Exhibits
10.26


 


SEPARATION AND
RELEASE AGREEMENT


 


This Separation and
Release Agreement (“Agreement”) by and between David Ferm  (“Executive”)
and PRIMEDIA Inc. (the “Company”), dated as of December 31, 2003 and executed
on the date specified below (the date of execution by the Executive hereinafter
referred to as the “Execution Date”).


 


RECITAL


 


Executive and Company
desire to reach a mutual understanding and acceptance of the terms and
conditions related to Executive’s cessation of employment with Company.


 


AGREEMENT


 


NOW,
THEREFORE, in
consideration of the mutual promises and covenants herein contained it is
hereby agreed as follows:


 


1.            
Cessation of Employment.  Executive shall cease to be an employee
of Company as of December 31, 2003 (“Separation Date”).


 


2.            
Payments.  In consideration of Executive’s acceptance of this
Agreement, on  the later of January 15, 2004 or the expiration of the
Revocation Period, as hereinafter defined, (the “Payment Date”), Executive
shall be entitled to receive and shall be paid the following payments by the
Company in respect of giving up future employment.


 


(a) Salary.  $750,000, an amount equal to
twelve (12) months’ base salary at Executive’s current rate of pay.


 


(b)  2003 Annual Bonus Payment. 
$450,000 with respect to the Executive’s annual incentive award payable under
PRIMEDIA’s annual incentive plan (the “Annual


 


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Incentive Award”) (based on a target Annual Incentive
Award equal to 65% of the Executive’s $750,000 base salary) in respect of
PRIMEDIA’s fiscal year ending December 31, 2003 (the “Bonus Amount”), provided
however in the event that the amount calculated as Executive’s actual Annual
Incentive Award exceeds $450,000, such excess, if any, will be paid to the
Executive when all other bonuses of senior executives of PRIMEDIA Magazines
Inc. are paid.


 


(c) Additional Payment.  PRIMEDIA will pay
to Executive a lump sum payment equal to $30,000, which amount represents
payment in full of Executive’s earned special or milestone bonus for 2003.


 


3.  Accrued
Rights.  Promptly following the Termination Date, PRIMEDIA will pay to
Executive a lump sum payment equal to the sum of (i) any unpaid Base Salary
accrued through the Separation Date, (ii) all accrued but unused vacation days,
and (iii) the amount of any unreimbursed business expenses incurred by
Executive in accordance with Company policy prior to the Separation Date.


 


4.  Tax
Withholding.  All payments made under Sections 2 and 3 shall be
treated as supplemental wage payments for purposes of federal, state and local
tax withholding.  PRIMEDIA may withhold from any amounts payable under
this Agreement the minimum amount of Federal, state and local income,
employment and other taxes required to be withheld in respect of supplemental
wage payments (which, as of the date hereof, was 25% of any such payment for
federal tax purposes), provided however that with respect to payments under
Sectioin 2 as such payments are payments in respect of Executive giving up
future employment, no New York State withholdings shall be deducted.


 


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5.  Attorneys
Fees.  PRIMEDIA will pay to Paul, Hastings, or reimburse Executive,
for all reasonable fees (including costs and expenses incurred thereby) of
legal counsel for such counsel’s legal services provided to Executive in
connection with the negotiation and settlement of the subject matter contained
in this Agreement, within thirty (30) days after receipt of a bill for all such
services.


 


6..  Stock
Options.  With respect to the outstanding options to purchase shares
of common stock of PRIMEDIA held by Executive as of the date hereof (the
“Options”), notwithstanding the provisions of any of the option award
agreements pursuant to which Executive was granted such options effective as of
the Separation Date, all of the Options having a $1.85 exercise price that have
not already vested as of the Separation Date shall vest and become fully
exercisable.


 


7.  Other Employee Benefits.


 


(a)  Group Health
Coverage.  Effective as of the Separation Date, PRIMEDIA shall
continue to provide Executive and his eligible dependents with medical, dental
and vision benefits pursuant to PRIMEDIA’s health and dental benefit program
until the expiration of the eighteen month period commencing on the Separation
Date.  Notwithstanding the foregoing, as a condition to receiving the
benefits hereunder, Executive and his eligible dependents shall elect to
receive group health benefit coverage from PRIMEDIA as permitted pursuant to
the Consolidated Omnibus Reconciliation Act of 1985, as amended (“COBRA”),
which coverage shall begin on the Separation Date and run through the eighteen
month period provided pursuant to COBRA.  Executive shall not be required
to pay for such coverage.


 


(b)  Other Benefits.  If Executive is
currently participating in the PRIMEDIA Thrift and Retirement Plan (the
“PRIMEDIA Plan”), from and after the Separation Date,


 


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Executive shall cease to be an active participant in
the “PRIMEDIA Plan”.  The vested value of Executive’s account balance
under the PRIMEDIA Plan will be paid to Executive by separate check issued by
the Trustee of the PRIMEDIA Plan in accordance with the provisions of the Plan;
provided, however, that if the vested value of Executive’s account balance
under the PRIMEDIA Plan is greater than $5,000 (excluding rollover money in
Executive’s account), Executive shall have the option to keep its vested
balance in the Plan pursuant to the terms of the Plan.  It is understood
that the release set forth in this Agreement shall not apply to any rights
arising out of the computation or distribution of Executive’s account balance.


