EXHIBIT 10.7
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is by and between X.X.
Xxxxxxxxx Corporation, a Delaware corporation (the "COMPANY"), and Xxxxx X.
Xxxxxxx ("EXECUTIVE").
WITNESSETH:
WHEREAS, Executive is presently serving as Chief Executive Officer of
the Company pursuant to an Employment Agreement dated May 1, 2002 ("PRIOR
AGREEMENT") and following execution of the Prior Agreement became Chairman of
the Board of Directors of the Company ("BOARD") in December 2002;
WHEREAS, the Company has entered into an Agreement and Plan of Merger
as of October 3, 2005 by and among Dex Media, Inc., the Company and Forward
Acquisition Corp., a wholly-owned subsidiary of the Company (the "MERGER SUB")
(the "MERGER AGREEMENT"), pursuant to which Dex Media, Inc. will be merged into
Merger Sub (the "MERGER") at the effective time as defined in Section 1.2 of the
Merger Agreement (the "EFFECTIVE TIME");
WHEREAS, the Board and Executive agree that Executive will relinquish
the position of Chairman and continue as Chief Executive Officer effective as of
the Effective Time;
WHEREAS, it is contemplated by the Company and Executive that this
Amendment and Restatement will be effective only upon and following the
Effective Time; and
WHEREAS, Executive desires to continue his employment with the Company
upon the terms and conditions hereinafter set forth in this amended and restated
employment agreement (this "AGREEMENT").
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the validity and
sufficiency of which is hereby acknowledged, the parties agree that, as of the
Effective Time, the Prior Agreement is amended and restated as follows:
1. Term of Employment. Subject to the provisions of Section 8 of this Agreement,
Executive shall be employed by the Company for a period (the "EMPLOYMENT TERM")
commencing at the Effective Time (the "COMMENCEMENT DATE" and the "EFFECTIVE
DATE") and ending on the third anniversary of the Effective Time. On the third
anniversary and each succeeding anniversary thereof, the Employment Term shall
automatically be extended for one additional year unless, not later than ninety
days prior to such anniversary, the Company or the Executive shall have given
notice of its or his intention not to extend the Employment Term. Any such
non-renewal of this Agreement by the Company shall be treated as a termination
of Executive's employment without Cause, as hereinafter defined; provided,
however, that during the three-year period commencing as of the Effective Time
and ending on the third anniversary thereof, the Company shall not give a notice
of its intention not to extend the Employment Term
unless such notice is first approved by the affirmative vote of not less than
seventy-five percent (75%) of the members of the entire Board cast at a meeting
specifically called for the purpose of acting upon a proposal to approve such
notice. This Agreement, in amending and restating the Prior Agreement, shall
replace and supercede the Prior Agreement as of the Effective Time.
2. Position. (a) Executive shall serve as Chief Executive Officer of the
Company. In such position, Executive shall have such duties and authority
commensurate with such position and, to the extent not inconsistent with the
foregoing, as shall be determined from time to time by the Board. Executive
shall be employed as the senior most executive officer of the Company (without
regard to any Chairman) and shall report directly to the Board.
(b) During the Employment Term, Executive will devote substantially all of his
business time and best efforts to the performance of his duties hereunder and
will not engage in any other business, profession or occupation for compensation
or otherwise which would conflict with the rendition of such services either
directly or indirectly, without the prior written consent of the Board; provided
that nothing herein shall be deemed to preclude Executive from serving on
business, civic or charitable boards or committees, as long as such activities
do not materially interfere with the performance of Executive's duties
hereunder.
3. Base Salary. Company shall pay Executive an annual base salary (the "BASE
SALARY") at the initial annual rate of $850,000 payable in equal bi-monthly
installments or otherwise in accordance with the payroll and personnel practices
of the Company in effect from time to time. Base Salary shall be reviewed
annually by the Board or a committee thereof to which the Board may from time to
time have delegated such authority (the "COMMITTEE") for possible increase (but
not decrease) in the sole discretion of the Board or the Committee, as the case
may be.
