Document:

Exhibit 4.3.4

	
 
    

 

THE KROGER CO.

TO

U.S. BANK NATIONAL ASSOCIATION

(formerly known as Firstar Bank, N.A.)

Trustee

 

 

THIRTY-SECOND SUPPLEMENTAL INDENTURE

Dated as of December 23, 2013

TO

INDENTURE

Dated as of June 25, 1999

 

 

3.300% SENIOR NOTES DUE 2021

	
 
    

 

 

TABLE OF CONTENTS

 

	
ARTICLE ONE   DEFINITIONS
    	
3
    
	
 
    	
 
    	
 
    
	
Section 101.
    	
Definitions
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE TWO   SECURITY FORMS
    	
6
    
	
 
    	
 
    	
 
    
	
Section 201.
    	
Form of Securities of this Series
    	
6
    
	
Section 202.
    	
Form of Face of Security
    	
6
    
	
Section 203.
    	
Form of Reverse of Security
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE THREE   THE SERIES OF SECURITIES
    	
14
    
	
 
    	
 
    	
 
    
	
Section 301.
    	
Title and Terms
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE FOUR   MODIFICATIONS AND ADDITIONS TO THE INDENTURE
    	
15
    
	
 
    	
 
    	
 
    
	
Section 401.
    	
Modifications to the Consolidation, Merger,   Conveyance, Transfer or Lease Provisions
    	
15
    
	
Section 402.
    	
Other Modifications
    	
16
    
	
Section 403.
    	
Additional Covenants; Defeasance and Covenant   Defeasance
    	
16
    
	
Section 404.
    	
Redemption of Securities
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE FIVE   MISCELLANEOUS
    	
26
    
	
 
    	
 
    	
 
    
	
Section 501.
    	
Miscellaneous
    	
26
    

 

 

THIRTY-SECOND SUPPLEMENTAL INDENTURE, dated as of December 23, 2013, between The Kroger Co., a corporation duly organized and existing under the laws of the State of Ohio (herein called the “Company”), having its principal office at 1014 Vine Street, Cincinnati, Ohio 45202 and U.S. Bank National Association (formerly known as Firstar Bank, N.A.), a banking corporation duly organized and existing under the laws of the State of Ohio, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has heretofore executed and delivered to the Trustee an Indenture dated as of June 25, 1999 (the “Indenture”), providing for the issuance from time to time of the Company’s unsecured debentures, notes or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series as in the Indenture provided.

 

Section 201 of the Indenture permits the form of the Securities of any series to be established pursuant to an indenture supplemental to the Indenture.

 

Section 301 of the Indenture permits the terms of the Securities of any series to be established in an indenture supplemental to the Indenture.

 

Section 901(7) of the Indenture provides that, without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Indenture for the purpose of establishing the form or terms of Securities of any series as permitted by Sections 201 and 301 of the Indenture.

 

The Company, pursuant to the foregoing authority, proposes in and by this Thirty-Second Supplemental Indenture to establish the terms and form of the Securities of a new series and to amend and supplement the Indenture in certain respects with respect to the Securities of such series.

 

All things necessary to make this Thirty-Second Supplemental Indenture a valid agreement of the Company, and a valid amendment of and supplement to the Indenture, have been done.

 

NOW, THEREFORE, THIS THIRTY-SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities of the series to be created hereby, as follows:

 

2

 

ARTICLE ONE

 

DEFINITIONS

 

Section 101.                             Definitions.

 

(a)                                 For all purposes of this Thirty-Second Supplemental Indenture:

 

(1)                                 Capitalized terms used herein without definition shall have the meanings specified in the Indenture;

 

(2)                                 All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Thirty-Second Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Thirty-Second Supplemental Indenture; and

 

(3)                                 The terms “hereof”, “herein”, “hereby”, “hereto”, “hereunder” and “herewith” refer to this Thirty-Second Supplemental Indenture.

 

(b)                                 For all purposes of the Indenture and this Thirty-Second Supplemental Indenture, with respect to the Securities of the series created hereby, except as otherwise expressly provided or unless the context otherwise requires:

 

“Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

 

“Attributable Debt” means, in connection with a Sale and Lease-Back Transaction, as of any particular time, the aggregate of present values (discounted at a rate per annum equal to the interest rate borne by the Securities of the series created by this Thirty-Second Supplemental Indenture) of the obligations of the Company or any Restricted Subsidiary for net rental payments during the remaining primary term of the applicable lease, calculated in accordance with generally accepted accounting principles.  The term “net rental payments” under any lease for any period shall mean the sum of the rental and other payments required to be paid in such period by the lessee thereunder, not including, however, any amounts required to be paid by such lessee (whether or not designated as rental or additional rental) on account of maintenance and repairs, reconstruction, insurance, taxes, assessments, water rates, operating and labor costs or similar charges required to be paid by such lessee thereunder or any amounts required to be paid by such lessee thereunder contingent upon the amount of sales, maintenance and repairs,

 

3

 

reconstruction, insurance, taxes, assessments, water rates or similar charges.

 

“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in New York City or Cincinnati, Ohio are authorized or obligated by law or executive order to close.

 

“Capital Lease” means any lease of property which, in accordance with generally accepted accounting principles, should be capitalized on the lessee’s balance sheet or for which the amount of the asset and liability thereunder as if so capitalized should be disclosed in a note to such balance sheet; and “Capitalized Lease Obligation” means the amount of the liability which should be so capitalized or disclosed.

 

“Comparable Treasury Issue” means the United States Treasury security selected by a Quotation Agent as having a maturity comparable to the remaining term of the Securities to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities (the maturity date of the Securities will be deemed to be January 15, 2021 for this purpose).

 

“Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations, after excluding the highest and lowest such Reference Treasury Dealer Quotations for such Redemption Date, or (ii) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Quotations.

 

“Consolidated Net Tangible Assets” means, for the Company and its Subsidiaries on a consolidated basis determined in accordance with generally accepted accounting principles, the aggregate amounts of assets (less depreciation and valuation reserves and other reserves and items deductible from gross book value of specific asset accounts under generally accepted accounting principles) which under generally accepted accounting principles would be included on a balance sheet after deducting therefrom (a) all liability items except deferred income taxes, commercial paper, short-term bank Indebtedness, Funded Indebtedness, other long-term liabilities and shareholders’ equity and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, which in each case would be so included on such balance sheet.

 

“Funded Indebtedness” means any Indebtedness maturing by its terms more than one year from the date of the determination thereof, including (i) any Indebtedness having a maturity of 12 months or less but by its terms renewable or extendible at the option of the obligor to a date

 

4

 

later than 12 months from the date of the determination thereof and (ii) rental obligations payable more than 12 months from the date of determination thereof under Capital Leases (such rental obligations to be included as Funded Indebtedness at the amount so capitalized at the date of such computation and to be included for the purposes of the definition of Consolidated Net Tangible Assets both as an asset and as Funded Indebtedness at the amount so capitalized).

 

“Merger” means the merger among the Company, Hornet Acquisition, Inc. and Harris Teeter Supermarkets, Inc.

 

“Merger Agreement” means the merger agreement dated July 8, 2013 among the Company, Hornet Acquisition, Inc. and Harris Teeter Supermarkets, Inc.

 

“Non-Restricted Subsidiary” means any Subsidiary that the Company’s Board of Directors has in good faith declared pursuant to a written resolution not to be of material importance, either singly or together with all other Non-Restricted Subsidiaries, to the business of the Company and its consolidated Subsidiaries taken as a whole.

 

“Operating Assets” means all merchandise inventories, furniture, fixtures and equipment (including all transportation and warehousing equipment but excluding office equipment and data processing equipment) owned or leased pursuant to Capital Leases by the Company or a Restricted Subsidiary.

 

“Operating Property” means all real property and improvements thereon owned or leased pursuant to Capital Leases by the Company or a Restricted Subsidiary and constituting, without limitation, any store, warehouse, service center or distribution center wherever located, provided that such term shall not include any store, warehouse, service center or distribution center which the Company’s Board of Directors declares by written resolution not to be of material importance to the business of the Company and its Restricted Subsidiaries.

 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Company, which shall initially be Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

“Redemption Event” means either (1) the Merger is not consummated on or prior to September 30, 2014 or (2) prior to September 30, 2014, the Merger Agreement is terminated other than in connection with the consummation of the Merger and is not otherwise amended or replaced.

 

“Reference Treasury Dealer” means (i) Merrill Lynch, Pierce, Fenner & Smith Incorporated, U.S. Bancorp Investments, Inc. and Wells

 

5

 

Fargo Securities, LLC and their successors; provided, however, that if any of the foregoing is not or shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Company.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date.

 

“Restricted Subsidiaries” means all Subsidiaries other than Non-Restricted Subsidiaries.

 

“Sale and Lease-Back Transaction” has the meaning specified in Section 1010.

 

“Special Mandatory Redemption Date” means the date no later than the tenth business day following the earlier to occur of (1) September 30, 2014, if the Merger has not been completed on or prior to September 30, 2014 and (2) the date that the Merger Agreement is terminated other than in connection with the consummation of the Merger and is not otherwise amended or replaced.

 

“Subsidiary” means (i) any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Company and/or one or more Subsidiaries or (ii) any partnership of which more than 50% of the partnership interest is owned by the Company or any Subsidiary.

 

ARTICLE TWO

 

SECURITY FORMS

 

Section 201.                             Form of Securities of this Series.

 

The Securities of this series shall be in the form set forth in this Article.

 

Section 202.                             Form of Face of Security.

 

This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary.  This Security is

 

6

 

not exchangeable for Securities registered in the name of a Person other than the Depositary or its nominee except in the limited circumstances described in the Indenture, and no transfer of this Security (other than a transfer of this Security as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary) may be registered except in the limited circumstances described in the Indenture.

 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to The Kroger Co. or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

No.

 

THE KROGER CO.

 

3.300% Senior Notes due 2021

 

	
CUSIP No.
    	
501044 CX7
    	
 
    
	
ISIN No.
    	
US501044CX79
    	
$
    

 

 

The Kroger Co., a corporation duly organized and existing under the laws of the State of Ohio (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to               , or registered assigns, the principal sum of $                     on January 15, 2021 and to pay interest thereon from December 23, 2013, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on January 15 and July 15 in each year, commencing July 15, 2014 at the rate of interest of 3.300% per annum until the principal hereof is paid or made available for payment.  Interest on the Security will be computed on the basis of a 360-day year of twelve 30-day months.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be January 1 and July 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date,

 

7

 

or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Company maintained for that purpose in Cincinnati, Ohio, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

In the case where any Interest Payment Date or the maturity date of this Security does not fall on a Business Day, payment of interest or principal otherwise payable on such day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or the maturity date of this Security.

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

 

Dated:  December 23, 2013

 

	
 
    	
THE KROGER CO.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

This is one of the Securities of the series designated therein referred to in the within mentioned Indenture.

 

8

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION, 
    
	
 
    	
as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized Officer
    
	
 
    	
 
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

Section 203.                             Form of Reverse of Security.

