Exhibit 10.3

 

RETENTION AGREEMENT

 

This Retention Agreement (the “Agreement”) is made and entered into effective as
of                         , by and between                        (the
“Director”) and NetRatings, Inc., a Delaware corporation (the “Company”).

 

R E C I T A L

 

In order to provide the Director with enhanced financial security and sufficient
encouragement to remain with the Company, the Board of Directors of the Company
(the “Board”) believes that it is imperative to provide the Director with
certain benefits upon the involuntary termination of the Director’s services as
a Board member of the Company provided that such termination was not for cause.

 

A G R E E M E N T

 

In consideration of the mutual covenants herein contained and the continued
service of the Director to the Company, the parties agree as follows:

 

1.   BENEFITS UPON REMOVAL FROM BOARD.

 

(A)  ACCELERATION OF VESTING.  SUBJECT TO SECTIONS 1(B), AND 1(D) BELOW AND AS
CONSIDERATION FOR THE COVENANTS MADE HEREIN BY DIRECTOR INCLUDING DIRECTOR’S
COVENANTS IN SECTION 3 HEREIN, IF THE DIRECTOR’S SERVICE TO THE COMPANY AS A
MEMBER OF THE BOARD TERMINATES AS A RESULT OF AN INVOLUNTARY TERMINATION (AS
DEFINED IN SECTION 2(B)) THEN (I) THE UNVESTED PORTION OF ANY STOCK OPTION(S)
HELD BY THE DIRECTOR AS OF THE DATE OF THIS AGREEMENT THAT WERE GRANTED BY THE
COMPANY SHALL IMMEDIATELY ACCELERATE AND BECOME FULLY VESTED, AND SUCH OPTIONS
SHALL REMAIN EXERCISABLE FOR THE PERIOD PRESCRIBED IN THE DIRECTOR’S STOCK
OPTION AGREEMENTS AND (II) THE COMPANY’S RIGHT OF REPURCHASE AS TO ANY SHARES
SOLD TO DIRECTOR PRIOR TO THE DATE OF THIS AGREEMENT PURSUANT TO A RESTRICTED
STOCK PURCHASE AGREEMENT OR SIMILAR AGREEMENT SHALL IMMEDIATELY LAPSE AS TO ALL
SHARES ISSUED PURSUANT TO SUCH AGREEMENT.

 

(B)  280G COMPLIANCE.  IN THE EVENT THE DIRECTOR BECOMES ENTITLED TO THE
BENEFITS PROVIDED UNDER THIS AGREEMENT (THE “PAYMENTS”), AND SUCH PAYMENTS WOULD
RESULT IN A “PARACHUTE PAYMENT” AS DESCRIBED IN SECTION 280G OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), THE AMOUNT OF SUCH PAYMENTS SHALL
BE EITHER:

 

(I)                                     THE FULL AMOUNT OF THE PAYMENTS, OR

 

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(II)                                  A REDUCED AMOUNT WHICH WOULD RESULT IN NO
PORTION OF THE PAYMENTS BEING SUBJECT TO THE EXCISE TAX IMPOSED PURSUANT TO
SECTION 4999 OF THE CODE (THE “EXCISE TAX”),

 

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by the
Director, on an after-tax basis, of the greatest amount of benefit.  Unless the
Company or the Director otherwise agree in writing, any determination required
under this Section shall be made in writing by independent public accountants
appointed by the Company and reasonably acceptable to the Director (the
“Accountants”), whose determination shall be conclusive and binding upon the
Director and the Company for all purposes.  The Company shall bear all costs the
Accountants may reasonably incur.

 

(C)  VOLUNTARY RESIGNATION; TERMINATION FOR CAUSE.  IF THE DIRECTOR VOLUNTARILY
RESIGNS FROM THE BOARD (AND SUCH RESIGNATION IS NOT AN INVOLUNTARY TERMINATION
DEFINED IN SECTION 2(B)), OR IF THE BOARD TERMINATES THE DIRECTOR’S SERVICES AS
A DIRECTOR FOR CAUSE, THEN THE DIRECTOR SHALL NOT BE ENTITLED TO RECEIVE ANY
BENEFITS SET FORTH IN THIS AGREEMENT.