4. Bonus. With respect to each fiscal year all or part of which is contained in
the Employment Term, Executive shall be eligible to participate in the Company's
Annual Incentive Program under the 2005 Stock Award and Incentive Plan or any
successor program or plan thereto or thereunder, with a target bonus opportunity
of 100% of Base Salary (not less than 70% of which shall be paid in cash) and a
maximum bonus opportunity not less than that for which he is eligible on the
Effective Date (the "BONUS").
5. Additional Compensation. As further compensation, Executive will be eligible
for participation in all other bonuses, long-term incentive compensation and
stock options and other equity participation arrangements made available
generally to senior executives of the Company, on terms and conditions no less
favorable than those offered to other senior executives of the Company, and at
no less attractive a level in the aggregate as that for which he is eligible on
the Effective Date.
6. Employee Benefits. During the Employment Term, Executive shall be eligible
for employee benefits (including perquisites, fringe benefits, vacation, pension
and profit sharing plan participation and life, health, accident and disability
insurance) made available generally to senior executives of the Company, on
terms and conditions no less favorable than those offered to other senior
executives of the Company, and at no less attractive a level in the aggregate as
that for which he is eligible on the Effective Date.
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7. Business Expenses. Reasonable travel, entertainment and other business
expenses incurred by Executive in the performance of his duties hereunder shall
be reimbursed by the Company in accordance with Company policies in effect from
time to time.
8. Termination of Employment. Each of Executive and the Company may terminate
the employment of Executive hereunder at any time in accordance with this
Section 8. Executive's entitlements hereunder in the event of any such
termination shall be as set forth in this Section 8. The provisions of this
Section 8 (and any related provision of Section 10) shall survive any
non-renewal of this Agreement by the Company pursuant to Section 1. With respect
to any termination of employment (voluntary or otherwise), any and all (i)
accrued but unused vacation and (ii) earned but unpaid bonus (with respect to
any full performance period) will be paid at the same time as other payments
provided for herein.
(a) For Cause by the Company. If Executive's employment is terminated by the
Company for Cause (as defined in Section 9(a) herein), he shall be entitled to
receive his Base Salary through the Date of Termination (as defined in Section
8(g)(ii) herein). All other benefits due Executive following Executive's
termination of employment pursuant to this Section 8(a) shall be determined in
accordance with the then-existing plans, policies and practices of the Company.
(b) Death or Disability. Executive's employment hereunder shall terminate upon
his death and may be terminated by the Company upon his Disability (as defined
in Section 9(c) herein) during the Employment Term. Upon termination of
Executive's employment hereunder upon the Executive's Disability or death,
Executive or his estate (as the case may be) shall be entitled to receive Base
Salary through the Date of Termination, plus a pro-rata portion of target Bonus,
based on the number of whole or partial months from the beginning of the bonus
period to the Date of Termination. In addition, if Executive's employment is
terminated as a result of Disability, Executive shall continue to be eligible to
participate in all health, medical and dental benefit plans of the Company, or
comparable coverage, until age 65 in accordance with the terms, conditions and
elections, if any, applicable to or in effect with respect to Executive at the
Date of Termination.
(c) Termination Not Following a Change in Control. If, during the Employment
Term and prior to a Change in Control (as defined in Section 9(b) herein) or
more than two years after a Change in Control, Executive's employment is
terminated by the Company without Cause, or by Executive under subclauses (i),
(ii) or (iii) of the definition of Good Reason (as defined in Section 9(d)
herein), Executive shall be entitled to the following:
(i) Base Salary through the Date of Termination at the rate in effect at the
time of Notice of Termination, as defined in Section 8(g)(i) herein, is given,
or if higher, at the rate in effect immediately prior to the event or
circumstance leading to the termination of employment, plus a pro rata (number
of days employed during calendar year divided by 360) portion of target Bonus,
plus all other amounts to which Executive is entitled under any then-existing
compensation or benefit plan of the Company.
