Document:

Exhibit 10.1

 

 

August 15, 2009

 

Charles B. Ammann

c/o United Online, Inc.

21301 Burbank Boulevard

Woodland Hills, CA   91367-6677

 

Dear Chuck:

 

This letter agreement sets
forth the terms and conditions of your continued employment with United Online, Inc.
(the “Company”), effective as of August 15,
2009 (the “Effective Date”).

 

1.             Position.  You will serve as Executive Vice
President, General Counsel and Secretary of the Company and report to the Chief Executive Officer of
the Company.  You will agree to devote
your full-time attention, skill and efforts to the performance of your duties
for the Company.

 

2.             Salary and Benefits.

 

(a)           You will be paid a salary at your current
annualized rate of $350,000.00, payable in bi-weekly installments in accordance
with the Company’s standard payroll practices, subject to such increases as may
be determined from time to time by the Company’s Board of Directors.  As used in this letter agreement, the term “Board of Directors” shall refer to
the Company’s Board of Directors or other governing body or committee to which
the authority of the Board of Directors has been delegated.

 

(b)           You will be eligible to participate in
the Company’s employee benefit plans, including its 401(k) plan.  In addition, you will be entitled to
participate in the Company’s Exec-U-Care Medical Reimbursement Insurance Plan
so long as such plan is made generally available to the Company’s senior
executives.  You will be entitled to a
minimum of four (4) weeks of paid vacation each year or such greater amount as
determined in accordance with the Company’s standard vacation policy.

 

(c)           The Company will promptly reimburse you
for all reasonable and necessary business expenses you incur in connection with
the business of the Company and the performance of your duties hereunder upon
your submission of reasonable and timely documentation of the expenses.  In no event shall any expense be reimbursed later than the
end of the calendar year following the calendar year in which that expense was
incurred, and the amounts reimbursed in any one calendar year shall not affect
the amounts reimbursable in any other calendar year.  Your right to receive such reimbursements may
not be exchanged or liquidated for any other benefit.

 

3.             Bonus.     For each fiscal year during
your period of employment, you will be eligible to participate in a bonus
program with eligibility for up to 100% of your annual base salary.  The performance criteria for purposes of
determining you actual bonus for each fiscal year will be established by the
Company’s  Board of
Directors.  Your annual bonus will be
increased to include any increases in

 

 

your annual bonus as approved by the Board of Directors.  Except as otherwise determined by the Board
of Directors or set forth herein, your bonus awards will be paid only if you
are employed by and in good standing with the Company at the time of such bonus
payments.  Your annual bonus award shall
in no event be paid later than the 15th day of the third month following the
end of your taxable year or, if later, the end of the Company’s taxable
year  in which such bonus award is
earned.

 

4.             Restricted Stock Units and Other Equity Awards.

 

(a)           Effective August 15, 2009, you will
be awarded restricted stock units covering 50,000 shares of the Company’s
common stock (the “RSU Award”).  The RSU Award will be granted under the
Company’s 2001 Stock Incentive Plan (the “Plan”) and
will be subject to the standard terms and conditions set forth in the Plan and
the Company’s standard form restricted stock unit agreement for employee awards
under such Plan.  Your RSU Award will
vest, and the underlying shares will be issued, on August 15, 2012,
subject to your continued employment with the Company through that date.

 

(b)           If your employment is terminated by the
Company “without cause” or by you for “good reason” (as each term is defined
below) prior to August 15, 2012,  the vesting of your RSU Award and any
other equity awards you hold as of the date of such termination will be
accelerated by the additional number of shares in which you would have
otherwise been vested at the time of such termination had you completed an
additional twelve (12) months of employment with the Company, calculated as if
such RSU Award and any such other equity awards vested on a monthly basis.  Such vesting acceleration will occur upon the
expiration of all applicable review and revocation periods applicable to the
Release referred to in Section 7(b) as statutorily required by law
and in no event later than the later of (i) the 15th day of the
third month following the end of your taxable year in which such termination of
employment occurs or (ii) the 15th day of the third month following the
end of the Company’s taxable year in which such termination of employment
occurs.  In no event will the number of
shares which vest on such an accelerated basis with respect to any particular
equity grant exceed the number of shares unvested immediately prior to the date
of such termination with respect to such grant. 
Except as
otherwise expressly provided in the agreement evidencing a particular  restricted stock unit award, the shares of
common stock underlying the restricted stock units that vest on such an
accelerated basis will be issued to you on the first business day, within the
sixty (60)-day period following the date of your cessation from service as a
result of your termination “without cause” (as defined below) or your
resignation for “good reason” (as defined below), on which the executed Release
required of you pursuant to Section 7(b) is effective and enforceable
in accordance with its terms following any applicable revocation period, or as
soon thereafter as administratively practicable, but in no event later than the
last business day of that sixty (60)-day period on which such Release is
effective and enforceable.

