EXHIBIT 10

 

iVILLAGE INC.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is entered into by and between
iVillage Inc., a Delaware corporation (the “Company”), and Douglas McCormick
(“Employee”) effective as of May 31, 2005 (the “Effective Date”).

 

In consideration of the mutual covenants and agreements hereinafter set forth,
the Company and Employee hereby agree as follows:

 

AGREEMENT

 

1.             EMPLOYMENT.  The Company hereby employs Employee to serve as
Chief Executive Officer and Chairman of the Board of Directors of the Company
with such duties and responsibilities as are usually vested in the office of
chief executive officer of a corporation and as otherwise set forth in the
Company’s By-Laws, and in such other executive and managerial capacities
consistent with his status and title as are determined by the Board of Directors
of the Company.

 

Unless earlier terminated or renewed as set forth herein, this Agreement shall
terminate on May 31, 2008 (the “Term”).

 

2.             COMPENSATION.

 

2.1           Base Salary. During the Term, Employee shall be paid a base salary
at the annual rate of six hundred thousand dollars ($600,000) (the “Base
Salary”). The Base Salary shall be payable in installments consistent with the
Company’s payroll practices and may be increased at the discretion of the Board
of Directors of the Company.

 

2.2           Bonus. Employee shall be eligible to participate in the Company’s
bonus plan. During the Term, Employee’s bonus will be targeted at ninety percent
(90%) of Employee’s Base Salary or five hundred forty thousand dollars
($540,000). Payment of a Bonus will be based on satisfactory performance of
Company, departmental and individual goals and objectives, as determined by the
Compensation Committee of the Board of Directors.  However, for fiscal year
2005, Employee’s Bonus will be based on criteria set forth in Exhibit A to this
Agreement.  Bonus criteria for fiscal years 2006 and 2007 will be set by the
Compensation Committee of the Board of Directors no later than the first quarter
of each respective fiscal year.

 

2.3           Long Term Incentives.

 

(a) Stock Options:  Employee shall receive a grant of an unvested nonstatutory
stock option to purchase 567,000 shares of the Company’s common stock pursuant
to a Company stock option plan (the “Initial Grant”).  Subject to Employee’s
continued employment and subject to Section 6.1, the Initial Grant will vest in
three equal installments of 189,000 option shares on each of the first, second
and third anniversaries of the Effective Date.  The per share exercise price

 

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of the Initial Grant shall be the closing sales price of a share of Company
common stock on the date of grant which is $6.20.  The Initial Grant will be
evidenced by the Company’s standard form of stock option agreement which shall
executed by and between the Company and the Employee.  The Company will file and
use its best efforts to cause to become effective a reoffer prospectus (as
defined in Instruction C to Form S-8) with the Securities and Exchange
Commission prior to March 1, 2006.

 

(b) Restricted Stock Units: Employee shall also be entitled to a grant of 50,000
unvested restricted stock units (“RSUs”) on or about each of January 1, 2006,
June 30, 2006 and June 30, 2007 (each of the three discrete grants of 50,000
RSUs will be referred to herein as the “First RSUs”, “Second RSUs” and “Third
RSUs”, respectively).  Each grant of RSUs will be subject to Employee’s
continued employment as Chief Executive Officer and also subject to the terms
and conditions of a RSU Agreement approved by the Compensation Committee.  Such
RSU Agreement will be substantially similar (i.e., no material changes to the
terms thereof) to the agreement attached as Exhibit D hereto. In the event the
Compensation Committee does not approve such RSU Agreement, Employee shall be
paid equivalent compensation in an amount equal to what Employee would have
received if it had been approved. If Employee remains employed as Chief
Executive Officer through the Term then all 150,000 RSUs shall vest on May 31,
2008.  If a Change in Control (as defined herein) occurs during Employee’s
employment and prior to the end of the Term, any RSUs not as yet granted shall
be granted as of the effective date of the Change in Control and all 150,000
RSUs shall also then be fully vested.  Any vested RSUs shall entitle Employee to
a lump sum cash payment as soon as practicable (but not more than 45 days) after
the vesting date with such cash amount equal to the number of vested RSUs
multiplied by the fair market value of a share of the Company’s common stock (as
defined in the RSU Agreement) as of the vesting date.  Subject to Section 6.1,
all unvested RSUs will be canceled without consideration upon Employee’s
termination of employment and all vested RSUs (including but not limited to any
RSUs that vest as a result of Section 6.1) shall also be canceled upon payment
of the requisite cash amount to Employee.  The numbers of RSUs referenced above
shall be subject to appropriate adjustments by the Company in the event of a
Company stock split, reverse stock split, recapitalization, stock dividend,
combination or exchange of shares, or similar transaction affecting the
Company’s capital structure.

 

(c) Performance Units:  Employee shall be entitled to a one time grant of
100,000 performance units (“PUs”) on or about January 1, 2006. The grant of PUs
will be subject Employee’s continued employment as Chief Executive Officer and
also subject to the terms and conditions of a PU Agreement approved by the
Compensation Committee.  Such PU Agreement will be substantially similar (i.e.,
no material changes to the terms thereof) to the agreement attached as Exhibit E
hereto. In the event the Compensation Committee does not approve such PU
Agreement, Employee shall be paid equivalent compensation in an amount equal to
what Employee would have received if it had been approved.  If Employee

 

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remains employed as Chief Executive Officer through the Term then all 100,000
PUs shall vest on May 31, 2008.  If a Change in Control (as defined herein)
occurs during Employee’s employment and prior to the end of the Term, any PUs
not as yet granted shall be granted as of the effective date of the Change in
Control and all PUs shall also then be fully vested.  Any vested PUs shall
entitle Employee to a lump sum cash payment as soon as practicable (but not more
than 45 days) after the vesting date in an amount equal to the number of vested
PUs multiplied by the fair market value of a share of the Company’s common stock
(as defined in the PU Agreement) as of the vesting date multiplied by the
“Applicable Percentage” (as defined in this subsection).  Subject to
Section 6.1, all unvested PUs will be canceled without consideration upon
Employee’s termination of employment and all vested PUs (including but not
limited to any PUs that vest as a result of Section 6.1) shall also be canceled
upon payment of the requisite cash amount to Employee.  For purposes of this
Agreement, “Applicable Percentage” shall mean, on the PU vesting date, either: 
(i) 0% if the fair market value of one share of Company common stock is less
than $8.00, (ii) 50% if the fair market value of one share of Company common
stock is equal to or greater than $8.00 and less than $9.00, (iii) 100% if the
fair market value of one share of Company common stock is equal to or greater
than $9.00 and less than $10.00, or (iv) 150% if the fair market value of one
share of Company common stock is equal to or greater than $10.00.  The threshold
dollar values referenced in the preceding sentence and the numbers of PUs
referenced above shall be subject to appropriate adjustments by the Company in
the event of a Company stock split, reverse stock split, recapitalization, stock
dividend, combination or exchange of shares, or similar transaction affecting
the Company’s capital structure.  For purposes of determining the Applicable
Percentage, the fair market value of a Company common share shall be as defined
in the PU Agreement.