 

This Security is one of a duly authorized issue of Securities of the Company (the “Securities”) issued and to be issued under an Indenture dated as of June 25, 1999, as supplemented by the First Supplemental Indenture dated as of June 25, 1999, the Second Supplemental Indenture dated as of June 25, 1999, the Third Supplemental Indenture dated as of June 25, 1999, the Fourth Supplemental Indenture dated as of September 22, 1999, the Fifth Supplemental Indenture dated as of September 22, 1999, the Sixth Supplemental Indenture dated as of September 22, 1999, the Seventh Supplemental Indenture dated as of February 11, 2000, the Eighth Supplemental Indenture dated as of February 11, 2000, the Ninth Supplemental Indenture dated as of August 21, 2000, the Tenth Supplemental Indenture dated as of May 11, 2001, the Eleventh Supplemental Indenture dated as of May 11, 2001, the Twelfth Supplemental Indenture dated as of August 16, 2001, the Thirteenth Supplemental Indenture dated as of April 3, 2002, the Fourteenth Supplemental Indenture dated as of June 17, 2002, the Fifteenth Supplemental Indenture dated as of January 28, 2003, the Sixteenth Supplemental Indenture dated as of December 20, 2004, the Seventeenth Supplemental Indenture dated as of August 15, 2007, the Eighteenth Supplemental Indenture dated as of January 16, 2008, the Nineteenth Supplemental Indenture dated as of March 27, 2008, the Twentieth Supplemental Indenture dated as of March 27, 2008, the Twenty-First Supplemental Indenture dated as of November 25, 2008, the Twenty-Second Supplemental Indenture dated as of October 1, 2009, the Twenty-Third Supplemental Indenture dated as of July 13, 2010, the Twenty-Fourth Supplemental Indenture dated as of January 19, 2012, the Twenty-Fifth Supplemental Indenture dated as of April 16, 2012, the Twenty-Sixth Supplemental Indenture dated as of April 16, 2012, the Twenty-Seventh Supplemental Indenture dated as of July 25, 2013, the Twenty-Eighth Supplemental Indenture dated as of July 25, 2013, the Twenty-Ninth Supplemental Indenture dated as of December 23, 2013, the Thirtieth Supplemental Indenture dated as of December 23, 2013, the Thirty-First Supplemental Indenture dated as of December 23, 2013 and the Thirty-Second Supplemental Indenture dated as of December 23, 2013 (as so supplemented, herein called the “Indenture”), each between the Company and Firstar Bank, N.A. (now known as U.S. Bank National Association), as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof, initially limited in aggregate principal amount to $700,000,000.

 

The Company may from time to time, without notice to or consent of the registered holders of the Securities issue further Securities (“Additional Securities”). The Additional Securities

 

9

 

will rank equal with the Securities in all respects (or in all respects other than the payment of interest accruing prior to the issue date of the Additional Securities, or except for the first payment of interest following the issue date of the Additional Securities). The Additional Securities may be consolidated and form a single series with the Securities and may have the same terms as to status, redemption, or otherwise, as the Securities.

 

The Securities will be redeemable, in whole or in part, at the option of the Company at any time.  If the Securities are redeemed prior to December 15, 2020, the redemption price will be equal to the greater of (i) 100% of the principal amount of such Securities and (ii) as determined by a Quotation Agent, the sum of the present values of (1) the principal amount of the Securities being redeemed and (2) the remaining scheduled payments of interest thereon (not including any portion of such payments of interest accrued and unpaid as of the date of redemption) from the redemption date to January 15, 2021 discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 16 basis points plus, in each case, accrued and unpaid interest thereon to the date of redemption. If the Securities are redeemed on or after December 15, 2020, the redemption price will be equal to 100% of the principal amount of such Securities, plus accrued and unpaid interest thereon to the date of redemption.

 

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each holder of the Securities to be redeemed.  Unless the Company defaults in payment of the redemption price, on and after the Redemption Date, interest will cease to accrue on the Securities or portions thereof called for redemption.

 

The Securities will be subject to a mandatory redemption in the event that a Redemption Event occurs. In such an event, the Securities will be redeemed at a redemption price equal to 101% of the principal amount thereof plus accrued and unpaid interest from the date of initial issuance, or the most recent date to which interest has been paid or provided for, whichever is later, to, but excluding, the Special Mandatory Redemption Date.

 

The Company, either directly or through the Trustee on its behalf, will cause notice of the special mandatory redemption to be sent, with a copy to the Trustee, not later than five Business Days after the occurrence of the Redemption Event to each holder of the Securities. Such notice will also specify the Special Mandatory Redemption Date. If funds sufficient to pay the special mandatory redemption price of all Securities to be redeemed on the Special Mandatory Redemption Date are deposited with the paying agent on or before such Special Mandatory Redemption Date the Securities will cease to bear interest and all rights under the Securities shall terminate.

 

If a Change of Control Triggering Event occurs, unless the Company has exercised its right to redeem the Securities, Holders of Securities will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their Securities pursuant to the offer described below (the “Change of Control Offer”).  In the Change of Control Offer, the Company shall offer payment in cash equal to 101% of the aggregate principal amount of Securities repurchased plus accrued and unpaid interest, if any, on the Securities repurchased, to the date of purchase (the “Change of Control Payment”).  Within 30 days following any Change of Control Triggering Event, or, at the Company’s option, prior to any Change of Control, but after the public announcement of the Change of Control, the Company shall mail a notice to Holders of Securities describing the transaction or transactions that constitute or may constitute the Change of

 

10

 

Control Triggering Event and offering to repurchase the Securities on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”), pursuant to the procedures described herein and in such notice.  The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the payment date specified in the notice.  The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Securities as a result of a Change of Control Triggering Event.  To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions herein, the Company shall be required to comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control provisions herein by virtue of such conflicts.

 

On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment all Securities or portions of Securities properly tendered pursuant to the Change of Control Offer; (ii) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Securities or portions of Securities properly tendered; and (iii) deliver or cause to be delivered to the Trustee the Securities properly accepted, together with an officers’ certificate stating the aggregate principal amount of Securities or portions of Securities being purchased.

 

“Below Investment Grade Rating Event” means the Securities are rated below an Investment Grade Rating by any two of the three Rating Agencies (as defined below) on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of the Change of Control (which 60-day period shall be extended so long as the rating of the Securities is under publicly announced consideration for possible downgrade below investment grade by any of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).

 

“Change of Control” means the occurrence of any of the following:  (1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Company or one of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s voting stock; or (3) the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors.  Notwithstanding the foregoing, a transaction will not be

 

11

 

deemed to involve a Change of Control if (1) the Company becomes a wholly owned subsidiary of a holding company that has agreed to be bound by the terms of the Securities and (2) the Holders of the voting stock of such holding company immediately following that transaction are substantially the same as the Holders of the Company’s voting stock immediately prior to that transaction.

 

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

 

“Continuing Directors” means, as of any date of determination, members of the Board of Directors of the Company who (1) were members of such Board of Directors on the date of original issuance of the Securities; or (2) were nominated for election or elected to such Board of Directors with the approval of a majority of the continuing directors under clause (1) or (2) of this definition who were members of such Board of Directors at the time of such nomination or election (either by a specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director, without objection to such nomination).

 

“Fitch” means Fitch, Inc.

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P and Fitch, and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the Company.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Person” means any individual, partnership, corporation, limited liability company, joint stock company, business trust, trust, unincorporated association, joint venture or other entity, or a government or political subdivision or agency thereof.

 

“Rating Agencies” means (1) each of Fitch, Moody’s and S&P; and (2) if Fitch, Moody’s or S&P ceases to rate the Securities or fails to make a rating of the Securities publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” as defined in Section 3(a)(62) of the Exchange Act, selected by the Company (as certified by a Board Resolution) as a replacement agency for Fitch, Moody’s or S&P, or any of them, as the case may be.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

 

The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of this Security or (ii) certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth therein.

 

If an Event of Default shall occur and be continuing, the principal of all Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 50% in aggregate principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time

 

12

 

Outstanding, on behalf of the Holders of all the Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Securities a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of (and premium, if any) or any interest on this Security on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000.  As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities of like tenor, of a different authorized denomination, as requested by the Holder surrendering the same.

 

Except where otherwise specifically provided in the Indenture, no service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

13

 

ARTICLE THREE

 

THE SERIES OF SECURITIES

 

Section 301.  Title and Terms.

 

There shall be a series of Securities designated as the “3.300% Senior Notes due 2021” of the Company.  Their Stated Maturity shall be January 15, 2021, and they shall bear interest at the rate of 3.300% per annum.

 

Interest on the Securities of this series will be payable semi-annually on January 15 and July 15 of each year, commencing July 15, 2014, until the principal thereof is made available for payment.  Interest on the Securities of this series will be computed on the basis of a 360-day year of twelve 30-day months.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the Person in whose name the Securities of this series (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be January 1 and July 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.

 

In the case where any Interest Payment Date or the maturity date of the Securities of this series does not fall on a Business Day, payment of interest or principal otherwise payable on such date need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or the maturity date of the Securities of this series.

 

The aggregate principal amount of Securities of this series which may be authenticated and delivered under this Thirty-Second Supplemental Indenture is initially limited to $700,000,000, except for Securities authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities of this series pursuant to Section 304, 305 and 306 of the Indenture and except for any Securities of this series which, pursuant to Section 303 of the Indenture, are deemed never to have been authenticated and delivered under the Indenture. Notwithstanding the foregoing, the Company may from time to time, without notice to or consent of the registered holders of the Securities issue further Securities (“Additional Securities”). The Additional Securities will rank equal with the Securities in all respects (or in all respects other than the payment of interest accruing prior to the issue date of the Additional Securities, or except for the first payment of interest following the issue date of the Additional Securities). The Additional Securities may be consolidated and form a single series with the Securities and may have the same terms as to status, redemption, or otherwise, as the Securities.

 

The Securities of this series will be represented by one or more Global Securities representing the entire $700,000,000 aggregate principal amount of the Securities of this series (as such amount may be increased by the Additional Securities), and the Depositary with respect to such Global Security or Global Securities will be The Depository Trust Company.

 

The Place of Payment for the principal of (and premium, if any) and interest on the Securities of this series shall be the office or agency of the Company in the City of Cincinnati, State of Ohio, maintained for such purpose, which shall be the Corporate Trust Office of the Trustee and at any other office or agency maintained by the Company for such purpose; provided, however, that at the

 

14

 

option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

The Securities of this series are redeemable prior to maturity at the option of the Company as provided in this Thirty-Second Supplemental Indenture.

 

The Securities of this series are not subject to a sinking fund and the provisions of Section 501(3) and Article Twelve of the Indenture shall not be applicable to the Securities of this series.

 

The Securities of this series are subject to defeasance at the option of the Company as provided in this Thirty-Second Supplemental Indenture.

 

ARTICLE FOUR

 

MODIFICATIONS AND ADDITIONS TO THE INDENTURE

 

Section 401.                             Modifications to the Consolidation, Merger, Conveyance, Transfer or Lease Provisions.

 

With respect to the Securities of this series, Section 801 of the Indenture shall be deleted in its entirety and the following shall be substituted therefor:

 

“Section 801. Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions.