 

(c)           If your employment is terminated by the
Company “without cause” or by you for “good reason” (as each term is defined
below) prior to August 15, 2012 in connection with, or within twelve
(12) months after, a change in control of the Company (as defined in the
applicable stock plan, stock option agreement or restricted stock unit
agreement), the vesting of your RSU Award and any other equity awards you hold
as of the date of such termination will be accelerated by the additional number
of shares in which you would have otherwise been vested at the time of such
termination had you completed an additional twelve (12) months of employment
with the Company or, if greater, an additional period of service equal
in duration to the actual period of service you completed between August 15,
2009 (or, with respect to any such other equity awards you hold outstanding as
of the date of such termination, the date of the commencement of vesting with
respect to such equity awards) and the date of such termination, in all cases
calculated as if such RSU Award and such other equity awards vested on a
monthly basis.  Such vesting acceleration
will occur upon the expiration of all applicable review and revocation periods
applicable to the Release referred to in Section 7(b) as statutorily
required by law and in no event later

 

2

 

than the later of (i) the
15th day of the third month following the end of your taxable year in which
such termination of employment occurs or (ii) the 15th day of the third
month following the end of the Company’s taxable year in which such termination
of employment occurs.  In no event will
the number of shares which vest on such an accelerated basis with respect to
any particular equity grant exceed the number of shares unvested immediately
prior to the date of such termination with respect to such grant.  Except as otherwise expressly provided in the
agreement evidencing a particular 
restricted stock unit award, the shares of common stock underlying the
restricted stock units that vest on such an accelerated basis will be issued to
you on the first business day, within the sixty (60)-day period following the
date of your cessation from service as a result of your termination “without
cause” (as defined below) or your resignation for “good reason” (as defined
below), on which the executed Release required of you pursuant to Section 7(b) is
effective and enforceable in accordance with its terms following any applicable
revocation period, or as soon thereafter as administratively practicable, but
in no event later than the last business day of that sixty (60)-day period on
which such Release is effective and enforceable.

 

(d)           Upon the termination of your employment
as a result of death or Disability (as defined below), the vesting of your
outstanding RSU Award and any other equity awards you hold as of the date of
such termination will be accelerated by the additional number of shares in
which you would have been vested at the time of such termination if you had
completed an additional twelve (12) months of service, calculated as if such
RSU Award and any other such equity awards vested on a monthly basis; provided
however, that in no event will the number of shares which vest on such an
accelerated basis with respect to any particular equity grant exceed the number of shares unvested
immediately prior to the date of such termination with respect to such
grant.  For purposes of this letter
agreement, “Disability” means your inability
to engage in any substantial gainful activity necessary to perform your duties
hereunder by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted, or can be
expected to last, for a continuous period of not less than twelve (12) months.

 

(e)           In the event of any inconsistency between
the terms set forth in this Section 4 and the terms set forth in the
agreement evidencing your RSU Award, the terms set forth in this letter
agreement will control. The provisions of this Section 4 and Section 7
will apply to the RSU Award and prior equity awards referred to herein, and
will also apply to future equity awards, except to the extent specifically
stated in the applicable award agreement or in a resolution of the Board of
Directors.

