Document:

Exhibit 10.2

 

UNITED
ONLINE, INC.

2001
STOCK INCENTIVE PLAN

STOCK ISSUANCE AGREEMENT

 

AGREEMENT made this 27th
day of January 2004, by and between United Online, Inc., a Delaware
corporation, and Mark Goldston, a Participant in the Plan.

 

All capitalized terms in this Agreement shall have the
meaning assigned to them in this Agreement or in the attached Appendix.

 

A.           PURCHASE
OF SHARES

 

1.             Purchase.  Participant hereby purchases 250,000 shares
of Common Stock (the “Purchased Shares”) pursuant to the provisions of the
Stock Issuance Program at the purchase price of $0.0001 per share (the “Purchase
Price”).

 

2.             Payment.  Concurrently with the delivery of this
Agreement to the Corporation, Participant shall pay the Purchase Price for the
Purchased Shares in cash or check payable to the Corporation and shall deliver
a duly-executed blank Assignment Separate from Certificate (in the form
attached hereto as Exhibit I) with respect to the Purchased Shares.

 

3.             Stockholder
Rights.  Until such time
as the Corporation exercises the Repurchase Right, Participant (or any
successor in interest) shall have all the rights of a stockholder (including
voting, dividend and liquidation rights) with respect to the Purchased Shares,
subject, however, to the transfer restrictions of this Agreement.

 

4.             Escrow.  The Corporation shall have the right to hold
the Purchased Shares in escrow until those shares have vested in accordance
with the Vesting Schedule.

 

5.             Compliance
with Law.  Under no
circumstances shall shares of Common Stock or other assets be issued or
delivered to Participant pursuant to the provisions of this Agreement unless,
in the opinion of counsel for the Corporation or its successors, there shall
have been compliance with all applicable requirements of Federal and state
securities laws, all applicable listing requirements of any applicable Stock
Exchange or the Nasdaq Stock Market on which the Common Stock is at the time
listed for trading and all other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery.

 

B.             TRANSFER
RESTRICTIONS

 

1.             Restriction
on Transfer.  Except for
any Permitted Transfer, Participant shall not transfer, assign, encumber or
otherwise dispose of any of the Purchased Shares which are subject to the Repurchase
Right.

 

 

2.             Restrictive
Legend.  The stock
certificate for the Purchased Shares shall be endorsed with the following
restrictive legend:

 

“The shares represented by this certificate are
unvested and subject to certain repurchase rights granted to the Corporation
and accordingly may not be sold, assigned, transferred, encumbered, or in any
manner disposed of except in conformity with the terms of a written agreement
dated January 27, 2004 between the Corporation and the registered holder
of the shares (or the predecessor in interest to the shares).  A copy of such agreement is maintained at the
Corporation’s principal corporate offices.”

 

3.             Transferee
Obligations.  Each person
(other than the Corporation) to whom the Purchased Shares are transferred by
means of a Permitted Transfer must, as a condition precedent to the validity of
such transfer, acknowledge in writing to the Corporation that such person is
bound by the provisions of this Agreement and that the transferred shares are
subject to the Repurchase Right to the same extent such shares would be so
subject if retained by Participant.

 

C.             REPURCHASE
RIGHT

 

1.             Grant.  The Corporation is hereby granted the right
(the “Repurchase Right”) to repurchase at the Purchase Price any or all of the
Purchased Shares in which Participant is not, at the time of his or her
cessation of Service, vested in accordance with the Vesting Schedule set
forth in Paragraph C.3 of this Agreement or the special vesting acceleration
provisions of Paragraph C.5 of this Agreement (such shares to be hereinafter
referred to as the “Unvested Shares”).