 

The Company covenants that it will not merge with or into or consolidate with any corporation, partnership, or other entity or sell, lease or convey all or substantially all of its assets to any other Person, unless (i) either the Company shall be the continuing corporation, or the successor entity or the Person which acquires by sale, lease or conveyance all or substantially all the assets of the Company (if other than the Company) shall be a corporation or partnership organized under the laws of the United States of America or any State thereof or the District of Columbia and shall expressly assume all obligations of the Company under this Indenture and the Securities of the series created by the Thirty-Second Supplemental Indenture, including the due and punctual payment of the principal of and interest on all the Securities of the series created by the Thirty-Second Supplemental Indenture according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be performed or observed by the Company, by supplemental indenture in form satisfactory to the Trustee, executed and delivered to the Trustee by such entity, and (ii) the Company, such person or such successor entity, as the case may be, shall not, immediately after such merger or consolidation, or such sale, lease or conveyance, be in default in the performance of any such covenant or condition and, immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing.

 

15

 

Section 802.                    Successor Substituted

 

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any sale, lease or conveyance of all or substantially all of the assets of the Company in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, lease or conveyance is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.”

 

Section 402.                             Other Modifications.

 

With respect to the Securities of this series, the Indenture shall be modified as follows:

 

(a)         The eighth paragraph of Section 305 of the Indenture shall be modified by inserting “, and a successor Depositary is not appointed by the Company within 90 days” at the end of clause (i) in such paragraph; and

 

(b)         Section 401 of the Indenture shall be modified by adding to the end of such Section the following paragraph:

 

“For the purpose of this Section 401, trust funds may consist of (A) money in an amount, or (B) U.S. Government Obligations (as defined in Section 1304) which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, the principal of, premium, if any, and each installment of interest on the Securities of this series on the Stated Maturity of such principal or installment of interest on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities of this series.”

 

Section 403.                             Additional Covenants; Defeasance and Covenant Defeasance.

 

(a)  With respect to the Securities of this series, the following provisions shall be added as Sections 1009, 1010 and 1011 and as Article Thirteen (Section references contained in these additional provisions are to the Indenture as supplemented by this Thirty-Second Supplemental Indenture):

 

“Section 1009.  Limitations on Liens.

 

After the date hereof and so long as any Securities of the series created by the Thirty-Second Supplemental Indenture are Outstanding, the Company will not issue, assume or guarantee, and will not permit any Restricted Subsidiary to issue, assume or guarantee, any Indebtedness which is secured by a mortgage, pledge, security interest, lien or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any of the foregoing) (each being hereinafter referred to as a “lien” or “liens”) of or upon any Operating Property or Operating Asset, whether now owned or hereafter acquired, of the Company or any Restricted Subsidiary without effectively

 

16

 

providing that the Securities of the series created by the Thirty-Second Supplemental Indenture (together with, if the Company shall so determine, any other Indebtedness of the Company ranking equally with the Securities) shall be equally and ratably secured by a lien on such assets ranking ratably with and equal to (or at the Company’s option prior to) such secured Indebtedness; provided that the foregoing restriction shall not apply to:

 

(a)             liens on any property or assets of any corporation existing at the time such corporation becomes a Restricted Subsidiary provided that such lien does not extend to any other property of the Company or any of its Restricted Subsidiaries;

 

(b)             liens on any property or assets (including stock) existing at the time of acquisition of such property or assets by the Company or a Restricted Subsidiary, or liens to secure the payment of all or any part of the purchase price of such property or assets (including stock) upon the acquisition of such property or assets by the Company or a Restricted Subsidiary or to secure any indebtedness incurred, assumed or guaranteed by the Company or a Restricted Subsidiary for the purpose of financing all or any part of the purchase price of such property or, in the case of real property, construction or improvements thereon or attaching to property substituted by the Company to obtain the release of a lien on other property of the Company on which a lien then exists, which indebtedness is incurred, assumed or guaranteed prior to, at the time of, or within 18 months after such acquisition (or in the case of real property, the completion of construction (including any improvements on an existing asset) or commencement of full operation at such property, whichever is later (which in the case of a retail store is the opening of the store for business to the public)); provided that in the case of any such acquisition, construction or improvement, the lien shall not apply to any other property or assets theretofore owned by the Company or a Restricted Subsidiary;

 

(c)              liens on any property or assets to secure Indebtedness of a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

 

(d)             liens on any property or assets of a corporation existing at the time such corporation is merged into or consolidated with the Company or a Restricted Subsidiary or at the time of a purchase, lease or other acquisition of the assets of a corporation or firm as an entirety or substantially as an entirety by the Company or a Restricted Subsidiary provided that such lien does not extend to any other property of the Company or any of its Restricted Subsidiaries;

 

(e)               liens on any property or assets of the Company or a Restricted Subsidiary in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, or in favor of any other country, or any political subdivision thereof, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Indebtedness incurred or guaranteed for the purpose of financing all or any part of the purchase price (or, in the case of real property, the cost of construction) of the property or assets subject to such liens (including, but not limited to, liens incurred in connection with pollution control, industrial revenue or similar financings);

 

17

 

(f)             liens existing on properties or assets of the Company or any Restricted Subsidiary existing on the date hereof; provided that such liens secure only those obligations which they secure on the date hereof or any extension, renewal or replacement thereof;

 

(g)               any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part, of any lien referred to in the foregoing clauses (a) through (f), inclusive; provided that such extension, renewal or replacement shall be limited to all or a part of the property or assets which secured the lien so extended, renewed or replaced (plus improvements and construction on real property);

 

(h)              liens imposed by law, such as mechanics’, workmen’s, repairmen’s, materialmen’s, carriers’, warehouseman’s, vendors’, or other similar liens arising in the ordinary course of business of the Company or a Restricted Subsidiary, or governmental (federal, state or municipal) liens arising out of contracts for the sale of products or services by the Company or any Restricted Subsidiary, or deposits or pledges to obtain the release of any of the foregoing liens;

 

(i)              pledges, liens or deposits under worker’s compensation laws or similar legislation and liens or judgments thereunder which are not currently dischargeable, or in connection with bids, tenders, contracts (other than for the payment of money) or leases to which the Company or any Restricted Subsidiary is a party, or to secure the public or statutory obligations of the Company or any Restricted Subsidiary, or in connection with obtaining or maintaining self-insurance or to obtain the benefits of any law, regulation or arrangement pertaining to unemployment insurance, old age pensions, social security or similar matters, or to secure surety, appeal or customs bonds to which the Company or any Restricted Subsidiary is a party, or in litigation or other proceedings such as, but not limited to, interpleader proceedings, and other similar pledges, liens or deposits made or incurred in the ordinary course of business;

 

(j)             liens created by or resulting from any litigation or other proceeding which is being contested in good faith by appropriate proceedings, including liens arising out of judgments or awards against the Company or any Restricted Subsidiary with respect to which the Company or such Restricted Subsidiary is in good faith prosecuting an appeal or proceedings for review or for which the time to make an appeal has not yet expired; or final unappealable judgment liens which are satisfied within 30 days of the date of judgment; or liens incurred by the Company or any Restricted Subsidiary for the purpose of obtaining a stay or discharge in the course of any litigation or other proceeding to which the Company or such Restricted Subsidiary is a party;

 

(k)              liens for taxes or assessments or governmental charges or levies not yet due or delinquent, or which can thereafter be paid without penalty, or which are being contested in good faith by appropriate proceedings; landlord’s liens on property held under lease; and any other liens or charges incidental to the conduct of the business of the Company or any Restricted Subsidiary or the ownership of the property or assets of any of them which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not, in the opinion of the Company, materially impair the use of such property or assets in the operation of the business of the Company or such Restricted Subsidiary or the value of such property or assets for the purposes of such business; or

 

18

 

(l)              liens not permitted by clauses (a) through (k) above if at the time of, and after giving effect to, the creation or assumption of any such lien, the aggregate amount of all Indebtedness of the Company and its Restricted Subsidiaries secured by all such liens not so permitted by clauses (a) through (k) above together with the Attributable Debt in respect of Sale and Lease-Back Transactions permitted by paragraph (a) of Section 1010 does not exceed 10% of Consolidated Net Tangible Assets.

 

Section 1010.  Limitations on Sale and Lease-Back Transactions.

 

After the date hereof and so long as any Securities of the series created by the Thirty-Second Supplemental Indenture are Outstanding, the Company agrees that it will not, and will not permit any Restricted Subsidiary to, enter into any arrangement with any Person providing for the leasing by the Company or a Restricted Subsidiary of any Operating Property or Operating Asset (other than any such arrangement involving a lease for a term, including renewal rights, for not more than three years and leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries), whereby such Operating Property or Operating Asset has been or is to be sold or transferred by the Company or any Restricted Subsidiary to such Person (herein referred to as a “Sale and Lease-Back Transaction”), unless:

 

(a)    the Company or such Restricted Subsidiary would, at the time of entering into a Sale and Lease-Back transaction, be entitled to incur Indebtedness secured by a lien on the Operating Property or Operating Asset to be leased in an amount at least equal to the Attributable Debt in respect of such Sale and Lease-Back Transaction without equally and ratably securing the Securities of the series created by the Thirty-Second Supplemental Indenture pursuant to Section 1009; or

 

(b)    the proceeds of the sale of the Operating Property or Operating Asset to be leased are at least equal to the fair market value of such Operating Property or Operating Asset (as determined by the chief financial officer or chief accounting officer of the Company) and an amount in cash equal to the net proceeds from the sale of the Operating Property or Operating Asset so leased is applied, within 180 days of the effective date of any such Sale and Lease-Back Transaction, to the purchase or acquisition (or, in the case of Operating Property, the construction) of Operating Property or Operating Assets or to the retirement, repurchase, redemption or repayment (other than at maturity or pursuant to a mandatory sinking fund or redemption provision and other than Indebtedness owned by the Company or any Restricted Subsidiary) of Securities of the series created by the Thirty-Second Supplemental Indenture or of Funded Indebtedness of the Company ranking on a parity with or senior to the Securities of the series created by the Thirty-Second Supplemental Indenture, or in the case of a Sale and Lease-Back Transaction by a Restricted Subsidiary, of Funded Indebtedness of such Restricted Subsidiary; provided that in connection with any such retirement, any related loan commitment or the like shall be reduced in an amount equal to the principal amount so retired.

 

The foregoing restriction shall not apply to, in the case of any Operating Property or Operating Asset acquired or constructed subsequent to the date eighteen months prior to the date of this Indenture, any Sale and Lease-Back Transaction with respect to such Operating Asset or Operating Property (including presently owned real property upon which such Operating Property is to be constructed) if a binding commitment is entered into with respect to

 

19

 

such Sale and Lease-Back Transaction within 18 months after the later of the acquisition of the Operating Property or Operating Asset or the completion of improvements or construction thereon or commencement of full operations at such Operating Property (which in the case of a retail store is the opening of the store for business to the public).

 

Section 1011.  Change of Control.

