Stock Option Agreement - PRIMEDIA Inc. and Thomas S. Rogers
STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of December 3, 1999, is made by
and between PRIMEDIA Inc. ("PRIMEDIA" or the "Company"), a Delaware corporation,
and Thomas S. Rogers (the "Optionee"), an employee of PRIMEDIA or a Subsidiary
or Parent (as defined below) of PRIMEDIA.
RECITALS
WHEREAS, the Optionee and PRIMEDIA have entered into the Employment
Agreement (as defined below), which provides, among other things, for the grant
of stock options to purchase shares of PRIMEDIA's common stock, $.01 par value
per share (the "Stock") to the Optionee; and
WHEREAS, PRIMEDIA wishes to afford the Optionee the opportunity to purchase
5,000,000 shares of Stock by awarding an option under the PRIMEDIA 1992 Stock
Purchase and Option Plan as amended (the "Plan"), the terms of which are hereby
incorporated by reference and made a part of the Agreement; and
WHEREAS, PRIMEDIA's Compensation Committee (the "Committee"), appointed to
administer the Plan, has determined that it would be to the advantage and in the
best interest of PRIMEDIA and its stockholders to grant to the Optionee a stock
option to purchase Stock as an incentive for increased efforts during the
Optionee's term of office with PRIMEDIA or a Subsidiary or Parent and has
advised PRIMEDIA thereof and instructed it to issue such Option (AS DEFINED
BELOW).
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
The following terms used herein shall have the meanings specified below:
"CAUSE" shall have the meaning set forth in the Employment Agreement.
"CHANGE IN CONTROL" shall have the meaning set forth in the Employment
Agreement.
"COMPENSATORY TRANSACTION" shall mean the exercise of a stock option
or any other transaction in which the Optionee receives Stock in
connection with the performance of services to the Company or any
affiliate of the Company.
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"CONSTRUCTIVE TERMINATION WITHOUT CAUSE" shall have the meaning set
forth in the Employment Agreement.
"DISABILITY" shall have meaning set forth in the Employment Agreement.
"EMPLOYMENT AGREEMENT" shall mean the Employment Agreement effective
as of the Effective Date as defined therein between the Optionee and
PRIMEDIA, as it may be amended from time to time.
"FAIR MARKET VALUE" shall have the meaning set forth in the Employment
Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"GRANT DATE" shall mean December 3, 1999.
"NON-RENEWAL OF THE TERM OF EMPLOYMENT BY PRIMEDIA" shall refer to a
non-renewal of the Term of Employment as described in Section 12(f)
of the Employment Agreement.
"PARENT" shall mean any corporation in an unbroken chain of
corporations ending with PRIMEDIA if each of the corporations other
than PRIMEDIA then owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
"SUBSIDIARY" shall mean any corporation in an unbroken chain of
corporations beginning with PRIMEDIA if each of the corporations, or
group of commonly controlled corporations, other than the last
corporation in the unbroken chain, then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
"TERM" shall mean 10 years from the Grant Date.
"TERMINATION FOR CAUSE" shall mean the termination of the Optionee's
employment by the Company for Cause in accordance with Section
12(c)(i) of the Employment Agreement.
"TERMINATION WITHOUT CAUSE" shall mean the termination of the
Optionee's employment by the Company without Cause.
"TRUSTEE" has the meaning set forth in Section 4.9.
"VEST" OR "VESTING" (regardless of capitalization) shall mean to
become exercisable as well as non-forfeitable, subject to the terms
of this Agreement.
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ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
On and as of the date hereof, PRIMEDIA irrevocably grants to the
Optionee a stock option to purchase all or any part of the number of shares of
Stock set forth in the Recitals to this Agreement (any or all such shares, the
"Option Shares") upon the terms and conditions set forth herein (the "Option").
SECTION 2.2 - EXERCISE PRICE
The exercise price shall be $12.3125 per Option Share without
commission or other charge.