 

2.4           Payment. Payment of all compensation to Employee hereunder
(including any payment under Section 6.1) shall be subject to all applicable
employment and withholding taxes and other customary deductions.

 

3.             OTHER EMPLOYMENT BENEFITS.

 

3.1           Business Expenses.  Upon submission of itemized expense statements
in the manner and form regularly specified by the Company, Employee shall be
entitled to reimbursement for reasonable travel (generally first class or
business class air fare if first class is unavailable) and other reasonable
business expenses incurred by Employee in the performance of his duties under
this Agreement in accordance with the Company’s travel and entertainment policy.

 

3.2           Fringe Benefits.  The Company shall make Employee the beneficiary
of and Employee shall receive the standard package of fringe benefits as the
Company generally provides to its other senior executive officers.  Fringe
benefits to be included in this standard benefit package include, but are not
limited to, medical and dental insurance coverage, disability insurance, four
(4) weeks of paid vacation per year, holidays and sick leave. Participation in
such

 

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fringe benefit programs will be subject to certain employee contributions that
may from time to time regularly be applicable to such programs.

 

3.3           Administrative Assistant.  During the term of this Agreement, the
Company shall employ Employee’s current administrative assistant (or in
Employee’s sole discretion, a substitute administrative assistant) on terms at
least as favorable as her existing compensation package, subject to changes in
Company-wide benefit programs.

 

3.4           No Other Benefits.  Employee understands and acknowledges that the
compensation specified in Sections 2 and 3 of this Agreement shall be in lieu of
any and all other compensation, benefits and plans.

 

4.             EMPLOYEE’S BUSINESS ACTIVITIES.  Employee shall devote
substantially all of his professional time, attention and energy exclusively to
the business and affairs of the Company and its affiliates, as its business and
affairs now exist and as they hereafter may be changed. In addition, Employee
will not engage in any consulting activity except with the prior written
approval of the Company (which shall not be unreasonably withheld), or at the
direction of the Company, except for consultancies for companies listed on
Exhibit B hereto, provided that such consultancies do not materially detract
from Employee’s ability to perform his obligations hereunder.  The foregoing
shall not be construed as preventing Employee from investing his assets in such
form or manner as will not require any significant services on his part in the
operation of the affairs of the businesses or entities in which such investments
are made. In addition, the foregoing shall not be construed as preventing
Employee from engaging in activities involving charitable, educational,
religious and other similar types of organizations and activities, or from
serving as a director of other companies, so long as such activities do not
interfere with the performance of his duties hereunder or otherwise violate the
terms hereof.

 

5.             OBLIGATION NOT TO COMPETE.  Employee acknowledges the highly
confidential nature of information regarding the Company’s businesses,
customers, suppliers, employees, agents, independent contractors and
consultants. Employee hereby agrees that (a) while he is employed by the Company
and (b) during the one (1) year period following his termination of employment
with the Company pursuant to Section 6.1  (the “Restricted Period”), Employee
shall not engage in, assist others in engaging in or provide services to any
organization, proprietorship or entity that engages in any business in which the
Company or its affiliates is actively engaged or is actively considering
engagement at the time of termination of Employee’s employment (“Competitive
Business”).  Employee also agrees that, during the Restricted Period, he shall
not in any manner directly or indirectly, solicit, or encourage any customer,
distributor, supplier, employee, agent, independent contractor, consultant or
any other person or company to terminate or alter its relationship with the
Company or its affiliates.  Each of the following activities shall, without
limitation, be deemed to violate the provisions of this Section 5: to engage in,
work with, have an interest or concern in, advise, lend money to, guarantee the
debts or obligations of, or permit one’s name or any part thereof to be used in
connection with, an enterprise or endeavor, either individually, in partnership,
or in conjunction with any person or persons, firms, associations, companies, or
corporations, whether as a principal, agent, shareholder, employee, officer,
director, partner, consultant or in any other manner whatsoever, which engages
in a Competitive Business; provided, however, that (i) Employee and/or his
affiliates shall retain the right to invest in or have an interest in entities
provided that said interest

 

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does not exceed five percent (5%) of the voting control of said entity and
(ii) the Company and Employee acknowledge that the Employee and/or his
affiliates currently have investments in, consultancies with and/or serve on the
Board of Directors of (and may retain such positions), the entities listed on
Exhibit B attached hereto.

 

6.             TERMINATION OF EMPLOYMENT AND EFFECTS OF TERMINATION.

 

6.1           Events of Termination.  Employee’s employment with the Company
shall terminate upon any one of the following (such last day of Employee’s
employment is referred to herein as the “Termination Date”):

 

(a)           The Company provides Employee with written notice of the Company’s
intent to terminate Employee’s employment with the Company without cause, in
which case termination shall be effective on the date specified in such written
notice, which shall be a date no earlier than thirty (30) days after the date of
the Notice unless Employee consents to an earlier date.  In the event of
termination under this subparagraph (a), the Company shall pay or provide to
Employee the items referenced below in subparagraphs (i) through (viii):

 

(i)            the accrued compensation and benefits otherwise payable to
Employee under Sections 2 and 3 through the Termination Date (including pay for
accrued but unused vacation and any then outstanding expense reimbursements);

 

(ii)           an amount equivalent to the Base Salary that Employee would have
earned had he remained employed through the end of the Term;

 

(iii)          an amount equivalent to any bonus which would have been earned by
Employee had he remained employed through the end of the Term (at the bonus
target specified in Section 2.2 above); provided that, in the event Employee is
terminated in fiscal year 2008, Employee’s bonus for fiscal year 2008 shall be
pro-rated to reflect the percentage of fiscal year 2008 in which Employee was
employed; and provided further that Employee shall not be entitled to receive
severance equal to such bonus compensation for prior completed fiscal years for
which he (A) already received a bonus or (B) did not satisfy the applicable
bonus criteria;