(ii) In lieu of any further salary payments to Executive for periods subsequent
to the Date of Termination, the Company shall pay as severance pay, not later
than the fifth
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business day following the Date of Termination, a severance payment (the
"SEVERANCE PAYMENT") equal to two times the sum of (A) Base Salary at the rate
in effect on the date Notice of Termination is given, or if higher, at the rate
in effect immediately prior to the event or circumstance leading to the
termination of employment, plus (B) target Bonus at the rate in effect on the
date of the Notice of Termination is given, or if higher, at the rate in effect
immediately prior to the event or circumstance leading to the termination of
employment without Cause, paid in lump sum without reduction for time value of
money.
(iii) Continued eligibility to participate in all health, medical and dental and
long term disability benefit plans of the Company for which Executive was
eligible immediately prior to the time of the Notice of Termination, or
comparable coverage, for two years, or, if sooner, until comparable health
insurance coverage is available to Executive in connection with subsequent
employment or self-employment. The coverage for which Executive shall continue
to be eligible under this Section shall be made available at no greater cost or
tax cost to Executive than that applicable to Executive at the time of
termination of employment.
(iv) Term life insurance equivalent in coverage, and at no greater cost or tax
cost to Executive, to that elected by Executive at the time of the Notice of
Termination, until the last day of the second calendar year beginning after
termination of employment, or, if sooner, until comparable life insurance
coverage is available to Executive in connection with subsequent employment or
self-employment.
(d) Termination Within Two Years Following a Change in Control. If, during the
Employment Term and within two years following a Change in Control, Executive's
employment is terminated by the Company without Cause, or by the Executive for
Good Reason, as hereinafter defined, Executive shall be entitled to the payments
and benefits set forth in Section 8(c), except that for purposes of this Section
8(d), references in such Section to "two times" or " two years" shall be changed
to "three times" and "three years." In addition, Executive shall be entitled to
receive, for the three years following termination of employment or, if sooner,
until subsequently employed or self-employed, (i) all perquisites and similar
benefits he was receiving immediately prior to the time of Notice of
Termination, (ii) reimbursement of expenses relating to financial planning
services, up to a maximum amount per year equal to the average of such amounts
paid to Executive for the two calendar years preceding the Date of Termination
and (iii) reimbursement of expenses relating to outplacement services, subject
to a maximum reimbursement under this clause (iii) of $25,000. For purposes of
this Agreement, termination of employment after the commencement of negotiations
with a potential acquiror or business combination partner but prior to an actual
Change of Control shall be deemed to be a termination of employment within two
years following a Change in Control if such negotiations subsequently result in
a transaction with such acquiror or business combination partner which
constitutes a Change in Control.
(e) Retirement. If during the Employment Term, Executive retires at normal
retirement age under the Company's qualified pension plan or any successor plan,
Executive shall be entitled to the payments and benefits specified in Section
8(b) as if his employment had terminated as a result of Disability.
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(f) Voluntary Termination of Employment. If during the Employment Term,
Executive terminates his employment under circumstances other than those
specified elsewhere in this Section 8, Executive shall be entitled to the
payments and benefits specified in Section 8(a).
(g) Notice and Date of Termination. (i) Any purported termination of employment
by the Company or by Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 17(i) hereof.
For purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a notice
which shall indicate (by reference to specific Section and sub-section numbers
and letters, for example, Section 8(d)) the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of employment under
the provision so indicated. If the event or circumstance on which the proposed
termination of employment is based is susceptible of cure, the Notice of
Termination shall not be deemed effective until Executive or the Company, as the
case may be, has had at least 30 days to effect such cure, and unless such event
or circumstance persists at the end of such cure period.