 

2.             Exercise
of the Repurchase Right. 
The Repurchase Right shall be exercisable by written notice delivered to
each Owner of the Unvested Shares during the ninety (90)-day period following
the date Participant ceases for any reason to remain in Service.  The notice shall indicate the number of
Unvested Shares to be repurchased and the date on which the repurchase is to be
effected, such date to be not more than thirty (30) days after the date of such
notice.  The certificates representing
the Unvested Shares to be repurchased shall be delivered to the Corporation on
the closing date specified for the repurchase. 
Concurrently with the receipt of such stock certificates, the Corporation
shall pay to Owner, in cash or cash equivalent (including the cancellation of
any purchase-money indebtedness), an amount equal to the Purchase Price
previously paid for the Unvested Shares to be repurchased from Owner.

 

3.             Termination
of the Repurchase Right. 
The Repurchase Right shall terminate with respect to any Unvested Shares
for which it is not timely exercised under Paragraph C.2.  In addition, the Repurchase Right shall terminate
and cease to be exercisable with respect to any and all Purchased Shares in
which Participant vests in accordance with the following Vesting Schedule:

 

2

 

(i)            Upon
Participant’s completion of four years of Service measured from January 27,
2004, Participant shall acquire a vested interest in, and the Repurchase Right
shall lapse with respect to, 100% of the Purchased Shares.

 

(ii)           If
Participant’s Service is terminated without cause, Involuntarily Terminated or
terminated due to death or disability (each as defined in the Employment
Agreement), Participant shall acquire a vested interest in, and the Repurchase
Right shall lapse with respect to, 100% of the Purchased Shares.

 

4.             Recapitalization.  Any new, substituted or additional securities
or other property (including cash paid other than as a regular cash dividend)
which is by reason of any Recapitalization distributed with respect to the
Purchased Shares shall be immediately subject to the Repurchase Right and any
escrow requirements hereunder, but only to the extent the Purchased Shares are
at the time covered by such right or escrow requirements.  Appropriate adjustments to reflect such
distribution shall be made to the number and/or class of securities subject to
this Agreement and to the price per share to be paid upon the exercise of the
Repurchase Right in order to reflect the effect of any such Recapitalization
upon the Corporation’s capital structure; provided, however,
that the aggregate purchase price shall remain the same.

 

5.             Corporate
Transaction.

 

(a)   Immediately
prior to the consummation of any Corporate Transaction, the Repurchase Right
shall automatically lapse in its entirety and the Purchased Shares shall vest
in full, except to the extent the Repurchase Right is to be assigned to the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.

 

(b)   To the
extent the Repurchase Right remains in effect following a Corporate
Transaction, such right shall apply to the new capital stock or other property
(including any cash payments) received in exchange for the Purchased Shares in
consummation of the Corporate Transaction, but only to the extent the Purchased
Shares are at the time covered by such right. 
Appropriate adjustments shall be made to the price per share payable
upon exercise of the Repurchase Right to reflect the effect of the Corporate
Transaction upon the Corporation’s capital structure; provided,
however, that the aggregate purchase price shall remain the
same.  The new securities or other
property (including cash payments) issued or distributed with respect to the
Purchased Shares in consummation of the Corporate Transaction shall immediately
be deposited in escrow with the Corporation (or the successor entity) and shall
not be released from escrow until Participant vests in such securities or other
property in accordance with the same Vesting Schedule in effect for the
Purchased Shares.

 

D.            SPECIAL
TAX ELECTION

 

1.             Section 83(b) Election.  Under Code Section 83, the excess of the
fair market value of the Purchased Shares on the date any forfeiture
restrictions applicable to such shares lapse over the Purchase Price paid for
such shares will be reportable as ordinary income on the lapse date.  For this purpose, the term “forfeiture
restrictions” includes the right of the

 

3

 

Corporation to repurchase the Purchased Shares pursuant to
the Repurchase Right.  Participant may
elect under Code Section 83(b) to be taxed at the time the Purchased
Shares are acquired, rather than when and as such Purchased Shares cease to be
subject to such forfeiture restrictions. 
Such election must be filed with the Internal Revenue Service within
thirty (30) days after the date of this Agreement.  Even if the fair market value of the
Purchased Shares on the date of this Agreement equals the Purchase Price paid
(and thus no tax is payable), the election must be made to avoid adverse tax
consequences in the future.  THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS EXHIBIT II
HERETO.  PARTICIPANT
UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY
(30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE
FORFEITURE RESTRICTIONS LAPSE.

