FTD Companies, Inc. (Form: 10-Q, Received: 11/06/2013 16:05:27)

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

FORM 10-Q


(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2013
Or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-33367

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


Delaware		32-0255852
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
3113 Woodcreek Drive Downers Grove, Illinois (Address of principal executive offices)		60515 (Zip Code)

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

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No ý *

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o *

*The registrant became subject to the requirements on October 1, 2013.

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	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

There were 18,583,927 shares of the Registrant's common stock outstanding at November 1, 2013.

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FTD COMPANIES, INC.
INDEX TO FORM 10-Q

For the Quarter Ended September 30, 2013


			Page
PART I.		FINANCIAL INFORMATION	4
	Item 1.	Financial Statements	4
		Unaudited Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012	4
		Unaudited Condensed Consolidated Statements of Operations for the Quarters and Nine Months Ended September 30, 2013 and 2012	5
		Unaudited Condensed Consolidated Statements of Comprehensive Income for the Quarters and Nine Months Ended September 30, 2013 and 2012	6
		Unaudited Condensed Consolidated Statement of Equity for the Nine Months Ended September 30, 2013	7
		Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012	8
		Notes to Unaudited Condensed Consolidated Financial Statements	9
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
	Item 4.	Controls and Procedures	45
PART II.		OTHER INFORMATION	46
	Item 1.	Legal Proceedings	46
	Item 1A.	Risk Factors	46
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
	Item 3.	Defaults Upon Senior Securities	71
	Item 4.	Mine Safety Disclosures	71
	Item 5.	Other Information	71
	Item 6.	Exhibits	71
SIGNATURES			72

FTD Companies, Inc. was a wholly owned subsidiary of United Online, Inc. ("United Online") until November 1, 2013. On November 1, 2013, United Online completed the separation of United Online into two independent, publicly traded companies: FTD Companies, Inc. and United Online (the "Separation"). The Separation was effected by a distribution by United Online of all of the issued and outstanding shares of FTD Companies, Inc. common stock to United Online stockholders. United Online stockholders of record as of the record date, October 10, 2013, received one share of FTD common stock for every five shares of United Online common stock they held. FTD Companies, Inc.'s

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Registration Statement on Form 10 was declared effective by the U. S. Securities and Exchange Commission (the "SEC") on October 1, 2013 (the "Form 10").

In this document, references to "FTD," the "Company," "we," "us" and "our" refer to FTD Companies, Inc. and its consolidated subsidiaries, after giving effect to the Separation.

This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "projections," "business outlook," "estimate," or similar expressions constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements about our strategies; the expected benefits of our separation from United Online; future financial performance; revenues; metrics; operating expenses; market trends, including those in the markets in which we compete; liquidity; cash flows and uses of cash; dividends; capital expenditures; depreciation and amortization; tax payments; foreign currency exchange rates; hedging arrangements; our ability to repay indebtedness and invest in initiatives; our products and services; pricing; marketing plans; competition; settlement of legal matters; and the impact of accounting pronouncements. Potential factors that could affect the matters about which the forward-looking statements are made include, among others, the factors disclosed in the section entitled "Risk Factors" in this Quarterly Report on Form 10-Q and additional factors that accompany the related forward-looking statements in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that may cause actual performance and results to differ materially from those predicted. Reported results should not be considered an indication of future performance. Except as required by law, we undertake no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	September 30, 2013			December 31, 2012

ASSETS
Current assets:
Cash and cash equivalents	$	28,347		$	67,347
Accounts receivable, net of allowances of $8,876 and $9,509 at September 30, 2013 and December 31, 2012, respectively		27,201			26,155
Inventories		6,084			7,996
Deferred tax assets, net		6,056			5,882
Prepaid expenses		5,975			5,485

Total current assets		73,663			112,865
Property and equipment, net		31,212			31,169
Intangible assets, net		175,367			194,288
Goodwill		338,743			333,987
Other assets		14,826			12,320

Total assets	$	633,811		$	684,629

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	36,029		$	55,702
Accrued liabilities		10,703			15,657
Accrued compensation		9,892			9,284
Deferred revenue		7,050			5,408
Income taxes payable		4,659			9,033
Current portion of long-term debt		—			10,856
Intercompany payable to United Online, Inc.		2,920			1,653

Total current liabilities		71,253			107,593
Long-term debt, net of discounts		220,000			233,144
Deferred tax liabilities, net		56,107			62,850
Other liabilities		3,057			3,744

Total liabilities		350,417			407,331

Commitments and contingencies
Equity:
Parent company investment		304,817			303,572
Accumulated other comprehensive loss		(21,423	)		(26,274	)

Total equity		283,394			277,298

Total liabilities and equity	$	633,811		$	684,629

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

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FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Quarter Ended September 30,						Nine Months Ended September 30,

	2013			2012			2013			2012
Revenues:
Products	$	88,633		$	85,753		$	370,980		$	359,151
Services		29,894			30,609			102,109			101,185

Total revenues		118,527			116,362			473,089			460,336
Operating expenses:
Cost of revenues—products		67,667			66,221			283,427			275,753
Cost of revenues—services		4,802			4,932			14,519			15,042
Sales and marketing		21,184			21,181			79,194			78,588
General and administrative		16,709			13,026			45,823			39,501
Amortization of intangible assets		5,721			6,431			18,524			19,092

Total operating expenses		116,083			111,791			441,487			427,976

Operating income		2,444			4,571			31,602			32,360
Interest income		153			182			496			564
Interest expense		(4,067	)		(3,260	)		(10,450	)		(10,301	)
Other income, net		25			131			265			474

Income (loss) before income taxes		(1,445	)		1,624			21,913			23,097
Provision (benefit) for income taxes		(1,625	)		115			6,958			7,472

Net income	$	180		$	1,509		$	14,955		$	15,625

Basic and diluted earnings per share	$	0.01		$	0.08		$	0.80		$	0.84

Basic and diluted average shares outstanding ^(a)		18,584			18,584			18,584			18,584

(a): On October 31, 2013, the 10,000 shares of the Company's common stock, par value $0.01 per share, issued and outstanding immediately prior to the separation from United Online, Inc. were automatically reclassified as and became 18,583,927 shares of common stock, par value $0.0001 per share. Basic and diluted earnings per share and the average number of shares outstanding were retrospectively restated adjusting for such reclassification.

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

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FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Quarter Ended September 30,						Nine Months Ended September 30,

	2013			2012			2013		2012
Net income	$	180		$	1,509		$	14,955	$	15,625
Other comprehensive income (loss):
Foreign currency translation		8,336			5,289			4,503		7,190
Cash flow hedges:
Changes in net gains (losses) on derivatives, net of tax of $(142) and $(83) for the quarters ended September 30, 2013 and 2012 and $183 and $(444) for the nine months ended September 30, 2013 and 2012, respectively		(226	)		(130	)		286		(695	)
Other hedges:
Changes in net gains (losses) on derivatives, net of tax of $(24) and $(59) for the quarters ended September 30, 2013 and 2012 and $39 and $(74) for the nine months ended September 30, 2013 and 2012, respectively		(37	)		(92	)		62		(116	)

Other comprehensive income		8,073			5,067			4,851		6,379

Comprehensive income	$	8,253		$	6,576		$	19,806	$	22,004

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

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FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(in thousands)

	Parent Company Investment			Accumulated Other Comprehensive Loss			Total Equity

Balance at December 31, 2012	$	303,572		$	(26,274	)	$	277,298
Net income		14,955			—			14,955
Net decrease in parent company investment		(13,710	)		—			(13,710	)
Other comprehensive income		—			4,851			4,851

Balance at September 30, 2013	$	304,817		$	(21,423	)	$	283,394

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

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FTD COMPANIES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30,

	2013			2012
Cash flows from operating activities:
Net income	$	14,955		$	15,625
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		25,151			26,573
Stock-based compensation		3,598			3,841
Provision for doubtful accounts receivable		1,200			1,572
Accretion of discounts and amortization of deferred financing and debt issue costs		664			821
Loss on extinguishment of debt		2,348			—
Non-cash allocations from parent company, net		715			1,717
Deferred taxes, net		(6,991	)		(6,976	)
Excess tax benefits from equity awards		(122	)		(4	)
Other, net		227			9
Changes in operating assets and liabilities:
Accounts receivable, net		(2,289	)		(2,510	)
Inventories		1,908			(564	)
Prepaid expenses and other current assets		194			1,964
Other assets		177			(1,372	)
Accounts payable		(20,895	)		(15,175	)
Accrued liabilities		(4,795	)		(1,856	)
Accrued compensation		650			498
Deferred revenue		1,690			2,079
Income taxes payable		(4,424	)		5,620
Intercompany payable to United Online, Inc.		1,267			111
Other liabilities		(660	)		(1,440	)

Net cash provided by operating activities		14,568			30,533

Cash flows from investing activities:
Purchases of property and equipment		(6,473	)		(3,772	)
Purchases of intangible assets		—			(78	)
Cash paid for acquisitions, net of cash acquired		—			(3,914	)
Proceeds from sales of investments		124			40
Purchases of investments		(61	)		(87	)

Net cash used for investing activities		(6,410	)		(7,811	)

Cash flows from financing activities:
Proceeds from revolving credit facility		220,000			—
Payments on term loan		(246,013	)		(17,663	)
Payments for debt issue costs		(2,924	)		—
Excess tax benefits from equity awards		122			4
Dividends paid to United Online, Inc.		(18,201	)		(3,179	)

Net cash used for financing activities		(47,016	)		(20,838	)

Effect of foreign currency exchange rate changes on cash and cash equivalents		(142	)		731
Change in cash and cash equivalents		(39,000	)		2,615
Cash and cash equivalents, beginning of period		67,347			47,058

Cash and cash equivalents, end of period	$	28,347		$	49,673

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS

Description of Business

FTD Companies, Inc. (together with its subsidiaries, "FTD" or the "Company"), through its operating subsidiaries, is a leading provider of floral, gift and related products and services to consumers, retail florists and other retail locations primarily in the United States ("U.S."), Canada, the United Kingdom ("U.K."), and the Republic of Ireland. The business uses the highly-recognized FTD and Interflora brands, both supported by the Mercury Man logo. FTD does not currently own or operate any retail locations, with the exception of one retail shop and several concession stands located in the U.K. While floral arrangements and plants are FTD's primary offerings, FTD also markets and sells gift items, including jewelry, sweets, gift baskets, wine, fruit, and spa products. FTD Group, Inc. ("FTD Group") is a wholly-owned subsidiary of FTD Companies, Inc. and its principal operating subsidiaries are Florists' Transworld Delivery, Inc. ("FTDI"), FTD.COM Inc. and Interflora British Unit ("Interflora"). The operations of the Company include those of its subsidiary, Interflora, Inc., of which one-third is owned by an outside third party. The minority interest related to Interflora, Inc. is not material for separate presentation.

Prior to November 1, 2013, FTD was a wholly-owned subsidiary of United Online, Inc. ("United Online"). On August 1, 2012, United Online announced that its Board of Directors had approved a preliminary plan to separate United Online into two independent, publicly traded companies: FTD Companies, Inc. and United Online, Inc. (the "Separation"). In September 2013, United Online received a private letter ruling from the Internal Revenue Service ("IRS") confirming that the separation and the distribution of shares of FTD Companies, Inc. common stock qualifies as a transaction that is tax-free for U.S. federal income tax purposes. On October 1, 2013, United Online announced that the U.S. Securities and Exchange Commission (the "SEC") had declared the FTD Companies, Inc. Registration Statement on Form 10 (the "Form 10") effective and that United Online's Board of Directors had approved the separation of the Company from United Online through a tax-free dividend involving the distribution of all FTD Companies, Inc. common stock held by United Online to United Online's stockholders on November 1, 2013. Immediately prior to the Separation, the authorized shares of FTD Companies, Inc. capital stock were increased from 10,000 to 65,000,000, divided into the following classes: 60,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share. The 10,000 shares of FTD common stock, par value $0.01 per share, that were previously issued and outstanding were automatically reclassified as and became 18,583,927 shares of common stock, par value $0.0001 per share. Upon the Separation, which occurred at 12:01 a.m. Eastern Daylight Time ("EDT") on November 1, 2013, holders of United Online common stock received one share of FTD common stock for every five shares of United Online common stock held on the record date (prior to giving effect to the reverse stock split of United Online shares). In addition, United Online effected a one-for-seven reverse stock split of United Online common stock, which became effective at 11:59 p.m. EDT on October 31, 2013. Following completion of the Separation, FTD Companies, Inc. became an independent, publicly traded company on the NASDAQ Global Select Market utilizing the symbol: "FTD."

On November 1, 2013, in conjunction with the Separation, Mark R. Goldston, Chairman, President and Chief Executive Officer of United Online, resigned as the Chief Executive Officer and sole director of FTD Companies, Inc. On November 1, 2013, in conjunction with the Separation, Robert S. Apatoff became President and Chief Executive Officer of FTD Companies, Inc. and Robert H. Berglass became

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

the non-executive Chairman of the Board of Directors of FTD Companies, Inc. Mr. Berglass has been a Director of United Online since 2001.

In connection with the Separation, the Company has incurred certain transaction related costs some of which were incurred by and allocated to the Company by United Online. These costs relate primarily to investment bankers, legal, accounting, tax, and other professional costs. During the quarter and nine months ended September 30, 2013, the Company incurred transaction related costs of $3.3 million and $4.7 million, respectively. The Company will incur additional transaction related costs in the fourth quarter of 2013. In addition, the Company will incur certain incremental ongoing costs, including board of directors fees, corporate overhead costs, legal, accounting, insurance, and investor relations, as a stand-alone public company.

The Company's corporate headquarters are located in Downers Grove, Illinois, and the Company also maintains offices in Centerbrook, Connecticut; Medford, Oregon; Sleaford, England; and Quebec, Canada.

Basis of Presentation

The Company's unaudited condensed consolidated financial statements for the quarters and nine months ended September 30, 2013 and 2012 have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), including those for interim financial information, and with the instructions for Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Accordingly, such financial statements do not include all of the information and note disclosures required by GAAP for complete financial statements. All significant intercompany accounts and transactions, other than those with United Online, have been eliminated in consolidation. The unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial position and operating results for the periods presented. The results of operations for such periods are not necessarily indicative of the results expected for any future periods. The unaudited condensed consolidated balance sheet information at December 31, 2012 was derived from the Company's audited consolidated financial statements, included in the Company's Form 10, but does not include all of the disclosures required by GAAP.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities and the reported amounts of revenues and expenses. Actual results could differ from these estimates and assumptions.

The most significant areas of the unaudited condensed consolidated financial statements that require management's judgment include the Company's revenue recognition, goodwill and indefinite-lived intangible assets, finite-lived intangible assets and other long-lived assets, allowance for doubtful accounts, income taxes, software capitalization, and legal contingencies.

The Company's unaudited condensed consolidated financial statements reflect the historical financial position, results of operations and cash flows of FTD. The unaudited condensed consolidated financial statements include expense allocations for certain corporate functions historically performed by United Online. Management believes the assumptions underlying such financial statements,

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

including the assumptions regarding the allocation of corporate expenses from United Online, are reasonable. Nevertheless, the unaudited condensed consolidated financial statements may not include all of the expenses that would have been incurred had the Company been a stand-alone company during the periods presented and may not reflect the Company's unaudited condensed consolidated financial position, results of operations and cash flows had the Company been a stand-alone company during the periods presented. For additional information related to costs allocated to the Company by United Online and the settlement of such costs, see Note 4—"Transactions with Related Parties—Transactions with United Online." Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of December 31, 2012 and 2011 and for each of the three years in the period ended December 31, 2012 and related notes thereto included in the Company's Form 10.

"Emerging Growth Company" Reporting Requirements

The Company qualifies as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"). For as long as the Company is deemed to be an "emerging growth company," the Company may take advantage of certain exemptions from various regulatory reporting requirements that are applicable to other public companies. Among other things, the Company is not required to (1) provide an auditor's attestation report on management's assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (2) comply with any new rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (4) comply with any new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies under Section 102(b)(1) of the JOBS Act, (5) provide certain disclosure regarding executive compensation required of larger public companies, or (6) hold a nonbinding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously approved.

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

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

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

of the date of the first sale of our common stock pursuant to an effective registration statement filed under the Securities Act.

Accounting Policies

Refer to the Company's audited consolidated financial statements included in the Company's Form 10 for a complete discussion of all significant accounting policies.

Recent Accounting Pronouncements

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income —In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income , as codified in Accounting Standards Codification ("ASC") 220. The amendments in this update require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about those amounts. For the Company, the amendments in this update are effective prospectively for reporting periods beginning after December 15, 2013. The Company does not expect this update to have a material impact on its consolidated financial statements.

Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists —In July 2013, FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists , as codified in ASC 740, Income Taxes . The amendments in this update state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU will be effective for the Company for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently assessing the impact of this update on its consolidated financial statements.

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SEGMENT INFORMATION

The Company operates in one operating and reportable segment—floral and related products and services. Geographic information for revenues was as follows (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,

	2013		2012		2013		2012
U.S.	$	85,764	$	83,904	$	354,872	$	344,416
U.K.		32,763		32,458		118,217		115,920

Total revenues	$	118,527	$	116,362	$	473,089	$	460,336

Geographic information for long-lived assets, which consist of property and equipment and other assets, was as follows (in thousands):

	September 30, 2013		December 31, 2012

U.S.	$	37,865	$	35,415
U.K.		8,173		8,074

Total long-lived assets	$	46,038	$	43,489

3. BALANCE SHEET COMPONENTS

Provided below is supplemental information on certain balance sheet components.

Financing Receivables

The Company has financing receivables related to equipment sales to its floral network members. The Company records financing receivables at fair value and amortizes such receivables to stated value. The current and noncurrent portions of financing receivables are included in accounts receivable and other assets, respectively, in the unaudited condensed consolidated balance sheets. The Company assesses financing receivables individually for balances due from current floral network members and collectively for balances due from terminated floral network members.

Credit quality of financing receivables was as follows (in thousands):

	September 30, 2013		December 31, 2012

Current	$	11,878	$	12,130
Past due		3,381		3,515

Total	$	15,259	$	15,645

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. BALANCE SHEET COMPONENTS (Continued)

The aging of past due financing receivables was as follows (in thousands):

	September 30, 2013		December 31, 2012

Current	$	11,878	$	12,130
Past due:
1 - 150 days past due		137		224
151 - 364 days past due		195		293
365 - 730 days past due		362		429
>730 days past due		2,687		2,569

Total	$	15,259	$	15,645

Financing receivables on nonaccrual status at September 30, 2013 and December 31, 2012 totaled $3.4 million and $3.6 million, respectively.

The allowance for credit losses and the recorded investment in financing receivables for the periods presented were as follows (in thousands):

	Nine Months Ended September 30,

	2013			2012
Allowance for credit losses:
Balance at January 1	$	3,464		$	3,655
Current period provision		74			226
Write-offs charged against allowance		(237	)		(322	)

Balance at September 30	$	3,301		$	3,559

Ending balance collectively evaluated for impairment	$	3,297		$	3,542

Ending balance individually evaluated for impairment	$	4		$	17

Recorded investments in financing receivables:
Balance collectively evaluated for impairment	$	3,414		$	3,735

Balance individually evaluated for impairment	$	11,845		$	12,384

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. BALANCE SHEET COMPONENTS (Continued)

Individually evaluated impaired loans, including the recorded investment in such loans, the unpaid principal balance and the allowance related to such loans, each totaled less than $0.1 million at both September 30, 2013 and December 31, 2012. The average recorded investment in such loans was less than $0.1 million in each of the nine months ended September 30, 2013 and 2012. Interest income recognized during the period that the loans were impaired was less than $0.1 million in each of the nine months ended September 30, 2013 and 2012.

Property and Equipment

Property and equipment consisted of the following (in thousands):

	September 30, 2013			December 31, 2012

Land and improvements	$	1,623		$	1,624
Buildings and improvements		16,090			16,049
Computer equipment		19,448			17,450
Computer software		27,855			23,799
Furniture and fixtures		3,781			3,491

		68,797			62,413
Accumulated depreciation		(37,585	)		(31,244	)

Total	$	31,212		$	31,169

Depreciation expense, including the amortization of leasehold improvements, for the quarters ended September 30, 2013 and 2012 was $2.2 million and $2.5 million, respectively, and $6.6 million and $7.5 million for the nine months ended September 30, 2013 and 2012, respectively.

4. TRANSACTIONS WITH RELATED PARTIES

Transactions with United Online

The unaudited condensed consolidated financial statements include direct costs of the Company incurred by United Online on the Company's behalf and an allocation of certain general corporate costs incurred by United Online. Direct costs include finance, legal, human resources, technology development, and other services and have been determined based on estimated levels of services expended by United Online for services provided to the Company. General corporate costs include, without limitation, executive oversight, accounting, internal audit, treasury, tax, and legal. The allocations of general corporate costs are based primarily on estimated time incurred and/or activities associated with FTD. Management believes the allocations of corporate costs from United Online are reasonable and does not believe the Company's costs would have been significantly different on a stand-alone basis. However, the consolidated financial statements may not include all of the costs that would have been incurred had the Company been a stand-alone company during the periods presented and may not reflect the Company's consolidated financial position, results of operations and cash flows had the Company been a stand-alone company during the periods presented.

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. TRANSACTIONS WITH RELATED PARTIES (Continued)

Costs incurred and allocated by United Online were included in the unaudited condensed consolidated statements of operations as follows (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,

	2013		2012		2013		2012
Cost of revenues—products	$	62	$	88	$	242	$	380
Cost of revenues—services		112		175		495		508
Sales and marketing		28		37		89		151
General and administrative		4,839		1,844		10,516		5,355

Total allocated expenses	$	5,041	$	2,144	$	11,342	$	6,394

The table above includes allocated stock-based compensation of $0.3 million and $0.2 million for the quarters ended September 30, 2013 and 2012, respectively, and $0.8 million and $0.6 million for the nine months ended September 30, 2013 and 2012, respectively, for the employees of United Online whose cost of services was partially allocated to the Company.

As noted above, United Online allocated both direct costs for services provided and general corporate costs to the Company. In addition, certain transaction and separation costs related to the Separation that were incurred by United Online were allocated to the Company. Allocations for direct costs and transaction and separation costs are reflected in the intercompany payable to United Online and are due upon demand. During the nine months ended September 30, 2013, the Company made payments totaling $7.7 million to United Online to settle intercompany charges. On October 31, 2013, the Company paid $2.9 million to United Online to settle the intercompany balance at September 30, 2013. Allocations of general corporate costs were not settled in cash and are reflected in the parent company investment.

In the nine months ended September 30, 2013, dividends totaling $18.2 million were declared by FTD Companies, Inc. and paid to United Online, of which $3.2 million represented reimbursement for certain equity-related compensation expenses, as defined and permitted under the terms of the Company's credit agreements (as described in Note 6—"Financing Arrangements"). Transactions with

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. TRANSACTIONS WITH RELATED PARTIES (Continued)

United Online, including both direct and general corporate costs discussed above, are summarized as follows (in thousands):

	Nine Months Ended September 30,

	2013			2012
Cash transactions:
Dividends paid	$	(18,201	)	$	(3,179	)
Allocated expenses settled in cash		8,743			4,324
Non-cash transactions:
Stock-based compensation and tax benefits from equity awards		3,776			3,832
Allocated expenses not settled in cash, net		715			1,717

Net transactions with United Online		(4,967	)		6,694
Less: Amount reflected in intercompany payable to United Online		8,743			4,324

Net increase (decrease) in parent company investment	$	(13,710	)	$	2,370

Transactions with The I.S. Group Limited

Interflora holds a 20.37% investment in The I.S. Group Limited ("I.S. Group"), which totaled $1.6 million and $1.5 million at September 30, 2013 and December 31, 2012, respectively, and is included in other assets in the unaudited condensed consolidated balance sheets. I.S. Group supplies floral-related products to Interflora's floral network members in both the U.K. and the Republic of Ireland. Interflora sells products to I.S. Group for which revenue is recognized on a gross basis. In addition, Interflora earns a commission on products sold by I.S. Group to floral network members, which are sourced from external suppliers. Beginning in 2012, Interflora also began purchasing products from I.S. Group for sale to consumers. In the quarters ended September 30, 2013 and 2012, revenues related to products sold to and commissions earned from I.S. Group were $0.6 million and $0.6 million, respectively, and $2.1 million and $2.0 million for the nine months ended September 30, 2013 and 2012, respectively. The cost of revenues related to products purchased from I.S. Group for the quarter and nine months ended September 30, 2013 were $0.1 million and $0.3 million, respectively and $0.1 million and $0.2 million for the quarter and nine months ended September 30, 2012, respectively. Amounts due from I.S. Group were $0.4 million and $0.5 million at September 30, 2013 and December 31, 2012, respectively, and amounts payable to I.S. Group were $1.3 million and $1.6 million at September 30, 2013 and December 31, 2012, respectively.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS

Goodwill

The change in the carrying amount of goodwill for the nine months ended September 30, 2013 was as follows (in thousands):

	Goodwill (Excluding Impairment Charges)		Accumulated Impairment Charges			Net

Balance at December 31, 2012	$	450,242	$	(116,255	)	$	333,987
Foreign currency translation		4,756		—			4,756

Balance at September 30, 2013	$	454,998	$	(116,255	)	$	338,743

During the quarter ended June 30, 2013, the Company recorded an out-of-period adjustment related to the translation of goodwill, which increased goodwill and decreased accumulated other comprehensive loss in the Company's balance sheet at June 30, 2013 by $7.9 million. This out-of-period adjustment was considered immaterial to that period and all prior periods and was netted in the foreign currency translation line item in the table above.

Intangible Assets

Intangible assets are primarily related to the acquisition of the Company by United Online in 2008 and consisted of the following (in thousands):

	September 30, 2013							December 31, 2012

	Gross Value		Accumulated Amortization			Net		Gross Value		Accumulated Amortization			Net
Complete technology	$	41,803	$	(41,578	)	$	225	$	41,831	$	(35,989	)	$	5,842
Customer contracts and relationships		105,940		(89,937	)		16,003		106,027		(76,993	)		29,034
Trademarks and trade names		159,281		(142	)		159,139		159,479		(67	)		159,412

Total	$	307,024	$	(131,657	)	$	175,367	$	307,337	$	(113,049	)	$	194,288

The Company's trademarks and trade names are primarily indefinite-lived for which there is no associated amortization expense or accumulated amortization. At September 30, 2013 and December 31, 2012, such indefinite-lived assets, after impairment and foreign currency translation adjustments, totaled $158.3 million and $158.5 million, respectively.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS (Continued)

Estimated future intangible assets amortization expense at September 30, 2013 was as follows (in thousands):


October—December 2013	$	4,391
Year ending December 31, 2014		11,686
Year ending December 31, 2015		334
Year ending December 31, 2016		142
Year ending December 31, 2017		101
Year ending December 31, 2018		100
Thereafter		335

Total	$	17,089

6. FINANCING ARRANGEMENTS

2011 Credit Agreement

On June 10, 2011, FTD Group, Inc. ("FTD Group"), a wholly owned subsidiary of the Company, entered into a credit agreement (the "2011 Credit Agreement") with Wells Fargo Bank, National Association, as Administrative Agent for the lenders, to refinance its previously outstanding credit facility. The 2011 Credit Agreement provided FTD Group with a $315 million senior secured credit facility consisting of (i) a $265 million seven-year term loan (the "Term Loan") and (ii) a $50 million five-year revolving credit facility (the "Revolving Credit Facility" and together with the Term Loan, the "Credit Facilities"), and certain other financial accommodations, including letters of credit.

The interest rates on both the Term Loan and the Revolving Credit Facility under the 2011 Credit Agreement were either a base rate plus 2.5% per annum, or LIBOR plus 3.5% per annum (with a LIBOR floor of 1.25% in the case of the Term Loan and step downs in the LIBOR margin on the Revolving Credit Facility depending on FTD Group's net leverage ratio). The interest rate on the Term Loan at December 31, 2012 was 4.75%. In addition, there was a commitment fee, which was equal to 0.45% per annum on the unused portion of the Revolving Credit Facility.

During the year ended December 31, 2012, FTD Group made a voluntary debt prepayment of $17.0 million, which eliminated all future scheduled mandatory principal payments under the 2011 Credit Agreement. Commencing in 2013 for fiscal year 2012, subject to certain exceptions, FTD Group was required to make annual repayments of a portion of the Term Loan based on excess cash flow as defined in the 2011 Credit Agreement. Such excess cash flow payment, which was paid in April 2013, totaled $10.9 million.

Under the terms of the 2011 Credit Agreement, FTD Group was generally restricted from transferring funds and other assets to FTD Companies, Inc. or United Online, with certain exceptions, including an annual basket of $15 million (subject to adjustment based on excess cash flow calculations) which was permitted to be used to make cash dividends, loans and advances to FTD Companies, Inc. or United Online, provided certain terms and conditions specified in the 2011 Credit Agreement were satisfied. These restrictions resulted in restricted net assets (as defined in Rule 4-08(e)(3) of Regulation S-X) of the Company and its subsidiaries totaling $277.3 million, including cash of $67.3 million, at December 31, 2012 which exceeded 25% of the consolidated net assets of the Company.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. FINANCING ARRANGEMENTS (Continued)

2013 Credit Agreement

On July 17, 2013, FTD Companies, Inc. entered into a new credit agreement (the "2013 Credit Agreement") 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, to refinance 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 2011 Credit Agreement in full and pay fees and expenses related to the 2013 Credit Agreement.

The obligations under the 2013 Credit Agreement are guaranteed by FTD Companies, Inc.'s material wholly-owned domestic subsidiaries (collectively, with FTD Companies, Inc., the "U.S. Loan Parties"). In addition, the obligations under the 2013 Credit Agreement are secured by a lien on substantially all of the assets of the U.S. Loan Parties, including a pledge of all of the outstanding capital stock of certain direct subsidiaries of the U.S. Loan Parties (except with respect to foreign subsidiaries and certain domestic subsidiaries whose assets consist primarily of foreign subsidiary equity interests, in which case such pledge shall be limited to 66% of the outstanding capital stock).

The interest rate set forth in the 2013 Credit Agreement is either LIBOR plus a margin ranging from 1.50% per annum to 2.25% per annum, a base rate plus a margin ranging from 0.50% per annum to 1.25% per annum, calculated according to the net leverage ratio of FTD Companies, Inc. and its subsidiaries. The initial base rate margin was 0.75% per annum and the initial LIBOR margin was 1.75% per annum. In addition, FTD Companies, Inc. will pay a commitment fee ranging from 0.20% per annum to 0.35% per annum on the unused portion of the revolving credit facility. The interest rate (based on LIBOR) and commitment fee rate at September 30, 2013 was 2.02% and 0.25%, respectively. The 2013 Credit Agreement contains customary representations and warranties, events of default, affirmative covenants and negative covenants, that, among other things, require FTD Companies, Inc. and its subsidiaries to maintain compliance with a maximum net leverage ratio and a minimum interest coverage ratio, and impose restrictions and limitations on, among other things, investments, dividends, and asset sales, and FTD Companies, Inc.'s and its subsidiaries' ability to incur additional debt and additional liens. FTD Companies, Inc. was in compliance with all covenants under the 2013 Credit Agreement at September 30, 2013.

Under the terms of the 2013 Credit Agreement, FTD Companies, Inc. is generally restricted from transferring funds and other assets to United Online, with certain exceptions prior to the Separation in connection with the reimbursement of certain expenses.

The refinancing of the 2011 Credit Agreement was accounted for in accordance with ASC 470, Debt. A significant portion of the debt under the 2011 Credit Agreement was considered to be extinguished and the Company recorded a $2.3 million loss on the extinguishment of debt which was recorded in interest expense during the quarter ended September 30, 2013. The changes in the

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. FINANCING ARRANGEMENTS (Continued)

Company's debt balances, net of discounts, for the nine months ended September 30, 2013 were as follows (in thousands):

	Balance at December 31, 2012		Draw Down of Debt		Repayments of Debt			Accretion of Discounts		Write-off of Discounts		Balance at September 30, 2013

2011 Credit Agreement, Term Loan	$	244,000	$	—	$	(246,013	)	$	281	$	1,732	$	—
2013 Credit Agreement		—		220,000		—			—		—		220,000

Total	$	244,000	$	220,000	$	(246,013	)	$	281	$	1,732	$	220,000

There are no scheduled mandatory debt payments under the 2013 Credit Agreement other than payment of the outstanding balance upon maturity in July 2018. Therefore, future minimum principal payments were as follows at September 30, 2013 (in thousands):

		Total Gross Debt			Year Ending December 31, 2018

2013 Credit Agreement		$	220,000		$	220,000

At September 30, 2013, the remaining borrowing capacity under the 2013 Credit Agreement, which was reduced by $1.4 million in outstanding letters of credit, was $128.6 million.

7. DERIVATIVE INSTRUMENTS

In March 2012, the Company entered into forward starting interest rate cap instruments based on 3-month LIBOR that are effective from January 2015 to June 2018 and have aggregated notional values totaling $130 million. The interest rate cap instruments are designated as cash flow hedges against expected future cash flows attributable to future 3-month LIBOR interest payments on a portion of the outstanding borrowings under the Company's debt agreements. The gains or losses on the instruments are reported in other comprehensive income to the extent that they are effective and will be reclassified into earnings when the expected future cash flows, beginning in January 2015 through June 2018 and attributable to future 3-month LIBOR interest payments, are recognized in earnings.