 

(iv)          continued insurance coverage on Employee for the remainder of the
Term (subject to applicable law and applicable employee contributions);

 

(v)           immediate acceleration of the vesting period for any outstanding
unvested stock options, RSUs and PUs then held by Employee;

 

(vi)          the following alternative number of fully vested RSUs will be
granted to Employee as of the Termination Date (assuming that such following
RSUs had not been previously granted to Employee pursuant to Section 2.3(b)): If
the Termination Date is prior to January 1, 2006, then the number of vested RSUs
to be granted is equal to the sum of (x) the First RSUs, plus (y) the Second
RSUs multiplied by the number of days Employee was employed as Chief Executive
Officer between July 1, 2005 and June 30, 2006 divided by 365;  If the
Termination Date is on or after January 1, 2006 and prior to July 1, 2006, then
the number of vested RSUs to be granted is equal to the Second RSUs multiplied
by the number of days Employee was employed as Chief Executive Officer between
July 1, 2005 and June 30, 2006

 

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divided by 365;  If the Termination Date is on or after July 1, 2006 and before
July 1, 2007, then the number of vested RSUs to be granted is equal to the Third
RSUs multiplied by the number of days Employee was employed as Chief Executive
Officer between July 1, 2006 and June 30, 2007 divided by 365 ;

 

(vii)         if the Termination Date is prior to January 1, 2006 and the PUs
have not yet been granted pursuant to Section 2.3(c), then such PUs shall be
granted to Employee as of the Termination Date and shall also be fully vested;
and

 

(viii)        all outstanding stock options then held by Employee will remain
exercisable for the earlier of a period of three (3) years after the Termination
Date or the scheduled termination date of such stock option.

 

Notwithstanding the foregoing, in no event shall the sum of subparagraphs
(ii) and (iii) be less than the greater of $870,000 or an amount equal to
Employee’s base pay and highest paid bonus for any completed year of the term of
this Agreement  (“Minimum Severance Payment”).  Employee’s rights under the
Company’s benefit plans of general application shall be determined under the
provisions of those plans. All pay and benefits described in subparagraphs
(ii) through (viii) of this section are conditioned upon execution (and
non-revocation by Employee) of appropriate and customary termination and release
agreements to be negotiated in good faith by the parties.  Cash severance shall
be paid in a lump sum as soon as practicable following the execution (and
passage of any applicable revocation period without Employee’s revocation) of
the termination and release agreement to the extent permitted by applicable
law.  Employee shall continue to comply with Section 5 after termination
pursuant to this subparagraph (a).

 

(b)           The Company determines, in good faith, that Employee should be
terminated for “cause” as defined in Section 6.2 below, in which case
termination shall be effective on the date that written notice of termination is
hand-delivered to Employee by the Company (or, if the Company is unable to
hand-deliver such notice to Employee, the date that such notice is mailed or
faxed to Employee pursuant to Section 10.9).  In the event of termination under
this subparagraph (b), the Company shall pay Employee the compensation and
benefits otherwise payable to Employee under Section 2.1 through the Termination
Date (including pay for accrued but unused vacation and any then outstanding
expense reimbursements), and the Company will have no obligation to pay Employee
the Base Salary or any bonus or other compensation for the remainder of the
Term. Employee’s rights under the Company’s benefit plans of general application
shall be determined under the provisions of those plans. Employee shall continue
to comply with Section 5 after termination pursuant to this subparagraph (b).

 

(c)           The resignation by Employee for “good reason” as defined in
Section 6.3 below, in which case resignation shall be effective on the date that
written notice of Employee’s resignation is delivered to the Company pursuant to
Section 10.9.  In the event of resignation under this subparagraph (c), the
Company shall pay Employee the compensation and benefits described in
subparagraph (a) of this section under the same terms and conditions described
in subparagraph (a).

 

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(d)           The effective date of any voluntary termination by Employee other
than for “good reason”. In the event of termination under this subparagraph (d),
the Company shall pay Employee the compensation and benefits described in
subparagraph (b) of this section under the same terms and conditions described
in subparagraph (b).

 

(e)           The date of Employee’s death or permanent disability. Permanent
disability may be deemed to occur, at the Company’s discretion communicated by
written notice to Employee, if Employee is incapacitated or disabled by accident
or sickness or otherwise so as to render him mentally or physically incapable of
performing the services required to be performed by him under this Agreement for
a period of 120 consecutive days.  In the event of termination under this
subparagraph (e), the Company shall pay Employee or his estate the compensation
and benefits otherwise payable to Employee under Section 2.1 through the
Termination Date (including pay for accrued but unused vacation and any then
outstanding expense reimbursements), and the Company will have no obligation to
pay Employee or his estate the Base Salary, any bonus or other compensation for
the remainder of the Term. Employee’s rights under the Company’s benefit plans
of general application shall be determined under the provisions of those plans
or the provision of any agreement executed pursuant to those plans. Employee
shall continue to comply with Section 5 after termination as a result of
permanent disability pursuant to this subparagraph (e).

 

(f)            The date of Employee’s Retirement.  In the event Employee retires
during the term of this Agreement, or if this Agreement is not renewed and no
new Agreement is entered into as a result of Employee’s retirement (defined as
Employee’s voluntary agreement to cease working for a Competitive Business or in
the capacity of a senior executive for any business), Employee will be entitled
to the benefits described in subparagraph (d) hereto and in addition any
outstanding vested stock options then held by Employee will remain exercisable
for the earlier of a period of five (5) years after the Termination Date or the
scheduled termination date of such stock options, provided Employee’s retirement
status remains unchanged.

 

(g)           In the event of a termination of Employee’s employment pursuant to
this Section 6.1, the Company and Employee agree to work together in good faith
to issue a joint press release discussing such termination with such language as
shall be mutually agreed by the parties.  Under no circumstances shall Employee
be required to obtain suitable employment elsewhere upon termination of this
Agreement or otherwise mitigate any post-termination payments required to be
made to Employee by the Company.