 

2.             FILING
RESPONSIBILITY.  PARTICIPANT
ACKNOWLEDGES THAT IT IS PARTICIPANT’S SOLE RESPONSIBILITY, AND NOT THE
CORPORATION’S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF
PARTICIPANT REQUESTS THE CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING
ON HIS OR HER BEHALF.

 

E.              GENERAL
PROVISIONS

 

1.             Assignment.  The Corporation may assign the Repurchase
Right to any person or entity selected by the Board, including (without
limitation) one or more stockholders of the Corporation.

 

2.             Notices.  Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the U.S. mail, registered or certified, postage
prepaid and properly addressed to the party entitled to such notice at the
address indicated below such party’s signature line on this Agreement or at
such other address as such party may designate by ten (10) days advance
written notice under this paragraph to all other parties to this Agreement.

 

3.             No Waiver.  The failure of the Corporation in any
instance to exercise the Repurchase Right shall not constitute a waiver of any
other repurchase rights that may subsequently arise under the provisions of
this Agreement or any other agreement between the Corporation and
Participant.  No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.

 

4.             Cancellation
of Shares.  If the
Corporation shall make available, at the time and place and in the amount and
form provided in this Agreement, the consideration for the Purchased Shares to
be repurchased in accordance with the provisions of this Agreement, then from
and after such time, the person from whom such shares are to be repurchased
shall no longer have any rights as a holder of such shares (other than the
right to receive payment of such consideration in accordance with this
Agreement).  Such shares shall be deemed
purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required

 

4

 

by this Agreement.

 

5.             Participant
Undertaking.  Participant
hereby agrees to take whatever additional action and execute whatever
additional documents the Corporation may deem necessary or advisable in order
to carry out or effect one or more of the obligations or restrictions imposed
on either Participant or the Purchased Shares pursuant to the provisions of
this Agreement.

 

6.             Agreement
is Entire Contract.  This
Agreement constitutes the entire contract between the parties hereto with
regard to the subject matter hereof. 
This Agreement is made pursuant to the provisions of the Plan and shall
in all respects be construed in conformity with the terms of the Plan.

 

7.             Governing
Law.  This Agreement shall
be governed by, and construed in accordance with, the laws of the State of
Delaware without resort to that State’s conflict-of-laws rules.

 

8.             Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

9.             Successors
and Assigns.  The
provisions of this Agreement shall inure to the benefit of, and be binding
upon, the Corporation and its successors and assigns and upon Participant,
Participant’s assigns and the legal representatives, heirs and legatees of
Participant’s estate, whether or not any such person shall have become a party
to this Agreement and have agreed in writing to join herein and be bound by the
terms hereof.

 

5

 

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

 

	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frederic A. Randall, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  EVP and General Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  2555 Townsgate Road

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Westlake Village, CA 91361

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Mark R. Goldston

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  XXXXXXX

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  XXXXXXX

  	
   

  
					

 

 

SPOUSAL
ACKNOWLEDGMENT

 

The undersigned spouse of the Participant has read and
hereby approves the foregoing Stock Issuance Agreement.  In consideration of the Corporation’s
granting the Participant the right to acquire the Purchased Shares in
accordance with the terms of such Agreement, the undersigned hereby agrees to
be irrevocably bound by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to purchase any
Purchased Shares in which the Participant is not vested at the time of his or
her termination of Service.

