FTD Ftd Companies, Inc.

PROPOSAL THREE: APPROVAL OF THE FTD COMPANIES, INC.
THIRD AMENDED AND RESTATED 2013 INCENTIVE COMPENSATION PLAN

General

        We are asking stockholders to approve the FTD Companies, Inc. Third Amended and Restated 2013 Incentive Compensation Plan, which we refer to as the Amended Plan. On April 19, 2017, upon recommendation of the Compensation Committee, the Board unanimously approved and adopted the Amended Plan, subject to the approval of our stockholders at the 2017 annual meeting of stockholders. The Amended Plan continues to afford us the ability to design compensatory awards that are responsive to our needs, and includes authorization for a variety of awards designed to advance our interests and long-term success by encouraging stock ownership among our officers and other employees, non-employee directors and certain other persons.

        The Amended Plan amends and restates in its entirety the FTD Companies, Inc. Amended and Restated 2013 Incentive Compensation Plan (last amended and restated as of June 9, 2015), or Current Plan. The material terms for qualified performance-based compensation for purposes of Section 162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the "Code") under the Current Plan were approved by our stockholders at the June 9, 2015 annual meeting of stockholders. If the Amended Plan is approved by stockholders at the 2017 annual meeting of stockholders, it will become effective on that day. Outstanding awards under the Current Plan will continue in effect in accordance with their terms. If the Amended Plan is not approved by our stockholders, no awards will be made under the Amended Plan, and the Current Plan will continue in effect. In addition, our ability under the Current Plan to make certain performance awards may be limited.

        Our principal reason for amending and restating the Current Plan is to increase the number of shares of common stock available for awards under the Amended Plan. Stockholder approval of the Amended Plan is also intended to again constitute approval of the material terms for "qualified performance-based compensation" under the Amended Plan for purposes of Section 162(m). In general, Section 162(m) disallows a deduction for certain compensation paid to our Chief Executive Officer and to each of our other three most highly compensated executive officers, other than our Chief Financial Officer, in a taxable year to the extent that compensation to the covered employee exceeds $1 million for such year. However, "qualified performance-based compensation" under Section 162(m) is generally not subject to the deduction limit if the compensation satisfies the requirements of Section 162(m). While we believe it is in the best interests of our stockholders and our best interests to have the ability to potentially grant "qualified performance-based compensation" under Section 162(m) under the Amended Plan, we may decide to grant compensation to covered employees that will not qualify as "qualified performance-based compensation" for purposes of Section 162(m). Moreover, even if we intend to grant compensation that qualifies as "qualified performance-based compensation" for purposes of Section 162(m) under the Amended Plan, we cannot guarantee that such compensation will so qualify or ultimately will be deductible.

        Generally, compensation attributable to stock options, appreciation rights and other performance-based awards may be deemed to qualify as "qualified performance-based compensation" under Section 162(m) if: (1) the grant is made by a committee of outside directors for purposes of Section 162(m); (2) the shareholder-approved plan under which the award is granted states the maximum number of shares with respect to which share-based awards may be granted, and the maximum amount of cash awards that may be granted, to any individual during a specified period of time; and (3) the amount of compensation an individual may receive under the awards is based solely on the achievement of one or more pre-established performance goals which incorporate business criteria approved by stockholders (or, in the case of stock options or appreciation rights, the increase in the value of the shares after the date of grant). Stockholder approval of this Proposal Three is intended to satisfy the shareholder approval requirements under Section 162(m).

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        We are seeking stockholder approval of the material terms for "qualified performance-based compensation" under the Amended Plan, including the performance measures and applicable individual grant limits under the Amended Plan, as well as the individuals eligible to receive awards under the Amended Plan, to have the flexibility to potentially grant awards under the Amended Plan that may be fully deductible for federal income tax purposes. If our stockholders approve the material terms for "qualified performance-based compensation" under the Amended Plan, assuming that all other Section 162(m) requirements are met, we may be able to obtain tax deductions with respect to awards issued under the Amended Plan to our Section 162(m) executive officers without regard to the limitations of Section 162(m) through approximately the 2022 annual meeting of stockholders (in other words, for five years).

        The Amended Plan also includes various other substantive changes and non-substantive and conforming changes. The material substantive changes are described in the "Summary of Material Changes" below, which is followed by a description of the highlights of the Amended Plan and a summary description of the other provisions of the Amended Plan.

        The actual text of the Amended Plan is attached to this proxy statement as Exhibit A . The following description of the Amended Plan is only a summary of its principal terms and provisions and is qualified by reference to the actual text as set forth in Exhibit A .

Why We Recommend That You Vote for Proposal Three

Share Increase

        The Amended Plan authorizes the Compensation Committee to provide equity-based compensation in the form of stock options, stock appreciation rights (or SARs), restricted stock, restricted stock units, performance shares, performance units, stock awards and dividend equivalents for the purpose of providing our employees, non-employee directors and certain non-employees who perform employee functions (and those of our affiliates) incentives and rewards for performance. Some of the key features of the Amended Plan that reflect our commitment to effective management of equity and incentive compensation are set forth below in this subsection.

        We believe that our future success depends in part on our ability to attract, motivate and retain high quality employees and non-employee directors and that the ability to provide equity-based and incentive-based awards under the Amended Plan is critical to achieving this success. We would be at a severe competitive disadvantage if we could not use stock-based awards to recruit and compensate our employees and non-employee directors.

        The use of common stock as part of our compensation program is also important to our continued success because we believe it fosters a pay-for-performance culture that is an important element of our overall compensation philosophy. We believe that equity compensation motivates employees and non-employee directors to create stockholder value because the value such individuals realize from their equity compensation is based on our stock price performance. Equity compensation also aligns the compensation interests of our directors and employees with the investment interests of our stockholders and promotes a focus on long-term value creation, because our equity compensation awards are subject to vesting and/or performance criteria.

        As of April 11, 2017, 695,328 shares remained available for issuance under the Current Plan. If the Amended Plan is not approved, we may be compelled to increase significantly the cash component of our employee and non-employee director compensation, which may not necessarily align employee and non-employee director compensation interests with the investment interests of our stockholders as well as equity-based awards. Replacing equity awards with cash would also increase cash compensation expense and use cash that would be better utilized if reinvested in our businesses or returned to our stockholders.

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        The following includes our view of the overhang and dilution associated with the Current Plan and the potential stockholder dilution that would result if our proposed share increase under the Amended Plan is approved. This information is as of December 31, 2016. As of that date, there were 27,300,292 shares of common stock outstanding:

•

Outstanding full-value awards (restricted stock units): 627,557 shares (1.9% of our fully-diluted shares outstanding);



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Outstanding stock options: 2,657,902 shares (8.1% of our fully-diluted shares outstanding) (outstanding stock options have a weighted average exercise price of $27.37 and a weighted average remaining term of 4.2 years);



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Total shares of common stock subject to outstanding awards, as described above (restricted stock units and stock options): 3,285,459 shares (10% of our fully-diluted shares outstanding);



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Total shares of common stock available for future awards under the Current Plan: 2,243,911 shares (6.8% of our fully-diluted shares outstanding);



•

The total number of shares of common stock subject to outstanding awards (3,285,459 shares), plus the total number of shares available for future awards under the Current Plan (2,243,911 shares), represents a current fully-diluted overhang percentage of 16.8% (in other words, the potential dilution of our stockholders represented by the Current Plan); and



•

If the Amended Plan is approved, the total shares of common stock subject to outstanding awards as of December 31, 2016 (3,285,459 shares), plus the total number of shares available for future awards under the Current Plan (2,243,911 shares), plus the proposed additional shares available for issuance under the Amended Plan (2,600,000 shares), represent a total potential fully-diluted overhang of 8,129,370 shares (22.9%) under the Amended Plan, which is an increase of 6.1% (from 16.8% to 22.9%) of fully-diluted shares.

        Based on the closing price on the NASDAQ Global Select Market for our common stock on April 11, 2017 of $20.00 per share, the aggregate market value as of that date of the additional 2,600,000 shares of common stock requested under the Amended Plan was $52 million.