SECTION 2.3 - CONSIDERATION TO PRIMEDIA: NO RIGHT TO EMPLOYMENT
In consideration of the Option grant, the Optionee agrees to
render faithful and efficient service to PRIMEDIA or a Subsidiary or Parent, in
accordance with the Employment Agreement. Nothing in this Agreement or in the
Plan shall confer upon the Optionee any right to continue in the employ of
PRIMEDIA or a Subsidiary or Parent or shall interfere with or restrict in any
way the rights of PRIMEDIA and any Subsidiary or Parent, which rights hereby are
expressly reserved, to terminate the Optionee's employment at any time for any
reason whatsoever, with or without cause, subject to the terms of the Employment
Agreement.
SECTION 2.4 - ADJUSTMENTS IN OPTION
(a) GENERAL. In the event of a stock split, stock dividend,
combination of shares or similar event or in the event that the outstanding
shares of Stock subject to the Option are, from time to time, changed into or
exchanged for a different number or kind of shares of Stock or other securities
of PRIMEDIA by reason of a merger, consolidation, recapitalization,
reclassification, or otherwise, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares or other consideration as
to which the Option, or portions thereof then unexercised, shall be exercisable
and/or in the exercise price and/or other terms and conditions of this Option,
and/or shall promptly make appropriate provision(s) for supplemental payments of
cash, securities, and/or other property, so as to avoid dilution or diminution
of the rights of the Optionee and of the economic opportunity and value
represented by the Option and to ensure there is no prejudice whatsoever to the
rights or economic value to the Optionee.
(b) ROLL-OVER PROVISIONS. In the event of any merger,
consolidation or other transaction in which the Company is not the surviving
entity or the Company becomes (directly or indirectly) a subsidiary of another
entity, the Company shall take such steps as are necessary to assure that,
except to the extent the Optionee elects to exercise the Option or any portion
thereof as provided in Section 2.4 (c) below, the Optionee shall (if he so
elects) be provided
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(i) a replacement option that is exercisable for equity
securities of the surviving entity or
(ii) if the Company or the surviving entity, as the case may be,
is a subsidiary of another entity, (A) a replacement option
that is exercisable for equity securities of the parent or
(B), if the Company or the surviving entity is one in a
chain of subsidiaries, a replacement option that is
exercisable for equity securities of the ultimate parent.
If the replacement option described in the preceding sentence is one to acquire
equity securities that are not publicly traded, the provisions of Section 4.8
below shall apply.
If
(x) the surviving entity or
(y) any entity that is the parent, whether directly or through a
chain of subsidiaries, of the Company or the surviving
entity, as the case may be,
has publicly traded securities issued and outstanding, such replacement option
shall be exercisable for such publicly traded securities.
Any replacement option described in this Section 2.4(b) shall provide
terms, conditions and economic opportunity (including, without limitation, an
aggregate spread value) no less favorable to the Optionee than did the Option
prior to such transaction. Any election by the Optionee pursuant to this Section
2.4(b) may be made as to all or any portion of the Option. Nothing in this
Section 2.4(b) shall prevent the Executive from exercising his rights pursuant
to Section 2.4(c) below.
(c) CHANGE IN CONTROL. In the event that holders of Stock receive cash,
securities or other property in respect of their Stock in connection with a
Change in Control transaction, the Company shall use its best efforts to enable
the Optionee (if he so elects) to exercise the Option (or any portion thereof)
at a time and in a fashion that will entitle him to receive in exchange for any
Stock thus acquired the same consideration as is received in such Change in
Control transaction by other holders of Stock.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
Subject to the provisions of Section 3.2, the Option shall vest
and become exercisable at the rate of 1/48th thereof (rounded up to the nearest
whole number) on the third day of each calendar month commencing December 3,
1999 (with the first 1/48th becoming exercisable on December 3, 1999), provided
that all Option Shares shall become exercisable no later than November 3, 2003.