 

If a Change of Control Triggering Event occurs, unless the Company has exercised its right to redeem the Securities, Holders of Securities will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their Securities pursuant to the offer described below (the “Change of Control Offer”).  In the Change of Control Offer, the Company shall offer payment in cash equal to 101% of the aggregate principal amount of Securities repurchased plus accrued and unpaid interest, if any, on the Securities repurchased, to the date of purchase (the “Change of Control Payment”).  Within 30 days following any Change of Control Triggering Event, or, at the Company’s option, prior to any Change of Control, but after the public announcement of the Change of Control, the Company shall mail a notice to Holders of Securities describing the transaction or transactions that constitute or may constitute the Change of Control Triggering Event and offering to repurchase the Securities on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”), pursuant to the procedures described herein and in such notice.  The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the payment date specified in the notice.  The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Securities as a result of a Change of Control Triggering Event.  To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions herein, the Company shall be required to comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control provisions herein by virtue of such conflicts.

 

On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment all Securities or portions of Securities properly tendered pursuant to the Change of Control Offer; (ii) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Securities or portions of Securities properly tendered; and (iii) deliver or cause to be delivered to the Trustee the Securities properly accepted, together with an officers’ certificate stating the aggregate principal amount of Securities or portions of Securities being purchased.

 

“Below Investment Grade Rating Event” means the Securities are rated below an Investment Grade Rating by any two of the three Rating Agencies (as defined below) on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of the Change of Control (which 60-day period shall be extended so long as the rating of the Securities is under publicly announced consideration for possible downgrade below investment grade by any of the Rating Agencies); provided that a Below Investment Grade Rating Event

 

20

 

otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).

 

“Change of Control” means the occurrence of any of the following:  (1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Company or one of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s voting stock; or (3) the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors.  Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Company becomes a wholly owned subsidiary of a holding company that has agreed to be bound by the terms of the Securities and (2) the Holders of the voting stock of such holding company immediately following that transaction are substantially the same as the Holders of the Company’s voting stock immediately prior to that transaction.

 

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

 

“Continuing Directors” means, as of any date of determination, members of the Board of Directors of the Company who (1) were members of such Board of Directors on the date of original issuance of the Securities; or (2) were nominated for election or elected to such Board of Directors with the approval of a majority of the continuing directors under clause (1) or (2) of this definition who were members of such Board of Directors at the time of such nomination or election (either by a specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director, without objection to such nomination).

 

“Fitch” means Fitch, Inc.

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P and Fitch, and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the Company.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

21

 

“Person” means any individual, partnership, corporation, limited liability company, joint stock company, business trust, trust, unincorporated association, joint venture or other entity, or a government or political subdivision or agency thereof.

 

“Rating Agencies” means (1) each of Fitch, Moody’s and S&P; and (2) if Fitch, Moody’s or S&P ceases to rate the Securities or fails to make a rating of the Securities publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” as defined in Section 3(a)(62) of the Exchange Act, selected by the Company (as certified by a Board Resolution) as a replacement agency for Fitch, Moody’s or S&P, or any of them, as the case may be.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

 

ARTICLE THIRTEEN

 

DEFEASANCE AND COVENANT DEFEASANCE

 

Section 1301.  Company’s Option to Effect Defeasance or Covenant Defeasance.

 

The Company may at its option by Board Resolution, at any time, elect to have either Section 1302 or Section 1303 applied to the Outstanding Securities of this series upon compliance with the conditions set forth below in this Article Thirteen.

 

Section 1302.  Defeasance and Discharge.

 

Upon the Company’s exercise of the option provided in Section 1301 applicable to this Section, the Company shall be deemed to have been discharged from its obligations with respect to the Outstanding Securities of the series created by the Thirty-Second Supplemental Indenture on the date the conditions set forth below are satisfied (hereinafter, “Defeasance”).  For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities of this series and to have satisfied all its other obligations under such Securities of this series and this Indenture insofar as such Securities of this series are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities of this series to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest on such securities when such payments are due, (B) the Company’s obligations with respect to such Securities of this series under Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (D) this Article Thirteen.  Subject to compliance with this Article Thirteen, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303.

 

Section 1303.  Covenant Defeasance.

 

Upon the Company’s exercise of the option provided in Section 1301 applicable to this Section, the Company shall be released from its obligations under Section 501(4) (in respect of

 

22

 

the covenants in Sections 1008 through 1010), Section 801 and Sections 1008 through 1010, the Securities of this series and the Holders of Securities of this series, on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”).  For this purpose, such covenant Defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities of this series shall be unaffected thereby.

 

Section 1304.  Conditions to Defeasance or Covenant Defeasance.

 

The following shall be the conditions to application of either Section 1302 or Section 1303 to the Outstanding Securities of this series:

 

(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 609 who shall agree to comply with the provisions of this Article Thirteen applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities of this series, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of, premium, if any, and each installment of interest on the Securities of this series on the Stated Maturity of such principal or installment of interest on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities of this series.  For this purpose, “U.S. Government Obligations” means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the Company thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such

 

23

 

custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depositary receipt.

 

(2) No Event of Default or event which with notice or lapse of time or both would become an Event of Default shall have occurred and be continuing on the date of such deposit or, insofar as subsections 501(6) and (7) are concerned, at any time during the period ending on the 121st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).

 

(3) Such Defeasance or covenant Defeasance shall not cause the Trustee to have a conflicting interest as defined in Section 608 and for purposes of the Trust Indenture Act with respect to any securities of the Company.

 

(4) Such Defeasance or covenant Defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.

 

(5) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to either the Defeasance under Section 1302 or the covenant Defeasance under Section 1303 (as the case may be) have been complied with.

 

(6) In the case of an election under Section 1302, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of this Thirty-Second Supplemental Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that and based thereon such opinion shall confirm that, and in the case of an election under Section 1303 the Company shall have delivered to the Trustee an Opinion of Counsel stating that, the Holders of the Outstanding Securities of this series will not recognize income, gain or loss for Federal income tax purposes as a result of such Defeasance or covenant Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Defeasance or covenant Defeasance had not occurred.

 

24

 

Section 1305.  Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions.

 

Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee—collectively, for purposes of this Section 1305, the “Trustee”) pursuant to Section 1304 in respect of the Securities of this series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities of this series and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities of this series, of all sums due and to become due thereon in respect of principal (and premium, if any) and interest, but such money need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities of this series.

 

Anything in this Article Thirteen to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1304 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Defeasance or covenant Defeasance.

 

Section 1306.  Reinstatement.

 

If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 1302 or 1303 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities of this series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Thirteen until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1302 or 1303; provided, however, that if the Company makes any payment of principal of (and premium, if any) or interest on any Security of this series following the reinstatement of its obligations, the Company shall be subjugated to the rights of the Holders of such Securities of this series to receive such payment from the money held by the Trustee or the Paying Agent.”

 

Section 404.                             Redemption of Securities.

 

With respect to Securities of this series, Section 1101 of the Indenture shall be deleted in its entirety and the following shall be substituted therefor:

 

“Section 1101.                Optional Redemption.

 

The Securities will be redeemable, in whole or in part, at the option of the Company at any time.  If the Securities are redeemed prior to December 15, 2020, the redemption price will be equal to the greater of (i) 100% of the principal amount of such Securities and (ii) as determined by a Quotation Agent, the sum of the present values of (1) the principal amount of

 

25

 

the Securities being redeemed and (2) the remaining scheduled payments of interest thereon (not including any portion of such payments of interest accrued and unpaid as of the date of redemption) from the redemption date to January 15, 2021, discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 16 basis points plus, in each case, accrued and unpaid interest thereon to the date of redemption.  If the Securities are redeemed on or after December 15, 2020 the redemption price will be equal to 100% of the principal amount of such Securities, plus accrued and unpaid interest thereon to the date of redemption.”

 

With respect to Securities of this series, the following provision shall be added as Section 1108 of the Indenture (Section references contained in this additional provision are to the Indenture as supplemented by this Thirty-Second Supplemental Indenture):

 

“Section 1108.                Special Mandatory Redemption

 

(a) The Securities will be subject to a mandatory redemption in the event that a Redemption Event occurs. In such an event, the Securities will be redeemed at a redemption price equal to 101% of the principal amount thereof plus accrued and unpaid interest from the date of initial issuance, or the most recent date to which interest has been paid or provided for, whichever is later, to, but excluding, the Special Mandatory Redemption Date.

 

(b) The Company, either directly or through the Trustee on its behalf, will cause notice of the special mandatory redemption to be sent, with a copy to the Trustee, not later than five Business Days after the occurrence of the Redemption Event to each holder of the Securities. Such notice will also specify the Special Mandatory Redemption Date. If funds sufficient to pay the special mandatory redemption price of all Securities to be redeemed on the Special Mandatory Redemption Date are deposited with the paying agent on or before such Special Mandatory Redemption Date the Securities will cease to bear interest and all rights under the Securities shall terminate.

 

(c) The provisions of Sections 1105 and 1106 of the Indenture shall apply in the case of a mandatory redemption pursuant to this Section 1108. Sections 1101 — 1104 and 1107 of the Indenture shall not apply in the case of a mandatory redemption pursuant to this Section 1108.”

 

ARTICLE FIVE

 

MISCELLANEOUS

 

Section 501.                            Miscellaneous.

 

(a)         The Trustee accepts the trusts created by the Indenture, as supplemented by this Thirty-Second Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Thirty-Second Supplemental Indenture.

 

26

 

(b)         The recitals contained herein shall be taken as statements of the Company, and the Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to the validity or sufficiency of this Thirty-Second Supplemental Indenture.

 

(c)          All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Indenture.

 

(d)         Each of the Company and the Trustee makes and reaffirms as of the date of execution of this Thirty-Second Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture.

 

(e)          All covenants and agreements in this Thirty-Second Supplemental Indenture by the Company or the Trustee and each Guarantor shall bind its respective successors and assigns, whether so expressed or not.

 

(f)           In case any provisions in this Thirty-Second Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(g)          Nothing in this Thirty-Second Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors under the Indenture and the Holders of the series of Securities created hereby, any benefit or any legal or equitable right, remedy or claim under the Indenture.

 

(h)         If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as may be amended from time to time, that is required under such Act to be a part of and govern this Thirty-Second Supplemental Indenture, the latter provision shall control.  If any provision hereof modifies or excludes any provision of such Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Thirty-Second Supplemental Indenture as so modified or excluded, as the case may be.

 

(i)             This Thirty-Second Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

(j)            All amendments to the Indenture made hereby shall have effect only with respect to the series of Securities created hereby.

 

(k)         All provisions of this Thirty-Second Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Thirty-Second Supplemental Indenture, shall be read, taken and construed as one and the same instrument.

 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

27

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

 

	
 
    	
THE KROGER CO.  
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Todd A. Foley
    
	
 
    	
 
    	
Name:
    	
Todd A. Foley 
    
	
 
    	
 
    	
Title:
    	
Vice President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
    
	
 
    	
as Trustee 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ William E. Sicking
    
	
 
    	
 
    	
Name:
    	
William E. Sicking 
    
	
 
    	
 
    	
Title:
    	
Vice President and Trust Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Attest:
    	
 
    
	
/s/ Carla D. Hofmann
    	
 
    
	
Name:
    	
Carla D. Hofmann
    	
 
    
	
Title:
    	
Assistant Vice President
    	
 
    

 

 

STATE OF OHIO                      )

) ss.:

COUNTY OF HAMILTON      )

 

On the 23rd day of December, 2013, before me personally came Todd A. Foley, to me known, who, being by me duly sworn, did depose and say that he is Vice President and Treasurer of The Kroger Co., one of the corporations described in and which executed the foregoing instrument, and that he signed his name thereto by like authority.