 

	
   

  	
  /s/ Nancy Jane Goldston

  	
   

  
	
   

  	
  PARTICIPANT’S SPOUSE

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  XXXXXXX

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  XXXXXXX

  	
   

  
					

 

 

EXHIBIT I

 

ASSIGNMENT
SEPARATE FROM CERTIFICATE

 

1.             FOR VALUE RECEIVED
                        hereby sell(s), assign(s) and transfer(s)
unto United Online, Inc. and any successor to its rights (the “Corporation”),
                                 
(           ) shares of the
Common Stock of the Corporation standing in his or her name on the books of the
Corporation represented by Certificate No.                     herewith and do(es) hereby irrevocably
constitute and appoint                                            
Attorney to transfer the said stock on the books of the Corporation with full
power of substitution in the premises.

 

Dated:                              ,
             .

 

 

	
   

  	
  Signature

  	
   

  	
   

  

 

 

Instruction:  Please do not fill in any blanks other than
the signature line.  Please sign exactly
as you would like your name to appear on the issued stock certificate.  The purpose of this assignment is to enable
the Corporation to exercise the Repurchase Right without requiring additional
signatures on the part of Participant.

 

 

EXHIBIT II

 

SECTION 83(b) TAX
ELECTION

 

This statement is being made under Section 83(b) of
the Internal Revenue Code, pursuant to Treas. Reg. Section 1.83-2.

 

1.                                       The taxpayer who performed the services
is:

 

Name:

Address:

Taxpayer Ident. No.:

 

2.                                       The property with respect to which the
election is being made is
             shares of the common stock of United Online, Inc.

 

3.                                       The property was issued on                                   ,
                .

 

4.                                       The taxable year in which the election is
being made is the calendar year                     .

 

5.                                       The property is subject to a repurchase
right pursuant to which the issuer has the right to acquire the property at the
original purchase price if for any reason taxpayer’s service with the issuer
terminates.  The issuer’s repurchase
right will lapse in whole or in part over a 48-month period ending
on  January 27, 2008.

 

6.                                       The fair market value at the time of
transfer (determined without regard to any restriction other than a restriction
which by its terms will never lapse) is
$             
per share.

 

7.                                       The amount paid for such property is
$             per share.

 

8.                                       A copy of this statement was furnished to
United Online, Inc. for whom taxpayer rendered the services underlying the
transfer of property.

 

9.                                       This statement is executed on                                      ,
              .

 

 

	
   

  	
   

  	
   

  
	
  Spouse (if any)

  	
   

  	
  Taxpayer

  

 

 

This election must be filed with
the Internal Revenue Service Center with which taxpayer files his or her
Federal income tax returns and must be made within thirty (30) days after the
execution date of the Stock Issuance Agreement. 
This filing should be made by registered or certified mail, return
receipt requested.  Participant must
retain two (2) copies of the completed form for filing with his or her
Federal and state tax returns for the current tax year and an additional copy
for his or her records.

 

 

APPENDIX

 

The following definitions shall be in effect under the
Agreement:

 

A.            Agreement
shall mean this Stock Issuance Agreement.

 

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

 

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

 

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

 

E.             Corporate
Transaction shall have the meaning set forth in the Employment
Agreement.

 

F.             Corporation
shall mean United Online, Inc.,  a
Delaware corporation, and any successor corporation to all or substantially all
of the assets or voting stock of United Online, Inc., which has assumed
United Online, Inc.’s rights under this Agreement.

 

G.            Employment
Agreement shall mean that certain Amended and Restated
Employment Agreement dated effective as of January 27, 2004, by and
between the Corporation and Participant.

 

H.            Involuntary Termination
shall have the meaning set forth in the Employment Agreement.

 

I.              Owner
shall mean Participant and all subsequent holders of the Purchased Shares who
derive their chain of ownership through a Permitted Transfer from Participant.

 

J.             Participant
shall mean the person to whom the Purchased Shares are issued under the Stock
Issuance Program.

 

K.            Permitted Transfer
shall mean (i) a gratuitous transfer of the Purchased Shares, provided and only if Participant obtains the Corporation’s
prior written consent to such transfer, (ii) a transfer of title to the
Purchased Shares effected pursuant to Participant’s will or the laws of
inheritance following Participant’s death or (iii) a transfer to the
Corporation in pledge as security for any purchase-money indebtedness incurred
by Participant in connection with the acquisition of the Purchased Shares.

