for a severance benefit equal to eight (8) weeks of Base Pay.

 

(c)                                  For employees with a title of Vice President, other than employees of MyPoints.com, Inc. with a title of Vice President of National Sales or Vice President of Business Development and Affiliate Sales, (i) if at least a full one (1) year period of employment has been completed prior to termination, the Severance Payment Benefit is four (4) weeks of Base Pay, plus an additional one (1) week of Base Pay for each full one (1) year period of employment

 

8

 

completed prior to termination, up to a maximum of twenty-six (26) weeks of Base Pay in total, and (ii) if less than a full one (1) year period of employment has been completed prior to termination, then the Severance Payment Benefit is two (2) weeks of Base Pay.  For example, an employee with a title of Vice President who has been employed continuously for four (4) years would be eligible for a severance benefit equal to eight (8) weeks of Base Pay.

 

(d)                                 The Severance Payment Benefit amount for employees with a title of Senior Vice President is (i) twenty-six (26) weeks of Base Pay if a full one (1) year period of employment has been completed prior to termination, or (ii) thirteen (13) weeks of Base Pay if less than a full one (1) year period of employment has been completed prior to termination.  For example, an employee with a title of Senior Vice President who has been employed continuously for four (4) years would be eligible for a severance benefit equal to twenty-six (26) weeks of Base Pay.

 

(e)                                  The Severance Payment Benefit amount for employees with a title of Executive Vice President or President is fifty-two (52) weeks of Base Pay if a full one (1) year period of employment has been completed prior to termination, or (ii) twenty-six (26) weeks of Base Pay if less than a full one (1) year period of employment has been completed prior to termination.  For example, an employee with a title of Executive Vice President who has been employed continuously for four (4) years would be eligible for a severance benefit equal to fifty-two (52) weeks of Base Pay.

 

(f)                                   Whether an employee is a President, Executive Vice President, Senior Vice President, Vice President or a Director-level employee 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.

 

(g)                                  In addition, for eligible employees who have completed at least a full one (1) year period of employment prior to termination and who have elected COBRA health benefits coverage, the Company will pay the employee’s premium for COBRA health benefits coverage for a number of weeks equal to the number of weeks of Base Pay to which such employee would be eligible to receive under the Severance Payment Benefit guideline applicable to such employee, up to a maximum of three (3) months.

 

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 (8) weeks’ Base Pay, or (b) one (1) week’s Base Pay.  For example, the benefit guideline for a person who has been employed for five (5) years would be one (1) week of Base Pay.  The benefit guideline for the person in the example under Section IV.B.1(a) above who was employed for four (4) years would be one (1) week’s Base Pay.

 

In addition, for eligible employees who have completed at least a full one (1) year period of employment prior to termination and who have elected COBRA health benefits coverage, the Company will pay the employee’s premium for COBRA health benefits coverage for a number of weeks equal to the number of weeks of Base Pay to which such employee would be eligible to receive under Section IV.B.1. above (if you had not been entitled to WARN Act notice), up to a maximum of three (3) months.

 

9

 

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.

 

·                  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.

 

10

 

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.

 

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

 

11

 

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 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

 

12

 

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.

 

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,

 

13

 

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.

 

14

 

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.
    

 

15

 

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/   Francis Lobo
    
	
 
    	
 
    	
 
    
	
 
    	
Title:   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
Dated:   March 28, 2014
    

 

 

SCHEDULE A

 

LIST OF COVERED SUBSIDIARIES PARTICIPATING IN THE PLAN

AS OF MAY 1, 2014

 

NetZero, Inc.

Juno Internet Services, Inc.

United Online Advertising Network, Inc.

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

MyPoints.com, Inc.

 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}]]