EXHIBIT 10.35
STAND-ALONE NONQUALIFIED STOCK OPTION AGREEMENT
(Time-Vested Award)
* * * * *
Participant: Atish Banerjea
Grant Date: January 18, 2011
Per Share Exercise Price: $6.97
Number of Shares subject to this Option: 50,000
* * * * *
     THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”), dated
as of the Grant Date specified above, is entered into by and between Dex One
Corporation, a corporation organized in the State of Delaware (the “Company”),
and the Participant specified above.
     This Nonqualified Stock Option is granted to the Participant on a
stand-alone basis, outside the Dex One Corporation Equity Incentive Plan, as
amended (the “Plan”), as a material inducement for the Participant to accept the
position of Senior Vice President and Chief Technology Officer of the Company.
Notwithstanding the foregoing, it is intended that all of the terms and
conditions of the Plan that would otherwise have been applicable to this
Nonqualified Stock Option had this Nonqualified Stock Option been granted under
the Plan (except as otherwise expressly provided herein) be applicable to this
Nonqualified Stock Option, and accordingly, references to the Plan are made
herein for such purpose and those terms are incorporated herein by reference.
The Plan is attached as Exhibit 10.4 to the Company’s Current Report on Form 8-K
filed with the Securities and Exchange Commission on February 4, 2010.
     NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and for other good and valuable consideration, the parties
hereto hereby mutually covenant and agree as follows:
     1. Incorporation By Reference; Plan Document Receipt. This Agreement is
subject in all respects to the terms and provisions of the Plan (including,
without limitation, any amendments thereto adopted at any time and from time to
time unless such amendments are expressly intended not to apply to this
Nonqualified Stock Option), all of which terms and provisions are made a part of
and incorporated in this Agreement as if they were each expressly set forth
herein. Any capitalized term not defined in this Agreement shall have the same
meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges
receipt of a true copy of the Plan and that the Participant has read the Plan
carefully and fully understands its content. In the event of any conflict
between the terms of this Agreement and the terms of the Plan, the terms of this
Agreement shall control. No part of this Nonqualified Stock Option granted
hereby is intended to qualify as an “incentive stock option” under Section 422
of the Code.

A-1

--------------------------------------------------------------------------------

 

Without limiting the generality of the preceding sentences, the number of shares
of Common Stock subject to the Nonqualified Stock Option and the Per Share
Exercise Price therefore shall be subject to adjustment as provided in
Section 5.7 of the Plan. Notwithstanding the foregoing, no amendment to the Plan
or this Agreement, or the exercise of any discretion by the Company, the
Committee, the Board or otherwise with respect to interpreting or administering
the Plan and/or this Agreement which would impair the rights of the Participant
shall be effective with respect to this Nonqualified Stock Option unless
specifically agreed to by the Participant in an advance writing. In addition,
any provision of the Plan which provides that the decisions and interpretation
of the Company, the Committee, the Board or otherwise are final, binding and
conclusive (or any other language of similar effect) shall not be applicable to
this Nonqualified Stock Option to the extent that the exercise of the powers
thereunder would be inconsistent with the economic intent of this Agreement.
     2. Grant of Option. The Company hereby grants to the Participant, as of the
Grant Date specified above, a Nonqualified Stock Option (this “Option”) to
acquire from the Company at the Per Share Exercise Price specified above, the
aggregate number of shares of Common Stock specified above (the “Option
Shares”). Except as otherwise provided by the Plan, the Participant agrees and
understands that nothing contained in this Agreement provides, or is intended to
provide, the Participant with any protection against potential future dilution
of the Participant’s interest in the Company for any reason. The Participant
shall have no rights as a stockholder with respect to any shares of Common Stock
covered by this Option unless and until the Participant has become the holder of
record of such shares, and no adjustments shall be made for ordinary dividends
in cash or other property, distributions or other rights in respect of any such
shares, except as otherwise specifically provided for in the Plan or this
Agreement.
     3. Vesting and Exercise.
          (a) Vesting. Subject to the provisions of Sections 3(b) through 3(d)
hereof, this Option shall vest and become exercisable as follows, subject to the
Participant’s continued service with the Company or its Subsidiaries on each
applicable Vesting Date (as provided below):

      Vesting Date   Number of Shares January 18, 2012   12,500 January 18, 2013
  12,500 January 18, 2014   12,500 January 18, 2015   12,500

Except as provided in Sections 3(b) and 3(c) hereof, there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date and
all vesting shall occur only on the appropriate Vesting Date specified above,
subject to the Participant’s continued service with the Company or any of its
Subsidiaries on each applicable Vesting Date. Upon expiration of this Option,
this Option shall be cancelled and no longer exercisable.

