**EXHIBIT 10**

 

**iVILLAGEINC.**

 

**EMPLOYMENTAGREEMENT**

 

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

 

In consideration of the mutual covenants andagreements hereinafter set forth, the Company and Employee hereby agree asfollows:

 

**AGREEMENT**

 

1.             **EMPLOYMENT. **TheCompany hereby employs Employee to serve as Chief Executive Officer andChairman of the Board of Directors of the Company with such duties andresponsibilities as are usually vested in the office of chief executive officerof a corporation and as otherwise set forth in the Company’s By-Laws, and insuch other executive and managerial capacities consistent with his status andtitle as are determined by the Board of Directors of the Company.

 

Unless earlierterminated 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, Employeeshall 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 ininstallments consistent with the Company’s payroll practices and may be increasedat the discretion of the Board of Directors of the Company.

 

2.2           *Bonus*. Employee shall be eligible toparticipate in the Company’s bonus plan. During the Term, Employee’s bonus willbe targeted at ninety percent (90%) of Employee’s Base Salary or five hundredforty thousand dollars ($540,000). Payment of a Bonus will be based onsatisfactory performance of Company, departmental and individual goals andobjectives, as determined by the Compensation Committee of the Board ofDirectors.  However, for fiscal year2005, Employee’s Bonus will be based on criteria set forth in Exhibit A tothis Agreement.  Bonus criteria forfiscal years 2006 and 2007 will be set by the Compensation Committee of theBoard of Directors no later than the first quarter of each respective fiscalyear.

 

2.3           *Long Term Incentives*.

 

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

 

----

 

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

 

(b) *RestrictedStock Units*:Employee shall also be entitledto a grant of 50,000 unvested restricted stock units (“RSUs”) on or about eachof January 1, 2006, June 30, 2006 and June 30, 2007 (each of thethree discrete grants of 50,000 RSUs will be referred to herein as the “FirstRSUs”, “Second RSUs” and “Third RSUs”, respectively).  Each grant of RSUs will be subject toEmployee’s continued employment as Chief Executive Officer and also subject tothe terms and conditions of a RSU Agreement approved by the CompensationCommittee.  Such RSU Agreement will besubstantially similar (i.e., no material changes to the terms thereof) to theagreement attached as Exhibit D hereto. In the event the CompensationCommittee does not approve such RSU Agreement, Employee shall be paidequivalent compensation in an amount equal to what Employee would have receivedif it had been approved. If Employee remains employed as Chief ExecutiveOfficer through the Term then all 150,000 RSUs shall vest on May 31,2008.  If a Change in Control (as definedherein) 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 theChange in Control and all 150,000 RSUs shall also then be fully vested.  Any vested RSUs shall entitle Employee to alump sum cash payment as soon as practicable (but not more than 45 days) afterthe vesting date with such cash amount equal to the number of vested RSUsmultiplied 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 unvestedRSUs will be canceled without consideration upon Employee’s termination ofemployment and all vested RSUs (including but not limited to any RSUs that vestas a result of Section 6.1) shall also be canceled upon payment of therequisite cash amount to Employee.  Thenumbers of RSUs referenced above shall be subject to appropriate adjustments bythe Company in the event of a Company stock split, reverse stock split,recapitalization, stock dividend, combination or exchange of shares, or similartransaction affecting the Company’s capital structure.

 

(c) *PerformanceUnits:* Employee shall beentitled 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 ChiefExecutive Officer and also subject to the terms and conditions of a PUAgreement approved by the Compensation Committee.  Such PU Agreement will be substantiallysimilar (i.e., no material changes to the terms thereof) to the agreementattached as Exhibit E hereto. In the event the Compensation Committee doesnot approve such PU Agreement, Employee shall be paid equivalent compensationin an amount equal to what Employee would have received if it had beenapproved.  If Employee

 

2

----

 

remains employed as Chief Executive Officer throughthe 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 PUsnot as yet granted shall be granted as of the effective date of the Change inControl and all PUs shall also then be fully vested.  Any vested PUs shall entitle Employee to alump sum cash payment as soon as practicable (but not more than 45 days) afterthe vesting date in an amount equal to the number of vested PUs multiplied bythe fair market value of a share of the Company’s common stock (as defined inthe PU Agreement) as of the vesting date multiplied by the “ApplicablePercentage” (as defined in this subsection). Subject to Section 6.1, all unvested PUs will be canceled withoutconsideration 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 toEmployee.  For purposes of thisAgreement, “Applicable****Percentage”shall mean, on the PU vesting date, either: (i) 0% if the fair market value of one share of Company commonstock is less than $8.00, (ii) 50% if the fair market value of one shareof 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 orgreater than $9.00 and less than $10.00, or (iv) 150% if the fair marketvalue of one share of Company common stock is equal to or greater than$10.00.  The threshold dollar valuesreferenced in the preceding sentence and the numbers of PUs referenced aboveshall be subject to appropriate adjustments by the Company in the event of aCompany stock split, reverse stock split, recapitalization, stock dividend,combination or exchange of shares, or similar transaction affecting the Company’scapital structure.  For purposes ofdetermining the Applicable Percentage, the fair market value of a Companycommon share shall be as defined in the PU Agreement.

 

2.4           *Payment*. Payment of all compensation toEmployee hereunder (including any payment under Section 6.1) shall besubject to all applicable employment and withholding taxes and other customarydeductions.

 

3.             **OTHER EMPLOYMENT BENEFITS.**

 

3.1           *Business Expenses*. Upon submission of itemized expense statements in the manner and formregularly specified by the Company, Employee shall be entitled to reimbursementfor reasonable travel (generally first class or business class air fare iffirst class is unavailable) and other reasonable business expenses incurred byEmployee in the performance of his duties under this Agreement in accordancewith the Company’s travel and entertainment policy.

 

3.2           *Fringe Benefits*.  TheCompany shall make Employee the beneficiary of and Employee shall receive thestandard package of fringe benefits as the Company generally provides to itsother senior executive officers.  Fringebenefits to be included in this standard benefit package include, but are notlimited to, medical and dental insurance coverage, disability insurance, four (4) weeksof paid vacation per year, holidays and sick leave. Participation in such

 

3

----

 

fringe benefit programs will be subject to certain employeecontributions that may from time to time regularly be applicable to suchprograms.

