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As filed with the Securities and Exchange Commission on June 28, 2013

File No. 001-35901

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 1 TO

FORM 10



GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934



FTD Companies, Inc.
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  32-0255852
(I.R.S. Employer
Identification No.)

3113 Woodcreek Drive
Downers Grove, Illinois

(Address of principal executive offices)

 

60515
(Zip Code)

Registrant's telephone number, including area code:
(630) 719-7800

Securities to be registered pursuant to Section 12(b) of the Act:

Title of each class to be so registered   Name of each exchange on which
each class is to be registered
Common Stock, par value $0.0001 per
share
  The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

Securities to be registered pursuant to Section 12(g) of the Act:
None



        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

   



FTD Companies, Inc.
Cross-Reference Sheet Between Information Statement and Items of Form 10

        The information required by the following Form 10 registration statement items is contained in the information statement sections that are identified below, each of which is incorporated herein by reference.

Item 1.    Business.

        The information required by this item is contained under the sections "Summary," "Risk Factors," "Cautionary Statement Concerning Forward-Looking Statements," "The Separation," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," "Certain Relationships and Related-Party Transactions," and "Where You Can Find More Information."

Item 1A.    Risk Factors.

        The information required by this item is contained under the sections "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements."

Item 2.    Financial Information.

        The information required by this item is contained under the sections "Selected Historical Consolidated Financial Data," "Unaudited Pro Forma Condensed Consolidated Financial Statements," and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Item 3.    Properties.

        The information required by this item is contained under the section "Business—Properties."

Item 4.    Security Ownership of Certain Beneficial Owners and Management.

        The information required by this item is contained under the section "Security Ownership of Management, Directors and Principal Stockholders."

Item 5.    Directors and Executive Officers.

        The information required by this item is contained under the section "Management."

Item 6.    Executive Compensation.

        The information required by this item is contained under the sections "Management" and "Executive Compensation."

Item 7.    Certain Relationships and Related Transactions, and Director Independence.

        The information required by this item is contained under the sections "Certain Relationships and Related-Party Transactions" and "Management."

Item 8.    Legal Proceedings.

        The information required by this item is contained under the section "Business—Legal Proceedings."

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Item 9.    Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters.

        The information required by this item is contained under the sections "Summary," "Risk Factors," "The Separation," "Executive Compensation," "Description of Capital Stock," and "Description of Certain Indebtedness."

Item 10.    Recent Sales of Unregistered Securities.

        Not applicable.

Item 11.    Description of Registrant's Securities to Be Registered.

        The information required by this item is contained under the sections "Summary," "The Separation," and "Description of Capital Stock."

Item 12.    Indemnification of Directors and Officers.

        The information required by this item is contained under the section "Description of Capital Stock—Indemnification of Directors and Officers; Limitation of Liability of Directors."

Item 13.    Financial Statements and Supplementary Data.

        The information required by this item is contained under the sections "Unaudited Pro Forma Condensed Consolidated Financial Statements," "Index to Consolidated Financial Statements," and the financial statements referenced therein.

Item 14.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

        Not applicable.

Item 15.    Financial Statements and Exhibits.

(a)
Financial Statements

        The information required by this item is contained under the sections "Unaudited Pro Forma Condensed Consolidated Financial Statements," "Index to Consolidated Financial Statements," and the financial statements referenced therein.

(b)
Exhibits

        The information required by this item is contained in the Exhibit Index following the signature page to this registration statement on Form 10.

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SIGNATURE

        Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

    FTD COMPANIES, INC.

 

 

By:

 

/s/ ROBERT S. APATOFF

        Name:   Robert S. Apatoff
        Title:   President

Dated: June 28, 2013

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EXHIBIT INDEX

Exhibit No.   Exhibit Description
  2.1   Form of Separation and Distribution Agreement by and between United Online, Inc. and FTD Companies, Inc.

 

3.1

 

Form of Amended and Restated Certificate of Incorporation of FTD Companies, Inc.*

 

3.2

 

Form of Second Amended and Restated Bylaws of FTD Companies, Inc.*

 

10.1

 

Form of Transition Services Agreement by and between United Online, Inc. and FTD Companies, Inc.*

 

10.2

 

Form of Employee Matters Agreement by and between United Online, Inc. and FTD Companies, Inc.*

 

10.3

 

Form of Tax Sharing Agreement by and between United Online, Inc. and FTD Companies, Inc.*

 

10.4

 

Credit Agreement, dated as of June 10, 2011, by and among FTD Group, Inc., a Delaware corporation, the financial institutions party thereto from time to time as lenders, Wells Fargo Securities, LLC, as sole lead arranger and sole book runner, and Wells Fargo Bank, National Association (incorporated by reference to United Online Inc.'s Current Report on Form 8-K, File No. 000-33367, filed on June 16, 2011)

 

21.1

 

List of subsidiaries of FTD Companies, Inc.

 

99.1

 

Preliminary Information Statement of FTD Companies, Inc., subject to completion, dated June 28, 2013*

*
Filed herewith. All other exhibits which are not filed herewith or incorporated by reference are to be filed by amendment.

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FTD Companies, Inc. Cross-Reference Sheet Between Information Statement and Items of Form 10
SIGNATURE
EXHIBIT INDEX

Exhibit 3.1

 

[FORM OF]

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

OF

 

FTD COMPANIES, INC.

 

 

ARTICLE I

 

NAME

 

The name of the Corporation is FTD Companies, Inc. (the “Corporation”).

 

ARTICLE II

 

REGISTERED OFFICE AND AGENT

 

The address of the registered office of the Corporation in the State of Delaware is 160 Greentree Drive, Suite 101, in the City of Dover, County of Kent. The name of its registered agent at that address is National Registered Agents, Inc.

 

ARTICLE III

 

PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (as amended from time to time, the “DGCL”).

 

ARTICLE IV

 

CAPITAL STOCK

 

The total number of shares of capital stock which the Corporation shall have authority to issue is                  shares, divided into the following classes:

 

shares of Common Stock having a par value of $0.0001 per share (the “Common Stock”); and

 

shares of Preferred Stock, having a par value of $0.0001 per share (the “Preferred Stock”).

 

The board of directors of the Corporation (the “Board of Directors”) is expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or

 



 

resolutions adopted by the Board of Directors providing for the issuance of such series and as may be permitted by the DGCL, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at any time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; (iv) entitled to vote separately or together with any other series or class of stock of the Corporation; or (v) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.

 

ARTICLE V

 

MANAGEMENT

 

The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

 

(a)     The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

 

(b)     The directors shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the bylaws of the Corporation (as in effect from time to time, the “Bylaws”). In addition, the affirmative vote of the holders of sixty-six and two-thirds percent of the outstanding shares of voting stock of the Corporation then entitled to vote on the election of directors shall be required for an alteration, amendment, change, addition or repeal of the Bylaws by the stockholders of the Corporation.

 

(c)     The number of directors of the Corporation shall be as from time to time fixed by resolution of the Board of Directors. Election of directors need not be by written ballot unless the Bylaws so provide. Advance notice of stockholder nominations for the election of directors and of any other business to be brought before any meeting of the stockholders shall be given in the manner provided in the Bylaws.

 

(d)     At each annual meeting of stockholders, directors of the Corporation shall be elected to hold office until the expiration of the term for which they are elected, or until their successors have been duly elected and qualified; except that if any such election shall not be so held, such election shall take place at a stockholders’ meeting called and held in accordance with the DGCL.

 

(e)     The directors of the Corporation shall be divided into three classes as nearly equal in size as is practicable, hereby designated Class I, Class II and Class III. For the purposes hereof, the initial Class I, Class II and Class III directors shall be those directors so designated by a resolution of the Board of Directors.  The term of office of the initial Class I directors shall expire at the annual meeting of stockholders in 2014; the term of office of the initial Class II directors shall expire at the annual meeting of stockholders in 2015; and the term of office of the initial Class III directors shall expire at the annual meeting of stockholders in 2016. At each succeeding annual meeting of stockholders beginning in 2014, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term.  If the number of directors is hereafter changed, each director then serving as such shall nevertheless continue as a director of the class of which he or she is a member until the

 

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expiration of his current term and any newly created directorships or decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as is practicable.

 

(f)      Vacancies occurring of the Board of Directors for any reason may be filled by vote of a majority of the remaining members of the Board of Directors, even if less than a quorum, at any meeting of the Board of Directors. A person so elected by the Board of Directors to fill a vacancy shall hold office for the remainder of the full term of the class of directors in which the vacancy was created or occurred and until such director’s successor shall have been duly elected and qualified.

 

(g)     No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this Article V by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

 

(h)     In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, the certificate of incorporation of the Corporation (as amended from time to time, the “Certificate of Incorporation”), and any Bylaws adopted by the stockholders of the Corporation; provided that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such Bylaws had not been adopted.

 

(i)      Any director or the entire Board of Directors may be removed by the affirmative vote of the holders of sixty-six and two-thirds percent of the outstanding shares of voting stock of the Corporation entitled to vote on the election of directors; provided that such removal may be made only for cause. Unless the Board of Directors has made a determination that removal is in the best interests of the Corporation (in which case the following definition shall not apply), “cause” for removal of a director shall be deemed to exist only if (i) the director whose removal is proposed (x) has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal, or (y) has been granted immunity to testify against another person who has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (ii) such director has been found by the affirmative vote of a majority of the directors then in office at any regular or special, meeting of the Board of Directors called for that purpose, or by a court of competent jurisdiction to have been guilty of willful misconduct in the performance of his or her duties to the Corporation in a matter of substantial importance to the Corporation; or (iii) such director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his or her ability as a director of the Corporation.

 

ARTICLE VI

 

MEETINGS OF STOCKHOLDERS

 

Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. Special meetings of stockholders, for any purpose or purposes may only be called by the Chairman of the Board of Directors or by a majority of the members of the Board of Directors. Only the business stated in the notice of a special meeting of stockholders of the Corporation may be transacted at

 

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any special meeting of stockholders of the Corporation. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws. Any action required or permitted to be taken by the stockholders of the Corporation may only be effected at a duly called annual or special meeting of the stockholders of the Corporation (and not by consent in lieu thereof).

 

ARTICLE VII

 

AMENDMENTS

 

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever herein are granted subject to this reservation. No amendment, alteration, change or repeal of Articles IV, V, VI or VIII of the Certificate of Incorporation shall be effective unless approved by sixty-six and two-thirds percent of the outstanding shares of voting stock of the Corporation then entitled to vote on the election of directors.

 

ARTICLE VIII

 

INDEMNIFICATION

 

The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal or legal representatives; provided that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article VIII shall include the right to have paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.

 

The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

 

The rights to indemnification and to the advance of expenses conferred in this Article VIII shall not be exclusive of any other right which any person may have or hereafter acquire under the Certificate of Incorporation, the Bylaws, any statute, agreement, vote of stockholders or disinterested directors or otherwise.

 

Any repeal or modification of this Article VIII by the stockholders of the Corporation shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

 

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ARTICLE IX

 

COMPROMISES AND ARRANGEMENTS

 

Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under Section 291 of the DGCL or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under Section 279 of the DGCL order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

 

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Exhibit 3.2

 

[FORM OF]

SECOND AMENDED AND RESTATED BYLAWS

 

OF

 

FTD COMPANIES, INC.

 

 

ARTICLE I

 

OFFICES

 

FTD Companies, Inc., a Delaware corporation (the “Corporation”), may have offices at such places both within and without the State of Delaware as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.

 

ARTICLE II

 

MEETINGS OF STOCKHOLDERS

 

Section 2.1       Place of Meetings.  Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors.

 

Section 2.2       Annual Meetings.  The annual meetings of stockholders for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the annual meeting of stockholders.

 

Section 2.3       Special Meetings.  Unless otherwise required by law or by the certificate of incorporation of the Corporation (as amended from time to time and including any certificates of designation with respect to any preferred stock of the Corporation, the “Certificate of Incorporation”), special meetings of stockholders, for any purpose or purposes, may be called by the Board of Directors pursuant to a resolution stating the purpose or purposes thereof or by the Chairman of the Board of Directors, if there be one. Any power of stockholders of the Corporation to call a special meeting is specifically denied. Notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than 10 days or more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. Only such business shall be conducted at a special meeting as shall be specified in the notice of meeting (or any supplement thereto).

 

Section 2.4       Adjournments.  Any meeting of the stockholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 



 

Section 2.5       Quorum.  Unless otherwise required by law or the Certificate of Incorporation, the presence in person or by proxy of the holders of shares of capital stock entitled to cast a majority of all the votes which could be cast at such meeting by the holders of all of the outstanding shares of capital stock entitled to vote at such meeting shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman presiding at the meeting or the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 2.4, until a quorum shall be present or represented.

 

Section 2.6       Voting.  When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable statute or of the Certificate of Incorporation or the Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. Votes of stockholders entitled to vote at a meeting of stockholders may be cast in person or by proxy. The Board of Directors, in its discretion, or the chairman presiding at a meeting of stockholders, in such person’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.

 

Section 2.7       No Consent of Stockholders in Lieu of Meeting.  Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of such holders and may not be effected by consent by such holders in lieu of such a meeting.

 

Section 2.8       Voting List.  The officer who has charge of the stock ledger of the Corporation shall prepare and make, or cause a third party to prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network; provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

 

Section 2.9       Stock Ledger.  The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 2.8 or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders of the Corporation.

 

Section 2.10     Nomination of Directors.  Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation with respect to the right of holders of preferred stock of the Corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders (a) by or at the direction of the Board of Directors (or any duly authorized

 

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committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.10 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 2.10.

 

In addition to any other applicable requirements, for a nomination to be made by a stockholder of the Corporation, such stockholder must have given timely notice thereof in proper written form to the secretary of the Corporation.

 

To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of the corporation not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided that if the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs.

 

To be in proper written form, a stockholder’s notice to the secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (including the rules and regulations thereunder, the “Exchange Act”); and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to nominate the persons named in such notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

 

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.10. If the chairman of the annual meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

 

Section 2.11     Business at Annual Meetings.  No business may be transacted at an annual meeting of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the annual meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.11 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 2.11.

 

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In addition to any other applicable requirements for business to be properly brought before an annual meeting by a stockholder of the Corporation, such stockholder must have given timely notice thereof in proper written form to the secretary.

 

To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, which ever first occurs.

 

To be in proper written form, a stockholder’s notice to the secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

 

No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.11; provided that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 2.11 shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an annual meeting determines that business was not properly brought before the annual meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

 

Section 2.12     Conduct of Meetings.  The Board of Directors may adopt by resolution such rules and regulations for the conduct of meetings of the stockholders of the Corporation as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.

 

Section 2.13     Inspectors of Election.  Before any meeting of stockholders of the Corporation, the Board of Directors shall appoint an inspector or inspectors of election to act at the meeting or its adjournment. The number of inspectors shall be either one or three. If any person appointed

 

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as inspector fails to appear or fails or refuses to act, then the chairman of the meeting may, and upon the request of any stockholder or a stockholder’s proxy shall, appoint a person to fill that vacancy.

 

Such inspectors shall: (a) determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies; (b) receive votes, ballots or consents; (c) hear and determine all challenges and questions in any way arising in connection with the right to vote; (d) count and tabulate all votes or consents; (e) determine the result; and (f) do any other acts that may be proper to conduct the election or vote with fairness to all stockholders. The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts started therein.

 

ARTICLE III

 

DIRECTORS

 

Section 3.1       Number.  The authorized number of directors shall be fixed and may be changed from time to time by resolution of the Board of Directors.

 

No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires. If, for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient at a special meeting of the stockholders of the Corporation called for that purpose in the manner provided in the Bylaws. The number of directors may not be increased by more than one unless approved by (a) two-thirds of each class of directors or (b) two-thirds of each outstanding class or series of such class of stock of the Corporation.

 

Section 3.2       Election and Term of Office of Directors.  Except as provided in the Certificate of Incorporation or the Bylaws, directors shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class to be originally elected for a term expiring at the next following annual meeting of stockholders, another class to be originally elected for a term expiring at the second following annual meeting of stockholders, and another class to be originally elected for a term expiring at the third following annual meeting of stockholders, with each class to hold office until its successor is duly elected and qualified. At each succeeding annual meeting of stockholders, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until such person’s successor shall have been elected and qualified or until such person’s earlier resignation or removal. Each director, including a director elected or appointed to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his earlier resignation or removal. Directors need not be stockholders unless so required by the Certificate of Incorporation or by the Bylaws, wherein other qualifications for directors may be prescribed. Election of directors need not be by written ballot unless so required by the Certificate of Incorporation or by the Bylaws.

 

Section 3.3       Duties and Powers.  The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by the Bylaws required to be exercised or done by the stockholders of the Corporation.

 

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Section 3.4       Meetings.  The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or the chief executive officer on two hours’ notice to each director by phone, fax or electronic mail; special meetings shall be called by the Chairman of the Board of Directors, the chief executive officer or secretary in like manner and on like notice on the written request of a majority of the Board of Directors unless the Board of Directors consists of only one director, in which case special meetings shall be called by the Chairman of the Board of Directors, the chief executive officer or secretary in like manner and on like notice on the written request of the sole director.

 

Section 3.5       Quorum.  Except as otherwise required by law, the Certificate of Incorporation or the Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.

 

Section 3.6       Actions by Written Consent of the Board of Directors.  Unless otherwise provided in the Certificate of Incorporation or the Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing or electronic communication, and the writing, writings or paper copies of the electronic communications are filed with the minutes of proceedings of the Board of Directors or committee.

 

Section 3.7       Resignation and Vacancies.  Any director may resign effective on giving written notice or notice by electronic transmission to the Chairman of the Board of Directors, the president, the secretary or the Board of Directors, unless the notice specifies a later time for that resignation to become effective. If the resignation of a director is effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective.

 

Unless otherwise provided in the Certificate of Incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. Each director so elected shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until a successor has been elected and qualified.

 

Unless otherwise provided in the Certificate of Incorporation, whenever the holders of any class or classes of stock or series of stock of the Corporation are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series of stock of the Corporation then in office, or by a sole remaining director so elected.

 

Section 3.8       Standing Committees of Directors.  The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, shall appoint from among its members (i) an Audit Committee, (ii) a Compensation Committee, and (iii) a Nominating and Corporate Governance Committee to perform the functions traditionally performed by such committees.

 

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Section 3.9       Committees.  The Board of Directors may designate one or more other committees (in addition to the mandatory standing committees described in Section 3.8), each such other committee to consist of one or more of the directors of the Corporation. With respect to all committees of the Board of Directors (including, but not limited to, the standing committees described in Section 3.8), in the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members of any committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee (including, but not limited to, any standing committee described in Section 3.8), to the extent permitted by law and subject to the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee (including, but not limited to, each standing committee described in Section 3.8) shall keep regular minutes and report to the Board of Directors when required.

 

Meetings and actions of committees (including the mandatory standing committees described in Section 3.8) shall be governed by, and held and taken in accordance with, the provisions of Article III, Section 3.4 (Meetings), Section 3.5 (Quorum), and Section 3.6 (Actions by Written Consent of the Board of Directors), and Article IV, Section 4.1 (Notice to Directors and Stockholders) and Section 4.2 (Waiver), with such changes in the context of those Bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members; provided that the time of regular meetings of committees (including the mandatory standing committees described in Section 3.8) may be determined either by resolution of the Board of Directors or by resolution of the committee, that special meetings of committees (including the mandatory standing committees described in Section 3.8) may also be called by resolution of the Board of Directors, and that notice of special meetings of committees (including the mandatory standing committees described in Section 3.8) shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee (including the mandatory standing committees described in Section 3.8) not inconsistent with the provisions of these Bylaws.

 

Section 3.10     Compensation.  The directors may be paid their expenses, if any, of the attendance at each meeting of the Board of Directors and shall receive such compensation for their services as directors as shall be determined by the Board of Directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

 

ARTICLE IV

 

NOTICES

 

Section 4.1       Notice to Directors and Stockholders.  Whenever, under the provisions of applicable law, the Certificate of Incorporation or the Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his, her or its address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail or, by a form of electronic transmission consented to by the stockholder or director to whom notice is given. An affidavit of the secretary or an assistant secretary of the Corporation or of the transfer agent or other agent of the Corporation that the notice has been given shall in the absence of fraud, be prima facie evidence of the

 

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facts stated therein. Notice to directors may also be given by telephone, facsimile, telegram or electronic transmission.

 

Section 4.2       Waiver.  Whenever notice is required to be given under applicable law, the Certificate of Incorporation or the Bylaws, a written waiver, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. The written waiver or any waiver by electronic transmission need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Attendance at the meeting is not a waiver of any right to object to the consideration of matters required by the Delaware General Corporate Law (“DGCL”) to be included in the notice of the meeting but not so included, if such objection is expressly made at the meeting.

 

ARTICLE V

 

OFFICERS

 

Section 5.1       Enumeration.  The officers of the Corporation shall be elected by the Board of Directors and shall, at a minimum, include a chief executive officer, a president, a chief financial officer and a secretary. The Board of Directors may elect from among its members a Chairman of the Board of Directors. The Board of Directors may also elect one or more vice presidents, senior vice presidents or executive vice presidents, and assistant secretaries and assistant treasurers. In addition, the chief executive officer may designate one or more vice presidents or senior vice presidents of the Corporation, although such individuals shall not be officers of the Corporation unless so designated by the Board of Directors. Any number of offices may be held by the same person, unless the Certificate of Incorporation or these Bylaws otherwise provide.

 

Section 5.2       Election.  The Board of Directors at its first meeting after each annual meeting of stockholders shall elect a chief executive officer, a president, a chief financial officer, and a secretary and may elect vice presidents.

 

Section 5.3       Appointment of Other Agents.  The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

 

Section 5.4       Compensation.  The salaries of all officers of the Corporation shall be fixed by the Board of Directors or any committee established by the Board of Directors for such purpose. The salaries of agents of the Corporation shall, unless fixed by the Board of Directors, be fixed by the chief executive officer or the president of the Corporation.

 

Section 5.5       Tenure.  The officers of the Corporation shall hold office until their successors are elected and qualified or until such officer’s earlier resignation or removal. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors.

 

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Section 5.6       Chairman of the Board of Directors.  The Chairman of the Board of Directors, if any, shall preside at all meetings of the Board of Directors of the Corporation and of the stockholders at which he/she shall be present. He/she shall have any may exercise such powers as are, from time to time, assigned to him/her by the Board of Directors and as maybe provided by law. In the absence of the Chairman of the Board of Directors, the chief executive officer shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board of Directors as may be provided by law.

 

Section 5.7       Chief Executive Officer, President and Executive Vice Presidents.  The chief executive officer of the Corporation shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. In the absence of the Chairman of the Board of Directors, the chief executive officer shall preside at all meetings of the stockholders and the Board of Directors. The chief executive officer, president or any executive vice president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.

 

In the absence of the chief executive officer or in the event of his inability or refusal to act, the president, if any, shall perform the duties of the chief executive officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the chief executive officer. The president shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. In the absence of the chief executive officer and president or in the event of their inability or refusal to act, an executive vice president, if any, (in the event there be more than one executive vice president, an executive vice president in the order designated by the directors) shall perform the duties of the chief executive officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the chief executive officer. The vice presidents shall perform such other duties and have such other powers as the Board of Directors or chief executive officer may from time to time prescribe.

 

Section 5.8       Secretary and Assistant Secretary.  The secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He/she shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or chief executive officer, under whose supervision he/she shall be. He/she shall have custody of the corporate seal of the Corporation and he/she, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.

 

The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

 

Section 5.9       Chief Financial Officer.  The chief financial officer shall be the chief financial officer of the Corporation, shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and

 

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shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He/she shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the chief executive officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his/her transactions as chief financial officer and of the financial condition of the Corporation. If required by the Board of Directors, he/she shall give the Corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his/her office and for the restoration to the Corporation, in case of his/her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his/her possession or under his/her control belonging to the Corporation.

 

The treasurer or an assistant treasurer, in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the chief financial officer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the chief financial officer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

 

ARTICLE VI

 

CAPITAL STOCK

 

Section 6.1       Certificates.  The shares of capital stock of the Corporation shall be represented by a certificate, unless and until the Board of Directors adopts a resolution permitting shares to be uncertificated. Certificates for shares of capital stock of the Corporation shall be signed by, or in the name of the Corporation by, (a) the Chairman of the Board of Directors, the chief executive officer, the president or any executive vice president, and (b) the chief financial officer, the secretary or an assistant secretary, certifying the number of shares owned by such stockholder in the Corporation.

 

Section 6.2       Signature.  Any of or all of the signatures on a certificate may be facsimile or conformed. In case any officer, transfer agent or registrar who has signed or whose facsimile or conformed signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

 

Section 6.3       Lost Certificates.  The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner’s legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

 

Section 6.4       Transfer of Stock.  Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly indorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be canceled and issuance of new equivalent uncertificated shares or certificated

 

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shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the Corporation.

 

Section 6.5       Record Date.  In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided that the Board of Directors may fix a new record date for any adjourned meeting.

 

Section 6.6       Registered Stockholders.  The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

 

ARTICLE VII

 

GENERAL PROVISIONS

 

Section 7.1       Dividends.  The Board of Directors, subject to the applicable provisions, if any, of the Certificate of Incorporation and applicable law, may declare and pay dividends upon the capital stock of the Corporation. Dividends may be paid in cash, in property or in shares of capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the Board of Directors shall deem conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

 

Section 7.2       Checks.  All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

 

Section 7.3       Fiscal Year.  The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

 

Section 7.4       Seal.  The Board of Directors may adopt a corporate seal having inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

 

Section 7.5       Loans.  The Board of Directors of this Corporation may, without stockholder approval, authorize loans to, or guarantee obligations of, or otherwise assist, including, without limitation, the adoption of employee benefit plans under which loans and guarantees may be

 

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made, any officer or other employee of the Corporation or of any of its subsidiaries, including any officer or employee who is a director of the Corporation or any of its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation.

 

Section 7.6       Representation of Shares of Other Corporations.  Any officer of the Corporation is authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The authority herein granted may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

 

Section 7.7       Construction; Definitions.  Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of the Bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

 

Section 7.8       Provisions Additional to Provisions of Law.  All restrictions, limitations, requirements and other provisions of the Bylaws shall be construed, insofar as possible, as supplemental and additional to all provisions of law applicable to the subject matter thereof and shall be fully complied with in addition to the said provisions of law unless such compliance shall be illegal.

 

Section 7.9       Provisions Contrary to Provisions of Law.  Any article, section, subsection, subdivision, sentence, clause or phrase of these Bylaws which upon being construed in the manner provided in Section 7.7, shall be contrary to or inconsistent with any applicable provisions of law, shall not apply so long as said provisions of law shall remain in effect, but such result shall not affect the validity or applicability of any other portions of these Bylaws, it being hereby declared that these Bylaws would have been adopted and each article, section, subsection, subdivision, sentence, clause or phrase thereof, irrespective of the fact that any one or more articles, sections, subsections, subdivisions, sentences, clauses or phrases is or are illegal.

 

ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.1       Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation.  Subject to Section 8.3, the Corporation shall, to the fullest extent permitted by Section 145 of the DGCL, as that Section may be amended and supplemented from time to time, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director or officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement,

 

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conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

 

Section 8.2       Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation.   Subject to Section 8.3, the Corporation shall, to the fullest extent permitted by Section 145 of the DGCL, as that Section may be amended and supplemented from time to time, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

 

Section 8.3       Authorization of Indemnification.  Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 8.1 or Section 8.2, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.

 

Section 8.4       Good Faith Defined.  For purposes of any determination under Section 8.3, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 8.4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of

 

13



 

which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 8.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 8.1 or Section 8.2, as the case may be.

 

Section 8.5       Indemnification by a Court.  Notwithstanding any contrary determination in the specific case under Section 8.3, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery in the State of Delaware for indemnification to the extent otherwise permissible under Section 8.1 and Section 8.2. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standards of conduct set forth in Section 8.1 or Section 8.2, as the case may be. Neither a contrary determination in the specific case under Section 8.3 nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 8.5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.

 

Section 8.6       Expenses Payable in Advance.  Expenses incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII.

 

Section 8.7       Nonexclusivity of Indemnification and Advancement of Expenses.  The indemnification and advancement of expenses provided by or granted pursuant to this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, the Bylaws, agreement, vote of stockholders or disinterested directors, applicable law or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 8.1 and Section 8.2 shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 8.1 or Section 8.2 but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL or otherwise.

 

Section 8.8       Insurance.  The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.

 

Section 8.9       Certain Definitions.  For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and

 

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beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.

 

Section 8.10     Survival of Indemnification and Advancement of Expenses.  The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

Section 8.11     Limitation on Indemnification.  Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 8.5), the Corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors.

 

Section 8.12     Indemnification of Employees and Agents.  The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

 

ARTICLE IX

 

AMENDMENTS

 

Section 9.1       Amendments.  Except as otherwise provided in the Certificate of Incorporation, the Bylaws may be altered, amended or repealed, or new Bylaws may be adopted, by (a) the holders of a majority of the outstanding shares of voting stock of the Corporation or (b) by the Board of Directors.

 

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Exhibit 10.1

[FORM OF]

TRANSITION SERVICES AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

                        , 2013



TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.1

 

Certain Definitions

 
1

Section 1.2

 

Interpretation

  2


ARTICLE II


SERVICES

Section 2.1

 

Services

 
3

Section 2.2

 

Additional Services

  4

Section 2.3

 

No Violations

  4

Section 2.4

 

Third-Party Providers

  4

Section 2.5

 

Independent Contractor

  5

Section 2.6

 

Employees and Representatives

  5

Section 2.7

 

Access

  5

Section 2.8

 

Service Coordinators; Disputes

  5


ARTICLE III


PAYMENT

Section 3.1

 

Pricing

 
6

Section 3.2

 

Taxes

  6

Section 3.3

 

Billing and Payment

  6

Section 3.4

 

Budgeting and Accounting

  6


ARTICLE IV


DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

Section 4.1

 

Disclaimer

 
7

Section 4.2

 

As Is; Where Is

  7


ARTICLE V


INDEMNIFICATION; LIMITATION OF LIABILITY

Section 5.1

 

Indemnification by FTD

 
7

Section 5.2

 

Indemnification by United Online

  7

Section 5.3

 

Limitation of Liability

  7

Section 5.4

 

Indemnification Procedure; Other Rights

  7


ARTICLE VI


FORCE MAJEURE

Section 6.1

 

General

 
8

Section 6.2

 

Notice

  8

Section 6.3

 

Subcontractors; Fees

  8

Section 6.4

 

Limitations

  8


ARTICLE VII

TERM AND TERMINATION

Section 7.1

 

Term of Services

  8

Section 7.2

 

Term and Termination of Agreement

  9


ARTICLE VIII

CONFIDENTIALITY

Section 8.1

 

Confidentiality

  9

Section 8.2

 

System Security

  9


ARTICLE IX


MISCELLANEOUS

Section 9.1

 

Further Assurances

 
9

Section 9.2

 

Amendments and Waivers

  10

Section 9.3

 

Entire Agreement

  10

Section 9.4

 

Third-Party Beneficiaries

  10

Section 9.5

 

Notices

  10

Section 9.6

 

Counterparts; Electronic Delivery

  10

Section 9.7

 

Titles and Headings

  10

Section 9.8

 

Severability

  10

Section 9.9

 

Assignability; Binding Effect

  11

Section 9.10

 

Governing Law

  11

Section 9.11

 

Construction

  11

Section 9.12

 

Performance

  11

Section 9.13

 

Title and Headings

  11

Section 9.14

 

Exhibits

  11


Exhibit A—Services


 

 


TRANSITION SERVICES AGREEMENT

        THIS TRANSITION SERVICES AGREEMENT (as the same may be amended or supplemented from time to time, this "Agreement") is entered into as of                  , 2013, by and between United Online, Inc., a Delaware corporation ("United Online"), and FTD Companies, Inc., a Delaware corporation ("FTD"). United Online and FTD are sometimes referred to herein individually as a "Party," and collectively as the "Parties."