 

 

	
 
    	
/s/ Dorothy D. Roberts
    

 

STATE OF OHIO                      )

) ss.:

COUNTY OF HAMILTON      )

 

On the 23rd day of December, 2013, before me personally came William E. Sicking, to me known, who, being by me duly sworn, did depose and say that he is a Vice President and Trust Officer of U.S. Bank National Association, one of the corporations described in and which executed the foregoing instrument, and that he signed his name thereto by like authority.

 

 

	
 
    	
/s/ Dorothy D. Roberts
    

 

1Exhibit 10.1

 

EXECUTION VERSION

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into effective as of December 19, 2013, by and between Dex Media, Inc., a Delaware corporation formerly known as SuperMedia Inc. (the “Company”), and Peter J. McDonald (“Executive”).

 

WHEREAS, on December 10, 2010, the Company and Executive entered into an Employment Agreement (the “Original Agreement”).

 

WHEREAS, the term of the Original Agreement ends on December 31, 2013; and

 

WHEREAS, the Company and Executive desire to amend and restate the Original Agreement to confirm the terms and conditions set forth in this Agreement.

 

THEREFORE, in consideration of the foregoing and the promises and the mutual covenants contained in this Agreement, and for other good and valuable consideration, the parties, the receipt and sufficiency of which the parties mutually acknowledge, the parties amend, and restate in its entirety, the Original Agreement and agree as follows:

 

1.                                      Term of Employment.  Subject to the provisions of this Agreement, Executive will be employed by the Company for the period (the “Initial Term”) commencing on the date hereof (the “Commencement Date”) and ending on December 31, 2016.  This Agreement will renew automatically for one-year periods (each, an “Extension Term”) until the Company or Executive gives written notice to the other party of nonrenewal at least 90 days before the end of the Initial Term or Extension Term, as applicable (the Initial Term together with any Extension Terms, the “Employment Term”).  The giving of notice of non-renewal will be subject to Section 8(g).

 

2.                                      Position.  The Company hereby employs Executive as President and Chief Executive Officer (“CEO”) of the Company, and Executive hereby accepts employment by the Company, upon the terms and conditions set forth in this Agreement.  As CEO, Executive will do and perform all services, acts, and things necessary or advisable to manage and conduct the business of the Company that are normally associated with the position of chief executive officer of similarly situated public companies.  Executive will be subject to the direction and policies from time to time established by the Board of Directors of the Company (the “Board”).  Notwithstanding anything to the contrary, the parties agree Executive is an at-will employee and either party may terminate Executive’s employment under this Agreement at any time, with or without cause.  As CEO, Executive will perform the services he is required to perform pursuant to this Agreement at 2200 West Airfield Drive, DFW Airport, Texas 75261 (it being understood that Executive may perform certain services at his home office(s)).  At the request of the Board, Executive will serve as an officer and director of the Company’s subsidiaries and other affiliates without additional compensation.

 

3.                                      Board Position.  During the Employment Term, the Board will nominate Executive for re-election as a member of the Board at the expiration of the then current term, provided that the foregoing will not be required to the extent prohibited by legal or regulatory requirements. Executive will not be entitled to any additional consideration for serving on the Board.  Executive will be governed by the same obligations regarding confidentiality, conflicts of interest, fiduciary duties, trading and disclosure policies and other governance guidelines that are applicable to other directors of the Company.

 

 

4.                                      Loyal and Conscientious Performance.  During his employment by the Company, Executive will devote substantially all of his business energies, interest, abilities, and productive time and efforts to the performance of his duties under this Agreement.  During the Employment Term, Executive will not engage in any other business, profession, or occupation for compensation or otherwise that would conflict with the rendition of such services either directly or indirectly without the prior written consent of the Board.

 

5.                                      Compensation of Executive.

 

(a)                                 Base Salary.  During the Employment Term, beginning on the date hereof and until December 31, 2013, the Company will pay Executive a pro-rated annual base salary of $977,000.  During the Employment Term, beginning on January 1, 2014, the Company will pay Executive an annual base salary (the “Base Salary”) at the initial annual rate of $1,050,000 per year in accordance with the usual payroll practices of the Company.  The Board or the Compensation and Benefits Committee (the “Committee”) will review Executive’s Base Salary annually.  The Board, acting at its sole option and election, may increase (but may not decrease unless the reduction in Base Salary is part of a program approved by the Board that affects all executives on a consistent basis) Executive’s Base Salary in effect during the Employment Term.

 

(b)                                 Short Term Incentive Award.  With respect to each calendar year beginning on or after January 1, 2014, Executive will be eligible to receive an annual incentive bonus under the Company’s annual incentive program as in effect from time to time, with a target bonus opportunity of 100% of Base Salary (the “Bonus”), based upon the attainment of one or more pre-established performance goals established by the Board or the Committee, within 90 days after the beginning of the calendar year, after consultation with Executive and prorated for any partial fiscal year during the Employment Term. Any Bonus paid to Executive, less applicable tax withholding, will be distributed pursuant to policies as determined by the Company, provided that payment of any Bonus will in all events be made in the calendar year following the calendar year to which such Bonus relates and within two and a half months following the end of the calendar year to which such Bonus relates.  The Board, acting at its sole option and election, may increase (but may not decrease unless the reduction in Bonus is part of a program approved by the Board that affects all executives on a consistent basis) Executive’s target Bonus opportunity.

 

(c)                                  Long-Term Incentive Award.

 

(i)                                     Equity Award.  The Company granted to Executive equity awards (“Equity Awards”) as follows on or about September [13], 2013 and in accordance with the terms communicated to Executive in that certain letter dated September 13, 2013: (A) a stock option to purchase 125,000 shares of the Company’s common stock with an exercise price per share equal to $10.25; and (B) an award for 50,000 restricted shares of the Company’s common stock. Any future Equity Awards granted by the Company and the amount of any such Equity Awards will be determined at the sole option and election of the Board or the Committee from time to time; provided that, notwithstanding the foregoing, Executive will be eligible to receive future Equity Awards in the form and on terms and conditions no less favorable than the future Equity Awards granted to other senior executives during the Employment Term.

 

2

 

(ii)                                  Stock Ownership.  During the Employment Term and for at least six months following the expiration of the Employment Term (for reasons other than death or Disability), Executive must maintain ownership of a number of shares of the Company’s common stock that is required by the terms of any executive stock ownership guidelines that are approved by the Board from time to time and applicable to executive officers of the Company generally.

 

(iii)                               Securities Filings.  The Company will provide Executive with reasonable assistance with the preparation and filing of Forms 3, 4, and 5, as applicable, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(iv)                              Long-Term Incentive Cash Award.  Under the Company’s 2013-2015 Cash Long-Term Incentive Plan or any successor plan (the “2013-2015 Cash LTIP”), Executive will be eligible for long-term cash incentive opportunities (the “LTI Awards”) with the following target cash values in accordance with the terms communicated to Executive in that certain letter dated September 13, 2013: for the 2013 fiscal year $750,000, for the 2014 fiscal year $1,125,000 and for the 2015 fiscal year $1,125,000 based upon the attainment of one or more pre-established performance goals established by the Board or the Committee within 90 days after the beginning of the calendar year, after consultation with Executive.  Any LTI Award paid to Executive, less applicable tax withholding, will be distributed pursuant to policies as determined by the Company, provided that payment of any LTI Award will in all events be made in the calendar year following the calendar year to which such LTI Award relates. Generally, amounts earned in a given year will be paid out at the end of the following fiscal year (e.g. amounts earned for 2013 performance will be paid out at the end of 2014).  Any future LTI Awards granted by the Company and the amount of any such LTI Awards will be determined at the sole option and election of the Board or the Committee from time to time; provided that, notwithstanding the foregoing, Executive will be eligible to receive future LTI Awards in the form and on terms and conditions no less favorable than the future LTI Awards granted to other senior executives during the Employment Term.

 

6.                                      Benefits.  While Executive is employed by the Company under this Agreement, Executive will be entitled to (A) such employee benefits as are provided from time to time by the Company to senior executives generally, at a level commensurate with Executive’s position, subject to the satisfaction of any eligibility requirements, and (B) a perquisite allowance of $2,200 per month.  Notwithstanding any other provision of this Agreement or any provision of the Company’s Executive Transition Plan, Executive will not be eligible to participate in and will not participate in the Executive Transition Plan.

 

7.                                      Expenses.  Upon presentation of appropriate documentation, Executive will be reimbursed in accordance with the Company’s expense reimbursement policy in effect from time to time (including expense verification policies) for all reasonable and necessary business expenses incurred in connection with the performance of Executive’s duties and responsibilities under this Agreement.

 

8.                                      Termination of Employment.  Each of Executive and the Company may terminate the employment of Executive at any time in accordance with this Section 8. Upon such termination, Executive will have only the rights set forth in this Section 8.

 

(a)                                 Accrued Benefits.  With respect to any termination of employment (voluntary or otherwise), Executive will be entitled to receive:

 

3

 

(i)                                     accrued and unpaid Base Salary through the Date of Termination (as defined in Section 8(f)(ii)), payable on the next payroll date following the Date of Termination;

 

(ii)                                  accrued but unused vacation time (determined in accordance with Company policies), payable within 30 days following the Date of Termination;

 

(iii)                               any earned but unpaid Bonus for any full fiscal year completed on or prior to the Date of Termination, payable at the same time as provided in Section 5(b); and

 

(iv)                              all other vested benefits, including the right to indemnification, due Executive following Executive’s termination of employment in accordance with the then-existing employee benefit plans, policies and practices of the Company (collectively, clauses (i) through (iv) are referred to in this Agreement as the “Accrued Benefits”).

 

(b)                                 For Cause by the Company. If Executive’s employment is terminated by the Company for Cause (as defined in Section 9(a)), Executive will be entitled to receive the Accrued Benefits (other than the benefit described in Section 8(a)(iii)).