The estimated fair values and notional values of outstanding derivative instruments were as follows (in thousands):

		Estimated Fair Value of Derivative Instruments				Notional Value of Derivative Instruments

	Balance Sheet Location	September 30, 2013		December 31, 2012		September 30, 2013		December 31, 2012
Derivative Assets:
Interest rate caps	Other assets	$	1,169	$	699	$	130,000	$	130,000
Derivative Liabilities:
Forward foreign currency exchange contracts	Accrued liabilities	$	—	$	38	$	—	$	1,860

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. DERIVATIVE INSTRUMENTS (Continued)

The effect of derivatives on accumulated other comprehensive loss was as follows (in thousands):

	Changes in Gains (Losses) Recognized in Accumulated Other Comprehensive Loss on Derivatives Before Tax

	Quarter Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Derivatives Designated as Cash Flow Hedging Instruments
Interest rate caps	$	(368	)	$	(213	)	$	469	$	(1,139	)
Derivatives Designated as Net Investment Hedging Instruments
Forward foreign currency exchange contracts	$	(61	)	$	(151	)	$	101	$	(190	)

At September 30, 2013, the effective portion, before tax effect, of the Company's interest rate caps designated as cash flow hedging instruments was $0.7 million, none of which was expected to be reclassified from accumulated other comprehensive loss into interest expense in the consolidated statements of operations within the next 12 months. There was no ineffectiveness related to the Company's forward foreign currency exchange contracts designated as net investment hedging instruments for the nine months ended September 30, 2013 and 2012.

8. FAIR VALUE MEASUREMENTS

The following table presents information about financial assets and derivative instruments that were required to be measured at fair value on a recurring basis (in thousands):

	Estimated Fair Value						Estimated Fair Value

	September 30, 2013						December 31, 2012
	Total		Level 1		Level 2		Total		Level 1		Level 2
Assets:
Money market funds	$	27,097	$	27,097	$	—	$	63,822	$	63,822	$	—
Derivative assets		1,169		—		1,169		699		—		699

Total	$	28,266	$	27,097	$	1,169	$	64,521	$	63,822	$	699

Liabilities:
Derivative liabilities	$	—	$	—	$	—	$	38	$	—	$	38

Total	$	—	$	—	$	—	$	38	$	—	$	38

The Company estimated the fair value of its long-term debt using a discounted cash flow approach that incorporates a market interest yield curve with adjustments for duration and risk profile. In determining the market interest yield curve, the Company considered, among other factors, its estimated credit spread. At September 30, 2013, the Company estimated its credit spread as 1.8% for the long-term debt associated with the 2013 Credit Agreement, resulting in a yield-to-maturity estimate of 3.1%. At December 31, 2012, the Company estimated its credit rating as BB+/BB for the long-term

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. FAIR VALUE MEASUREMENTS (Continued)

debt associated with the 2011 Credit Agreement, resulting in a discount rate of 3.8%. The table below summarizes the estimated fair values for long-term debt (in thousands):

	September 30, 2013				December 31, 2012

			Estimated Fair Value				Estimated Fair Value
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	Carrying Amount		Level 2		Carrying Amount		Level 2
Long-term debt, net of discounts, including current portion	$	220,000	$	221,807	$	244,000	$	261,090

9. INCENTIVE COMPENSATION PLANS

United Online Stock-Based Compensation

Until November 1, 2013, the Company's employees participated in United Online's 2010 Incentive Compensation Plan, which included United Online's Stock-Based Compensation Plan. The following table summarizes the stock-based compensation that has been included in the following line items within the unaudited condensed consolidated statements of operations (in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,

	2013		2012		2013		2012
Operating expenses:
Cost of revenues-products	$	7	$	19	$	28	$	25
Cost of revenues-services		4		11		14		17
Sales and marketing		475		435		1,349		1,189
General and administrative		500		718		1,428		2,049

Total stock-based compensation	$	986	$	1,183	$	2,819	$	3,280

Tax benefit recognized	$	262	$	269	$	737	$	742

Allocated expenses from United Online include stock-based compensation of $0.3 million and $0.2 million for the quarters ended September 30, 2013 and 2012, respectively, and $0.8 million and $0.6 million for the nine months ended September 30, 2013 and 2012, respectively, for the employees of United Online whose costs of services was partially allocated to the Company. These costs are not reflected in the table above; however, these costs are included in general and administrative expenses in the unaudited condensed consolidated statements of operations. For additional information related to costs allocated to the Company by United Online, see Note 4—"Transactions with Related Parties—Transactions with United Online."

Recent Awards- Restricted Stock Unit Grants

Effective March 6, 2013, the Compensation Committee of the Board of Directors of United Online approved a restricted stock unit ("RSU") grant to an executive officer of the Company of 0.1 million shares. The restricted stock units vest as to one-third of the total number of units awarded annually over a three-year period beginning February 15, 2013.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. INCENTIVE COMPENSATION PLANS (Continued)

Effective March 6, 2013, the Secondary Compensation Committee of the Board of Directors of United Online approved restricted stock unit grants to other executive officers and employees of the Company totaling 0.6 million shares. The restricted stock units vest as to one-quarter of the total number of units awarded annually over a four-year period beginning February 15, 2013.

10. INCOME TAXES

The Company recorded a $1.6 million tax benefit for the quarter ended September 30, 2013 on a pre-tax loss of $1.4 million, resulting in an effective tax rate of 112.5%, which was significantly higher than the U.S. federal statutory tax rate of 35%. The effective tax rate was impacted by a reduction in the U.K. statutory corporation tax rate during the quarter, which resulted in a tax benefit of $1.4 million resulting from the re-measurement of deferred tax balances. Also impacting the effective rate was the treatment of certain non-deductible costs related to the Separation as a permanent difference.

The Company's effective income tax rate for the nine months ended September 30, 2013 of 31.8% was lower than the U.S. federal statutory tax rate of 35% primarily due to the reduction in the U.K. statutory corporation tax rate during the period, partially offset by the treatment of certain non-deductible costs related to the Separation as a permanent difference.

11. EARNINGS PER SHARE

Basic and diluted earnings per share were calculated using the following (in thousands, except per share amounts):

	Quarter Ended September 30,				Nine Months Ended September 30,

	2013		2012		2013		2012
Net income	$	180	$	1,509	$	14,955	$	15,625

Basic and diluted earnings per share	$	0.01	$	0.08	$	0.80	$	0.84

Basic and diluted average shares outstanding		18,584		18,584		18,584		18,584

Immediately prior to the Separation, the authorized shares of FTD Companies, Inc. capital stock were increased from 10,000 to 65,000,000, divided into the following classes: 60,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share. The 10,000 shares of FTD common stock, par value $0.01 per share, that were previously issued and outstanding were automatically reclassified as and became 18,583,927 shares of common stock, par value $0.0001 per share. Upon the Separation, on November 1, 2013, holders of United Online common stock received one share of FTD common stock for every five shares of United Online common stock held on October 10, 2013, the record date. Basic and diluted earnings per share and the average number of shares outstanding were retrospectively restated adjusting for such reclassification. The same number of shares was used to calculate basic and diluted earnings per share since no FTD stock-based awards were outstanding prior to the Separation. Diluted earnings per share subsequent to the Separation will reflect the dilution related to converted and any potential future FTD stock-based awards.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. CONTINGENCIES—LEGAL MATTERS

In March 2012, Hope Kelm, Barbara Timmcke, Regina Warfel, Brett Reilly, Juan M. Restrepo, and Jennie H. Pham filed a purported class action complaint (the "Kelm Class Action") in United States District Court, District of Connecticut, against the following defendants: (i) Chase Bank USA, N.A., Bank of America, N.A., Capital One Financial Corporation, Citigroup, Inc., and Citibank, N.A. (collectively, the "Credit Card Company Defendants"); (ii) 1-800-Flowers.com, Inc., United Online, Inc., Memory Lane, Inc., Classmates International, Inc., FTD Group, Inc., Days Inns Worldwide, Inc., Wyndham Worldwide Corporation, PeopleFindersPro, Inc., Beckett Media LLC, Buy.com, Inc., Rakuten USA, Inc., IAC/InterActiveCorp, and Shoebuy.com, Inc. (collectively, the "E-Merchant Defendants"); and (iii) Trilegiant Corporation, Inc. ("Trilegiant"), Affinion Group, LLC ("Affinion"), and Apollo Global Management, LLC ("Apollo"). The complaint alleges (1) violations of the Racketeer Influenced Corrupt Organizations Act ("RICO") by all defendants, and aiding and abetting violations of such act by the Credit Card Company Defendants; (2) aiding and abetting violations of federal mail fraud, wire fraud and bank fraud statutes by the Credit Card Company Defendants; (3) violations of the Electronic Communications Privacy Act ("ECPA") by Trilegiant, Affinion and the E-Merchant Defendants, and aiding and abetting violations of such act by the Credit Card Company Defendants; (4) violations of the Connecticut Unfair Trade Practices Act by Trilegiant, Affinion, Apollo, and the E-Merchant Defendants, and aiding and abetting violations of such act by the Credit Card Company Defendants; (5) violation of California Business and Professions Code section 17602 by Trilegiant, Affinion, Apollo, and the E-Merchant Defendants; and (6) unjust enrichment by all defendants. The plaintiffs seek class certification, restitution and disgorgement of all amounts wrongfully charged to and received from plaintiffs, damages, treble damages, punitive damages, preliminary and permanent injunctive relief, attorneys' fees, costs of suit, and pre- and post-judgment interest on any amounts awarded.

In March 2012, Debra Miller and William Thompson filed a purported class action complaint (the "Miller Class Action") in United States District Court, District of Connecticut, against the following defendants: (i) Trilegiant, Affinion, Apollo, Vertrue, Inc., Webloyalty.com, Inc., and Adaptive Marketing, LLC (collectively, the "Membership Companies"); (ii) 1-800-Flowers.com, Inc., Beckett Media LLC, Buy.com, Inc., Classmates International, Inc., Days Inn Worldwide, Inc., FTD Group, Inc., IAC/Interactivecorp, Inc., Memory Lane, Inc., Peoplefinderspro, Inc., Rakuten USA, Inc., Shoebuy.com, Inc., United Online, Inc., Wells Fargo & Company, and Wyndham Worldwide Corporation (collectively, the "Marketing Companies"); and (iii) Bank of America, N.A., Capital One Financial Corporation, Chase Bank USA, N.A., and Citibank, N.A. (collectively, the "Credit Card Companies"). The complaint alleges (1) violations of RICO by all defendants, and aiding and abetting violations of such act by the Credit Card Companies; (2) aiding and abetting violations of federal mail fraud, wire fraud and bank fraud statutes by the Credit Card Companies; (3) violations of the ECPA by the Membership Companies and the Marketing Companies, and aiding and abetting violations of such act by the Credit Card Companies; (4) violations of the Connecticut Unfair Trade Practices Act by the Membership Companies and the Marketing Companies, and aiding and abetting violations of such act by the Credit Card Companies; (5) violation of California Business and Professions Code section 17602 by the Membership Companies and the Marketing Companies; and (6) unjust enrichment by all defendants. The plaintiffs seek class certification, restitution and disgorgement of all amounts wrongfully charged to and received from the plaintiffs, damages, treble damages, punitive damages, preliminary and permanent injunctive relief, attorneys' fees, costs of suit, and pre- and post-judgment interest on any amounts awarded.

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. CONTINGENCIES—LEGAL MATTERS (Continued)

In April 2012, the Kelm Class Action and the Miller Class Action were consolidated with a related case under the case caption In re Trilegiant Corporation, Inc. In September 2012, the plaintiffs filed their consolidated amended complaint and named five additional defendants. The defendants have responded to the consolidated amended complaint by joining in motions to dismiss filed by other defendants on December 7, 2012. Those motions were argued before the district court on September 25, 2013, and taken under submission. The court has not yet ruled on the motion to dismiss, and no trial date has been set.

In addition, in December 2012, David Frank filed a purported class action complaint (the "Frank Class Action") in United States District Court, District of Connecticut, against the following defendants: Trilegiant, Affinion, Apollo (collectively, the "Frank Membership Companies"); 1-800-Flowers.com, Inc., Beckett Media LLC, Buy.com, Inc., Classmates International, Inc., Days Inn Worldwide, Inc., FTD Group, Inc., Hotwire, Inc., IAC/Interactivecorp, Inc., Memory Lane, Inc., Orbitz Worldwide, LLC, PeopleFindersPro, Inc., Priceline.com, Inc., Shoebuy.com, Inc., TigerDirect, Inc., United Online, Inc., and Wyndham Worldwide Corporation (collectively, the "Frank Marketing Companies"); Bank of America, N.A., Capital One Financial Corporation, Chase Bank USA, N.A., Chase Paymentech Solutions, LLC, Citibank, N.A., Citigroup, Inc., and Wells Fargo Bank, N.A. (collectively, the "Frank Credit Card Companies"). The complaint alleges (1) violations of RICO by all defendants; (2) aiding and abetting violations of such act by the Frank Credit Card Companies; (3) aiding and abetting commissions of mail fraud, wire fraud and bank fraud by the Frank Credit Card Companies; (4) violation of the ECPA by the Frank Membership Companies and the Frank Marketing Companies, and aiding and abetting violations of such act by the Frank Credit Card Companies; (5) violations of the Connecticut Unfair Trade Practices Act by the Frank Membership Companies and the Frank Marketing Companies, and aiding and abetting violations of such act by the Frank Credit Card Companies; (6) violation of California Business and Professions Code section 17602 by the Frank Membership Companies and the Frank Marketing Companies; and (7) unjust enrichment by all defendants. The plaintiff seeks class certification, restitution and disgorgement of all amounts wrongfully charged to and received from plaintiff, damages, treble damages, punitive damages, preliminary and permanent injunctive relief, attorneys' fees, costs of suit, and pre- and post-judgment interest on any amounts awarded. On January 23, 2013, the plaintiff moved to consolidate the Frank Class Action with the In re Trilegiant Corporation, Inc. action. In response, the court ordered the plaintiff to show cause as to why, among other things, the plaintiff should be afforded named plaintiff status. The plaintiff filed his response to the order to show cause on February 15, 2013. The court has not yet ruled upon the request for consolidation or the order to show cause.

In December 2008, Interflora, Inc. (in which the Company has a two-thirds ownership interest) and Interflora issued proceedings against Marks and Spencer plc ("Marks and Spencer") seeking injunctive relief, damages, interest, and costs in an action claiming infringement of U.K. trademark registration number 1329840 and European Community trademark registration number 909838, both for the word "Interflora". Marks and Spencer did not make a counterclaim. In July 2009, the High Court of Justice of England and Wales (the "High Court"), referred certain questions to the Court of Justice of European Union ("CJEU") for a preliminary ruling. In September 2011, the CJEU handed down its judgment on the questions referred by the High Court. In February 2012, the High Court scheduled the trial for April 2013. In September 2012, Interflora executed an indemnity agreement by which Interflora agreed to indemnify Interflora, Inc. against all losses and expenses arising out of this action which Interflora, Inc. may incur after July 10, 2012. The trial in this matter concluded in April 2013. In

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. CONTINGENCIES—LEGAL MATTERS (Continued)

May 2013, the High Court ruled that Marks and Spencer infringed the Interflora trademarks. In June 2013, the High Court issued an injunction prohibiting Marks and Spencer from infringing the Interflora trademarks in specified jurisdictions and ordered Marks and Spencer to provide certain disclosures in order for damages to be quantified. The High Court granted Marks and Spencer permission to appeal the ruling. Marks and Spencer has submitted its appeal on the grounds for which permission was granted by the High Court, and is further seeking permission to appeal on additional grounds.

The Company has been cooperating with certain governmental authorities in connection with their respective investigations of its former post-transaction sales practices and certain other current or former business practices. In 2010, FTD.COM and Classmates Online, Inc. (a wholly-owned subsidiary of United Online) received subpoenas from the Attorney General for the State of Kansas and the Attorney General for the State of Maryland, respectively. These subpoenas were issued on behalf of a Multistate Work Group that consists of the Attorneys General for the following states: 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 primary focus of the inquiry concerns certain post-transaction sales practices in which these companies previously engaged with certain third-party vendors. In the second quarter of 2012, the Company received an offer of settlement from the Multistate Work Group consisting of certain injunctive relief and the consideration of two areas of monetary relief: (1) restitution to consumers and (2) a $20 million payment by these companies for the violations alleged by the Multistate Work Group and to reimburse the Multistate Work Group for its investigation costs. The Company rejected the Multistate Work Group's offer. The Company has since had ongoing discussions with the Multistate Work Group regarding the non-monetary aspects of a negotiated resolution. The Company is continuing to cooperate with the Multistate Work Group and is providing requested information. There can be no assurances as to the terms on which the Company and the Multistate Work Group may agree to settle this matter, or that any settlement of this matter may be reached. The Company is not able to reasonably estimate the amount of possible loss or range of loss that may arise, if any. In the event that the Company and the Multistate Work Group agree to settle this matter, or if no settlement is reached and there are adverse judgments against the Company in connection with litigation filed by the Attorneys General of the Multistate Work Group, there could be a material adverse effect on the Company's financial position, results of operations and cash flows.

The Company cannot predict the outcome of these or any other governmental investigations or other legal actions or their potential implications for its business. There are no assurances that additional governmental investigations or other legal actions will not be instituted in connection with the Company's former post-transaction sales practices or other current or former business practices.

The Separation and Distribution Agreement which was executed between FTD and United Online in connection with the Separation provides United Online with the right to control the litigation and settlement of certain litigation matters that relate to United Online, its predecessors and its consolidated subsidiaries and the Company, its predecessors and its consolidated subsidiaries and which were asserted before the Separation, as well as specified litigation matters which are asserted after the Separation. These matters include the ongoing matters relating to the Company's former post-transaction sales practices or other current or former business practices described above. The Separation and Distribution Agreement also provides for the allocation of liabilities and expenses between United Online and the Company with respect to these matters. It also establishes procedures with respect to claims subject to indemnification, insurance claims and related matters. The Company

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. CONTINGENCIES—LEGAL MATTERS (Continued)

and United Online may not prevail in existing or future claims and any judgments against the Company, or settlement or resolution of such claims may involve the payment of significant sums, including damages, fines, penalties, or assessments, or changes to the Company's business practices.

The Company records a liability when it believes that it is both probable that a loss will be incurred, and the amount of loss can be reasonably estimated. The Company evaluates, at least quarterly, developments in its legal matters that could affect the amount of liability that has been previously accrued, and makes adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount. The Company may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (i) if the damages sought are indeterminate, (ii) if the proceedings are in early stages, (iii) if there is uncertainty as to the outcome of pending appeals, motions or settlements, (iv) if there are significant factual issues to be determined or resolved, and (v) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any. With respect to the other legal matters described above, the Company has determined, based on its current knowledge, that the amount of possible loss or range of loss, including any reasonably possible losses in excess of amounts already accrued, is not reasonably estimable. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond the Company's control. As such, there can be no assurance that the final outcome of these matters will not materially and adversely affect the Company's business, financial condition, results of operations, or cash flows.

13. SUPPLEMENTAL CASH FLOW INFORMATION

The following table sets forth supplemental cash flow disclosures (in thousands):

	Nine Months Ended September 30,

	2013		2012
Cash paid for interest	$	6,620	$	9,821
Cash paid for income taxes, net	$	19,300	$	6,791

At September 30, 2013, non-cash investing items included $1.4 million of property and equipment, $0.7 million prepaid expenses, and $0.3 million of deferred financing fees that were not yet paid for and were included in accounts payable and other liabilities in the Company's consolidated balance sheet.

14. SUBSEQUENT EVENTS

FTD Separation from United Online

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. SUBSEQUENT EVENTS (Continued)

Online, Inc. The Separation was effected by United Online through a tax-free dividend involving the distribution of all FTD Companies, Inc. common stock held by United Online to United Online's stockholders on November 1, 2013. Upon the Separation, which occurred at 12:01a.m EDT on November 1, 2013, holders of United Online common stock received one share of FTD common stock for every five shares of United Online common stock they held on the record date (prior to giving effect to the reverse stock split of United Online shares). In addition, United Online effected a one-for-seven reverse stock split of United Online common stock, which became effective at 11:59 p.m. EDT on October 31, 2013. Following completion of the Separation, FTD Companies, Inc. became an independent, publicly traded company on the NASDAQ Global Select Market utilizing the symbol: "FTD."

As part of the Separation, FTD entered into various agreements with United Online which provide for the allocation between the Company and United Online of the assets, liabilities, and obligations, of United Online and its subsidiaries, and govern the relationship between United Online and the Company after the Separation. These agreements became effective on November 1, 2013 and included the following:

•: The Separation and Distribution Agreement provides for the transfer of assets and assumption of liabilities and settlement of intercompany accounts between the Company and United Online, governs the rights and obligations of FTD and United Online regarding the Separation, and provides United Online with the right to control and settle certain litigation as disclosed in Note 12.
•: The Tax Sharing Agreement governs United Online and FTD's rights, responsibilities and obligations after the Separation with respect to payment of taxes, including any taxes that may be imposed that arise from the failure of the distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning of Section 355 of the Code and sets forth the respective obligations among the Company and United Online with respect to the preparation and filing of tax returns, the administration of tax audits and disputes and other tax matters.
•: The Transition Services Agreement provides for United Online to continue to provide various services to the Company on an interim, transitional basis, generally for a period of up to 12 months.
•: The Employee Matters Agreement ("EMA") sets forth agreements between the Company and United Online as to certain employment, compensation, and benefits matters and provides for the treatment of outstanding equity awards of United Online in connection with the Separation.

Conversion of United Online Stock Option and Stock Unit Awards

Under the terms of the EMA, the following will occurr as a result of the Separation:

•: Employee stock options and RSUs issued under the previous United Online Incentive Plans will be adjusted and converted into new equity awards for FTD common stock using a formula designed to preserve the intrinsic value and fair value of the awards immediately prior to the separation. Such formula is based on the volume weighted average price for the three trading days immediately preceding and the three trading days immediately following the distribution date (and not including the distribution date). Converted awards will retain the same terms and

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FTD COMPANIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. SUBSEQUENT EVENTS (Continued)

conditions and vesting schedule, issuance dates and expiration dates of the original United Online awards.

•: The United Online RSUs held by Mark R. Goldston and directors of United Online that were outstanding immediately prior to the Separation vested on November 1, 2013, subsequent to the Separation, and will be settled: (i) in the case of one-half of such RSUs, in United Online common stock; and (ii) in the case of the remaining one-half of such RSUs, in FTD common stock. The number of shares will be determined by utilizing the same conversion adjustment mechanisms used to convert the RSUs held by employees. Options to purchase United Online common stock that were outstanding immediately prior to the Separation and held by these same individuals will also be converted into: (i) in the case of one-half of such options, United Online options; and (ii) in the case of the remaining one-half of such options, FTD Options, utilizing the same adjustment mechanisms as noted above for employee stock options.

United Online Employee Stock Purchase Plan

On October 31, 2013, each outstanding purchase right under the United Online Employee Stock Purchase Plan automatically was exercised by applying the payroll deductions or other permitted contributions of each participant thereunder to the purchase of shares of United Online common stock at the purchase price per share in effect for that purchase interval. These purchased shares of United Online common stock were subject to the conversion adjustments noted above related to other equity awards.

FTD Companies, Inc. Incentive Compensation Plan

United Online's Board of Directors approved the FTD Companies, Inc. Incentive Compensation Plan (the "2013 Plan") effective upon the Separation. The 2013 Plan consists of three separate incentive compensation programs: (i) the discretionary grant program, (ii) the stock issuance program and (iii) the incentive bonus program, which authorize the granting of awards to employees and non-employee directors, including stock options, stock appreciation rights, RSUs and other stock-based awards and cash incentive programs. Under the 2013 Plan, 1.2 million shares of the Company's common stock have been reserved for issuance of awards on or after the 2013 Plan effective date.

FTD India Private Limited

In connection with the Separation, the Company formed a new, wholly-owned subsidiary in the Republic of India, FTD India Private Limited. As contemplated by the Separation and Distribution Agreement, personnel of United Online's India operations that were primarily dedicated to servicing the Company's business in India became employees of FTD India Private Limited. Additionally, certain equipment dedicated primarily to servicing the Company's business in India ("the FTD India Assets") will be transferred by United Online to FTD India Private Limited in exchange for a cash payment equal to the fair market value of the FTD India Assets.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Overview

We are a premier floral and gifting 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 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.

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. 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.

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Separation from United Online

Prior to November 1, 2013, FTD was a wholly owned subsidiary of United Online. On August 1, 2012, United Online announced that its Board of Directors had approved a preliminary plan to separate the Company into two independent, publicly traded companies: FTD Companies, Inc. and United Online, Inc. (the "Separation"). In September 2013, the Company received a private letter ruling from the Internal Revenue Service ("IRS") confirming that the separation and the distribution of shares of FTD Companies, Inc. common stock qualifies as a transaction that is tax-free for U.S. federal income tax purposes. On October 1, 2013, United Online announced that the SEC had declared the FTD Companies, Inc. Registration Statement on Form 10 effective and that United Online's Board of Directors had approved the separation of the Company from United Online through a tax-free dividend involving the distribution of all FTD Companies, Inc. common stock held by United Online to United Online's stockholders on November 1, 2013. Immediately prior to the Separation, the authorized shares of FTD Companies, Inc. capital stock were increased from 10,000 to 65,000,000, divided into the following classes: 60,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share. The 10,000 shares of FTD common stock, par value $0.01 per share, that were previously issued and outstanding were automatically reclassified as and became 18,583,927 shares of common stock, par value $0.0001 per share. Upon the Separation, which occurred at 12:01 a.m. Eastern Daylight Time ("EDT") on November 1, 2013, holders of United Online common stock received one share of FTD common stock for every five shares of United Online common stock held on the record date (prior to giving effect to the reverse stock split of United Online shares). In addition, United Online effected a one-for-seven reverse stock split of United Online common stock, which became effective at 11:59 p.m. EDT on October 31, 2013. Following completion of the Separation, FTD Companies, Inc. became an independent, publicly traded company on the NASDAQ Global Select Market utilizing the symbol: "FTD."

In connection with the Separation, we have incurred certain transaction related costs some of which were incurred by and allocated to the Company by United Online. These costs relate primarily to investment bankers, legal, accounting, tax, and other professional costs. During the quarter and nine months ended September 30, 2013, the Company incurred transaction related costs of $3.3 million and $4.7 million, respectively. We will incur additional transaction related costs in the fourth quarter of 2013. In addition, we will incur certain ongoing public company costs, including board of directors fees, corporate overhead costs, legal, accounting, insurance, and investor relations, as a stand-alone public company.

Key Business Metrics

We review a number of key business metrics to help us monitor our performance and trends affecting our businesses, and to develop forecasts and budgets. These key measures include the following:

Consumer Orders. We monitor the number of consumer orders for floral, gift and related products during a given period. Consumer orders are orders delivered during the period that originated in the U.S. and Canada, primarily from the www.ftd.com website and the 1-800-SEND-FTD telephone number, and in the U.K. and the Republic of Ireland, primarily from the www.interflora.co.uk website and various telephone numbers and other websites. The number of consumer orders is not adjusted for non-delivered orders that are refunded on or after the scheduled delivery date. Orders originating with a florist or other retail location for delivery to consumers are not included. The number of consumer orders received may fluctuate significantly from quarter to quarter due to seasonality resulting from the timing of key holidays; general economic conditions; fluctuations in marketing expenditures on initiatives designed to attract new and retain existing customers; changes in pricing for our floral, plant, and gift products or competitive offerings; new or terminated partnerships; and changing consumer preferences, among other factors.

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Average Order Value. We monitor the average value for consumer orders delivered in a given period, which we refer to as the average order value. Average order value represents the average U.S. Dollar amount received for consumer orders delivered during a period. For orders placed outside the U.S. (principally in the U.K. and the Republic of Ireland), this average U.S. Dollar amount is determined after translating the local currency amounts received into U.S. Dollars. Average order value includes merchandise revenues and shipping and service fees paid by the consumer, less discounts and refunds (net of refund-related fees charged to floral network members). Average order values may fluctuate from period to period based on the average foreign currency exchange rates; product mix; changes in merchandise pricing, shipping and service fees; levels of refunds issued; and discounts, among other factors.

The table below sets forth, for the periods presented, as applicable, our consolidated revenues, consumer orders, average order value, and average currency exchange rates.

	Quarter Ended										Nine Months Ended September 30,

	September 30, 2013		June 30, 2013		March 31, 2013		December 31, 2012		September 30, 2012		Nine Months Ended September 30,
	September 30, 2013		June 30, 2013		March 31, 2013		December 31, 2012		September 30, 2012		2013		2012
Revenues (in thousands)	$	118,527	$	164,279	$	190,283	$	153,178	$	116,362	$	473,089	$	460,336
Consumer orders (in thousands)		1,250		1,921		2,204		1,787		1,239		5,375		5,233
Average order value	$	61.69	$	61.27	$	61.01	$	60.13	$	61.06	$	61.26	$	61.65
Average currency exchange rate: GBP to USD		1.55		1.54		1.54		1.61		1.58		1.54		1.58

Our revenues and operating results typically exhibit seasonality. Revenues and operating results tend to be lower for the quarter ending September 30 because none of the most popular floral and gift-giving holidays, which include Mother's Day in the U.S. and the U.K., Valentine's Day, Christmas, Easter, and Thanksgiving, fall within that quarter. In addition, depending on the year, Easter and the U.K. Mother's Day sometimes fall within the quarter ending March 31 and sometimes fall within the quarter ending June 30. Furthermore, depending on the year, certain of the most popular floral and gift-giving holidays, such as Valentine's Day, may occur on a weekend or government holiday. As a result of these variations, we believe that comparisons of our revenues and operating results for any period with those of the immediately preceding period, or, in some instances, the same period of the preceding fiscal year, may be of limited relevance in evaluating our historical performance and predicting our future financial performance. Our working capital, cash and borrowings may also fluctuate during the year as a result of the factors described above.

Financial Statement Presentation

Revenues

Products Revenues

Products revenues are derived primarily from selling floral, gift and related products to consumers and the related shipping and service fees. 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 floral network members.

Services Revenues

Services revenues related to orders sent through the floral network are variable based on either the number of orders or on the value of orders and are recognized in the period in which the orders

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are delivered. Membership and other subscription-based fees are recognized monthly as earned, on a month-to-month basis.

Cost of Revenues

Cost of revenues primarily includes product costs; shipping and delivery costs; costs associated with taking orders; printing and postage costs; systems installation, training and support costs; telecommunications and data center costs; depreciation of network computers and equipment; license fees; costs related to customer billing and billing support for floral network members; fees associated with the storage and processing of customer credit cards and associated bank fees; domain name registration fees; and personnel and overhead-related costs associated with operating our networks.

Sales and Marketing

Sales and marketing expenses include expenses associated with promoting our brands, products and services. Expenses associated with promoting our brands, products and services include advertising and promotion expenses; fees paid to online and other corporate partners and to floral network members related to order volume sent through our floral network; and personnel and overhead-related expenses for marketing, merchandising, customer service, and sales personnel. In addition, sales and marketing expenditures also include branding and customer acquisition campaigns consisting of television, Internet, public relations, sponsorships, print, and outdoor advertising, and retail and other performance-based distribution relationships. Marketing and advertising costs to promote our brands, products and services are expensed in the period incurred. Advertising and promotion expenses include media, agency, and promotion expenses. Media production costs are expensed the first time the advertisement is run. Media and agency costs are expensed over the period the advertising runs.

General and Administrative

General and administrative expenses consist of personnel-related expenses for executive, finance, legal, human resources, technology, facilities, and internal audit. In addition, general and administrative expenses include, among other costs, maintenance of existing software, technology, and websites; development of new or improved software technology; professional fees for legal, accounting, and financial services; insurance; occupancy and other overhead-related costs; non-income taxes; bad debt expense; reserves or expenses incurred related to litigation, investigations, or similar matters; and gains and losses on sale of assets. These include direct expenses incurred by FTD, as well as general corporate costs which have been allocated to FTD by United Online. General and administrative expenses also include expenses resulting from actual or potential transactions such as acquisitions, spin offs, financing transactions, and other strategic transactions.

Amortization of Intangible Assets

Amortization of intangible assets relates primarily to intangible assets associated with the acquisition of the Company by United Online in 2008. Amortization of intangible assets includes amortization of certain acquired trademarks and trade names; acquired software and technology; acquired customers; and other acquired identifiable intangible assets. In accordance with the provisions set forth in ASC 350, goodwill and indefinite-lived intangible assets are not being amortized but are tested for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would indicate the fair value may be below the carrying amount.

Interest Income

Interest income consists primarily of earnings on our cash and cash equivalents and interest on long-term receivables, including those from our technology system sales.

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Interest Expense

Interest expense consists of interest expense on our credit facilities, including accretion of discounts and amortization of debt issue costs, loss on extinguishment of debt, and our interest rate caps.

Other Income (Expense), Net

Other income (expense), net, consists of gains and losses on foreign currency exchange rate transactions; realized and unrealized gains and losses on certain forward foreign currency exchange contracts; equity earnings on investments in subsidiaries; and other non-operating income and expenses.

Results of Operations

Quarter and Nine Months Ended September 30, 2013 compared to
Quarter and Nine Months Ended September 30, 2012

The following information sets forth, for the periods presented, selected historical consolidated statements of operations data. The information should be read in conjunction with Liquidity and Capital Resources, Contractual Obligations, and Other Commitments included herein Item 2, as well as "Quantitative and Qualitative Disclosures About Market Risk" included in Part I, Item 3 of this Form 10-Q, and the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Form 10-Q.