RECITALS

        WHEREAS, United Online, acting through its direct and indirect Subsidiaries, owns and conducts the UOL Businesses and the FTD Business;

        WHEREAS, United Online and FTD have entered into a Separation and Distribution Agreement, dated as of the date hereof (the "Separation Agreement"), pursuant to which United Online will be separated into two independent publicly-traded companies: (a) FTD, which, following consummation of the transactions contemplated by the Separation Agreement, will own and conduct the FTD Business, and (b) United Online, which, following the consummation of the transactions contemplated by the Separation Agreement, will own and conduct the UOL Businesses;

        WHEREAS, in connection with the Separation, FTD desires to procure certain services from United Online, and United Online is willing to provide such services to FTD, during a transition period commencing on the Distribution Date, on the terms and subject to the conditions set forth in this Agreement;

        WHEREAS, each Party desires to set forth in this Agreement the principal terms and conditions pursuant to which it will provide or receive such services; and

        WHEREAS, the execution of this Agreement by the Parties is a condition precedent to the consummation of the transactions contemplated by the Separation Agreement.

        NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:


ARTICLE I

DEFINITIONS

        Section 1.1    Certain Definitions.    Capitalized terms used but not defined in this Agreement shall have the respective meanings ascribed to such terms in the Separation Agreement. As used in this Agreement (including in Exhibit A), the following capitalized terms shall have the following meanings, applicable both to the singular and the plural forms of the terms described:

        "Additional Interest" has the meaning set forth in Section 3.3(b).

        "Additional Services" has the meaning set forth in Section 2.2.

        "Additional Third-Party Providers" has the meaning set forth in Section 2.4(b).

        "Affiliate" has the meaning set forth in the Separation Agreement.

        "Agreement" has the meaning set forth in the preamble to this Agreement.

        "Agreement Dispute" has the meaning set forth in the Separation Agreement.

        "Ancillary Agreements" has the meaning set forth in the Separation Agreement.

        "Bankruptcy Code" means 11 U.S.C. §§ 101 et seq., as amended.

        "Business Days" has the meaning set forth in the Separation Agreement.

        "Contract" has the meaning set forth in the Separate Agreement.


        "Distribution" has the meaning set forth in the Separation Agreement.

        "Distribution Date" has the meaning set forth in the Separation Agreement.

        "FTD" has the meaning set forth in the preamble to this Agreement.

        "FTD Business" has the meaning set forth in the Separation Agreement.

        "FTD Entities" has the meaning set forth in the Separation Agreement.

        "FTD Indemnitees" has the meaning set forth in the Separation Agreement.

        "Governmental Authority" has the meaning set forth in the Separation Agreement.

        "Group" has the meaning set forth in the Separation Agreement.

        "Known Third-Party Providers" has the meaning set forth in Section 2.4(b).

        "Law" has the meaning set forth in the Separation Agreement.

        "Losses" has the meaning set forth in the Separation Agreement.

        "Party" or "Parties" has the meaning set forth in the preamble to this Agreement.

        "Payment Date" has the meaning set forth in Section 3.3(b).

        "Person" has the meaning set forth in the Separation Agreement.

        "Sales Taxes" has the meaning set forth in Section 3.2.

        "Security Regulations" has the meaning set forth in Section 8.2(a).

        "Separation" has the meaning set forth in the Separation Agreement.

        "Separation Agreement" has the meaning set forth in the Recitals to this Agreement.

        "Service Coordinator" has the meaning set forth in Section 2.8.

        "Service Costs" means the amounts to be paid by FTD to United Online for Services provided pursuant to this Agreement.

        "Services" means the services identified in Exhibit A.

        "Subsidiaries" has the meaning set forth in the Separation Agreement.

        "Systems" has the meaning set forth in Section 8.2(a).

        "Term" has the meaning set forth in Section 7.2.

        "Third-Party Products and Services" has the meaning set forth in Section 2.4(a).

        "Third-Party Providers" has the meaning set forth in Section 2.4(a).

        "United Online" has the meaning set forth in the preamble to this Agreement.

        "UOL Businesses" has the meaning set forth in the Separation Agreement.

        "UOL Entities" has the meaning set forth in the Separation Agreement.

        "UOL Indemnitees" has the meaning set forth in the Separation Agreement.

        Section 1.2    Interpretation.    In this Agreement, unless the context clearly indicates otherwise:

2



ARTICLE II

SERVICES

        Section 2.1    Services.    

3


        Section 2.2    Additional Services.    If FTD reasonably determines that additional transition services not listed in Exhibit A are necessary to conduct the FTD Business after the Distribution Date, FTD shall provide written notice to United Online requesting United Online (i) to provide additional (including as to volume, amount, level or frequency, as applicable) or different services which United Online is not expressly obligated to provide under this Agreement if such services are of the type and scope provided by any member of the UOL Entities (including any employee of any member of the UOL Entities) for FTD prior to the Distribution Date, or (ii) expand the scope of any Service (such additional or expanded services, the "Additional Services"). United Online shall consider such request in good faith and shall use commercially reasonable efforts to provide any such Additional Service; provided that no member of the UOL Entities shall be obligated to perform any Additional Services if such member, in its reasonable judgment, does not have adequate resources to perform such Additional Services or if the provision of such Additional Services would interfere with the operation of the UOL Businesses. United Online shall notify FTD within ten (10) calendar days of receipt of such request as to whether it will or will not provide the Additional Services. If United Online agrees to provide Additional Services pursuant to this Section 2.3, then the Parties shall in good faith negotiate the terms of a supplement to Exhibit A which will describe in reasonable detail the service, project scope, term, price and payment terms to be charged for each Additional Service. Once agreed to in writing, the supplement to Exhibit A shall be deemed part of this Agreement as of such date, and the Additional Services shall be deemed "Services" provided hereunder, in each case subject to the terms and conditions of this Agreement.

        Section 2.3    No Violations.    Notwithstanding anything to the contrary in this Agreement, neither Party (nor any member of its respective Group) shall be required to perform Services hereunder or to take any actions relating thereto that conflict with or violate any applicable Law or any material Contract, sublicense, authorization, certification or permit.

        Section 2.4    Third-Party Providers.    

4


        Section 2.5    Independent Contractor.    United Online (and each applicable member of the UOL Entities) shall act under this Agreement solely as an independent contractor, and not as an agent, of FTD (and each applicable member of the FTD Entities).

        Section 2.6    Employees and Representatives.    Unless otherwise agreed in writing, each employee and representative of United Online (or a member of the UOL Entities) that provides Services to FTD (or a member of the FTD Entities) pursuant to this Agreement shall (a) be deemed for all purposes to be an employee or representative of United Online (or such member of the UOL Entities) and not an employee or representative of FTD (or such member of the FTD Entities) and (b) be under the direction, control and supervision of United Online (or such member of the UOL Entities), and United Online (or such member of the UOL Entities) shall have the sole right to exercise all authority with respect to the employment (including termination of employment) and assignment of such employee or representative and shall have the sole responsibility to pay for all personnel and other related expenses, including salary or wages, of such employee or representative.

        Section 2.7    Access.    FTD shall provide (or cause any applicable member of the FTD Entities to provide) United Online (or any applicable member of the UOL Entities) such reasonable access to the employees, representatives, facilities and books and records of FTD (or such member of the FTD Entities) as United Online (or such member of the UOL Entities) shall reasonably request in order to enable United Online (or such member of the UOL Entities) to provide any Service required under this Agreement. United Online receiving access pursuant to this Section 2.7 must conform with the confidentiality and security provisions in Article VIII, as applicable.

        Section 2.8    Service Coordinators; Disputes.    Each Party shall appoint a representative to act as the primary contact with respect to the provision of the Services (each such person, a "Service Coordinator"). The initial Service Coordinator for FTD shall be                  , and the initial Service Coordinator for United Online shall be                  . The Service Coordinators shall meet as expeditiously as possible to resolve any dispute under this Agreement (including, but not limited to, any disputes relating to payments under Article III), and any dispute that is not resolved by the Service Coordinators within thirty (30) calendar days shall be deemed an Agreement Dispute under the Separation Agreement and shall be resolved in accordance with the dispute resolution procedures set forth in Article                   of the Separation Agreement. Each Party may treat an act of the other Party's Service Coordinator as being authorized by such other Party without inquiring whether such Service Coordinator had authority to so act; provided that no Service Coordinator shall have authority to amend this Agreement. Each Party shall advise the other Party promptly in writing of any change in its respective Service Coordinator, setting forth the name of the replacement Service Coordinator, and stating that the replacement Service Coordinator is authorized to act for such Party in accordance with this Section 2.8.

5



ARTICLE III

PAYMENT

        Section 3.1    Pricing.    Each Service provided by United Online (or another applicable member of the UOL Entities) shall be charged to FTD at the fees for such Service determined in accordance with Exhibit A, and the Service Costs shall be payable by FTD in the manner set forth in Section 3.3.

        Section 3.2    Taxes.    The Parties acknowledge that fees charged for Services may be subject to goods and service taxes, value added taxes, sales taxes or similar taxes (collectively, "Sales Taxes"). With respect to each Service provided under this Agreement, (a) United Online shall be liable for reporting and paying the Sales Taxes or any other applicable taxes imposed on fees received for providing such Service and (b) FTD shall reimburse United Online for the amount of such taxes paid on fees received for providing such Service. FTD shall be liable for any applicable use taxes imposed on Services received.

        Section 3.3    Billing and Payment.    

        Section 3.4    Budgeting and Accounting.    Upon reasonable request, each Party will cooperate with the other Party with respect to budgeting and accounting matters relating to the Services.

6



ARTICLE IV

DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

        Section 4.1    Disclaimer.    EXCEPT AS EXPRESSLY PROVIDED IN SECTION 2.1, FTD ACKNOWLEDGES AND AGREES THAT UNITED ONLINE (AND EACH MEMBER OF THE UOL ENTITIES) MAKES NO REPRESENTATIONS OR WARRANTIES (INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) OR GUARANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY SERVICES PROVIDED HEREUNDER.

        Section 4.2    As Is; Where Is.    EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES (AND ANY RELATED PRODUCTS) TO BE PROVIDED UNDER THIS AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS.


ARTICLE V

INDEMNIFICATION; LIMITATION OF LIABILITY

        Section 5.1    Indemnification by FTD.    FTD, and on behalf of each member of the FTD Entities, hereby agrees to indemnify, defend and hold harmless the UOL Indemnitees from and against any and all Losses relating to, arising out of or resulting from FTD's gross negligence or willful misconduct in the performance of its obligations hereunder, or material breach of this Agreement, other than to the extent such Losses are attributable to the gross negligence, willful misconduct or material breach of this Agreement by any member of the UOL Entities.

        Section 5.2    Indemnification by United Online.    United Online, and on behalf of each member of the UOL Entities, hereby agrees to indemnify, defend and hold harmless the FTD Indemnitees from and against any and all Losses relating to, arising out of or resulting from United Online's gross negligence or willful misconduct in the performance of its obligations hereunder, or material breach of this Agreement, other than to the extent such Losses are attributable to the gross negligence, willful misconduct or material breach of this Agreement by any member of the FTD Entities.

        Section 5.3    Limitation of Liability.    

        Section 5.4    Indemnification Procedure; Other Rights.    All claims for indemnification pursuant to Section 5.1 or Section 5.2 shall be made in accordance with the procedures set forth in Section                  of the Separation Agreement and shall be subject to Sections                   of the Separation Agreement.

7



ARTICLE VI

FORCE MAJEURE

        Section 6.1    General.    If United Online (or any member of the UOL Entities) is prevented from or delayed in complying, in whole or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, earthquake, strike, walkout, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or components, equipment failure, any law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any Governmental Authority, riot, civil commotion, war, rebellion, act of terrorism, nuclear or other accident, explosion, casualty, pandemic, act of God, or act, omission or delay in acting by any Governmental Authority or by FTD (or any member of the FTD Entities) or any other cause, whether or not of a class or kind listed in this sentence, which is beyond the reasonable control of United Online (or any other applicable member of the UOL Entities), then upon notice to FTD pursuant to Section 6.2, the affected provisions and/or other requirements of this Agreement shall be suspended during the period of such disability and, unless otherwise set forth herein to the contrary, United Online (and any applicable member of the UOL Entities) shall have no liability to FTD (or any member of the FTD Entities) in connection therewith.

        Section 6.2    Notice.    Upon becoming aware of a disability causing a delay in the performance or preventing performance of any Services to be provided by United Online (or another member of the UOL Entities) under this Agreement, United Online shall promptly notify FTD in writing of the existence of such disability and the anticipated duration of the disability.

        Section 6.3    Subcontractors; Fees.    FTD shall have the right, but not the obligation, to hire or engage one or more subcontractors to perform the Services affected by the disability for the duration of the period during which such disability delays or prevents the performance of such Services by United Online, it being agreed that the fees paid or payable under this Agreement with respect to the Services affected by the disability shall be reduced (or refunded, if applicable) on a dollar-for-dollar basis for all amounts paid by FTD to such subcontractors; provided that United Online shall not be responsible for the amount of fees charged by any such subcontractors to perform such Services to the extent they exceed the fees payable under this Agreement for such Services.

        Section 6.4    Limitations.    Each Party shall use its commercially reasonable efforts to promptly remove any disability under Section 6.1 as soon as possible; provided that nothing in this Article VI will be construed to require the settlement of any lawsuit or other legal proceeding, strike, walkout, lockout or other labor dispute on terms which, in the reasonable judgment of the affected Party, are contrary to its interest. It is understood that the settlement of a lawsuit or other legal proceeding, strike, walkout, lockout or other labor dispute will be entirely within the discretion of the affected Party.


ARTICLE VII

TERM AND TERMINATION

        Section 7.1    Term of Services.    Subject to the penultimate sentence of Section 7.2 and except as otherwise set forth in Exhibit A, each of the Services shall be provided for the term specified in Section 7.2; provided that FTD shall have the right to terminate one or more of the Services that it receives under this Agreement at the end of a designated month by giving United Online at least thirty (30) days' prior written notice of such termination. Except as otherwise agreed, each Service may only be terminated in whole, and partial termination of a Service shall not be permitted without the prior approval of United Online, such approval not to be unreasonably withheld or delayed. The Parties shall cooperate with each other in good faith in their efforts to reasonably effect early termination of Services, including, where applicable, partial termination, and to agree in good faith upon appropriate reduction of the charges hereunder in connection with such early termination.

8


        Section 7.2    Term and Termination of Agreement.    This Agreement shall terminate upon the earlier of (a) the cessation of all Services pursuant to Section 7.1 or (b) the one year anniversary of the Distribution Date; provided that FTD shall have the one-time right to extend the term of this Agreement until the two year anniversary of the Distribution Date by providing United Online with written notice thereof at least sixty (60) calendar days prior to the one year anniversary of the Distribution Date; provided further that Articles III, IV, V and VIII shall survive the termination of this Agreement, and any such termination shall not affect any payment obligation for Services rendered prior to termination. Notwithstanding the foregoing: (i) the Parties may terminate this Agreement by mutual written consent and (ii) the Parties each reserve the right to immediately terminate this Agreement by written notice to the other Party in the event that such other Party shall have (A) applied for or consented to the appointment of a receiver, trustee or liquidator; (B) admitted in writing an inability to pay debts as they mature; (C) made a general assignment for the benefit of creditors; or (D) filed a voluntary petition, or have filed against it a petition, for an order of relief under the Bankruptcy Code. The period from the Distribution Date to the date of termination of this Agreement in accordance with this Section 7.2 is referred to as the "Term."


ARTICLE VIII

CONFIDENTIALITY

        Section 8.1    Confidentiality.    Each Party agrees that the specific terms and conditions of this Agreement and any information conveyed or otherwise received by or on behalf of a Party in conjunction herewith shall be Confidential Information subject to the confidentiality provisions (and exceptions thereto) set forth in Section                  of the Separation Agreement.

        Section 8.2    System Security.    


ARTICLE IX

MISCELLANEOUS

        Section 9.1    Further Assurances.    Subject to the limitations or other provisions of this Agreement, (a) each Party shall, and shall cause the other members of its Group to, use commercially reasonable efforts (subject to, and in accordance with applicable Law) to take promptly, or cause to be taken promptly, all actions, and to do promptly, or cause to be done promptly, and to assist and cooperate

9


with the other Party in doing, all things reasonably necessary, proper or advisable to carry out the intent and purposes of this Agreement, including using commercially reasonable efforts to perform all covenants and agreements herein applicable to such Party or any member of its Group and (b) neither Party will, nor will either Party allow any other member of its Group to, without the prior written consent of the other Party, take any action which would reasonably be expected to prevent or materially impede, interfere with or delay the provision of any Services hereunder during the Term. Without limiting the generality of the foregoing, where the cooperation of third parties would be necessary in order for a Party to completely fulfill its obligations under this Agreement, such Party shall use commercially reasonable efforts to cause such third parties to provide such cooperation.

        Section 9.2    Amendments and Waivers.    

        Section 9.3    Entire Agreement.    This Agreement, the Separation Agreement, the other Ancillary Agreements and the Exhibits and Schedules attached hereto and thereto, constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof.

        Section 9.4    Third-Party Beneficiaries.    Except as provided in Article V relating to Indemnitees, this Agreement is solely for the benefit of the Parties and shall not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

        Section 9.5    Notices.    All notices, requests, permissions, waivers and other communications hereunder shall be provided in accordance with the provisions of Section                  of the Separation Agreement.

        Section 9.6    Counterparts; Electronic Delivery.    This Agreement may be executed in multiple counterparts, each of which when executed shall be deemed to be an original, but all of which together shall constitute one and the same agreement. Execution and delivery of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic means shall be deemed to be, and shall have the same legal effect as, execution by an original signature and delivery in person.

        Section 9.7    Titles and Headings.    Titles and headings to Sections and Articles herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

        Section 9.8    Severability.    If any term or other provision of this Agreement or the Exhibits attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any

10


manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

        Section 9.9    Assignability; Binding Effect.    Except as otherwise expressly provided in this Agreement, neither Party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, and any attempt to assign this Agreement without such consent shall be void and of no effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

        Section 9.10    Governing Law.    This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Delaware, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction.

        Section 9.11    Construction.    This Agreement shall be construed as if jointly drafted by the Parties, and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have relied upon their own knowledge and judgment and upon the advice of the attorneys of their choosing. The Parties have had access to independent legal advice, have conducted such investigations they and their counsel thought appropriate, and have consulted with such other independent advisors as they and their counsel deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by the other Party, or such other Party's employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if one exists, on the part of the other Party (or such other Party's employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement.

        Section 9.12    Performance.    Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party.

        Section 9.13    Title and Headings.    Titles and headings to Sections and Articles are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

        Section 9.14    Exhibits.    The Exhibits attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

[Signature Page Follows]

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        IN WITNESS WHEREOF, the Parties have caused this Transition Services Agreement to be signed by their authorized representatives as of the date first above written.

    UNITED ONLINE, INC.

 

 

By:

 

 

Name:
Title:

 

 

FTD COMPANIES, INC.

 

 

By:

 

  

Name:
Title:

12



EXHIBIT A

UNITED ONLINE SERVICES

1




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TABLE OF CONTENTS
TRANSITION SERVICES AGREEMENT
RECITALS
ARTICLE I DEFINITIONS
ARTICLE II SERVICES
ARTICLE III PAYMENT
ARTICLE IV DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
ARTICLE V INDEMNIFICATION; LIMITATION OF LIABILITY
ARTICLE VI FORCE MAJEURE
ARTICLE VII TERM AND TERMINATION
ARTICLE VIII CONFIDENTIALITY
ARTICLE IX MISCELLANEOUS
EXHIBIT A UNITED ONLINE SERVICES

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Exhibit 10.2

[FORM OF]

EMPLOYEE MATTERS AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

                        , 2013



TABLE OF CONTENTS

ARTICLE I


DEFINITIONS AND INTERPRETATION

Section 1.1

 

Definitions

 
1


ARTICLE II


GENERAL PRINCIPLES

Section 2.1

 

Assumption and Retention of Liabilities; Related Assets

 
4

Section 2.2

 

Participation in Benefit Plans

  5

Section 2.3

 

Assumption of Certain Benefit Plans

  5

Section 2.4

 

Service Recognition

  5

Section 2.5

 

Approval by United Online As Sole Stockholder

  5

Section 2.6

 

Transfer of Assets

  6


ARTICLE III


U.S. QUALIFIED DEFINED CONTRIBUTION PLANS

Section 3.1

 

UOL 401(k) Plan; FTD 401(k) Plan

 
6

Section 3.2

 

Contributions as of the Distribution Date

  6


ARTICLE IV


U.S. HEALTH AND WELFARE PLANS

Section 4.1

 

Health And Welfare Plans Maintained By United Online Prior To The Distribution Date

 
6

Section 4.2

 

Time-Off Benefits

  8


ARTICLE V


EMPLOYEE STOCK PURCHASE PLAN

Section 5.1

 

Effect of Distribution on UOL ESPP

 
8

Section 5.2

 

Establishment of FTD Employee Stock Purchase Plan

   


ARTICLE VI


EFFECT ON UOL EQUITY AWARDS

Section 6.1

 

Stock Options

 
9

Section 6.2

 

Time Based and Performance Based Restricted Stock Units

  10


ARTICLE VII


ADDITIONAL COMPENSATION MATTERS; SEVERANCE

Section 7.1

 

Annual Incentive Awards

 
12

Section 7.2

 

Individual Arrangements

  12

Section 7.3

 

Severance Plans

  12

Section 7.4

 

Sections 162(m)/409A

  13

Section 7.5

 

Certain Director Fees

  13


ARTICLE VIII


GENERAL AND ADMINISTRATIVE

Section 8.1

 

Employer Rights

 
13

Section 8.2

 

No Rights to Employment

  13

Section 8.3

 

Continuation of Elections/Release Of Information/Right To Reimbursement

  13


ARTICLE IX


INDEMNIFICATION

Section 9.1

 

General Indemnification

 
14


ARTICLE X


MISCELLANEOUS

Section 10.1

 

Further Assurances

 
14

Section 10.2

 

Amendments and Waivers

  14

Section 10.3

 

Entire Agreement

  14

Section 10.4

 

Third Party Beneficiaries

  14

Section 10.5

 

Notices

  14

Section 10.6

 

Counterparts; Electronic Delivery

  15

Section 10.7

 

Titles and Headings

  15

Section 10.8

 

Severability

  15

Section 10.9

 

Assignability; Binding Effect

  15

Section 10.10

 

Governing Law

  15

Section 10.11

 

Construction

  15

Section 10.12

 

Performance

  15

Section 10.13

 

Title and Headings

  16

Section 10.14

 

Schedules

  16


EMPLOYEE MATTERS AGREEMENT

        THIS EMPLOYEE MATTERS AGREEMENT (as the same may be amended or supplemented from time to time, this "Agreement") is entered into as of , 2013, by and between United Online, Inc., a Delaware corporation ("United Online"), and FTD Companies, Inc., a Delaware corporation ("FTD"). United Online and FTD are sometimes referred to herein individually as a "Party," and collectively as the "Parties."


RECITALS

        WHEREAS, United Online and FTD have entered into a Separation and Distribution Agreement, dated as of the date hereof (the "Separation Agreement"), pursuant to which United Online will be separated into two independent publicly-traded companies: (a) FTD, which, following consummation of the transactions contemplated by the Separation Agreement, will own and conduct the FTD Business, and (b) United Online, which, following the consummation of the transactions contemplated by the Separation Agreement, will own and conduct the UOL Businesses;

        WHEREAS, as set forth in the Separation Agreement, and subject to the terms and conditions thereof, the Parties currently intend to effect the distribution by United Online to the holders of outstanding shares of common stock, par value $0.0001 per share, of United Online, on a pro rata basis, of all of the outstanding shares of common stock, par value $0.0001 per share, of FTD, owned by United Online as of the Distribution Date (which shall represent 100% of the issued and outstanding shares of FTD common stock) (the "Distribution"); and

        WHEREAS, pursuant to the Separation Agreement, United Online and FTD have agreed to enter into this Agreement for the purpose of allocating Assets, Liabilities and responsibilities with respect to employee compensation and benefit plans and programs between them.

        NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, the Parties mutually covenant and agree as follows:


ARTICLE I

DEFINITIONS AND INTERPRETATION

        Section 1.1    Definitions.    Capitalized terms used, but not defined herein, shall have the meanings assigned to such terms in the Separation Agreement and the following terms shall have the following meanings:

        "Affiliate" has the meaning set forth in the Separation Agreement.

        "Agreement" has the meaning set forth in the preamble to this Agreement.

        "Ancillary Agreements" has the meaning set forth in the Separation Agreement.

        "Assets" has the meaning set forth in the Separation Agreement.

        "Benefit Plan" means, with respect to an entity, each plan, program, arrangement, agreement or commitment that is an employment, change in control, consulting, non-competition or deferred compensation plan, program, arrangement, agreement or commitment or an executive compensation, incentive bonus or other bonus, employee pension, profit-sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation rights, restricted stock unit, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, sick leave, vacation pay, disability or accident insurance plan, corporate-owned or key-man life insurance or other employee benefit plan, program, arrangement, agreement or commitment, including any "employee benefit plan" (as defined in Section 3(3) of ERISA), in each case, that is sponsored or maintained by such entity or to which such entity contributes or is required to contribute.


        "COBRA" means the continuation coverage requirements for "group health plans" under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, as codified in Code Section 4980B and Sections 601 through 608 of ERISA.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Distribution" has the meaning set forth in the preamble to this Agreement.

        "DOL" means the U.S. Department of Labor.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

        "ERISA Affiliate" means, with respect to any Person, each business or entity which is a member of a "controlled group of corporations," under "common control" or a member of an "affiliated service group" with such Person within the meaning of Sections 414(b), (c) or (m) of the Code, or required to be aggregated with such Person under Section 414(o) of the Code, or under "common control" with such Person within the meaning of Section 4001(a)(14) of ERISA.

        "Former Employee" means any individual who is a Former UOL Employee or a Former FTD Employee.

        "Former FTD Employee" means any individual whose employment with United Online and its Subsidiaries terminated for any reason prior to the Distribution Date and who primarily provided services for an FTD Business at the time of his or her termination of employment.

        "Former UOL Employee" means any individual whose employment with United Online and its Subsidiaries terminated for any reason prior to the Distribution Date, other than a Former FTD Employee.

        "FTD" has the meaning set forth in the preamble to this Agreement.

        "FTD 401(k) Plan" has the meaning set forth in Section 3.1(a).

        "FTD Benefit Plan" means any Benefit Plan sponsored, maintained, contributed to or required to be contributed to by any member of the FTD Entities or any ERISA Affiliate thereof following the Distribution Date, including the Benefit Plans assumed pursuant to Section 2.3(a).

        "FTD Board of Directors" means the board of directors of FTD.

        "FTD Business" has the meaning set forth in the Separation Agreement.

        "FTD Employee" means any individual who, immediately prior to the Distribution Date, is employed by any member of the FTD Entities, including active employees and employees on vacation or approved leave of absence (including maternity, paternity, family, sick leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves).

        "FTD Entities" has the meaning set forth in the Separation Agreement.

        "FTD Flexible Benefits Program" has the meaning set forth in Section 4.1(c).

        "FTD Option" has the meaning set forth in Section 6.1(b).

        "FTD Participant" means any individual who is a FTD Employee, a Former FTD Employee, a member of the FTD Board of Directors (including any member of the FTD Board of Directors who also continues as a member of the UOL Board of Directors on and following the Distribution Date but excluding, solely for purposes of Article VI, each individual listed on Schedule E) or a beneficiary, dependent or alternate payee of any of the foregoing.

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        "FTD Post-Separation Stock Price" means the volume weighted average price of a share of FTD Common Stock trading on NASDAQ over the first three trading days following the Distribution Date.

        "FTD Stock Plan" has the meaning set forth in Section 2.5.

        "FTD Stock Unit Award" has the meaning set forth in Section 7.2(b).

        "FTD Subsidiaries" has the meaning set forth in the Separation Agreement.

        "FTD Welfare Plans" has the meaning set forth in Section 4.1(a).

        "Group" has the meaning set forth in the Separation Agreement.

        "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as amended.

        "IRS" means the U.S. Internal Revenue Service.

        "Liabilities" has the meaning set forth in the Separation Agreement.

        "Participating Company" means United Online and any entity the employees of which are eligible to participate in a UOL Benefit Plan.

        "Parties" has the meaning set forth in the preamble to this Agreement.

        "Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

        "Post-Distribution UOL Holder" has the meaning set forth in Section 6.1(a).

        "Post-Distribution UOL Option" has the meaning set forth in Section 6.1(a).

        "Post-Distribution UOL Stock Unit Award" has the meaning set forth in Section 6.2(a).

        "Separation Agreement" has the meaning set forth in the recitals to this Agreement.

        "United Online" has the meaning set forth in the preamble to this Agreement.

        "UOL 401(k) Plan" means the United Online, Inc. 401k Plan.

        "UOL Benefit Plan" means any Benefit Plan sponsored, maintained or contributed to by any member of the UOL Entities or any ERISA Affiliate thereof (or to which any such entity contributes or is required to contribute), whether prior to or following the Distribution Date, other than a FTD Benefit Plan.

        "UOL Board of Directors" means the board of directors of United Online.

        "UOL Businesses" has the meaning set forth in the Separation Agreement.

        "UOL Employee" means any individual who, immediately prior to the Distribution Date, is employed by any member of the UOL Entities, including active employees and employees on vacation or approved leave of absence (including maternity, paternity, family, sick leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves).

        "UOL Entities" has the meaning set forth in the Separation Agreement.

        "UOL ESPP" means the plan set forth on Schedule D hereto.

        "UOL Flexible Benefits Program" means the United Online, Inc. Flexible Benefit Plan.

        "UOL Option" has the meaning set forth in Section 6.1(a).

3


        "UOL Participant" means any individual who is a UOL Employee, a Former UOL Employee, a member of the UOL Board of Directors (whether or not any such Board member continues as a member of the FTD Board of Directors on and following the Distribution Date but excluding, solely for purposes of Article VI, each individual listed on Schedule A), a former member of the FTD Predecessor Board of Directors, or a beneficiary, dependent or alternate payee of any of the foregoing.

        "UOL Post-Separation Stock Price" means the volume weighted average price of a share of UOL Common Stock trading on NASDAQ over the first three trading days following the Distribution Date.

        "UOL Severance Plan" means the severance plan set forth on Schedule B hereto.

        "UOL Stock Plans" means the United Online, Inc. 2001 Stock Incentive Plan, the United Online, Inc. 2010 Incentive Compensation Plan, the United Online 2001 Supplemental Stock Incentive Plan, the FTD Group, Inc. 2005 Equity Incentive Award Plan, and any other stock option or stock incentive compensation plan or arrangement maintained before the Distribution Date for employees, officers, non-employee directors or other independent contractors of any of the UOL Entities, as amended.

        "UOL Stock Unit Award" has the meaning set forth in Section 6.2(a).

        "UOL Subsidiaries" has the meaning set forth in the Separation Agreement.

        "UOL Welfare Plans" means the health and welfare plans set forth on Schedule C hereto.

        "U.S." means the United States of America.


ARTICLE II

GENERAL PRINCIPLES

        Section 2.1    Assumption and Retention of Liabilities; Related Assets.    

        (a)   As of the Distribution Date, except as otherwise expressly provided for in this Agreement, United Online shall, or shall cause one or more members of the UOL Entities to, assume or retain and United Online hereby agrees to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all UOL Benefit Plans, (ii) all Liabilities with respect to the employment, service, workers compensation, termination of employment or termination of service of all UOL Employees and Former UOL Employees and their dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker of any member of the UOL Entities or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the UOL Entities or whose employment or service is or was otherwise primarily associated with the UOL Businesses), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the UOL Entities or FTD Entities, and (iii) any other Liabilities or obligations expressly assigned to any of the UOL Entities under this Agreement. The Liabilities assumed or retained by the UOL Entities as provided for in this Section 2.1(a) shall be UOL Liabilities for all purposes of the Separation Agreement.

        (b)   As of the Distribution Date, except as otherwise expressly provided for in this Agreement, FTD shall, or shall cause one or more members of the FTD Entities to, assume or retain, as applicable, and FTD hereby agrees to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all FTD Benefit Plans, (ii) all Liabilities with respect to the employment, service, workers compensation, termination of employment or termination of service of all FTD Employees and Former FTD Employees and their dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent

4


contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker of any member of the FTD Entities or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the FTD Entities or whose employment or service is or was otherwise primarily associated with the FTD Businesses), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the UOL Entities or FTD Entities, and (iii) any other Liabilities or obligations expressly assigned to any of the FTD Entities under this Agreement. The Liabilities assumed or retained by the FTD Entities as provided for in this Section 2.1(b) shall be FTD Liabilities for all purposes of the Separation Agreement.

