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As filed with the Securities and Exchange Commission on September 30, 2013

File No. 001-35901

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



AMENDMENT NO. 6 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.

3



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 30, 2013

4



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 30, 2013*

*
Filed herewith.

**
Previously filed.

5




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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

October 31, 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

  12

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

  13


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

  15


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

 
23

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

  25

Section 8.8

 

Privileged Matters

  26

Section 8.9

 

Financial Information Certifications

  28


ARTICLE IX


MUTUAL RELEASES; INDEMNIFICATION

Section 9.1

 

Release of Pre-Distribution Claims

 
28

Section 9.2

 

Indemnification by FTD

  30

Section 9.3

 

Indemnification by United Online

  30

Section 9.4

 

Procedures for Indemnification

  31

Section 9.5

 

Indemnification Obligations Net of Insurance Proceeds

  33

Section 9.6

 

Indemnification Obligations Net of Taxes

  33

Section 9.7

 

Contribution

  34

Section 9.8

 

Remedies Cumulative

  34

Section 9.9

 

Survival of Indemnities

  34

Section 9.10

 

Limitation of Liability

  34


ARTICLE X


DISPUTE RESOLUTION

Section 10.1

 

Appointed Representative

 
34

Section 10.2

 

Negotiation and Dispute Resolution

  34

Section 10.3

 

Arbitration

  35


ARTICLE XI


TERMINATION

Section 11.1

 

Termination

 
36

Section 11.2

 

Effect of Termination

  36


ARTICLE XII


MISCELLANEOUS

Section 12.1

 

Further Assurances

 
36

Section 12.2

 

Payment of Expenses

  36

Section 12.3

 

Amendments and Waivers

  37

Section 12.4

 

Late Payments

  37

Section 12.5

 

Entire Agreement

  37

Section 12.6

 

Survival of Agreements

  37

Section 12.7

 

Coordination With Tax Sharing Agreement

  37

Section 12.8

 

Coordination With Employee Matters Agreement

  37

Section 12.9

 

Third Party Beneficiaries

  37

ii


Section 12.10

 

Notices

  38

Section 12.11

 

Counterparts; Electronic Delivery

  38

Section 12.12

 

Severability

  38

Section 12.13

 

Assignability; Binding Effect

  38

Section 12.14

 

Governing Law

  38

Section 12.15

 

Construction

  39

Section 12.16

 

Performance

  39

Section 12.17

 

Title and Headings

  39

Section 12.18

 

Exhibits and Schedules

  39

Exhibits:

       


Exhibit A—FTD Subsidiaries


 

A-1

Exhibit B—United Online Subsidiaries

  B-1

Exhibit C—Shared Scripts

  C-1

iii



SEPARATION AND DISTRIBUTION AGREEMENT

        This SEPARATION AND DISTRIBUTION AGREEMENT (this "Agreement") is entered into as of October 31, 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:

        "Accessing Party" has the meaning set forth in Section 8.7(d).

        "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.

2


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

3


        "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.

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

4


        "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).

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

5


        "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.

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

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        "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.

        "Security Regulations" has the meaning set forth in Section 8.7(d).

        "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.

        "System" has the meaning set forth in Section 8.7(b).

        "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.    Intercompany Accounts outstanding as of September 30, 2013 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, and Intercompany Accounts outstanding as of October 31, 2013 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. 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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ARTICLE III

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

        Section 3.1    SEC and Other Securities Filings.    

        Section 3.2    NASDAQ Listing Application.    

        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.

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        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.

        Section 4.2    Mechanics of the Distribution.    

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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 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.

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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.    

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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:

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        Section 8.7    Confidentiality.    

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        Section 8.8    Privileged Matters.    

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        Section 8.9    Financial Information Certifications.    


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 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):

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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 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 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.

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        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.

        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, the Reverse Stock Split, 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. United Online will pay FTD $50,000 as reimbursement for a portion of the Transaction Expenses related to the Reverse Stock Split. All other transaction expenses shall be borne by the Party incurring such fees, costs and expenses. 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 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. In

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the case of any Transaction Expenses that are billed to United Online rather than any of the FTD Entities, United Online will use its commercially reasonable efforts to provide FTD with invoices relating to amounts payable and accruals or other good faith estimates of such amounts under clauses (i) and (ii) above within 30 days of the Distribution Date.

        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.

37


        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,

38


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]

39


        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

[TO BE ATTACHED]

C-1



Schedule 2.2(b)

Intercompany Agreements



Schedule 2.4(a)

FTD India Assets

Description
  Category   Qty  

Cisco Switch

  Network     1  

  Equipment        

Cisco Switch

  Network Equipment     1  

Polycom Sound Station

  Audio device     1  

Polycom Video Conferencing Unit VSX 7000

  VC Conf Device     1  

Fax Machine

  Fax Machine     1  

HP Mini Printer,Cash Drawer,Thermal Receipt Printer,Swipe Reader, Barcode Scanne

  Printers      

Lexmark E360Dn Printer - 34S0583

  Printers     1  

Printer

  Printers     1  

Lexmark E3 Printer

  Printers     1  

Sun Servers purchased from Sum Micro Systems

  Servers     7  

HP RP 5700- 2 ,MINI USB Swipe Reader-2,APG Multipro Series Cash Drawer- Mu

  Printer and Accessories     2  

Seagate 300GB 10K RPM 2.5" SAS HDD 3 Nos

  Server accessories     3  

SEGATE 300 GB HDD- 5, Hitachi 300 GB HDD-1, 8 GB Memory Stic - 3

  Server accessories     9  

Dell PE 1850 Servers-15 Nos & BigIP-1

  Servers     15  

Desktops and Accessories

  Desktops & Laptops     25  

Projector Infocus

  Projector     1  

Cisco Switches

  Network Equipment     4  

25 Dell Power Edge Servers

  Servers     25  

Dell Power Edge 710 RM Servers 4 Nos

  Servers     2  

Desktops and Accessories

  Desktops & Laptops     10  

2 No.sDell PE Servers

  Servers     2  

Dell Laptops

  Desktops & Laptops     10  

Desktops and Accessories

  Desktops & Laptops     20  

Desktops and Accessories

  Desktops & Laptops     50  

Dell(TM) PowerEdge(TM) R720 Rack Mount Server

  Servers     2  

273685-Apple I Ph

       

273686-Apple I Ph

       

273687-Samsung No

       

273688-Dell PE R2

       

273689-Dell Power

       

EMC Backup hardware

  Server     2  

Racks

  Furniture     6  

Slotted Angle Racks

  Furniture      

Server Racks

  Furniture     2  

Data Center Rack

  Furniture     2  

EMC Storage Hardware

  Server        


Schedule 2.4(b)

FTD India Lease

        Lease Agreement dated September 7, 2012, between Sarwarunnisa Begum and United Online Software Development (India) Private Limited, regarding the property situated at 7th Floor, "B" Block in Babukhans' Millennium Center, Somajiguda, Hyderabad.



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

Workers Compensation

Vehicle Liability

Commercial General Liability

Umbrella Liability

Excess Liability

Ocean Marine

Crime and Excess

Property (U.S. and Canada)

Property (Europe)

Cyber Business Interruption



Schedule 7.1(b)(ii)

Claims Made Policies

Employment Practices Liability
Fiduciary Liability
Primary Cyber Liability
Excess Cyber Liability         



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 (the "Multistate Investigation").




QuickLinks

SEPARATION AND DISTRIBUTION AGREEMENT by and between UNITED ONLINE, INC. and FTD COMPANIES, INC. dated as of October 31, 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 2.4(a) FTD India Assets
Schedule 2.4(b)
FTD India Lease
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

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Exhibit 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

FTD COMPANIES, INC.

        FTD Companies, Inc., a corporation organized and existing under the laws of the State of Delaware, does hereby certify as follows:


ARTICLE I

NAME

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


ARTICLE II

REGISTERED OFFICE AND AGENT

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


ARTICLE III

PURPOSE

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


ARTICLE IV

CAPITAL STOCK

        The total number of shares of capital stock which the Corporation shall have authority to issue is 65,000,000 shares, divided into the following classes:

        60,000,000 shares of Common Stock having a par value of $0.0001 per share (the "Common Stock"); and


        5,000,000 shares of Preferred Stock, having a par value of $0.0001 per share (the "Preferred Stock").

        The board of directors of the Corporation (the "Board of Directors") is expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such series and as may be permitted by the DGCL, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at any time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; (iv) entitled to vote separately or together with any other series or class of stock of the Corporation; or (v) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.


ARTICLE V

MANAGEMENT

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

2


3



ARTICLE VI

MEETINGS OF STOCKHOLDERS

        Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. Special meetings of stockholders, for any purpose or purposes may only be called by the Chairman of the Board of Directors or by a majority of the members of the Board of Directors. Only the business stated in the notice of a special meeting of stockholders of the Corporation may be transacted at any special meeting of stockholders of the Corporation. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws. Any action required or permitted to be taken by the stockholders of the Corporation may only be effected at a duly called annual or special meeting of the stockholders of the Corporation (and not by consent in lieu thereof).


ARTICLE VII

AMENDMENTS

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


ARTICLE VIII

INDEMNIFICATION

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

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

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

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

4



ARTICLE IX

COMPROMISES AND ARRANGEMENTS

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

5


        IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be in its corporate name this 31st day of October, 2013.

    FTD COMPANIES, INC.

