EXHIBIT 10.3

 

PRIMEDIA INC.

1992 STOCK PURCHASE AND OPTION PLAN

NONQUALIFIED STOCK OPTION AGREEMENT FOR NON-EMPLOYEE DIRECTORS

 

No. of Shares subject to

Nonqualified Stock Option: ___

 

THIS NONQUALIFIED STOCK OPTION AGREEMENT FOR NON-EMPLOYEE DIRECTORS (this
“Agreement”), dated as of the ____ day of June, 2008, by and between PRIMEDIA
INC., a Delaware corporation (the “Corporation”), and
___________________________ (the “Participant”), is made pursuant and subject to
the provisions of the Corporation’s 1992 Stock Purchase and Option Plan (the
“Plan”), a copy of which is attached hereto. All terms used herein that are
defined in the Plan have the same meaning given them in the Plan.

 

1.

Grant of Option. Pursuant to the Plan, the Corporation, on June __, 2008 (the
“Date of Grant”), granted to the Participant, subject to the terms and
conditions of the Plan and subject further to the terms and conditions set forth
herein, the right and option (this “Option”) to purchase from the Corporation
all or any part of an aggregate of __________ shares of the common stock of the
Corporation, $0.01 par value per share (the “Common Stock”), at the exercise
price of $___________ per share. Such price per share is not less than the Fair
Market Value of a share of Common Stock on the Date of Grant. This Option is
exercisable as hereinafter provided.

 

2.

Terms and Conditions. This Option is subject to the following terms and
conditions:

 

(a)

Expiration Date. This Option shall expire at 11:59 p.m. on December 31, 2013
(the “Expiration Date”) or such earlier time as set forth in paragraphs 3, 4 or
5 of this Agreement.

 

(b)

Exercise of Option. Except as provided in the Plan and in paragraphs 3, 4 or 5
of this Agreement, this Option shall become exercisable at the time or times set
forth on Exhibit A attached hereto. Once this Option has become exercisable, it
shall continue to be exercisable until the earlier of the termination of the
Participant’s rights hereunder pursuant to paragraphs 3, 4 or 5 of this
Agreement or until the Expiration Date. A partial exercise of this Option shall
not affect the Participant’s right to exercise the Option with respect to the
remaining shares of Common Stock subject to the Option, subject to the
conditions of the Plan and this Agreement.

 

(c)

Method of Exercise and Payment for Shares. This Option shall be exercised by
delivering written notice of exercise to the attention of the Corporation’s
General Counsel at the Corporation’s address specified in paragraph 10 below.
The exercise date shall be the date of delivery of the notice of exercise. Such
notice must be accompanied by payment of the Option price in full. The
Participant

 

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may pay part or all of the Option price (i) in cash, (ii) by check, bank draft
or money order payable to the Corporation, (iii) if approved by the Committee,
by surrendering (actually or by attestation) shares of Common Stock to the
Corporation that the Participant already owns and to the extent necessary to
avoid adverse accounting treatment, has either held for at least six months or
acquired on the open market, (iv) if approved by the Committee, by a cashless
exercise through a broker, (v) if approved by the Committee, by having shares of
Common Stock withheld by the Corporation from the shares otherwise to be
received or (vi) by any combination of the aforementioned methods of payment. If
shares of Common Stock are used to pay part or all of the Option price, the sum
of the cash and cash equivalent and the Fair Market Value (determined as of the
day preceding the date of exercise) of the shares of Common Stock surrendered
must not be less than the Option price of the shares of Common Stock for which
the Option is being exercised.

 

(d)

Transferability. Except as provided herein, this Option is nontransferable and
during the Participant's lifetime, only the Participant may exercise this
Option. This Option may be transferred by will or the laws of descent and
distribution and, notwithstanding the foregoing, during the Participant's
lifetime, may be transferred by the Participant to the Participant's “family
members” (as such term is defined in the General Instructions to the Form S-8
Registration Statement Under the Securities Act of 1933), on such terms and
conditions as the Committee may provide. Any such transfer will be permitted
only if (i) the Participant does not receive any consideration for the transfer
and (ii) the Committee expressly approves the transfer. Any transferee to whom
this Option is transferred shall be bound by the same terms and conditions that
govern this Option; provided, however, that the transferee may not transfer this
Option except by will or the laws of descent and distribution. No right or
interest of the Participant in this Option shall be liable for, or subject to,
any lien, obligation or liability of the Participant.