 

(c)                                  Death or Disability. Executive’s employment will terminate upon his death and may be terminated by the Company upon his Disability (as defined in Section 9(c)) during the Employment Term. Upon termination of Executive’s employment by reason of Executive’s Disability or death, Executive or his estate (as the case may be) will be entitled to receive:

 

(i)                                     the Accrued Benefits;

 

(ii)                                  up to 18 months of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) group health plan continuation coverage, at the Company’s expense, if and to the extent that Executive or, as applicable, his covered spouse and/or dependents are eligible for and entitled to receive such coverage in accordance with the Company’s group health plan(s) and applicable law (“Subsidized COBRA Coverage”);

 

(iii)                               a pro-rata portion of the Bonus that would have been earned under Section 5(b) for the year in which the Date of Termination occurs if the Executive’s employment had continued and in accordance with the Company’s achievement, if any, of the pre-established performance goals established by the Board or the Committee (which portion of the Bonus will be based upon the ratio that the number of days elapsed from the beginning of the year until the Date of Termination bears to 365), payable at the same time as provided in Section 5(b) subject, however, to a delay of up to six months from the Date of Termination if and to the extent required in order to satisfy the requirements of Section 16(b) and Code Section 409A (the “Pro-Rated Short Term Bonus”);

 

(iv)                              any earned but unpaid LTI Award that would have been paid within one-year following the Date of Termination plus a pro-rata portion of the LTI Award that would have been earned under Section 5(c)(iv) for the year in which the Date of Termination occurs if the Executive’s employment had continued and in accordance with the Company’s achievement, if any, of the pre-established performance goals

 

4

 

established by the Board or the Committee (which portion of the LTI Award will be based upon the ratio that the number of days elapsed from the beginning of the year until the Date of Termination bears to 365), payable at the same time as provided in Section 5(c)(iv) subject, however, to a delay of up to six months from the Date of Termination if and to the extent required in order to satisfy the requirements of Section 16(b) and Code Section 409A (collectively, the “Pro-Rated Long-Term Bonus”); and

 

(v)                                 immediate vesting (and, with respect to any cash-settled Company Equity Awards, payout) of a portion of Executive’s unvested outstanding Company Equity Awards (with such portion equal to the difference between (X) a percentage equal to (1) the number of days elapsed from the beginning of the relevant performance period until the Date of Termination, divided by (2) the total number of days in the performance period and (Y) the portion, expressed as a percentage, of the Equity Award that is vested immediately prior to the Date of Termination) and the ability to exercise such Equity Awards in accordance with the terms of the award agreements granting such Equity Awards; provided that, for clarity, the calculation described in this section will be calculated separately for each such Equity Award (the “Pro-Rated Accelerated Equity Vesting”).

 

(d)                                 Termination Without Cause or for Good Reason Unrelated to a Change in Control. If Executive’s employment under this Agreement is terminated by the Company without Cause or by Executive for Good Reason (as defined in Section 9(d)), other than a termination to which Section 8(e) (relating to termination in connection with a Change in Control) applies, then, subject to timely satisfaction of the release and other conditions set forth in Section 8(i), Executive will be entitled to the following (which Executive acknowledges will be in partial consideration for Executive’s compliance with the post-termination obligations hereunder (including the obligations under Section 12 and 13)):

 

(i)                                     the Accrued Benefits;

 

(ii)                                  a lump sum cash severance payment equal to two (2.0) times the sum of (A) Base Salary at the rate in effect on the date Notice of Termination is given (but not less than the initial rate of Base Salary set forth in Section 5(a)), plus (B) an amount equal to Executive’s target Bonus opportunity (i.e., 100% of Base Salary) for the year in which such termination of employment occurs (the “Severance Payment”), and such Severance Payment will be paid on the date that is 60 days following the Date of Termination, subject, however, to a delay of up to six months from the Date of Termination if and to the extent required in order to satisfy the requirements of Section 16(b) and Code Section 409A;

 

(iii)                               the Pro-Rated Short Term Bonus;

 

(iv)                              the Pro-Rated Long-Term Bonus;

 

(v)                                 the Pro-Rated Accelerated Equity Vesting; and

 

(vi)                              up to 18 months of Subsidized COBRA Coverage.

 

(e)                                  Termination in Connection With a Change in Control.  If, during the Employment Term and within three months prior to or two years following a Change in Control, Executive’s employment is terminated by the Company without Cause or by

 

5

 

Executive for Good Reason, then Executive’s employment will be deemed to have been terminated in connection with the Change in Control and, subject to timely satisfaction of the release and other conditions set forth in Section 8(i), Executive will be entitled to receive the following (which Executive acknowledges will be in partial consideration for Executive’s compliance with the post-termination obligations under this Agreement (including the obligations under Section 12 and Section 13)):

 

(i)                                     the Accrued Benefits;

 

(ii)                                  the Severance Payment (except the multiple will be changed from two (2.0) to three (3.0)), and such Severance Payment will be paid on the date that is 60 days following the Date of Termination, subject, however, to a delay of up to six months from the Date of Termination if and to the extent required in order to satisfy the requirements of Section 16(b) and Code Section 409A;

 

(iii)                               the Pro-Rated Short Term Bonus (except that the portion of the Bonus which will be prorated will be based on the greater of target Bonus and actual Bonus earned);

 

(iv)                              any earned but unpaid LTI Award and any LTI Award for the then-current performance period will be paid in accordance with the terms of the 2013-2015 Cash LTIP;

 

(v)                                 immediate vesting and payout of Executive’s unvested outstanding Company Equity Awards (the “Full Accelerated Equity Vesting”); and

 

(vi)                              up to 18 months of Subsidized COBRA Coverage.

 

Notwithstanding any other provision, and subject to timely satisfaction of the release and other conditions set forth in Section 8(i), as a result of the SuperMedia Inc. and Dex One Corporation merger, if Executive is terminated by the Company without Cause or resigns for Good Reason on or prior to April 30, 2015 and another Change in Control has not occurred, Executive will be entitled to receive the payments and benefits set forth in this Section 8(e) but will not receive the payments in clause (iv) and will instead receive the Pro-Rated Long-Term Bonus.

 

(f)                                   Voluntary Resignation.  Upon termination of Executive’s employment as a result of a voluntary resignation, Executive will be entitled to the Accrued Benefits.

 

(g)                                  Nonrenewal of Employment Term.  Upon termination of Executive’s employment at the end of the Employment Term as a result of the Company’s delivery of a written notice of non-renewal pursuant to Section 1, subject to timely satisfaction of the release and other conditions set forth in Section 8(i), Executive will be entitled to the following (which Executive acknowledges will be in partial consideration for Executive’s compliance with the post-termination obligations hereunder (including the obligations under Section 12 and 13)):

 

(i)                                     the Accrued Benefits;

 

(ii)                                  the Severance Payment (except the multiple will be changed from two (2.0) to one (1.0)), and such Severance Payment will be paid on the date that is 60

 

6

 

days following the expiration of the Employment Term, subject, however, to a delay of up to six months from the Date of Termination if and to the extent required in order to satisfy the requirements of Section 16(b) and Code Section 409A;

 

(iii)                               any earned but unpaid LTI Award that would have been paid within one-year following the Date of Termination, payable at the same time as provided in Section 5(c)(iv) subject, however, to a delay of up to six months from the Date of Termination if and to the extent required in order to satisfy the requirements of Section 16(b) and Code Section 409A;

 

(iv)                              the Full Accelerated Equity Vesting; and

 

(v)                                 up to 18 months of Subsidized COBRA Coverage.

 

Upon termination of Executive’s employment at the end of the Employment Term as a result of Executive’s delivery of a written notice of non-renewal pursuant to Section 1, subject to timely satisfaction of the release and other conditions set forth in Section 8(i), Executive will be entitled to receive the payments and benefits set forth in this Section 8(g) except he will not receive the payment in clause (ii) (the Severance Payment).

 

(h)                                 Notice and Date of Termination.

 

(i)                                     Any termination of employment by the Company or by Executive (for any reason other than death) must be communicated by written notice of termination (the “Notice of Termination”) to the other party hereto in accordance with Section 18(b). In the case of a termination by the Company for Cause or a termination by the Executive for Good Reason, the Notice of Termination must set forth in reasonable detail the facts and circumstances claimed to give rise to such termination for “Cause” or “Good Reason,” as the case may be, within the meaning of Section 9(a) or 9(d), and the Notice of Termination must be provided, if at all, within 90 days following the date the party giving such Notice of Termination first has knowledge of the occurrence of the condition giving rise to such termination. Executive may only exercise his rights to terminate for Good Reason thereafter if the Company does not cure the condition giving rise to such termination within 30 days following the receipt of the written Notice of Termination.

 

(ii)                                  “Date of Termination” means (A) if employment is terminated for Disability, 30 days after Notice of Termination is given (provided that Executive has not returned to the full-time performance of his duties during such 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 any applicable notice and/or “cure” provisions of clause (i), the date specified in the Notice of Termination (which, except in the case of a termination of employment by the Company for Cause, must not be less than 30 days after the date such Notice of Termination is given).

 

(i)                                     Release of Claims; Other Payment Conditions. Any provision of this Agreement to the contrary notwithstanding, as conditions to the Company being obligated to make the payments or provide the benefits (beyond the Accrued Benefits) under this Section 8, (i) within 45 days after the Date of Termination, the Company must receive from Executive an executed valid general release of claims substantially in the form attached hereto as Exhibit A (the “General Release”), with such changes as are acceptable to the Company, it being the intent of the parties that the release be a full

 

7

 

and complete release and waiver of, and covenant not to assert, all rights of Executive that is fully enforceable against Executive under all applicable law in effect from time to time, and such General Release has not been and may no longer be revoked, and (ii) on or before the Date of Termination, the Executive must (A) turn over all copies of Confidential Information (as defined in Section 13) in his control to the Company, and (B) resign from the Board of the Company and the board of directors or comparable body of every subsidiary or other Affiliate of the Company, and every committee thereof.

 

(j)                                    Health Insurance Benefits.  If this Agreement expires by its terms, or if Executive’s employment under this Agreement is terminated by the Company without Cause or by Executive for Good Reason, then after the expiration of Subsidized COBRA Coverage and until Executive’s 65th birthday, the Company will provide health insurance benefits to Executive if (i) Executive pays the entire cost for such health insurance on an after-tax basis; (ii) the Company determines that providing such health insurance benefits for Executive during such period would not result in any fines, penalties or other adverse consequences for the Company, its insurance programs, or other employees; (iii) providing such health insurance benefits for Executive is not prohibited under any of the Company’s plans or programs; and (iv) Executive is not eligible to receive health insurance benefits from another employer.

 

9.                                      Definitions.

 

(a)                                 “Cause” for the purpose of this Agreement means (i) the Executive’s willful and continued failure to substantially perform his duties after written demand by the Board (other than such failure resulting from the Executive’s Disability or termination for Good Reason), (ii) the Executive’s conviction of (or plea of nolo contendere to) a felony involving theft, embezzlement, dishonesty, fraud or moral turpitude 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; or (iii) the Executive’s material breach of this Agreement.  For purposes of this definition, no act or omission by the Executive will be “willful” unless it is made by the Executive in bad faith or without a reasonable belief that such act or omission was in the best interests of the Company.  For the avoidance of doubt, an act or omission will not be considered as willful where the Executive has acted in a manner consistent with a resolution of the Board (or a committee thereof).  Cause will not exist unless and until determined by at least a majority of the Board at a meeting of the Board called and held for such purpose (after at least 5 days’ advance written notice to the Executive and an opportunity for the Executive and his counsel to be heard before the Board).

 

(b)                                 “Change in Control” will have the meaning set forth in the Company’s Amended and Restated Long-Term Incentive Plan (which is attached as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 11, 2013).  Notwithstanding the foregoing, to the extent that the term “Change in Control” is being used to trigger the timing of a distribution of deferred compensation subject to the provisions of Code Section 409A (as opposed to triggering the vesting of benefits or the amount of severance benefits payable), no Change in Control will be deemed to have occurred for purpose of triggering the distribution of such deferred compensation if it is not a “change in control event” within the meaning of Code Section 409A and the applicable treasury regulations thereunder.