 

 

By:

 

  

        Name:    
        Title:    



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AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF FTD COMPANIES, INC.
ARTICLE I NAME
ARTICLE II REGISTERED OFFICE AND AGENT
ARTICLE III PURPOSE
ARTICLE IV CAPITAL STOCK
ARTICLE V MANAGEMENT
ARTICLE VI MEETINGS OF STOCKHOLDERS
ARTICLE VII AMENDMENTS
ARTICLE VIII INDEMNIFICATION
ARTICLE IX COMPROMISES AND ARRANGEMENTS

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Exhibit 10.1

[FORM OF]

TRANSITION SERVICES AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

October 31, 2013



TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.1

 

Certain Definitions

 
1

Section 1.2

 

Interpretation

  3


ARTICLE II

SERVICES

Section 2.1

 

Services

 
3

Section 2.2

 

Additional Services

  4

Section 2.3

 

No Violations

  4

Section 2.4

 

Third-Party Providers

  4

Section 2.5

 

Independent Contractor

  5

Section 2.6

 

Employees and Representatives

  5

Section 2.7

 

Access

  5

Section 2.8

 

Service Coordinators; Disputes

  5


ARTICLE III

PAYMENT

Section 3.1

 

Pricing

 
6

Section 3.2

 

Taxes

  6

Section 3.3

 

Billing and Payment

  6

Section 3.4

 

Estimates

  7


ARTICLE IV

DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

Section 4.1

 

Disclaimer

 
7

Section 4.2

 

As Is; Where Is

  7


ARTICLE V

INDEMNIFICATION; LIMITATION OF LIABILITY

Section 5.1

 

Indemnification by FTD

 
7

Section 5.2

 

Indemnification by United Online

  7

Section 5.3

 

Limitation of Liability

  7

Section 5.4

 

Indemnification Procedure; Other Rights

  8


ARTICLE VI

FORCE MAJEURE

Section 6.1

 

General

 
8

Section 6.2

 

Notice

  8

Section 6.3

 

Subcontractors; Fees

  8

Section 6.4

 

Limitations

  8

       

i



ARTICLE VII

TERM AND TERMINATION

Section 7.1

 

Term of Services

 
9

Section 7.2

 

Term and Termination of Agreement

  9


ARTICLE VIII

CONFIDENTIALITY

Section 8.1

 

Confidentiality

 
9

Section 8.2

 

System Security

  9


ARTICLE IX

MISCELLANEOUS

Section 9.1

 

Further Assurances

 
10

Section 9.2

 

Amendments and Waivers

  10

Section 9.3

 

Entire Agreement

  10

Section 9.4

 

Third-Party Beneficiaries

  11

Section 9.5

 

Notices

  11

Section 9.6

 

Counterparts; Electronic Delivery

  11

Section 9.7

 

Severability

  11

Section 9.8

 

Assignability; Binding Effect

  11

Section 9.9

 

Governing Law

  11

Section 9.10

 

Construction

  11

Section 9.11

 

Performance

  12

Section 9.12

 

Title and Headings

  12

Section 9.13

 

Exhibits

  12


Exhibit A—Services


 

 

ii



TRANSITION SERVICES AGREEMENT

        THIS TRANSITION SERVICES AGREEMENT (as the same may be amended or supplemented from time to time, this "Agreement") is entered into as of October 31, 2013, by and between United Online, Inc., a Delaware corporation ("United Online"), and FTD Companies, Inc., a Delaware corporation ("FTD"). United Online and FTD are sometimes referred to herein individually as a "Party," and collectively as the "Parties."


RECITALS

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

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

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

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

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

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


ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

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

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

1


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        "Services" means the services identified in Exhibit A.

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

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

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

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

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

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

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

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

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

2


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


ARTICLE II

SERVICES

        Section 2.1    Services.    

3


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

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

        Section 2.4    Third-Party Providers.    

4


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

        Section 2.6    Employees and Representatives.    Unless otherwise agreed in writing, each employee and representative of United Online (or a member of the UOL Entities) that provides Services to FTD (or a member of the FTD Entities) pursuant to this Agreement shall (a) be deemed for all purposes to be an employee or representative of United Online (or such member of the UOL Entities) and not an employee or representative of FTD (or such member of the FTD Entities) and (b) be under the direction, control and supervision of United Online (or such member of the UOL Entities), and United Online (or such member of the UOL Entities) shall have the sole right to exercise all authority with respect to the employment (including termination of employment) and assignment of such employee or representative and shall have the sole responsibility to pay for all personnel and other related expenses, including salary or wages, of such employee or representative. For the sake of clarity, United Online (or the applicable member of the UOL Entities) shall have no obligation to ensure that the same individuals who have historically performed particular Services will continue to perform such Services hereunder, and United Online (or the applicable member of the UOL Entities) shall in its sole discretion determine the appropriate individuals to assign to particular Services, including, without limitation, the appropriate level of seniority and supervision required therefor.

        Section 2.7    Access.    FTD shall provide (or cause any applicable member of the FTD Entities to provide) United Online (or any applicable member of the UOL Entities) such reasonable access to the employees, representatives, facilities and books and records of FTD (or such member of the FTD Entities) as United Online (or such member of the UOL Entities) shall reasonably request in order to enable United Online (or such member of the UOL Entities) to provide any Service required under this Agreement. For the sake of clarity, such access will include, without limitation, FTD's providing virtual private network (or VPN) access or establishing active accounts for the applicable employees of the UOL Entities who will be providing Corporate Services (described in Exhibit A). Any member of the UOL Entities receiving access pursuant to this Section 2.7 must conform with the confidentiality and security provisions in Article VIII, as applicable. FTD shall be solely responsible for terminating such access as soon as the applicable Services for which such access was required have ceased or such access is no longer needed in order for the Services to be provided.

        Section 2.8    Service Coordinators; Disputes.    Each Party shall appoint a representative to act as the primary contact with respect to the provision of the Services (each such person, a "Service Coordinator"). The initial Service Coordinator for FTD shall be Scott D. Levin, and the initial Service Coordinator for United Online shall be Charles B. Ammann. The Service Coordinators shall meet as expeditiously as possible to resolve any dispute under this Agreement (including, but not limited to, any disputes relating to payments under Article III), and any dispute that is not resolved by the Service

5


Coordinators within thirty (30) calendar days shall be deemed an Agreement Dispute under the Separation Agreement and shall be resolved in accordance with the dispute resolution procedures set forth in Article X of the Separation Agreement. Each Party may treat an act of the other Party's Service Coordinator as being authorized by such other Party without inquiring whether such Service Coordinator had authority to so act; provided that no Service Coordinator shall have authority to amend this Agreement. Each Party shall advise the other Party promptly in writing of any change in its respective Service Coordinator, setting forth the name of the replacement Service Coordinator, and stating that the replacement Service Coordinator is authorized to act for such Party in accordance with this Section 2.8.


ARTICLE III

PAYMENT

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

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

        Section 3.3    Billing and Payment.    

6


        Section 3.4    Estimates.    Upon reasonable request, each Party will cooperate with the other Party with respect to providing a good faith estimate of Service Costs for the following quarter (and in the case of SOX Assistance Services and Payroll Processing Services, for the 2014 fiscal year) based on the level of Services then requested (it being understood, however, that any such estimate shall not be deemed to establish a limitation on the maximum amount of Service Costs that may be billed for the applicable Services).


ARTICLE IV

DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

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

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


ARTICLE V

INDEMNIFICATION; LIMITATION OF LIABILITY

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

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

        Section 5.3    Limitation of Liability.    

7


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


ARTICLE VI

FORCE MAJEURE

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

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

        Section 6.3    Subcontractors; Fees.    FTD shall have the right, but not the obligation, to hire or engage one or more subcontractors to perform the Services affected by the disability for the duration of the period during which such disability delays or prevents the performance of such Services by United Online.

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

8



ARTICLE VII

TERM AND TERMINATION

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

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


ARTICLE VIII

CONFIDENTIALITY

        Section 8.1    Confidentiality.    Each Party agrees that the specific terms and conditions of this Agreement and any information conveyed or otherwise received by or on behalf of a Party in conjunction herewith shall be Confidential Information subject to the confidentiality provisions (and exceptions thereto) set forth in Section 8.7 of the Separation Agreement.

        Section 8.2    System Security.    

9



ARTICLE IX

MISCELLANEOUS

        Section 9.1    Further Assurances.    Subject to the limitations or other provisions of this Agreement, (a) each Party shall, and shall cause the other members of its Group to, use commercially reasonable efforts (subject to, and in accordance with applicable Law) to take promptly, or cause to be taken promptly, all actions, and to do promptly, or cause to be done promptly, and to assist and cooperate with the other Party in doing, all things reasonably necessary, proper or advisable to carry out the intent and purposes of this Agreement, including using commercially reasonable efforts to perform all covenants and agreements herein applicable to such Party or any member of its Group and (b) neither Party will, nor will either Party allow any other member of its Group to, without the prior written consent of the other Party, take any action which would reasonably be expected to prevent or materially impede, interfere with or delay the provision of any Services hereunder during the Term. Without limiting the generality of the foregoing, where the cooperation of third parties would be necessary in order for a Party to completely fulfill its obligations under this Agreement, such Party shall use commercially reasonable efforts to cause such third parties to provide such cooperation.

        Section 9.2    Amendments and Waivers.    

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

10


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

        Section 9.5    Notices.    All notices, requests, permissions, waivers and other communications hereunder shall be provided in accordance with the provisions of Section 12.10 of the Separation Agreement.

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

        Section 9.7    Severability.    If any term or other provision of this Agreement or the Exhibits attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

        Section 9.8    Assignability; Binding Effect.    Except as otherwise expressly provided in this Agreement, neither Party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, and any attempt to assign this Agreement without such consent shall be void and of no effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

        Section 9.9    Governing Law.    This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Delaware, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction.

        Section 9.10    Construction.    This Agreement shall be construed as if jointly drafted by the Parties, and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have relied upon their own knowledge and judgment and upon the advice of the attorneys of their choosing. The Parties have had access to independent legal advice, have conducted such investigations they and their counsel thought appropriate, and have consulted with such other independent advisors as they and their counsel deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by the other Party, or such other Party's employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if one exists, on the part of the other Party (or such other Party's employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement.

