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Exhibit 10.81  

 
 

LIBRARY SERVICE AGREEMENT EXTENSION    
    

        This Extension Agreement dated as of January 1, 2004 is by and between Hallmark Entertainment, Inc. ("HEI") and Crown Media Distribution, LLC
("CMD"). 

        WHEREAS,
Crown Media Holdings, Inc. ("Crown") and HEI previously entered into an agreement, dated September 28, 2001 (the "Library Service Agreement"), for HEI's services
as administrator and sales representative for the film library owned by Crown (the "Crown Library); and 

        WHEREAS,
THE Library Services Agreement was subsequently assigned by Crown to CMD on December 14, 2001, following Crown's assignment of its rights in the Crown Library to CMD; and 

        WHEREAS,
the parties desire to extend the term of the Library Services Agreement; 

        NOW,
THEREFORE, Crown and HEI hereby agree as follows: 

        1.     The
term of the Library Services Agreement shall be extended for an additional period of three years, terminating on December 31, 2006, subject to any
earlier termination pursuant to the terms of the Library Service Agreement. 

        2.     All
other terms and conditions of the Library Service Agreement, including the yearly Service Fee, will remain unchanged and in full force and effect. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Extension Agreement as of the date set forth above. 

	

HALLMARK ENTERTAINMENT, INC.	
 	

 
	

By:	
 	

/s/  ANTHONY GUIDO      
	
 	

 
	Title:	 	EXECUTIVE VICE PRESIDENT	 	 
	

CROWN MEDIA DISTRIBUTION, LLC	
 	

 
	

By:	
 	

/s/  CHARLES STANFORD      
	
 	

 
	Title:	 	EXECUTIVE VICE PRESIDENT	 	 

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LIBRARY SERVICE AGREEMENT EXTENSIONExhibits 10.20

 

EXECUTION
COPY

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT, made
and entered into as of October 14, 2003 (“the Execution Date”) by and between
PRIMEDIA Inc., a Delaware corporation (together with its successors and assigns
permitted under this Agreement, the “Company”), and Kelly Conlin (the
“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company desires
to employ the Executive and to enter into an agreement embodying the terms of
such employment (this “Agreement”), and the Executive desires to enter into
this Agreement and to accept such employment, subject to the terms and
provisions of this Agreement;

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is mutually
acknowledged, the Company and the Executive (individually a “Party” and
together the “Parties”) agree as follows:

 

1.                                       DEFINITIONS.

 

(a)  “Affiliate”
of a person or other entity shall mean a person or other entity that directly
or indirectly controls, is controlled by, or is under common control with the
person or other entity specified.

 

(b)  “Annual
Bonus” shall mean the annual cash bonus, if any, payable to the Executive in
respect of any given calendar year under the applicable Company annual
incentive plan pursuant to Section 5 of this Agreement.

 

(c)  “Base Salary”
shall mean the salary provided for in Section 4 below or any increased salary
granted to the Executive pursuant to Section 4 of this Agreement.

 

(d)  “Board” shall
mean the Board of Directors of the Company.

 

(e)  “Cause” shall
mean:

 

(i)            the Executive is convicted of (x) a
misdemeanor involving moral turpitude or involving fraud against the Company or
(y) a felony; or

 

(ii)           the Executive is determined to be
guilty of willful gross neglect or willful gross misconduct in carrying out his
duties under this Agreement (by action or inaction) (including, without
limitation, a breach of any policies of the Company, including policies
relating to securities trading, sexual harassment, confidentiality, and drug
and alcohol use), resulting, in any such case, in material economic harm to the
Company, unless the Executive reasonably believed in good faith that such
action or inaction was in the best interests of the Company.

 

(f)  “Constructive
Termination” shall mean termination by the Executive of his employment, at his
initiative, following the occurrence of any of the following events without his
consent:

 

(i)            a reduction in (x) the Executive’s
Base Salary to an amount below $900,000 or (y) the termination or material
reduction of any material employee benefit or perquisite enjoyed by the
Executive (other than, with respect to either of the foregoing, as part of an
across-the-board reduction applicable to all senior corporate executive
officers of the Company (or as otherwise may be required by law, in the event a
material benefit or perquisite is prohibited by law to be provided to senior
executive officers of the Company);

 

 

(ii)           the failure to elect or reelect the
Executive to any of the positions described in Section 3 of this Agreement or
the removal of him from any such position;

 

(iii)          (x) a material diminution in the
Executive’s duties and responsibilities as described in Section 3 of this
Agreement or (y) the assignment to the Executive of duties or responsibilities
which are materially inconsistent with his duties and responsibilities as
described in Section 3 of this Agreement or which materially impair the
Executive’s ability to function as the Chief Executive Officer of the Company;
or

 

(iv)          the failure of the Company to obtain
the assumption in writing of its obligation to perform this Agreement by any
successor to all or substantially all of the assets of the Company within 30
calendar days after the closing of a merger, consolidation, sale or similar
transaction.

 

Notwithstanding the
foregoing, following written notice from the Executive of any of the events
described in (i) through (iv) above, the Company shall have thirty (30)
calendar days in which to cure the alleged conduct.  If the Company fails to cure, the Executive’s termination shall
become effective on the 31st calendar day following such written notice.

 

(g)  “Disability”
shall mean the Executive’s failure, due to physical or mental incapacity, to substantially
perform his duties and responsibilities under this Agreement for a period that
is reasonably expected to continue for at least six (6) consecutive months, as
determined by a medical doctor selected by the Company and the Executive.  If the Parties cannot agree on a medical
doctor, each Party shall select a medical doctor and the two doctors shall
select a third who shall be the approved medical doctor for this purpose.

 

(h)  “Effective
Date” shall be October 21, 2003.

 

(i)  “Execution
Date” shall mean the date on which this Agreement is finally executed by both
Parties

 

(j)  “Stock” shall
mean the common stock of the Company.

 

(k)  “Term of
Employment” shall mean the period specified in Section 2 below (including any
extension as provided therein) during which the Executive is employed pursuant
to this Agreement.

 

(l)  “Voting
Stock” shall mean capital stock of any class or classes having general voting
power under ordinary circumstances, in the absence of contingencies, to elect
the directors of a corporation.

 

2.                                       TERM OF
EMPLOYMENT.

 

The Term of Employment shall
begin on the Effective Date, and shall extend until the fourth anniversary of
the Effective Date, with automatic one-year renewals commencing on such fourth
anniversary and on each anniversary thereafter unless and until either Party
notifies the other at least three (3) months before the scheduled renewal date
that the Term of Employment is not to be renewed.  Notwithstanding the foregoing, the Term of Employment may be
earlier terminated by either Party in accordance with the provisions of Section
9 of this Agreement.

 

3.                                       POSITION,
DUTIES AND RESPONSIBILITIES.

 

(a)  Commencing on
the Effective Date and continuing through the end of the Term of Employment,
the Executive shall be employed as the Chief Executive Officer of the Company
and shall have such duties and authority as shall be determined from time to
time by the Board, which shall be consistent with the duties and authority of
chief executive officers of public companies of similar size and

 

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type, and such other duties commensurate with the
Executive’s positions, all as shall be reasonably determined by the Board.  If requested, the Executive shall also (i)
serve as a member of the Board (and any committees thereof) and other boards of
directors of any subsidiaries of the Company and (ii) hold such corporate
officer titles and positions of the Company and any of its subsidiaries as may
be selected by the Board, in any such case without additional compensation
therefor.  In connection with the
foregoing, the Company shall use its commercially reasonable best efforts to
cause the Executive to be appointed as a member of the Board as soon practicable
after the Effective Date.  The Executive,
in carrying out his duties under this Agreement, shall report directly to the
Board.  During the Term of Employment,
the Executive shall devote substantially all of his business time and attention
to the performance of his duties hereunder and shall use his reasonable best
efforts, skills and abilities to promote its interests.

