Ex-10.16



 




Exhibit 10.16



NON-QUALIFIED STOCK OPTION AGREEMENT




     NON-QUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”) made as of the date specified
on Annex A attached hereto (the “Grant Date”), between R.H. Donnelley Corporation, a Delaware
corporation (the “Company”), and the undersigned individual (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”), a copy of which you may access electronically on the RHD Intranet under
“Human Resources”. Unless otherwise defined herein, the terms defined in the 2005 Plan shall have
the same defined meanings in this Option 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 Option. The Company hereby grants to the Participant the right and
option (this “Option”) to purchase all or any part of an aggregate of the number of shares
specified on Annex A of the Company’s Common Stock, par value $1.00 per share (the “Shares”). This
Option is in all respects limited and conditioned as hereinafter provided, and is subject to the
terms and conditions of the 2005 Plan (which terms and conditions are and automatically shall be
incorporated herein by reference and made a part hereof and shall control in the event of any
conflict with any terms of this Option Agreement). This Option is a non-qualified Option and
not an Incentive Stock Option.



     2. Exercise Price. The exercise price per share of the Shares purchasable under this
Option is specified on Annex A (the “Exercise Price”), which is equal to the Fair Market Value of
Stock as of the Grant Date.



     3. Term. Unless earlier terminated pursuant to the 2005 Plan or this Option
Agreement, this Option shall expire on the expiration date specified on Annex A (the “Expiration
Date”), which is the seventh anniversary of the Grant Date. This Option shall not be exercisable
on or after the Expiration Date.



     4. Exercise of Option. Unless otherwise specified on Annex A, this Option may be
exercised in three equal installments of the Shares on each of the first three anniversaries of the
Grant Date, so that this Option shall be exercisable as to all Shares on the last such anniversary.
Any portion of this Option that becomes exercisable in accordance with the foregoing shall remain
exercisable, subject to the 2005 Plan or this Option Agreement (including without limitation
Paragraph 8), until the Expiration Date or until other termination of this Option in accordance
with the 2005 Plan. Prior to the exercise of this Option and delivery of the resulting Shares, the
Participant shall not have any rights of a stockholder with respect to this Option or the Shares
subject to this Option.



     5. Method of Exercising Option. (a) Subject to the terms and conditions of the 2005
Plan and this Option Agreement, this Option may be exercised upon written notice to the Company at
its principal office, which is currently located at 1001 Winstead Drive, Cary, NC 27513,
Attention: Vice President — Compensation. Such notice (a suggested form of which is



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attached as Annex B) shall state the Participant’s election to exercise this Option and the number
of shares with respect to which it is being exercised; shall be signed by the Participant (or
permitted assignee or legal representative); shall, if the Company so requests, be accompanied by
the investment representation statement referred to in Paragraph 6; and shall be accompanied by
payment of the full Exercise Price of the Shares with respect to which this Option is exercised.
The Exercise Price shall be paid to the Company:





     (i) in cash or its equivalent;




     (ii)
in Stock previously acquired by the Participant; provided that such shares of Stock have been owned by the Participant for more than 6 months on the
date of exercise and have a Fair Market Value as of the date of exercise equal to
the Exercise Price of the Shares with respect to which this Option is exercised; or




     (iii) in any combination of (i) or (ii) above.


In the event such Exercise Price is to be paid, in whole or in part, with shares of Stock, the
Committee may impose additional requirements on the payment of the Exercise Price through the
surrender of such Stock.





     (b) Upon receipt of such notice and payment, the Company, as promptly as practicable,
shall deliver or cause to be delivered a certificate or certificates representing the
Shares with respect to which this Option is so exercised. The certificate or certificates
for the Shares as to which this Option shall have been so exercised shall be registered in
the name of the person or persons so exercising this Option (or, if this Option shall be
exercised by the Participant and if the Participant shall so request in the notice
exercising this Option, shall be registered in the name of the Participant and the
Participant’s spouse, jointly, with right of survivorship or a trust established by the
Participant for estate planning purposes) and shall be delivered as provided above to or
upon the written order of the person or persons exercising this Option. In the event this
Option is exercised by any person or persons after the legal disability or death of the
Participant, such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise this Option. All Shares that shall be purchased upon the
exercise of this Option as provided herein shall be fully paid and non-assessable by the
Company.




     (c) Notwithstanding any provision in this Paragraph 5 to the contrary, this Option may
be exercised in such other manner consistent with the 2005 Plan and applicable law as from
time to time may be authorized in writing by the Company with respect to such “cashless”
option exercise arrangements as the Company from time to time may maintain with securities
brokers. Any such arrangements and written authorizations may be terminated at any time by
the Company without notice to the Participant.



     6. Shares to be Purchased for Investment. In the event the offer and sale of Shares
to be purchased upon the exercise of this Option are not covered by a then effective registration



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statement under the Securities Act of 1933, as amended (the “Securities Act”), the Company may
require as a condition to such exercise the Participant (or other person entitled to exercise this
Option) to deliver to the Company an investment representation statement, as well as any other
documentation or information as the Committee shall reasonably request. The Company shall be
entitled to restrict the transferability of the shares issued upon any such exercise to the extent
necessary to avoid a risk of violation of the Securities Act or of any state laws or regulations.
Such restrictions may, at the discretion of the Company, be noted or set forth in full on the share
certificates issued upon exercise of this Option.