        In 2014, 2015 and 2016, we granted awards under the Current Plan covering approximately 471,000, 2,238,000 and 1,526,000 shares of common stock, respectively. Based on our basic weighted average of shares of common stock outstanding for those three years of 18,962,000, 28,722,000 and 27,483,000, respectively, for the three-year period 2014-2016, our average burn rate, not taking into account forfeitures, was 5.3% (our individual years' burn rates were 2.5% for 2014, 7.8% for 2015 and 5.6% for 2016).

        In determining the number of shares to request for approval under the Amended Plan, our management team worked with FW Cook, the Compensation Committee's independent compensation consultant, and the Compensation Committee to evaluate a number of factors including our recent share usage and criteria expected to be utilized by proxy advisory firms in evaluating our proposal for the Amended Plan.

        If the Amended Plan is approved, we intend to utilize the shares authorized under the Amended Plan to continue our practice of incentivizing key individuals through annual equity grants. We currently anticipate that the additional shares requested under the Amended Plan will last for about four years, based on our historic grant rates and the approximate current share price, but could last for a shorter period of time if actual practice does not match historic rates or our share price changes materially. However, we do not as a matter of course make public forecasts as to utilization of equity awards due to the unpredictability of the underlying assumptions and estimates. In particular, our actual usage under the Amended Plan will be impacted by changes in the number and level of our employees, the type of equity awards we grant, our potential growth and activities, the financial impact

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of grants and other factors, such as industry performance and general business, economic, regulatory, market and financial conditions, as well as factors specific to our business, all of which are difficult to predict and many of which are beyond our control. As noted in "Summary of the Other Provisions of the Amended Plan" and elsewhere below, our Compensation Committee would retain full discretion under the Amended Plan to determine the number and amount of awards to be granted under the Amended Plan, subject to the terms of the Amended Plan, and future benefits that may be received by participants under the Amended Plan are not determinable at this time.

        We believe that we have demonstrated a commitment to sound equity compensation practices in recent years. We recognize that equity compensation awards dilute stockholder equity, so we have carefully managed our equity incentive compensation. Our equity compensation practices are intended to be competitive and consistent with market practices, and we believe our historical share usage has been responsible and mindful of stockholder interests, as described above.

Section 162(m)

        As discussed above, one reason for submitting this Proposal Three to stockholders is to again obtain stockholder approval of the material terms for "qualified performance-based compensation" under the Amended Plan for purposes of Section 162(m). Such stockholder approval is expected to enable us to structure certain awards so that they may be able to qualify as "qualified performance-based compensation" under Section 162(m).

        In particular, the Amended Plan includes a list of performance measures upon which the Compensation Committee must condition a grant or vesting of a "qualified performance-based award" pursuant to the Amended Plan, which measures are as follows (including relative or growth achievement regarding such measures):

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earnings or operating income before interest, taxes, depreciation, amortization and/or charges for stock-based compensation;



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earnings per share;



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growth in earnings or earnings per share;



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market price of the common stock;



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return on equity or average stockholder equity;



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total stockholder return or growth in total stockholder return, either directly or in relation to a comparative group;



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return on capital;



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return on assets or net assets;



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invested capital, rate of return on capital or return on invested capital;



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revenue, growth in revenue or return on sales;



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income or net income;



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operating income or net operating income;



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operating profit or net operating profit;



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operating margin;



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return on operating revenue or return on operating profit;



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cash flow or cash flow per share (before or after dividends);

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•

market share;



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collections and recoveries;



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debt reduction;



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litigation and regulatory resolution goals;



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expense control goals;



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budget comparisons;



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development and implementation of strategic plans and/or organizational restructuring goals;



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productivity goals;



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workforce management and succession planning goals;



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economic value added;



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measures of customer satisfaction;



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formation of joint ventures or marketing or customer service collaborations or the completion of other corporate transactions intended to enhance our revenue or profitability or enhance our customer base;



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mergers, acquisitions and other strategic transactions;



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earnings before interest, taxes, depreciation and amortization; and



•

fulfillment measures.

        In addition to the performance measures, the Amended Plan includes individual grant limits for equity or incentive awards that can be granted pursuant to the Amended Plan, as further described below under the heading "Summary of the Other Provisions of the Amended Plan."

        In evaluating this Proposal Three, stockholders should consider all of the information in this Proposal Three.

Summary of Material Changes

        Increase in the Number of Available Shares.     The Current Plan authorizes awards under the Current Plan for up to 5,200,000 shares of common stock (subject to certain reductions as described in the Current Plan). The total aggregate number of shares of common stock available for issuance or transfer for awards under the Amended Plan is increased by 2,600,000 to 7,800,000 (which includes the shares remaining available for future awards under the Current Plan), plus shares that again become available under the Amended Plan (or predecessor versions thereof) after December 31, 2016 as a result of the share counting provisions of the Amended Plan, all as further explained below under "Summary of the Other Provisions of the Amended Plan." The number and kind of shares available under the Amended Plan are subject to adjustment for stock dividends and stock splits and in certain other situations as further described in the Amended Plan.

        Share Counting.     The Amended Plan changes the share counting method for awards granted on or after the date on which the Amended Plan is approved by stockholders (the "Plan Restatement Date") so that the available shares under the aggregate share limit described above will be reduced by one share of common stock for every one share of common stock that is subject to an award granted on or after the Plan Restatement Date (as opposed to the Current Plan that reduces the share authorization by 2.3 shares for each share granted subject to an award other than an option or stock appreciation right, also known as a "fungible ratio"). The Current Plan provides that any shares of common stock that are tendered or withheld to satisfy withholding tax liabilities regarding an award other than a stock

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option or stock appreciation right will again be available for issuance under the Current Plan based on the fungible ratio. In addition, the Current Plan provides that the following shares of common stock will not be added back to the shares authorized for issuance under the Current Plan: shares tendered or withheld in payment of the exercise price of a stock option; shares tendered or withheld to satisfy any tax withholding obligation with respect to stock options or stock appreciation rights; shares subject to a stock appreciation right that are not issued in connection with its stock settlement on exercise thereof; and shares reacquired by us on the open market or otherwise using cash proceeds from the exercise of stock options under the Current Plan. The Amended Plan has been revised to provide that, as of the Plan Restatement Date, if the exercise price of an option or the withholding tax liabilities regarding an award are satisfied by tendering or withholding shares of common stock, such tendered or withheld shares will again be available for issuance under the Amended Plan in the same manner such shares were originally counted against the applicable share authorization during a ten-year period.

        Per-Person Share Limits.     The Current Plan provides that the limit on awards granted under the Current Plan to any single non-employee director in any single calendar year will not exceed $750,000 in aggregate grant date fair value (excluding any deferrals of cash fees/retainers by such individuals into shares of common stock). The Amended Plan has been revised to provide that the $750,000 per-director, per-year limit will also factor in any cash fees payable to such non-employee director for such calendar year, as described below.

        Delegation of Administration of the Plan.     The Amended Plan clarifies that if the Board vests the authority to administer all, or a portion of, the Amended Plan in the Compensation Committee, the Compensation Committee may delegate to one or more officers or directors the authority to grant and determine the terms and conditions of awards under the Amended Plan, subject to such limitations as determined by the Compensation Committee. However, no authority may be delegated with respect to awards made to any participant who is, or is determined by the applicable plan administrator to be likely to become, a "covered employee" within the meaning of Section 162(m) or to any officer or director of the Company subject to Section 16 of the Exchange Act.

        Administration of the Amended Plan.     The Amended Plan clarifies that the plan administrator has the authority to determine any waiver, continuation or acceleration of vesting terms for any awards made under the Discretionary Grant Program, the Stock Issuance Program and the Incentive Bonus Program.

        New Provisions with Respect to Stock Options.     The Amended Plan (1) clarifies that an award agreement may contain different terms regarding the effect of termination of service than the terms set forth in the Amended Plan, and (2) clarifies that the plan administrator has discretion to continue or modify the vesting terms of a stock option, including to accelerate or waive vesting, or to provide for continued vesting, of all or a portion of a stock option.

