EX-10.5






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).






 









 








     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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