        Section 2.2    Participation in Benefit Plans.    Except as otherwise expressly provided for in this Agreement or as otherwise expressly agreed to in writing between the Parties, effective as of the Distribution Date, (i) each member of the FTD Entities shall cease to be a Participating Company in any UOL Benefit Plan, (ii) each member of the UOL Entities shall cease to be a Participating Company in any FTD Benefit Plan, (iii) each FTD Participant shall cease to participate in, be covered by, accrue benefits under, be eligible to contribute to or have any rights under any UOL Benefit Plan, and United Online and FTD shall take all necessary action to effectuate each such cessation and (iv) each UOL Participant shall cease to participate in, be covered by, accrue benefits under, be eligible to contribute to or have any rights under any FTD Benefit Plan, and FTD and United Online shall take all necessary action to effectuate each such cessation.

        Section 2.3    Assumption of Certain Benefit Plans.    

        (a)   Prior to and effective as of the Distribution Date, United Online shall take all steps necessary to assign to a member of the FTD Entities, and such member of the FTD Entities shall take all steps necessary to assume, all Liabilities in respect of each Benefit Plan in which only FTD Participants participate, including, but not limited to, the FTD Retirement Plans.

        (b)   Prior to and effective as of the Distribution Date, FTD shall take all steps necessary to assign to a member of the UOL Entities, and such member of the UOL Entities shall take all steps necessary to assume, all Liabilities in respect of each Benefit Plan in which only UOL Participants participate.

        Section 2.4    Service Recognition.    

        (a)    Pre-Distribution Service Credit.    FTD shall give each FTD Participant full credit for purposes of eligibility, vesting, determination of level of benefits, and, to the extent applicable, benefit accruals under any FTD Benefit Plan for such FTD Participant's service with United Online or any of its Subsidiaries prior to the Distribution Date to the same extent such service was recognized by the applicable Benefit Plans immediately prior to the Distribution Date and United Online shall give each UOL Participant full credit for purposes of eligibility, vesting, determination of level of benefits, and, to the extent applicable, benefit accruals under any UOL Benefit Plan for such UOL Participant's service with United Online or any of its Subsidiaries prior to the Distribution Date to the same extent such service was recognized by the applicable Benefit Plans immediately prior to the Distribution Date; provided that such service shall not be recognized to the extent that such recognition would result in the duplication of benefits.

        (b)   Nothing herein shall limit the UOL Entities or FTD Entities from recognizing service in addition to the service required to be recognized hereunder.

        Section 2.5    Approval by United Online As Sole Stockholder.    Prior to the Distribution Date, FTD shall adopt the FTD Companies, Inc. 2013 Incentive Compensation Plan (the "FTD Stock Plan") which shall contain an addendum authorizing the issuance of long-term incentive awards having material terms and conditions substantially similar to those long-term incentive awards issued under the relevant UOL Stock Plans that are to be replaced with such FTD long-term incentive awards pursuant to Article VI. Prior to the Distribution, United Online, as FTD's sole shareholder, shall approve (a) the FTD Stock Plan; and (b) the annual incentive plans adopted by FTD in accordance with Section 7.1(c).

5


        Section 2.6    Transfer of Assets.    Assets, if any, attributable to the Liabilities referenced in the preceding provisions of this Article II shall be allocated (if applicable) as provided in the remaining provisions of this Agreement.


ARTICLE III

U.S. QUALIFIED DEFINED CONTRIBUTION PLANS

        Section 3.1    UOL 401(k) Plan; FTD 401(k) Plan.    

        (a)    Establishment of the FTD 401(k) Plan.    Prior to and effective as of the Distribution Date, FTD shall, or shall cause one or more members of the FTD Entities to, establish a defined contribution plans and trusts for the benefit of FTD Participants (the "FTD 401(k) Plan"). FTD shall take all necessary, reasonable and appropriate action to establish, maintain and administer the FTD 401(k) Plan so that it is qualified under Section 401(a) of the Code and that the related trust(s) is/are exempt under Section 501(a) of the Code. The members of the FTD Entities shall be responsible for any and all Liabilities and other obligations with respect to the FTD 401(k) Plan, and the members of the UOL Entities shall be responsible for any and all Liabilities and other obligations with respect to the UOL 401(k) Plan, except as expressly provided in Section 3.1(b).

        (b)    Transfer of UOL 401(k) Plan Assets and Accrued Benefit Liabilities.    As soon as practicable but no later than sixty (60) days following the Distribution Date, United Online shall cause the accrued benefits (reflected in the accounts, including any outstanding loan balances) under the UOL 401(k) Plan attributable to FTD Participants and all of the Assets in the UOL 401(k) Plan related thereto to be transferred in-kind to the FTD 401(k) Plan, and FTD shall cause the FTD 401(k) Plan to accept such transfer of accrued benefits and Assets and, effective as of the date of such transfer, to assume and to fully perform, pay and discharge in due course in full, all obligations of the UOL 401(k) Plan relating to the accrued benefits of FTD Participants as of the Distribution Date. The transfer of Assets and Liabilities specified in this paragraph shall be conducted in accordance with Section 414(l) of the Code and Section 208 of ERISA.

        (c)    Form 5310-A.    As soon as practicable following the date hereof, United Online and FTD shall, to the extent necessary, file or cause to be filed IRS Form 5310-A regarding the transfer of Assets and Liabilities from the UOL 401(k) Plan to the FTD 401(k) Plan as provided in this Article III.

        Section 3.2    Contributions as of the Distribution Date.    All contributions payable to the UOL 401(k) Plan with respect to employee deferrals and contributions, matching contributions and other contributions for FTD Participants through the Distribution Date, determined in accordance with the terms and provisions of the UOL 401(k) Plan, ERISA and the Code, shall be paid by United Online to the UOL 401(k) Plan prior to the date of the Asset transfer described in Section 3.1(b).

        Section 3.3    Alternative Date.    Notwithstanding any other provision of this Article III, references to the Distribution Date in this Article III may, in the discretion of United Online and FTD, be deemed to be references to such later date as may be mutually determined by United Online and FTD.


ARTICLE IV

U.S. HEALTH AND WELFARE PLANS

        Section 4.1    Health And Welfare Plans Maintained By United Online Prior To The Distribution Date.    

        (a)    Establishment of the FTD Welfare Plans.    One or more members of the UOL Entities maintain the UOL Welfare Plans for the benefit of eligible UOL Participants and FTD Participants. Prior to and effective as of the Distribution Date, FTD shall, or shall cause a member of the FTD Entities to, adopt, for the benefit of eligible FTD Participants, health and welfare plans, the terms of

6


which are substantially comparable, in the aggregate, to the terms of the UOL Welfare Plans as in effect immediately prior to the Distribution Date (collectively, the "FTD Welfare Plans").

        (b)    Terms of Participation in FTD Welfare Plans.    FTD shall cause the FTD Welfare Plans to (i) waive all preexisting conditions limitations, exclusions, and service conditions with respect to participation and coverage requirements applicable to FTD Participants, other than limitations that were in effect with respect to FTD Participants as of the Distribution Date under the UOL Welfare Plans, and (ii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a FTD Participant following the Distribution Date to the extent such FTD Participant had satisfied any similar limitation under the analogous UOL Welfare Plan. FTD Participants shall initially be eligible for participation in and benefits under FTD retiree welfare plans on the same basis under which they were eligible for participation in and benefits under the United Online retiree welfare plans immediately before the Distribution.

        (c)    Reimbursement Account Plan.    Prior to and effective as of the Distribution Date, one or more members of the FTD Entities shall establish flexible spending reimbursement accounts under a cafeteria plan qualifying under Section 125 of the Code (the "FTD Flexible Benefits Program") and each FTD Employee shall be eligible as of the Distribution Date to participate in the FTD Flexible Benefits Program pursuant to the terms of such plan. As of the Distribution Date, FTD shall cause the FTD Flexible Benefits Program to accept a transfer of the health care flexible spending reimbursement accounts of each FTD Employee who participates in the UOL Flexible Benefits Program immediately prior to the Distribution Date, and to honor and continue through October 31, 2013 the elections made by each FTD Employee under the UOL Flexible Benefits Program in respect of the health care flexible spending reimbursement accounts that are in effect immediately prior to the Distribution Date. As soon as practicable following the Distribution Date, United Online shall cause to be transferred from the UOL Flexible Benefits Program to the FTD Flexible Benefits Program the excess, if any, of the aggregate accumulated contributions to the health care flexible spending reimbursement accounts made by FTD Employees prior to the Distribution Date during 2013 over the aggregate reimbursement payouts paid to the FTD Employees for such year from such accounts. FTD shall cause the FTD Flexible Benefits Program to accept a transfer of the dependent care flexible spending reimbursement accounts of each FTD Employee who participates in the UOL Flexible Benefits Program immediately prior to the Distribution Date, and to honor and continue through October 31, 2013 the elections made by each FTD Employee under the UOL Flexible Benefits Program in respect of the dependent care flexible spending reimbursement accounts that are in effect immediately prior to the Distribution Date. As soon as practicable following the Distribution Date, United Online shall cause to be transferred from the UOL Flexible Benefits Program to the FTD Flexible Benefits Program the excess, if any, of the aggregate accumulated contributions to the dependent care flexible spending reimbursement accounts made by FTD Employees prior to the Distribution Date during 2013 over the aggregate reimbursement payouts paid to the FTD Employees for such year from such accounts. From and after the Distribution Date, FTD shall assume and be solely responsible for all claims by FTD Employees under the FTD Flexible Benefits Program incurred at any time during 2013, whether incurred prior to, on or after the Distribution Date, that have not been paid in full as of the Distribution Date.

        (d)    COBRA and HIPAA.    Prior to and effective as of the Distribution Date, FTD shall assume, or shall cause the applicable FTD Welfare Plans to assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to FTD Participants who, as of the day prior to the Distribution Date, were covered under a UOL Welfare Plan pursuant to COBRA. United Online shall administer compliance with any certificate of creditable coverage requirements of HIPAA or Medicare applicable to the UOL Welfare Plans with respect to FTD Participants. The Parties agree that neither the Distribution nor any transfers of employment that occur prior to or as of the Distribution Date in connection with the transactions contemplated by this Agreement shall constitute a COBRA qualifying event for purposes of COBRA; provided that, in all events, FTD shall

7


assume, or shall cause the FTD Welfare Plans to retain or assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to all FTD Employees.

        (e)    Liabilities.    

        Section 4.2    Time-Off Benefits.    FTD shall credit each FTD Participant with the amount of accrued but unused vacation time, sick time and other time-off benefits that such FTD Participant had earned as of the Distribution Date.


ARTICLE V

EMPLOYEE STOCK PURCHASE PLAN

        Section 5.1    Effect of Distribution on UOL ESPP.    Pursuant to the terms of the UOL ESPP, each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of the Distribution, by applying the payroll deductions or other permitted contributions of each participant thereunder for the purchase interval in which the Distribution occurs to the purchase of shares of UOL Common Stock at the purchase price per share in effect for that purchase interval. However, the applicable limitation on the number of shares of UOL Common Stock purchasable per participant shall continue to apply to any such purchase, but not the limitation applicable to the maximum number of shares of UOL Common Stock purchasable in total by all participants thereunder. United Online shall use reasonable efforts to provide at least ten (10) days' prior written notice of the occurrence of the Distribution, and participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights prior to the effective date of the Distribution.

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ARTICLE VI

EFFECT ON UOL EQUITY AWARDS

        Section 6.1    Stock Options.    

        (a)   Each option to purchase UOL Common Stock granted under the UOL Stock Plans (a "UOL Option") that is outstanding immediately prior to the Distribution Date and that is held by a UOL Employee or a Former Employee, (a "Post-Distribution UOL Holder") shall be adjusted immediately following the close of market on the Distribution Date (and shall thereafter be referred to as a "Post-Distribution UOL Option") as follows:

        (b)   Each UOL Option that is outstanding immediately prior to the Distribution Date and that is held by a FTD Employee shall, effective immediately following the close of market on the Distribution Date, be assumed and converted into an option to purchase FTD Common Stock (a "FTD Option") as follows:

9


        (c)   Each option to purchase UOL Common Stock granted under the UOL Stock Plans that is outstanding immediately prior to the Distribution Date and that is held by Mark R. Goldston or by a Participant who is a non-employee member of the UOL Board of Directors shall, effective immediately following the close of market on the Distribution Date, be assumed and converted into (i) in the case of one-half of such options, Post-Distribution UOL Options; and (ii) in the case of the remaining one-half of such options, FTD Options, in each case utilizing the adjustment mechanisms set forth in Section 6.1(a) and Section 6.1(b) above so that the total aggregate spread value of the UOL Options, on the one hand, and the sum of the total aggregate spread value of the Post-Distribution UOL Options and the FTD Options, on the other, is equivalent. The division of the UOL Options as set forth above in this subsection (c) shall be done on a grant-by-grant basis based on the number of shares underlying each grant of UOL Options. Upon the exercise of (or FTD's receipt of notice of the intent to exercise) an option award to purchase FTD stock by Mark R. Goldston, FTD shall promptly notify United Online and shall promptly provide documentation and other information necessary to permit United Online to duly and timely prepare and file all Tax Returns (including IRS and other information returns) and duly and timely remit to each Tax Authority any payroll, withholding or other payments due in connection with such exercise. In addition, FTD shall timely pay United Online an amount equal to the applicable income and employment tax withholding due in connection with such exercise. Upon the exercise of (or FTD's receipt of notice of the intent to exercise) an option award to purchase FTD stock by a member of the Board of Directors of United Online prior to the Distribution, FTD shall promptly notify United Online and shall promptly provide documentation and other information necessary to permit United Online to prepare and file all Tax Returns (including IRS and other information returns) in connection with such exercise. Any terms used in this Section 6.1(c) and not defined herein shall have the meaning set forth in the Tax Sharing Agreement between the parties hereto, dated as of                        , 2013.

        Section 6.2    Time-Based and Performance-Based Restricted Stock Units.    

        (a)   Each United Online time-based restricted stock unit award or performance-based restricted stock unit award granted under the UOL Stock Plans (including each deferred unit attributable to the deemed investment in UOL Common Stock under a non-qualified deferred compensation plan) (a "UOL Stock Unit Award") that is outstanding immediately prior to the Distribution Date and that is held by a UOL Employee or a Former Employee shall be adjusted immediately following the close of market on the Distribution Date (and shall thereafter be referred to as a "Post-Distribution UOL Stock Unit Award") as follows:

10


        (b)   Each UOL Stock Unit Award that is outstanding immediately prior to the Distribution Date and that is held by a FTD Employee shall, immediately following the close of market on the Distribution Date, be assumed and converted into a time-based restricted stock unit award or performance-based restricted stock unit award (or deferred stock unit) with respect to FTD Common Stock (a "FTD Stock Unit Award") as follows:

        (c)   Each United Online restricted stock unit award granted under the UOL Stock Plans that is outstanding immediately prior to the Distribution Date and that is held by Mark R. Goldston or by a Participant who is a non-employee member of the UOL Board of Directors shall, immediately following the close of market on the Distribution Date, immediately vest and be settled (i) in the case of one-half of such restricted stock unit awards, UOL Common Stock; and (ii) in the case of the remaining one-half of such restricted stock unit awards, FTD Common Stock, in each case utilizing the adjustment mechanisms set forth in Section 6.2(a)(i) and Section 6.2(b)(i) above so that the total aggregate value of the United Online restricted stock unit awards, on the one hand, and the aggregate value of the shares of UOL Common Stock and FTD Common Stock, on the other, is equivalent. The division of the United Online restricted stock unit awards as set forth above in this subsection (c) shall be done on a grant-by-grant basis based on the number of shares underlying each grant of United Online restricted stock units.

        (d)   All of the foregoing adjustments shall be effected in accordance with Sections 424 and 409A of the Code. In no event shall the adjustments set forth in this Section 6.2 serve to provide additional benefits to a holder of restricted stock unit awards beyond what such holder would have received had

11


he or she been the holder of the number of shares of UOL Common Stock equal to the number of such holder's restricted stock units.

        (e)   The Parties shall use reasonable best efforts to maintain effective registration statements with the SEC with respect to the awards described in this Article VI, to the extent any such registration statement is required by applicable Law.


ARTICLE VII

ADDITIONAL COMPENSATION MATTERS; SEVERANCE

        Section 7.1    Annual Incentive Awards.    

        (a)    FTD Assumption of Annual Incentive Liability.    Prior to and effective as of the Distribution Date, FTD shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge in due course in full, all obligations relating to any annual incentive awards that any FTD Participant is eligible to receive with respect to calendar year 2013 and, effective as of the Distribution Date, United Online shall have no obligation with respect to any such annual incentive award.

        (b)    United Online Assumption of Annual Incentive Liability.    Prior to and effective as of the Distribution Date, United Online shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge in due course in full, all obligations relating to any annual incentive awards that any UOL Participant is eligible to receive with respect to calendar year 2013 and, effective as of the Distribution Date, FTD shall have no obligation with respect thereto.

        (c)    Establishment of FTD Annual Incentive Plans.    Prior to and effective as of the Distribution Date, FTD shall adopt annual incentive plans which shall permit the issuance of annual incentive awards on terms and conditions established in the discretion of the FTD Board of Directors and/or the Compensation Committee thereof.

        Section 7.2    Individual Arrangements.    

        (a)    United Online Individual Arrangements.    Except as otherwise provided herein, United Online shall assume or retain, as applicable, and shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to, any employment, change in control, consulting, non-competition, retention or other compensatory arrangement previously entered into or provided by any member of the UOL Entities or FTD Entities to any UOL Participant (the "UOL Participant Agreements"). Effective as of the Distribution Date, FTD shall take all steps necessary to assign to United Online, and United Online shall take all steps necessary to assume, all Liabilities in respect of the UOL Participant Agreements.

        (b)    FTD Individual Arrangements.    Except as otherwise provided herein, FTD shall assume or retain, as applicable, and shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to, any employment, change in control, consulting, non-competition, retention or other compensatory arrangement previously entered into or provided by any member of the UOL Entities or FTD Entities to any FTD Participant (the "FTD Participant Agreements"). Effective as of the Distribution Date, United Online shall take all steps necessary to assign to FTD, and FTD shall take all steps necessary to assume, all Liabilities in respect of the FTD Participant Agreements.

        Section 7.3    Severance Plans.    

        (a)    Assumption of Severance Liabilities.    Prior to and effective as of the Distribution Date (i) FTD shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge in due course in full, all obligations relating to any benefit to which a FTD Participant is

12


entitled under a UOL Severance Plan and (ii) United Online shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge in due course in full all obligations relating to any benefit to which a UOL Participant is entitled under a UOL Severance Plan.

        (b)    Effect of the Separation on Severance.    United Online and FTD acknowledge and agree that the transactions contemplated by the Separation Agreement will not constitute a termination of employment of any FTD Participant for purposes of any policy, plan, program or agreement of any member of the UOL Entities or FTD Entities that provides for the payment of severance, separation pay, salary continuation or similar benefits in the event of a termination of employment.

        Section 7.4    Sections 162(m)/409A.    Notwithstanding anything in this Agreement to the contrary (including the treatment of supplemental and deferred compensation plans, outstanding long-term incentive awards and annual incentive awards provided for herein), the Parties agree to cooperate in good faith regarding the need to provide treatment different from that otherwise provided herein to ensure that (i) a federal income tax deduction for the payment of such supplemental or deferred compensation or long-term incentive award, annual incentive award or other compensation is not limited by reason of Section 162(m) of the Code, to the extent such award or compensation is intended to qualify as performance-based compensation for purposes of Section 162(m) of the Code, and (ii) the treatment of such supplemental or deferred compensation or long-term incentive award, annual incentive award or other compensation does not cause the imposition of a tax under Section 409A of the Code.

        Section 7.5    Certain Director Fees.    United Online shall retain responsibility for the payment of any fees payable in respect of service on the UOL Board of Directors that are payable but not yet paid as of the Distribution Date, and FTD shall have no responsibility for any such payments (whether owed to an individual who is a member of the FTD Board of Directors as of the Distribution Date or otherwise). FTD shall retain responsibility for the payment of any fees payable in respect of service on the FTD Board of Directors, and United Online shall have no responsibility for any such payments (whether owed to an individual who is a member of the UOL Board of Directors as of the Distribution Date or otherwise).


ARTICLE VIII

GENERAL AND ADMINISTRATIVE

        Section 8.1    Employer Rights.    Nothing in this Agreement shall (i) prohibit any FTD Entities from amending, modifying or terminating any FTD Benefit Plan at any time in its sole discretion or (ii) prohibit any UOL Entities from amending, modifying or terminating any UOL Benefit Plan at any time in its sole discretion.

        Section 8.2    No Rights to Employment.    Nothing in this Agreement is intended to confer upon any employee or former employee of any of the UOL Entities or FTD Entities any right to continued employment, or any recall or similar rights to an individual on layoff or any type of approved leave.

        Section 8.3    Continuation of Elections/Release Of Information/Right To Reimbursement.    Effective as of the Distribution Date, FTD and United Online shall cause each FTD Benefit Plan and each UOL Benefit Plan, respectively, to recognize and maintain all existing elections and designations (including all beneficiary designations) to the extent applicable. To the extent permitted by applicable Law, all authorizations for the release of information and rights to reimbursement made by or relating to FTD Participants under UOL Benefit Plans or by UOL Participants under FTD Benefit Plans shall be transferred to and be in full force and effect under the corresponding FTD Benefit Plans or UOL Benefit Plans, respectively, until such authorizations or rights are replaced or revoked by, or no longer apply to, the relevant FTD Participant or UOL Participant, as the case may be.

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ARTICLE IX

INDEMNIFICATION

        Section 9.1    General Indemnification.    Any claim for indemnification under this Agreement shall be governed by, and be subject to, the provisions of Article                         of the Separation Agreement, which provisions are hereby incorporated by reference into this Agreement and any references to "Agreement" in such Article IX as incorporated herein shall be deemed to be references to this Agreement.


ARTICLE X

MISCELLANEOUS

        Section 10.1    Further Assurances.    Subject to the limitations or other provisions of this Agreement, (a) each Party shall, and shall cause the other members of its Group to, use commercially reasonable efforts (subject to, and in accordance with applicable Law) to take promptly, or cause to be taken promptly, all actions, and to do promptly, or cause to be done promptly, and to assist and cooperate with the other Party in doing, all things reasonably necessary, proper or advisable to carry out the intent and purposes of this Agreement, including using commercially reasonable efforts to perform all covenants and agreements herein applicable to such Party or any member of its Group and (b) neither Party will, nor will either Party allow any other member of its Group to, without the prior written consent of the other Party, take any action which would reasonably be expected to prevent or materially impede, interfere with or delay the matters contemplated by this Agreement. Without limiting the generality of the foregoing, where the cooperation of third parties would be necessary in order for a Party to completely fulfill its obligations under this Agreement, such Party shall use commercially reasonable efforts to cause such third parties to provide such cooperation.

        Section 10.2    Amendments and Waivers.    

        (a)   Subject to Section                         of the Separation Agreement, this Agreement may not be amended except by an agreement in writing signed by both Parties.

        (b)   Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the Party entitled to the benefit thereof and any such waiver shall be validly and sufficiently given for the purposes of this Agreement if it is in writing signed by an authorized representative of such Party. No delay or failure in exercising any right, power or remedy hereunder shall affect or operate as a waiver thereof; nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies that either Party would otherwise have.

        Section 10.3    Entire Agreement.    This Agreement, the Separation Agreement, the other Ancillary Agreements and the Exhibits and Schedules attached hereto and thereto, constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof.

        Section 10.4    Third Party Beneficiaries.    This Agreement is solely for the benefit of the Parties and shall not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

        Section 10.5    Notices.    All notices, requests, permissions, waivers and other communications hereunder shall be provided in accordance with the provisions of Section                         of the Separation Agreement.

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        Section 10.6    Counterparts; Electronic Delivery.    This Agreement may be executed in multiple counterparts, each of which when executed shall be deemed to be an original, but all of which together shall constitute one and the same agreement. Execution and delivery of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic means shall be deemed to be, and shall have the same legal effect as, execution by an original signature and delivery in person.

        Section 10.7    Titles and Headings.    Titles and headings to Sections and Articles herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

        Section 10.8    Severability.    If any term or other provision of this Agreement or Schedules attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any provision in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.

        Section 10.9    Assignability; Binding Effect.    Except as otherwise expressly provided in this Agreement, neither Party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, and any attempt to assign this Agreement without such consent shall be void and of no effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

        Section 10.10    Governing Law.    This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Delaware, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction.

        Section 10.11    Construction.    This Agreement shall be construed as if jointly drafted by the Parties, and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have relied upon their own knowledge and judgment and upon the advice of the attorneys of their choosing. The Parties have had access to independent legal advice, have conducted such investigations they and their counsel thought appropriate, and have consulted with such other independent advisors as they and their counsel deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by the other Party, or such other Party's employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if one exists, on the part of the other Party (or such other Party's employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement.

        Section 10.12    Performance.    Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party.

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        Section 10.13    Title and Headings.    Titles and headings to Sections and Articles herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

        Section 10.14    Schedules.    The Schedules attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

[Signature Page Follows]

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        IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to be duly executed as of the day and year first above written.


 

 

UNITED ONLINE, INC.

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    

 

 

FTD COMPANIES, INC.

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    



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TABLE OF CONTENTS
EMPLOYEE MATTERS AGREEMENT
RECITALS
ARTICLE I DEFINITIONS AND INTERPRETATION
ARTICLE II GENERAL PRINCIPLES
ARTICLE III U.S. QUALIFIED DEFINED CONTRIBUTION PLANS
ARTICLE IV U.S. HEALTH AND WELFARE PLANS
ARTICLE V EMPLOYEE STOCK PURCHASE PLAN
ARTICLE VI EFFECT ON UOL EQUITY AWARDS
ARTICLE VII ADDITIONAL COMPENSATION MATTERS; SEVERANCE
ARTICLE VIII GENERAL AND ADMINISTRATIVE
ARTICLE IX INDEMNIFICATION
ARTICLE X MISCELLANEOUS

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Exhibit 10.3

[FORM OF]

TAX SHARING AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

                        , 2013


TABLE OF CONTENTS

 
   
  Page

Article I DEFINITIONS

  1

Article II PREPARATION AND FILING OF TAX RETURNS

 
5

Section 2.1

 

United Online's Responsibility

 
5

Section 2.2

 

FTD's Responsibility

  5

Section 2.3

 

Agent

  6

Section 2.4

 

Manner of Tax Return Preparation

  6

Section 2.5

 

Tax Services

  6

Article III LIABILITY FOR TAXES

 
6

Section 3.1

 

United Online's Liability

 
6

Section 3.2

 

FTD's Liability

  6

Section 3.3

 

Subsequent Adjustments

  7

Section 3.4

 

Determination of Taxes Attributable to the FTD Business

  7

Article IV DISTRIBUTION TAXES AND ALLOCATION

 
7

Section 4.1

 

Distribution Taxes

 
7

Section 4.2

 

Private Letter Rulings; Tax Opinion

  8

Section 4.3

 

Carrybacks

  9

Section 4.4

 

Allocation of Tax Assets

  10

Section 4.5

 

Allocation of Certain Tax Items

  10

Section 4.6

 

Tax Treatment of Equity-Related Compensation

  10

Article V INDEMNIFICATION

 
11

Section 5.1

 

Generally

 
11

Section 5.2

 

Inaccurate, Incomplete or Untimely Information

  11

Section 5.3

 

Adjustments to Payments

  11

Section 5.4

 

Reporting of Indemnifiable Loss

  12

Section 5.5

 

No Indemnification for Tax Items

  12

Section 5.6

 

Double Recovery

  12

Article VI PAYMENTS

 
12

Section 6.1

 

In General

 
12

Section 6.2

 

Treatment of Payments

  13

Section 6.3

 

Prompt Performance

  13

Section 6.4

 

After Tax Amounts

  13

Section 6.5

 

Interest

  13

Article VII TAX PROCEEDINGS

 
13

Section 7.1

 

Audits

 
13

Section 7.2

 

Notice

  14

Section 7.3

 

Remedies

  14

Section 7.4

 

Control of Distribution Tax Proceedings

  14

Article VIII MISCELLANEOUS PROVISIONS

 
15

Section 8.1

 

Effectiveness

 
15

Section 8.2

 

Cooperation and Exchange of Information

  15

Section 8.3

 

Dispute Resolution

  16

i


 
   
  Page

Section 8.4

 

Changes in Law

  16

Section 8.5

 

Confidentiality

  16

Section 8.6

 

Affiliates

  16

Section 8.7

 

Authority

  17

Section 8.8

 

Setoff

  17

Section 8.9

 

Amendments and Waivers

  17

Section 8.10

 

Entire Agreement

  17

Section 8.11

 

Third-Party Beneficiaries

  17

Section 8.12

 

Notices

  18

Section 8.13

 

Counterparts; Electronic Delivery

  18

Section 8.14

 

Severability

  18

Section 8.15

 

Assignability; Binding Effect

  18

Section 8.16

 

Governing Law

  18

Section 8.17

 

Construction

  18

Section 8.18

 

Titles and Headings

  19

Section 8.19

 

Coordination with Employee Matters Agreement

  19

Section 8.20

 

Conflict or Inconsistency Between Agreements

  19

ii



TAX SHARING AGREEMENT

        THIS TAX SHARING AGREEMENT (as the same may be amended or supplemented from time to time, this "Agreement") is entered into as of                  , 2013, by and between United Online, Inc., a Delaware corporation ("United Online"), and FTD Companies, Inc., a Delaware corporation ("FTD"). United Online and FTD are sometimes referred to herein individually as a "Party," and collectively as the "Parties." Capitalized terms used herein and not otherwise defined have the respective meanings set forth in Article I.


RECITALS

        WHEREAS, United Online and FTD have entered into a Separation and Distribution Agreement, dated as of the date hereof (the "Separation Agreement"), pursuant to which United Online will be separated into two independent publicly-traded companies: (a) FTD, which, following consummation of the transactions contemplated by the Separation Agreement, will own and conduct the FTD Business, and (b) United Online, which, following the consummation of the transactions contemplated by the Separation Agreement, will own and conduct the UOL Businesses;

        WHEREAS, UNOL Intermediate, Inc., a Delaware corporation, which wholly owns all of the FTD Affiliates, was renamed FTD Companies, Inc. on April 25, 2013;

        WHEREAS, United Online is the common parent of an affiliated group of corporations that files a consolidated United States federal income tax return;

        WHEREAS, as set forth in the Separation Agreement, and subject to the terms and conditions thereof, the Parties currently intend to effect the distribution by United Online to the holders of outstanding shares of common stock, par value $0.0001 per share, of United Online, on a pro rata basis, of all of the outstanding shares of common stock, par value $0.0001 per share, of FTD, owned by United Online as of the Distribution Date (which shall represent 100% of the issued and outstanding shares of FTD common stock) (the "Distribution");

        WHEREAS, following the Distribution, (a) FTD will be the common parent of an affiliated group of corporations that files a consolidated United States federal income tax return and (b) the currently existing affiliated group of which United Online is the common parent will remain in existence with all of its previous members other than FTD and those FTD Affiliates which were previously members;

        WHEREAS, United Online has received a private letter ruling from the IRS (the "IRS Ruling") to the effect that, among other things, for United States federal income tax purposes, the Distribution will qualify as a tax-free distribution under section 355 of the Code; and

        WHEREAS, the Parties desire to set forth their agreement on the rights and obligations, following the Distribution, of the members of the UOL Tax Group, on the one hand, and the members of the FTD Tax Group, on the other hand, with respect to (a) handling and allocating United States federal, state and local and foreign Taxes in periods beginning before the Distribution Date, (b) Taxes resulting from transactions effectuated in connection with the Distribution and (c) various other Tax matters.

        NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, the Parties mutually covenant and agree as follows:


ARTICLE I

DEFINITIONS

        "Affiliate" means with respect to any Person, any other Person of which all or a portion of the stock or other equity interests are owned, directly or indirectly, by such first Person.

        "Agreement" means this Tax Sharing Agreement.

