Document:

exv10w10w1

 

 Exhibit 10.10.1

     FIRST AMENDMENT dated as of March 5, 2007 (this “Amendment”) to the Credit Agreement
dated as of November 17, 2006 (as amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among IDEARC INC. (the “Borrower”), the lenders from time
to time party thereto (the “Lenders”) and JPMORGAN CHASE BANK, N.A., as collateral agent
and administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

     WHEREAS, the Borrower, the Administrative Agent and each of the Lenders have agreed, on the
terms and subject to the conditions set forth herein, to amend the Credit Agreement in the manner
set forth herein.

     NOW, THEREFORE, in consideration of the above premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

     SECTION 1. Defined Terms. Each capitalized term used and not defined herein shall have
the meaning assigned to it in the Credit Agreement (as amended hereby).

     SECTION 2. Amendment to the Credit Agreement. Effective as of the First Amendment
Effective Date (as defined below), Section 5.13 of the Credit Agreement is hereby amended by
replacing the number “120” with the number “210”.

     SECTION 3. Representations and Warranties. The Borrower hereby represents and warrants
to the Administrative Agent and the Lenders that as of the First Amendment Effective Date and after
giving effect hereto:

     (a) This Amendment has been duly authorized, executed and delivered by the Borrower, and each
of this Amendment and the Credit Agreement (as amended hereby) constitutes a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

     (b) No Default or Event of Default has occurred and is continuing.

     (c) All representations and warranties of each Loan Party contained in the Loan Documents (as
amended hereby) are true and correct in all material respects on and as of the First Amendment
Effective Date (except with respect to representations and warranties expressly made only as of an
earlier date, in which case such representations and warranties were true and correct in all
material respects as of such earlier date).

     SECTION 4. Effectiveness. The amendment contemplated by Section 2 shall become
effective as of the first date (the “First Amendment Effective Date”) on which:

     (a) The Administrative Agent shall have received counterparts of this Amendment that, when
taken together, bear the signatures of the Borrower and the Required Lenders.

 

 

     (b) The Administrative Agent shall have received payment of all reasonable fees and
out-of-pocket expenses, to the extent invoiced, to be paid or reimbursed to it by the Borrower
pursuant to the Credit Agreement, including those referred to in Section 6 hereof.

     The Administrative Agent shall notify the Borrower and the Lenders of the First Amendment Effective
Date and such notice shall be conclusive and binding.

     SECTION 5. Effect of Amendment. (a) This Amendment shall apply and be effective only
with respect to the provisions of the Credit Agreement specifically referred to herein. This
Amendment shall constitute a Loan Document.

     (b) On and after the First Amendment Effective Date, each reference in the Credit Agreement to
“this Agreement”, “hereunder”, “hereof”, “herein” or words of like import, and each reference to
the Credit Agreement in any other Loan Document shall be deemed a reference to the Credit Agreement
(as amended hereby).

     SECTION 6. Expenses. The Borrower agrees to reimburse the Administrative Agent for its
reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees,
charges and disbursements of outside counsel for the Administrative Agent.

     SECTION 7. Governing Law; Counterparts. (a) This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

     (b) This Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, and all such counterparts together shall constitute one and the
same instrument. Delivery of any executed counterpart of a signature page to this Amendment by
facsimile transmission or other electronic imaging means shall be as effective as delivery of a
manually executed counterpart hereof.

     SECTION 8. Headings. The headings of this Amendment are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof.

 

 

     IN WITNESS WHEREOF, the parties hereto have cause this First Amendment to be duly executed and
delivered by their duly authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	IDEARC INC.

 	 
	 	By:  	/s/ Andrew Coticchio
 	 
	 	 	Name:  	Andrew Coticchio 	 
	 	 	Title:  	Chief Financial Officer and Treasurer 	 
	 
	 	JPMORGAN CHASE BANK, N.A.,

As Administrative Agent and a Lender,

 	 
	 	By:  	/s/ Sharon Bazbaz
 	 
	 	 	Name:  	Sharon Bazbaz 	 
	 	 	Title:  	Vice Presidentexv10w20

 

Exhibit 10.20

IDEARC INC. LONG-TERM INCENTIVE PLAN

PERFORMANCE UNIT AGREEMENT

2007-2009 AWARD CYCLE

AGREEMENT between Idearc Inc. (“Idearc” or the “Company”) and you (the “Participant”) and your
heirs and beneficiaries.

1. Purpose of Agreement. The purpose of this Agreement is to provide a grant of performance units
(“Performance Units”) to the Participant.

2. Agreement. This Agreement is entered into pursuant to the terms of the 2006 Idearc Inc.
Long-Term Incentive Plan (the “Plan”), and evidences the grant of an award in the form of
Performance Units pursuant to the Plan. This Agreement is intended to comply with the requirements
of Section 162(m) of the Internal Revenue Code and the Treasury Department Regulations thereunder.
The Performance Units and this Agreement (including the covenants set forth in Exhibit A (the
“Covenants”), which are incorporated into and shall be a part of the Agreement) are subject to the
terms and provisions of the Plan. By executing this Agreement, the Participant agrees to be bound
by the terms and provisions of the Plan, this Agreement and by the actions of the Human Resources
Committee of Idearc’s Board of Directors or any successor thereto (the “Committee”), and any
designee of the Committee. To the extent that there is a conflict between the terms of the Plan
and the terms of this Agreement, the terms of this Agreement shall control.

