EXHIBIT 10.5
R.H. DONNELLEY CORPORATION
RESTRICTED STOCK UNITS AGREEMENT
     RESTRICTED STOCK UNITS AGREEMENT (this “RSU Agreement”) made as of July 22,
2008 (the “Grant Date”), between R.H. Donnelley Corporation, a Delaware
corporation (the “Company”), and David C. Swanson, the Chairman and Chief
Executive Officer of the Company (the “Participant”), pursuant to the R.H.
Donnelley Corporation 2005 Stock Award and Incentive Plan (as may be amended
from time to time, the “2005 Plan”). Unless otherwise defined herein, the terms
defined in the 2005 Plan shall have the same defined meanings in this RSU
Agreement.
     In consideration of the mutual covenants hereinafter set forth and for
other good and valuable consideration, the validity and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
     1. Grant of Restricted Stock Units. The Company hereby grants to the
Participant an award of 300,000 Restricted Stock Units (“RSUs”). Each RSU
represents a forfeitable right to receive one share of the Company’s Common
Stock, par value $1.00 per share (a “Share”), at a specified future date, if the
terms and conditions of the 2005 Plan and this RSU Agreement have been met. RSUs
are granted under Section 6(e) of the 2005 Plan, are in all respects limited and
conditioned as hereinafter provided, and are subject to the terms and conditions
of the 2005 Plan, which terms and conditions are incorporated herein by
reference and made a part hereof and shall control in the event of any conflict
with any terms of this RSU Agreement.
     2. Account for Participant. The Company shall maintain a bookkeeping
account for Participant (the “Account”) reflecting the number of RSUs then
credited to Participant hereunder as a result of the grant of RSUs and any
crediting of additional RSUs to Participant pursuant to payments equivalent to
dividends paid on Shares under Section 6 hereof (“Dividend Equivalents”).
     3. Vesting of RSUs. Except as provided in Section 4 below, the RSUs will
become vested in accordance with the following schedule, subject to the
Participant’s continued employment with the Company:

          Vesting Date   Vested RSUs
Participant’s 55th Birthday
    150,000  
Participant’s 56th Birthday
    200,000  
Participant’s 57th Birthday
    250,000  
Participant’s 58th Birthday
    300,000  

For purposes of this RSU Agreement, “vested” and “vesting” means that the RSUs
will not be forfeited in certain Termination (as defined below) of employment
scenarios as provided under Sections 4(c) and 5(a)(iv), and will be subject to
settlement in accordance with Section 5. RSUs remain subject to forfeiture,
however, as provided under Sections 4(a) and 7(b).

 

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     4. Termination of Employment.
          (a) Forfeiture Events. Notwithstanding the vesting schedule set out in
Section 3 above, both vested and unvested RSUs shall be forfeited in their
entirety in the event of:
               (i) The Participant’s voluntary resignation of his employment
with the Company, other than for Good Reason or as a result of his Disability,
prior to attaining age 58; provided, however, that if an Unapproved Change in
Significant Control occurs, the risk of forfeiture described in this
Section 4(a)(i) shall lapse as to any RSUs that were vested as of the effective
date of such event; or
               (ii) Termination of the Participant’s employment with the Company
for Cause or the Participant’s violation of the restrictive covenants of his
Amended and Restated Employment Agreement dated as of December 31, 2008, and all
amendments thereto (the “Employment Agreement”).
          (b) Acceleration Events. Notwithstanding the vesting schedule set out
in Section 3 above, unvested RSUs shall become fully vested in the event of:
               (i) Termination of the Participant’s employment with the Company
as a result of his death or Disability; or
               (ii) Within two years following a Change in Control, the
Participant’s Involuntary Separation from Service or termination for Good
Reason. For purposes of this Agreement, termination of employment after the
commencement of negotiations with a potential acquiror or business combination
partner shall be deemed to be a termination of employment within two years
following a Change in Control if within 2 years after the Executive’s
termination such negotiations result in a transaction with such acqurior or
business combination partner which constitutes a Change in Control.
          (c) Effect of Other Termination. If the Participant’s employment
Terminates for any reason other than those enumerated in Section 4(a) and
(b) above, any RSUs that are unvested at the date of such Termination shall be
forfeited.
          (d) Definitions. As used in this RSU Agreement, the term “Good Reason”
shall have the meaning set forth in the Executive’s Employment Agreement entered
into as of October 3, 2005 as in effect prior to the Amended and Restated
Employment Agreement dated as of December 31, 2008; the terms “Disability” and
“Cause” shall have the meanings set forth in the Employment Agreement; the terms
“Unapproved Change in Significant Control” and “Involuntary Separation from
Service” shall have the meanings set forth in the Participant’s Supplemental
Executive Retirement Agreement with the Company effective as of December 31,
2008 (the “SERP”); and the term “Termination” (and “Terminates” and similar
terms) shall mean Participant’s “separation from service” from the Company and
its subsidiaries and affiliates within the meaning of Treasury Regulation §
1.409A-1(h) and any successor thereto.