        Revisions to Change in Control Provisions.     The Current Plan generally provides that an award may provide for accelerated vesting in the event of a change in control only where either (1) within a specified period following the change in control the holder of the award is involuntarily terminated for reasons other than for "cause" (as defined in the Current Plan or the applicable award agreement) or terminates his or her employment for "good reason" (as defined in the applicable award agreement), or (2) the award is not assumed, continued or converted into replacement awards in a manner described in the award agreement, in each case as further described in the Current Plan. As further described below, the Amended Plan has been revised to provide the plan administrator with flexibility to take certain actions with respect to outstanding awards in the event of a change of control. The Amended Plan generally provides that, in the event of a change in control, unless otherwise provided in an award agreement or as provided by the plan administrator at the time of grant, the plan administrator generally may continue or accelerate the vesting and/or exercisability of awards, waive or modify performance or other conditions related to the payment or other rights under awards, cancel

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and cash out awards, or make such other modifications or adjustments as the plan administrator deems appropriate to maintain and protect the rights and interests of holders of such awards upon or following the change in control. The plan administrator need not take the same action or actions with respect to all awards, or portions thereof, with respect to all holders of awards. Further, the plan administrator may take different actions with respect to the vested and unvested portions of awards.

        Tax Withholding.     The Amended Plan has been revised to provide that if any shares of common stock otherwise issuable upon issuance, exercise, vesting or settlement of an award, are withheld in satisfaction of applicable withholding tax liabilities, the number of shares of common stock that are so withheld will be limited to the number of shares with a fair market value of the date of withholding no greater than the aggregate amount of such liabilities based on the maximum, rather than the minimum, statutory withholding rates for federal, state, local, foreign income tax and payroll tax purposes.

        Change in Control Definition.     The Current Plan includes a definition of change in control. The Amended Plan does not change the definition of change in control, but provides that an award agreement may contain a different definition of "change in control" than the definition set forth in the Amended Plan.

Other Amended Plan Highlights

        Incentive Programs.     The Amended Plan consists of three separate incentive compensation programs: (1) the discretionary grant program; (2) the stock issuance program; and (3) the incentive bonus program. The principal features of each program are described throughout this Proposal Three.

        Administration.     The Compensation Committee (either acting directly or through a subcommittee of two or more members) has the exclusive authority to administer the discretionary grant, stock issuance and incentive bonus programs with respect to awards made to our officers and directors who are subject to Section 16 of the Exchange Act, and "covered employees" under Section 162(m), and the Board has vested in the Compensation Committee the authority to administer those programs with respect to all other eligible individuals. However, the Board may at any time vest in a secondary committee of one or more directors, or retain to itself, the power to administer such programs for individuals other than Section 16 persons and "covered employees." If the Board vests such authority to administer all, or a portion of those programs in the Compensation Committee, the Compensation Committee may delegate to one or more officers or directors the authority to grant and determine the terms of awards under the Amended Plan, subject to such limitations as the Compensation Committee determines, but no such authority may be delegated with respect to awards made to our officers and directors who are subject to Section 16 of the Exchange Act and "covered employees" under Section 162(m). All awards to non-employee directors will be made by the Board on the basis of the recommendations of the Compensation Committee or by the Compensation Committee (or a subcommittee thereof) comprised solely of independent directors. The term "plan administrator," as used in this summary, means the Compensation Committee (or subcommittee) and any secondary committee, to the extent each such entity is acting within the scope of its administrative authority under the Amended Plan.

        Members of the Compensation Committee or any secondary committee serve for such period of time as the Board may determine and may be removed by the Board at any time. The Board may also at any time terminate the functions of any secondary committee and reassume all powers and authority previously delegated to such secondary committee.

        Each plan administrator will, within the scope of its administrative functions under the Amended Plan, have full power and authority (subject to the provisions of the Amended Plan and applicable law) to establish such rules and regulations as it may deem appropriate for proper administration of the discretionary grant, stock issuance and incentive bonus programs and to make such determinations

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under, and issue such interpretations of, the provisions of those programs and any outstanding awards granted under such programs as it may deem necessary or advisable. Decisions of the plan administrator within the scope of its administrative functions under the Amended Plan will be final and binding on all parties who have an interest in the discretionary grant, stock issuance and incentive bonus programs under its jurisdiction or any award under such programs.

        Share Recycling Provisions.     Under the Amended Plan (or any predecessor version of the plan), if any shares of common stock subject to an award are forfeited, if an award is cancelled or expires or is forfeited, or an award is settled for cash or is unearned (in whole or in part), then in each such case the shares of common stock subject to such award will, to the extent of such forfeiture, cancellation, expiration, cash settlement or less-than-maximum earning, again be available for awards under the Amended Plan as described above with respect to share counting under the Amended Plan. As of the Plan Restatement Date, in the event that the exercise price of an option or the withholding tax liabilities arising from an award are satisfied by the tendering of shares of common stock (either actually or by attestation) or by the withholding of shares of common stock by us, the shares of common stock so tendered or withheld will again be available for awards under the Amended Plan in the same manner such shares were originally counted against the applicable share authorization until the tenth anniversary of the Plan Restatement Date.

        Shares of common stock issued or transferred pursuant to awards granted under the Amended Plan in substitution for or in conversion of, or in connection with the assumption of, awards held by awardees of an entity engaging in a corporate acquisition or merger with us or any of our subsidiaries will not count against the share limits under the Amended Plan. Additionally, shares available under certain plans that we or our subsidiaries may assume in connection with corporate transactions with another entity may be available for certain awards under the Amended Plan, but will not count against the share limits under the Amended Plan.

        No Repricing Without Stockholder Approval.     We have never repriced underwater stock options or SARs, and the repricing of stock options and SARs (outside of certain corporate transactions or adjustment events described in the Amended Plan) is prohibited without stockholder approval under the Amended Plan.

        Change in Control Definition.     The Amended Plan includes a definition of "change in control." Generally, unless otherwise provided in an award agreement, a change in control will be deemed to have occurred (subject to certain limitations if the award is subject to Section 409A of the Code) upon any of the following events:

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the consummation of a merger, consolidation or other reorganization approved by our stockholders in which a change in ownership or control of us is effected through the acquisition by any person or group of related persons (other than us or a person that, prior to such transaction, directly or indirectly controls, is controlled by or is under common control with, us) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of our outstanding securities (as measured in terms of the power to vote with respect to the election of directors);



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the consummation of a sale, transfer or other disposition of all or substantially all of our assets;



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the consummation of any transaction or series of related transactions pursuant to which any person or group of related persons (other than us or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, us) acquires directly or indirectly beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of our outstanding securities (measured in terms of the power to vote with respect to the election of directors) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from us or the acquisition of outstanding securities held by one or more of our existing stockholders; or

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•

a change in a majority of the membership of the Board over a period of thirty-six (36) months or less that is not approved by the current membership of the Board or their approved successors, subject to certain limitations as described in the Amended Plan.

        Performance Goals.     The Amended Plan includes "performance goals," which are measurable (either on a GAAP or non-GAAP basis) performance objectives established pursuant to the Amended Plan for participants who receive grants of performance shares or performance units or, when so determined by the Compensation Committee, stock options, SARs, restricted stock, restricted stock units, cash incentive awards, dividend equivalents or other awards pursuant to the Amended Plan. Performance goals may be described in terms of company-wide objectives or objectives that are related to the performance of the individual participant or of one or more of the subsidiaries, divisions, departments, regions, functions or other organizational units within us or our subsidiaries. The performance goals may be made relative to the performance of other companies or subsidiaries, departments, regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves. The performance goals applicable to any award intended to constitute "qualified performance-based compensation" under Section 162(m) will be based on one or more, or a combination, of the metrics described above under "Section 162(m)" (including relative or growth achievement regarding such metrics).

