Employment Agreement - PRIMEDIA Inc., About.com Inc. and Scott Kurnit
September 17, 2001
Mr. Scott Kurnit
About.com
1440 Broadway
New York, NY 10018
Dear Scott:
The purpose of this letter agreement (this "Letter") is to set forth the
terms and conditions pursuant to which your employment with PRIMEDIA Inc.
("PRIMEDIA") and About.com, Inc. ("About") under your Employment Agreement dated
October 29, 2000, as amended January 16, 2001, (together, the "Agreement") shall
terminate effective December 31, 2001 (the "Termination Date").
1. Effective upon the date of this Letter, you will cease to be a director
or officer of PRIMEDIA and any of its subsidiaries, including About,
except that you shall retain the title of Chairman of About through the
Termination Date. From the date of this letter through the Termination
Date, notwithstanding anything contained in the Agreement to the
contrary, your duties shall be to assist the new Chief Executive
Officer of About in the smooth, orderly and positive transition of
About, with particular attention to the About Guides (including the
upcoming Guide Roadshow) and team members, and you will not be required
to perform any particular duties or tasks. Any request for your
assistance shall be subject to your personal schedule and obligations
and may be performed from any location. In no event shall any failure
to perform hereunder be deemed a breach of this Letter. During the
period from the date of this Letter through the Termination Date, you
shall spend no more than two and one-half days per week fulfilling such
duties.
2. Through and including the 30th day following the date of this Letter,
your Base Salary, as defined in the Agreement, shall be paid at the
annual rate of $600,000 in accordance with the terms of the Agreement.
Effective upon the 31st day following the date of this Letter, and
notwithstanding anything contained in the Agreement to the contrary,
your Base Salary, as defined in the Agreement, shall be paid at the
annual rate of $300,000, in accordance with About's normal pay
practices, through the Date of Termination..
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3. Effective upon the Termination Date, and notwithstanding anything
contained in the Employment Agreement to the contrary, you shall cease
to be an employee of PRIMEDIA and About and shall also cease to be
Chairman of About.
4. The provisions of this Letter shall be in substitution for the
provisions of the Agreement, unless specifically set forth in this
Letter to the contrary.
5. For the period from January 1, 2002 through the February 28, 2005, you
shall be paid, in regular installments on About's normal pay dates, an
amount equal, on an annualized basis, to $300,000, which amount
represents one-half of your Base Salary, as defined in the Employment
Agreement.
6. No later than March 31, 2002, you shall be paid an amount equal to (a)
$4,520.55 multiplied by the actual number of calendar days from and
including February 28, 2001 through and including the 30th day
following date of this Letter (the "First Period") plus (b) $2,260.27
multiplied by number determined by subtracting the number from 365 the
number of calendar days in the First Period. No later than March 31,
2003 and 2004, you shall be paid, on each occasion, an amount equal to
$825,000. No later than March 31, 2005, you shall be paid an amount
equal to $958,355.93.
7. With respect to your Options and Restricted Shares, as defined in the
Agreement, effective on the Termination Date, one-half of all Options
(1,302,650 options) and one-half of all Restricted Shares (1,105,550
Restricted Shares). shall vest and the remainder shall be forfeited and
terminated The provisions of your Non-Qualified Stock Option Agreement
dated as of February 28, 2001 and your Restricted Stock Award Agreement
dated as of February 28, 2001 shall continue to apply to your vested
Options and vested Restricted Shares.
8. The provisions of Sections 6 and 7 of the Employment Agreement shall
remain in full force and effect through the Termination Date and you
shall be paid any unpaid amounts thereunder following the Termination
Date in accordance with About's normal policy and any underlying
applicable employee benefit plans; provided that with respect to your
PRIMEDIA stock options issued for your About stock options as a result
of the merger of PRIMEDIA and About, you shall not be entitled to any
acceleration of vesting nor any extended vesting period which would
otherwise apply to employees who were About optionees prior to the
change of control and are either terminated without cause or
voluntarily terminate with good reason. You shall not be entitled to
any severance benefits following your termination of employment under
any PRIMEDIA or About general severance policy.
9. The following provisions shall relate to competitive activities:
a. "Competing Business" shall mean a business whose primary business
is:
(i) a network of websites which websites provide content of a
scope and in a manner substantially similar to the
websites making up the About network or
(ii) websites that compete with non-About PRIMEDIA websites on
the date of this Letter including in the subject areas of
teen, bridal, automotive, apartment leasing, equine,
crafts, or outdoor enthusiast areas.
b. Non-Compete Period shall mean the period from the date of this
Letter through and including February 28, 2005.