 

6.2           Termination For “Cause” Defined.  For purposes of Sections
6.1(a) and 6.1(b) above, “cause” for Employee’s termination shall exist at any
time after the happening of one or more of the following events:

 

(a)           Employee has breached any material provision of this Agreement or
any other agreement between the Company and the Employee, which breach is not
cured within thirty (30) days following the delivery to Employee of written
notice reasonably describing the alleged breach;

 

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(b)           Employee has engaged in habitual neglect of his duties as an
employee of the Company which remains uncured following delivery to Employee of
written notice reasonably describing the offending conduct and a reasonable
opportunity to cure;

 

(c)           Employee has committed a material act of dishonesty including,
without limitation, Employee’s theft, misuse or unauthorized disclosure of
proprietary information;

 

(d)           Employee is convicted of a felony or a crime involving moral
turpitude not involving a conviction for operating a motor vehicle under the
influence of alcohol or any other motor vehicle violation; or

 

(e)           Any chemical dependency or substance abuse resulting in a
continuous and material impairment of the Employee’s ability to perform his
duties as an employee of the Company.

 

6.3           Resignation For “Good Reason” Defined.  Employee may regard his
employment as being constructively terminated and may, therefore, resign within
thirty (30) days of the Employee’s discovery of the occurrence of one or more of
the following events, any of which shall constitute “good reason” for such
resignation:

 

(a)           Without the Employee’s prior written consent, the assignment to
the Employee of any duties materially inconsistent with the Employee’s position,
duties, responsibilities and status with the Company as set forth in this
Agreement, whether after a Change in Control (as defined in Exhibit C hereto) or
otherwise;

 

(b)           Without Employee’s consent in each instance, a reduction by the
Company of the Employee’s base salary or of any bonus compensation formula
applicable to Employee, or the Company’s failure to pay Employee the applicable
bonus pursuant to Section 2.2 in any fiscal year despite satisfaction of the
corresponding applicable bonus criteria for such fiscal year as set forth in
Exhibit A hereto for fiscal year 2005 or by the Compensation Committee of the
Company’s Board of Directors for subsequent fiscal years during the Term;

 

(c)           The Company or any affiliate(s) requiring the Employee to be based
anywhere other than within twenty-five (25) miles of the area in which he
resides, except for required travel on the Company’s or an affiliate’s business
to an extent substantially consistent with the Employee’s present business
travel obligations;

 

(d)           A breach by the Company of any material provision of this
Agreement or any other agreement between the Company and the Employee, which
breach is not cured within thirty (30) days following the delivery to the
Company of written notice reasonably describing the alleged breach;

 

(E)           THE COMPANY’S NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS FAILS
TO NOMINATE EMPLOYEE AS A NOMINEE FOR ELECTION TO THE COMPANY’S BOARD OF
DIRECTORS UPON EXPIRATION OF EMPLOYEE’S TERM AS A DIRECTOR OR EMPLOYEE IS
REMOVED AS CHAIRMAN OR FROM THE COMPANY’S BOARD OF DIRECTORS DURING HIS TERM
WITHOUT CAUSE.  NOTWITHSTANDING THE FOREGOING, REMOVAL OF EMPLOYEE AS CHAIRMAN
OF THE BOARD OF DIRECTORS SHALL NOT BE CONSIDERED “GOOD

 

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REASON” UNDER THIS AGREEMENT IF SUCH REMOVAL IS REQUIRED IN ORDER TO COMPLY WITH
CHANGES IN LEGAL OR REGULATORY REQUIREMENTS APPLICABLE TO THE COMPANY.

 

(F)           THE OCCURRENCE OF A CHANGE IN CONTROL OF THE COMPANY (AS DEFINED
IN EXHIBIT C) IN WHICH CASE EMPLOYEE SHALL BE ENTITLED TO THE SEVERANCE
COMPENSATION DESCRIBED IN SECTION 6.1(A) OF THIS AGREEMENT.  NOTWITHSTANDING THE
FOREGOING, EMPLOYEE WILL NOT BE ENTITLED TO THE SEVERANCE COMPENSATION DESCRIBED
IN SECTIONS 6.1(A) OR 6.1(C) OF THIS AGREEMENT UPON A CHANGE IN CONTROL IN THE
EVENT THAT EMPLOYEE IS OFFERED AND ACCEPTS A POSITION AS CHIEF EXECUTIVE OFFICER
OR ITS EQUIVALENT FOR THE SUCCESSOR ENTITY AFTER THE CHANGE IN CONTROL.

 

(G)          AS OF A DATE AT LEAST THREE (3) MONTHS PRIOR TO THE EXPIRATION OF
THE TERM, THE COMPANY SHALL HAVE FAILED EITHER TO PROVIDE EMPLOYEE WITH NOTICE
OF THE COMPANY’S INTENTION TO RENEW THIS AGREEMENT ON THE SAME TERMS OR ENTER
INTO A NEW AGREEMENT WITH EMPLOYEE ON SUBSTANTIALLY SIMILAR OR BETTER TERMS THAN
THIS AGREEMENT.

 

6.4           Effect of Termination Payments.  Employee agrees and acknowledges
that upon Employee’s termination of employment with the Company pursuant to
Section 6 of this Agreement, Employee shall only be entitled to the severance
payments and benefits (including stock option vesting), if any, specified in
Section 6 or in the applicable stock option agreements and such severance
payments and benefits shall be in lieu of all other severance payments and
benefits which might otherwise be payable to Employee by the Company.

 

7.             CONFIDENTIALITY; WORKS FOR HIRE.

 

7.1           Confidentiality.  As used herein, the term “Confidential
Information” means all trade secrets or confidential information concerning the
business, products, practices or techniques of the Company and/or its affiliates
and any third parties with whom they deal, including, but not limited to, price
lists, pricing information, product information systems, designs, research,
membership lists, members and users personal information, negotiations with
regard to corporate transactions, sponsorship and advertising arrangements,
contracts and licenses, processes, inventions, developments, proposals, plans,
advertiser lists, technical, accounting and financial information of the Company
and/or its affiliates, their customers or suppliers (whether or not copyrighted
or copyrightable or patented or patentable).  At all times, both during
Employee’s employment by the Company and after Employee’s termination, Employee
will keep in strict confidence and will not disclose any Confidential
Information including, but not limited to, Confidential Information concerning
any client, customer, or business partner of the Company, to any person or
entity, or make use of any such Confidential Information for Employee’s own
purposes or for the benefit of any person or entity, except as may be necessary
in the ordinary course of performing Employee’s duties as an employee of the
Company.  The term “Confidential Information” does not include information which
(i) is or becomes generally available to the public other than as a result of a
disclosure by the Employee, (ii) was within the Employee’s possession prior to
being furnished to the Employee by or on behalf of the Company pursuant hereto
or (iii) becomes available to the Employee on a non-confidential basis from a
source other than the Company or any of its present of prospective directors,
officers, employees, agents or advisors; provided that with respect to clauses
(ii) and

 

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(iii) above, the source of such information was not bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the Company or any other party with respect to such
information.

