EXHIBIT 10.3

FORM OF RETENTION AGREEMENT

This Retention Agreement (the “Agreement”) is entered into effective this 2nd
day of October 2006, between Marchex, Inc., a Delaware corporation (the
“Company”), and ___________ (the “Executive”).

WITNESSETH:

WHEREAS, Executive is employed by the Company or one of its wholly-owned
subsidiaries (referred to collectively as the “Company”) and the Company desires
to provide certain security to Executive in connection with any potential change
in control of the Company; and

NOW, THEREFORE, it is hereby agreed by and between the parties, for good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, as follows:

1. Payment Upon a Change of Control. In the event of a Change of Control (as
defined below) the Company shall, within thirty (30) days of such Change of
Control or such later date as is required by Section 409A(a)(2)(B)(i) of the
Internal Revenue Code of 1986, as amended (the “Code), make a lump sum cash
payment to Executive equal to two (2) times the product of the Executive’s
Annual Salary (as defined below) plus the greater of the aggregate amount of any
bonuses paid to or earned by the Executive with respect to the Company’s
immediately prior fiscal year or such Executive’s pro rata portion of the
aggregate bonus pool under the Company’s Annual Incentive Plan (the “Plan”) for
the then current fiscal year assuming achievement under the Plan of the maximum
performance targets for such fiscal year.

2. Benefits Upon a Change of Control. If within twelve (12) months following a
Change of Control (as defined below): (i) the Company shall terminate the
Executive’s employment with the Company without Cause (as defined below), or
(ii) the Executive shall voluntarily terminate such employment with Good Reason
(as defined below), the Company shall provide reimbursement of health care
premiums for Executive and his dependents, for a period of eighteen (18) months
from the date of Executive’s Employment Termination (as defined below), to the
extent that Executive is eligible for and elects continuation coverage under
COBRA (provided that such reimbursement shall terminate upon commencement of new
employment by an employer that offers health care coverage to its employees).

3. Definitions. For purposes of this Agreement:

(a) “Annual Salary” shall mean Executive’s salary at the greater of
(i) Executive’s annualized base salary (including Executive’s monthly car
allowance, if any) in effect on the date of the Change of Control, or
(ii) Executive’s annualized base salary in effect on Executive’s Employment
Termination.

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(b) “Cause” shall mean that the Company’s Board of Directors (the “Board”) has
reasonably determined in good faith that any one or more of the following has
occurred:

 

  (i) the Executive shall have been convicted of, or shall have pleaded guilty
or nolo contendere to, any felony;

 

  (ii) the Executive shall have willfully failed or refused to carry out the
reasonable and lawful instructions of the Board (other than as a result of
illness or disability) concerning duties or actions consistent with the
Executive’s then current position in a timely manner and otherwise in a manner
reasonable acceptable to the Board and such failure or refusal shall have
continued for a period of ten (10) days following written notice from the Board
describing such failure or refusal in reasonable detail;

 

  (iii) the Executive shall have breached any material provision of his
confidentiality and assignment of inventions agreement; or

 

  (iv) the Executive shall have committed any material fraud, embezzlement,
misappropriation of funds, breach of fiduciary duty or other act of dishonesty
against the Company.

(c) “Change of Control” shall mean the occurrence of any of the following
events:

 

  (i) an acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “Person” or “Group”
(as such terms are used for the purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) immediately
after which such Person or Group has Beneficial Ownership (within the meaning of
Rule l3d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
the combined voting power of the Company’s then-outstanding Voting Securities;
provided, however, in determining whether or not a Change of Control has
occurred, Voting Securities which are acquired in a “Non-Control Acquisition”
(as hereinafter defined) shall not constitute an acquisition which would
constitute a Change of Control. A “Non-Control Acquisition” shall mean an
acquisition by (i) any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliate of the Company, (ii) the Company,
(iii) any Person in connection with a Non-Control Transaction (as hereinafter
defined), or (iv) any holder of the Company’s Class A Common Stock as of the
date hereof;

 

  (ii)

individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a

 

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majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

 

  (iii) the consummation of:

 

  (a) A merger, consolidation or reorganization with or into the Company or in
which securities of the Company are issued, unless such merger, consolidation or
reorganization is a “Non-Control Transaction”. A “Non-Control Transaction” is a
merger, consolidation or reorganization with or into the Company or in which
securities of the Company are issued where:

 

  A. the shareholders of the Company immediately before such merger,
consolidation, or reorganization, own, directly or indirectly, at least
fifty-one percent (51%) of the combined voting power of the outstanding voting
securities of the corporation resulting form 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,

 

  B. 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 a majority of the members of the board of
directors of the Surviving Corporation or a corporation owning directly or
indirectly fifty-one percent (51%) or more of the Voting Securities of the
Surviving Corporation, and

 

  C. no Person or Group, other than (i) the Company, (ii) any subsidiary of the
Company, (iii) any employee benefit plan (or any trust forming a part thereof)
maintained by the Company immediately prior to such merger, consolidation, or
reorganization, or (iv) any holder of the Company’s Class A Common Stock as of
the date hereof, owns twenty percent (20%) or more of the combined voting power
of the Surviving Corporation’s then-outstanding voting securities; or

 

  (b) a complete liquidation or dissolution of the Company; or

 

  (c) the sale of disposition of all or substantially all of the assets of the
Company to any Person.