 

(D)  RELEASE OF CLAIMS.  THE DIRECTOR SHALL NOT BE ENTITLED TO ANY OF THE
BENEFITS DESCRIBED IN THIS SECTION 1 UNLESS AND UNTIL THE DIRECTOR, IN
CONSIDERATION FOR SUCH BENEFITS, EXECUTES A RELEASE OF CLAIMS IN A FORM
SATISFACTORY TO THE COMPANY; PROVIDED, HOWEVER, THAT SUCH RELEASE SHALL NOT
APPLY TO ANY RIGHT OF THE DIRECTOR TO BE INDEMNIFIED BY THE COMPANY.

 

2.   DEFINITION OF TERMS.  THE FOLLOWING TERMS REFERRED TO IN THIS AGREEMENT
SHALL HAVE THE FOLLOWING MEANINGS:

 

(A)  CAUSE.  “CAUSE” SHALL MEAN:  (I) ANY ACT OF PERSONAL DISHONESTY TAKEN BY
THE DIRECTOR IN CONNECTION WITH HIS RESPONSIBILITIES AS A DIRECTOR WHICH IS
INTENDED TO RESULT IN SUBSTANTIAL PERSONAL ENRICHMENT OF THE DIRECTOR; (II) THE
DIRECTOR’S CONVICTION OF A FELONY WHICH THE BOARD REASONABLY BELIEVES HAS HAD OR
WILL HAVE A MATERIAL DETRIMENTAL EFFECT ON THE COMPANY’S REPUTATION OR BUSINESS;
(III) A WILLFUL ACT BY THE DIRECTOR WHICH CONSTITUTES MISCONDUCT AND IS
MATERIALLY INJURIOUS TO THE COMPANY; AND (IV) CONTINUED WILLFUL VIOLATIONS BY
THE DIRECTOR OF THE DIRECTOR’S OBLIGATIONS TO THE COMPANY AFTER THERE HAS BEEN
DELIVERED TO THE DIRECTOR A WRITTEN DEMAND FOR PERFORMANCE FROM THE COMPANY
WHICH DESCRIBES THE BASIS FOR THE COMPANY’S BELIEF THAT THE DIRECTOR HAS NOT
SUBSTANTIALLY PERFORMED HIS DUTIES.

 

(B)  INVOLUNTARY TERMINATION.  “INVOLUNTARY TERMINATION” SHALL MEAN (I) WITHOUT
THE DIRECTOR’S EXPRESS WRITTEN CONSENT, THE REMOVAL OF THE DIRECTOR FROM THE
BOARD OR THE FAILURE OF THE COMPANY’S SHAREHOLDERS TO RE-ELECT SUCH DIRECTOR TO
THE BOARD OTHER THAN FOR CAUSE; (II) IN THE CASE OF THE CHAIRMAN OF THE BOARD,
THE REMOVAL OF SUCH DIRECTOR FROM SUCH POSITION OTHER THAN FOR CAUSE; (III) THE
DEATH OR DISABILITY (AS DEFINED IN SECTION 2(C) BELOW) OF THE DIRECTOR; OR
(IV) ANY BREACH BY THE COMPANY OF ANY MATERIAL PROVISION OF THIS AGREEMENT.

 

(C)  DISABILITY.  “DISABILITY” SHALL MEAN THE INABILITY OF THE DIRECTOR TO
PERFORM HIS DUTIES AS A MEMBER OF THE BOARD AS THE RESULT OF HIS INCAPACITY DUE
TO PHYSICAL OR MENTAL ILLNESS, AND SUCH INABILITY, AT LEAST 26 WEEKS AFTER ITS
COMMENCEMENT, IS DETERMINED TO BE TOTAL AND PERMANENT BY A PHYSICIAN SELECTED BY
THE COMPANY OR ITS INSURERS AND REASONABLY ACCEPTABLE TO THE DIRECTOR (OR THE
DIRECTOR’S LEGAL REPRESENTATIVE).