2

--------------------------------------------------------------------------------

 

          (b) Accelerated Vesting; Committee Discretion to Accelerate Vesting.
Notwithstanding the foregoing, in the event of the Participant’s termination of
service with the Company and its Subsidiaries by the Company without “Cause,” by
the Participant for “Good Reason” (each as defined in the Dex One Corporation
Severance Plan — Senior Vice President (Effective as Amended October 14, 2010),
as the same may hereafter be amended and/or superseded from time to time)(the
“SVP Severance Plan”)), or as a result of the Participant’s death or Disability,
then the unvested portion of this Option that would have become vested on the
next Vesting Date (as set forth above) immediately following such termination
had the Participant remained in the service of the Company and its Subsidiaries
through such Vesting Date shall become immediately vested as of the date of such
termination. In addition to the foregoing, the Committee may, in its sole
discretion, provide for accelerated vesting of this Option at any time and for
any reason.
          (c) Change in Control. Notwithstanding the provisions of Sections 3(a)
and 3(b) hereof, in the event of the Participant’s termination of service with
the Company and its Subsidiaries by the Company without Cause or by the
Participant for Good Reason within three (3) months prior to or two (2) years
following a “Change in Control” (as defined in the SVP Severance Plan), any
unvested portion of this Option shall become fully and immediately vested and
exercisable on the date of such termination (or the date of the Change in
Control, if such termination occurs within three (3) months prior to such Change
in Control). In addition to the foregoing, the Committee may, in its sole
discretion, provide for accelerated vesting of this Option at any time and for
any reason. The parties hereto agree that if other officers, directors or
employees of the Company have outstanding stock options, SARs or similar awards
which vest upon a Change in Control (either by the terms of the applicable award
agreement or through the act of the Committee, the Board or otherwise), than,
notwithstanding the foregoing, this Option shall vest as to 100% of the unvested
portion of this Option as of the Change in Control. The parties further
acknowledge and agree that to the extent that this Option remains unvested upon
a termination of Executive’s employment in which the first sentence of this
Section 3(c) could be applicable, this Option shall not terminate until the last
date on which this Option could vest in accordance with this Section 3(c).
          (d) Expiration. Unless earlier terminated in accordance with the terms
and provisions of the Plan and/or this Agreement, all portions of this Option
(whether vested or not vested) shall expire and shall no longer be exercisable
after the expiration of ten (10) years from the Grant Date.
     4. Termination. Subject to the terms of the Plan and this Agreement, this
Option, to the extent vested at the time of the Participant’s termination of
service with the Company or its Subsidiaries (taking into account the
accelerated vesting provisions set forth herein) shall remain exercisable as
follows:
          (a) General. Except as otherwise provided in Sections 4(b) and 4(c)
hereof, in the event of the Participant’s termination of service with the
Company and its Subsidiaries for any reason, the vested portion of this Option
shall remain exercisable until the earlier of (i) one (1) year from the date of
such termination, and (ii) the expiration of the stated term of this Option
pursuant to Section 3(d) hereof.

3

--------------------------------------------------------------------------------

 

          (b) Termination for Cause. In the event of the Participant’s
termination of service with the Company and its Subsidiaries for Cause, the
vested portion of this Option shall remain exercisable until the earlier of
(i) thirty (30) days from the date of such termination, and (ii) the expiration
of the stated term of this Option pursuant to Section 3(d) hereof; provided that
if such Cause event has a material adverse effect on the Company or its
reputation, the Participant’s entire Option (whether or not vested) shall
instead terminate and expire upon such termination.
          (c) Treatment of Unvested Option upon Termination. Any portion of this
Option that is not vested as of the date of the Participant’s termination of
service with the Company and its Subsidiaries for any reason shall terminate and
expire as of the date of such termination.
     5. Method of Exercise and Payment. Subject to Section 8 hereof, to the
extent that this Option has become vested and exercisable with respect to a
number of shares of Common Stock as provided herein, this Option may thereafter
be exercised by the Participant, in whole or in part, at any time or from time
to time prior to the expiration of this Option as provided herein and in
accordance with any of the methods set forth in Section 2.1(c) of the Plan,
including, without limitation, by the filing of any written form of exercise
notice as may be required by the Committee and payment in full of the Per Share
Exercise Price specified above multiplied by the number of shares of Common
Stock underlying the portion of this Option exercised.
     6. Non-Transferability. This Option, and any rights and interests with
respect thereto, issued under this Agreement shall not be sold, exchanged,
transferred, assigned or otherwise disposed of in any way by the Participant (or
any beneficiary of the Participant), other than by testamentary disposition by
the Participant or the laws of descent and distribution. Notwithstanding the
foregoing, the Committee may, in its sole discretion, permit this Option to be
transferred to a “family member” (as defined in Section A.1.(a)(5) of the
general instructions of Form S-8) for no value, provided that such transfer
shall only be valid upon execution of a written instrument in form and substance
acceptable to the Committee in its sole discretion evidencing such transfer and
the transferee’s acceptance thereof signed by the Participant and the
transferee, and provided, further, that this Option may not be subsequently
transferred other than by will or by the laws of descent and distribution or to
another “family member” (as permitted by the Committee in its sole discretion)
in accordance with the terms of the Plan and this Agreement, and shall remain
subject to the terms of the Plan and this Agreement. Any attempt to sell,
exchange, transfer, assign, pledge, encumber or otherwise dispose of or
hypothecate in any way this Option, or the levy of any execution, attachment or
similar legal process upon this Option, contrary to the terms and provisions of
this Agreement and/or the Plan shall be null and void and without legal force or
effect.
     7. Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to the choice
of law principles thereof.
     8. Withholding of Tax. The Company shall have the power and the right to
deduct or withhold, or require the Participant to remit to the Company, an
amount sufficient to satisfy any federal, state, local and foreign taxes of any
kind (including, but