 

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Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company which, by reducing
the number of Voting Securities outstanding, increases the proportional number
of shares Beneficially Owned by the Subject Person, provided that if a Change of
Control would occur (but for the operation of this sentence) and after such
acquisition of Voting Securities by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities, then a Change of Control
shall occur.

(d) “Employment Termination” shall mean the effective date of: (i) Executive’s
voluntary termination of employment with the Company with Good Reason, or
(ii) the termination of Executive’s employment by the Company without Cause.

(e) “Good Reason” shall exist if, without Executive’s express written consent,
the following occurs:

 

  (i) a material diminution in the nature or scope of the Executive’s duties,
responsibilities, authority, powers or functions as compared to the Executive’s
duties, responsibilities, authority, powers or functions immediately prior to
the Change of Control;

 

  (ii) if the Executive is no longer (a) an executive officer of a
publicly-traded company, or (b) a Section 16 reporting person under the 1934
Act;

 

  (iii) a reduction in the Executive’s Annual Salary; or

 

  (iv) the relocation of Executive’s office at which he is to perform his duties
and responsibilities hereunder to a location more than sixty (60) miles from
Seattle, Washington.

4. Certain Additional Payments by the Company. In the event it shall be
determined at any time that as a result, directly or indirectly, of any payment
or distribution by the Company to or for the benefit of the Executive, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a “Payment”), the Executive would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax), then the Executive shall be entitled to
promptly receive from the Company an additional payment (a “Gross-Up Payment”)
in an amount such that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but
excluding any income taxes on the Payment, the Executive is in the same
after-tax position as if no Excise Tax had been imposed upon the Executive.

5. Mitigation and Set-Off. Executive shall not be required to mitigate
Executive’s damages by seeking other employment or otherwise, and except as
expressly provided in Section

 

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2 of this Agreement, the Company’s obligations under this Agreement shall not be
reduced in any way by reason of any compensation or benefits received (or
foregone) by Executive from sources other than the Company after Executive’s
employment termination, or any amounts that might have been received by
Executive in other employment had Executive sought other employment.

6. Attorney’s Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

7. Assignment and Transfer. This Agreement shall not be terminated by the merger
or consolidation of the Company with any corporate or other entity or by the
transfer of all or substantially all of the assets of the Company to any other
person, corporation, firm or entity. In the event of a sale of all or
substantially all of the assets of the Company and in connection with such sale
the person or entity purchasing such assets does not assume this Agreement, the
Executive shall have the right to terminate his employment hereunder for Good
Reason. The provisions of this Agreement shall be binding on and shall inure to
the benefit of any such successor in interest to the Company. Neither this
Agreement nor any of the rights, duties or obligations of the Executive shall be
assignable by the Executive, nor shall any of the payments required or permitted
to be made to the Executive by this Agreement be encumbered, transferred or in
any way anticipated, except as required by applicable laws.

8. Severable Provisions. The provisions of this Agreement are severable and the
invalidity of any one or more provisions shall not affect the validity of any
other provision.

9. Withholding. The Company may withhold from any payment that it is required to
make under this Agreement amounts sufficient to satisfy applicable withholding
requirements under any federal, state or local law.

10. Amendment. This Agreement may be amended at any time by written agreement
between the Company and Executive.

11. Financing. Cash and benefit payments under this Agreement shall constitute
general obligations of the Company. Executive shall have only an unsecured right
to payment thereof out of the general assets of the Company. Notwithstanding the
foregoing, the Company may, by agreement with one or more trustees to be
selected by the Company, create a trust on such terms, as the Company shall
determine, to make payments to Executive in accordance with the terms of this
Agreement.

 

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12. Notices. All notices hereunder shall be in writing and shall be deemed to
have been duly given on the date of personal delivery; or on the date of
electronic confirmation of receipt, if sent by telecopier; or three (3) days
after deposit in the United States mail, if mailed by certified or registered
mail, return receipt requested (postage prepaid); or one (1) day after delivery
by a reputable overnight courier (delivery charges prepaid), as follows:

 

If to the Company:       Marchex, Inc.    413 Pine Street, Suite 500    Seattle,
WA 98101    Telephone No.: 206.331.3310    Facsimile No: 206.331.3696   
Attention: General Counsel Copy to:       Francis J. Feeney, Jr., Esq.    DLA
Piper US LLP    33 Arch Street, 26th floor    Boston, MA 02110    Telephone No:
(617) 406-6063    Facsimile No: (617) 406-6163 If to the Executive:      
Telephone No.:    Facsimile No.

or to such other address as a party may notify the other pursuant to a notice
given in accordance with this Section 12.

13. Governing Law. This Agreement shall be construed under and enforced in
accordance with the internal substantive laws of the State of Washington. Any
litigation arising out of or incidental to this Agreement shall be initiated
only in a court of competent jurisdiction located within the State of
Washington. Each party hereby consents to the personal jurisdiction of the State
of Washington, acknowledges that venue is proper in any state or Federal court
in the State of Washington, agrees that any action related to this Agreement
must be brought in a state or Federal court in the State of Washington and
waives any objection that may exist, now or in the future, with respect to any
of the foregoing.

14. Employment. This Agreement shall not be construed as creating an express or
implied contract of employment and, except as otherwise agreed to in writing
between the Executive and the Company, the Executive shall not have any right to
be retained in the employ of the Company.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as an
instrument under seal on the day and year first written above.

 

MARCHEX, INC By:        Name:   Title: EMPLOYEE:        Name:

 

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