 


8.  Releases.


 


(a) Executive for Executive, Executive’s heirs,
executors, administrators and assigns, hereby unconditionally releases,
discharges and acquits Company, its subsidiaries, parents, and affiliates, and
each of them, and their respective officers, directors, shareholders, partners,
employees, agents and affiliates, and each of them (hereinafter collectively
referred to as “Releasees”) from any and all debts, agreements, promises,
liabilities, claims, damages, actions, causes of action, or demands of any kind
or nature including without limitation all claims of wrongful discharge, breach
of contract, intentional infliction of emotional distress, breach of alleged
implied covenant of good faith and fair dealing, invasion of privacy,
defamation, and age or sex discrimination, or discrimination based on any other
ground, including but not limited to those arising under the Age Discrimination
in Employment Act, as amended, Title VII of the Civil Rights Act of 1964, the
Executive Retirement Income Security Act of 1974, the Fair Labor Standards Act,
as amended, the Americans with


 


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Disabilities Act and the Family and Medical Leave Act
of 1993 and all other federal, state and local equal employment, fair
employment, civil or human rights laws, codes and ordinances, regardless of
whether such claims are past, present, or future, personal or representative,
known or unknown, or arising out of any occurrence to date and expressly
including but not limited to any liability arising out of or in connection with
the employment of Executive by Company, or the termination hereof, and claims
for attorneys’ fees and costs, and any and all forms of compensation, including
without limitation any amounts payable under the Executive’s Employment
Agreement dated February 22, 2000, as amended (the “Employment Agreement”), any
incentive awards or bonuses, relating to such employment, other than as
specifically set forth in this Agreement.


 


(b)  It is
understood and agreed that the releases set forth in clause (a) above  are
intended as and shall be deemed to be a full and complete release of any and
all claims that Executive may have against the Company arising out of any
occurrence arising on or before the date of this Agreement and said release is
intended to cover and does cover any and all future damages not now known to
Executive or which may later develop or be discovered, including all causes of
action therefor and arising out of or in connection with any occurrence arising
on or before the date of this Agreement.  For purposes of clarity, the
release in the preceding paragraph is intended to include and does include (i)
a release by Executive of any claims Executive may have that could be a part of
the class action lawsuit Harrell v. PRIMEDIA Inc. et al, in the United States
District Court, Central District of California, Case No. 01-07006 (the “Harrell
Class Action”) and (ii) an irrevocable waiver of Executive’s right to
participate as a class member in the Harrell Class Action.


 


(c).  By signing and returning this Agreement,
Executive acknowledges that Executive:


 


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(i)           
has carefully read and fully understands the terms of this Agreement;


 


(ii)          
is entering into this Agreement voluntarily and knowing that Executive is
releasing claims that Executive has or believes Executive may have against
Company;


 


(iii)         
has hereby been advised by this Agreement that Executive has the right to
consult with an attorney of Executive’s choosing prior to signing this
Agreement; and


 


(iv)         
is giving this release of claims in return for consideration to which Executive
otherwise would not have been entitled, to wit, any compensation and benefit
enhancements beyond those that Executive would otherwise be entitled to
pursuant to the Company’s policies and practices.


 


(d)  Executive hereby covenants not to sue or
bring any claim against Releasees and acknowledges and agrees that this general
release may be pleaded as a full and complete defense to, and may be used as
the basis for an injunction against, any action, claim, suit or other
proceeding which may be instituted, prosecuted or attempted in breach of this
release.


 


9.  Non-Disparagement. 
Executive promises not to make any statement, written or oral, directly or
indirectly, which in any way disparages Company or any of its affiliates or
their publications, or the employees, officers, directors or shareholders of
any of them.  Executive promises to maintain this Agreement in strict
confidence and to make no disclosure of the terms of this settlement to any
third party, provided, however, that nothing herein contained shall prohibit


 


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Executive from disclosing the terms of this Agreement
as may be required by law.  Notwithstanding anything herein to the
contrary, the foregoing shall in no way limit the effect of the release set
forth above.


 


10,  The Company and
Executive agree that the Agreement Not to Compete set forth in Section 8 (a) of
the Employment Agreement is amended to read and provide as follows:


 


(a)          “Non-Compete, No Hire.  Through December 31, 2004:


 


(i) You (Executive) agree
not to accept employment with, or provide services to, any person, firm or
corporation that publishes magazines that compete with magazines published on
the date hereof by PRIMEDIA Consumer Magazines and Media excluding New York
Magazine.


 


(ii) You agree not to
yourself or for and on behalf of any person, firm or corporation for which you
provide services, solicit for employment or hire any employee employed by any
of the Company’s businesses to which you rendered services during the term of
your employment with the Company.”


 


11.  Company
Property.  Except as specifically set forth in this Agreement to the
contrary, Executive agrees to return all Company property in Executive’s
possession to Company on or before the Separation Date.  Executive
acknowledges receipt of the Notice on Conclusion of Employment, attached hereto
as Exhibit “A”.  Executive understands and agrees that any disclosure in
contravention of this Agreement or Notice on Conclusion of Employment may
release Company from any obligations it may have to Executive under this
Agreement.


