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As filed with the Securities and Exchange Commission on September 9, 2013

File No. 001-35901

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



AMENDMENT NO. 4 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."

2



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: September 9, 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 July 17, 2013, by and among FTD Companies, Inc., Interflora British Unit, the material wholly-owned domestic subsidiaries of FTD Companies, Inc. party thereto as guarantors, the financial institutions party thereto from time to time, Bank of America Merrill Lynch and Wells Fargo Securities, LLC, as joint lead arrangers and book managers, and Bank of America, N.A., as administrative agent for the lenders.**

 

10.5

 

Form of FTD Companies, Inc. 2013 Incentive Compensation Plan**

 

10.6

 

Form of Employment Agreement by and between FTD Companies, Inc. and Robert S. Apatoff*

 

10.7

 

Form of Employment Agreement by and between FTD Companies, Inc. and Becky A. Sheehan*

 

10.8

 

Service Agreement by and between Interflora Holdings Limited and Rhys J. Hughes, as amended*

 

21.1

 

List of subsidiaries of FTD Companies, Inc.**

 

99.1

 

Preliminary Information Statement of FTD Companies, Inc., subject to completion, dated September 9, 2013*

*
Filed herewith.

**
Previously filed.

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

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Exhibit 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

[    •    ], 2013



TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.1

 

Definitions

 
1

Section 1.2

 

Interpretation

  8


ARTICLE II

THE SEPARATION

Section 2.1

 

Transfers of Assets and Assumptions of Liabilities

 
9

Section 2.2

 

Termination of Intercompany Agreements

  10

Section 2.3

 

Settlement of Intercompany Account

  11

Section 2.4

 

Separation of United Online Software Development (India) Pvt Ltd

  11


ARTICLE III

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

Section 3.1

 

SEC and Other Securities Filings

 
12

Section 3.2

 

NASDAQ Listing Application

  12

Section 3.3

 

Governmental Approvals and Consents

  13

Section 3.4

 

Ancillary Agreements

  13

Section 3.5

 

Governance Matters

  13


ARTICLE IV

THE DISTRIBUTION

Section 4.1

 

Delivery to Transfer Agent

 
13

Section 4.2

 

Mechanics of the Distribution

  14


ARTICLE V

CONDITIONS

Section 5.1

 

Conditions Precedent to Consummation of the Transactions

 
14

Section 5.2

 

Right Not to Close

  15


ARTICLE VI

NO REPRESENTATIONS OR WARRANTIES

Section 6.1

 

Disclaimer of Representations and Warranties

 
15

Section 6.2

 

As Is, Where Is

  16


ARTICLE VII

CERTAIN COVENANTS AND ADDITIONAL AGREEMENTS

Section 7.1

 

Insurance Matters

 
16

Section 7.2

 

Use of Names

  18

Section 7.3

 

Mail and Other Communications

  19

Section 7.4

 

Litigation

  19

Section 7.5

 

Assumption of Certain Liabilities Under Indemnification Agreements

  22

Section 7.6

 

Licenses

  22

i



ARTICLE VIII

ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE

Section 8.1

 

Agreement for Exchange of Information

 
22

Section 8.2

 

Ownership of Information

  24

Section 8.3

 

Compensation for Providing Information

  24

Section 8.4

 

Retention of Records

  24

Section 8.5

 

Limitation of Liability

  24

Section 8.6

 

Production of Witnesses

  24

Section 8.7

 

Confidentiality

  24

Section 8.8

 

Privileged Matters

  25

Section 8.9

 

Financial Information Certifications

  27


ARTICLE IX


MUTUAL RELEASES; INDEMNIFICATION

Section 9.1

 

Release of Pre-Distribution Claims

 
27

Section 9.2

 

Indemnification by FTD

  28

Section 9.3

 

Indemnification by United Online

  29

Section 9.4

 

Procedures for Indemnification

  30

Section 9.5

 

Indemnification Obligations Net of Insurance Proceeds

  31

Section 9.6

 

Indemnification Obligations Net of Taxes

  32

Section 9.7

 

Contribution

  32

Section 9.8

 

Remedies Cumulative

  33

Section 9.9

 

Survival of Indemnities

  33

Section 9.10

 

Limitation of Liability

  33


ARTICLE X


DISPUTE RESOLUTION

Section 10.1

 

Appointed Representative

 
33

Section 10.2

 

Negotiation and Dispute Resolution

  33

Section 10.3

 

Arbitration

  34


ARTICLE XI


TERMINATION

Section 11.1

 

Termination

 
35

Section 11.2

 

Effect of Termination

  35


ARTICLE XII


MISCELLANEOUS

Section 12.1

 

Further Assurances

 
35

Section 12.2

 

Payment of Expenses

  35

Section 12.3

 

Amendments and Waivers

  35

Section 12.4

 

Late Payments

  36

Section 12.5

 

Entire Agreement

  36

Section 12.6

 

Survival of Agreements

  36

Section 12.7

 

Coordination With Tax Sharing Agreement

  36

Section 12.8

 

Coordination With Employee Matters Agreement

  36

Section 12.9

 

Third Party Beneficiaries

  36

ii


Section 12.10

 

Notices

  37

Section 12.11

 

Counterparts; Electronic Delivery

  37

Section 12.12

 

Severability

  37

Section 12.13

 

Assignability; Binding Effect

  37

Section 12.14

 

Governing Law

  37

Section 12.15

 

Construction

  38

Section 12.16

 

Performance

  38

Section 12.17

 

Title and Headings

  38

Section 12.18

 

Exhibits and Schedules

  38

Exhibits:

       


Exhibit A—FTD Subsidiaries


 

 

Exhibit B—United Online Subsidiaries

   

Exhibit C—Shared Scripts

   

iii



SEPARATION AND DISTRIBUTION AGREEMENT

        This SEPARATION AND DISTRIBUTION AGREEMENT (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, currently owns and conducts the FTD Business and the UOL Businesses;

        WHEREAS, the Board of Directors of United Online has determined that it is advisable and in the best interests of United Online and its stockholders to separate United Online into two independent publicly traded companies: (a) United Online which, following consummation of the transactions contemplated by this Agreement, will own and conduct the UOL Businesses, and (b) FTD which, following consummation of the transactions contemplated by this Agreement, will own and conduct the FTD Business;

        WHEREAS, pursuant to the terms of this Agreement, the Parties intend to effect: (a) the Separation, whereby the UOL Businesses and the FTD Business will be separated, and (b) the Distribution, whereby United Online will distribute to the holders of outstanding shares of common stock, par value $0.0001 per share, of United Online ("UOL Common Stock"), on a pro rata basis, all of the outstanding shares of common stock, par value $0.0001 per share, of FTD ("FTD Common Stock"), owned by United Online as of the Distribution Date (which shall represent one hundred percent (100%) of the issued and outstanding shares of FTD Common Stock); and

        WHEREAS, United Online has received a private letter ruling (the "IRS Ruling") from the Internal Revenue Service (the "IRS") substantially to the effect that, among other things, for U.S. federal income tax purposes, the Distribution will qualify as a tax-free distribution under Section 355 of the Code (the "Intended Tax-Free Treatment").

        NOW, THEREFORE, in consideration of the foregoing premises and the covenants and agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:


ARTICLE I

DEFINITIONS

        Section 1.1    Definitions.    As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.1:

        "Action" means any demand, claim, action, suit, countersuit, arbitration, litigation, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal or authority.

        "Affiliate" means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the specified Person. For this purpose "control" of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities, by contract or otherwise; provided that for purposes of this Agreement, unless this Agreement expressly provides otherwise, the determination as to whether a Person is an Affiliate of another Person will be made assuming no FTD Entity is an Affiliate of any UOL Entity and no UOL Entity is an Affiliate of any FTD Entity.

        "Agreement" has the meaning set forth in the preamble to this Agreement and includes all schedules and exhibits attached hereto or delivered pursuant hereto.


        "Agreement Dispute" has the meaning set forth in Section 10.2(a).

        "Ancillary Agreements" has the meaning set forth in Section 3.4.

        "Appointed Representative" has the meaning set forth in Section 10.1.

        "Appropriate Member of the FTD Entities" has the meaning set forth in Section 9.2.

        "Appropriate Member of the UOL Entities" has the meaning set forth in Section 9.3.

        "Asset" means all rights, properties or other assets, whether real, personal or mixed, tangible or intangible, of any kind, nature and description, whether accrued, contingent or otherwise, and wheresoever situated and whether or not carried or reflected, or required to be carried or reflected, on the books of any Person.

        "Business Day" means a day other than a Saturday, a Sunday or a day on which banking institutions located in Los Angeles, California, New York, New York or Chicago, Illinois are authorized or obligated by applicable Law or executive order to close.

        "Claims Made Policies" has the meaning set forth in Section 7.1(b)(ii).

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

        "Combined Policies" has the meaning set forth in Section 7.1(b)(ii).

        "Confidential Information" means any and all information:

        "Confidential Operational Information" means any and all proprietary operational information, data or material, including, but not limited to, (a) specifications, ideas, concepts, formulae, compositions, models, sketches, photographs, graphs, drawings, samples, improvements and strategies for products or services, (b) quality assurance policies, procedures and specifications, (c) Software, (d) training materials and information, (e) past, current and planned research and development, and current and planned manufacturing or distribution methods and processes, and (f) all other know-how, methodologies, processes, procedures, techniques and trade secrets related to design, development and operational processes.

        "Consent" means any consent, waiver or approval from, or notification requirement, to any Person other than a member of either Group.

        "Contract" means any written, oral, implied or other contract, agreement, covenant, lease, license, guaranty, indemnity, representation, warranty, assignment, sales order, purchase order, power of

2


attorney, instrument or other commitment, assurance, undertaking or arrangement that is binding on any Person or entity or any part of its property under applicable Law.

        "Credit Agreement" means the Credit Agreement, dated as of July 17, 2013, by and among FTD, Interflora British Unit, a company incorporated under the laws of England and Wales, the material wholly-owned domestic subsidiaries of FTD party thereto as guarantors, the financial institutions party thereto from time to time, Bank of America Merrill Lynch and Wells Fargo Securities, LLC, as joint lead arrangers and book managers, and Bank of America, N.A., as administrative agent for the lenders, as may be amended from time to time.

        "Distribution" means the transactions contemplated by Section 4.2.

        "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 Time" means the time at which the Distribution is effective on the Distribution Date.

        "Employee Matters Agreement" means that certain Employee Matters Agreement, dated the date hereof, by and between United Online and FTD, as may be amended from time to time.

        "Encumbrance" means any claim, charge, mortgage, lien, pledge, option, power of sale, hypothecation, retention of title, right of pre-emption, right of first refusal or other third party right or security interest of any kind or an agreement, arrangement or obligation to create any of the foregoing with the exception of liens arising by operation of law in the normal course of business.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "Existing D&O Policies" has the meaning set forth in Section 7.1(c)(i).

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

        "FTD Assets" means all Assets owned by the FTD Entities or the UOL Entities that (a) are used primarily in, or that primarily relate to, the FTD Business or (b) were purchased and paid for by the FTD Business, including, without limitation, all FTD Intellectual Property and all Assets recorded on the balance sheet of FTD as of the date of this Agreement.

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

        "FTD Common Stock" has the meaning set forth in the recitals to this Agreement.

        "FTD Entities" means FTD and the FTD Subsidiaries.

        "FTD Indemnitees" means each member of the FTD Entities, their respective Affiliates, and each of their respective current or former stockholders, members, directors, officers, managers, agents and employees (in each case, in such Person's respective capacity as such), and their respective heirs, executors, administrators, successors and assigns.

        "FTD India" means FTD India Private Limited, an Indian subsidiary of FTD, or another Indian subsidiary of FTD, as determined by FTD.

        "FTD India Assets" has the meaning set forth in Section 2.4(a).

        "FTD India Personnel" has the meaning set forth in Section 2.4(c).

        "FTD Intellectual Property" means all Intellectual Property (other than Shared IP owned by the UOL Entities) that (a) is used primarily in, or that primarily relates to, the FTD Business or (b) was

3


purchased and paid for by the FTD Business, including FTD's proprietary web-based e-commerce platform.

        "FTD Liabilities" means, except as otherwise expressly provided in this Agreement or one or more Ancillary Agreements, and excluding Liabilities for each Shared Litigation Matter allocated pursuant to Section 7.4(a), all Liabilities of the UOL Entities arising out of, or primarily related to, the FTD Assets or the operation of the FTD Business (including, without limitation, the Credit Agreement).

        "FTD Specific Policies" has the meaning set forth in Section 7.1(a).

        "FTD Subsidiaries" means (a) each of the entities listed on Exhibit A hereto, (b) any other entity (other than any UOL Subsidiary) that was owned, in whole or in part, by any of the entities listed on Exhibit A hereto prior to the Distribution Time, and (c) any other entity which becomes a Subsidiary of FTD after the Distribution Time.

        "Governmental Approval" means any notice, report or other filing to be given to or made with, or any release, consent, substitution, approval, amendment, registration, permit or authorization from any Governmental Authority.

        "Governmental Authority" means any U.S. federal, state, local, non-U.S. or international court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority.

        "Group" means either the UOL Entities or the FTD Entities, as the context requires.

        "Guarantee" means any guarantee (including guarantees of performance or payment under Contracts, commitments, Liabilities and permits), letter of credit or other credit or credit support arrangement or similar assurance, including surety bonds, bid bonds, advance payment bonds, performance bonds, payment bonds, retention and/or warranty bonds or other bonds or similar instruments.

        "Indebtedness" of any specified Person means (a) all obligations of such specified Person for borrowed money or arising out of any extension of credit to or for the account of such specified Person (including reimbursement or payment obligations with respect to surety bonds, letters of credit, bankers' acceptances and similar instruments), (b) all obligations of such specified Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such specified Person upon which interest charges are customarily paid, (d) all obligations of such specified Person under conditional sale or other title retention agreements relating to Assets purchased by such specified Person, (e) all obligations of such specified Person issued or assumed as the deferred purchase price of property or services, (f) all liabilities secured by (or for which any Person to which any such liability is owed has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge or other encumbrance on property owned or acquired by such specified Person (or upon any revenues, income or profits of such specified Person therefrom), whether or not the obligations secured thereby have been assumed by the specified Person or otherwise become liabilities of the specified Person, (g) all capital lease obligations of such specified Person, (h) all securities or other similar instruments convertible or exchangeable into any of the foregoing, and (i) any liability of others of a type described in any of the preceding clauses (a) through (h) in respect of which the specified Person has incurred, assumed or acquired a liability by means of a Guarantee.

        "Indemnifiable Loss" has the meaning set forth in Section 9.5.

        "Indemnifying Party" has the meaning set forth in Section 9.4(a).

        "Indemnitee" means any UOL Indemnitee or any FTD Indemnitee.

        "Indemnity Payment" has the meaning set forth in Section 9.5.

4


        "India Separation Date" has the meaning set forth in Section 2.4(a).

        "Information Statement" means the information statement, attached as an exhibit to the Registration Statement, and any related documentation to be provided to holders of UOL Common Stock in connection with the Distribution, including any amendments or supplements thereto.

        "Insurance Policy" means any insurance policies and insurance Contracts, including, without limitation, general liability, property and casualty, workers' compensation, automobile, marine, directors & officers liability, errors and omissions, employee dishonesty and fiduciary liability policies, whether, in each case, in the nature of primary, excess, umbrella or self-insurance overage, together with all rights, benefits and privileges thereunder.

        "Insurance Proceeds" means those monies (in each case, net of any out-of-pocket costs or expenses incurred in the collection thereof):

        "Intellectual Property" means all intellectual property and industrial property rights of any kind or nature, including all U.S. and foreign (i) patents, patent applications, patent disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions and extensions thereof, (ii) Trademarks, (iii) copyrights and copyrightable subject matter, (iv) rights of publicity, (v) moral rights and rights of attribution and integrity, (vi) rights in Software, (vii) trade secrets and all other confidential information, know-how, inventions, proprietary processes, formulae, models and methodologies, (viii) rights of privacy and rights to personal information, (ix) telephone numbers and Internet protocol addresses, (x) all rights in the foregoing and in other similar intangible assets, (ix) all applications and registrations for the foregoing and (xii) all rights and remedies against past, present, and future infringement, misappropriation, or other violation of the foregoing.

        "Intended Tax-Free Treatment" has the meaning set forth in the recitals to this Agreement.

        "Intercompany Account" means any receivable, payable or loan between any member of the UOL Entities, on the one hand, and any member of the FTD Entities, on the other hand, that exists prior to the Distribution Time and is reflected in the records of the relevant members of the UOL Entities and the FTD Entities, except for any such receivable, payable or loan that arises pursuant to this Agreement or any Ancillary Agreement.

        "Intercompany Agreement" means any Contract, whether or not in writing between or among any member of the UOL Entities, on the one hand, and any member of the FTD Entities, on the other hand, entered into prior to the Distribution Date, but excluding any Contract to which a Person other than any member of the UOL Entities or the FTD Entities is also a Party.

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

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

        "JAMS" has the meaning set forth in Section 10.2(c).

        "JAMS Rules" has the meaning set forth in Section 10.3(a).

5


        "Law" means any law, statute, ordinance, code, rule, regulation, order, writ, proclamation, judgment, injunction or decree of any Governmental Authority.

        "Liabilities" means any and all Indebtedness, liabilities, assurances, commitments and obligations of any nature or description, whether accrued, fixed or contingent, mature or inchoate, known or unknown, whether and however arising (including, without limitation, (i) arising out of any Contract, Law, Action, tort based theory or any other legal theory or (ii) any act or failure to act by any past or present stockholders, members, directors, officers, managers, agents or employees of any of the Parties),, and whether or not the same would be required by GAAP to be reflected in financial statements or disclosed in the notes thereto.

        "Litigation Expenses" has the meaning set forth in Section 7.4(a)(ii).

        "Loss" or "Losses" means any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, interest costs, Taxes, fines and expenses (including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and attorneys', accountants', consultants' and other professionals' fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder), of any kind or nature, whether or not the same would properly be reflected on any financial statements or the footnotes thereto.

        "Mediation Period" has the meaning set forth in Section 10.2(c).

        "NASDAQ" means the NASDAQ Global Select Market.

        "NASDAQ Listing Application" has the meaning set forth in Section 3.2(a).

        "Occurrence Based Policies" has the meaning set forth in Section 7.1(b)(ii).

        "Other Party Marks" has the meaning set forth in Section 7.2(a).

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

        "Permitted Lien" means (a) Security Interests consisting of zoning or planning restrictions, easements, servitudes, licenses, permits and other restrictions or limitations on the use of real property or minor irregularities in title thereto which do not materially impair the use or value of the respective property, (b) Security Interests for current Taxes, assessments or similar governmental charges or levies not yet due or which are being contested in good faith and (c) mechanic's, workmen's, materialmen's, carrier's, repairer's, warehousemen's and other similar Security Interests arising or incurred in the ordinary course of business for amounts not overdue.

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

        "Pre-Distribution Claim" has the meaning set forth in Section 7.1(d)(i).

        "Record Date" means the close of business on the date, to be determined by the Board of Directors of United Online, as the record date for determining holders of UOL Common Stock entitled to receive shares of FTD Common Stock in the Distribution.

        "Record Holders" has the meaning set forth in Section 4.1.

        "Registration Statement" means the registration statement on Form 10 of FTD with respect to the registration under the Exchange Act of the FTD Common Stock to be distributed in the Distribution, including any amendments or supplements thereto.

        "Reverse Stock Split" means the one-for-seven reverse stock split of UOL Common Stock that United Online intends to implement immediately prior to the Distribution.

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        "Run-Off Policy" has the meaning set forth in Section 7.1(c)(iii).

        "SEC" means the United States Securities and Exchange Commission.

        "Security Interest" means any mortgage, security interest, pledge, lien, charge, claim, option, indenture, right to acquire, right of first refusal, deed of trust, licenses to third Parties, leases to third Parties, security agreements, voting or other restriction, right-of-way, covenant, condition, easement, servitude, zoning matters, permit, restriction, encroachment, restriction on transfer, restrictions or limitations on use of real or personal property or any other encumbrance of any nature whatsoever, imperfections in or failure of title or defect of title.

        "Separation" means the transactions contemplated by Article II.

        "Shared IP" means any Intellectual Property other than (i) Trademarks and (ii) Shared Scripts that is owned by the UOL Entities and used by the FTD Entities or vice versa prior to the Distribution Time.

        "Shared Litigation Matters" means (a) each Action listed on Schedule 7.4; (b) each additional Action hereafter asserted against both a member of the UOL Entities and a member of the FTD Entities that arises out of or relates to any of the practices challenged in the Actions listed on Schedule 7.4 that occurred prior to the consummation of the Distribution; (c) any Action asserted against both a member of the UOL Entities and a member of the FTD Entities prior to the consummation of the Distribution; and (d) any other Action consolidated with any Action referred to in clause (a), (b) or (c) above.

        "Shared Scripts" means all computer programming scripts that are owned by the UOL Entities as of the Distribution Time and are used by the FTD Entities prior to the Distribution Time, including, without limitation, the scripts set forth on Exhibit C.

        "Software" means all computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, and technology supporting the foregoing, and all documentation, including flowcharts and other logic and design diagrams, technical, functional and other specifications, and user and training materials related to any of the foregoing.

        "Subsidiary" means, with respect to any specified Person, any corporation, partnership, limited liability company, joint venture or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such specified Person or by any one or more of its subsidiaries, or by such specified Person and one or more of its subsidiaries.

        "Tax" or "Taxes" has the meaning set forth in the Tax Sharing Agreement.

        "Tax Return" has the meaning set forth in the Tax Sharing Agreement.

        "Tax Sharing Agreement" means that certain Tax Sharing Agreement, dated as of the date hereof, by and between United Online and FTD, as may be amended from time to time.

        "Third-Party Claim" has the meaning set forth in Section 9.4(b).

        "Trademarks" means all U.S. and foreign trademarks, service marks, corporate names, trade names, domain names, logos, slogans, designs, trade dress and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing.

        "Transactions" means the Separation, the Distribution and any other transactions contemplated by this Agreement or any Ancillary Agreement.

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        "Transfer Agent" means Computershare.

        "Transaction Expenses" has the meaning set forth in Section 12.2.

        "Transition Period" has the meaning set forth in Section 7.2(a).

        "Transition Services Agreement" means that certain Transition Services Agreement, dated as of the date hereof, by and between United Online and FTD, as may be amended from time to time.

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

        "UOL Assets" means any Assets owned by the UOL Entities, other than any FTD Assets.

        "UOL Businesses" means (a) the communications and content and media businesses conducted by the UOL Entities (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 Entities as of or prior to the date of this Agreement (including any terminated, divested or discontinued business or operations of the UOL Entities).

        "UOL Common Stock" has the meaning set forth in the recitals to this Agreement.

