Document:

Exhibit 10(b)

 

 

CANTEL MEDICAL CORP.

 

ANNUAL INCENTIVE COMPENSATION PLAN

 

 

PERSONAL AND CONFIDENTIAL

 

 

Purpose
and Objectives

 

The
purpose of the Incentive Compensation Plan (Plan) is to contribute to the
motivation of key employees in accomplishing the Company’s goals.  The objectives of the Plan are as follows:

 

·                  Clearly
communicate and reinforce strategic, operational and financial objectives.

 

·                  Provide a
competitive incentive for achievement of corporate and divisional goals on both
an individual and team basis.

 

·                  Establish an
objective basis for determining annual awards.

 

Plan Definitions

 

Certain
words or phrases used in this plan document are defined as follows:

 

·                  Award - An annual
incentive compensation award.

 

·                  Base Salary — Base salary
as of July 31st of the Plan Year (or a participant’s last day
of employment with the Company if prior to July 31st), disregarding any
reduction in the rate of base salary during the six-month period immediately
preceding such date.

 

·                  Company — Cantel
Medical Corp.

 

·                  Compensation
Committee — a subgroup of the Company’s Board of Directors
responsible for the following functions: (1) discharging the Board’s
responsibilities relating to compensation of executive officers; (2) producing
an annual report on executive compensation for inclusion in the proxy
statement; and (3) design, maintenance and administration of all of the
Company’s incentive plans.

 

·                  Plan Year - The period
from August 1st - July 31st (fiscal year
of Company).  The initial Plan Year is
the fiscal year ending July 31, 2010.

 

·                  Target Award - An incentive
compensation award to be earned by a participant based on achieving
pre-determined financial objectives and other performance objectives during the
Plan Year that represents payment at 100%.

 

Eligibility

 

All
executive officers of the Company, the CEOs of the Company’s Minntech
Corporation, Mar Cor Purification, Inc. and Crosstex International, Inc.
subsidiaries and other direct reports to the CEO of the Company and key
employees who are approved by the Compensation Committee are eligible for
Awards under this Plan.  New
hires/promotions are eligible for a pro-rated Award. Participation will be
based on a position’s level and ability to influence the long term performance
of the Company.  Participants are
identified by title and recommended by the CEO of Cantel Medical Corp., subject
to the approval of the Compensation Committee.

 

Administration

 

The
Compensation Committee has ultimate authority over the Plan, is responsible for
approving the Plan and may alter any provision of the Plan or terminate the
Plan at any time subject to the terms of the Plan herein. The Compensation
Committee will directly administer the Plan with respect to all
participants.  Specific responsibilities
of the Committee include:

 

·                  Approving Annual Incentive Compensation Plan

 

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·                  Approving the performance objectives, targets
and ranges

 

·                  Determining incentive compensation award
percentages

 

·                  Approving incentive compensation awards

 

The
CEO of the Company will make recommendations to the Compensation Committee and
resolve questions regarding the interpretation of the Plan.

 

Prior
to the commencement of each new Plan Year or within seventy-five (75) days
thereafter, the Compensation Committee shall approve and adopt specific
performance targets and target award levels for Plan participants for such
year.  Such performance targets and
target award levels shall be set forth in an Annual Incentive Compensation
Plan.

 

Target Award Levels

 

The
target incentive awards for each eligible position (by category) are expressed
as a percentage of Base Salary as follows:

 

	
  ELIGIBLE POSITION

  	
   

  	
  TARGET INCENTIVE AWARD

  
	
   

  	
   

  	
   

  
	
  CEO/President

  	
   

  	
  70% - 100%

  
	
   

  	
   

  	
   

  
	
  COO,
  Division CEO, Executive Vice President, Senior Vice Presidents

  	
   

  	
  45% - 65%

  
	
   

  	
   

  	
   

  
	
  Vice
  Presidents

  	
   

  	
  40% - 55%

  
	
   

  	
   

  	
   

  
	
  Other
  Key Employees

  	
   

  	
  10% - 35%

  

 

Notwithstanding
the foregoing, Division CEOs will have 25% of their Bonus Target based on the
annual Performance Target established for executives of Cantel Medical
Corp.  The remaining 75% will be based on
the annual performance target specific to the operations of such CEO’s
division(s), which shall be established by the CEO of the Company in
consultation with the Compensation Committee.