3. Contingency. The grant of Performance Units is contingent on the Participant’s timely
acceptance of this Agreement and satisfaction of the other conditions contained herein. If the
Participant does not properly accept (or revokes acceptance of) this Agreement the Participant
shall not be entitled to the Performance Units regardless of the extent to which the vesting
requirements in paragraph 5 (“Vesting”) are satisfied.

4. Number of Units. The Participant is granted the number of Performance Units as specified on
Exhibit 1 attached hereto. A Performance Unit is a hypothetical share of Idearc’s common stock.
The value of a Performance Unit on any given date shall be equal to the closing price of Idearc’s
common stock on the New York Stock Exchange as of such date. A Performance Unit does not represent
an equity interest in Idearc and carries no voting rights. A Dividend Equivalent Unit (“DEU”) or
fraction thereof (rounded to three decimal places) shall be added to each Performance Unit each
time that a dividend is paid on Idearc’s common stock. The amount of each DEU shall be equal to
the dividend paid on a share of Idearc’s common stock. The DEU shall be converted into Performance
Units or fractions thereof (rounded to three decimal places) based upon the closing price of
Idearc’ s common stock traded on the New York Stock Exchange on the dividend payment date of each
declared dividend on Idearc’s common stock, and such Performance Units or fractions thereof shall
be added to the Participant’s Performance Unit balance. To the extent that the Plan Administrator
or the Company makes an administrative error with respect to the number or value of the Performance
Units granted to the Participant under this Agreement, the Company specifically reserves the right
to correct such error and the Participant agrees that he or she shall be legally bound by any
corrective action taken by the Company or the Plan Administrator.

 

 

5. Vesting.

(a) General. The Participant shall vest in the Performance Units to the extent provided in
paragraph 5(b) (“Performance Requirement”) only if the Participant satisfies the requirements of
paragraph 5(c) (“Three- Year Continuous Employment Requirement”), except as otherwise provided
in paragraph 7 (“Early Cancellation/Accelerated Vesting of Performance Units”).

(b) Performance Requirement.

(1) General The Performance Units shall vest based on the compound average growth rate of
the total shareholder return (“TSR”) of Idearc’s common stock for the three-year period
beginning January 1, 2007, and ending at the close of business on December 31, 2009 (the
“Award Cycle”), relative to the combined weighted compound average growth rate of the TSR of
the companies in the Standard & Poor’s Midcap 400 Index (“S&P Midcap 400”) and the TSR of
R.H. Donnelley Corp. (“RHD”) during the same three-year period. No Performance Units shall
vest unless the Committee determines that certain threshold performance requirements have
been satisfied. The formula for determining the total number of Performance Units that may
vest and become payable (the “Payout Formula”) will equal the number of units that you are
granted as described in paragraph 4 and Exhibit 1 (plus any additional Performance Units
added with respect to DEUs credited over the Award Cycle) times the LTI Vested Percentage
(as defined below). For example, if (a) you are granted 1,000 Performance Units, and (b)
those Performance Units are credited with an additional 150 Performance Units as a result of
DEUs added over the Award Cycle, and (c) the LTI Percentage Payout is 90%, you will
generally vest in (1,000 Performance Units + 150 Performance Units from DEUs) times 90%, or
1,035 Performance Units, which shall be payable in cash as described in paragraph 6.

(2) Definitions. For purposes of the performance requirement and Payout Formula set forth
in paragraph 5(b)(1)-

	 	(i)	 	“Total Weighted TSR” shall be equal to (i) 80% of the compound
average growth rate of the S&P Midcap 400 TSR during the Award Cycle, plus (ii)
20% of the compound average growth rate of the RHD TSR during the Award Cycle.
	 
	 	(ii)	 	“Idearc Total TSR” shall be equal to the compound average
growth rate of Idearc’s TSR during the Award Cycle.
	 
	 	(iii)	 	“Performance Attainment” shall be expressed as a percentage
(rounded to one decimal place)that is equal to the quotient derived by dividing
the Idearc Total TSR by the Total Weighted TSR .
	 
	 	(iv)	 	“LTI Percentage Payout” shall be an amount (between 0 and 150%)
as determined by the Committee for the award cycle as provided in the table
below; provided, that if the Performance Attainment includes a fraction
of a percentage point, the corresponding LTI Percentage Payout set forth in the
table below shall be increased to give effect to such fraction by increasing
such LTI Percentage Payout by a percentage equal to the product of

2

 

	 	a.	 	the Performance
Attainment fraction (e.g., .1, .2, .3, etc.) multiplied by
	 
	 	b.	 	the difference between
such LTI Percentage Payout and the next highest LTI
Percentage Payout set forth in the table below.