 

3.

Exercise in the Event of Death. This Option shall be exercisable for all or part
of the number of shares of Common Stock that the Participant is entitled to
purchase pursuant to paragraph 2(b) as of the date of the Participant’s death,
reduced by the number of shares for which the Participant previously exercised
the Option, in the event the Participant dies while serving as a director on the
Board of Directors of the Corporation or any Subsidiary and prior to the
Expiration Date and the termination of the Participant’s rights under paragraphs
4 or 5 of this Agreement. In that event, this Option may be exercised by the
Participant’s estate, or the person or persons to whom the Participant’s rights
under this Option shall pass by will or the laws of descent and distribution,
for the remainder of the period preceding the Expiration Date or within one year
of the date the Participant dies, whichever period is shorter.

 

4.

Exercise in the Event of Disability. This Option shall be exercisable for all or
part of the number of shares of Common Stock that the Participant is entitled to
purchase pursuant to paragraph 2(b) as of the date the Participant becomes
“Disabled” (as defined below), reduced by the number of shares for which the
Participant previously exercised the

 

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Option, if the Participant becomes Disabled while serving as a director on the
Board of Directors of the Corporation or any Subsidiary and prior to the
Expiration Date and the termination of the Participant’s rights under paragraphs
3 or 5 of this Agreement. In that event, the Participant may exercise this
Option for the remainder of the period preceding the Expiration Date or within
one year of the date the Participant ceases to serve on the Board of Directors
of the Corporation or any Subsidiary on account of being Disabled, whichever
period is shorter. For purposes of this Agreement, “Disabled” means that the
Participant is unable to engage in any substantial gainful activity by reason of
any medically determined physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than 12 months. The Committee, in its sole discretion, shall
determine whether the Participant is Disabled for purposes of this Agreement.

 

5.

Exercise After Termination of Service. This Option shall be exercisable for all
or part of the number of shares of Common Stock that the Participant is entitled
to purchase pursuant to paragraph 2(b) as of the date the Participant ceases to
serve as a director on the Board of Directors of the Corporation or any
Subsidiary, reduced by the number of shares for which the Participant previously
exercised the Option, if the Participant ceases to serve as a director, other
than on account of death or becoming Disabled, prior to the Expiration Date and
the termination of the Participant’s rights under paragraphs 3 or 4 of this
Agreement. In that event, the Participant may exercise this Option for the
remainder of the period preceding the Expiration Date or until the date that is
ninety (90) days after the date the Participant ceases to serve on the Board of
Directors of the Corporation or any Subsidiary, whichever period is shorter.

 

6.

Agreement to Terms of the Plan and Agreement. The Participant has received a
copy of the Plan, has read and understands the terms of the Plan and this
Agreement, and agrees to be bound by their terms and conditions.

 

7.

Minimum Exercise. This Option may not be exercised for less than [_______]
shares of Common Stock unless it is exercised for the full number of shares of
Common Stock that remain subject to the Option.

 

8.

Fractional Shares. Fractional shares shall not be issuable hereunder, and when
any provision hereof may entitle the Participant to a fractional share, such
fractional share shall be disregarded.

 

9.

Change in Capital Structure. The terms of this Option may be adjusted in
accordance with the terms and conditions of the Plan as the Committee determines
is equitably required in the event the Corporation effects one or more stock
splits, spin-offs, stock dividends, stock combinations or reclassifications or
engages in any recapitalizations, mergers or other similar changes in
capitalization described in the Plan.

 

10.

Notice. Any notice or other communication given pursuant to this Agreement, or
in any way with respect to this Option, shall be in writing and shall be
personally delivered or mailed by United States registered or certified mail,
postage prepaid, return receipt requested or documented overnight delivery
service, to the following addresses:

 

 

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If to the Corporation:

PRIMEDIA INC.

3585 Engineering Drive

 

Norcross, Georgia 30092

 

Attn: General Counsel

 

 

If to the Participant:

                                                               

                                                               

                                                               

 

 

11.

No Right to Continued Service. This Option does not confer upon the Participant
any right with respect to continued service on the Board of Directors of the
Corporation or any Subsidiary, nor shall it interfere in any way with the right
of the Corporation or any Subsidiary to terminate the Participant’s service at
any time without assigning a reason therefor.