(ii) "DATE OF TERMINATION" shall mean (A) if employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided that
Executive shall not have returned to the full-time performance of his duties
during such thirty (30) day period), (B) if employment is terminated by reason
of death, the date of death, and (C) if employment is terminated for any other
reason, subject to the effectiveness of notice and "cure" provisions of clause
(i) above, the date specified in the Notice of Termination (which, in the case
of a termination of employment by the Company for Cause shall not be less than
ten (10) days after the date such Notice of Termination is given); provided that
if within thirty (30) days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written agreement of
the parties, by a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or the time
for appeal therefrom having expired and no appeal having been perfected);
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence; and
provided, further that in the event Executive gives Notice of Termination for
Good Reason based upon any matter referred to in clause (ii) of the definition
of Good Reason, and it is thereafter determined that said grounds do not
constitute Good Reason, then so long as Executive reasonably believed in good
faith that he had grounds for termination of employment for Good Reason, the
Company may not terminate Executive's employment for Cause based upon such
matters.
(iii) Any provision of this Agreement to the contrary notwithstanding, during
the three-year period commencing as of the Effective Time and ending on the
third anniversary thereof, the Company shall not give a Notice of Termination to
the Executive unless such Notice of Termination is first approved by the
affirmative vote of not less than seventy-five percent (75%) of the members of
the entire Board cast at a meeting specifically called for the purpose of acting
upon a proposal to approve such Notice of Termination.
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(h) Any provision of this Agreement to the contrary notwithstanding, Executive
shall be obligated to execute a general release of claims in favor of the
Company, substantially in the form attached hereto as Exhibit A, as a condition
to receiving benefits and payments under Sections 8(c) or (d) of this Agreement.
(i) Notwithstanding anything to the contrary set forth herein, the following
provisions of this Agreement shall survive any termination of Executive's
employment hereunder and/or termination of this Agreement: Sections 8, 9, 10,
11, 12, 13, 14, 15, 16 and 17(f) and (g).
9. Definitions. (a) "CAUSE" shall mean (i) Executive's willful and continued
failure substantially to perform the duties of his position (other than as a
result of total or partial incapacity due to physical or mental illness or as a
result of a termination by Executive for Good Reason, as hereinafter defined),
(ii) any willful act or omission by Executive constituting dishonesty, fraud or
other malfeasance, which in any such case is demonstrably (and, in the case of
other malfeasance, materially) injurious to the financial condition or business
reputation of the Company or any of its affiliates, or (iii) Executive's
conviction of a felony under the laws of the United States or any state thereof
or any other jurisdiction in which the Company or any of its subsidiaries
conducts business which materially impairs the value of Executive's services to
the Company or any of its subsidiaries. For purposes of this definition, no act
or failure to act shall be deemed "willful" unless effected by Executive not in
good faith and without a reasonable belief that such action or failure to act
was in or not opposed to the best interests of the Company.
(b) "CHANGE IN CONTROL" shall mean the occurrence of any of the following
events:
(i) any "person," as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any company owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person (as defined above) who has entered into an
agreement with the Company to effect a transaction described in subsections (i),
(iii) or (iv) of this definition) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof;
(iii) the consummation of a merger or consolidation of the Company with any
other company, other than (A) a merger or consolidation which would result in
the voting
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securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 60% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person (as defined above) becomes the beneficial owner (as defined
above) of more than 20% of the combined voting power of the Company's then
outstanding securities; or
(iv) the shareholders of the Company have approved a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets, and all other
required governmental approvals of such transaction have been obtained.
(v) For purposes of this Agreement, the Merger shall constitute a Change in
Control.
(c) "DISABILITY" shall mean the Executive's inability, as a result of physical
or mental incapacity, to perform the duties of his position for a period of six
(6) consecutive months or for an aggregate of six (6) months in any twelve (12)
consecutive month period. Any question as to the existence of the Disability of
Executive as to which Executive and the Company cannot agree shall be determined
in writing by a qualified independent physician mutually acceptable to Executive
and the Company. If Executive and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in writing.
The determination of Disability made in writing to the Company and Executive
shall be final and conclusive for all purposes of the Agreement.