        "UOL Entities" means United Online and the UOL Subsidiaries.

        "UOL Indemnitees" means each member of the UOL Entities and their Affiliates and each of their respective current or former stockholders, members, directors, officers, managers, agents and employees (in each case, in such Person's respective capacity as such) and their respective heirs, executors, administrators, successors and assigns.

        "UOL India" means United Online Software Development (India) Private Limited, a wholly-owned subsidiary of United Online.

        "UOL Liabilities" means any Liabilities of the UOL Entities, other than any FTD Liabilities.

        "UOL Subsidiaries" means (a) each of the entities listed on Exhibit B hereto, (b) any other entity (other than any FTD Subsidiary) that is owned, in whole or in part, by any of the entities listed on Exhibit B hereto prior to the Distribution Time, and (c) any other entity which becomes a Subsidiary of UOL after the Distribution Time.

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

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ARTICLE II

THE SEPARATION

        Section 2.1    Transfers of Assets and Assumptions of Liabilities.    Except as otherwise expressly provided herein (including but not limited to Section 2.4 and Section 7.4) or in any of the Ancillary Agreements:

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        Section 2.2    Termination of Intercompany Agreements.    

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        Section 2.3    Settlement of Intercompany Account.    Each Intercompany Account (other than those set forth in Schedule 2.3(a)) outstanding immediately prior to the Distribution Date will be settled, capitalized, cancelled, assigned or assumed by the relevant members of the UOL Entities and the FTD Entities prior to the Distribution Time, in each case in the manner agreed to by the Parties; provided that each Intercompany Account set forth in Schedule 2.3(b) will be settled, capitalized, cancelled, assigned or assumed by the relevant members of the UOL Entities and the FTD Entities no later than forty-five (45) days after the Distribution Date, in each case in the manner agreed to by the Parties. Each Intercompany Account outstanding immediately prior to the Distribution Date set forth in Schedule 2.3(a) shall continue to be outstanding after the Distribution Date (unless previously satisfied in accordance with its terms) and thereafter shall be deemed to be, for each Party (or the relevant member of such Party's Group), an obligation to a third party and shall no longer be an Intercompany Account. With respect to any outstanding checks issued by UOL Entities, FTD Entities, or any of their respective Subsidiaries prior to the Distribution Date, such outstanding checks shall be honored following the Distribution Date by the entity owning the account on which the check is drawn. As between UOL Entities and FTD Entities (and their respective Subsidiaries) all payments and reimbursements received after the Distribution Date by either Party (or any of its Subsidiaries) in respect or satisfaction of a business, Asset or Liability of the other Party (or any of its Subsidiaries), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, as promptly as commercially practicable or as otherwise agreed between the Parties, upon receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause its applicable Subsidiary to pay over, to the other Party the amount of such payment or reimbursement.

        Section 2.4    Separation of United Online Software Development (India) Pvt Ltd.    

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In the event that any FTD India Personnel does not accept FTD India's offer of employment as described above, for any reason whatsoever, then UOL India shall pay all applicable dues, compensation or other amounts (whether statutory or contractual) to such FTD India Personnel on account of severance of employment or separation of service of such FTD India Personnel. FTD India shall (and FTD shall cause FTD India to) reimburse UOL India for an amount equal to all such payments made by UOL or UOL India to such FTD India Personnel and for any other costs incurred by UOL or UOL India related to the matters contemplated in this Section 2.4.


ARTICLE III

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

        Section 3.1    SEC and Other Securities Filings.    

        Section 3.2    NASDAQ Listing Application.    

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        Section 3.3    Governmental Approvals and Consents.    To the extent that any of the Transactions require any Governmental Approval or Consent which has not been obtained prior to the date of this Agreement, the Parties will use their respective commercially reasonable efforts to obtain, or caused to be obtained, such Governmental Approval or Consent prior to the Distribution Time.

        Section 3.4    Ancillary Agreements.    Prior to the Distribution Time, each Party shall execute and deliver, and shall cause each applicable member of its Group to execute and deliver, as applicable, the following agreements (collectively, including any exhibits, schedules, attachments, tables or other appendices thereto and each other agreement or other instrument contemplated therein, the "Ancillary Agreements"):

        Section 3.5    Governance Matters.    


ARTICLE IV

THE DISTRIBUTION

        Section 4.1    Delivery to Transfer Agent.    Subject to the conditions specified in Section 5.1, on or prior to the Distribution Date, United Online will authorize the Transfer Agent, for the benefit of holders of record of UOL Common Stock at the close of business on the Record Date (the "Record Holders"), to effect the book-entry transfer of all outstanding shares of FTD Common Stock and will order the Transfer Agent to effect the Distribution at the Distribution Time in the manner set forth in Section 4.2.

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        Section 4.2    Mechanics of the Distribution.    


ARTICLE V

CONDITIONS

        Section 5.1    Conditions Precedent to Consummation of the Transactions.    None of the Transactions shall become effective unless the following conditions have been satisfied or (except with respect to clauses (b) and (c) below) waived by the Board of Directors of United Online, in its sole and absolute discretion, at or before the Distribution Time:

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        Section 5.2    Right Not to Close.    Each of the conditions set forth in Section 5.1 is for the benefit of United Online and the Board of Directors of United Online may, in its sole and absolute discretion, determine whether to waive any condition, in whole or in part (other than the conditions set forth in Section 5.1(b) and Section 5.1(c) above). Any determination made by the Board of Directors of United Online concerning the satisfaction or waiver of any or all of the conditions in Section 5.1 will be conclusive and binding on the Parties. The satisfaction of the conditions set forth in Section 5.1 will not create any obligation on the part of United Online to any other Person to effect any of the Transactions or in any way limit United Online' right to terminate this Agreement and the Ancillary Agreements as set forth in Section 11.1 or alter the consequences of any termination from those specified in Section 11.2.


ARTICLE VI

NO REPRESENTATIONS OR WARRANTIES

        Section 6.1    Disclaimer of Representations and Warranties.    EACH PARTY (ON BEHALF OF ITSELF AND EACH OTHER MEMBER OF ITS GROUP) ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN ANY ANCILLARY AGREEMENT OR IN ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, NO PARTY IS REPRESENTING OR WARRANTING IN ANY WAY AS TO (A) THE ASSETS, BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED, DISTRIBUTED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, (B) ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, (C) THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF ANY PARTY, (D) THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR (E) THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, DISTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER OR

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THEREUNDER TO CONVEY TITLE TO ANY ASSET UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF.

        Section 6.2    As Is, Where Is.    EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, ALL ASSETS TRANSFERRED PURSUANT TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT ARE BEING TRANSFERRED AS IS, WHERE IS, WITH ALL FAULTS.


ARTICLE VII

CERTAIN COVENANTS AND ADDITIONAL AGREEMENTS

        Section 7.1    Insurance Matters.    

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        Section 7.2    Use of Names.    

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        Section 7.3    Mail and Other Communications.    

        Section 7.4    Litigation    

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        Section 7.5    Assumption of Certain Liabilities Under Indemnification Agreements.    Notwithstanding any provision to the contrary, FTD agrees that FTD Liabilities includes all Liabilities of the UOL Entities to any former or current director or officer of the UOL Entities under any indemnification agreement with such director or officer, solely to the extent that such Liabilities arise out of, or primarily relate to, the FTD Assets, serving as a director or officer of the FTD Entities, or the operation of the FTD Business.

        Section 7.6    Licenses.    


ARTICLE VIII

ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE

        Section 8.1    Agreement for Exchange of Information.    

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        Section 8.2    Ownership of Information.    Any information owned by any Party that is provided to a requesting Party pursuant to Section 8.1(a) shall be deemed to remain the property of the providing Party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed to grant or confer rights of license or otherwise to the requesting Party with respect to any such information. To the extent that any Confidential Information concerns or relates to one Party and not to the other Party, the Party to which the Confidential Information relates shall own such Confidential Information.

        Section 8.3    Compensation for Providing Information.    A Party requesting information pursuant to Section 8.1(a) agrees to reimburse the providing Party for the reasonable expenses, if any, of gathering and copying such information, to the extent that such expenses are incurred for the benefit of the requesting Party.

        Section 8.4    Retention of Records.    To facilitate the exchange of information pursuant to this Article VIII after the Distribution Date, for a period of six (6) years following the Distribution Date, except as otherwise required or agreed in writing, the Parties agree to use commercially reasonable efforts to retain, or cause to be retained, all information in their, or any member of their Group's, respective possession or control on the Distribution Date in accordance with the policies and procedures of United Online as in effect on the Distribution Date.

        Section 8.5    Limitation of Liability.    No Party shall have any Liability to the other Party (a) if any historical information exchanged or provided pursuant to this Article VIII is found to be inaccurate, in the absence of gross negligence or willful misconduct by the Party that provided such information or (b) if any information is destroyed despite using commercially reasonable efforts to comply with the provisions of Section 8.4.

        Section 8.6    Production of Witnesses.    At all times from and after the Distribution Date, upon reasonable request:

        Section 8.7    Confidentiality.    

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        Section 8.8    Privileged Matters.    

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        Section 8.9    Financial Information Certifications.    In order to enable the principal executive officer or officers, principal financial officer or officers and controller or controllers of each of the Parties to make the certifications required of them under Section 302 of the Sarbanes-Oxley Act of 2002, within thirty (30) days following the end of any fiscal quarter during which FTD was a Subsidiary of United Online, and within sixty (60) days following the end of any fiscal year during which FTD was a Subsidiary of United Online, the other Party shall provide, or cause to be provided by any other applicable member of its Group, a certification statement with respect to testing of internal controls for corporate and shared services processes for such quarter, year or portion thereof to those certifying officers and employees, which certification shall be in substantially the same form as has been provided by officers or employees in certifications delivered prior to the Distribution Date (provided that such certification shall be made by the relevant Party or any other applicable member of its Group rather than individual officers or employees), or as otherwise agreed upon between the Parties.


ARTICLE IX

MUTUAL RELEASES; INDEMNIFICATION

        Section 9.1    Release of Pre-Distribution Claims.    

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        Section 9.2    Indemnification by FTD.    Except as provided in Section 7.4(a), Section 7.4(f), Section 9.4 or Section 9.5, FTD shall, and, in the case of Section 9.2(a) or Section 9.2(b), shall in addition cause another Appropriate Member of the FTD Entities to, indemnify, defend and hold

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harmless, the UOL Indemnitees from and against any and all Losses of the UOL Indemnitees relating to, arising out of or resulting from any of the following (without duplication):

in each case, regardless of when or where the loss, claim, accident, occurrence, event or happening giving rise to the Loss took place, or whether any such loss, claim, accident, occurrence, event or happening is known or unknown, or reported or unreported and regardless of whether such loss, claim, accident, occurrence, event or happening giving rise to the Loss existed prior to, on or after the Distribution Date or relates to, arises out of or results from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to, on or after the Distribution Date. As used in this Section 9.2, "Appropriate Member of the FTD Entities" means the member or members of the FTD Entities, if any, whose acts, conduct or omissions or failures to act caused, gave rise to or resulted in the Loss from and against which indemnity is provided.

        Section 9.3    Indemnification by United Online.    Except as provided in Section 7.4(a), Section 7.4(f), Section 9.4 or Section 9.5, United Online shall, and, in the case of Section 9.3(a) or Section 9.3(b), shall in addition cause any other Appropriate Member of the UOL Entities to, indemnify, defend and hold harmless the FTD Indemnitees from and against any and all Losses of the FTD Indemnitees relating to, arising out of or resulting from any of the following (without duplication):

in each case, regardless of when or where the loss, claim, accident, occurrence, event or happening giving rise to the Loss took place, or whether any such loss, claim, accident, occurrence, event or happening is known or unknown, or reported or unreported and regardless of whether such loss, claim, accident, occurrence, event or happening giving rise to the Loss existed prior to, on or after the Distribution Date or relates to, arises out of or results from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to, on or after the Distribution Date. As used in this Section 9.3, "Appropriate Member of the UOL Entities" means the member or members of

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the UOL Entities, if any, whose acts, conduct or omissions or failures to act caused, gave rise to or resulted in the Loss from and against which indemnity is provided.

        Section 9.4    Procedures for Indemnification.    

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        Section 9.5    Indemnification Obligations Net of Insurance Proceeds.    The Parties intend that any Loss subject to indemnification or reimbursement pursuant to this Article IX (an "Indemnifiable Loss") will be net of Insurance Proceeds that actually reduce the amount of the Loss. Accordingly, the amount which an Indemnifying Party is required to pay to any Indemnitee will be reduced by any Insurance Proceeds actually recovered by or on behalf of the Indemnitee in reduction of the related Loss. If an Indemnitee receives a payment (an "Indemnity Payment") required by this Agreement from an Indemnifying Party in respect of any Loss and subsequently receives Insurance Proceeds, the Indemnitee

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will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payments received over the amount of the Indemnity Payments that would have been due if the Insurance Proceeds recovery had been received, realized or recovered before the Indemnity Payments were made. The Indemnitee shall use and cause its Affiliates to use commercially reasonable efforts to recover any Insurance Proceeds to which the Indemnitee is entitled with respect to any Indemnifiable Loss. The existence of a claim by an Indemnitee for insurance or against a third party in respect of any Indemnifiable Loss shall not, however, delay any payment pursuant to the indemnification provisions contained in this Article IX and otherwise determined to be due and owing by an Indemnifying Party; rather, the Indemnifying Party shall make payment in full of such amount so determined to be due and owing by it against a concurrent written assignment by the Indemnitee to the Indemnifying Party of the portion of the claim of the Indemnitee for such insurance or against such third party equal to the amount of such payment. The Indemnitee shall use and cause its Affiliates to use commercially reasonable efforts to assist the Indemnifying Party in recovering or to recover on behalf of the Indemnifying Party, any Insurance Proceeds to which the Indemnifying Party is entitled with respect to any Indemnifiable Loss as a result of such assignment. The Indemnitee shall make available to the Indemnifying Party and its counsel all employees, books and records, communications, documents, items or matters within its knowledge, possession or control that are necessary, appropriate or reasonably deemed relevant by the Indemnifying Party with respect to the recovery of such Insurance Proceeds; provided that nothing in this sentence shall be deemed to require a Party to make available books and records, communications, documents or items which (i) in such Party's good faith judgment could result in a waiver of any privilege even if the Parties cooperated to protect such privilege as contemplated by this Agreement or (ii) such Party is not permitted to make available because of any Law or any confidentiality obligation to a third party, in which case such Party shall use commercially reasonable efforts to seek a waiver of or other relief from such confidentiality restriction. Unless the Indemnifying Party has made payment in full of any Indemnifiable Loss, such Indemnifying Party shall use and cause its Affiliates to use commercially reasonable efforts to recover any Insurance Proceeds to which it or such Affiliate is entitled with respect to any Indemnifiable Loss.

        Section 9.6    Indemnification Obligations Net of Taxes.    The Parties intend that any Indemnifiable Loss will be net of Taxes. Accordingly, the amount which an Indemnifying Party is required to pay to an Indemnitee will be adjusted to reflect any tax benefit to the Indemnitee from the underlying Loss and to reflect any Taxes imposed upon the Indemnitee as a result of the receipt of such payment. Such an adjustment will first be made at the time that the Indemnity Payment is made and will further be made, as appropriate, to take into account any change in the liability of the Indemnitee for Taxes that occurs in connection with the final resolution of an audit by a taxing authority. For purposes of this Section 9.6, the value of any tax benefit to the Indemnitee from the underlying Loss shall be an amount equal to the product of (a) the amount of any present or future deduction allowed or allowable to the Indemnitee by the Code, or other applicable Law, as a result of such Loss and (b) the highest statutory rate applicable under Section 11 of the Code, or other applicable Law. Except with respect to any Indemnity Payment for Losses relating to a breach of the Tax Sharing Agreement, which Indemnity Payments shall be treated in accordance with the Tax Sharing Agreement, and to the extent permitted by Law, the Parties will treat any Indemnity Payment paid pursuant to this Article IX as a capital contribution made by United Online to FTD or as a distribution made by FTD to United Online, as the case may be, on the date of this Agreement.

        Section 9.7    Contribution.    If the indemnification provided for in this Article IX is unavailable to an Indemnitee in respect of any Indemnifiable Loss, then the Indemnifying Party, in lieu of indemnifying such Indemnitee, shall contribute to the Losses paid or payable by such Indemnitee as a result of such Indemnifiable Loss in such proportion as is appropriate to reflect the relative fault of FTD and each other member of the FTD Entities, on the one hand, and United Online and each other member of the UOL Entities, on the other hand, in connection with the circumstances which resulted in such Indemnifiable Loss.

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        Section 9.8    Remedies Cumulative.    The remedies provided in this Article IX shall be cumulative and, subject to the provisions of Article X, shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

        Section 9.9    Survival of Indemnities.    The rights and obligations of each of the Parties and their respective Indemnitees under this Article IX shall survive the Distribution Date indefinitely, unless a specific survival or other applicable period is expressly set forth herein, and shall survive the sale or other transfer by any Party or any of its Subsidiaries of any Assets or businesses or the assignment by it of any Liabilities.

        Section 9.10    Limitation of Liability.    EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED IN ANY ANCILLARY AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES (INCLUDING IN RESPECT OF LOST PROFITS OR REVENUES), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF ANY PROVISION OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.


ARTICLE X

DISPUTE RESOLUTION

        Section 10.1    Appointed Representative.    Each Party shall appoint a representative who shall be responsible for administering the dispute resolution provisions in Section 10.2 (each, an "Appointed Representative"). Each Appointed Representative shall have the authority to resolve any Agreement Disputes on behalf of the Party appointing such representative.

        Section 10.2    Negotiation and Dispute Resolution.    

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        Section 10.3    Arbitration.    

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ARTICLE XI

TERMINATION

        Section 11.1    Termination.    This Agreement and each of the Ancillary Agreements may be terminated at any time prior to the Distribution Time by and in the sole discretion of United Online without the approval of any other Party.

        Section 11.2    Effect of Termination.    In the event of termination pursuant to Section 11.1, neither Party shall have any Liability of any kind to the other Party.


ARTICLE XII

MISCELLANEOUS

        Section 12.1    Further Assurances.    Subject to the limitations or other provisions of this Agreement and any Ancillary 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 consummate and make effective the Transactions and to carry out the intent and purposes of this Agreement and the Ancillary Agreements, including using commercially reasonable efforts to obtain satisfaction of the conditions precedent in Article V or in any Ancillary Agreement within its reasonable control and to perform all covenants and agreements herein or in any Ancillary Agreement applicable to such Party or any member of its Group and, upon reasonable request, executing and delivering to the other Party or any member of its Group any other documents and materials, and take any further actions that are reasonably necessary for the other Party or member of its Group to perfect its title in or to any FTD Asset or UOL Asset assigned to such other Party or member of its Group hereunder (at the expense of the Party or member of its Group requesting that such further actions be taken) 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 any of the Transactions. Without limiting the generality of the foregoing, where the cooperation of third Parties, such as insurers or trustees, would be necessary in order for a Party to completely fulfill its obligations under this Agreement or any Ancillary Agreement, such Party shall use commercially reasonable efforts to cause such third Parties to provide such cooperation.

        Section 12.2    Payment of Expenses.    Except as otherwise expressly provided in this Agreement or in any Ancillary Agreement, all fees, costs and expenses incurred by any of the FTD Entities or UOL Entities (i) from and after April 1, 2013, in connection with the preparation, execution, delivery, printing and implementation of this Agreement and any Ancillary Agreement, the Registration Statement, the Information Statement, the Distribution, and the consummation of the transactions contemplated by the foregoing (including, without limitation, any fees payable to United Online's financial advisors, legal advisors and accountants) (collectively, "Transaction Expenses") and (ii) relating to the transactions contemplated in Section 2.4 of this Agreement, shall be charged to and paid by FTD and shall be deemed to be FTD Liabilities. All fees, costs and expenses incurred by any of the FTD Entities or UOL Entities in connection with the Reverse Stock Split shall be borne half by the FTD Entities and half by the UOL Entities. All other transaction expenses shall be borne by the Party incurring such fees, costs and expenses. For the period of April 1, 2013 through June 30, 2013, the Transaction Expenses total $1.4 million. For the avoidance of doubt, after the fifth Business Day following the Distribution Date, none of the UOL Entities shall be permitted to incur any new Transaction Expenses on behalf of any FTD Entities (it being understood that any Transaction Expenses related to commitments made prior to such date shall not be considered new Transaction Expenses for purposes of such restriction). Any amount or expense to be paid or reimbursed by any

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Party to any other Party shall be so paid or reimbursed promptly after the existence and amount of such obligation is determined and a written demand therefor is made. United Online will use its commercially reasonable efforts to provide FTD with invoices relating to amounts payable under clause (i) above within 30 days of the Distribution Date and, if requested by FTD, accruals or other good faith estimates of such amounts.

        Section 12.3    Amendments and Waivers.    

        Section 12.4    Late Payments.    Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or otherwise invoiced or demanded in writing and properly payable that are not paid within thirty (30) days of the date of such bill, invoice or other written demand) shall accrue interest at a rate per annum equal to 5%.

        Section 12.5    Entire Agreement.    This Agreement, the Ancillary Agreements and the Exhibits and Schedules referenced herein and therein and attached hereto or thereto, constitute the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all prior negotiations, agreements, commitments, writings, courses of dealing and understandings with respect to the subject matter hereof.

        Section 12.6    Survival of Agreements.    Except as otherwise expressly contemplated by this Agreement or any Ancillary Agreement, all covenants and agreements of the Parties contained in this Agreement and each Ancillary Agreement shall survive the Distribution Time and remain in full force and effect in accordance with their applicable terms.

        Section 12.7    Coordination With Tax Sharing Agreement.    Except as specifically provided herein, this Agreement shall not apply to Taxes (which are covered by the Tax Sharing Agreement). In the case of any conflict between this Agreement and the Tax Sharing Agreement in relation to any matter addressed in the Tax Sharing Agreement, the Tax Sharing Agreement shall prevail.

        Section 12.8    Coordination With Employee Matters Agreement.    Except as specifically provided herein, this Agreement shall not apply to employee compensation and benefit plans and programs (which are covered by the Employee Matters Agreement). In the case of any conflict between this Agreement and the Employee Matters Agreement in relation to any matter addressed in the Employee Matters Agreement, the Employee Matters Agreement shall prevail.

        Section 12.9    Third Party Beneficiaries.    Except (a) as provided in Article IX relating to Indemnitees and for the release of any Person provided under Section 9.1, (b) as provided in Section 7.1 relating to insured persons, (c) as provided in Section 8.1(a), and (d) as specifically provided in any Ancillary Agreement, this Agreement and the Ancillary Agreements are solely for the benefit of the Parties and should 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 or the Ancillary Agreements.