 

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

 

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

 

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

 

5.             **OBLIGATION NOT TO COMPETE**. Employee acknowledges the highly confidential nature of informationregarding the Company’s businesses, customers, suppliers, employees, agents,independent contractors and consultants. Employee hereby agrees that (a) whilehe is employed by the Company and (b) during the one (1) year periodfollowing 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 servicesto any organization, proprietorship or entity that engages in any business inwhich the Company or its affiliates is actively engaged or is activelyconsidering engagement at the time of termination of Employee’s employment (“CompetitiveBusiness”).  Employee also agrees that,during the Restricted Period, he shall not in any manner****directlyor indirectly, solicit, or encourage any customer, distributor, supplier,employee, agent, independent contractor, consultant or any other person orcompany to terminate or alter its relationship with the Company or itsaffiliates.** **Eachof the following activities shall, without limitation, be deemed to violate theprovisions of this Section 5: to engage in, work with, have an interest orconcern in, advise, lend money to, guarantee the debts or obligations of, orpermit one’s name or any part thereof to be used in connection with, anenterprise or endeavor, either individually, in partnership, or in conjunctionwith 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 aCompetitive Business; provided, however, that (i) Employee and/or hisaffiliates shall retain the right to invest in or have an interest in entitiesprovided that said interest

 

4

----

 

does not exceed five percent (5%) of the voting control of said entityand (ii) the Company and Employee acknowledge that the Employee and/or hisaffiliates currently have investments in, consultancies with and/or serve onthe Board of Directors of (and may retain such positions), the entities listedon 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 ofthe following (such last day of Employee’s employment is referred to herein asthe “Termination Date”):

 

(a)           TheCompany provides Employee with written notice of the Company’s intent toterminate Employee’s employment with the Company without cause, in which casetermination 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 theNotice unless Employee consents to an earlier date.  In the event of termination under thissubparagraph (a), the Company shall pay or provide to Employee the items referencedbelow in subparagraphs (i) through (viii):

 

(i)            theaccrued compensation and benefits otherwise payable to Employee under Sections2 and 3 through the Termination Date (including pay for accrued but unusedvacation and any then outstanding expense reimbursements);

 

(ii)           anamount equivalent to the Base Salary that Employee would have earned had heremained employed through the end of the Term;

 

(iii)          anamount equivalent to any bonus which would have been earned by Employee had heremained employed through the end of the Term (at the bonus target specified inSection 2.2 above); provided that, in the event Employee is terminated infiscal year 2008, Employee’s bonus for fiscal year 2008 shall be pro-rated toreflect the percentage of fiscal year 2008 in which Employee was employed; andprovided further that Employee shall not be entitled to receive severance equalto such bonus compensation for prior completed fiscal years for which he (A) alreadyreceived a bonus or (B) did not satisfy the applicable bonus criteria;

 

(iv)          continuedinsurance coverage on Employee for the remainder of the Term (subject toapplicable law and applicable employee contributions);

 

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

 

(vi)          thefollowing alternative number of fully vested RSUs will be granted to Employeeas of the Termination Date (assuming that such following RSUs had not beenpreviously granted to Employee pursuant to Section 2.3(b)): If theTermination Date is prior to January 1, 2006, then the number of vestedRSUs to be granted is equal to the sum of (x) the First RSUs, plus (y) theSecond RSUs multiplied by the number of days Employee was employed as ChiefExecutive Officer between July 1, 2005 and June 30, 2006 divided by365;  If the Termination Date is on orafter January 1, 2006 and prior to July 1, 2006, then the number ofvested RSUs to be granted is equal to the Second RSUs multiplied by the numberof days Employee was employed as Chief Executive Officer between July 1,2005 and June 30, 2006

 

5

----

 

divided by 365;  If theTermination 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 RSUsmultiplied by the number of days Employee was employed as Chief ExecutiveOfficer between July 1, 2006 and June 30, 2007 divided by 365 ;

 

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

 

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

 

Notwithstandingthe foregoing, in no event shall the sum of subparagraphs (ii) and (iii) beless than the greater of $870,000 or an amount equal to Employee’s base pay andhighest paid bonus for any completed year of the term of this Agreement  (“Minimum Severance Payment”).  Employee’s rights under the Company’s benefitplans of general application shall be determined under the provisions of thoseplans. All pay and benefits described in subparagraphs (ii) through (viii) ofthis section are conditioned upon execution (and non-revocation byEmployee) of appropriate and customary termination and release agreements to benegotiated in good faith by the parties. Cash severance shall be paid in a lump sum as soon as practicablefollowing the execution (and passage of any applicable revocation periodwithout Employee’s revocation) of the termination and release agreement to theextent permitted by applicable law. Employee shall continue to comply with Section 5 after terminationpursuant to this subparagraph (a).

 

(b)           TheCompany determines, in good faith, that Employee should be terminated for “cause”as defined in Section 6.2 below, in which case termination shall beeffective on the date that written notice of termination is hand-delivered toEmployee by the Company (or, if the Company is unable to hand-deliver suchnotice to Employee, the date that such notice is mailed or faxed to Employeepursuant to Section 10.9).  In theevent of termination under this subparagraph (b), the Company shall payEmployee the compensation and benefits otherwise payable to Employee under Section 2.1through the Termination Date (including pay for accrued but unused vacation andany then outstanding expense reimbursements), and the Company will have noobligation to pay Employee the Base Salary or any bonus or other compensationfor the remainder of the Term. Employee’s rights under the Company’s benefitplans of general application shall be determined under the provisions of thoseplans. Employee shall continue to comply with Section 5 after terminationpursuant to this subparagraph (b).

 

(c)           Theresignation 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 ofEmployee’s resignation is delivered to the Company pursuant to Section 10.9.  In the event of resignation under thissubparagraph (c), the Company shall pay Employee the compensation and benefitsdescribed in subparagraph (a) of this section under the same termsand conditions described in subparagraph (a).