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SECTION 3.2 - ACCERELATION OF EXERCISABILITY
(a) Of the Option Shares vesting each month, 41,667 Option Shares
are deemed to be "Special Acceleration Option Shares". If the Fair Market Value
of a share of Stock doubles from the exercise price and remains at or above that
level for 30 consecutive calendar days, all Special Acceleration Option Shares
shall become vested and such vesting of the Special Acceleration Option Shares
shall be in lieu of the vesting of 41,667 Option Shares on a monthly basis. So
long as the Special Acceleration Option Shares have not been vested pursuant to
the preceding sentence, the Special Acceleration Option Shares shall continue to
vest at a rate of 41,667 Option Shares per month. Once all Special Acceleration
Option Shares have vested, vesting of 41,667 Option Shares per month shall be
deemed to have occurred; however, the operation of Section 3.2(a) shall never
result in the number of Option Shares that vest being less than the number which
would have vested based on the regular monthly vesting schedule, after deduction
of Special Acceleration Option Shares that have vested as a result of such
acceleration. To illustrate the above, assume on the second anniversary date the
Fair Market Value of the Stock has gone up 100% in value. 2,500,008 Option
Shares would have vested on the basis of monthly vesting. In this instance,
however, Optionee would be entitled to full acceleration of the Special
Acceleration Option Shares for an aggregate of 3,500,016 Option Shares as
follows:
- 1,500,000 Option Shares based on monthly vesting at the rate of 1/48
per month of the 2,999,984 non-acceleration Option Shares, plus
- all 2,000,016 Special Acceleration Option Shares based on the Fair
Market Value test's having been met.
- The balance of the Option Shares continue to vest in accordance with
Section 3.1 on the basis of 1/48 of 3,000,000, or 62,500 Option Shares
per month, until all Option Shares are vested.
(b) Notwithstanding anything in this Agreement to the contrary, any
Option Shares not yet vested shall vest and become immediately exercisable upon
the Optionee's death, Disability, Termination without Cause, Non-Renewal of the
Term of Employment by PRIMEDIA, or Constructive Termination without Cause.
(c) In the event of a Change in Control, all then-unvested Option
Shares shall become immediately vested and exercisable.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent after the first to occur
of the following events (the "Expiration Date"):
(a) The tenth anniversary of the Grant Date; or
(b) 90 days after the effective date of the termination of the
Optionee's employment by reason of Termination for Cause or voluntary
termination by the Optionee (but
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such 90-day limit shall not affect the exercisability of the Option as a result
of a termination due to death or Disability, a Termination without Cause, a
Constructive Termination without Cause or a retirement following the end of the
Term of Employment (as defined in the Employment Agreement), Anything in this
Agreement to the contrary notwithstanding, this Option shall continue for its
original Term in the event of a Non-Renewal of the Term of Employment by
PRIMEDIA.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the Optionee's lifetime, only the Optionee may exercise the
Option or any exercisable portion thereof; provided, however, that if during the
Term the Plan is amended to allow for transfers of Options, any such permitted
transferee may exercise the Option or receive Option Shares from the Trustee
pursuant to the Restricted Stock Unit Agreement referred to in Section 4.9.
Subject to the preceding sentence, after the death of the Optionee and prior to
the close of business on the Expiration Date, the Option or any exercisable
portion thereof may be exercised by the Optionee's legal representative, or by
any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution. The party entitled to exercise the
Option shall be referred to herein as the "Exercising Party".
SECTION 4.2 - PARTIAL EXERCISE
The Option or any exercisable portion thereof may be exercised in
whole or in part at any time prior to the close of business on the Expiration
Date; provided, however, that any exercise shall be for whole Option Shares
only.