 

Awards
will be determined as follows:

 

	
   

  	
   

  	
  EARNINGS GROWTH

  CORP

  	
   

  	
  EARNINGS

   GROWTH

  DIVISION

  	
   

  
	
  CORPORATE  EXECUTIVES

  	
   

  	
  100

  	
  %

  	
  —

  	
   

  
	
  DIVISION
  CEOs

  	
   

  	
  25

  	
  %

  	
  75

  	
  %

  

 

3

 

Payout Ranges

 

Payout
ranges are based upon target incentive award and are expressed as a percentage
of base salary as follows:

 

	
   

  	
   

  	
  MINIMUM

  	
   

  	
  TARGET

  	
   

  	
  MAXIMUM

  	
   

  
	
  Financial Objective

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  	
  200

  	
  %

  

 

Determination of Awards

 

To
maintain a focus on increasing shareholder value and driving superior financial
performance, awards under this Plan will be based on the achievement of growth
in the Company’s earnings, as measured by earnings per share or on such other
performance criteria as may be established by the Compensation Committee for
each Plan Year and set forth in the Annual Incentive Compensation Plan.
Notwithstanding the specific performance criteria established, in making a
determination as to whether or not such criteria was satisfied and the extent
to which a bonus should be awarded, the Compensation Committee shall take into consideration
factors such as unanticipated taxes, acquisition costs, non-recurring and
extraordinary items, and other equitable factors, as determined by the
Compensation Committee in its discretion.

 

Distribution
of Awards

 

Awards
under the Plan are to be paid to eligible participants in cash as soon as
financial performance is finalized and individual performance has been
assessed, but in no case later than October 15th.

 

Subject
to the terms of a participant’s employment, severance or other written compensation
agreement with the Company, a participant must be actively employed by the
Company on the date the Award is paid to receive the Award.  Participants hired or promoted to an eligible
position for participation in the Plan during the Plan Year may receive a
pro-rated Award (based on time in the eligible position during the Plan Year)
subject to the approval of the Compensation Committee.

 

In
the event a participant’s employment is terminated prior to the end of the Plan
Year due to death, disability, or normal retirement, the participant or
beneficiary will be entitled to receive the Award (in whole or on a pro rata
basis for the period employed) that would have been earned if participant’s
employment had continued to the end of the Plan Year, subject to the approval
of the Compensation Committee.

 

At
the sole discretion of the Compensation Committee, a participant may not
receive an Award, or the amount of an Award may be decreased, due to
substantiated poor individual performance or misconduct and may be declared
ineligible under the Plan.  The Committee
intends to provide written notice to such participant promptly following its
knowledge or determination of poor individual performance or misconduct and
give the participant an opportunity to dispute or explain his performance or
misconduct and, to the extent practical, correct any correctible poor
performance; provided, however, that the failure to provide such notice shall
not affect the Committee’s rights under this paragraph.

 

General
Provisions

 

Limitations
on Vested Interest

 

It
is understood that the Awards hereunder are within the sole discretion of the
Company.  No participant has any vested
interest in an award under the Plan until such Award has been approved by the
Compensation Committee.

 

Participants
may be deleted from the Plan at the beginning of each Plan Year at the sole
discretion of the Compensation Committee by giving written notice to such
participants at least 

 

4

 

thirty
(30) days prior to the commencement of the Plan Year. New participants may be
added to the Plan at any time at the sole discretion of the Compensation
Committee.

 

Employment
Rights

 

The
Plan does not give any employee the right to be retained in the employ of the
Company.  Specifically, the Plan does not
create an employment contract for the Plan Year or any part thereof.