 

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3.   OTHER ACTIVITIES. 

 

(a)  In order to protect the Company’s valuable proprietary information,
Director agrees that during Director’s term of service to the Company and for a
period of one (1) year following the termination of such services with the
Company for any reason, Director shall not, as a compensated or uncompensated
officer, director, consultant, advisor, partner, joint venturer, investor,
independent contractor, employee or otherwise, provide any labor, services,
advice or assistance to any of the following entities, which are direct
competitors of the Company:  (i) Comscore Networks, Compete and HitWise and (ii)
WebSideStory, WebTrends, Omniture, CoreMetrics and any company that generates at
least fifty percent of its revenues in its most recent completed fiscal year
from web analytics based on the tagging of a web page.  Director acknowledges
and agrees that the restrictions contained in the preceding sentence are
reasonable and necessary, as there is a significant risk that Director’s
provision of labor, services, advice or assistance to any of those competitors
could result in the inevitable disclosure of the Company’s proprietary
information.  Director further acknowledges and agrees that the restrictions
contained in this paragraph will not preclude Director from engaging in any
trade, business or profession that Director is qualified to engage in. 
Notwithstanding the foregoing, Director is permitted to own, individually, as a
passive investor up to a one percent (1%) interest in any publicly traded
entity.

 

(B)  UPON THE TERMINATION OF DIRECTOR’S SERVICES TO THE COMPANY AS A MEMBER OF
ITS BOARD, DIRECTOR SHALL NOT, FOR A PERIOD OF TWELVE (12) MONTHS KNOWINGLY
SOLICIT FOR THE PURPOSES OF EMPLOYMENT OR TO HIRE, WITHOUT PRIOR WRITTEN CONSENT
OF THE COMPANY, ANY EMPLOYEE OF THE COMPANY, EITHER DIRECTLY OR INDIRECTLY
THROUGH AN ASSOCIATED COMPANY, EMPLOYEE SEARCH OR PLACEMENT FIRM OR ANY OTHER
THIRD PARTY.

 

4.   SUCCESSORS.

 

(A)  COMPANY’S SUCCESSORS.  ANY SUCCESSOR TO THE COMPANY (WHETHER DIRECT OR
INDIRECT AND WHETHER BY PURCHASE, LEASE, MERGER, CONSOLIDATION, LIQUIDATION OR
OTHERWISE) TO ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S BUSINESS AND ASSETS
SHALL ASSUME THE COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT.

 

(B)  DIRECTOR’S SUCCESSORS.  WITHOUT THE WRITTEN CONSENT OF THE COMPANY, THE
DIRECTOR SHALL NOT ASSIGN OR TRANSFER THIS AGREEMENT OR ANY RIGHT OR OBLIGATION
UNDER THIS AGREEMENT TO ANY OTHER PERSON OR ENTITY.  NOTWITHSTANDING THE
FOREGOING, THE TERMS OF THIS AGREEMENT AND ALL RIGHTS OF THE DIRECTOR HEREUNDER
SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE DIRECTOR’S PERSONAL OR
LEGAL REPRESENTATIVES, EXECUTORS, ADMINISTRATORS, SUCCESSORS, HEIRS,
DISTRIBUTEES, DEVISEES AND LEGATEES.

 

5.   NOTICES.  NOTICES AND ALL OTHER COMMUNICATIONS CONTEMPLATED BY THIS
AGREEMENT SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN WHEN
PERSONALLY DELIVERED OR WHEN MAILED BY U.S. REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED AND POSTAGE PREPAID.  IN THE CASE OF THE DIRECTOR, MAILED
NOTICES SHALL BE ADDRESSED TO HIM AT THE HOME ADDRESS WHICH HE MOST RECENTLY

 

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COMMUNICATED TO THE COMPANY IN WRITING.  IN THE CASE OF THE COMPANY, MAILED
NOTICES SHALL BE ADDRESSED TO ITS CORPORATE HEADQUARTERS, AND ALL NOTICES SHALL
BE DIRECTED TO THE ATTENTION OF ITS SECRETARY.