 

7.2           Works for Hire.  Employee acknowledges that all right, title and
interest he obtains in all works of authorship, designs, computer programs,
copyrights and copyright applications, inventions, discoveries, developments,
know-how, systems, processes, formulae, patent and patent applications, trade
secrets, new products, internal reports and memoranda, strategies, and marketing
plans conceived, devised, developed, written, reduced to practice, or otherwise
created or obtained by Employee in connection with his employment by the Company
(the “Intellectual Property”) are regarded as “works for hire”.  Employee hereby
transfers and assigns to the Company all right, title, and interest to the
Intellectual Property.  Promptly after Employee obtains knowledge of any
Intellectual Property, he will disclose it to the Company.  Upon request of the
Company, he will execute and deliver all documents or instruments and take all
other action as the Company may deem reasonably necessary to transfer all right,
title, and interest in any Intellectual Property to the Company; to vest in the
Company good, valid and marketable title to such Intellectual Property; to
perfect, by registration or otherwise, trademark, copyright and patent
protection of the Company with respect to such Intellectual Property; and
otherwise to protect the Company’s trade secrets and proprietary interest in
such Intellectual Property.

 

IN THE EVENT OF THE TERMINATION OF EMPLOYEE’S EMPLOYMENT FOR ANY REASON,
EMPLOYEE WILL DELIVER TO THE COMPANY ALL DOCUMENTS, NOTES, DRAWINGS, BLUEPRINTS,
FORMULAE, SPECIFICATIONS, COMPUTER PROGRAMS, DATA AND OTHER MATERIALS OF ANY
NATURE PERTAINING TO ANY INTELLECTUAL PROPERTY OR TO EMPLOYEE’S WORK WITH THE
COMPANY, AND WILL NOT TAKE ANY OF THE FOREGOING OR ANY REPRODUCTION OF ANY OF
THE FOREGOING THAT IS EMBODIED IN A TANGIBLE MEDIUM OF EXPRESSION.

 

8.             ASSIGNMENT AND TRANSFER.  Employee’s rights and obligations under
this Agreement shall not be transferable by assignment or otherwise, and any
purported assignment, transfer or delegation thereof shall be void. This
Agreement shall inure to the benefit of, and be enforceable by, any purchaser of
substantially all of the Company’s assets, any corporate successor to the
Company or any assignee thereof.

 

9.             NO INCONSISTENT OBLIGATIONS.  Employee is aware of no
obligations, legal or otherwise, inconsistent with the terms of this Agreement
or with his undertaking employment with the Company.

 

10.           MISCELLANEOUS.

 

10.1         Governing Law.  This Agreement will be governed by and construed in
accordance with the laws of the State of New York without giving effect to any
choice of law or conflicting provision or rule.

 

10.2         Entire Agreement.  This Agreement, together with the attached
exhibits, contains the entire agreement and understanding between the parties
hereto and supersedes any

 

10

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prior or contemporaneous written or oral agreements between them respecting the
subject matter hereof.  Employee acknowledges, represents and warrants to the
Company that no oral or written representations have been made to Employee by
the Company, or any representative of the Company regarding (a) the Company’s
financial condition or its prospects or (b) any obligation, commitment or
understanding on behalf of the Company to continue to employ Employee for any
specific period of time except as specifically set forth herein.

 

10.3         Amendment.  This Agreement may be amended only by a writing signed
by Employee and by a duly authorized representative of the Company (other than
Employee).

 

10.4         Severability.  If any term, provision, covenant or condition of
this Agreement, or the application thereof to any person, place or circumstance,
shall be held to be invalid, unenforceable or void, the remainder of this
Agreement and such term, provision, covenant or condition as applied to other
persons, places and circumstances shall remain in full force and effect.

 

10.5         Construction.  The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement. The language in all parts of this Agreement
shall be in all cases construed according to its fair meaning and not strictly
for or against the Company or Employee.

 

10.6         Rights Cumulative.  The rights and remedies provided by this
Agreement are cumulative, and the exercise of any right or remedy by either
party hereto (or by its successor), whether pursuant to this Agreement, to any
other agreement, or to law, shall not preclude or waive such party’s right to
exercise any or all other rights and remedies.

 

10.7         Nonwaiver.  No failure or neglect of either party hereto in any
instance to exercise any right, power or privilege hereunder or under law shall
constitute a waiver of any other right, power or privilege or of the same right,
power or privilege in any other instance. All waivers by either party hereto
must be contained in a written instrument signed by the party to be charged and,
in the case of the Company, by an officer of the Company (other than Employee)
or other person duly authorized by the Company.

 

10.8         Remedy for Breach.  The parties hereto agree that, in the event of
breach or threatened breach of any covenants of Employee, the damage or imminent
damage to the value and the goodwill of the Company’s business shall be
inestimable, and that therefore any remedy at law or in damages shall be
inadequate. Accordingly, the parties hereto agree that the Company shall be
entitled to apply for injunctive relief against Employee in the event of any
breach or threatened breach of any of such provisions by Employee, in addition
to any other relief (including damages) available to the Company under this
Agreement or under law.

 

10.9         Notices.  All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgement of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):

 

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if to the Company, to:

 

iVillage Inc.
500 Seventh Avenue
New York, New York  10018
Attention: Legal Department
Telephone No.: (212) 600-6000
Facsimile No.: (212) 600-6556

 

if to Employee, to:

 

Douglas McCormick
1080 Fifth Avenue

Penthouse

New York, New York  10128

Telephone No.: (212) 876-9230
Facsimile No.: (212) 876-2077

 

with a copy to:

 

David Alan Miller

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York 10174-1901

Telephone No.: (212) 818-8800

Facsimile No.: (212) 818-8881

 

and

 

David Alexander

Peyser & Alexander Management Inc.