For example, if the Performance Attainment is 98.6%, then the LTI Percentage Payout
of 80% set forth in the table below shall be increased to 86% (.6 x [90-80]= 6 + 80=
86). If the Performance Attainment is 101.4%, then the LTI Percentage Payout of
108% set forth in the table below shall be increased to 111.2% (.4 x [116-108] = 3.2
+ 108 = 111.2).:

	 	 	 	 	 	 	 
	Performance	 	LTI Percentage	 	Performance	 	LTI Percentage
	Attainment	 	Payout	 	Attainment	 	Payout
	Below 90%
	 	0%
	 	98%
	 	80%
	90%
	 	25%
	 	99%
	 	90%
	91%
	 	30%
	 	100%
	 	100%
	92%
	 	35%
	 	101%
	 	108%
	93%
	 	40%
	 	102%
	 	116%
	94%
	 	45%
	 	103%
	 	124%
	95%
	 	50%
	 	104%
	 	132%
	96%
	 	60%
	 	105%
	 	140%
	97%
	 	70%
	 	106% and above
	 	150%

	 	(v)	 	“TSR” or “Total Shareholder Return” shall mean the change in the price of a
share of common stock from the beginning of a period (as measured by the closing
price of a share of such stock on the last trading day preceding the beginning of
the period) until the end of such period (the “Measurement Period”)(as measured by
the closing price of a share of such stock on the last trading day of the period),
adjusted to reflect the reinvestment of dividends (if any) through the purchase of
common stock and as may be necessary to take into account stock splits or other
events similar to those described in Section 4.3 of the Plan. Measurement Periods
may vary between and/or during an Award Cycle, and may or may not be coextensive
with the Award Cycle.

(c) Three-Year Continuous Employment Requirement. Except as otherwise determined by the
Committee, or except as otherwise provided in paragraph 7(b), the Performance Units shall vest
only if the Participant is continuously employed by the Company from the date the Performance
Units are granted through the end of the Award Cycle.

(d) Transfer. Transfer of employment from Idearc to a Related Company (as defined in paragraph
13), from a Related Company to Idearc, or from one Related Company to another Related Company
shall not constitute a separation from employment hereunder, and service

3

 

with a Related Company shall be treated as service with the Company for purposes of the
three-year continuous employment requirement in paragraph 5(c).

6. Payment. All payments under this Agreement shall be made in cash. As soon as practicable
after the end of the Award Cycle (but in no event later than March 15, 2010), except as described
in paragraph 7(c), the value of the vested Performance Units (minus any withholding for taxes)
shall be paid to the Participant. The amount of cash that shall be paid (plus withholding for
taxes and any applicable deferral election) shall equal the number of vested Performance Units
times the closing price of Idearc’s common stock on the New York Exchange as of the last trading
day in the Award Cycle. If the Participant dies before any payment due hereunder is made, such
payment shall be made to the Participant’s beneficiary. Once a payment has been made with respect
to a Performance Unit, the Performance Unit shall be canceled.

7. Early Cancellation/Accelerated Vesting of Performance Units. Subject to the provisions of
paragraphs 7(c) and 5, Performance Units may vest or be forfeited before vesting as follows:

(a) Retirement Before July 1, 2007, Voluntary Separation On or Before December 31, 2009 or
Discharge for Cause On or Before December 31, 2009.

(1) If the Participant (i) Retires (as defined in paragraph 7(b)(4)) before July 1, 2007,
(ii) quits on or before December 31, 2009, (iii) is terminated for Cause (as defined below)
on or before December 31, 2009, or (iv) separates from employment on or before December 31,
2009 under circumstances not described in paragraph 7(b), all then-unvested Performance
Units shall be canceled immediately and shall not be payable.

     (a) (2) For purposes of this Agreement, “Cause” means a participant’s (a) conviction
or plea of nolo contendre to a felony; (b) commission of fraud or a material act or omission
involving dishonesty with respect to the Company or a Related Company, as reasonably
determined by the Company; (c) willful failure or refusal to carry out the material
responsibilities of his or her employment, as reasonably determined by the Company; (d)
gross negligence, willful misconduct, or engaging in a pattern of behavior which has had or
is reasonably likely to have a significant adverse effect on the Company or a Related
Company, as reasonably determined by the Company; (e) willfully engaging in any act or
omission that is in material violation of a material policy of the Company, including,
without limitation, policies on business ethics and conduct, and policies on the use of
inside information and insider trading; or (f) a material breach of any of the Covenants set
forth in Exhibit A to this Agreement.

(b) Retirement After June 30, 2007, Involuntary Termination Without Cause On or Before December
31, 2009, Termination Due to Death or Disability On or Before December 31, 2009.

(1) This paragraph 7(b) shall apply if the Participant:

(i) Retires (as defined below) after June 30, 2007, or

4

 

(ii) Separates from employment by reason of an involuntary termination without Cause
(as determined by the Senior Vice President — Human Resources of Idearc), death, or
disability (as defined below) on or before the last day of the Award Cycle.
“Disability” shall mean the total and permanent disability of the Participant as defined
by, or determined under, the Company’s long-term disability benefit plan.

