TAXABLE MERGER: FTD Group, United Online

Issue:

On 8/26/2008, FTD Group, Inc [FTD] was merged into United Online Inc. [UNTD]

Cause:

This merger is not a typical cash plus stock reorganization. It is a completely taxable transaction. This opinion can be verified by reading the documents at http://files.shareholder.com/support/download.aspx?file=UNTD/416211746x0xS1047469-08-8268/1142701/filing.pdf

For each FTD share, shareholders received $10.15 in cash and 0.4087 shares of UNTD common stock.

Resolution:

This merger will be accounted for as a sale of the FTD stock and a purchase of UNTD stock. The total merger consideration can be computed as the sum of the cash received plus the value of the UNTD shares received, plus any cash received for fractional shares. UNTD closed at $10.93 on 8/26/2008.
1) Multiply UNTD shares received by 10.93 = ____________
2) Cash received @ 10.15 times FTD shares = ____________
3) Cash in lieu of fractional shares, if any = __________________________
4) Total merger consideration (1) + (2) + (3) = _______________________

First, enter a sale of all FTD stock for the total merger consideration computed above. Round this sale amount to two decimal places. Then, enter a purchase of the number of UNTD shares received for the purchase amount computed in (1), above, rounded to two decimal places.

If the broker charges a Reorganization Fee, you can either deduct that as a commission against the sale of the FTD stock, or add it as a commission on the purchase of the UNTD shares.