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        "After Tax Amount" means any additional amount necessary to reflect (through a gross-up mechanism) the hypothetical Tax consequences of the receipt or accrual of any payment required to be made under this Agreement (including payment of an additional amount or amounts hereunder and the effect of the deductions available for interest paid or accrued and for Taxes such as state and local Income Taxes), determined by using the highest marginal corporate Tax rate (or rates, in the case of an item that affects more than one Tax) for the relevant Taxable Period (or portion thereof).

        "Ancillary Agreements" has the meaning set forth in the Separation Agreement.

        "Audit" means any audit, assessment of Taxes, or other examination by any Taxing Authority, proceeding, or appeal of such a proceeding relating to Taxes, whether administrative or judicial, including proceedings relating to competent authority determinations.

        "Carryback" has the meaning set forth in Section 4.3(c).

        "Code" means the Internal Revenue Code of 1986, as amended, and any successor thereto.

        "Consolidated Return" means any Tax Return reflecting or reporting United States federal, state, local or foreign Taxes filed on a consolidated, combined, unitary or similar basis which includes both (i) FTD or one or more FTD Affiliates and (ii) United Online or one or more UOL Affiliates.

        "Controlling Party" has the meaning set forth in Section 7.4(c).

        "Dispute Resolution Commencement Date" has the meaning set forth in Section 8.3.

        "Dispute" has the meaning set forth in Section 8.3.

        "Distribution" has the meaning set forth in the recitals to this Agreement.

        "Distribution Date" means the date on which the Distribution occurs, such date to be determined by, or under the authority of, the Board of Directors of United Online, in its sole and absolute discretion.

        "Distribution Taxes" means any Taxes imposed on United Online or any UOL Affiliate resulting from, or arising in connection with, the failure of the Distribution to be tax-free to United Online or such UOL Affiliate under section 355 of the Code (including, without limitation, any Tax resulting from the application of section 355(d) or 355(e) of the Code to the Distribution) or corresponding provisions of the laws of any other jurisdictions. Each Tax referred to in the immediately preceding sentence shall be determined using the highest marginal federal and state corporate Income Tax rate for the relevant Taxable Period (or portion thereof).

        "Employee Matters Agreement" has the meaning set forth in the Separation Agreement.

        "Filing Party" has the meaning set forth in Section 7.1.

        "Final Determination" means the final resolution of liability for any Tax for any Taxable Period, by or as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Code section 7121 or 7122, or a comparable agreement under the laws of other jurisdictions, which resolves the entire liability for such Tax for any Taxable Period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations.

        "FTD" has the meaning set forth in the first sentence of this Agreement.

        "FTD Affiliate" means any previous, current or future Affiliate of FTD and/or one or more of its Affiliates.

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        "FTD Business" means (a) the consumer business and the floral network business conducted by the FTD Group and (b) any other business directly conducted by any member of the FTD Group as of or prior to the date of this Agreement.

        "FTD Group" means FTD and each FTD Affiliate.

        "FTD Group Member" means FTD, each Person that is or was an FTD Affiliate and each Person that becomes an FTD Affiliate after the Distribution.

        "FTD Tax Group" means the Tax Group of which FTD is the common parent.

        "Income Tax" means any federal, state, local or foreign Tax based upon, measured by or calculated by reference to net income or profits, net receipts or gross receipts (regardless of whether denominated as an "income tax," a "franchise tax" or otherwise).

        "Indemnifiable Loss Deduction" has the meaning set forth in Section 5.3.

        "Indemnified Loss" has the meaning set forth in Section 5.3.

        "Indemnifying Party" has the meaning set forth in Section 5.3.

        "Indemnitee" has the meaning set forth in Section 5.3.

        "IRS" means the United States Internal Revenue Service or any successor thereto, including, but not limited to its agents, representatives, and attorneys.

        "IRS Ruling" has the meaning set forth in the recitals to this Agreement.

        "IRS Ruling Documents" means (1) the request for a private letter ruling under section 355 and various other sections of the Code, filed by United Online with the IRS in connection with the Distribution, together with any supplemental filings or ruling requests or other materials subsequently submitted in connection with such request on behalf of United Online, its Affiliates and shareholders to the IRS, the appendices and exhibits thereto, and any rulings issued by the IRS to United Online in response to such request or (2) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with the Distribution.

        "Non-Controlling Party" has the meaning set forth in Section 7.4(c).

        "Owed Party" has the meaning set forth in Section 6.1.

        "Owing Party" has the meaning set forth in Section 6.1.

        "Payment Period" has the meaning set forth in Section 6.5.

        "Party" has the meaning set forth in the second sentence of this Agreement.

        "Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

        "Post-Distribution Period" means a Taxable Period (or portion thereof) beginning after the Distribution Date.

        "Pre-Distribution Period" means a Taxable Period (or portion thereof) ending on or before the Distribution Date.

        "Prohibited Act" has the meaning set forth in Section 4.4.

        "Representation Letter" means an officer's certificate in which certain representations, warranties and covenants are made on behalf of United Online and FTD in connection with the issuance of the Tax Opinion.

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        "Restated Tax Saving Amount" has the meaning set forth in Section 5.4.

        "Separation Agreement" has the meaning set forth in the recitals to this Agreement.

        "Refund" means any refund (or credit in lieu thereof) of Taxes (including any overpayment of Taxes that can be refunded or, alternatively, applied to other Taxes payable), including any interest paid on or with respect to such refund of Taxes; provided that for purposes of this Agreement, the amount of any Refund required to be paid to another Party shall be reduced by the net amount of any Income Taxes imposed on, related to, or attributable to, the receipt or accrual of such Refund.

        "Straddle Period" means a Taxable Period that begins on or before and ends after the Distribution Date.

        "Supplemental IRS Ruling Documents" means (1) any request for a Supplemental IRS Ruling and any materials, appendices and exhibits submitted or filed therewith and any Supplemental IRS Rulings issued by the IRS to United Online in response to any such request and (2) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with the Distribution.

        "Supplemental IRS Ruling" means (1) any ruling issued by the IRS in connection with the Distribution, other than a ruling in response to United Online's initial request for the IRS Ruling, and (2) any similar ruling issued by any other Taxing Authority addressing the application of a provision of the laws of another jurisdiction to the Distribution.

        "Tax" and "Taxes" include all taxes, charges, fees, duties, levies, imposts or other assessments imposed by any federal, state, local or foreign Taxing Authority, including, but not limited to, income, gross receipts, excise, property, sales, use, license, capital stock, transfer, franchise, payroll, withholding, social security, value added and other taxes, and any interest, penalties or additions attributable thereto.

        "Tax Asset" means any Tax Item that has accrued for Tax purposes, but has not been used during a Taxable Period, and that could reduce a Tax in another Taxable Period, including, but not limited to, a net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction, credit related to alternative minimum tax and any other Tax credit.

        "Tax Benefit" means a reduction in the Tax liability of a taxpayer for any Taxable Period. A Tax Benefit shall be deemed to have been realized or received from a Tax Item in a Taxable Period only if and to the extent that the Tax liability of the taxpayer for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is less than it would have been if such Tax liability were determined without regard to such Tax Item.

        "Tax Detriment" means an increase in the Tax liability of a taxpayer for any Taxable Period. A Tax Detriment shall be deemed to have been realized or received from a Tax Item in a Taxable Period only if and to the extent that the Tax liability of the taxpayer for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is more than it would have been if such Tax liability were determined without regard to such Tax Item.

        "Tax Group" means any United States federal, state, local or foreign affiliated, consolidated, combined, unitary or similar group or fiscal unity that joins in the filing of a single Tax Return.

        "Tax Item" means any item of income, gain, loss, deduction, credit, recapture of credit or any other attribute or item (including the adjusted basis of property) that may have the effect of increasing or decreasing any Tax.

        "Tax Opinion" means an opinion issued to United Online by Skadden, Arps, Slate, Meagher & Flom LLP (which opinion will rely upon the effectiveness of the IRS Ruling), in form and substance acceptable to the Parties substantially to the effect that, among other things, the Distribution will qualify as a tax-free distribution under section 355 of the Code.

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        "Tax Return" means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated tax) supplied or required to be supplied to, or filed or required to be filed with, a Taxing Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

        "Tax Saving Amount" has the meaning set forth in Section 5.3.

        "Tax Services" has the meaning set forth in Section 2.5(a).

        "Taxable Period" means any period for which a liability for Tax is determined.

        "Taxing Authority" means any governmental authority or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).

        "Transition Services Agreement" has the meaning set forth in the Separation Agreement.

        "Treasury Regulations" means the final and temporary (but not proposed) income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

        "United Online" has the meaning set forth in the first sentence of this Agreement.

        "UOL Affiliate" means any previous, current or future Affiliate of United Online and/or one or more of its Affiliates, but excluding FTD and any FTD Affiliate.

        "UOL Businesses" means (a) the communications and content and media businesses conducted by the UOL Group (including, without limitation, NetZero, Juno, Classmates.com and MyPoints.com) and (b) any other business (other than the FTD Business) directly conducted by any member of the UOL Group as of or prior to the date of this Agreement.

        "UOL Group" means United Online and each UOL Affiliate, but excluding any FTD Group Member.

        "UOL Group Member" means United Online, each Person that is or was a UOL Affiliate, and each Person that becomes a UOL Affiliate after the Distribution, but excluding any FTD Group Member.

        "UOL Tax Group" means the Tax Group of which United Online is the common parent.


ARTICLE II

PREPARATION AND FILING OF TAX RETURNS

        Section 2.1    United Online's Responsibility.    United Online shall have sole and exclusive responsibility for the preparation and filing of:

        (a)   all Consolidated Returns;

        (b)   all Tax Returns that include only United Online and/or any UOL Affiliate; and

        (c)   any Tax Returns required to be filed for a Taxable Period ending on or before, or that includes, the Distribution Date that are not otherwise described in Section 2.1 or Section 2.2.

        Section 2.2    FTD's Responsibility.    FTD shall have sole and exclusive responsibility for the preparation and filing of all Tax Returns that include only FTD and/or any FTD Affiliate.

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        Section 2.3    Agent.    Subject to the other applicable provisions of this Agreement, FTD hereby irrevocably designates, and agrees to cause each FTD Affiliate to so designate, United Online as its sole and exclusive agent and attorney-in-fact to take such actions (including execution of documents) as are appropriate in any and all matters (including Audits) relating to any Tax Return described in Section 2.1(a) or Section 2.1(c).

        Section 2.4    Manner of Tax Return Preparation.    Unless otherwise required by a Taxing Authority or by applicable law, the Parties shall prepare and file all Tax Returns, and take all other actions, in a manner consistent with this Agreement, the Separation Agreement, the IRS Ruling Documents, any Supplemental IRS Ruling Documents and past practice. All Tax Returns shall be filed on a timely basis (taking into account applicable extensions) by the Party responsible for filing such Tax Returns under this Agreement.

        Section 2.5    Tax Services.    


ARTICLE III

LIABILITY FOR TAXES

        Section 3.1    United Online's Liability.    

        (a)   United Online shall be liable for all Taxes due with respect to all Tax Returns described in (a) Section 2.1(a) or Section 2.1(c), except to the extent described in Section 3.2 hereof, and (b) Section 2.1(b). United Online shall be liable for any Tax deficiency assessed with respect to the portion of such Tax Returns for which it is responsible. United Online shall be entitled to receive and retain all Refunds of Taxes previously paid by United Online or any UOL Affiliates with respect to Taxes described in this Section 3.1.

        Section 3.2    FTD's Liability.    FTD shall be liable for all Taxes due with respect to Tax Returns described in (a) Section 2.1(a) or Section 2.1(c), but only to the extent that such Taxes are attributable to the FTD Business, and with respect to Income Taxes, as determined pursuant to Section 3.4, and (b) Section 2.2. FTD shall be liable for any Tax deficiency assessed with respect to the portion of such Tax Returns for which it is responsible. FTD shall be entitled to receive and retain all Refunds of Taxes previously paid by FTD or any FTD Affiliates with respect to Taxes described in this Section 3.2.

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        Section 3.3    Subsequent Adjustments.    If, as a result of any payment by United Online of a Tax in connection with an Audit, adjustment, or amended Tax Return described in Section 2.1, FTD receives a reciprocal (i.e., arising directly from such adjustment) net Tax Benefit, FTD shall pay the amount of such Tax Benefit to United Online. If, as a result of any payment by FTD of a Tax in connection with an Audit, adjustment, or amended Tax Return described in Section 2.1 or Section 2.2, United Online receives a reciprocal net Tax Benefit, United Online shall pay the amount of such Tax Benefit to FTD.

        Section 3.4    Determination of Taxes Attributable to the FTD Business.    


ARTICLE IV

DISTRIBUTION TAXES AND ALLOCATION

        Section 4.1    Distribution Taxes.    

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        Section 4.2    Private Letter Rulings; Tax Opinion.    

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        Section 4.3    Carrybacks.    

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        Section 4.4    Allocation of Tax Assets.    

        (a)   United Online and FTD shall cooperate, each at its own expense, in determining the allocation of any Tax Assets or Tax liabilities among the Parties in accordance with the Code and Treasury Regulations (and any applicable state, local and foreign laws). In the absence of controlling legal authority or unless otherwise provided under this Agreement, Tax Assets or Tax liabilities shall be allocated to the legal entity that incurred the cost or burden associated with the creation of such Tax Assets or Tax liabilities. United Online and FTD hereby agree to compute all Taxes for Post-Distribution Periods and Straddle Periods consistently with the determinations made pursuant to this Section 4.4 unless otherwise required by a Final Determination.

        (b)   To the extent that the amount of any Tax Asset is later reduced or increased by a Taxing Authority, or as a result of an Audit or carrybacks of Tax Assets from Post-Distribution Periods of either the UOL Tax Group or the FTD Tax Group, such reduction or increase shall be allocated to the Party to which such Tax Attribute was allocated pursuant to Section 4.4(a)

        Section 4.5    Allocation of Certain Tax Items.    

        Section 4.6    Tax Treatment of Equity-Related Compensation.    

        (a)   United Online or a UOL Affiliate shall be entitled to claim any Tax deduction relating to (A) (i) the exercise of an option award to purchase United Online stock and (ii) the vesting of a restricted stock unit with respect to United Online stock, in each case, held by an employee or former employee of United Online or a UOL Affiliate at the time of such exercise, vesting or payment; (B) with respect to Mark R. Goldston (i) the exercise of an option award to purchase United Online stock or FTD stock and (ii) the vesting of a restricted stock unit with respect to United Online stock or FTD stock; and (C) with respect to a member of the Board of Directors of United Online prior to the

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Distribution (i) the exercise of an option award to purchase United Online stock or FTD stock and (ii) the vesting of a restricted stock unit with respect to United Online stock or FTD stock.

        (b)   Subject to Section 4.6(a)(B) and (C), FTD or an FTD Affiliate shall be entitled to claim any Tax deduction relating to (i) the exercise of an option award to purchase FTD stock and (ii) the vesting of a restricted stock unit with respect to FTD stock, in each case, held by an employee or former employee of United Online or a UOL Affiliate at the time of such exercise, vesting or payment.

        (c)   Upon the exercise of (or FTD's receipt of notice of the intent to exercise) an option award to purchase FTD stock by Mark R. Goldston, FTD shall promptly notify United Online and shall promptly provide documentation and other information necessary to permit United Online to duly and timely prepare and file all Tax Returns (including IRS and other information returns) and duly and timely remit to each Tax Authority any payroll, withholding or other payments due in connection with such exercise. In addition, FTD shall timely pay United Online an amount equal to the applicable income and employment tax withholding due in connection with such exercise. Upon the exercise of (or FTD's receipt of notice of the intent to exercise) an option award to purchase FTD stock by a member of the Board of Directors of United Online prior to the Distribution, FTD shall promptly notify United Online and shall promptly provide documentation and other information necessary to permit United Online to prepare and file all Tax Returns (including IRS and other information returns) in connection with such exercise.


ARTICLE V

INDEMNIFICATION

        Section 5.1    Generally.    The UOL Tax Group shall jointly and severally indemnify FTD, each FTD Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any and all Taxes or Tax deficiencies for which United Online or any UOL Affiliate is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys' fees and costs, that are attributable to, or result from the failure of United Online or any director, officer or employee to make any payment required to be made under this Agreement. The FTD Tax Group shall jointly and severally indemnify United Online, each UOL Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any and all Taxes or Tax deficiencies for which FTD or any FTD Affiliate is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys' fees and costs, that is attributable to, or results from, the failure of FTD, any FTD Affiliate or any director, officer or employee to make any payment required to be made under this Agreement.

        Section 5.2    Inaccurate, Incomplete or Untimely Information.    The UOL Tax Group shall jointly and severally indemnify FTD, each FTD Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any loss, cost, damage, fine, penalty, or other expense of any kind attributable to the negligence of United Online or any UOL Affiliate in supplying FTD or any FTD Affiliate with inaccurate, incomplete or untimely information, in connection with the preparation of any Tax Return. The FTD Tax Group shall jointly and severally indemnify United Online, each UOL Affiliate, and their respective directors, officers and employees, and hold them harmless from and against any loss, cost, damage, fine, penalty, or other expense of any kind attributable to the negligence of FTD or any FTD Affiliate in supplying United Online or any UOL Affiliate with inaccurate, incomplete or untimely information, in connection with the preparation of any Tax Return.

        Section 5.3    Adjustments to Payments.    Any Party that is entitled to receive a payment (the "Indemnitee") under this Agreement from another Party (the "Indemnifying Party") with respect to any Taxes, losses, costs, damages or expenses suffered or incurred by the Indemnitee (an "Indemnified Loss") shall pay to such Indemnifying Party, or the Indemnifying Party shall pay to the Indemnitee, as

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applicable, an amount equal to the difference between any "Tax Saving Amount" actually realized by the Indemnitee in the year of the payment and the amount of the Indemnified Loss. For purposes of this Section 5.3, the "Tax Saving Amount" shall equal the amount by which the Income Taxes of the Indemnitee or any of its affiliates are reduced (including, without limitation, through the receipt of a refund, credit or otherwise), plus any related interest received by the Indemnitee (net of Tax) from a Taxing Authority, as a result of claiming as a deduction or offset on any relevant Tax Return amounts attributable to an Indemnified Loss (the "Indemnifiable Loss Deduction").

        Section 5.4    Reporting of Indemnifiable Loss.    In the event that an Indemnitee incurs an Indemnified Loss, such Indemnitee shall claim as a deduction or offset on any relevant Tax Return (including, without limitation, any claim for refund) such Indemnified Loss to the extent such position is more likely than not (within the meaning of Section 1.6662-4(d) of the Treasury Regulations) to be sustained with respect to United States federal, state and local Tax Returns or has similar appropriate authoritative support with respect to any Tax Return other than a United States federal, state or local Tax Return. Except as otherwise provided in this Agreement, the Indemnitee shall have primary responsibility for the preparation of its Tax Returns and reporting thereon such Indemnifiable Loss Deduction; provided that the Indemnitee shall consult with, and provide the Indemnifying Party with a reasonable opportunity to review and comment on the portion of the Indemnitee's Tax Return relating to the Indemnified Loss. If a Dispute arises between the Indemnitee and the Indemnifying Party as to whether a deduction or tax position with respect to an Indemnified Loss is "more likely than not" (with respect to United States federal, state and local Tax Returns) to be sustained or similar appropriate authoritative support (with respect to any Tax Return other than a United States federal, state or local Tax Return) for the claiming of an Indemnifiable Loss Deduction, such Dispute shall be resolved in accordance with the principles and procedures set forth in Section 8.3. United Online and FTD shall act in good faith to coordinate their Tax Return filing positions with respect to the Taxable Periods that include an Indemnifiable Loss Deduction. Any Tax Saving Amount calculated under Section 5.3 hereof shall be adjusted in the event of an Audit which results in a Final Determination that increases or decreases the amount of the Indemnifiable Loss Deduction reported on any relevant Tax Return of the Indemnitee. The Indemnitee shall promptly inform the Indemnifying Party of any such Audit and shall attempt in good faith to sustain the Indemnifiable Loss Deduction at issue in the Audit. Upon receiving a written notice of a Final Determination in respect of an Indemnifiable Loss Deduction, the Indemnitee shall redetermine the Tax Saving Amount attributable to the Indemnifiable Loss Deduction under Section 5.3 hereof, taking into account the Final Determination (the "Restated Tax Saving Amount"). If the Restated Tax Saving Amount is greater than the Tax Saving Amount, the Indemnitee shall promptly pay the Indemnifying Party an amount equal to the difference between such amounts. If the Restated Tax Saving Amount is less than the Tax Saving Amount, then the Indemnifying Party shall pay to the Indemnitee an amount equal to the difference between such amounts promptly after receipt of written notice setting forth the amount due and the computation thereof.

        Section 5.5    No Indemnification for Tax Items.    Nothing in this Agreement or any other ancillary document shall be construed as a guarantee of the existence or amount of any loss, credit, carryforward, basis or other Tax Item, whether past, present or future, of any Party.

        Section 5.6    Double Recovery.    Notwithstanding anything herein to the contrary, no Party shall be entitled to indemnification hereunder for any amount to the extent such Party has otherwise been reimbursed for such amount.


ARTICLE VI

PAYMENTS

        Section 6.1    In General.    In the event that one party (the "Owing Party") is required to make a payment to another party (the "Owed Party") pursuant to this Agreement, then such payments shall be

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made according to this Article VI. All payments shall be made to the Owed Party or to the appropriate Taxing Authority as specified by the Owed Party within the time prescribed for payment in this Agreement, or if no period is prescribed, within twenty (20) days after delivery of written notice of payment owing together with a computation of the amounts due.

        Section 6.2    Treatment of Payments.    Unless otherwise required by any Final Determination, the Parties agree that any payments made by one Party to the other Party (other than payments of interest pursuant to Section 6.5 and payments of After Tax Amounts pursuant to Section 6.4) pursuant to this Agreement shall be treated for all Tax purposes as nontaxable payments made immediately prior to the Distribution and, accordingly not includible in the taxable income of the recipient.

        Section 6.3    Prompt Performance.    All actions required to be taken by any Party under this Agreement shall be performed within the time prescribed for performance in this Agreement, or if no period is prescribed, such actions shall be performed promptly.

        Section 6.4    After Tax Amounts.    If pursuant to a Final Determination it is determined that the receipt or accrual of any payment made under this Agreement (other than payments of interest pursuant to Section 6.5) is subject to any Tax, the Party making such payment shall be liable for (a) the After Tax Amount with respect to such payment and (b) interest at the rate described in Section 6.5 on the amount of such Tax from the date such Tax accrues through the date of payment of such After Tax Amount. A Party making a demand for a payment pursuant to this Agreement and for a payment of an After Tax Amount with respect to such payment shall separately specify and compute such After Tax Amount. However, a Party may choose not to specify an After Tax Amount in a demand for payment pursuant to this Agreement without thereby being deemed to have waived its right subsequently to demand an After Tax Amount with respect to such payment.

        Section 6.5    Interest.    If an Owing Party fails to make any payment pursuant to this Agreement within the period prescribed for such payment in this Agreement, such Owing Party shall be obligated to pay, in addition to the amount otherwise due, interest on such amount at a rate per annum equal to five percent (5%). Such interest shall be payable at the same time as the payment to which it relates.


ARTICLE VII

TAX PROCEEDINGS

        Section 7.1    Audits.    Except as otherwise provided in Section 7.4, the Party responsible for preparing and filing a Tax Return pursuant to Article II (the "Filing Party") shall have the right to control, contest, and represent the interests of itself and any of its Affiliates in any Audit relating to such Tax Return; provided that if the other Party (the "Non-Filing Party") paid Taxes or would be required to pay Taxes with respect to such Tax Return pursuant to Section 3.1 or Section 3.2, as applicable, the Non-Filing Party shall be entitled to participate in such Audit, at its own cost and expense and with counsel of its own choosing (such counsel to be reasonably acceptable to the Filing Party), and the Filing Party shall not settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit without the prior written consent of the Non-Filing Party (such consent not to be unreasonably withheld, delayed or conditioned) to the extent that the proposed settlement or agreement to any deficiency, claim or adjustment results in a material adjustment to Taxes paid or to be paid by the Non-Filing Party pursuant to Section 3.1 or Section 3.2, as applicable. The Filing Party's rights shall extend to any matter pertaining to the management and control of an Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution or determination of any Tax Item. Each of the Filing Party and the Non-Filing Party shall bear its respective costs incurred in handling, settling, or contesting an Audit, and any costs incurred by both Parties shall be shared equally. The Filing Party shall advise the Non-Filing Party of all significant Tax issues subject to an Audit by any Taxing Authority with respect to which the Non-Filing Party paid Taxes or would be required to pay Taxes pursuant to Section 3.1 or

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Section 3.2, as applicable, and shall keep the Non-Filing Party fully informed on a timely basis with respect to any proposed contest, compromise or settlement thereof. For purposes of this Section 7.1, an adjustment to Taxes paid or to be paid by the Non-Filing Party shall be deemed to be material if and only if such adjustment is reasonably expected to exceed $100,000.

        Section 7.2    Notice.    Within twenty (20) business days after a Party receives a written notice or other information from a Taxing Authority of the existence of a Tax issue that may give rise to an indemnification obligation under this Agreement, such Party shall notify the other Party of such issue, and thereafter shall promptly forward to the other Party copies of notices and material communications with any Taxing Authority relating to such issue. The failure of one Party to notify the other Party of any matter relating to a particular Tax for a Taxable Period or to take any action specified in this Agreement shall not relieve such other Party of any liability and/or obligation which it may have under this Agreement with respect to such Tax for such Taxable Period, except to the extent that such other Party's rights under this Agreement are materially prejudiced by such failure.

        Section 7.3    Remedies.    Subject to Section 5.2, FTD agrees that no claim against United Online and no defense to FTD's liabilities or obligations to United Online under this Agreement shall arise from the resolution by United Online of any deficiency, claim or adjustment relating to the redetermination of any Tax Item of United Online or any UOL Affiliate.

        Section 7.4    Control of Distribution Tax Proceedings.    

        (a)   United Online shall have the right to control, contest, and represent the interests of itself and any UOL Affiliate in any Audits relating to Distribution Taxes for which United Online bears liability pursuant to Section 4.1(a) or Section 4.1(c), and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit. United Online' rights shall extend to any matter pertaining to the management and control of such Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item. FTD shall be entitled through counsel of its choosing and reasonably acceptable to United Online to monitor the conduct or settlement of any such Audit by United Online, and United Online shall keep FTD and such counsel fully informed on a timely basis with respect thereto. United Online shall provide FTD and such counsel with such information as either of them may reasonably request (which request may be general or specific), but all costs and expenses incurred in such monitoring shall be borne by FTD.

        (b)   FTD shall have the right to control, contest, and represent the interests of itself and any FTD Affiliate in any Audits relating to Distribution Taxes for which FTD bears liability pursuant to Section 4.1(b) or Section 4.1(c), and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit. FTD's rights shall extend to any matter pertaining to the management and control of such Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item. United Online shall be entitled through counsel of its choosing and reasonably acceptable to FTD to monitor the conduct or settlement of any such Audit by FTD, and FTD shall keep United Online and such counsel fully informed on a timely basis with respect thereto. FTD shall provide United Online and such counsel with such information as either of them may reasonably request (which request may be general or specific), but all costs and expenses incurred in such monitoring shall be borne by United Online.

        (c)   United Online shall have the right to control and contest any Audits relating to Distribution Taxes for which they both bear liability pursuant to Section 4.1(d) and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Audit; provided that FTD may assume sole control of any such Audit if such Party acknowledges in writing that it has sole liability for any Distribution Taxes that are reasonably expected to arise in such Audit (the Party controlling such Audit, the "Controlling Party" and the other Party, the "Non-Controlling Party"). The control rights shall extend to any matter pertaining to the management

14


and control of such Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item. The Non-Controlling Party shall be entitled through counsel of its choosing and reasonably acceptable to the Controlling Party to monitor the conduct or settlement of any such Audit by the Controlling Party, and the Controlling Party shall keep the Non-Controlling Party and such counsel fully informed on a timely basis with respect thereto. The Controlling Party shall provide the Non-Controlling Party and such counsel with such information as either of them may reasonably request (which request may be general or specific), but all costs and expenses incurred in such monitoring shall be borne by the Non-Controlling Party.


ARTICLE VIII

MISCELLANEOUS PROVISIONS

        Section 8.1    Effectiveness.    This Agreement shall become effective on the                        .

        Section 8.2    Cooperation and Exchange of Information.    

Each Party shall use reasonable best efforts to comply in connection with the foregoing matters within ten (10) business days or such shorter period as may be required by the applicable Taxing Authority or otherwise in connection with any Audit. Each Party shall make its employees and facilities available on a reasonable and mutually convenient basis in connection with the foregoing matters.

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        Section 8.3    Dispute Resolution.    Unless otherwise agreed by the Parties, any dispute, controversy or claim arising out of or relating to this Agreement or the breach, termination or validity hereof ("Dispute") which arises between United Online and FTD shall be resolved pursuant to this Section 8.3. The Dispute shall first be negotiated between the appropriate senior executives of United Online and FTD who shall have the authority to resolve the matter. Such executives shall meet to attempt in good faith to negotiate a resolution of the Dispute prior to pursuing other available remedies, within ten (10) days of receipt by United Online or FTD, as applicable, of notice of a Dispute, which date of receipt shall be referred to herein as the "Dispute Resolution Commencement Date." If the senior executives are unable to resolve the Dispute within thirty (30) days from the Dispute Resolution Commencement Date, then United Online and FTD shall jointly retain a nationally recognized accounting firm reasonably acceptable to both Parties to resolve the Dispute. The accounting firm selected by the Parties shall act as an arbitrator to resolve all points of disagreement, and its decision shall be final and binding upon all parties involved. Following the decision of such accounting firm, United Online and FTD shall each take or cause to be taken any action necessary to implement the decision of such accounting firm. United Online and FTD shall share equally the administrative costs of the arbitration and such accounting firm's fees, disbursements and expenses, and shall each bear their respective other costs and expenses related to the arbitration.

        Section 8.4    Changes in Law.    

        (a)   Any reference to a provision of the Code, Treasury Regulations, or a law of another jurisdiction shall include a reference to any applicable successor provision or law.

        (b)   If, due to any change in applicable law or regulations or their interpretation by any court of law or other governing body having jurisdiction subsequent to the date specified in the preamble to this Agreement, performance of any provision of this Agreement or any transaction contemplated hereby shall become impracticable or impossible, the Parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

        Section 8.5    Confidentiality.    Each of the Parties hereto shall hold and cause its directors, officers, employees, advisors and consultants to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information (other than any such information relating solely to the business or affairs of such Party) concerning the other Party hereto furnished it by such other Party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) in the public domain through no fault of such Party or (2) later lawfully acquired from other sources not under a duty of confidentiality by the Party to which it was furnished), and no Party shall release or disclose such information to any other Person, except its Affiliates and its and their directors, officers, employees, auditors, attorneys, financial advisors, bankers or other consultants who shall be advised of and agree to be bound by the provisions of this Section 8.5. Each of the Parties hereto shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other Party if it exercises the same care as it takes to preserve confidentiality for its own similar information.

        Section 8.6    Affiliates.    

        (a)   United Online shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any other UOL Group Member; provided that if it is contemplated that a UOL Group Member may cease to be controlled, directly or indirectly, by United Online as a result of a transfer of its stock or other ownership interests to a third party in exchange for consideration in an amount approximately equal to the fair market value of the stock or other ownership interests transferred and such consideration is not expected to be distributed outside of the UOL Group to the shareholders of United Online, then United Online may request in writing no later than thirty (30) days prior to such cessation that FTD execute a release of

16


such UOL Group Member from its obligations under this Agreement effective as of such transfer, provided that United Online shall succeed to the rights of such UOL Group Member under this Agreement and shall have confirmed in writing the obligations of United Online and the remaining UOL Group Members with respect to their own obligations and the obligations of the departing UOL Group Member, and that such departing UOL Group Member shall have executed a release of any rights it may have against FTD by reason of this Agreement.