        Each applicable performance goal may include a minimum threshold level of performance below which no award will be earned, levels of performance at which specified portions of an award will be earned and a maximum level of performance at which an award will be fully earned. In the case of an award intended to constitute "qualified performance-based compensation" under Section 162(m), each performance goal will be objectively determinable to the extent required under Section 162(m). Each applicable performance goal may be structured at the time of the award to provide for appropriate adjustments or exclusions for one or more items, including: (a) asset impairments or write-downs; (b) litigation or governmental investigation expenses and judgments, verdicts and settlements in connection therewith; (c) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; (d) accruals for reorganization and restructuring programs; (e) costs and expenses incurred in connection with actual or potential business combinations, mergers, acquisitions, dispositions, spin-offs, financing transactions, and other strategic transactions; (f) costs and expenses incurred in connection with the relocation of the principal offices of us or any parent or subsidiary; (g) any unusual, infrequent, extraordinary or nonrecurring items; (h) bonus or incentive compensation costs and expenses associated with cash-based awards made under the Amended Plan or other bonus or incentive compensation plans of us or any parent or subsidiary; (i) items of income, gain, loss or expense attributable to the operations of any business acquired by us or any parent or subsidiary; (j) items of income, gain, loss or expense attributable to one or more business operations divested by us or any parent or subsidiary or the gain or loss realized upon the sale of any such business or assets thereof; and (k) the impact of foreign currency fluctuations or changes in exchange rates. However, no such adjustment will be made in the case of an award intended to constitute "qualified performance-based compensation" under Section 162(m) if it would result in the loss of the otherwise available exemption under Section 162(m). Awards subject to performance goals may be either intended to qualify as "qualified performance-based compensation" or not intended to so qualify.

        Other Features.     The Amended Plan also provides that, except with respect to converted, assumed or substituted awards as described in the Amended Plan, no stock options or SARs will be granted with an exercise or base price less than the fair market value of our common stock on the date of grant.

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Summary of the Other Provisions of the Amended Plan

General

        Eligibility.     Employees, as well as consultants and other independent advisors (provided that such individuals satisfy the Form S-8 definition of an "employee"), in our employ or service or in the employ or service of our parent or subsidiary companies (whether now existing or subsequently established) are eligible to participate in the Amended Plan. Our non-employee directors (or directors of any parent or subsidiary company) are also eligible to participate in the Amended Plan. As of April 11, 2017, there were approximately 142 employees, 10 non-employee directors and no consultants expected to participate in the Amended Plan.

        Securities Subject to the Amended Plan.     Subject to adjustment as described in the Amended Plan, the number of shares of common stock available for awards of

        1)    stock options or SARs,

        2)    restricted stock,

        3)    restricted stock units,

        4)    performance shares or performance units,

        5)    common stock, or

        6)    dividend equivalents,

will not exceed in the aggregate 7,800,000 shares of common stock (consisting of 1,601,518 shares of common stock originally available under the Amended Plan, plus up to 3,598,482 shares approved in 2015, plus 2,600,000 shares anticipated to be approved in 2017), plus any shares of common stock granted at any time under the Amended Plan (or predecessor versions thereof) that again become available under the Amended Plan after December 31, 2016 as a result of forfeiture, cancellation, expiration, or cash settlement of awards or in satisfaction of certain tax withholding obligations as further described above under "Other Amended Plan Highlights." Shares of common stock issued or transferred under the Amended Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

        The aggregate number of shares of common stock available for issuance or transfer under the Amended Plan described above will be further reduced by (1) one share of common stock for every one share of common stock subject to a stock option or SAR granted on or after the date on which the FTD Companies, Inc. 2013 Incentive Compensation Plan was approved by our stockholders in 2013 (the "Plan Effective Date") and (2) 2.3 shares of common stock for every one share of common stock subject to an award other than a stock option or SAR granted on or after the Plan Effective Date, but prior to the Plan Restatement Date, and (3) one share of common stock for every one share of common stock subject to an award other than a stock option or stock appreciation right granted on or after the Plan Restatement Date. Any shares of common stock that again become available under the Amended Plan will, except as otherwise provided in the Amended Plan, be added back in the same manner such shares were originally counted against the applicable aggregate number of shares of common stock available for issuance.

        ISO Limitation.     The maximum number of shares of common stock which may be issued under the Amended Plan pursuant to stock options intended to qualify as ISOs may not exceed 7,800,000 shares in the aggregate, subject to adjustment as provided for in the Amended Plan.

        Per Person Limits.     Each person participating in the Amended Plan will be subject to the following limitations (each of which limitation will be multiplied by two for participants in the Amended Plan for

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the year in which their service to us commences and will be subject to adjustment from time to time as described in the Amended Plan):

•

for certain awards denominated in terms of shares of common stock (whether payable in common stock, cash or a combination of both) that are intended to constitute "qualified performance-based compensation" under Section 162(m), or options or stock appreciation rights, the maximum number of shares of common stock for which such awards intended to constitute "qualified performance-based compensation" under Section 162(m), or options or stock appreciation rights, may be granted to such person in any calendar year may not exceed in the aggregate 1,500,000 shares of common stock under the discretionary grant program and an additional 1,500,000 shares of common stock in the aggregate under each of the stock issuance and incentive bonus programs;



•

with respect to any individual who is a non-employee director of ours, the aggregate maximum value at the grant date for which awards may be granted to such individual in any calendar year (calculating the value of any such awards based on the grant date fair value for financial reporting purposes), taken together with any cash fees payable to such non-employee director for such calendar year, may not exceed $750,000; and



•

for awards denominated in cash (whether payable in cash, common stock or a combination of both) and subject to one or more performance-vesting conditions that are intended to constitute "qualified performance-based compensation" under Section 162(m), the maximum dollar amount for which such awards may be granted in the aggregate to such person in any calendar year may not exceed $5,000,000.

Discretionary Grant Program

        Under the discretionary grant program, eligible persons may be granted stock options to purchase shares of our common stock or SARs tied to the value of our common stock. The plan administrator has complete discretion to determine which eligible individuals are to receive stock option grants or SARs, the time or times when those stock options or SARs are to be granted, the number of shares subject to each such grant, the time or times when the award is to become exercisable, the vesting schedule (if any) to be in effect for the grant, the maximum term for which the granted stock option or SAR is to remain outstanding (not to exceed ten years) and the status of any granted stock option as either an ISO or a non-statutory stock option under the federal tax laws.

        The plan administrator has the discretionary authority to structure one or more awards under the discretionary grant program so that those awards will vest and become exercisable only after the achievement of pre-established corporate performance objectives based on one or more performance goals and measured over the performance period specified by the plan administrator at the time of the award.

        Stock Options.     Each stock option will be evidenced by one or more documents in the form approved by the plan administrator, subject to the terms of the Amended Plan. Each granted stock option will have an exercise price per share determined by the plan administrator, but the exercise price may not be less than one hundred percent of the fair market value of the stock option shares on the grant date, except with respect to converted, assumed or substituted awards as described in the Amended Plan. No granted stock option may have a term in excess of ten years. Each stock option generally vests and becomes exercisable for the underlying shares in one or more installments over a specified period of service measured from the grant date.

33

        The exercise price for a stock option will become immediately due upon exercise of the stock option. Such exercise price will, subject to the terms of the applicable award agreement, be payable in one or more of the following forms:

•

cash or check made payable to us;



•

shares of our common stock (whether delivered in the form of actual stock certificates or through attestation of ownership) held for the requisite period (if any) necessary to avoid any resulting charge to our earnings for financial reporting purposes and valued at fair market value on the date of exercise;



•

shares of our common stock otherwise issuable under the stock option but withheld by us in satisfaction of the exercise price, with such withheld shares to be valued at fair market value on the date of exercise (i.e., net option exercise); and



•

to the extent both permitted by law and the stock option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the optionee will concurrently provide instructions to (a) a brokerage firm (reasonably satisfactory to us for purposes of administering such procedure in compliance with our pre-clearance/pre-notification policies) to effect the immediate sale of the purchased shares and remit to us, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable income and employment taxes required to be withheld by us by reason of such exercise and (b) us to deliver the certificates for the purchased shares directly to such brokerage firm (or provide for book entry transfer of such purchased shares) on such settlement date in order to complete the sale.

        Except to the extent the sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the date of exercise.

        Stock options may be granted as non-statutory stock options or as stock options intending to qualify as ISOs. Stock option awards that are intended to constitute ISOs are subject to additional terms and conditions as further described in the Amended Plan.