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        Section 12.10    Notices.    All notices, requests, permissions, waivers and other communications hereunder or under any Ancillary Agreement shall be in writing and shall be deemed to have been duly given (a) when personally delivered to the intended recipient, (b) five (5) Business Days following sending by registered or certified mail, postage prepaid, (c) one (1) Business Day following sending by overnight delivery via a national courier service, and (d) when sent, if sent by facsimile, provided that the facsimile transmission is promptly confirmed and any facsimile or electronic mail, provided that the facsimile or electronic mail transmission is promptly confirmed, in each case, addressed to a Party at the following address for such Party:

        Section 12.11    Counterparts; Electronic Delivery.    This Agreement and the Ancillary Agreements 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, any Ancillary Agreement or any other documents pursuant to this Agreement or any Ancillary 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 12.12    Severability.    If any term or other provision of this Agreement, any Ancillary Agreement or the Exhibits or Schedules attached hereto or thereto 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 and the Ancillary Agreements shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions 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 and the Ancillary Agreements so as to affect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the fullest extent possible. If any sentence in this Agreement or in any Ancillary Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.

        Section 12.13    Assignability; Binding Effect.    Except as otherwise expressly provided in this Agreement, neither Party may assign this Agreement or any of the Ancillary Agreements or any rights or obligations hereunder or thereunder without the prior written consent of the other Party hereto or thereto, and any attempt to assign this Agreement or any of the Ancillary Agreements without such consent shall be void and of no effect. This Agreement and the Ancillary Agreements shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

        Section 12.14    Governing Law.    This Agreement and the Ancillary Agreements shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Delaware,

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without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction.

        Section 12.15    Construction.    This Agreement and the Ancillary Agreements 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 and the Ancillary Agreements are 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, the Ancillary Agreements 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 or any Ancillary Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement or any Ancillary 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 any Ancillary Agreement or their 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 or any Ancillary Agreement.

        Section 12.16    Performance.    Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein or in any Ancillary Agreement to be performed by any Subsidiary or Affiliate of such Party.

        Section 12.17    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 or any Ancillary Agreement.

        Section 12.18    Exhibits and Schedules.    The Exhibits and Schedules attached hereto or to any Ancillary Agreement are incorporated herein or therein by reference and shall be construed with and as an integral part of this Agreement or such Ancillary Agreement to the same extent as if the same had been set forth verbatim herein or therein.

[Signature Page Follows]

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        IN WITNESS WHEREOF, the Parties have signed this Separation and Distribution Agreement effective as of the date first set forth above.

    UNITED ONLINE, INC.

 

 

By:

 

  

        Name:    
        Title:    

 

 

FTD COMPANIES, INC.

 

 

By:

 

 

        Name:    
        Title:    

   

[Signature Page to Separation and Distribution Agreement]



Exhibit A

FTD Subsidiaries
(all entities are directly or indirectly wholly-owned by FTD Companies, Inc. unless otherwise indicated)

FTD Group, Inc.

FTD, Inc.

Value Network Service, Inc.

FTD.CA, Inc.

FTD International Corporation

Florists' Transworld Delivery, Inc.

FTD Holdings, Incorporated

Renaissance Greeting Cards, Inc.

FTD Canada, Inc.

FTD.COM INC.

Flowers USA, Inc.

Interflora, Inc. (331/3% owned by Florists' Transworld Delivery, Inc.; 331/3% owned by Interflora British Unit)

FTD UK Holdings Limited

Interflora Holdings Limited

Interflora Group Limited

Interflora Investments Limited

Interflora British Unit

I.S. Group Limited (20.37% owned by Interflora British Unit)

A-1



Exhibit B

UOL Subsidiaries
(all entities are directly or indirectly wholly-owned by United Online, Inc. unless otherwise indicated)

NetZero, Inc.

Juno Online Services, Inc.

Juno Internet Services, Inc.

Classmates Media Corporation

NetZero Modecom, Inc.

NetZero Wireless, Inc.

United Online Communications, Inc.

United Online Advertising Network, Inc.

United Online Web Services, Inc.

UOL Advertising, Inc.

United Online Software Development India Private Limited

Adcurate, Inc.

Classmates Media Corporation

FreeInternet.com, Inc.

Memory Lane, Inc.

MyPoints.com, Inc.

CMC Services, Inc.

Opobox, Inc.

Classmates International, Inc.

Yearbook Archives, Inc.

StayFriends GmbH

Klassträffen Sweden AB

Trombi Acquisition SARL

Klassenfreunde.ch GmbH

B-1



Exhibit C

Shared Scripts

C-1



Schedule 2.2(b)

Intercompany Agreements

[TO COME]



Schedule 2.3(a)

Intercompany Accounts

[TO COME]



Schedule 2.3(b)

Intercompany Accounts

[TO COME]



Schedule 2.4(a)

FTD India Assets

[TO COME]



Schedule 2.4(b)

FTD India Leases

[TO COME]



Schedule 3.5(c)(i)

Certain Resignations

Robert S. Apatoff



Schedule 3.5(c)(ii)

Certain Resignations

Mark R. Goldston
Charles B. Ammann
Rebecca K. Marquez



Schedule 7.1(b)(i)

Occurrence Based Policies

[TO COME]



Schedule 7.1(b)(ii)

Claims Made Policies

[TO COME]



Schedule 7.4

Shared Litigation Matters

        In re: Trilegiant Corporation, Inc., Civil Action No. 3:12-cv-396-VLB (D. Conn.) (Consolidated Amended Complaint filed Sept. 7, 2012) (defendants include United Online, Inc., FTD Group, Inc., and Classmates International, Inc.)

        Frank v. Trilegiant et al., Civil Action No. 2:12-cv-01721-VLB (D. Conn.) (Class Action Complaint filed Dec. 5, 2012) (defendants include United Online, Inc., FTD Group, Inc., and Classmates International, Inc.)

        Any Actions or Liabilities arising from investigations initiated by subpoenas that FTD.COM, Inc. and Classmates Online, Inc. received in 2010 from the Attorney General for the State of Kansas and the Attorney General for the State of Maryland, issued on behalf of a Multistate Work Group consisting of the Attorneys General for Alabama, Alaska, Delaware, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Michigan, New Mexico, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Vermont, and Washington.



Exhibit 21.1

List of Subsidiaries

Florists' Transworld Delivery, Inc., a Michigan corporation

FTD Canada, Inc., incorporated in Canada

FTD Group, Inc., a Delaware corporation

FTD, Inc., a Delaware corporation

FTD.CA, INC., a Delaware corporation

FTD.COM Inc., a Delaware corporation

Interflora British Unit, incorporated in England and Wales

Interflora, Inc., a Michigan corporation (662/3% ownership)




QuickLinks

SEPARATION AND DISTRIBUTION AGREEMENT by and between UNITED ONLINE, INC. and FTD COMPANIES, INC. dated as of [ • ], 2013
TABLE OF CONTENTS
SEPARATION AND DISTRIBUTION AGREEMENT
RECITALS
ARTICLE I DEFINITIONS
ARTICLE II THE SEPARATION
ARTICLE III CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION
ARTICLE IV THE DISTRIBUTION
ARTICLE V CONDITIONS
ARTICLE VI NO REPRESENTATIONS OR WARRANTIES
ARTICLE VII
CERTAIN COVENANTS AND ADDITIONAL AGREEMENTS
ARTICLE VIII
ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE
ARTICLE IX MUTUAL RELEASES; INDEMNIFICATION
ARTICLE X DISPUTE RESOLUTION
ARTICLE XI TERMINATION
ARTICLE XII MISCELLANEOUS
Exhibit A FTD Subsidiaries (all entities are directly or indirectly wholly-owned by FTD Companies, Inc. unless otherwise indicated)
Exhibit B
UOL Subsidiaries (all entities are directly or indirectly wholly-owned by United Online, Inc. unless otherwise indicated)
Exhibit C Shared Scripts
Schedule 2.2(b)
Intercompany Agreements
Schedule 2.3(a)
Intercompany Accounts
Schedule 2.3(b) Intercompany Accounts
Schedule 2.4(a) FTD India Assets
Schedule 2.4(b)
FTD India Leases
Schedule 3.5(c)(i)
Certain Resignations
Schedule 3.5(c)(ii) Certain Resignations
Schedule 7.1(b)(i) Occurrence Based Policies
Schedule 7.1(b)(ii) Claims Made Policies
Schedule 7.4 Shared Litigation Matters
List of Subsidiaries

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.6

EMPLOYMENT AGREEMENT

        This Employment Agreement (the "Agreement") is made and entered into as of the date the last party hereto signs the Agreement but is made effective as of the Effective Date (as defined below in Section 1(a)) by and between FTD Companies, Inc., a Delaware corporation (the "Company"), with principal corporate offices at 3113 Woodcreek Drive, Downers Grove, Illinois 60515, and Robert S. Apatoff, whose address is 3113 Woodcreek Drive, Downers Grove, Illinois 60515 ("Employee").

        WHEREAS, effective as of the date hereof, Employee and the Company desire to enter into an employment agreement.

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

1.
Term; Position.

        (a)   The term of this Agreement will commence on the date on which the spin-off of the Company from United Online, Inc. (the "Spin-Off") is consummated (the "Effective Date") and extend through the third anniversary of the Effective Date, unless this Agreement is earlier terminated as provided herein (the "Term"). For the avoidance of doubt, if the Spin-Off is not consummated by June 30, 2014, this Agreement shall terminate and be of no force or effect.

        (b)   Employee will serve as President and Chief Executive Officer of the Company and report to the Board of Directors of the Company. Employee agrees to devote Employee's full-time attention, skill and efforts to the performance of Employee's duties for the Company.

2.
Salary and Benefits.

        (a)   Employee will be paid a salary at an annualized rate of $730,000 payable in successive bi-weekly or other installments in accordance with the Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Board of Directors. As used in this Agreement, the term "Board of Directors" shall refer to the Board of Directors of the Company or other governing body or committee to which the authority of the Board of Directors of the Company with respect to executive compensation matters has been delegated, including (without limitation) the Compensation Committee of the Board of Directors of the Company.

        (b)   Employee will be eligible to participate in each of the Company's employee benefit plans that is made generally available either to the Company's employees or to the Company's senior executives and for which Employee satisfies the applicable eligibility requirements. Employee will be entitled to a minimum of four (4) weeks of paid vacation each year or such greater amount as determined in accordance with the Company's standard vacation policy.

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

        (d)   As soon as practicable following the effective date of the Spin-Off and the filing of an effective Form S-8, the Board of Directors shall grant to Employee (i) a number of restricted stock units relating to Company stock with an aggregate value of $2,500,000, determined based on the average per-share closing price of the Company's stock for the five (5) trading days prior to the date of grant; and (ii) a number of options to purchase Company stock equal to the number of restricted stock


units granted pursuant to Section 2(d)(i), with an exercise price equal to the per-share closing price on the date of grant. The restricted stock units and options shall vest at the rate of one-third on each of the first three anniversaries of the date of grant, and shall be subject to such other terms and conditions as may be determined by the Board of Directors (or an appropriate committee thereof).

3.
Bonus.

        For each fiscal year of the Company during the Term of this Agreement, Employee will be eligible to participate in a bonus program with a target bonus set by the Board of Directors in an amount of up to 100% of Employee's annual rate of base salary. The performance criteria for purposes of determining Employee's actual bonus for each fiscal year will be established by the Board of Directors, and Employee's annual bonus for one or more of those fiscal years may be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company at the time such bonus payment is paid. Employee's bonus payment for each fiscal year shall in no event be paid later than the 15th day of the third month following the end of the Company's fiscal year for which such bonus is earned.

4.
Restricted Stock Units and Other Equity Awards.

        (a)   If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section 7(b) below, any and all equity awards Employee holds on the date of such termination (other than any equity award granted after the Effective Date that expressly provides to the contrary) will vest on an accelerated basis as to that number of additional shares in which Employee would have otherwise been vested at the time of such termination had Employee completed an additional twelve (12) months of employment with the Company and had each applicable equity award been structured so as to vest in successive equal monthly installments over the vesting schedule for that award. In no event will the number of additional shares which vest on such an accelerated basis with respect to any particular equity award exceed the number of shares unvested under that award immediately prior to the date of such termination. Except as otherwise expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required to comply with any applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), the shares of the common stock of the Company ("Common Stock") underlying the equity awards that vest on an accelerated basis in accordance with this Section 4(a) will be issued to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), provided the Release required of Employee pursuant to Section 7(b) has become effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, the issuance shall be effected during the portion of that period that occurs in the second taxable year.

        (b)   If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) at any time during the Term and within the period commencing with the execution by the Company of a definitive agreement for a Change in Control (as defined below) and ending with the earlier of (i) the termination of that agreement without the consummation of such Change in Control or (ii) the expiration of the twenty-four (24)-month period measured from the date such Change in Control occurs, then upon Employee's satisfaction of the Release Condition set forth in Section 7(b) below, any and all equity awards Employee holds on the

2


date of such termination will fully vest on an accelerated basis with respect to all non-vested shares of Common Stock at the time subject to those awards, except to the extent otherwise provided in the equity award agreement for any equity award granted after the Effective Date of this Agreement. Except as otherwise expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of Common Stock (or any replacement securities) underlying the equity awards that fully vest on an accelerated basis in accordance with this Section 4(b), or the proceeds of any cash retention program established in replacement of those shares pursuant to the terms of the applicable award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), provided the Release required of Employee pursuant to Section 7(b) has become effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, the issuance shall be effected during the portion of that period that occurs in the second taxable year.

        (c)   Upon Employee's "separation from service" (as defined below) as a result of Employee's death or Disability (as defined below), any and all equity awards Employee holds on the date of such separation from service will vest on an accelerated basis as to that number of additional shares in which Employee would have otherwise been vested on the date of such separation from service had Employee completed an additional twelve (12) months of employment with the Company and had each applicable equity award been structured so as to vest in successive equal monthly installments over the vesting schedule for that award. Except as otherwise expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of Common Stock underlying the equity awards that vest on an accelerated basis in accordance with this Section 4(c) will be issued on the date of such separation from service or as soon as administratively practicable thereafter, but in no event later than the later of (i) the end of the calendar year in which such separation from service occurs or (ii) the 15th day of the third calendar month following the date of such separation from service. For purposes of this Agreement, "Disability" means Employee's inability to engage in any substantial activity necessary to perform Employee's duties and responsibilities hereunder by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months.

        (d)   The vesting acceleration provisions of this Section 4 and Section 7 will apply to all outstanding equity awards held by Employee on the Effective Date, whether or not the agreements evidencing those awards provide for such acceleration, and those agreements, to the extent they provide for a lesser amount of acceleration, are hereby amended to incorporate the acceleration provisions of Section 4 and Section 7 of this Agreement for the period this Agreement remains in effect, and such vesting acceleration provisions will also apply to equity awards made after the Effective Date of this Agreement except to the extent specifically stated in the applicable award agreement or in a resolution of the Board of Directors covering those future awards. The shares subject to each equity award that vests pursuant to the vesting acceleration provisions of this Section 4 shall be issued in accordance with the applicable issuance date provisions of this Section 4, except to the extent the agreement evidencing such award provides otherwise or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code.

3


5.
Policies; Procedures.

        As an employee of the Company, Employee will be expected to abide by all of the Company's policies and procedures, including (without limitation) the terms of any Company handbook, insider trading policy and code of ethics in effect from time to time.

6.
At Will Employment.

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

7.
Separation from Service.

        (a)    Termination by Employee.    If Employee terminates his or her employment with the Company for any reason other than as a result of his or her death or Disability or his or her resignation for "good reason" (as defined below), then all the obligations of the Company set forth in this Agreement will cease, other than the obligation to pay Employee, on his or her employment termination date, any earned but unpaid compensation for services rendered through that termination date and any accrued but unused vacation days as of that termination date (collectively, the "Accrued Obligations"). If Employee terminates his or her employment with the Company for "good reason" (as defined below) during the Term, then in addition to Employee's right to receive the Accrued Obligations, Employee will, upon Employee's satisfaction of the Release Condition set forth in Section 7(b) below, become entitled to the Separation Payment (as defined below) and the Additional Payments (as defined below), to the same extent as if Employee's employment had been terminated by the Company "without cause" (as defined below) during the Term, and Employee will also be entitled, in accordance with the applicable provisions of Section 4 above, to the accelerated vesting of any equity awards Employee holds at the time of such termination. Following Employee's termination of his or her employment with the Company under this Section 7(a), Employee will continue to be obligated to comply with the terms of Section 9 below.

        (b)    Termination by the Company.    If Employee's employment is terminated by the Company "without cause" (as defined below) during the Term, then in addition to Employee's right to receive the Accrued Obligations, Employee will, upon Employee's satisfaction of the Release Condition set forth below in this Section 7(b), become entitled to a cash separation payment (the "Separation Payment") in an aggregate amount equal to two (2) times the base salary at the annual rate in effect for Employee at the time. In addition, contingent upon Employee's satisfaction of the Release Condition, Employee will be eligible for the following additional separation payments (the "Additional Payments"):

4


        Payment of the Separation Payment and the Additional Payments (if any) and the accelerated vesting of Employee's equity awards under Section 4 will each be contingent upon the satisfaction of the following requirements (collectively the "Release Condition"): (i) Employee must execute and deliver to the Company, within twenty-one (21) days (or forty-five (45) days to the extent such longer period is required under applicable law) after the effective date of Employee's termination of employment, a comprehensive agreement releasing the Company and its officers, directors, employees, stockholders, subsidiaries, affiliates, representatives and other related parties from all claims that Employee may have with respect to such parties relating to Employee's employment with the Company and the termination

5


of that employment relationship and containing such other and additional terms as the Company deems satisfactory (the "Release") and (ii) such Release must become effective and enforceable after the expiration of any applicable revocation period under federal or state law.

        Except as provided in the following paragraph, the Separation Payment to which Employee becomes entitled under this Section 7(b) or under Section 7(a) above will be payable in a series of twelve (12) successive equal monthly installments, beginning on the first regular payday for the Company's salaried employees, within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), on which Employee's executed Release is effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, the first such monthly installment shall be paid during the portion of that period that occurs in the second taxable year. The remaining monthly installments shall be paid on successive monthly anniversaries of the initial monthly installment hereunder. For purposes of Section 409A of the Code, Employee's right to receive such Separation Payment shall be deemed a right to receive a series of separate individual payments and not a right to single payment.

        If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his or her employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes entitled under this Section 7(b) or under Section 7(a) above upon Employee's satisfaction of the Release Condition will be payable in a single lump-sum payment on the first regular payday for the Company's salaried employees, within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), on which Employee's executed Release is effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, then such payment shall be made during the portion of that period that occurs in the second taxable year. Any Separation Payment to which Employee becomes entitled hereunder in connection with a termination following a Change in Control other than a Qualifying Change in Control will be paid in installments as set forth in the immediately preceding paragraph of this Section 7(b). For purposes of this Agreement, a "Change in Control" shall have the meaning assigned to such term in the Company's most recently-adopted equity compensation plan, and a "Qualifying Change in Control" shall mean the date on which there occurs a "Change in Control" (as defined above) that also qualifies as: (i) a change in the ownership of the Company, as determined in accordance with Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the effective control of the Company, as determined in accordance with Section 1.409A-3(i)(5)(vi) of the Treasury Regulations, or (iii) a change in the ownership of a substantial portion of the assets of the Company, as determined in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury Regulations. For the avoidance of doubt, the Spin-Off shall not constitute a Change in Control or a Qualifying Change in Control for purposes of the Agreement.

        If Employee's employment is terminated by the Company "without cause" (as defined below), the Company will have no further obligation to Employee pursuant to this Agreement other than the Accrued Obligations, the vesting of Employee's outstanding equity awards in accordance with the applicable vesting acceleration provisions of Section 4 above and the obligations of the Company pursuant to this Section 7(b).

        If Employee's employment is terminated by the Company "with cause" (as defined below), the Company will have no further obligation to Employee under the terms of this Agreement, other than the Accrued Obligations.

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        Notwithstanding the termination of Employee's employment by the Company "with cause" or "without cause," or by Employee for "good reason" or without "good reason", Employee will continue to be subject to the restrictive covenants set forth in Section 9, whether or not Employee becomes entitled to any severance or separation payments or benefits pursuant to Section 4 or Section 7 of this Agreement.

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

        (c)    Termination by Death or Disability.    

        If Employee incurs a "separation from service" (as defined below) as a result of his or her death or Disability, the Company will be obligated to pay the Accrued Obligations to Employee, Employee's estate or beneficiaries (as the case may be) on the date of such separation from service or as soon as administratively practicable thereafter, but in no event later than sixty (60) days after the date of such separation from service. In the event of such separation from service due to Employee's death or Disability, Employee or Employee's estate or beneficiaries, as the case may be, will also be entitled to the accelerated vesting of Employee's equity awards as set forth in Section 4(c) above. The provisions of this Section 7(c) will not affect or change the rights or benefits to which Employee is otherwise entitled under the Company's employee benefit plans or otherwise.

        (d)    Definitions.    

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

        "good reason" means:

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        "with cause" means Employee's termination of employment by the Company for any of the following reasons:

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

        "separation from service" means Employee's cessation of employee status with the Company by reason of Employee's death, resignation, dismissal or other termination event and shall be deemed to occur at such time as the level of bona fide services Employee is to render as such an employee (or as a non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services Employee rendered as an employee during the immediately preceding thirty-six (36) months (or such shorter period of time in which Employee has actually been in employee status with the Company). Any such determination of Employee's separation from service shall, however, be made in accordance with the applicable standards of the Treasury Regulations issued under Section 409A of the Code.

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

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proof of Employee's death. Any remaining payments or benefits due under this Agreement will be paid in accordance with the normal payment dates specified herein.

        (f)    Provisions Applicable to "Specified Employee".    Notwithstanding Section 7(e) above, the following provisions shall also be applicable to Employee if Employee is a "specified employee" at the time of Employee's separation of service:

8.
Withholding Taxes.

        All forms of compensation payable pursuant to the terms this Agreement, whether payable in cash, shares of Common Stock or other property, are subject to reduction to reflect the applicable withholding and payroll taxes.

9.
Restrictive Covenants.

        Until one (1) year after the termination of Employee's employment with the Company, Employee will not, directly or indirectly, solicit or recruit for employment, any person or persons who are employed by Company or any of its subsidiaries or affiliates, or who were so employed at any time within a period of twelve (12) months immediately prior to the date Employee's employment terminated, or otherwise interfere with the relationship between any such person and the Company; nor will Employee assist anyone else in recruiting any such employee to work for another company or business or discuss with any such person his or her leaving the employ of the Company or engaging in a business activity in competition with the Company. Notwithstanding the foregoing, if Employee and the Company enter into any restrictive covenant agreement, the terms of which conflict with this Section 9, the terms of such agreement shall govern. Employee hereby agrees to enter into a Confidentiality and Non-Competition Agreement and an Employee Proprietary Information and Inventions Agreement with the Company on or prior to the Effective Date, which agreements shall be in substantially the forms attached hereto as Appendix A and B.