 

8

 

(c)                                  “Disability” means the Executive’s inability, as a result of physical or mental incapacity, to perform the duties of his position for a period of 6 consecutive months or for an aggregate of 6 months in any 12 consecutive month period.  Any question as to whether Disability exists as to which the Executive and the Company cannot agree will be determined in writing by a qualified independent physician mutually acceptable to the Executive and the Company.  If the Executive and the Company cannot agree as to a qualified independent physician, each will appoint such a physician and those two physicians will select a third who will make such determination in writing.  The determination of Disability made in writing to the Company and the Executive will be final and conclusive for all purposes of this Agreement.

 

(d)                                 “Good Reason” means (i) any diminution in Executive’s title, position, authority, duties or responsibilities; re-assignment of Executive’s direct reporting relationship to anyone other than the Board; 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 (including, but not limited to, the hiring and termination of direct reports and other senior employees); (ii) failure to elect Executive or re-elect Executive as a member of the Board so long as the Company or any successor entity remains a publicly traded company; (iii) a material reduction in the Executive’s annual base salary or target annual bonus opportunity unless such a reduction is part of a program that affects all executives on a consistent basis; (iv) a relocation of the Executive’s principal workplace by a distance that exceeds 50 miles, (v) any failure by any successor entity in a Change in Control to assume the obligations of the Company under this Agreement (by operation of law or otherwise); or (vi) any other material breach of this Agreement by the Company.

 

10.                               Section 280G.

 

(a)                                 If any payment or benefit received or to be received by Executive in connection with or contingent on a change in ownership or control of the Company, within the meaning of 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, and whether or not pursuant to this Agreement (such payments or benefits being 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”), then Executive will be entitled to receive either (i) the full amount of the Total Payments, or (ii) a portion of the Total Payments having a value equal to one dollar less than three (3) times Executive’s “base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of clauses (i) and (ii), after taking into account applicable federal, state, and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest portion of the Total Payments. For purposes of determining the after-tax amounts in (i) and (ii) above, Executive will be deemed to pay federal, state and local income tax at the highest marginal rates, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If there is a reduction of the Total Payments pursuant to the foregoing, then, unless the parties agree otherwise, such reduction will occur in the following order: (A) any cash severance payable by reference to Executive’s Base Salary or Bonus; (B) any other cash amount payable to Executive; (C) any benefit valued as a “parachute payment;” and (D) acceleration of vesting of any equity awards.

 

9

 

(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 will 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 will 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 will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

 

(c)                                  All determinations under this Section 10 must be made by a nationally recognized accounting firm, which must not be the auditor of the acquiror in the transaction constituting a change in ownership or control of the Company (within the meaning of Section 280G of the Code), selected by the Company (the “Auditor”), and the Company will pay all costs and expenses of the Auditor. The Company will 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, substantially in the form of the Indemnification Agreement which is attached as Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2013, whichever affords or afforded greatest protection to Executive, and Executive will 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 will 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 will 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.

 

12.                               Non-Competition; Non-Solicitation. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates and accordingly agrees to the following provisions of this Section 12:

 

10

 

(a)                                 During the Employment Term: (i) Executive will not directly or indirectly engage in any business that is in competition with any line of business then conducted by the Company or its Affiliates (including by performing or soliciting the performance of services for any Person that 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 passive investor of less than 2% of the outstanding equity of any entity), consultant, advisor, agent, sales representative or other participant; (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 12, 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 or was an independent contractor of the Company or any of its Affiliates, unless such Person has ceased to be employed by or contracted 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 reduce or terminate its relationship with the Company; provided, however, that upon Executive’s written request, the Board, at its sole option and election, may waive the restrictions set forth in this Section 12(a).

 

(b)                                 For a period of 18 months following the Date of Termination: (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, proprietor, employee, partner, investor (other than as a holder of less than 2% of the outstanding equity of any public entity), 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; (ii) Executive will not directly or indirectly induce any employee or independent contractor of the Company or any of its Affiliates to engage in any activity in which Executive is prohibited to engage by this Section 12, or to terminate his or her employment with the Company or any of its subsidiaries; provided, that, any general solicitations of employment made directly or indirectly by Executive which are not specifically directed at employees or independent contractors of the Company will not be, nor will it be deemed to be, a violation of this Section 12; and (iii) Executive will not directly or indirectly induce customers or suppliers of the Company or its Affiliates to reduce or terminate its relationship with the Company; provided, however, that upon Executive’s written request, the Board, at its sole option and election, may waive the restrictions set forth in this Section 12(b).

 

(c)                                  For purposes of this Agreement, “directional advertising or marketing” means 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 will be distinguished from “creative advertising or marketing,” which is primarily (I) 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 (II) generally delivered by intrusive means.

 

11

 

(d)                                 The term “Person” will be interpreted broadly to include any corporation, company, “group” (within the meaning of Section 13(d)(3) of the Exchange Act), partnership, limited liability company, other entity or individual.

 

(e)                                  The term “Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such Person.  For purposes of this definition, the term “control” (including the correlative terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

(f)                                   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 will not be rendered void but will 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 will not affect the enforceability of any of the other restrictions contained in this Agreement.

 

13.                               Confidential Information; Non-disparagement.  The Company agrees to provide and Executive recognizes that his employment with the Company will involve access to information of substantial value to the Company that is current and not generally known in the business and that gives the Company an advantage over its competitors who do not know or use it, including but not limited to, techniques, designs, drawings, processes, inventions, developments, equipment, prototypes, sales and customer information, and business and financial information relating to the business, products, services, practices, and techniques of the Company, (the “Confidential Information”).  Executive will at all times regard and preserve as confidential such Confidential Information obtained by Executive from whatever source and will not, either during his employment with the Company or thereafter, publish or disclose any part of such Confidential Information in any manner at any time, nor use the Confidential Information except on behalf of the Company, without the prior written consent of the Company.  Notwithstanding the foregoing, “Confidential Information” will not apply to information that (a) was known to the public prior to its disclosure to Executive; (b) becomes generally known to the public subsequent to disclosure to Executive through no wrongful act of Executive or any of Executive’s representatives; or (c) Executive is required to disclose by applicable law, regulation, or legal process (provided that Executive will provide the Company with prior notice of the contemplated disclosure and reasonably cooperate with the Company at its expense in seeking a protective order or other appropriate protection of such information).  Executive also agrees to turn over all copies of Confidential Information in his control to the Company upon request or upon termination of his employment with the Company.  Executive agrees that, while he is employed by the Company and thereafter, he will not, or encourage or induce others to, disparage the Company or any of its past and present officers, directors, employees, stockholders, products, or services. As a condition of this Agreement, Executive will sign and return a copy of any and all of the Company’s standard agreements, forms and other documents typically completed and signed by newly hired employees.

 

12

 

14.                               Material Inducement; Specific Performance; Other Remedies. Executive acknowledges and agrees that the covenants entered into by Executive in Sections 12 and Section 13 are essential elements of the parties’ agreement as expressed in this Agreement, are a material inducement for the Company to enter into this Agreement. The parties acknowledge and agree that the other party’s remedies at law for a breach or threatened breach of any of the provisions of Section 12 or Section 13 would be inadequate and, in recognition of this fact, the parties agree that, in the event of such a breach or threatened breach, in addition to any remedies at law, the other party, without posting any bond or showing irreparable harm, will 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. In the event of a violation by Executive of Section 12 or Section 13 (as determined by the Board in its good faith discretion), any severance being paid to Executive pursuant to this Agreement or otherwise will immediately cease. If it is determined that Executive has not violated Section 12 and Section 13, any ceased payments will be immediately paid to Executive, plus interest equal to LIBOR plus 2% per annum.  Executive understands that the provisions of Section 12 and Section 13 may limit his ability to earn a livelihood in a business similar to the business of the Company, but nevertheless agrees and hereby acknowledges that the consideration referenced in this Agreement is sufficient to justify the restrictions contained in such provisions.  In consideration thereof and in light of Executive’s education, skills and abilities, Executive agrees that he will not assert in any forum of any nature or description that, and it should not be considered that, such provisions prevent him from earning a living or otherwise are void or held unenforceable.

 

15.                               Legal Fees. Upon presentation of appropriate documentation, the Company will pay or reimburse Executive for Executive’s reasonable counsel fees incurred (a) in connection with the negotiation and documentation of this Agreement, up to a maximum of $25,000, and (b) in connection with any proceeding instituted by Executive to enforce the Company’s obligations under this Agreement; provided that in the case of clause (b), such Company obligation will not apply if Executive’s claim is found to be frivolous or is brought or pursued by Executive in bad faith. This Section 15 is not intended to, nor will it be deemed to, limit Executive’s right to legal fees in connection with Section 11 of this Agreement or as otherwise provided under applicable law.

 

16.                               Section 409A Savings Clause.

 

(a)                                 Parties’ Intent. The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement will be interpreted to be in compliance therewith. To the extent any of the payments or benefits required under this Agreement are, or in the opinion of counsel to the Company or Executive, could be interpreted in the future to create, a nonqualified deferred compensation plan that does not meet the requirements of Code Section 409A(a)(2), (3) and (4), the Company and Executive hereby agree to execute any and all amendments to this Agreement or otherwise reform this Agreement as deemed necessary by either of such counsel and reasonably acceptable to the other, and prepared by counsel to the Company, to either cause such payments or benefits not to be a nonqualified deferred compensation plan or to meet the requirement of Code Section 409A. In amending or reforming this Agreement for Code Section 409A purposes, the parties maintain, to the maximum extent practicable, the original intent and economic benefit of this Agreement without subjecting Executive to additional tax or interest; provided further, however, the

 

13

 

Company will not be obligated to pay any additional material amount to Executive as a result of such amendment.

 

(b)                                 Delayed Distribution to Key Employees. If the Company determines in accordance with Code Sections 409A and 416(i), that Executive is a “Specified Employee” (within the meaning of Code Section 409A) of the Company on the date his employment with the Company terminates and, the parties agree that a delay in severance pay and benefits provided under this Agreement is necessary for compliance with Code Section 409A(a)(2)(B)(i), then any severance payments and any continuation of benefits or reimbursement of benefit costs provided under this Agreement, and not otherwise exempt from Code Section 409A (for example, pursuant to the “short-term deferral” or “separation pay” exemptions”), will be delayed until the earlier of (i) the first day of the seventh (7th) calendar month commencing after Executive’s termination of employment, or (ii) Executive’s death, consistent with and to the extent necessary to meet the requirements of Code Section 409A (the “409A Delay Period”). In such event, any such severance payments and the cost of any such continuation of benefits provided under this Agreement that would otherwise be due and payable to Executive during the 409A Delay Period will be paid to Executive in a lump sum cash amount at the end of the 409A Delay Period.

 

(c)                                  Separation from Service. A termination of employment will not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits following or upon a termination of employment (to the extent such payments or benefits are subject to Code Section 409A) unless such termination also constitutes a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” “separation from service” or like terms mean Separation from Service.

 

(d)                                 Separate Payments. Each payment required under this Agreement will be considered a separate payment for purposes of determining the applicability of or exemption from Section 409A. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period will be within the sole discretion of the Company.