Revenues

	Quarter Ended September 30,				Change						Nine Months Ended September 30,				Change

	2013		2012		$			%			2013		2012		$			%
	(in thousands, except percentages and average order value)
Products	$	88,633	$	85,753	$	2,880			3	%	$	370,980	$	359,151	$	11,829			3	%
Services		29,894		30,609		(715	)		(2	)%		102,109		101,185		924			1	%

Total revenues	$	118,527	$	116,362	$	2,165			2	%	$	473,089	$	460,336	$	12,753			3	%

Consumer orders		1,250		1,239		11			1	%		5,375		5,233		142			3	%
Average order value	$	61.69	$	61.06	$	0.63			1	%	$	61.26	$	61.65	$	(0.39	)		(1	)%

The increase in total revenues for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012, was primarily due to an increase in revenues generated by our consumer business. The increase in products revenues for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012, was driven by a 1% increase in consumer order volume driven by an increase in order volume in both the U.K. and the U.S. as well as a 1% increase in average order value. Excluding the unfavorable impact of foreign currency exchange rates, average order value increased 2% for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012, due to higher average order values in both the U.S. and the U.K. Also contributing to the increase in products revenues was a $1.1 million increase in container sales to our floral network members. The decrease in services revenues for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012, was primarily related to a decrease in membership and subscription-based revenues. Foreign currency exchange rates had a $0.6 million unfavorable impact on total revenues for the quarter ended September 30, 2013 due to a weaker British Pound versus the U.S. Dollar.

The increase in total revenues for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, was primarily due to an increase in revenues generated by our consumer business, and includes a $4.1 million increase in revenues generated by the Flying Flowers,

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Flowers Direct and Drake Algar businesses which we acquired in April 2012. The increase in products revenues for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, was driven by a 3% increase in consumer order volume, substantially all of which was due to the contribution of orders from the Flying Flowers and Flowers Direct businesses. Partially offsetting this increase in order volume was a 1% decrease in average order value primarily due to consumer orders generated by the Flying Flowers and Flowers Direct businesses, which have lower average order values compared to the rest of our consumer business. Excluding the Flying Flowers and Flowers Direct businesses and the unfavorable impact of changes in foreign currency exchange rates, average order value increased by 1%. Also contributing to the increase in products revenues was a $3.3 million increase in container sales to our floral network members. The increase in services revenues was primarily related to a $1.4 million increase in order-related revenues driven by an increase in order volume in the floral network business offset in part by a $0.4 million decrease in membership and subscription-based revenue. Foreign currency exchange rates had a $2.9 million unfavorable impact on total FTD revenues for the nine months ended September 30, 2013 due to a weaker British Pound versus the U.S. Dollar.

Cost of Revenues

	Quarter Ended September 30,						Change						Nine Months Ended September 30,						Change

	2013			2012			$			%			2013			2012			$			%
	(in thousands, except percentages)
Products	$	67,667		$	66,221		$	1,446			2	%	$	283,427		$	275,753		$	7,674			3	%
Services		4,802			4,932			(130	)		(3	)%		14,519			15,042			(523	)		(3	)%

Total cost of revenues	$	72,469		$	71,153		$	1,316			2	%	$	297,946		$	290,795		$	7,151			2	%

Cost of products revenues as a percentage of products revenues		76.3	%		77.2	%								76.4	%		76.8	%
Cost of services revenues as a percentage of services revenues		16.1	%		16.1	%								14.2	%		14.9	%
Total cost of revenues as a percentage of total revenues		61.1	%		61.1	%								63.0	%		63.2	%

The increase in cost of revenues for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012, was primarily due to the increase in products revenues, which was driven by an increase in consumer order volume and increased container sales. Foreign currency exchange rates had a $0.4 million favorable impact on cost of revenues for the quarter. Cost of revenues as a percentage of revenues remained relatively flat for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012.

The increase in cost of revenues for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, was primarily due to the increase in products revenues, which was driven by an increase in consumer order volume and increased container sales. Foreign currency exchange rates had a $2.0 million favorable impact on cost of revenues for the nine months ended September 30, 2013. Cost of revenues as a percentage of revenues remained relatively flat for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012.

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Sales and Marketing

	Quarter Ended September 30,						Change					Nine Months Ended September 30,						Change

	2013			2012			$		%			2013			2012			$		%
	(in thousands, except percentages)
Sales and marketing	$	21,184		$	21,181		$	3		—	%	$	79,194		$	78,588		$	606		1	%
Sales and marketing expenses as a percentage of revenues		17.9	%		18.2	%							16.7	%		17.1	%

Sales and marketing expenses were relatively flat for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012. This was driven by a $0.2 million increase in marketing costs related to the consumer businesses and a $0.2 million increase in marketing expenditures related to an increase in floral network order volume. These increases were offset by a $0.4 million decrease in selling costs in the floral network business.

The increase in sales and marketing expenses for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, was primarily related to a $2.0 million increase in marketing costs related to the Flying Flowers, Flowers Direct and Drake Algar businesses, a $1.1 million increase in marketing expenditures related to an increase in floral network order volume and a $0.3 million increase related to an increase in consumer order volume. These increases were partially offset by a $2.2 million decrease in certain higher cost marketing programs in the consumer businesses and a $0.8 million decrease in selling costs in the floral network businesses.

General and Administrative

	Quarter Ended September 30,						Change					Nine Months Ended September 30,						Change

	2013			2012			$		%			2013			2012			$		%
	(in thousands, except percentages)
General and administrative	$	16,709		$	13,026		$	3,683		28	%	$	45,823		$	39,501		$	6,322		16	%
General and administrative expenses as a percentage of revenues		14.1	%		11.2	%							9.7	%		8.6	%

The increase in general and administrative expenses for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012, was primarily due to $3.3 million in costs recorded in the quarter ended September 30, 2013 associated with the Separation and a $0.7 million increase in personnel related costs.

The increase in general and administrative expenses for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, was primarily due to $4.7 million in costs recorded in the nine months ended September 30, 2013 associated with the Separation, compared to $0.6 million of transaction related costs recorded in the nine months ended September 30, 2012 associated with the acquisition of the Flying Flowers, Flowers Direct and Drake Algar businesses, a $2.0 million increase in legal fees and dispute settlement costs and a $2.0 million increase in personnel related costs. These increases were partially offset by an interim award of $1.7 million as reimbursement of legal fees in the Marks and Spencer litigation and a $0.4 million decrease in bad debt expense.

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Amortization of Intangible Assets

	Quarter Ended September 30,				Change						Nine Months Ended September 30,				Change

	2013		2012		$			%			2013		2012		$			%
	(in thousands, except percentages)
Amortization of intangible assets	$	5,721	$	6,431	$	(710	)		(11	)%	$	18,524	$	19,092	$	(568	)		(3	)%

The decrease in amortization of intangible assets for the quarter and nine months ended September 30, 2013, compared to the quarter and nine months ended September 30, 2012, was primarily due to certain complete technology intangible assets becoming fully amortized during the quarter.

Interest Income

	Quarter Ended September 30,				Change						Nine Months Ended September 30,				Change

	2013		2012		$			%			2013		2012		$			%
	(in thousands, except percentages)
Interest Income	$	153	$	182	$	(29	)		(16	)%	$	496	$	564	$	(68	)		(12	)%

Interest income was relatively flat for the quarter and nine months ended September 30, 2013 compared to the quarter and nine months ended September 30, 2012.

Interest Expense

	Quarter Ended September 30,				Change					Nine Months Ended September 30,				Change

	2013		2012		$		%			2013		2012		$		%
	(in thousands, except percentages)
Interest Expense	$	4,067	$	3,260	$	807		25	%	$	10,450	$	10,301	$	149		1	%

The increase in interest expense for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012, was primarily due to a $2.3 million loss on extinguishment of debt recorded in connection with the refinancing of the Company's credit facilities, offset by a $1.5 million reduction in interest expense related to favorable interest rates and lower debt principal balances outstanding.

The increase in interest expense for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, was primarily due to a $2.3 million loss on extinguishment of debt in connection with the refinancing of the Company's credit facilities, partially offset by a $2.2 million reduction in interest expense related to favorable interest rates and lower debt principal balances outstanding.

Other Income, Net

	Quarter Ended September 30,				Change						Nine Months Ended September 30,				Change

	2013		2012		$			%			2013		2012		$			%
	(in thousands, except percentages)
Other Income, Net	$	25	$	131	$	(106	)		(81	)%	$	265	$	474	$	(209	)		(44	)%

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The decrease in other income, net, for the quarter and nine months ended September 30, 2013, compared to the quarter and nine months ended September 30, 2012, was primarily due to a decrease in gains associated with foreign currency exchange transactions.

Provision (Benefit) for Income Taxes

	Quarter Ended September 30,						Nine Months Ended September 30,

	2013			2012			2013			2012
	(in thousands, except percentages)
Provision (benefit) for income taxes	$	(1,625	)	$	115		$	6,958		$	7,472
Effective income tax rate		112.5	%		7.1	%		31.8	%		32.4	%

During the quarter ended September 30, 2013, the Company recorded a pre-tax loss of $1.4 million, including $3.3 million of costs associated with the Separation, certain of which were treated as a permanent difference. Additionally during the quarter ended September 30, 2013, we recorded a tax benefit of $1.4 million due to a reduction in the U.K. statutory corporation tax rate. This was the primary driver of the change in effective tax rate for the quarter ended September 30, 2013 compared to the quarter ended September 30, 2012.

The decrease in our effective income tax rate for the nine months ended September 30, 2013, compared to the nine months ended September 30, 2012, was primarily due to a reduction in the U.K. statutory corporation tax rate partially offset by the treatment of certain non-deductible costs related to the Separation as a permanent difference in the nine months ended September 30, 2013.

Liquidity and Capital Resources

2011 Credit Agreement

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2013 Credit Agreement

On July 17, 2013, we entered into a new credit agreement (the "2013 Credit Agreement") 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, to refinance 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 2011 Credit Agreement in full and pay fees and expenses related to the 2013 Credit Agreement.

The interest rate set forth in the 2013 Credit Agreement is either LIBOR plus a margin ranging from 1.50% per annum to 2.25% per annum, or a base rate plus a margin ranging from 0.50% per annum to 1.25% per annum, calculated according to the net leverage ratio of FTD Companies, Inc. and its subsidiaries. The initial base rate margin is 0.75% per annum and the initial LIBOR margin is 1.75% per annum. In addition, FTD Companies, Inc. will pay a commitment fee ranging from 0.20% per annum to 0.35% per annum on the unused portion of the revolving credit facility. The interest rate (based on LIBOR) and commitment fee rate at September 30, 2013 was 2.02% and 0.25%, respectively. The 2013 Credit Agreement contains customary representations and warranties, events of default, affirmative covenants and negative covenants, that, among other things, require FTD Companies, Inc. and its subsidiaries to maintain compliance with a maximum net leverage ratio and a minimum interest coverage ratio, and impose restrictions and limitations on, among other things, investments, dividends, and asset sales, and our ability to incur additional debt and additional liens. FTD Companies, Inc. was in compliance with all covenants under the 2013 Credit Agreement at September 30, 2013.

Under the terms of the 2013 Credit Agreement, FTD Companies, Inc. is generally restricted from transferring funds and other assets to United Online, with certain exceptions in connection with the reimbursement of certain expenses.

The refinancing of the 2011 Credit Agreement was accounted for in accordance with ASC 470, Debt. A significant portion of the debt under the 2011 Credit Agreement was considered to be extinguished and we recorded a $2.3 million loss on the extinguishment of debt in interest expense during the quarter ended September 30, 2013.

The degree to which our assets are leveraged and the terms of our debt could materially and adversely affect our ability to obtain additional capital, as well as the terms at which such capital might be offered to us. We currently expect to have sufficient liquidity to fulfill our interest payment obligations, at least in the next twelve months.

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Nine Months Ended September 30, 2013 compared to Nine Months Ended September 30, 2012

Our total cash and cash equivalents balance decreased by $39.0 million to $28.3 million at September 30, 2013, compared to $67.3 million at December 31, 2012. Our summary cash flows for the periods presented were as follows (in thousands):

	Nine Months Ended September 30,

	2013			2012
Net cash provided by operating activities	$	14,568		$	30,533
Net cash used for investing activities	$	(6,410	)	$	(7,811	)
Net cash used for financing activities	$	(47,016	)	$	(20,838	)

Net cash provided by operating activities decreased by $16.0 million, or 52%. Net cash provided by operating activities is driven by our net income adjusted for non-cash items and changes in working capital, including, but not limited to, depreciation and amortization, stock-based compensation, loss on extinguishment of debt and deferred taxes. The decrease in net cash provided by operating activities was primarily due to a $13.6 million unfavorable change in working capital, a $1.7 million decrease in non-cash items, and a $0.7 million decrease in net income. The change in working capital was primarily related to a decrease in accounts payable of $5.7 million related to the timing of payments and a $9.1 million decrease in taxes payable related to timing of tax payments. Changes in working capital can cause variation in our cash flows provided by operating activities due to seasonality, timing and other factors.

Net cash used for investing activities decreased by $1.4 million. The decrease was primarily due to $3.9 million of cash paid for the acquisition of the Flying Flowers, Flowers Direct and Drake Algar businesses during the nine months ended September 30, 2012. The decrease was partially offset by a $2.7 million increase in purchases of property and equipment.

Capital expenditures for the nine months ended September 30, 2013 totaled $6.5 million. At September 30, 2013 and December 31, 2012, we had $1.4 million and $1.2 million, respectively, of property and equipment that was not yet paid for and was included in accounts payable and other liabilities in the consolidated balance sheets. We currently anticipate that our total capital expenditures for 2013 will be in the range of $10 million to $12 million, which includes the aforementioned $1.2 million of purchases on account at December 31, 2012, as well as capital expenditures related to the Separation. The actual amount of future capital expenditures may fluctuate due to a number of factors, including, without limitation, potential future acquisitions and new business initiatives, which are difficult to predict and which could change significantly over time. Additionally, technological advances may require us to make capital expenditures to develop or acquire new equipment or technology in order to replace aging or technologically obsolete equipment.

Net cash used for financing activities increased by $26.2 million. In the nine months ended September 30, 2013, we paid dividends of $18.2 million to United Online compared to $3.2 million in the nine months ended September 30, 2012. As noted above, in connection with the refinancing of our 2011 Credit Agreement, we entered into our 2013 Credit Agreement on July 17, 2013. We drew $220 million of the new $350 million revolving credit facility and used approximately $19.0 million of our existing cash balance to repay our 2011 Credit Agreement in full, and pay fees and expenses related to the 2013 Credit Agreement. Net cash used for refinancing activities and debt repayments on the Company's credit facilities was $28.9 million in the nine months ended September 30, 2013. In the nine months ended September 30, 2012 the Company made $17.7 million of debt payments on the outstanding 2011 Credit Agreement.

Based on our current projections, we expect to continue to generate positive cash flows from operations at least for the next twelve months. We may use our existing cash balances and future cash

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generated from operations to fund, among other things, working capital, interest payments under the 2013 Credit Agreement and capital expenditures.

If we need to raise additional capital through public or private debt or equity financings, strategic relationships or other arrangements, this capital might not be available to us in a timely manner, on acceptable terms, or at all. Our failure to raise sufficient capital when needed could severely constrain or prevent us from, among other factors, developing new or enhancing existing services or products, acquiring other services, businesses, or technologies or funding significant capital expenditures and have a material adverse effect on our business, financial position, results of operations, and cash flows, as well as impair our ability to service our debt obligations. If additional funds were raised through the issuance of equity or convertible debt securities, the percentage of stock owned by the then-current stockholders could be reduced. Furthermore, such equity or any debt securities that we issue might have rights, preferences, or privileges senior to holders of our common stock. In addition, trends in the securities and credit markets may restrict our ability to raise any such additional funds, at least in the near term.

Contractual Obligations

Contractual obligations at September 30, 2013 were as follows (in thousands):

	Total		Less than 1 Year		1 Year to Less than 3 Years		3 Years to Less than 5 Years		More than 5 Years

Debt, including interest(1)	$	255,972	$	4,981	$	13,447	$	237,544	$	—
Noncancelable operating leases		2,721		1,496		1,145		80		—
Purchase obligations		13,716		11,232		2,484		—		—
Other liabilities(2)		2,135		1,197		306		200		432

Total	$	274,544	$	18,906	$	17,382	$	237,824	$	432

(1): Interest obligations were estimated using implied forward interest rates for 3-month LIBOR based on quoted market rates from the U.S. dollar-denominated interest-rate swap curve.
(2): At September 30, 2013, we had liabilities for uncertain tax positions totaling $0.9 million, of which $0.2 million was included in other liabilities in the contractual obligations table above and, at September 30, 2013, was expected to be due in less than one year. We are not able to reasonably estimate when or if cash payments for long-term liabilities related to uncertain tax positions will occur.

Commitments under letters of credit at September 30, 2013 were scheduled to expire as follows (in thousands):

		Total			Less than 1 Year

Letters of credit		$	1,352		$	1,352

Standby letters of credit are maintained by FTD to secure credit card processing activity and additional letters of credit are maintained related to inventory purchases.

Other Commitments

In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, sureties and insurance companies, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by

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third parties. In addition, we expect to enter into indemnification agreements with our directors and certain of our officers and employees that will require FTD, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. We have also agreed to indemnify certain former officers, directors, and employees of acquired companies in connection with the acquisition of such companies. We expect to maintain director and officer insurance, which may cover certain liabilities, including those arising from our obligation to indemnify our directors and certain of our officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances.

It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses.

Off-Balance Sheet Arrangements

At September 30, 2013 we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.

Recent Accounting Pronouncements

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income —In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income , as codified in Accounting Standards Codification ("ASC") 220. The amendments in this update require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about those amounts. For the Company, the amendments in this update are effective prospectively for reporting periods beginning after December 15, 2013. We do not expect this update to have a material impact on our consolidated financial statements.

Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists —In July 2013, FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists , as codified in ASC 740, Income Taxes . The amendments in this update state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU will be effective for us for fiscal years, and interim periods within those years,

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beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. We are currently assessing the impact of this update on our consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks arising from transactions in the normal course of business, principally risk associated with interest rate and foreign currency exchange rate fluctuations.

Interest Rate Risk

We are exposed to interest rate risk on our cash and cash equivalents and the outstanding balance of the 2013 Credit Agreement. The interest rate set forth in the 2013 Credit Agreement is either LIBOR plus a margin ranging from 1.50% per annum to 2.25% per annum, or a base rate plus a margin ranging from 0.50%per annum to 1.25% per annum, calculated according to FTD's net leverage ratio. In March 2012, the Company entered into forward starting interest rate cap instruments based on 3-month LIBOR that are effective from January 2015 to June 2018 and have aggregated notional values totaling $130 million. The interest rate cap instruments are designated as cash flow hedges against expected future cash flows attributable to future 3-month LIBOR interest payments on outstanding borrowings. The gains or losses on the instruments are reported in other comprehensive income to the extent that they are effective and will be reclassified into earnings when the expected future cash flows, beginning in January 2015 through June 2018 and attributable to future 3-month LIBOR interest payments, are recognized in earnings. A 100 basis point increase in LIBOR rates would result in an estimated annual increase in our interest expense related to the outstanding debt under the 2013 Credit Agreement of approximately $2.2 million.

While we do not currently maintain any short-term investments, we still maintain deposits, which are classified as cash equivalents. Therefore, our interest income is sensitive to changes in the general level of U.S. and certain foreign interest rates.

Foreign Currency Exchange Risk

We transact business in foreign currencies, and we are exposed to risk resulting from fluctuations in foreign currency exchange rates, particularly the British Pound ("GBP"), the Euro ("EUR"), and the Canadian Dollar ("CAD"), which may result in gains or losses being reported in our results of operations. Volatilities in GBP, EUR, CAD and other relevant foreign currencies are monitored by us throughout the year. We face two risks related to foreign currency exchange rates—translation risk and transaction risk. Amounts invested in our foreign operations are translated into U.S. Dollars using period-end exchange rates. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in the consolidated balance sheets. Revenues and expenses in foreign currencies translate into higher or lower revenues and expenses in U.S. Dollars as the U.S. Dollar weakens or strengthens against other currencies. Substantially all of the revenues of our foreign subsidiaries are received, and substantially all expenses are incurred, in currencies other than the U.S. Dollar, which increases or decreases the related U.S. Dollar-reported revenues and expenses depending on the exchange rate used to translate these revenues and expenses. Therefore, changes in foreign currency exchange rates may negatively affect our consolidated revenues and net income. A 10% adverse change in overall foreign currency exchange rates over an entire year would not have a material impact on estimated annual revenues or estimated annual income before income taxes. These estimates assume an adverse shift in all foreign currency exchange rates against the U.S. Dollar, which do not always move in the same direction or in the same degrees, and actual results may differ materially. Net foreign currency transaction gains or losses arising from transactions denominated in

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currencies other than the local functional currency are included in other income, net, in the consolidated statements of operations.

At times, we utilize forward foreign currency exchange contracts to protect the value of our net investments in certain foreign subsidiaries denominated in currencies other than the U.S. Dollar. These contracts are designated as hedges of net investments in foreign entities. At September 30, 2013, we had no forward foreign currency exchange contracts outstanding.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please refer to Note 12 "Contingencies—Legal Matters" of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

Our business, the Separation, and our common stock are subject to a number of risks and uncertainties. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q. Based on information currently known, we believe that the following information identifies the most significant risk factors affecting our business, the Separation, and our common stock. However, the risks and uncertainties faced by us are not limited to those described below, nor are they listed in order of significance.

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

Risks Relating to Our Business

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

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

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

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

The consumer market for flowers and gifts is highly competitive and fragmented as consumers can purchase the products we offer from numerous sources, including traditional local retail florists, supermarkets, mass merchants, gift retailers, and floral and gift mass marketers. We believe the primary competitive factors in the consumer market are price, quality of products, selection, customer service,

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ordering convenience, and strength of brand. The floral network services market is highly competitive as well, and retail florists and supermarkets may choose from a variety of providers that offer similar products and services. In the U.S., our key competitors in the consumer market include online, catalog and floral and gift retailers and mass market retailers with floral departments, including such companies as 1-800-FLOWERS.COM, Inc., Proflowers.com, and Teleflora. Our key competitors in the U.S. floral network services market include providers of online or e-commerce services, retailers and wholesalers of floral-related products, and other floral network services, such as Teleflora and BloomNet Wire Service, a subsidiary of 1-800-FLOWERS.COM, Inc. International key competitors in the consumer market include mass market retailers, such as Asda, Marks & Spencer, Next, and Waitrose/John Lewis, as well as online, catalog and specialty gift retailers such as eFlorist, Moonpig, Serenata Flowers, and Arena Flowers.

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

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

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

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

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

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

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

We believe that our strategic relationships with leading online retailers and direct marketers are critical to attract customers, facilitate broad market acceptance of our products and brands and enhance our sales and marketing capabilities. A failure to maintain existing strategic relationships or to

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establish additional relationships that generate a significant amount of traffic from other websites could limit the growth of our business. Establishing and maintaining relationships with leading online retailers and direct marketers is competitive and expensive. We may not successfully enter into additional strategic relationships. In addition, we may not be able to renew existing strategic relationships beyond their current terms or may be required to pay significant fees to maintain and expand these strategic relationships. Further, many online retailers and direct marketers that we may approach to establish an advertising presence or with whom we already have an existing relationship may also provide advertising services for our competitors. As a result, these companies may be reluctant to enter into, maintain or expand a strategic relationship with us. Our business, financial condition, results of operations, and cash flows may suffer if we fail to enter into new strategic relationships, or maintain or expand existing strategic relationships, or if these strategic relationships do not result in traffic on our websites sufficient to justify their costs.

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

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

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

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

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

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

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

We believe that our success in promoting and enhancing our brands depends on our ability to provide our customers high-quality products within the required timeframe and maintain a high level of customer service. Our business depends, in part, on the ability of our floral network members and third-party suppliers who fulfill our orders to do so at high-quality levels. We work with our floral network members and third-party suppliers to develop best practices for quality assurance; however, we generally do not directly control or continuously monitor any floral network member or third-party supplier. A failure to maintain our relationship with key floral network members or third-party suppliers or the failure of our floral network members or third-party suppliers to fulfill orders to our customers' satisfaction, at an acceptable level of quality and within the required timeframe, could adversely impact our brands and cause us to lose customers, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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

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

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

•: adverse fluctuations in foreign currency exchange rates;
•: potentially adverse tax consequences, including the complexities of foreign value added taxes and restrictions on the repatriation of earnings;
•: increased financial accounting, tax and reporting burdens and complexities;
•: lack of familiarity with, and unexpected changes in, foreign regulatory requirements;
•: difficulties in managing and staffing international operations;
•: the burdens of complying with a wide variety of foreign laws, regulations, and legal and regulatory standards;
•: political, social, and economic instability abroad, terrorist attacks and security concerns in general; and
•: reduced or varied protection for intellectual property and proprietary rights.

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

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

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

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

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

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

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

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

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

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

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

•: severe weather;
•: disease, infestation, and other biological problems;
•: import duties and quotas;
•: time-consuming import regulations or controls at airports;
•: changes in trading status;
•: economic uncertainties and currency fluctuations, including as a result of the recent volatility and disruptions in the credit markets and general economy;
•: foreign government laws and regulations;
•: political, social, and economic instability, terrorist attacks, and security concerns in general;
•: nationalization;
•: fair trade and other social or environmental certifications, requirements or practices;
•: governmental bans or quarantines;
•: disruption in transportation and delivery;
•: trade restrictions, including U.S. retaliation against foreign trade practices; and
•: transportation availability and costs.

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

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

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

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

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

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

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

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

A key element of our business strategy is to generate a high volume of traffic on our consumer websites and through our toll-free telephone numbers. However, we may not be able to accommodate all of the growth in user demand on our consumer websites or through our toll-free telephone numbers. Our inability to add additional hardware and software to upgrade our existing technology or network infrastructure to accommodate, in a timely manner, increased traffic to our consumer websites

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or increased volume through our toll-free telephone numbers, may cause decreased levels of customer service and satisfaction. Failure to implement new systems effectively or within a reasonable period of time could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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

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

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

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

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

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

We transact business in different foreign currencies and may be exposed to financial market risk resulting from fluctuations in foreign currency exchange rates, including the British Pound, the Euro, and the Canadian Dollar. Revenues and expenses in foreign currencies translate into higher or lower revenues and expenses in U.S. Dollars as the U.S. Dollar weakens or strengthens against such other currencies. Substantially all of the revenues of our international businesses are received, and substantially all expenses are incurred, in currencies other than the U.S. Dollar, which increases or decreases the related U.S. Dollar-reported revenues and expenses depending on the fluctuations in foreign currency exchange rates. Certain of our key business metrics, such as average order value, are similarly affected by such foreign currency exchange rate fluctuations. Changes in global economic conditions, market factors, and governmental actions, among other factors, can affect the value of these currencies in relation to the U.S. Dollar. A strengthening of the U.S. Dollar compared to these currencies and, in particular, to the British Pound and the Euro, has had, and in future periods could have, an adverse effect on the comparisons of our revenues and operating income against prior periods.

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We cannot accurately predict the impact of future foreign currency exchange rate fluctuations on our operating results, and such fluctuations could negatively impact the comparisons of such results against prior periods.

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

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

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

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

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

We are subject to income and various other taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our consolidated provision for income taxes. During the ordinary course of business, there are many transactions for which the ultimate tax determination is uncertain. We are subject to audit in various jurisdictions, and such jurisdictions may assess additional

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income and other taxes against us. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions, and our historical recognition of other tax matters. The results of an audit or litigation could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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

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

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

Various governmental agencies have in the past asserted claims, instituted legal actions, inquiries or investigations, or imposed obligations relating to our business practices, such as our marketing, billing, customer retention, renewal, cancellation, refund, or disclosure practices, and they may continue to do so in the future. We and United Online have received civil investigative demands and subpoenas, as applicable, from the Federal Trade Commission ("FTC") and the Attorneys General of various states, primarily regarding their respective investigations into certain former post-transaction sales practices and certain of our and United Online's marketing, billing, renewal and privacy practices and disclosures. We and United Online have been cooperating with these investigations. However, the

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outcome of these or any other governmental investigations or their potential implications for our business are uncertain. We and United Online may not prevail in existing or future claims and any judgment against us or settlement or resolution of such claims may involve the payment of significant sums, including damages, fines, penalties, or assessments, or changes to our business practices. For example, in 2010, FTD, Inc. paid $640,000 to resolve an investigation of the Attorney General for the State of New York related to FTD, Inc.'s former post-transaction sales practices. Defending against lawsuits, inquiries, and investigations also involves significant expense and diversion of management's attention and resources from other matters. In addition, following the Separation, United Online will have the right to control the litigation and settlement of certain litigation matters that relate to United Online, its predecessors and its consolidated subsidiaries and FTD, its predecessors and its consolidated subsidiaries and which were asserted before the Separation, as well as specified litigation matters which are asserted after the Separation, and the allocation of liabilities and expenses to us relating to such litigation matters. These matters include the investigations referenced above relating to certain post-transaction sales practices and certain other current or former business practices. See Note 12—"Contingencies—Legal Matters" of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

There are no assurances that additional governmental investigations or other legal actions will not be instituted in connection with our former post-transaction sales practices or other current or former business practices. Enforcement actions or changes in enforcement policies and procedures could result in changes to our business practices, as well as significant damages, fines, penalties or assessments, which could decrease our revenues or increase the costs of operating our business. To the extent that our services and business practices change as a result of claims or actions by governmental agencies or private parties, or we are required to pay significant sums, including damages, fines, penalties, or assessments, our business, financial condition, results of operations, and cash flows could be materially and adversely affected. For more information, see Note 12—"Contingencies—Legal Matters" of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Quarterly Report on 10-Q.

The Separation and Distribution Agreement which was executed between us and United Online in connection with the Separation provides United Online with the right to control the litigation and settlement of certain litigation matters that relate to United Online, its predecessors and its consolidated subsidiaries and us, our predecessors and our consolidated subsidiaries, and which were asserted before the Separation, as well as specified litigation matters which are asserted after the Separation. These matters include the ongoing matters relating to our and United Online's former post-transaction sales practices or other current or former business practices. The Separation and Distribution Agreement also provides United Online with the right to allocate certain liabilities and expenses to us with respect to these matters. We and United Online may not prevail in these or other existing or future legal claims and any judgments against us and, in respect of the matters under United Online's control, we have limited rights to contest the terms of any settlement or other resolution agreed to by United Online and its allocation of liabilities and expenses to us. It is possible that we and United Online may have differing interests in respect of the terms of any such settlement or other resolution of the matters under United Online's control. The settlement or other resolution of litigation claims by us, or by United Online in respect to the matters under United Online's control, may involve the payment of significant sums, including damages, fines, penalties, or assessments, or changes to our business practices, and may have a significant adverse effect on our business, financial condition and results of operations.

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

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

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

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

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

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

•: disruption of our ongoing business and significant diversion of resources and management time from day-to-day responsibilities;

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•: acquisition financings that involve the issuance of potentially dilutive equity or the incurrence of debt;
•: reduction of cash and other resources available for operations and other uses;
•: exposure to risks specific to the acquired business, service or technology to which we are not currently exposed;
•: risks of entering markets in which we have little or no direct prior experience;
•: unforeseen obligations or liabilities;
•: difficulty assimilating the acquired customer bases, technologies, and operations;

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•: difficulty assimilating and retaining management and employees of the acquired business;
•: potential impairment of relationships with users, customers or vendors as a result of changes in management of the acquired business or other factors;
•: large write-offs either at the time of the acquisition or in the future, the incurrence of restructuring and other exit costs, the amortization of identifiable intangible assets, and the impairment of amounts capitalized as goodwill, intangible assets, and other long-lived assets; and
•: lack of, or inadequate, controls, policies, and procedures appropriate for a public company, and the time, cost, and difficulties related to the implementation of such controls, policies, and procedures or the remediation of any deficiencies.

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

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

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

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

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

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

At November 1, 2013, we had $220 million of indebtedness outstanding. We will continue to have a substantial amount of indebtedness which could have significant consequences for our business and financial condition. For example:

•: If we fail to meet payment obligations or otherwise default under our debt, the lenders will have the right to accelerate the indebtedness and exercise other rights and remedies against us.
•: We will be required to dedicate a portion of our cash flows from operations to make interest payments on the debt, thereby reducing funds available for working capital, capital expenditures, dividends, acquisitions, and other purposes.
•: Our ability to obtain additional financing to fund future working capital needs, capital expenditures, additional acquisitions, and other general corporate requirements could be limited. In addition, our ability to borrow additional amounts under our revolving credit facility, which is a significant source of liquidity, is subject to the absence of defaults and our ability to make representations contained in our revolving credit facility. Failure to meet our borrowing conditions under our revolving credit facility could materially and adversely impact our liquidity.
•: Our debt imposes operating and financial covenants and restrictions on us, including limitations on our ability to use cash flows for the benefit of our subsidiaries, and compliance with such covenants and restrictions may adversely affect our ability to adequately finance our operations or capital needs in the future, to pursue attractive business opportunities that may arise in the future, to redeem or repurchase capital stock, to pay dividends, to sell assets, and to make capital expenditures.
•: Our failure to comply with the covenants in our debt, including failure as a result of events beyond our control, could result in an event of default on our debt. Upon an event of default, the lenders of that debt could elect to cause all amounts outstanding with respect to that debt to become immediately due and payable and we would be unable to access our revolving credit facility. An event of default could materially and adversely affect our operating results, financial condition, and liquidity.
•: We will experience increased vulnerability to, and limited flexibility in planning for, changes to our businesses and adverse economic and industry conditions.
•: We may be at a competitive disadvantage relative to other companies with less indebtedness.
•: The interest rates under our debt will fluctuate and, accordingly, interest expense may increase.