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          (e) Effect of Forfeiture. Except as provided in Section 4(b)(ii), once
RSUs are forfeited (including under Section 7(b)), no subsequent event will
result in vesting or settlement of the forfeited RSUs.
     5. Settlement.
          (a) Time of Settlement of RSUs. Vested RSUs, if not previously settled
or forfeited, will be settled promptly at the earliest of the following times:
               (i) The later of (A) the date the Participant attains age 58 or
(B) the first day of the seventh (7th) month commencing after the Termination of
his employment for any reason other than those enumerated in Sections 5(a)(ii),
(iii) and (iv) below;
               (ii) The first day of the month following the date of the
Participant’s death;
               (iii) The first day of the seventh (7th) month commencing after
the Participant’s Termination due to Disability, Termination without Cause or
Termination for Good Reason; and
               (iv) The effective date in the event of a Change in Control. As
used in this RSU Agreement, the term “Change in Control” shall have the meaning
set forth in the SERP.
          (b) Form of Settlement of RSUs. RSUs will be settleable by delivery of
one Share for each RSU then being settled, together with Dividend Equivalents,
if any, payable in cash under Section 6(a)(i). The Company may determine whether
or not to credit fractional RSUs in connection with Dividend Equivalents or
adjustments; if fractional RSUs are credited, they will be settled in cash
unless otherwise determined by the Company.
          (c) If vested RSUs are settled in connection with a Change in Control
and no Termination of employment has occurred, any RSUs that have not yet vested
as of the effective date of the Change in Control will remain outstanding and
continue to vest in accordance with the schedule set forth in Section 3 above,
subject to the Executive’s continued employment with the Company.
     6. Dividend Equivalents.
          (a) Crediting and Payment of Dividend Equivalents. Dividend
Equivalents will be credited and paid on the RSUs as follows:
               (i) Ordinary Cash Dividends. If the Company declares and pays a
dividend on Shares in the form of an ordinary cash dividend, dividend
equivalents will not be immediately credited or paid to the Participant, but the
aggregate amount of such dividends that would have been paid or payable had the
RSUs to be settled instead been outstanding Shares at each record date occurring
since the initial grant or crediting of such RSUs will be paid as an additional
cash payment (without interest) at the time of such settlement.