500 Fifth Avenue, Suite 2700

New York, New York 10110

Telephone No.: (212) 764-6455

Facsimile No.: (212) 921-4249

 

10.10       Assistance in Litigation.  Employee shall, during and after
termination of employment, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.  If such information or assistance is
required after termination of Employee’s employment, Employee shall be entitled
to reasonable reimbursement of Employee’s out-of-pocket expenses (excluding
attorney’s fees) and, in the event such assistance exceeds ten (10) hours of
Employee’s time in the aggregate, for Employee’s time in connection therewith.

 

10.11       Arbitration.  Any dispute or disagreement arising out of this
Agreement or a claimed breach, except that which involves a right to injunctive
relief, shall be resolved by arbitration in New York, New York under the
Voluntary Labor Arbitration Rules of

 

12

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the American Arbitration Association. The arbitrator’s decisions shall be final
and binding upon the parties and judgment may be entered in any court.

 

10.12       Execution.  This Agreement may be executed in counterparts, each of
which shall be deemed an original but both of which together will constitute one
and the same instrument.

 

10.13       Amendment.  This Agreement may be amended or modified by written
agreement executed by the parties.  Employee will consent to amendments of this
Agreement that are required in order for the Company to comply with changes to
applicable law or regulation.

 

10.14       Expenses.  The Company shall reimburse Employee for the reasonable
professional fees and expenses incurred by Employee in connection with the
negotiation of this Agreement up to a maximum of $15,000 in the aggregate.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.

 

 

iVILLAGE INC.

EMPLOYEE

 

 

 

 

By

/s/ Steven Elkes

 

 /s/ Douglas McCormick

 

Name:  Steven Elkes

Douglas McCormick

Title:

Executive Vice President – Operations
and Business Affairs

 

 

13

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EXHIBIT A

 

Bonus Calculation for 2005

 

EBITDA Goal for 2005 is $17.227 million (after appropriate accruals for bonus
payments) payable as follows:

 

95% of Goal =  50% of target bonus

 

100% of Goal =  100% of target bonus

 

125% of Goal =  150% of target bonus

 

150% of Goal =  200% of target bonus

 

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EXHIBIT B

 

Douglas McCormick and/or McCormick Media, Inc.

INVESTMENTS, CONSULTANCIES AND/OR BOARD SEATS

 

Lovelawyer.com

On24.com

Starvest Investments

Waterfront, Inc.

Rho Ventures V Affiliates Fund LP

Circle Graphics

Care 2

Moonstorm, Inc.

 

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EXHIBIT C

 

DEFINITION OF “CHANGE IN CONTROL”      A “Change in Control” shall mean the
occurrence of the following: (a)   An acquisition (other than directly from the
Company) of any voting securities of the Company (the “Voting Securities”) by
any “Person”  (as the term person is used for purposes of Section 13(d) or
Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), immediately after which such Person has “Beneficial Ownership” (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent
(50%) or more of the then outstanding shares of the Company’s common stock
(“Shares”) or the combined voting power of the Company’s then outstanding Voting
Securities; provided, however, in determining whether a Change in Control has
occurred pursuant to this Section, Shares or Voting Securities which are
acquired in a “Non-Control Acquisition” (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly, by
the Company (for purposes of this definition, a  “Subsidiary”), (ii) the Company
or its Subsidiaries, or (iii) any Person in connection with a “Non-Control
Transaction”. A”Non-Control Transaction” shall mean a merger, consolidation or
reorganization involving the Company in connection with which (i)    the
stockholders of the Company, immediately before such merger, consolidation or
reorganization, own, directly or indirectly, immediately following such merger,
consolidation or reorganization, at least seventy percent (70%) of the combined
voting power of the outstanding Voting Securities of the corporation resulting
from such merger, consolidation or reorganization (the “Surviving Corporation”)
in substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization; (ii) the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members of the board of
directors of the Surviving Corporation or a corporation beneficially owning,
directly or indirectly, a majority of the Voting Securities of the Surviving
Corporation; and (iii) no Person (other than the Company, any Subsidiary, any
employee benefit plan (or any trust forming a part thereof) maintained by the
Company, the Surviving Corporation or any Subsidiary, or any Person who,
immediately prior to such merger, consolidation or reorganization had Beneficial
Ownership of fifteen percent (15%) or more of the then outstanding Voting
Securities) owns, directly or indirectly, fifteen percent (15%) or more of the
combined voting power of the Surviving Corporation’s then outstanding voting
securities; and (b)   The individuals who, as of May 31, 2005 are members of the
Board of Directors of the Company (the “Incumbent Board”), cease for any reason
to constitute at least fifty percent (50%) of the members of the Board;
provided, however, that if the election, or nomination for election by the
Company’s common stockholders, of any new director was approved by a vote of at
least fifty percent (50%) of the Incumbent Board, such new director shall, for
purposes of this definition, be considered a member of the Incumbent Board;
provided, further, however, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a “Proxy Contest”) including by reason
of any agreement intended to avoid or settle any Election Contest or Proxy
Contest.

 

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EXHIBIT D

 

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”).

 

Award Dates:

 

January 1, 2006, June 30, 2006 and June 30, 2007

 

 

 

Number of Units Subject to Award:

 

A total of 150,000 Units with 50,000 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) 50,000, plus
(y) 50,000 multiplied by the number of days you were employed as Company Chief

 

17

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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 50,000 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
(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
50,000 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.

 

 

 

Vesting Schedule:

 

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.

 

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.

 

18

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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 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.

 

19

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8.      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 be given or delivered to you relating to this
Agreement shall be in writing and addressed to you at such address of which you
advise the Company in writing.  All notices shall be deemed effective upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.

 

9.      Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Company and its successors and assigns
and upon you and the legal representatives, heirs and the legatees of your
estate.  You may not assign any of your rights or benefits under this
Agreement.  The Company may assign this Agreement to any
successor(s)-in-interest.

 

10.    Administration/Indemnification. The Company shall have the exclusive
discretionary authority to, in good faith, interpret and construe any term or
provision of this Agreement, adopt and change rules and regulations in the
administration of the Award, and make modifications to this Agreement to comport
with applicable law.  Any such interpretation and/or decisions shall be binding
on all persons having an interest in the Award subject to the arbitration
provisions of Section 13.