        (b)   FTD shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any other member of the FTD Group; provided that if it is contemplated that member of the FTD Group may cease to be controlled, directly or indirectly, by FTD as a result of a transfer of its stock or other ownership interests to a third party in exchange for consideration in an amount approximately equal to the fair market value of the stock or other ownership interests transferred and such consideration is not expected to be distributed outside of the FTD Group to the shareholders of FTD, then FTD may request in writing no later than thirty (30) days prior to such cessation that United Online execute a release of such member of the FTD Group from its obligations under this Agreement effective as of such transfer, provided that FTD shall succeed to the rights of such member of the FTD Group under this Agreement and shall have confirmed in writing the obligations of FTD and the remaining members of the FTD Group with respect to their own obligations and the obligations of the departing member of the FTD Group, and that such departing member of the FTD Group shall have executed a release of any rights it may have against United Online by reason of this Agreement

        Section 8.7    Authority.    Each of the Parties hereto represents, on behalf of itself and its affiliates, to the other that (a) it has the corporate power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and general equity principles.

        Section 8.8    Setoff.    All payments to be made by any Party under this Agreement may be netted against payments due to such Party under this Agreement, but otherwise shall be made without setoff, counterclaim or withholding, all of which are hereby expressly waived.

        Section 8.9    Amendments and Waivers.    

        (a)   Subject to Section                   of the Separation Agreement, this Agreement may not be amended except by an agreement in writing signed by both Parties.

        (b)   Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the Party entitled to the benefit thereof and any such waiver shall be validly and sufficiently given for the purposes of this Agreement if it is in writing signed by an authorized representative of such Party. No delay or failure in exercising any right, power or remedy hereunder shall affect or operate as a waiver thereof; nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies that either Party would otherwise have.

        Section 8.10    Entire Agreement.    This Agreement, the Separation Agreement, the other Ancillary Agreements and the Exhibits and Schedules attached thereto, constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof.

        Section 8.11    Third-Party Beneficiaries.    Except as provided in Article V relating to Indemnitees, this Agreement is solely for the benefit of United Online, the UOL Affiliates, FTD and the FTD

17


Affiliates, and shall not be deemed to confer upon any other third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

        Section 8.12    Notices.    All notices, requests, permissions, waivers and other communications hereunder shall be provided in accordance with the provisions of Section of the Separation Agreement.

        Section 8.13    Counterparts; Electronic Delivery.    This Agreement may be executed in multiple counterparts, each of which when executed shall be deemed to be an original, but all of which together shall constitute one and the same agreement. Execution and delivery of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic means shall be deemed to be, and shall have the same legal effect as, execution by an original signature and delivery in person.

        Section 8.14    Severability.    If any term or other provision of this Agreement is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any provision in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.

        Section 8.15    Assignability; Binding Effect.    Except as otherwise expressly provided in this Agreement, neither Party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, and any attempt to assign this Agreement without such consent shall be void and of no effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. This Agreement may be enforced separately by each member of the UOL Tax Group and each member of the FTD Tax Group.

        Section 8.16    Governing Law    This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Delaware, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction.

        Section 8.17    Construction.    This Agreement shall be construed as if jointly drafted by the Parties, and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have relied upon their own knowledge and judgment and upon the advice of the attorneys of their choosing. The Parties have had access to independent legal advice, have conducted such investigations they and their counsel thought appropriate, and have consulted with such other independent advisors as they and their counsel deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by the other Party, or such other Party's employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if one exists, on the part of the other Party (or such other Party's employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement.

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        Section 8.18    Titles and Headings.    Titles and headings to Sections and Articles herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

        Section 8.19    Coordination with Employee Matters Agreement.    To the extent any covenants or agreements between the Parties with respect to employment Taxes are set forth in the Employee Matters Agreement, such matters shall be governed exclusively by the Employee Matters Agreement and not by this Agreement.

        Section 8.20    Conflict or Inconsistency Between Agreements.    Except as provided in Section 8.19, in the event of any conflict or inconsistency between any provision of this Agreement and any provision of either the Separation Agreement or any of the other Ancillary Agreements, the applicable provisions of this Agreement shall prevail.

[Signature Page Follows]

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        WHEREFORE, the Parties have signed this Tax Sharing Agreement effective as of the date first set forth above.

 
   
   
    UNITED ONLINE, INC., on behalf of itself and the UOL Affiliates

 

 

By:

 

  

        Name:
        Title:

 

 

FTD COMPANIES, INC., on behalf of itself and the FTD Affiliates

 

 

By:

 

 

        Name:
        Title:



QuickLinks

TAX SHARING AGREEMENT
RECITALS
ARTICLE I DEFINITIONS
ARTICLE II PREPARATION AND FILING OF TAX RETURNS
ARTICLE III LIABILITY FOR TAXES
ARTICLE IV DISTRIBUTION TAXES AND ALLOCATION
ARTICLE V INDEMNIFICATION
ARTICLE VI PAYMENTS
ARTICLE VII TAX PROCEEDINGS
ARTICLE VIII MISCELLANEOUS PROVISIONS

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TABLE OF CONTENTS
FTD COMPANIES, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PRELIMINARY AND SUBJECT TO COMPLETION, DATED JUNE 28, 2013

Exhibit 99.1

LOGO

                    , 2013

Dear United Online, Inc. Stockholder:

        We are pleased to inform you that United Online, Inc.'s ("United Online") Board of Directors has approved the distribution of all of the shares of common stock of FTD Companies, Inc., a wholly-owned subsidiary of United Online ("FTD"), to the stockholders of United Online.

        As a result of the distribution, United Online will be separated into two independent, publicly-traded companies, and United Online stockholders will own all of the outstanding shares of FTD and will continue to own all of the outstanding shares of United Online. United Online will continue to operate its Communications and Content & Media businesses, and its common stock will continue to be listed on the Nasdaq Global Select Market under the symbol "UNTD." FTD will own and operate its floral and gift products and services businesses. FTD has applied to list its common stock on the Nasdaq Global Select Market under the symbol "FTD."

        The distribution of FTD common stock will occur on                    , 2013, by way of a pro rata dividend to United Online stockholders. This means that each United Online stockholder will receive one share of FTD common stock for every one share of United Online common stock held of record as of the close of business on                    , 2013, the record date for the distribution. Shares of FTD common stock will be issued in book-entry form only, which means that no physical stock certificates will be issued. A book-entry account statement reflecting your ownership of shares of FTD common stock will be mailed to you, or your brokerage account will be credited for the shares.

        Stockholder approval of the distribution is not required. You do not need to take any action to receive your shares of FTD common stock. You do not need to pay any consideration for your shares of FTD common stock or surrender or exchange your shares of United Online common stock.

        If you sell your shares of United Online common stock after the record date and prior to or on the distribution date, you may also be selling your right to receive shares of FTD common stock. You are encouraged to consult with your financial advisor regarding specific implications of selling your United Online common stock after the record date and prior to or on the distribution date. United Online intends for the distribution of FTD common stock to be tax-free for stockholders. Accordingly, the distribution is subject to certain customary conditions including, among other things, the receipt of a ruling from the Internal Revenue Service and an opinion of tax counsel confirming that the distribution generally will be tax-free for U.S. federal income tax purposes. You should consult your own tax advisor as to the particular consequences of the distribution to you, including the applicability and effect of any U.S. federal, state and local, and foreign tax laws, which may result in the distribution being taxable to you.

        The enclosed information statement, which is being mailed to all United Online stockholders, describes the distribution in detail and contains important information about FTD, including its historical consolidated financial statements. We urge you to read the information statement carefully and in its entirety.

        We want to thank you, at this historic and exciting time, for your continued support for United Online, and we look forward to your support of FTD in the future.

    Sincerely,

 

 

Mark R. Goldston
Chairman, President and Chief Executive Officer
United Online, Inc.

PRELIMINARY AND SUBJECT TO COMPLETION, DATED JUNE 28, 2013

LOGO

, 2013

Dear Future FTD Companies, Inc. Stockholder:

        We are very pleased that you will soon be a stockholder of FTD Companies, Inc. ("FTD"). As a result of the separation of our company from United Online, Inc., we will once again become an independent, publicly-traded company, with a storied history dating back 103 years.

        FTD will continue to be a premier provider of floral, gift and related products and services to consumers and retail florists, as well as to other retail locations offering floral and gift products primarily in the U.S., Canada, the U.K., and the Republic of Ireland. Our business uses the highly-recognized FTD® and Interflora® brands, both supported by the iconic Mercury Man logo that is displayed in tens of thousands of floral shops worldwide. Our portfolio of brands also includes Flying Flowers, Flowers Direct, and Drake Algar in the U.K.

        As an independent, publicly-traded company, we believe we can more effectively focus on our key strategic objectives and maximize long-term value to you as a stockholder.

        In connection with our separation from United Online, Inc., we have applied to list our common stock on the Nasdaq Global Select Market under the symbol "FTD."

        We invite you to learn more about FTD and its subsidiaries by reviewing the enclosed information statement. We are excited by our future prospects, and look forward to your support as a holder of our common stock.

  Sincerely,

 

Robert S. Apatoff

  President

  FTD Companies, Inc.

Information contained herein is subject to completion or amendment. A registration statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

PRELIMINARY AND SUBJECT TO COMPLETION, DATED JUNE 28, 2013

INFORMATION STATEMENT

FTD COMPANIES, INC.

Common Stock
(Par Value $0.0001 Per Share)



        We are sending this Information Statement to you in connection with the separation of our company, FTD Companies, Inc. ("FTD"), from United Online, Inc. ("United Online"). The separation will be effected by a distribution by United Online of all of the issued and outstanding shares of FTD common stock, on a pro rata basis, to United Online stockholders. As a result of the distribution, each United Online stockholder will receive one share of FTD common stock for every one share of United Online common stock held of record as of the close of business on                  , 2013, the record date for the distribution. The distribution is expected to take place on                  , 2013. The separation, distribution and other corporate transactions required to effect the separation of FTD from United Online and the distribution of FTD common stock to United Online stockholders are collectively referred to in this Information Statement as the "Separation."

        Stockholder approval of the Separation is not required. You do not need to take any action to receive your shares of FTD common stock. You do not need to pay any consideration for your shares of FTD common stock or surrender or exchange your shares of United Online common stock. Shares of FTD common stock will be issued in book-entry form only, which means that no physical stock certificates will be issued. A book-entry account statement reflecting your ownership of shares of FTD common stock will be mailed to you, or your brokerage account will be credited for the shares.

        The Separation is subject to certain customary conditions, including, among other things, the receipt of a ruling from the Internal Revenue Service and an opinion of tax counsel confirming that the distribution will generally be tax-free for U.S. federal income tax purposes.

        United Online currently owns all of the outstanding shares of FTD common stock. Accordingly, there is no current trading market for FTD common stock. However, we expect that a limited market for FTD common stock, commonly known as a "when-issued" trading market, will begin on or shortly before the record date, and we expect that "regular-way" trading of FTD common stock will begin on the first trading day following the distribution date. Upon consummation of the Separation, United Online common stock will continue to be listed on the Nasdaq Global Select Market ("NASDAQ") under the symbol "UNTD," and we expect that FTD common stock will be listed on NASDAQ under the symbol "FTD."

        As discussed in this Information Statement, if you sell your shares of United Online common stock in the "regular-way" market after the record date and on or prior to the distribution date, you will also be selling your right to receive shares of FTD common stock in the distribution. You are encouraged to consult with your financial advisor regarding the specific implications of selling your shares of United Online common stock after the record date and on or prior to the distribution date.

        We are an "emerging growth company" as defined under the federal securities laws. For implications of our status as an "emerging growth company," please see "Summary—Emerging Growth Company Status" beginning on page 3, "Risk Factors" beginning on page 18, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 59.

        In reviewing this Information Statement, you should carefully consider the matters described in the section entitled "Risk Factors" beginning on page 18.



        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this Information Statement is truthful or complete. Any representation to the contrary is a criminal offense.



This Information Statement is not an offer to sell, or a solicitation of an offer to buy, any securities.

This Information Statement was first mailed to United Online stockholders on or about                , 2013.

   

The date of this Information Statement is                , 2013



TABLE OF CONTENTS

SUMMARY

    1  

RISK FACTORS

   
18
 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

   
42
 

THE SEPARATION

   
43
 

CAPITALIZATION

   
52
 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

   
53
 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

   
54
 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
59
 

BUSINESS

   
86
 

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

   
96
 

MANAGEMENT

   
101
 

EXECUTIVE COMPENSATION

   
108
 

SECURITY OWNERSHIP OF MANAGEMENT, DIRECTORS AND PRINCIPAL STOCKHOLDERS

   
114
 

DESCRIPTION OF CAPITAL STOCK

   
117
 

DESCRIPTION OF CERTAIN INDEBTEDNESS

   
122
 

WHERE YOU CAN FIND MORE INFORMATION

   
123
 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

   
F-1
 

i


      

      


SUMMARY

        This summary highlights selected information contained elsewhere in this Information Statement and provides an overview of our company, our separation from United Online and the distribution of our common stock by United Online to its stockholders. For a more complete understanding of our business and the Separation, you should read this entire Information Statement carefully, particularly the discussions set forth under "Risk Factors," "Cautionary Statement Concerning Forward-Looking Statements," and our historical consolidated financial statements, our unaudited pro forma condensed consolidated financial statements and the respective notes to those financial statements appearing elsewhere in this Information Statement. Except as otherwise indicated or unless the context otherwise requires, (1) references in this Information Statement to "FTD," our "company," "we," "our," or "us" refer to FTD Companies, Inc., a Delaware corporation, and its consolidated subsidiaries after giving effect to the Separation, and (2) references in this Information Statement to "United Online" or "UOL" refer to United Online, Inc., a Delaware corporation, its predecessors and its consolidated subsidiaries, other than, for all periods following the Separation, FTD Companies, Inc. and its consolidated subsidiaries.


Our Company

        We are a premier floral and gift products and services company. We provide floral, gift and related products and services to consumers and retail florists, as well as to other retail locations offering floral and gift products primarily in the U.S., Canada, the U.K., and the Republic of Ireland. Our business uses the highly-recognized FTD® and Interflora® brands, both supported by the iconic Mercury Man logo that is displayed in tens of thousands of floral shops worldwide. Our portfolio of brands also includes Flying Flowers, Flowers Direct, and Drake Algar in the U.K.


Our Competitive Strengths

        We believe that our company possesses a number of competitive advantages that distinguishes us from our competitors, including:

    Strong brand recognition:  Our FTD and Interflora brands, both supported by the iconic Mercury Man logo that is displayed in tens of thousands of floral shops worldwide, are highly recognizable. Our Flowers Direct, Flying Flowers, and Drake Algar brands are also well known in the U.K. market.

    Comprehensive and innovative products and services:  We believe that our product innovation distinguishes us from our competitors. We offer exclusive FTD and Interflora branded products and other exclusive products designed with our strategic partners, which provide our customers with a wide selection of products for gift-giving and self-purchase occasions. Further, for our floral network members, we provide a comprehensive suite of products and services that promote their revenue growth and enhance their operating efficiencies, including services that enable such members to send, receive, and deliver floral orders.

    Complementary consumer and floral network businesses:  The majority of floral orders generated by our consumer business are hand-designed and hand-delivered by the members of our floral networks.

    Strong cash flow:  Orders placed on our consumer websites or through our telephone numbers typically are paid for using a credit, debit or payment card, or PayPal; therefore, consumers generally pay for floral and gift orders before we pay our floral network members and third-party providers to fulfill and deliver them. Further, we do not maintain significant physical inventory because our floral network members and third-party suppliers maintain substantially all floral and gift physical inventory and facilities. We anticipate that our business will continue to generate stable cash flow going forward, which will allow us to continue to service and pay down our debt and to invest in our business.

 

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    Experienced management team:  Our management team has a strong track record of performance and execution.


Our Business Strategy

        Our vision is to be the leading and most trusted floral and gifting company in the world. Our mission is to inspire, support, and delight our customers when expressing life's most important sentiments.

    Product Selection:  Our extensive range of fresh cut flowers and floral arrangements, plants and gifts provides our customers with choice in expressing life's most important sentiments. We offer exclusive FTD and Interflora branded products and other exclusive products designed with our strategic partners. Our premium and branded floral and gift products include The FTD College Rose Collection, FTD Floral Jewels™ Birthstone Collection, FTD Color Your Day™ Collection, Better Homes and Gardens Collection, FTD Luxury Collection™, USO Collection, Jane Seymour Silk Botanicals, Vera Wang Bridal and Everyday Collections, along with Baccarat, Nambe, Orrefors, Rogaska, Waterford, Wedgewood, and Godiva, among others. We believe we can further inspire, support, and delight our customers with floral and gift categories such as gift baskets, chocolate and sweets, and jewelry. The aforementioned trademarks are the registered and unregistered trademarks of their respective owners.

    Delivery Services:  Our products can be purchased through numerous websites using a computer or mobile device, by telephone or in retail shops. We offer a variety of delivery options, including same-day delivery (subject to certain limitations) to the U.S., Canada, the U.K., and the Republic of Ireland; and next-day and future-day delivery service throughout the world. Our fulfillment model includes independent retail florists and third-party vendors who ship directly to our customers. Further, we are part of an international network of floral retailers, which enables consumers to purchase products for delivery in more than 150 countries.

    Quality of Products and Services:  We offer our customers a satisfaction guarantee under which we guarantee fresh, beautiful floral arrangements and plants that will generally last at least seven days. We strive to deliver high caliber customer service to our consumer customers, floral network members, and other customers. We operate a customer service center in our headquarters in Downers Grove, Illinois, and in other locations in the U.S., the U.K., and in outsourced locations. High quality products and excellent customer service are critical to the brand strength and brand loyalty that we have built over the past 103 years.

        We are seeking to expand our business by, among other things, marketing to our current and potential consumer and floral network customers. Our marketing efforts are primarily focused on generating orders from new and existing customers; marketing our services to our floral network members; attracting new members to our floral networks; and marketing our services to alternative channels such as supermarkets and mass merchants. We also engage in a variety of activities to build and enhance the FTD, Interflora, and associated brands.

        For our consumer business, we engage in multi-channel, integrated marketing efforts, which include online advertising and marketing, including search engine marketing and optimization; social media and group-buying programs; co-marketing and affiliate partnerships and loyalty programs such as airlines, credit card companies and hotel chains; database marketing to existing consumer customers featuring email promotions; direct mail and other forms of print advertising; an email-based reminder service that provides consumers with personalized reminders of occasions such as birthdays, anniversaries, and key gift-giving holidays; and radio and television advertising. As consumer shopping continues to migrate from computers to mobile devices, we are committed to providing the best shopping experience, regardless of device type.

 

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        For our floral network business, our marketing efforts include member appreciation and training events; sponsoring and participating in floral and retail industry trade shows; and offline media campaigns. In addition, many of our marketing efforts for our consumer business are also designed to integrate with and enhance the businesses of our floral network members. By enhancing the FTD and Interflora brands, we increase the possibility that a consumer will place an order directly with one of our floral network members since floral retailers frequently highlight their association with our floral networks in their own marketing efforts. We also employ dedicated sales forces to market our products and services to our floral network members and to encourage other floral retailers to become members of our floral networks.

        As part of our business strategy, we intend to expand the breadth of our brand through organic growth and, where appropriate, through the acquisition of complementary businesses.

        We generate revenues primarily from the sale of products and services.

    Products Revenues:  Products revenues are derived primarily from selling floral, gift and related products to consumers. Products revenues also include revenues generated from sales of branded and non-branded hard goods, software and hardware systems, cut flowers, packaging and promotional products, and a wide variety of other floral-related supplies to our floral network members.

    Services Revenues:  Services revenues are derived primarily from orders sent to floral network members and fees for floral network services.


Corporate Information

        Our company, FTD Companies, Inc., formerly known as UNOL Intermediate, Inc., is a Delaware corporation that was formed in April 2008 in connection with United Online's acquisition of FTD Group, Inc., a Delaware corporation ("FTD Group"). FTD Group is a Delaware corporation that was formed in 2003 solely for the purpose of acquiring majority ownership of FTD, Inc. FTD, Inc. is a Delaware corporation that commenced operations in 1994 and includes the operations of its principal operating subsidiaries, Florists' Transworld Delivery, Inc., FTD.COM Inc. ("FTD.COM") and Interflora British Unit ("Interflora").


"Emerging Growth Company" Status

        As a company with less than $1 billion in revenues during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"). For as long as a company is deemed to be an "emerging growth company," it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. These provisions include:

    an exemption from the auditor attestation requirement in the assessment of the "emerging growth company's" internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act");

    an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies;

    an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board (the "PCAOB") requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

    reduced disclosure about the "emerging growth company's" executive compensation arrangements; and

 

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    an exemption from the requirements of holding a nonbinding advisory vote on executive compensation and the requirement to obtain stockholder approval of any golden parachutes not previously approved.

        Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

        We would cease to be an "emerging growth company" upon the earliest of:

    the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement filed under the Securities Act;

    the last day of the fiscal year in which our total annual gross revenues exceed $1 billion;

    the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities; or

    the date on which we become a "large accelerated filer," as defined in Rule 12b-2 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market value of our common stock held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.


The Separation

Overview

        On                        , 2013, United Online's Board of Directors approved the Separation. On the distribution date, holders of United Online common stock will receive one share of FTD common stock for every one share of United Online common stock held at the close of business on the record date. Stockholders who are entitled to receive shares of FTD common stock in the distribution will not be required to pay any cash or deliver any other consideration, including any shares of United Online common stock, to receive shares of FTD common stock in the distribution.

        Prior to the Separation, we will have entered into a separation and distribution agreement (the "Separation and Distribution Agreement") and several other ancillary agreements with United Online for the purpose of allocating various assets, liabilities, and obligations between our company and United Online. These agreements will govern our relationship with United Online following the Separation and will provide arrangements for employee matters, tax matters, technology and intellectual property matters, legal and regulatory matters, and certain other liabilities and obligations. These agreements will also include arrangements with respect to transition services, which will generally terminate after a period of 12 months (subject to an option, at FTD's election, to extend for up to an additional 12 months). The Separation and Distribution Agreement will provide that we will indemnify United Online against any and all losses relating to liabilities arising out of the FTD business, and that United Online will indemnify us against any and all losses relating to liabilities arising out of the UOL businesses. See "Certain Relationships and Related-Party Transactions—Agreements with United Online."

        The distribution of FTD common stock as described in this Information Statement is subject to the satisfaction or waiver of certain conditions. Even if all of the conditions have been satisfied, United Online's Board of Directors may, in its sole and absolute discretion, terminate and abandon the Separation at any time prior to the distribution date if United Online's Board of Directors determines,

 

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in its sole discretion, that the Separation is not in the best interests of United Online or its stockholders, or that it is not advisable to separate FTD from United Online. See "The Separation—Conditions to the Separation."

Questions and Answers About the Separation

        The following provides only a summary of the terms of the Separation. For a more detailed description of the matters described below, see "The Separation."

Q:
What is the Separation?

A:
The Separation is a transaction by which FTD will separate from United Online through the distribution of FTD common stock to the stockholders of United Online. Following the Separation, (1) FTD will be a public company and will own and operate its consumer business and floral network business (collectively, the "FTD business"), and (2) United Online will continue as a public company and will own and operate its Communications and Content & Media businesses (collectively, the "UOL businesses").

Q:
What are the reasons for and benefits of separating FTD from United Online?

A:
United Online's Board of Directors regularly reviews the businesses that comprise United Online to ensure that United Online's resources are being put to use in a manner that is in the long-term interests of United Online and its stockholders. United Online has reviewed various strategic alternatives and determined that the formation of two "pure-play" businesses offers the best potential for long-term stockholder and corporate value. Additionally, United Online's Board of Directors believes that, as a "pure-play" company that is separate and independent from United Online following the Separation, FTD will be well positioned to deliver stockholder and corporate value for the following reasons:

FTD is expected to have more strategic flexibility, including more opportunities for strategic partnerships or acquisitions, including potential acquisitions using its equity as consideration;

FTD is expected to be in a better position to optimize its capital structure than a larger conglomerate business;

FTD's operating structure is expected to be streamlined, with decision making improved by reducing management layers; and

FTD is expected to create more effective equity compensation in the form of FTD common stock, the performance of which will be more closely aligned with the performance of its senior management.

In determining whether to effect the Separation, United Online's Board of Directors also has considered the costs and risks associated with the Separation. Notwithstanding these costs and risks, United Online's Board of Directors has determined that, for the reasons outlined above, the Separation provides each of United Online and FTD with certain opportunities and benefits that it expects will enhance stockholder and corporate value. For a more detailed discussion of the reasons for the Separation, see "The Separation—Reasons for the Separation."

Q:
What will I receive in the distribution?

A:
You will receive one share of FTD common stock for every one share of United Online common stock you own as of the close of business on the record date.

 

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Q:
What will I retain after the distribution?

A:
You will retain your shares of United Online common stock, and your proportionate interest in United Online will not change as a result of the Separation.

Q:
Why is the Separation being structured as a distribution?

A:
The distribution generally will be tax-free for U.S. federal income tax purposes. United Online believes that such a tax-free distribution of FTD shares is the most efficient way to accomplish the Separation and will enhance long-term value for United Online stockholders.

Q:
How many shares of FTD common stock will be distributed in total?

A:
Approximately       million shares of FTD common stock will be distributed in the Separation, based on the total number of shares of United Online common stock expected to be outstanding as of the record date. The actual number of shares of FTD common stock to be distributed will be calculated on the record date.

Q:
Will United Online retain any interest in FTD following the Separation?

A:
No. United Online will distribute all of the issued and outstanding shares of FTD common stock to its stockholders. Following the distribution, FTD will be a separate company from United Online, and United Online will not retain any ownership interest in FTD.

Q:
What is the record date for the distribution?

A:
The record date for the distribution will be the close of business on                        , 2013.

Q:
When will the distribution occur?

A:
The distribution will occur on or around                        , 2013.

Q:
What do I have to do to participate in the Separation?

A:
No stockholder approval of the distribution is required or sought, although you are urged to read this entire document carefully and in its entirety. You are not being asked for a proxy, and we request that you not send a proxy. No action is required on your part to receive your shares of FTD common stock. You will neither be required to pay any consideration for the new shares nor to surrender any shares of United Online common stock to participate in the Separation.

Q:
How will United Online distribute shares of FTD common stock?

A:
All shares of FTD common stock will be distributed as uncertificated shares registered in book-entry form through the direct registration system. No physical stock certificates will be distributed. Following the distribution, United Online will cause the transfer agent to deliver an account statement to each holder of FTD common stock reflecting the number of shares of FTD common stock held by such holder. If you own your United Online shares beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the number of FTD shares you receive in the distribution. For a more detailed description, see "The Separation—When and How You Will Receive Our Shares."

Q:
What are the U.S. federal income tax consequences of the distribution?

A:
The distribution is conditioned on the receipt by United Online of a ruling (the "IRS Ruling") from the Internal Revenue Service (the "IRS") and an opinion from United Online's tax counsel,

 

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    in form and substance acceptable to United Online and FTD (the "Tax Opinion"), substantially to the effect that the distribution of shares of FTD common stock will qualify as a tax-free transaction under Section 355 of the Internal Revenue Code of 1986, as amended (the "Code"), and that, for U.S. federal income tax purposes, (1) no gain or loss will be recognized by United Online upon the distribution of FTD common stock in the Separation, and (2) no gain or loss generally will be recognized by, and no amount generally will be included in the income of, holders of United Online common stock upon the receipt of shares of FTD common stock. Such conditions are waivable by United Online's Board of Directors in its sole and absolute discretion. For a more detailed description, see "The Separation—Material U.S. Federal Income Tax Consequences of the Separation."

Q:
How will the distribution affect my tax basis in my shares of United Online common stock?

A:
Assuming that the distribution is tax-free to United Online stockholders, your tax basis in United Online common stock held by you immediately prior to the distribution will be allocated between your United Online common stock and FTD common stock that you receive in the distribution in proportion to the relative fair market values of each immediately following the distribution. United Online will provide its stockholders with information to enable them to compute their tax basis in both United Online and FTD shares. This information will be posted on United Online's website, www.unitedonline.com, promptly following the distribution date. You should consult your tax advisor about how this allocation will work in your situation, including a situation where you have purchased United Online shares at different times or for different amounts, and regarding any particular consequences of the distribution to you. For a more detailed description, see "The Separation—Material U.S. Federal Income Tax Consequences of the Separation."

Q:
Will FTD's common stock be listed on a stock exchange?

A:
There is currently no public market for FTD common stock. A condition to the Separation is the listing of FTD common stock on NASDAQ. We are in the process of applying to list FTD common stock on NASDAQ and expect to list under the ticker symbol "FTD." It is anticipated that trading of FTD common stock will commence on a "when-issued" basis at least two trading days prior to the record date under the symbol "FTDWI." "When-issued" trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. "When-issued" trades generally settle within four trading days after the distribution date. On the first trading day following the distribution date, any "when-issued" trading with respect to FTD common stock will end, and "regular-way" trading will begin. "Regular-way" trading refers to trading after a security has been issued and typically involves a transaction that settles on the third full trading day following the date of the transaction. For a more detailed description, see "The Separation—Market for Our Common Stock."

Q:
Will my shares of United Online common stock continue to trade?

A:
Yes. United Online common stock will continue to be listed and traded on NASDAQ under the symbol "UNTD."

Q:
If, on or before the distribution date, I sell shares of United Online common stock that I held on the record date, am I still entitled to receive shares of FTD common stock distributable with respect to the shares of United Online common stock I sold?

A:
Beginning on or shortly before the record date and continuing up to and including the distribution date, United Online expects that its common stock will trade in two markets on NASDAQ: a "regular-way" market and an "ex-distribution" market. If you are a holder of record of shares of United Online common stock as of the record date and choose to sell those shares in the

 

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    "regular-way" market after the close of business on the record date and up to and including the distribution date, you will also be selling the right to receive shares of FTD common stock in the distribution. However, if you are a holder of record of shares of United Online common stock as of the record date and choose to sell those shares in the "ex-distribution" market after the close of business on the record date and up to and including the distribution date, you will still receive the shares of FTD common stock that you would be entitled to receive in the distribution pursuant to your ownership of the shares of United Online common stock. You are encouraged to consult with your financial advisor regarding the specific implications of selling shares of United Online common stock prior to or on the distribution date.

Q:
Will the Separation affect the trading price of my United Online common stock?

A:
Yes. The trading price of shares of United Online common stock immediately following the distribution will be lower than immediately prior to the distribution because its trading price will no longer reflect the value of the FTD business. We cannot provide you with any assurance as to the price at which either the United Online shares or FTD shares will trade following the Separation.

Q:
What will the relationship be between United Online and FTD after the Separation?

A:
Following the Separation, we will be an independent, publicly-traded company, and United Online will have no continuing ownership interest in us. We will have entered into the Separation and Distribution Agreement and several other ancillary agreements with United Online for the purpose of allocating various assets, liabilities, and obligations between our company and United Online. These agreements will govern our relationship with United Online following the Separation and will provide arrangements for employee matters, tax matters, technology and intellectual property matters, legal and regulatory matters, and certain other liabilities and obligations. These agreements will also include arrangements with respect to transition services, which will generally terminate after a period of 12 months (subject to an option, at FTD's election, to extend for up to an additional 12 months). The Separation and Distribution Agreement will provide that we will indemnify United Online against any and all losses relating to liabilities arising out of the FTD business, and that United Online will indemnify us against any and all losses relating to liabilities arising out of the UOL businesses.

Q:
Will FTD retain any debt in connection with the Separation?

A:
Yes. Prior to the Separation, FTD Group intends to either refinance its indebtedness under that certain credit agreement, dated June 10, 2011, by and among FTD Group, the financial institutions party thereto from time to time as lenders, Wells Fargo Securities, LLC, as sole lead arranger and sole book runner, and Wells Fargo Bank, National Association, as administrative agent for the lenders (the "Credit Agreement"), or seek consent of and/or waiver from the lenders as required by the terms of the Credit Agreement to effect the Separation and to make certain amendments to the Credit Agreement related to the Separation. At December 31, 2012, the outstanding principal balance of the term loan under the Credit Agreement was $246 million. At December 31, 2012, the revolving credit facility under the Credit Agreement was undrawn, except for $1.5 million in outstanding letters of credit.

 

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Q:
What will happen to United Online equity awards in connection with the Separation?