11


        Section 9.11    Performance.    Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party.

        Section 9.12    Title and Headings.    Titles and headings to Sections and Articles are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

        Section 9.13    Exhibits.    The Exhibits attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

[Signature Page Follows]

12


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

    UNITED ONLINE, INC.

 

 

By:

 

 

Name:
Title:

 

 

FTD COMPANIES, INC.

 

 

By:

 

  

Name:
Title:

[Signature Page to Transition Services Agreement]

13



EXHIBIT A

UNITED ONLINE SERVICES

A-1




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

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Exhibit 10.2

[FORM OF]

EMPLOYEE MATTERS AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

October 31, 2013



TABLE OF CONTENTS

ARTICLE I


DEFINITIONS AND INTERPRETATION

Section 1.1

 

Definitions

 
1


ARTICLE II


GENERAL PRINCIPLES

Section 2.1

 

Assumption and Retention of Liabilities; Related Assets

 
4

Section 2.2

 

Participation in Benefit Plans

  5

Section 2.3

 

Assumption of Certain Benefit Plans

  5

Section 2.4

 

Service Recognition

  5

Section 2.5

 

Approval by United Online As Sole Stockholder

  5

Section 2.6

 

Transfer of Assets

  6


ARTICLE III


U.S. QUALIFIED DEFINED CONTRIBUTION PLANS

Section 3.1

 

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

 
6

Section 3.2

 

Contributions as of the Distribution Date

  6


ARTICLE IV


U.S. HEALTH AND WELFARE PLANS

Section 4.1

 

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

 
6

Section 4.2

 

Time-Off Benefits

  8


ARTICLE V


EMPLOYEE STOCK PURCHASE PLAN

Section 5.1

 

Effect of Distribution on UOL ESPP

 
8

Section 5.2

 

Establishment of FTD Employee Stock Purchase Plan

   


ARTICLE VI


EFFECT ON UOL EQUITY AWARDS

Section 6.1

 

Stock Options

 
8

Section 6.2

 

Time-Based Restricted Stock Units

  10


ARTICLE VII


ADDITIONAL COMPENSATION MATTERS; SEVERANCE

Section 7.1

 

Annual Incentive Awards

 
11

Section 7.2

 

Individual Arrangements

  11

Section 7.3

 

Severance Plans

  12

Section 7.4

 

Sections 162(m)/409A

  12

Section 7.5

 

Certain Director Fees

  12


ARTICLE VIII


GENERAL AND ADMINISTRATIVE

Section 8.1

 

Employer Rights

 
12

Section 8.2

 

No Rights to Employment

  12

Section 8.3

 

Continuation of Elections/Release Of Information/Right To Reimbursement

  13


ARTICLE IX


INDEMNIFICATION

Section 9.1

 

General Indemnification

 
13


ARTICLE X


MISCELLANEOUS

Section 10.1

 

Further Assurances

 
13

Section 10.2

 

Amendments and Waivers

  13

Section 10.3

 

Entire Agreement

  13

Section 10.4

 

Third Party Beneficiaries

  14

Section 10.5

 

Notices

  14

Section 10.6

 

Counterparts; Electronic Delivery

  14

Section 10.7

 

Titles and Headings

  14

Section 10.8

 

Severability

  14

Section 10.9

 

Assignability; Binding Effect

  14

Section 10.10

 

Governing Law

  14

Section 10.11

 

Construction

  14

Section 10.12

 

Performance

  15

Section 10.13

 

Title and Headings

   

Section 10.14

 

Schedules

  15


EMPLOYEE MATTERS AGREEMENT

        THIS EMPLOYEE MATTERS AGREEMENT (as the same may be amended or supplemented from time to time, this "Agreement") is entered into as of October 31, 2013, by and between United Online, Inc., a Delaware corporation ("United Online"), and FTD Companies, Inc., a Delaware corporation ("FTD"). United Online and FTD are sometimes referred to herein individually as a "Party," and collectively as the "Parties."


RECITALS

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

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

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

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


ARTICLE I

DEFINITIONS AND INTERPRETATION

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        "FTD Participant" means any individual who is a FTD Employee, a Former FTD Employee, a member of the FTD Board of Directors (including any member of the FTD Board of Directors who also continues as a member of the UOL Board of Directors on and following the Distribution Date) or a beneficiary, dependent or alternate payee of any of the foregoing.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        "UOL ESPP" means the United Online, Inc. 2010 Employee Stock Purchase Plan.

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

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

        "UOL Participant" means any individual who is a UOL Employee, a Former UOL Employee, a member of the UOL Board of Directors (whether or not any such Board member continues as a

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member of the FTD Board of Directors on and following the Distribution Date) or a beneficiary, dependent or alternate payee of any of the foregoing.

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

        "UOL Pre-Separation Stock Price' means the volume weighted average price of a share of UOL Common Stock trading on NASDAQ over the three trading days immediately preceding the Distribution Date.

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

        "UOL Severance Plan" means the United Online, Inc. Severance Benefit Plan.

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

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

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

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

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


ARTICLE II

GENERAL PRINCIPLES

        Section 2.1    Assumption and Retention of Liabilities; Related Assets.    

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

        (b)   As of the Distribution Date, except as otherwise expressly provided for in this Agreement, FTD shall, or shall cause one or more members of the FTD Entities to, assume or retain, as applicable, and FTD hereby agrees to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all FTD Benefit Plans, (ii) all Liabilities with respect to the employment, service, workers compensation, termination of employment or termination of service of all FTD Employees and

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Former FTD Employees and their dependents and beneficiaries (and any alternate payees in respect thereof) and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker of any member of the FTD Entities or in any other employment, non-employment, or retainer arrangement, or relationship with any member of the FTD Entities or whose employment or service is or was otherwise primarily associated with the FTD Businesses), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the UOL Entities or FTD Entities, including but not limited to any corrective contributions to the UOL 401(k) Plan or other payments, in either case which may be due or relate to FTD Employees and Former FTD Employees based on the resolution of any IRS Voluntary Correction Program submission with respect to the UOL 401(k) Plan and (iii) any other Liabilities or obligations expressly assigned to any of the FTD Entities under this Agreement. The Liabilities assumed or retained by the FTD Entities as provided for in this Section 2.1(b) shall be FTD Liabilities for all purposes of the Separation Agreement.

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

        Section 2.3    Assumption of Certain Benefit Plans.    

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

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

        Section 2.4    Service Recognition.    

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

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

        Section 2.5    Approval of FTD Stock Plan by United Online As Sole Stockholder.    Prior to the Distribution Date, FTD shall adopt the FTD Companies, Inc. 2013 Incentive Compensation Plan (the "FTD Stock Plan"). Prior to the Distribution, United Online, as FTD's sole shareholder, shall approve the FTD Stock Plan.

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


ARTICLE III

U.S. QUALIFIED DEFINED CONTRIBUTION PLANS

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

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

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

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

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


ARTICLE IV

U.S. HEALTH AND WELFARE PLANS

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

        (a)    Establishment of the FTD Welfare Plans.    One or more members of the UOL Entities maintain the UOL Welfare Plans for the benefit of eligible UOL Participants and FTD Participants. Prior to and effective as of the Distribution Date, FTD shall, or shall cause a member of the FTD Entities to, adopt, for the benefit of eligible FTD Participants, health and welfare plans, the terms of which are substantially comparable, in the aggregate, to the terms of the UOL Welfare Plans as in effect immediately prior to the Distribution Date (collectively, the "FTD Welfare Plans").

        (b)    Terms of Participation in FTD Welfare Plans.    FTD shall cause the FTD Welfare Plans to (i) waive all preexisting conditions limitations, exclusions, and service conditions with respect to

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

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

        (d)    Liabilities.    

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


ARTICLE V

EMPLOYEE STOCK PURCHASE PLAN

        Section 5.1    Effect of Distribution on UOL ESPP.    Pursuant to the terms of the UOL ESPP, each outstanding purchase right shall automatically be exercised on October 31, 2013 by applying the payroll deductions or other permitted contributions of each participant thereunder to the purchase of shares of UOL Common Stock at the purchase price per share in effect for that purchase interval. However, the applicable limitation on the number of shares of UOL Common Stock purchasable per participant shall continue to apply to any such purchase, but not the limitation applicable to the maximum number of shares of UOL Common Stock purchasable in total by all participants thereunder. The purchase rights under the UOL ESPP will be subject to the adjustments set forth in Section 6.1(a) below.


ARTICLE VI

EFFECT ON UOL EQUITY AWARDS

        Section 6.1    Stock Options.    

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

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

        (c)   Each option to purchase UOL Common Stock granted under the UOL Stock Plans that is outstanding immediately prior to the Distribution Date and that is held by Mark R. Goldston or by a Participant who is a non-employee member of the UOL Board of Directors shall, effective as of immediately prior to the opening of market on the Distribution Date, be assumed and converted into (i) in the case of one-half of such options, Post-Distribution UOL Options; and (ii) in the case of the remaining one-half of such options, FTD Options, in each case utilizing the adjustment mechanisms set forth in Section 6.1(a) and Section 6.1(b) above so that the total aggregate spread value of the UOL Options, on the one hand, and the sum of the total aggregate spread value of the Post-Distribution UOL Options and the FTD Options, on the other, is equivalent. The division of the UOL Options as set forth above in this subsection (c) shall be done on a grant-by-grant basis based on the number of shares underlying each grant of UOL Options. Upon the exercise of (or FTD's receipt of notice of the intent to exercise) an FTD Option by Mark R. Goldston, FTD shall promptly notify United Online and shall promptly provide documentation and other information necessary to permit United Online to duly and timely prepare and file all Tax Returns (including IRS and other information returns) and duly and timely remit to each Tax Authority any payroll, withholding or other payments due in connection with such exercise. In addition, FTD shall timely pay United Online an amount equal to the applicable income and employment tax withholding due in connection with such exercise. Upon the exercise of (or FTD's receipt of notice of the intent to exercise) an FTD Option by a member of the UOL Board of Directors, FTD shall promptly notify United Online and shall promptly provide documentation and other information necessary to permit United Online to prepare and file all Tax Returns (including IRS and other information returns) in connection with such exercise. Any terms used in this Section 6.1(c) and not defined herein shall have the meaning set forth in the Tax Sharing Agreement between the parties hereto, dated as of October 31, 2013.