 

Except arising from any action taken, or failure to act, in bad faith, each
person providing services in connection with the administration of the Award
under this Agreement, shall be indemnified and held harmless by the Company
against and from (i) any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the Award, and (ii) from any and all amounts paid by him or her, with the
Company’s prior approval, in settlement thereof or paid by him or her in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall have given the Company a reasonable
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

 

11.    Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of New York without resort
to that State’s conflict-of-laws rules.

 

12.    At Will Employment. Nothing in this Agreement or your Award will provide
you with any right to continue in Service or employment for any period of
specific duration or interfere with or otherwise restrict in any way your right
or the right of the Company to terminate your Service or employment at any time
for any reason, with or without cause, or for no reason, subject to the
Employment Agreement.

 

20

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13.    Mandatory Arbitration. ANY AND ALL DISPUTES OR CONTROVERSIES BETWEEN YOU
AND THE COMPANY ARISING OUT OF, RELATING TO OR OTHERWISE CONNECTED WITH THIS
AGREEMENT OR THE AWARD OF RESTRICTED STOCK UNITS EVIDENCED HEREBY OR THE
VALIDITY, CONSTRUCTION, PERFORMANCE OR TERMINATION OF THIS AGREEMENT SHALL BE
SETTLED EXCLUSIVELY BY BINDING ARBITRATION PURSUANT TO SECTION 10.11 OF THE
EMPLOYMENT AGREEMENT WHICH IS INCORPORATED BY REFERENCE HEREIN AS IF SET FORTH
FULLY HEREIN.

 

21

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14.    Amendments and Waivers.  This Agreement and any of the provisions hereof
may be amended, waived (either generally or in a particular instance and either
retroactively or prospectively), modified or supplemented, in whole or in part,
only by written agreement signed by the parties hereto; provided, that, the
observance of any provision of this Agreement may be waived in writing by the
party that will lose the benefit of such provision as a result of such waiver. 
The waiver by any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach, except as otherwise
explicitly provided for in such waiver.  Except as otherwise expressly provided
herein, no failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder, or otherwise available in
respect hereof at law or in equity, shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

 

15.    Severability.  Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law but the invalidity or unenforceability
of any provision or portion of any provision of this Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability of this
Agreement, including that provision or portion of any provision, in any other
jurisdiction.  In addition, should a court or arbitrator determine that any
provision or portion of any provision of this Agreement, is not reasonable or
valid, the parties hereto agree that such provision should be interpreted and
enforced to the maximum extent which such court or arbitrator deems reasonable
or valid.

 

16.    Acknowledgement.  You acknowledge that you have had the opportunity to
discuss this matter with and obtain advice from your private attorney, have had
sufficient time to, and have carefully read and fully understand all the
provisions of this Agreement, and are knowingly and voluntarily entering into
this Agreement.

 

17.    No Strict Construction.  The language used in this Agreement will be
deemed to be the language chosen by the Company and you to express the parties’
mutual intent, and no rule of law or contract interpretation that provides that
in the case of ambiguity or uncertainty a provision should be construed against
the draftsperson will be applied against any party.

 

18.    Headings. The headings of the paragraphs, subparagraphs, clauses and
subclauses of this Agreement are for convenience of reference only and shall not
in any way affect the meaning or interpretation of any of the provisions hereof.

 

19.    Definitions.  The following definitions shall be in effect under the
Agreement:

 

a)                   Agreement shall mean this Restricted Stock Unit Agreement.

 

b)                  Change in Control shall mean the definition provided in
Exhibit C of the Employment Agreement.

 

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c)                   Common Stock shall mean the Company’s common stock.

 

d)                  Company shall mean iVillage Inc., a Delaware corporation.

 

e)                   Employment Agreement shall mean the employment agreement,
effective as of May 31, 2005, entered into by and between the Company and
Douglas McCormick.

 

f)                     Fair Market Value shall mean, as of any date, the value
of Common Stock determined as follows:

 

(i)  If the Common Stock is listed or quoted on any established stock exchange
or a national market system, including without limitation The Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Company deems reliable;

 

(ii)  If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Company deems
reliable; or

 

(iii)  In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Company.

 

g)                  Qualifying Termination shall mean (i) your Service was
terminated prior to the Scheduled Vesting Date by the Company without “cause”
(as defined in the Employment Agreement) or by you for “good reason” (as defined
in the Employment Agreement) and (ii) you executed and did not revoke the
release of claims agreements required by Section 6.1(a) of the Employment
Agreement.

 

h)                  Service shall mean your performance of services for the
Company in the capacity of Chief Executive Officer.  For purposes of this
Agreement, you shall be deemed to cease Service immediately upon the date which
you no longer perform services in the foregoing capacity for the Company.

 

i)                      Withholding Taxes shall mean the federal, state and
local income and employment taxes required to be withheld by the Company in
connection with the issuance of a Cash Payment for the Units that vest under the
Award.

 

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As a condition of the Award, please execute the Acknowledgment section below to
indicate your acceptance of the terms and conditions of your Award.

 

 

iVillage Inc.

 

 

 

BY:

 

 

 

 

 

TITLE:

 

 

 

 

 

DATED:

 

, 2005

 

ACKNOWLEDGMENT

 

I hereby acknowledge and accept the foregoing terms and conditions of the
Restricted Stock Unit Award evidenced by this Agreement.  I further acknowledge
and agree that the foregoing sets forth the entire understanding between the
Company and me regarding my entitlement to receive any Cash Payments subject to
such Award and supersedes all prior oral and written agreements on that subject.

 

 

SIGNATURE:

 

 

 

 

 

 

 

DATED:

 

, 2005

 

24

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EXHIBIT E

 

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”).

 

Award Date:

January 1, 2006

 

Number of Units Subject to Award:

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.

 

Vesting Schedule:

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.

 

--------------------------------------------------------------------------------

 

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 be given or delivered to you relating to this
Agreement shall be in writing and addressed to you at such address of which you
advise the Company in writing.  All notices shall be deemed effective upon
personal delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.

 

28.    Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Company and its successors and assigns
and upon you and the legal representatives, heirs and the legatees of your
estate.  You may not assign any of your rights or benefits under this
Agreement.  The Company may assign this Agreement to any
successor(s)-in-interest.

 

29.    Administration/Indemnification. The Company shall have the exclusive
discretionary authority to, in good faith, interpret and construe any term or
provision of this Agreement, adopt and change rules and regulations in the
administration of the Award, and make modifications to this Agreement to comport
with applicable law.  Any such interpretation and/or decisions shall be binding
on all persons having an interest in the Award subject to the arbitration
provisions of Section 13.