 

L.             Plan
shall mean the United Online, Inc. 2001 Stock Incentive Plan.

 

M.           Plan Administrator
shall mean either the Board or a committee of the Board acting in its
administrative capacity under the Plan.

 

N.            Purchase Price
shall have the meaning assigned to such term in Paragraph A.1.

 

A-1

 

O.            Purchased Shares
shall have the meaning assigned to such term in Paragraph A.1.

 

P.             Recapitalization
shall mean any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the Corporation’s
outstanding Common Stock as a class without the Corporation’s receipt of
consideration.

 

Q.            Repurchase Right
shall mean the right granted to the Corporation in accordance with Article C.

 

R.            Service
shall mean the Participant’s performance of services for the Corporation in the
capacity of an employee, as described in the Employment Agreement.

 

S.             Stock
Issuance Program shall mean the Stock Issuance Program under the
Plan.

 

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

 

U.            Vesting Schedule shall
mean the vesting schedule specified in Paragraph C.3, pursuant to which
the Purchased Shares are to vest in whole or in part over Participant’s period
of Service.

 

V.            Unvested Shares
shall have the meaning assigned to such term in Paragraph C.1.

 

A-2Exhibit 10.3

 

UNITED ONLINE, INC.

 

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT

 

RECITALS

 

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

 

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

 

C.                                     All
capitalized terms in this Agreement shall have the meaning assigned to them in
the attached Appendix A.

 

NOW, THEREFORE,
it is hereby agreed as follows:

 

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

 

AWARD SUMMARY

 

	
  Award Date:

  	
   

  	
  March 24,
  2005

  
	
   

  	
   

  	
   

  
	
  Number of Shares Subject to Award:

  	
   

  	
  500,000
  shares of Common Stock (the “Shares”)

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  The Shares
  shall vest in a series of four (4) successive equal annual installments
  upon the Participant’s completion of each year of Service over the four
  (4)-year period measured from February 15, 2005. However, one or more
  Shares may be subject to accelerated vesting in accordance with the
  provisions of Paragraphs 4 and 6 of this Agreement.

  
	
   

  	
   

  	
   

  
	
  Issuance Schedule

  	
   

  	
  The Shares
  in which the Participant vests in accordance with the foregoing Vesting
  Schedule will be issuable immediately upon vesting, subject to the
  Corporation’s collection of the applicable Withholding Taxes. The procedures
  pursuant to which the applicable Withholding Taxes are to be collected are
  set forth in Paragraph 8 of this Agreement.

  

 

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

 

3.                                       Cessation of
Service.  Except as
otherwise provided in Paragraphs 4 and 6 below, should the Participant cease
Service for any reason prior to vesting in one or more Shares subject to this
Award, then the Award will be immediately cancelled with respect to those
unvested Shares, and the number of Restricted Stock Units will be reduced
accordingly.  The Participant shall
thereupon cease to have any right or entitlement to receive any Shares under
those cancelled units.

 

4.                                       Accelerated Vesting.   The following special vesting acceleration
provisions shall be in effect for the Award and shall be in addition to the
vesting acceleration provisions of Paragraph 6(c) of this Agreement:

 

(a)                                  Should
the Participant’s Service terminate by reason of death or permanent disability,
then all the Shares at the time subject to this Award shall immediately vest.

 

(b)                                 Should
the Participant’s Service be terminated at any time by the Corporation (or any
Parent or Subsidiary) other than for Cause, then all the Shares at the time
subject to this Award shall immediately vest.