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        Section 6.2    Time-Based Restricted Stock Units.    

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

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

        (c)   Each United Online restricted stock unit award granted under the UOL Stock Plans that is outstanding immediately prior to the Distribution Date and that is held by Mark R. Goldston or by a Participant who is a non-employee member of the UOL Board of Directors shall, effective as of immediately prior to the opening of market on the Distribution Date, immediately vest and be settled (i) in the case of one-half of such restricted stock unit awards, UOL Common Stock; and (ii) in the

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case of the remaining one-half of such restricted stock unit awards, FTD Common Stock, in each case utilizing the adjustment mechanisms set forth in Section 6.2(a)(i) and Section 6.2(b)(i) above so that the total aggregate value of the United Online restricted stock unit awards, on the one hand, and the aggregate value of the shares of UOL Common Stock and FTD Common Stock, on the other, is equivalent. The division of the United Online restricted stock unit awards as set forth above in this subsection (c) shall be done on a grant-by-grant basis based on the number of shares underlying each grant of United Online restricted stock units.

        (d)   All of the foregoing adjustments shall be effected in accordance with Sections 424 and 409A of the Code. In no event shall the adjustments set forth in this Section 6.2 serve to provide additional benefits to a holder of restricted stock unit awards beyond what such holder would have received had he or she been the holder of the number of shares of UOL Common Stock equal to the number of such holder's restricted stock units.

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


ARTICLE VII

ADDITIONAL COMPENSATION MATTERS; SEVERANCE

        Section 7.1    Annual Incentive Awards.    

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

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

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

        Section 7.2    Individual Arrangements.    

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

        (b)    FTD Individual Arrangements.    Except as otherwise provided herein, FTD shall assume or retain, as applicable, and shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to, any employment, change in control,

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consulting, non-competition, retention or other compensatory arrangement previously entered into or provided by any member of the UOL Entities or FTD Entities to any FTD Participant (the "FTD Participant Agreements"). Effective as of the Distribution Date, United Online shall take all steps necessary to assign to FTD, and FTD shall take all steps necessary to assume, all Liabilities in respect of the FTD Participant Agreements.

        Section 7.3    Severance Plans.    

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

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

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

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


ARTICLE VIII

GENERAL AND ADMINISTRATIVE

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

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

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


ARTICLE IX

INDEMNIFICATION

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


ARTICLE X

MISCELLANEOUS

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

        Section 10.2    Amendments and Waivers.    

        (a)   Subject to Section 11.1 of the Separation Agreement, this Agreement may not be amended except by an agreement in writing signed by both Parties.

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

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

13


written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof.

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

        Section 10.5    Notices.    All notices, requests, permissions, waivers and other communications hereunder shall be provided in accordance with the provisions of Section 12.10 of the Separation Agreement.

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

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

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

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

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

        Section 10.11    Construction.    This Agreement shall be construed as if jointly drafted by the Parties, and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have relied upon their own knowledge and judgment and upon the advice of the attorneys of their choosing. The Parties have had access to independent legal advice, have conducted such investigations they and their counsel thought appropriate, and have consulted with such other independent advisors as they and their counsel deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by the other Party, or such other Party's employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if

14


one exists, on the part of the other Party (or such other Party's employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement.

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

        Section 10.13    Schedules.    The Schedules attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

[Signature Page Follows]

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


 

 

UNITED ONLINE, INC.

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    

 

 

FTD COMPANIES, INC.

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    

        [Signature Page to Employee Matters Agreement]



SCHEDULE A

UOL WELFARE PLANS

MEDICAL

Aetna Select EPO
Aetna Choice POS II Basic
Aetna Choice POS II Plus
Exec—U—Care Plan

DENTAL

Aetna DMO
Aetna PPO Basic
Aetna PPO Plus
Aetna Employee Assistance Program

VISION

VSP

LIFE & AD&D INSURANCE

MetLife Life Insurance
MetLife AD&D Insurance
MetLife Supplemental Life Insurance

SHORT- & LONG TERM DISABILITY

MetLife Short-Term Disability
MetLife Long-Term Disability

FLEXIBLE SPENDING ACCOUNTS

Medical Flexible Spending Account
Dependent Flexible Spending Account

VOLUNTARY BENEFITS

Long Term Care Insurance
Accident Insurance
Whole Life Insurance
Critical Illness Insurance




QuickLinks

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

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.3

[FORM OF]

TAX SHARING AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

October 31, 2013


TABLE OF CONTENTS

 
   
  Page

Article I DEFINITIONS

  1

Article II PREPARATION AND FILING OF TAX RETURNS

 
5

Section 2.1

 

United Online's Responsibility

 
5

Section 2.2

 

FTD's Responsibility

  5

Section 2.3

 

Agent

  6

Section 2.4

 

Manner of Tax Return Preparation

  6

Section 2.5

 

Tax Services

  6

Article III LIABILITY FOR TAXES

 
6

Section 3.1

 

United Online's Liability

 
6

Section 3.2

 

FTD's Liability

  6

Section 3.3

 

Subsequent Adjustments

  7

Section 3.4

 

Determination of Taxes Attributable to the FTD Business

  7

Article IV DISTRIBUTION TAXES AND ALLOCATION

 
7

Section 4.1

 

Distribution Taxes

 
7

Section 4.2

 

Private Letter Rulings; Tax Opinion

  8

Section 4.3

 

Carrybacks

  9

Section 4.4

 

Allocation of Tax Assets

  10

Section 4.5

 

Allocation of Certain Tax Items

  10

Section 4.6

 

Tax Treatment of Equity-Related Compensation

  10

Article V INDEMNIFICATION

 
11

Section 5.1

 

Generally

 
11

Section 5.2

 

Inaccurate, Incomplete or Untimely Information

  11

Section 5.3

 

Adjustments to Payments

  11

Section 5.4

 

Reporting of Indemnifiable Loss

  12

Section 5.5

 

No Indemnification for Tax Items

  12

Section 5.6

 

Double Recovery

  12

Article VI PAYMENTS

 
12

Section 6.1

 

In General

 
12

Section 6.2

 

Treatment of Payments

  13

Section 6.3

 

Prompt Performance

  13

Section 6.4

 

After Tax Amounts

  13

Section 6.5

 

Interest

  13

Article VII TAX PROCEEDINGS

 
13

Section 7.1

 

Audits

 
13

Section 7.2

 

Notice

  14

Section 7.3

 

Remedies

  14

Section 7.4

 

Control of Distribution Tax Proceedings

  14

Article VIII MISCELLANEOUS PROVISIONS

 
15

Section 8.1

 

Effectiveness

 
15

Section 8.2

 

Cooperation and Exchange of Information

  15

Section 8.3

 

Dispute Resolution

  16

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  Page

Section 8.4

 

Changes in Law

  16

Section 8.5

 

Confidentiality

  16

Section 8.6

 

Affiliates

  16

Section 8.7

 

Authority

  17

Section 8.8

 

Setoff

  17

Section 8.9

 

Amendments and Waivers

  17

Section 8.10

 

Entire Agreement

  17

Section 8.11

 

Third-Party Beneficiaries

  17

Section 8.12

 

Notices

  18

Section 8.13

 

Counterparts; Electronic Delivery

  18

Section 8.14

 

Severability

  18

Section 8.15

 

Assignability; Binding Effect

  18

Section 8.16

 

Governing Law

  18

Section 8.17

 

Construction

  18

Section 8.18

 

Titles and Headings

  19

Section 8.19

 

Coordination with Employee Matters Agreement

  19

Section 8.20

 

Conflict or Inconsistency Between Agreements

  19

ii



TAX SHARING AGREEMENT

        THIS TAX SHARING AGREEMENT (as the same may be amended or supplemented from time to time, this "Agreement") is entered into as of October 31, 2013, by and between United Online, Inc., a Delaware corporation ("United Online"), and FTD Companies, Inc., a Delaware corporation ("FTD"). United Online and FTD are sometimes referred to herein individually as a "Party," and collectively as the "Parties." Capitalized terms used herein and not otherwise defined have the respective meanings set forth in Article I.


RECITALS

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

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

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

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

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

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

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

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


ARTICLE I

DEFINITIONS

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

        "Agreement" means this Tax Sharing Agreement.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2


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

        "FTD Group" means FTD and each FTD Affiliate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3


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

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

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

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

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

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

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

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

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

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

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

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

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

4


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

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

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

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

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

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

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

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

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

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

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

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

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


ARTICLE II

PREPARATION AND FILING OF TAX RETURNS

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

        (a)   all Consolidated Returns;

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

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

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

5


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

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

        Section 2.5    Tax Services.    


ARTICLE III

LIABILITY FOR TAXES

        Section 3.1    United Online's Liability.    

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

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

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

        Section 3.4    Determination of Taxes Attributable to the FTD Business.    


ARTICLE IV

DISTRIBUTION TAXES AND ALLOCATION

        Section 4.1    Distribution Taxes.    

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        Section 4.2    Private Letter Rulings; Tax Opinion.    

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        Section 4.3    Carrybacks.    

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        Section 4.4    Allocation of Tax Assets.    