Under the terms of the 2013 Credit Agreement, we are permitted to incur additional indebtedness subject to certain conditions, and the risks described above may be increased if we incur additional indebtedness.

The 2013 Credit Agreement includes guarantees on a joint and several basis by certain of FTD Companies, Inc.'s existing and future, direct and indirect, material wholly-owned domestic subsidiaries and is secured by first priority security interests in, and mortgages on, substantially all of the tangible and intangible assets of FTD Companies, Inc. and certain of FTD Companies, Inc.'s direct and indirect domestic, wholly-owned subsidiaries and first priority pledges of all the equity interests owned by FTD Companies, Inc. in certain of its existing and future direct and indirect subsidiaries (except with respect to foreign subsidiaries and certain domestic subsidiaries whose assets consist primarily of foreign subsidiary equity interests, in which case such pledges are limited to 66% of the outstanding capital stock). The occurrence of an event of default under the 2013 Credit Agreement could permit the

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lenders to cause all amounts outstanding under the 2013 Credit Agreement to become immediately due and payable, terminate the commitments of such lenders to make further extensions of credit under the 2013 Credit Agreement, to call and enforce the guarantees, and to foreclose on the collateral securing such debt.

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

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

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

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

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

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

A significant number of our members and customers authorize us to bill their payment card accounts (credit or debit) directly for all amounts charged by us. These members and customers provide payment card information and other personally identifiable information which, depending on the particular payment plan, may be maintained to facilitate future payment card transactions. We rely on third-party and internally-developed encryption and authentication technology to provide the security and authentication to effectively secure transmission of confidential information, including

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

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

Risks Relating to the Separation

We face the following risks in connection with the Separation:

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

In September 2013, United Online received a private letter ruling from the Internal Revenue Service ("IRS") confirming that the separation and the distribution of shares of FTD Companies, Inc. common stock qualifies as a transaction that is tax-free for U.S. federal income tax purposes and will not result in the recognition, for U.S. federal income tax purposes, of income, gain or loss by United Online, Inc. or its stockholders The IRS Ruling and the Tax Opinion rely on certain facts, assumptions, and undertakings, and certain representations from United Online and us, regarding the past and future conduct of both respective businesses and other matters, and the Tax Opinion will rely on the IRS Ruling. Notwithstanding the IRS Ruling and the Tax Opinion, the IRS could determine that the distribution should be treated as a taxable transaction if it determines that any of these facts, assumptions, representations, or undertakings is not correct, or that the distribution should be taxable for other reasons, including if the IRS were to disagree with the conclusions in the Tax Opinion that are not covered by the IRS Ruling.

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

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

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

In connection with the Separation, we have entered into a number of agreements with United Online that govern the ongoing relationships between United Online and its subsidiaries and us after the Separation. Our success will depend, in part, on the maintenance of these ongoing relationships with United Online and its subsidiaries and their performance of their obligations under these agreements.

The agreements that we entered into with United Online may involve, or may appear to involve, conflicts of interest.

In connection with the Separation, we entered into certain agreements with United Online which provide for the allocation between the Company and United Online of certain assets, liabilities, and obligations of United Online and its subsidiaries, and will govern the relationship between United Online and us following the Separation. We negotiated these agreements with United Online while we were still a wholly-owned subsidiary of United Online. Accordingly, some of our executive officers and directors were employees or directors of United Online or its subsidiaries at the time of the negotiations and, as such, had an obligation to serve the interests of United Online and its subsidiaries. As a result, they could be viewed as having had a conflict of interest.

Certain of our directors may have actual or potential conflicts of interest because of their cross directorships and stock ownership with United Online.

We continue to have overlap in directors with United Online, which may lead to conflicting interests. Our board of directors includes Robert Berglass (the Chairman of our Board of Directors), James T. Armstrong and Dennis Holt who are members of the board of directors of United Online. These members of our board of directors also serve on the board of directors of United Online and have fiduciary duties to both United Online's and our stockholders. These individuals may have actual or apparent conflicts of interest with respect to matters involving or affecting each company.

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

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

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state, local, or foreign law may establish similar liability for other matters, including laws governing tax-qualified pension plans, as well as other contingent liabilities.

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

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

Under the Tax Sharing Agreement that we entered into with United Online, we are generally responsible for any taxes imposed on United Online that arise from the failure of the distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning of Section 355 of the Code, to the extent such failure to qualify is attributable to actions, events or transactions relating to our stock, assets or business, or a breach of the relevant representations or any covenants made by us in the Tax Sharing Agreement or the materials submitted to the IRS in connection with the request for the IRS Ruling.

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

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

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

We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an "emerging growth company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies. Among other things, we are not required to (1) provide an auditor's attestation report on management's assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley

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Act, (2) comply with any new rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (3) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (4) comply with any new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies under Section 102(b)(1) of the JOBS Act, (5) provide certain disclosure regarding executive compensation required of larger public companies, or (6) hold a nonbinding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously approved. Accordingly, the information that we provide stockholders in our Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, and in our other filings with the SEC, may be different than what is available with respect to other public companies. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile and adversely affected.

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

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

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

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

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

Our historical and unaudited condensed consolidated financial statements included herein this Form 10-Q do not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as an independent, publicly traded company during the periods presented or those that we will achieve in the future. This is primarily a result of the following factors:

•: Prior to the Separation, our business was operated by United Online as part of its broader corporate organization, rather than as an independent company. United Online historically performed, and is currently performing, various corporate functions for us, including, but not limited to, senior management, legal, human resources, finance, information technology, and centrally-managed employee benefit arrangements. Our historical consolidated financial statements reflect allocations of corporate expenses from United Online for these and similar functions. These allocations may not be indicative of the actual expenses that would have been incurred had we operated as an independent, publicly traded company for all periods presented, and we expect to incur certain incremental costs which are estimated to range from $2 million to $5 million on an annual pre-tax basis; and
•: Other significant changes may occur in our cost structure, management, financing, and business operations as a result of our operation as a company separate from United Online.

For these reasons, our cost structure may be higher and our future financial costs and performance may be worse than the performance implied by the historical and unaudited condensed consolidated financial information presented in this Form 10-Q.

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

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

We may incur greater costs as an independent, publicly traded company than we did when we were part of United Online, which could decrease our profitability.

We shared economies of scope and scale with United Online in costs and vendor relationships, and took advantage of United Online's size and purchasing power in procuring certain products and services, such as insurance and healthcare benefits, and technology, such as computer software licenses. After the Separation, as a separate, independent entity, we may be unable to obtain these products, services and technologies at prices or on terms as favorable to us as those we obtained prior to the Separation. We also relied on United Online to provide various information technology, payroll, legal, and other services. While we have entered into a Transition Services Agreement, which governs certain relationships between us and United Online after the Separation and pursuant to which United Online will continue to provide certain of these services on a short-term transitional basis after the Separation, this arrangement may not capture all the benefits our business has enjoyed as a result of being integrated with the other businesses of United Online. In addition, we will be required to establish the necessary infrastructure and systems to supply these services on an ongoing basis. We may not be able to replace the services provided by United Online in a timely manner or on terms and conditions as

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favorable as those we received from United Online. If functions previously performed by United Online cost us more than the amounts reflected in our historical financial statements, our profitability could decrease.

We might have been able to receive better terms from unaffiliated third parties than the terms we received in our agreements with United Online.

The agreements related to the Separation, including the Separation and Distribution Agreement, the Tax Sharing Agreement, the Transition Services Agreement, the Employee Matters Agreement, and any other agreements, were negotiated in the context of our separation from United Online while we were still part of United Online. Although these agreements were intended to be on an arm's-length basis, they may not reflect terms that would have resulted from arm's-length negotiations among unaffiliated third parties. Conversely, certain agreements related to the Separation may include terms that are more favorable than those that would have resulted from arm's-length negotiations among unaffiliated third parties. Following expiration of these agreements, we will have to enter into new agreements with unaffiliated third parties, and such agreements may include terms that are less favorable to us. The terms of the agreements negotiated in the context of our separation concerned, among other things, allocations of assets, liabilities, rights, indemnifications, and other obligations between United Online and us.

Certain of the contracts to be transferred or assigned from United Online or its affiliates to us or one of our affiliates in connection with the Separation require the consent of a third party to such transfer or assignment. If such consent is not obtained, we may not be entitled to the benefit of such contracts in the future.

In connection with the Separation, a number of contracts with service providers and other third parties were assigned by United Online or its affiliates to us or one of our affiliates. However, some of these contracts require the contractual counterparty's consent to such an assignment. Similarly, in some circumstances, we are a joint beneficiary of contracts, and we will need to enter into a new agreement with the third party to replicate the contract or assign the portion of the contract related to our business. It is possible that some parties may use the requirement of a consent to seek more favorable contractual terms from us or seek to terminate the contract. If (1) we are unable to obtain such consents on commercially reasonable and satisfactory terms, (2) we enter into new agreements on significantly less favorable terms, or (3) if any contract is terminated, we may be unable to obtain the benefits, assets, and contractual commitments that are intended to be allocated to us as part of the Separation. The failure to timely complete the assignment of existing contracts, or the negotiation of new arrangements, with any of our key suppliers, including those that are a single source or limited source suppliers, or a termination of any of those arrangements, could negatively impact our business, financial condition, results of operations, and cash flows.

A court could require that we assume responsibility for obligations allocated to United Online under the Separation and Distribution Agreement.

Under the Separation and Distribution Agreement, from and after the Separation, we and United Online are responsible for the debts, liabilities, and other obligations related to the businesses which each company owns and operates following the consummation of the Separation. Although we do not expect to be liable for any obligations that are not allocated to us under the Separation and Distribution Agreement, a court could disregard the allocation agreed to between the parties, and require that we assume responsibility for obligations allocated to United Online, particularly if United Online were to refuse or were unable to pay or perform the allocated obligations.

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Potential indemnification liabilities to United Online pursuant to the Separation and Distribution Agreement could materially and adversely affect our company.

Among other things, the Separation and Distribution Agreement provides for indemnification obligations designed to make our company financially responsible for substantially all liabilities that may exist relating to our business activities, whether incurred prior to or after the Separation. If we are required to indemnify United Online under the circumstances set forth in the Separation and Distribution Agreement, we may be subject to substantial liabilities.

In connection with the Separation, United Online has indemnified us for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that United Online's ability to satisfy its indemnification obligation will not be impaired in the future.

Pursuant to the Separation and Distribution Agreement, United Online will indemnify us for substantially all liabilities that exist relating to United Online's business activities, whether incurred prior to or after the Separation. However, third parties could seek to hold us responsible for any of the liabilities that United Online agrees to retain, and there can be no assurance that the indemnity from United Online will be sufficient to protect us against the full amount of such liabilities, or that United Online will be able to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from United Online any amounts for which we are held liable, we may be temporarily required to bear these losses.

The Separation may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.

The Separation is subject to review under various state and federal fraudulent conveyance laws. Fraudulent conveyance laws generally provide that an entity engages in a constructive fraudulent conveyance when (1) the entity transfers assets and does not receive fair consideration or reasonably equivalent value in return, and (2) the entity (a) is insolvent at the time of the transfer or is rendered insolvent by the transfer, (b) has unreasonably small capital with which to carry on its business, or (c) intends to incur or believes it will incur debts beyond its ability to repay its debts as they mature. An unpaid creditor or an entity acting on behalf of a creditor, including, without limitation, a trustee or debtor-in-possession in a bankruptcy by us or United Online or any of our respective subsidiaries, may bring a lawsuit alleging that the Separation or any of the related transactions constituted a constructive fraudulent conveyance. If a court accepts these allegations, it could impose a number of remedies, including, without limitation, voiding our claims against United Online, requiring our stockholders to return to United Online some or all of the shares of our common stock distributed in the distribution, or providing United Online with a claim for money damages against us in an amount equal to the difference between the consideration received by United Online and the fair market value of FTD at the time of the Separation.

The measure of insolvency for purposes of the fraudulent conveyance laws will vary depending on which jurisdiction's law is applied. Generally, an entity would be considered insolvent if (1) the sum of its debts is greater than all of its property, at a fair valuation; (2) the present fair saleable value of its assets is less than its probable liabilities on its debts as such debts become absolute and matured; (3) it cannot pay its debts and other liabilities, including contingent liabilities and other commitments as they mature; or (4) it has unreasonably small capital for the business in which it is engaged. We cannot assure you what standard a court would apply to determine insolvency or that a court would determine that we, any of our respective subsidiaries or United Online were solvent at the time of or after giving effect to the Separation.

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The distribution of our common stock by United Online is also subject to review under state corporate distribution statutes. Under the General Corporation Law of the State of Delaware (the "DGCL"), a corporation may only pay dividends to its stockholders either (1) out of its surplus (net assets minus capital) or (2) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Although United Online made the distribution of our common stock entirely from surplus, we cannot assure you that a court will not later determine that some or all of the distribution to United Online stockholders was unlawful.

United Online's Board of Directors obtained an opinion that FTD Companies, Inc. and United Online each were solvent at the time of the Separation, including immediately after the payment of the dividend and the Separation, are able to repay our respective debts as they mature following the Separation and have sufficient capital to carry on our respective businesses, and that the distribution was made entirely out of surplus in accordance with Section 170 of the DGCL. We cannot assure you, however, that a court would reach the same conclusions set forth in such opinion in determining whether United Online or FTD Companies, Inc. were insolvent at the time of, or after giving effect to, the Separation, or whether lawful funds were available for the distribution to United Online's stockholders.

Risks Relating to Our Common Stock

You will face the following risks in connection with ownership of our common stock:

The market price of our common stock may fluctuate significantly.

The Company's common stock began trading "regular way" on the NASDAQ Global Select Market under the stock ticker symbol "FTD" on November 1, 2013. There can be no assurance that an active trading market for our common stock will be sustained in the future. The lack of an active trading market may make it more difficult for you to sell our shares and could lead to our share price being depressed or more volatile. In addition, the market price of our common stock may fluctuate significantly.

We cannot predict the prices at which our common stock may trade after the distribution. The market price of our common stock may fluctuate significantly, depending upon many factors, some of which may be beyond our control, including, but not limited to:

•: a shift in our investor base;
•: our quarterly or annual earnings, or those of other companies in our industry;
•: actual or anticipated fluctuations in our operating results;
•: success or failure of our business strategy;
•: our ability to obtain financing as needed;
•: changes in accounting standards, policies, guidance, interpretations, or principles;
•: changes in laws and regulations affecting our business, including tax legislation;
•: announcements by us or our competitors of significant acquisitions or dispositions;
•: the failure of securities analysts to cover our common stock after the distribution;
•: changes in earnings estimates by securities analysts or our ability to meet our earnings guidance;
•: the operating and stock price performance of other comparable companies;
•: investor perception of us and the floral retail industry;

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•: overall market fluctuations; and
•: general economic conditions and other external factors.

Stock markets in general have also experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could negatively affect the trading price of our common stock.

Substantial sales of our common stock may occur in connection with the distribution, which could cause the market price of our common stock to decline.

The shares of our common stock that United Online distributed to its stockholders generally may be sold immediately in the public market. Although we have no actual knowledge of any plan or intention on the part of any holder of five percent or more of the outstanding shares of United Online to sell our common stock after the distribution date, it is possible that some United Online stockholders will sell our common stock received in the distribution for reasons such as our business profile or market capitalization as an independent company not fitting their investment objectives or because our common stock is not included in certain indices after the distribution. The sales of significant amounts of our common stock or the perception in the market that this will occur may result in the lowering of the market price of our common stock.

Your percentage ownership in our company may be diluted in the future.

Your percentage ownership in our company may be diluted in the future because of equity awards that we expect to grant to our directors, officers, and employees, and because of adjustments made to outstanding United Online equity awards in connection with the Separation. We have established equity incentive plans that will provide for the grant of common stock-based equity awards to our directors, officers, and employees. In addition, we may issue equity as all or part of the consideration paid for acquisitions and strategic investments we may make in the future.

We may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock.

While we have no specific plan to issue preferred stock, our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, optional, or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our Board of Directors may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.

Provisions in our charter documents and the DGCL could discourage potential acquisition proposals, could delay, deter or prevent a change in control, and could limit the price certain investors might be willing to pay for our common stock.

Certain provisions of the DGCL and our certificate of incorporation and bylaws may inhibit a change of control not approved by our Board of Directors or changes in the composition of our Board of Directors, which could result in the entrenchment of current management. These provisions include:

•: advance notice requirements for nominations of candidates for election to our Board of Directors or for proposing matters that can be acted on by stockholders at annual meetings of stockholders;

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•: limitations on who may call special meetings of stockholders;
•: limitations on the ability of stockholders to amend, alter or repeal our bylaws;
•: the division of our Board of Directors into three classes with staggered terms;
•: limitations on the removal of directors;
•: the inability of the stockholders to act by written consent; and
•: the authority of our Board of Directors to issue, without stockholder approval, "blank check" preferred stock with such terms as the Board of Directors may determine to increase the number of outstanding shares and thwart a takeover attempt.

We believe these provisions protect our stockholders from coercive or harmful takeover tactics by requiring potential acquirers to negotiate with our Board of Directors and by providing our Board of Directors with adequate time to assess any acquisition proposal, and are not intended to make our company immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of our company and our stockholders.

We currently do not expect to pay any cash dividends and the price of our stock may not appreciate.

We presently intend to retain future earnings, if any, to reinvest in the growth of our businesses and to make interest payments on or pay down our debt and fund potential acquisitions. As a result, we do not currently expect to pay any cash dividends. If we do not pay dividends, the price of our common stock that you receive in the distribution must appreciate for you to recognize a gain on your investment upon sale. This appreciation may not occur.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) - (c) Not applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

The Company filed an Amended and Restated Certificate of Incorporation (the "Amended and Restated Certificate of Incorporation"), and adopted the Second Amended and Restated Bylaws (the "Second Amended and Restated Bylaws"), each of which became effective at 11:59 p.m. on October 31, 2013. A summary of the Amended and Restated Certificate of Incorporation and the Second Amended and Restated Bylaws is included in the "Description of Capital Stock" in the information statement included in the Company's Form 10 and is incorporated by reference herein. In addition, the descriptions of the foregoing are qualified in their entirety by reference to the complete terms and conditions of the Amended and Restated Certificate of Incorporation and Second Amended and Restated Bylaws, which are filed as Exhibits 3.1 and 3.2 hereto, respectively.

ITEM 6. EXHIBITS

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: November 6, 2013	FTD COMPANIES, INC. (Registrant)
	By:	/s/ BECKY A. SHEEHAN Becky A. Sheehan Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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EXHIBIT INDEX

				Incorporated by Reference to

			Filed with this Form 10-Q	Incorporated by Reference to
No.		Exhibit Description	Filed with this Form 10-Q	Form	File No.	Date Filed
	2.1	Separation and Distribution Agreement by and between United Online, Inc. and FTD Companies, Inc.	X
	3.1	Amended and Restated Certificate of Incorporation of FTD Companies, Inc.	X
	3.2	Second Amended and Restated Bylaws of FTD Companies, Inc.	X
	10.1	Transition Services Agreement by and between United Online, Inc. and FTD Companies, Inc.	X
	10.2	Employee Matters Agreement by and between United Online, Inc. and FTD Companies, Inc.	X
	10.3	Tax Sharing Agreement by and between United Online, Inc. and FTD Companies, Inc.	X
	10.4	Employment Agreement by and between FTD Companies, Inc. and Scott D. Levin	X
	31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002	X
	31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002	X
	32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002	X
	32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002	X
	101.INS	XBRL Instance Document	X
	101.SCH	XBRL Taxonomy Extension Schema Document	X
	101.CAL	XBRL Taxonomy Calculation Linkbase Document	X
	101.LAB	XBRL Taxonomy Label Linkbase Document	X
	101.PRE	XBRL Taxonomy Presentation Linkbase Document	X
	101.DEF	XBRL Taxonomy Extension Definition Document	X

Exhibit 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

by and between

UNITED ONLINE, INC.

and

FTD COMPANIES, INC.

dated as of

October 31, 2013

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ARTICLE I

DEFINITIONS

Section 1.1	Definitions	1
Section 1.2	Interpretation	9

ARTICLE II

THE SEPARATION

Section 2.1	Transfers of Assets and Assumptions of Liabilities	11
Section 2.2	Termination of Intercompany Agreements	12
Section 2.3	Settlement of Intercompany Account	12
Section 2.4	Separation of United Online Software Development (India) Pvt Ltd.	13

ARTICLE III

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

Section 3.1	SEC and Other Securities Filings	14
Section 3.2	NASDAQ Listing Application	14
Section 3.3	Governmental Approvals and Consents	14
Section 3.4	Ancillary Agreements	14
Section 3.5	Governance Matters	15

ARTICLE IV

THE DISTRIBUTION

Section 4.1	Delivery to Transfer Agent	15
Section 4.2	Mechanics of the Distribution	15

ARTICLE V

CONDITIONS

Section 5.1	Conditions Precedent to Consummation of the Transactions	16
Section 5.2	Right Not to Close	17

ARTICLE VI

NO REPRESENTATIONS OR WARRANTIES

Section 6.1	Disclaimer of Representations and Warranties	17
Section 6.2	As Is, Where Is	18

ARTICLE VII

CERTAIN COVENANTS AND ADDITIONAL AGREEMENTS

Section 7.1	Insurance Matters	18
Section 7.2	Use of Names	20
Section 7.3	Mail and Other Communications.	21
Section 7.4	Litigation	22
Section 7.5	Assumption of Certain Liabilities Under Indemnification Agreements	25
Section 7.6	Licenses	25

ARTICLE VIII

ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE

Section 8.1	Agreement for Exchange of Information	25
Section 8.2	Ownership of Information	27
Section 8.3	Compensation for Providing Information	27
Section 8.4	Retention of Records	27
Section 8.5	Limitation of Liability	27
Section 8.6	Production of Witnesses	27
Section 8.7	Confidentiality	28
Section 8.8	Privileged Matters	29
Section 8.9	Financial Information Certifications	30

ARTICLE IX

MUTUAL RELEASES; INDEMNIFICATION

Section 9.1	Release of Pre-Distribution Claims	31
Section 9.2	Indemnification by FTD	33
Section 9.3	Indemnification by United Online	33
Section 9.4	Procedures for Indemnification	34
Section 9.5	Indemnification Obligations Net of Insurance Proceeds	36
Section 9.6	Indemnification Obligations Net of Taxes	36
Section 9.7	Contribution	37
Section 9.8	Remedies Cumulative	37
Section 9.9	Survival of Indemnities	37
Section 9.10	Limitation of Liability	37

ARTICLE X

DISPUTE RESOLUTION

Section 10.1	Appointed Representative	37
Section 10.2	Negotiation and Dispute Resolution	37
Section 10.3	Arbitration	38

ARTICLE XI

TERMINATION

Section 11.1	Termination	39
Section 11.2	Effect of Termination	39

ARTICLE XII

MISCELLANEOUS

Section 12.1	Further Assurances	39
Section 12.2	Payment of Expenses	40
Section 12.3	Amendments and Waivers	40
Section 12.4	Late Payments	40
Section 12.5	Entire Agreement	40
Section 12.6	Survival of Agreements	41
Section 12.7	Coordination With Tax Sharing Agreement	41
Section 12.8	Coordination With Employee Matters Agreement	41
Section 12.9	Third Party Beneficiaries	41
Section 12.10	Notices	41
Section 12.11	Counterparts; Electronic Delivery	41
Section 12.12	Severability	42
Section 12.13	Assignability; Binding Effect	42
Section 12.14	Governing Law	42
Section 12.15	Construction	42
Section 12.16	Performance	42
Section 12.17	Title and Headings	43
Section 12.18	Exhibits and Schedules	43

Exhibits :

Exhibit A – FTD Subsidiaries
Exhibit B – United Online Subsidiaries
Exhibit C – Shared Scripts

iii

SEPARATION AND DISTRIBUTION AGREEMENT

This SEPARATION AND DISTRIBUTION AGREEMENT (this “ Agreement ”) is entered into as of 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:

(a) that is Confidential Operational Information;

(b) that is proprietary business information, data or material (other than Confidential Operational Information), including, but not limited to, (i) earnings reports and forecasts, (ii) macro-economic reports and forecasts, (iii) business plans, (iv) general market evaluations and surveys, (v) financing and credit-related information and (vi) customer information;

(c) that is a trade secret under applicable trade secret or other Law or is required to be maintained in confidence by any Law or under any Contract;

(d) constituting communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction

(including attorney work product), communications and materials otherwise related to or made or prepared in connection with or in preparation for any legal proceeding; or

(e) constituting notes, analyses, compilations, studies, summaries and other material that contain or are based, in whole or in part, upon any information included in the foregoing clauses (a) through (d).

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

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

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

“ 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).

“ 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):

(a) received by an insured Person from any insurer, insurance underwriter, mutual protection and indemnity club or other risk collective, excluding any proceeds received directly or indirectly (such as through reinsurance arrangements) from any captive insurance Subsidiary of the insured Person; or

(b) paid on behalf of an insured Person by any insurer, insurance underwriter, mutual protection and indemnity club or other risk collective, excluding any such payment made directly or indirectly (such as through reinsurance arrangements) from any captive insurance Subsidiary of the insured Person, on behalf of the insured.

“ 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.

“ 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)(i).

“ 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).

“ 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.

“ 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:

(a) words used in the singular include the plural and words used in the plural include the singular;

(b) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”;

(d) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”;

(e) accounting terms used herein shall have the meanings historically ascribed to them by United Online and its Subsidiaries, including FTD and United Online, in its and their internal accounting and financial policies and procedures in effect immediately prior to the date of this Agreement;

(f) all references herein to Articles, Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be deemed references to Articles, Sections, paragraphs, subparagraphs or clauses of, or Exhibits or Schedules to, this Agreement;

(g) reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;

(h) reference to any Law means such Law (including any and all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;

(j) if there is any conflict between the provisions of the main body of this Agreement or an Ancillary Agreement and the Exhibits or Schedules hereto or thereto, the provisions of the main body of this Agreement or the Ancillary Agreement, as applicable, shall control unless explicitly stated otherwise in such Exhibits or Schedule;

(k) if there is any conflict between the provisions of this Agreement and any Ancillary Agreement, the provisions of such Ancillary Agreement shall control (but only with respect to the subject matter thereof) unless explicitly stated otherwise therein; and

(l) any portion of this Agreement or any Ancillary Agreement obligating a Party to take any action or to refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to cause its relevant Subsidiaries to take such action or to refrain from taking such action, as the case may be.

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:

(a) Effective as of the Distribution Time (i) all FTD Assets are intended to be and shall become Assets of the FTD Entities, (ii) all FTD Liabilities are intended to be and shall become the Liabilities of the FTD Entities and (iii) all other Assets and Liabilities of the UOL Entities are intended to be and shall remain exclusively the Assets and Liabilities of the UOL Entities.

(b) United Online agrees that, effective as of the Distribution Time, it will transfer or cause to be transferred to FTD or to such other members of the FTD Entities as FTD may designate all right, title and interest in FTD Assets held by any member of the UOL Entities (if any).

(c) FTD agrees that, effective as of the Distribution Time, it will transfer or cause to be transferred to United Online or to such other member of the UOL Entities as United Online may designate all right, title and interests in UOL Assets held by any member of the FTD Entities (if any).

(d) FTD agrees that it will, or will cause another member of the FTD Entities designated by FTD to (i) assume any of the FTD Liabilities for which a member of the FTD Entities is not the obligor, effective as of the Distribution Time, and (ii) timely pay and discharge all of the FTD Liabilities, at and after the Distribution Time.

(e) United Online agrees that it will, or will cause another member of the UOL Entities designated by United Online to (i) assume any of the UOL Liabilities for which a member of the UOL Entities is not the obligor, effective as of the Distribution Time, and (ii) timely pay and discharge all of the UOL Liabilities, at and after the Distribution Time.

(f) In the event that any conveyance of an Asset required hereby is not effected at or before the Distribution Time, the obligation to transfer such Asset shall continue past the Distribution Time and shall be accomplished as soon thereafter as practicable.

(g) If any Asset may not be transferred by reason of the requirement to obtain the consent of any third-party and such consent has not been obtained by the Distribution Time, then (unless otherwise expressly agreed by United Online and FTD) such Asset shall not be transferred until such consent has been obtained. Subject to reimbursement from the other Party of all reasonable costs and expenses incurred in connection with such actions, United Online and FTD, as the case may be, shall (i) cause the owner of such Asset to use commercially reasonable efforts to provide to the appropriate member of the other Group all the rights and benefits under such Asset, (ii) cause such owner to enforce such Asset for the benefit of such member and (iii) cause such member to assume all obligations of such Asset, in each case to the extent that such action does not cause a breach or default under such Asset. Both Parties shall otherwise cooperate and use commercially reasonable efforts to provide the economic and operational equivalent of an assignment or transfer of the Asset as of the Distribution Time.

(h) From and after the Distribution Time, each Party shall promptly transfer or cause the members of its Group promptly to transfer to the other Party or the appropriate member of the other Party’s Group, from time to time, any property received that is an Asset of the other Party or a

member of such other Party’s Group. Without limiting the foregoing, funds received by a member of one Group upon the payment of accounts receivable that belong to a member of the other Group shall be transferred to the other Group by wire transfer as promptly as practicable after the receiving party becomes aware of having received such funds.

Section 2.2 Termination of Intercompany Agreements .

(a) Termination of Agreements between UOL Entities and FTD Entities . Except as set forth in Section 2.2(b), United Online, on behalf of itself and each of the other members of the UOL Entities, and FTD, on behalf of itself and each of the other members of the FTD Entities, hereby terminate, effective as of the Distribution Time, any and all Intercompany Agreements and other intercompany arrangements and course of dealings. No such terminated Intercompany Agreement, intercompany arrangement or course of dealings will be of any further force or effect from and after the Distribution Time, and all Parties shall be released from all Liabilities thereunder other than the Liability to settle any Intercompany Accounts as provided in Section 2.3. Each Party shall take, or cause to be taken, any and all actions as may be reasonably necessary to effect the foregoing.

(b) Exceptions. The provisions of Section 2.2(a) shall not apply to any of the following agreements (which agreements shall continue to be outstanding after the Distribution Date and thereafter shall be deemed to be, for each relevant Party or the member of such Party’s Group), an obligation to a third party and shall no longer be an Intercompany Agreement):

(i) this Agreement and the Ancillary Agreements (and each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement);

(ii) any confidentiality or non-disclosure agreements among any members of either Group or employees of any member of either Group; and

(iii) any agreement listed or described in Schedule 2.2(b), if any.

(c) If any Intercompany Agreement, intercompany arrangement and/or course of dealings is terminated pursuant to Section 2.2(a) and, but for the mistake or oversight of either Party hereto, would have been listed in Schedule 2.2(b), then, at the request of United Online or FTD made within twelve (12) months following the Distribution Date, the relevant Parties shall negotiate in good faith after the Distribution to determine whether, notwithstanding such termination, such Intercompany Agreement, intercompany arrangement and/or course of dealings should continue following the Distribution Date and the terms and conditions upon which the Parties may continue with respect thereto.

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 .

(a) On or before November 1, 2013, UOL India will (and UOL will cause UOL India to) transfer, free from all Encumbrances, all of UOL India’s right, title and interest in all computer servers and other hardware and other immaterial assets dedicated primarily to servicing the FTD Business in India, as set forth in Schedule 2.4(a) (as may be amended from time to time upon mutual agreement of the Parties) (the “ FTD India Assets ”), to FTD India in exchange for a cash payment to UOL India in an amount equal to the fair market value of the FTD India Assets at the time of such transfer. On or before such transfer date (the “ India Separation Date ”), FTD India will (and FTD will cause FTD India to) purchase, acquire and assume all of UOL India’s right, title and interest in the FTD India Assets, free from all Encumbrances, in exchange for such cash payment. United Online and FTD agree that the current estimated aggregate fair market value of all the FTD India Assets is less than $750,000. The Parties shall use their respective commercially reasonable efforts to cause the India Separation Date to occur as soon as reasonably practicable following the date of this Agreement.

(b) On or before the India Separation Date, UOL India will (and UOL will cause UOL India to) assign, novate, enter into appropriate contractual arrangements or take such other commercially reasonable actions, as may be required, to cause the transfer of all of UOL India’s rights and obligations under the leasehold contract in respect of the lease of the property situated at 7 th floor, B block, Babukhans’ Millennium Center, Somajiguda, Hyderabad, India, occupied by personnel primarily dedicated to servicing the FTD Business, as set forth in Schedule 2.4(b), to FTD India. FTD India will (and FTD will cause FTD India to) bear all the costs and the expenses (including but not limited to stamp duty and registration charges, attorneys’ fees, and other third party costs and expenses) payable in relation to the transfer of such leasehold contracts, and all obligations under such transferred leasehold contracts shall be the sole responsibility of FTD India from and after such transfer.

(c) On or prior to the India Separation Date, (i) FTD India will (and FTD will cause FTD India to) provide (i) all personnel of UOL India primarily dedicated to servicing the FTD Business and (ii) any other personnel of UOL or UOL India as mutually agreed upon by the Parties (collectively, the “ FTD India Personnel ”) with an offer of fresh employment with FTD India, and (ii) UOL India will provide FTD India with the voluntary resignation letters of such FTD India Personnel who accept employment with FTD India.