 

5.             Policies; Procedures; Proprietary Information and Inventions Agreement.  As an employee of the Company, you will be
expected to abide by all of the Company’s policies and procedures, including
(without limitation) the terms of the Proprietary Information and Inventions
Agreement between you and the Company (a copy of which is attached hereto as Appendix
A and which is incorporated herein by reference), the Insider Trading
Policy, the Code of Ethics and the Employee Handbook.

 

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

 

3

 

7.             Separation
from Service.

 

(a)           Termination by
You.  If you terminate your  employment with the Company for any reason
other than as a result of your death or Disability or your resignation for “good
reason” (as defined below), then all obligations of the Company as set forth in
this letter agreement will cease, other than the obligation to pay you, on your
termination date, any earned but unpaid compensation for services rendered
through that date and any accrued but unused vacation days as of your
termination date (collectively, the “Accrued Obligations”).
If you terminate your employment with the Company for “good reason”, (as
defined below) prior to August 15, 2012, then in addition to the
foregoing, the Company will pay you the Separation Payment (as defined below)  and the bonus
payment (described in the second sentence of Section 7(b) below),
subject to the conditions set forth and your compliance with the requirements
in Section 7(b) below for a Separation Payment made in connection a
termination “without cause”, and you will also be entitled to the accelerated
vesting of your RSU Award and any other equity awards you hold as of the
Effective Date in accordance with Section 4 above.  Notwithstanding your Separation from Service
pursuant to this Section 7(a), you will continue to be obligated to comply
with the terms of the Proprietary Information and Inventions Agreement and if
applicable, the restrictive covenants set forth in Section 9 below.

 

(b)           Termination by the Company.  If (i) your employment
is terminated by the Company “without cause” (as defined below) prior to August 15,
2012, (ii) you execute and deliver to the Company, within twenty-one (21)
days  (or forty-five (45) days to the
extent such longer period is required under applicable law) after the effective
date of your termination of employment, a comprehensive agreement releasing the
Company and its officers, directors, employees, stockholders, subsidiaries,
affiliates, representatives and other parties and containing such other and
additional terms as the Company deems satisfactory (the “Release”)
and (iii) such Release becomes effective and enforceable after the
expiration of any applicable revocation period under federal or state law, then
the Company will pay you a separation payment (the “Separation
Payment”) equal to the sum of (i) twelve (12) months of
your then current monthly base salary, (ii) your Annual Bonus (as defined
below), and (iii) a prorated portion of your Annual Bonus (as defined
below) based upon the time elapsed between December 31 of the preceding
year and your date of termination. In addition, notwithstanding the fourth
sentence of Section 3 above but contingent upon your delivery of an
effective and enforceable Release in accordance with the foregoing provisions
of this Section 7(b), if the date of such termination occurs following the
end of a fiscal year and prior to the date that you would have otherwise been
entitled to be paid your annual bonus for that fiscal year, the Company will
pay you an amount equal to the annual bonus that you would have received had
you remained employed by, and in good standing with, the Company through the
date the annual bonus for that fiscal year is paid in the following fiscal
year, with that amount to be paid at the same time and manner that such payment
would have paid to you had you remained employed through such date, but in no
event later than the last day of the fiscal year immediately following fiscal
year for which such bonus is earned.

 

Payment of this Separation
Payment and the additional bonus amount (if any) under this Section 7(b) and
the accelerated vesting of your equity awards under Section 4, will each
be contingent upon the satisfaction of the following requirements: (i) you
execute and deliver to the Company on a timely basis your required Release in
accordance with this Section 7(b), (ii) such Release becomes
effective and enforceable after the expiration of any applicable revocation
period under federal or state law and (iii) you continue to comply with
the Proprietary Information and Inventions Agreement and the restricted
covenants set forth in Section 9 below.

 

4

 

The Separation Payment under this Section 7(b) will be
payable in a series of twelve (12) successive equal monthly installments,
beginning on the first regular payday for the Company’s salaried employees,
within the sixty (60)-day period following the date of your “separation from
service” (as such term is defined in Treasury Regulations issued under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”))
as a result of your termination “without cause” (as defined below), on which
your executed Release is effective and enforceable in accordance with its terms
following any applicable revocation period, or as soon thereafter as
administratively practicable, but in no event later than the last day of that
sixty (60)-day period on which such Release is effective and enforceable. Your
right to each such monthly installment of the Separation Payment shall be
deemed, for purposes of Section 409A of the Code, to be a right to a
series of separate payments.