 

Non-Assignment

 

Incentive
compensation payments may not be pledged, assigned or transferred for any
reason other than in connection with the death of a Participant.

 

Withholding

 

Any
taxes required to be withheld by Federal, State or Local Regulations will be
deducted from incentive compensation payments hereunder.

 

Discontinuance, Suspension or Amendment of the Plan

 

The
Company, with the approval of the Compensation Committee, may discontinue or
suspend the Plan at any time, or amend the Plan in any respect.  The Company may review the Plan and its
administration at any time to determine whether the objectives of the Plan
continue to be met.

 

5Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (this “Agreement”)
is made and entered into effective as of December 9, 2010, by and between
SuperMedia Inc., a Delaware corporation (the “Company”), and Peter J.
McDonald (“Executive”).  In
consideration of 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, 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 “Employment Term”) commencing on December     ,
2010 (the “Commencement Date”) and ending on December 31,
2013.  This Agreement may be extended by
written agreement of both parties. 
Neither the expiration of this Agreement by its terms nor the giving of
notice of non-renewal will constitute any basis for termination under Section 8(d) or
Section 8(e), but will be subject to Section 8(f).

 

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.  Executive will be subject to the direction
and policies from time to time established by the Board of Directors (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. 
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.  The Board will take such action as may be
necessary to appoint or elect Executive as a member of the Board as of the
Commencement Date, subject to the limitations of applicable law. Thereafter,
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, the Company will
pay Executive an annual base salary (the “Base Salary”) at the initial
annual rate of $900,000 per year in accordance with the usual payroll practices
of the Company.  The Board or the
Compensation 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) Executive’s
Base Salary in effect during the Employment Term.

 

(b)           Signing and
Relocation.  On or
before December 31, 2010, Executive will receive a cash payment of
$750,000, subject to applicable tax withholding.

 

(c)           Short Term
Incentive Award.  With
respect to each calendar year beginning after December 31, 2010, 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 75 days following the end of the calendar year to which such Bonus
relates.

 

(d)           Long-Term
Incentive Award.

 

(i)            Initial Award.  Simultaneously with the execution of this
Agreement by the parties, the Company will grant to Executive the following
equity awards (the “Equity Awards”) pursuant to the Company’s 2009
Long-Term Incentive Plan (the “Plan”): (A) in accordance with the
terms of the Form of Stock Option Agreement attached hereto as Exhibit A,
a stock option to purchase 150,000 shares of the Company’s common stock with an
exercise price per share equal to the fair market value per share on the date
of grant (as determined under the Plan); and (B) in accordance with the
terms of the Form of Restricted Stock Award Agreement attached hereto as Exhibit B,
a restricted stock award granted for 150,000 shares of the Company’s common
stock. Except for the equity grants described in this Agreement, Executive will
have no right to any future grants of Equity Awards from the Company, it being
the understanding of the parties that the equity grants provided for in this
Agreement are intended to cover the entire Employment Term. Any future Equity
Awards granted by the Company and the amount of any such awards will be
determined at the sole option and election of the Board or the Committee from
time to time.

 

(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, which number will be at least equal to
50% of the number of “net shares” (as defined below) attributable to the
vesting of the restricted stock award and to the exercise of the stock
options  described in Section 5(d)(i) above,
provided, however, that the foregoing stock ownership requirement will end
immediately prior to the time of a “Change in Control” (as defined in Section 9(b))
that occurs during the period such ownership requirement would otherwise apply.
For the purposes of this Section 5(d)(ii), (A) the “net shares”
attributable to the vesting of restricted stock will be 

 

2

 

equal to the excess of the
number of shares that become vested over the number of shares which, on the
vesting date, have a fair market value (determined under the Plan) equal to the
income tax payable by Executive with respect to the vesting of the restricted
stock, and (B) the “net shares” attributable to the exercise of a stock
option will be equal to the excess of the number of shares with respect to
which the option is being exercised over the number of shares which, on the
exercise date, have a fair market value (determined under the Plan) equal to
the sum of (x) the exercise price for said shares, and (y) the income
tax payable by Executive with respect to the exercise of the option. In
determining the income tax payable under parts (A) and (B) of the
preceding sentence, it is assumed that Executive will be subject to income tax
in the applicable taxing jurisdictions (federal, state and/or local) at the
highest marginal rates in each such jurisdiction.