(2) If the Participant separates from employment prior to the end of the Award Cycle under
circumstances described in paragraph 7(b )(1), the Participant’s then-unvested Performance
Units shall be subject to the vesting provisions set forth in paragraph 5(a), except that
the three-year continuous employment requirement set forth in paragraph 5(c) shall not
apply, provided that the Participant has not and does not commit a material breach of any of
the Covenants and provided that the Participant executes a release satisfactory to the
Company waiving any claims he may have against the Company.

(3) Any Performance Units that vest pursuant to paragraph 7(b)(2) shall be payable as soon
as practicable after the end of the Award Cycle (but in no event later than March 15, 2010),
except as described in paragraph 7(c). However, the Committee retains the discretion to
determine whether and the extent to which the Participant is eligible to receive DEUs with
respect to dividends declared after the Participant’s separation from employment pursuant to
paragraph 7 (b)(1), and the Committee’s exercise of this discretion shall be final,
conclusive and binding.

(4) For purposes of this Agreement, “Retire” means voluntary termination of employment by
the Participant after the date on which the sum of the employee’s age and number of years of
service with Idearc or a predecessor company (including Verizon Communications Inc.) is at
least 75, provided the number of years of service is at least 15.

(c) Change in Control. Upon the occurrence of a Change in Control of Idearc (as hereinafter
defined) on or before the last day of the Award Cycle, all then-unvested Performance Units shall
vest and be payable immediately (without prorating of the award) at an LTI Percentage Payout of
100% without regard to the performance requirement in paragraph 5(b) or the three-year
continuous employment requirement in paragraph 5(c). A Change in Control that occurs after the
end of the Award Cycle shall have no effect on whether any Performance Units vest or become
payable. A Participant who receives the immediate award payment provided in this paragraph 7(
c) shall be entitled to receive payment for all DEUs earned before the Change in Control, even
if such DEUs are paid or payable after the Change in Control.

(d) Vesting Schedule. Except and to the extent provided in paragraphs 7 (b) and (c), nothing
in this paragraph 7 shall alter the vesting schedule prescribed by paragraph 5.

(e) For purposes of paragraph 7(c), “Change in Control” means the occurrence of any of the
following:

                    (i) any person, as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), other than (1) the

5

 

Company, (2) any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, (3) any entity owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company, or (4) any person
who becomes a beneficial owner (as defined below) in connection with a transaction described in
clause (1) of subparagraph (iii) below, is or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including
in the securities beneficially owned by such person any securities acquired directly from the
Company or its affiliates) representing 40 percent or more of the combined voting power of the
Company’s then outstanding voting securities;

                    (ii) the following individuals cease for any reason to constitute a majority of the directors
then serving: individuals who on December 31, 2006, constitute the board of directors of the
Company and any new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not limited to a consent
solicitation relating to the election of directors of the Company) whose appointment or election by
the board or nomination for election by the Company’s shareholders was approved or recommended by a
vote of at least two-thirds of the directors then still in office who were directors on December
31, 2006, or whose appointment, election or nomination for election was previously so approved or
recommended;

                    (iii) there is consummated a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other entity, other than (1) a merger or consolidation which
results in the directors of the Company immediately prior to such merger or consolidation
continuing to constitute at least a majority of the board of directors of the Company, the
surviving entity or any parent thereof or (2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly from the Company or
its affiliates) representing 40% or more of the combined voting power of the Company’s then
outstanding securities;

                    (iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of
the Company or there is consummated an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets, other than a sale or disposition by the Company of
all or a majority of the Company’s assets, income or revenue to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by shareholders of the Company in
substantially the same proportions as their ownership of the Company immediately prior to such
sale; or

                    (v) any other transaction or event occurs that is designated by the Company’s board of
directors as a “Change in Control” for purposes of this Agreement or that would be required to be
reported as a “change in control” on Form 8-K under the Exchange Act.

8. Shareholder Rights. The Participant shall have no rights as a shareholder with respect to
shares of common stock to which this grant relates.

6

 

9. Revocation or Amendment of Agreement. Except to the extent required by law or specifically
contemplated under this Agreement (including, but not limited to, corrections of any administrative
errors), the Committee or the Senior Vice President — Human Resources of Idearc may not, without
the written consent of the Participant, (a) revoke this Agreement insofar as it relates to the
Performance Units granted hereunder, or (b) make or change any determination or change any term,
condition or provision affecting the Performance Units if the determination or change would
materially and adversely affect the Performance Units or the Participant’s legitimate rights
thereto. Nothing in the preceding sentence shall preclude the Committee or the Senior Vice
President — Human Resources of Idearc from exercising reasonable administrative discretion with
respect to the Plan or this Agreement, and the exercise of such discretion shall be final,
conclusive and binding.

10. Assignment. The Performance Units shall not be assigned, pledged or transferred except by
will or by the laws of descent and distribution. During the Participant’s lifetime, the
Performance Units may be deferred only by the Participant or by the Participant’s guardian or legal
representative in accordance with the deferral regulations, if any, established by the Company.

11. Beneficiary. The Participant shall designate a beneficiary in writing and in such manner as
is acceptable to the Senior Vice President — Human Resources of Idearc. If the Participant fails
to designate a beneficiary, or if no such designated beneficiary survives the Participant, the
Participant’s beneficiary shall be the Participant’s estate.

12. Other Plans and Agreements. Any payment received by the Participant pursuant to this
Agreement shall not be taken into account as compensation in the determination of the Participant’s
benefits under any pension, savings, group insurance, severance or other benefit plan maintained by
Idearc or a Related Company. The Participant acknowledges that receipt of this Agreement shall not
entitle the Participant to any other benefits under the Plan or any other plans maintained by the
Company or Related Company.

13. Related Company. For purposes of this Agreement, “Related Company” means (a) any corporation,
partnership, joint venture, or other entity in which Idearc Inc. holds a direct or indirect
ownership or proprietary interest of 50 percent or more, or (b) any corporation, partnership, joint
venture, or other entity in which Idearc Inc. holds an ownership or other proprietary interest of
less than 50 percent but which, in the discretion of the Committee, is treated as a Related Company
for purposes of this Agreement.

14. Employment Status. The grant of the Performance Units shall not be deemed to constitute a
contract of employment for a particular term between the Company or a Related Company and the
Participant, nor shall it constitute a right to remain in the employ of any such Company or Related
Company.

15. Withholding. The Participant shall be responsible for any taxes that arise in connection with
this grant of Performance Units, and the Company shall make such arrangements as it deems necessary
for withholding of any taxes it determines are required to be withheld pursuant to any applicable
law or regulation.

7

 

16. Committee Authority. The Committee shall have complete discretion in the exercise of its
rights, powers, and duties under this Agreement. Any interpretation or construction of any
provision of, and the determination of any question arising under, this Agreement shall be made by
the Committee in its discretion and such exercise shall be final, conclusive, and binding. The
Committee may designate any individual or individuals to perform any of its functions hereunder.

17. Successors. This Agreement shall be binding upon, and inure to the benefit of, any successor
or successors of the Company and the person or entity to whom the Performance Units may have been
transferred by will, the laws of descent and distribution, or beneficiary designation. All terms
and conditions of this Agreement imposed upon the Participant shall, unless the context clearly
indicates otherwise, be deemed, in the event of the Participant’s death, to refer to and be binding
upon the Participant’s heirs and beneficiaries.

18. Construction. This Agreement is intended to grant the Performance Units upon the terms and
conditions authorized by the Plan. Any provisions of this Agreement that cannot be so
administered, interpreted, or construed shall be disregarded. In the event that any provision of
this Agreement is held invalid or unenforceable, such provision shall be considered separate and
apart from the remainder of this Agreement, which shall remain in full force and effect. In the
event that any provision, including any Covenant, is held to be unenforceable for being unduly
broad as written, such provision shall be deemed amended to narrow its application to the extent
necessary to make the provision enforceable according to applicable law and shall be enforced as
amended.

19. Defined Terms. Except where the context clearly indicates otherwise, all capitalized terms
used herein shall have the definitions ascribed to them by the Plan, and the terms of the Plan
shall apply where appropriate.

20. Execution of Agreement. The Participant shall indicate consent to the terms of this Agreement
(including its Exhibit) and the Plan by executing this Agreement pursuant to the instructions
provided and otherwise shall comply with the requirements of paragraph 3. The Participant and
Idearc hereby expressly agree that the use of electronic media to indicate confirmation, consent,
signature, acceptance, agreement and delivery shall be legally valid and have the same legal force
and effect as if the Participant and Idearc executed this Agreement (including its Exhibit) in
paper form.

21. Confidentiality. Except to the extent otherwise required by law, the Participant shall not
disclose, in whole or in part, any of the terms of this Agreement. This paragraph 21 does not
prevent the Participant from disclosing the terms of this Agreement to the Participant’s spouse or
beneficiary or to the Participant’s legal, tax, or financial adviser, provided that the Participant
take all reasonable measures to assure that the individual to whom disclosure is made does not
disclose the terms of this Agreement to a third party except as otherwise required by law.

22. Applicable Law. The validity, construction, interpretation and effect of this Agreement shall
be governed by and construed in accordance with the laws of the State of Delaware, without giving
effect to the conflicts of laws provisions thereof.

8

 

23. Notice. Any notice to the Company provided for in this Agreement shall be addressed to the
Company in care of the Senior Vice President — Human Resources of Idearc at P. O. Box 619810, 2200
West Airfield Dr., D/FW Airport, TX, 75261 and any notice to the Participant shall be addressed to
the Participant at the current address shown on the payroll of the Company, or to such other
address as the Participant may designate to the Company in writing. Any notice shall be delivered
by hand, sent by telecopy or enclosed in a properly sealed envelope as stated above, registered and
deposited, postage prepaid, in a post office regularly maintained by the United States Postal
Service.

24. Dispute Resolution.

(a) General. Except as otherwise provided in paragraph 25 below, all disputes arising under the
Plan or this Agreement and all claims in which a Participant seeks damages that relate in any
way to the Performance Units or other benefits of the Plan are subject to the dispute resolution
procedure described below in this paragraph 24. The parties to this Agreement are not required
to arbitrate Employment Claims, as defined in subsection (a)(ii) below, in which the Participant
does not seek damages that relate in any way to the Performance Units or other benefits of the
Plan or this Agreement.

(i) For purposes of this Agreement, the term “Units Award Dispute” shall mean any claim
against the Company or a Related Company regarding (A) the interpretation of the Plan or
this Agreement, (B) any of the terms or conditions of the Performance Units issued under
this Agreement, or (C) allegations of entitlement to Performance Units or additional
Performance Units, or any other benefits under the Plan, other than Employment Claims
described in subsection (a)(ii) below; provided, however, that any dispute relating to the
forfeiture of an award as a result of a breach of any of the Covenants contained in Exhibit
A shall not be subject to the dispute resolution procedures provided for in this paragraph
24.

(ii) For purposes of this Agreement, the term “Units Damages Dispute” shall mean any
employment related claims between the Participant and the Company or a Related Company or
against the directors, officers, employees, representatives, or agents of the Company or a
Related Company, including claims of alleged employment discrimination, wrongful
termination, or violations of Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, 42 U.S.C. § 1981, the Fair Labor
Standards Act, the Family Medical Leave Act, the Sarbanes-Oxley Act, or any other federal,
state or local law, statute, regulation, or ordinance relating to employment or any common
law theories of recovery relating to employment, such as breach of contract, tort, or public
policy claims (“Employment Claims”), in which the damages sought relate in any way to
Performance Units or other benefits of the Plan.

(b) Internal Dispute Resolution Procedure. All Units Award Disputes shall be referred in the
first instance to the Idearc Employee Benefits Committee (“EB Committee”) for resolution
internally within Idearc. Except where otherwise prohibited by law, all Units Award Disputes
must be filed in writing with the EB Committee no later than one year from

9

 

the date that the dispute accrues. Consistent with paragraph 24(c)(i) of this Agreement,
decisions about the enforceability of the limitations period contained herein are for the
arbitrator to decide. To the fullest extent permitted by law, the EB Committee shall have full
power, discretion, and authority to interpret the Plan and this Agreement and to decide all
Units Award Disputes brought under this Plan and Agreement before them. Determinations made by
the EB Committee shall be final, conclusive and binding, subject only to review by arbitration
pursuant to subsection (c) below under the arbitrary and capricious standard of review.

(c) Arbitration. All appeals from determinations of Units Award Disputes by the EB Committee
as described in subsection (b) above, as well as all Units Damages Disputes, shall be submitted
to the American Arbitration Association (“AAA”) for final and binding arbitration on an
individual basis (and not on a collective or class action basis) before a single arbitrator
pursuant to its Commercial Arbitration Rules in effect at the time this grant is accepted.
Except where otherwise prohibited by law, all appeals of Units Award Disputes and all Units
Damages Disputes must be filed in writing with the AAA no later than one year from the date that
the appeal or dispute accrues. Consistent with paragraph 24(c)(i) of this Agreement, decisions
about the enforceability of the limitations period contained herein are for the arbitrator to
decide. If the Participant and either the Company or a Related Company are party to any prior
agreement to arbitrate claims before the AAA under rules other than its Commercial Arbitration
Rules, claims that are arbitrable under any such agreements shall be submitted to the AAA for
disposition under its Commercial Arbitration Rules together with disputes that are arbitrable
under this Agreement in order to promote expeditious and efficient dispute resolution. A copy
of the AAA’s Commercial Arbitration Rules may be obtained from Human Resources. The arbitration
shall be held at the office of the AAA nearest the place of the Participant’s most recent
employment by the Company or a Related Company, unless the parties agree to a different
location. All claims by the Company or a Related Company against the Participant, except for
breaches of any of the Covenants, shall also be raised in such arbitration proceedings.

(i) The arbitrator shall have the authority to determine whether this arbitration agreement
is enforceable and whether any dispute submitted for arbitration hereunder is arbitrable.
The arbitrator shall decide all issues submitted for arbitration according to the terms of
the Plan, this Agreement, existing Company policy, and applicable substantive state and
federal law and shall have the authority to award any remedy or relief which could be
awarded by a court. The decision of the arbitrator shall be final and binding and
enforceable in any applicable court.

(ii) The Participant understands and agrees that when Units Award Disputes or Units Damages
Disputes are submitted for arbitration pursuant to this Agreement, both the Participant and
the Company or a Related Company waive any right to sue each other in a court of law or
equity, to have a trial by jury, or to resolve disputes on a collective, or class, basis,
and that the sole forum available for the resolution of such issues is arbitration as
provided herein. This dispute resolution procedure shall not prevent either the Participant
or the Company or a Related Company from commencing an action in any court of competent
jurisdiction for the purpose of obtaining injunctive relief to prevent

10

 

irreparable harm pending arbitration hereunder; in such event, both the Participant and the
Company or a Related Company agree that the party who commences the action may proceed
without necessity of posting a bond.

(iii) In consideration of the Participant’s agreement in subsection (ii) above, the Company
or a Related Company will pay all filing, administrative and arbitrator’s fees incurred in
connection with the arbitration proceedings. If the AAA requires the Participant to pay the
initial filing fee, the Company or a Related Company will reimburse the Participant for that
fee.

(iv) The parties intend that the arbitration procedure to which they hereby agree shall be
the exclusive means for resolving all Units Award Disputes and Units Damages Disputes.
Their agreement in this regard shall be interpreted as broadly and inclusively as reason
permits to realize that intent.

(v) Notwithstanding any other provision of this Agreement, this dispute resolution
provision shall be governed by laws of the State of Texas to the extent that it is not
governed by the Federal Arbitration Act.

25. Additional Remedies. Notwithstanding the dispute resolution procedures, including
arbitration, of paragraph 24 of this Agreement, and in addition to any other rights or remedies,
whether legal, equitable, or otherwise, that each of the parties to this Agreement may have
(including the right of the Company to terminate the Participant for Cause), the Participant
acknowledges that-

(a) The Covenants in Exhibit A to this Agreement are essential to the continued goodwill and
profitability of the Company;

(b) The Participant has broad-based skills that will serve as the basis for employment
opportunities that are not prohibited by the Covenants in Exhibit A;

(c) When the Participant’s employment with the Company terminates, the Participant shall be
able to earn a livelihood without violating any of the Covenants in Exhibit A;

(d) Irreparable damage to the Company shall result in the event that the Covenants in Exhibit A
are not specifically enforced and that monetary damages will not adequately protect the Company
from a breach of these Covenants;

(e) If any dispute arises concerning the violation or anticipated or threatened violation by
the Participant of any of the Covenants in Exhibit A, an injunction may be issued restraining
such violation pending the determination of such controversy, and no bond or other security
shall be required in connection therewith;

(f) The Covenants in Exhibit A shall continue to apply after any expiration, termination, or
cancellation of this Agreement;

11

 

(g) The Participant’s breach of any of the Covenants in Exhibit A shall result in the
Participant’s immediate forfeiture of all rights and benefits, including all Performance Units
and DEUs, under this Agreement; and

(h) All disputes relating to the Covenants in Exhibit A, including their interpretation and
enforceability and any damages (including but not limited to damages resulting in the forfeiture
of an award under this Agreement) that may result from the breach of such Covenants, shall not
be subject to the dispute resolution procedures, including arbitration, of paragraph 24 of this
Agreement, but shall instead be determined in a court of competent jurisdiction.

[Remainder of page left blank intentionally]

12

 

SIGNATURE PAGE

     IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized representative of
the Company.

	 	 	 	 	 
	 	IDEARC INC.

 	 
	 	By:  	 	 
	 

     The undersigned Participant hereby accepts the Performance Units granted pursuant to this
Performance Unit Agreement (2007-2009 Award Cycle) subject to the applicable terms and conditions
of the Plan and the terms and conditions of the Agreement.

	 	 	 	 	 
	 	 	 
	 	 	 
	 	Participant 	 
	 	 	 

13

 

	 	 	 	 	 

IDEARC INC. LONG-TERM INCENTIVE PLAN

PERFORMANCE UNIT AGREEMENT

2007-2009 AWARD CYCLE

EXHIBIT 1

Participant: [here insert name of participant]

Performance Units Granted: [here insert # of Performance Units]

 

 

IDEARC INC. LONG-TERM INCENTIVE PLAN

PERFORMANCE UNIT AGREEMENT

2007-2009 AWARD CYCLE

EXHIBIT A — COVENANTS

1. Noncompetition — In consideration for the benefits described in the Agreement to which this
Exhibit A is attached and other good and valuable consideration, you, the Participant, agree that:

(a) Prohibited Conduct — During the period of your employment with the Company or any Related
Company, and for the period ending twelve (12) months following a termination of your employment
for any reason with the Company or any Related Company, you shall not, without the prior written
consent of the Senior Vice President — Human Resources of Idearc:

(1) personally engage in Competitive Activities (as defined below); or

(2) work for, own, manage, operate, control, or participate in the ownership, management,
operation, or control of, or provide consulting or advisory services to, any person,
partnership, firm, corporation, institution or other entity engaged in Competitive
Activities, or any company or person affiliated with such person or entity engaged in
Competitive Activities; provided that your purchase or holding, for investment purposes, of
securities of a publicly traded company shall not constitute “ownership” or “participation
in the ownership” for purposes of this paragraph so long as your equity interest in any such
company is less than a controlling interest; provided that this paragraph (a) shall not
prohibit you from (i) being employed by, or providing services to, a consulting firm,
provided that you do not personally engage in Competitive Activities or provide consulting
or advisory services to any individual, partnership, firm, corporation, institution or other
entity engaged in Competitive Activities, or any person or entity affiliated with such
individual, partnership, firm, corporation, institution or other entity engaged in
Competitive Activities, or (ii) engaging in the private practice of law as a sole
practitioner or as a partner in (or as an employee of or counsel to) a law firm in
accordance with applicable legal and professional standards.

(b) Competitive Activities — For purposes of the Agreement, to which this Exhibit A is
attached, “Competitive Activities” means activities relating to products or services of the same
or similar type as the products or services (1) which are sold (or, pursuant to an existing
business plan, will be sold) to paying customers of the Company or any Related Company, and (2)
for which you have responsibility to plan, develop, manage, market, oversee or perform, or had
any such responsibility within your most recent 24 months of employment with the Company or any
Related Company.