 


12.  Indemnification. 
Executive agrees to indemnify and hold harmless the Company from any claims
made or assessed, including interest and penalties, by any Federal, state or
local governmental agency or taxing authority which claim asserts, that the
Company improperly withheld


 


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from the amounts payable to Executive under this
Agreement.  Upon receipt of any such claim by the Company, the Company
shall give Executive reasonable notice and an opportunity to defend such claim
on behalf of the Company.  Unless Executive shall have satisfactorily
paid, settled or gotten dismissed any such claim within 90 days of receipt of
notice from the Company, the Company shall have the right to pay such claim in
full and claim the amount so paid from Executive.


 


13.  Entire
Agreement.  This Agreement sets forth the entire agreement between the
parties regarding Executive’s separation from Company, supersedes any prior
written, oral or implied agreement between the parties hereto regarding the
subject matter hereof and may only be amended by a written agreement signed by
the parties hereto.  Notwithstanding the foregoing, the provision of
Section 8 of the Employment Agreement, as amended by this Agreement, shall
remain in full force and effect.


 


14.  No
Publicity.  Executive agrees and understands that neither the content
nor the execution of this Agreement shall constitute or be construed as any
implied or actual admission by Company of any liability to or of the validity
of any claim by Executive that Executive is entitled to additional compensation
or continued employment with the Company or that the Company engaged in any
wrongdoing.


 


15.  Executive’s
Determination.  Executive hereby represents and agrees that in
entering into this Agreement, Executive has relied solely upon Executive’s own
judgment, belief and knowledge and Executive’s own legal and other professional
advisors and that no statement made by or on behalf of Company has in any way
influenced Executive in such regard.


 


16.  No Claims
Assigned.  Executive hereby represents and warrants to Company that
Executive has not assigned any claim Executive may or might have against
Company to any third party.


 


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17.  Governing
Law.  This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.


 


18.  Full
Settlement.  It is agreed by each of the parties hereto that they have
read the above and fully understand the terms of this Agreement which they
voluntarily execute in good faith and deem to be a full and equitable
settlement of this matter.


 


19.  Separability. 
The provisions of this Separation and Release Agreement are severable.  If
any provision of the Separation and Release Agreement is declared invalid or
unenforceable, the ruling will not affect the validity and enforceability of
any other provision of the Separation and Release Agreement.


 


20.  Review
Right.  Executive may review and consider this Agreement for a period
of up to forty-five (45) days from the date of this Agreement.  Executive
agrees and understands that Executive’s failure to execute this Agreement and
to return this signed document on or before forty-five (45) days after the date
of this Agreement will release Company from any obligation to enter into this
Agreement.


 


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21.  Revocation.
 Executive shall be entitled to revoke this Agreement within seven (7)
days after Executive’s timely execution of same by delivering a written
revocation to Company.  If Executive so revokes or if Executive fails to
execute this document, this Agreement shall be null and void and of no force
and effect and the provisions of the Employment Agreement shall control the
Executive’s cessation of employment effective December 31, 2003.


 


	
  Agreed and Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ David Ferm

  	
   

  	
  Dated:  January 6,
  2003

  	
   

  
	
  David Ferm

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed and Accepted for
  PRIMEDIA Inc.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Beverly C. Chell

  	
   

  	
  Dated:  January 5,
  2003

  	
   

  
	
  Name:  Beverly C.
  Chell

  	
   

  	
   

  
	
  Title: Vice Chairman

  	
   

  	
   

  



 


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EXHIBIT
“A”


 


NOTICE
ON CONCLUSION OF EMPLOYMENT


 


In connection with the conclusion of employment with
PRIMEDIA Inc. and/or its subsidiaries and affiliates (“Company”), each employee
has an obligation to surrender and return to Company all mail, files, records,
manuals, books, blank forms, tapes, discs, photographs, negatives, documents,
letters, memoranda, notes, notebooks, materials, property, reports, data
tables, calculations, information or copies thereof, which are the property of
Company or which relate in any way to the business, products, practices or
techniques of Company and all other property, trade secrets or confidential
information of Company and any third parties with whom it deals, including but
not limited to, all keys, passwords, combinations and documents which in any of
these cases are in the employee’s possession or under the employee’s control.


 


The employee also has a continuing obligation to
preserve as CONFIDENTIAL and
refrain from using, trade secrets or confidential information concerning the
business, products, practices or techniques of Company and any third parties
with whom it deals, including but not limited to, manuscripts, photographs,
techniques, systems, designs, research, processes, inventions, developments,
proposals, plans, publications, computer programs, user manuals and
documentation, products (whether or not copyrighted or copyrightable, or
patented or patentable), marketing and merchandising methods, subscriber,
circulation, customer or supplier lists, business, accounting and financial
information of Company, that has been disclosed to or is known to the Executive
by reason of employment by Company, and to refrain from acts or omissions that
would reduce the value of such trade secrets and confidential information to
Company.


 


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