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10.
Deferred Compensation Programs

        Any compensation deferred by Employee pursuant to one or more non-qualified deferred compensation plans or arrangements of the Company subject to Section 409A of the Code and not otherwise expressly addressed by the terms of this Agreement, shall be paid at such time and in such form of payment as set forth in each applicable plan or arrangement governing the payment of any such deferred amounts.

11.
Clawback.

        Any amounts paid or payable to Employee pursuant to this Agreement or the Company's equity or compensation plans shall be subject to recovery or clawback to the extent required by any applicable law or any applicable securities exchange listing standards.

12.
Entire Agreement/Construction of Terms.

        (a)   This Agreement, together with any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity awards made to Employee from time to time during Employee's period of employment, contains all of the terms of Employee's employment with the Company and supersedes any prior understandings or agreements, whether oral or written, between Employee and the Company, including but not limited to the Employment Agreement between Employee and FTD Group, Inc., effective as of February 7, 2011, as amended, which Employment Agreement shall terminate as of the Effective Date and be of no further force or effect.

        (b)   If any provision of this Agreement is held by an arbitrator or a court of competent jurisdiction to conflict with any federal, state or local law, or to be otherwise invalid or unenforceable, such provision shall be construed or modified in a manner so as to maximize its enforceability while giving the greatest effect as possible to the intent of the parties. To the extent any provision cannot be construed or modified to be enforceable, such provision will be deemed to be eliminated from this Agreement and of no force or effect, and the remainder of this Agreement will otherwise remain in full force and effect and be construed as if such portion had not been included in this Agreement.

        (c)   This Agreement is not assignable by Employee. This Agreement may be assigned by the Company to its subsidiaries or affiliates or to successors in interest to the Company or its lines of business.

        (d)   The severance payments and benefits under this Agreement are intended, where possible, to comply with the "short term deferral exception" and the "involuntary separation pay exception" to Code Section 409A. Accordingly, the provisions of this Agreement applicable to the Separation Payment and the accelerated vesting of Employee's equity awards and the issuance of shares of Common Stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or both of those exceptions, to the maximum extent allowable. However, to the extent any payment or benefit to which Employee becomes entitled under this Agreement is deemed to constitute an item of deferred compensation subject to the requirements of Code Section 409A, the provisions of this Agreement applicable to that payment or benefit shall be applied, construed and administered so that such payment or benefit is made or provided in compliance with the applicable requirements of Code Section 409A. In addition, should there arise any ambiguity as to whether any other provisions of this Agreement would contravene one or more applicable requirements or limitations of Code Section 409A and the Treasury Regulations thereunder, such provisions shall be interpreted, administered and applied in a manner that complies with the applicable requirements of Code Section 409A and the Treasury Regulations thereunder.

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13.
Amendment and Governing Law.

        This Agreement may not be amended or modified except by an express written agreement sign by Employee and the Chairman of the Board of Directors of the Company and approved by the Board of Directors. Employee agrees that any dispute in the meaning, effect or validity of this Agreement shall be resolved in accordance with the laws of the State of Illinois without regard to the conflict of laws provisions thereof. Employee hereby irrevocably submits to the jurisdiction (including without limitation in personam jurisdiction), process and venue of the courts of the State of Illinois and the Federal courts of the United States located in Chicago, Illinois, and hereby agrees that any action, suit or proceeding initiated by Illinois for the interpretation or enforcement of the provisions of this Agreement shall, and that any action, suit or proceeding initiated by Company for the interpretation or enforcement of the provisions of this Agreement may, be heard and determined exclusively in a Federal court, or, if not permitted by applicable law, then in a State court, situated in Chicago, Illinois.

14.
Surviving Provisions.

        Following any termination or expiration of this Agreement, Sections 5, 6, 7(e), 7(f), 8, 9, 10, 11, 12, 13 and 14 will survive, and, if Employee's employment with the Company continues thereafter, Employee's employment with the Company will continue to be "at will".

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date stated in the opening paragraph.



Robert S. Apatoff
   

Date signed:                                                            

 

 

FTD COMPANIES, INC.

By:

 

 

 

 
   
 
   
Name:        
   
 
   
Title:        
   
 
   

Date signed:                                                            

 

 

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Appendix A


CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

        CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the "Agreement") is made and entered into as of the date the last party hereto signs the Agreement but is made effective as of the Effective Date (as defined below) between FTD Companies, Inc. (the "Company") and Robert S. Apatoff (the "Executive").

        RECITALS:

        NOW, THEREFORE, in consideration of the offer to and acceptance by the Executive of employment as President and Chief Executive Officer of the Company and of other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto additionally agree as follows:

        Section 1.    Secrecy, Non-Competition, No Interference and Non-Solicitation.    

        (a)    No Competing Employment.    The Executive acknowledges that (i) the agreements and covenants contained in this Section 1 are essential to protect the value of the Company's business and assets and (ii) by virtue of his employment with the Company, the Executive will obtain such knowledge, know-how, training and experience of such a character that there is a substantial probability that such knowledge, know-how, training and experience could be used to the substantial advantage of a competitor of the Company and to the Company's substantial detriment. Therefore, the Executive agrees that, for the period (the "Restricted Period") commencing on the date of this Agreement and ending on the date that is twelve (12) months after the date on which the Executive is no longer employed by the Company for any reason, the Executive shall not participate, operate, manage, consult, join, control or engage, directly or indirectly, for the benefit of the Executive or on behalf of or in conjunction with any person, partnership, corporation or other entity, whether as an employee, consultant, agent, officer, stockholder, member, investor, agent or otherwise, in any business activity if such activity constitutes the sale or provision of floral products or services that are similar to, or competitive with, floral products or services then being sold or provided by the Company or any of its subsidiaries or affiliated companies, including, without limitation, retail florists' business services, floral order transmission and related network services, development and distribution of branded floral products on the Internet or other consumer direct segment of the floral industry (including, without limitation, Interflora, Inc., Teleflora LLC, 1-800-FLOWERS.COM, Inc., Proflowers.com, and Floral Source) (a "Competitive Activity"), in any of: the City of Downers Grove, Illinois, the County of DuPage, Illinois or any other city or county in the State of Illinois; the District of Columbia or any other state, territory, district or commonwealth of the United States or any county, parish, city or similar political subdivision in any other state, territory, district or commonwealth of the United States; any other country or territory anywhere in the world or in any city, canton, county, district, parish, province or any other political subdivision in any such country or territory; or anywhere in the world (each city, canton, commonwealth, county, district, parish, province, state, country, territory or other political subdivision or other location in the world shall be referred to as a "Non-competition Area"). The parties to this Agreement intend that the covenant contained in the preceding sentence of this Section 1(a) shall be construed as a series of separate covenants, one for each city, canton, commonwealth, county, district, parish, state, province, country, territory, or other political subdivision or other area of the world specified. Except for geographic coverage, each separate covenant shall be considered identical in terms to the covenant contained in the preceding sentence. The parties further


acknowledge the breadth of the covenants, but agree that such broad covenants are necessary and appropriate in the light of the global nature of the Competitive Activity. If, in any judicial or other proceeding, a court or other body declines to enforce any of the separate covenants included in this Section 1(a), the unenforceable covenant shall be considered eliminated from these provisions for the purpose of those proceedings to the extent necessary to permit the remaining separate covenants to be enforced. Notwithstanding the foregoing, the Executive may maintain or undertake purely passive investments on behalf of the Executive, the Executive's immediate family or any trust on behalf of the Executive or the Executive's immediate family in companies engaged in a Competitive Activity so long as the aggregate interest represented by such investments does not exceed 1% of any class of the outstanding publicly traded debt or equity securities of any company engaged in a Competitive Activity.

        (b)    Nondisclosure of Confidential Information.    The Executive, except in connection with his employment hereunder, shall not disclose to any person or entity or use, either during the Executive's employment with the Company or at any time thereafter, any information not in the public domain, in any form, acquired by the Executive while employed by the Company or, if acquired following the Executive's employment with the Company, such information that, to the Executive's knowledge, has been acquired, directly or indirectly, from any person or entity owing a duty of confidentiality to the Company or any of its affiliates, relating to the Company, United Online, Inc., a Delaware corporation and the former parent corporation of the Company ("UOL"), or any of its successors or their subsidiaries or affiliated companies (collectively, the "Company Group"), including but not limited to trade secrets, technical information, systems, procedures, test data, price lists, financial or other data (including the revenues, costs or profits associated with any of the Company's products or services), business and product plans, code books, invoices and other financial statements, computer programs, discs and printouts, customer and supplier lists or names, personnel files, sales and advertising material, telephone numbers, names, addresses or any other compilation of information, written or unwritten, that is or was used in the business of the Company, UOL, any predecessor of the Company, UOL or any of the Company's, or UOL's subsidiaries, affiliates, successors or assigns. The Executive agrees and acknowledges that all of such information, in any form, and copies and extracts thereof are and shall remain the sole and exclusive property of the Company or other Company Group entity, and upon termination of his employment with the Company, the Executive shall return to the Company the originals and all copies (and shall delete all such items in electronic format) of any such information provided to or acquired by the Executive in connection with the performance of the Executive's duties for the Company, and shall return to the Company all files, correspondence, computer equipment and disks or other communications (including any such materials in electronic format) received, maintained or originated by the Executive during the course of the Executive's employment.

        (c)    No Interference and Non-Solicitation.    During the Restricted Period, the Executive shall not, whether for the Executive's own account or for the account of any other individual, partnership, firm, corporation or other business organization, solicit, endeavor to entice away from the Company, UOL, or any of the Company's or UOL's subsidiaries or affiliated companies, or otherwise interfere with the relationship of the Company or UOL or any of its or their subsidiaries or affiliated companies with, any person who, to the knowledge of the Executive, is (or has at any time within the preceding three months been) employed by or otherwise engaged to perform services for the Company, UOL or any of the Company's or UOL's subsidiaries or affiliated companies (including, but not limited to, any independent sales representatives or organizations) or any entity who is, or was within the then most recent 12-month period, a customer or client of the Company, UOL, any predecessor of the Company or UOL or any of the Company's or UOL's subsidiaries or affiliated companies (a "Customer") or a supplier or vendor of the Company or UOL or any of the Company's or UOL's subsidiaries or affiliated companies (a "Supplier"); provided, however, that this Section 1(c) shall not prohibit the Executive from employing, for the Executive's own account, following a termination of the employment of the Executive, any person employed by a Customer or Supplier, if such employment is not in connection with a Competitive Activity.

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        Section 2.    Calculation of Time Period.    The Executive agrees that if the Executive violates the provisions of Section 1(a) of this Agreement, the running of the Restricted Period shall be tolled for the period in which the Executive is in violation of such non-competition provisions. The Executive understands that the foregoing restrictions may limit the Executive's ability to earn a livelihood in a business engaged in a Competitive Activity, but the Executive nevertheless believes that the Executive has received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise provided in connection with the Spin-Off to clearly justify restrictions that, in any event, given his education, skills and ability, the Executive does not believe would prevent the Executive from earning a living.

        Section 3.    Inventions.    

        (a)    Defined.    The Executive understands that during term of the Executive's employment, there have been and are certain restrictions on the Executive's development of technology, ideas, and inventions, referred to in this Agreement as "Invention Ideas." The term Invention Ideas means all ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents and copyrights relating to any existing or planned service or product of the Company, and all improvements, rights, and claims related to the foregoing, that are conceived, developed, or reduced to practice by the Executive alone or with others. The Executive agrees that all original works of authorship which were or are made by the Executive (solely or jointly with others) as a member of the Company's (or any of its affiliate's) Board of Directors or within the scope of the Executive's employment and which are protectable by copyright are "works made for hire," as the term is defined in the United States Copyright Act (17 USCA, Section 101).

        (b)    Disclosure.    The Executive agrees to maintain adequate and current written records on the development of all Invention Ideas and to disclose promptly to the Company all Invention Ideas and relevant records, which records will remain the sole property of the Company. The Executive further agrees that all information and records pertaining to any idea, process, trademark, service mark, invention, technology, computer program, original work of authorship, design formula, discovery, patent, or copyright that might reasonably be construed to be an Invention Idea, but was, during the period that the Executive served as a member of the Company's (or any of its affiliate's) Board of Directors, or is conceived, developed, or reduced to practice by the Executive (alone or with others) during the Executive's employment or during the one-year period following termination of the Executive's employment, shall be promptly disclosed to the Company (such disclosure to be received in confidence). Any disclosure pursuant to this Section 3(b) will be received by the Company in confidence so that the Company may examine such information to determine if in fact it constitutes Invention Ideas subject to this Agreement.

        (c)    Assignment.    The Executive agrees to, and does hereby continuously, assign to the Company, without further consideration, all right, title, and interest that the Executive may presently have or acquire (throughout the United States and in all foreign countries), free and clear of all liens and encumbrances, in and to each Invention Idea, which shall be the sole property of the Company, whether or not patentable. In the event any Invention Idea shall be deemed by the Company to be patentable or otherwise registrable, the Executive shall assist the Company (at its expense) in obtaining patent or other applicable registrations, and the Executive shall execute all documents and do all other things (including testifying at the Company's expense) necessary or proper to obtain patent or other applicable registrations and to vest the Company with full title to them. The Executive's obligation to assist the Company in obtaining and enforcing patents, registrations or other rights for such inventions in any and all countries, shall continue beyond the termination of my employment, but the Company shall compensate the Executive at a reasonable rate after such termination for the time actually spent by the Executive at the Company's request for such assistance. Should the Company be unable to secure the Executive's signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Invention Idea, whether due to the

3


Executive's mental or physical incapacity or any other cause, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as the Executive's agent and attorney-in-fact, to act for and on the Executive's behalf, to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other rights of protections with the same force and effect as if executed and delivered by the Executive. Notwithstanding the foregoing provisions of this Section 3:

        (d)    Exclusions.    Except as disclosed in Exhibit A attached hereto, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or improvements to the foregoing that the Executive wishes to exclude from this Agreement. If nothing is listed on Exhibit A, the Executive represents that the Executive has no such inventions or improvements at the time of signing this Agreement, and that the Executive is not aware of any existing contract in conflict with this Agreement.

        (e)    Post-Termination Period.    The Executive understands and acknowledges that because of the difficulty of establishing when any idea, process, invention, etc., is first conceived or developed by the Executive, or whether it results from access to confidential, trade secret or proprietary information or the Company's equipment, facilities, and data, the Executive agrees that any idea, process, trademark, service mark, invention, technology, computer program, original work of authorship, design, formula, discovery, patent, copyright, or any improvement, rights, or claims related to the foregoing shall be presumed to be an Invention Idea if it relates to any existing or planned service or product of the Company, subsidiaries or affiliates, and if it is conceived, developed, used, sold, exploited, or reduced to practice by the Executive or with the Executive's aid within six months after the Executive's termination of employment with the Company. The Executive may rebut the above presumption if the Executive proves that the invention, idea, process, etc., is not an Invention Idea as defined in Section 3(a).

        (f)    Illinois Statute.    The Executive understands that nothing in this Agreement is intended to expand the scope of protection provided the Executive by Illinois Statute 765 ILCS 1060.

        Section 4.    Irreparable Injury.    It is further expressly agreed that the Company will or would suffer irreparable injury if the Executive were to compete with the Company or any of its or their subsidiaries or affiliated companies in violation of this Agreement or the Executive were to otherwise breach this Agreement. Any such violation or breach will cause the Company irreparable harm, the amount of which may be extremely difficult to estimate, thus, making any remedy at law or in damages inadequate. Consequently, the Company shall have the right to apply to a court of appropriate jurisdiction for, and the Executive consents and stipulates to the entry of, an order of injunctive relief in prohibiting the Executive from competing with the Company, its successors or any of its or their subsidiaries or affiliated companies in violation of this Agreement, an order restraining any other breach or threatened breach of this Agreement, and any other relief the Company and such court deems appropriate. This right shall be in addition to any other remedy available to the Company in law or equity. The parties hereby agree that the attorneys' fees of the prevailing party in any such proceeding or action shall be paid by the non-prevailing party.

        Section 5.    Representation and Warranties of the Executive.    The Executive represents and warrants that the execution of this Agreement and subsequent employment with the Company does not and will not conflict with any obligations that the Executive has to any former employers or any other entity. The Executive further represents and warrants that the Executive has not brought to the Company, and

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will not at any time bring to the Company, any materials, documents or other property of any nature of a former employer.

        Section 6.    Miscellaneous.    

        (a)    Jurisdiction, Choice of Law and Venue.    The validity and construction of this Agreement shall be governed by the internal laws of the State of Illinois, excluding the conflicts-of-laws principles thereof. Each party hereto consents to the jurisdiction of, and venue in, any federal or state court of competent jurisdiction located in Chicago, Illinois.

        (b)    Entire Agreement.    This Agreement and any other agreement or document delivered in connection with this Agreement, including the letter agreement dated as of the date hereof, between the Company and the Executive, state the entire agreement and understanding of the parties on the subject matter of this Agreement, and supersede all previous agreements, arrangements, communications and understandings relating to that subject matter.

        (c)    Counterparts.    This Agreement may be signed in two or more counterparts, each of which shall be deemed an original, with the same effect as if all signatures were on the same document.

        (d)    Amendment; Waiver; etc.    This Agreement, and each other agreement or document delivered in connection with this Agreement, may be amended, modified, superseded or canceled, and any of the terms thereof may be waived, only by a written document signed by each party to this Agreement or, in the case of waiver, by the party or parties waiving compliance. The delay or failure of any party at any time or times to exercise any right or require the performance of any duty under this Agreement or any other agreement or document delivered in connection with this Agreement shall in no way affect the right of that party at a later time to exercise that right or enforce that duty or any other right or duty. No waiver by any party of any condition or of any breach of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed or construed to be a further or continuing waiver of any such condition or breach or of the breach of any other term of this Agreement. A single or partial exercise of any right shall not preclude any other or further exercise of the same right or of any other right. The rights and remedies provided by this Agreement shall be cumulative and not exclusive of each other or of any other rights or remedies provided by law.

        (e)    Severability.    If any provision of this Agreement or any other agreement or document delivered in connection with this Agreement, if any, is partially or completely invalid or unenforceable in any jurisdiction, then that provision shall be ineffective in that jurisdiction to the extent of its invalidity or unenforceability, but the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, all of which shall be construed and enforced as if that invalid or unenforceable provision were omitted, nor shall the invalidity or unenforceability of that provision in one jurisdiction affect its validity or enforceability in any other jurisdiction. The Company and the Executive agree that the period of time and the geographical area described in Section 1 are reasonable in view of the nature of the business in which the Company is engaged and proposes to be engaged, and the Executive's understanding of his prospective future employment opportunities. However, if the time period or the geographical area, or both, described in Section 1 should be judged unreasonable in any judicial proceeding, then the period of time shall be reduced by that number of months and the geographical area shall be reduced by elimination of that portion, or both, as are deemed unreasonable, so that the restriction covenant of Section 1 may be enforced during the longest period of time and in the fullest geographical area as is adjudged to be reasonable.

        (f)    Employment "At-Will"    

        Both the Executive and the Company acknowledge that nothing in this Agreement creates a contract for employment for any specific duration. The Executive's employment shall be "at-will",

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meaning both the Company and the Executive can terminate the relationship at any time, with or without reason or notice.

        (g)    Survival of Obligations.    The obligations of the Executive set forth in this Agreement shall survive the termination of Employee's employment with the Company and the termination of this Agreement.

        (h)    Assignment.    This Agreement may be freely assigned by the Company, but may not be assigned by the Executive without the prior written consent of the Company which may be withheld at the Company's sole discretion.

        (i)    Binding Effect.    This Agreement shall inure to the benefit of the Company and its successors and assigns, and shall be binding upon the Executive and the Executive's heirs, personal representatives and any permitted assigns.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

      FTD COMPANIES, INC.

 

 

 

By:

 

 

 

 

 
           
 
            Name:    
               
 
            Its:    
               
 

 

 

 


Robert S. Apatoff

6



Appendix A

EXHIBIT A
EXECUTIVE'S DISCLOSURE

        Except as set forth below, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or any claims, rights, or improvements to the foregoing that I wish to exclude from the operation of this Agreement:













 

Date:        
   
 
 
 
        Robert S. Apatoff


Appendix B

EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT

        In consideration of my employment or continued employment by Florists Transworld Delivery, Inc. (my "Employer"), the compensation I receive, and any other consideration I have been provided that was conditioned on my execution of this Employee Proprietary Information and Inventions Agreement ("the Agreement"), I agree as follows:

1.     PROPRIETARY INFORMATION.

        (a)    Parties.    I understand and agree that this Agreement is intended to benefit Employer and all of its affiliates including, but not limited to, FTD Companies, Inc. and all of its current and future direct and indirect parents and subsidiaries and their successors (all of the foregoing being referred to, individually and collectively, ad the "Company").

        (b)    Confidential Restrictions.    I understand that, during the course of my work as an employee of Employer, I have had and will have access to Proprietary Information (as defined below) concerning the Company and parties with which the Company has a business relationship. I acknowledge that the Company has developed, compiled, and otherwise obtained, at great expense, such Proprietary Information. I agree to hold in strict confidence all Proprietary Information and will not disclose any Proprietary Information to anyone outside of the Companyand will not use, copy, publish, summarize, or remove from Company premises Proprietary Information, except during my employment to the extent necessary to carry out my responsibilities as an employee of Employer. I further agree that the publication of any Proprietary Information through literature or speeches must be approved in advance in accordance with the Company's applicable policies and procedures. I understand that my employment creates a relationship of confidence and trust between me and Employer with respect to Proprietary Information, and I voluntarily accept this trust and confidence.

        (c)    Proprietary Information Defined.    I understand that the term "Proprietary Information" in this Agreement means all information and any idea, in whatever form, tangible or intangible, whether disclosed to or learned or developed by me, pertaining in any manner to the current or proposed business of the Company unless the information (i) is publicly known through lawful means; (ii) was rightfully in my possession prior to my employment with the Company as demonstrated by written documents currently in existence; (iii) is disclosed to me without restriction by a third party who rightfully possesses and discloses the information and who did not learn of it directly from the Company; or (iv) is reasonably known to people in the trade or industry. Without limiting the scope of the definition, I understand that the Company considers the following to be included in the definition of Proprietary Information: (i) all client/customer lists and all lists or other compilations containing client, customer or vendor information; (ii) information about products, proposed products, research, product development, techniques, processes, costs, profits, product pricing, markets, marketing plans, strategies, forecasts, sales and commissions; (iii) plans for the future development and new product concepts; (iv) all information regarding the Company's subscribers and all information regarding the Company's subscribers compiled by or derived from the Company's database; (v) the compensation and terms of employment of other employees; (vi) all other information that has been or will be given to me in confidence by the Company; and (vii) software in various stages of development, designs, drawings, specifications, techniques, models, data, source code, algorithms, object code, documentation, diagrams, flow charts, computer programs, databases, and other data of any kind and description, including electronic data recorded or retrieved by any means. Proprietary Information also includes any information described above which the Company obtains from another party and which the Company treats as proprietary or designates as Proprietary Information whether or not owned or developed by the Company or the other party.