 

If your employment is terminated by the Company “without cause,” the
Company will have no further obligation to you pursuant to this letter
agreement other than the Accrued Obligations, the acceleration of vesting
provided in Section 4 above and the obligations of the Company pursuant to
this Section 7(b).

 

If your employment
is terminated by the Company “with cause” as defined below, the Company will
have no further obligation to you under the terms of this letter agreement,
other than the Accrued Obligations.

 

Notwithstanding the termination of your
employment by the Company “with cause” or “without cause,” or by you for “good
reason”, you will continue to be obligated to comply with the terms of the
Proprietary Information and Inventions Agreement and the restrictive covenants
set forth in Section 9 below.

 

If any payment or benefit received or to be
received by you (including any payment or benefit received pursuant to this
letter agreement or otherwise) would be (in whole or part) subject to the
excise tax imposed by Section 4999 of the Code, or any successor provision
thereto, or any similar tax imposed by state or local law, or any interest or
penalties with respect to such excise tax (such tax or taxes, together with any
such interest and penalties, are hereafter collectively referred to as the “Excise Tax”), then, the cash
payments provided to you under this letter agreement shall first be reduced,
with each such payment to be reduced pro-rata but without any change in the
payment date and with the monthly installments of the Separation Payment to be
the first such cash payments so reduced, and then, if necessary, the
accelerated vesting of your equity awards pursuant to the provisions of this
letter agreement shall be reduced in the same chronological order in which
those awards were made, but only to the extent necessary to assure that you
receive only the greater of (i)  the
amount of those payments and benefits which would not constitute a parachute
payment under Code Section 280G or (ii)  the amount which yields
you the greatest after-tax amount of benefits after taking into account any
Excise Tax imposed on the payments and benefits provided you hereunder (or on
any other payments or benefits to which your may become entitled in connection
with any change in control or ownership of the Company or the subsequent
termination of your employment with the Company).

 

(c)           Termination by Death or
Disability.  If your
employment is terminated as a result of your death or Disability, the Company
will be obligated to pay the Accrued Obligations to you, your estate or
beneficiaries (as the case may be) on your termination date or as soon as
administratively practicable thereafter, but in no event later than sixty (60)
days after the date of such termination. 
In the event of a termination of your employment due to death or
Disability, you or your estate or beneficiaries, as the case may be, will be
entitled to the accelerated vesting of your equity awards as set forth in Section 4(d) above.  The provisions of this Section 7(c) will
not affect or change the rights or benefits to which you are otherwise entitled
under the Company’s employee benefit plans or otherwise.

 

5

 

	
   

  	
  (d)

  	
  Definitions.

  
	
   

  	
   

  	
   

  
	
   

  	
  For purposes of this letter agreement, the following definitions will
  be in effect:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “good reason” means:

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  a material reduction in your authority, duties or responsibilities,
  without your prior written consent, unless such reduction is effected at the
  request of Mark R. Goldston;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  a material change in the geographic location at which you must
  perform services (the parties acknowledge that you are currently required to
  perform services at 21301 Burbank Boulevard, Woodland Hills, CA 91367)
  without your prior consent; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  any material un-waived breach by the Company of the terms of this
  letter agreement; provided however, that with respect to any of the clause
  (i) — (iv) events above, you will not be deemed to have resigned
  for good reason unless (A) you provide written notice to the Company of
  the existence of the good reason event within ninety (90) days after its initial
  occurrence, (B) the Company is provided with thirty (30) days in which
  to cure such good reason event, and (C) your termination of employment
  is effected within one hundred eighty (180) days following the occurrence of
  the non-cured clause (i) — (iv) event.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “with
  cause” means your commission of any one or more of the
  following acts:

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  willfully damaging of the
  property, business, business relationships, reputation or goodwill of the
  Company or its subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  commission of a felony or
  a misdemeanor involving moral turpitude;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  theft, dishonesty, fraud
  or embezzlement;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  willfully violating any
  rules or regulations of any governmental or regulatory body that is or
  is reasonably expected to be injurious to the Company or its subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  the use of alcohol,
  narcotics or other controlled substances to the extent that it prevents you
  from efficiently performing services for the Company or its subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (vi)

  	
  willfully injuring any
  other employee of the Company or its subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (vii)

  	
  willfully injuring any
  person in the course of performance of services for the Company or its
  subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (viii)

  	
  disclosing to a competitor
  or other unauthorized persons confidential or proprietary information or
  secrets of the Company or its subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ix)

  	
  solicitation of business
  on behalf of a competitor or a potential competitor of the Company or its
  subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (x)

  	
  harassment of any other
  employee of the Company or its subsidiaries or the commission of any act
  which otherwise creates an offensive work environment for other employees of
  the Company or its subsidiaries;

  
	
   

  	
   

  	
   

  
	
   

  	
  (xi)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (xii)

  	
  breach of any material
  term of this letter; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (xiii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “without cause” means any reason
  not within the scope of the definition of the term “with cause.”

  

 

6

 

(e)           Code Section 409A Deferral Period.  Notwithstanding any provision in this letter
agreement to the contrary (other than Section 7(f) below), no payment
or distribution under this letter agreement which constitutes an item of
deferred compensation under Section 409A of the Code and becomes payable
by reason of your termination of employment with the Company will be made to
you until you incur a “separation from service” (as such term is defined in
Treasury Regulations issued under Section 409A of the Code) in connection
with such  termination of
employment.  For purposes of this letter
agreement, each amount to be paid or benefit to be provided you shall be
treated as a separate identified payment or benefit for purposes of Section 409A
of the Code.  In addition, no payment or
benefit which constitutes an item of deferred compensation under Section 409A
of the Code and becomes payable by reason of your  separation from service will be made to you
prior to the earlier of (i) the first
day of the seventh (7th) month measured from the date of such separation from
service or (ii) the date of your  death,
if you are deemed at the time of such separation from service to be a specified
employee (as determined pursuant to Code Section 409A and the Treasury
Regulations thereunder) and such delayed commencement is otherwise required in
order to avoid a prohibited distribution under Code Section 409A(a)(2).
Upon the expiration of the applicable deferral period, all payments and
benefits deferred pursuant to this Section 7(e) (whether they would
have otherwise been payable in a single sum or in installments in the absence
of such deferral) shall be paid or provided to you in a lump sum on the first
day of the seventh (7th) month after the date of your separation from service
or, if earlier, the first day of the month immediately following the date the
Company receives proof of your death. Any remaining payments or benefits due
under this letter agreement will be paid in accordance with the normal payment
dates specified herein.

 

(f)            Provisions Applicable to “Specified Employee”.  Notwithstanding Section 7(e) above,
the following provisions shall also be applicable to you if you are a “specified
employee” at the time of your separation of service:

 

(i)            Any payments or benefits which become due and payable to
you during the period beginning with the date of your separation from service
and ending on March 15 of the following calendar year shall not be subject
to the holdback provisions of Section 7(e) and shall accordingly be
paid as and when they become due and payable under this letter agreement in
accordance with the short-term deferral exception to Code Section 409A.

 

(ii)           The remaining portion of the payments and benefits to
which you become entitled under this letter agreement, to the extent they do
not in the aggregate exceed the dollar limit described below and are otherwise
scheduled to be paid no later than the last day of the second calendar year
following the calendar year in which your separation from service occurs, shall
not be subject to any deferred commencement date under Section 7(e) and
shall be paid to you as they become due and payable under this letter
agreement.  For purposes of this
subparagraph (ii), the applicable dollar limitation will be equal to two times
the lesser of (i) your annualized
compensation (based on your annual rate of pay for the calendar year preceding
the calendar year of your separation from service, adjusted to reflect any
increase during that calendar year which was expected to continue indefinitely
had such separation from service not occurred) or (ii) the compensation limit
under Section 401(a)(17) of the Code as in effect in the year of such  separation from service.  To the extent the portion of the severance
payments and benefits to which you would otherwise be entitled under this
letter agreement during the deferral period under Section 7(e) exceeds
the foregoing dollar limitation, such excess shall be paid in a lump sum upon
the expiration of that deferral period, in accordance with the deferred payment
provisions of Section 7(e), and the remaining severance payments and
benefits (if any) shall be paid in accordance with the normal payment dates
specified for them herein.