SECTION 4.3 - MANNER OF EXERCISE
The Option or any exercisable portion thereof may be exercised solely
by delivering to the Office of the Secretary of PRIMEDIA all of the following
prior to the close of business on the Expiration Date:
(a) notice in writing, signed by the Exercising Party, stating the
number of Option Shares with respect to which the Option is being exercised;
(b) full payment of the exercise price for the Option Shares with
respect to which such Option or portion thereof is exercised, at a rate of
$12.3125 per Option Share, which may be made (i) by delivery to the Company of
cash, a wire transfer of immediately available funds, or a check payable to the
order of the Company in an amount equal to the exercise price of such Option
Shares; (ii) by delivering to the Company shares of Stock (which, in the event
they were acquired in a Compensatory Transaction, shall have been held by the
Optionee for at least six months before the date of such exercise) having an
aggregate Fair Market Value on the
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date of presentation equal to the exercise price of such Option Shares: (iii)
through reasonable procedures that afford the Optionee the opportunity to sell
immediately some or all of the Option Shares underlying the exercised portion of
this Option, including without limitation, through a "brokered exercise" by
delivery or irrevocable instructions to a broker to sell a portion of Option
Shares deliverable upon the exercise of the Option sufficient to result in net
proceeds at least equal to the aggregate exercise price of the portion of the
Option so exercised and to deliver promptly to the Company an amount equal to
such aggregate exercise price or (iv) by any combination of (i),(ii) or (iii).
(c) In the event that the Exercising Party is not the Optionee,
appropriate proof, in the sole judgment of PRIMEDIA, of the right of such
person to exercise the Option.
SECTION 4.4 - CONDITIONS TO ISSUANCE BY PRIMEDIA OF OPTION SHARES
Notwithstanding the foregoing Section 4.3, the Committee in its
reasonable discretion may take any additional steps that it deems appropriate,
including the requirement of additional documents, representations and actions
of or by the Exercising Party, to ensure the observance and performance of the
representations set forth in the notice of exercise, and compliance with
applicable federal or state securities laws or regulations.
SECTION 4.5 - OPTION SHARES TO BE ISSUED
The Option Shares deliverable upon the exercise of the Option or any
portion thereof or pursuant to the Restricted Stock Units Agreement may be
either previously authorized but unissued shares of Stock or issued shares that
have been reacquired subsequently by PRIMEDIA. Such Option Shares shall be fully
paid and nonassessable.
SECTION 4.6 - NO RIGHTS AS STOCKHOLDER
Neither the Optionee nor any Exercising Party shall be stockholder of
PRIMEDIA in respect of any Option Shares or have any of the rights or privileges
thereof in respect of any Option Shares unless and until certificates
representing such Option Shares shall have been issued PRIMEDIA to such Optionee
or other Exercising Party.
SECTION 4.7 - SECURITIES REGISTRATION: SECURITIES LAW COMPLIANCE
The Company represents that the Option Shares to be issued are or will
be upon issuance registered for resale by the Optionee or any Exercising Party
without restriction under the Securities Act of 1933 and under any and all
applicable state securities laws, and shall remain registered after the Option
or, any portion thereof, is exercised and, if applicable, Option Shares are
delivered pursuant to the Restricted Stock Units Agreement. Upon issuance of any
Option Share hereunder, the Optionee shall, if requested by the Company, make
such representations and furnish such information as may reasonably be necessary
to permit the Company to issue or transfer such Option Shares in compliance with
the provisions of applicable Federal and/or state securities laws.
SECTION 4.8 - GOING PRIVATE PROTECTION
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In the event that the Stock of the Company ceases to be listed, or
qualified for trading, on a national securities exchange or national market
system in the United States, the Company and the Optionee shall have previously
negotiated, in good faith, definitive agreements governing the rights, following
such event, of the Optionee in respect of the Option Shares acquired or to be
acquired pursuant to the Option so that the rights, value and economic
opportunity (including, without limitation, an aggregate spread value)
represented by such Option Shares, and by the Option , are not diminished.