 

6

----

 

(d)           Theeffective date of any voluntary termination by Employee other than for “goodreason”. In the event of termination under this subparagraph (d), the Companyshall pay Employee the compensation and benefits described in subparagraph (b) ofthis section under the same terms and conditions described in subparagraph(b).

 

(e)           Thedate of Employee’s death or permanent disability. Permanent disability may bedeemed to occur, at the Company’s discretion communicated by written notice toEmployee, if Employee is incapacitated or disabled by accident or sickness orotherwise so as to render him mentally or physically incapable of performingthe services required to be performed by him under this Agreement for a periodof 120 consecutive days.  In the event oftermination under this subparagraph (e), the Company shall pay Employee or his estatethe compensation and benefits otherwise payable to Employee under Section 2.1through the Termination Date (including pay for accrued but unused vacation andany then outstanding expense reimbursements), and the Company will have noobligation to pay Employee or his estate the Base Salary, any bonus or othercompensation for the remainder of the Term. Employee’s rights under the Company’sbenefit plans of general application shall be determined under the provisionsof those plans or the provision of any agreement executed pursuant to thoseplans. Employee shall continue to comply with Section 5 after terminationas a result of permanent disability pursuant to this subparagraph (e).

 

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

 

(g)           Inthe 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 jointpress release discussing such termination with such language as shall bemutually agreed by the parties.  Under nocircumstances shall Employee be required to obtain suitable employmentelsewhere upon termination of this Agreement or otherwise mitigate anypost-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 happeningof one or more of the following events:

 

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

 

7

----

 

(b)           Employeehas engaged in habitual neglect of his duties as an employee of the Companywhich remains uncured following delivery to Employee of written noticereasonably describing the offending conduct and a reasonable opportunity tocure;

 

(c)           Employeehas 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 crimeinvolving moral turpitude not involving a conviction for operating a motorvehicle under the influence of alcohol or any other motor vehicle violation; or

 

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

 

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

 

(a)           Withoutthe Employee’s prior written consent, the assignment to the Employee of anyduties 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) orotherwise;

 

(b)           WithoutEmployee’s consent in each instance, a reduction by the Company of the Employee’sbase salary or of any bonus compensation formula applicable to Employee, or theCompany’s failure to pay Employee the applicable bonus pursuant to Section 2.2in any fiscal year despite satisfaction of the corresponding applicable bonuscriteria for such fiscal year as set forth in Exhibit A hereto for fiscalyear 2005 or by the Compensation Committee of the Company’s Board of Directorsfor subsequent fiscal years during the Term;

 

(c)           TheCompany or any affiliate(s) requiring the Employee to be based anywhere otherthan within twenty-five (25) miles of the area in which he resides, except forrequired travel on the Company’s or an affiliate’s business to an extentsubstantially consistent with the Employee’s present business travelobligations;

 

(d)           Abreach by the Company of any material provision of this Agreement or any otheragreement between the Company and the Employee, which breach is not curedwithin thirty (30) days following the delivery to the Company of written noticereasonably describing the alleged breach;

 

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

 

8

----

 

**REASON” UNDER THISAGREEMENT IF SUCH REMOVAL IS REQUIRED IN ORDER TO COMPLY WITH CHANGES IN LEGALOR REGULATORY REQUIREMENTS APPLICABLE TO THE COMPANY.**

 

**(F)****          ****THEOCCURRENCE OF A CHANGE IN CONTROL OF THE COMPANY (AS DEFINED IN EXHIBIT C)IN WHICH CASE EMPLOYEE SHALL BE ENTITLED TO THE SEVERANCE COMPENSATIONDESCRIBED IN SECTION 6.1(A) OF THIS AGREEMENT.  NOTWITHSTANDING THE FOREGOING, EMPLOYEE WILLNOT BE ENTITLED TO THE SEVERANCE COMPENSATION DESCRIBED IN SECTIONS 6.1(A) OR6.1(C) OF THIS AGREEMENT UPON A CHANGE IN CONTROL IN THE EVENT THATEMPLOYEE IS OFFERED AND ACCEPTS A POSITION AS CHIEF EXECUTIVE OFFICER OR ITSEQUIVALENT FOR THE SUCCESSOR ENTITY AFTER THE CHANGE IN CONTROL.**

 

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

 

6.4           *Effect of Termination Payments*.  Employeeagrees and acknowledges that upon Employee’s termination of employment with theCompany pursuant to Section 6 of this Agreement, Employee shall only beentitled to the severance payments and benefits (including stock optionvesting), if any, specified in Section 6 or in the applicable stock optionagreements and such severance payments and benefits shall be in lieu of allother severance payments and benefits which might otherwise be payable toEmployee by the Company.

 

7.             **CONFIDENTIALITY; WORKS FOR HIRE.**

 

7.1           *Confidentiality.*  As usedherein, the term “Confidential Information” means all trade secrets orconfidential information concerning the business, products, practices ortechniques of the Company and/or its affiliates and any third parties with whomthey deal, including, but not limited to, price lists, pricing information,product information systems, designs, research, membership lists, members andusers 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 orpatented or patentable).  At all times,both during Employee’s employment by the Company and after Employee’stermination, Employee will keep in strict confidence and will not disclose anyConfidential Information including, but not limited to, ConfidentialInformation concerning any client, customer, or business partner of theCompany, to any person or entity, or make use of any such ConfidentialInformation for Employee’s own purposes or for the benefit of any person orentity, except as may be necessary in the ordinary course of performingEmployee’s duties as an employee of the Company.  The term “Confidential Information” does notinclude information which (i) is or becomes generally available to thepublic other than as a result of a disclosure by the Employee, (ii) waswithin the Employee’s possession prior to being furnished to the Employee by oron behalf of the Company pursuant hereto or (iii) becomes available to theEmployee on a non-confidential basis from a source other than the Company orany of its present of prospective directors, officers, employees, agents or advisors;provided that with respect to clauses (ii) and

 

9

----

 

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

 

7.2           *Works for Hire.*  Employeeacknowledges that all right, title and interest he obtains in all works ofauthorship, designs, computer programs, copyrights and copyright applications,inventions, discoveries, developments, know-how, systems, processes, formulae,patent and patent applications, trade secrets, new products, internal reportsand memoranda, strategies, and marketing plans conceived, devised, developed,written, reduced to practice, or otherwise created or obtained by Employee inconnection with his employment by the Company (the “Intellectual Property”) areregarded as “works for hire”.  Employeehereby transfers and assigns to the Company all right, title, and interest tothe Intellectual Property.  Promptlyafter Employee obtains knowledge of any Intellectual Property, he will discloseit to the Company.  Upon request of theCompany, he will execute and deliver all documents or instruments and take allother action as the Company may deem reasonably necessary to transfer allright, title, and interest in any Intellectual Property to the Company; to vestin the Company good, valid and marketable title to such Intellectual Property;to perfect, by registration or otherwise, trademark, copyright and patentprotection of the Company with respect to such Intellectual Property; andotherwise to protect the Company’s trade secrets and proprietary interest insuch Intellectual Property.