        SARs.     The Amended Plan allows the issuance of two types of SARs under the discretionary grant program:

•

Tandem SARs granted in conjunction with stock options, which provide the holders with the right to surrender the related stock option for an appreciation distribution from us in an amount equal to the excess of (1) the fair market value of the vested shares of common stock subject to the surrendered stock option over (2) the aggregate exercise price payable for those shares; and



•

Stand-alone SARs, which allow the holders to exercise those rights as to a specific number of shares of our common stock determined by the plan administrator upon such terms and conditions as the plan administrator may establish, and receive in exchange an appreciation distribution from us in an amount equal to the excess of (1) the fair market value of the shares of common stock as to which those rights are exercised over (2) the aggregate base price in effect for those shares. The base price per share (except with respect to converted, assumed or substituted awards as described in the Amended Plan) may not be less than the fair market value per share of our common stock on the date the stand-alone SAR is granted, and the SAR may not have a term in excess of ten years.

        Tandem SARs may be granted at any time prior to the exercise or termination of the related stock option. However, a tandem SAR awarded in relation to an ISO must be granted concurrently with such ISO. The appreciation distribution on any exercised tandem or stand-alone SAR may be paid in (1) cash, (2) shares of our common stock or (3) a combination of cash and shares of our common stock. Upon cessation of service with us, the holder of a SAR will have a period of time specified by

34

the plan administrator in which to exercise such right to the extent exercisable at that time. The plan administrator has complete discretion to extend the period following the holder's cessation of service during which his or her outstanding SARs may be exercised, provide for continued vesting during the applicable post-service exercise period and/or to accelerate the exercisability or vesting of those SARs in whole or in part. Such discretion may be exercised at any time while the SAR remains outstanding.

        Cessation of Service.     Except as otherwise provided in an award agreement, the Amended Plan includes certain provisions that govern the exercise of stock options or SARs that are outstanding as of a participant's cessation of service. Any option or SAR outstanding at the time of the participant's cessation of service for any reason will remain exercisable for such period of time thereafter as determined by the plan administrator and set forth in the documents evidencing the stock option or SAR (which we refer to as the post-service exercise period). However, no such stock option or SAR will be exercisable after the expiration of the original term. Any stock option or SAR held by the participant at the time of the participant's death and exercisable in whole or in part at that time may be subsequently exercised by the personal representative of the participant's estate or by the person or persons to whom the option is transferred pursuant to the participant's will or the laws of inheritance or by the participant's designated beneficiary or beneficiaries of that stock option or SAR. If the participant's service is terminated for cause, or if the participant otherwise engages in conduct constituting grounds for a termination for cause, while holding one or more outstanding stock options or SARs granted under the Amended Plan, then all of those stock options or SARs will terminate immediately and cease to be outstanding. During the applicable post-service exercise period, the stock option or SAR may not be exercised for more than the number of shares that are vested and exercisable. However, one or more stock options or SARs under the discretionary grant program may be structured so that those stock options or SARs will continue to vest in whole or part during the applicable post-service exercise period. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the stock option or SAR term, the stock option or SAR will terminate and cease to be outstanding for any shares for which the stock option or SAR has not been exercised.

        The plan administrator has complete discretion to:

1)

extend the period following the participant's cessation of service during which his or her outstanding stock options or SARs may be exercised (but the period may not extend longer than the original term of the stock option or SAR);



2)

include automatic exercise provisions;



3)

include an automatic extension provision under which the specified post-service exercise period in effect for any stock option or SAR granted under the discretionary grant program will automatically be extended by an additional period of time to account for periods during which the exercise of that stock option or SAR or the immediate sale of the shares acquired under such stock option or SAR could not be effected in compliance with applicable federal and state securities laws (but such an extension may not result in the continuation of such stock option beyond the expiration date of the term of that stock option or SAR);



4)

continue or modify the vesting terms of a stock option or SAR, including to accelerate or waive vesting or provide for continued vesting, of all or a portion of a stock option; and/or



5)

accelerate the exercisability or vesting of such stock options or SARs in whole or in part.

Such discretion may be exercised at any time while the stock options or SARs remain outstanding.

        Repurchase Rights.     The plan administrator has the discretion to grant stock options that are exercisable for unvested shares of common stock. Should the optionee cease service while such shares are unvested, we will have the right, subject to the restrictions described below under "Repricing/Cash-Out Prohibition," to repurchase any or all of those unvested shares at a price per share equal to

35

the lower of (1) the exercise price paid per share or (2) the fair market value per share of common stock at the time of repurchase. The terms upon which such repurchase right will be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) will be established by the plan administrator.

        Repricing/Cash-Out Prohibition.     Except in connection with certain corporate transactions or events as described in the Amended Plan, the plan administrator may not implement any of the following repricing/cash-out programs without obtaining stockholder approval: (1) the cancellation of outstanding stock options or SARs in return for new stock options or SARs with a lower exercise price per share, (2) the cancellation of outstanding stock options or SARs with exercise prices per share in excess of the then current fair market value per share of our common stock for consideration payable in cash, equity securities or in the form of any other award under the Amended Plan, or (3) the direct reduction of the exercise price in effect for outstanding stock options or SARs. These restrictions are intended to prohibit the repricing of "underwater" stock options and SARs without stockholder approval, but they will not be construed to prohibit adjustments of awards in connection with certain corporate transactions or events as described under the Amended Plan.

        Change in Control.     The following provisions apply to the stock options and stock appreciation rights in the event of a change in control, unless otherwise provided in an award agreement or as otherwise expressly determined by the plan administrator at or after the time of grant. In the event of a change in control, the plan administrator may provide for any one or more of the following actions with respect to outstanding stock options or stock appreciation rights, including as contingent upon the closing or completion of the change in control transaction: (1) the continuation, acceleration or extension of time periods for purposes of exercising, vesting in, or realizing gain from such stock options or stock appreciation rights; (2) the waiver or modification of performance or other conditions related to the payment or other rights under the stock option or stock appreciation right; (3) the cancellation of the stock option or stock appreciation right for a payment, in such form as may be determined by the Compensation Committee, equal to the excess, if any, of the value of the property the holder would have received upon the exercise of the stock option or stock appreciation right immediately prior to the effective time of the change in control, over any exercise price or base price payable in connection with such exercise; or (4) such other modification or adjustment to the stock option or stock appreciation right as the plan administrator deems appropriate to maintain and protect the rights and interests of holders of such awards upon or following the change in control. The plan administrator need not take the same action or actions with respect to all stock options or stock appreciation rights, or portions thereof, with respect to all participants. Further, the plan administrator may take different actions with respect to the vested and unvested portions of stock options and stock appreciation rights.

Stock Issuance Program

        Shares may be issued or transferred (referred to as issued in this section) under the stock issuance program, either as vested or unvested shares, through direct and immediate issuances. Each such stock issuance will be evidenced by a stock issuance agreement that complies with the applicable terms of the Amended Plan. Shares of common stock may also be issued under the stock issuance program pursuant to performance shares or restricted stock units that entitle participants to receive the shares underlying such awards (or cash) upon the attainment of designated performance goals or the satisfaction of the specified service requirements, or upon the expiration of a designated time period following the vesting of such awards.

        The plan administrator has complete discretion under the program to determine which eligible individuals are to receive awards under the stock issuance program, the time or times when those awards are to be made, the number of shares subject to each such award, the vesting schedule to be in effect for the award, the issuance or transfer schedule for the shares which vest under the award, the

36

cash consideration (if any) payable per share, the performance objectives (if any) for each such award and the form (cash or shares of common stock) in which the award is to be settled.

        Shares of common stock may be issued under the stock issuance program for any of the following items of consideration which the plan administrator deems appropriate in each individual instance:

•

cash or check made payable to us;



•

past services rendered to us (or any parent or subsidiary); or



•

any other valid consideration under the State in which we are then incorporated.

        However, if the consideration for the shares will be paid in the form of a cash purchase price, then the cash consideration payable per share will not be less than 100% of the fair market value per share of common stock on the date of issuance.

        Shares of common stock issued under the stock issuance program may, in the discretion of the plan administrator, be fully and immediately vested upon issuance as a bonus for service rendered or may vest in one or more installments over or after the participant's period of service or upon the attainment of specified performance objectives. The elements of the vesting schedule applicable to any unvested shares of common stock issued under the stock issuance program will be determined by the plan administrator and incorporated into the stock issuance agreement. Shares of common stock may also be issued under the stock issuance program pursuant to performance shares or restricted stock units which entitle the recipients to receive the shares underlying those awards or cash upon the attainment of designated performance goals or the satisfaction of specified service requirements or upon the expiration of a designated time period following the vesting of those awards, including (without limitation) a deferred distribution date following the termination of the participant's service.

        Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which the participant may have the right to receive with respect to the participant's unvested shares of common stock by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares, spin-off transaction, extraordinary dividend or distribution or other change affecting the outstanding common stock as a class without our receipt of consideration will be issued subject to (1) the same vesting requirements applicable to the participant's unvested shares of common stock and (2) such escrow arrangements as the plan administrator deems appropriate. Equitable adjustments to reflect each such transaction will also be made by the plan administrator to the repurchase price payable per share by us for any unvested securities subject to our existing repurchase rights under the Amended Plan. However, the aggregate repurchase price will in each instance remain the same.

        If the participant ceases to remain in service while holding one or more unvested shares of common stock issued under the stock issuance program, or if the performance objectives are not attained with respect to one or more such unvested shares of common stock, then those shares will be immediately surrendered to us for cancellation, and the participant will have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the participant for consideration paid in cash or cash equivalents, we will repay to the participant the lower of (1) the cash consideration paid for the surrendered shares or (2) the fair market value of those shares at the time of cancellation.

        The plan administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of common stock which would otherwise occur upon the cessation of the participant's service or the non-attainment of the performance objectives applicable to those shares. However, no vesting requirements tied to the attainment of performance objectives may be waived with respect to awards intended to constitute "qualified performance-based compensation" under Section 162(m) except in the event of the participant's cessation of service by reason of death or "permanent disability"

37

(as defined in the Amended Plan or the applicable award agreement) or in connection with a change in control as described in the Amended Plan.

        Performance-Based Awards.     The plan administrator will have the discretionary authority, consistent with Section 162(m), to structure one or more awards under the stock issuance program that are intended to constitute "qualified performance-based compensation" under Section 162(m) so that the shares of common stock subject to those awards will vest (or vest and become issuable) upon the achievement of pre-established corporate performance objectives based on one or more performance goals described above under "Section 162(m)" and measured over the performance period specified by the plan administrator at the time of the award.

        Outstanding awards of performance shares or restricted stock units under the stock issuance program will automatically terminate, and no shares of our common stock will actually be issued in satisfaction of those awards, if the performance goals or service requirements established for such awards are not attained. However, the plan administrator has the discretionary authority to issue vested shares of our common stock or cash in satisfaction of one or more outstanding awards of performance shares or restricted stock units as to which the designated performance goals or service requirements are not attained. In no event, however, will any vesting requirements tied to the attainment of performance objectives be waived with respect to awards intended to qualify as "qualified performance-based compensation" under Section 162(m), except in the event of the participant's death or permanent disability or in connection with a change in control of us, as described below.

        With respect to performance shares awarded under the Amended Plan, at the end of the performance period, the plan administrator must determine the actual level of attainment for each performance objective and the extent to which the performance shares awarded for that period are to vest and become payable based on the attained performance levels. The performance shares which so vest will be paid as soon as practicable following the end of the performance period, unless such payment is to be deferred for the period specified by the plan administrator at the time the performance shares are awarded or the period selected by the participant in accordance with the applicable requirements of Section 409A of the Code. Performance shares may be paid in cash or shares of our common stock, or a combination of the two, as set forth in the applicable award agreement. Performance shares may also be structured so that the shares are convertible into shares of our common stock, but the rate at which each performance share is to so convert will be based on the attained level of performance for each applicable performance objective.

        Change in Control.     The following provisions apply to awards outstanding under the stock issuance program in the event of a change in control, unless otherwise provided in an award agreement or as otherwise expressly determined by the plan administrator at or after the time of grant. In the event of a change in control, the plan administrator may provide for any one or more of the following actions with respect to outstanding awards under the stock issuance program, including as contingent upon the closing or completion of the change in control transaction: (1) the continuation, acceleration or extension of time periods for purposes of exercising, vesting in, or realizing gain from such awards; (2) the waiver or modification of performance or other conditions related to the payment or other rights under the awards; (3) the cash settlement of the awards for an equivalent cash value, as determined by the plan administrator; or (4) such other modification or adjustment to awards as the plan administrator deems appropriate to maintain and protect the rights and interests of holders of such awards upon or following the change in control. The plan administrator need not take the same action or actions with respect to all awards, or portions thereof, with respect to all participants. Further, the plan administrator may take different actions with respect to the vested and unvested portions of awards. The plan administrator's authority to take the foregoing actions also extends to any awards intended to constitute "qualified performance-based compensation" under Section 162(m), except where such action would result in the loss of the otherwise available exemption of the award under Section 162(m).

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Incentive Bonus Program

        Cash bonus awards, performance unit awards and dividend equivalent rights may be awarded under the incentive bonus program. The plan administrator has complete discretion under the program to determine which eligible individuals are to receive such awards under the program, the time or times when those awards are to be made, the performance objectives for each such award, the amount payable at one or more designated levels of attained performance, any applicable service vesting requirements, the payout schedule for each such award and the method by which the award is to be settled (cash or shares of our common stock).

        Cash Bonus Awards.     Cash bonus awards vest in one or more installments over or after the participant's continued service with us or upon the attainment of specified performance goals. Each cash bonus award will be evidenced by one or more documents in the form approved by the plan administrator, subject to the terms of the Amended Plan. The elements of the vesting schedule applicable to each cash bonus award will be determined by the plan administrator and incorporated into the applicable award agreement. The plan administrator will also have the discretionary authority, consistent with Section 162(m), to structure one or more cash bonus awards intended to qualify as "qualified performance-based compensation" so that those awards will vest upon the achievement of pre-established corporate performance objectives based upon one or more performance goals described above under "Section 162(m)" measured over the performance period specified by the plan administrator at the time of the award.

        Outstanding cash bonus awards will automatically terminate, and no cash payment or other consideration will be due the holders of those awards, if the performance goals or service requirements established for those awards are not attained or satisfied. The plan administrator may in its discretion waive the cancellation and termination of one or more unvested cash bonus awards which would otherwise occur upon the cessation of the participant's service or the non-attainment of the performance objectives applicable to those awards. However, no vesting requirements tied to the attainment of performance goals may be waived with respect to awards intended to qualify as "qualified performance-based compensation" under Section 162(m), except in the event of the participant's cessation of service by reason of death or permanent disability or in connection with a change in control of us, as further described in the Amended Plan.

        Cash bonus awards which become due and payable following the attainment of the applicable performance goals or satisfaction of the applicable service requirement (or the waiver of such goals or service requirement) may be paid in (1) cash, (2) shares of common stock valued at fair market value on the payment date or (3) a combination of cash and shares of common stock, as set forth in the applicable award agreement.

        Performance Units.     Performance unit awards will be evidenced by one or more documents in the form approved by the plan administrator, subject to the terms of the Amended Plan. Performance unit awards are subject to the following parameters:

•

A performance unit represents either (1) a unit with a dollar value tied to the level at which pre-established corporate performance objectives based on one or more performance goals are attained or (2) a participating interest in a special bonus pool tied to the attainment of pre-established corporate performance objectives based on one or more performance goals. The amount of the bonus pool may vary with the level at which the applicable performance objectives are attained, and the value of each performance unit which becomes due and payable upon the attained level of performance will be determined by dividing the amount of the resulting bonus pool (if any) by the total number of performance units issued and outstanding at the completion of the applicable performance period.

39

•

Performance units may also be structured to include a service-vesting requirement which the participant must satisfy following the completion of the performance period in order to vest in the performance units awarded with respect to that performance period.



•

Performance units which become due and payable following the attainment of the applicable performance objectives and the satisfaction of any applicable service-vesting requirement may be paid in cash or shares of our common stock valued at fair market value on the payment date, or a combination of shares of common stock and cash, as set forth in the applicable award agreement.