(d) In the event that any FTD India Personnel does not accept FTD India’s offer of employment as described above, for any reason whatsoever, and such FTD India Personnel does not wish to continue his/her employment with UOL or UOL India, as the case may be, then UOL or UOL India shall pay all applicable dues, compensation or other amounts (whether statutory or contractual) to such FTD India Personnel on account of his/her severance of his/her employment.

(e) Any payments required to be paid to FTD India Personnel in connection with their resignation from UOL or UOL India and/or employment with FTD India shall be paid by FTD India, and in the event any such payments are paid by UOL or UOL India to the FTD India Personnel, FTD India shall (and FTD shall cause FTD India to) reimburse UOL or UOL India, as applicable, for an

amount equal to all such payments made by UOL or UOL India to FTD India Personnel hereunder and for any other costs incurred by UOL or UOL India related to the matters contemplated in this Section 2.4.

ARTICLE III

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

Section 3.1 SEC and Other Securities Filings .

(a) Prior to the date of this Agreement, the Parties prepared and filed the Registration Statement with the SEC.

(b) The Parties shall use their respective commercially reasonable efforts to cause the Registration Statement to become effective as soon as reasonably practicable following the date of this Agreement.

(c) As soon as practicable after the Registration Statement becomes effective, FTD shall mail the Information Statement to the Record Holders.

(d) The Parties shall cooperate in preparing and filing with the SEC, and shall use their respective commercially reasonable efforts to cause to become effective, any other registration statements or amendments or supplements thereto that are necessary or appropriate in order to effect the Transactions, or to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the Transactions.

(e) The Parties shall take all such actions as may be necessary or appropriate under the securities or “blue sky” Laws of the states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Transactions.

Section 3.2 NASDAQ Listing Application .

(a) Prior to the date of this Agreement, the Parties prepared and filed an application for the listing on NASDAQ of FTD Common Stock to be issued to the Record Holders in the Distribution (the “ NASDAQ Listing Application ”).

(b) The Parties shall use their respective commercially reasonable efforts to have the NASDAQ Listing Application approved, subject to official notice of issuance, as soon as reasonably practicable following the date of this Agreement.

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

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

(a) Tax Sharing Agreement;

(b) Transition Services Agreement;

(d) such other written agreements, documents or instruments as the Parties may agree are reasonably necessary or desirable and which specifically state that they are Ancillary Agreements within the meaning of this Agreement.

Section 3.5 Governance Matters .

(a) Articles of Incorporation and Bylaws . On or prior to the Distribution Date, the Parties shall take all necessary actions to adopt each of the amended and restated certificate of incorporation and the amended and restated bylaws of FTD, each substantially in the forms filed by FTD with the SEC as exhibits to the Registration Statement.

(b) Officers and Directors . On or prior to the Distribution Date, the Parties shall take all necessary action so that, as of the Distribution Date, the officers and directors of FTD will be as set forth in the Information Statement.

(c) Certain Resignations . On or prior to the Distribution Date, (i) FTD shall deliver, or cause to be delivered, to United Online resignations, effective immediately after the Distribution, of each individual set forth on Schedule 3.5(c)(i) from each such individual’s position or positions with any member of the UOL Entities and (ii) United Online shall deliver, or cause to be delivered, to FTD resignations, effective immediately after the Distribution, of each individual set forth on Schedule 3.5(c)(ii) from each such individual’s position or positions with any member of the FTD Entities.

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 .

(a) Effective as of 12:01 a.m., New York time, on the Distribution Date, United Online will direct the Transfer Agent to distribute, effective as of the Distribution Time, to each Record Holder, one share of FTD Common Stock for every five shares of United Online Common Stock held by such Record Holder on the Record Date (prior to giving effect to the Reverse Stock Split). All such shares of FTD Common Stock to be so distributed shall be distributed as uncertificated shares registered in book-entry form through the direct registration system. No certificates therefor shall be distributed. Following the Distribution, United Online shall cause the Transfer Agent to deliver an account statement to each holder of FTD Common Stock reflecting such holder’s ownership thereof. All of the shares of FTD Common Stock distributed in the Distribution will be validly issued, fully paid and non-assessable.

(b) The Transfer Agent will initially hold any FTD Common Stock that remains unclaimed by a Record Holder for the account of such Record Holder. Any FTD Common Stock that remains unclaimed by any Record Holder 180 days after the Distribution Date will be delivered to FTD (or its transfer agent) for the account of such Record Holder and such Record Holder will look only to FTD for the FTD Common Stock, subject in each case to applicable escheat or other abandoned property Laws. Following the delivery of the FTD Common Stock to FTD (or its transfer agent), United Online expressly waives any claim to any such unclaimed FTD Common Stock delivered to FTD (or its transfer agent) pursuant to this Section 4.2(b) and United Online shall have no liability with respect to any such unclaimed FTD Common Stock.

(c) Notwithstanding the foregoing provisions of this Section 4.2, the rights of holders of restricted stock and stock options of United Online shall be as provided in the Employee Matters Agreement.

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:

(a) the Board of Directors of United Online shall have approved the Transactions, including the declaration of the Distribution, which approval may be given or withheld at its sole and absolute discretion;

(b) the SEC has declared effective the Registration Statement on Form 10, with no stop order in effect with respect thereto, and with no proceedings for such purpose pending or threatened by the SEC;

(c) FTD shall have mailed the Information Statement (and such other information concerning FTD, the FTD Business, FTD’s operations and management, the Distribution and such other matters as the Parties shall determine and as may otherwise be required by Law) to the Record Holders;

(d) all other actions and filings necessary or appropriate under applicable federal or state securities Laws and state blue sky Laws in connection with the Transactions shall have been taken;

(e) the IRS Ruling shall remain in full force and effect and shall not have been modified or amended in any respect adversely affecting the Intended Tax-Free Treatment of the Distribution;

(f) United Online shall have received an opinion from Skadden, Arps, Slate, Meagher & Flom LLP (which opinion will rely upon the effectiveness of the IRS Ruling), dated as of the Distribution Date, in form and substance acceptable to the Parties substantially to the effect that, among other things, the Distribution will qualify as a tax-free transaction under Section 355 of the Code;

(g) the FTD Common Stock to be distributed pursuant to the Distribution and related transactions shall have been accepted for listing on NASDAQ, subject to official notice of issuance;

(h) the Ancillary Agreements shall have been executed and delivered by each of the Parties thereto and no Party to any of the Ancillary Agreements will be in material breach of any such agreement;

(i) any material Governmental Approvals and Consents necessary to consummate the Transactions or any portion thereof shall have been obtained and be in full force and effect;

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

(k) no other event or development shall have occurred or failed to occur that, in the judgment of the Board of Directors of United Online, in its sole discretion, prevents the consummation of the Transactions or any portion thereof or makes the consummation of the Transactions inadvisable.

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.

ARTICLE VII

CERTAIN COVENANTS AND ADDITIONAL AGREEMENTS

Section 7.1 Insurance Matters .

(a) General . Each Insurance Policy owned or maintained by or on behalf of the UOL Entities that relates exclusively to (i) the FTD Business (“ FTD Specific Policies ”) shall be an FTD Asset and (ii) the UOL Businesses shall be a UOL Asset. All other Insurance Policies shall be subject to the provisions of Section 7.1(b).

(b) Combined Policies . United Online hereby agrees to use its commercially reasonable efforts to take the following actions, effective in each case prior to or on the Distribution Date (it being understood that FTD shall be responsible for all premiums, costs and fees associated with (x) any new Insurance Policies placed for the benefit of FTD pursuant to this Section 7.1(b) and (y) any incremental increase in any Insurance Policy’s premiums, costs and fees associated with the prior acts coverage or with the transitional services coverage relating to the Transition Services Agreement):

(i) allow each Insurance Policy listed in Schedule 7.1(b)(i) (the “ Occurrence Based Policies ”) to expire by its terms and place separate policies for each of United Online and FTD on substantially similar terms as the Occurrence Based Policies; and

(ii) allow each Insurance Policy listed in Schedule 7.1(b)(ii) (the “ Claims Made Policies ” and together with the Occurrence Based Policies, the “ Combined Policies ”) to expire by its terms and place separate policies for each of United Online and FTD on substantially similar terms as the Claims Made Policies and, in the case of United Online’s Claims Made Policies, including prior acts coverage with full retroactivity for United Online and FTD if such coverage is available and commercially reasonable, as determined by United Online.

(i) United Online shall cause each Insurance Policy with respect to those Persons who are currently covered by the UOL Entities’ existing directors and officers Insurance Policies (the “ Existing D&O Policies ”) to be renewed as of the Distribution Date on substantially similar terms as the Existing D&O Policies, but with an exclusion for claims that arise out of, or are primarily related to, the FTD Assets, serving as a director or officer of the FTD Entities, or the operation of the FTD Business.

(ii) FTD shall cause directors and officers Insurance Policies to be put in place as of the Distribution Date for the benefit of directors and officers of

the FTD Entities (it being understood that FTD shall be responsible for all premiums, costs and fees associated with such policies).

(iii) For the six-year period commencing immediately after the Distribution Date, United Online shall maintain in effect prepaid run-off tail coverage (the “ Run-Off Policy ”) for claims that arise out of, or are primarily related to, the FTD Assets, serving as a director or officer of the FTD Entities, or the operation of the FTD Business prior to the Distribution Date, with respect to those Persons who are currently covered by the Existing D&O Policies, on terms and at limits no less favorable than the coverage currently provided under such policies. All premiums and commissions due with respect to the Run-Off Policy shall be paid by FTD.

(d) Pre-Distribution Claims .

(i) For any claim asserted against any member of the FTD Entities after the Distribution Date arising out of an occurrence or Loss taking place prior to the Distribution Date (“ Pre-Distribution Claim ”), the applicable member of the FTD Entities may access coverage under any of the Insurance Policies under which the applicable member of the FTD Entities is insured and United Online shall cooperate with the applicable member of the FTD Entities in connection with the tendering of such claims.

(ii) In the event that a Pre-Distribution Claim relates to the same occurrence for which any member of the UOL Entities is seeking coverage under an Insurance Policy, and the limits under the applicable Insurance Policy are not sufficient to fund all covered claims of the applicable member of the UOL Entities and the applicable member of the FTD Entities, amounts due under such Insurance Policy shall be paid to the respective entities in proportion to the amounts which otherwise would be due were the limits of liability infinite.

(iii) After the Distribution Date, any third party administrator fees and deposits related to claims made under any Insurance Policy shall be paid in accordance with the protocol historically used prior to the Distribution Date.

(e) Retentions/Deductibles .

(i) For any Pre-Distribution Claim made after the Distribution Date, all amounts necessary to exhaust or otherwise satisfy all applicable retentions, deductibles or other amounts not covered by such policy shall be:

(A) paid by United Online to the extent such claim relates exclusively to the UOL Businesses;

(B) paid by FTD to the extent such claim relates exclusively to the FTD Business; or

(C) split equitably between United Online and FTD, as determined in United Online’s reasonable discretion, for all other claims, including any claim relating to general corporate matters.

(ii) FTD shall be permitted to determine whether to settle any claim for which FTD is required to pay any applicable deductibles or retentions pursuant to Section 7.1(e)(i)(B); provided that FTD shall not enter into any such settlement without the consent (not to be unreasonably withheld, conditioned or delayed) of United Online if the settlement (A) has the effect of permitting any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any UOL Entity, (B) does not release the UOL Entities from all liabilities and obligations with respect to such claim, (C) includes an admission of guilt or liability on behalf of any of the UOL Entities, or (D) is otherwise prejudicial to any of the UOL Entities.

(iii) For the avoidance of doubt, any dispute between the Parties arising out of or related to this Section 7.1(e) shall be subject to the dispute resolution provisions of Article X.

(f) Unearned Premium . United Online and FTD shall be entitled to their respective interest in any unearned premium paid by any insurer as a result of the cancellation of any of the Combined Policies pursuant to Section 7.1(b)(i) or Section 7.1(b)(ii). Each Party’s respective interest in any unearned premium shall be determined based on the proportion of the premium paid by each Party with respect to such policy in accordance with the internal premium allocation model historically used prior to the Distribution Date.

(g) Expirations and Renewals . With respect to any Combined Policy that expires prior to the Distribution Date, United Online shall, in its sole discretion, take any of the following actions: (i) allow the policy to expire and place separate policies for United Online and FTD in accordance with Section 7.1(b), as applicable, (ii) extend the policy through the Distribution Date or (iii) renew the policy.

(h) Copies of Policies . As soon as reasonably practical following the Distribution Date, United Online shall, at its own expense, provide to FTD copies of all FTD Specific Policies and all Combined Policies. At any time after the Distribution Date, upon the reasonable request of FTD, United Online shall provide to FTD copies of all other documents related to any FTD Specific Policies or any Combined Policies (in each case, including without limitation, certificates of insurance, insurer quotes and documents provided to underwriters).

Section 7.2 Use of Names .

(a) Except as otherwise provided in any Ancillary Agreement, as soon as practicable and in any event prior to the end of the period beginning on the Distribution Date and ending ninety (90) days thereafter (the “ Transition Period ”), the Parties, each at their own expense, shall remove, strike over or otherwise obliterate any and all exterior and interior signs and identifiers on Assets or properties owned or held by such Party or any member of its Group that show any affiliation with any member of the other Group. United Online hereby grants to FTD and FTD hereby grants to United Online, and each Party shall cause the other members of its respective Group to grant to the other Party, during the Transition Period, a worldwide, non-exclusive, non-transferable, fully-paid and royalty-free license to use each member of their Group’s respective corporate names (“ Other Party Marks ”) on any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, websites, email, computer software and other material used in their respective businesses as of the Distribution Time. Any use by either Party or any member of its Group of any of the Other Party Marks of the other Party as permitted in this Section 7.2 is subject to their compliance with the quality control requirements and guidelines in effect for the Other Party Marks as of the Distribution

Time. Notwithstanding the foregoing, United Online shall use commercially reasonable efforts to change all references to the Other Party Marks of FTD and each other member of its Group, and FTD shall use commercially reasonable efforts to change all references to the Other Party Marks of United Online and each other member of its Group, in each case, as soon as practicable following the Distribution Time.

(b) Except as otherwise provided in any Ancillary Agreement, at the end of the Transition Period, (i) without the prior written consent of United Online, FTD shall not, and shall cause each other member of its Group not to, use or display the name “United Online,” or any variations thereof, or other trademarks, trade names, logos or identifiers using any of such names or otherwise owned by or licensed to any member of the UOL Entities, or hold itself out as having any affiliation with United Online or any member of its Group and (ii) without the prior written consent of FTD, United Online shall not, and shall cause each other member of its Group not to, use or display the name “FTD,” “Interflora,” or any variations thereof, or other trademarks, trade names, logos or identifiers using any of such names or otherwise owned by or licensed to any member of the FTD Entities, or hold itself out as having any affiliation with FTD or any member of its Group; provided that notwithstanding the foregoing, nothing contained in this Agreement shall prevent any Party from using any other Party’s name in public filings with Governmental Authorities, materials intended for distribution to either Party’s stockholders or any other communication in any medium that describes the relationship between the Parties, including materials distributed to employees relating to the transition of employee benefit plans; provided that the continuation of references to such Other Party Marks in telephone directories (and other similar third party or incidental uses which are not capable of being updated within the time period set forth above) will not breach this Section 7.2; and provided that the foregoing shall not prohibit either Party or any member of a Party’s Group from making use of any Other Party Mark in a manner that would constitute “fair use” under applicable Law if any unaffiliated third party made such use or would otherwise be legally permissible for any unaffiliated third party without the consent of the Party owning such Other Party Mark.

(c) Each Party shall use the Other Party Marks as allowed hereunder only in connection with goods or services that are of a level of quality at least equal to the quality of comparable goods or services marketed by that Party before the Distribution Time and that it will allow the Party owning the right to such Other Party Marks reasonable inspection rights, upon reasonable written notice, to ensure compliance with the foregoing.

Section 7.3 Mail and Other Communications .

(a) From time to time following the Distribution Date, a member of one Group may receive mail, packages and other communications properly belonging to a member of the other Group.

(b) Accordingly, at all times after the Distribution Date:

(i) FTD authorizes each member of the UOL Entities to open all mail, packages and other communications received by any member of the UOL Entities, subject to the confidentiality provisions and restrictions in Section 8.7, and to the extent that any such mail, package or other communication does not relate solely to UOL Businesses, United Online shall, or shall cause any other applicable member of the UOL Entities to, promptly deliver such mail, package or other communication to a member of the FTD Entities; and

(ii) United Online authorizes each member of the FTD Entities to open all mail, packages and other communications received by any member of

the FTD Entities, subject to the confidentiality provisions and restrictions in Section 8.7, and to the extent that any such mail, package or other communication does not relate solely to FTD Business, FTD shall, or shall cause any other applicable member of the FTD Entities to, promptly deliver such mail, package or other communication to a member of the UOL Entities.

(c) The provisions of this Section 7.3 are not intended to, and will not be deemed to, constitute an authorization by any Party to permit the other to accept service of process on its behalf and no Party is or will be deemed to be the agent of any other Party for service of process purposes.

Section 7.4 Litigation

(a) Shared Litigation Matters .

(i) Control of Shared Litigation Matters . United Online shall have the right to control the litigation and settlement of the Shared Litigation Matters; provided, however , that with respect to Shared Litigation Matters other than the Multistate Investigation (as defined in Schedule 7.4 hereto), United Online shall not enter into any settlement thereof without the consent (not to be unreasonably withheld, conditioned or delayed) of FTD if the proposed settlement agreement includes non-monetary requirements or covenants applicable to any FTD Entity that are materially more restrictive than the non-monetary requirements or covenants included in any settlements entered into by any FTD Entity prior to the proposed settlement; provided, further , that in the event the Multistate Investigation is not settled within the six (6) month period (the “Settlement Period”) following the Distribution Date, United Online shall not enter into any settlement of the Multistate Investigation without the consent (not to be unreasonably withheld, conditioned or delayed) of FTD if the proposed settlement agreement includes non-monetary requirements or covenants applicable to any FTD Entity that are materially more restrictive than the non-monetary requirements or covenants that were included in the last draft of the settlement agreement proposed by the Attorneys General during the Settlement Period. FTD agrees that the outside legal counsel currently retained by United Online in the Shared Litigation Matters may continue to represent the interests of both FTD and United Online. FTD shall use commercially reasonable efforts to cooperate with United Online with respect to such Shared Litigation Matters.

(ii) Allocation of Litigation Expenses . United Online shall initially pay all joint attorneys’, accountants’, consultants’, expert witnesses’ and other professionals’ fees and expenses and all other out-of-pocket costs incurred on behalf of itself and FTD in the investigation, defense and/or evaluation of each Shared Litigation Matter (“ Litigation Expenses ”). United Online shall periodically furnish to FTD copies of invoices paid by United Online for Litigation Expenses. Within thirty (30) days of FTD’s receipt of such invoices, FTD shall pay United Online an amount equal to one-third of the Litigation Expenses (or such other share of the Litigation Expenses as reasonably determined by United Online), representing FTD’s estimated share of the Litigation Expenses. For each Shared Litigation Matter, within sixty (60) days of the final determination of FTD’s allocation of liability pursuant to Section 7.4(a)(iii) below, United Online shall provide to FTD a proposed allocation of the Litigation Expenses between United Online and FTD, calculated to be in proportion to United Online’s and FTD’s respective allocated liability for the settlement or judgment of the Shared Litigation Matter. If FTD does not object to the proposed allocation within sixty (60)

days, FTD shall pay to United Online, or United Online shall pay to FTD, the amount necessary to true up the amounts contributed by each company to match the allocation of the Litigation Expenses. If FTD provides United Online with a written notice of objection to United Online’s allocation of Litigation Expenses within such sixty (60) day period, United Online and FTD shall endeavor in good faith to negotiate a mutually agreeable allocation of such Litigation Expenses. If FTD and United Online have not reached a mutually agreeable allocation of such Litigation Expenses within ninety (90) days of United Online’s receipt of such objection notice, either FTD or United Online may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article X . FTD shall be entitled to observe the litigation with counsel of its own selection at its own cost, and is responsible for the costs of its own in-house counsel and other internal personnel.

(iii) Allocation of Liability for Shared Litigation Matters . United Online shall propose an allocation of liability for any judgment or settlement of a Shared Litigation Matter, based upon (A) if available, the allocation identified by a court verdict or, in the event of a settlement, the settling counterparty ( i.e. , the third party that United Online and/or FTD is entering into a settlement with), or, if neither is available, (B) the respective amount of revenue received by FTD and United Online from the post-transaction sales transactions at issue in the Shared Litigation Matter. To the extent that a settlement or judgment is based on challenged practices other than, or other matters in addition to, the post-transaction sales transactions at issue in the Shared Litigation Matter, United Online shall in good faith determine an equitable apportionment of that part of the settlement or judgment as between United Online and FTD. If FTD provides United Online with a written notice of objection to United Online’s allocation of liability within sixty (60) days of receipt of that allocation, United Online and FTD shall endeavor in good faith to negotiate a mutually agreeable allocation of such liability. If FTD and United Online have not reached a mutually agreeable allocation of such liability within ninety (90) days of United Online’s receipt of such objection notice, either FTD or United Online may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article X herein . For the avoidance of doubt, FTD shall bear no liability for claims in the Shared Litigation Matters that are based on auto-renewal practices.

(b) Other Actions Primarily Relating to UOL Business . United Online agrees that at all times from and after the Distribution, if an Action other than a Shared Litigation Matter, relating primarily to the UOL Business is commenced by a third party naming FTD Entities as a defendant thereto, then United Online shall use its reasonable best efforts to cause FTD to be removed from such Action; provided that if United Online is unable to cause FTD to be removed from such Action, United Online and FTD shall cooperate and consult to the extent reasonably necessary or advisable with respect to such Action, and United Online shall control and pay for the defense of such Action, and FTD shall be entitled to observe with counsel of its own selection at its own cost, and is responsible for the costs of its own in-house counsel and other internal personnel. United Online shall control the settlement of such an Action; provided that United Online shall not enter into any such settlement without the consent (not to be unreasonably withheld, conditioned or delayed) of FTD if the settlement (i) has the effect of permitting any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any FTD Entity, (ii) does not release the FTD Entities from all liabilities and obligations with respect to such Action, (iii) includes an admission of guilt or liability on behalf of any FTD Entity, or (iv) is otherwise prejudicial to any of the FTD Entities. United Online shall in good faith determine an equitable apportionment of the settlement or judgment as between United Online and FTD. If FTD provides United Online with a written notice of objection to United Online’s

allocation of liability within sixty (60) days of receipt of that allocation, United Online and FTD shall endeavor in good faith to negotiate a mutually agreeable allocation of such liability. If FTD and United Online have not reached a mutually agreeable allocation of such liability within ninety (90) days of United Online’s receipt of such objection notice, either FTD or United Online may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article X herein.

(c) Other Actions Primarily Relating to FTD Business . FTD agrees that at all times from and after the Distribution, if an Action other than a Shared Litigation Matter, relating primarily to the FTD Business is commenced by a third party naming UOL Entities as a defendant thereto, then FTD shall use its reasonable best efforts to cause UOL Entities to be removed from such Action; provided that if FTD is unable to cause UOL Entities to be removed from such Action, United Online and FTD shall cooperate and consult to the extent reasonably necessary or advisable with respect to such Action, and FTD shall control and pay for the defense of such Action, and United Online shall be entitled to observe with counsel of its own selection at its own cost, and is responsible for the costs of its own in-house counsel and other internal personnel. FTD shall control the settlement of such an Action; provided that FTD shall not enter into any such settlement without the consent (not to be unreasonably withheld, conditioned or delayed) of United Online if the settlement (i) has the effect of permitting any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any UOL Entity, (ii) does not release the UOL Entities from all liabilities and obligations with respect to such Action, (iii) includes an admission of guilt or liability on behalf of any UOL Entity, or is (iv) otherwise prejudicial to any of the UOL Entities. FTD shall in good faith determine an equitable apportionment of the settlement or judgment as between FTD and United Online. If United Online provides FTD with a written notice of objection to FTD’s allocation of liability within sixty (60) days of receipt of that allocation, FTD and United Online shall endeavor in good faith to negotiate a mutually agreeable allocation of such liability. If United Online and FTD have not reached a mutually agreeable allocation of such liability within ninety (90) days of FTD’s receipt of such objection notice, either United Online or FTD may request in writing to the other Party that such allocation be resolved through the dispute resolution mechanism provided in Article X herein.

(d) Other Actions Not Relating Primarily to UOL Business or FTD Business . United Online and FTD agree that, at all times from and after the Distribution, if an Action other than a Shared Litigation Matter, which does not relate primarily to the UOL Business or the FTD Business is commenced by a third party naming both one or more UOL Entities Parties and one or more FTD Entities as defendants thereto, then United Online and FTD shall cooperate and consult to the extent reasonably necessary or advisable with respect to such Action, and each Party shall bear its own costs of defending such Action.

(e) Certain Actions Relating Only to FTD Business . United Online and FTD agree that if an Action other than a Shared Litigation Matter, which asserts claims that arise out of or relate to any of the practices challenged in the Shared Litigation Matters listed on Schedule 7.4, is commenced by a third party naming one or more FTD Entities as defendants thereto, then United Online shall have the option to jointly control the litigation of such Action, but may at any time transfer full control of all or part of such Action to FTD. United Online shall provide FTD with thirty (30) days’ notice of any such transfer. FTD shall cooperate and consult to the extent reasonably necessary or advisable with respect to such Action.

(f) Third-Party Actions Arising From the Transactions . Except as set forth in the Ancillary Agreements, and subject to Section 9.2(c) and Section 9.3(c), United Online and FTD agree that if an Action that challenges, arises from, or relates to the Transactions, is commenced by a third party naming one or more FTD Entities or one or more UOL Entities, or any of their respective directors

or officers as defendants thereto, such Action shall be treated as a Shared Litigation Matter. FTD and United Online shall cooperate and consult to the extent reasonably necessary or advisable with respect to such Action.

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 .

(a) United Online, for itself and on behalf of the UOL Subsidiaries, hereby grants, and shall cause the UOL Subsidiaries to grant, to FTD a worldwide, perpetual, irrevocable, nonexclusive, sublicensable, royalty-free, transferable right and license to use, copy, distribute and create derivative works of the Shared IP owned by the UOL Entities. FTD, for itself and on behalf of the FTD Subsidiaries, hereby grants, and shall cause the FTD Subsidiaries to grant, to UOL a worldwide, perpetual, irrevocable, nonexclusive, sublicensable, royalty-free, transferable right and license to use, copy, distribute and create derivative works of the Shared IP owned by the FTD Entities.

(b) United Online, for itself and as a representative of the UOL Subsidiaries, hereby grants, and shall cause the UOL Subsidiaries to grant, to FTD a worldwide, perpetual, irrevocable, nonexclusive, royalty-free, non-transferable (except to a successor of all or substantially all of the FTD Assets) right and license to use and create derivative works of the Shared Scripts. FTD agrees that the Shared Scripts constitute Confidential Information of the UOL Entities, such that the provisions in Section 8.7 shall apply thereto. For clarity, FTD shall not, and shall cause its sublicensees to not, combine any Shared Scripts with open source code such that any Shared Scripts are disclosed or provided to third parties. The foregoing license shall not be sublicensable except to FTD’s Affiliates and subcontractors; provided that FTD obligates any sublicensees to abide by confidentiality obligations at least as stringent as those set forth herein. FTD acknowledges that the Shared Scripts are provided by United Online “as-is” and that the limitation of liability set forth in Section 8.5 shall apply thereto.

ARTICLE VIII

ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE

Section 8.1 Agreement for Exchange of Information .

(a) Subject to Section 8.1(b):

(i) for a period of six (6) years following the Distribution Date, as soon as reasonably practicable after written request: (A) United Online shall afford to any member of the FTD Entities and their authorized accountants, counsel and other designated representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information and to preserve the completeness and integrity of the Information, to, or, at the FTD Entities’ expense, provide copies of, all books, records, Contracts, instruments, data, documents and other information in the possession or under the control of any member of the UOL Entities immediately following the Distribution Date that relates to any member of the FTD Entities, the FTD Business or the employees or former employees of the FTD

Business and (B) FTD shall afford to any member of the UOL Entities and their authorized accountants, counsel and other designated representatives reasonable access during normal business hours to, or, at the UOL Entities’ expense, provide copies of, all books, records, Contracts, instruments, data, documents and other information in the possession or under the control of any member of the FTD Entities immediately following the Distribution Date that relates to any member of the UOL Entities, the FTD Entities, the UOL Businesses, the FTD Business, or the employees or former employees of the UOL Businesses or the FTD Business; and

(ii) for a period of two (2) years following the Distribution Date, as soon as reasonably practicable after written request: (A) to the extent that information or knowledge with respect to the FTD Business as of or prior to the Distribution Time is available through discussions with employees of any member of the UOL Entities, United Online shall make such employees reasonably available to FTD to provide such information or knowledge and (B) to the extent that information or knowledge relating to the UOL Businesses or the FTD Business as of or prior to the Distribution Time is available through discussions with employees of any member of the FTD Entities, FTD shall make such employees reasonably available to United Online to provide such information or knowledge;

provided that in the event that FTD or United Online, as applicable, determine that any such provision of or access to any information in response to a request under this Section 8.1(a) would be commercially detrimental in any material respect, violate any Law or agreement or waive any attorney-client privilege, the work product doctrine or other applicable privilege, the Parties shall take all reasonable measures to permit compliance with such request in a manner that avoids any such harm or consequence; provided that to the extent specific information- or knowledge-sharing provisions are contained in any of the Ancillary Agreements, such other provisions (and not this Section 8.1(a)) shall govern; provided that the 6-year period in Section 8.1(a)(i) or the 2-year period in Section 8.1(a)(ii), as applicable, shall be extended with respect to requests related to any third party litigation or other dispute filed prior to the end of such period until such litigation or dispute is finally resolved.

(b) A request for information under Section 8.1(a) may be made: (i) to comply with reporting, disclosure, filing or other requirements imposed on the requesting Party (including under applicable securities laws) by a Governmental Authority having jurisdiction over such requesting Party, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, claims defense, regulatory filings, litigation or other similar requirements (other than in connection with any action, suit or proceeding in which any member of the UOL Entities is adverse to any member of the FTD Entities, or vice versa), (iii) for use in compensation, benefit or welfare plan administration or other bona fide business purposes, or (iv) to comply with any obligations under this Agreement or any Ancillary Agreement.

(c) Without limiting the generality of Section 8.1(a), until the end of the first full fiscal year following the Distribution Date (and for a reasonable period of time thereafter as required for any Party to comply with reporting, disclosure, filing or other requirements imposed on the requesting Party (including under applicable securities laws) by a Governmental Authority having jurisdiction over such requesting Party for the fiscal year during which the Distribution Date occurs), FTD shall use its commercially reasonable efforts to cooperate with any requests from any member of the UOL Entities pursuant to Section 8.1(a) and United Online shall use its commercially reasonable efforts to cooperate with any requests from any member of the FTD Entities pursuant to Section 8.1(a), in each case to enable the requesting Party to meet its timetable to comply with reporting, disclosure, filing or other

requirements imposed on the requesting Party (including under applicable securities laws) by a Governmental Authority having jurisdiction over such requesting Party.

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:

(a) FTD shall use commercially reasonable efforts to make available, or cause to be made available, to any member of the UOL Entities, the directors, officers, employees and agents of any member of the FTD Entities as witnesses to the extent that the same may reasonably be required by the requesting Party (giving consideration to business demands of such directors, officers, employees and agents) in connection with any legal, administrative or other proceeding in which the requesting Party may from time to time be involved, except in the case of any action, suit or proceeding in which any member of the FTD Entities is adverse to any member of the UOL Entities; and

(b) United Online shall use commercially reasonable efforts to make available, or cause to be made available, to any member of the FTD Entities, the directors, officers, employees and agents of any member of the UOL Entities as witnesses to the extent that the same may reasonably be required by the requesting Party (giving consideration to business demands of such directors, officers, employees and agents) in connection with any legal, administrative or other proceeding in which the requesting Party may from time to time be involved, except in the case of any action, suit or proceeding in which any member of the UOL Entities is adverse to any member of the FTD Entities.

Section 8.7 Confidentiality .

(a) FTD (on behalf of itself and each other member of its Group) and United Online (on behalf of itself and each other member of its Group) shall hold, and shall cause each of their respective Affiliates to hold, and each of the foregoing shall cause their respective directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, and not to disclose or release or use, for any purpose other than as expressly permitted pursuant to this Agreement or the Ancillary Agreements, any and all Confidential Information concerning any member of the other Group without the prior written consent of such member of the other Group; provided that the Parties may disclose, or may permit disclosure of, such Confidential Information (i) to their respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such information for auditing and other non-commercial purposes and who are informed of their obligation to hold such information confidential to the same extent as is applicable to the Parties hereunder and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if the Parties or any of their respective Affiliates are required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule, or (iii) as necessary in order to permit a Party to prepare and disclose its financial statements, or other disclosures required by Law or such applicable stock exchange. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made pursuant to clause (ii) above, the Party requested to disclose Confidential Information concerning a member of the other Group, shall promptly notify such member of the other Group of the existence of such request or demand and, to the extent commercially practicable, shall provide such member of the other Group thirty (30) days (or such lesser period as is commercially practicable) to seek an appropriate protective order or other remedy, which the Parties will cooperate in obtaining. In the event that such appropriate protective order or other remedy is not obtained, the Party that is required to disclose Confidential Information about a member of the Group shall furnish, or cause to be furnished, only that portion of the Confidential Information that is legally required to be disclosed and shall use commercially reasonable efforts to ensure that confidential treatment is accorded such information.