(d) "GOOD REASON" means:
(i) removal from, or failure to be reappointed or reelected to, Executive's
position as specified in Section 2 (other than as a result of a promotion); or
(ii) material diminution in Executive's title, position, duties or
responsibilities, re-assignment of Executive's reporting relationship to anyone
other than the Board, or the assignment to Executive of duties that are
inconsistent, in a material respect, with the scope of duties and
responsibilities associated with Executive's position as specified in Section 2;
provided, however, that for purposes of this Agreement, the appointment of a
Chairman of the Board and/or a Presiding Director and change in duties and
responsibilities related to such appointment(s) in connection with the Merger
and/or the maintenance thereof following the Merger shall not constitute Good
Reason; or
(iii) reduction in Base Salary or target or maximum Bonus opportunity, reduction
in target opportunity under long term incentive, stock option and other equity
award, or reduction in participation level in benefit and other plans for
executive officers; or
(iv) relocation of Executive's principal workplace without his consent; or
(v) other material breach of this Agreement by the Company.
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10. Certain Payments. (a) If any payment or benefits received or to be received
by Executive in connection with or contingent on a change in ownership or
control, within the meaning defined in Section 280G of the Internal Revenue Code
(the "CODE") (or any successor provision thereto), whether or not in connection
with Executive's termination of employment, and whether or not pursuant to this
Agreement (such payments or benefits, excluding the Gross-Up Payment, as
hereinafter defined, shall hereinafter be referred to as the "TOTAL PAYMENTS")
will be subject to an excise tax as provided for in Section 4999 of the Code
(the "EXCISE TAX"), the Company shall pay to Executive an additional amount no
later than the due date for Executive's tax return with respect to such Excise
Tax (the "GROSS-UP PAYMENT") such that the net amount retained by Executive,
after deduction of any Excise Tax on the Total Payments and any federal, state
and local income and employment taxes and Excise Tax upon the Gross-Up Payment,
shall be equal to the Total Payments; provided, however, that if the Total
Payments are less than 360% of the Executive's Base Amount, as defined in
Section 280G(b)(3) of the Code, the Executive shall not be entitled to the
Gross-Up Payment, and the Total Payments shall be reduced as provided for in
Section 10(d) below.
(b) For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" (within the meaning of
Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("TAX
COUNSEL") reasonably acceptable to Executive and selected by the accounting firm
acting as the "Auditor", as defined below, such payments or benefits (in whole
or in part) do not constitute parachute payments, including by reason of Section
280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the
meaning of Section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of Executive's residence or, if higher, in the state and locality of
Executive's principal place of employment, on the date of termination (or if
there is no date of termination, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 10), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.
(c) In the event that the Excise Tax is finally determined to be less than the
amount taken into account hereunder in calculating the Gross-Up Payment,
Executive shall repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (including that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by Executive to
the extent that such repayment results in a reduction in Excise Tax and/or a
federal, state or local income or employment tax deduction). In the event that
the Excise Tax is determined to exceed the amount
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taken into account hereunder in calculating the Gross-Up Payment (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment in respect of such excess (plus any interest, penalties or additions
payable by Executive with respect to such excess) at the time that the amount of
such excess is finally determined. Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments.
(d) If the Total Payments would constitute an "excess parachute payment", but
are less than 360% of the Base Amount, such payments shall be reduced to the
largest amount that may be paid to the Executive without the imposition of the
Excise Tax or the disallowance as deductions to the Company under Section 280G
of the Code of any such payments. Unless Executive shall have given prior
written notice to the Company specifying a different order, the Company shall
reduce or eliminate the payments or benefits by first reducing or eliminating
the portion of the payments or benefits that are not payable in cash and then by
reducing or eliminating cash payments, in each case, in reverse chronological
order, starting with payments or benefits that are to be paid farthest in time
from the applicable determination of the Auditor (as defined below). Any written
notice given by Executive pursuant to the preceding sentence shall take
precedence over the provisions of any plan, agreement or arrangement governing
Executive's entitlement and rights to such payments or benefits.