        Dividend Equivalent Rights.     Dividend equivalent awards will be evidenced by one or more documents in the form approved by the plan administrator, subject to the terms of the Amended Plan. Dividend equivalent rights may be issued as stand-alone awards or in tandem with other awards made under the Amended Plan, other than stock options and SARs. Each dividend equivalent right award represents the right to receive the economic equivalent of each dividend or distribution, whether paid in cash, securities or other property (other than shares of our common stock) which is made per issued and outstanding share of our common stock during the term the dividend equivalent right remains outstanding. Payment of the amounts attributable to such dividend equivalent rights may be made in cash or shares of our common stock, or a combination of shares of common stock and cash, as set forth in the applicable award agreement, either concurrently with the actual dividend or distribution made per issued and outstanding share of our common stock, or subject to a specified vesting schedule or a deferred payment date. However, any amounts attributable to dividend equivalent rights relating to an award subject to performance-vesting requirements will not vest or become payable prior to the vesting of that award (or the portion of that award to which the dividend equivalent right relates) upon the attainment of the applicable performance goals and will, accordingly, be subject to cancellation and forfeiture to the same extent as the underlying award in the event the performance goals are not attained. The term of each dividend equivalent award will be established by the plan administrator at the time of grant, but no dividend equivalent award will have a term in excess of 10 years.

        The plan administrator also has the discretionary authority, consistent with Section 162(m), to structure one or more dividend equivalent right awards intended to qualify as "qualified performance-based compensation" so that those awards vest only upon the achievement of certain pre-established corporate performance objectives based on one or more of the performance goals described above under "Section 162(m)" specified by the plan administrator at the time of the award.

        Change in Control.     The following provisions apply to awards outstanding under the incentive bonus program in the event of a change in control, unless otherwise provided in an award agreement or as otherwise expressly determined by the plan administrator at or after the time of grant. In the event of a change in control, the plan administrator may provide for any one or more of the following actions with respect to outstanding awards under the incentive bonus program, including as contingent upon the closing or completion of the change in control transaction: (1) the continuation, acceleration or extension of time periods for purposes of exercising, vesting in, or realizing gain from such awards; (2) the waiver or modification of performance or other conditions related to the payment or other rights under the awards; (3) the cash settlement of the awards for an equivalent cash value, as determined by the plan administrator; or (4) such other modification or adjustment to awards as the plan administrator deems appropriate to maintain and protect the rights and interests of holders of such awards upon or following the change in control. The plan administrator need not take the same action or actions with respect to all awards, or portions thereof, with respect to all participants. Further, the plan administrator may take different actions with respect to the vested and unvested portions of awards. The plan administrator's authority to take the foregoing actions also extends to any awards intended to constitute "qualified performance-based compensation" under Section 162(m), except where such action would result in the loss of the otherwise available exemption of the award under Section 162(m).

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General Provisions

        Adjustments.     In the event of any merger, reorganization, consolidation, stock split, reverse stock split, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), recapitalization, combination of shares, exchange of shares, spin-off transaction, or other change affecting the common stock or the value thereof (including, without limitation, a change in control transaction), or any other corporate transaction or event having an effect similar to any of the foregoing, equitable adjustments will be made by the plan administrator to the Amended Plan and to awards in such manner as the plan administrator deems equitable or appropriate taking into consideration the accounting and tax consequences, including such adjustments in (1) the maximum number and/or class of securities issuable under the Amended Plan (but only if and to the extent that such adjustment would not cause an ISO to fail to qualify as an ISO), (2) the per-person share and cash limits specified under the Amended Plan, (3) the maximum number and/or class of securities for which any one person may be granted common stock-denominated awards under the discretionary grant program or under the stock issuance and incentive bonus programs per calendar year, (4) the number and/or class of securities and the exercise or base price per share in effect under each outstanding award under the discretionary grant program (including, if the plan administrator deems appropriate, the substitution of similar stock options to purchase the shares of, or other awards denominated in the shares of, another company), (5) the number and/or class of securities subject to each outstanding award under the stock issuance program and the cash consideration (if any) payable per share, (6) the number and/or class of securities subject to each outstanding award under the incentive bonus program denominated in shares of common stock and (7) the number and/or class of securities subject to our outstanding repurchase rights under the Amended Plan and the repurchase price payable per share. Any such adjustments will be final, binding and conclusive.

        In addition, for each stock option or SAR with purchase or exercise price greater than the consideration offered in connection with any such transaction or event or change in control transaction, the plan administrator may in its discretion elect to cancel such stock option or SAR without any payment to the person holding such stock option or SAR. Moreover, in the event of any such transaction or event, the Compensation Committee may provide in substitution for any or all outstanding Awards under the Plan such alternative consideration (including cash), if any, as it, in good faith, determines to be equitable in the circumstances and will require in connection with such substitution the surrender of all awards so replaced in a manner that complies with Section 409A of the Code.

        Valuation.     The fair market value per share of our common stock on any relevant date under the Amended Plan will be deemed to be equal to the closing selling price per share at the close of regular trading hours on such date on the national stock exchange serving as the primary market for our common stock at that time (or if there is no closing selling price on the date in question, then the fair market value will be the closing selling price on the last preceding date for which such quotation exists).

        Stockholder Rights and Transferability.     No holder of a stock option has any stockholder rights with respect to the stock option shares until such option holder has exercised the stock option, paid the exercise price and become the holder of record of the purchased shares, and will have no rights to dividends or dividend equivalents with respect to the stock option. The holder of a SAR does not have any stockholder rights with respect to the shares subject to that SAR unless and until such person exercises the SAR and becomes the holder of record of the shares of our common stock issued upon such exercise, and will have no rights to dividends or dividend equivalents with respect to the SAR. Stock options are not assignable or transferable other than by will or the laws of inheritance following the optionee's death, and during the optionee's lifetime, the stock option may only be exercised by the optionee. However, the plan administrator may structure one or more non-statutory stock options under the Amended Plan so that those stock options will be transferable during optionee's lifetime by a

41

gratuitous transfer to one or more members of the optionee's family or to a trust established for the optionee and/or one or more such family members or to a member of the optionee's family pursuant to a domestic relations order. The transferred portion of such non-statutory stock option may only be exercised by the person or persons who acquire a proprietary interest in the stock option pursuant to the transfer. The holder of an option may designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under the discretionary grant program (whether ISOs or non-statutory options), and those stock options will, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the optionee's death while holding those stock options.

        Stand-alone SARs, unvested shares of common stock, performance shares, restricted stock units, cash awards, performance units and stand-alone dividend equivalent rights are subject to the same transferability restrictions and beneficiary designation rights applicable to non-statutory stock options.

        A participant has full stockholder rights with respect to any shares of our common stock issued to him or her under the stock issuance program, whether or not those shares are vested. Accordingly, the participant will have the right to vote such shares and to receive any dividends paid on such shares, subject to any applicable vesting requirements. A participant does not have any stockholder rights with respect to the shares of our common stock subject to a performance share or restricted stock unit award until that award vests and the underlying shares of common stock (if any) are actually issued. However, dividend equivalent rights may be paid or credited, either in cash or in actual or phantom shares of common stock, on outstanding performance share or restricted stock unit awards, subject to such terms and conditions as the plan administrator may deem appropriate. In no event, however, will any dividends or dividend equivalent rights relating to awards subject to performance-vesting conditions vest or otherwise become payable prior to the time the underlying award (or the portion of such award to which such dividend or dividend equivalents relate) vests and will accordingly be subject to cancellation and forfeiture to the same extent as the underlying award in the event those performance conditions are not attained.

        Withholding Taxes.     Our obligation to deliver shares of common stock upon the exercise, issuance or vesting of an award under the Amended Plan is subject to the satisfaction of all applicable income and employment tax withholding requirements. The plan administrator may structure one or more awards so that shares of our common stock may be used as follows to satisfy all or part of the withholding taxes to which such holders of those awards may become subject in connection with the issuance, exercise, vesting or settlement of those awards:

•

We may be given the right to withhold, from the shares of common stock otherwise issuable upon the issuance, exercise, vesting or settlement of such an award, a portion of those shares with an aggregate fair market value equal to the applicable withholding taxes. The number of shares of common stock which may be so withheld will be limited to the number of shares which have a fair market value on the date of withholding no greater than the aggregate amount of such liabilities based on the maximum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that could be applicable to such supplemental taxable income (or such other rate that will not cause an adverse accounting consequence or cost).