 

(e)                                  Reimbursements. To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (i) all expenses or other reimbursements hereunder will be made no later than the time frame set forth in this Agreement, but in any event, on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (ii) any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit, and (iii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year will in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

 

(f)                                   Offsets. Notwithstanding any other provision of this Agreement to the contrary, in no event must any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

 

14

 

17.                               Clawback of Incentive-Based Compensation. Notwithstanding any other provision in this Agreement to the contrary, any “incentive-based compensation” within the meaning of Section 10D of the Exchange Act will be subject to claw-back by the Company in the manner required by Section 10D(b)(2) of the Exchange Act, as determined by the applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.

 

18.                               Miscellaneous.

 

(a)                                 This Agreement will be binding upon and inure to the benefit of Executive and Executive’s heirs, executors, personal representatives, assigns, administrators, and legal representatives.  Because of the unique and personal nature of Executive’s duties under this Agreement, neither this Agreement nor any obligations under this Agreement may be delegated by Executive.  This Agreement will be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives.

 

(b)                                 All notices or demands of any kind required or permitted to be given by the Company or Executive under this Agreement must be given in writing and must be personally delivered (and receipted for) or mailed by certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Company:

 

Dex Media, Inc.

P.O. Box 619810

2200 West Airfield Drive

DFW Airport, Texas 75261-9810

Attn:  Chairman of the Board of Directors

 

With a copy to:

 

Dex Media, Inc.

P.O. Box 619810

2200 West Airfield Drive

DFW Airport, Texas 75261-9810

Attn:  General Counsel

 

If to Executive:

 

200 North Ocean Blvd

Delray Beach, Florida 33483

 

Any such written notice will be deemed received when personally delivered or three days after its deposit in the United States mail as specified above.  Either party may change its address for notices by giving notice to the other party in the manner specified in this Section 18(b).

 

(c)                                  This Agreement will be construed and interpreted in accordance with the substantive laws of the State of Texas without regard to conflict-of-law principles or any other principle that could result in the application of the laws of any other jurisdiction.

 

15

 

(d)                                 This Agreement contains the complete, final, and exclusive agreement of the parties relating to the subject matter of this Agreement, and supersedes all prior written, and prior and contemporaneous oral, agreements or arrangements between the parties.

 

(e)                                  This Agreement cannot be amended or modified except by a written agreement signed by Executive and the Company.

 

(f)                                   No term, covenant, or condition of this Agreement or any breach thereof will be deemed waived, except with the written consent of the party against whom the wavier in claimed, and any waiver or any such term, covenant, condition, or breach will not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition, or breach.

 

(g)                                  The finding by a court of competent jurisdiction of the unenforceablity, invalidity, or illegality of any provision of this Agreement will not render any other provision of this Agreement unenforceable, invalid, or illegal.  It is the express intent of the parties to modify and replace any invalid or unenforceable term or provision with a valid and enforceable term or provision that most accurately represents the parties’ intention with respect to the invalid or unenforceable term or provision.

 

(h)                                 Executive represents and warrants that he is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that his execution and performance of this Agreement will not violate or breach any other agreements between Executive and any other Person or entity or impose any restriction on the ability of Executive to perform his obligations and duties under this Agreement or carry out the business of the Company.

 

(i)                                     The section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and will not in any way affect the meaning or interpretation of this Agreement.  References in this Agreement to Sections and Exhibits are to the Sections and Exhibits of this Agreement unless the context requires otherwise.  The word “include” and its derivatives means to include without limitation.

 

(j)                                    This Agreement may be executed in any number of counterparts, each of which will be deemed an original, all of which together will constitute one and the same instrument.

 

16

 

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

 

 

	
Dated:   December 19, 2013
    	
THE   COMPANY:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Raymond R. Ferrell
    
	
 
    	
Name:
    	
Raymond   R. Ferrell
    
	
 
    	
Its:
    	
Acting   General Counsel & Corporate Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
Dated:   December 19, 2013
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Peter J. McDonald
    
	
 
    	
Peter   J. McDonald
    

 

[Signature page to Employment Agreement]

 

 

EXHIBIT A

 

General Release Agreement

 

THIS GENERAL RELEASE AGREEMENT (this “Release”) is made as of the          day of                                                   , by and between Peter J. McDonald (the “Executive”) and Dex Media, Inc., a Delaware corporation (the “Company”).

 

WHEREAS, the Executive’s employment as an executive of the Company has terminated; and

 

WHEREAS, pursuant to Section 8(i) of the Employment Agreement by and between the Company and the Executive dated December ·, 2013 (the “Employment Agreement”), the Company has agreed to pay the Executive certain amounts, subject to the execution of this Release.

 

NOW THEREFORE, in consideration of these premises and the mutual promises contained herein, and intending to be legally bound hereby, the parties agree as follows:

 

1.                      Consideration

 

The Executive acknowledges that: (i) the payments set forth in Section 8 of the Employment Agreement constitute full settlement of all his rights under the Employment Agreement, (ii) he has no entitlement under any other severance or similar arrangement maintained by the Company, and (iii) except as otherwise provided specifically in this Release, the Company does not and will not have any other liability or obligation to the Executive. The Executive further acknowledges that, in the absence of his execution of this Release, the benefits and payments specified in Section 8 of the Employment Agreement would not otherwise be due to him.

 

2.                      Release and Covenant Not to Sue

 

(a)                 The Executive, his heirs and representatives release, waive and forever discharge the Company, its predecessors and successors, assigns, stockholders, subsidiaries, parents, affiliates, officers, directors, trustees, current and former employees, agents and attorneys, past and present and in their respective capacities as such (the Company and each such person or entity is each referred to as a “Released Person”) from all pending or potential claims, counts, causes of action and demands of any kind whatsoever or nature for money or anything else, whether such claims are known or unknown, that arose prior to the Executive’s signing this Release and that relate in any way to the Executive’s employment or termination of employment with the Company. This release includes, but is not limited to, any and all claims of race discrimination, sexual discrimination, national origin discrimination, religious discrimination, disability discrimination, age discrimination and unlawful retaliation and any and all claims under the following: Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq.; Civil Rights Act of 1866,42 U.S.C. § 1981 et seq.; the Family and Medical Leave Act, as amended, 29 U.S.C. § 2601, et seq.; the Americans with Disabilities Act, as amended, 42 U.S.C. § 12101, et seq.; the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, 29 U.S.C. § 621, et seq.; Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq.; Rehabilitation Act of 1973, 29 U.S.C. § 706, et seq.; any state, municipal and other local anti-discrimination statutes; any and all claims for alleged breach of an express or implied contract; any and all tort claims including, but not 

 

[Signature page to Employment Agreement]

 

 

limited to, alleged retaliation for assertion of workers’ compensation rights; any and all claims under workers’ compensation law; and any and all claims for attorney’s fees or costs.

 

(b)                 The Executive expressly represents that he has not filed a lawsuit or initiated any other administrative proceeding against a Released Person and that he has not assigned any claim against a Released Person. The Executive further promises not to initiate a lawsuit or to bring any other claim against any Released Person arising out of or in any way related to the Executive’s employment by the Company or the termination of that employment. This Release will not prevent the Executive from filing a charge with the Equal Employment Opportunity Commission (or similar state agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state agency); provided, however, that any claims by the Executive for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred. In addition, this release shall not affect the Executive’s rights under the Older Workers Benefit Protection Act to have a judicial determination of the validity of this release and waiver.

 

(c)                  The foregoing will not be deemed to release the Company from (a) claims solely to enforce this Release, (b) claims solely to enforce Section 8 of the Employment Agreement, (c) claims for indemnification under the Company’s By-Laws and/or any applicable indemnification agreements, and/or (d) claims to continue health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended or similar state law. The foregoing will not be deemed to release any person or entity from claims arising after the date of this Release, whether under this Release, under the Employment Agreement or otherwise.

 

3.                      Restrictive Covenants

 

The Executive acknowledges that the confidentiality and restrictive covenant provisions contained in Sections 12, 13 and 14 of the Employment Agreement (the “Restrictive Covenants”) will survive the termination of Executive’s employment for the period of time specified in such provisions. The Executive affirms that the Restrictive Covenants are reasonable and necessary to protect the legitimate interests of the Company, that he received adequate consideration in exchange for agreeing to those restrictions and that he will abide by those restrictions.

 

4.                      Return of Company Property

 

The Executive represents and warrants that he has returned all property belonging to the Company, including, but not limited to, all keys, access cards, office equipment, computers, cellular telephones, notebooks, documents, records, files, written materials, electronic information, credit cards bearing the Company’s name, and other Company property (originals or copies in whatever form) in the Executive’s possession or under the Executive’s control.

 

5.                      Cooperation

 

The Executive further agrees that, subject to reimbursement of his reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including litigation, investigations, or governmental proceedings) in which the Executive was in any way involved during his employment with the Company; provided that such cooperation shall not unreasonably interfere with Executive’s employment with another employer after termination of his employment with the Company. The Executive shall render such cooperation in a timely manner on reasonable notice from the Company.

 

19

 

6.                      Rescission Right

 

The Executive expressly acknowledges and recites that (a) he has read and understands the terms of this Release in its entirety, (b) he has entered into this Release knowingly and voluntarily, without any duress or coercion; (c) he has been advised orally and is hereby advised in writing to consult with an attorney with respect to this Release before signing it; (d) he was provided twenty-one (21) calendar days after receipt of the Release to consider its terms before signing it; and (e) he is provided seven (7) calendar days from the date of signing to terminate and revoke this Release, in which case this Release shall be unenforceable, null and void. The Executive may revoke this Release during those seven (7) days by providing written notice of revocation to the Company at the address specified in Section 18(b) of the Employment Agreement.

 

7.                      Miscellaneous

 

(d)                 No Admission of Liability.  This Release is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company to the Executive. There have been no such violations, and the Company specifically denies any such violations.

 

(e)                  No Reinstatement.  The Executive agrees that he will not without the consent of the Company apply for reinstatement with the Company or seek in any way to be reinstated, re-employed or hired by the Company in the future.

 

(f)                   Successors and Assigns.  This Release shall inure to the benefit of and be binding upon the Company and the Executive and their respective successors, permitted assigns, executors, administrators and heirs. The Executive may not make any assignment of this Release or any interest herein, by operation of law or otherwise. The Company may assign this Release to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise.

 

(g)                  Severability.  Whenever possible, each provision of this Release will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Release is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Release will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.

 

(h)                 Entire Agreement; Amendments.  Except as otherwise provided herein, this Release contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. This Release may not be changed or modified, except by an agreement in writing signed by each of the parties hereto.

 

(i)                     Governing Law.  This Release shall be governed by, and enforced in accordance with, the laws of the State of Texas, without regard to the application of the principles of conflicts of laws.

 

20

 

(j)                    Counterparts and Facsimiles.  This Release may be executed, including execution by facsimile signature, in multiple counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument.

 

IN WITNESS WHEREOF, the Company has caused this Release to be executed by its duly authorized officer, and the Executive has executed this Release, in each case as of the date first above written.

 

 

	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Peter   J. McDonald
    
	
 
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
Date:
    	
 
    

 

21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00224-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00224-of-00352.parquet"}]]