 

**IN THE EVENT OF THE TERMINATION OFEMPLOYEE’S EMPLOYMENT FOR ANY REASON, EMPLOYEE WILL DELIVER TO THE COMPANY ALLDOCUMENTS, NOTES, DRAWINGS, BLUEPRINTS, FORMULAE, SPECIFICATIONS, COMPUTERPROGRAMS, DATA AND OTHER MATERIALS OF ANY NATURE PERTAINING TO ANY INTELLECTUALPROPERTY OR TO EMPLOYEE’S WORK WITH THE COMPANY, AND WILL NOT TAKE ANY OF THEFOREGOING OR ANY REPRODUCTION OF ANY OF THE FOREGOING THAT IS EMBODIED IN ATANGIBLE MEDIUM OF EXPRESSION.**

 

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

 

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

 

10.           **MISCELLANEOUS**.

 

10.1         *Governing Law.*  ThisAgreement will be governed by and construed in accordance with the laws of theState of New York without giving effect to any choice of law or conflictingprovision or rule.

 

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

 

10

----

 

prior or contemporaneous written or oral agreements between them respectingthe subject matter hereof.  Employeeacknowledges, represents and warrants to the Company that no oral or writtenrepresentations have been made to Employee by the Company, or anyrepresentative of the Company regarding (a) the Company’s financial conditionor its prospects or (b) any obligation, commitment or understanding onbehalf of the Company to continue to employ Employee for any specific period oftime except as specifically set forth herein.

 

10.3         *Amendment*.  ThisAgreement may be amended only by a writing signed by Employee and by a dulyauthorized representative of the Company (other than Employee).

 

10.4         *Severability*.  If anyterm, provision, covenant or condition of this Agreement, or the applicationthereof 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 andcircumstances shall remain in full force and effect.

 

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

 

10.6         *Rights Cumulative*. The rights and remedies provided by this Agreement are cumulative, andthe exercise of any right or remedy by either party hereto (or by itssuccessor), whether pursuant to this Agreement, to any other agreement, or tolaw, shall not preclude or waive such party’s right to exercise any or allother rights and remedies.

 

10.7         *Nonwaiver*.  No failureor neglect of either party hereto in any instance to exercise any right, poweror privilege hereunder or under law shall constitute a waiver of any otherright, power or privilege or of the same right, power or privilege in any otherinstance. All waivers by either party hereto must be contained in a writteninstrument 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 dulyauthorized by the Company.

 

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

 

10.9         *Notices*.  All noticesand other communications hereunder shall be in writing and shall be deemedgiven if delivered personally or by commercial delivery service, or mailed byregistered or certified mail (return receipt requested) or sent via facsimile(with acknowledgement of complete transmission) to the parties at the followingaddresses (or at such other address for a party as shall be specified by likenotice):

 

11

----

 

if to the Company, to:

 

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

 

if to Employee, to:

 

Douglas McCormick1080 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, uponreasonable notice, furnish such information and proper assistance to theCompany as may reasonably be required by the Company in connection with anylitigation in which it or any of its subsidiaries or affiliates is, or maybecome, a party.  If such information orassistance is required after termination of Employee’s employment, Employeeshall be entitled to reasonable reimbursement of Employee’s out-of-pocketexpenses (excluding attorney’s fees) and, in the event such assistance exceedsten (10) hours of Employee’s time in the aggregate, for Employee’s time inconnection therewith.

 

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

 

12

----

 

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

 

10.12       *Execution*.  ThisAgreement may be executed in counterparts, each of which shall be deemed anoriginal but both of which together will constitute one and the sameinstrument.

 

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

 

10.14       *Expenses*.  The Companyshall reimburse Employee for the reasonable professional fees and expensesincurred by Employee in connection with the negotiation of this Agreement up toa 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

----

 

**EXHIBIT A**

 

Bonus Calculation for 2005

 

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

 

95% of Goal =  50% of targetbonus

 

100% of Goal =  100% of targetbonus

 

125% of Goal =  150% of targetbonus

 

150% of Goal =  200% of targetbonus

 

14

----

 

**EXHIBIT B**

 

**DouglasMcCormick 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.

 

15

----

 

**EXHIBIT C**

 