 

7

 

8.             Withholding Taxes. 
All forms of compensation payable pursuant to the terms this letter agreement,
whether payable in cash, shares of the Company’s common stock or other
property, are subject to reduction to reflect the applicable withholding and
payroll taxes.

 

9.             Restrictive Covenants. 
Until one (1) year after the termination of your employment with
the Company for any reason, so long as you are receiving the Separation
Payment, you will not, at any place in any county, city or other political
subdivision of the United States in which the Company or its subsidiaries is
engaged in business or providing its services:

 

a.             directly or indirectly design, develop, manufacture,
market or sell any product or service which is in competition with the products
or services of the Company or its subsidiaries; or

 

b.             directly
or indirectly own any interest in, control, be employed by or associated with
or render advisory, consulting or other services (including but not limited to
services in research) to any person or entity, or subsidiary, subdivision,
division or joint venture of such entity in connection with the design,
development, manufacture, marketing or sale of a product or service which is in
competition with the products or services of the Company or its subsidiaries;
provided, however, that nothing in this letter agreement will prohibit you from
owning less than one percent (1%) of the equity interests of any publicly held
entity.

 

10.           Entire
Agreement.  This letter
agreement, together with the Proprietary Information and Inventions Agreement
between you and the Company, any Company handbooks and policies in effect from
time to time and the applicable stock plans and any stock option agreements,
restricted stock unit agreements or other agreement evidencing the equity
awards made to you from time to time during your period of employment
(including, without limitation, the RSU Award), contains all of the terms of
your employment with the Company and supersedes any prior understandings or
agreements, whether oral or written, between you and the Company.  If any provision of this letter agreement is
held by an arbitrator or a court of competent jurisdiction to conflict with any
federal, state or local law, or to be otherwise invalid or unenforceable, such
provision shall be construed in a manner so as to maximize its enforceability
while giving the greatest effect as possible to the intent of the parties.  To the extent any provision cannot be
construed to be enforceable, such provision will be deemed to be eliminated
from this letter agreement and of no force or effect, and the remainder of this
letter agreement will otherwise remain in full force and effect and be
construed as if such portion had not been included in this letter agreement.
This letter agreement is not assignable by you. 
This letter agreement may be assigned by the Company to its subsidiaries
or to successors in interest to the Company or its lines of business.

 

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

 

12.           Term.  This letter agreement will expire on August 15,
2012, except Sections 6, 7(e), 7(f), 8, 9, 10, 11 and 12 will survive such
expiration.  Following the expiration of
this letter agreement, your employment with the Company will continue to be “at
will”.

 

8

 

We look forward to continuing
to work with you.  Please indicate your
agreement with the terms and provisions of this letter agreement by signing and
dating the enclosed duplicate copy and returning it to me by August 15,
2009.

 

If you have any questions,
please call the undersigned.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  
	
   

  	
   

  	
  Mark R. Goldston

  
	
   

  	
   

  	
  Chairman, President and
  Chief Executive Officer

  

 

I have read the foregoing
and accept the terms and provisions set forth in this letter agreement as of
the date shown at the top of this letter agreement:

 

 

	
  /s/ Charles B. Ammann

  	
   

  
	
  Charles B. Ammann

  	
   

  

 

9

 

Appendix A

 

[Proprietary Information and Inventions Agreement]

 

[to be attached]

 

10Exhibit
10.2

 

FIRST AMENDMENT

TO

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This
First Amendment to Second Amended and Restated Employment Agreement, made and
entered into effective as of August 15, 2009 (the “Amendment”),
amends that certain Second Amended and Restated Employment Agreement dated
effective as of January 1, 2009 (the “Original Agreement”)
by and between United Online, Inc. (the “Company”),
and Frederic A. Randall, Jr. 
Capitalized terms used and not otherwise defined herein shall have the
respective meanings set forth in the Original Agreement.