        (d)    Company Materials.    I understand that I will be entrusted with "Company Materials" (as defined below) which are important to the Company's business or the business of Company customers or clients. I agree that during my employment, I will not deliver any Company Materials to any person


or entity outside the Company, except as I am required to do in connection with performing my duties for Company. For purposes of this Agreement, "Company Materials" are documents, electronic files or any other tangible or electronic items that contain information concerning the business, operations or plans of the Company or its customers, whether the documents have been prepared by me or others. Company Materials include, but are not limited to, computers, computer disk drives, computer files, computer disks, documents, code, flowcharts, schematics, designs, graphics, customer lists, drawings, photographs, customer information, etc.

        (e)    Information Use Return and Acknowledgement.    I agree that I will not retain and I will return all Proprietary Information and all copies of it in whatever form, as well as all Company Materials, apparatus, equipment and other Company property along with all reproductions, to Employer after my employment terminates. The only exceptions are (i) my personal copies of records of my compensation; (ii) any agreements between me and the Company that I have signed; and (iii) my copy of this Agreement. I agree to execute reasonable documentation if requested by Employer upon the termination of my employment reflecting such return and acknowledging my obligations under this Agreement.

        (f)    Prior Actions and Knowledge.    I represent and warrant that from the time of my first contact or communication with the Company, I have held in strict confidence all Proprietary Information and have not disclosed any Proprietary Information to anyone outside of the Company, or used, copied, published, or summarized any Proprietary Information except to the extent necessary to carry out my responsibilities as an employee of Employer.

        (g)    Former Employer Information; Consents.    I agree that I will not, during my employment, improperly use or disclose any confidential information, proprietary information or trade secrets of my former or any concurrent employers. I agree that I will not bring onto the premises of the Company any document or any property belonging to my former or any concurrent employers unless consented to in writing by them. I represent and warrant that I have returned all property and confidential information belonging to all prior employers. I also represent and warrant that my performance of services for Employer will not require any authorization, consent, exemption or other action by any other party and will not conflict with, violate or breach any agreement, instrument, order, judgment or decree to which I am subject.

        (h)    Conflicting Employment.    I agree that, during the term of my employment, I will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or may become involved during the term of my employment, nor will I engage in any other business activities that conflict with my obligations to the Company.

        (i)    Non-Solicitation of Customers.    I understand and agree that as a result of my employment and the position that I hold, the Company has entrusted and will in the future entrust me with Proprietary Information that is maintained by the Company in confidence and that, if known, would have economic value to a competitor. Such Proprietary Information includes, but is not limited to, customer identities, requirements, purchasing volumes, demographic needs, and other individualized customer information, coding, future technology plans, product strategies, business strategies, coding models, and the like. I understand and agree that my solicitation of Company customers on behalf of an entity other than the Company would involve the use of such Proprietary Information. Consequently, I agree that during the term of my employment with Employer, any other affiliate of the Company or the Company, and for a period of one (1) year after termination (voluntarily or involuntarily) of my employment, I shall not, for myself or any third party, solicit, directly or indirectly, any customer of the Company who was a Company customer during my employment for the purpose of offering products or services that compete in the same market with the Company's products or services. In addition, I agree that I will not, for myself or any third party, solicit, directly or indirectly, any

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potential customer of the Company with whom the Company was engaged in substantial negotiations during my employment. I hereby acknowledge that pursuit of the activities forbidden by this paragraph would necessarily involve the use or disclosure of Proprietary Information in breach of this Agreement, but that proof of such breach would be extremely difficult. None of my activities will be prohibited under this Paragraph if I can prove that the action was taken without the use in any way of Proprietary Information.

        (j)    Non-Solicitation of Employees.    I agree that for the term of my employment with Employer, any other affiliate of the Company or the Company, and for a period of one (1) year following the termination (voluntarily or involuntarily) of my employment, I will not, on behalf of myself or any other person or entity, either directly or indirectly, solicit the services of any person who was employed by the Company on or prior to the date of my termination of employment.

2.     INVENTIONS.

        (a)    Defined.    I understand that during the term of my employment, there have been and are certain restrictions on my development of technology, ideas, and inventions, referred to in this Agreement as "Invention Ideas." The term Invention Ideas means all ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, relating to any existing or planned service or product of the Company and all improvements, rights, and claims related to the foregoing that are conceived, developed, or reduced to practice by me alone or with others, except to the extent that applicable state law prohibits the assignment of these rights. I agree that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by copyright are "works made for hire," as the term is defined in the United States Copyright Act (17 USCA, Section 101).

        (b)    Notice Regarding State Invention Assignment Laws.    The laws of some states prohibit the assignment of certain invention rights (e.g., Delaware Code Title 19 § 805; Illinois 765 ILCS 1060/1-3; Kansas Stat. Ann. § 44-130; Minnesota Stat. 13A, § 181.78; North Carolina Gen. Stat. Art. 10A, § 66-57.1; Utah Stat. § 34-39-1 through 34-39-3; Washington RCW 49.44.140). This Agreement shall be construed so that it complies with all such applicable laws. To that end, to the extent applicable state law requires it, you are notified as follows:

If the state law that applies provides greater invention rights to you than are described in the above notice, those greater rights will apply to you.

        (c)    Disclosure.    I agree to maintain adequate and current written records on the development of all Invention Ideas and to disclose promptly to Employer all Invention Ideas and relevant records, which records will remain the sole property of Employer. I further agree that all information and records pertaining to any idea, process, trademark, service mark, invention, technology, computer program, original work of authorship, design formula, discovery, patent, or copyright that might reasonably be construed to be an Invention Idea, but is conceived, developed, or reduced to practice by me (alone or with others) during my employment or during the one year period following termination of my employment, shall be promptly disclosed to Employer. If I inform Employer before making a specific disclosure pursuant to this paragraph that I contend the subject matter being disclosed is not subject to this Agreement, then the disclosure will be received by Employer in confidence so that

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Employer may examine such information to determine if in fact it constitutes Invention Ideas subject to this Agreement.

        (d)    Assignment.    I agree to assign and hereby do assign to Employer, without further consideration, all right, title, and interest that I may presently have or may acquire in the future (throughout the United States and in all foreign countries), free and clear of all liens and encumbrances, in and to each Invention Idea, which shall be the sole property of Employer, whether or not patentable. The rights I have assigned, and will assign, include all copyrights, patent rights, trade secret rights and any rights of publicity or personality (including usage of my name, voice, image, likeness and performance in any and all media), vested and contingent, and include extensions and renewals thereof and the right to license and assign. I will waive and hereby do waive any moral rights I have or may have in any Invention Idea. In the event any Invention Idea shall be deemed by Employer to be patentable or otherwise registrable, I will assist Employer or the Company, as Employer may direct (at its expense) in obtaining letters patent or other applicable registrations, and I will execute all documents and do all other things (including testifying at Employer's expense) necessary or proper to obtain letters patent or other applicable registrations and to vest Employer or the Company, as Employer may direct, with full title to them. My obligation to assist Employer in obtaining and enforcing patents, registrations or other rights for such inventions in any and all countries, shall continue beyond the termination of my employment, but Employer or the Company shall compensate me at a reasonable rate after such termination for the time actually spent by me at Employer's request for such assistance. Should Employer be unable to secure my signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Invention Idea, whether due to my mental or physical incapacity or any other cause, I irrevocably designate and appoint Employer and each of its duly authorized officers and agents as my agent and attorney-in-fact, to act for and on my behalf, to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other rights of protections with the same force and effect as if executed and delivered by me.

        (e)    License.    In the case of any invention or work of authorship that I own or in which I have an interest that is not owned by Employer pursuant to the other terms in this Agreement, the following shall apply. If I use the invention or work of authorship, or allow it to be used, in the course of the Company's business, or incorporate the invention or work of authorship, or allow it to be incorporated, into any product or process owned or developed in whole or in part by the Company, I will grant, and I hereby do grant to Employer and/or one or more affiliates of the Company, as Employer may direct, and their assigns a nonexclusive, perpetual, irrevocable, fully paid-up, royalty-free, worldwide license of all of my interests in the invention or work of authorship, including all rights to make, use, sell, reproduce, modify, distribute, perform publicly, display publicly and transmit the invention or work of authorship, without restriction. At Employer's direction and expense I will execute all documents and take all actions necessary or convenient for Employer and the Company to document, obtain, maintain or assign their license rights hereunder of my interest in any such invention or work of authorship.

        (f)    Exclusions.    Except as disclosed in Exhibit A, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or improvements to the foregoing that I wish to exclude from this Agreement. If nothing is listed on Exhibit A, I represent that I have no such inventions or improvements at the time of signing this Agreement. I am not aware of any existing contract in conflict with this Agreement.

        (g)    Post-Termination Period.    I acknowledge that because of the difficulty of establishing when any idea, process, invention, etc., is first conceived or developed by me, or whether it results from access to Proprietary Information or the Company's equipment, facilities, and data, I agree that any idea, process, trademark, service mark, invention, technology, computer program, original work of

4


authorship, design, formula, discovery, patent, copyright, or any improvement, rights, or claims related to the foregoing shall be presumed to be an Invention Idea if it relates to any existing or planned service or product of the Company, and if it is conceived, developed, used, sold, exploited, or reduced to practice by me or with my aid within six months after my termination of employment (voluntarily or involuntarily)with Employer, or any other affiliate of the Company, or the Company. I can rebut the above presumption if I prove that the invention, idea, process, etc., is not an Invention Idea as defined in paragraph 2(a).

        (h)    State Law Regarding Invention Rights.    I understand that nothing in this Agreement is intended to expand the scope of protection regarding invention rights that is provided to me by applicable state law.

3.     CONTRACTS.

        I understand that the Company has or may enter into contracts with the government or other companies under which certain intellectual property rights will be required to be protected, assigned, licensed, or otherwise transferred and I hereby agree to execute such other documents and agreements as are necessary to enable the Company to meet its obligations under those contracts.

4.     REMEDIES.

        I recognize that nothing in this Agreement is intended to limit any remedy of the Company under applicable state law protecting confidential information or trade secrets or any other relevant state or federal law. In addition, I recognize that my violation of this Agreement could cause the Company irreparable harm, the amount of which may be extremely difficult to estimate, thus, making any remedy at law or in damages inadequate. Therefore, I agree that the Company shall have the right to apply to any court of competent jurisdiction for an order restraining any breach or threatened breach of this Agreement and for any other relief the Company deems appropriate. This right shall be in addition to any other remedy available to the Company in law or equity.

5.     MISCELLANEOUS PROVISIONS.

        (a)    Assignment/Successors and Assigns.    I agree that Employer may assign to another person or entity any of its rights under this Agreement. This Agreement shall be binding upon me and my heirs, personal representatives, and successors, and shall inure to the benefit of the Employer's successors and assigns.

        (b)    Jurisdiction, Choice of Law and Venue.    The validity, interpretation, enforceability and performance of this Agreement shall be governed and construed in accordance with the laws of the State of Illinois, excluding the conflicts-of-laws principles thereof. Each party hereto consents to the jurisdiction of, and venue in, any federal or state court of competent jurisdiction located in the County of DuPage in the State of Illinois.

        (c)    Severability.    If any provision of this Agreement, or application thereof to any person, place, or circumstances, shall be held by a court of competent jurisdiction to be invalid, unenforceable, or void, such provision shall be deemed to be modified to the maximum extent possible to give effect to the intent of the language while still remaining enforceable under applicable law. The remainder of this Agreement and application thereof shall remain in full force and effect.

        (d)    No Guarantee of Employment.    I understand this Agreement is not a guarantee of continued employment. My employment is terminable at any time by Employer or me, with or without cause or prior notice, except as may be otherwise provided in an express written employment agreement properly authorized by Employer.

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        (e)    Entire Agreement.    The terms of this Agreement are the final expression of my agreement with respect to these subjects and may not be contradicted by evidence of any prior or contemporaneous agreement. This Agreement shall replace and supersede any similar agreement that currently is in effect between me and Employer or the Company, provided that Employer shall retain all rights that have arisen under that prior agreement up to the time I sign this new Agreement. This Agreement shall constitute the complete and exclusive statement of its terms and no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding involving this Agreement. This Agreement can only be modified in writing signed by FTD Companies, Inc.'s General Counsel (if Employer is, at the time of the modification, an affiliate of FTD Companies, Inc.), or signed by Employer's President or General Counsel (if Employer is not an affiliate of FTD Companies, Inc. at the time of the modification).

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY NOTED ON EXHIBIT A TO THIS AGREEMENT ANY PROPRIETARY INFORMATION, IDEAS, PROCESSES, TRADEMARKS, SERVICE MARKS, INVENTIONS, TECHNOLOGY, COMPUTER PROGRAMS, ORIGINAL WORKS OF AUTHORSHIP, DESIGNS, FORMULAS, DISCOVERIES, PATENTS, COPYRIGHTS, OR IMPROVEMENTS, OR RIGHTS THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.

Date:        
   
 
 
 
        Robert S. Apatoff

6



EXHIBIT A
EMPLOYEE'S DISCLOSURE

        Prior Inventions.    Except as set forth below, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or any claims, rights, or improvements to the foregoing that I wish to exclude from the operation of this Agreement:













 

Date:        
   
 
 
 
        Robert S. Apatoff

7




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Appendix A
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
Appendix A EXHIBIT A EXECUTIVE'S DISCLOSURE
Appendix B EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
EXHIBIT A EMPLOYEE'S DISCLOSURE

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Exhibit 10.7

EMPLOYMENT AGREEMENT

        This Employment Agreement (the "Agreement") is made and entered into as of the date the last party hereto signs the Agreement but is made effective as of the Effective Date (as defined below in Section 1(a)) by and between FTD Companies, Inc., a Delaware corporation (the "Company"), with principal corporate offices at 3113 Woodcreek Drive, Downers Grove, Illinois 60515, and Becky A. Sheehan, whose address is 3113 Woodcreek Drive, Downers Grove, Illinois 60515 ("Employee").

        WHEREAS, effective as of the date hereof, Employee and the Company desire to enter into an employment agreement.

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

1.
Term; Position.

        (a)   The term of this Agreement will commence on the date on which the spin-off of the Company from United Online, Inc. (the "Spin-Off") is consummated (the "Effective Date") and extend through the third anniversary of the Effective Date, unless this Agreement is earlier terminated as provided herein (the "Term"). For the avoidance of doubt, if the Spin-Off is not consummated by June 30, 2014, this Agreement shall terminate and be of no force or effect.

        (b)   Employee will serve as Executive Vice President and Chief Financial Officer of the Company and report to the Chief Executive Officer of the Company. Employee agrees to devote Employee's full-time attention, skill and efforts to the performance of Employee's duties for the Company.

2.
Salary and Benefits.

        (a)   Employee will be paid a salary at an annualized rate of $438,152, payable in successive bi-weekly or other installments in accordance with the Company's standard payroll practices for salaried employees. Employee's rate of salary will be subject to such increases as may be determined from time to time by the Board of Directors. As used in this Agreement, the term "Board of Directors" shall refer to the Board of Directors of the Company or other governing body or committee to which the authority of the Board of Directors of the Company with respect to executive compensation matters has been delegated, including (without limitation) the Compensation Committee of the Board of Directors of the Company.

        (b)   Employee will be eligible to participate in each of the Company's employee benefit plans that is made generally available either to the Company's employees or to the Company's senior executives and for which Employee satisfies the applicable eligibility requirements. Employee will be entitled to a minimum of four (4) weeks of paid vacation each year or such greater amount as determined in accordance with the Company's standard vacation policy.

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

        (d)   As soon as practicable following the effective date of the Spin-Off and the filing of an effective Form S-8, the Board of Directors shall grant to Employee (i) a number of restricted stock units relating to Company stock with an aggregate value of $650,000, determined based on the average per-share closing price of the Company's stock for the five (5) trading days prior to the date of grant; and (ii) a number of options to purchase Company stock equal to the number of restricted stock units


granted pursuant to Section 2(d)(i), with an exercise price equal to the per-share closing price on the date of grant. The restricted stock units and options shall vest at the rate of one-third on each of the first three anniversaries of the date of grant, and shall be subject to such other terms and conditions as may be determined by the Board of Directors (or an appropriate committee thereof).

3.
Bonus.

        For each fiscal year of the Company during the Term of this Agreement, Employee will be eligible to participate in a bonus program with a target bonus set by the Board of Directors in an amount of up to 100% of Employee's annual rate of base salary. The performance criteria for purposes of determining Employee's actual bonus for each fiscal year will be established by the Board of Directors, and Employee's annual bonus for one or more of those fiscal years may be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company at the time such bonus payment is paid. Employee's bonus payment for each fiscal year shall in no event be paid later than the 15th day of the third month following the end of the Company's fiscal year for which such bonus is earned.

4.
Restricted Stock Units and Other Equity Awards.

        (a)   If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) during the Term, then upon Employee's satisfaction of the Release Condition set forth in Section 7(b) below, any and all equity awards Employee holds on the date of such termination (other than any equity award granted after the Effective Date that expressly provides to the contrary) will vest on an accelerated basis as to that number of additional shares in which Employee would have otherwise been vested at the time of such termination had Employee completed an additional twelve (12) months of employment with the Company and had each applicable equity award been structured so as to vest in successive equal monthly installments over the vesting schedule for that award. In no event will the number of additional shares which vest on such an accelerated basis with respect to any particular equity award exceed the number of shares unvested under that award immediately prior to the date of such termination. Except as otherwise expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required to comply with any applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), the shares of the common stock of the Company ("Common Stock") underlying the equity awards that vest on an accelerated basis in accordance with this Section 4(a) will be issued to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), provided the Release required of Employee pursuant to Section 7(b) has become effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, the issuance shall be effected during the portion of that period that occurs in the second taxable year.

        (b)   If Employee's employment is terminated by the Company "without cause" or by Employee for "good reason" (as each term is defined below) at any time during the Term and within the period commencing with the execution by the Company of a definitive agreement for a Change in Control (as defined below) and ending with the earlier of (i) the termination of that agreement without the consummation of such Change in Control or (ii) the expiration of the twenty-four (24)-month period measured from the date such Change in Control occurs, then upon Employee's satisfaction of the Release Condition set forth in Section 7(b) below, any and all equity awards Employee holds on the

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date of such termination will fully vest on an accelerated basis with respect to all non-vested shares of Common Stock at the time subject to those awards, except to the extent otherwise provided in the equity award agreement for any equity award granted after the Effective Date of this Agreement. Except as otherwise expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of Common Stock (or any replacement securities) underlying the equity awards that fully vest on an accelerated basis in accordance with this Section 4(b), or the proceeds of any cash retention program established in replacement of those shares pursuant to the terms of the applicable award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), provided the Release required of Employee pursuant to Section 7(b) has become effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, the issuance shall be effected during the portion of that period that occurs in the second taxable year.

        (c)   Upon Employee's "separation from service" (as defined below) as a result of Employee's death or Disability (as defined below), any and all equity awards Employee holds on the date of such separation from service will vest on an accelerated basis as to that number of additional shares in which Employee would have otherwise been vested on the date of such separation from service had Employee completed an additional twelve (12) months of employment with the Company and had each applicable equity award been structured so as to vest in successive equal monthly installments over the vesting schedule for that award. Except as otherwise expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of Common Stock underlying the equity awards that vest on an accelerated basis in accordance with this Section 4(c) will be issued on the date of such separation from service or as soon as administratively practicable thereafter, but in no event later than the later of (i) the end of the calendar year in which such separation from service occurs or (ii) the 15th day of the third calendar month following the date of such separation from service. For purposes of this Agreement, "Disability" means Employee's inability to engage in any substantial activity necessary to perform Employee's duties and responsibilities hereunder by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months.

        (d)   The vesting acceleration provisions of this Section 4 and Section 7 will apply to all outstanding equity awards held by Employee on the Effective Date, whether or not the agreements evidencing those awards provide for such acceleration, and those agreements, to the extent they provide for a lesser amount of acceleration, are hereby amended to incorporate the acceleration provisions of Section 4 and Section 7 of this Agreement for the period this Agreement remains in effect, and such vesting acceleration provisions will also apply to equity awards made after the Effective Date of this Agreement except to the extent specifically stated in the applicable award agreement or in a resolution of the Board of Directors covering those future awards. The shares subject to each equity award that vests pursuant to the vesting acceleration provisions of this Section 4 shall be issued in accordance with the applicable issuance date provisions of this Section 4, except to the extent the agreement evidencing such award provides otherwise or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code.

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5.
Policies; Procedures.

        As an employee of the Company, Employee will be expected to abide by all of the Company's policies and procedures, including (without limitation) the terms of any Company handbook, insider trading policy and code of ethics in effect from time to time.

6.
At Will Employment.

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

7.
Separation from Service.

        (a)    Termination by Employee.    If Employee terminates his or her employment with the Company for any reason other than as a result of his or her death or Disability or his or her resignation for "good reason" (as defined below), then all the obligations of the Company set forth in this Agreement will cease, other than the obligation to pay Employee, on his or her employment termination date, any earned but unpaid compensation for services rendered through that termination date and any accrued but unused vacation days as of that termination date (collectively, the "Accrued Obligations"). If Employee terminates his or her employment with the Company for "good reason" (as defined below) during the Term, then in addition to Employee's right to receive the Accrued Obligations, Employee will, upon Employee's satisfaction of the Release Condition set forth in Section 7(b) below, become entitled to the Separation Payment (as defined below) and the Additional Payments (as defined below), to the same extent as if Employee's employment had been terminated by the Company "without cause" (as defined below) during the Term, and Employee will also be entitled, in accordance with the applicable provisions of Section 4 above, to the accelerated vesting of any equity awards Employee holds at the time of such termination. Following Employee's termination of his or her employment with the Company under this Section 7(a), Employee will continue to be obligated to comply with the terms of Section 9 below.