     7. Non-Transferability of Option; Forfeiture. (a) This Option 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, and during the lifetime of the Participant, this
Option shall be exercisable only by the Participant or his or her guardian or legal representative,
except that this Option may be transferred to one or more transferees during the lifetime of the
Participant and may be exercised by such transferees in accordance with the terms of this Option,
but only if and to the extent such transfers are permitted by the Committee, subject to any terms
and conditions which the Committee may impose thereon (including limitations the Committee may deem
appropriate in order that offers and sales of Shares will meet applicable requirements of
registration forms under the Securities Act specified by the Securities and Exchange Commission).
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 Option
Agreement, except as otherwise determined by the Committee, and to any additional terms and
conditions deemed necessary or appropriate by the Committee.




     (b) This Option, any Shares purchased hereunder and any gains realized upon exercise
of this Option are subject to forfeiture under certain circumstances in accordance with
Section 11 of the 2005 Plan.



     8. Termination of Employment. (a) Exercisability Upon Termination by Death,
Disability or Retirement. If the Participant’s employment by the Company or any subsidiary or
affiliate terminates by reason of death, Disability (as defined below) or Retirement (as defined
below), this Option may be exercised until the earlier to occur of one year after the date of such
termination or the Expiration Date, to the full extent of this Option, regardless of the extent to
which it was exercisable at the time of such death, Disability or Retirement; provided, however,
that in the event of Early Retirement (as defined below), the entire vested portion of this Option
and 50% of the unvested portion of this Option shall be exercisable during such period. Upon
expiration of any such post-termination exercise period, this Option shall terminate.




     (b) Effect of Other Termination. Unless otherwise determined by the Committee, if the
Participant’s employment by the Company or any subsidiary or affiliate terminates for any
reason, other than death, Disability or Retirement or for Cause, this Option shall be
exercisable during the period of 90 days after such termination or until the Expiration
Date, whichever period is shorter, but only to the extent to which this Option was
exercisable at the time of such termination. If such



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termination is for Cause, then this Option shall terminate upon such termination,
unless otherwise determined by the Committee. Upon expiration of any such post-termination
exercise period, this Option shall terminate.




     (c) Definitions. The term “Disability” shall have the meaning defined for such term
in the long-term disability plan of the Company, as in effect from time to time, and the
term “Retirement” shall mean your termination after your attaining (i) age 50 years with 20
years of service with the Company or any of its subsidiaries or affiliates (“Early
Retirement”), (ii) age 55 years with 10 years of service with the Company or any of its
subsidiaries or affiliates or (iii) age 65 years without regard to years of such service.



     9. Change in Control. Notwithstanding Section 10 of the 2005 Plan, upon
a Change in Control, this Option shall terminate automatically with respect to all unvested Shares
covered by this Option at that time and the Participant shall be entitled to an amount of cash
equal to the excess of the Change in Control Price over the Exercise Price, multiplied by the
number of unvested Shares, and all vested shares shall remain subject to and governed by Section 10
of the Plan; provided, however, that the transactions contemplated by that certain Preferred
Stock and Warrant Purchase Agreement, dated as of September 21, 2002, by and among the Company and
the investors listed therein (as amended and supplemented to date and from time to time, the
“Preferred Stock and Warrant Purchase Agreement”), including, without limitation, the initial
issuance of the Preferred Shares and the Warrants (each as defined in the Preferred Stock and
Warrant Purchase Agreement) and any other issuances or other matters provided therein, shall not
constitute a Change in Control as defined in Section 10(c) of the 2005 Plan.



     10. No Guarantee of Continued Employment or Other Service. THE PARTICIPANT
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO PARAGRAPH 4 IS EARNED ONLY BY
CONTINUING AS AN EMPLOYEE AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND
AGREES THAT THIS OPTION 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.



     11. Withholding. The Company and any subsidiary or affiliate is authorized to
withhold from any payment relating to this Option, including from a distribution of Stock, 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 Option, 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 this
Option. This authority shall include authority to withhold or receive Stock or other property and
to make cash payments in respect thereof in satisfaction



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of a Participant’s withholding obligations, either on a mandatory or elective basis in the
discretion of the Committee. Notwithstanding any provision in the 2005 Plan to the contrary, only
the minimum amount of Stock deliverable in connection with this Option necessary to satisfy
statutory withholding requirements will be withheld.




     12. Governing Law; Entire Agreement; Option Surrender. (a) The validity,
construction and effect of this Option 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) The 2005 Plan and this Option 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 Option Agreement must be in writing
signed by the Company (oral statements by any person cannot modify this Option Agreement).
Decisions of the Committee with respect to the administration and interpretation of the
2005 Plan and this Option Agreement shall be final, conclusive and binding on all persons
interested therein.




     (c) As a condition to the right to exercise this Option, the Participant must not have
theretofore delivered to the Company a written document signed by the Participant
surrendering the Option to the Company.


IN WITNESS WHEREOF, the Company has caused this Option Agreement to be duly executed by its duly
authorized officers and the Participant has executed this Option Agreement, each on Annex A, as of
the Grant Date.





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