**DEFINITION OF “CHANGE IN CONTROL”**      A “Change in Control” shall mean theoccurrence of the following: (a)  An acquisition (other than directly from the Company) of any votingsecurities of the Company (the “Voting Securities”) by any “Person”  (as the term person is used for purposes of Section 13(d) orSection 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) offifty percent (50%) or more of the then outstanding shares of the Company’scommon stock (“Shares”) or the combined voting power of the Company’s thenoutstanding Voting Securities; provided, however, in determining whether aChange in Control has occurred pursuant to this Section, Shares or VotingSecurities which are acquired in a “Non-Control Acquisition” (as hereinafterdefined) shall not constitute an acquisition which would cause a Change inControl. A “Non-Control Acquisition” shall mean an acquisition by (i) anemployee benefit plan (or a trust forming a part thereof) maintained by (A) theCompany or (B) any corporation or other Person of which a majority of itsvoting 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 itsSubsidiaries, or (iii) any Person in connection with a “Non-ControlTransaction”. A”Non-Control Transaction” shall mean a merger, consolidation orreorganization involving the Company in connection with which (i)    the stockholders of the Company, immediatelybefore such merger, consolidation or reorganization, own, directly orindirectly, immediately following such merger, consolidation or reorganization,at least seventy percent (70%) of the combined voting power of the outstandingVoting Securities of the corporation resulting from such merger, consolidationor reorganization (the “Surviving Corporation”) in substantially the sameproportion as their ownership of the Voting Securities immediately before suchmerger, consolidation or reorganization; (ii) the individuals who weremembers of the Incumbent Board immediately prior to the execution of theagreement providing for such merger, consolidation or reorganization constituteat least two-thirds of the members of the board of directors of the SurvivingCorporation or a corporation beneficially owning, directly or indirectly, amajority of the Voting Securities of the Surviving Corporation; and (iii) noPerson (other than the Company, any Subsidiary, any employee benefit plan (orany trust forming a part thereof) maintained by the Company, the SurvivingCorporation or any Subsidiary, or any Person who, immediately prior to suchmerger, consolidation or reorganization had Beneficial Ownership of fifteenpercent (15%) or more of the then outstanding Voting Securities) owns, directlyor indirectly, fifteen percent (15%) or more of the combined voting power ofthe Surviving Corporation’s then outstanding voting securities; and (b)   The individuals who, as of May 31, 2005are 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 membersof the Board; provided, however, that if the election, or nomination forelection by the Company’s common stockholders, of any new director was approvedby a vote of at least fifty percent (50%) of the Incumbent Board, such newdirector shall, for purposes of this definition, be considered a member of theIncumbent Board; provided, further, however, that no individual shall beconsidered a member of the Incumbent Board if such individual initially assumedoffice as a result of either an actual or threatened solicitation of proxies orconsents 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 ElectionContest or Proxy Contest.

 

16

----

 

**EXHIBIT D**

 

**RESTRICTED STOCK UNITAGREEMENT**

** **

iVillage Inc. (the “Company”) is pleased to inform Douglas McCormick (“you”)that you are being awarded Restricted Stock Units (the “Units”) under thisAgreement pursuant to your Employment Agreement.  Capitalized terms not otherwise defined inthe body of this Agreement shall have the meaning assigned to them in Paragraph19.

 

To the extent they become vested, the Units will entitle you to a cashpayment.  The Units are a non-votingbookkeeping device solely to determine the amount of such cash payment.  Each vested Unit represents the right toreceive the cash equivalent of the then Fair Market Value of one share of theCompany’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 beawarded, the applicable vesting schedule for the Units, the dates on whichthe Cash Payment for each vested Unit can become payable to you and theremaining 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

----

 
|               |   | 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 vestedUnit will be issued to you as soon as practicable (but not more than 45 days) afterthe vesting of such Unit in accordance with the above Vesting Schedule.  Any Cash Payment under this Agreement shallbe reduced by any and all applicable Withholding Taxes.  The Cash Payment following vesting of thecorresponding Units shall be in complete satisfaction of such vested Units andsuch Units shall then be cancelled.

 

2.      ***Forfeitability****.* Should you cease Service prior tovesting in one or more Units subject to your Award, your Award will becancelled with respect to those unvested Units on the first date you are nolonger rendering Service, regardless of the reason for the termination of yourService, except as otherwise expressly provided in the above VestingSchedule.  You will cease to have anyright or entitlement to receive a Cash Payment for any cancelled Units.

 

Except as otherwise expressly provided in theabove Vesting Schedule, the Vesting Schedule requires your continuedService through the applicable vesting date as a condition to the vesting ofthe applicable Units and the rights and benefits under this Agreement.  Except as otherwise expressly provided in theabove Vesting Schedule, Service for only a portion of a vesting period, even ifa substantial portion, will not entitle you to any proportionate vesting oravoid or mitigate the forfeiture that occurs upon the termination of yourService.

 

18

----

 

3.      ***Transferability****.* You may not sell or transfer anyinterest in your Award, your Units, or pledge or otherwise hedge the sale ofthose Units, including (without limitation) any short sale or any acquisitionor disposition of any put or call option or other instrument tied to the valueof the Units.  Any attempt by you to doso will result in an immediate forfeiture of all of the Units that are subjectto this Agreement.  However, your rightto receive a Cash Payment for any Units which have vested at or prior to yourdeath but which remain unpaid at the time of your death may be transferredpursuant to the provisions of your will or trust or the laws of inheritance orto your designated beneficiary following your death.  You may make such a beneficiary designationat any time by filing the appropriate form with the Company.

 

4.      ***Stockholder Rights****.* The Units create no fiduciary duty ofthe Company to you, and shall create only an unfunded, unsecured contractualobligation 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 EmploymentAgreement.  The Units shall not betreated 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 whichthe record date is prior to the date of issuance of a Cash Payment for vestedUnits.

 

5.      ***Adjustments****.* Should any change be made to the CommonStock by reason of any stock split, stock dividend, recapitalization, combinationof shares, exchange of shares or other change affecting the outstanding CommonStock as a class without the Company’s receipt of consideration, appropriateadjustments (that are consistent with any adjustments the Company makes toother shareholders or optionholders) will be made to the number of Units thatare outstanding or which are still subject to being awarded.

 

6.      ***Taxation****.* You will recognize ordinary income forfederal, state and local income tax purposes on each date the Units vest.  You will be solely responsible for payment ofany and all applicable taxes.

 

7.      ***Withholding Taxes****.* All applicable Withholding Taxes, asdetermined by the Company, must be withheld from Cash Payments or otherwiseprovided for by you at the time the Units vest pursuant to this Agreement.

 

If any withholding event occurs other thanwith respect to the vesting of such Units, or if the Company for any reason isunable to satisfy the withholding obligations with respect to the vesting ofthe Units, the Company shall be entitled to require you to make a cash paymentto the Company and/or to deduct from other compensation payable to you theamount of any such withholding obligation.

 

19

----

 

8.      ***Notice****.* Any notice to be given or delivered tothe Company relating to this Agreement shall be in writing and addressed to theCompany at its principal corporate offices. Any notice to be given or delivered to you relating to this Agreementshall be in writing and addressed to you at such address of which you advisethe Company in writing.  All noticesshall 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 shallinure to the benefit of, and be binding upon, the Company and its successorsand assigns and upon you and the legal representatives, heirs and the legateesof your estate.  You may not assign anyof your rights or benefits under this Agreement.  The Company may assign this Agreement to anysuccessor(s)-in-interest.

