EXHIBIT 10.8
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.
XxXxxxxx ("EXECUTIVE").
WITNESSETH:
WHEREAS, Executive is presently serving as President and Chief
Operating Officer of the Company pursuant to an Employment Agreement dated
September 21, 2002 ("PRIOR AGREEMENT");
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 of Directors of the Company (the "Board") and
Executive agree that Executive will continue as President and Chief Operating
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 first anniversary of the Effective Time.
On the first 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.
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 President and Chief Operating
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 Chief
Executive Officer of the Company and/or the Board. Executive shall be employed
as the senior most operational officer of the Company (other than the Chief
Executive Officer) and shall report directly to the Chief Executive Officer.
(b) During the Employment Term, except as otherwise agreed in writing
between the parties, 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 $600,000 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 80% of Base Salary (not less than 55% 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
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fifth 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.
(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.
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(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 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
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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 Chief Executive Officer, 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; 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.
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,
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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 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
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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
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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.
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.
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(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 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.
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17. Miscellaneous. (a) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
(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
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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
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. XxXxxxxx
/s/ Xxxxx X. XxXxxxxx
----------------------------------------------
X.X. XXXXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and General Counsel
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