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

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

        Section 4.5    Allocation of Certain Tax Items.    

        Section 4.6    Tax Treatment of Equity-Related Compensation.    

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

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

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

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


ARTICLE V

INDEMNIFICATION

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

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

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

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

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

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

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


ARTICLE VI

PAYMENTS

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

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

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

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

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

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


ARTICLE VII

TAX PROCEEDINGS

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

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

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

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

        Section 7.4    Control of Distribution Tax Proceedings.    

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

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

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

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


ARTICLE VIII

MISCELLANEOUS PROVISIONS

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

        Section 8.2    Cooperation and Exchange of Information.    

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

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

        Section 8.4    Changes in Law.    

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

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

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

        Section 8.6    Affiliates.    

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

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

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

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

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

        Section 8.9    Amendments and Waivers.    

        (a)   Subject to Section 11.1 of the Separation Agreement, this Agreement may not be amended except by an agreement in writing signed by both Parties.

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

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

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

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

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

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

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

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

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

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

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

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

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

[Signature Page Follows]

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

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

 

 

By:

 

  

        Name:
        Title:

 

 

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

 

 

By:

 

 

        Name:
        Title:



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

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Exhibit 10.5

FTD COMPANIES, INC.
2013 INCENTIVE COMPENSATION PLAN


ARTICLE ONE

GENERAL PROVISIONS

I.     PURPOSE OF THE PLAN

        The Plan is intended to promote the interests of FTD Companies, Inc., a Delaware corporation, by providing eligible persons in the Corporation's service with the opportunity to participate in one or more cash or equity incentive compensation programs designed to encourage them to continue their service relationship with the Corporation.

        Capitalized terms shall have the meanings assigned to such terms in the attached Appendix.

II.    STRUCTURE OF THE PLAN

        A.    The Plan shall be divided into a series of separate incentive compensation programs:

        B.    The provisions of Articles One and Five shall apply to all incentive compensation programs under the Plan and shall govern the interests of all persons under the Plan.

III.  ADMINISTRATION OF THE PLAN

        A.    The Compensation Committee (whether acting directly or through a subcommittee of two or more members thereof) shall have sole and exclusive authority to administer the Discretionary Grant, Stock Issuance and Incentive Bonus Programs with respect to Section 16 Insiders. Administration of the Discretionary Grant, Stock Issuance and Incentive Bonus Programs with respect to all other persons eligible to participate in those programs may, at the Board's discretion, be vested in the Compensation Committee or a Secondary Board Committee, or the Board may retain the power to administer those programs with respect to all such persons. All Awards to non-employee Board members shall be made by the Board on the basis of the recommendations of the Compensation Committee or by the Compensation Committee (or subcommittee thereof) which shall at the time of any such Award be comprised solely of two or more independent Board members, as determined in accordance with the independence standards established by the Stock Exchange on which the Common Stock is at the time primarily traded.

        B.    Members of the Compensation Committee or any Secondary Board Committee shall serve for such period of time as the Board may determine and may be removed by the Board at any time. The


Board may also at any time terminate the functions of any Secondary Board Committee and reassume all powers and authority previously delegated to such committee.

        C.    Each Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary Grant, Stock Issuance and Incentive Bonus Programs and to make such determinations under, and issue such interpretations of, the provisions of those programs and any outstanding Awards thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Grant, Stock Issuance and Incentive Bonus Programs under its jurisdiction or any Award thereunder.

        D.    Service as a Plan Administrator by the members of the Compensation Committee or the Secondary Board Committee shall constitute service as Board members, and the members of each such committee shall accordingly be entitled to full indemnification and reimbursement as Board members for their service on such committee. No member of the Compensation Committee or the Secondary Board Committee shall be liable for any act or omission made in good faith with respect to the Plan or any Award thereunder.

IV.    ELIGIBILITY

        A.    The persons eligible to participate in the Plan are as follows:

        B.    The Plan Administrator shall have full authority to determine, (i) with respect to Awards made under the Discretionary Grant Program, which eligible persons are to receive such Awards, the time or times when those Awards are to be made, the number of shares to be covered by each such Award, the time or times when the Award is to become exercisable, the vesting schedule (if any) applicable to the Award, the maximum term for which such Award is to remain outstanding and the status of a granted option as either an Incentive Option or a Non-Statutory Option; (ii) with respect to Awards under the Stock Issuance Program, which eligible persons are to receive such Awards, the time or times when the Awards are to be made, the number of shares subject to each such Award, the vesting and issuance schedules applicable to the shares which are the subject of such Award, the cash consideration (if any) payable for those shares and the form (cash or shares of Common Stock) in which the Award is to be settled; and (iii) with respect to Awards under the Incentive Bonus Program, which eligible persons are to receive such Awards, the time or times when the Awards are to be made, the performance objectives for each such Award, the amounts payable at designated levels of attained performance, any applicable service vesting requirements, the payout schedule for each such Award and the form (cash or shares of Common Stock) in which the Award is to be settled.

        C.    The Plan Administrator shall have the absolute discretion to grant options or stock appreciation rights in accordance with the Discretionary Grant Program, to effect stock issuances and other stock-based awards in accordance with the Stock Issuance Program and to grant incentive bonus awards in accordance with the Incentive Bonus Program.

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V.     STOCK SUBJECT TO THE PLAN; NUMBER OF SHARES; SHARE COUNTING

        A.    Authorized Number of Shares.    Subject to adjustment under Section V.E. of this Article One, Awards may be made under the Plan on or after the Plan Effective Date for up to 6,000,000 shares of Common Stock. Shares of Common Stock issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

        B.    Share Counting.    If any shares of Common Stock subject to an Award are forfeited, an Award expires or an Award is settled for cash (in whole or in part), or, then in each such case the shares of Common Stock subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for Awards under the Plan. In the event that withholding tax liabilities arising from an Award other than an option or stock appreciation right are satisfied by the tendering of shares of Common Stock (either actually or by attestation) or by the withholding of shares of Common Stock by the Corporation, the shares of Common Stock so tendered or withheld shall again be available for Awards under the Plan. Notwithstanding anything to the contrary contained herein, the following shares of Common Stock shall not be added to the shares of Common Stock authorized for grant under the Plan: (i) shares of Common Stock tendered by the Participant or withheld by the Corporation in payment of the purchase price of an option under the Plan; (ii) shares of Common Stock tendered by the Participant or withheld by the Corporation to satisfy any tax withholding obligation with respect to options or stock appreciation rights under the Plan; (iii) shares of Common Stock subject to a stock appreciation right under the Plan that are not issued in connection with its stock settlement on exercise thereof; and (iv) shares of Common Stock reacquired by the Corporation on the open market or otherwise using cash proceeds from the exercise of options under the Plan.

        C.    Incentive Stock Option Limit.    The maximum number of shares of Common Stock which may be issued pursuant to Incentive Options granted under the Plan shall not exceed 6,000,000 shares in the aggregate, subject to adjustment from time to time under Section V.E of this Article One.

        D.    Per Person Limits.    Each person participating in the Plan shall be subject to the following limitations:

        E.    Adjustments.    In the event of any merger, reorganization, consolidation, stock split, reverse stock split, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), recapitalization, combination of shares, exchange of shares, spin-off transaction, or other change affecting the Common Stock or the value thereof (including, without limitation, a Change in Control transaction), then equitable adjustments shall be made by the Plan Administrator to the Plan and to Awards in such manner as the Plan Administrator deems equitable or appropriate taking into consideration the accounting and tax consequences, including such adjustments in (i) the maximum

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number and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of securities that may be issued under the Plan pursuant to Incentive Options, (iii) the maximum number and/or class of securities for which any one person may be granted Common Stock-denominated Awards under the Discretionary Grant Program or under the Stock Issuance and Incentive Bonus Programs per calendar year, (iv) the number and/or class of securities and the exercise or base price per share in effect under each outstanding Award under the Discretionary Grant Program (including, if the Plan Administrator deems appropriate, the substitution of similar options to purchase the shares of, or other awards denominated in the shares of, another company), (v) the number and/or class of securities subject to each outstanding Award under the Stock Issuance Program and the cash consideration (if any) payable per share, (vi) the number and/or class of securities subject to each outstanding Award under the Incentive Bonus Program denominated in shares of Common Stock and (vii) the number and/or class of securities subject to the Corporation's outstanding repurchase rights under the Plan and the repurchase price payable per share. Any such adjustments shall be final, binding and conclusive.

        F.    No Effect on Certain Rights of Corporation.    Outstanding Awards granted pursuant to the Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.


ARTICLE TWO

DISCRETIONARY GRANT PROGRAM

I.     OPTION TERMS

        Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options.

        A.    Exercise Price.    

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        B.    Exercise and Term of Options.    

        C.    Effect of Termination of Service.    

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        D.    Stockholder Rights.    The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become a holder of record of the purchased shares.

        E.    Repurchase Rights.    The Plan Administrator shall have the discretion to grant options which are exercisable for unvested shares of Common Stock. Should the Optionee cease Service while such shares are unvested, the Corporation shall have the right to repurchase any or all of those unvested shares at a price per share equal to the lower of (i) the exercise price paid per share or (ii) the Fair Market Value per share of Common Stock at the time of repurchase. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right.

        F.    Transferability of Options.    The transferability of options granted under the Plan shall be governed by the following provisions:

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II.    INCENTIVE OPTIONS

        The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and Six shall be applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options when issued under the Plan shall not be subject to the terms of this Section II.

        A.    Eligibility.    Incentive Options may only be granted to Employees.

        B.    Dollar Limitation.    The aggregate Fair Market Value of the shares of Common Stock (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000).

        To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, then for purposes of the foregoing limitations on the exercisability of those options as Incentive Options, such options shall be deemed to become first exercisable in that calendar year on the basis of the chronological order in which they were granted, except to the extent otherwise provided under applicable law or regulation.