 

5.                                       Stockholder Rights and Dividend Equivalents

 

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

 

(b)                                 Notwithstanding
the foregoing, should any dividend or other distribution, whether regular or
extraordinary and whether payable in cash, shares of Common Stock or other
property, be declared and paid on the outstanding Common Stock while one or 

 

2

 

more
Shares remain subject to this Award (i.e., those Shares are not otherwise
issued and outstanding for purposes of entitlement to the dividend or
distribution), then the following provisions shall govern the Participant’s
interest in that dividend or distribution:

 

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

 

(ii)                                  For
any other dividend or distribution, a special book account shall be established
for the Participant and credited with a phantom dividend equivalent to the
actual dividend or distribution which would have been paid on the Shares at the
time subject to this Award had they been issued and outstanding and entitled to
that dividend or distribution.  As the
Shares subsequently vest hereunder, the phantom dividend equivalents so
credited to those Shares in the book account shall be distributed to the
Participant (in the same form the actual dividend or distribution was paid to
the holders of the Common Stock entitled to that dividend or distribution)
concurrently with the issuance of the vested Shares to which those phantom
dividend equivalents relate.  However, each
such distribution shall be subject to the Corporation’s collection of the
Withholding Taxes applicable to that distribution.

 

6.                                       Change of Control.

 

(a)                                  Any
Restricted Stock Units subject to this Award at the time of a Change in Control
may be assumed by the successor entity or otherwise continued in full force and
effect or may be replaced with a cash incentive program of the successor entity
which preserves the Fair Market Value of the unvested shares of Common Stock
subject to the Award at the time of the Change in Control and provides for
subsequent payout of that value in accordance with the vesting schedule applicable
to the Award. In the event of such assumption or continuation of the Award or
such replacement of the Award with a cash incentive program, no accelerated
vesting of the Restricted Stock Units shall occur at the time of the Change in
Control.

 

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

 

3

 

Change
in Control transaction, provided the substituted common stock is readily
tradable on an established U.S. securities exchange or market.

 

(c)                                  Any
Restricted Stock Units which are assumed or otherwise continued in effect in
connection with a Change in Control or replaced with a cash incentive program
under Paragraph 6(a) shall be subject to accelerated vesting in accordance
with the following provision:

 

Should
the Participant’s Service be Involuntarily Terminated in connection with or
following the Change in Control event, then the Participant shall immediately
vest in all of the unvested Shares at the time subject to the Award.

 

(d)                                 If
the Restricted Stock Units subject to this Award at the time of the Change in
Control are not assumed or otherwise continued in effect or replaced with a
cash incentive program under Paragraph 6(a), then those units will vest
immediately prior to the closing of the Change in Control.  The Shares subject to those vested units will
be issued immediately upon such vesting (or otherwise converted into the right
to receive the same consideration per share of Common Stock payable to the
other stockholders of the Corporation in consummation of that Change in
Control), subject to the Corporation’s collection of the applicable Withholding
Taxes pursuant to the provisions of Paragraph 8.

 

(e)                                  Should
the accelerated vesting of the Shares pursuant to the provisions of this
Paragraph 6 result in a parachute payment under Code Section 280G, then
the Participant shall be entitled to the Code Section 4999 tax gross-up
payment provided under his Employment Agreement, whether or not that Employment
Agreement with such gross-up payment provision is in effect at the time of such
accelerated vesting. Accordingly, the Code Section 4999 tax gross-up
payment provisions of the Participant’s Employment Agreement are hereby
incorporated by reference into this Agreement and shall form part of the terms
and provisions of this Agreement as if expressly set forth herein.

 

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

 

7.                                       Adjustment in
Shares.  Should any change
be made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, appropriate adjustments shall be made to the total
number and/or class of securities issuable pursuant to this Award in order to
reflect such change and thereby preclude a dilution or enlargement of benefits
hereunder.