Without limiting the foregoing, such definitive agreements shall (i) specify
that the Optionee may sell Option Shares acquired pursuant to the Option on no
less favorable a basis than sales made by KKR Associates and/or any of its
Affiliates (as defined in the Employment Agreement) ("KKR"), it s fund investors
or their respective successors, (ii) shall have appropriate terms governing
registration rights, tag-along rights, anti-dilution rights, and puts and calls
between the Company and the Optionee no less favorable than similar provisions
applicable to KKR, its fund investors or their respective successors, and (iii)
shall provide, at the Optionee's election, for full prompt cash liquidity (at
Fair Market) value) in the event of any termination of the Optionee's employment
with the Company that is described in Section 3.2(b) above.
SECTION 4.9 - DEFERRAL OF OPTION GAINS.
(a) The Optionee shall have the right in his sole discretion to defer,
in the form of Restricted Stock Units (instead of receiving Option Shares), any
gains attributable to the exercise of any portion of the Option. "Restricted
Stock Unit" has the meaning defined in the Restricted Stock Units Agreement, the
form of which is appended hereto as Exhibit A (the "Restricted Stock Units
Agreement").
(b) If he elects to exercise his rights pursuant to Section 4.9(a),
the Optionee shall deliver to the Company a Notice of Election to Defer Option
Gain through Restricted Stock Units substantially in the form of Exhibit B
hereto (a "Notice of Election") specifying the number of Option Shares as to
which the gains are to be deferred. A Notice of Election may be delivered at any
time, and from time to time, commencing on the date of this Agreement, shall
become effective 180 days after its delivery to the Company and shall remain
effective until the day immediately following the Expiration Date of this
Option. Such Notice of Election, once delivered, shall be irrevocable. Delivery
of a Notice of Election shall not, however, require that the portion of the
Option specified in the Notice of Election ever be exercised. Upon delivery of a
Notice of Election, the Company and the Optionee shall execute the Restricted
Stock Units Agreement if they have not already done so. Notwithstanding anything
herein to the contrary, the Notice of Election shall be inapplicable to any
portion of the Option which is exercised before the 180th day after the Notice
of Election is delivered.
(c) In the event of exercise of any portion of the Option that is
subject to a Notice of Election, the Optionee shall deliver to the Company
shares of Stock (the "Presentation Shares") owned by the Optionee (which, in the
event they were acquired in a Compensatory Transaction, shall have been held by
the Optionee for at least six months before the date of such exercise) and
having an aggregate Fair Market Value on the date of delivery equal to the
exercise price. The Optionee shall thereupon have discharged his entire
obligation with respect to payment of the exercise price of such thereupon have
discharged his entire obligation with respect to payment of the exercise price
of such portion of the Option. The number of Option Shares as to which the
Option is being exercised in excess of the number of Presentation Shares shall
be
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deferred in the form of Restricted Stock Unit. The Company shall return to the
Optionee a number of option shares equal to the number of Presentation Shares
delivered by him in connection with such exercise. In the event the Optionee
would thereby to entitled to any fractional Restricted Stock Units, a
corresponding amount of cash shall instead be delivered to the Trustee pursuant
to Section 4.9(d) below.