(e) All determinations under this Section 10 shall be made by a nationally
recognized accounting firm selected by Executive (the "AUDITOR"), and the
Company shall pay all costs and expenses of the Auditor. The Company shall
cooperate in good faith in making such determinations and in providing the
necessary information for this purpose.
11. Indemnification. The Company will indemnify Executive (and his legal
representative or other successors) to the fullest extent permitted (including a
payment of expenses in advance of final disposition of a proceeding) by
applicable law, as in effect at the time of the subject act or omission, or by
the Certificate of Incorporation and By-Laws of the Company, as in effect at
such time or on the Commencement Date, or by the terms of any indemnification
agreement between the Company and Executive, whichever affords or afforded
greatest protection to Executive, and Executive shall be entitled to the
protection of any insurance policies the Company may elect to maintain generally
for the benefit of its directors and officers (and to the extent the Company
maintains such an insurance policy or policies, Executive shall be covered by
such policy or policies, in accordance with its or their terms to the maximum
extent of the coverage available for any Company officer or director), against
all costs, charges and expenses whatsoever incurred or sustained by him or his
legal representatives (including but not limited to any judgment entered by a
court of law) at the time such costs, charges and expenses are incurred or
sustained, in connection with any action, suit or proceeding to which Executive
(or his legal representatives or other successors) may be made a party by reason
of his having accepted employment with the Company or by reason of his being or
having been a director, officer or employee of the Company, or any subsidiary of
the Company, or his serving or having served any other enterprise as a director,
officer or employee at the request of the Company. Executive's rights under this
Section 11 shall continue without time limit for so long as he may be subject to
any such liability, whether or not the Employment Term may have ended.
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12. Non-Competition. Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates and
accordingly agrees that
(a) during the Employment Term:
(i) Executive will not directly or indirectly engage in any business which is in
competition with any line of business then conducted by the Company or its
affiliates (including without limitation by performing or soliciting the
performance of services for any person who is a customer or client of the
Company or any of its affiliates) whether such engagement is as an officer,
director, proprietor, employee, partner, investor (other than as a holder of
less than 1% of the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent, sales representative or other participant, in any
location in which the Company or any of its affiliates then conducts any such
competing line of business; and
(ii) Executive will not directly or indirectly induce any employee of the
Company or any of its affiliates to engage in any activity in which Executive is
prohibited to engage by this Section, or to terminate his or her employment with
the Company or any of its affiliates, and will not directly or indirectly employ
or offer employment to any person who was employed by the Company or any of its
affiliates unless such person shall have ceased to be employed by the Company or
any of its affiliates for a period of at least 12 months; and
(iii) Executive will not directly or indirectly solicit customers or suppliers
of the Company or its affiliates or induce any such person to materially reduce
or terminate its relationship with the Company.
(b) for one year following the Employment Term:
(i) Executive will not directly or indirectly engage in any local directional
advertising or marketing (whether in print, electronic, wireless or other
format) business or provide pre-press publishing or utilize digital and intranet
technologies to repurpose print directory information for electronic, wireless
or related distribution, in each case which is in competition with the business
then conducted by the Company or its affiliates, whether such engagement is as
an officer, director, proprietor, employee, partner, investor (other than as a
holder of less than 5% of the outstanding capital stock of a publicly traded
corporation), consultant, advisor, agent, sales representative or other
participant, in any location in which the Company or any of its affiliates then
conducts any such competing line of business; and
(ii) Executive will not directly or indirectly induce any employee of the
Company or any of its affiliates to engage in any activity in which Executive is
prohibited to engage by this Section, or to terminate his or her employment with
the Company or any of its affiliates, and will not directly or indirectly employ
or offer employment to any person who was employed by the Company or any of its
affiliates unless such person shall have ceased to be employed by the Company or
any of its affiliates for a period of at least 12 months; and
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(iii) Executive will not directly or indirectly solicit customers or suppliers
of the Company or its affiliates or induce any such person to materially reduce
or terminate its relationship with the Company.