 

4

 

8.                                       Issuance of
Shares of Common Stock.

 

(a)                                  As
soon as administratively practicable following each date one or more Shares
vest in accordance with the provisions of this Agreement, the Corporation shall
issue to or on behalf of the Participant a certificate (which may be in
electronic form) for the shares of Common Stock which vest on that date under
the Award and shall concurrently distribute to the Participant any phantom
dividend equivalents with respect to those Shares, subject in each instance to
the Corporation’s collection of the applicable Withholding Taxes. The
Corporation shall collect the Withholding Taxes with respect to the distributed
phantom dividend equivalents by withholding a portion of that distribution
equal to the amount of the applicable Withholding Taxes, with the cash portion
of the distribution to be the first portion so withheld.  Until such time as the Corporation provides
the Participant with notice to the contrary, the Corporation shall collect the
Withholding Taxes with respect to the vested Shares through an automatic Share
withholding procedure pursuant to which the Corporation will withhold,
immediately as the Shares vest under the Award, a portion of those vested
Shares with a Fair Market Value (measured as of the vesting date) equal to the
amount of such Withholding Taxes  (the “Share
Withholding Method”); provided, however,
that the amount of any Shares so withheld shall not exceed the amount necessary
to satisfy the Corporation’s required tax withholding obligations using the
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to supplemental taxable income.
Participant shall be notified in writing in the event such Share Withholding
Method is no longer available.

 

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

 

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

 

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

 

(c)                                  Except
as otherwise provided in Paragraph 6 or Paragraph 8(a), the settlement of all
Restricted Stock Units which vest under the Award shall be made solely in
shares of Common Stock.  In no event,
however, shall any fractional shares be issued. 
Accordingly, the total number of shares of Common Stock to be issued at
the time the Award vests shall, to the extent necessary, be rounded down to the
next whole share in order to avoid the issuance of a fractional share.

 

5

 

9.                                       Compliance with
Laws and Regulations. The issuance of shares of Common Stock
pursuant to the Award shall be subject to compliance by the Corporation and
Participant with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Common Stock may be listed for trading at
the time of such issuance.

 

10.                                 Notices.  Any notice required to be given or delivered
to the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices.  Any notice required to be given or delivered
to Participant shall be in writing and addressed to Participant at the address
indicated below Participant’s signature line on this Agreement.  All notices shall be deemed effective upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.

 

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

 

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

 

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

 

6

 

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

 

 

	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frederic A.
  Randall, Jr.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  EVP and General Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Mark R.
  Goldston

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  XXXXXXX

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  XXXXXXX

  	
   

  
						

 

7

 

APPENDIX A

 

DEFINITIONS

 

The following definitions
shall be in effect under the Agreement:

 

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

 

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

 

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

 

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

 

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

 

F.                                      Change in Control
shall mean a change in ownership or control of the Corporation effected through
any of the following transactions:

 

(i)                                     a
merger or consolidation approved by the Corporation’s stockholders, unless
securities possessing more than fifty percent (50%) of the total combined
voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and
substantially in the same proportion, by the persons who beneficially owned the
Corporation’s outstanding voting securities immediately prior to such
transaction,

 

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

 

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

 

A-1

 

(iv)                              a
change in the composition of the Board over a period of thirty-six (36)
consecutive months or less such that a majority of the Board members ceases, 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.

 

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

 

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

 

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

 

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

 

K.                                    Employment Agreement  shall mean the
Amended and Restated Employment Agreement between the Participant and the
Corporation dated as of January 27, 2004 and as in effect on the date of
the Award.

 

L.                                      Fair Market Value
per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

 

(i)                                     If
the Common Stock is at the time traded on the Nasdaq National Market, then the
Fair Market Value shall be the closing selling price per share of Common Stock,
as such price is reported by the National Association of Securities Dealers. If
there is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

 

(ii)                                  If
the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock on
the date in question on the Stock Exchange determined by the Plan Administrator
to be the primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange.  If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.

 

A-2

 

M.                                 Involuntarily Terminated  shall have
the meaning assigned to that term in the Employment Agreement.

 

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

 

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

 

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

 

Q.                                    Plan
shall mean the Corporation’s 2001 Stock Incentive Plan, as amended and
restated.

 

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

 

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

 

T.                                     Stock Exchange
shall mean the American Stock Exchange or the New York Stock Exchange.

 

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

 

A-3

 

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

 

A-4

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