 

(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”).

 

6.             Benefits.  While Executive is employed by the Company
under this Agreement, Executive will be entitled to 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. 
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:

 

(i)            accrued and
unpaid Base Salary through the Date of Termination (as defined in Section 8(g)(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; and

 

(iv)          all other
vested benefits, including the right to indemnification, due Executive
following Executive’s termination of employment in accordance with the then-

 

3

 

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(c) for
the year in which the Date of Termination occurs if the Executive’s employment
had continued (which portion 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); and

 

(iv)          immediate
vesting of the portion of Executive’s unvested outstanding Company Equity
Awards that would have become vested on the anniversary of the Commencement
Date next following the Date of Termination had Executive remained employed by
the Company through such anniversary date (the “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(h),
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 one and one-half (1.5) 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))
(the “Severance Payment”), 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.  Such
Severance Payment will be payable on the date that is 60 

 

4

 

days following the
Termination Date, 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 Accelerated
Equity Vesting; and

 

(iv)          up to 12 months
of Subsidized COBRA Coverage.

 

(e)           Termination in
Connection With a Change in Control.  If, during the Employment Term and within
three (3) months prior to or two years following a Change in Control,
Executive’s employment is terminated by the Company without Cause or by
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(h),
Executive will be entitled to the payments and benefits set forth in Section 8(d),
except that, for purposes of this Section 8(e), (A) the
Severance Payment multiple in Section 8(d)(ii) will be changed
from 1.5 to 3.0, (B) all of Executive’s unvested outstanding Company
Equity Awards will fully and immediately vest, and (C) Subsidized COBRA
Coverage will be available for up to 18 months (as opposed to 12 months).  Executive acknowledges that the foregoing
severance benefits will be in partial consideration for Executive’s compliance
with the post-termination obligations under this Agreement (including the
obligations under Section 12).

 

(f)            Voluntary
Resignation; Expiration of Employment Term.  Upon termination of Executive’s employment as
a result of a voluntary resignation, Executive will be entitled to the Accrued
Benefits.  Upon termination of Executive’s
employment as a result of expiration of the Employment Term, subject to timely
satisfaction of the release and other conditions set forth in Section 8(h),
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 and (ii) (A) the
Severance Payment and (B) immediate vesting of the portion of Executive’s
outstanding Company Equity Awards that would have vested on the first anniversary
of the expiration of the initial Employment Term had Executive remained
employed through such anniversary unless 
(X) Executive has given notice to the Company of his intention not
to seek any extension of the initial Employment Term or (Y) the Company
has, not fewer than 60 days before the expiration of the initial Employment
Term, given a written offer to Executive to extend the initial Employment Term
for a period of one year beyond the initial Employment Term and Executive has
failed to accept such offer in writing within ten business days of receipt, in
the case of which failure to accept Executive will not be entitled to the
Severance Payment or such accelerated vesting. 
Such Severance Payment will be payable on the date that is 60 days
following expiration of the initial 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.

 

(g)           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).

 

5

 

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).

 

(h)           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 C
(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 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.

 

(i)            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 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 exists when the Board determines that any of
the following has occurred: (i) Executive’s willful and continued failure
substantially to perform the duties of his position (other than as a result of
a 

 

6

 

termination by Executive for
Good Reason); (ii) any willful act or omission by Executive constituting
dishonesty, fraud, or other malfeasance; (iii) Executive’s conviction of
(or plea of nolo contendere to) a felony or a misdemeanor involving theft,
embezzlement, dishonesty, 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 (iv) Executive’s material
breach of this Agreement.  For purposes
of this definition, no act or failure to act will be deemed “willful” unless
effected by Executive not in good faith and without a reasonable belief that
such action or failure to act was in or not opposed to the best interests of
the Company. No termination for Cause will be effective unless made by a
majority of the Board, at a meeting of the Board, held for such purpose, where
Executive and his counsel have an opportunity, on at least 5 days advance
written notice, to be heard before the Board.

