EXHIBIT 99.3
PERFORMANCE UNIT
AGREEMENT
iVillage Inc. (the
“Company”) is pleased to inform Douglas McCormick
(“you”) that you are being awarded Performance Units
(the “Units”) under this Agreement pursuant to your
Employment Agreement. Capitalized terms not otherwise defined
in the body of this Agreement shall have the meaning assigned to
them in Paragraph 19.
To the extent they become vested,
the Units will entitle you to a cash payment. The Units are a
non-voting bookkeeping device solely to determine the amount of
such cash payment. Each vested Unit represents the right to
receive the cash equivalent of the then Fair Market Value of one
share of the Company’s Common Stock on the vesting date of
that Unit multiplied by the Applicable Percentage (the “Cash
Payment”).
This Agreement sets forth the award
date and number of Units to be awarded, the applicable vesting
schedule for the Units, the dates on which the Cash Payment
for each vested Unit can become payable to you and the remaining
terms and conditions governing your award (the
“Award”).
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Award
Date:
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January 1, 2006
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Number of Units Subject to
Award:
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100,000 unvested Units to be awarded
on the above Award Date, subject to your continued Service.
Notwithstanding the foregoing, if prior to January 1, 2006
there is (i) a Change in Control that occurs during your
period of Service or (ii) a Qualifying Termination, the
ungranted Units scheduled to be awarded under this Agreement on the
Award Date shall instead be awarded to you as fully vested Units on
(x) the effective date of the Change in Control or (y) the date of
your termination of Service, as applicable.
No Units will be awarded after your Service has
terminated.
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Vesting Schedule:
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All Units will vest on May 31,
2008 (“Scheduled Vesting Date”) provided you
continuously render Service through the Scheduled Vesting Date.
Awarded Units will fully vest earlier on either of the following
dates: (i) the date your Service was terminated in a
Qualifying Termination or (ii) the effective date of a Change
in Control that occurs during your Service. No Units will vest
after your Service has terminated.
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Other terms of your Award are as
follows:
20. Cash Payment. A Cash Payment for each vested Unit will be
issued to you as soon as practicable (but not more than 45 days)
after the vesting of such Unit in accordance with the above Vesting
Schedule. Any Cash Payment under this Agreement shall be
reduced by any and all applicable Withholding Taxes. The Cash
Payment following vesting of the corresponding Units shall be in
complete satisfaction of such vested Units and such Units shall
then be cancelled. If the Applicable Percentage is 0% on the
vesting date, then there shall be no Cash Payment under this
Agreement and all Units shall then be cancelled.
21. Forfeitability . Should you cease Service prior to vesting in one
or more Units subject to your Award, your Award will be cancelled
with respect to those unvested Units on the first date you are no
longer rendering Service, regardless of the reason for the
termination of your Service, except as otherwise expressly provided
in the above Vesting Schedule. You will cease to have any
right or entitlement to receive a Cash Payment for any cancelled
Units.
Except as otherwise expressly
provided in the above Vesting Schedule, the Vesting
Schedule requires your continued Service through the
applicable vesting date as a condition to the vesting of the
applicable Units and the rights and benefits under this
Agreement. Except as otherwise expressly provided in the
above Vesting Schedule, Service for only a portion of a vesting
period, even if a substantial portion, will not entitle you to any
proportionate vesting or avoid or mitigate the forfeiture that
occurs upon the termination of your Service.
22. Transferability . You
may not sell or transfer any interest in your Award, your Units, or
pledge or otherwise hedge the sale of those Units, including
(without limitation) any short sale or any acquisition or
disposition of any put or call option or other instrument tied to
the value of the Units. Any attempt by you to do so will
result in an immediate forfeiture of all of the Units that are
subject to this Agreement. However, your right to receive a
Cash Payment for any Units which have vested at or prior to your
death but which remain unpaid at the time of your death may be
transferred pursuant to the provisions of your will or trust or the
laws of inheritance or to your designated beneficiary following
your death. You may make such a beneficiary designation at
any time by filing the appropriate form with the
Company.
23. Stockholder Rights
. The Units create no fiduciary duty of the
Company to you, and shall create only an unfunded, unsecured
contractual obligation on the part of the Company to issue a Cash
Payment for vested Units, subject to the terms and conditions of
this Agreement and the Employment Agreement. The Units shall
not be treated as property or as a trust fund of any
kind.
You will not have any stockholder
rights, including voting rights or dividend rights, with respect to
the Units. Except as otherwise provided in Paragraph 5, no
adjustments will be made for dividends or other rights of a holder
for which the record date is prior to the date of issuance of a
Cash Payment for vested Units.
24. Adjustments . Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting
the outstanding Common Stock as a class without the Company’s
receipt of consideration, appropriate adjustments (that are
consistent with any adjustments the Company makes to other
shareholders or optionholders) will be made to the number of Units
that are outstanding or which are still subject to being
awarded.
25. Taxation . You
will recognize ordinary income for federal, state and local income
tax purposes on each date the Units vest. You will be solely
responsible for payment of any and all applicable taxes.
26. Withholding Taxes
. All applicable Withholding Taxes, as determined
by the Company, must be withheld from Cash Payments or otherwise
provided for by you at the time the Units vest pursuant to this
Agreement.
If any withholding event occurs
other than with respect to the vesting of such Units, or if the
Company for any reason is unable to satisfy the withholding
obligations with respect to the vesting of the Units, the Company
shall be entitled to require you to make a cash payment to the
Company and/or to deduct from other compensation payable to you the
amount of any such withholding obligation.
27. Notice . Any
notice to be given or delivered to the Company relating to this
Agreement shall be in writing and addressed to the Company at its
principal corporate offices. Any