 

Except arising from any action taken, or failure to act, in bad faith, each
person providing services in connection with the administration of the Award
under this Agreement, shall be indemnified and held harmless by the Company
against and from (i) any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the

 

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Award, and (ii) from any and all amounts paid by him or her, with the Company’s
prior approval, in settlement thereof or paid by him or her in satisfaction of
any judgment in any such claim, action, suit, or proceeding against him or her,
provided he or she shall have given the Company a reasonable opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf.  The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company’s Certificate of Incorporation or
Bylaws, by contract, as a matter of law, or otherwise, or under any power that
the Company may have to indemnify them or hold them harmless.

 

30.    Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of New York without resort
to that State’s conflict-of-laws rules.

 

31.    At Will Employment. Nothing in this Agreement or your Award will provide
you with any right to continue in Service or employment for any period of
specific duration or interfere with or otherwise restrict in any way your right
or the right of the Company to terminate your Service or employment at any time
for any reason, with or without cause, or for no reason, subject to the
Employment Agreement.

 

32.    Mandatory Arbitration. ANY AND ALL DISPUTES OR CONTROVERSIES BETWEEN YOU
AND THE COMPANY ARISING OUT OF, RELATING TO OR OTHERWISE CONNECTED WITH THIS
AGREEMENT OR THE AWARD OF PERFORMANCE UNITS EVIDENCED HEREBY OR THE VALIDITY,
CONSTRUCTION, PERFORMANCE OR TERMINATION OF THIS AGREEMENT SHALL BE SETTLED
EXCLUSIVELY BY BINDING ARBITRATION PURSUANT TO SECTION 10.11 OF THE EMPLOYMENT
AGREEMENT WHICH IS INCORPORATED BY REFERENCE HEREIN AS IF SET FORTH FULLY
HEREIN.

 

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33.    Amendments and Waivers. This Agreement and any of the provisions hereof
may be amended, waived (either generally or in a particular instance and either
retroactively or prospectively), modified or supplemented, in whole or in part,
only by written agreement signed by the parties hereto; provided, that, the
observance of any provision of this Agreement may be waived in writing by the
party that will lose the benefit of such provision as a result of such waiver. 
The waiver by any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach, except as otherwise
explicitly provided for in such waiver.  Except as otherwise expressly provided
herein, no failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder, or otherwise available in
respect hereof at law or in equity, shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

 

34.    Severability. Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law but the invalidity or unenforceability
of any provision or portion of any provision of this Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability of this
Agreement, including that provision or portion of any provision, in any other
jurisdiction.  In addition, should a court or arbitrator determine that any
provision or portion of any provision of this Agreement, is not reasonable or
valid, the parties hereto agree that such provision should be interpreted and
enforced to the maximum extent which such court or arbitrator deems reasonable
or valid.

 

35.    Acknowledgement. You acknowledge that you have had the opportunity to
discuss this matter with and obtain advice from your private attorney, have had
sufficient time to, and have carefully read and fully understand all the
provisions of this Agreement, and are knowingly and voluntarily entering into
this Agreement.

 

36.    No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the Company and you to express the parties’
mutual intent, and no rule of law or contract interpretation that provides that
in the case of ambiguity or uncertainty a provision should be construed against
the draftsperson will be applied against any party.

 

37.    Headings. The headings of the paragraphs, subparagraphs, clauses and
subclauses of this Agreement are for convenience of reference only and shall not
in any way affect the meaning or interpretation of any of the provisions hereof.

 

38.    Definitions.  The following definitions shall be in effect under the
Agreement:

 

j)                      Agreement shall mean this Performance Unit Agreement.

 

k)                   Applicable Percentage shall mean, on the Unit vesting date,
either:  (i) 0% if the Fair Market Value of one share of Common Stock is less
than $8.00, (ii) 50% if the Fair Market Value of one share of Common Stock is
equal to or greater than $8.00 and less than $9.00, (iii) 100% if the Fair
Market Value of one share of Common

 

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Stock is equal to or greater than $9.00 and less than $10.00, or (iv) 150% if
the Fair Market Value of one share of Common Stock is equal to or greater than
$10.00.

 

l)                      Change in Control shall mean the definition provided in
Exhibit C of the Employment Agreement.

 

m)                Common Stock shall mean the Company’s common stock.

 

n)                  Company shall mean iVillage Inc., a Delaware corporation.

 

o)                  Employment Agreement shall mean the employment agreement,
effective as of May 31, 2005, entered into by and between the Company and
Douglas McCormick.

 

p)                  Fair Market Value shall mean, as of any date, the value of
Common Stock determined as follows:

 

(i)  If the Common Stock is listed or quoted on any established stock exchange
or a national market system, including without limitation The Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Company deems reliable;

 

(ii)  If the Common Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Company deems
reliable; or

 

(iii)  In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Company.

 

q)                  Qualifying Termination shall mean (i) your Service was
terminated prior to the Scheduled Vesting Date by the Company without “cause”
(as defined in the Employment Agreement) or by you for “good reason” (as defined
in the Employment Agreement) and (ii) you executed and did not revoke the
release of claims agreements required by Section 6.1(a) of the Employment
Agreement.

 

r)                     Service shall mean your performance of services for the
Company in the capacity of Chief Executive Officer.  For purposes of this
Agreement, you shall be deemed to cease Service immediately upon the date which
you no longer perform services in the foregoing capacity for the Company.

 

s)                   Withholding Taxes shall mean the federal, state and local
income and employment taxes required to be withheld by the Company in connection
with the issuance of a Cash Payment for the Units that vest under the Award.

 

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As a condition of the Award, please execute the Acknowledgment section below to
indicate your acceptance of the terms and conditions of your Award.

 

 

iVillage Inc.

 

 

 

BY:

 

 

 

 

 

TITLE:

 

 

 

 

 

DATED:

 

, 2005

 

ACKNOWLEDGMENT

 

I hereby acknowledge and accept the foregoing terms and conditions of the
Performance Unit Award evidenced by this Agreement.  I further acknowledge and
agree that the foregoing sets forth the entire understanding between the Company
and me regarding my entitlement to receive any Cash Payments subject to such
Award and supersedes all prior oral and written agreements on that subject.

 

 

SIGNATURE:

 

 

 

 

 

 

 

DATED:

 

, 2005

 

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