        (b)    Termination by the Company.    If Employee's employment is terminated by the Company "without cause" (as defined below) during the Term, then in addition to Employee's right to receive the Accrued Obligations, Employee will, upon Employee's satisfaction of the Release Condition set forth below in this Section 7(b), become entitled to a cash separation payment (the "Separation Payment") in an aggregate amount equal to two (2) times the base salary at the annual rate in effect for Employee at the time. In addition, contingent upon Employee's satisfaction of the Release Condition, Employee will be eligible for the following additional separation payments (the "Additional Payments"):

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        Payment of the Separation Payment and the Additional Payments (if any) and the accelerated vesting of Employee's equity awards under Section 4 will each be contingent upon the satisfaction of the following requirements (collectively the "Release Condition"): (i) Employee must execute and deliver to the Company, within twenty-one (21) days (or forty-five (45) days to the extent such longer period is required under applicable law) after the effective date of Employee's termination of employment, a comprehensive agreement releasing the Company and its officers, directors, employees, stockholders, subsidiaries, affiliates, representatives and other related parties from all claims that Employee may have with respect to such parties relating to Employee's employment with the Company and the termination

5


of that employment relationship and containing such other and additional terms as the Company deems satisfactory (the "Release") and (ii) such Release must become effective and enforceable after the expiration of any applicable revocation period under federal or state law.

        Except as provided in the following paragraph, the Separation Payment to which Employee becomes entitled under this Section 7(b) or under Section 7(a) above will be payable in a series of twelve (12) successive equal monthly installments, beginning on the first regular payday for the Company's salaried employees, within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), on which Employee's executed Release is effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, the first such monthly installment shall be paid during the portion of that period that occurs in the second taxable year. The remaining monthly installments shall be paid on successive monthly anniversaries of the initial monthly installment hereunder. For purposes of Section 409A of the Code, Employee's right to receive such Separation Payment shall be deemed a right to receive a series of separate individual payments and not a right to single payment.

        If Employee's employment is terminated by the Company "without cause" (as defined below) or if Employee terminates his or her employment with the Company for "good reason" (as defined below) during the Term and within the twenty-four (24) month period beginning on the effective date of a Qualifying Change in Control (as defined below), the Separation Payment to which Employee becomes entitled under this Section 7(b) or under Section 7(a) above upon Employee's satisfaction of the Release Condition will be payable in a single lump-sum payment on the first regular payday for the Company's salaried employees, within the sixty (60)-day period following the date of Employee's "separation from service" (as defined below) as a result of Employee's termination "without cause" (as defined below) or Employee's resignation for "good reason" (as defined below), on which Employee's executed Release is effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, then such payment shall be made during the portion of that period that occurs in the second taxable year. Any Separation Payment to which Employee becomes entitled hereunder in connection with a termination following a Change in Control other than a Qualifying Change in Control will be paid in installments as set forth in the immediately preceding paragraph of this Section 7(b). For purposes of this Agreement, a "Change in Control" shall have the meaning assigned to such term in the Company's most recently-adopted equity compensation plan, and a "Qualifying Change in Control" shall mean the date on which there occurs a "Change in Control" (as defined above) that also qualifies as: (i) a change in the ownership of the Company, as determined in accordance with Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the effective control of the Company, as determined in accordance with Section 1.409A-3(i)(5)(vi) of the Treasury Regulations, or (iii) a change in the ownership of a substantial portion of the assets of the Company, as determined in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury Regulations. For the avoidance of doubt, the Spin-Off shall not constitute a Change in Control or a Qualifying Change in Control for purposes of the Agreement.

        If Employee's employment is terminated by the Company "without cause" (as defined below), the Company will have no further obligation to Employee pursuant to this Agreement other than the Accrued Obligations, the vesting of Employee's outstanding equity awards in accordance with the applicable vesting acceleration provisions of Section 4 above and the obligations of the Company pursuant to this Section 7(b).

        If Employee's employment is terminated by the Company "with cause" (as defined below), the Company will have no further obligation to Employee under the terms of this Agreement, other than the Accrued Obligations.

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        Notwithstanding the termination of Employee's employment by the Company "with cause" or "without cause," or by Employee for "good reason" or without "good reason", Employee will continue to be subject to the restrictive covenants set forth in Section 9, whether or not Employee becomes entitled to any severance or separation payments or benefits pursuant to Section 4 or Section 7 of this Agreement.

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

        (c)    Termination by Death or Disability.    

        If Employee incurs a "separation from service" (as defined below) as a result of his or her death or Disability, the Company will be obligated to pay the Accrued Obligations to Employee, Employee's estate or beneficiaries (as the case may be) on the date of such separation from service or as soon as administratively practicable thereafter, but in no event later than sixty (60) days after the date of such separation from service. In the event of such separation from service due to Employee's death or Disability, Employee or Employee's estate or beneficiaries, as the case may be, will also be entitled to the accelerated vesting of Employee's equity awards as set forth in Section 4(c) above. The provisions of this Section 7(c) will not affect or change the rights or benefits to which Employee is otherwise entitled under the Company's employee benefit plans or otherwise.

        (d)    Definitions.    

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

        "good reason" means:

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        "with cause" means Employee's termination of employment by the Company for any of the following reasons:

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

        "separation from service" means Employee's cessation of employee status with the Company by reason of Employee's death, resignation, dismissal or other termination event and shall be deemed to occur at such time as the level of bona fide services Employee is to render as such an employee (or as a non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services Employee rendered as an employee during the immediately preceding thirty-six (36) months (or such shorter period of time in which Employee has actually been in employee status with the Company). Any such determination of Employee's separation from service shall, however, be made in accordance with the applicable standards of the Treasury Regulations issued under Section 409A of the Code.

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

8


proof of Employee's death. Any remaining payments or benefits due under this Agreement will be paid in accordance with the normal payment dates specified herein.

        (f)    Provisions Applicable to "Specified Employee".    Notwithstanding Section 7(e) above, the following provisions shall also be applicable to Employee if Employee is a "specified employee" at the time of Employee's separation of service:

8.
Withholding Taxes.

        All forms of compensation payable pursuant to the terms this Agreement, whether payable in cash, shares of Common Stock or other property, are subject to reduction to reflect the applicable withholding and payroll taxes.

9.
Restrictive Covenants.

        Until one (1) year after the termination of Employee's employment with the Company, Employee will not, directly or indirectly, solicit or recruit for employment, any person or persons who are employed by Company or any of its subsidiaries or affiliates, or who were so employed at any time within a period of twelve (12) months immediately prior to the date Employee's employment terminated, or otherwise interfere with the relationship between any such person and the Company; nor will Employee assist anyone else in recruiting any such employee to work for another company or business or discuss with any such person his or her leaving the employ of the Company or engaging in a business activity in competition with the Company. Notwithstanding the foregoing, if Employee and the Company enter into any restrictive covenant agreement, the terms of which conflict with this Section 9, the terms of such agreement shall govern. Employee hereby agrees to enter into a Confidentiality and Non-Competition Agreement and an Employee Proprietary Information and Inventions Agreement with the Company on or prior to the Effective Date, which agreements shall be in substantially the forms attached hereto as Appendix A and B.

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10.
Deferred Compensation Programs.

        Any compensation deferred by Employee pursuant to one or more non-qualified deferred compensation plans or arrangements of the Company subject to Section 409A of the Code and not otherwise expressly addressed by the terms of this Agreement, shall be paid at such time and in such form of payment as set forth in each applicable plan or arrangement governing the payment of any such deferred amounts.

11.
Clawback.

        Any amounts paid or payable to Employee pursuant to this Agreement or the Company's equity or compensation plans shall be subject to recovery or clawback to the extent required by any applicable law or any applicable securities exchange listing standards.

12.
Entire Agreement/Construction of Terms.

        (a)   This Agreement, together with any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity awards made to Employee from time to time during Employee's period of employment, contains all of the terms of Employee's employment with the Company and supersedes any prior understandings or agreements, whether oral or written, between Employee and the Company, including but not limited to the Employment Agreement between Employee and Florists' Transworld Delivery, Inc., entered into as of April 30, 2008, as amended, which Employment Agreement shall terminate as of the Effective Date and be of no further force or effect.

        (b)   If any provision of this Agreement is held by an arbitrator or a court of competent jurisdiction to conflict with any federal, state or local law, or to be otherwise invalid or unenforceable, such provision shall be construed or modified in a manner so as to maximize its enforceability while giving the greatest effect as possible to the intent of the parties. To the extent any provision cannot be construed or modified to be enforceable, such provision will be deemed to be eliminated from this Agreement and of no force or effect, and the remainder of this Agreement will otherwise remain in full force and effect and be construed as if such portion had not been included in this Agreement.

        (c)   This Agreement is not assignable by Employee. This Agreement may be assigned by the Company to its subsidiaries or affiliates or to successors in interest to the Company or its lines of business.

        (d)   The severance payments and benefits under this Agreement are intended, where possible, to comply with the "short term deferral exception" and the "involuntary separation pay exception" to Code Section 409A. Accordingly, the provisions of this Agreement applicable to the Separation Payment and the accelerated vesting of Employee's equity awards and the issuance of shares of Common Stock thereunder and the determination of Employee's separation from service due to termination of Employee's employment without cause or Employee's resignation for good reason shall be applied, construed and administered so that those payments and benefits qualify for one or both of those exceptions, to the maximum extent allowable. However, to the extent any payment or benefit to which Employee becomes entitled under this Agreement is deemed to constitute an item of deferred compensation subject to the requirements of Code Section 409A, the provisions of this Agreement applicable to that payment or benefit shall be applied, construed and administered so that such payment or benefit is made or provided in compliance with the applicable requirements of Code Section 409A. In addition, should there arise any ambiguity as to whether any other provisions of this Agreement would contravene one or more applicable requirements or limitations of Code Section 409A and the Treasury Regulations thereunder, such provisions shall be interpreted, administered and applied in a manner that complies with the applicable requirements of Code Section 409A and the Treasury Regulations thereunder.

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13.
Amendment and Governing Law.

        This Agreement may not be amended or modified except by an express written agreement sign by Employee and the Chief Executive Officer of the Company and approved by the Board of Directors. Employee agrees that any dispute in the meaning, effect or validity of this Agreement shall be resolved in accordance with the laws of the State of Illinois without regard to the conflict of laws provisions thereof. Employee hereby irrevocably submits to the jurisdiction (including without limitation in personam jurisdiction), process and venue of the courts of the State of Illinois and the Federal courts of the United States located in Chicago, Illinois, and hereby agrees that any action, suit or proceeding initiated by Illinois for the interpretation or enforcement of the provisions of this Agreement shall, and that any action, suit or proceeding initiated by Company for the interpretation or enforcement of the provisions of this Agreement may, be heard and determined exclusively in a Federal court, or, if not permitted by applicable law, then in a State court, situated in Chicago, Illinois.

14.
Surviving Provisions.

        Following any termination or expiration of this Agreement, Sections 5, 6, 7(e), 7(f), 8, 9, 10, 11, 12, 13 and 14 will survive, and, if Employee's employment with the Company continues thereafter, Employee's employment with the Company will continue to be "at will".

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date stated in the opening paragraph.



Becky A. Sheehan
   

Date signed:                                                            

 

 

FTD COMPANIES, INC.

By:

 

 

 

 
   
 
   
Name:        
   
 
   
Title:        
   
 
   

Date signed:                                                            

 

 

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Appendix A


CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

        CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the "Agreement") is made and entered into as of the date the last party hereto signs the Agreement but is made effective as of the Effective Date (as defined below) between FTD Companies, Inc. (the "Company") and Becky A. Sheehan (the "Executive").

        RECITALS:

        NOW, THEREFORE, in consideration of the offer to and acceptance by the Executive of employment as Executive Vice President and Chief Financial Officer of the Company and of other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto additionally agree as follows:

        Section 1.    Secrecy, Non-Competition, No Interference and Non-Solicitation.    

        (a)    No Competing Employment.    The Executive acknowledges that (i) the agreements and covenants contained in this Section 1 are essential to protect the value of the Company's business and assets and (ii) by virtue of her employment with the Company, the Executive will obtain such knowledge, know-how, training and experience of such a character that there is a substantial probability that such knowledge, know-how, training and experience could be used to the substantial advantage of a competitor of the Company and to the Company's substantial detriment. Therefore, the Executive agrees that, for the period (the "Restricted Period") commencing on the date of this Agreement and ending on the date that is twelve (12) months after the date on which the Executive is no longer employed by the Company for any reason, the Executive shall not participate, operate, manage, consult, join, control or engage, directly or indirectly, for the benefit of the Executive or on behalf of or in conjunction with any person, partnership, corporation or other entity, whether as an employee, consultant, agent, officer, stockholder, member, investor, agent or otherwise, in any business activity if such activity constitutes the sale or provision of floral products or services that are similar to, or competitive with, floral products or services then being sold or provided by the Company or any of its subsidiaries or affiliated companies, including, without limitation, retail florists' business services, floral order transmission and related network services, development and distribution of branded floral products on the Internet or other consumer direct segment of the floral industry (including, without limitation, Interflora, Inc., Teleflora LLC, 1-800-FLOWERS.COM, Inc., Proflowers.com, and Floral Source) (a "Competitive Activity"), in any of: the City of Downers Grove, Illinois, the County of DuPage, Illinois or any other city or county in the State of Illinois; the District of Columbia or any other state, territory, district or commonwealth of the United States or any county, parish, city or similar political subdivision in any other state, territory, district or commonwealth of the United States; any other country or territory anywhere in the world or in any city, canton, county, district, parish, province or any other political subdivision in any such country or territory; or anywhere in the world (each city, canton, commonwealth, county, district, parish, province, state, country, territory or other political subdivision or other location in the world shall be referred to as a "Non-competition Area"). The parties to this Agreement intend that the covenant contained in the preceding sentence of this Section 1(a) shall be construed as a series of separate covenants, one for each city, canton, commonwealth, county, district, parish, state, province, country, territory, or other political subdivision or other area of the world specified. Except for geographic coverage, each separate covenant shall be


considered identical in terms to the covenant contained in the preceding sentence. The parties further acknowledge the breadth of the covenants, but agree that such broad covenants are necessary and appropriate in the light of the global nature of the Competitive Activity. If, in any judicial or other proceeding, a court or other body declines to enforce any of the separate covenants included in this Section 1(a), the unenforceable covenant shall be considered eliminated from these provisions for the purpose of those proceedings to the extent necessary to permit the remaining separate covenants to be enforced. Notwithstanding the foregoing, the Executive may maintain or undertake purely passive investments on behalf of the Executive, the Executive's immediate family or any trust on behalf of the Executive or the Executive's immediate family in companies engaged in a Competitive Activity so long as the aggregate interest represented by such investments does not exceed 1% of any class of the outstanding publicly traded debt or equity securities of any company engaged in a Competitive Activity.

        (b)    Nondisclosure of Confidential Information.    The Executive, except in connection with her employment hereunder, shall not disclose to any person or entity or use, either during the Executive's employment with the Company or at any time thereafter, any information not in the public domain, in any form, acquired by the Executive while employed by the Company or, if acquired following the Executive's employment with the Company, such information that, to the Executive's knowledge, has been acquired, directly or indirectly, from any person or entity owing a duty of confidentiality to the Company or any of its affiliates, relating to the Company, United Online, Inc., a Delaware corporation and the former parent corporation of the Company ("UOL"), or any of its successors or their subsidiaries or affiliated companies (collectively, the "Company Group"), including but not limited to trade secrets, technical information, systems, procedures, test data, price lists, financial or other data (including the revenues, costs or profits associated with any of the Company's products or services), business and product plans, code books, invoices and other financial statements, computer programs, discs and printouts, customer and supplier lists or names, personnel files, sales and advertising material, telephone numbers, names, addresses or any other compilation of information, written or unwritten, that is or was used in the business of the Company, UOL, any predecessor of the Company, UOL or any of the Company's, or UOL's subsidiaries, affiliates, successors or assigns. The Executive agrees and acknowledges that all of such information, in any form, and copies and extracts thereof are and shall remain the sole and exclusive property of the Company or other Company Group entity, and upon termination of her employment with the Company, the Executive shall return to the Company the originals and all copies (and shall delete all such items in electronic format) of any such information provided to or acquired by the Executive in connection with the performance of the Executive's duties for the Company, and shall return to the Company all files, correspondence, computer equipment and disks or other communications (including any such materials in electronic format) received, maintained or originated by the Executive during the course of the Executive's employment.

        (c)    No Interference and Non-Solicitation.    During the Restricted Period, the Executive shall not, whether for the Executive's own account or for the account of any other individual, partnership, firm, corporation or other business organization, solicit, endeavor to entice away from the Company, UOL, or any of the Company's or UOL's subsidiaries or affiliated companies, or otherwise interfere with the relationship of the Company or UOL or any of its or their subsidiaries or affiliated companies with, any person who, to the knowledge of the Executive, is (or has at any time within the preceding three months been) employed by or otherwise engaged to perform services for the Company, UOL or any of the Company's or UOL's subsidiaries or affiliated companies (including, but not limited to, any independent sales representatives or organizations) or any entity who is, or was within the then most recent 12-month period, a customer or client of the Company, UOL, any predecessor of the Company or UOL or any of the Company's or UOL's subsidiaries or affiliated companies (a "Customer") or a supplier or vendor of the Company or UOL or any of the Company's or UOL's subsidiaries or affiliated companies (a "Supplier"); provided, however, that this Section 1(c) shall not prohibit the Executive from employing, for the Executive's own account, following a termination of the employment

2


of the Executive, any person employed by a Customer or Supplier, if such employment is not in connection with a Competitive Activity.

        Section 2.    Calculation of Time Period.    The Executive agrees that if the Executive violates the provisions of Section 1(a) of this Agreement, the running of the Restricted Period shall be tolled for the period in which the Executive is in violation of such non-competition provisions. The Executive understands that the foregoing restrictions may limit the Executive's ability to earn a livelihood in a business engaged in a Competitive Activity, but the Executive nevertheless believes that the Executive has received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise provided in connection with the Spin-Off to clearly justify restrictions that, in any event, given her education, skills and ability, the Executive does not believe would prevent the Executive from earning a living.

        Section 3.    Inventions.    

        (a)    Defined.    The Executive understands that during term of the Executive's employment, there have been and are certain restrictions on the Executive's development of technology, ideas, and inventions, referred to in this Agreement as "Invention Ideas." The term Invention Ideas means all ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents and copyrights relating to any existing or planned service or product of the Company, and all improvements, rights, and claims related to the foregoing, that are conceived, developed, or reduced to practice by the Executive alone or with others. The Executive agrees that all original works of authorship which were or are made by the Executive (solely or jointly with others) as a member of the Company's (or any of its affiliate's) Board of Directors or within the scope of the Executive's employment and which are protectable by copyright are "works made for hire," as the term is defined in the United States Copyright Act (17 USCA, Section 101).

        (b)    Disclosure.    The Executive agrees to maintain adequate and current written records on the development of all Invention Ideas and to disclose promptly to the Company all Invention Ideas and relevant records, which records will remain the sole property of the Company. The Executive further agrees that all information and records pertaining to any idea, process, trademark, service mark, invention, technology, computer program, original work of authorship, design formula, discovery, patent, or copyright that might reasonably be construed to be an Invention Idea, but was, during the period that the Executive served as a member of the Company's (or any of its affiliate's) Board of Directors, or is conceived, developed, or reduced to practice by the Executive (alone or with others) during the Executive's employment or during the one-year period following termination of the Executive's employment, shall be promptly disclosed to the Company (such disclosure to be received in confidence). Any disclosure pursuant to this Section 3(b) will be received by the Company in confidence so that the Company may examine such information to determine if in fact it constitutes Invention Ideas subject to this Agreement.

        (c)    Assignment.    The Executive agrees to, and does hereby continuously, assign to the Company, without further consideration, all right, title, and interest that the Executive may presently have or acquire (throughout the United States and in all foreign countries), free and clear of all liens and encumbrances, in and to each Invention Idea, which shall be the sole property of the Company, whether or not patentable. In the event any Invention Idea shall be deemed by the Company to be patentable or otherwise registrable, the Executive shall assist the Company (at its expense) in obtaining patent or other applicable registrations, and the Executive shall execute all documents and do all other things (including testifying at the Company's expense) necessary or proper to obtain patent or other applicable registrations and to vest the Company with full title to them. The Executive's obligation to assist the Company in obtaining and enforcing patents, registrations or other rights for such inventions in any and all countries, shall continue beyond the termination of my employment, but the Company shall compensate the Executive at a reasonable rate after such termination for the time actually spent

3


by the Executive at the Company's request for such assistance. Should the Company be unable to secure the Executive's signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Invention Idea, whether due to the Executive's mental or physical incapacity or any other cause, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as the Executive's agent and attorney-in-fact, to act for and on the Executive's behalf, to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other rights of protections with the same force and effect as if executed and delivered by the Executive. Notwithstanding the foregoing provisions of this Section 3:

        (d)    Exclusions.    Except as disclosed in Exhibit A attached hereto, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or improvements to the foregoing that the Executive wishes to exclude from this Agreement. If nothing is listed on Exhibit A, the Executive represents that the Executive has no such inventions or improvements at the time of signing this Agreement, and that the Executive is not aware of any existing contract in conflict with this Agreement.

        (e)    Post-Termination Period.    The Executive understands and acknowledges that because of the difficulty of establishing when any idea, process, invention, etc., is first conceived or developed by the Executive, or whether it results from access to confidential, trade secret or proprietary information or the Company's equipment, facilities, and data, the Executive agrees that any idea, process, trademark, service mark, invention, technology, computer program, original work of authorship, design, formula, discovery, patent, copyright, or any improvement, rights, or claims related to the foregoing shall be presumed to be an Invention Idea if it relates to any existing or planned service or product of the Company, subsidiaries or affiliates, and if it is conceived, developed, used, sold, exploited, or reduced to practice by the Executive or with the Executive's aid within six months after the Executive's termination of employment with the Company. The Executive may rebut the above presumption if the Executive proves that the invention, idea, process, etc., is not an Invention Idea as defined in Section 3(a).

        (f)    Illinois Statute.    The Executive understands that nothing in this Agreement is intended to expand the scope of protection provided the Executive by Illinois Statute 765 ILCS 1060.

        Section 4.    Irreparable Injury.    It is further expressly agreed that the Company will or would suffer irreparable injury if the Executive were to compete with the Company or any of its or their subsidiaries or affiliated companies in violation of this Agreement or the Executive were to otherwise breach this Agreement. Any such violation or breach will cause the Company irreparable harm, the amount of which may be extremely difficult to estimate, thus, making any remedy at law or in damages inadequate. Consequently, the Company shall have the right to apply to a court of appropriate jurisdiction for, and the Executive consents and stipulates to the entry of, an order of injunctive relief in prohibiting the Executive from competing with the Company, its successors or any of its or their subsidiaries or affiliated companies in violation of this Agreement, an order restraining any other breach or threatened breach of this Agreement, and any other relief the Company and such court deems appropriate. This right shall be in addition to any other remedy available to the Company in law or equity. The parties hereby agree that the attorneys' fees of the prevailing party in any such proceeding or action shall be paid by the non-prevailing party.