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               (ii) Share Dividends and Splits. If the Company declares and pays
a dividend on Shares in the form of additional Shares, or there occurs a forward
split of Shares, then a number of additional RSUs shall be credited to the
Participant as of the payment date for such dividend or forward share split
equal to (A) the number of RSUs credited to the Participant as of the record
date for such dividend or split multiplied by (B) the number of additional
Shares actually paid as a dividend or issued in such split in respect of each
then outstanding Share.
               (iii) Other Dividends and Distributions. If the Company declares
and pays a dividend or distribution on Shares that is an extraordinary cash
dividend or in the form of property other than additional Shares, then a number
of additional RSUs shall be credited to the Participant as of the payment date
for such dividend or distribution equal to (A) the number of RSUs credited to
the Participant as of the record date for such dividend or distribution
multiplied by (B) the amount of cash plus the fair market value of any such
property paid as a dividend or distribution on each Share at such payment date,
divided by (C) the Fair Market Value of a Share at such dividend payment date.
          (b) Adjustments. The number of RSUs credited to Participant’s Account
shall be appropriately adjusted, in order to prevent dilution or enlargement of
Participant’s rights with respect to RSUs or to reflect any changes in the
number of outstanding Shares resulting from any event referred to in Section
12(c) of the 2005 Plan, taking into account any RSUs credited to Participant in
connection with such event under Section 6(a) hereof.
          (c) Vesting and Settlement of RSUs Resulting from Dividend Equivalents
and Adjustments. RSUs which directly or indirectly result from Dividend
Equivalents on or adjustments to an RSU granted hereunder shall be subject to
the same vesting terms (risk of forfeiture) as apply to the granted RSU and will
be settled at the same time as the granted RSU.
     7. Non-Transferability of RSUs; Additional Forfeiture Conditions.
          (a) Limitations on Transferability. RSUs and the Participant’s rights
under this RSU Agreement shall not be pledged, hypothecated or otherwise
encumbered or subject to any lien, obligation or liability of the Participant to
any party (other than the Company or its subsidiary or affiliate), or assigned
or transferred by the Participant, other than by will or the laws of descent and
distribution or to a Beneficiary upon the death of the Participant, designated
in accordance with Section 12(b) of the 2005 Plan. A Beneficiary, transferee or
other person claiming any rights under the 2005 Plan from or through the
Participant shall be subject to all terms and conditions of the 2005 Plan and
this RSU Agreement, except as otherwise determined by the Committee, and to any
additional terms and conditions deemed necessary or appropriate by the
Committee.
          (b) Additional Forfeiture Conditions. RSUs together with any Shares
distributed in settlement of RSUs and any Award Gain (as defined in Section
11(a) of the 2005 Plan) realized in connection with the RSUs are subject to
forfeiture under certain circumstances, in accordance with Section 11 of the
2005 Plan.

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     8. Participant Representations and Warranties Upon Settlement. As a
condition to the settlement of the RSUs, the Company may require Participant to
make any representation or warranty to the Company as may be required under any
applicable law or regulation, as reasonably determined by the Company.
     9. No Guarantee of Continued Employment or Other Service. THE PARTICIPANT
ACKNOWLEDGES AND AGREES THAT THE VESTING OF RSUs PURSUANT TO SECTION 4 IS EARNED
ONLY BY CONTINUING AS AN EMPLOYEE AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THE RSUs OR ACQUIRING SHARES IN SETTLEMENT OF
THE RSUs HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS
RSU AGREEMENT AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT FOR THE VESTING PERIOD, FOR
ANY PERIOD OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH THE PARTICIPANT’S
RIGHT TO TERMINATE OR THE COMPANY’S RIGHT TO TERMINATE THE PARTICIPANT AT ANY
TIME, WITH OR WITHOUT CAUSE.
     10. Withholding. The Company and any subsidiary or affiliate is authorized
to withhold from any payment to the Participant relating to the RSUs, including
from a distribution of Shares, or any payroll or other payment to the
Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving this RSU, and to take such other
action as the Committee may deem advisable to enable the Company and the
Participant to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to the RSUs. Accordingly, at the time of
settlement of RSUs, the Company will withhold from any Shares deliverable in
settlement of the RSUs, in accordance with Section 12(d)(i) of the Plan, the
number of Shares having a value nearest to, but not exceeding, the amount of
income and employment taxes required to be withheld under applicable laws and
regulations, and pay the amount of such withholding taxes in cash to the
appropriate taxing authorities; provided, however, that the Committee may
determine at any time that no Shares will be withheld hereunder, and provided
further that Shares will not be withheld hereunder if and to the extent that the
Participant has made arrangements with the Company at least 90 days before the
date of settlement of the RSUs to pay withholding taxes in some other way, and
such arrangements are satisfactory to the Company. Participant will be
responsible for any withholding taxes not satisfied by means of such mandatory
withholding and for all taxes in excess of such withholding taxes that may be
due upon vesting or settlement of RSUs.
     11. Miscellaneous Provisions.
          (a) Governing Law. The validity, construction and effect of this RSU
Agreement shall be determined in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law, and
applicable provisions of federal law.
          (b) Entire Agreement. The 2005 Plan and this RSU Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede in their entirety all prior undertakings and agreements of the
Company and the Participant with respect to the subject matter hereof. Any
modification of this RSU Agreement must be in writing signed by