(b) Notwithstanding anything to the contrary set forth herein, the Parties shall be deemed to have satisfied their obligations hereunder with respect to Confidential Information of any member of the other Group if they exercise the same degree of care (but no less than a reasonable degree of care) as they exercise to preserve confidentiality for their own similar Confidential Information.

(c) Upon the written request of a member of a Group, FTD or United Online, as applicable, shall take, or shall cause the applicable members of their Group to take, reasonable steps to promptly (i) deliver to the requesting Party all original copies of Confidential Information (whether written or electronic) concerning the requesting Party or any member of its Group that is in the possession of the non-requesting Party or any member of its Group and (ii) if specifically requested by the requesting Party, destroy any copies of such Confidential Information (including any extracts therefrom), unless such delivery or destruction would violate any Law; provided that the non-requesting Party shall not be obligated to destroy Confidential Information that is required by or relates to the business of the non-requesting Party or any member of its Group. Upon the written request of the requesting Party, FTD or United Online, as applicable, shall cause one of their, or another applicable member of their Group’s, duly authorized officers to certify in writing to the requesting Party that the requirements of the preceding sentence have been satisfied in full.

(d) In connection with the exchange of information under this Agreement, the Parties will mutually determine the secured means by which information will be exchanged, including, without limitation, by establishing virtual private network (or VPN) access or providing active accounts to designated personnel of the applicable Party. If a Party hereunder (or a subsidiary of such Party) (the

“Accessing Party”) is given access to the computer systems or software (collectively, “Systems”) of the other Party (or a subsidiary of such other Party) in connection with the exchange of information under this Agreement, the Accessing Party shall comply (or cause its subsidiary to comply) with all of the system security policies, procedures and requirements (collectively, “Security Regulations”) of the other Party (or the subsidiary of such other Party), and shall not (or shall cause its subsidiary not to) tamper with, compromise or circumvent any security or audit measures employed by the other Party (or the subsidiary of such other Party). The Accessing Party shall (or shall cause its subsidiary to) access and use only those Systems of the other Party (or a subsidiary of such other Party) for which it has been granted the right to access and use, it being understood that the other Party shall be solely responsible for terminating the Accessing Party’s (or its subsidiary’s) 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 or received by the Accessing Party. The Accessing Party shall use commercially reasonable efforts to ensure that only those of its personnel (or the personnel of its subsidiary) who are specifically authorized to have access to the other Party’s Systems (or the Systems of a subsidiary of such other Party) gain such access, and use commercially reasonable efforts to prevent unauthorized access, use, destruction, alteration or loss of information contained therein, including notifying its personnel (or the personnel of its subsidiary) of the restrictions set forth in this Agreement and of the other Party’s Security Regulations.

Section 8.8 Privileged Matters .

(a) Pre-Distribution Services . The Parties recognize that legal and other professional services that have been and will be provided prior to the Distribution Time have been and will be rendered for the collective benefit of the Parties and their Affiliates, and that each of the Parties and their Affiliates should be deemed to be the client with respect to such pre-Distribution services for the purposes of asserting all privileges that may be asserted under applicable Law.

(b) Post-Distribution Services . The Parties recognize that legal and other professional services will be provided following the Distribution Time that will be rendered solely for the benefit of FTD and its Affiliates or United Online and its Affiliates, as the case may be. With respect to such post-Distribution services, the Parties agrees as follows:

(i) United Online shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the UOL Businesses, whether or not the privileged information is in the possession of or under the control of United Online or FTD. United Online shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting UOL Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated by or against any member of the UOL Entities, whether or not the privileged information is in the possession of or under the control of United Online or FTD; and

(ii) FTD shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the FTD Business, whether or not the privileged information is in the possession of or under the control of United Online or FTD. FTD shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting FTD Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated by or against any member of the FTD Entities, whether or not the

privileged information is in the possession of or under the control of United Online or FTD.

(c) The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 8.8, with respect to all privileges not allocated pursuant to the terms of Section 8.8(b) and with respect to the Shared Litigation Matters. FTD may not waive, and shall cause each other member of the FTD Entities not to waive, any privilege that could be asserted by a member of the UOL Entities under any applicable Law, and in which a member of the UOL Entities has a shared privilege, without the consent of United Online, which consent shall not be unreasonably withheld, conditioned or delayed or as provided in Section 8.8(d) or Section 8.8(e) below. United Online may not waive, and shall cause each other member of the UOL Entities not to waive, any privilege that could be asserted by a member of the FTD Entities under any applicable Law, and in which a member of the FTD Entities has a shared privilege, without the consent of FTD, which consent shall not be unreasonably withheld, conditioned or delayed or as provided in Section 8.8(d) or Section 8.8(e) below.

(d) In the event of any litigation or dispute between or among FTD and United Online, or any members of their respective Groups, the Parties may waive a privilege in which a member of the other Group has a shared privilege, without obtaining the consent from any other Party; provided that such waiver of a shared privilege shall be effective only as to the use of information with respect to the litigation or dispute between the relevant Parties and/or the applicable members of their respective Groups, and shall not operate as a waiver of the shared privilege with respect to third Parties.

(e) If a dispute arises between or among FTD and United Online, or any members of their respective Groups, regarding whether a privilege should be waived to protect or advance the interest of a Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of such Party and shall not unreasonably withhold consent to any request for waiver by such Party. Each Party specifically agrees that it will not withhold consent to waiver for any purpose except to protect its own legitimate interests or the legitimate interests of any other member of its Group.

(f) Upon receipt by either Party, or by any member of its Group, of any subpoena, discovery or other request which requires for the production or disclosure of information which such Party knows is subject to a shared privilege or as to which a member of the other Group has the sole right hereunder to assert or waive a privilege, or if either Party obtains knowledge that any of its or any other member of its Group’s current or former directors, officers, agents or employees have received any subpoena, discovery or other requests which requires the production or disclosure of such privileged information, such Party shall promptly notify the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the information and to assert any rights it or they may have under this Section 8.8 or otherwise to prevent the production or disclosure of such privileged information.

(g) The access to information being granted pursuant to Section 8.1, the agreement to provide witnesses and individuals pursuant to Section 8.6 hereof, and the transfer of privileged information between and among the Parties and the members of their respective Groups pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement, any of the Ancillary Agreements or otherwise.

Section 8.9 Financial Information Certifications .

(a) In order to enable the principal executive officer or officers, principal financial officer or officers and controller or controllers of each of the Parties to make the certifications

required of them under Section 302 of the Sarbanes-Oxley Act of 2002, within thirty (30) days following the end of any fiscal quarter during which FTD was a Subsidiary of United Online, and within thirty-five (35) days following the end of any fiscal year during which FTD was a Subsidiary of United Online, the other Party shall provide, or cause to be provided by any other applicable member of its Group, a certification statement with respect to testing of internal controls for corporate and shared services processes and other accounting disclosure matters to be reasonably and mutually agreed upon, for such quarter, year or portion thereof to those certifying officers and employees, which certification shall be in substantially the same form as has been provided by officers or employees in certifications delivered prior to the Distribution Date in the case of the third quarter of 2013, and in a reasonable and mutually agreed upon form in the case of the year ended December 31, 2013 ( provided that such certification shall be made by the relevant Party or any other applicable member of its Group rather than individual officers or employees), or as otherwise agreed upon between the Parties.

(b) Notwithstanding the foregoing clause (a) of this Section 8.9, in connection with the audit of United Online’s financial statements for the year ended December 31, 2013 as it relates to the period during which FTD was a Subsidiary of United Online, FTD agrees to cooperate with United Online and its accounting firm and timely provide, and/or provide access to, any reasonably requested information, records and employees so as to enable United Online and its accounting firm to complete by December 31, 2013 the audit processes and procedures related to the discontinued operations for the ten-month period ended October 31, 2013.

(c) Upon FTD’s request, United Online shall provide a certification statement related to FTD’s compliance with the Credit Agreement during the third quarter of 2013, and during the portion of the fourth quarter of 2013 during which FTD was a Subsidiary of United Online, which certification shall be in a reasonable and mutually agreed upon form and shall relate to only those covenants or provisions of the Credit Agreement as to which United Online’s employees had primary responsibility while FTD was a Subsidiary of United Online prior to the Distribution Date ( provided that such certification shall be made by United Online rather than individual officers or employees).

(d) Upon the request of FTD’s accounting firm in connection with completing an audit or review of FTD’s financial statements, United Online shall request any outside law firms engaged by United Online with respect to Shared Litigation that is under the control of United Online to provide oral or written updates with respect thereto as reasonably requested by such accounting firm.

ARTICLE IX

MUTUAL RELEASES; INDEMNIFICATION

Section 9.1 Release of Pre-Distribution Claims .

(a) Except as provided in Section 9.1(d) and Section 9.1(f), effective as of the Distribution Time, FTD does hereby, on behalf of itself and each member of the FTD Entities, release and forever discharge each UOL Indemnitee, from any and all Liabilities whatsoever to any member of the FTD Entities, whether at law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Distribution Time, including in connection with the Transactions.

(b) Except as provided in Section 9.1(d) and Section 9.1(f), effective as of the Distribution Time, United Online does hereby, for itself and each other member of the UOL Entities,

release and forever discharge each FTD Indemnitee from any and all Liabilities whatsoever to any member of the UOL Entities, whether at law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Distribution Time, including in connection with the Transactions.

(c) The Parties expressly understand and acknowledge that it is possible that unknown losses or claims exist or might come to exist or that present losses may have been underestimated in amount, severity, or both. Accordingly, the Parties are deemed expressly to understand provisions and principles of law such as Section 1542 of the Civil Code of the State of California (as well as any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar or comparable to Section 1542), which Section provides: GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The Parties are hereby deemed to agree that the provisions of Section 1542 and all similar federal or state laws, rights, rules, or legal principles of California or any other jurisdiction that may be applicable herein, are hereby knowingly and voluntarily waived and relinquished with respect to the releases in Section 9.1(a) and Section 9.1(b).

(d) Nothing contained in Section 9.1(a) or Section 9.1(b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in, or contemplated to continue pursuant to, this Agreement or any Ancillary Agreement. Without limiting the foregoing, nothing contained in Section 9.1(a) or Section 9.1(b) shall release any Person from:

(i) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of that Group under, this Agreement or any Ancillary Agreement;

(ii) any Liability that such Person may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement for claims brought by third Persons, which Liability shall be governed by the provisions of this Article IX and, if applicable, the appropriate provisions of the Ancillary Agreements;

(iii) any unpaid accounts payable or receivable arising from or relating to the sale, provision, or receipt of goods, payment for goods, property or services purchased, obtained or used in the ordinary course of business by any member of the UOL Entities from any member of the FTD Entities, or by any member of the FTD Entities from any member of the UOL Entities; or

(iv) any Liability the release of which would result in the release of any Person other than an Indemnitee; provided that the Parties agree not to bring suit, or permit any other member of their respective Group to bring suit, against any Indemnitee with respect to such Liability.

(e) FTD shall not make, and shall not permit any other member of the FTD Entities to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against any UOL Indemnitee with respect to any Liabilities released pursuant to Section 9.1(a). United Online shall not make, and shall not permit any member of the UOL Entities to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against any FTD Indemnitee with respect to any Liabilities released pursuant to Section 9.1(b).

(f) Nothing contained in Section 9.1(a) or Section 9.1(b) shall release or discharge the UOL Entities or FTD Entities from any matter covered in Section 7.4(a) or Section 7.4(f).

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):

(a) any FTD Liability, including the failure of any member of the FTD Entities or any other Person to pay, perform or otherwise promptly discharge any FTD Liabilities in accordance with their respective terms, whether prior to, at or after the Distribution Time;

(b) any breach by any member of the FTD Entities of any provision of this Agreement or of any of the Ancillary Agreements, subject to any limitations of liability provisions and other provisions applicable to any such breach set forth therein; and

(c) with respect to all information contained in the Registration Statement or the Information Statement (other than information regarding any member of the UOL Entities provided by any member of the UOL Entities in writing to FTD expressly for inclusion in the Registration Statement or the Information Statement), any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading;

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):

(a) any UOL Liability, including the failure of any member of the UOL Entities or any other Person to pay, perform or otherwise promptly discharge any UOL Liabilities in accordance with their respective terms, whether prior to, at or after the Distribution Time;

(b) any breach by any member of the UOL Entities of any provision of this Agreement or of any of the Ancillary Agreements, subject to any limitations of liability provisions and other provisions applicable to any such breach set forth therein; and

(c) solely with respect to information regarding any member of the UOL Entities provided by any member of the UOL Entities in writing to FTD expressly for inclusion in the Registration Statement or the Information Statement, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading;

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 .

(a) An Indemnitee shall give notice of any matter that such Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement or any Ancillary Agreement (other than a Third-Party Claim which shall be governed by Section 9.4(b)) to any Party that is or may be required pursuant to this Agreement or any Ancillary Agreement to make such indemnification (the “ Indemnifying Party ”) promptly (and in any event within fifteen (15) days) after making such a determination. Such notice shall state the amount of the Loss claimed, if known, and method of computation thereof, and contain a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee; provided that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure.

(b) If a claim or demand is made against an Indemnitee by any Person who is not a Party to this Agreement or an Affiliate of a Party (a “ Third-Party Claim ”) as to which such Indemnitee is or reasonably expects to be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within thirty (30) days) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided that the failure to provide notice of any such Third-Party Claim shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred by the Indemnitee in defending such Third-Party Claim during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim.

(c) An Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably

acceptable to the Indemnitee, if it gives written notice of its intention to do so (including a statement that the Indemnitee is entitled to indemnification under this Article IX) to the applicable Indemnitees within thirty (30) days of the receipt of notice from such Indemnitees of the Third-Party Claim (failure of the Indemnifying Party to respond within such thirty (30) day period shall be deemed to be an election by the Indemnifying Party not to assume the defense for such Third-Party Claim). After a notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided that such access shall not require the Indemnitee to disclose any information the disclosure of which would, in the good faith judgment of the Indemnitee, result in the loss of any existing privilege with respect to such information or violate any applicable Law.

(d) Notwithstanding anything to the contrary in this Section 9.4, in the event that (i) an Indemnifying Party elects not to assume the defense of a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the Indemnitee, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee, (iv) the Indemnitee’s exposure to Liability in connection with such Third-Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder, or (v) the Party making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnitee or any of its material Assets, such Indemnitee shall be entitled to control the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnitee’s choosing (such counsel to be reasonably acceptable to the Indemnifying Party). If the Indemnitee is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnitee in such defense and make available to the Indemnitee all witnesses and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee; provided that such access shall not require the Indemnifying Party to disclose any information the disclosure of which would, in the good faith judgment of the Indemnifying Party, result in the loss of any existing privilege with respect to such information or violate any applicable Law.

(e) Unless the Indemnifying Party has failed to assume the defense of the Third-Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third-Party Claim without the consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed). If an Indemnifying Party has failed to assume the defense of the Third-Party Claim, it shall not be a defense to any obligation to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability.

(f) In the case of a Third-Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third-Party Claim without the consent (not to be unreasonably withheld, conditioned or delayed) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other non-monetary relief to be entered, directly or indirectly, against any Indemnitee, does not release the Indemnitee from all liabilities and obligations with

respect to such Third-Party Claim or includes an admission of guilt or liability on behalf of the Indemnitee.

(g) Absent fraud or intentional misconduct by an Indemnifying Party, the indemnification provisions of this Article IX shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or Losses resulting from any breach of this Agreement or any Ancillary Agreement, and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article IX against any Indemnifying Party.

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.

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 .

(a) Except as otherwise provided in this Agreement or in any Ancillary Agreement, in the event of a controversy, dispute or claim arising out of, in connection with, or in relation

to the interpretation, performance, nonperformance, validity, termination or breach of this Agreement or any Ancillary Agreement or otherwise arising out of, or in any way related to this Agreement or any Ancillary Agreement or any of the transactions contemplated hereby or thereby (each, an “ Agreement Dispute ”), the Appointed Representatives shall negotiate in good faith for a reasonable period of time, and not less than thirty (30) days, to settle any such Agreement Dispute.

(b) Nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences and discussions in connection with efforts to settle an Agreement Dispute that is not otherwise independently discoverable shall be offered or received as evidence or used for impeachment or for any other purpose, but shall be considered as to have been disclosed for settlement purposes.

(c) If a satisfactory resolution of any Agreement Dispute is not achieved by the Appointed Representatives within a reasonable period of time, the Parties agree to seek to resolve such Agreement Dispute by mediation administered by Judicial Arbitration and Mediation Services, Inc. (“ JAMS ”) and its mediation rules, and to bear equally the costs of the mediation. If the Agreement Dispute has not been resolved through mediation within ninety (90) days after the date of service of written notice of such Agreement Dispute, or such longer period as the Parties may mutually agree in writing (the “ Mediation Period ”), each Party will be entitled to refer the dispute to arbitration in accordance with Section 10.3.

Section 10.3 Arbitration .

(a) If the Agreement Dispute has not been resolved for any reason during the Mediation Period, such Agreement Dispute shall be resolved, at the request of either Party, by arbitration administered by JAMS under its Arbitration Rules (the “ JAMS Rules ”), conducted in Los Angeles, California. There shall be three arbitrators. Each Party shall appoint one arbitrator. The two party-appointed arbitrators shall agree on a third arbitrator who will chair the arbitral tribunal. Any arbitrator not appointed within a reasonable time shall be appointed in accordance with the JAMS Rules. Any controversy concerning whether an Agreement Dispute is an arbitrable Agreement Dispute, whether arbitration has been waived, whether an assignee of this Agreement is bound to arbitrate, or as to the interpretation or enforceability of this Section 10.3 will be determined by the arbitrators. In resolving any Agreement Dispute, the Parties intend that the arbitrators apply the substantive laws of the State of Delaware, without regard to any choice of law principles thereof that would mandate the application of the laws of another jurisdiction. The Parties intend that the provisions to arbitrate set forth herein be valid, enforceable and irrevocable, and any award rendered by the arbitrators shall be final on the Parties, subject to review under the JAMS Optional Arbitration Appeal Procedure, which the Parties adopt and agree to implement (as it exists on the effective date of this Agreement) with respect to any interim or final award in an arbitration arising out of or related to an Agreement Dispute. The JAMS appeal panel will consist of three retired appellate judges, selected pursuant to the JAMS Appellate Procedures. The standard of review on such an appeal will be the same standard as the first-level federal appellate court in the jurisdiction that would apply to an appeal from a trial court decision. For the avoidance of doubt, that standard of review shall de novo review of conclusions of law and mixed questions of law and fact, and factual findings shall be reviewed for clear error. The Parties agree to comply with any award made in any such arbitration proceedings and agree to enforcement of or entry of judgment upon such award, in any court of competent jurisdiction, including any Los Angeles Superior Court for the State of California or federal court in the Central District of California. The arbitrators shall be entitled, if appropriate, to award monetary damages and other remedies, including equitable remedies, subject to the provisions of Section 9.10. Any interim measures granted by the arbitrators, including injunctive relief, shall be immediately appealable to a JAMS appeal panel under the same standards as applicable in the U.S. federal courts of appeal. The Parties will use their commercially reasonable efforts to encourage the

arbitrators to resolve any arbitration related to any Agreement Dispute as promptly as practicable. Except as required by applicable Law, including disclosure or reporting requirements, the arbitrators and the Parties shall maintain the confidentiality of all information, records, reports, or other documents obtained in the course of the arbitration, and of all awards, orders, or other arbitral decisions rendered by the arbitrators.

(b) The arbitrators may consolidate arbitration under this Agreement with any arbitration arising under or relating to any of the Ancillary Agreements if the subject of the Agreement Disputes thereunder arise out of or relate essentially to the same set of facts or transactions. Such consolidated arbitration will be determined by the arbitrators appointed for the arbitration proceeding that was commenced first in time.

(c) Unless otherwise agreed in writing, the Parties will continue to provide service and honor all other commitments under this Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of this Article X with respect to all matters not subject to such dispute resolution.

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 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 .

(a) Subject to Section 11.1, neither this Agreement nor any of the Ancillary Agreements may be amended except by an agreement in writing signed by both Parties.

(b) Any term or provision of this Agreement or of any Ancillary 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 or such Ancillary 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 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.

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:

(a) If to United Online:

United Online, Inc.
21301 Burbank Boulevard
Woodland Hills, California 91367
Attention: General Counsel
Fax: (818) 287-3010

(b) If to FTD:

FTD Companies, Inc.
3113 Woodcreek Drive
Downers Grove, Illinois 60515
Attention: General Counsel
Fax: (630) 724-6651

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, 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 ]

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:	/s/ Neil P. Edwards
	Name: Neil P. Edwards
	Title: Executive Vice President and Chief Financial Officer


FTD COMPANIES, INC.


By:	/s/ Becky Sheehan
	Name:	Becky Sheehan
	Title:	Executive Vice President and Chief Financial Officer

[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. (33-1/3% owned by Florists’ Transworld Delivery, Inc.; 33-1/3% 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

[REDACTED]

C-1

Schedule 2.2(b)

Intercompany Agreements

Insertion Order dated [REDACTED], between [REDACTED] and [REDACTED].

Schedule 2.4(a)

FTD India Assets

Description	Category	Qty
Cisco Switch	Network Equipment	1
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 7 th 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 ”).

Exhibit 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

FTD COMPANIES, INC.

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

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

2. The original Certificate of Incorporation (the “Certificate of Incorporation”) was filed with the Secretary of State of the State of Delaware on April 25, 2008, under the name “UNOL Intermediate, Inc.” On April 25, 2013, the name of the Corporation was changed from “UNOL Intermediate, Inc.” to “FTD Companies, Inc.” upon the filing of a Certificate of Amendment (the “Certificate of Amendment”) pursuant to Sections 228 and 242 of the General Corporation Law of the State of Delaware (the “DGCL”).

3. This Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), amends and restates the Certificate of Incorporation, as amended by the Certificate of Amendment, in its entirety. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with Sections 242 and 245 of the DGCL and shall become effective as of 11:59 p.m., Eastern time, on the date this Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. The text of the Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety 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 19904. 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.

Upon this Amended and Restated Certificate of Incorporation of the Corporation becoming effective at 11:59 p.m., Eastern time, on October 31, 2013, the date of filing with the Secretary of State of the State of Delaware, pursuant to the DGCL (the “Effective Time”), the 10,000 shares of the Corporation’s common stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time, will be automatically reclassified as and become 18,583,927 shares of Common Stock.

ARTICLE V

MANAGEMENT

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

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

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

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

(d) At each annual meeting of stockholders, directors of the Corporation shall be elected to hold office until the expiration of the term for which they are elected, or until their successors have been duly elected and qualified; except that if

any such election shall not be so held, such election shall take place at a stockholders’ meeting called and held in accordance with the DGCL.

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

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

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

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

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

ARTICLE VI

MEETINGS OF STOCKHOLDERS

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

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.

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

FTD COMPANIES, INC.

By:	/s/ Robert S. Apatoff
	Name:	Robert S. Apatoff
	Title:	President

Exhibit 3.2

SECOND AMENDED AND RESTATED BYLAWS

FTD COMPANIES, INC.

ARTICLE I

OFFICES

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

ARTICLE II

MEETINGS OF STOCKHOLDERS

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

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

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

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

Section 2.5 Quorum . Unless otherwise required by law or the Certificate of Incorporation, the presence in person or by proxy of the holders of shares of capital stock entitled to cast a majority of all the votes which could be cast at such meeting by the holders of all of the outstanding shares of capital stock entitled to vote at such

meeting shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman presiding at the meeting or the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 2.4, until a quorum shall be present or represented.

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

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

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

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

Section 2.10 Nomination of Directors . Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation with respect to the right of holders of preferred stock of the Corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.10 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 2.10.

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

To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of the corporation not less than 90 days nor more than 120 days prior to the anniversary date of the

immediately preceding annual meeting of stockholders; provided that if the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs.

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

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

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

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

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

To be in proper written form, a stockholder’s notice to the secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of capital stock of the Corporation which are owned

beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

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

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

Section 2.13 Inspectors of Election . Before any meeting of stockholders of the Corporation, the Board of Directors shall appoint an inspector or inspectors of election to act at the meeting or its adjournment. The number of inspectors shall be either one or three. If any person appointed as inspector fails to appear or fails or refuses to act, then the chairman of the meeting may, and upon the request of any stockholder or a stockholder’s proxy shall, appoint a person to fill that vacancy.

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

ARTICLE III

DIRECTORS

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

No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires. If, for any cause, the directors shall not have been elected at an annual meeting, they may

be elected as soon thereafter as convenient at a special meeting of the stockholders of the Corporation called for that purpose in the manner provided in the Bylaws. The number of directors may not be increased by more than one unless approved by (a) two-thirds of each class of directors or (b) two-thirds of each outstanding class or series of such class of stock of the Corporation.

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

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

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

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

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

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

effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective.

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

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

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

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

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

Section 3.10 Compensation . The directors may be paid their expenses, if any, of the attendance at each meeting of the Board of Directors and shall receive such compensation for their services as directors as shall be determined by the Board of Directors. No such payment shall preclude any director from serving the Corporation in any

other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE IV

NOTICES

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

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

ARTICLE V

OFFICERS

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

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

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

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

Corporation shall, unless fixed by the Board of Directors, be fixed by the chief executive officer or the president of the Corporation.

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

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

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

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

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

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

Section 5.9 Chief Financial Officer . The chief financial officer shall be the chief financial officer of the Corporation, shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He/she shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the chief executive officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his/her transactions as chief financial officer and of the financial condition of the Corporation. If required by the Board of Directors, he/she shall give the Corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his/her office and for the restoration to the Corporation, in case of his/her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his/her possession or under his/her control belonging to the Corporation.

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

ARTICLE VI

CAPITAL STOCK

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

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

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

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

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

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

ARTICLE VII

GENERAL PROVISIONS

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

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

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

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

Section 7.5 Loans . The Board of Directors of this Corporation may, without stockholder approval, authorize loans to, or guarantee obligations of, or otherwise assist, including, without limitation, the adoption of employee benefit plans under which loans and guarantees may be made, any officer or other employee of the Corporation or of any of its subsidiaries, including any officer or employee who is a director of the Corporation or any of its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation.

Section 7.6 Representation of Shares of Other Corporations . Any officer of the Corporation is authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The authority herein granted may be exercised

either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

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

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

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

ARTICLE VIII

INDEMNIFICATION

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

Section 8.2 Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation . Subject to Section 8.3, the Corporation shall, to the fullest extent permitted by Section 145 of the DGCL, as that Section may be amended and supplemented from time to time, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably

believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

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

Section 8.4 Good Faith Defined . For purposes of any determination under Section 8.3, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 8.4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 8.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 8.1 or Section 8.2, as the case may be.

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

Section 8.6 Expenses Payable in Advance . Expenses incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or

officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII.

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

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

Section 8.9 Certain Definitions . For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.

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

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

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

ARTICLE IX

AMENDMENTS

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

Exhibit 10.1

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	4
Section 2.2	Additional Services	4
Section 2.3	No Violations	5
Section 2.4	Third-Party Providers	5
Section 2.5	Independent Contractor	5
Section 2.6	Employees and Representatives	5
Section 2.7	Access	6
Section 2.8	Service Coordinators; Disputes	6

ARTICLE III

PAYMENT

Section 3.1	Pricing	6
Section 3.2	Taxes	7
Section 3.3	Billing and Payment	7
Section 3.4	Estimates	7

ARTICLE IV

DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

Section 4.1	Disclaimer	8
Section 4.2	As Is; Where Is	8

ARTICLE V

INDEMNIFICATION; LIMITATION OF LIABILITY

Section 5.1	Indemnification by FTD	8
Section 5.2	Indemnification by United Online	8
Section 5.3	Limitation of Liability	8
Section 5.4	Indemnification Procedure; Other Rights	9

ARTICLE VI

FORCE MAJEURE

Section 6.1	General	9
Section 6.2	Notice	9
Section 6.3	Subcontractors; Fees	9
Section 6.4	Limitations	9

ARTICLE VII

TERM AND TERMINATION

Section 7.1	Term of Services	9
Section 7.2	Term and Termination of Agreement	10

ARTICLE VIII

CONFIDENTIALITY

Section 8.1	Confidentiality	10
Section 8.2	System Security	10

ARTICLE IX

MISCELLANEOUS

Section 9.1	Further Assurances	11
Section 9.2	Amendments and Waivers	11
Section 9.3	Entire Agreement	11
Section 9.4	Third-Party Beneficiaries	11
Section 9.5	Notices	12
Section 9.6	Counterparts; Electronic Delivery	12
Section 9.7	Severability	12
Section 9.8	Assignability; Binding Effect	12
Section 9.9	Governing Law	12
Section 9.10	Construction	12
Section 9.11	Performance	12
Section 9.12	Title and Headings	13
Section 9.13	Exhibits	13

Exhibit A — Services

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT (as the same may be amended or supplemented from time to time, this “ Agreement ”) is entered into as of 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.

“ Business Days ” has the meaning set forth in the Separation Agreement.

“ Contract ” has the meaning set forth in the Separate Agreement.

“ Distribution ” has the meaning set forth in the Separation Agreement.

“ Distribution Date ” has the meaning set forth in the Separation Agreement.

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

“ FTD Business ” has the meaning set forth in the Separation Agreement.

“ FTD Entities ” has the meaning set forth in the Separation Agreement.

“ FTD Indemnitees ” has the meaning set forth in the Separation Agreement.

“ Governmental Authority ” has the meaning set forth in the Separation Agreement.

“ Group ” has the meaning set forth in the Separation Agreement.

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

“ Law ” has the meaning set forth in the Separation Agreement.

“ Losses ” has the meaning set forth in the Separation Agreement.

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

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

“ Person ” has the meaning set forth in the Separation Agreement.

“ Sales Taxes ” has the meaning set forth in Section 3.2.

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

“ Separation ” has the meaning set forth in the Separation Agreement.

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

“ Service Coordinator ” has the meaning set forth in Section 2.8.

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

“ Services ” means the services identified in Exhibit A .

“ Subsidiaries ” has the meaning set forth in the Separation Agreement.

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

“ Term ” has the meaning set forth in Section 7.2.

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

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

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

“ UOL Businesses ” has the meaning set forth in the Separation Agreement.

“ UOL Entities ” has the meaning set forth in the Separation Agreement.

“ UOL Indemnitees ” has the meaning set forth in the Separation Agreement.

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

(a) words used in the singular include the plural and words used in the plural include the singular;

(b) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”;

(d) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”;

(e) accounting terms used herein shall have the meanings historically ascribed to them by United Online and its Subsidiaries, including FTD, in its and their internal accounting and financial policies and procedures in effect immediately prior to the date of this Agreement;

(f) all references herein to Articles, Sections, paragraphs, subparagraphs, clauses or Exhibits shall be deemed references to Articles, Sections, paragraphs, subparagraphs or clauses of, or Exhibits to, this Agreement;

(i) references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; a reference to such Person’s “Subsidiaries” shall be deemed to mean such Person’s Subsidiaries following the Distribution, and any reference to a third party shall be deemed to mean a Person who is not a Party or a Subsidiary of a Party;

(j) if there is any conflict between the provisions of the main body of this Agreement and Exhibit A , the provisions of the main body of this Agreement shall control unless explicitly stated otherwise in Exhibit A ;

(k) if there is any conflict between the provisions of this Agreement and the Separation Agreement, the provisions of this Agreement shall control (but only with respect to the subject matter hereof) unless explicitly stated otherwise herein; and

(l) any portion of this Agreement obligating a Party to take any action or to refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to cause its relevant Subsidiaries to take such action or to refrain from taking such action, as the case may be.

ARTICLE II

SERVICES

Section 2.1 Services .

(a) Except as otherwise set forth in Exhibit A , United Online shall use commercially reasonable efforts to provide (or to cause another applicable member of the UOL Entities to provide) to FTD (or another applicable member of the FTD Entities) each Service in a manner, scope, nature, timeliness and quality consistent with the manner, scope, nature, timeliness and quality in which such Service (i) was provided to FTD (or such other applicable member of the FTD Entities) prior to the Distribution Date by United Online (or such other applicable member of the UOL Entities) and (ii) is provided after the Distribution Date by United Online (or such other applicable member of the UOL Entities) for its own business.

(b) For those services provided to FTD prior to the Distribution Date, FTD shall use the Services for substantially the same purposes and in substantially the same manner (including as to volume, amount, level or frequency, as applicable) as such services have been used immediately prior to the Distribution Date; provided that Exhibit A shall control the scope of and any limitation on the Services to be provided (to the extent set forth therein) including any Services that were not previously provided to FTD prior to the Distribution Date, unless otherwise agreed in writing.

(c) FTD agrees to use commercially reasonable efforts to reduce or eliminate its dependency on the Services as soon as reasonably practicable.