 

10.    ***Administration/Indemnification****.* The Company shall have the exclusivediscretionary authority to, in good faith, interpret and construe any term orprovision of this Agreement, adopt and change rules and regulations in theadministration of the Award, and make modifications to this Agreement tocomport with applicable law.  Any suchinterpretation and/or decisions shall be binding on all persons having aninterest in the Award subject to the arbitration provisions of Section 13.

 

Except arisingfrom any action taken, or failure to act, in bad faith, each person providingservices in connection with the administration of the Award under thisAgreement, shall be indemnified and held harmless by the Company against andfrom (i) any loss, cost, liability, or expense that may be imposed upon orreasonably incurred by him or her in connection with or resulting from anyclaim, action, suit, or proceeding to which he or she may be a party or inwhich he or she may be involved by reason of any action taken or failure to actunder 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 herin satisfaction of any judgment in any such claim, action, suit, or proceedingagainst him or her, provided he or she shall have given the Company areasonable opportunity, at its own expense, to handle and defend the samebefore he or she undertakes to handle and defend it on his or her ownbehalf.  The foregoing right ofindemnification shall not be exclusive of any other rights of indemnificationto which such persons may be entitled under the Company’s Certificate****ofIncorporation or Bylaws, by contract, as a matter of law, or otherwise, orunder any power that the Company may have to indemnify them or hold themharmless.

 

11.    ***Governing Law****.*The interpretation, performance and enforcement of thisAgreement shall be governed by the laws of the State of New York without resortto that State’s conflict-of-laws rules.

 

12.    ***At Will Employment****.* Nothing in this Agreement or your Awardwill provide you with any right to continue in Service or employment for anyperiod of specific duration or interfere with or otherwise restrict in any wayyour right or the right of the Company to terminate your Service or employmentat any time for any reason, with or without cause, or for no reason, subject tothe Employment Agreement.

 

20

----

 

**13.****    *Mandatory Arbitration.* ANY AND ALLDISPUTES OR CONTROVERSIES BETWEEN YOU AND THE COMPANY ARISING OUT OF, RELATINGTO OR OTHERWISE CONNECTED WITH THIS AGREEMENT OR THE AWARD OF RESTRICTED STOCKUNITS EVIDENCED HEREBY OR THE VALIDITY, CONSTRUCTION, PERFORMANCE ORTERMINATION OF THIS AGREEMENT SHALL BE SETTLED EXCLUSIVELY BY BINDINGARBITRATION PURSUANT TO SECTION 10.11 OF THE EMPLOYMENT AGREEMENT WHICH ISINCORPORATED BY REFERENCE HEREIN AS IF SET FORTH FULLY HEREIN.**

 

21

----

 

14.    ***Amendments and Waivers***.  This Agreement and any of the provisionshereof may be amended, waived (either generally or in a particular instance andeither retroactively or prospectively), modified or supplemented, in whole orin part, only by written agreement signed by the parties hereto; provided,that, the observance of any provision of this Agreement may be waived inwriting by the party that will lose the benefit of such provision as a resultof such waiver.  The waiver by any party heretoof a breach of any provision of this Agreement shall not operate or beconstrued as a further or continuing waiver of such breach or as a waiver ofany other or subsequent breach, except as otherwise explicitly provided for insuch waiver.  Except as otherwiseexpressly provided herein, no failure on the part of any party to exercise, andno delay in exercising, any right, power or remedy hereunder, or otherwiseavailable in respect hereof at law or in equity, shall operate as a waiverthereof, nor shall any single or partial exercise of such right, power orremedy by such party preclude any other or further exercise thereof or theexercise of any other right, power or remedy.

 

15.    ***Severability***.  Whenever possible, each provision or portionof any provision of this Agreement shall be interpreted in such manner as to beeffective and valid under applicable law but the invalidity or unenforceabilityof any provision or portion of any provision of this Agreement in anyjurisdiction shall not affect the validity or enforceability of the remainderof this Agreement in that jurisdiction or the validity or enforceability ofthis Agreement, including that provision or portion of any provision, in anyother jurisdiction.  In addition, shoulda court or arbitrator determine that any provision or portion of any provisionof this Agreement, is not reasonable or valid, the parties hereto agree thatsuch provision should be interpreted and enforced to the maximum extent whichsuch court or arbitrator deems reasonable or valid.

 

16.    ***Acknowledgement***.  You acknowledge that you have had theopportunity to discuss this matter with and obtain advice from your privateattorney, have had sufficient time to, and have carefully read and fullyunderstand all the provisions of this Agreement, and are knowingly andvoluntarily entering into this Agreement.

 

17.    ***No Strict Construction***.  The language used in this Agreement will bedeemed 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 providesthat in the case of ambiguity or uncertainty a provision should be construedagainst the draftsperson will be applied against any party.

 

18.    ***Headings***. The headings of theparagraphs, subparagraphs, clauses and subclauses of this Agreement are forconvenience of reference only and shall not in any way affect the meaning orinterpretation of any of the provisions hereof.

 

19.    ***Definitions****.* The followingdefinitions shall be in effect under the Agreement:

 

a)                   **Agreement**shall mean this Restricted Stock Unit Agreement.

 

b)                  **Changein Control** shall mean the definition provided in Exhibit C ofthe Employment Agreement.

 

22

----

 

c)                   **CommonStock** shall mean the Company’s common stock.

 

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

 

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

 

f)                     **FairMarket Value** shall mean, as of any date, the value of Common Stockdetermined as follows:

 

(i)  If the Common Stock is listed or quoted on any establishedstock exchange or a national market system, including without limitation TheNasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq StockMarket, 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 orsystem for the last market trading day prior to the time of determination, asreported in The Wall Street Journal or such other source as the Company deemsreliable;

 

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

 

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

 

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

 

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

 

i)                      **WithholdingTaxes** shall mean the federal, state and local income and employmenttaxes required to be withheld by the Company in connection with the issuance ofa Cash Payment for the Units that vest under the Award.