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the Company (oral statements by any person cannot modify this RSU Agreement).
Decisions of the Committee with respect to the administration and interpretation
of the 2005 Plan and this RSU Agreement shall be final, conclusive and binding
on all persons interested therein.
          (c) No Rights as Stockholder Prior to Settlement. Prior to the
delivery of the Shares in settlement of the RSUs, Participant shall not have any
rights of a stockholder with respect to the RSUs or the Shares potentially
deliverable in settlement of this RSU.
          (d) Unfunded Award. The grant of the RSUs and any provision for
distribution of Shares in settlement of Participant’s Account hereunder shall be
by means of bookkeeping entries on the books of the Company and shall not create
in Participant any right to, or claim against any, specific assets of the
Company, nor result in the creation of any trust or escrow account for
Participant. With respect to Participant’s entitlement to any distribution
hereunder, Participant shall be a general creditor of the Company.
          (e) Compliance with Code Section 409A. To the extent that that RSUs
(or a portion thereof) constitute 409A Awards, settlement of such RSUs may not
be accelerated in the discretion of the Company (except to the extent permitted
under Treasury Regulation § 1.409A-3(h)(1) and (2)). Other provisions of this
RSU Agreement notwithstanding, under U.S. federal income tax laws and Treasury
Regulations (including proposed regulations) as presently in effect or hereafter
implemented, (i) if the timing of any distribution in settlement of RSUs would
result in Participant’s constructive receipt of income relating to the RSUs
prior to such distribution, the date of distribution will be the earliest date
after the specified date of distribution that distribution can be effected
without resulting in such constructive receipt; (ii) in furtherance of (i), any
distribution of RSUs deemed to be 409A Awards the timing of which is tied to a
termination of employment will occur not earlier until six months after
separation from service if the Participant is a “Specified Employee” within the
meaning of Code Section 409A(a)(2)(B)(i); and (ii) if the Participant otherwise
would be subject to constructive receipt of income relating to the RSUs prior to
such distribution, any rights of Participant or retained authority of the
Company with respect to RSUs hereunder shall be automatically modified and
limited to the extent necessary so that Participant will not be deemed to be in
constructive receipt of income relating to the RSUs prior to the distribution
and so that Participant shall not be subject to any penalty under Section 409A.
          (f) Counterparts. This RSU Agreement may be executed in counterparts,
each of which shall be an original, with the same effect as if the signatures
affixed thereto were upon the same instrument.

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     IN WITNESS WHEREOF, the Company has caused this RSU Agreement to be duly
executed by its duly authorized officer and the Participant has executed this
RSU Agreement, effective as of the Grant Date.

                          R.H. Donnelley Corporation    
 
               
 
      By:        /s/ Gretchen Zech
 
     Name: Gretchen Zech    
 
               Title: Senior Vice President/HR    
ACCEPTED AND AGREED TO:
               
 
               
/s/ David C. Swanson
               
 
               
David C. Swanson
               
Chief Executive Officer
               

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