 

6.   MISCELLANEOUS PROVISIONS.

 

(A)  WAIVER.  NO PROVISION OF THIS AGREEMENT SHALL BE MODIFIED, WAIVED OR
DISCHARGED UNLESS THE MODIFICATION, WAIVER OR DISCHARGE IS AGREED TO IN WRITING
AND SIGNED BY THE PARTY HERETO ADVERSELY AFFECTED THEREBY.  NO WAIVER BY EITHER
PARTY OF ANY BREACH OF, OR OF COMPLIANCE WITH, ANY CONDITION OR PROVISION OF
THIS AGREEMENT BY THE OTHER PARTY SHALL BE CONSIDERED A WAIVER OF ANY OTHER
CONDITION OR PROVISION OR OF THE SAME CONDITION OR PROVISION AT ANOTHER TIME.

 

(B)  WHOLE AGREEMENT.  THIS AGREEMENT, ANY STOCK OPTION AGREEMENTS REPRESENTING
OPTIONS, AND ANY OTHER RESTRICTED STOCK PURCHASE AGREEMENT OR SIMILAR AGREEMENT
REPRESENT THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AS TO THE
SUBJECT MATTER HEREIN AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS,
WHETHER WRITTEN OR ORAL. NOTHING IN THIS AGREEMENT, HOWEVER, IS INTENDED TO
AFFECT THE RIGHTS OF THE DIRECTOR, OR THE COVERED DEPENDENTS OF THE DIRECTOR,
UNDER ANY APPLICABLE LAW WITH RESPECT TO HEALTH INSURANCE CONTINUATION COVERAGE.

 

(C)  CHOICE OF LAW.  THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE
OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.

 

(D)  SEVERABILITY.  THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION OR
PROVISIONS OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION HEREOF, WHICH SHALL REMAIN IN FULL FORCE AND EFFECT.

 

(E)  ARBITRATION.  THE COMPANY AND THE DIRECTOR AGREE THAT ANY DISPUTE OR
CONTROVERSY ARISING OUT OF OR RELATING TO ANY INTERPRETATION, CONSTRUCTION,
PERFORMANCE OR BREACH OF THIS AGREEMENT SHALL BE SETTLED BY ARBITRATION TO BE
HELD IN NEW YORK, NEW YORK, IN ACCORDANCE WITH THE NATIONAL RULES FOR THE
RESOLUTION OF EMPLOYMENT DISPUTES THEN IN EFFECT OF THE AMERICAN ARBITRATION
ASSOCIATION.  THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE AND
BINDING ON THE PARTIES TO THE ARBITRATION.  JUDGMENT MAY BE ENTERED ON THE
ARBITRATOR’S AWARD IN ANY COURT HAVING JURISDICTION.

 

(F)  NO ASSIGNMENT OF BENEFITS.  THE RIGHTS OF ANY PERSON TO PAYMENTS OR
BENEFITS UNDER THIS AGREEMENT SHALL NOT BE MADE SUBJECT TO OPTION OR ASSIGNMENT,
EITHER BY VOLUNTARY OR INVOLUNTARY ASSIGNMENT OR BY OPERATION OF LAW, INCLUDING
(WITHOUT LIMITATION) BANKRUPTCY, GARNISHMENT, ATTACHMENT OR OTHER CREDITOR’S
PROCESS, AND ANY ACTION IN VIOLATION OF THIS SECTION 6(F) SHALL BE VOID.

 

(G)  EMPLOYMENT TAXES.  PAYMENTS MADE PURSUANT TO THIS AGREEMENT MAY BE SUBJECT
TO WITHHOLDING OF APPLICABLE INCOME AND EMPLOYMENT TAXES.

 

(H)  COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH OF
WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER WILL CONSTITUTE ONE
AND THE SAME INSTRUMENT.

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

 

 

COMPANY:

NETRATINGS, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

DIRECTOR:

 

 

 

 

 

 

 

 

 

Name:

 

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