2. Interference With Business Relations — During the period of your employment with the Company or
any Related Company, and for a period ending with the expiration of twelve (12) months following a
termination of your employment for any reason with the Company or any Related Company, you shall
not, without the written consent of the Senior Vice President — Human Resources of Idearc:

A-1

 

(a) recruit, induce or solicit any employee, directly or indirectly, of the Company or Related
Company for employment or for retention as a consultant or service provider;

(b) hire or participate (with another person or entity) in the process of hiring (other than
for the Company or any Related Company) any person who is then an employee of the Company or any
Related Company, or provide names or other information about any employees of the Company or
Related Company to any person or entity (other than the Company or any Related Company),
directly or indirectly, under circumstances that could lead to the use of any such information
for purposes of recruiting, soliciting or hiring;

(c) interfere, directly or indirectly, with the relationship of the Company or any Related
Company with any of its employees, agents, or representatives;

(d) solicit or induce, or in any manner attempt to solicit or induce, directly or indirectly,
any client, customer, or prospect of the Company or any Related Company (1) to cease being, or
not to become, a customer of the Company or any Related Company or (2) to divert any business of
such customer or prospect from the Company or any Related Company; or

(e) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, the
relationship, contractual or otherwise, between the Company or any Related Company and any of
its customers, clients, prospects, suppliers, consultants, employees, agents, or
representatives.

3. Return Of Property; Intellectual Property Rights — You agree that on or before termination of
your employment for any reason with the Company or any Related Company, you shall return to the
Company all property owned by the Company or any Related Company or in which the Company or any
Related Company has an interest, including files, documents, data and records (whether on paper or
in tapes, disks, or other machine-readable form), office equipment, credit cards, and employee
identification cards. You acknowledge that the Company (or, as applicable, a Related Company) is
the rightful owner of, and you hereby do assign, all right, title and interest in and to any
programs, ideas, inventions, discoveries, patentable or copyrighted material, or trademarks that
you may have originated or developed, or assisted in originating or developing, during your period
of employment with the Company or a Related Company, where any such origination or development
involved the use of Company or Related Company time, information or resources, was made in the
exercise of your responsibilities for or on behalf of the Company or a Related Company or was
related to the Company’s or a Related Company’s business or to the Company’s or a Related Company’s
actual or demonstrably anticipated research or development. You shall at all times, both before
and after termination of your employment, cooperate with the Company (or, as applicable, any
Related Company) in executing and delivering documents requested by the Company or a Related
Company, and taking any other actions, that are necessary or requested by the Company or a Related
Company to assist the Company or any Related Company in patenting, copyrighting, protecting,
enforcing or registering any programs, ideas, inventions, discoveries, works of authorship, data,
information, patentable or copyrighted material, or trademarks, and to vest title thereto solely in
the Company (or, as applicable, a Related Company). If at any time after your termination of
employment, you determine that you have any Secret and Confidential Information in your possession
or

A-2

 

control, you shall immediately return to the Company all such Secret and Confidential Information
in your possession or control, including all copies and portions thereof.

4. Proprietary And Confidential Information — You shall at all times, including after any
termination of your employment with the Company or any Related Company, preserve the
confidentiality of all Proprietary Information (defined below) and trade secrets of the Company or
any Related Company, and you shall not use for the benefit of any person, other than the Company or
a Related Company, or disclose to any person, except and to the extent that disclosure of such
information is legally required, any Proprietary Information or trade secrets of the Company or any
Related Company. “Proprietary Information” means any information or data related to the Company or
any Related Company, including information entrusted to the Company or a Related Company by others,
which has not been fully disclosed to the public by the Company or a Related Company and which is
treated as confidential or protected within the Company or any Related Company or is of value to
competitors, such as strategic or tactical business plans; undisclosed business, operational or
financial data; ideas, processes, methods, techniques, systems, models, devices, programs, computer
software, or related information; documents relating to regulatory matters or correspondence with
governmental entities; undisclosed information concerning any past, pending, or threatened legal
dispute; pricing or cost data; the identity, reports or analyses of business prospects; business
transactions that are contemplated or planned; research data; personnel information or data;
identities of users or purchasers of the Company’s or Related Company’s products or services; the
Agreement to which this Exhibit A is attached; and other non-public information pertaining to or
known by the Company or a Related Company, including confidential or non- public information of a
third party that you know or should know the Company or a Related Company is obligated to protect.

5. Definitions — Except where clearly provided to the contrary, all capitalized terms used in this
Exhibit A shall have the definitions given to those terms in the Agreement to which this Exhibit A
is attached.

6. Agreement to Covenants. You shall indicate your agreement to these Covenants in accordance with
the instructions provided in the Agreement, and your acceptance of the Agreement shall include your
acceptance of these Covenants. You and Idearc hereby expressly agree that the use of electronic
media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be
legally valid and have the same legal force and effect as if you and Idearc executed these
Covenants in paper form.

A-3

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