(d) On each day as of which the Exercising Party exercises any vested
portion of the Option and the Optionee is entitled to receive any Restricted
Stock Units by virtue of the Optionee's having given notice to pursuant this
Section, the Company shall (a) deliver in trust to the trustee pursuant to a
Trust Agreement substantially in the form of Exhibit C between the Company and
such Trustee (the "Trustee") the number of Option Shares corresponding to the
number of Units so granted (and any other cash or property that would have been
delivered to Optionee had he exercised to the terms of such Trust Agreement, and
(b) deliver to the Exercising Party written advice of the number of Restricted
Stock Units so issued and of the delivery of such Option Shares and any cash or
property to the Trustee. The Company shall deliver the Option Shares, together
with all cash and other property that has been distributed in respect of each
Option Shares, together with all cash and other property that has been
distributed in respect of each Option Share since the date of exercise, to the
Exercising Party or his legal representative on the date or dates specified in
the Notice of Election provided that the Company's obligation to do shall be
discharged to the extent that the Trustee delivers Option Shares, cash and
property to the Exercising party. In the event that no Trustee delivers Option
Shares, cash and property to the Exercising Party. In the event that no Trustee
has been appointed at the date of execution of this Agreement, the Company
agrees that it will appoint a Trustee under a Trust Agreement substantially in
the form of Exhibit C no later than the business day before the first day of
exercisability of any portion as to which a Notice of Election shall have been
given. The Notice of Election may provide for earlier delivery in the event of
financial need (as approved by the Compensation Committee of the Board), death
or Disability.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 - OPTION NOT TRANSFERABLE
Unless allowed under the terms of the Plan as in effect at the time of
transfer, the Optionee's rights under this Agreement may not be transferred or
assigned, and neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee
or his or her legal successors or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means,
whether such disposition be voluntary or involuntary or occur by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
not be null, and void and of no effect. Notwithstanding the foregoing, this
Section 5.1 shall not prevent transfers by will or by the applicable laws of
descent and distribution or in accordance with the terms of the Plans as then in
effect. All of the terms and provisions of this Agreement shall be binding on,
and shall inure to the benefit of, the respective legal successors and assigns
of the parties.
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SECTION 5.2 - SHARES TO BE RESERVED
PRIMEDIA shall at all times during the term of the Option reserve and
keep available such number of shares of Stock as will be sufficient to satisfy
the requirements of this Agreement.
SECTION 5.3 - NOTICES
Any notice to be given under the terms of this Agreement to PRIMEDIA
shall be addressed to PRIMEDIA as follows: PRIMEDIA Inc., 745 Fifth Avenue, New
York, New York, 10151, Attention: General Counsel. Any notice to be given to the
Optionee shall be sent to the address given beneath his or her signature to this
Agreement. By a notice given pursuant to this Section 5.3, either party may
hereafter designate a different address for notices. Any notice that is required
to be given to the Optionee shall, if the Optionee is then deceased, be given so
the Optionee's personal representative if such representative has previously
informed PRIMEDIA of his or her status and address by written notice under this
Section 5.3. All notices and other communications under this Agreement shall be
in writing and shall have been deemed duly given when delivered personally,
mailed by registered mail, return receipt requested or sent by documented
overnight delivery service.
SECTION 5.4 - TITLES
Titles are provided herein for convenience of reference only and are
not to serve as a basis for interpretation or construction of this Agreement.
SECTION 5.5 - APPLICABILITY OF PLAN, EMPLOYMENT AGREEMENT
This Agreement, the Option and any Option Shares issued hereunder
shall be subject to all of the terms and provisions of the Plan, as modified by
the Employment Agreement. In the event of any conflict among this Agreement, the
Plan or the Employment Agreement, the terms of this Agreement shall control. The
issuance of the Option, including its terms as contained in this Agreement,
shall not affect the Company's obligations pursuant to Section 7(d) of the
Employment Agreement with respect to Internet Options (as defined therein),
which obligations remain fully in effect.
SECTION 5.6 - AMENDMENT; WAIVER
No provision of this Agreement may be amended or modified except by an
instrument or instruments in writing signed by the parties hereto. Any party may
waive compliance by another with any of the provisions of this Agreement,
provided that (a) no waiver of any provision hereof shall be construed as a
waiver of any other provision or subsequent breach and (b) any such waiver shall
be in writing signed by the party waiving such compliance. The failure of any
party hereto to enforce at any time any provision hereof shall not be construed
to be a waiver of such provision, nor in any way to affect the validity hereof
of any part hereof or the right of any party thereafter to enforce each and
every such provision.
SECTION 5.7 - GOVERNING LAW
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To the extent not governed by the laws of the United States, including
the Code, this Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York (without regard to conflicts
of law principles for such state).
SECTION 5.8 - RESOLUTION OF DISPUTES
Any disputes under this Agreement shall be resolved in accordance with
Section 14 of the Employment Agreement, which shall be deemed incorporated
herein in full.