 

12.

No Stockholder Rights. The Participant shall not have any rights as a
stockholder with respect to shares of Common Stock subject to the Option until
the date of exercise of the Option and the issuance of the shares of Common
Stock that are being acquired.

 

13.

Impact on Other Plans and Arrangements. The determination of whether the value
of this Option or any income attributable thereto will be included or excluded
in calculating any severance, resignation, redundancy, end of service payments,
bonuses or long-service awards, any payments or benefits under any pension or
retirement plans or any other compensation or benefits will be based on the
terms of the applicable plan, program or arrangement. If such plan, program or
arrangement would not otherwise require the inclusion of such amounts in such
calculation, then such amounts shall be excluded from such calculation.

 

14.

Binding Effect. Subject to the limitations stated above and in the Plan, this
Agreement shall be binding upon and inure to the benefit of the legatees,
distributees, transferees and personal representatives of the Participant and
the successors of the Corporation.

 

15.

Conflicts. In the event of any conflict between the provisions of the Plan and
the provisions of this Agreement, the provisions of the Plan shall govern. All
references herein to the Plan shall mean the Plan as in effect on the date
hereof.

 

16.

Governing Law. This Agreement shall be governed by the laws of the State of
Delaware, without regard to its conflict of laws principles, except to the
extent federal law applies.

 

17.

Securities Laws. No shares of Common Stock shall be issued pursuant to this
Option except in accordance with all applicable securities and other laws, rules
and regulations and subject to such approvals of any governmental agencies as
may be required.

 

18.

Tax Consequences and Section 409A. The Participant acknowledges that there may
be tax consequences upon the acquisition and disposition of shares of Common
Stock acquired upon exercise of the Option, and that the Participant should
consult a tax advisor

 

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prior to such acquisition or disposition. The Option is intended to be exempt
from the requirements of Section 409A of the Code. Notwithstanding the
preceding, the Corporation and its Subsidiaries shall not be liable to the
Participant or any other person if the Internal Revenue Service or any court or
other authority having jurisdiction over such matter determines for any reason
that this Agreement is subject to taxes, penalties or interest as a result of
failing to comply with Section 409A of the Code.

 

19.

Withholding Obligations. If applicable, the Participant shall remit to the
Corporation amounts sufficient to satisfy any federal, state or local
withholding tax requirements before the issuance of any Common Stock pursuant to
exercise of this Option. Such payment shall be made in the form of cash or cash
equivalent acceptable to the Committee or, if the Committee permits, by delivery
of shares of Common Stock that the Participant already owns and, to the extent
necessary to avoid adverse accounting consequences, has owned for at least six
months or by withholding from the number of shares of Restricted Stock otherwise
issuable hereunder, a number of shares with a Fair Market Value equal to the
withholding liability (but no more than the minimum required withholding). In
addition, the Committee may, in its sole discretion, to the extent permitted by
applicable law, allow such withholding obligation to be satisfied by any other
method described in the Plan.

 

20.

Amendment or Termination. This Agreement may be amended or terminated at any
time by the mutual agreement and written consent of the Participant and the
Corporation, but only to the extent permitted under the Plan.

 

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed by a
duly authorized officer, and the Participant has affixed his signature hereto.

CORPORATION:

 

PRIMEDIA INC.

 

By:                                          
                                      

Name:                                                                           

Title:                                          
                                  

 

PARTICIPANT:

 

 

                                          
                                             

Participant

 

 

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EXHIBIT A

Vesting Provisions

 

Except as otherwise provided in the Agreement, this Option shall become
exercisable as set forth below.

This Option shall become exercisable with respect to one-third (1/3) of the
shares of Common Stock subject to the Option on each of December 31, 2008,
December 31, 2009 and December 31, 2010 (rounded down to the nearest whole share
or up if the last remaining shares are vesting), provided the Participant is
still serving on the Board of Directors of the Corporation or any Subsidiary at
each such time.

 

Notwithstanding the foregoing, the Option shall become exercisable with respect
to one-hundred percent (100%) of the shares of Common Stock subject to the
Option if the Participant dies or becomes Disabled while still serving on the
Board of Directors of the Corporation or any Subsidiary.

 

 

 

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