 

(b)  Nothing
herein shall preclude the Executive from (i) serving on the boards of directors
(or advisory committees) of a reasonable number of other corporations or
entities with the express written consent of the Board (which consent shall not
be unreasonably withheld), only one of which may be a public company, (ii)
serving on the boards of a reasonable number of trade associations and/or
charitable organizations, (iii) engaging in a reasonable number of charitable
activities and community affairs, and (iv) managing his personal investments
and affairs, provided that such activities set forth in this Section 3(b) do
not conflict or materially interfere with the effective discharge of his duties
and responsibilities under Section 3(a) above.

 

4.                                       BASE SALARY.

 

During the Term of
Employment, the Executive shall be paid an annualized gross Base Salary,
payable in accordance with the regular payroll practices of the Company, of $900,000.  The Base Salary shall be reviewed annually
for increase in the discretion of the Board, and any increase (or, in the event
of an across-the-board reduction applicable to all senior corporate executive
officers of the Company, any decrease in proportion to such reduction) in such
amount from time to time shall constitute “Base Salary” for purposes of this
Agreement.

 

5.                                       ANNUAL
INCENTIVE AWARDS.

 

During the Term of
Employment, the Executive shall be eligible to earn an Annual Bonus in respect
of each calendar year occurring during the Term of Employment pursuant to the
two Executive Incentive Plans covering senior executives of the Company (the
“Bonus Plans”), the amount of which shall be based upon a percentage of the
Executive’s Base Salary (or such other metric or amount as the Board may
establish pursuant to the Bonus Plans), provided that the target Annual
Bonus percentage under the Bonus Plans for each calendar year occurring during
the Term of Employment shall be equal to at least fifty percent (50%) of the
amount of Base Salary the Executive actually earned in the year in respect of
which the Annual Bonus, if any, is payable. 
Any Annual Bonus shall only be payable upon the achievement by the
Company as a whole of certain performance goals to be established in respect of
each calendar year by the Board (or a designated committee thereof) after
consultation with the Executive, provided that the Executive may receive
a greater or lesser Annual Bonus amount as determined by the Board in
accordance with achievement of such performance goals and as pursuant to the
terms of the Bonus Plans; and provided, further, that the Company
acknowledges that any annual bonus program established as described herein will
include an opportunity for the Executive to earn one hundred percent (100%) of
the Executive’s Base Salary, based upon the achievement of certain performance
goals, and that the Company may, but shall not be obligated to, provide an
opportunity for the Executive to earn more than 100% of the Executive’s Base
Salary as an Annual Bonus. Notwithstanding the foregoing, the Executive shall
be entitled to the following: (a) the Executive shall receive an Annual Bonus
equal to $100,000 in respect of the balance of calendar year 2003 (the “2003
Bonus”) and (b) with respect to calendar year 2004, the Executive shall earn an
Annual Bonus pursuant to the Bonus Plans, the amount of which shall be at least
equal to $450,000 (such minimum bonus amount, the “2004 Bonus”).  Notwithstanding the foregoing, and subject to
the provisions of Section 9 of this Agreement, in the event

 

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that the Term of Employment is
scheduled to terminate prior to December 31 of any given calendar year, the
Executive shall only be eligible to earn a pro rata portion of his Annual Bonus
amount, based on the number of days during such calendar year in which the
Executive is employed hereunder.  All
bonuses payable under this Section 5 shall be paid at the same time as annual
cash bonuses are paid to other senior corporate executives of the Company
pursuant to the applicable Bonus Plans.

 

6.                                       EQUITY AND
EQUITY-BASED AWARDS.

 

(a)  Stock
Purchase.  The Executive shall invest
$250,000 in shares of Stock on the open market within the first 90 days immediately
following the Effective Date, to the extent permitted by and pursuant to
applicable securities laws, and an additional $250,000 in shares of Stock on
the open market at the then market price within the twelve months immediately
following the Effective Date, to the extent permitted by and pursuant to
applicable securities laws.

 

(b)  Options.  On the Effective Date, the Company shall
grant to the Executive an option to purchase 2,000,000 shares of Stock, having
a per share exercise price equal to the fair market value per share of Stock on
the Execution Date.  Such option shall
be granted under the Company’s 1992 Stock Purchase and Option Plan, as amended
from time to time (“Stock Incentive Plan”). 
This option shall vest with respect to 25% of the shares of Stock
subject to such option on October 21, 2004 and on each October 21 thereafter
through October 21, 2007.  In the event
of a termination without Cause by the Company (other than due to the
Executive’s death or Disability) or a termination by the Executive upon the
occurrence of a Constructive Termination (in each case in accordance with the
terms of this Agreement) (i) prior to October 21, 2005, the option shall become
vested with respect to up to 50% of the shares of Stock subject to such option
(to the extent not previously vested) and (ii) any then vested (and
unexercised) portion of the option shall remain outstanding and exercisable for
a period of six months following the date of such termination.  The form of this option award is attached as
Exhibit A to this Agreement.

 

(c)  Restricted
Stock.  On  the Effective Date, the Company shall grant to the Executive
1,000,000 shares of restricted Stock of the Company (“Restricted Stock”).  Such Restricted Stock shall be granted under
the Stock Incentive Plan.  So long as
the Executive remains employed hereunder, the Restricted Stock shall vest as to
(i) 50% of the shares on  October 21,
2005, (ii) an additional 25% of the shares on October 21, 2006, and (iii) the
remaining 25% of the shares on October 21, 2007.  The form of this Restricted Stock Award is attached as Exhibit B
to this Agreement.

 

(d)  During the Term of Employment, the
Executive shall also be eligible to be considered by the Board (or a designated
committee thereof) to receive additional equity-based awards under the
Company’s equity-based plans in accordance with the Company’s practices
applicable to senior-level executives, at a level commensurate with the
Executive’s position with the Company hereunder; provided, however,
that nothing herein shall be deemed to be, nor construed as, a commitment,
promise or obligation by the Company to make any additional equity or
equity-based awards to the Executive (other than those specifically provided
for in Sections 6(b) and (c) above).

 

7.                                       EMPLOYEE
BENEFIT PROGRAMS.

 

During the Term of
Employment, the Executive shall be entitled to participate in any employee
pension and welfare benefit plans and programs made available to the Company’s
senior executive officer level employees generally, as such plans or programs
may be in effect from time to time, including, without limitation, pension,
profit sharing, savings and other retirement plans or programs, 401(k),
medical, dental, hospitalization, short-term and long-term disability and life
insurance plans, accidental death and dismemberment protection, travel accident
insurance, and any other pension or retirement plans or programs and any other
employee welfare benefit plans or programs that may be sponsored by the Company
from time to time, including any plans that supplement the above-listed types
of plans or programs, whether funded or unfunded.  The Executive’s participation shall be based on, and

 

4

 

the calculation of all benefits
shall be based on, the assumptions that the Executive has met all
service-period or other requirements for such participation provided that no
such assumptions shall be made as to a tax-qualified plan if such assumption
would jeopardize the tax-qualified status of such plan. Notwithstanding
anything set forth in this Section 7 or in Section 9 below to the contrary, in
the event of any termination of the Executive’s employment hereunder, for any
reason and by either party, the Executive shall cease active participation in
the Company’s employee stock purchase plan (the “ESPP”), and any amounts
deducted by the Company from the Executive’s Base Salary but not yet used by
the Company to purchase Stock for the benefit of the Executive shall be
promptly returned to the Executive, subject to any provision of the ESPP (as in
effect on the date of such termination) to the contrary.

 

8.                                       REIMBURSEMENT
OF BUSINESS AND OTHER EXPENSES; PERQUISITES; VACATIONS; RELOCATION EXPENSES.

 

(a)  Business
Expenses.  The Executive is authorized
to incur reasonable expenses in carrying out his duties and responsibilities
under this Agreement and the Company shall promptly reimburse him for all
reasonable business expenses incurred in connection with the performance of his
duties hereunder, subject to the Executive’s provision of reasonable
documentation of such expenses in accordance with the Company’s business
expense reimbursement policy.  The
Company shall pay all reasonable financial consultant and legal fees and
expenses (not to exceed $17,000) incurred by the Executive in connection with
the negotiation of the Executive’s employment arrangements with the Company
pursuant to this Agreement on and prior to the Execution Date.

 

(b)  Perquisites.  During the Term of Employment, the Executive
shall be entitled to tax preparation, financial counseling, first-class air
travel and limousine services and, in addition, any other perquisites in effect
from time to time for the Company’s senior executives generally.

 

(c)  Vacation.  During the Term of Employment, the Executive
shall be entitled to four weeks of paid vacation, to be taken at such time(s)
as the Executive and the Board reasonably agrees is appropriate.

 

(d)  Relocation
Expenses.

 

(i)            In connection with the Executive’s
commencement of employment hereunder, as soon as practicable after the
Execution Date, the Company  shall
provide the Executive with a furnished 
apartment or arrange for alternative temporary lodging in New York, New
York (the “Business Residence”), which Business Residence shall be of a size
and style that is commensurate with the Executive’s position with the Company
hereunder.  The Company also hereby
agrees to pay and/or reimburse, as applicable, the Executive for all reasonable
costs incurred by the Executive in connection with the maintenance and use of
such Business Residence during the period commencing on the Effective Date and
ending no later than October 31, 2004 (the “Reimbursement Period”) (unless such
period is otherwise extended by the Board pursuant to Section 8(d)(ii) below),
for reasonable travel expenses incurred by the Executive in connection with his
commute between his current primary residence in the Boston, Massachusetts
metropolitan area  and his Business
Residence during the Reimbursement Period, subject to the Executive’s provision
of reasonable documentation of such expenses in accordance with the Company’s
business expense reimbursement policy.

 

(ii)           Notwithstanding the foregoing, (x)
the Executive hereby agrees that, during the Term of Employment but in no event
later than July 31, 2004, so long as the Executive remains employed hereunder,
the Executive shall propose to the Board for its approval (which approval will
not be unreasonably withheld) a reasonable plan for the relocation of his
Primary Residence (the “Relocation Plan”) and (y) in the event that the Company
and the Executive agree on the terms of such Relocation Plan and such plan is
agreed upon by the Board and the Executive prior to July 31, 2004, the Parties
may amend this Agreement to reflect such other terms that are

 

5

 

consistent with the approved
Relocation Plan and to terminate or amend the Company’s obligations under this
Section 8(d).  In the event the Parties
cannot agree to such Relocation Plan prior to July 31, 2004, the Executive
shall become entitled to only those payments and benefits provided under the
Company’s traditional relocation policy for senior executive officers,
effective as of November 1, 2004 (subject to any extension of the Reimbursement
Period as provided in paragraph (i) above).

 

(iii)          To the extent that any payments or
benefits provided to or for the benefit of the Executive under Section 8(d)(i)
or (ii) result in taxable income to the Executive, the Company shall provide
the Executive with an amount equal to any income and other taxes payable by the
Executive upon the provision of such payments or benefits (and an additional
amount equal to any taxes imposed on such tax gross-up amount), such that the
Executive shall not incur any tax costs with respect to such payments and
benefits.

 

9.                                       TERMINATION OF
EMPLOYMENT.

 

(a)  Termination
Due to Death.  In the event that the
Executive’s employment hereunder is terminated due to his death, his estate or
his beneficiaries, as the case may be, shall be entitled to the following
benefits:

 

(i)            payment of his then Base Salary
through the end of the month in which death occurs, payable in a lump sum
promptly after the Company receives notice of his death;

 

(ii)           in the event of any such termination
in any year other than 2003 or 2004, payment of an amount equal to fifty
percent (50%) of the Executive’s Base Salary then in effect in lieu of any
Annual Bonus payment for the year in which the Executive’s death occurs,
payable in a single installment no later than thirty (30) days after the
Company receives notice of his death; and

 

(iii)          to the extent unpaid as of the date of
his death, payment of the 2003 Bonus and the 2004 Bonus, payable in a single
installment no later than thirty (30) days after the Company receives notice of
his death.

 

(b)           Termination Due to Disability.  In the event that the Executive’s employment is terminated due to
his Disability, he shall be entitled to the following benefits:

 

(i)            disability benefits in accordance
with the Company’s long-term disability program (the “LTD Plan”) then in
effect, provided, however, that in the event a termination due to
Disability occurs prior to the date the Executive becomes entitled to benefits
under the LTD Plan, the Executive shall continue to receive his then Base
Salary until such time as the Executive becomes entitled to coverage under the
LTD Plan;

 

(ii)           payment of his Base Salary then in
effect through the end of the month in which such disability benefits commence,
payable in a lump sum promptly after such termination of employment;

 

(iii)          in the event of any such termination
in any year other than 2003 or 2004, payment of an amount equal to fifty
percent (50%) of the Executive’s Base Salary then in effect in lieu of any Annual
Bonus payment for the year in which the Executive’s termination occurs, payable
in a single installment no later than thirty (30) days after the date of his
termination; and

 

(iv)          to the extent unpaid as of the date of
his termination, payment of the 2003 Bonus and the 2004 Bonus, payable in a
single installment no later than thirty (30) days after such termination of
employment.

 

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In no event shall a
termination of the Executive’s employment for Disability occur until the Party
terminating his employment gives written notice to the other Party in
accordance with Section 20 below.

 

(c)  Termination
by the Company for Cause.

 

(i)            A termination for Cause by the
Company shall not take effect unless the following provisions of this paragraph
(i) are complied with:  The Executive
shall first be given written notice by the Board of its intention to terminate
him for Cause, such notice (A) to state in detail the particular act or acts or
failure or failures to act that constitute the grounds on which the proposed
termination for Cause is based and (B) to be given within ninety (90) days of
the Board learning of such act or acts or failure or failures to act.  The Executive shall then have ten (10)
calendar days after the date that such written notice has been received by the
Executive in which to cure such conduct, to the extent such cure is possible
(solely with respect to paragraph (ii) of the definition of “Cause” set forth
in Section 1(e) above).  If the Executive
fails to cure such conduct or such cure is not possible, the Executive shall
then be entitled to a hearing before the Board, at
which the Executive and his representative shall have the right to attend and
address the Board.  Such
hearing shall be held within  fifteen
(15) calendar days of such notice to the Executive, provided he requests such
hearing within ten (10) calendar days of receipt of the written notice from the
Board of the intention to terminate him for Cause.  If, within five (5) calendar days following such hearing, the
Executive is furnished written notice by the Board confirming that at least two-thirds of the entire membership of the Board
determined, in good faith, that the Executive engaged in conduct set forth in
the definition of Cause herein, the Executive  shall thereupon be immediately terminated for Cause.

 

(ii)           In the event the Company terminates
the Executive’s employment for Cause, the Executive shall be entitled to his
Base Salary then in effect through the date of the termination, payable in a
lump sum promptly after such termination of employment.

 

(d)  Termination
without Cause by the Company or Constructive Termination by the Executive.

 

(i)            In the event that (x) the
Executive’s Term of Employment is terminated by the Company without Cause,
other than due to Disability or death or (y) there is a Constructive
Termination, and, in either such case, such termination occurs after the
Effective Date but prior to October 21, 2007, the Executive shall be entitled
to the following benefits:

 

(A)          payment of Base Salary then in effect
through the date of termination, payable in a lump sum promptly after such
termination of employment;

 

(B)           continued payment of Base Salary, at
the annualized rate in effect on the date of termination, for a period of 24
months following the date of such termination;

 

(C)           to the extent unpaid as of the date
of his termination, payment of the 2003 Bonus and the 2004 Bonus, payable in a
single installment no later than thirty (30) days after such termination of
employment;

 

(D)          if the date of such
termination occurs in calendar year 2005, 2006 or 2007 (but prior to October
21, 2007), a lump sum payment equal to a pro-rata portion of the Annual Bonus,
if any, which the Executive would have received pursuant to Section 5 of this
Agreement in respect of such year if the Executive had remained employed
hereunder through the date annual bonuses are payable to senior executive
officers in respect of such year under the applicable Bonus Plans, with such
pro-rata portion based 

 

7

 

on the number of days the
Executive was employed during the applicable year (relative to the number of
days in such year); and

 

(E)           the Executive shall be entitled to
continued participation, at the same level of expense paid by the Executive
prior to such termination, in all medical, dental, vision and hospitalization
insurance coverage and in other similar welfare employee benefit plans or
programs generally available to employees of the Company (collectively,
“Welfare Plans”) in which he was participating on the date of his termination
until the earlier of:  (1) 24 months
following the date of termination and  (2)
the date, or dates, he becomes eligible for coverage and benefits under corresponding
plans and programs of a subsequent employer. 
The Executive shall promptly advise the Company of any such subsequent
employment and the benefits he receives in connection therewith.  In the event the Company’s Welfare Plans do
not permit continuation of the Executive’s participation following his
termination, the Company shall provide the Executive with an amount that, after
taxes, is sufficient for him to purchase equivalent benefits.

 

(ii)           In the event that the Term of
Employment is renewed pursuant to Section 2 of this Agreement, and thereafter
(x) the Executive’s Term of Employment is terminated by the Company without
Cause, other than due to Disability or death or (y) there is a Constructive
Termination, and, in either such case, such termination of employment occurs on
or after October 21, 2007, the Executive shall be entitled to the following
benefits:

 

(A)          payment of Base Salary then in effect
through the date of termination, payable in a lump sum promptly after such
termination of employment;

 

(B)           continued payment of Base Salary, at
the annualized rate in effect on the date of termination, for a period of 12
months following the date of such termination;

 

(C)           for any year in which the
date of such termination occurs, a lump sum payment equal to a pro-rata portion
of the Annual Bonus, if any, which the Executive would have received pursuant
to Section 5 of this Agreement in respect of such year if the Executive had
remained employed hereunder through the date annual bonuses are payable to senior
executive officers in respect of such year under the applicable Bonus Plans,
with such pro-rata portion based on the number of days the Executive was
employed during the applicable year (relative to the number of days in such
year); and

 

(D)          the Executive shall be entitled to
continued participation, at the same level of expense paid by the Executive
prior to such termination, in all Welfare Plans in which he was participating
on the date of his termination until the earlier of:  (1) 12 months following the date of termination and  (2) the date, or dates, he becomes eligible
for coverage and benefits under the corresponding plans and programs of a
subsequent employer.  The Executive
shall promptly advise the Company of any such subsequent employment and the
benefits he receives in connection therewith. 
In the event the Company’s Welfare Plans do not permit continuation of
the Executive’s participation following his termination, the Company shall
provide the Executive with an amount that, after taxes, is sufficient for him
to purchase equivalent benefits.

 

(e)  Voluntary
Termination.  A termination of the Term
of Employment by the Executive on his own initiative, other than a termination
due to death or Disability or a Constructive Termination, shall have the same
consequences as provided in Section 9(c)(ii) upon a termination for Cause.  A voluntary termination under this Section
9(e) shall be effective 30 calendar days after the Company receives prior
written notice, unless the Company elects by providing in writing to the
Executive to make such termination effective earlier.

 

8

 

(f)            Non-renewal of the Term of Employment by the
Company.  In the event that the Company
notifies the Executive pursuant to Section 2 of this Agreement that the Term of
Employment shall not be renewed, the Executive shall be entitled to the same
payments and benefits as provided in Section 9(d)(ii) above. Upon any early
termination of the Term of Employment, this provision shall not apply.

 

(g)  Consequences
of a Change of Control.

 

(i)            Following a “change of control”
(within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”)), in the event that the Executive’s Term of Employment is
terminated pursuant to Section 9(d)(i) or (ii) (as applicable), the Executive
shall be entitled to receive the payments and benefits provided in Section
9(d)(i) or (ii), as applicable, above, for the applicable periods provided
therein and paid in accordance therewith; provided that, in addition,
all amounts, rights and benefits to which the Executive is entitled to receive
from the Company but which are not then vested, whether under this Agreement or
otherwise, shall become fully vested.

 

(ii)           If, upon a change of control or
thereafter, any amount or benefit (collectively, the “Covered Payments”) paid
or distributed to the Executive by the Company or any Affiliate pursuant to
this Agreement or otherwise is or becomes subject to  an excise tax under Section 4999 of the Code or any similar tax
that may hereafter be imposed (collectively, “Excise Taxes”), the Company shall
pay to the Executive at the time specified below, the Tax Reimbursement
Payment.  The Tax Reimbursement Payment
is defined as the net-after tax amount that is paid by the Company and retained
by the Executive, after payment by the Executive of all Excise Taxes imposed on
the Covered Payments (the “Gross-Up Payment”), and all taxes (including any
Excise Taxes, income taxes and interest or penalties imposed with respect to
such taxes) imposed on the Gross-Up Payment, that is equal to the Excise Tax
imposed upon the Covered Payment.  The
determination of whether Covered Payments are subject to Excise Taxes, and, if
so, the amount of the Tax Reimbursement Payment to be paid to the Executive,
shall be made by an independent auditor (the “Auditor”) jointly selected by the
Company and the Executive and paid by the Company, provided
that the Gross-Up Payment and the Tax Reimbursement Payment shall be
subject to adjustment based on any determinations made by the Internal Revenue
Service.  The Auditor shall be a
nationally recognized United States public accounting firm which has not,
during the two years preceding the date of its selection, acted in any way on
behalf of the Company.  If the Executive
and the Company cannot agree on the firm to serve as the Auditor, then the
Executive and the Company shall each select an accounting firm and those two
firms shall jointly select the accounting firm to serve as the Auditor.  The portion of the Tax Reimbursement Payment
attributable to a Covered Payment shall be paid to the Executive by the Company
prior to the date that the corresponding Excise Tax payment is due to be paid
by the Executive (through withholding or otherwise).  The Executive covenants that he will use the Tax Reimbursement
Payment under this subsection (ii) for the sole purpose of paying the Excise
Taxes.

 

(h)  Other
Termination Benefits.  In the case of
any of the terminations described in this Section 9 above, the Executive (or
his estate) shall also be entitled to:

 

(i)            the balance of any Annual Bonuses
due for calendar years which have been completed and to which he is entitled,
pursuant to the terms of the Bonus Plans, to receive, but which have not yet been
paid; provided, however, that in the event that the Executive’s
employment is terminated between the end of any given calendar year but prior
to the date the Annual Bonus would otherwise be paid in respect of such year
pursuant to the Bonus Plans, the Executive shall also be entitled to such
unpaid Annual Bonus, notwithstanding any terms of the Bonus Plans to the
contrary; and provided, further, that upon a termination for
Cause or a Voluntary Termination, no discretionary portion of any then unpaid
Annual Bonus shall be paid;

 

9

 

(ii)           any expense reimbursements due the
Executive under Sections 8 and 9 of this Agreement;

 

(iii)          payment of the Executive’s accrued but
unused vacation days, if any, for the year in which such termination occurs,
which shall be payable in accordance with the Company’s policies applicable to
senior executive officers; and

 

(iv)          other benefits, if any, in accordance
with applicable benefit plans and programs of the Company.

 

(i)  No
Mitigation; No Offset.  In the event of
any termination of employment under this Section 9, the Executive shall be
under no obligation to seek other employment and there shall be no offset
against amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain.

 

(j)  Nature of
Payments.  Any amounts due under this
Section 9 are in the nature of severance payments considered to be reasonable
by the Company and the Executive and are not in the nature of a penalty.

 

10.                                 CONFIDENTIALITY.

 

(a)  The Executive
agrees that he will not, at any time during the Term of Employment and, on and
after the time of the termination of his employment with the Company, whether
at the insistence of the Executive or the Company, and regardless of the
reasons therefor, disclose or use any trade secret, proprietary or confidential
information of the Company or any subsidiary or Affiliate of the Company,
obtained during the course of his employment, except as required in the course
of such employment (as determined in good faith by the Executive in connection
with the performance of his duties hereunder) or with the written permission of
the Company or, as applicable, any subsidiary or Affiliate of the Company or as
may be required by law, provided that, if the Executive receives legal process
with regard to disclosure of such information, he shall promptly notify the
Company and cooperate with the Company in seeking a protective order (collectively, “Confidential Information”).  Confidential Information shall not include
information that is public knowledge or that is otherwise generally known in
the industry, so long as such public knowledge is not due to any breach of the
Executive of the terms of this Section 10 or, to the knowledge of the
Executive, to the breach of any other employee or former employee of the
Company of any similar covenant not to disclose confidential information.

 

(b)  The Executive
agrees that at the time of the termination of his employment with the Company,
whether at the insistence of the Executive or the Company, and regardless of
the reasons therefor, he will deliver to the Company, and not keep or deliver
to anyone else, any and all notes, files, memoranda, papers and, in general,
any and all physical matter containing Confidential Information, including any
and all documents significant to the conduct of the business of the Company or
any subsidiary or Affiliate of the Company which are in his possession, except
for any documents for which the Company or any subsidiary or Affiliate of the
Company has given written consent to removal at the time of the termination of
the Executive’s employment and his personal rolodex, personal files, phone book
and similar items.

 

The Executive agrees that
the Company’s remedies at law would be inadequate in the event of a breach or
threatened breach of this Section 10; accordingly, the Company shall be
entitled, in addition to its rights at law, to seek an injunction and other
equitable relief without the need to post a bond.

 

10

 

11.                                 NON-COMPETITION.

 

(a)           “Competing Business” shall mean a business whose primary
business is one or more of the following (to the extent that the Company
engages in any such business on the date of any termination of the Executive’s
employment hereunder):  the publication
and distribution of business magazines, consumer enthusiast magazines, free
publications or the operation of content websites or such other primary business
in which the Company engages on the date of any termination of the Executive’s
employment hereunder.

 

(b)           “Restricted Period” shall mean the last day of the twelve
(12) month period following the date of any termination of employment by the
Company or the Executive, for any reason.

 

(c)           The Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates and
accordingly agrees as follows:

 

(i)            During the Term of Employment and
the Restricted Period, the Executive will not directly or indirectly:

 

(A)  engage
in any business that is a Competing Business;

 

(B)  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;

 

(C)  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

 

(D)  interfere
with, or attempt to interfere with, business relationships (whether formed
before, on or after the date of this Agreement) between the Company and any of
its affiliates and their respective material customers, clients or suppliers.

 

(ii)           Notwithstanding anything to the
contrary in this Agreement, the Executive may: (x) 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 the Executive (i) is not a controlling person
of, or a member of a group which controls, such person and (ii) does not,
directly or indirectly, own five percent (5%) or more of any class of
securities of such person (excluding
any interest the Executive owns through a mutual fund, private equity fund or
other pooled account) and (y) provide services for a subsidiary, division
or other entity of a Competing Business, so long as the subsidiary, division or
entity in which the Executive may be providing services is not itself a
Competing Business.

 

(iii)          During the Term of Employment and the
Restricted Period, the Executive will not, whether on the Executive’s own
behalf or on behalf of or in conjunction with any person, company, business entity
or other organization whatsoever, directly or indirectly hire any executive or
employee who was employed by the Company as of the date of the Executive’s
termination of employment with the Company or who left the employment of the
Company coincident with, or within one hundred eighty (180) days prior to or
after, the termination of the Executive’s employment with the Company, provided
that nothing herein shall prevent the Executive from the general advertising
for employees or from serving as a reference for an employee of the Company).

 

(iv)          The Company and the Executive agree
that, in the event the Executive violates the provisions of this Section 11
following his termination of employment, the Company shall cease any payments
being made under Sections 9(d)(i) or (ii) (as applicable), 9(f) and/or 9(g) of

 

11

 

this Agreement; provided,
however, that in the event an arbitrator (as selected in accordance with
the provisions of Section 12 of this Agreement) determines that the Executive
has violated the provisions of this Section 11 following his termination of
employment to a material extent, the Company shall also be entitled to recoup a
pro rata portion of the payments previously made to the Executive pursuant to
Sections 9(d)(i) or (ii) (as applicable), 9(f) and/or 9(g) of this Agreement, with such
pro-rata portion based on the number of days during the Restricted Period that
the arbitrator determines the Executive violated such provisions to a material extent
(relative to the number of days in the Restricted Period).

 

12.                                 RESOLUTION OF
DISPUTES.

 

Any disputes arising under
or in connection with this Agreement shall be resolved by binding arbitration,
to be held in New York, New York, in accordance with the rules and procedures
of the American Arbitration Association. 
Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. 
Each Party shall bear his or its own costs of the arbitration or
litigation.  In the event that the
arbitrator determines that the Executive has prevailed on substantially all
issues in dispute in the arbitration, the Company shall bear all costs and
expenses of the Executive with respect to the arbitration (including reasonable
attorneys’ fees and disbursements of the Executive’s counsel); provided,
however, that the Executive shall bear all costs and expenses of the
Company with respect to the arbitration (including reasonable attorneys’ fees
and disbursements of the Company’s counsel) in the event that the arbitrator
determines that the Executive’s claims in the dispute were, in the aggregate,
frivolous or otherwise taken in bad faith.

 

13.                                 INDEMNIFICATION.

 

(a)  The Company
agrees that if the Executive is made a party, or is threatened to be made a
party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (“Proceeding”), by reason of the fact that he
is or was a director, officer or employee of the Company or any of its
subsidiaries or affiliates or is or was serving at the request of the Company
as a director, officer, member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of such Proceeding
is the Executive’s alleged action in an official capacity while serving as a
director, officer, member, employee or agent, the Executive shall be
indemnified and held harmless by the Company to the fullest extent legally permitted
or authorized by the Company’s certificate of incorporation or bylaws or
resolutions of the Company’s Board of Directors or, if greater, by the laws of
the State of Delaware, against all cost, expense, liability and loss
(including, without limitation, attorney’s fees, judgments, fines, excise taxes
or other liabilities or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in connection therewith, and
such indemnification shall continue as to the Executive even if he has ceased
to be a director, member, employee or agent of the Company or other entity and
shall inure to the benefit of the Executive’s heirs, executors and
administrators.

 

(b)  Neither the
failure of the Company (including its board of directors, independent legal
counsel or stockholders) to have made a determination prior to the commencement
of any proceeding concerning payment of amounts claimed by the Executive under
Section 13(a) above that indemnification of the Executive is proper because he
has met the applicable standard of conduct, nor a determination by the Company
(including its board of directors, independent legal counsel or stockholders)
that the Executive has not met such applicable standard of conduct, shall
create a presumption that the Executive has not met the applicable standard of
conduct.

 

(c)  The Company
agrees to continue and maintain a directors’ and officers’ liability insurance
policy covering the Executive to the extent the Company provides such coverage
for its other executive officers and directors, as applicable.

 

12

 

14.                                 ASSIGNABILITY;
BINDING NATURE.

 

This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, heirs (in the case of the Executive) and assigns.  Rights or obligations of the Company under
this Agreement may be, and may only be, assigned or transferred by the Company
pursuant to a merger or consolidation in which the Company is not the continuing
entity, or the sale or liquidation of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all
or substantially all of the assets of the Company and such assignee or
transferee assumes the liabilities, obligations and duties of the Company, as
contained in this Agreement, either contractually or as a matter of law.  No rights or obligations of the Executive
under this Agreement may be assigned or transferred by the Executive other than
his rights to compensation and benefits, which may be transferred only by will
or operation of law, provided that any amount due hereunder to the
Executive at the time of his death shall instead be paid to his estate or his
designated beneficiary.

 

15.                                 AMENDMENT OR
WAIVER.

 

No provision in this
Agreement may be amended unless such amendment is agreed to in writing and
signed by the Executive and an authorized officer of the Company.  No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent
time.  Any waiver must be in writing and
signed by the Executive or an authorized officer of the Company, as the case
may be.

 

16.                                 SEVERABILITY.

 

In the event that any
provision or portion of this Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining provisions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law so as to achieve the purposes of
this Agreement.

 

17.                                 SURVIVORSHIP.

 

Except as otherwise
expressly set forth in this Agreement, the respective rights and obligations of
the Parties hereunder shall survive any termination of the Executive’s
employment.  Upon the expiration of the
term of the Agreement, the respective rights and obligations of the Parties
shall survive such expiration to the extent necessary to carry out the
intentions of the Parties as embodied in the rights (such as vested rights) and
obligations of the Parties under this Agreement.

 

18.                                 REFERENCES.

 

In the event of the
Executive’s death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.

 

19.                                 GOVERNING LAW.

 

This Agreement shall be
governed in accordance with the laws of New York without reference to
principles of conflict of laws.

 

20.                                 HEADINGS.

 

The headings of the sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this Agreement.

 

13

 

21.                                 NOTICES.

 

All notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed given when (a) delivered personally, (b) delivered by certified or
registered mail, postage prepaid, return receipt requested or (c) delivered by
overnight courier (provided that a written acknowledgment of receipt is
obtained by the overnight courier) to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
such notice of:

 

If to the Company:

 

PRIMEDIA Inc.

745 Fifth Avenue

New York, New York 10151

Attention:  General Counsel

 

With a copy to:

 

Simpson Thacher & Bartlett
LLP

425 Lexington Avenue

New York, New York 10017

Attention:  Gary Horowitz, Esq.

 

If to the Executive:

 

Kelly Conlin

c/o PRIMEDIA Inc.

745 Fifth Avenue

New York, New York 10151

 

With a copy
to:

 

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Attention:  Michael S. Sirkin, Esq.

 

22.                                 ENTIRE AGREEMENT.

 

This Agreement contains the
entire understanding and agreement between the Parties concerning the subject
matter hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the Parties
with respect thereto.

 

23.                                 COUNTERPARTS.

 

This Agreement may be
executed in two or more counterparts.

 

[Signatures on next page.]

 

14

 

IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first written above.

 

 

	
   

  	
  PRIMEDIA
  Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Beverly C. Chell

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/
  Kelly Conlin

  	
   

  
	
   

  	
       Kelly
  Conlin

  

 

15

 

Exhibit A

 

INCENTIVE
STOCK OPTION AGREEMENT

 

THIS AGREEMENT (the “Agreement”), dated as of October 21, 2003, is made
by and between PRIMEDIA Inc. (“PRIMEDIA”) a Delaware corporation, and Kelly
Conlin  (the “Optionee”), an
employee of PRIMEDIA or a Subsidiary or Parent (as defined below) of PRIMEDIA.

 

RECITALS

 

WHEREAS, PRIMEDIA wishes to afford the Optionee the opportunity to
purchase two million (2,000,000) shares of PRIMEDIA’s common stock, par value
per share (the “Common Stock”); and

 

WHEREAS, PRIMEDIA wishes to award options to purchase shares of Common
Stock 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 this 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 and
Incentive Stock Option to purchase Common 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 there of and instructed it to issue such
Option.

 

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 attributed to it under the
Employment Agreement.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Constructive Termination” shall have the meaning attributed to
it under the Employment Agreement.

 

“Disability” shall have the meaning attributed to it under the
Employment Agreement.

 

“Employment Agreement” shall mean that certain employment
agreement made and entered into as of October 14, 2003 by and between PRIMEDIA
and the Optionee.

 

“Grant Date” shall mean October 21, 2003.

 

“Incentive Stock Option” shall have the meaning attributed to it
by Section 422 of the Code.

 

 

“Non-Qualified Stock Option” shall mean each Option forming part
of this grant that is not an Incentive Stock Option.

 

“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 corporation in such chain.

 

“Retirement” shall mean the Optionee’s retirement at age 65 or
over (or such other age as may be approved by the Board of Directors of
PRIMEDIA) after having been employed by PRIMEDIA or a Subsidiary or Parent for
at least three (3) consecutive  years
after the Grant Date.

 

“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.

 

“Trigger Date” shall mean October 21, 2003.

 

ARTICLE II

 

GRANT OF OPTION

 

Section 2.1 - Grant of Option

 

On and as of the date hereof PRIMEDIA irrevocably grants to the
Optionee an Incentive Stock Option to purchase all or any part of the number of
shares of Common Stock set forth in the Recitals to this Agreement (any such
shares, the “Shares”) upon the terms and conditions set forth herein (the
“Option”).

 

Section 2.2 - Exercise Price

 

The exercise price shall be $3.09 per 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, with such
duties and responsibilities as PRIMEDIA shall from time to time prescribe.  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.

 

 

Section 2.4 - Adjustments in Option

 

Subject to Section 9 of the Plan, in the event of a stock split, stock
dividend, combination of shares or similar event or in the event that the
outstanding shares of Common Stock subject to the Option are, from time to
time, changed into or exchanged for a different number or kind of shares of
common 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.  Any
such adjustment made by the Committee shall be final and binding upon the Optionee,
PRIMEDIA and all other interested persons.

 

ARTICLE III

PERIOD OF EXERCISABILITY

 

Section 3.1 - Commencement of
Exercisability

 

The Option shall become exercisable as follows:

 

	
  Date Option Becomes

  Exercisable

  	
   

  	
  Percentage
  of Shares as to

  which Option is Exercisable

  	
   

  
	
  Trigger Date through the first anniversary
  of the Trigger Date

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the first anniversary of the Trigger
  Date

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the second anniversary of the Trigger
  Date

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the third anniversary of the Trigger
  Date

  	
   

  	
  75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the fourth anniversary of the Trigger
  Date

  	
   

  	
  100

  	
  %

  

 

Notwithstanding the foregoing:

 

(a)                                  in the event of a
termination of employment because of death, Disability or Retirement, the
Option shall become exercisable as to all Shares as of the effective date of
such termination of employment;

 

(b)                                 in the event of a
termination of employment of the Optionee prior to October 21, 2005 (i) by
PRIMEDIA for any reason other than for Cause or the Disability of the Optionee,
or (ii) by the Optionee as a result of a Constructive Termination, the Option
shall become exercisable as to such number of Shares as the Option would have
become exercisable if the Optionee had remained employed with PRIMEDIA through
the second anniversary of the Trigger Date;

 

(c)                                  in the event of any
termination of employment of the Optionee other than as described in Section
3.1(a) and (b) above, the Option shall not become exercisable as to any
additional Shares following the effective date of the termination of
employment, and any unvested portion of the Option shall terminate immediately
upon such effective date.

 

 

Section 3.2 - 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 eighth
anniversary of the Grant Date; or

 

(b)                                 The first anniversary
of the effective date of the Optionee’s termination of employment by reason of
death, Retirement or Disability; or

 

(c)                                  180 days after the
effective date of the termination of the Optionee’s employment (i) other than
by PRIMEDIA for Cause or by reason of the Disability of the Optionee or (ii) by
the Optionee as a result of a Constructive Termination; or

 

(d)                                 45 days after any
termination of the Optionee’s employment (i) by PRIMEDIA  for Cause or (ii) by the Optionee for any
reason other than due to death, Retirement, Disability or a Constructive
Termination; or

 

(e)                                  If the Committee so
determines pursuant to Section 9 of the Plan, the effective date of either the
merger or consolidation of PRIMEDIA into another corporation, or the exchange
or acquisition by another corporation of all or substantially all of PRIMEDIA’s
assets or 80% or more of its then outstanding voting stock, or the
recapitalization, reclassification, liquidation or dissolution of PRIMEDIA. At
least ten (10) days prior to the effective date of such event, the Committee
shall give the Optionee notice of such event if the Option has not yet been
fully exercised and the Expiration Date has not yet occurred.

 

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. 
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 personal 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 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 Shares with
respect to which the Option is being exercised;

 

(b)           Full
payment (in cash, by check or by a combination thereof) for the Shares with respect
to which such Option or portion thereof is exercised, at a rate of $3.09 per
Share; and

 

(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 Shares

 

Notwithstanding the foregoing Section 4.3, the Committee in its
absolute 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.

 

In addition, PRIMEDIA shall not be required to issue or deliver any
certificate representing Shares prior to:

 

(a)           The
obtaining of approval or other clearance from any state or federal governmental
agency or securities exchange that the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and

 

(b)           The
lapse of such reasonable period of time following the exercise of the Option as
the Committee may from time to time establish for reasons of administrative
convenience.

 

Section 4.5 - Shares
to be Issued

 

The Shares deliverable upon the exercise of the Option, or any portion
thereof, may be either previously authorized but unissued shares of Common
Stock or issued shares that have been reacquired subsequently by PRIMEDIA.  Such shares shall be fully paid and
nonassessable.

 

Section 4.6 - Sale of Shares

 

Each Exercising Party shall be obligated to notify PRIMEDIA in writing
when any Shares are sold, transferred or otherwise disposed of.

 

Section 4.7 - No Rights as Stockholder

 

Neither the Optionee nor any Exercising Party shall be a stockholder
of  PRIMEDIA or have any of the rights
or privileges thereof in respect of any Shares unless and until

 

 

certificates representing such
Shares shall have been issued by PRIMEDIA 
to such Optionee or other Exercising Party.

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.1 - Administration

 

The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules.  All actions taken and
all interpretations and determinations made by the Committee shall be final and
binding upon the Optionee or other Exercising Party, PRIMEDIA and all other
interested persons.  No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this
Agreement.  In its absolute discretion,
the Board of Directors of PRIMEDIA may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan and this
Agreement.  

 

Section 5.2 - Option Not Transferable

 

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
be null and void and of no effect. 
Notwithstanding the foregoing, this Section 5.2 shall not prevent
transfers by will or by the applicable laws of descent and distribution.  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.

 

Section 5.3 - Shares to be Reserved

 

PRIMEDIA shall at all times during the term of the Option reserve and
keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of this Agreement.

 

Section 5.4 - 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:  Beverly C.
Chell, 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 5.4, 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 to 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 5.4.  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 5.5 - 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 5.6 - Applicability of Plan and
Employment Agreement 

 

This Agreement, the Option and any Shares issued hereunder shall be
subject to all of the terms and provisions of the Plan to the extent
applicable.  In the event of any
conflict between this Agreement and the Plan, the terms of the Plan shall
control. In the event of any conflict between this Agreement, the Plan and the
Employment Agreement, the terms of the Employment Agreement shall control.

 

Section 5.7 - 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.  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 5.8 - Governing Law

 

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 Delaware (without regard to conflicts
of law principles for such state).

 

Section 5.9 - Jurisdiction

 

PRIMEDIA  and the Optionee
hereby irrevocably submit to the jurisdiction of any New York or Delaware state
court, or any Federal court in the Southern District of New York or in Delaware
in any action or proceeding arising out of or relating to this Agreement, and
the parties hereto irrevocably agree that all claims in respect of such action
or proceeding shall be heard and determined only in such courts. PRIMEDIA and
the Optionee hereby consent to and grant to any such court jurisdiction over
the persons of such parties and over the subject matter of any such dispute and
agree that delivery or mailing of any process or other papers in the manner
provided in Section 5.4 hereof, or in such other manner as may be permitted by
law, shall be valid and sufficient service thereof.

 

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto on the date first set forth above.

 

	
   

  	
  PRIMEDIA
  Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED AND ACCEPTED BY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Optionee Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Optionee Name (Print):

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Social Security Number:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
								

 

 

Exhibit B

 

RESTRICTED STOCK AWARD AGREEMENT

 

THIS AGREEMENT (the
“Agreement”), dated as of October 21, 2003 (the “Grant Date”) between PRIMEDIA,
INC., a Delaware corporation (the “Company”), and Kelly Conlin (the
“Participant”).  Any capitalized terms
not otherwise defined herein shall have the meanings set forth in the
Employment Agreement or the Plan.

 

WHEREAS, the
Company maintains the 1992 Stock Purchase and Option Plan (the “Plan”), which
Plan as it may be amended from time to time is incorporated herein by reference
and made a part of this Agreement;

 

WHEREAS, the
Compensation Committee of the Board of Directors has determined that it would
be in the best interests of the Company and its stockholders to grant the
restricted stock award provided for herein (the “Restricted Stock Award”) to
the Participant pursuant to the Plan and the terms set forth herein;

 

WHEREAS, the
Company and the Participant have entered into an employment agreement dated as
of October 14, 2003 (the “Employment Agreement”); and

 

WHEREAS, the
Employment Agreement provides for the grant of shares of restricted common
stock of the Company, par value $0.01 (“Common Stock”) to the Participant;

 

NOW THEREFORE,
in consideration of the mutual covenants hereinafter set forth, the parties
hereto agree as follows:

 

1.             Grant of the Restricted Shares.  Subject to the terms and conditions of the
Plan, and the additional terms and conditions set forth in this Agreement, the
Company hereby grants to the Participant a Restricted Stock Award consisting of
1,000,000 shares of Common Stock  (the
“Restricted Shares”).  The Restricted
Shares shall vest and become nonforfeitable in accordance with Section 2
hereof.