A:
Outstanding United Online equity awards at the time of the Separation will be treated as follows:

Stock Options.    Options to purchase shares of United Online common stock ("United Online Options") that are outstanding on the distribution date and held by any individual who is employed by FTD prior to the Separation (each, an "FTD Employee") will be converted into options to purchase shares of our common stock ("FTD Options"), without any changes to the original terms of the United Online Options, other than appropriate adjustments to increase the number of shares of our common stock subject to each FTD Option and reduce the exercise price payable per share, so as to preserve the value that existed with respect to the United Online Options immediately prior to the Separation. No changes will be made with respect to United Online Options held by any individual who is employed by United Online immediately prior to the Separation (each, a "Remaining Employee") or former or retired employees other than similar adjustments with respect to the number of shares of United Online common stock subject to each United Online Option and the exercise price payable per share so as to preserve the value that existed with respect to such United Online Option immediately prior to the Separation.

United Online Options held by directors of United Online (including Mark R. Goldston, Chairman, President and Chief Executive Officer of United Online) on the distribution date will be converted into FTD Options and United Online Options, in each case, with appropriate adjustments as described above so as to preserve the aggregate value of such options.

Restricted Stock Units.    United Online restricted stock units that are held by FTD Employees on the distribution date will be converted into our restricted stock units covering an increased number of shares of our common stock, so as to preserve the value that existed with respect to each such United Online restricted stock unit immediately prior to the Separation, and other than such adjustments, the original terms of such restricted stock units, including the vesting and issuance schedules, will remain unchanged. United Online restricted stock units held by Remaining Employees on the distribution date will be adjusted to increase the number of shares of United Online common stock subject to each such award so as to preserve the value that existed with respect to such award immediately prior to the Separation and, other than such adjustment, the original terms of the United Online restricted stock unit, including the vesting and issuance schedules, will remain unchanged.

United Online restricted stock units held by directors of United Online (including Mr. Goldston) on the distribution date will vest as of the distribution date and be settled in FTD shares and United Online shares, in each case, with the appropriate adjustments as described above so as to preserve the aggregate value of such restricted stock units.

Continued Vesting.    The service-vesting requirements in effect for each United Online award will remain unchanged in connection with the Separation and will be measured in terms of both service prior to the Separation and continued service with the entity employing the holder immediately after the Separation.

Employee Stock Purchase Plan.    The then-current purchase period under the United Online 2010 Employee Stock Purchase Plan will end as of the Separation and all then-outstanding purchase rights will be automatically exercised in accordance with the provisions of the plan.

Q:
What are the risks associated with the Separation?

A:
There are a number of risks associated with the Separation and with ownership of FTD common stock, including:

The risk of being unable to achieve the benefits expected from the Separation;

 

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    The loss of economies of scope and scale from operating as one company;

    The risk of limitations on FTD's ability to engage in desirable strategic transactions and equity issuances following the Separation because of certain restrictions relating to requirements for tax-free distributions;

    The risk of FTD being unable to make, on a timely basis, the changes necessary to operate as an independent, publicly-traded company; and

    The potential tax liabilities that could arise if the Separation were to fail to qualify as a tax-free transaction for U.S. federal income tax purposes.

    United Online's Board of Directors considered such risks and concluded that the potential benefits of the Separation outweighed its potential costs. For a more detailed discussion of the risk factors associated with the Separation, see "Risk Factors."

Q:
What are the conditions to the Separation?

A:
The Separation is subject to a number of conditions set forth in the Separation and Distribution Agreement, including, among others, (1) declaration of the distribution by United Online's Board of Directors, (2) the Securities and Exchange Commission (the "SEC") declaring effective the registration statement on Form 10 of which this Information Statement forms a part, (3) receipt of the IRS Ruling and the Tax Opinion, and (4) NASDAQ approving FTD common stock for listing, subject to official notice of issuance. For a more detailed description, see "The Separation—Conditions to the Separation."

Q:
Can United Online decide to cancel the Separation even if all the conditions have been satisfied?

A:
Yes. United Online's Board of Directors may, in its sole discretion and at any time prior to the distribution date, terminate and abandon the Separation, even if all of the conditions to the Separation have been satisfied. For a more detailed description, see "The Separation—Conditions to the Separation."

Q:
Will I have dissenters' rights in connection with the Separation?

A:
No. United Online stockholders will not be entitled to assert dissenters' rights in connection with the Separation.

Q:
Where can I get more information?

A:
Before the Separation, if you have any questions relating to the Separation, you should contact United Online at:

Investor Relations
United Online, Inc.
21301 Burbank Boulevard
Woodland Hills, California 91367
Phone: (818) 287-3560

After the Separation, if you have any questions relating to the Separation or to FTD, you should contact FTD at:

Investor Relations
FTD Companies, Inc.
3113 Woodcreek Drive
Downers Grove, Illinois 60515
Phone: (630) 719-7800

 

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Summary of the Separation

        The following provides a summary of the material terms of the Separation. For a more detailed description, see "The Separation."

Distributing Company

  United Online, Inc., a Delaware corporation. After the Separation, United Online will not own any shares of FTD common stock.


Distributed Company


 


FTD Companies, Inc., a Delaware corporation and a wholly-owned subsidiary of United Online. After the Separation, FTD will be an independent, publicly-traded company.


Distributed Securities


 


United Online will distribute all of the shares of FTD common stock owned by United Online, which will be 100% of FTD common stock issued and outstanding immediately prior to the distribution. Based on the approximately        million shares of United Online common stock outstanding on                    , 2013, and applying the distribution ratio of one share of FTD common stock for every one share of United Online common stock, approximately        million shares of FTD common stock will be distributed to United Online stockholders who hold United Online common stock as of the record date.


Record Date


 


The record date for the distribution is the close of business on                    , 2013.


Distribution Date


 


The distribution date is                    , 2013.


Transfer Agent


 

 


Distribution Ratio


 


Each holder of United Online common stock will receive one share of FTD common stock for every one share of United Online common stock held on the record date. If you sell your shares of United Online common stock on or before the distribution date, the buyer of those shares may, in certain circumstances, be entitled to receive the shares of FTD common stock distributed on the distribution date. For a more detailed description, see "The Separation—Trading of United Online Common Stock After the Record Date and On or Prior to the Distribution."

 

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Distribution Procedures

 

After the close of business on the distribution date, United Online will release the shares of FTD common stock to the transfer agent for distribution to United Online stockholders. The transfer agent will distribute the shares of FTD common stock by crediting those shares to book-entry accounts established by the transfer agent for persons who were stockholders of United Online as of the record date. Shares of FTD common stock will be issued as uncertificated shares registered in book-entry form through the direct registration system. No physical stock certificates will be issued. You will not be required to make any payment or surrender or exchange your shares of United Online common stock or take any other action to receive your shares of FTD common stock. However, as discussed below, if you sell shares of United Online common stock in the "regular-way" market after the record date and on or before the distribution date, you will be selling your right to receive the associated shares of FTD common stock in the distribution. Registered stockholders will receive additional information from the transfer agent shortly after the distribution date. If you hold your United Online shares in "street name" through a broker, bank or other nominee, you will receive additional information from your broker, bank or other nominee.


Trading Prior to or On the Distribution Date


 


Beginning on or shortly before the record date and continuing up to and including the distribution date, United Online expects that its common stock will trade in two markets on NASDAQ: a "regular-way" market and an "ex-distribution" market. Any holder of record of shares of United Online common stock as of the record date who chooses to sell those shares in the "regular-way" market after the close of business on the record date and up to and including the distribution date will also be selling the right to receive shares of FTD common stock in the distribution. However, any holder of record of shares of United Online common stock as of the record date who chooses to sell those shares in the "ex-distribution" market after the close of business on the record date and up to and including the distribution date will still receive the shares of FTD common stock that he/she would be entitled to receive in the distribution pursuant to his/her ownership of the shares of United Online common stock.



 


You are encouraged to consult with your financial advisor regarding the specific implications of selling shares of United Online common stock prior to or on the distribution date. For a more detailed description, see "The Separation—Trading of United Online Common Stock After the Record Date and On or Prior to the Distribution."

 

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Trading Market and Symbol

 

Subject to completion of the distribution, FTD common stock will be listed on NASDAQ under the symbol "FTD." We cannot predict the trading prices for FTD common stock when such trading begins. We anticipate that trading in shares of FTD common stock will begin on a "when-issued" basis on or shortly before the record date under the symbol "FTDWI" and will continue up to and including the distribution date. On the first trading day following the distribution date, any "when-issued" trading in respect of FTD common stock will end and "regular-way" trading in shares of FTD common stock will begin. If trading begins on a "when-issued" basis, you may purchase or sell FTD common stock up to and including the distribution date, but your transaction will not settle until after the distribution date. For more information regarding "regular-way" trading and "when-issued" trading, see the section entitled "The Separation—Trading of United Online Common Stock After the Record Date and On or Prior to the Distribution."


Assets and Liabilities


 


We will enter into the Separation and Distribution Agreement with United Online, which will contain the key provisions relating to the Separation of the FTD business from the UOL businesses and the distribution of FTD common stock. Among other things, the Separation and Distribution Agreement will allocate the assets and liabilities of United Online and its subsidiaries between us and United Online and describe when and how any required transfers and assumptions of assets and liabilities will occur between us and United Online. For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online—Separation and Distribution Agreement."


Indebtedness and Other Financing Arrangements


 


Prior to the Separation, FTD Group intends to either refinance its indebtedness under the Credit Agreement or seek consent of and/or waiver from the lenders as required by the terms of the Credit Agreement to effect the Separation and to make certain amendments to the Credit Agreement related to the Separation. Under the Credit Agreement, FTD Group has a term loan maturing in 2018 and a $50 million revolving credit facility under the Credit Agreement maturing in 2016. At December 31, 2012, the outstanding principal balance of the term loan under the Credit Agreement was $246 million. At December 31, 2012, the revolving credit facility was undrawn, except for $1.5 million in outstanding letters of credit.

 

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Relationship with United Online after the Distribution

 

After the distribution, United Online will not own any shares of FTD common stock and, as a result, each of United Online and FTD will be independent, publicly-traded companies with their own separate management and boards of directors. In addition to the Separation and Distribution Agreement, FTD will enter into other ancillary agreements with United Online to define various continuing relationships between United Online and FTD after the distribution, including a transition services agreement (the "Transition Services Agreement"), a tax sharing agreement (the "Tax Sharing Agreement"), and an employee matters agreement (the "Employee Matters Agreement"). For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online."


Indemnification


 


The Separation and Distribution Agreement will provide that we (and our subsidiaries) will indemnify United Online (and its remaining subsidiaries) against any and all losses relating to liabilities arising out of the FTD business, and that United Online (and its remaining subsidiaries) will indemnify us (and our subsidiaries) against any and all losses relating to liabilities arising out of UOL businesses. In addition, under the terms of the Tax Sharing Agreement that we will enter into with United Online, we also will be generally responsible for any taxes imposed on United Online that arise from the failure of the distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning of Section 355 of the Code, to the extent such failure to qualify is attributable to actions, events or transactions relating to our stock, assets or business, or a breach of the relevant representations or covenants made by us in the Tax Sharing Agreement. For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online—Tax Sharing Agreement."


U.S. Federal Income Tax Consequences


 


The Separation is conditioned on the receipt by United Online of the IRS Ruling and the Tax Opinion substantially to the effect that the distribution of shares of FTD common stock will qualify as a tax-free transaction under Section 355 of the Code, and that, for U.S. federal income tax purposes, (1) no gain or loss will be recognized by United Online upon the distribution of FTD common stock in the Separation, and (2) no gain or loss generally will be recognized by, and no amount generally will be included in the income of, holders of United Online common stock upon receipt of shares of FTD common stock. You should, however, consult your own tax advisor as to the particular tax consequences to you. For a more detailed description, see "The Separation—Material U.S. Federal Income Tax Consequences of the Separation."

 

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Conditions to the Separation

 

We expect that the Separation will be effective as of the close of business on the distribution date, provided that the following conditions have been satisfied or waived by United Online's Board of Directors, in its sole and absolute discretion:

 

United Online's Board of Directors has, in its sole and absolute discretion, declared the distribution;

 

the SEC has declared effective our registration statement on Form 10, of which this Information Statement forms a part, with no stop order in effect with respect thereto, and with no proceedings for such purpose pending or threatened by the SEC;

 

we have mailed this Information Statement (and such information concerning our company, businesses, operations and management, the distribution and such other matters as we and United Online shall determine and as may otherwise be required by law) to the holders of record of United Online common stock;

 

all other actions and filings necessary or appropriate under applicable federal or state securities laws and state blue sky laws in connection with the distribution shall have been taken;

 

the IRS Ruling remains in full force and effect and has not been modified or amended in any respect adversely affecting the intended tax-free treatment of the distribution;

 

United Online has received the Tax Opinion, dated the distribution date, in form and substance satisfactory to United Online and us, substantially to the effect that the distribution of shares of FTD common stock will qualify as a tax-free transaction under Section 355 of the Code;

 

NASDAQ has approved FTD common stock for listing, subject to official notice of issuance;

 

the ancillary agreements to the Separation and Distribution Agreement have been executed and delivered by each of the parties thereto and no party to any of the ancillary agreements is in material breach of any such agreement;

 

any material governmental approvals and consents necessary to consummate the Separation or any portion thereof have been obtained and are in full force and effect;

 

no preliminary or permanent injunction or other order, decree, or ruling issued by a governmental authority, and no statute (as interpreted through the orders or rules of any governmental authority duly authorized to effectuate the statute), rule, regulation or executive order promulgated or enacted by any governmental authority is in effect preventing the consummation of, or materially limiting the benefits of, the Separation; and

 

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no other event or development has occurred or failed to occur that, in the judgment of United Online's Board of Directors, in its sole discretion, prevents the consummation of the Separation or any portion thereof or makes the consummation of the Separation inadvisable.



 


However, even if all of the foregoing conditions have been satisfied, United Online may terminate and abandon the Separation at any time prior to the distribution date if United Online's Board of Directors determines, in its sole discretion, that the Separation is not in the best interests of United Online or its stockholders, or that it is not advisable for our company to separate from United Online.


Reasons for the Separation


 


United Online's Board of Directors believes that creating two public companies will achieve a number of benefits, including:

 

Enhanced Operational Flexibility and Ability to Allocate Resources More Efficiently.    The Separation is expected to allow each of United Online and our company to prioritize independently our various investment opportunities going forward. In addition, United Online's Board of Directors believes that each of our management teams will be better positioned to pursue organic growth and/or acquisitions and fund those growth investments via direct access to the debt or equity markets, as appropriate, taking into account only those considerations relating to each company's business strategies and business models. Increased operational agility is expected to enhance each company's ability to more effectively operate and compete and hence create value for our respective stockholders.

 

Enhanced Ability to Use Stock More Efficiently as an Acquisition Currency.    We intend to grow our business after the Separation both organically and through acquisitions if we identify attractive acquisition opportunities that satisfy our investment criteria and expect to offer FTD common stock as consideration, either in whole or in part, in connection with future acquisitions. It is expected that the market will likely place a higher valuation multiple on our company, when analyzed on a fully-distributed basis, than it would place on us as a subsidiary of United Online, all other things being equal, on the basis that FTD's closest publicly-traded competitor operating in primarily the same industry was trading at a higher valuation multiple than that of United Online prior to the announcement of the Separation. However, there is no assurance that such higher valuation multiple will be achieved. The resulting anticipated increase in valuation multiple for our company will cause our equity to represent an attractive acquisition currency that will permit us to effect acquisitions in a manner that preserves capital with significantly less dilution of the existing stockholders' interests. In addition, United Online's Board of Directors believes that having our own publicly-traded common stock will provide a more efficient and attractive acquisition currency for us than the existing common stock of United Online, which is of a type that is generally viewed as less desirable acquisition currency due, in part, to market perceptions about conglomerates of unrelated businesses. Therefore, we believe the distribution may allow us and United Online to pursue strategic opportunities that are not otherwise available within United Online's pre-separation corporate structure.

 

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Fit and Focus and Flexibility to Pursue Independent Business Purposes.    The Separation will allow United Online and our management teams to focus on their respective strategic priorities, the different challenges and opportunities in their businesses, and their different financial profiles and capital needs. By eliminating the necessary time and resources required to resolve conflicting business priorities and strategic needs, our two separate companies will be able to better serve our respective customers and markets, and compete in our respective industries through quicker decision making, more efficient deployment of resources, and enhanced responsiveness to customers and markets.

 

Increased Flexibility with respect to Management Compensation.    We and United Online will have our own separate stock, which will allow for equity-based incentive awards that more directly link and closely align the interests of each of our companies and our employees, making equity-based incentive awards an even more effective management tool to attract, motivate and retain key employees.


Risk Factors


 


Our business is subject to both general and specific business risks relating to our operations. Our business is also subject to risks relating to the Separation, and, following the Separation, we will be subject to risks relating to being an independent, publicly-traded company. Accordingly, you should read carefully the section entitled "Risk Factors" beginning on page 18.

 

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RISK FACTORS

        Our business, the Separation, and our common stock are subject to a number of risks and uncertainties. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Information Statement. Based on information currently known, we believe that the following information identifies the most significant risk factors affecting our business, the Separation, and our common stock. However, the risks and uncertainties faced by us are not limited to those described below, nor are they listed in order of significance.

        If any of the following events occur, our business, financial condition, results of operations, and cash flows could be materially adversely affected, and the trading price of our common stock could materially decline.

Risks Relating to Our Business

        We face the following risks in connection with the general conditions and trends of the industries in which we operate:

         Current or future economic conditions may have a material and adverse impact on our business, financial condition, results of operations, and cash flows.

        Economic conditions in the U.S. and the European Union have been depressed and may remain challenging for the foreseeable future. Our products and services are discretionary and dependent upon levels of consumer spending. Consumer spending patterns are difficult to predict and are sensitive to, among other factors, the general economic climate, the consumers' levels of disposable income, consumer debt, and overall consumer confidence. The challenging economic conditions have adversely impacted certain aspects of our businesses in a number of ways, including reduced demand, more aggressive pricing for similar products and services by our competitors, increased credit risks, increased credit card failures, a loss of customers, and increased use of discounted pricing for certain of our products and services. It is likely that these and other factors will continue to adversely impact our businesses, at least in the near term. The challenging economic conditions may adversely impact our key vendors and customers. Such economic conditions and decreased consumer spending have, in certain cases, resulted in, and may in the future result in, a variety of negative effects such as a reduction in revenues, increased costs, lower gross margin and operating margin percentages, increased allowances for doubtful accounts and write-offs of accounts receivable, increased provisions for excess and obsolete inventories, and recognition of impairments of assets, including goodwill and other intangible and long-lived assets. Any of the above factors could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         Competition could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        The consumer market for flowers and gifts is highly competitive and fragmented as consumers can purchase the products we offer from numerous sources, including traditional local retail florists, supermarkets, mass merchants, gift retailers, and floral and gift mass marketers. We believe the primary competitive factors in the consumer market are price, quality of products, selection, customer service, ordering convenience, and strength of brand. The floral network services market is highly competitive as well, and retail florists and supermarkets may choose from a variety of providers that offer similar products and services. In the U.S., our key competitors in the consumer market include online, catalog and floral and gift retailers and mass market retailers with floral departments, including such companies as 1-800-FLOWERS.COM, Inc., Proflowers.com, and Teleflora. Our key competitors in the U.S. floral network services market include providers of online or e-commerce services, retailers and wholesalers of floral-related products, and other floral network services, such as Teleflora and BloomNet Wire Service, a subsidiary of 1-800-FLOWERS.COM, Inc. International key competitors in the consumer market include mass market retailers, such as Asda, Marks & Spencer, Next, and

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Waitrose/John Lewis, as well as online, catalog and specialty gift retailers such as eFlorist, Serenata Flowers, and Arena.

        We face intense competition in the consumer market. We expect that the sales volumes at supermarkets and mass merchants will continue to increase, and that other online floral mass marketers will continue to increase their competition with us. In particular, the nature of the Internet as a marketplace facilitates competitive entry and comparative shopping, and we have experienced increased competition. Some of our competitors may have significant competitive advantages over us, may engage in more significant discounting, may devote significantly greater resources to marketing campaigns or other aspects of their business or may respond more quickly and effectively than we can to new or changing opportunities or customer requirements.

        We face intense competition in the market for floral network services. In addition, the number of retail florists has been declining over a number of years. As the number of retail florists decreases, competition for the business of the remaining retail florists will intensify.

        Increased competition in the consumer market or the floral network services market may result in lower revenues, reduced gross margins, loss of market share, and increased marketing expenditures. We cannot provide assurance that we will be able to compete successfully or that competitive pressures will not have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         Our revenues and operating results fluctuate on a seasonal basis and may suffer if revenues during peak seasons do not meet our expectations.

        Our business is seasonal, and our quarterly revenues and operating results typically exhibit seasonality. For example, revenues and operating results tend to be lower for the quarter ending September 30 because none of the most popular floral and gift holidays, which include Valentine's Day, Easter, Mother's Day, Thanksgiving, and Christmas, fall within that quarter. In addition, depending on the year, Easter and the U.K. Mother's Day sometimes fall within the quarter ending March 31 and sometimes fall within the quarter ending June 30.

        Our operating results may suffer if revenues during our peak seasons do not meet expectations, as we may not generate sufficient revenues to offset increased costs incurred in preparation for peak seasons. Our working capital and cash flows also fluctuate during the year as a result of the factors set forth above. Moreover, the operational risks described elsewhere in these risk factors may be significantly exacerbated if those risks were to occur during a peak season.

         We are dependent on our strategic relationships to help promote our consumer websites; failure to establish, maintain or enhance these relationships could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        We believe that our strategic relationships with leading online retailers and direct marketers are critical to attract customers, facilitate broad market acceptance of our products and brands and enhance our sales and marketing capabilities. A failure to maintain existing strategic relationships or to establish additional relationships that generate a significant amount of traffic from other websites could limit the growth of our business. Establishing and maintaining relationships with leading online retailers and direct marketers is competitive and expensive. We may not successfully enter into additional strategic relationships. In addition, we may not be able to renew existing strategic relationships beyond their current terms or may be required to pay significant fees to maintain and expand these strategic relationships. Further, many online retailers and direct marketers that we may approach to establish an advertising presence or with whom we already have an existing relationship may also provide advertising services for our competitors. As a result, these companies may be reluctant to enter into, maintain or expand a strategic relationship with us. Our business, financial condition, results of operations, and cash flows may suffer if we fail to enter into new strategic relationships, or maintain or

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expand existing strategic relationships, or if these strategic relationships do not result in traffic on our websites sufficient to justify their costs.

        In addition, we are subject to many risks beyond our control that influence the success or failure of our strategic relationships. For example, if any of the online retailers or direct marketers with which we have strategic relationships experience financial or operational difficulties that materially and adversely affect their ability to satisfy their obligations under their agreements with us, our business, financial condition, results of operations, and cash flows could be materially and adversely affected.

         Our marketing efforts may not be successful or may become more expensive, either of which could increase our costs and adversely impact our key metrics and financial results.

        We spend significant resources marketing our brands, products, and services. We rely on relationships with a wide variety of third parties, including Internet search providers such as Google, Internet advertising networks, retailers, distributors, and direct marketers, to source new customers and to promote or distribute our products and services. In addition, from time to time, we may spend a significant amount on marketing, including through television advertising. With any of our brands, products, and services, if our marketing activities are inefficient or unsuccessful, if important third-party relationships or marketing strategies, such as Internet search engine marketing and search engine optimization, become more expensive or unavailable, or are suspended or terminated, for any reason, if there is an increase in the proportion of consumers visiting our websites or purchasing our products and services by way of marketing channels with higher marketing costs as compared to channels that have lower or no associated marketing costs, or if our marketing efforts do not result in our products and services being prominently ranked in Internet search listings, our key metrics and financial results could be materially and adversely impacted.

         Our consumer business relies heavily on email campaigns, and any disruptions or restrictions on the sending of emails or increase in the associated costs could adversely affect our business, financial condition, results of operations, and cash flows.

        We generate a significant portion of our consumer orders from the emails we send to customers who have previously ordered products from us. We also engage in a number of third-party email marketing campaigns in which such third parties include our marketing offers in the emails they send.

        An increase in the number of customers to whom we are not able to send emails, or who elect to not receive or are unable to receive our emails could adversely affect our business, financial condition, results of operations, and cash flows. From time to time, Internet service providers block bulk email transmissions or otherwise experience technical difficulties that result in our inability to successfully deliver emails to our customers. Third parties may also block, impose restrictions on, or start to charge for, the delivery of emails through their email systems. Due to the importance of email to our businesses, any disruption or restriction on the distribution of emails or increase in the associated costs could materially and adversely affect our revenues and profitability.

         We are dependent on third parties who fulfill orders and deliver goods and services to our customers and their failure to provide our customers with high-quality products within the required timeframe and a high level of customer service may harm our brands and could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        We believe that our success in promoting and enhancing our brands depends on our ability to provide our customers high-quality products within the required timeframe and a high level of customer service. Our business depends, in part, on the ability of our floral network members and third-party suppliers who fulfill our orders to do so at high-quality levels. We work with our floral network members and third-party suppliers to develop best practices for quality assurance; however, we generally do not directly control or continuously monitor any floral network member or third-party supplier. A failure to maintain our relationship with key floral network members or third-party

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suppliers or the failure of our floral network members or third-party suppliers to fulfill orders to our customers' satisfaction, at an acceptable level of quality and within the required timeframe, could adversely impact our brands and cause us to lose customers, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        Additionally, because we depend upon third parties for the delivery of our products to customers, strikes or other service interruptions affecting these shippers could have an adverse effect on our ability to deliver our products on a timely basis. If any of our shippers are unable or unwilling to deliver our products, we would have to engage alternative shippers, which could increase our costs. A disruption in any of our shippers' delivery of our products could cause us to lose customers or could increase our costs, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         We face risks relating to operating and doing business internationally that could adversely affect our businesses and results of operations.

        Our businesses operate in a number of countries outside the U.S. Conducting international operations involves risks and uncertainties, including:

        The occurrence of any one of these risks could negatively affect our international operations, our key business metrics, and our financial results.

         The success of our business is dependent on our floral network members and on the financial performance of the retail floral industry.

        A significant portion of our profitability is dependent on our floral network members. The amount of revenues and profits we generate from individual floral network members can vary significantly. We have lost, and may continue to lose, floral network members as a result of both declines in the number of local retail florists as a result of economic factors and competition, as well as our members choosing not to do business with us. There can be no assurance that the decline in the number of floral network members will not increase in the future, or that we will not lose floral network members that generate significant revenues for our business, either of which could materially and adversely affect our business, financial condition, results of operations, or cash flows.

        In addition, the operating and financial success of our business has been, and is expected to continue to be, dependent on the financial performance of the retail floral industry. There can be no assurance that the retail floral industry will not decline, that consumer preferences for, and purchases of, floral products will not decline, or that retail florist revenues or inter-city floral delivery transactions will not decline in absolute terms. A sustained decline in the sales volume of the retail floral industry

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could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         Shifts in the mix of products versus services sold, and types of products and services sold, may adversely affect our financial results.

        The cost of revenues associated with our products revenues is generally higher than that associated with our services revenues. In addition, the cost of revenues associated with certain products and services may be higher than that associated with other products and services. As a result, changes in the proportion of revenues that is represented by products revenues versus services revenues, and certain types of products and services versus others, may adversely affect our revenues, cost of revenues, cost of revenues as a percentage of revenues, and income from operations.

         Shifts in the mix of products and services sold at standard pricing as compared to discounted pricing or the failure to maintain our standard pricing for products and services could have adverse effects on our financial results.

        Due to economic conditions and for competitive and other reasons, we have been offering broader and greater discounts to the consumer, both on a promotional basis to consumers generally, as well as through strategic arrangements with third parties that have a fixed, and in certain cases greater, discount or other associated costs. We also offer discounts on our floral network service fees from time to time on a promotional basis. Shifts in the mix of products and services sold that have resulted in increases in the proportion of products and services sold at a discount, and at times at greater discounts, including through such strategic arrangements, have resulted, and may in the future result, in reduced revenues, an increase in cost of revenues as a percentage of revenues, and a decrease in operating income. We currently intend to continue selling a portion of our products and services at a discount, including through such strategic arrangements, and there are no assurances that the portion of products and services sold at a discount will not continue to increase. The continued use of discounts, including through such strategic arrangements, for our products and services may result in our becoming more reliant upon offering discounts in order to sell our products and services, which could result in our having to reduce our standard pricing, and may adversely impact our financial results.

         If the supply of flowers becomes limited, the price of these products could rise or these products may become unavailable, which could result in our not being able to meet consumer demand and could have a material effect on our business, financial condition, results of operations, and cash flows.

        Many factors, such as weather conditions, agricultural limitations, restrictions relating to the management of pests and disease, and fair trade and other social or environmental issues, affect the supply of flowers and the price of our floral products. If the supply of flowers available for sale is limited, the wholesale prices of flowers could rise, which would cause us to increase our prices or reduce our profits. An increase in our prices could result in a decline in customer demand for our floral products, which would decrease our revenues. Alternatively, we may not be able to obtain high-quality flowers in an amount sufficient to meet customer demand. Even if available, flowers from alternative sources may be of lesser quality or more expensive than those currently offered by us. A large portion of our supply of flowers is sourced from Colombia, Ecuador, Holland, and Kenya.

        The availability and price of our products could be affected by a number of other factors affecting suppliers, including:

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         Our business could be shut down or severely impacted by a catastrophic event.

        Our business could be materially and adversely affected by a catastrophic event. A disaster such as a fire, earthquake, flood, power loss, terrorism, or other similar event, affecting any of our facilities, data centers or computer systems, or those of our third-party vendors, or a system interruption or delay that slows down the Internet or makes the Internet or our websites temporarily unavailable, could result in a significant and extended disruption of our operations and services. Any prolonged disruption of our services due to these or other events would severely impact our businesses. We do not carry flood insurance for our facilities, and the property, business interruption and other insurance we do carry may not be sufficient to cover, if at all, losses that may occur as a result of any events which cause interruptions in our services.

         Our success is dependent on the intellectual property that we use.

        We regard the "FTD" and "Interflora" trademarks, the "Mercury Man" logo, the "FTD.COM" and the "Interflora.co.uk" Internet domain names and the other service marks, trademarks, and other intellectual property that we use in our business as being critical to our success. Our company and our subsidiaries have applied for the registration of, and have been issued, trademark registrations for trademarks and service marks used in our business in the U.S. and various foreign countries; however, in some other countries, there are certain pre-existing and potentially conflicting trademark registrations held by third parties. We rely on a combination of copyright, trademark, and trade secret laws, confidentiality procedures, contractual provisions, and license and other agreements with employees, customers and others to protect our intellectual property rights. In addition, we may also rely on the third-party owners of the intellectual property rights we license to protect those rights. We license some of our intellectual property rights, including the Mercury Man logo, to third parties. The steps taken by us and those third parties to protect our intellectual property rights may not be adequate, and other third parties may infringe or misappropriate our intellectual property rights. This could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Furthermore, the validity, enforceability, and scope of protection of intellectual property in Internet-related industries are uncertain and still evolving.

        We are also subject to the risk of claims alleging that our business practices infringe on the intellectual property rights of others. These claims could result in lengthy and costly litigation. Moreover, resolution of any such claim against us may require our company or one of our subsidiaries to obtain a license to use the intellectual property rights at issue or possibly to cease using those rights

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altogether. Any of those events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         Significant problems with our key systems or those of our third-party vendors could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        The systems underlying the operations of our business are complex and diverse and must efficiently integrate with third-party systems, such as credit card processors. Key systems include, without limitation, order transmission, fulfillment and processing, including the systems for transmitting orders through our floral networks; billing; website and database management; customer support; telecommunications network management; and internal financial systems. Some of these systems are outsourced to third parties, and other systems, such as Interflora's order transmission, fulfillment and billing system and our customer service telephone system, are not redundant. All information technology and communication systems are subject to reliability issues, denial of service attacks, integration and compatibility concerns, and security threatening intrusions. The continued and uninterrupted performance of our key systems is critical to our success. Unanticipated problems affecting these systems could cause interruptions in our services. In addition, if our third-party vendors face financial or other difficulties, our business could be adversely impacted. Any significant errors, damage, failures, interruptions, delays, or other problems with our systems or our third-party vendors or their systems could adversely impact our ability to satisfy our customers and could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         We may be unable to increase capacity or introduce enhancements to our consumer websites or our toll-free telephone numbers in a timely manner or without service interruptions.