For purposes of this Agreement, "directional advertising or marketing"
shall mean advertising or marketing primarily (1) designed for purposes of
directing consumers who are seeking a product or service to providers of that
product or service in order to satisfy such consumer's previously recognized
need or desire for such product or service and (2) generally delivered by
non-intrusive means; and shall be distinguished from "creative advertising or
marketing," which is primarily (1) designed to stimulate (as opposed to direct)
demand for products or services in consumers who did not previously recognize
such need or desire for such products or services and (2) generally delivered by
intrusive means.
It is expressly understood and agreed that although Executive and the
Company consider the restrictions contained in this Section 12 to be reasonable,
if a final judicial determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained in this Agreement
is an unenforceable restriction against Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
13. Confidentiality; Nondisparagement. (a) Executive will not at any time
(whether during or after his employment with the Company) disclose or use for
his own benefit or purposes or the benefit or purposes of any other person,
firm, partnership, joint venture, association, corporation or other business
organization, entity or enterprise other than the Company and any of its
subsidiaries or affiliates, any trade secrets, information, data, or other
confidential information relating to customers, development programs, costs,
marketing, trading, investment, sales activities, promotion, credit and
financial data, manufacturing processes, financing methods, plans, employees,
organizational structure or the business and affairs of the Company generally,
or of any subsidiary or affiliate of the Company, provided that the foregoing
shall not apply to information which is not unique to the Company or which is
generally known to the industry or the public other than as a result of
Executive's breach of this covenant. Executive agrees that upon termination of
his employment with the Company for any reason, he will return to the Company
immediately all memoranda, books, papers, plans, information, letters and other
data, and all copies thereof or therefrom, in any way relating to the business
of the Company and its affiliates, except that he may retain personal notes,
notebooks, rolodexes and diaries. Executive further agrees that he will not
retain or use for his account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business
of the Company or its affiliates.
(b) Executive will not knowingly disparage the reputation of the Company in a
manner that causes or is reasonably likely to cause material harm to its
business; provided, however, that Executive may (i) express his own opinions
about the Company to other senior
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executives of the Company or to the Board and (ii) comply with applicable legal
process without being deemed to have violated this provision.
14. Material Inducement; Specific Performance. Executive acknowledges and agrees
that the covenants entered into by Executive in Sections 12 and 13(a) are
essential elements of the parties' agreement as expressed herein, are a material
inducement for the Company to enter into this Agreement and the breach thereof
would be a material breach of this Agreement. Executive further acknowledges and
agrees that the Company's remedies at law for a breach or threatened breach of
any of the provisions of Section 12 or Section 13(a) would be inadequate and, in
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
15. Litigation Support. Executive agrees that he will assist and cooperate with
the Company, at the Company's sole cost and expense and, in the case of
post-termination, in a manner so as to not unreasonably interfere with any other
employment obligations of Executive, in connection with the defense or
prosecution of any claim that may be made against or by the Company or its
affiliates, or in connection with any ongoing or future investigation or dispute
or claim of any kind involving the Company or its affiliates, including any
proceeding before any arbitral, administrative, judicial, legislative, or other
body or agency, including testifying in any proceeding, to the extent such
claims, investigations or proceedings relate to services performed or required
to be performed by Executive, pertinent knowledge possessed by Executive, or any
act or omission by Executive. Executive further agrees to perform all acts and
to execute and deliver any documents that may be reasonably necessary to carry
out the provisions of this Section, at the Company's sole cost and expense and,
in the case of post-termination, in a manner so as to not unreasonably interfere
with any other employment obligations of Executive. If Executive determines in
good faith that separate counsel is necessary in connection with its compliance
with this Section 15, then the Company shall pay all reasonable fees and
expenses of such counsel retained by Executive in connection herewith. Following
Executive's termination of employment, this covenant shall expire and be of no
further force or effect upon the later to occur of (a) one year following such
termination of employment and (b) in the event of termination of employment
under Sections 8(c) or (d), the maximum number of years following such
termination specified in the applicable sub-section during which Executive is
eligible to continue to participate in the Company's benefit plans.
16. Legal Fees. The Company will pay or reimburse Executive, as incurred, all
legal fees and costs incurred by Executive in enforcing his rights under the
Agreement, if Executive's position substantially prevails. Following a Change in
Control, the Company will pay or reimburse Executive, as incurred, for all such
fees and costs unless Executive's claim was frivolous or was brought or pursued
by Executive in bad faith.
17. Miscellaneous. (a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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(b) Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company and supercedes any and all prior and/or contemporaneous agreements,
either oral or written, other than the agreements evidencing any grants of stock
options, stock appreciation rights and other equity-based awards, between the
parties thereto, with respect to the subject matter hereof. There are no
restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein other than those
expressly set forth herein and in the incentive compensation and other employee
benefit plans and arrangements of the Company referenced herein. This Agreement
may not be altered, modified, or amended except by written instrument signed by
the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(d) Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.
(e) Assignment. This Agreement shall not be assignable by Executive and shall be
assignable by the Company only with the consent of Executive except as set forth
in Section 17(h); provided that no such assignment by the Company shall relieve
the Company of any liability hereunder, whether accrued before or after such
assignment.
(f) No Mitigation. Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
and no such employment, if obtained, or compensation or benefits payable in
connection therewith, shall reduce any amounts or benefits to which Executive is
entitled hereunder except as provided for in Sections 8(c) and (d).
(g) Arbitration. Any dispute between the parties to this Agreement arising from
or relating to the terms of this Agreement (other than as specified under
Section 14 with respect to Sections 12 and 13(a) hereof) or the employment of
Executive by the Company shall be submitted to arbitration in New York, New York
under the auspices of the American Arbitration Association.
(h) Successors; Binding Agreement.
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Such assumption
and agreement shall be obtained prior to the effectiveness of any such
succession. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid
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which assumes and agrees to perform this Agreement by operation of law, or
otherwise. Prior to a Change in Control, the term "Company" shall also mean any
affiliate of the Company to which Executive may be transferred and the Company
shall cause such successor employer to be considered the "Company" bound by the
terms of this Agreement and this Agreement shall be amended to so provide.
Following a Change in Control the term "Company" shall not mean any affiliate of
the Company to which Executive may be transferred unless Executive shall have
previously approved of such transfer in writing, in which case the Company shall
cause such successor employer to be considered the "Company" bound by the terms
of this Agreement and this Agreement shall be amended to so provide.
(ii) This Agreement shall inure to the benefit of and be binding upon personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive should die while any amount
would still be payable to Executive hereunder if Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the devisee, legatee or other
designee of Executive or, if there is no such designee, to the estate of
Executive.
(i) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to
Executive at the address appearing from time to time in the personnel records of
the Company and to the Company at the address of its corporate headquarters,
directed to the attention of the Board with a copy to the Secretary of the
Company, or in either case to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
(j) Withholding Taxes. The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(k) 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.
18. Compliance with Section 409A of the Code. This Agreement is intended to
comply and shall be administered in a manner that is intended to comply with
Section 409A of the Code and shall be construed and interpreted in accordance
with such intent. To the extent that a payment and/or benefit is subject to
Section 409A of the Code, it shall be paid in a manner that will comply with
Section 409A of the Code, including proposed, temporary or final regulations or
any other guidance issued by the Secretary of the Treasury and the Internal
Revenue Service with respect thereto (the "Guidance"). Any provision of this
Agreement that would cause a payment and/or benefit to fail to satisfy Section
409A of the Code shall have no force and effect until amended to comply with
Code Section 409A (which amendment may be retroactive to the extent permitted by
the Guidance).
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Xxxxx X. Xxxxxxx
/s/ XXXXX X. XXXXXXX
--------------------------------------------
X.X. XXXXXXXXX CORPORATION
By: /s/ XXXXXX X. XXXX
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and General Counsel
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