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The holder of the award may be given the right to deliver to us, at the time of the issuance, exercise, vesting or settlement of such award, one or more shares of our common stock previously acquired by such individual with an aggregate fair market value at the time of delivery equal to all or a portion of the required withholding taxes (not to exceed 100% of the required withholding taxes). The shares of common stock so delivered will not reduce the number of shares of common stock authorized for issuance under the Amended Plan.

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        Deferral Programs.     One or more of the following deferral programs may be implemented under the Amended Plan:

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The plan administrator may structure one or more awards under the stock issuance or incentive bonus programs so that the participants may be provided with an election to defer the compensation associated with those awards for federal income tax purposes, subject to Section 409A of the Code.



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The plan administrator may implement a non-employee director retainer fee deferral program that allows our non-employee directors the opportunity to elect, prior to the start of each calendar year, to convert the Board and Board committee retainer fees to be earned for such year into restricted stock units under the stock issuance program that defer the issuance of the shares of common stock that vest under those restricted stock units until a permissible date or event under Section 409A of the Code. If such a program is established, the plan administrator will have the authority to establish such rules and procedures as it deems appropriate for the filing of such deferral elections and the designation of the permissible distribution events under Section 409A of the Code.



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To the extent we maintain one or more separate non-qualified deferred compensation arrangements which allow the participants the opportunity to make notional investments of their deferred account balances in shares of our common stock, the plan administrator may authorize the share reserve under the Amended Plan to serve as the source of any shares of common stock that become payable under those deferred compensation arrangements. In such event, after the Plan Restatement Date, the share reserve under the Amended Plan will be reduced by one share of common stock for each share of common stock issued under the Amended Plan in settlement of the deferred compensation owed under those separate arrangements.

        Amendment and Termination.     Our Board will have the complete and exclusive power and authority to amend or modify the Amended Plan in all respects. However, stockholder approval will be required for any amendment which would (1) materially increase the number of shares of common stock authorized for issuance under the Amended Plan (other than in connection with certain corporate transactions or events as described in the Amended Plan), (2) materially increase the benefits accruing to participants, (3) materially expand the class of individuals eligible to participate in the Amended Plan, (4) expand the types of awards which may be made under the Amended Plan or extend the term of the Amended Plan, (5) reduce or limit the scope of the prohibition on repricing programs set forth in the Amended Plan or otherwise eliminate such prohibition or (6) effect any other change or modification for which stockholder approval is required under applicable law or regulation or pursuant to the listing standards of the stock exchange on which our common stock is at the time primarily traded. However, no such amendment or modification will materially adversely affect the rights and obligations with respect to awards at the time outstanding under the Amended Plan unless the participant consents to such amendment or modification.

        Subject to the prohibition on the repricing of stock options and SARs described above, the Compensation Committee may amend the terms of any award granted under the Amended Plan prospectively or retroactively, except in the case of an award intended to qualify as "qualified performance-based compensation" under Section 162(m) (other than in connection with the participant's death or disability, or a change in control) where such action would result in the loss of the otherwise available exemption of the award under Section 162(m). Subject to adjustments permitted under the Amended Plan, no such amendment will impair the rights of any participant without his or her consent.

        Awards may be made under the Amended Plan that involve shares of common stock in excess of the number of shares then available for issuance under the Amended Plan, provided no shares will actually be issued pursuant to those awards until the number of shares of common stock available for

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issuance under the Amended Plan is sufficiently increased by stockholder approval of an amendment of the Amended Plan authorizing such increase. If such stockholder approval is not obtained within 12 months after the date the first excess award is made, then all awards granted on the basis of such excess shares will terminate and cease to be outstanding.

        The Board may in its discretion terminate the Amended Plan at any time. Termination of the Amended Plan will not affect the rights of participants or their successors under any awards outstanding under the Amended Plan and not exercised in full on the date of termination.

        Effective Date and Duration.     The Amended Plan will become effective on the Plan Restatement Date (i.e., the date that the Amended Plan is approved by our stockholders). Awards may be granted under the Amended Plan at any time and from time to time prior to the tenth anniversary of the Plan Restatement Date, on which date the Amended Plan will expire except with respect to awards then outstanding under the Amended Plan. However, no Incentive Option may be granted under the Amended Plan after the tenth anniversary of the date on which the Amended Plan was approved and adopted by the Board. Such outstanding awards will remain in effect until they have been exercised or terminated, or have expired.

Federal Income Tax Consequences

        The following is a brief summary of certain of the Federal income tax consequences of certain transactions under the Amended Plan based on Federal income tax laws in effect. This summary, which is presented for the information of stockholders considering how to vote on this Proposal Three and not for Amended Plan participants, is not intended to be complete and does not describe Federal taxes other than income taxes (such as Medicare and Social Security taxes), or state, local or foreign tax consequences.

Tax Consequences to Participants

        Non-Qualified Stock Options.     In general,

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no income will be recognized by an optionee at the time a non-qualified stock option is granted;



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at the time of exercise of a non-qualified stock option, ordinary income will be recognized by the optionee in an amount equal to the difference between the option price paid for the shares and the fair market value of the shares, if unrestricted, on the date of exercise; and



•

at the time of sale of shares acquired pursuant to the exercise of a non-qualified stock option, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held.

        Incentive Stock Options.     No income generally will be recognized by an optionee upon the grant or exercise of an ISO. The exercise of an ISO, however, may result in alternative minimum tax liability. If shares of common stock are issued to the optionee pursuant to the exercise of an ISO, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to the optionee, then upon sale of such shares, any amount realized in excess of the option price will be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss.

        If shares of common stock acquired upon the exercise of an ISO are disposed of prior to the expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the exercise price paid for such shares. Any further gain (or loss) realized by

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the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.

        SARs.     No income will be recognized by a participant in connection with the grant of a tandem SAR or a stand-alone SAR. When the SAR is exercised, the participant normally will be required to include as taxable ordinary income in the year of exercise an amount equal to the amount of cash received and the fair market value of any unrestricted shares of common stock received on the exercise.

        Restricted Stock.     The recipient of restricted stock generally will be subject to tax at ordinary income rates on the fair market value of the restricted stock (reduced by any amount paid by the recipient for such restricted stock) at such time as the restricted stock is no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code ("Restrictions"). However, a recipient who so elects under Section 83(b) of the Code within 30 days of the date of transfer of the stock will have taxable ordinary income on the date of transfer of the stock equal to the excess of the fair market value of such stock (determined without regard to the Restrictions) over the purchase price, if any, of such restricted stock. If a Section 83(b) election has not been timely made, any dividends received with respect to restricted stock that are subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to the recipient.

        Restricted Stock Units.     No income generally will be recognized upon the award of restricted stock units. The recipient of a restricted stock unit award generally will be subject to tax at ordinary income rates on the fair market value of unrestricted common stock on the date that such stock is transferred to the participant under the award (reduced by any amount paid by the participant for such restricted stock units), and the capital gains/loss holding period for such stock will also commence on such date.

        Performance Shares and Performance Units.     No income generally will be recognized upon the grant of performance shares or performance units. Upon payment in respect of the earn-out of performance shares or performance units, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any nonrestricted common stock received.

Tax Consequences to Us or Our Subsidiaries

        To the extent that a participant recognizes ordinary income in the circumstances described above, we or the subsidiary for which the participant performs services will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an "excess parachute payment" within the meaning of Section 280G of the Code and is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m). In this regard, certain types of awards under the Amended Plan, such as time-vested restricted stock and restricted stock units, cannot qualify as performance-based awards under Section 162(m), and in other cases awards may fail to qualify if all requirements for qualification are not met in connection with such awards.

Registration with the SEC

        We intend to file a Registration Statement on Form S-8 relating to the issuance of additional shares of common stock under the Amended Plan with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, as soon as practicable after approval of the Amended Plan by our stockholders.

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New Plan Benefits

        It is not possible to determine the specific amounts and types of awards that may be awarded in the future under the Amended Plan because the grant and actual settlement of awards under the Amended Plan are subject to the discretion of the plan administrators.

        The following table shows, as to each named executive officer and the various indicated groups, the aggregate number of options awarded under the Current Plan from inception through April 11, 2017: