EXHIBIT 99.2
RESTRICTED STOCK UNIT
AGREEMENT
iVillage Inc. (the
“Company”) is pleased to inform Douglas McCormick
(“you”) that you are being awarded Restricted Stock
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 (the “Cash Payment”).
This Agreement sets forth the award
dates 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 Dates:
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January 1, 2006, June 30,
2006 and June 30, 2007
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Number of Units Subject to
Award:
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A total of 210,000 Units with 70,000
unvested Units to be awarded on each of the three (3) above
Award Dates, respectively, subject to your continued Service.
Notwithstanding the foregoing, if there is a Change in Control that
occurs during your period of Service and prior to any of the above
Award Dates, any Units scheduled to be awarded under this Agreement
in the future shall instead be awarded to you as fully vested Units
on the effective date of the Change in Control.
In addition, the Award Date for certain of the ungranted Units will
be accelerated to your date of termination of Service under one of
the following: (i) if there is a Qualifying Termination prior
to January 1, 2006, then you will be awarded a number of
vested Units that is equal to the sum of (x) 70,000, plus (y)
70,000 multiplied by the number of days you were employed as
Company Chief Executive Officer between July 1, 2005 and
June 30, 2006 divided by 365; or (ii) if there is a
Qualifying Termination on or after January 1, 2006 and prior
to July 1, 2006, then you will be awarded a number of vested
Units that is equal to 70,000 multiplied by the number of days you
were employed as Company Chief Executive Officer between
July 1, 2005 and June 30,
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2006 divided by 365; or
(iii) if there is a Qualifying Termination on or after
July 1, 2006 and before July 1, 2007, then you will be
awarded a number of vested Units that is equal to 70,000 multiplied
by the number of days you were employed as Company Chief Executive
Officer between July 1, 2006 and June 30, 2007 divided by
365.
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:
1.
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.
2.
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.
3.
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.
4.
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.
5.
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.
6.
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.
7.
Withholding
Taxes .
All applicable Withholding Taxes, as
determined by the Company, must be withheld from Cash Payments or
otherwise provide