        C.    10% Stockholder.    If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant date, and the option term shall not exceed five (5) years measured from the option grant date.

III.  STOCK APPRECIATION RIGHTS

        A.    Authority.    The Plan Administrator shall have full power and authority, exercisable in its sole discretion, to grant stock appreciation rights in accordance with this Section III to selected Optionees or other individuals eligible to receive option grants under the Discretionary Grant Program.

        B.    Types.    Two types of stock appreciation rights shall be authorized for issuance under this Section III: (i) tandem stock appreciation rights ("Tandem Rights") and (ii) stand-alone stock appreciation rights ("Stand-alone Rights").

        C.    Tandem Rights.    The following terms and conditions shall govern the grant and exercise of Tandem Rights.

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        D.    Stand-Alone Rights.    The following terms and conditions shall govern the grant and exercise of Stand-alone Rights:

        E.    Post-Service Exercise.    The provisions governing the exercise of Tandem and Stand-alone Rights following the cessation of the recipient's Service shall be substantially the same as those set forth in Section I.C.1 of this Article Two for the options granted under the Discretionary Grant Program, and the Plan Administrator's discretionary authority under Section I.C.2 of this Article Two shall also extend to any outstanding Tandem or Stand-alone Appreciation Rights.

IV.    CHANGE IN CONTROL

        A.    In the event of an actual Change in Control transaction, each outstanding Award under the Discretionary Grant Program may be (i) assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction

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or (ii) replaced with a cash incentive program of the successor corporation which preserves the spread existing at the time of the Change in Control on any shares as to which the Award is not otherwise at that time exercisable and provides for the subsequent vesting and concurrent payment of that spread in accordance with the same exercise/vesting schedule in effect for that Award, but only if such replacement cash program would not result in the treatment of the Award as an item of deferred compensation subject to Code Section 409A. However, to the extent the Award is not to be so assumed, continued or replaced, that Award shall, immediately prior to the effective date of the Change in Control transaction, become exercisable as to all the shares of Common Stock at the time subject to that Award and may be exercised as to any or all of those shares as fully vested shares of Common Stock, except to the extent the acceleration of such Award is subject to other limitations imposed by the Plan Administrator or the underlying Award Agreement provides otherwise. Notwithstanding the foregoing, any Award outstanding under the Discretionary Grant Program on the date of such Change in Control shall be subject to cancellation and termination, without cash payment or other consideration due the Award holder, if the Fair Market Value per share of Common Stock on such date of the Change in Control (or any earlier date specified in the definitive agreement for the Change in Control transaction) is less than the per share exercise or base price in effect for such Award.

        B.    All repurchase rights outstanding under the Discretionary Grant Program shall automatically terminate, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, immediately prior to the effective date of an actual Change in Control transaction, except to the extent: (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) or are otherwise to continue in full force and effect pursuant to the terms of the Change in Control transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator or the underlying Award Agreement provides otherwise.

        C.    Immediately following the consummation of the Change in Control, all outstanding Awards under the Discretionary Grant Program shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction.

        D.    Each Award under the Discretionary Grant Program that is assumed in connection with a Change in Control or otherwise continued in effect shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities into which the shares of Common Stock subject to that Award would have been converted in consummation of such Change in Control had those shares actually been outstanding at that time. Appropriate adjustments to reflect such Change in Control shall also be made to the exercise or base price per share in effect under each outstanding Award, provided the aggregate exercise or base price in effect for such securities shall remain the same. To the extent the actual holders of the Corporation's outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation may, in connection with the assumption or continuation of the outstanding Awards under the Discretionary Grant Program and with the consent of the Plan Administrator obtained prior to the Change in Control, substitute, for the securities underlying those assumed rights, one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control transaction, provided such common stock is readily traded on an established U.S. securities exchange or market.

        E.    The Plan Administrator shall have the discretionary authority to structure one or more outstanding Awards under the Discretionary Grant Program so that those Awards shall, immediately prior to the effective date of an actual Change in Control transaction, become exercisable as to all the shares of Common Stock at the time subject to those Awards and may be exercised as to any or all of those shares as fully vested shares of Common Stock, whether or not those Awards are to be assumed in the Change in Control transaction or otherwise continued in effect. In addition, the Plan

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Administrator shall have the discretionary authority to structure one or more of the Corporation's repurchase rights under the Discretionary Grant Program so that those rights shall terminate immediately prior to the effective date of an actual Change in Control transaction, and the shares subject to those terminated rights shall thereupon vest in full.

        F.     The Plan Administrator shall have full power and authority to structure one or more outstanding Awards under the Discretionary Grant Program so that those Awards shall become exercisable as to all the shares of Common Stock at the time subject to those Awards in the event the Optionee's Service is subsequently terminated by reason of an Involuntary Termination within a designated period (not to exceed twenty-four (24) months) following the effective date of any Change in Control transaction in which those Awards do not otherwise fully accelerate. In addition, the Plan Administrator may structure one or more of the Corporation's repurchase rights so that those rights shall immediately terminate with respect to any shares held by the Optionee at the time of such Involuntary Termination, and the shares subject to those terminated repurchase rights shall accordingly vest in full at that time.

        G.    The portion of any Incentive Option accelerated in connection with a Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-statutory Option under the Federal tax laws.

V.     PROHIBITION ON REPRICING PROGRAMS

        The Plan Administrator shall not (i) implement any cancellation/regrant program pursuant to which outstanding options or stock appreciation rights under the Plan are cancelled and new options or stock appreciation rights are granted in replacement with a lower exercise price per share, (ii) cancel outstanding options or stock appreciation rights under the Plan with exercise or base prices per share in excess of the then current Fair Market Value per share of Common Stock for consideration payable in cash, equity securities of the Corporation or in the form of any other Award under the Plan, except in connection with a Change in Control transaction, or (iii) otherwise directly reduce the exercise price in effect for outstanding options or stock appreciation rights under the Plan, without in each such instance obtaining stockholder approval.


ARTICLE THREE

STOCK ISSUANCE PROGRAM

I.     STOCK ISSUANCE TERMS

        Shares of Common Stock may be issued under the Stock Issuance Program, either as vested or unvested shares, through direct and immediate issuances. Each such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms specified below. Shares of Common Stock may also be issued under the Stock Issuance Program pursuant to performance shares or restricted stock units which entitle the recipients to receive the shares underlying those Awards upon the attainment of designated performance goals or the satisfaction of specified Service requirements or upon the expiration of a designated time period following the vesting of those Awards. Shares of Common Stock, performance shares and restricted stock units shall be subject to the same transferability restrictions and beneficiary designation rules applicable to Stand-alone Rights, as set forth in Section III. D.4 of Article Two.

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        A.    Issue Price.    

        B.    Vesting Provisions.    

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II.    CHANGE IN CONTROL

        A.    Each Award outstanding under the Stock Issuance Program on the effective date of an actual Change in Control transaction may be (i) assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction or (ii) replaced with a cash incentive program of the successor corporation which preserves the Fair Market Value of the underlying shares of Common Stock at the time of the Change in Control and provides for the subsequent vesting and payment of that value in accordance with the same vesting schedule in effect for those shares at the time of such Change in Control. If any such Award is subject to a performance-vesting condition tied to the attainment of one or more specified performance goals, then upon the assumption, continuation or replacement of that Award, the performance vesting condition shall automatically be cancelled, and such Award shall thereupon be converted into a Service-vesting Award that will vest upon the completion of a Service period co-terminous with the portion of the performance period (and any subsequent Service vesting component that was originally part of that Award) remaining at the time of the Change in Control. However, to the extent any Award outstanding under the Stock Issuance Program on the effective date of such Change in Control Transaction is not to be so assumed, continued or replaced, that Award shall vest in full immediately prior to the effective date of the actual Change in Control transaction and the shares of Common Stock underlying the portion of the Award that vests on such accelerated basis shall be issued in accordance with the applicable Award Agreement, unless such accelerated vesting is precluded by other limitations imposed in the Stock Issuance Agreement.

        B.    Each outstanding Award under the Stock Issuance Program which is assumed in connection with a Change in Control or otherwise continued in effect shall be adjusted immediately after the consummation of that Change in Control so as to apply to the number and class of securities into which the shares of Common Stock subject to that Award immediately prior to the Change in Control would have been converted in consummation of such Change in Control had those shares actually been outstanding at that time, and appropriate adjustments shall also be made to the cash consideration (if any) payable per share thereunder, provided the aggregate amount of such cash consideration shall remain the same. To the extent the actual holders of the Corporation's outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation may, in connection with the assumption or continuation of the outstanding Awards and with the consent of the Plan Administrator obtained prior to the Change in Control, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control transaction, provided such common stock is readily traded on an established U.S. securities exchange or market.

        C.    The Plan Administrator shall have the discretionary authority to structure one or more unvested Awards under the Stock Issuance Program so that the shares of Common Stock subject to

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those Awards shall automatically vest (or vest and become issuable) in whole or in part immediately prior to the effective date of an actual Change in Control transaction or upon the subsequent termination of the Participant's Service by reason of an Involuntary Termination within a designated period (not to exceed twenty-four (24) months) following the effective date of that Change in Control transaction. The Plan Administrator's authority under this Section II.C shall also extend to any Awards intended to qualify as performance-based compensation under Code Section 162(m), even though the actual vesting of those Awards pursuant to this Section II.C may result in their loss of performance-based status under Code Section 162(m).


ARTICLE FOUR

INCENTIVE BONUS PROGRAM

I.     INCENTIVE BONUS TERMS

        The Plan Administrator shall have full power and authority to implement one or more of the following incentive bonus programs under the Plan:

        Cash Awards, Performance Unit Awards and stand-alone DER Awards shall be subject to the same transferability restrictions and beneficiary designation rules applicable to Stand-alone Rights, as set forth in Section III. D.4 of Article Two.