4


        Section 5.    Representation and Warranties of the Executive.    The Executive represents and warrants that the execution of this Agreement and subsequent employment with the Company does not and will not conflict with any obligations that the Executive has to any former employers or any other entity. The Executive further represents and warrants that the Executive has not brought to the Company, and will not at any time bring to the Company, any materials, documents or other property of any nature of a former employer.

        Section 6.    Miscellaneous.    

        (a)    Jurisdiction, Choice of Law and Venue.    The validity and construction of this Agreement shall be governed by the internal laws of the State of Illinois, excluding the conflicts-of-laws principles thereof. Each party hereto consents to the jurisdiction of, and venue in, any federal or state court of competent jurisdiction located in Chicago, Illinois.

        (b)    Entire Agreement.    This Agreement and any other agreement or document delivered in connection with this Agreement, including the letter agreement dated as of the date hereof, between the Company and the Executive, state the entire agreement and understanding of the parties on the subject matter of this Agreement, and supersede all previous agreements, arrangements, communications and understandings relating to that subject matter.

        (c)    Counterparts.    This Agreement may be signed in two or more counterparts, each of which shall be deemed an original, with the same effect as if all signatures were on the same document.

        (d)    Amendment; Waiver; etc.    This Agreement, and each other agreement or document delivered in connection with this Agreement, may be amended, modified, superseded or canceled, and any of the terms thereof may be waived, only by a written document signed by each party to this Agreement or, in the case of waiver, by the party or parties waiving compliance. The delay or failure of any party at any time or times to exercise any right or require the performance of any duty under this Agreement or any other agreement or document delivered in connection with this Agreement shall in no way affect the right of that party at a later time to exercise that right or enforce that duty or any other right or duty. No waiver by any party of any condition or of any breach of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed or construed to be a further or continuing waiver of any such condition or breach or of the breach of any other term of this Agreement. A single or partial exercise of any right shall not preclude any other or further exercise of the same right or of any other right. The rights and remedies provided by this Agreement shall be cumulative and not exclusive of each other or of any other rights or remedies provided by law.

        (e)    Severability.    If any provision of this Agreement or any other agreement or document delivered in connection with this Agreement, if any, is partially or completely invalid or unenforceable in any jurisdiction, then that provision shall be ineffective in that jurisdiction to the extent of its invalidity or unenforceability, but the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, all of which shall be construed and enforced as if that invalid or unenforceable provision were omitted, nor shall the invalidity or unenforceability of that provision in one jurisdiction affect its validity or enforceability in any other jurisdiction. The Company and the Executive agree that the period of time and the geographical area described in Section 1 are reasonable in view of the nature of the business in which the Company is engaged and proposes to be engaged, and the Executive's understanding of her prospective future employment opportunities. However, if the time period or the geographical area, or both, described in Section 1 should be judged unreasonable in any judicial proceeding, then the period of time shall be reduced by that number of months and the geographical area shall be reduced by elimination of that portion, or both, as are deemed unreasonable, so that the restriction covenant of Section 1 may be enforced during the longest period of time and in the fullest geographical area as is adjudged to be reasonable.

5


        (f)    Employment "At-Will"    

        Both the Executive and the Company acknowledge that nothing in this Agreement creates a contract for employment for any specific duration. The Executive's employment shall be "at-will", meaning both the Company and the Executive can terminate the relationship at any time, with or without reason or notice.

        (g)    Survival of Obligations.    The obligations of the Executive set forth in this Agreement shall survive the termination of Employee's employment with the Company and the termination of this Agreement.

        (h)    Assignment.    This Agreement may be freely assigned by the Company, but may not be assigned by the Executive without the prior written consent of the Company which may be withheld at the Company's sole discretion.

        (i)    Binding Effect.    This Agreement shall inure to the benefit of the Company and its successors and assigns, and shall be binding upon the Executive and the Executive's heirs, personal representatives and any permitted assigns.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

    FTD COMPANIES, INC.

 

 

By:

 

 

 

 
       
 
        Name:    
           
 
        Its:    
           
 

 

 


Becky A. Sheehan

6



Appendix A

EXHIBIT A
EXECUTIVE'S DISCLOSURE

        Except as set forth below, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or any claims, rights, or improvements to the foregoing that I wish to exclude from the operation of this Agreement:













 

Date:        
   
 
 
 
        Becky A. Sheehan


Appendix B

EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT

        In consideration of my employment or continued employment by Florists Transworld Delivery, Inc. (my "Employer"), the compensation I receive, and any other consideration I have been provided that was conditioned on my execution of this Employee Proprietary Information and Inventions Agreement ("the Agreement"), I agree as follows:

1.     PROPRIETARY INFORMATION.

        (a)    Parties.    I understand and agree that this Agreement is intended to benefit Employer and all of its affiliates including, but not limited to, FTD Companies, Inc. and all of its current and future direct and indirect parents and subsidiaries and their successors (all of the foregoing being referred to, individually and collectively, ad the "Company").

        (b)   Confidential Restrictions. I understand that, during the course of my work as an employee of Employer, I have had and will have access to Proprietary Information (as defined below) concerning the Company and parties with which the Company has a business relationship. I acknowledge that the Company has developed, compiled, and otherwise obtained, at great expense, such Proprietary Information. I agree to hold in strict confidence all Proprietary Information and will not disclose any Proprietary Information to anyone outside of the Companyand will not use, copy, publish, summarize, or remove from Company premises Proprietary Information, except during my employment to the extent necessary to carry out my responsibilities as an employee of Employer. I further agree that the publication of any Proprietary Information through literature or speeches must be approved in advance in accordance with the Company's applicable policies and procedures. I understand that my employment creates a relationship of confidence and trust between me and Employer with respect to Proprietary Information, and I voluntarily accept this trust and confidence.

        (c)    Proprietary Information Defined.    I understand that the term "Proprietary Information" in this Agreement means all information and any idea, in whatever form, tangible or intangible, whether disclosed to or learned or developed by me, pertaining in any manner to the current or proposed business of the Company unless the information (i) is publicly known through lawful means; (ii) was rightfully in my possession prior to my employment with the Company as demonstrated by written documents currently in existence; (iii) is disclosed to me without restriction by a third party who rightfully possesses and discloses the information and who did not learn of it directly from the Company; or (iv) is reasonably known to people in the trade or industry. Without limiting the scope of the definition, I understand that the Company considers the following to be included in the definition of Proprietary Information: (i) all client/customer lists and all lists or other compilations containing client, customer or vendor information; (ii) information about products, proposed products, research, product development, techniques, processes, costs, profits, product pricing, markets, marketing plans, strategies, forecasts, sales and commissions; (iii) plans for the future development and new product concepts; (iv) all information regarding the Company's subscribers and all information regarding the Company's subscribers compiled by or derived from the Company's database; (v) the compensation and terms of employment of other employees; (vi) all other information that has been or will be given to me in confidence by the Company; and (vii) software in various stages of development, designs, drawings, specifications, techniques, models, data, source code, algorithms, object code, documentation, diagrams, flow charts, computer programs, databases, and other data of any kind and description, including electronic data recorded or retrieved by any means. Proprietary Information also includes any information described above which the Company obtains from another party and which the Company treats as proprietary or designates as Proprietary Information whether or not owned or developed by the Company or the other party.

        (d)    Company Materials.    I understand that I will be entrusted with "Company Materials" (as defined below) which are important to the Company's business or the business of Company customers or clients. I agree that during my employment, I will not deliver any Company Materials to any person


or entity outside the Company, except as I am required to do in connection with performing my duties for Company. For purposes of this Agreement, "Company Materials" are documents, electronic files or any other tangible or electronic items that contain information concerning the business, operations or plans of the Company or its customers, whether the documents have been prepared by me or others. Company Materials include, but are not limited to, computers, computer disk drives, computer files, computer disks, documents, code, flowcharts, schematics, designs, graphics, customer lists, drawings, photographs, customer information, etc.

        (e)    Information Use Return and Acknowledgement.    I agree that I will not retain and I will return all Proprietary Information and all copies of it in whatever form, as well as all Company Materials, apparatus, equipment and other Company property along with all reproductions, to Employer after my employment terminates. The only exceptions are (i) my personal copies of records of my compensation; (ii) any agreements between me and the Company that I have signed; and (iii) my copy of this Agreement. I agree to execute reasonable documentation if requested by Employer upon the termination of my employment reflecting such return and acknowledging my obligations under this Agreement.

        (f)    Prior Actions and Knowledge.    I represent and warrant that from the time of my first contact or communication with the Company, I have held in strict confidence all Proprietary Information and have not disclosed any Proprietary Information to anyone outside of the Company, or used, copied, published, or summarized any Proprietary Information except to the extent necessary to carry out my responsibilities as an employee of Employer.

        (g)    Former Employer Information; Consents.    I agree that I will not, during my employment, improperly use or disclose any confidential information, proprietary information or trade secrets of my former or any concurrent employers. I agree that I will not bring onto the premises of the Company any document or any property belonging to my former or any concurrent employers unless consented to in writing by them. I represent and warrant that I have returned all property and confidential information belonging to all prior employers. I also represent and warrant that my performance of services for Employer will not require any authorization, consent, exemption or other action by any other party and will not conflict with, violate or breach any agreement, instrument, order, judgment or decree to which I am subject.

        (h)    Conflicting Employment.    I agree that, during the term of my employment, I will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or may become involved during the term of my employment, nor will I engage in any other business activities that conflict with my obligations to the Company.

        (i)    Non-Solicitation of Customers.    I understand and agree that as a result of my employment and the position that I hold, the Company has entrusted and will in the future entrust me with Proprietary Information that is maintained by the Company in confidence and that, if known, would have economic value to a competitor. Such Proprietary Information includes, but is not limited to, customer identities, requirements, purchasing volumes, demographic needs, and other individualized customer information, coding, future technology plans, product strategies, business strategies, coding models, and the like. I understand and agree that my solicitation of Company customers on behalf of an entity other than the Company would involve the use of such Proprietary Information. Consequently, I agree that during the term of my employment with Employer, any other affiliate of the Company or the Company, and for a period of one (1) year after termination (voluntarily or involuntarily) of my employment, I shall not, for myself or any third party, solicit, directly or indirectly, any customer of the Company who was a Company customer during my employment for the purpose of offering products or services that compete in the same market with the Company's products or services. In addition, I agree that I will not, for myself or any third party, solicit, directly or indirectly, any

2


potential customer of the Company with whom the Company was engaged in substantial negotiations during my employment. I hereby acknowledge that pursuit of the activities forbidden by this paragraph would necessarily involve the use or disclosure of Proprietary Information in breach of this Agreement, but that proof of such breach would be extremely difficult. None of my activities will be prohibited under this Paragraph if I can prove that the action was taken without the use in any way of Proprietary Information.

        (j)    Non-Solicitation of Employees.    I agree that for the term of my employment with Employer, any other affiliate of the Company or the Company, and for a period of one (1) year following the termination (voluntarily or involuntarily) of my employment, I will not, on behalf of myself or any other person or entity, either directly or indirectly, solicit the services of any person who was employed by the Company on or prior to the date of my termination of employment.

2.     INVENTIONS.

        (a)    Defined.    I understand that during the term of my employment, there have been and are certain restrictions on my development of technology, ideas, and inventions, referred to in this Agreement as "Invention Ideas." The term Invention Ideas means all ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, relating to any existing or planned service or product of the Company and all improvements, rights, and claims related to the foregoing that are conceived, developed, or reduced to practice by me alone or with others, except to the extent that applicable state law prohibits the assignment of these rights. I agree that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by copyright are "works made for hire," as the term is defined in the United States Copyright Act (17 USCA, Section 101).

        (b)    Notice Regarding State Invention Assignment Laws.    The laws of some states prohibit the assignment of certain invention rights (e.g., Delaware Code Title 19 § 805; Illinois 765 ILCS 1060/1-3; Kansas Stat. Ann. § 44-130; Minnesota Stat. 13A, § 181.78; North Carolina Gen. Stat. Art. 10A, § 66-57.1; Utah Stat. § 34-39-1 through 34-39-3; Washington RCW 49.44.140). This Agreement shall be construed so that it complies with all such applicable laws. To that end, to the extent applicable state law requires it, you are notified as follows:

If the state law that applies provides greater invention rights to you than are described in the above notice, those greater rights will apply to you.

        (c)    Disclosure.    I agree to maintain adequate and current written records on the development of all Invention Ideas and to disclose promptly to Employer all Invention Ideas and relevant records, which records will remain the sole property of Employer. I further agree that all information and records pertaining to any idea, process, trademark, service mark, invention, technology, computer program, original work of authorship, design formula, discovery, patent, or copyright that might reasonably be construed to be an Invention Idea, but is conceived, developed, or reduced to practice by me (alone or with others) during my employment or during the one year period following termination of my employment, shall be promptly disclosed to Employer. If I inform Employer before making a specific disclosure pursuant to this paragraph that I contend the subject matter being disclosed is not subject to this Agreement, then the disclosure will be received by Employer in confidence so that

3


Employer may examine such information to determine if in fact it constitutes Invention Ideas subject to this Agreement.

        (d)    Assignment.    I agree to assign and hereby do assign to Employer, without further consideration, all right, title, and interest that I may presently have or may acquire in the future (throughout the United States and in all foreign countries), free and clear of all liens and encumbrances, in and to each Invention Idea, which shall be the sole property of Employer, whether or not patentable. The rights I have assigned, and will assign, include all copyrights, patent rights, trade secret rights and any rights of publicity or personality (including usage of my name, voice, image, likeness and performance in any and all media), vested and contingent, and include extensions and renewals thereof and the right to license and assign. I will waive and hereby do waive any moral rights I have or may have in any Invention Idea. In the event any Invention Idea shall be deemed by Employer to be patentable or otherwise registrable, I will assist Employer or the Company, as Employer may direct (at its expense) in obtaining letters patent or other applicable registrations, and I will execute all documents and do all other things (including testifying at Employer's expense) necessary or proper to obtain letters patent or other applicable registrations and to vest Employer or the Company, as Employer may direct, with full title to them. My obligation to assist Employer in obtaining and enforcing patents, registrations or other rights for such inventions in any and all countries, shall continue beyond the termination of my employment, but Employer or the Company shall compensate me at a reasonable rate after such termination for the time actually spent by me at Employer's request for such assistance. Should Employer be unable to secure my signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Invention Idea, whether due to my mental or physical incapacity or any other cause, I irrevocably designate and appoint Employer and each of its duly authorized officers and agents as my agent and attorney-in-fact, to act for and on my behalf, to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other rights of protections with the same force and effect as if executed and delivered by me.

        (e)    License.    In the case of any invention or work of authorship that I own or in which I have an interest that is not owned by Employer pursuant to the other terms in this Agreement, the following shall apply. If I use the invention or work of authorship, or allow it to be used, in the course of the Company's business, or incorporate the invention or work of authorship, or allow it to be incorporated, into any product or process owned or developed in whole or in part by the Company, I will grant, and I hereby do grant to Employer and/or one or more affiliates of the Company, as Employer may direct, and their assigns a nonexclusive, perpetual, irrevocable, fully paid-up, royalty-free, worldwide license of all of my interests in the invention or work of authorship, including all rights to make, use, sell, reproduce, modify, distribute, perform publicly, display publicly and transmit the invention or work of authorship, without restriction. At Employer's direction and expense I will execute all documents and take all actions necessary or convenient for Employer and the Company to document, obtain, maintain or assign their license rights hereunder of my interest in any such invention or work of authorship.

        (f)    Exclusions.    Except as disclosed in Exhibit A, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or improvements to the foregoing that I wish to exclude from this Agreement. If nothing is listed on Exhibit A, I represent that I have no such inventions or improvements at the time of signing this Agreement. I am not aware of any existing contract in conflict with this Agreement.

        (g)    Post-Termination Period.    I acknowledge that because of the difficulty of establishing when any idea, process, invention, etc., is first conceived or developed by me, or whether it results from access to Proprietary Information or the Company's equipment, facilities, and data, I agree that any idea, process, trademark, service mark, invention, technology, computer program, original work of

4


authorship, design, formula, discovery, patent, copyright, or any improvement, rights, or claims related to the foregoing shall be presumed to be an Invention Idea if it relates to any existing or planned service or product of the Company, and if it is conceived, developed, used, sold, exploited, or reduced to practice by me or with my aid within six months after my termination of employment (voluntarily or involuntarily)with Employer, or any other affiliate of the Company, or the Company. I can rebut the above presumption if I prove that the invention, idea, process, etc., is not an Invention Idea as defined in paragraph 2(a).

        (h)    State Law Regarding Invention Rights.    I understand that nothing in this Agreement is intended to expand the scope of protection regarding invention rights that is provided to me by applicable state law.

3.     CONTRACTS.

        I understand that the Company has or may enter into contracts with the government or other companies under which certain intellectual property rights will be required to be protected, assigned, licensed, or otherwise transferred and I hereby agree to execute such other documents and agreements as are necessary to enable the Company to meet its obligations under those contracts.

4.     REMEDIES.

        I recognize that nothing in this Agreement is intended to limit any remedy of the Company under applicable state law protecting confidential information or trade secrets or any other relevant state or federal law. In addition, I recognize that my violation of this Agreement could cause the Company irreparable harm, the amount of which may be extremely difficult to estimate, thus, making any remedy at law or in damages inadequate. Therefore, I agree that the Company shall have the right to apply to any court of competent jurisdiction for an order restraining any breach or threatened breach of this Agreement and for any other relief the Company deems appropriate. This right shall be in addition to any other remedy available to the Company in law or equity.

5.     MISCELLANEOUS PROVISIONS.

        (a)    Assignment/Successors and Assigns.    I agree that Employer may assign to another person or entity any of its rights under this Agreement. This Agreement shall be binding upon me and my heirs, personal representatives, and successors, and shall inure to the benefit of the Employer's successors and assigns.

        (b)    Jurisdiction, Choice of Law and Venue.    The validity, interpretation, enforceability and performance of this Agreement shall be governed and construed in accordance with the laws of the State of Illinois, excluding the conflicts-of-laws principles thereof. Each party hereto consents to the jurisdiction of, and venue in, any federal or state court of competent jurisdiction located in the County of DuPage in the State of Illinois.

        (c)    Severability.    If any provision of this Agreement, or application thereof to any person, place, or circumstances, shall be held by a court of competent jurisdiction to be invalid, unenforceable, or void, such provision shall be deemed to be modified to the maximum extent possible to give effect to the intent of the language while still remaining enforceable under applicable law. The remainder of this Agreement and application thereof shall remain in full force and effect.

        (d)    No Guarantee of Employment.    I understand this Agreement is not a guarantee of continued employment. My employment is terminable at any time by Employer or me, with or without cause or prior notice, except as may be otherwise provided in an express written employment agreement properly authorized by Employer.

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        (e)    Entire Agreement.    The terms of this Agreement are the final expression of my agreement with respect to these subjects and may not be contradicted by evidence of any prior or contemporaneous agreement. This Agreement shall replace and supersede any similar agreement that currently is in effect between me and Employer or the Company, provided that Employer shall retain all rights that have arisen under that prior agreement up to the time I sign this new Agreement. This Agreement shall constitute the complete and exclusive statement of its terms and no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding involving this Agreement. This Agreement can only be modified in writing signed by FTD Companies, Inc.'s General Counsel (if Employer is, at the time of the modification, an affiliate of FTD Companies, Inc.), or signed by Employer's President or General Counsel (if Employer is not an affiliate of FTD Companies, Inc. at the time of the modification).

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY NOTED ON EXHIBIT A TO THIS AGREEMENT ANY PROPRIETARY INFORMATION, IDEAS, PROCESSES, TRADEMARKS, SERVICE MARKS, INVENTIONS, TECHNOLOGY, COMPUTER PROGRAMS, ORIGINAL WORKS OF AUTHORSHIP, DESIGNS, FORMULAS, DISCOVERIES, PATENTS, COPYRIGHTS, OR IMPROVEMENTS, OR RIGHTS THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.

Date:        
   
 
 
 
        Becky A. Sheehan

6



EXHIBIT A
EMPLOYEE'S DISCLOSURE

        Prior Inventions.    Except as set forth below, there are no ideas, processes, trademarks, service marks, inventions, technology, computer programs, original works of authorship, designs, formulas, discoveries, patents, copyrights, or any claims, rights, or improvements to the foregoing that I wish to exclude from the operation of this Agreement:













 

Date:        
   
 
 
 
        Becky A. Sheehan

7




QuickLinks

Appendix A
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
Appendix A EXHIBIT A EXECUTIVE'S DISCLOSURE
Appendix B EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
EXHIBIT A EMPLOYEE'S DISCLOSURE

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Exhibit 10.8

LOGO

    DATED 8 FEBRUARY 2005    

 

 

INTERFLORA HOLDINGS LIMITED

 

(1)

 

 

and

 

 

 

 

RHYS JOHN HUGHES

 

(2)

 

 




 

 

 

 

SERVICE AGREEMENT

 

 
   

   


CONTENTS

Clause
  Heading   Page  

1

 

Appointment

   
1
 

2

 

Duration of the Employment

   
1
 

3

 

Scope of the Employment

   
1
 

4

 

Place of work

   
2
 

5

 

Remuneration

   
2
 

6

 

Car

   
3
 

7

 

Expenses

   
3
 

8

 

Holidays

   
4
 

9

 

Sickness benefits

   
4
 

10

 

Pension, death benefit and medical insurance

   
5
 

11

 

Restrictions during the Employment

   
5
 

12

 

Confidential information and company documents

   
5
 

13

 

Inventions and other intellectual property

   
6
 

14

 

Termination

   
7
 

15

 

Restrictive covenants

   
9
 

16

 

Disciplinary and grievance procedures

   
10
 

17

 

Data Protection

   
10
 

18

 

Notices

   
11
 

19

 

Former contracts of employment

   
11
 

20

 

Choice of law and submission to jurisdiction

   
11
 

21

 

General

   
11
 

Schedule 1

 

Principal terms

   
14
 

Schedule 2

 

Definitions and interpretation

   
15
 

Date: 8 February 2005

Parties:

The parties agree as follows:

        1    Appointment    

        2    Duration of the Employment    

        3    Scope of the Employment    

1


        4    Place of work    

        5    Remuneration    

2


        6    Car    

        7    Expenses    

3


        8    Holidays    

        9    Sickness benefits    

4


        10    Pension, death benefit and medical insurance    

        11    Restrictions during the Employment    

        12    Confidential information and company documents    

5


        13    Inventions and other intellectual property    

6


        14    Termination    

7


8


        15    Restrictive covenants    

9


        16    Disciplinary and grievance procedures    

        17    Data Protection    

10


        18    Notices    

        19    Former contracts of employment    

        20    Choice of law and submission to jurisdiction    

        21    General    

11


12


Rhys Hughes

31 July, 2006

Dear Rhys,


Variation to terms and conditions of employment

        This letter confirms the amendments that will be made to your employment agreement with Interflora Holdings Limited (the "Company") dated 8 February 2005 (the "Agreement"), with effect from the date of Completion (as defined in Appendix One to this letter). The amendments are as follows:-

        Capitalised terms in this letter not otherwise defined herein will have the meaning set out in the Agreement. Other than as set out above, all other terms of the Agreement will remain in effect.