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c. You agree that during the Non-Compete Period you shall not,
directly or indirectly:
(i) engage in any business that is a Competing Business;
(ii) enter the employ of, or render any services to, any
person or entity (or any division of any person or
entity) which is a Competing Business;
(iii) acquire a financial interest in, or otherwise become
actively involved with or in, any Competing Business,
directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee
or consultant; or
(iv) interfere with, or attempt to interfere with, business
relationships formed before the date of this Letter
between About or any of its affiliates and its material
customers, clients or suppliers.
d. Notwithstanding anything to the contrary in this Section 9, you
may directly or indirectly own, solely as an investment,
securities of any person engaged in a Competing Business which are
publicly traded on a national or regional stock exchange or on the
over-the-counter market if you are not a controlling person of, or
a member of a group which controls, such person.
e. You agree that, whether on your own behalf or on behalf of or in
conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly:
(i) You will not, during the Non-Compete Period, solicit any
executive of PRIMEDIA or About or any of their respective
subsidiaries employed by any of them on the date of this
Letter, or
(ii) You will not
(A) during the Non-Compete Period, hire any executive
who is employed by About or any of its
subsidiaries on the date of this Letter or
(B) through the second anniversary of the date of this
Letter, hire any executive who left the employment
of About or any of its subsidiaries between
February 27, 2001 and the date of this Letter;
provided that in the event such person served as a
financial executive of About, such non-hiring
period shall expire on the first anniversary of
the date of this Letter.
f. No provision of this Section 9 shall prohibit you from continuing
to serve on the board of directors of other business entities upon
which Executive served during the Employment Term.
g. It is expressly understood and agreed that although you, PRIMEDIA
and About consider the restrictions contained in this Section 9 to
be reasonable, if a final judicial determination is made by a
court of competent jurisdiction that the time or territory or any
other restriction contained in this Letter is an unenforceable
restriction against you, the provisions of this Letter shall not
be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent
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jurisdiction finds that any restriction contained in this Letter
is unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
10. You will not at any time (whether during or after your employment
with About) disclose or use for your own benefit or purposes or the
benefit or purposes of any other person, firm, partnership, joint
venture, association, corporation or other business organization,
entity or enterprise other than PRIMEDIA and any of its subsidiaries or
affiliates including About, any trade secrets, information, data, or
other confidential information relating to customers, development
programs, costs, marketing, trading, investment, sales activities,
promotion, credit and financial data, manufacturing processes,
financing methods, plans, or the business and affairs of About
generally, or of any subsidiary or affiliate of About; provided that
the foregoing shall not apply to information which is not unique to
About or which is known to the industry or the public other than as a
result of your breach of this covenant. Except as required by law, you
will not disclose to anyone, other than your immediate family and legal
or financial advisors, the existence or contents of this Letter. You
agree that upon the Date of Termination, you will return to About
immediately all memoranda, books, papers, plans, information, letters
and other data, and all copies thereof or therefrom, in any way
relating to the business of About and its affiliates, except that you
may retain personal notes, notebooks and diaries that do not contain
confidential information of the type described in the preceding
sentence. You further agree that you will not retain or use for your
account at any time any trade names, trademark or other proprietary
business designation used or owned in connection with the business of
About or its affiliates.
11. You acknowledge and agree that remedies at law for a breach of any of
the provisions of Sections 9 and 10 of this Letter would be inadequate
and, in recognition of this fact, agree that, in the event of such a
breach, in addition to any remedies at law, PRIMEDIA or About, without
posting any bond, may obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
12. You, PRIMEDIA and About agree that the press release in the form
attached hereto as Exhibit A, will be released by PRIMEDIA as soon as
practicable following the execution of this Letter by the parties. You,
PRIMEDIA and About acknowledge and agree that such press release is the
press release referred to in the Mutual Release and Non-Disparagement
Agreement, attached hereto as Exhibit B, and being executed by the
parties concurrently with the execution of this Letter.
13. You, PRIMEDIA and About agree to execute, concurrently with the
execution of this Letter, the Mutual Release and Non-Disparagement
Agreement, attached hereto as Exhibit B and on the Termination Date to
execute the Mutual Release attached hereto as Exhibit C. You, PRIMEDIA
and About agree that this Letter supersedes any other letters, e-mails
or other documents between or among the parties with respect to the
subjects hereof, including your September 6, 2001 letter to Tom Rogers
and the e-mail to you from Beverly Chell sent September 9, 2001.
14. Terms capitalized in this Letter and not specifically defined herein
shall have the definitions thereof in the Agreement apply.
15. The provisions of Sections 13 (a), (b), (c), (d), (f), (g), (j) (k) and
(l) are incorporated in this Letter by reference to the Agreement, as
if specifically set forth herein in full, and shall apply to the
provisions of this Letter.
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Please indicate your agreement with the terms and provisions of this
Letter by executing a copy hereof in the space indicated below and returning it
by fax or in person delivery to me.
Very truly yours,
PRIMEDIA Inc. Agreed to and accepted
By /s/ Beverly C. Chell By /s/ Scott Kurnit
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Vice Chairman Scott Kurnit
About.com, Inc.
By /s/ Beverly C. Chell
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Vice Chairman