 

23

----

 

As a condition of the Award, please execute the Acknowledgment section belowto 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 ofthe Restricted Stock Unit Award evidenced by this Agreement.  I further acknowledge and agree that theforegoing sets forth the entire understanding between the Company and meregarding my entitlement to receive any Cash Payments subject to such Award andsupersedes all prior oral and written agreements on that subject.

 
|   | SIGNATURE: |   |
|--------|------------|--------|
|   |       |
|   |       |   |
|   | DATED:     |   | , 2005 |
|        |            |        |  |  |

 

24

----

 

**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 Agreementpursuant to your Employment Agreement. Capitalized terms not otherwise defined in the body of this Agreementshall have the meaning assigned to them in Paragraph 19.

 

To the extent they become vested, the Units will entitle you to a cashpayment.  The Units are a non-votingbookkeeping device solely to determine the amount of such cash payment.  Each vested Unit represents the right toreceive the cash equivalent of the then Fair Market Value of one share of theCompany’s Common Stock on the vesting date of that Unit multiplied by theApplicable Percentage (the “Cash Payment”).

 

This Agreement sets forth the award date and number of Units to beawarded, the applicable vesting schedule for the Units, the dates on whichthe Cash Payment for each vested Unit can become payable to you and theremaining 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. ***ACash 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 withthe above Vesting Schedule.  Any CashPayment under this Agreement shall be reduced by any and all applicableWithholding Taxes.  The Cash Paymentfollowing vesting of the corresponding Units shall be in complete satisfactionof such vested Units and such Units shall then be cancelled.  If the Applicable Percentage is 0% on thevesting date, then there shall be no Cash Payment under this Agreement and allUnits shall then be cancelled.

 

21.    ***Forfeitability****.* Should you cease Service prior to vesting in one or moreUnits subject to your Award, your Award will be cancelled with respect to thoseunvested Units on the first date you are no longer rendering Service,regardless of the reason for the termination of your Service, except asotherwise expressly provided in the above Vesting Schedule.  You will cease to have any right orentitlement to receive a Cash Payment for any cancelled Units.

 

Except as otherwise expressly provided in theabove Vesting Schedule, the Vesting Schedule requires your continuedService through the applicable vesting date as a condition to the vesting ofthe applicable Units and the rights and benefits under this Agreement.  Except as otherwise expressly provided in theabove Vesting Schedule, Service for only a portion of a vesting period, even ifa substantial portion, will not entitle you to any proportionate vesting oravoid or mitigate the forfeiture that occurs upon the termination of yourService.

 

22.    ***Transferability****.* You may not sell or transfer anyinterest in your Award, your Units, or pledge or otherwise hedge the sale ofthose Units, including (without limitation) any short sale or any acquisitionor disposition of any put or call option or other instrument tied to the valueof the Units.  Any attempt by you to doso will result in an immediate forfeiture of all of the Units that are subjectto this Agreement.  However, your rightto receive a Cash Payment for any Units which have vested at or prior to yourdeath but which remain unpaid at the time of your death may be transferredpursuant to the provisions of your will or trust or the laws of inheritance orto your designated beneficiary following your death.  You may make such a beneficiary designationat any time by filing the appropriate form with the Company.

 

23.    ***Stockholder Rights****.* The Units create no fiduciary duty ofthe Company to you, and shall create only an unfunded, unsecured contractualobligation 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 EmploymentAgreement.  The Units shall not betreated 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 whichthe record date is prior to the date of issuance of a Cash Payment for vestedUnits.

 

----

 

24.    ***Adjustments****.* Should any change be made to the Common Stock by reason ofany stock split, stock dividend, recapitalization, combination of shares,exchange of shares or other change affecting the outstanding Common Stock as aclass without the Company’s receipt of consideration, appropriate adjustments(that are consistent with any adjustments the Company makes to othershareholders or optionholders) will be made to the number of Units that areoutstanding or which are still subject to being awarded.

 

25.    ***Taxation****.*You will recognize ordinary income for federal, state and local income taxpurposes on each date the Units vest. You will be solely responsible for payment of any and all applicabletaxes.

 

26.    ***Withholding Taxes****.* All applicable Withholding Taxes, asdetermined by the Company, must be withheld from Cash Payments or otherwiseprovided for by you at the time the Units vest pursuant to this Agreement.

 

If any withholding event occurs other thanwith respect to the vesting of such Units, or if the Company for any reason isunable to satisfy the withholding obligations with respect to the vesting ofthe Units, the Company shall be entitled to require you to make a cash paymentto the Company and/or to deduct from other compensation payable to you theamount of any such withholding obligation.

 

27.    ***Notice****.*Any notice to be given or delivered to the Company relating to this Agreementshall be in writing and addressed to the Company at its principal corporateoffices.  Any notice to be given ordelivered to you relating to this Agreement shall be in writing and addressedto you at such address of which you advise the Company in writing.  All notices shall be deemed effective uponpersonal delivery or upon deposit in the U.S. mail, postage prepaid andproperly addressed to the party to be notified.

 

28.    ***Successors and Assigns****.* The provisions of this Agreement shallinure to the benefit of, and be binding upon, the Company and its successorsand assigns and upon you and the legal representatives, heirs and the legateesof your estate.  You may not assign anyof your rights or benefits under this Agreement.  The Company may assign this Agreement to anysuccessor(s)-in-interest.

 

29.    ***Administration/Indemnification****.* The Company shall have the exclusivediscretionary authority to, in good faith, interpret and construe any term orprovision of this Agreement, adopt and change rules and regulations in theadministration of the Award, and make modifications to this Agreement tocomport with applicable law.  Any suchinterpretation and/or decisions shall be binding on all persons having aninterest in the Award subject to the arbitration provisions of Section 13.

