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.
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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.
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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.
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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 notice to b