 

2.             Vesting

 

(a.)          Subject to the Participant’s continued employment with the
Company and the terms of this Agreement, the Restricted Shares shall vest and
become nonforfeitable (i) with respect to fifty percent (50%) of the Restricted
Shares initially granted hereunder, on the second anniversary of the Grant
Date, and (ii) with respect to an additional 25% of the Restricted Shares
initially granted hereunder, on each of the third and fourth anniversaries
thereof.

 

(b.)          If the Participant’s employment with the Company is
terminated for any reason, the Restricted Shares shall, to the extent not then
vested, be forfeited by the Participant without consideration; provided,
however, that if, prior to October 21, 2005, the Participant’s
employment is terminated (x) by the Company without Cause (as defined in the
Employment Agreement) or (y) by the Participant upon the occurrence of a
Constructive Termination (as defined in the Employment Agreement), the
Restricted Shares shall vest and become nonforfeitable with respect to fifty
percent (50%) of the Restricted Shares initially granted hereunder; provided,
further, however, that if, at any time prior to October 21, 2007,
the Participant’s employment is terminated due to the Participant’s death or
Disability (as defined in the Employment Agreement), all Restricted Shares, to
the extent not then vested, shall become immediately vested and nonforfeitable.

 

 

(c.)          Notwithstanding any other provision of this Agreement to
the contrary, in the event of a Change of Control, the Restricted Shares shall,
to the extent not then vested and not previously forfeited, immediately become
fully vested and nonforfeitable.

 

3.             Certificates. 
Certificates evidencing the Restricted Shares shall be issued by the
Company and shall be registered in the Participant’s name on the stock transfer
books of the Company promptly after the date hereof, but shall remain in the
physical custody of the Company or its designee at all times prior to the
vesting of such Restricted Shares pursuant to Section 2.  The Participant hereby acknowledges and
agrees that the Company shall retain custody of such certificate or
certificates until the restrictions imposed by Section 2 on the Common Stock
granted hereunder lapse.  As a condition
to the receipt of this Restricted Stock Award, the Participant shall deliver to
the Company a stock power or powers, duly endorsed in blank, relating to the
Restricted Shares. No certificates shall be issued for fractional Shares.

 

4.             Rights as a Stockholder.  The Participant shall be the record owner of
the Restricted Shares until or unless such Shares are forfeited pursuant to
Section 2 hereof and as record owner shall be entitled to all rights of a
common stockholder of the Company, including, without limitation, voting rights
with respect to the Restricted Shares; provided that (i) any cash or
in-kind dividends paid with respect to the Restricted Shares which have not
previously vested shall be withheld by the Company and shall be paid to the
Participant only when, and if, such Restricted Shares shall become fully vested
pursuant to Section 2 and (ii) the Restricted Shares shall be subject to the
limitations on transfer and encumbrance set forth in Section 6.  As soon as practicable following the vesting
of any Restricted Shares pursuant to Section 2, certificates for the Restricted
Shares which shall have vested shall be delivered to the Participant or to the
Participant’s legal guardian or representative along with the stock powers
relating thereto.

 

5.             Legend on Certificates.  The certificates representing the unvested Restricted Shares
shall bear a legend stating that the Restricted Shares are subject to the
provisions of this Agreement and shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or
the rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares are listed, and any
applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.

 

6.             Transferability. 
The Restricted Shares may not, at any time prior to becoming vested
pursuant to Section 2, be transferred, sold, assigned, pledged, hypothecated or
otherwise disposed of unless such transfer, sale, assignment, pledge,
hypothecation or other disposition complies with the provisions of this
Agreement or the Plan.

 

7.             Purchaser’s Employment by the Company.   Subject to the terms of the Employment
Agreement, nothing contained in this Agreement (i) obligates the Company or any
subsidiary of the Company to employ the Participant in any capacity whatsoever
or (ii) prohibits or restricts the Company (or any such subsidiary) from
terminating the employment of the Participant at any time or for any reason
whatsoever, with or without Cause, and the Participant hereby acknowledges and
agrees that, except as otherwise provided in the  Employment Agreement, neither the Company nor any other person
has made any representations or promises whatsoever to the Participant
concerning the Participant’s employment or continued employment by the Company
or any subsidiary of the Company.

 

8.             Change in Capitalization.  If, prior to the time the restrictions
imposed by Section 2 on the Restricted Shares granted hereunder lapse, the
Company shall be reorganized, or consolidated or merged with another
corporation or any similar event, any stock, securities or other property
exchangeable for such Restricted Shares, or received in connection with such
Shares, pursuant to such reorganization, consolidation, merger or other similar
event shall be deposited with the Company and

 

 

shall become subject to the
restrictions and conditions of this Agreement to the same extent as if it had
been the original property granted hereby.

 

9.             Withholding.  
It shall be a condition of the obligation of the Company upon delivery
of Restricted Shares to the Participant that the Participant pay to the Company
such amount as may be requested by the Company for the purpose of satisfying
any liability for any Federal, state or local income or other taxes required by
law to be withheld with respect to such Restricted Shares, including the
payment to the Company upon the vesting of the Restricted Shares (or such
earlier or later date as may be applicable under Section 83 of the Code) or
other settlement in respect of the Restricted Shares of all such taxes.  The Company shall be authorized to take such
action as may be necessary in the opinion of the Company’s counsel (including,
without limitation, withholding vested Restricted Shares otherwise deliverable
to Participant hereunder and/or withholding amounts from any compensation or
other amount owing from the Company to the Participant) to satisfy all
obligations for the payment of any such taxes. 
The Participant is hereby advised to seek his own tax counsel regarding
the taxation of the grant of Restricted Shares made hereunder.

 

10.           Securities Laws. 
Upon the vesting of any Restricted Shares, the Company may require the
Participant to make or enter into such written representations, warranties and
agreements as the Committee may reasonably request in order to comply with
applicable securities laws or with this Agreement and appropriate legends may
be placed on the certificates.  The
granting of the Restricted Shares hereunder shall be subject to all applicable
laws, rules and regulations and to such approvals of any governmental agencies
as may be required and appropriate legends may be placed on the certificates.

 

11.           Notices. 
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its General Counsel, and any
notice to be given to the Participant shall be addressed to him at the address
given beneath his signature hereto.  By
a notice given pursuant to this Section 11, either party may hereafter
designate a different address for notices to be given to him.  Any notice which is required to be given to
the Participant shall, if the Participant is then deceased, be given to the
Participant’s personal representative if such representative has previously
informed the Company of his status and address by written notice under this
Section 11.  Any notice shall have been
deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.

 

12.           Governing Law. 
The laws of the State of Delaware (or if the Company reincorporates in
another state, the laws of that state) shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflicts of laws.

 

13.           Restricted Stock Award Subject to the Employment
Agreement and Plan.   The Restricted
Stock Award shall be subject to all terms and provisions of the Plan and the
Employment Agreement, to the extent applicable to the Restricted Shares.  In the event of any conflict between this
Agreement and the Plan, the terms of the Plan shall control.  In the event of any conflict among this
Agreement, the Plan and the Employment Agreement, the terms of the Employment
Agreement shall control.

 

14.           Signature in Counterparts.  This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement.

 

	
   

  	
  PRIMEDIA,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Kelly Conlin

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