 

Except arisingfrom any action taken, or failure to act, in bad faith, each person providingservices in connection with the administration of the Award under thisAgreement, shall be indemnified and held harmless by the Company against andfrom (i) any loss, cost, liability, or expense that may be imposed upon orreasonably incurred by him or her in connection with or resulting from anyclaim, action, suit, or proceeding to which he or she may be a party or inwhich he or she may be involved by reason of any action taken or failure to actunder the

 

----

 

Award, and (ii) from any and all amounts paid by him or her, withthe Company’s prior approval, in settlement thereof or paid by him or her insatisfaction of any judgment in any such claim, action, suit, or proceedingagainst him or her, provided he or she shall have given the Company areasonable opportunity, at its own expense, to handle and defend the samebefore he or she undertakes to handle and defend it on his or her ownbehalf.  The foregoing right ofindemnification shall not be exclusive of any other rights of indemnificationto which such persons may be entitled under the Company’s Certificate****ofIncorporation or Bylaws, by contract, as a matter of law, or otherwise, orunder any power that the Company may have to indemnify them or hold themharmless.

 

30.    ***Governing Law****.*The interpretation, performance and enforcement of thisAgreement shall be governed by the laws of the State of New York without resortto that State’s conflict-of-laws rules.

 

31.    ***At Will Employment****.* Nothing in this Agreement or your Awardwill provide you with any right to continue in Service or employment for anyperiod of specific duration or interfere with or otherwise restrict in any wayyour right or the right of the Company to terminate your Service or employmentat any time for any reason, with or without cause, or for no reason, subject tothe Employment Agreement.

 

**32.****    *Mandatory Arbitration.* ANY AND ALLDISPUTES OR CONTROVERSIES BETWEEN YOU AND THE COMPANY ARISING OUT OF, RELATINGTO OR OTHERWISE CONNECTED WITH THIS AGREEMENT OR THE AWARD OF PERFORMANCE UNITSEVIDENCED HEREBY OR THE VALIDITY, CONSTRUCTION, PERFORMANCE OR TERMINATION OFTHIS AGREEMENT SHALL BE SETTLED EXCLUSIVELY BY BINDING ARBITRATION PURSUANT TO SECTION 10.11OF THE EMPLOYMENT AGREEMENT WHICH IS INCORPORATED BY REFERENCE HEREIN AS IF SETFORTH FULLY HEREIN.**

 

----

 

33.    ***Amendments and Waivers***. This Agreementand any of the provisions hereof may be amended, waived (either generally or ina particular instance and either retroactively or prospectively), modified orsupplemented, in whole or in part, only by written agreement signed by theparties hereto; provided, that, the observance of any provision of thisAgreement may be waived in writing by the party that will lose the benefit ofsuch provision as a result of such waiver. The waiver by any party hereto of a breach of any provision of thisAgreement shall not operate or be construed as a further or continuing waiverof such breach or as a waiver of any other or subsequent breach, except asotherwise 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 hereofat law or in equity, shall operate as a waiver thereof, nor shall any single orpartial exercise of such right, power or remedy by such party preclude anyother or further exercise thereof or the exercise of any other right, power orremedy.

 

34.    ***Severability***. Whenever possible, eachprovision or portion of any provision of this Agreement shall be interpreted insuch manner as to be effective and valid under applicable law but theinvalidity or unenforceability of any provision or portion of any provision ofthis Agreement in any jurisdiction shall not affect the validity orenforceability of the remainder of this Agreement in that jurisdiction or thevalidity or enforceability of this Agreement, including that provision orportion of any provision, in any other jurisdiction.  In addition, should a court or arbitratordetermine that any provision or portion of any provision of this Agreement, isnot reasonable or valid, the parties hereto agree that such provision should beinterpreted and enforced to the maximum extent which such court or arbitratordeems reasonable or valid.

 

35.    ***Acknowledgement***. You acknowledge thatyou have had the opportunity to discuss this matter with and obtain advice fromyour private attorney, have had sufficient time to, and have carefully read andfully understand all the provisions of this Agreement, and are knowingly and voluntarilyentering into this Agreement.

 

36.    ***No Strict Construction***. The languageused in this Agreement will be deemed to be the language chosen by the Companyand you to express the parties’ mutual intent, and no rule of law orcontract interpretation that provides that in the case of ambiguity oruncertainty a provision should be construed against the draftsperson will beapplied against any party.

 

37.    ***Headings***. The headings of theparagraphs, subparagraphs, clauses and subclauses of this Agreement are forconvenience of reference only and shall not in any way affect the meaning orinterpretation of any of the provisions hereof.

 

38.    ***Definitions****.* The followingdefinitions shall be in effect under the Agreement:

 

j)                      **Agreement**shall mean this Performance Unit Agreement.

 

k)                   **ApplicablePercentage** shall mean, on the Unit vesting date, either:  (i) 0% if the Fair Market Value of oneshare of Common Stock is less than $8.00, (ii) 50% if the Fair MarketValue of one share of Common Stock is equal to or greater than $8.00 and lessthan $9.00, (iii) 100% if the Fair Market Value of one share of 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 Common Stock is equal to or greaterthan $10.00.

 

l)                      **Changein Control** shall mean the definition provided in Exhibit C ofthe Employment Agreement.

 

m)                **CommonStock** shall mean the Company’s common stock.

 

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

 

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

 

p)                  **FairMarket Value** shall mean, as of any date, the value of Common Stockdetermined as follows:

 

(i)  If the Common Stock is listed or quoted on any establishedstock exchange or a national market system, including without limitation TheNasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq StockMarket, 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 orsystem for the last market trading day prior to the time of determination, asreported in The Wall Street Journal or such other source as the Company deemsreliable;

 

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

 

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

 

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

 

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

 

s)                   **WithholdingTaxes** shall mean the federal, state and local income and employmenttaxes required to be withheld by the Company in connection with the issuance ofa Cash Payment for the Units that vest under the Award.

 

----

 

As a condition of the Award, please execute the Acknowledgment section belowto 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 ofthe Performance Unit Award evidenced by this Agreement.  I further acknowledge and agree that theforegoing sets forth the entire understanding between the Company and meregarding my entitlement to receive any Cash Payments subject to such Award andsupersedes all prior oral and written agreements on that subject.

 
|   | SIGNATURE: |   |
|--------|------------|--------|
|   |       |
|   |       |   |
|   | DATED:     |   | , 2005 |
|        |            |        |  |  |

 

----