        A key element of our business strategy is to generate a high volume of traffic on our consumer websites and through our toll-free telephone numbers. However, we may not be able to accommodate all of the growth in user demand on our consumer websites or through our toll-free telephone numbers. Our inability to add additional hardware and software to upgrade our existing technology or network infrastructure to accommodate, in a timely manner, increased traffic to our consumer websites or increased volume through our toll-free telephone numbers, may cause decreased levels of customer service and satisfaction. Failure to implement new systems effectively or within a reasonable period of time could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        We also regularly introduce additional or enhanced features and services to retain current customers and attract new customers to our consumer websites. If we introduce a feature or a service that is not favorably received, our current customers may not use our consumer websites as frequently, or we may not be successful in attracting new customers. We may also experience difficulties that could delay or prevent us from introducing new services and features. Furthermore, these new services or features may contain errors that are discovered only after they are introduced. We may need to significantly modify the design of these services or features to correct errors. If customers encounter difficulty with or do not accept new services or features, this could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         Our business could suffer as a result of significant credit card or debit card fraud.

        Orders placed on our consumer websites or through our toll-free telephone numbers typically are paid for using a credit card or debit card. Our revenues and gross margins could decrease if we experience significant credit card or debit card fraud. Failure to adequately detect and avoid fraudulent credit card or debit card transactions could cause us to lose our ability to accept credit cards or debit cards as forms of payment and result in charge-backs of the fraudulently charged amounts. Furthermore, widespread credit card or debit card fraud may lessen our customers' willingness to purchase products on our consumer websites or through our toll-free telephone numbers. As a result,

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such failure could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         We are exposed to the credit risk of our floral network members.

        When an FTD or Interflora floral network member fulfills an order from an originating member, we become liable to the fulfilling member for payment on the order, even if we do not receive payment from the originating member. Accordingly, we are exposed to the credit risk of our floral network members. Although we reserve for this exposure, we cannot be sure that the exposure will not be greater than we anticipate. An increase in this exposure, coupled with material instances of default, in the aggregate, could have an adverse effect on our business, financial condition, results of operations, and cash flows.

         Fluctuations in foreign currency exchange rates could adversely affect comparisons of our operating results.

        We transact business in different foreign currencies and may be exposed to financial market risk resulting from fluctuations in foreign currency exchange rates, including the British Pound, the Euro, and the Canadian Dollar. Revenues and expenses in foreign currencies translate into higher or lower revenues and expenses in U.S. Dollars as the U.S. Dollar weakens or strengthens against such other currencies. Substantially all of the revenues of our international businesses are received, and substantially all expenses are incurred, in currencies other than the U.S. Dollar, which increases or decreases the related U.S. Dollar-reported revenues and expenses depending on the fluctuations in foreign currency exchange rates. Certain of our key business metrics, such as average order value, are similarly affected by such foreign currency exchange rate fluctuations. Changes in global economic conditions, market factors, and governmental actions, among other factors, can affect the value of these currencies in relation to the U.S. Dollar. A strengthening of the U.S. Dollar compared to these currencies and, in particular, to the British Pound and the Euro, has had, and in future periods could have, an adverse effect on the comparisons of our revenues and operating income against prior periods. We cannot accurately predict the impact of future foreign currency exchange rate fluctuations on our operating results, and such fluctuations could negatively impact the comparisons of such results against prior periods.

         Changes in laws and regulations and new laws and regulations may adversely affect our business, financial condition, results of operations, and cash flows.

        We are subject to a variety of international, federal, state, and local laws and regulations, including, without limitation, those relating to taxation, bulk email or "spam," advertising, including, without limitation, targeted or behavioral advertising, user privacy and data protection, consumer protection, antitrust, and unclaimed property. Compliance with the various laws and regulations, which in many instances are unclear or unsettled, is complex. New laws and regulations, such as those being considered or recently enacted by certain states or the federal government related to automatic-renewal practices, user privacy, targeted or behavioral advertising, floral-related fees and advertising, and taxation, could impact our revenues or certain of our business practices or those of our advertisers. Any changes in the laws and regulations applicable to us, the enactment of any additional laws or regulations, or the failure to comply with, or increased enforcement activity of, such laws and regulations, could significantly impact our products and services, our costs, or the manner in which we or our advertisers conduct business, all of which could adversely impact our results of operations and cause our business to suffer.

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         Foreign, state, and local governments may attempt to impose additional sales and use taxes, value added taxes or other taxes on our business activities, including our past sales, which could decrease our ability to compete, reduce our sales, and have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        In accordance with current industry practice by domestic floral and gift order gatherers and our interpretation of applicable law, our consumer business collects and remits sales and use taxes on orders that are delivered in a limited number of states where it has a physical presence or other form of jurisdictional nexus. If states successfully challenge this practice and impose sales and use taxes on orders delivered in states where we do not have physical presence or another form of jurisdictional nexus, we could incur substantial tax liabilities for past sales and lose future sales as a result of the increased tax cost that would be borne by the customer. Also, states may seek to reclassify the status of Internet order gatherers, such as our consumer business, as persons that are deemed to fulfill the underlying order, in which case, a state may seek to impose taxes on the receipts generated by our consumer business for orders fulfilled and delivered by florists outside such state. In addition, future changes in the operation of our online and telephonic sales channels could result in the imposition of additional sales and use tax or other tax obligations.

        Additionally, in accordance with current industry practice by international floral and gift direct marketers and our interpretation of applicable law, we collect and remit value added taxes on certain consumer orders placed through Interflora. Future changes in the operation of our business could result in the imposition of additional tax obligations. Moreover, if a foreign taxing authority successfully challenges our current practice or implements new legislative initiatives, we could incur substantial tax liabilities for past sales and lose future sales as a result of the increased tax costs that would be borne by the customer. The imposition of additional tax liabilities for past or future sales could decrease our ability to compete with traditional retailers and reduce our sales, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        We are subject to income and various other taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our consolidated provision for income taxes. During the ordinary course of business, there are many transactions for which the ultimate tax determination is uncertain. We are subject to audit in various jurisdictions, and such jurisdictions may assess additional income and other taxes against us. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions, and our historical recognition of other tax matters. The results of an audit or litigation could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        In connection with our Internet-based transactions, a number of states have been considering or adopting legislation or instituting policy initiatives, including those that would facilitate a finding of nexus to exist between Internet companies with the states, aimed at expanding the reach of sales and use taxes or imposing state income or other taxes on various innovative theories, including agency attribution from independent third-party service providers. Such legislation or initiatives could result in the imposition of additional sales and use taxes, or the payment of state income or other taxes, on certain transactions conducted over the Internet. In addition, advertisers and other third parties may choose to not do business with us in order to avoid nexus with certain states. If such legislation is enacted, or such initiatives are instituted, and unless overturned by the courts, the legislation or initiatives could subject us to substantially increased tax liabilities for past and future sales or state income or other taxes, require us to collect additional sales and use taxes, cause our future sales to decrease, or otherwise negatively impact our businesses, and thus have a material adverse effect on us.

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         Legal actions or investigations could subject us to substantial liability, require us to change our business practices, and adversely affect our business, financial condition, results of operations, and cash flows.

        We are currently, and have been in the past, party to various legal actions and investigations. These actions may include, without limitation, claims by private parties in connection with consumer protection and other laws, claims that we infringe third-party patents, trademarks, copyrights or other intellectual property or proprietary rights, securities laws claims, claims involving marketing practices or unfair competition, claims in connection with employment practices, breach of contract claims, and other business-related claims. The nature of our business could subject us to additional claims for similar matters, as well as a wide variety of other claims, including, without limitation, for privacy and security matters. The failure to successfully defend against these and other types of claims, including claims relating to our business practices, could result in our incurring significant liabilities related to judgments or settlements or require us to change our business practices. Infringement claims may also result in our being required to obtain licenses from third parties, which licenses may not be available on acceptable terms, if at all. Both the cost of defending claims, as well as the effect of settlements and judgments, could cause our results of operations to fluctuate significantly from period to period and could materially and adversely affect our business, financial condition, results of operations, and cash flows. In addition, we also file actions against third parties from time to time for various reasons, including, without limitation, to protect our intellectual property rights, to enforce our contractual rights, or to make other business-related claims. The legal fees, costs and expenses associated with these actions may be significant, and if we were to lose these actions, we may be required to pay the other party's legal fees, costs and expenses, which also may be significant and could materially and adversely affect our business, financial condition, results of operations, and cash flows.

        Various governmental agencies have in the past asserted claims, instituted legal actions, inquiries or investigations, or imposed obligations relating to our business practices, such as our marketing, billing, customer retention, renewal, cancellation, refund, or disclosure practices, and they may continue to do so in the future. We and United Online have received civil investigative demands and subpoenas, as applicable, from the Federal Trade Commission ("FTC") and the Attorneys General of various states, primarily regarding their respective investigations into certain former post-transaction sales practices and certain of our and United Online's marketing, billing, renewal and privacy practices and disclosures. We and United Online have been cooperating with these investigations. However, the outcome of these or any other governmental investigations or their potential implications for our business are uncertain. We and United Online may not prevail in existing or future claims and any judgment against us or settlement or resolution of such claims may involve the payment of significant sums, including damages, fines, penalties, or assessments, or changes to our business practices. For example, in 2010, FTD, Inc. paid $640,000 to resolve an investigation of the Attorney General for the State of New York related to FTD, Inc.'s former post-transaction sales practices. Defending against lawsuits, inquiries, and investigations also involves significant expense and diversion of management's attention and resources from other matters. There are no assurances that additional governmental investigations or other legal actions will not be instituted in connection with our former post-transaction sales practices or other current or former business practices. Enforcement actions or changes in enforcement policies and procedures could result in changes to our business practices, as well as significant damages, fines, penalties or assessments, which could decrease our revenues or increase the costs of operating our business. To the extent that our services and business practices change as a result of claims or actions by governmental agencies or private parties, or we are required to pay significant sums, including damages, fines, penalties, or assessments, our business, financial condition, results of operations, and cash flows could be materially and adversely affected. For more information, see the section entitled "Business—Legal Proceedings."

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         Governmental regulation of the collection and use of personal information or our failure to comply with these regulations could harm our businesses.

        The FTC has regulations regarding the collection and use of personal information obtained from individuals when accessing websites, with particular emphasis on access by minors. In addition, other governmental authorities have regulations to govern the collection and use of personal information that may be obtained from customers or visitors to websites. These regulations include requirements that procedures be established to disclose and notify users of our websites of our privacy and security policies, obtain consent from users for collection and use of personal information and provide users with the ability to access, correct or delete personal information stored by us. In addition, the FTC and other governmental authorities have made inquiries and investigations of companies' practices with respect to their users' personal information collection and dissemination practices to confirm these are consistent with stated privacy policies and to determine whether precautions are taken to secure consumers' personal information. The FTC and certain state agencies also have made inquiries, and in a number of situations, brought actions against companies to enforce the privacy policies of these companies, including policies relating to security of consumers' personal information.

        As discussed in the preceding risk factor, we have been cooperating with the Attorneys General of various states in connection with their inquiries and investigations of, among other things, the privacy policy of our FTD.COM business. Becoming subject to the regulatory and enforcement efforts of the FTC, a state agency or other governmental authority could have a material adverse effect on our ability to collect demographic and personal information from users, which, in turn, could have a material adverse effect on our marketing efforts, business, financial condition, results of operations, and cash flows. In addition, the adverse publicity regarding the existence or results of an investigation could have an adverse impact on customers' willingness to use our websites and services and thus could adversely impact our future revenues.

        Certain of our international businesses, such as our international consumer and floral network businesses, must also comply with data protection and privacy laws in the U.K., including the Data Protection Act 1998. If we or any of the third-party services on which we rely fail to transmit customer information and payment details in a secure manner, or if they otherwise fail to protect customer privacy in online transactions or if they transfer personal information outside the European Economic Area without complying with certain required conditions, then we risk being exposed to civil and criminal liability in the U.K., usually in the form of fines, as well as claims from individuals alleging damages as a result of the alleged non-compliance. We may also be required to alter our data collection and use practices. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         We may be unsuccessful at acquiring additional businesses, services or technologies. Even if we make acquisitions, it may not improve our results of operations and may also adversely impact our business, financial condition, and cash flows.

        Acquisitions of businesses, services or technologies may provide us with an opportunity to diversify the products and services we offer, leverage our assets and core competencies, complement our existing businesses, or expand our geographic reach. We may evaluate a wide variety of potential strategic transactions that we believe may complement our existing businesses. However, we may not realize the anticipated benefits and synergies of an acquisition, and our attempts at integrating an acquired business may not be successful. Acquiring a business, service or technology involves many operational and financial risks, including risks relating to:

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        In addition, an acquisition of a foreign business involves risks in addition to those set forth above, including risks associated with foreign currency exchange rates, potentially unfamiliar economic, political, and regulatory environments, and integration difficulties due to language, cultural, and geographic differences. Any of these risks could harm our business, financial condition, results of operations, and cash flows.

         Our ability to operate our business could be seriously harmed if we lose members of our senior management team or other key employees.

        Our business is largely dependent on the efforts and abilities of our senior management and other key personnel. Any of our officers or employees can terminate his or her employment relationship at any time. The loss of any of these key employees or our inability to attract or retain other qualified employees could seriously harm our business and prospects. We do not expect to carry key-person life insurance on any of our employees.

         We utilize outsourced staff and temporary employees, who may not be as well trained or committed to our customers as our permanent employees, and their failure to provide our customers with high-quality customer service may cause our customers not to return, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

        We utilize and rely on a significant number of outsourced staff and temporary employees, in addition to our permanent employees, to take orders and respond to customer inquiries. These outsourced staff and temporary employees may not have the same level of commitment to our customers or be as well trained as our permanent employees. In addition, we may not hire enough outsourced staff or temporary employees to adequately handle the increased volume of telephone calls we receive during peak periods. We maintain only a limited number of permanent customer support employees and rely on one third-party vendor for our outsourced customer support. Our permanent employees may not be able to provide the necessary range or level of customer support services in the event that our third-party vendor unexpectedly becomes unable or unwilling to provide some or all of these services to us. If our customers are dissatisfied with the quality of the customer service they

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receive, they may not place orders with us again, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

         Following the Separation, we will continue to have a substantial amount of indebtedness which could adversely affect our ability to raise additional capital to fund operations, our flexibility in operating our business, and our ability to react to changes in the economy or our industry.

        At March 31, 2013, we had $246.0 million of indebtedness outstanding. Following the Separation, we will have a substantial amount of indebtedness which could have significant consequences for our business and financial condition. For example:

        Under the terms of the Credit Agreement, we are permitted to incur additional indebtedness subject to certain conditions, and the risks described above may be increased if we incur additional indebtedness.

        The Credit Agreement includes guarantees on a joint and several basis by FTD Companies, Inc. and certain of FTD Group's existing and future, direct and indirect, domestic subsidiaries and is secured by first priority security interests in, and mortgages on, substantially all of the tangible and intangible assets of FTD Group, FTD Companies, Inc., and certain of FTD Group's direct and indirect subsidiaries and first priority pledges of all the equity interests owned by FTD Companies, Inc., in FTD

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Group and by FTD Group in certain of its existing and future direct and indirect subsidiaries (except with respect to foreign subsidiaries in which case such pledges are limited to 66% of the outstanding capital stock). The occurrence of an event of default under the Credit Agreement could permit the lenders to cause all amounts outstanding under the Credit Agreement to become immediately due and payable, terminate the commitments of such lenders to make further extensions of credit under the Credit Agreement, to call and enforce the guarantees, and to foreclose on the collateral securing such debt.

         We may increase our debt level or raise additional capital in the future, which could affect our financial health and may decrease our profitability.

        To execute our business strategy, we may require additional capital. If we incur additional debt or raise equity through the issuance of preferred stock, the terms of the debt or preferred stock issued may give the holders rights, preferences, and privileges senior to those of holders of our common stock, particularly in the event of liquidation. The terms of any new debt may also impose additional and more stringent restrictions on our operations than currently in place. If we issue additional common equity, either through public or private offerings or rights offerings, your percentage ownership in our company would decline if you do not participate on a ratable basis. If we are unable to raise additional capital when required, it could affect our liquidity, business, financial condition, results of operations, and cash flows.

         An increase in interest rates may increase our overall interest expense.

        A rapid increase in interest rates could have an immediate adverse impact on us due to our outstanding variable-rate debt. Although we attempt to mitigate interest rate risk by utilizing interest rate hedges, there is no assurance that our efforts will be fully successful. In addition, in the event of an increase in interest rates, we may be unable to refinance maturing debt with new debt at equal or better interest rates.

         Our business is subject to online security risks, and a security breach or inappropriate access to, or use of, our networks, computer systems or services or those of third-party vendors could expose us to liability, claims, and a loss of revenue.

        The success of our business depends on the security of our networks and, in part, on the security of the network infrastructures of our third-party vendors. In connection with conducting our business in the ordinary course, we store and transmit customer and member information, including personally identifiable information. Unauthorized or inappropriate access to, or use of, our networks, computer systems or services, whether intentional, unintentional or as a result of criminal activity, could potentially jeopardize the security of confidential information, including credit card information, of our customers and of third parties. A number of other websites have publicly disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their sites. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the perception of the effectiveness of our security measures could be harmed and we could lose members, customers or vendors. A party that is able to circumvent our security measures could misappropriate our proprietary information or the information of our members or customers, cause interruption in our operations, or damage our computers or those of our members or customers.

        A significant number of our members and customers authorize us to bill their payment card accounts (credit or debit) directly for all amounts charged by us. These members and customers provide payment card information and other personally identifiable information which, depending on

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the particular payment plan, may be maintained to facilitate future payment card transactions. We rely on third-party and internally-developed encryption and authentication technology to provide the security and authentication to effectively secure transmission of confidential information, including payment card numbers. Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in the technology used by us to protect transaction data being breached or compromised. Non-technical means, for example, actions by an employee, can also result in a data breach. Under payment card rules and our contracts with our card processors, if there is a breach of payment card information that we store, we could be liable to the banks that issue the payment cards for their related expenses and penalties. In addition, if we fail to follow payment card industry security standards, even if there is no compromise of customer information, we could incur significant fines or lose our ability to give our members and customers the option of using payment cards. If we were unable to accept payment cards, our businesses would be seriously harmed.

        We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches, including any breach related to us or the parties with which we have commercial relationships, could damage our reputation and expose us to a risk of loss, litigation, and possible liability. We cannot assure you that the security measures we take will be effective in preventing these types of activities. We also cannot assure you that the security measures of our third-party vendors, including network providers, providers of customer and billing support services, and other vendors, will be adequate. In addition to potential legal liability, these activities may adversely impact our reputation or our revenues and may interfere with our ability to provide our products and services, all of which could adversely impact our business. In addition, the coverage and limits of our insurance policies may not be adequate to reimburse us for losses caused by security breaches.

Risks Relating to the Separation

        We face the following risks in connection with the Separation:

         If the distribution were to fail to qualify as a tax-free transaction for U.S. federal income tax purposes, then the distribution could result in significant tax liabilities.

        United Online has requested a private letter ruling from the IRS, substantially to the effect that, for U.S. federal income tax purposes, the distribution will qualify as a tax-free transaction for U.S. federal income tax purposes under Section 355 of the Code. In addition, United Online expects to receive the Tax Opinion, substantially to the effect that the distribution so qualifies. The IRS Ruling and the Tax Opinion will rely on certain facts, assumptions, and undertakings, and certain representations from United Online and us, regarding the past and future conduct of both respective businesses and other matters, and the Tax Opinion will rely on the IRS Ruling. Notwithstanding the IRS Ruling and the Tax Opinion, the IRS could determine that the distribution should be treated as a taxable transaction if it determines that any of these facts, assumptions, representations, or undertakings is not correct, or that the distribution should be taxable for other reasons, including if the IRS were to disagree with the conclusions in the Tax Opinion that are not covered by the IRS Ruling.

        If the distribution ultimately is determined to be taxable, then a stockholder of United Online that received shares of our common stock in the distribution would be treated as having received a distribution of property in an amount equal to the fair market value of such shares on the distribution date and could incur significant income tax liabilities. Such distribution would be taxable to such stockholder as a dividend to the extent of United Online's current and accumulated earnings and profits. Any amount that exceeded United Online's earnings and profits would be treated first as a non-taxable return of capital to the extent of such stockholder's tax basis in its shares of United Online stock with any remaining amount being taxed as a capital gain. In addition, United Online would recognize a taxable gain in an amount equal to the excess, if any, of the fair market value of the shares

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of common stock of our company held by United Online on the distribution date over United Online's tax basis in such shares.

        In addition, under the terms of the Tax Sharing Agreement that we will enter into with United Online, we also generally will be responsible for any taxes imposed on United Online that arise from the failure of the distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning of Section 355 of the Code, to the extent such failure to qualify is attributable to actions, events or transactions relating to our stock, assets or business, or a breach of the relevant representations or any covenants made by us in the Tax Sharing Agreement, the materials submitted to the IRS in connection with the request for the IRS Ruling or the representation letter provided to counsel in connection with the Tax Opinion. The amounts of such taxes could be significant.

         Our success will depend in part on our ongoing relationship with United Online after the Separation.

        In connection with the Separation, we will enter into a number of agreements with United Online that will govern the ongoing relationships between United Online and us after the Separation. Our success will depend, in part, on the maintenance of these ongoing relationships with United Online.

         We will be subject to continuing contingent liabilities of United Online following the Separation.

        After the Separation, there will be several significant areas where the liabilities of United Online may become our obligations. For example, under the Code and the related rules and regulations, each corporation that was a member of the United Online consolidated tax reporting group during any taxable period or portion of any taxable period ending on or before the effective time of the distribution is jointly and severally liable for the U.S. federal income tax liability of the entire United Online consolidated tax reporting group for such taxable period. In connection with the Separation, we will enter into a Tax Sharing Agreement with United Online that will allocate the responsibility for prior period taxes of the United Online consolidated tax reporting group between our company and United Online. For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online—Tax Sharing Agreement." If United Online were unable to pay any prior period taxes for which it is responsible, however, we could be required to pay the entire amount of such taxes, and such amounts could be significant. Other provisions of federal, state, local, or foreign law may establish similar liability for other matters, including laws governing tax-qualified pension plans, as well as other contingent liabilities.

         We might not be able to engage in desirable strategic transactions and equity issuances following the distribution because of certain restrictions relating to requirements for tax-free distributions.

        Our ability to engage in significant equity transactions could be limited or restricted after the distribution in order to preserve, for U.S. federal income tax purposes, the tax-free nature of the distribution by United Online. Even if the distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, the distribution may result in corporate-level taxable gain to United Online under Section 355(e) of the Code if 50% or more, by vote or value, of shares of our stock or United Online's stock are acquired or issued as part of a plan or series of related transactions that includes the Separation. The process for determining whether an acquisition or issuance triggering these provisions has occurred is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. Any acquisitions or issuances of our stock or United Online's stock within a two-year period after the distribution generally are presumed to be part of such a plan, although our company or United Online, as applicable, may be able to rebut that presumption.

        Under the Tax Sharing Agreement that we will enter into with United Online, we also generally will be responsible for any taxes imposed on United Online that arise from the failure of the distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning of

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Section 355 of the Code, to the extent such failure to qualify is attributable to actions, events or transactions relating to our stock, assets or business, or a breach of the relevant representations or any covenants made by us in the Tax Sharing Agreement, the materials submitted to the IRS in connection with the request for the IRS Ruling or the representation letter provided to counsel in connection with the Tax Opinion. For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online—Tax Sharing Agreement."

         We may be unable to achieve some or all of the benefits that we expect to achieve as an independent, publicly-traded company.

        As an independent, publicly-traded company, we believe that our businesses will benefit from, among other things: (1) enhanced strategic and management focus; (2) the ability to independently establish strategic priorities, growth strategies, and financial objectives; (3) more efficient capital allocation and direct access to capital; (4) the ability to implement a tailored approach to recruiting and retaining employees, including the ability to design effective incentives for the management team and employees that are more closely tied to business performance; (5) improved investor understanding of our business strategy and operating results; and (6) the ability to allow investors to choose between investing in United Online and/or FTD. However, by separating from United Online, we may be more susceptible to securities market fluctuations and other adverse events than we would have been if we were still a subsidiary of United Online. In addition, we may not be able to achieve some or all of the benefits that we expect to achieve as an independent company in the time in which we expect to do so, if at all. For example, the process of operating as a newly independent public company may distract our management team from focusing on our business and strategic priorities. If we do not realize the anticipated benefits from the Separation for any reason, our business may be adversely affected.

         We are an "emerging growth company" and cannot be certain if the reduced disclosure requirements applicable to "emerging growth companies" will make our common stock less attractive to investors.

        We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an "emerging growth company," we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies. Among other things, we will not be required to (1) provide an auditor's attestation report on management's assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (2) comply with any new rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (4) comply with any new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies under Section 102(b)(1) of the JOBS Act, (5) provide certain disclosure regarding executive compensation required of larger public companies, or (6) hold a nonbinding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously approved. Accordingly, the information that we provide stockholders in this Information Statement and in our other filings with the SEC may be different than what is available with respect to other public companies. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile and adversely affected.

        Additionally, as an "emerging growth company," we have elected to take advantage of the extended transition period for complying with new or revised accounting standards applicable to public companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. The election to

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comply with these public company effective dates is irrevocable pursuant to Section 107(b) of the JOBS Act.

        We will remain an "emerging growth company" until the earliest of (1) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (2) the date on which we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 under the Exchange Act or any successor statute, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, (3) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period, and (4) the end of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement filed under the Securities Act.

         We may be unable to make, on a timely basis, the changes necessary to operate as an independent, publicly-traded company.

        Our financial results previously were included within the consolidated results of United Online. As a result of the Separation, we will be directly subject to the reporting and other obligations under the Exchange Act immediately after the distribution date. In addition, as a public entity, we will be subject to the requirements of the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly, and current reports about our business and financial condition. Under the Sarbanes-Oxley Act, we must maintain effective disclosure controls and procedures and internal control over financial reporting, which requires significant resources and management oversight. As an "emerging growth company," we are excluded from Section 404(b) of the Sarbanes-Oxley Act, which otherwise would have required our auditors to formally attest to and report on the effectiveness of our internal control over financial reporting. If we cannot maintain effective disclosure controls and procedures or favorably assess the effectiveness of our internal control over financial reporting, or once we are no longer an "emerging growth company," our independent registered public accounting firm cannot provide an unqualified attestation report on the effectiveness of our internal control over financial reporting, investor confidence and, in turn, the market price of our common stock could decline.

         Our historical and unaudited pro forma condensed consolidated financial statements are not necessarily representative of the results we would have achieved as an independent, publicly-traded company and may not be a reliable indicator of future results.

        The historical and unaudited pro forma condensed consolidated financial statements included in this Information Statement do not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as an independent, publicly-traded company during the periods presented or those that we will achieve in the future. This is primarily a result of the following factors:

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        For these reasons, our cost structure may be higher and our future financial costs and performance may be worse than the performance implied by the historical and unaudited pro forma condensed consolidated financial information presented in this Information Statement.

        For additional information about the past financial performance of our business and the basis of the presentation of the historical and unaudited pro forma condensed consolidated financial statements, see "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Condensed Consolidated Financial Statements," and the historical consolidated financial statements and the accompanying notes included elsewhere in this Information Statement.

         There can be no assurance that we will have access to the capital markets on acceptable terms.

        From time to time, we may need to access the long-term and short-term capital markets to obtain financing. Although we believe that the sources of capital in place at the time of the Separation will permit us to finance our operations for the foreseeable future on acceptable terms, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including, but not limited to: (1) our financial performance, (2) our credit ratings or absence of a credit rating, (3) the liquidity of the overall capital markets, and (4) the state of the economy. There can be no assurance that we will have access to the capital markets on acceptable terms and conditions.

         We may incur greater costs as an independent, publicly-traded company than we did when we were part of United Online, which could decrease our profitability.

        We share economies of scope and scale with United Online in costs and vendor relationships, and take advantage of United Online's size and purchasing power in procuring certain services, such as insurance and healthcare benefits, and technology, such as computer software licenses. After the Separation, as a separate, independent entity, we may be unable to obtain these services and technologies at prices or on terms as favorable to us as those we obtained prior to the Separation. We also rely on United Online to provide various legal, administrative, and other corporate services. While we expect to enter into the Transition Services Agreement, which will govern certain relationships between us and United Online after the Separation and pursuant to which United Online will continue to provide certain of these services on a short-term transitional basis after the Separation, this arrangement may not capture all the benefits our business has enjoyed as a result of being integrated with the other businesses of United Online. In addition, we will be required to establish the necessary infrastructure and systems to supply these services on an ongoing basis. We may not be able to replace the services provided by United Online in a timely manner or on terms and conditions as favorable as those we receive from United Online. If functions previously performed by United Online cost us more than the amounts reflected in our historical financial statements, our profitability could decrease.

         We might have been able to receive better terms from unaffiliated third parties than the terms we receive in our agreements with United Online.

        The agreements related to the Separation, including the Separation and Distribution Agreement, the Tax Sharing Agreement, the Transition Services Agreement, the Employee Matters Agreement, and any other agreements, will be negotiated in the context of our separation from United Online while we are still part of United Online. Although these agreements are intended to be on an arm's-length basis, they may not reflect terms that would have resulted from arm's-length negotiations among unaffiliated third parties. Conversely, certain agreements related to the Separation may include terms that are more favorable than those that would have resulted from arm's-length negotiations among unaffiliated third parties. Following expiration of these agreements, we will have to enter into new agreements with unaffiliated third parties, and such agreements may include terms that are less favorable to us. The terms of the agreements being negotiated in the context of our separation concern, among other things,

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allocations of assets, liabilities, rights, indemnifications, and other obligations between United Online and us. For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online."

         Certain of the contracts to be transferred or assigned from United Online or its affiliates to us or one of our affiliates in connection with the Separation require the consent of a third party to such transfer or assignment. If such consent is not obtained, we may not be entitled to the benefit of such contracts in the future.

        In connection with the Separation, a number of contracts with service providers and other third parties are to be assigned by United Online or its affiliates to us or one of our affiliates. However, some of these contracts require the contractual counterparty's consent to such an assignment. Similarly, in some circumstances, we are a joint beneficiary of contracts, and we will need to enter into a new agreement with the third party to replicate the contract or assign the portion of the contract related to our business. It is possible that some parties may use the requirement of a consent to seek more favorable contractual terms from us or seek to terminate the contract. If (1) we are unable to obtain such consents on commercially reasonable and satisfactory terms, (2) we enter into new agreements on significantly less favorable terms, or (3) if any contract is terminated, we may be unable to obtain the benefits, assets, and contractual commitments that are intended to be allocated to us as part of the Separation. The failure to timely complete the assignment of existing contracts, or the negotiation of new arrangements, with any of our key suppliers, including those that are a single source or limited source suppliers, or a termination of any of those arrangements, could negatively impact our business, financial condition, results of operations, and cash flows.

         A court could require that we assume responsibility for obligations allocated to United Online under the Separation and Distribution Agreement.

        Under the Separation and Distribution Agreement, from and after the Separation, we and United Online will be responsible for the debts, liabilities, and other obligations related to the businesses which each company owns and operates following the consummation of the Separation. Although we do not expect to be liable for any obligations that are not allocated to us under the Separation and Distribution Agreement, a court could disregard the allocation agreed to between the parties, and require that we assume responsibility for obligations allocated to United Online, particularly if United Online were to refuse or were unable to pay or perform the allocated obligations. For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online—Separation and Distribution Agreement."

         Potential indemnification liabilities to United Online pursuant to the Separation and Distribution Agreement could materially and adversely affect our company.

        Among other things, the Separation and Distribution Agreement provides for indemnification obligations designed to make our company financially responsible for substantially all liabilities that may exist relating to our business activities, whether incurred prior to or after the Separation. If we are required to indemnify United Online under the circumstances set forth in the Separation and Distribution Agreement, we may be subject to substantial liabilities.

         In connection with the Separation, United Online will indemnify us for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that United Online's ability to satisfy its indemnification obligation will not be impaired in the future.

        Pursuant to the Separation and Distribution Agreement, United Online will indemnify us for substantially all liabilities that may exist relating to United Online's business activities, whether incurred

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prior to or after the Separation. However, third parties could seek to hold us responsible for any of the liabilities that United Online agrees to retain, and there can be no assurance that the indemnity from United Online will be sufficient to protect us against the full amount of such liabilities, or that United Online will be able to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from United Online any amounts for which we are held liable, we may be temporarily required to bear these losses.

         The Separation may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.