SECTION 5.9 - REPRESENTATIONS
The Company represents and warrants that (a) it is fully authorized by
action of its Board and Compensation Committee (and of any other person or body
whose action is required) to enter into this Agreement and to perform its
obligations under it; (b) the execution, delivery and performance of this
Agreement by the Company does not violate any applicable law, regulation, order,
judgment or decree or any agreement, plan or corporate governance document of
the Company; (c) the terms of this Agreement are consistent with the terms of
the Plan; and (d) upon the execution and delivery of this Agreement by the
Company and the Optionee, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its terms, except to
the extent enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally.
SECTION 5.10 - COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto on the date first set forth above.
PRIMEDIA Inc.
By: /s/ Beverly C. Chell
----------------------
Name: Beverly C. Chell
Title: Vice Chairman
AGREED AND ACCEPTED BY:
/s/ Thomas S. Rogers
--------------------
Optionee Signature
Thomas S. Rogers
Address: c/o PRIMEDIA, INC.
745 Fifth Avenue
New York, NY 10151
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EXHIBIT B
NOTICE OF ELECTION TO DEFER OPTION GAIN
THROUGH RESTRICTED STOCK UNITS
TO: PRIMEDIA, Inc.
ATTN: General Counsel
RE: Stock Option Agreement
Pursuant to Section 4.9 of the Stock Option Agreement dated as
of December 3, 1999 (the "Agreement") between PRIMEDIA, Inc. and Thomas S.
Rogers, please award me Restricted Stock Units in lieu of issuing shares of
PRIMEDIA stock in the event that I exercise the Option, as follows:
_________ Upon any exercise by me of this Option (CHECK THIS LINE IF
YOU WANT THIS NOTICE TO APPLY TO ANY EXERCISE YOU MAKE OF THE OPTION).
or
__________ Upon my exercise of this Option as to _____ Option Shares
(CHECK THIS LINE IF YOU WANT THIS NOTICE TO APPLY TO A SINGLE EXERCISE
AND ENTER THE NUMBER OF OPTION SHARES YOU WANT THIS NOTICE TO APPLY
TO).
THIS NOTICE OF ELECTION IS EFFECTIVE 180 DAYS AFTER ITS DELIVERY TO
THE COMPANY AND SHALL BE IRREVOCABLE. I UNDERSTAND THAT THIS NOTICE OF ELECTION
WILL BE INAPPLICABLE TO ANY PORTION OF THE OPTION THAT I EXERCISE BEFORE SUCH
NOTICE OF ELECTION BECOMES EFFECTIVE. I FURTHER UNDERSTAND THAT IF MY EMPLOYMENT
TERMINATES UNDER CIRCUMSTANCES IN WHICH I HAVE LESS THAN 180 DAYS TO EXERCISE
OUTSTANDING OPTIONS (E.G., PURSUANT TO SECTION 3.3(B) OF THE STOCK OPTION
AGREEMENT), THIS NOTICE OF ELECTION MUST HAVE BEEN DELIVERED AT LEAST 180 DAYS
IN ADVANCE OF OPTION EXERCISE IN ORDER TO BE EFFECTIVE AT THE TIME OF EXERCISE.
I understand that the Company will deliver the Option Shares and any
other property represented by the Restricted Stock Units, as described in such
Section 4.9, to the Trustee (as defined in the Agreement) at the time required
by such Section. I elect to have Option Shares in like number and any other
property due to me under such Section 4.9 or represented by the Restricted Stock
Units delivered to me or my legal representative as soon as practicable after
the earliest of the following:
- my death
- my Disability (as defined in the Employment Agreement referred to
in the Agreement)
- a request based on financial need (which request shall have been
granted by the Compensation Committee of your Board of
Directors); or
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- _______________________________________________________________
(Supply date or dates and percentage of Option Shares and other
property to be delivered on each date.)
-------------------------------
Thomas S. Rogers *
DATE: ________________, 200__
*or his legal representative