        Please sign a copy of this letter and return it to Larry Johnson to indicate your acceptance of this variation of your Agreement.

Yours sincerely,

GRAPHIC

for and on behalf
of the Company

   

AMENDMENT TO EMPLOYMENT AGREEMENT—RHYS HUGHES


        I confirm I have read and understood the terms of this letter and agree to the variation of my Agreement.

Signed

GRAPHIC

Employee signature



Appendix One

1.     BONUS ENTITLEMENT

2.     MANAGEMENT INCENTIVE PLAN BONUS


3.     CLIFF BONUS

4.     DEFINITIONS

   


(1)
The first Financial Year will commence on July 1, 2006.

   


(2)
The first year of the Management Incentive Plan Bonus will commence on July 1, 2006 and end on June 30, 2007


Schedule 1

Principal terms

The title and capacity

  Finance Director

Notice period

 

6 months (such notice not to be served before the date falling six months after the date of this agreement)

Remuneration

 

£86,010

Holidays

 

25 days

Sickness benefit

 

65 days

Employer's contributions to personal pension

 

8% of salary

Executive's contributions to personal pension

 

4% of salary

Date of commencement of continuous employment

 

16/07/2001

Business Hours

 

9:00 am - 5:00 pm Monday - Friday

14



Schedule 2

Definitions and interpretation

1.    Definitions    

Board   the board of directors for the time being of the Company or any committee of directors for the time being

Completion

 

as defined in the Investment Agreement

Confidential Information

 

information relating to the business, products, affairs and finances of the Company or of any Group Company or their agents, suppliers, customers or distributors (including actual or potential client or supplier details, terms of business, pricing and fee arrangements, other financial and other trade and business secrets) for the time being confidential to it or to them or treated by it or them as such and trade secrets (including, without limitation, technical data and know-how) provided that information shall not be or shall cease to be confidential to the extent that it comes to be in the public domain otherwise than as a result of any unauthorised act or default of the Executive and/or because it is the Executive's property as part of his personal skill and knowledge

Contact Period

 

the 12 month period ending on the sooner of:

 

 

(a)

 

the date of termination of the Employment; and

 

 

(b)

 

the date on which Executive last carried out duties assigned to him by the Company.

 

 

A reference to an activity or thing which took place "during the Contact Period" includes any activity or thing which started and/or ended at any time during the Contact Period

Employment

 

the Executive's employment with the Company

ERA

 

the Employment Rights Act 1996 as amended

Group

 

the Company and the Group Companies

Group Company

 

any company which is for the time being a subsidiary or holding company of the Company and any subsidiary of any such holding company and for the purposes of this Agreement the terms "subsidiary" and "holding company" shall have the meanings ascribed to them by sections 736 and 736A Companies Act 1985

15


Investment Agreement   the investment agreement of 19 November 2004 between the Company, 3i Group plc and others, the Managers (as defined in that agreement) and 3i Investments plc

Remuneration Committee

 

the remuneration committee of the Company as appointed from time to time as defined in the Investment Agreement

Salary

 

the salary referred to in clause 5.1

2.    Interpretation    

16



Schedule 3

Bonus

1
The Executive shall be entitled to a bonus (the "Bonus") in respect of each financial year of the Company subject to the terms of this Schedule.

2
The Bonus, if payable pursuant to paragraph 4 below, shall be of an amount equal to between 10% and 35% of the Salary of the Executive payable pursuant to clause 5.1 of this Agreement, as determined pursuant to paragraph 5 below.

3
If payable, the Bonus shall be payable within 14 days of the approval of the audited accounts in respect of any financial period by the Board. The Board may, in its absolute discretion and with the written consent of 3i (as defined in the Investment Agreement), make interim payments of the Bonus to the Executive. If the amount of the Bonus in respect of any financial year is less than the aggregate amount of any such interim payments then the excess shall be repayable to the Company as a debt on demand.

4
The Executive shall only be entitled to receive the Bonus provided that the net profits of the Group in any financial period before interest, taxation, depreciation and amortisation of goodwill and after taking into account the effect of the Bonus and other bonuses payable to employees of the Group ("EBIT") (calculated by reference to the consolidated audited financial accounts of the Group for the relevant period) are equal to or exceed the EBIT target set out in:

4.1
the Business Plan; or

4.2
if the same exists, in any agreed Annual Business Plan,
5
In the event that the EBIT in relation to any financial period is:

5.1
equal to the Target the Bonus shall be 10% of the Salary;

5.2
equal to or in excess of 125% of the Target the Bonus shall be 35% of the Salary; and

5.3
between the Target and 125% of the Target the Bonus shall increase on a straight line basis between 10% of the Salary and 35% of the Salary (e.g. if the EBIT is equal to 110% of the Target the Bonus shall be 20% of the Salary).

6
In the event that the employment of the Executive shall terminate during a financial year then the Bonus shall be apportioned by dividing the Bonus which would otherwise be payable to the Executive by 12 and multiplying the resultant amount by the number of complete months during which the Executive continued in employment. Any such payment will not become due until the date provided for payment in paragraph 3. The costs associated with the termination of the employment of the Executive shall be added back to the EBIT for the relevant financial period.

17


        In witness of which this Agreement is executed as a deed by the parties and delivered on the date which is written at the start of this agreement:

The Company        

Executed as a deed by Interflora

 

)

 

 
Holdings Limited acting by:   )  
GRAPHIC
    )   Director
    )    
    )  
GRAPHIC
        Director/Secretary

The Executive

 

 

 

 

Executed as a deed by Rhys John

 

)

 

 
Hughes in the presence of:   )    
    )  
GRAPHIC


Witness

 


GRAPHIC

 

 

 

 

Full name

 

Richard Medd

 

 

 

 

Address

 

Browne Jacobson
Nottingham

 

 

 

 

Occupation

 

Solicitor

 

 

 

 

18


Rhys Hughes

September 6, 2006

Dear Rhys,


Variation to terms and conditions of employment

        This letter confirms the amendments that will be made to your employment agreement with Interflora Holdings Limited (the "Company") dated 8 February 2005 as amended by variation in terms dated July 31, 2006 (collectively the "Agreement"), with effect as of the date of this letter. The amendments are as follows:-

        Other than as set out above, all other terms of the Agreement will remain in effect.

        Please sign a copy of this letter and return it to Larry Johnson to indicate your acceptance of this variation of your Agreement.

Yours sincerely,

   

Steve Richards, President

   

for and on behalf

   

of the Company

   

        I confirm I have read and understood the terms of this letter and agree to the variation of my Agreement.

Signed

   


GRAPHIC

   

Employee signature

   


GRAPHIC

   

Rhys Hughes

31 July, 2006

Dear Rhys,


Variation to terms and conditions of employment

        This letter confirms the amendments that will be made to your employment agreement with Interflora Holdings Limited (the "Company") dated 8 February 2005 (the "Agreement"), with effect from the date of Completion (as defined in Appendix One to this letter). The amendments are as follows:-

        Capitalised terms in this letter not otherwise defined herein will have the meaning set out in the Agreement. Other than as set out above, all other terms of the Agreement will remain in effect.

        Please sign a copy of this letter and return it to Larry Johnson to indicate your acceptance of this variation of your Agreement.

Yours sincerely,

   


GRAPHIC

   

for and on behalf

   

of the Company

   

   

AMENDMENT TO EMPLOYMENT AGREEMENT—RHYS HUGHES


        I confirm I have read and understood the terms of this letter and agree to the variation of my Agreement.

Signed

   


GRAPHIC

   

Employee signature

   


Appendix One

1.     BONUS ENTITLEMENT

2.     MANAGEMENT INCENTIVE PLAN BONUS


3.     CLIFF BONUS

4.     DEFINITIONS

   


(1)
The first Financial Year will commence on July 1, 2006.

   


(2)
The first year of the Management Incentive Plan Bonus will commence on July 1, 2006 and end on June 30, 2007

LOGO

Rhys Hughes

13 October, 2008

Dear Rhys,


Variation to terms and conditions of employment

        This letter confirms the amendments that will be made to your employment agreement with Interflora Holdings Limited (the "Company") dated 8 February 2005, as amended by variations in terms dated, respectively, 31 July, 2006 (the "31 July Amendment") and 6 September, 2006 (collectively, the "Agreement"), with effect as of 26 August, 2008, on which date FTD Group, Inc. ("FTD"), the Company's indirect parent, merged into UNOLA Corp., an indirect wholly-owned subsidiary of United Online, Inc. ("United Online") and the Company became a wholly-owned, indirect subsidiary of United Online.

        Whereas, you have been appointed President of the Company as of May 19, 2008;

        Whereas, the Company desires for you to serve in such capacity, and you desire to continue to serve in such capacity; and

        Whereas, the Company and you mutually desire to increase your Salary and MIP Bonus opportunity, with effect as of 26 August, 2008;

        Now, therefore, the amendments to your Agreement are as follows:


 

 

 

 

 

 

 
            Interflora British Unit
Interflora House, Sleaford,
Lincolnshire NG34 7TB

 

 

 

 

 

 

Tel 01529 304141
Fax 01529 413704
www.interflora.co.uk

   

GRAPHIC


Rhys Hughes
13 October, 2008
Page 2

        Capitalised terms in this letter not otherwise defined herein will have the meaning set out in the Agreement. Other than as set out above, all other terms of the Agreement will remain in effect.

        Please sign two originals of this letter and return them to Paul Jordan at the address below to indicate your acceptance of this variation of your Agreement:

        After the letter has been countersigned on behalf of the Company, one of the fully-signed originals will be returned to you.

Yours sincerely,    


GRAPHIC

 

 
Mark R. Goldston    
For and on behalf of the Company    

2


Rhys Hughes
13 October, 2008
Page 3

        I confirm that I have read and understood the terms of this letter and agree to the variation of my Agreement.

Signed    


GRAPHIC

 

 
Rhys Hughes    

3


Rhys Hughes

December     , 2009

Dear Rhys,


Variation to terms and conditions of employment

        Reference is made to your employment agreement with Interflora Holdings Limited (the "Company") dated February 8, 2005, as amended by variations in terms dated July 31, 2006 (the "July 2006 Amendment"), September 6, 2006 (the "September 2006 Amendment"), and October 13, 2008 (the "October 2008 Amendment" and collectively with the July 2006 Amendment and the September 2006 Amendment, the "Agreement").

        This letter confirms the amendments to the Agreement with effect from the date of this letter.

            Interflora British Unit
Interflora House, Sleaford,
Lincolnshire NG34 7TB

 

 

 

 

 

 

Tel 01529 304141
Fax 01529 413704
www.interflora.co.uk

 

 

 

 

 

 

Registered in England No: 297087
Registered Office: Interflora House,
Sleaford, Lincolnshire NG34 7TB

        Capitalised terms in this letter not otherwise defined herein will have the meaning set out in the Agreement. Other than as set out above, all other terms of the Agreement will remain in effect.


        Please sign a copy of this letter and return it to my attention to indicate your acceptance of this variation of your Agreement.

Yours sincerely,

GRAPHIC

For and on behalf of the Company

        I confirm I have read and understood the terms of this letter and agree to the variation of my Agreement.

Signed

GRAPHIC

Rhys Hughes


LOGO

Rhys Hughes

31st May 2012


Variation to terms and conditions of employment

        Reference is made to your employment agreement with Interflora Holdings Limited (the "Company") dated 8 February 2005, as amended by variations in terms dated 31 July 2006 (the "July 2006 Amendment"), 6 September 2006 (the "September 2006 Amendment"), 13 October 2008 (the "October 2008 Amendment"), and 24 December 2009 (the "December 2009 Amendment" and collectively with the other referenced amendments, the "Agreement").

        This letter confirms the amendments to the Agreement with effect from the date of this letter.

Cliff Bonus

        Sections 3.1 through 3.6 of Appendix One of the July 2006 Amendment, as Appendix One was further amended by the September 2006 Amendment, the October 2008 Amendment and the December 2009 Amendment (as amended, "Appendix One"), are hereby deleted in their entirety and replaced with the following:

   

Interflora Holdings Limited
lnterflora House
Watergate, Sleaford
Lincolnshire NG34 7TB
Tel: 01529 304141
Fax: 01529 413704
Registered in England No: 05286424
Registered Office: Interflora House,
Sleaford, Lincolnshire NG34 7TB


Rhys Hughes
Re: Variations to terms and conditions of employment
31st May 2012

        Capitalised terms in this letter not otherwise defined herein will have the meaning set out in the Agreement. Other than as set out above, all other terms of the Agreement will remain in effect.

        Please sign a copy of this letter and return it to my attention to indicate your acceptance of this variation of your Agreement.

Yours sincerely,    


GRAPHIC

John Dunstan
For and on behalf of the Company

 

 

        I confirm I have read and understood the terms of this letter and agree to the variation of my Agreement.

Signed    


GRAPHIC

 

 
Rhys Hughes    

2




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CONTENTS
Variation to terms and conditions of employment
Appendix One
Schedule 1
Principal terms
Schedule 2
Definitions and interpretation
Schedule 3
Bonus
Variation to terms and conditions of employment
Variation to terms and conditions of employment
Appendix One
Variation to terms and conditions of employment
Variation to terms and conditions of employment
Variation to terms and conditions of employment

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

PRELIMINARY AND SUBJECT TO COMPLETION, DATED SEPTEMBER 9, 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 five shares of United Online common stock held of record as of the close of business on September     , 2013, the record date for the distribution, prior to giving effect to a one-for-seven reverse stock split that United Online intends to implement immediately prior to the distribution. The reverse stock split was approved by the United Online stockholders at the special meeting of stockholders held on September 5, 2013. We believe the reverse stock split will help maintain the marketability and liquidity of United Online's common stock following 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 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 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. However, any cash that you receive in lieu of fractional shares generally will be taxable to you. 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 SEPTEMBER 9, 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 SEPTEMBER 9, 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 five shares of United Online common stock held of record as of the close of business on                  , 2013, the record date for the distribution, prior to giving effect to a one-for-seven reverse stock split that United Online intends to implement immediately prior to the distribution (the "Reverse Stock Split"). The Reverse Stock Split was approved by the United Online stockholders at the special meeting of stockholders held on September 5, 2013. United Online believes the Reverse Stock Split will help maintain the marketability and liquidity of its common stock following the distribution. 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. You will receive cash instead of any fractional shares of our common stock, which will generally be taxable to you.

        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 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 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 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 20, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 63.

        In reviewing this Information Statement, you should carefully consider the matters described in the section entitled "Risk Factors" beginning on page 20.



        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

   
20
 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

   
44
 

THE SEPARATION

   
45
 

CAPITALIZATION

   
55
 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

   
56
 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

   
57
 

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

   
63
 

BUSINESS

   
92
 

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

   
102
 

MANAGEMENT

   
107
 

EXECUTIVE COMPENSATION

   
115
 

SECURITY OWNERSHIP OF MANAGEMENT, DIRECTORS AND PRINCIPAL STOCKHOLDERS

   
133
 

DESCRIPTION OF CAPITAL STOCK

   
136
 

DESCRIPTION OF CERTAIN INDEBTEDNESS

   
141
 

WHERE YOU CAN FIND MORE INFORMATION

   
142
 

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," "FTD Entities," 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," "UOL" or "UOL Entities" 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 make interest payments on or 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 five shares of United Online common stock held at the close of business on the record date, prior to giving effect to the Reverse Stock Split that United Online intends to implement immediately prior to the distribution. The Reverse Stock Split was approved by the United Online stockholders at the special meeting of stockholders held on September 5, 2013. 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 for the provision of certain transition services generally for a period of up to 12 months (subject to an option, at FTD's election, to extend certain services 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."

 

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        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, 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."

 

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Q:
What will I receive in the distribution?

A:
You will receive one share of FTD common stock for every five shares of United Online common stock you own as of the close of business on the record date (prior to giving effect to the Reverse Stock Split that United Online intends to implement immediately prior to the distribution). The following table illustrates the number of shares of FTD common stock and United Online common stock you would hold based on the number of shares of United Online common stock held on the record date, the distribution ratio of one-for-five and the reverse stock split ratio of one-for-seven (assuming you continue to hold such shares through the distribution date).

  Number of shares of
United Online common stock
owned on record date
  Number of shares
of FTD common
stock to be received
  Number of shares
of United Online
common stock
held following
Reverse Stock Split
 
    35     7     5  
    100     20     14  
    200     40     28  
    500     100     71  

    Fractional shares of our common stock will not be issued with respect to the distribution, and fractional shares of United Online common stock will not be issued with respect to the Reverse Stock Split. If you would be entitled to receive a fractional share of our common stock in the distribution or a fractional share of United Online common stock in the Reverse Stock Split, you will instead receive a cash payment with respect to the fractional share. Any cash payments made instead of fractional shares will generally be taxable to you.

Q:
What will I retain after the distribution?

A:
The number of shares of United Online common stock that you own will not change as a result of the Separation. However, on September 5, 2013, United Online stockholders approved a reverse stock split of United Online's issued and outstanding shares of common stock in a ratio of one-for-three, one-for-four, one-for-five, one-for-six or one-for-seven shares to be determined by United Online's Board of Directors. On September 6, 2013, United Online's Board of Directors established a reverse stock split ratio of one-for-seven. The Reverse Stock Split is expected to be implemented immediately prior to the distribution and will result in the number of shares of United Online common stock held by you being reduced proportionately based on the one-for-seven Reverse Stock Split ratio. After the distribution, you will also own shares of our common stock.

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.

 

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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:
How will fractional shares be treated in the distribution?

A:
Fractional shares of our common stock will not be issued. If you would be entitled to receive a fractional share of our common stock in the distribution, you will instead receive a cash payment with respect to the fractional share.

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, 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. United Online received the IRS Ruling from the IRS on September 4, 2013. However, any cash payments made instead of fractional shares will generally be taxable to you. For a more detailed

 

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    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 on or shortly before the record date under the symbol "FTDDV." "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 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 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 "regular-way" market after the close of business on the record date and up to the distribution date, you will also be selling the right to receive shares of FTD common stock in the distribution. Shares of United Online common stock that trade on the "regular way" market will trade under the ticker symbol "UNTD." 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 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. Shares of United Online common stock that trade on the "ex-distribution" market will trade under the ticker symbol "UNTDV." You are encouraged

 

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    to consult with your financial advisor regarding the specific implications of selling shares of United Online common stock prior to the distribution date.

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

A:
Yes. As a result of the Separation, the trading price of shares of United Online common stock immediately following the Separation is expected to change from the trading price immediately prior to the Separation because the trading price will no longer reflect the value of the FTD business. Furthermore, until the market has fully analyzed the value of United Online after the Separation of FTD, United Online may experience more stock price volatility than usual. There can be no assurance that, following the Separation, the combined value of the common stock of United Online and the common stock of FTD will equal or exceed what the value of United Online common stock would have been in the absence of the Separation. It is possible that after the Separation, the combined value of the equity of United Online and FTD will be less than the value of the equity of United Online before the distribution. In addition, the Reverse Stock Split is expected to be implemented immediately prior to the distribution and will impact the trading price of shares of United Online common stock.

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 for the provision of certain transition services generally for a period of up to 12 months (subject to an option, at FTD's election, to extend certain services 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. On July 17, 2013, FTD Companies, Inc. entered into a new credit agreement (the "Credit Agreement") by and among FTD Companies, Inc., Interflora, the material wholly-owned domestic subsidiaries of FTD party thereto as guarantors, the financial institutions party thereto from time to time, Bank of America Merrill Lynch and Wells Fargo Securities, LLC, as joint lead arrangers and book managers, and Bank of America, N.A., as administrative agent for the lenders, to refinance the senior secured credit facilities of FTD Group 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 "2011 Credit Agreement"). On July 17, 2013, FTD Companies, Inc. drew $220 million of the new $350 million revolving credit facility and used approximately $19 million of its existing cash balance to repay its previously outstanding credit facilities in full and pay fees and expenses related to the Credit Agreement.

 

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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 and adjustments to reflect the Reverse Stock Split.

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 and, with respect to United Online Options, to reflect the Reverse Stock Split.

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 adjustments to reflect the Reverse Stock Split and, other than such adjustments, 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 and, with respect to United Online shares, to reflect the Reverse Stock Split.

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.

 

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Q:
What will FTD's dividend policy be after the Separation?

A:
We presently intend to retain future earnings, if any, to reinvest in the growth of our businesses and to make interest payments on or pay down our debt and fund potential acquisitions. As a result, we do not currently expect to pay any cash dividends.

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;

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.

 

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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) 724-6984

 

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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 five shares of United Online common stock (prior to giving effect to the Reverse Stock Split that United Online intends to implement immediately prior to the distribution), 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 September     , 2013.


Distribution Date


 


The distribution date is                    , 2013.


Transfer Agent


 


Computershare


Distribution Ratio


 


Each holder of United Online common stock will receive one share of FTD common stock for every five shares of United Online common stock held at the close of business on the record date (prior to giving effect to the Reverse Stock Split that United Online intends to implement immediately prior to the distribution). 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 Prior to the Distribution."

 

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Distribution Procedures

 

Prior to the commencement of trading on NASDAQ 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 the Distribution Date


 


Beginning on or shortly before the record date and continuing up to 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 the distribution date will also be selling the right to receive shares of FTD common stock in the distribution. Shares of United Online common stock that trade on the "regular way" market will trade under the ticker symbol "UNTD." 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 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. Shares of United Online common stock that trade on the "ex-distribution" market will trade under the ticker symbol "UNTDV."



 


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


 


On July 17, 2013, FTD Companies, Inc. entered into the Credit Agreement to refinance the senior secured credit facilities of FTD Group under the 2011 Credit Agreement. On July 17, 2013, FTD Companies, Inc. drew $220 million of the new $350 million revolving credit facility and used approximately $19 million of its existing cash balance to repay its previously outstanding credit facilities in full and pay fees and expenses related to the Credit Agreement.

 

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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. However, any cash payments made instead of fractional shares will generally be taxable to you. United Online received the IRS Ruling from the IRS on September 4, 2013. You should 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 12:01 a.m., Eastern time, 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;

 

we have received the IRS Ruling from the IRS and 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





 

 

 

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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.

 

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.


Dividend Policy


 


We presently intend to retain future earnings, if any, to reinvest in the growth of our businesses and to make interest payments on or pay down our debt and fund potential acquisitions. As a result, we do not currently expect to pay any cash dividends.


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 20.

 

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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