        The Separation is subject to review under various state and federal fraudulent conveyance laws. Fraudulent conveyance laws generally provide that an entity engages in a constructive fraudulent conveyance when (1) the entity transfers assets and does not receive fair consideration or reasonably equivalent value in return, and (2) the entity (a) is insolvent at the time of the transfer or is rendered insolvent by the transfer, (b) has unreasonably small capital with which to carry on its business, or (c) intends to incur or believes it will incur debts beyond its ability to repay its debts as they mature. An unpaid creditor or an entity acting on behalf of a creditor, including, without limitation, a trustee or debtor-in-possession in a bankruptcy by us or United Online or any of our respective subsidiaries, may bring a lawsuit alleging that the Separation or any of the related transactions constituted a constructive fraudulent conveyance. If a court accepts these allegations, it could impose a number of remedies, including, without limitation, voiding our claims against United Online, requiring our stockholders to return to United Online some or all of the shares of our common stock distributed in the distribution, or providing United Online with a claim for money damages against us in an amount equal to the difference between the consideration received by United Online and the fair market value of FTD at the time of the Separation.

        The measure of insolvency for purposes of the fraudulent conveyance laws will vary depending on which jurisdiction's law is applied. Generally, an entity would be considered insolvent if (1) the sum of its debts is greater than all of its property, at a fair valuation; (2) the present fair saleable value of its assets is less than its probable liabilities on its debts as such debts become absolute and matured; (3) it cannot pay its debts and other liabilities, including contingent liabilities and other commitments as they mature; or (4) it has unreasonably small capital for the business in which it is engaged. We cannot assure you what standard a court would apply to determine insolvency or that a court would determine that we, any of our respective subsidiaries or United Online were solvent at the time of or after giving effect to the Separation.

        The distribution of our common stock by United Online is also subject to review under state corporate distribution statutes. Under the General Corporation Law of the State of Delaware (the "DGCL"), a corporation may only pay dividends to its stockholders either (1) out of its surplus (net assets minus capital) or (2) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Although United Online intends to make the distribution of our common stock entirely from surplus, we cannot assure you that a court will not later determine that some or all of the distribution to United Online stockholders was unlawful.

        Prior to the Separation, United Online's Board of Directors expects to obtain an opinion that we and United Online each will be solvent at the time of the Separation, including immediately after the payment of the dividend and the Separation, will be able to repay our respective debts as they mature following the Separation and will have sufficient capital to carry on our respective businesses, and that the distribution will be made entirely out of surplus in accordance with Section 170 of the DGCL. We cannot assure you, however, that a court would reach the same conclusions set forth in such opinion in determining whether United Online or we were insolvent at the time of, or after giving effect to, the Separation, or whether lawful funds were available for the distribution to United Online's stockholders.

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         The Separation may not occur, and until the distribution occurs, United Online has the sole discretion to change the terms of the distribution in ways that may be unfavorable to us.

        The Separation may not occur, and United Online's Board of Directors may, in its absolute and sole discretion, decide at any time prior to the distribution not to proceed with the Separation. Until the consummation of the distribution, United Online's Board of Directors will have the sole and absolute discretion to determine and change the terms of the distribution, including the establishment of the record date and distribution date. These changes could be unfavorable to us.

Risks Relating to Our Common Stock

        You will face the following risks in connection with ownership of our common stock:

         There is no existing market for our common stock, and a trading market that will provide you with adequate liquidity may not develop. In addition, once our common stock begins trading, the market price of our common stock may fluctuate significantly.

        There is currently no public market for our common stock. It is anticipated that on or prior to the record date for the distribution, trading of shares of our common stock will begin on a "when-issued" basis and will continue up to and including the distribution date. However, there can be no assurance that an active trading market for our common stock will develop as a result of the distribution or be sustained in the future. The lack of an active trading market may make it more difficult for you to sell our shares and could lead to our share price being depressed or more volatile.

        We cannot predict the prices at which our common stock may trade after the distribution. The market price of our common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including, but not limited to:

        Stock markets in general have also experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could negatively affect the trading price of our common stock.

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         The combined post-distribution value of United Online and our shares may not equal or exceed the pre-distribution value of United Online shares.

        We cannot assure you that the combined trading prices of United Online common stock and our common stock after the distribution will be equal to or greater than the trading price of United Online common stock prior to the distribution. Until the market has fully evaluated the business of United Online without our business, the price at which United Online common stock trades may fluctuate more significantly than might otherwise be typical. Similarly, until the market has fully evaluated the stand-alone business of our company, the price at which shares of our common stock trades may fluctuate more significantly than might otherwise be typical, including volatility caused by general market conditions.

         Substantial sales of our common stock may occur in connection with the distribution, which could cause the market price of our common stock to decline.

        The shares of our common stock that United Online distributes to its stockholders generally may be sold immediately in the public market. Although we have no actual knowledge of any plan or intention on the part of any holder of five percent or more of the outstanding shares of United Online to sell our common stock on or after the record date, it is possible that some United Online stockholders will sell our common stock received in the distribution for reasons such as our business profile or market capitalization as an independent company not fitting their investment objectives or because our common stock is not included in certain indices after the distribution. The sales of significant amounts of our common stock or the perception in the market that this will occur may result in the lowering of the market price of our common stock.

         Your percentage ownership in our company may be diluted in the future.

        Your percentage ownership in our company may be diluted in the future because of equity awards that we expect to grant to our directors, officers, and employees and because of adjustments being made to outstanding United Online equity awards in connection with the Separation. We intend to establish equity incentive plans that will provide for the grant of common stock-based equity awards to our directors, officers, and employees. In addition, we may issue equity as all or part of the consideration paid for acquisitions and strategic investments we may make in the future.

         We may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock.

        While we have no specific plan to issue preferred stock, our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, optional, or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our Board of Directors may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock. For a more detailed description, see "Description of Capital Stock—Preferred Stock."

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         Provisions in our charter documents and the DGCL could discourage potential acquisition proposals, could delay, deter or prevent a change in control, and could limit the price certain investors might be willing to pay for our common stock.

        Certain provisions of the DGCL and our certificate of incorporation and bylaws may inhibit a change of control not approved by our Board of Directors or changes in the composition of our Board of Directors, which could result in the entrenchment of current management. These provisions include:

        We believe these provisions protect our stockholders from coercive or harmful takeover tactics by requiring potential acquirers to negotiate with our Board of Directors and by providing our Board of Directors with adequate time to assess any acquisition proposal, and are not intended to make our company immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of our company and our stockholders. For a more detailed description, see "Description of Capital Stock—Anti-Takeover Provisions."

         We currently do not expect to pay any cash dividends.

        We presently intend to retain future earnings, if any, to reinvest in the growth of our core consumer and floral network businesses. As a result, we do not currently expect to pay any cash dividends. If we do not pay dividends, the price of our common stock that you receive in the distribution must appreciate for you to recognize a gain on your investment upon sale. This appreciation may not occur.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

        We have made forward-looking statements in this Information Statement, including in the sections entitled "Questions and Answers About the Separation," "Summary," "Risk Factors," "The Separation," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business," that are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include, but are not limited to, statements about the Separation, expectations regarding the potential benefits of such transaction, the expected tax-free nature of the transaction, future financial performance, revenues, operating expenses, operating income, capital expenditures, depreciation and amortization, stock-based compensation, business strategies, financing plans, competitive position, potential growth opportunities, the effects of competition, and the effects of future legislation or regulations.

        Forward-looking statements can be identified by the use of forward-looking terminology such as the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "might," "should," "could," or the negative of these terms or similar expressions.

        Forward-looking statements involve risks, uncertainties, and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements in this Information Statement. We do not have any intention or obligation to update forward-looking statements after we distribute this Information Statement.

        The risk factors discussed in "Risk Factors" could cause our results to differ materially from those expressed in forward-looking statements.

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THE SEPARATION

Background

        On                    , 2013, United Online's Board of Directors approved the Separation. After the close of business on the distribution date, holders of United Online common stock will receive one share of our common stock for every one share of United Online common stock held at the close of business on the record date. Stockholders who are entitled to receive shares of our common stock in the distribution will not be required to pay any cash or deliver any other consideration, including any shares of United Online common stock, to receive shares of our common stock in the distribution.

        Prior to the Separation, we will have entered into the Separation and Distribution Agreement and several other ancillary agreements with United Online for the purpose of allocating various assets, liabilities, and obligations between our company and United Online. These agreements will govern our relationship with United Online following the Separation and will provide arrangements for employee matters, tax matters, technology and intellectual property matters, legal and regulatory matters, and certain other liabilities and obligations. These agreements will also include arrangements with respect to transition services, which will generally terminate after a period of 12 months (subject to an option, at FTD's election, to extend for up to an additional 12 months). The Separation and Distribution Agreement will provide that we will indemnify United Online against any and all losses relating to liabilities arising out of the FTD business, and that United Online will indemnify us against any and all losses relating to liabilities arising out of the UOL businesses. See "Certain Relationships and Related-Party Transactions—Agreements with United Online."

        The distribution of our common stock as described in this Information Statement is subject to the satisfaction or waiver of certain conditions. Even if all of the conditions have been satisfied, United Online's Board of Directors may, in its sole and absolute discretion, terminate and abandon the Separation at any time prior to the distribution date if United Online's Board of Directors determines, in its sole discretion, that the Separation is not in the best interests of United Online or its stockholders, or that it is not advisable for our company to separate from United Online. See "The Separation—Conditions to the Separation."

Reasons for the Separation

        United Online's Board of Directors regularly reviews the businesses that comprise United Online to ensure that United Online's resources are being put to use in a manner that is in the long-term interests of United Online and its stockholders. United Online's Board of Directors believes that the separation of United Online's and FTD's businesses will maximize the value of the respective businesses and will benefit each of United Online and our company in the following ways:

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        In determining whether to effect the Separation, United Online's Board of Directors has also considered the costs and risks associated with the Separation. Notwithstanding these costs and risks, United Online's Board of Directors has determined that, for the reasons outlined above, the Separation provides each of United Online and us with certain opportunities and benefits that it expects will enhance stockholder and corporate value.

When and How You Will Receive Our Shares

        On the distribution date, United Online will distribute, on a pro rata basis, all of the issued and outstanding shares of our common stock to holders of United Online common stock as of the record date.                    will serve as transfer agent and registrar for our common stock in connection with the distribution. If you are entitled to receive shares of our common stock in the distribution, the common stock will be distributed to your account as follows:

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        Holders of United Online common stock are not being asked to take any action in connection with the Separation. No stockholder approval of the Separation is required or is being sought. You are not being asked for a proxy, and we request that you not send a proxy. You are also not being asked to surrender or exchange any of your shares of United Online common stock, pay any consideration or take any other action for shares of our common stock. The number of outstanding shares of United Online common stock will not change as a result of the distribution.

Number of Shares You Will Receive

        On the distribution date, United Online will distribute one share of our common stock for every one share of United Online common stock outstanding as of the close of business on the record date.

Transferability of Shares You Receive

        The shares of our common stock distributed to United Online stockholders will be freely transferable, except for shares received by persons who may be deemed to be FTD's "affiliates" under the Securities Act. Persons who may be deemed to be "affiliates" of our company after the Separation generally include individuals or entities that control, are controlled by, or are under common control with our company and may include directors and certain officers or principal stockholders of us. Our "affiliates" will be permitted to sell their shares of our common stock only pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act, such as the exemptions afforded by Rule 144 promulgated under the Securities Act. Of the        shares of our common stock we expect to distribute in connection with the Separation,          will be held by our affiliates and may be resold subject to Rule 144.

Material U.S. Federal Income Tax Consequences of the Separation

        The following is a summary of the material U.S. federal income tax consequences to United Online and to the holders of shares of United Online common stock in connection with the Separation. This summary is based on the Code, the Treasury Regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect as of the date of this Information Statement and all of which are subject to differing interpretations and may change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below. This summary assumes that the Separation will be consummated in accordance with the Separation and Distribution Agreement and as described in this Information Statement.

        Except as specifically described below, this summary is limited to holders of shares of United Online common stock that are U.S. Holders, as defined immediately below. For purposes of this summary, a U.S. Holder is a beneficial owner of United Online common stock that is, for U.S. federal income tax purposes:

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        This summary also does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the U.S. federal income tax laws, such as:

        This summary does not address the U.S. federal income tax consequences to United Online stockholders who do not hold shares of United Online common stock as a capital asset. Moreover, this summary does not address any state, local, or foreign tax consequences or any estate, gift or other non-income tax consequences.

        If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds shares of United Online common stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to the tax consequences of the distribution.

        YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC U.S. FEDERAL, STATE AND LOCAL, AND NON-U.S. TAX CONSEQUENCES OF THE SEPARATION IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES AND THE EFFECT OF POSSIBLE CHANGES IN LAW THAT MIGHT AFFECT THE TAX CONSEQUENCES DESCRIBED IN THIS INFORMATION STATEMENT.

Treatment of the Distribution

        United Online is seeking an IRS Ruling, substantially to the effect that, on the basis of certain facts presented, and representations and assumptions set forth in the request submitted to the IRS for such IRS Ruling, the distribution of our common stock will qualify as tax-free under Section 355 of the Code. In addition to obtaining the IRS Ruling, United Online expects to receive the Tax Opinion on certain aspects of the tax treatment of the distribution not addressed by the IRS in the IRS Ruling.

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        Assuming the distribution qualifies under Section 355 of the Code, for U.S. federal income tax purposes:

        Although the IRS Ruling generally will be binding on the IRS, the IRS Ruling will be based on certain facts and assumptions, and certain representations and undertakings, from United Online and us that certain necessary conditions to obtain tax-free treatment under the Code have been satisfied. Furthermore, as a result of the IRS's general ruling policy with respect to distributions under Section 355 of the Code, the IRS will not rule on whether a distribution satisfies certain critical requirements necessary to obtain tax-free treatment under the Code. Specifically, the IRS will not rule that a distribution was effected for a valid business purpose, that a distribution does not constitute a device for the distribution of earnings and profits, or that a distribution is not part of a plan described in Section 355(e) of the Code (as discussed below). Instead, the IRS Ruling will be based on representations made to the IRS by United Online that these requirements have been established. In connection with obtaining the ruling, United Online expects to obtain the Tax Opinion, which is expected to include a conclusion that the distribution is being effected for a valid business purpose, that the distribution does not constitute a device for the distribution of earnings and profits, and that the distribution is not part of a plan described in Section 355(e) of the Code (as discussed below). The Tax Opinion will be expressed as of the date issued and will not cover subsequent periods, and the Tax Opinion will rely on the IRS Ruling. As a result, the Tax Opinion is not expected to be issued until after the date of this Information Statement. An opinion of counsel represents counsel's best legal judgment based on current law and is not binding on the IRS or any court. We cannot assure you that the IRS will agree with the conclusions expected to be set forth in the Tax Opinion, and it is possible that the IRS or another tax authority could adopt a position contrary to one or all of those conclusions and that a court could sustain that contrary position. If any of the facts, representations, assumptions, or undertakings described or made in connection with the IRS Ruling or the Tax Opinion are not correct, are incomplete or have been violated, the IRS Ruling could be revoked retroactively or modified by the IRS, and our ability to rely on the Tax Opinion could be jeopardized. We are not aware of any facts or circumstances, however, that would cause these facts, representations, or assumptions to be untrue or incomplete, or that would cause any of these undertakings to fail to be complied with, in any material respect.

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        If, notwithstanding the conclusions that we expect to be included in the IRS Ruling and the Tax Opinion, it is ultimately determined that the distribution does not qualify as tax-free under Section 355 of the Code for U.S. federal income tax purposes, then United Online would recognize gain in an amount equal to the excess, if any, of the fair market value of our common stock distributed to United Online stockholders on the distribution date over United Online's tax basis in such shares. In addition, each United Online stockholder that receives shares of our common stock in the distribution could be treated as receiving a distribution in an amount equal to the fair market value of our common stock that was distributed to the stockholder, which generally would be taxed as a dividend to the extent of the stockholder's pro rata share of United Online's current and accumulated earnings and profits, including United Online's taxable gain, if any, on the distribution, then treated as a non-taxable return of capital to the extent of the stockholder's basis in the United Online stock and thereafter treated as capital gain from the sale or exchange of United Online stock.

        Even if the distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, the distribution may result in corporate level taxable gain to United Online under Section 355(e) of the Code if 50% or more, by vote or value, of our stock or United Online stock is treated as acquired or issued as part of a plan or series of related transactions that includes the distribution. If an acquisition or issuance of our stock or United Online stock triggers the application of Section 355(e) of the Code, United Online would recognize taxable gain as described above, but the distribution would be tax-free to each United Online stockholder.

        U.S. Treasury regulations require certain stockholders that receive stock in a distribution to attach a detailed statement setting forth certain information relating to the distribution to their respective U.S. federal income tax returns for the year in which the distribution occurs. Within a reasonable period after the distribution, United Online will provide stockholders who receive our common stock in the distribution with the information necessary to comply with such requirement. In addition, all stockholders are required to retain permanent records relating to the amount, basis, and fair market value of our common stock received in the distribution and to make those records available to the IRS upon request of the IRS.

Market for Our Common Stock

        There is currently no public market for our common stock. A condition to the Separation is the listing of our common stock on NASDAQ. We are in the process of applying to list our common stock on NASDAQ and expect to list under the ticker symbol "FTD."

        Beginning on or shortly before the record date and continuing up to and including the distribution date, we expect that there will be a "when-issued" market for our common stock under the symbol "FTDWI." "When-issued" trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The "when-issued" trading market will be a market for shares of our common stock that will be distributed to United Online stockholders on the distribution date. If you own shares of United Online common stock as of the record date, you will be entitled to shares of our common stock distributed pursuant to the distribution. You may trade this entitlement to shares of our common stock, without trading the shares of United Online common stock you own, on the "when-issued" market. On the first trading day following the distribution date, "when-issued" trading with respect to our common stock will end and "regular-way" trading will begin. "Regular-way" trading refers to trading after a security has been issued and typically involves a transaction that settles on the third full business day following the date of the transaction.

Trading of United Online Common Stock After the Record Date and On or Prior to the Distribution

        Beginning on or shortly before the record date and continuing up to and including the distribution date, United Online expects that its common stock will trade in two markets on NASDAQ: a

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"regular-way" market and an "ex-distribution" market. Shares of United Online common stock that trade on the "regular-way" market will trade with an entitlement to receive shares of our common stock distributed pursuant to the distribution. Shares that trade on the "ex-distribution" market will trade without an entitlement to receive shares of our common stock distributed pursuant to the distribution. Therefore, if you sell shares of United Online common stock in the "regular-way" market after the close of business on the record date and up to and including the distribution date, you will be selling your right to receive shares of our common stock in the distribution. If you sell shares of United Online common stock in the "ex-distribution" market after the close of business on the record date and up to and including the distribution date, you will still receive the shares of our common stock that you would be entitled to receive in the distribution pursuant to your ownership of the shares of United Online common stock.

Treatment of Equity-Based Compensation

        The following discussion describes the expected treatment of United Online equity awards in connection with the Separation and is subject to approval of United Online's compensation committee (the "Compensation Committee"). The different types of awards discussed below are described in further detail under "Executive Compensation." The post-separation treatment of awards held by an employee will depend on the type of award and whether the person is an employee of United Online or our company immediately prior to the Separation. For purposes of this discussion, an "FTD Employee" refers to an individual who is employed by us immediately prior to the Separation and a "Remaining Employee" refers to an individual who is employed by United Online immediately prior to the Separation. The treatment described below will become effective as of the distribution date.

Stock Options

        United Online Options that are outstanding on the distribution date and held by any FTD Employee will be converted into FTD Options, without any changes to the original terms of the United Online Options, other than appropriate adjustments to increase the number of shares of our common stock subject to each FTD Option and reduce the exercise price payable per share, so as to preserve the value that existed with respect to the United Online Options immediately prior to the Separation. No changes will be made with respect to United Online Options held by Remaining Employees or former or retired employees, other than similar adjustments with respect to the number of shares of United Online common stock subject to each United Online Option and the exercise price payable per share so as to preserve the value that existed with respect to such United Online Options immediately prior to the Separation.

        United Online Options held by directors of United Online (including Mr. Goldston) on the distribution date will be converted into FTD Options and United Online Options, in each case, with appropriate adjustments as described above so as to preserve the aggregate value of such options.

Restricted Stock Units

        United Online restricted stock units that are held by FTD Employees on the distribution date will be converted via the issuance of a dividend into our restricted stock units covering an increased number of shares of our common stock, so as to preserve the value that existed with respect to each such United Online restricted stock unit immediately prior to the Separation, and other than such adjustments, the original terms of such restricted stock units, including the vesting and issuance schedules, will remain unchanged. United Online restricted stock units held by Remaining Employees on the distribution date will be adjusted to increase the number of shares of United Online common stock subject to each such award so as to preserve the value that existed with respect to such award immediately prior to the Separation and, other than such adjustment, the original terms of the United Online restricted stock unit, including the vesting and issuance schedules, will remain unchanged.

49


        United Online restricted stock units held by directors of United Online (including Mr. Goldston) on the distribution date will vest as of the distribution date and be settled in FTD shares and United Online shares, in each case, with appropriate adjustments as described above so as to preserve the aggregate value of such restricted stock units.

Continued Vesting

        The service-vesting requirements in effect for each United Online award will remain unchanged in connection with the Separation and will be measured in terms of both service prior to the Separation and continued service with the entity employing the holder immediately after the Separation.

Employee Stock Purchase Plan

        The then-current purchase period under the United Online 2010 Employee Stock Purchase Plan will end as of the Separation and all then-outstanding purchase rights will be automatically exercised in accordance with the provisions of the plan.

Results of the Separation

        After the Separation, we will be an independent, publicly-traded company. Immediately following the distribution, we expect to have approximately            stockholders of record, based on the number of registered stockholders of United Online common stock on            , 2013, and approximately              million shares of our common stock outstanding. The actual number of shares to be distributed will be determined on the record date and will reflect any exercise of United Online Options and the vesting of United Online restricted stock units at any time prior to the record date. The distribution will not affect the number of outstanding shares of United Online common stock or any rights of holders of United Online common stock.

        We will enter into a Separation and Distribution Agreement and several other agreements with United Online to effect the Separation and to provide a framework for our relationship with United Online after the Separation. We cannot assure you that these agreements are or will be on terms as favorable to us or to United Online as agreements with unaffiliated third parties. For a more detailed description, see "Certain Relationships and Related-Party Transactions—Agreements with United Online."

Conditions to the Separation

        We expect that the Separation will be effective as of the close of business on the distribution date, provided that the following conditions have been satisfied or waived by United Online's Board of Directors, at its sole and absolute discretion:

50


        The fulfillment of the foregoing conditions will not create any obligation on the part of United Online to effect the distribution, and United Online's Board of Directors may terminate the Separation and Distribution Agreement and abandon the Separation at any time prior to the distribution if United Online determines, in its sole discretion, that the Separation is not in the best interests of United Online or its stockholders, or that it is not advisable for our company to separate from United Online.

Solvency Opinion

        Prior to the Separation, United Online's Board of Directors expects to obtain an opinion from an independent financial advisory firm that we and United Online each will be solvent at the time of the Separation, including immediately after the distribution and the Separation, will be able to repay our respective debts as they mature following the Separation and will have sufficient capital to carry on our respective businesses, and that the distribution will be made entirely out of surplus in accordance with Section 170 of the DGCL.

Reasons for Furnishing this Information Statement

        This Information Statement is being furnished solely to provide information to United Online stockholders who are entitled to receive shares of our common stock in the distribution. This Information Statement is not, and is not to be construed as, an inducement or encouragement to buy, hold, or sell any of our securities. We believe that the information in this Information Statement is accurate as of the date indicated on the cover page. Changes may occur after that date, and neither United Online nor our company undertakes any obligation to update such information except pursuant to our respective obligations under the securities laws.

51



CAPITALIZATION

        The following table sets forth our capitalization as of March 31, 2013, on a historical basis and on a pro forma basis to give effect to the pro forma adjustments included in our unaudited pro forma condensed consolidated financial statements (see "Unaudited Pro Forma Condensed Consolidated Financial Statements"). The pro forma adjustments include:

        The pro forma adjustments are based on available information and assumptions that management believes are reasonable; however, such adjustments are subject to change based on the final terms of the distribution and the agreements that define our relationship with United Online after the distribution. In addition, such adjustments are estimates and may not prove to be accurate. Accordingly, the pro forma information below is not necessarily indicative of what our cash and cash equivalents and capitalization would have been had the Separation and distribution been completed as of March 31, 2013.

        The information in the following table should be read in conjunction with "Selected Historical Consolidated Financial Data," "Unaudited Pro Forma Condensed Consolidated Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our audited consolidated financial statements and accompanying notes included elsewhere in this Information Statement.

 
  March 31, 2013  
 
  Historical   Pro Forma  
 
  (in thousands)
 

Cash and cash equivalents

  $ 69,660   $               
           

Capitalization:

             

Indebtedness:

             

Revolving credit facility

                      

Long-term debt, including current portion, net of discounts

    244,092                   
           

Total indebtedness

    244,092                   
           

Equity:

             

Common stock, $0.0001 par value

                      

Additional paid-in capital

                      

Parent company investment

    311,487                   

Accumulated other comprehensive loss

    (38,056 )   (             )
           

Total equity

    273,431                   
           

Total capitalization

  $ 517,523   $               
           

52



SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

        The following tables present our selected historical consolidated financial data. The selected historical consolidated financial data as of March 31, 2013 and for the quarters ended March 31, 2013 and 2012 was derived from our unaudited condensed consolidated financial statements included elsewhere in this Information Statement. The selected historical consolidated financial data as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010 was derived from our audited consolidated financial statements included elsewhere in this Information Statement.

        Our historical consolidated financial statements include allocations of certain expenses from United Online, including expenses related to senior management, legal, human resources, finance, information technology, and centrally managed employee benefit arrangements. We consider the allocations of expenses from United Online to be reasonable. These costs may not be representative of the future costs we will incur as an independent, public company, and do not include certain additional costs we may incur as an independent public company.

        The financial statements included in this Information Statement may not necessarily reflect our financial position, results of operations, and cash flows as if we had operated as a stand-alone public company during all periods presented. Accordingly, our historical results should not be relied upon as an indicator of our future performance.

        The following selected historical consolidated financial and operating data should be read in conjunction with "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Certain Relationships and Related-Party Transactions," and our consolidated financial statements and related notes included elsewhere in this Information Statement.

 
  Quarter Ended
March 31,
  Year Ended December 31,  
 
  2013   2012   2012   2011   2010  

Consolidated Statements of Operations Data (in thousands):

                               

Revenues

  $ 190,283   $ 176,447   $ 613,514   $ 587,249   $ 554,576  

Operating income

  $ 17,224   $ 14,636   $ 44,189   $ 41,217   $ 32,113  

Net income

  $ 9,306   $ 7,854   $ 21,174   $ 15,721   $ 6,607  

 

 
   
  December 31,  
 
  March 31,
2013
 
 
  2012   2011  

Consolidated Balance Sheet Data (in thousands):

                   

Total assets

  $ 667,447   $ 684,629   $ 677,459  

Long-term debt, net of discounts

  $ 233,236   $ 233,144   $ 258,474  

Cash dividends paid to parent company

  $ 2,853   $ 19,299   $ 15,000  

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

        The unaudited pro forma condensed consolidated statement of operations for the quarter ended March 31, 2013 and unaudited pro forma condensed consolidated balance sheet as of March 31, 2013 were derived from our unaudited condensed consolidated financial statements included elsewhere in this Information Statement. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2012 was derived from our audited consolidated financial statements included elsewhere in this Information Statement.

        The unaudited pro forma condensed consolidated financial statements reflect adjustments to our historical financial results in connection with the Separation. The unaudited pro forma condensed consolidated statement of operations gives effect to these events as if they occurred on January 1, 2012, the beginning of our last fiscal year. The unaudited pro forma condensed consolidated balance sheet gives effect to these events as if they occurred as of March 31, 2013, our latest balance sheet date. The pro forma adjustments are described in the accompanying notes and include the following:

        The pro forma adjustments are based on available information and assumptions that management believes are reasonable; however, such adjustments are subject to change based on the final terms of the distribution and the agreements that define our relationship with United Online after the distribution. In addition, such adjustments are estimates and may not prove to be accurate. Accordingly, the pro forma information below is not necessarily indicative of what our financial position and results of operations would have been had the Separation and distribution been completed on the dates indicated.

        The unaudited pro forma financial information is for illustrative and informational purposes only and is not intended to represent, or be indicative of, what our financial position or results of operations would have been had the Separation and related transactions occurred on the dates indicated. The unaudited pro forma financial information also should not be considered representative of our financial position, and you should not rely on the financial information presented below as a representation of our future performance.

        We expect to experience changes in our ongoing cost structure when we become an independent, publicly-traded company. For example, our historical consolidated financial statements include allocations of certain expenses from United Online, including expenses related to senior management, legal, human resources, finance, information technology, and centrally managed employee benefit arrangements. These costs may not be representative of the future costs we will incur as an independent public company. These anticipated cost changes have not been reflected in our unaudited pro forma condensed consolidated statement of operations. For a description of the allocation of expenses to us by United Online, see Note 5, "Transactions with Related Parties—Transactions with United Online," to our audited consolidated financial statements as of December 31, 2012 and 2011 and for each of the three years ended December 31, 2012 included elsewhere in this Information Statement.

        The following unaudited pro forma condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010 and accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Information Statement.

54



FTD COMPANIES, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE QUARTER ENDED MARCH 31, 2013

(in thousands, except per share amounts)

 
  As Reported   Pro Forma
Adjustments
  Pro Forma  

Revenues:

                   

Products

  $ 153,202   $            $           

Services

    37,081              
               

Total revenues

    190,283              

Operating expenses:

                   

Cost of revenues—products

    117,276              

Cost of revenues—services

    4,974              

Sales and marketing

    30,287              

General and administrative

    14,115              

Amortization of intangible assets

    6,407              

Restructuring and other exit costs

                 
               

Total operating expenses

    173,059              
               

Operating income

    17,224              

Interest income

    169              

Interest expense

    (3,192 )            

Other income (expense), net

    158              
               

Income before income taxes

    14,359              

Provision for income taxes

    5,053       (a)      
               

Net income

  $ 9,306   $     $    
               

Pro forma earnings per common share:

                   

Basic

                   
                   

Diluted

                   
                   

Pro forma weighted-average common shares outstanding:

                   

Basic

            (b)      
                   

Diluted

            (c)      
                   

   

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

55



FTD COMPANIES, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2012

(in thousands, except per share amounts)

 
  As Reported   Pro Forma
Adjustments
  Pro Forma  

Revenues:

                   

Products

  $ 477,579   $            $           

Services

    135,935              
               

Total revenues

    613,514              

Operating expenses:

                   

Cost of revenues—products

    366,935              

Cost of revenues—services

    19,811              

Sales and marketing

    104,913              

General and administrative

    52,123              

Amortization of intangible assets

    25,543              

Restructuring and other exit costs

                 
               

Total operating expenses

    569,325              
               

Operating income

    44,189              

Interest income

    750              

Interest expense

    (13,562 )            

Other income (expense), net

    627              
               

Income before income taxes

    32,004              

Provision for income taxes

    10,830              (a)      
               

Net income

  $ 21,174   $     $    
               

Pro forma earnings per common share:

                   

Basic

                   
                   

Diluted

                   
                   

Pro forma weighted-average common shares outstanding:

                   

Basic

                   (b)      
                   

Diluted

                   (c)      
                   

   

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

56



FTD COMPANIES, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

MARCH 31, 2013

(in thousands)

 
  As Reported   Pro Forma
Adjustments
  Pro Forma  

ASSETS

                   

Current assets:

                   

Cash and cash equivalents

  $ 69,660   $            $           

Accounts receivable, net of allowances

    30,010              

Inventories, net

    5,542              

Deferred tax assets, net

    5,643              

Prepaid expenses

    5,200              

Other current assets

    80              
               

Total current assets

    116,135              

Property and equipment, net

    29,923              

Intangible assets, net

    184,407              

Goodwill

    324,941              

Other assets

    12,041              
               

Total assets

  $ 667,447   $     $    
               

LIABILITIES AND EQUITY

                   

Current liabilities:

                   

Accounts payable

  $ 47,360   $     $    

Accrued liabilities

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