4

--------------------------------------------------------------------------------

 

not limited to, the Participant’s FICA and SDI obligations) which the Company,
in its sole discretion, deems necessary to be withheld or remitted to comply
with the Code and/or any other applicable law, rule or regulation with respect
to this Option and, if the Participant fails to do so, the Company may otherwise
refuse to issue or transfer any shares of Common Stock otherwise required to be
issued pursuant to this Agreement. Any statutorily required withholding
obligation with regard to the Participant may be satisfied by reducing the
amount of cash or shares of Common Stock otherwise deliverable upon exercise of
this Option or by any other method, as selected by the Participant, as provided
in Section 5.5 of the Plan.
     9. Entire Agreement; Amendment. This Agreement, together with the Plan,
contains the entire agreement between the parties hereto with respect to the
subject matter contained herein, and supersedes all prior agreements or prior
understandings, whether written or oral, between the parties relating to such
subject matter. This Agreement may only be modified or amended by a writing
signed by both the Company and the Participant, except as specifically provided
in the Plan (as limited by this Agreement).
     10. Notices. Any notice hereunder by the Participant shall be given to the
Company in writing and such notice shall be deemed duly given only upon receipt
thereof by the General Counsel (or its designee) of the Company, or, if not
available, the Board. Any notice hereunder by the Company shall be given to the
Participant in writing and such notice shall be deemed duly given only upon
receipt thereof at such address as the Participant may have on file with the
Company.
     11. No Right to Service. Nothing in this Agreement shall interfere with or
limit in any way the right of the Company or its Subsidiaries to terminate the
Participant’s service at any time, for any reason and with or without Cause.
     12. Transfer of Personal Data. The Participant authorizes, agrees and
unambiguously consents to the transmission by the Company (or any Subsidiary) of
any personal data information related to this Option awarded under this
Agreement for legitimate business purposes. This authorization and consent is
freely given by the Participant.
     13. Compliance with Laws. The issuance of this Option (and the Option
Shares upon exercise of this Option) pursuant to this Agreement shall be subject
to, and shall comply with, any applicable requirements of any foreign and U.S.
federal and state securities laws, rules and regulations (including, without
limitation, the provisions of the Securities Act of 1933, as amended, the
Exchange Act and in each case any respective rules and regulations promulgated
thereunder) and any other law or regulation applicable thereto. The Company
shall not be obligated to issue this Option or any of the Option Shares pursuant
to this Agreement if any such issuance would violate any such requirements. The
Company represents that it is not restricted from granting the award
contemplated under this Agreement for any reason. The Company shall register the
shares subject to this award on an S-8 or S-3 (or other appropriate registration
statement).
     14. Section 409A. Notwithstanding anything herein or in the Plan to the
contrary, this Option is intended to be exempt from the applicable requirements
of

5

--------------------------------------------------------------------------------

 

Section 409A of the Code and shall be limited, construed and interpreted in
accordance with such intent as is reasonable under the circumstances.
     15. Binding Agreement; Assignment. This Agreement shall inure to the
benefit of, be binding upon, and be enforceable by the Company and its
successors and assigns. The Participant shall not assign (except in accordance
with Section 6 hereof) this Option or any part of this Agreement without the
prior express written consent of the Company.
     16. Headings. The titles and headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
     17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
     18. Further Assurances. Each party hereto shall do and perform (or shall
cause to be done and performed) all such further acts and shall execute and
deliver all such other agreements, certificates, instruments and documents as
either party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated thereunder.
     19. Severability. The invalidity or unenforceability of any provisions of
this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of any provision of this Agreement in any
other jurisdiction, it being intended that all rights and obligations of the
parties hereunder shall be enforceable to the fullest extent permitted by law.
     20. Acquired Rights. The Participant acknowledges and agrees that: (a) the
Company may terminate or amend the Plan at any time, subject to the limitations
contained in the Plan and this Agreement, (b) the award of this Option made
under this Agreement is completely independent of any other award or grant and
is made at the sole discretion of the Company; (c) no past grants or awards
(including, without limitation, this Option) give the Participant any right to
any grants or awards in the future whatsoever; and (d) any benefits granted
under this Agreement are not part of the Participant’s ordinary salary, and
shall not be considered as part of such salary in the event of severance,
redundancy or resignation.
* * * * *

6

--------------------------------------------------------------------------------

 

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

            DEX ONE CORPORATION
      By:   /s/ Gretchen Zech         Name:   Gretchen Zech        Title:  
Senior Vice President, Human Resources          PARTICIPANT
      /s/ Atish Banerjea       Atish Banerjea           

7