        A.    Cash Awards.    The Plan Administrator shall have the discretionary authority under the Plan to make Cash Awards which are to vest in one or more installments over the Participant's continued Service with the Corporation or upon the attainment of specified performance goals. Each such Cash Award shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided however, that each such document shall comply with the terms specified below.

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        B.    Performance Unit Awards.    The Plan Administrator shall have the discretionary authority to make Performance Unit Awards in accordance with the terms of the Incentive Bonus Program. Each such Performance Unit Award shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided however, that each such document shall comply with the terms specified below.

        C.    DER Awards.    The Plan Administrator shall have the discretionary authority to make DER Awards in accordance with the terms of the Incentive Bonus Program. Each such DER Award shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided however, that each such document shall comply with the terms specified below.

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II.    CHANGE IN CONTROL

        A.    The Plan Administrator shall have the discretionary authority to structure one or more Awards under the Incentive Bonus Program so that those Awards shall automatically vest in whole or in part immediately prior to the effective date of an actual Change in Control transaction or upon the subsequent termination of the Participant's Service by reason of an Involuntary Termination within a designated period (not to exceed twenty-four (24) months) following the effective date of such Change in Control. To the extent any such Award is, at the time of such Change in Control, subject to a performance-vesting condition tied to the attainment of one or more specified performance goals, then that performance vesting condition shall automatically be cancelled on the effective date of such Change in Control, and such Award shall thereupon be converted into a Service-vesting Award that will vest upon the completion of a Service period co-terminous with the portion of the performance period (and any subsequent Service vesting component that was originally part of that Award) remaining at the time of the Change in Control.

        B.    The Plan Administrator's authority under Paragraph A of this Section II shall also extend to any Award under the Incentive Bonus Program intended to qualify as performance-based compensation under Code Section 162(m), even though the actual vesting of that Award may result in the loss of performance-based status under Code Section 162(m).


ARTICLE FIVE

MISCELLANEOUS

I.     DEFERRED COMPENSATION

        A.    The Plan Administrator may, in its sole discretion, structure one or more Awards under the Stock Issuance or Incentive Bonus Programs so that the Participants may be provided with an election to defer the compensation associated with those Awards for federal income tax purposes. Any such deferral opportunity shall comply with all applicable requirements of Code Section 409A.

        B.    The Plan Administrator may implement a non-employee Board member retainer fee deferral program under the Plan so as to allow the non-employee Board members the opportunity to elect,

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prior to the start of each calendar year, to convert the Board and Board committee retainer fees to be earned for such year into restricted stock units under the Stock Issuance Program that will defer the issuance of the shares of Common Stock that vest under those restricted stock units until a permissible date or event under Code Section 409A. If such program is implemented, the Plan Administrator shall have the authority to establish such rules and procedures as it deems appropriate for the filing of such deferral elections and the designation of the permissible distribution events under Code Section 409A.

        C.    To the extent the Corporation maintains one or more separate non-qualified deferred compensation arrangements which allow the participants the opportunity to make notional investments of their deferred account balances in shares of Common Stock, the Plan Administrator may authorize the share reserve under the Plan to serve as the source of any shares of Common Stock that become payable under those deferred compensation arrangements. In such event, the share reserve under the Plan shall be reduced on a share-for-share basis for each share of Common Stock issued under the Plan in settlement of the deferred compensation owed under those separate arrangements.

II.    TAX WITHHOLDING

        A.    The Corporation's obligation to deliver shares of Common Stock upon the exercise, issuance or vesting of an Award under the Plan shall be subject to the satisfaction of all applicable income and employment tax withholding requirements.

        B.    The Plan Administrator may, in its discretion, structure one or more Awards so that shares of Common Stock may be used as follows to satisfy all or part of the Withholding Taxes to which such holders of those Awards may become subject in connection with the issuance, exercise, vesting or settlement of those Awards:

III.  SHARE ESCROW/LEGENDS

        Unvested shares may, in the Plan Administrator's discretion, be held in escrow by the Corporation until the Participant's interest in such shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those unvested shares.

IV.    EFFECTIVE DATE AND TERM OF THE PLAN

        A.    The Plan shall become effective on the Plan Effective Date.

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        B.    Awards may be granted under the Plan at any time and from time to time prior to the tenth anniversary of the Plan Effective Date, on which date the Plan will expire except as to Awards then outstanding under the Plan. Such outstanding Awards shall remain in effect until they have been exercised or terminated, or have expired.

V.     AMENDMENT OF THE PLAN

        A.    The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects; provided, however, that stockholder approval shall be required for any amendment to the Plan which (i) materially increases the number of shares of Common Stock authorized for issuance under the Plan (other than pursuant to Section V.E of Article One), (ii) materially increases the benefits accruing to Optionees or Participants, (iii) materially expands the class of individuals eligible to participate in the Plan, (iv) expands the types of awards which may be made under the Plan or extends the term of the Plan or (v) would reduce or limit the scope of the prohibition on repricing programs set forth in Section V of Article Two or otherwise eliminate such prohibition, or (vi) effect any other change or modification to the Plan for which stockholder approval is required under applicable law or regulation or pursuant to the listing standards of the Stock Exchange on which the Common Stock is at the time primarily traded. However, no such amendment or modification shall adversely affect the rights and obligations with respect to Awards at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or modification.

        B.    The Compensation Committee shall have the discretionary authority to adopt and implement from time to time such addenda or subplans to the Plan as it may deem necessary in order to bring the Plan into compliance with applicable laws and regulations of any foreign jurisdictions in which Awards are to be made under the Plan and/or to obtain favorable tax treatment in those foreign jurisdictions for the individuals to whom the Awards are made.

        C.    Awards may be made under the Plan that involve shares of Common Stock in excess of the number of shares then available for issuance under the Plan, provided no shares shall actually be issued pursuant to those Awards until the number of shares of Common Stock available for issuance under the Plan is sufficiently increased by stockholder approval of an amendment of the Plan authorizing such increase. If such stockholder approval is not obtained within twelve (12) months after the date the first excess Award is made, then all Awards granted on the basis of such excess shares shall terminate and cease to be outstanding.

        D.    The provisions of the Plan and the outstanding Awards under the Plan shall, in the event of any ambiguity, be construed, applied and interpreted in a manner so as to ensure that all Awards and Award Agreements provided to Optionees or Participants who are subject to U.S. income taxation either qualify for an exemption from the requirements of Section 409A of the Code or comply with those requirements; provided, however, that the Corporation shall not make any representations that any Awards made under the Plan will in fact be exempt from the requirements of Section 409A of the Code or otherwise comply with those requirements, and each Optionee and Participant shall accordingly be solely responsible for any taxes, penalties or other amounts which may become payable with respect to his or her Awards by reason of Section 409A of the Code.

VI.   USE OF PROCEEDS

        Any cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate purposes.

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VII. REGULATORY APPROVALS

        A.    The implementation of the Plan, the granting of any Award under the Plan and the issuance of any shares of Common Stock in connection with the issuance, exercise, vesting or settlement of any Award under the Plan shall be subject to the Corporation's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the Awards made under the Plan and the shares of Common Stock issuable pursuant to those Awards.

        B.    No shares of Common Stock or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance with all applicable requirements of applicable securities laws, including the filing and effectiveness of the Form S-8 registration statement for the shares of Common Stock issuable under the Plan, and all applicable listing requirements of any Stock Exchange on which Common Stock is then listed for trading.

VIII.  NO EMPLOYMENT/SERVICE RIGHTS

        Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate such person's Service at any time for any reason, with or without cause.

19



APPENDIX

        The following definitions shall be in effect under the Plan:

        A.    Award shall mean any of the following awards authorized for issuance or grant under the Plan: stock options, stock appreciation rights, direct stock issuances, restricted stock or restricted stock unit awards, performance shares, performance units, dividend-equivalent rights and cash incentive awards.

        B.    Award Agreement shall mean the written and/or electronic agreement(s) between the Corporation and the Optionee or Participant evidencing a particular Award made to that individual under the Plan, as such agreement(s) may be in effect from time to time.

        C.    Board shall mean the Corporation's Board of Directors.

        D.    Cause shall, with respect to each Award made under the Plan, be defined in accordance with the following provisions:

        E.    Change in Control shall, with respect to each Award made under the Plan, be defined in accordance with the following provisions:

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

        G.    Common Stock shall mean the Corporation's common stock.

        H.    Compensation Committee shall mean the Compensation Committee of the Board comprised of two (2) or more non-employee Board members.

        I.     Corporation shall mean FTD Companies, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of FTD Companies, Inc. which has by appropriate action assumed the Plan.

        J.     Discretionary Grant Program shall mean the discretionary grant program in effect under Article Two of the Plan pursuant to which stock options and stock appreciation rights may be granted to one or more eligible individuals.

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

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        L.    Exercise Date shall mean the date on which the Corporation shall have received written notice of the option exercise.

        M.   Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading hours (i.e., before after-hours trading begins) on the date in question on the Stock Exchange serving as the primary market for the Common Stock, as such price is reported by the National Association of Securities Dealers (if primarily traded on the Nasdaq Global or Global Select Market) or as officially quoted in the composite tape of transactions on any other Stock Exchange on which the Common Stock is then primarily traded. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

        N.    Family Member means, with respect to a particular Optionee or Participant, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

        O.    Full Value Award means any of the following Awards made under the Stock Issuance or Incentive Bonus Programs that are settled in shares of Common Stock: restricted stock awards (unless issued for cash consideration equal to the Fair Market Value of the shares of Common Stock on the award date), restricted stock unit awards, performance shares, performance units, cash incentive awards and any other Awards under the Plan other than stock options and stock appreciation rights issued under the Discretionary Grant Program and dividend equivalent rights under the Incentive Bonus Program.