Section 2.2 Additional Services . If FTD reasonably determines that additional transition services not listed in Exhibit A are necessary to conduct the FTD Business after the Distribution Date, FTD shall provide written notice to United Online requesting United Online (i) to provide additional (including as to volume, amount, level or frequency, as applicable) or different services which United Online is not expressly obligated to provide under this Agreement if such services are of the type and scope provided by any member of the UOL Entities (including any employee of any member of the UOL Entities) for FTD prior to the Distribution Date, or (ii) expand the scope of any Service (such additional or expanded services, the “ Additional Services ”). United Online shall consider such request in

good faith and shall use commercially reasonable efforts to provide any such Additional Service; provided that no member of the UOL Entities shall be obligated to perform any Additional Services if such member, in its reasonable judgment, does not have adequate resources to perform such Additional Services or if the provision of such Additional Services would interfere with the operation of the UOL Businesses. United Online shall notify FTD within ten (10) calendar days of receipt of such request as to whether it will or will not provide the Additional Services. If United Online agrees to provide Additional Services pursuant to this Section 2.3, then the Parties shall in good faith negotiate the terms of a supplement to Exhibit A which will describe in reasonable detail the service, project scope, term, price and payment terms to be charged for each Additional Service. Once agreed to in writing, the supplement to Exhibit A shall be deemed part of this Agreement as of such date, and the Additional Services shall be deemed “Services” provided hereunder, in each case subject to the terms and conditions of this Agreement.

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

Section 2.4 Third-Party Providers .

(a) Each Party shall use commercially reasonable efforts to obtain any required consents, licenses or approvals of the providers (“ Third-Party Providers ”) of any products or services required to be used in providing any Services pursuant to this Agreement (“ Third-Party Products and Services ”). The Parties understand and agree that provision of any Services requiring the use of any Third-Party Products and Services shall be subject to receipt of any required consents, licenses or approvals of the applicable Third-Party Providers.

(b) With respect to each Service, (i) FTD hereby consents to United Online’s use of any Third-Party Provider(s) named in Exhibit A with respect to such Service (“ Known Third-Party Providers ”) and (ii) if, after the date of this Agreement, United Online reasonably determines that it requires the use of Third-Party Providers in addition to the Known Third-Party Providers (“ Additional Third-Party Providers ”) in providing such Service, the use of such Additional Third-Party Providers shall require the written consent of FTD’s Service Coordinator and, subject to Section 2.4(c), such consent will not be unreasonably withheld, conditioned or delayed.

(c) Notwithstanding the foregoing, in those instances in which the use of Third-Party Products and Services will require payment of additional consideration by FTD and the payment of such additional consideration is not contemplated by this Agreement (including Exhibit A ) or has not been previously agreed by the Parties, then (i) United Online will provide FTD with ten (10) calendar days’ prior written notice detailing the amount of such additional consideration and (ii) FTD will then have the option to (A) procure its own Third Party Products and Services at its own expense or (B) authorize United Online to incur the required additional consideration on its behalf and at FTD’s expense and such additional consideration will be deemed a Service Cost under this Agreement.

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 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 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 .

(a) Within fifteen (15) calendar days after the end of each month, United Online will invoice FTD for the applicable Service Costs on a monthly basis, in arrears, for the prior month just ended. The invoice shall set forth for the period covered by such invoice (i) the type of Services rendered, (ii) the Service Costs for each type of Service provided, and (iii) the hours performed for the Services (based on 30 minute increments).

(b) FTD agrees to pay all of the Service Costs on or before thirty (30) calendar days after the date on which an invoice for Service Costs is delivered to FTD (the “ Payment Date ”) by check or wire transfer of immediately available funds to an account designated in writing from time to time by United Online; provided that the Parties may agree to a net amount owed by one Party to the other. If a Party fails to pay any monthly payment on or before the Payment Date, such Party shall be obligated to pay, in addition to the amount due pursuant to such invoice, interest on such amount at a rate per annum equal to 5% (“ Additional Interest ”); provided that if the Parties agree to a net amount owed by one Party to the other with respect to Service Costs in any monthly period, the Party to whom such net amount is owed shall not be liable for Additional Interest. Unless otherwise agreed in writing between the Parties, all payments made pursuant to this Agreement shall be made in U.S. dollars.

(c) Notwithstanding the foregoing, if a Party in good faith disputes any invoiced charge, payment of such charge shall be made only after mutual resolution of such dispute. Each Party agrees to notify the other Party promptly, and in no event later than the relevant Payment Date, of any disputed charge. The respective Service Coordinators for each Party shall review any dispute. Additional Interest shall not accrue on any amount in dispute, and no default shall be alleged until after the relevant Payment Date.

(d) During the term of this Agreement, pursuant to Section 2.7, each Party shall keep such books, records and accounts as are reasonably necessary to verify the calculation of the fees and related expense for Services provided hereunder. Each Party shall provide documentation supporting any amounts invoiced pursuant to this Section 3.3 as the other Party may from time to time reasonably request. Each Party shall have the right to review such books, records and accounts at any time during normal business hours upon reasonable written notice, and each Party agrees to conduct any such review in a manner so as not to unreasonably interfere with the other Party’s normal business operations.

Section 3.5 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 .

(a) IN NO EVENT SHALL ANY PARTY, NOR ANY MEMBER OF ITS GROUP, NOR ANY DIRECTOR, OFFICER, MANAGER, EMPLOYEE OR AGENT THEREOF, BE LIABLE, WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE TO THE OTHER PARTY (OR ANY UOL INDEMNITEES OR FTD INDEMNITEES, AS APPLICABLE) FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES (INCLUDING IN RESPECT OF LOST PROFITS OR REVENUES) AS A RESULT OF ANY BREACH, PERFORMANCE OR NON-PERFORMANCE BY SUCH PERSON UNDER THIS AGREEMENT, WHETHER OR NOT SUCH PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT TO THE EXTENT ANY SUCH AMOUNT IS PAID TO A THIRD PARTY BY THE INDEMNIFIED PARTY OR ANY OF ITS AFFILIATES.

(b) EACH GROUP’S TOTAL LIABILITY TO THE OTHER GROUP UNDER THIS AGREEMENT FOR ANY CLAIM SHALL NOT EXCEED, IN THE AGGREGATE, AN AMOUNT EQUAL TO THE TOTAL AMOUNT PAID FOR SERVICES UNDER THIS AGREEMENT.

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.

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 .

(a) If a Party hereunder (or a subsidiary of such Party) (the “ Accessing Party ”) is given access to the computer systems or software (collectively, “ Systems ”) of the other Party (or a subsidiary of such other Party) in connection with the provision or receipt of a Service, the Accessing Party shall comply (or cause its subsidiary to comply) with all of the system security policies, procedures and requirements (collectively, “ Security Regulations ”) of the other Party (or the subsidiary of such other Party), and shall not (or shall cause its subsidiary not to) tamper with, compromise or circumvent any security or audit measures employed by the other Party (or the subsidiary of such other Party). The Accessing Party shall (or shall cause its subsidiary to) access and use only those Systems of the other Party (or a subsidiary of such other Party) for which it has been granted the right to access and use, it being understood that the other Party shall be solely responsible for terminating the Accessing Party’s (or its subsidiary’s) 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 or received by the Accessing Party.

(b) The Accessing Party shall use commercially reasonable efforts to ensure that only those of its personnel (or the personnel of its subsidiary) who are specifically authorized to have access to the other Party’s Systems (or the Systems of a subsidiary of such other Party) gain such access, and use commercially reasonable efforts to prevent unauthorized access, use, destruction, alteration or

loss of information contained therein, including notifying its personnel (or the personnel of its subsidiary) of the restrictions set forth in this Agreement and of the other Party’s Security Regulations.

(c) The Parties shall cooperate in performing a quarterly review of access to each other’s Systems to confirm that the list of personnel and access of such personnel to such Systems is appropriate. Each Party shall be solely responsible for terminating the other Party’s 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 or received by the Accessing Party.

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 .

(a) Subject to Section 11.1 of the Separation Agreement, this Agreement may be amended, modified or supplemented only 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 9.3 Entire Agreement . This Agreement, the Separation Agreement, the other Ancillary Agreements and the Exhibits and Schedules attached hereto and thereto, constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof.

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

Section 9.5 Notices . All notices, requests, permissions, waivers and other communications hereunder shall be provided in accordance with the provisions of Section 12.11 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.

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 ]

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:		/s/ Neil P. Edwards
		Name:	Neil P. Edwards
		Title:	Executive Vice President and Chief Financial
			Officer


FTD COMPANIES, INC.


By:	/s/ Becky Sheehan
	Name:		Becky Sheehan
	Title:		Executive Vice President and Chief Financial
			Officer

[Signature Page to Transition Services Agreement]

EXHIBIT A

UNITED ONLINE SERVICES

United Online agrees to provide (or cause another applicable member of the UOL Entities to provide) to FTD (or another applicable member of the FTD Entities) the following services (the “ Services ”).

A. OPERATIONS SERVICES

1. Services . The operations services to be provided by United Online to FTD (the “ Operations Services ”) are as follows:

a. Systems Administration . This Service entails ongoing management (including account and DNS management), training and assistance in troubleshooting the following: FTD’s florist and consumer websites; Oracle EBS application (as defined below); Longview application; Clarity application; and the Solaris, Linux (RedHat Enterprise and CentOS) and Microsoft Windows Server operating systems (collectively, the “ Covered Systems ”). Ongoing management services include management of hardware, database administration, software maintenance, and physical access to the datacenters.

b. Network Administration . This Service entails ongoing management, training and assistance in troubleshooting the network components used by the Covered Systems. This Service covers equipment, such as routers, switches, load-balancers, and firewall devices for both physical and virtual private networks used to connect FTD’s networks to United Online’s networks for the provision of other Services herein, as well as Internet backbone connectivity and intra-office connectivity. Ongoing management services include management of network hardware and software maintenance.

c. Video Conferencing . This Service entails permitting FTD’s use of United Online’s video conference appliance which enables multi-site video conferencing.

d. [REDACTED] Feeds . If United Online receives from [REDACTED] files generated by FTD’s use of [REDACTED] corporate credit cards and related accounts, pursuant to this Service, United Online will forward such files to an FTP server designated by FTD.

e. Secure Meeting . This Service entails permitting FTD’s use of United Online’s screen-sharing and webinar-hosting services known as “Secure Meeting”.

2. Fees and Expenses .

a. Service Costs for Operations Services will be based on the following blended rates:

· employees with a title of “Senior Vice President” or above, at the hourly rate of [REDACTED];

· employees with a title of “Vice President”, at the hourly rate of [REDACTED]; and

· other employees, at the hourly rate of [REDACTED].

A-1

b. In addition to Service Costs based on employee time determined pursuant to the above Section A.2.a. of this Exhibit A, Service Costs for the Video Conference Service described in the above Section A.1.c. of this Exhibit A will include a flat fee of [REDACTED] per month.

c. In addition to Service Costs based on employee time determined pursuant to the above Section A.2.a. of this Exhibit A, Service Costs for the Secure Meeting Service described in the above Section A.1.e. of this Exhibit A will include a flat fee of [REDACTED] per month.

d. Travel and related expenses that are fairly attributable to FTD will be charged or allocated directly to FTD.

e. Operations Services performed by a subcontractor or outside service provider on FTD’s behalf, will be billed directly to FTD. FTD acknowledges that [REDACTED] may provide services to FTD related to the Operations Services provided hereunder and FTD will be solely responsible for the payment of [REDACTED] for any such services.

3. Termination . United Online will cease providing Operations Services on December 31, 2013, unless such Services are earlier terminated by FTD.

4. Known Third-Party Providers . The following are Known Third-Party Providers for the Operations Services:

a. [REDACTED] (pursuant to FTD’s agreement therewith);

b. [REDACTED] (pursuant to FTD’s agreement therewith);

c. [REDACTED] (pursuant to FTD’s agreement therewith); and

d. [REDACTED] (through November 30, 2013, to the extent FTD is relying on United Online for network connectivity).

B. APPLICATIONS SERVICES

1. Services . The applications services to be provided by United Online to FTD (the “ Applications Services ”) are as follows:

a. Oracle Applications . For purposes of this Agreement, the Oracle Applications for managing business information (namely, HR, SSHR, iExpense, AP, OTL, and GL) are collectively referred to as “Oracle EBS.” Prior to, or immediately after, the Distribution Date, FTD will have its own instance of the Oracle EBS applications populated with FTD-specific data. The Services entail maintenance, software patching and user training for FTD’s Oracle EBS applications.

b. Longview and Clarity Applications . The Service entails assisting FTD with questions regarding United Online’s Longview and Clarity applications. For the sake of clarity, FTD acknowledges and agrees that United Online’s personnel are not required to respond beyond their general understanding of United Online’s Longview and Clarity applications, FTD will not rely on any information provided by United Online’s personnel with respect

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thereto, and United Online will not be responsible for any information that was provided or omitted in any such personnel’s response to questions hereunder.

2. Fees and Expenses .

a. Service Costs for Applications Services will be based on the following blended rates:

· employees in the Technology department with a title of “Senior Vice President” or above, at the hourly rate of [REDACTED];

· employees in the Technology department with a title of “Vice President”, at the hourly rate of [REDACTED];

· other employees in the Technology department, at the hourly rate of [REDACTED];

· employees in the Human Resources department with a title of “Director”, at the hourly rate of [REDACTED]; and

· other employees in the Human Resources department, at the hourly rate of [REDACTED].

b. Travel and related expenses that are fairly attributable to FTD will be charged or allocated directly to FTD.

3. Termination . United Online will cease providing Longview and Clarity Applications Services on December 31, 2013, and Oracle Applications Services on January 31, 2014, in each case, unless earlier terminated by FTD.

C. CORPORATE SERVICES

1. Services . The following services will be provided by United Online to FTD (collectively, the “ Corporate Services ”):

a. Payroll processing . The Service entails providing payroll processing services through United Online’s ADP platform for FTD’s U.S. employees. United Online may assist with FTD’s implementation of FTD’s separate ADP platform but United Online shall not be obligated to do so.

b. Stock plan administration . The Service entails providing stock plan administration services for FTD’s equity grants and employee stock purchase program. United Online may assist with FTD’s implementation of FTD’s separate Fidelity platform but United Online shall not be obligated to do so. For the sake of clarity, such Service does not include accounting-related support, including, but not limited to, equity reconciliations and calculation of stock-based compensation.

c. SOX assistance . For the sake of clarity, the Parties acknowledge and agree that FTD will be responsible for FTD’s overall Sarbanes-Oxley (“ SOX ”) compliance efforts and for any management decisions concerning FTD’s SOX compliance efforts. The SOX Assistance Service entails providing the following:

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· completion of control “remediation” testing, year-end/”refresh” control testing, review of SSAE-16 reports that FTD obtains from specific third-party service providers, and facilitation of the third quarter and fourth quarter 2013 process owner control self-assessments (the “ 2013 SOX Assistance Services ”);

· assisting FTD’s management in preparing their preliminary 2014 SOX Risk Assessment (the “ Risk Assessment Services ”), and assisting FTD management in identifying their preliminary business units, business processes and IT applications/systems to be considered “in-scope” for 2014 SOX compliance purposes (the “ Scoping Services ”);

· providing and explaining SOX documentation applicable to FTD, including, but not limited to, process narratives, information technology understanding documents, risk and control matrices, control testing sheets, and other materials as mutually agreed upon by the Parties, to the FTD personnel designated by FTD (the “ Document Transition Services ”); and

· assisting with screening and selecting employee candidates and potential service providers (the “ Screening Services ”).

2. Fees and Expenses .

a. Service Costs for Corporate Services will be based on the following blended rates:

· payroll processing:

(1) employees with a title of “Vice President” or above, at the hourly rate of [REDACTED];

(2) employees with a title of “Senior Director”, at the hourly rate of [REDACTED]; and

(3) other employees, at the hourly rate of [REDACTED];

· stock plan administration:

(1) employees with a title of “Vice President” or above, at the hourly rate of [REDACTED]; and

(2) other employees, at the hourly rate of [REDACTED];

· SOX assistance:

(1) employees with a title of “Vice President” or above, at the hourly rate of [REDACTED];

(2) other employees, at the hourly rate of [REDACTED]; and

(3) [REDACTED]consultants, at the hourly rate of [REDACTED] (it being understood by the Parties that [REDACTED]’s consulting fees for SOX Assistance Services are currently estimated to not exceed [REDACTED]

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(not including travel and related expenses), and the Parties agree that if such estimate later changes such that [REDACTED]’s consulting fees are expected to exceed [REDACTED], at such time, FTD shall elect either to immediately terminate the applicable Services or to continue the applicable Services and be responsible for the additional consulting fees).

b. In addition to Service Costs based on employee time determined pursuant to the above Section C.2.a. of this Exhibit A, Service Costs for the Payroll Processing Service will include a flat fee of [REDACTED] per month.

c. Travel and related expenses that are fairly attributable to FTD will be charged or allocated directly to FTD.

3. Termination. United Online will cease providing the Corporate Services by the following dates:

· payroll processing — October 31, 2014;

· stock plan administration — December 31, 2013; and

· SOX assistance — March 31, 2014.

4. Known Third-Party Providers . The following are Known Third-Party Providers for the Corporate Services:

a. [REDACTED]

b. [REDACTED]

D. HUMAN RESOURCES SERVICES

1. Services . The human resources services to be provided by United Online to FTD (the “ HR Services ”) are as follows:

a. Oracle HRMS . The Service entails providing administration of the human resources information system known as Oracle HRMS, part of the Oracle EBS applications, and related assistance upon reasonable request.

2. Fees and Expenses .

a. Service Costs for Human Resources Services will be based on the following blended rates:

· employees with a title of “Director”, at the hourly rate of [REDACTED]; and

· other employees, at the hourly rate of [REDACTED].

b. Travel and related expenses that are fairly attributable to FTD will be charged or allocated directly to FTD.

3. Termination . United Online will cease providing HR Services on January 31, 2014, unless earlier terminated by FTD.

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E. LEGAL SERVICES

1. Services . The Service entails consulting with FTD with respect to contracts or initiatives previously executed or undertaken by FTD or its subsidiaries upon FTD’s reasonable request (collectively, the “ Legal Services ”) and oversight and management of Shared Litigation pursuant to the Separation Agreement (the “Shared Litigation Services”). For the sake of clarity, Legal Services will not include providing legal advice to FTD, including, without limitation, regarding corporate governance or securities law matters; non-U.S. law matters; strategic initiatives, such as mergers, acquisitions or divestitures; or business initiatives, such as new products, services, programs or fee structures.

2. Fees and Expenses .

a. Service Costs for Legal Services and Shared Litigation Services will be based on the following blended rates:

· employees with a title of “Executive Vice President”, at the hourly rate of [REDACTED];

· employees with a title of “Senior Vice President”, at the hourly rate of [REDACTED]; and

· employees with a title of “Vice President”, at the hourly rate of [REDACTED].

b. Travel and related expenses that are fairly attributable to FTD will be charged or allocated directly to FTD.

c. Legal Services and Shared Litigation Services provided by outside counsel on FTD’s behalf, will be billed directly to FTD where feasible; otherwise, the compensation or consideration for Legal Services provided by outside counsel will be allocated in good faith to FTD in the exercise of United Online’s reasonable discretion and based on the billing statement entries where available and the compensation or consideration for Shared Litigation Services provided by outside counsel will be allocated in accordance with the Separation Agreement.

3. Termination . United Online will cease providing Legal Services on December 31, 2013, unless earlier terminated by FTD. United Online will provide Shared Litigation Services for as long as United Online controls the litigation and settlement of Shared Litigation under the Separation Agreement and FTD will not have the right to terminate such Shared Litigation Services.

4. Known Third-Party Providers . The following are Known Third-Party Providers for the Legal Services: List of law firms to be provided to FTD as soon as reasonably practicable upon request.

F. HYDERABAD SERVICES

1. The Hyderabad Services entail the following:

a. Operations and Facilities . The Service entails providing facilities-related services, including, without limitation, utilities (such as, electricity and air conditioning), insurance, network connectivity, telephone switch, parking, and building security, to the Indian

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subsidiary of FTD (“ FTD India ”) in connection with the Sublease of office space from United Online’s Indian subsidiary (“ UOL India ”) hereunder.

b. Corporate Services . The Service entails providing general accounting services, payroll processing services, and human resources services (including assistance with recruiting) to FTD India, as well as related training of its new accounting employee.

c. Sublease . The Service entails providing FTD India with the continued use of the office space and furniture that was being used by employees of FTD India as of immediately prior to the India Separation Date (as defined in the Separation Agreement). The Parties shall mutually determine how to segregate employees and operations for security and other reasons.

2. Fees and Expenses .

a. Service Costs for the Hyderabad Services will be based on the following:

· Operations and Facilities Services will equal one-third (1/3) of the monthly costs incurred by UOL India therefor, plus twenty percent (20%).

· The Corporate Services will equal a flat rate of [REDACTED] per month.

· The Sublease will equal thirty percent (30%) of the monthly rent, plus twenty percent (20%).

b. Travel and related expenses that are fairly attributable to FTD will be charged or allocated directly to FTD.

3. Termination . United Online will (and will cause UOL India to) cease providing the Corporate Services on December 31, 2013, unless earlier terminated by FTD or FTD India. United Online will (and will cause UOL India to) continue to provide, and FTD or FTD India will continue to pay for, Operations and Facilities Services and the Sublease through March 31, 2014 or such later termination date applicable to the subleased office space that will be vacated by FTD India (even if FTD India elects to relocate to another facility in advance of the effective termination date for such office space).

4. Known Third-Party Providers . The following are Known Third-Party Providers for the Hyderabad Services: the lessors under the lease agreements for the office space covered by the Sublease.

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Exhibit 10.2

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	5
	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	7
	ARTICLE V
	EMPLOYEE STOCK PURCHASE PLAN
Section 5.1	Effect of Distribution on UOL ESPP	7
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	9
	ARTICLE VII
	ADDITIONAL COMPENSATION MATTERS; SEVERANCE
Section 7.1	Annual Incentive Awards	10
Section 7.2	Individual Arrangements	10
Section 7.3	Severance Plans	10
Section 7.4	Sections 162(m)/409A	11
Section 7.5	Certain Director Fees	11
	ARTICLE VIII
	GENERAL AND ADMINISTRATIVE
Section 8.1	Employer Rights	11
Section 8.2	No Rights to Employment	11
Section 8.3	Continuation of Elections/Release Of Information/Right To Reimbursement	11
	ARTICLE IX
	INDEMNIFICATION
Section 9.1	General Indemnification	11
	ARTICLE X
	MISCELLANEOUS
Section 10.1	Further Assurances	12
Section 10.2	Amendments and Waivers	12
Section 10.3	Entire Agreement	12
Section 10.4	Third Party Beneficiaries	12
Section 10.5	Notices	12
Section 10.6	Counterparts; Electronic Delivery	12
Section 10.7	Titles and Headings	12
Section 10.8	Severability	12
Section 10.9	Assignability; Binding Effect	13
Section 10.10	Governing Law	13
Section 10.11	Construction	13
Section 10.12	Performance	13
Section 10.13	Title and Headings
Section 10.14	Schedules	13

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.

“ 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 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 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.

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 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 .

(i) Insured Benefits. With respect to employee welfare and fringe benefits that are provided through the purchase of insurance, United Online shall cause the UOL Welfare Plans to fully perform, pay and discharge in due course in full all claims of FTD Participants that are incurred prior to the Distribution Date and FTD shall cause the FTD Welfare Plans to fully perform, pay and discharge in due course in full all claims of FTD Participants that are incurred on or after the Distribution Date.

(ii) Self-Insured Benefits. With respect to employee welfare and fringe benefits that are provided on a self-insured basis, (A) United Online shall or shall cause a member of the UOL Entities to fully perform, pay and discharge in due course in full, all claims of FTD Participants that are incurred prior to the Distribution Date, and (B) FTD shall or shall cause a member of the FTD Entities to fully perform, pay and discharge in due course in full all claims of FTD Participants that are incurred on or after the Distribution Date.

(iii) Incurred Claim Definition. For purposes of this Section 4.1(e), a claim or Liability is deemed to be incurred (A) with respect to medical, dental, vision and/or prescription drug benefits, upon the rendering of health services giving rise to such claim or Liability; (B) with respect to life insurance, accidental death and dismemberment and business travel accident insurance, upon the occurrence of the event giving rise to such claim or Liability; (C) with respect to disability benefits, upon the date of an individual’s disability, as determined by the disability benefit insurance carrier or claim administrator, giving rise to such claim or Liability; and (D) with respect to a period of continuous hospitalization, upon the date of admission to the hospital.

(iv) Claim Experience. Notwithstanding the foregoing, the Parties shall take any action necessary to ensure that any claims experience under the UOL Welfare Plans attributable to FTD Participants shall be allocated to the FTD Welfare Plans.

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:

(i) The number of shares of UOL Common Stock subject to each Post-Distribution UOL Option shall be equal to the product (rounded down to the nearest whole share) of (A) the number of shares of UOL Common Stock subject to the corresponding UOL Option immediately prior to the Distribution Date and (B) a fraction, the numerator of which is the UOL Pre-Separation Stock Price and the denominator of which is the UOL Post-Separation Stock Price (such fraction, the “ UOL Ratio ”).

(ii) The exercise price per share for each Post-Distribution UOL Option shall be equal to (A) the exercise price of the corresponding UOL Option immediately prior to the Distribution Date divided by (B) the UOL Ratio (rounded up to the nearest whole cent).

(iii) Each Post-Distribution UOL Option shall otherwise be subject to the same terms, vesting conditions, exercise procedures, expiration dates and termination provisions and other terms and conditions as were in effect immediately prior to the Distribution Date for the corresponding UOL Option.

(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:

(i) The number of shares of FTD Common Stock subject to each FTD Option shall be equal to the product (rounded down to the nearest whole share) of (A) the number of shares of UOL Common Stock subject to the corresponding UOL Option immediately prior to the Distribution Date and (B) a fraction, the numerator of which is the UOL Pre-Separation Stock Price and the denominator of which is the FTD Post-Separation Stock Price (such fraction, the “ FTD Ratio ”).

(ii) The exercise price per share for each FTD Option shall be equal to the product of (A) the exercise price of the corresponding UOL Option immediately prior to the Distribution Date and (B) a fraction, the numerator of which is the FTD Post-Separation Stock Price and the denominator of which is the UOL Pre-Separation Stock Price.

(iii) Each FTD Option shall otherwise be subject to the same terms, vesting conditions, exercise procedures, expiration dates and termination provisions and other terms and conditions as were in effect immediately prior to the Distribution Date for the corresponding UOL Option. With respect to each FTD Option, FTD shall give each FTD Participant full vesting service credit 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 with respect to the corresponding UOL Option immediately prior to the Distribution Date.

(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.

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:

(i) The number of shares of UOL Common Stock subject to each Post-Distribution UOL Stock Unit Award shall be equal to the product (rounded up to the nearest whole share) of (A) the number of shares of UOL Common Stock subject to the corresponding UOL Stock Unit Award immediately prior to the Distribution Date and (B) the UOL Ratio.

(ii) To the extent that a dividend equivalent relating to the Distribution is credited to the account of a holder of a United Online restricted stock unit, (A) the adjustments described in Section 6.2(a)(i) shall be made in a manner which does not result in double crediting; and (B) the ultimate payout of such dividend equivalent shall be made in the form of shares of UOL Common Stock with a value equal to the shares of FTD Common Stock which would otherwise have been released.

(iii) Each Post-Distribution UOL Stock Unit Award shall be subject to the same terms, vesting conditions, issuance dates and method of distribution and other terms and conditions as were in effect immediately prior to the Distribution Date for the corresponding UOL Stock Unit Award.

(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:

(i) The number of shares of FTD Common Stock subject to each FTD Stock Unit Award shall be equal to the product (rounded up to the nearest whole share) of (A) the number of shares of UOL Common Stock subject to the corresponding UOL Stock Unit Award immediately prior to the Distribution Date and (B) the FTD Ratio.

(ii) To the extent that a dividend equivalent relating to the Distribution is credited to the account of a holder of a United Online restricted stock unit, (A) the adjustments described in Section 6.2(b)(i) shall be made in a manner which does not result in double crediting; and (B) the ultimate payout of such dividend equivalent shall be made in the form of shares of FTD Common Stock.

(iii) Each FTD Stock Unit Award shall be subject to the same terms, vesting conditions, issuance dates and method of distribution and other terms and conditions that were in effect immediately prior to the Distribution Date for the corresponding UOL Stock Unit Award. With respect to each FTD Stock Unit Award, FTD shall give each FTD Participant full vesting service credit 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 with respect to the corresponding UOL Stock Unit Award immediately prior to the Distribution Date.

(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 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, 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.

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.

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

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

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

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:	/s/ Neil P. Edwards
	Name:	Neil P. Edwards
	Title:	Executive Vice President and Chief Financial Officer

FTD COMPANIES, INC.

By:	/s/ Becky Sheehan
	Name:	Becky Sheehan
	Title:	Executive Vice President and Chief Financial Officer

[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

Exhibit 10.3

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	5
Section 2.4	Manner of Tax Return Preparation	5
Section 2.5	Tax Services	5
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	6
Section 3.4	Determination of Taxes Attributable to the FTD Business	6
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	8
Section 4.4	Allocation of Tax Assets	9
Section 4.5	Allocation of Certain Tax Items	9
Section 4.6	Tax Treatment of Equity-Related Compensation	9
Article V INDEMNIFICATION		10
Section 5.1	Generally	10
Section 5.2	Inaccurate, Incomplete or Untimely Information	10
Section 5.3	Adjustments to Payments	10
Section 5.4	Reporting of Indemnifiable Loss	10
Section 5.5	No Indemnification for Tax Items	11
Section 5.6	Double Recovery	11
Article VI PAYMENTS		11
Section 6.1	In General	11
Section 6.2	Treatment of Payments	11
Section 6.3	Prompt Performance	11
Section 6.4	After Tax Amounts	11
Section 6.5	Interest	11
Article VII TAX PROCEEDINGS		12
Section 7.1	Audits	12
Section 7.2	Notice	12
Section 7.3	Remedies	12
Section 7.4	Control of Distribution Tax Proceedings	12
Article VIII MISCELLANEOUS PROVISIONS		13
Section 8.1	Effectiveness	13
Section 8.2	Cooperation and Exchange of Information	13
Section 8.3	Dispute Resolution	13
Section 8.4	Changes in Law	14
Section 8.5	Confidentiality	14
Section 8.6	Affiliates	14
Section 8.7	Authority	15
Section 8.8	Setoff	15
Section 8.9	Amendments and Waivers	15
Section 8.10	Entire Agreement	15
Section 8.11	Third-Party Beneficiaries	15
Section 8.12	Notices	15
Section 8.13	Counterparts; Electronic Delivery	15
Section 8.14	Severability	15
Section 8.15	Assignability; Binding Effect	15
Section 8.16	Governing Law	16
Section 8.17	Construction	16
Section 8.18	Titles and Headings	16
Section 8.19	Coordination with Employee Matters Agreement	16
Section 8.20	Conflict or Inconsistency Between Agreements	16

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, 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.

“ 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.

“ 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.

“ 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.

“ 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.

“ 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.

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.

(a) In General. It is the intention of the Parties that except as specifically provided herein, the Transition Services Agreement shall govern the provision of tax services by United Online to FTD and the other members of the FTD Group (the “ Tax Services ”).

(b) Right to Review. United Online shall provide or cause to be provided any Tax Return (or portion or excerpt thereof relating exclusively to FTD or FTD Affiliates) to be filed by United Online on behalf of FTD

pursuant to this Agreement at least ten (10) business days prior to the due date of such Tax Return, including extensions. FTD shall have the right to comment on any such Tax Return (or portion or excerpt thereof, as applicable), and United Online shall reasonably consider FTD’s comments.

(c) Information. United Online shall provide or cause to be provided to FTD copies of all Tax Returns (or portions or excerpts thereof relating exclusively to FTD or FTD Affiliates) filed on behalf of FTD, in each case within fifteen (15) days of filing pursuant to this Agreement, and shall promptly provide any notices or communications from any Taxing Authority relating to any Tax or Tax Return of FTD or an FTD Affiliate covered by the Tax Services.

(d) List of Tax Returns. As soon as practicable after the Distribution Date, United Online shall provide to FTD a list of all Tax Returns to be filed by United Online on behalf of FTD or FTD Affiliates pursuant to Section 2.1(a) or Section 2.1(c).

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.

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 .

(a) United States Federal Income Tax. For purposes of Section 3.2, the amount of U.S. federal Income Tax attributable to the FTD Business shall be the amount of such U.S. federal Income Taxes that the FTD Tax Group would have been required to pay on a consolidated basis if the FTD Tax Group had paid tax on behalf of an affiliated group consisting only of the FTD Group, as determined in a manner consistent with the following principles:

(i) including only Tax Items of members of the FTD Tax Group that were included in the relevant UOL Tax Group consolidated Tax Return;

(ii) using all elections, accounting methods and conventions used on the UOL Tax Group consolidated Tax Return for such period; and

(iii) applying the highest statutory marginal corporate Income Tax rate in effect for such taxable period.

(b) State Income Tax. For purposes of Section 3.2, the amount of state or local Income Taxes attributable to the FTD Business shall be as determined by United Online in a manner consistent with the principles set forth in

Section 3.4(a) (for the avoidance of doubt, using the highest statutory marginal state or local corporate Income Tax rate for such applicable state or local jurisdiction, as the case may be).

(c) Foreign Income Tax. For purposes of Section 3.2, the amount of foreign Income Taxes attributable to the FTD Business shall be as determined by United Online in a manner consistent with the principles set forth in Section 3.4(a).

ARTICLE IV

DISTRIBUTION TAXES AND ALLOCATION

Section 4.1 Distribution Taxes .