 

RECITALS

 

WHEREAS, Mr. Randall has been offered and has
voluntarily accepted the position of Executive Vice President and Chief
Strategy Officer of the Company, effective August 15, 2009, thereby
voluntarily relinquishing his position as the Company’s Executive Vice
President, General Counsel and Secretary as of that date; and

 

WHEREAS, the parties desire to amend the
Original Agreement to reflect the change in Mr. Randall’s position and
such other revisions to the Original Agreement as are described herein.

 

NOW, THEREFORE, in consideration of the mutual promises
set forth herein, and other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

1.             The
definition of “Company” as set forth in the recitals of the Original Agreement
is hereby removed and replaced in its entirety as follows:

 

“For purposes of this
Agreement, the term “Company” shall mean United Online.”

 

2.             Section 2.1
of the Original Agreement is hereby removed and replaced in its entirety as
follows:

 

“Employee shall
serve as Executive Vice President and Chief Strategy Officer of the
Company.  In this capacity, Employee
shall perform such customary, appropriate and reasonable executive duties as
are usually performed by the Chief Strategy Officer, including but not limited
to strategic planning and acquisitions, and such duties as are delegated to him
from time to time by the Chief Executive Officer of the Company.  Employee shall report directly to the Company’s
Chief Executive Officer.”

 

3.             All
other references in the Original Agreement to “Executive Vice President and
General Counsel” of the Company, including but not limited to the reference in
the second paragraph of Section 4.2(e), shall hereafter be deemed to refer
to “Executive Vice President and Chief Strategy Officer.

 

4.             Sections 3.3(c) and 3.3(d) of the Original
Agreement are hereby deleted in their entirety.

 

 

5.             The term “Competitive Business Activity” in Section 5
of the Original Agreement is hereby removed and replaced in its entirety as
follows:

 

“The term ‘Competitive Business Activity’ shall mean any business,
activity or endeavor that the Company or any of its subsidiaries or other
affiliates is currently engaged in or that the Company or any of its
subsidiaries or other affiliates engages in, or has agreed to acquire or engage
in (including, but not limited to, by merger, asset acquisition or similar
transaction), at any time during the period you are employed by the Company,
currently including, but not limited to, the business of providing (i) floral
and related products and services to consumers and retail florists, as well as
to other retail locations offering floral and related products and services, (ii) online
social networking services, (iii) online loyalty marketing services and
loyalty rewards programs, and/or (iv) Internet access services, Internet
security services, Web hosting services and email.”

 

6.             The second paragraph of Section 7 of the Original
Agreement is hereby deleted in its entirety.

 

7.             Appendix A attached to the Original Agreement is
hereby removed and replaced in its entirety as set forth on Appendix A
attached hereto.

 

8.             Except as modified by this
Amendment, all the terms and provisions of the Original Agreement shall
continue in full force and effect.

 

(Signature Page Follows)

 

2

 

IN
WITNESS WHEREOF, each of the parties hereto has executed this Amendment on the
date specified therefor below.

 

 

	
   

  	
  /s/ Frederic A. Randall, Jr.

  
	
   

  	
  Frederic A. Randall, Jr.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Goldston

  
	
   

  	
   

  	
  Mark R. Goldston

  
	
   

  	
   

  	
  Chairman, President and Chief Executive Officer

  

 

3

 

Appendix A

 

“Change in Control”
of United Online shall mean a change in ownership or control of United Online
effected through any of the following transactions:

 

“United
Online” 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.

 

“Board”
shall mean United Online’s Board of Directors.

 

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

 

(i)            a merger or consolidation approved
by United Online’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 United Online’s outstanding voting securities
immediately prior to such transaction,

 

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

 

(iii)          the acquisition, directly or
indirectly by any person or related group of persons (other than United Online
or a person that directly or indirectly controls, is controlled by, or is under
common control with, United Online), 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 United Online’s
outstanding securities, or

 

(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.

 

4

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