        P.     Good Reason shall, with respect to each Award made under the Plan, be defined in accordance with the following provisions:

provided and only if such change, reduction or relocation is effected by the Corporation (or any Parent or Subsidiary) without the individual's consent. An individual will not be deemed to have resigned for Good Reason unless (i) the individual provides written notice to the Corporation of the existence of the Good Reason event within ninety (90) days after its initial occurrence; (ii) the Corporation is

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provided with thirty (30) days after receipt of such notice in which to cure such Good Reason event; and (iii) the individual effectively terminates employment within one hundred eighty (180) days following the occurrence of the non-cured event.

        Q.    Incentive Bonus Program shall mean the incentive bonus program in effect under Article Four of the Plan.

        R.    Incentive Option shall mean an option which satisfies the requirements of Code Section 422.

        S.     Involuntary Termination shall mean the termination of the Service of any individual which occurs by reason of:

        T.     1934 Act shall mean the Securities Exchange Act of 1934, as amended.

        U.    Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code Section 422.

        V.     Optionee shall mean any person to whom an option is granted under the Discretionary Grant Program.

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

        X.    Participant shall mean any person who is issued (i) shares of Common Stock, restricted stock units, performance shares, performance units or other stock-based awards under the Stock Issuance Program or (ii) an incentive bonus award under the Incentive Bonus Program.

        Y.    Permanent Disability or Permanently Disabled shall mean the inability of the Optionee or the Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more..

        Z.    Performance Goals shall mean any of the following performance criteria upon which the vesting of one or more Awards under the Plan may be based: (i) earnings or operating income before interest, taxes, depreciation, amortization and/or charges for stock-based compensation; (ii) earnings per share; (iii) growth in earnings or earnings per share; (iv) market price of the Common Stock; (v) return on equity or average stockholder equity; (vi) total stockholder return or growth in total stockholder return, either directly or in relation to a comparative group; (vii) return on capital; (viii) return on assets or net assets; (ix) invested capital, rate of return on capital or return on invested capital; (x) revenue, growth in revenue or return on sales; (xi) income or net income; (xii) operating income or net operating income; (xiii) operating profit or net operating profit; (xiv) operating margin; (xvi) return on operating revenue or return on operating profit; (xvi) cash flow or cash flow per share (before or after dividends); (xvii) market share; (xviii) collections and recoveries; (xix) debt reduction; (xx) litigation and regulatory resolution goals; (xxi) expense control goals; (xxii) budget comparisons; (xxiii) development and implementation of strategic plans and/or organizational restructuring goals; (xxiv) productivity goals; (xxv) workforce management and succession planning goals; (xxvi) economic value added; (xxvii) measures of customer satisfaction; (xxviii) formation of joint ventures or marketing or customer service collaborations or the completion of other corporate transactions intended to enhance the Corporation's revenue or profitability or enhance its customer base; (xxix) mergers, acquisitions and

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other strategic transactions; (xxx) earnings before interest, taxes, depreciation and amortization; and (xxxi) fulfillment measures. In addition, such performance criteria may be based upon the attainment of specified levels of the Corporation's performance under one or more of the measures described above as compared to the performance of other entities (or an index covering multiple entities), in either case on an absolute or relative basis, and may also be based on the performance of any of the Corporation's business units or divisions or any Parent or Subsidiary. Each applicable Performance Goal may include a minimum threshold level of performance below which no Award will be earned, levels of performance at which specified portions of an Award will be earned and a maximum level of performance at which an Award will be fully earned. Each applicable performance goal may be structured at the time of the Award to provide for appropriate adjustments or exclusions for one or more of the following items: (A) asset impairments or write-downs; (B) litigation or governmental investigation expenses and judgments, verdicts and settlements in connection therewith; (C) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; (D) accruals for reorganization and restructuring programs; (E) costs and expenses incurred in connection with actual or potential business combinations, mergers, acquisitions, dispositions, spin-offs, financing transactions, and other strategic transactions; (F) costs and expenses incurred in connection with the relocation of the principal offices of the Corporation or any Parent or Subsidiary; (G) any unusual, infrequent, extraordinary or nonrecurring items; (H) bonus or incentive compensation costs and expenses associated with cash-based awards made under the Plan or other bonus or incentive compensation plans of the Corporation or any Parent or Subsidiary; (I) items of income, gain, loss or expense attributable to the operations of any business acquired by the Corporation or any Parent or Subsidiary; (J) items of income, gain, loss or expense attributable to one or more business operations divested by the Corporation or any Parent or Subsidiary or the gain or loss realized upon the sale of any such business or assets thereof and (K) the impact of foreign currency fluctuations or changes in exchange rates.

        AA.   Plan shall mean the Corporation's 2013 Incentive Compensation Plan, as set forth in this document and as subsequently amended or modified from time to time.

        BB.    Plan Administrator shall mean the particular entity, whether the Compensation Committee, the Board or the Secondary Board Committee, which is authorized to administer the Discretionary Grant, Stock Issuance and Incentive Bonus Programs with respect to one or more classes of eligible persons, to the extent such entity is carrying out its administrative functions under the Plan with respect to the persons under its jurisdiction.

        CC.   Plan Effective Date shall mean September 30, 2013, the date on which the Plan was approved by Corporation's stockholder.

        DD.   Qualifying Change in Control shall mean a Change in Control that also qualifies as: (i) a change in the ownership of the Corporation, as determined in accordance with Section 1.409A-3(i)(5)(v) of the regulations promulgated under Code Section 409A; (ii) a change in the effective control of the Corporation, as determined in accordance with Section 1.409A-3(i)(5)(vi) of the regulations promulgated under Code Section 409A; or (iii) a change in the ownership of a substantial portion of the assets of the Corporation, as determined in accordance with Section 1.409A-3(i)(5)(vii) of the regulations promulgated under Code Section 409A.

        EE.   Secondary Board Committee shall mean a committee of one or more Board members appointed by the Board to administer the Plan with respect to eligible persons other than Section 16 Insiders.

        FF.     Section 16 Insider shall mean an officer or director of the Corporation subject to the short-swing profit liabilities of Section 16 of the 1934 Act.

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        GG.   Service shall mean the performance of services for the Corporation (or any Parent or Subsidiary, whether now existing or subsequently established) by a person in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the option grant or stock issuance. For purposes of the Plan, an Optionee or Participant shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) the Optionee or Participant no longer performs services in any of the foregoing capacities for the Corporation or any Parent or Subsidiary or (ii) the entity for which the Optionee or Participant is performing such services ceases to remain a Parent or Subsidiary of the Corporation, even though the Optionee or Participant may subsequently continue to perform services for that entity. Service shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Corporation; provided, however, that should such leave of absence exceed three (3) months, then for purposes of determining the period within which an Incentive Option may be exercised as such under the federal tax laws, the Optionee's Service shall be deemed to cease on the first day immediately following the expiration of such three (3)-month period, unless Optionee is provided with the right to return to Service following such leave either by statute or by written contract. Except to the extent otherwise required by law or expressly authorized by the Plan Administrator or by the Corporation's written policy on leaves of absence, no Service credit shall be given for vesting purposes for any period the Optionee or Participant is on a leave of absence.

        HH.   Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.

          II.    Stock Issuance Agreement shall mean the agreement entered into by the Corporation and the Participant at the time of issuance of shares of Common Stock under the Stock Issuance Program.

        JJ.     Stock Issuance Program shall mean the stock issuance program in effect under Article Three of the Plan.

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

        LL.    10% Stockholder shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).

        MM.    Withholding Taxes shall mean the applicable federal and state income and employment withholding taxes to which the holder of an Award under the Plan may become subject in connection with the issuance, exercise, vesting or settlement of that Award.

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QuickLinks

ARTICLE ONE GENERAL PROVISIONS
ARTICLE TWO DISCRETIONARY GRANT PROGRAM
ARTICLE THREE STOCK ISSUANCE PROGRAM
ARTICLE FOUR INCENTIVE BONUS PROGRAM
ARTICLE FIVE MISCELLANEOUS
APPENDIX

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

PRELIMINARY AND SUBJECT TO COMPLETION, DATED SEPTEMBER 30, 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 November 1, 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 October 10, 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 30, 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 intend 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 30, 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 October 10, 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 64.

        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

   
64
 

BUSINESS

   
93
 

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

   
103
 

MANAGEMENT

   
108
 

EXECUTIVE COMPENSATION

   
116
 

SECURITY OWNERSHIP OF MANAGEMENT, DIRECTORS AND PRINCIPAL STOCKHOLDERS

   
134
 

DESCRIPTION OF CAPITAL STOCK

   
137
 

DESCRIPTION OF CERTAIN INDEBTEDNESS

   
142
 

WHERE YOU CAN FIND MORE INFORMATION

   
143
 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

   
F-1
 

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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 September 30, 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. The Separation and Distribution Agreement will provide that we will indemnify United Online against any and all losses relating to liabilities arising out of the FTD business, and that United Online will indemnify us against any and all losses relating to liabilities arising out of the UOL businesses. See "Certain Relationships and Related-Party Transactions—Agreements with United Online."

        The distribution of FTD common stock as described in this Information Statement is subject to the satisfaction or waiver of certain conditions. Even if all of the conditions have been satisfied, United

 

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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."

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

 

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

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

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

 

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Q:
What is the record date for the distribution?

A:
The record date for the distribution will be the close of business on October 10, 2013.

Q:
When will the distribution occur?

A:
The distribution will occur on November 1, 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 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

 

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    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 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

 

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    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. 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.

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 reflect the distribution ratio of one-for-five and 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

 

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    that existed with respect to the Unit