(a) United Online’s Liability for Distribution Taxes. Notwithstanding Article III, United Online shall be liable for one hundred percent (100%) of any Distribution Taxes that are attributable to, or result from, one or more of the following:

(i) any action or omission by any UOL Group Member that is inconsistent with any material or information, or that constitutes a breach of any covenant or representation, pertaining to any UOL Group Member in the IRS Ruling Documents, the IRS Ruling, any Supplemental IRS Ruling Documents, any Supplemental IRS Ruling or the Representation Letter;

(ii) any action or omission by any UOL Group Member after the Distribution Date, including, without limitation, a cessation, transfer to affiliates, or disposition of its active trades or businesses, or an issuance of stock, stock buyback or payment of an extraordinary dividend by any UOL Group Member following the Distribution;

(iii) any acquisition of any stock or assets of any UOL Group Member by one or more other Persons occurring prior to or following the Distribution; or

(iv) any issuance of stock by any UOL Group Member, or change in ownership of stock in any UOL Group Member, that causes section 355(d) or section 355(e) of the Code to apply to the Distribution.

(b) FTD’s Liability for Distribution Taxes. Notwithstanding Article III, FTD shall be liable for one hundred percent (100%) of any Distribution Taxes that are attributable to, or result from, one or more of the following:

(i) any action or omission by any FTD Group Member that is inconsistent with any material or information, or that constitutes a breach of any covenant or representation, pertaining to any FTD Group Member in the IRS Ruling Documents, the IRS Ruling, any Supplemental IRS Ruling Documents, any Supplemental IRS Ruling or the Representation Letter;

(ii) any action or omission by any member of the FTD Group after the Distribution Date, including without limitation, a cessation, transfer to affiliates or disposition of its active trades or businesses, or an issuance of stock, stock buyback or payment of an extraordinary dividend by any member of the FTD Group following the Distribution;

(iii) any acquisition of any stock or assets of any member of the FTD Group by one or more other Persons following the Distribution; or

(iv) any issuance of stock by any member of the FTD Group, or change in ownership of stock in any member of the FTD Group, that causes section 355(d) or section 355(e) of the Code to apply to the Distribution.

(c) First Party Responsible. The first party to act or fail to act in a manner that results in the imposition of Distribution Taxes shall be liable for one hundred percent (100%) of such Distribution Taxes pursuant to Section 4.1(a) or 4.1(b), as applicable; provided that if such first party is able to act, and does act, in a manner that

results in Distribution Taxes not being imposed, then such first party shall not be liable for any Distribution Taxes imposed as a result of any act or omission by the other party subsequent to the first party’s action or omission.

(d) No Party Responsible. If Distribution Taxes are imposed and no Party bears responsibility for the imposition of such taxes under Section 4.1(c), or if both Parties shall bear simultaneous responsibility for the imposition of such taxes under Section 4.1(c), then FTD shall be liable for fifty percent (50%) of such Distribution Taxes pursuant to Section 4.1(a) or 4.1(b), and United Online shall be liable for fifty percent (50%), of such Distribution Taxes pursuant to Section 4.1(a) or 4.1(b).

Section 4.2 Private Letter Rulings; Tax Opinion.

(a) Information. United Online has provided FTD with copies of the IRS Ruling Documents submitted on or prior to the date of this Agreement, and shall provide FTD with copies of any IRS Ruling Documents or Supplemental IRS Ruling Documents prepared after such date prior to the submission of such IRS Ruling Documents or Supplemental IRS Ruling Documents, as applicable, to a Taxing Authority. United Online shall provide FTD with a copy of the IRS Ruling, a copy of the Representation Letter and a copy of the Tax Opinion.

(b) Cooperation by FTD. FTD shall cooperate with United Online, and shall take any and all actions reasonably requested by United Online, in connection with (i) United Online’ submission of any IRS Ruling Documents prepared after the date specified in the preamble to this Agreement and (ii) United Online’s request for the Tax Opinion (including, without limitation, by making any representation or covenant or providing any materials or information requested by Skadden, Arps, Slate, Meagher & Flom LLP).

(i) In General . At the reasonable request of FTD, United Online shall cooperate with FTD and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a Supplemental IRS Ruling or other guidance from the IRS or any other Taxing Authority for the purpose of confirming the continuing validity of any ruling issued by any Taxing Authority addressing the application of the law to the Distribution; provided that United Online shall not be obligated to seek a Supplemental IRS Ruling if it reasonably believes that seeking such Supplemental IRS Ruling would adversely affect United Online, its shareholders or any other UOL Group Member. In no event shall United Online be required to file any Supplemental IRS Ruling Documents unless FTD represents that (A) it has read the Supplemental IRS Ruling Documents and (B) all information and representations, if any, relating to FTD and the other members of the FTD Group contained in the Supplemental IRS Ruling Documents are true, correct and complete in all material respects. FTD shall reimburse United Online for all reasonable costs and expenses incurred by United Online and any other UOL Group Member in obtaining a Supplemental IRS Ruling requested by FTD. FTD shall not seek any guidance (whether written or oral) from the IRS or any other Taxing Authority concerning the Distribution except as set forth in this Section 4.2(c).

(ii) Participation Rights . If United Online requests a Supplemental IRS Ruling or other guidance after the date specified in the preamble to this Agreement: (A) United Online shall keep FTD informed in a timely manner of all material actions taken or proposed to be taken by United Online in connection therewith; (B) United Online shall (1) reasonably in advance of the submission of any such Supplemental IRS Ruling Documents provide FTD with a draft thereof, (2) reasonably consider FTD’s comments to such draft, (3) provide FTD with a final copy of the Supplemental IRS Ruling Documents, (4) provide FTD with notice reasonably in advance of, and FTD shall have the right to attend, any meetings with the Taxing Authority (subject to the approval of the Taxing Authority) that relate to such Supplemental IRS Ruling and (5) provide FTD with a copy of such Supplemental IRS Ruling.

Section 4.3 Carrybacks.

(a) The carryback of any loss, credit or other Tax Asset from any Post-Distribution Period shall be in accordance with the provisions of the Code and Treasury Regulations (and any applicable state, local or foreign laws).

(b) Except to the extent otherwise consented to by United Online (such consent not to be unreasonably withheld, conditioned or delayed) or prohibited by applicable law, FTD shall elect to relinquish, waive or otherwise forgo the carryback of any loss, credit or other Tax Asset from any Post-Distribution Period to any Pre-Distribution Period or Straddle Period (a “ Carryback ”). In the event that FTD (or the appropriate member of the FTD Group) is prohibited by applicable law to relinquish, waive or otherwise forgo a Carryback (or United Online consents to a Carryback), United Online shall cooperate with FTD, at FTD’s expense, in seeking from the appropriate Taxing Authority such Refund as reasonably would result from such Carryback, to the extent that such Refund is directly attributable to such Carryback, and shall pay over to FTD the amount of such Refund within ten (10) days after such Refund is received; provided that FTD shall indemnify and hold the members of the UOL Group harmless from and against any and all collateral Tax consequences resulting from or caused by any such Carryback, including, without limitation, the loss or postponement of any benefit from the use of Tax Assets generated by a UOL Group Member if (i) such Tax Assets expire unutilized, but would have been utilized but for such Carryback, or (ii) the use of such Tax Assets is postponed to a later taxable period than the taxable period in which such Tax Assets would have been utilized but for such Carryback.

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 .

(a) Allocation Between Taxable Periods. If applicable law requires the Taxable Period of any FTD Group Member that was a member of the UOL Tax Group prior to the Distribution Date to end as of the close of the Distribution Date, then Tax Items shall be included in each Taxable Period in accordance with Treasury Regulation § 1.1502-76(b)(2)(i) with no election under Treasury Regulation § 1.1502-76(b)(2)(ii).

(b) Allocation Within a Straddle Period. If applicable law does not require the Taxable Period of FTD and each FTD Group Member that was a member of the UOL Tax Group prior to the Distribution Date to end as of the close of the Distribution Date, then the amount of Tax Items attributable to each portion of the Straddle Period shall be determined by means of a closing of the books and records of such FTD Group Member as of the close of the Distribution Date; provided that exemptions, allowances or deductions that are calculated on an annual or periodic basis shall be allocated between such portions in proportion to the number of days in each such portion.

(c) Extraordinary Transactions. Notwithstanding anything to the contrary in this Agreement, for all Tax purposes, the Parties shall report any transaction that is outside the ordinary course of the normal day-to-day operations of the FTD Business that is undertaken, caused or permitted by any FTD Group Member that occurs on the Distribution Date but after the Distribution as occurring on the date after the Distribution Date pursuant to Treasury Regulation § 1.1502-76(b)(1)(ii)(B) or any similar or analogous provision of state, local or foreign law. United Online shall not make a ratable allocation election pursuant to Treasury Regulation § 1.1502-76(b)(2)(ii)(D) or any similar or analogous provision of state, local or foreign law for the tax year in which the Distribution occurs.

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 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 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 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 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 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 October 31, 2013.

Section 8.2 Cooperation and Exchange of Information .

(a) Cooperation. United Online and FTD shall each cooperate fully (and each shall cause its respective Affiliates to cooperate fully) with all reasonable requests from another Party hereto, or from an agent, representative or advisor to such Party, in connection with the preparation and filing of Tax Returns, claims for refund, and Audits concerning issues or other matters covered by this Agreement. Such cooperation shall include, without limitation:

(i) the retention until the expiration of the applicable statute of limitations, and the provision upon request, of Tax Returns, books, records (including information regarding earnings and profits and the ownership and Tax basis of property), documentation and other information relating to the Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings, closing agreements or other determinations by Taxing Authorities;

(ii) providing FTD access to United Online’s tax software in order to input relevant data and otherwise prepare and file all Tax Returns for which FTD is responsible pursuant to Section 2.2;

(iii) the execution of any document that may be necessary or reasonably helpful in connection with any Audit, or the filing of a Tax Return or refund claim by a member of the FTD Tax Group or the UOL Tax Group, including certification, to the best of a Party’s knowledge, of the accuracy and completeness of the information it has supplied or any power of attorney required by the applicable Taxing Authority to be provided by one Party to another Party for the performance by such other Party of acts required or permitted under this Agreement; and

(iv) the use of the Party’s reasonable best efforts to obtain any documentation that may be necessary or reasonably helpful in connection with any of the foregoing.

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.

(b) Failure to Perform. If a Party materially fails to comply with any of its obligations set forth in Section 8.2(a) upon reasonable request and notice by the other Party, and such failure results in the imposition of

additional Taxes, the non-performing Party shall be liable in full for such additional Taxes notwithstanding anything to the contrary in this Agreement.

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 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.

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 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.

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 ]

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:	/s/ Neil P. Edwards
	Name:	Neil P. Edwards
	Title:	Executive Vice President and Chief Financial Officer

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

By:	/s/ Becky Sheehan
	Name:	Becky Sheehan
	Title:	Executive Vice President and Chief Financial Officer

[Signature Page to Tax Sharing Agreement]

Exhibit 10.4

EMPLOYMENT AGREEMENT

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

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

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

1. Term; Position.

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

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

2. Salary and Benefits.

(a) Employee will be paid a salary at an annualized rate of $300,000, payable in successive bi-weekly or other installments in accordance with the Company’s standard payroll practices for salaried employees. Employee’s rate of salary will be subject to such increases as may be determined from time to time by the Board of Directors. As used in this Agreement, the term “ Board of Directors ” shall refer to the Board of Directors of the Company or other governing body or committee to which the authority of the Board of Directors of the Company with respect to executive compensation matters has been delegated, including (without limitation) the Compensation Committee of the Board of Directors of the Company.

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

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

(d) As soon as practicable following the effective date of the Spin-Off and the filing of an effective Form S-8, the Board of Directors shall grant to Employee a number of restricted stock units relating to Company stock with an aggregate value of $325,000, determined based on the average per-share closing price of the Company’s stock for the five (5) trading days prior to the date of grant. The restricted stock units shall vest at the rate of one-third on each of the first three anniversaries of the date of grant, and shall be subject to such other terms and conditions as may be determined by the Board of Directors (or an appropriate committee thereof).

3. Bonus.

For each fiscal year of the Company during the Term of this Agreement, Employee will be eligible to participate in a bonus program with a target bonus set by the Board of Directors in an amount of up to 100% of Employee’s annual rate of base salary (prorated from the commencement date of Employee’s employment with the Company for fiscal year 2013). The performance criteria for purposes of determining Employee’s actual bonus for each fiscal year will be established by the Board of Directors, and Employee’s annual bonus for one or more of those fiscal years may be increased to include any additional amounts approved by the Board of Directors. Except as otherwise determined by the Board of Directors or set forth herein, Employee will not be entitled to a bonus payment for any fiscal year unless Employee is employed by, and in good standing with, the Company at the time such bonus payment is paid. Employee’s bonus payment for each fiscal year shall in no event be paid later than the 15th day of the third month following the end of the Company’s fiscal year for which such bonus is earned.

4. Restricted Stock Units and Other Equity Awards.

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

(b) If Employee’s employment is terminated by the Company “without cause” or by Employee for “good reason” (as each term is defined below) at any time during the Term and within the period commencing with the execution by the Company of a definitive agreement for a Change in Control (as defined below) and ending with the earlier of (i) the termination of that agreement without the

consummation of such Change in Control or (ii) the expiration of the twenty-four (24)-month period measured from the date such Change in Control occurs, then upon Employee’s satisfaction of the Release Condition set forth in Section 7(b) below, any and all equity awards Employee holds on the date of such termination will fully vest on an accelerated basis with respect to all non-vested shares of Common Stock at the time subject to those awards, except to the extent otherwise provided in the equity award agreement for any equity award granted after the Effective Date of this Agreement. Except as otherwise expressly provided in the agreement evidencing a particular restricted stock unit or other equity award or to the extent another issuance date may be required in order to comply with any applicable requirements of Section 409A of the Code, the shares of Common Stock (or any replacement securities) underlying the equity awards that fully vest on an accelerated basis in accordance with this Section 4(b), or the proceeds of any cash retention program established in replacement of those shares pursuant to the terms of the applicable award agreement, will be issued or distributed to Employee within the sixty (60)-day period following the date of Employee’s “separation from service” (as defined below) as a result of Employee’s termination “without cause” (as defined below) or Employee’s resignation for “good reason” (as defined below), provided the Release required of Employee pursuant to Section 7(b) has become effective and enforceable in accordance with its terms following the expiration of the applicable revocation period in effect for that Release. However, should such sixty (60)-day period span two taxable years, the issuance shall be effected during the portion of that period that occurs in the second taxable year.

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

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

5. Policies; Procedures.

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

6. At Will Employment.

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

7. Separation from Service.

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

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

(I) Employee will be eligible for an additional separation payment in an amount equal to a pro-rated bonus for the fiscal year in which such involuntary termination occurs. Such pro-rated bonus will be determined by multiplying (A) the actual bonus (if any) Employee would have earned for that fiscal year, based on the level at which the applicable performance goals for such fiscal year are in fact attained, had Employee continued in the Company’s employ through the date that bonus award becomes due and payable by (B) a fraction the numerator of which is the number of whole months (rounded to the next highest whole month) Employee remained in the Company’s employ during that fiscal year and the denominator of which is twelve (12),

with such pro-rated bonus (if any) to be paid at the same time and in same form that the bonus payment for such fiscal year would have been made following the completion of that fiscal year had Employee remained in the Company’s employ through the payment date. However, if such involuntary termination occurs in the same fiscal year of the Company in which a Change in Control occurs, then such pro-rated bonus will instead be determined by (1) multiplying (A) Employee’s target bonus for that fiscal year by (B) a fraction the numerator of which is the number of whole months (rounded to the next highest whole month) Employee remained in the Company’s employ during that fiscal year and the denominator of which is twelve (12) and (2) reducing such amount by any bonus earned by Employee for the same fiscal year under Section 3 of this Agreement, with such pro-rated bonus to be paid (in the same form in which the bonus payment for such fiscal year would have been paid had Employee remained in the Company’s employ through the payment date) as follows:

(i) if such Change in Control occurs on or before the date of such involuntary termination, then such payment shall be made on the date on which the first monthly installment of the Separation Payment (or, in the case of a termination following a Qualifying Change in Control (as defined below), the lump sum Separation Payment) is paid; or

(ii) if such Change in Control occurs after the date of such involuntary termination, then such payment shall be made on the later of (x) the third (3rd) business day following the effective date of such Change in Control or (y) the sixtieth (60th) day following the date of Employee’s separation from service (as defined below) or, if such sixtieth (60th) day is not otherwise a business day, then the immediately preceding business day.

(II) In addition, if the date of such involuntary termination occurs after the end of a fiscal year of the Company but prior to the date in the subsequent fiscal year on which Employee’s bonus for that fiscal year would have otherwise become due and payable on the basis of the applicable performance goals attained for that year had Employee continued in employment with the Company, then the Company will pay Employee an additional separation payment equal to the bonus that Employee would have received on the basis of the attained performance goals had Employee remained employed by, and in good standing with, the Company through the payment date for such bonus, with that amount to be paid in a lump sum (in the same form in which such bonus payment would have been paid had Employee remained in the Company’s employ through the payment date) on the later of (i) the date on which the first monthly installment of the Separation Payment (or, in the case of a termination following a Qualifying Change in Control, the lump sum Separation Payment) is paid to Employee as set forth below in this Section 7(b) or (ii) the date such bonus would have been paid to Employee pursuant to Section 3 of this Agreement had Employee continued in the Company’s employ through such payment date.

(III) In no event shall any such Additional Payment be made later than the last day of the applicable period necessary to qualify such Additional Payment for the short-term deferral exception under Code Section 409A.

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

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

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

If Employee’s employment is terminated by the Company “without cause” (as defined below), the Company will have no further obligation to Employee pursuant to this Agreement other than the Accrued Obligations, the vesting of Employee’s outstanding equity awards in accordance with the applicable

vesting acceleration provisions of Section 4 above and the obligations of the Company pursuant to this Section 7(b).

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

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

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

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

(d) Definitions .

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

“good reason” means:

(i) a material reduction in Employee’s base salary without Employee’s prior written consent;

(ii) a material reduction in Employee’s authority, duties or responsibilities, without Employee’s prior written consent;

(iii) a material change in the geographic location at which Employee must perform services (the parties acknowledge that Employee is currently required to perform services at 3113

Woodcreek Drive, Downers Grove, Illinois 60515) without Employee’s prior written consent; or

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

“ with cause ” means Employee’s termination of employment by the Company for any of the following reasons:

(i) if Employee is convicted of, or enters a plea of nolo contendere to, a felony or a misdemeanor involving any act of moral turpitude;

(ii) if Employee commits an act of actual fraud, embezzlement, theft or similar dishonesty against the Company or any of its subsidiaries or affiliates;

(iii) if Employee commits any willful misconduct or gross negligence resulting in material harm to the Company or any of its subsidiaries or affiliates; or

(iv) if Employee fails, after receipt of detailed written notice and after receiving a period of at least thirty (30) days following such notice to cure such failure, to use his or her reasonable good faith efforts to follow the reasonable and lawful direction of the Board of Directors and to perform his or her obligations hereunder.

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

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

(e) Code Section 409A Deferral Period . Notwithstanding any provision in this Agreement to the contrary (other than Section 7(f) below), no payment or distribution under this Agreement which constitutes an item of deferred compensation under Section 409A of the Code and becomes payable by reason of Employee’s termination of employment with the Company will be made to Employee until Employee incurs a separation from service (as such term is defined above and determined in accordance with Treasury Regulations issued under Section 409A of the Code) in connection with such termination of employment. For purposes of this Agreement, each amount to be paid or benefit to be provided Employee shall be treated as a separate identified payment or benefit for purposes of Section 409A of the Code. In addition, no payment or benefit which constitutes an item of deferred compensation under Section 409A of the Code and becomes payable by reason of Employee’s separation from service will be made to Employee prior to the earlier of (i) the first day of the seventh (7th) month measured from the date of such separation from service or (ii) the date of Employee’s death, if Employee is deemed at the

time of such separation from service to be a “specified employee” (as determined pursuant to Code Section 409A and the Treasury Regulations thereunder) and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable deferral period, all payments and benefits deferred pursuant to this Section 7(e) (whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid or provided to Employee in a lump sum on the first day of the seventh (7th) month after the date of Employee’s separation from service or, if earlier, the first day of the month immediately following the date the Company receives proof of Employee’s death. Any remaining payments or benefits due under this Agreement will be paid in accordance with the normal payment dates specified herein.

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

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

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

8. Withholding Taxes.

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

9. Restrictive Covenants.

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

10. Deferred Compensation Programs.

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

11. Clawback.

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

12. Entire Agreement/Construction of Terms.

(a) This Agreement, together with any Company handbooks and policies in effect from time to time and the applicable stock plans and agreements evidencing the equity awards made to Employee from time to time during Employee’s period of employment, contains all of the terms of Employee’s employment with the Company and supersedes any prior understandings or agreements, whether oral or written, between Employee and the Company.

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

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

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

13. Amendment and Governing Law.

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

14. Surviving Provisions.

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

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

/s/ Scott D. Levin
October 28, 3013


FTD COMPANIES, INC.
/s/ Mark R. Goldston
Chairman & CEO
October 30, 3013

Appendix A

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

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

R E C I T A L S:

A. The Company and the Executive have entered into that certain employment agreement of even date with this Agreement pursuant to which the Executive will serve as Executive Vice President, General Counsel and Secretary of the Company, commencing on the date on which the spin-off of the Company from United Online, Inc. (“ Spin-Off ”) is consummated (the “ Effective Date ”); and

B. In connection therewith, the Company and the Executive desire to provide for certain additional obligations.

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

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

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

anywhere in the world or in any city, canton, county, district, parish, province or any other political subdivision in any such country or territory; or anywhere in the world (each city, canton, commonwealth, county, district, parish, province, state, country, territory or other political subdivision or other location in the world shall be referred to as a “ Non-competition Area ”). The parties to this Agreement intend that the covenant contained in the preceding sentence of this Section 1(a) shall be construed as a series of separate covenants, one for each city, canton, commonwealth, county, district, parish, state, province, country, territory, or other political subdivision or other area of the world specified. Except for geographic coverage, each separate covenant shall be considered identical in terms to the covenant contained in the preceding sentence. The parties further acknowledge the breadth of the covenants, but agree that such broad covenants are necessary and appropriate in the light of the global nature of the Competitive Activity. If, in any judicial or other proceeding, a court or other body declines to enforce any of the separate covenants included in this Section 1(a), the unenforceable covenant shall be considered eliminated from these provisions for the purpose of those proceedings to the extent necessary to permit the remaining separate covenants to be enforced. Notwithstanding the foregoing, the Executive may maintain or undertake purely passive investments on behalf of the Executive, the Executive’s immediate family or any trust on behalf of the Executive or the Executive’s immediate family in companies engaged in a Competitive Activity so long as the aggregate interest represented by such investments does not exceed 1% of any class of the outstanding publicly traded debt or equity securities of any company engaged in a Competitive Activity.

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

(c) No Interference and Non-Solicitation . During the Restricted Period, the Executive shall not, whether for the Executive’s own account or for the account of any other individual, partnership, firm, corporation or other business organization, solicit, endeavor to entice away from the Company, UOL, or any of the Company’s or UOL’s subsidiaries or affiliated companies, or otherwise interfere with the relationship of the Company or UOL or any of its or their subsidiaries or affiliated companies with, any person who, to the knowledge of the Executive, is (or has at any time within the

preceding three months been) employed by or otherwise engaged to perform services for the Company, UOL or any of the Company’s or UOL’s subsidiaries or affiliated companies (including, but not limited to, any independent sales representatives or organizations) or any entity who is, or was within the then most recent 12-month period, a customer or client of the Company, UOL, any predecessor of the Company or UOL or any of the Company’s or UOL’s subsidiaries or affiliated companies (a “ Customer ”) or a supplier or vendor of the Company or UOL or any of the Company’s or UOL’s subsidiaries or affiliated companies (a “ Supplier ”); provided , however , that this Section 1(c) shall not prohibit the Executive from employing, for the Executive’s own account, following a termination of the employment of the Executive, any person employed by a Customer or Supplier, if such employment is not in connection with a Competitive Activity.

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

Section 3. Inventions .

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

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

(c) Assignment . The Executive agrees to, and does hereby continuously, assign to the Company, without further consideration, all right, title, and interest that the Executive may presently have or acquire (throughout the United States and in all foreign countries), free and clear of all liens and encumbrances, in and to each Invention Idea, which shall be the sole property of the Company, whether or not patentable. In the event any Invention Idea shall be deemed by the Company to be patentable or otherwise registrable, the Executive shall assist the Company (at its expense) in obtaining patent or other applicable registrations, and the Executive shall execute all documents and do all other things (including testifying at the Company’s expense) necessary or proper to obtain patent or other applicable registrations and to vest the Company with full title to them. The Executive’s obligation to assist the Company in obtaining and enforcing patents, registrations or other rights for such inventions in any and all countries, shall continue beyond the termination of my employment, but the Company shall compensate the Executive at a reasonable rate after such termination for the time actually spent by the Executive at the Company’s request for such assistance. Should the Company be unable to secure the Executive’s signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Invention Idea, whether due to the Executive’s mental or physical incapacity or any other cause, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as the Executive’s agent and attorney-in-fact, to act for and on the Executive’s behalf, to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other rights of protections with the same force and effect as if executed and delivered by the Executive. Notwithstanding the foregoing provisions of this Section 3:

This provisions of this Section 3(c) do not apply to any invention for which no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on the Executive’s own time, unless (a) the invention relates (i) to the business of the Company or (ii) to the Executive’s actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by the Executive for the Company.

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

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

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

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

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

Section 6. Miscellaneous .

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

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

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

(d) Amendment; Waiver; etc . This Agreement, and each other agreement or document delivered in connection with this Agreement, may be amended, modified, superseded or canceled, and any of the terms thereof may be waived, only by a written document signed by each party to this Agreement or, in the case of waiver, by the party or parties waiving compliance. The delay or failure of any party at any time or times to exercise any right or require the performance of any duty under this Agreement or any other agreement or document delivered in connection with this Agreement shall in no way affect the right of that party at a later time to exercise that right or enforce that duty or any other right or duty. No waiver by any party of any condition or of any breach of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed or construed to be a further or

continuing waiver of any such condition or breach or of the breach of any other term of this Agreement. A single or partial exercise of any right shall not preclude any other or further exercise of the same right or of any other right. The rights and remedies provided by this Agreement shall be cumulative and not exclusive of each other or of any other rights or remedies provided by law.

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

(f) Employment “At-Will” . Both the Executive and the Company acknowledge that nothing in this Agreement creates a contract for employment for any specific duration. The Executive’s employment shall be “at-will”, meaning both the Company and the Executive can terminate the relationship at any time, with or without reason or notice.

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

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

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

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

	FTD COMPANIES, INC.


	By:
	Name:
	Its:


	Scott D. Levin

Appendix B

EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT

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

1. PROPRIETARY INFORMATION.

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

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

(c) Proprietary Information Defined. I understand that the term “Proprietary Information” in this Agreement means all information and any idea, in whatever form, tangible or intangible, whether disclosed to or learned or developed by me, pertaining in any manner to the current or proposed business of the Company unless the information (i) is publicly known through lawful means; (ii) was rightfully in my possession prior to my employment with the Company as demonstrated by written documents currently in existence; (iii) is disclosed to me without restriction by a third party who rightfully possesses and discloses the information and who did not learn of it directly from the Company; or (iv) is reasonably known to people in the trade or industry. Without limiting the scope of the definition, I understand that the Company considers the following to be included in the definition of Proprietary Information: (i) all client/customer lists and all lists or other compilations containing client, customer or vendor information; (ii) information about products, proposed products, research, product development, techniques, processes, costs, profits, product pricing, markets, marketing

plans, strategies, forecasts, sales and commissions; (iii) plans for the future development and new product concepts; (iv) all information regarding the Company’s subscribers and all information regarding the Company’s subscribers compiled by or derived from the Company’s database; (v) the compensation and terms of employment of other employees; (vi) all other information that has been or will be given to me in confidence by the Company; and (vii) software in various stages of development, designs, drawings, specifications, techniques, models, data, source code, algorithms, object code, documentation, diagrams, flow charts, computer programs, databases, and other data of any kind and description, including electronic data recorded or retrieved by any means. Proprietary Information also includes any information described above which the Company obtains from another party and which the Company treats as proprietary or designates as Proprietary Information whether or not owned or developed by the Company or the other party.

(d) Company Materials. I understand that I will be entrusted with “Company Materials” (as defined below) which are important to the Company’s business or the business of Company customers or clients. I agree that during my employment, I will not deliver any Company Materials to any person or entity outside the Company, except as I am required to do in connection with performing my duties for Company. For purposes of this Agreement, “Company Materials” are documents, electronic files or any other tangible or electronic items that contain information concerning the business, operations or plans of the Company or its customers, whether the documents have been prepared by me or others. Company Materials include, but are not limited to, computers, computer disk drives, computer files, computer disks, documents, code, flowcharts, schematics, designs, graphics, customer lists, drawings, photographs, customer information, etc.

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

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

(g) Former Employer Information; Consents. I agree that I will not, during my employment, improperly use or disclose any confidential information, proprietary information or trade secrets of my former or any concurrent employers. I

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

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

(i) Non-Solicitation of Customers. I understand and agree that as a result of my employment and the position that I hold, the Company has entrusted and will in the future entrust me with Proprietary Information that is maintained by the Company in confidence and that, if known, would have economic value to a competitor. Such Proprietary Information includes, but is not limited to, customer identities, requirements, purchasing volumes, demographic needs, and other individualized customer information, coding, future technology plans, product strategies, business strategies, coding models, and the like. I understand and agree that my solicitation of Company customers on behalf of an entity other than the Company would involve the use of such Proprietary Information. Consequently, I agree that during the term of my employment with Employer, any other affiliate of the Company or the Company, and for a period of one (1) year after termination (voluntarily or involuntarily) of my employment, I shall not, for myself or any third party, solicit, directly or indirectly, any customer of the Company who was a Company customer during my employment for the purpose of offering products or services that compete in the same market with the Company’s products or services. In addition, I agree that I will not, for myself or any third party, solicit, directly or indirectly, any potential customer of the Company with whom the Company was engaged in substantial negotiations during my employment. I hereby acknowledge that pursuit of the activities forbidden by this paragraph would necessarily involve the use or disclosure of Proprietary Information in breach of this Agreement, but that proof of such breach would be extremely difficult. None of my activities will be prohibited under this Paragraph if I can prove that the action was taken without the use in any way of Proprietary Information.

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

2. INVENTIONS.

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

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

NOTICE: This Agreement does not apply to an invention for which no equipment, supplies, facility, or trade secret information of the employer was used and which was developed entirely on the employee’s own time, unless (a) the invention relates at the time of conception or reduction to practice (i) to the business of the employer, or (ii) to the employer’s actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by the employee for the employer.

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

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

will be received by Employer in confidence so that Employer may examine such information to determine if in fact it constitutes Invention Ideas subject to this Agreement.

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

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

maintain or assign their license rights hereunder of my interest in any such invention or work of authorship.

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

(g) Post-Termination Period. I acknowledge that because of the difficulty of establishing when any idea, process, invention, etc., is first conceived or developed by me, or whether it results from access to Proprietary Information or the Company’s equipment, facilities, and data, I agree that any idea, process, trademark, service mark, invention, technology, computer program, original work of authorship, design, formula, discovery, patent, copyright, or any improvement, rights, or claims related to the foregoing shall be presumed to be an Invention Idea if it relates to any existing or planned service or product of the Company, and if it is conceived, developed, used, sold, exploited, or reduced to practice by me or with my aid within six months after my termination of employment (voluntarily or involuntarily)with Employer, or any other affiliate of the Company, or the Company. I can rebut the above presumption if I prove that the invention, idea, process, etc., is not an Invention Idea as defined in paragraph 2(a).

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

3. CONTRACTS.

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

4. REMEDIES.

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

Company deems appropriate. This right shall be in addition to any other remedy available to the Company in law or equity.

5. MISCELLANEOUS PROVISIONS.

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

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

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

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

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

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY NOTED ON EXHIBIT A TO THIS AGREEMENT ANY PROPRIETARY INFORMATION, IDEAS, PROCESSES, TRADEMARKS, SERVICE

MARKS, INVENTIONS, TECHNOLOGY, COMPUTER PROGRAMS, ORIGINAL WORKS OF AUTHORSHIP, DESIGNS, FORMULAS, DISCOVERIES, PATENTS, COPYRIGHTS, OR IMPROVEMENTS, OR RIGHTS THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.

Date:
			Scott D. Levin

EXHIBIT A
EMPLOYEE’S DISCLOSURE

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

Date:
			Scott D. Levin

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert S. Apatoff, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FTD Companies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and to the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.


Date: November 6, 2013		/s/ ROBERT S. APATOFF Robert S. Apatoff President and Chief Executive Officer

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Becky A. Sheehan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FTD Companies, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.


Date: November 6, 2013		/s/ BECKY A. SHEEHAN Becky A. Sheehan Executive Vice President and Chief Financial Officer

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

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Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

I, Robert S. Apatoff, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(a) The Quarterly Report on Form 10-Q of FTD Companies, Inc. for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2013


/s/ ROBERT S. APATOFF Robert S. Apatoff President and Chief Executive Officer

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Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

I, Becky A. Sheehan, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(b) The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2013


/s/ BECKY A. SHEEHAN Becky A. Sheehan Executive Vice President and Chief Financial Officer

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Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002