 

(b)           “Change in
Control” has the meaning set forth in the Company’s 2009 Long-Term
Incentive Plan (which is attached as Exhibit 10.6 to the Company’s Current
Report on Form 8-K filed with the Securities and Exchange Commission on January 6,
2010). 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.

 

(c)           “Disability”
means 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
the existence of the Disability of Executive as to which Executive and the
Company cannot agree will be determined in writing by a qualified independent
physician mutually acceptable to Executive and the Company. If 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 Executive will be final and conclusive for all
purposes of the Agreement.

 

(d)           “Good Reason”
means: (i) any diminution in Executive’s title, position, 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 as specified in Section 2;
(ii) a material reduction in target Bonus opportunity; (iii) a
relocation of Executive’s principal workplace by a distance that exceeds 50
miles; or (iv) 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 

 

7

 

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.

 

(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 10.6 to the Company’s Current Report on Form 8-K
filed with the Securities and Exchange Commission on January 6, 2010,
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 

 

8

 

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. 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:

 

(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 

 

9

 

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.

 

(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; Nonsolicitation;
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 

 

10

 

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.

 

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 $20,000, 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.

 

11

 

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 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 

 

12

 

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.

 

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:

 

SuperMedia 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:

 

SuperMedia Inc.

 

13

 

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 5(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.

 

(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 

 

14

 

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.

 

15

 

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

 

	
  Dated:
  December     , 2010

  	
   

  	
  THE COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Cody Wilbanks

  
	
   

  	
   

  	
  Its:

  	
  Executive Vice President—

  General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE:

  
	
  Dated:
  December     , 2010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Peter J. McDonald

  

 

[Signature
page to Employment Agreement]

 

 

Exhibit
A

 

SUPERMEDIA INC.

EMPLOYEE STOCK OPTION AGREEMENT

 

Peter McDonald

Grantee

 

	
  Date of Grant:

  	
   

  	
  December 9, 2010

  
	
  Total Number of Shares Relating to the Option
  Granted:

  	
   

  	
  150,000

  
	
  Exercise Price per Share

  	
   

  	
  $7.25

  
	
  Expiration Date:

  	
   

  	
  December 9, 2013

  
	
  General Vesting Schedule:

  	
   

  	
  3 years, with vesting in installments of 1/3 on
  the anniversary date of the Date of Grant in each of the years.

  

 

GRANT OF OPTION

 

1.                                      GRANT OF OPTION.  The Compensation Committee of the Board of
Directors (the “Board”) of SuperMedia Inc., a
Delaware corporation (the “Company”),
pursuant to the SuperMedia Inc. 2009 Long-Term Incentive Plan (the “Plan”), hereby grants to you, the
above-named Grantee, effective as of the Date of Grant set forth above, a
Nonqualified Stock Option to purchase the total number of shares set forth
above of the Company’s Stock, at the exercise price set forth above for each
share subject to this Option, subject to adjustment as provided in the
Plan.  The Option is exercisable in
installments in accordance with the Vesting Schedule set forth above with the
exercise price payable at the time of exercise. 
To the extent not exercised, installments shall be cumulative and may be
exercised in whole or in part until the Option terminates.  The Option may not be exercised after the
Expiration Date, or the applicable date following your termination of
employment specified in this Stock Option Agreement (this “Agreement”).

 

2.                                      TERMINATION OF EMPLOYMENT/CHANGE IN CONTROL.  The following provisions will apply in the
event your employment with the Company and all Affiliates of the Company
(collectively, the “Company Group”)
terminates or a Change in Control occurs before the Expiration Date set forth
in the Agreement:

 

2.1            Termination Generally.  If your employment with the Company Group
terminates before the Expiration Date for any reason other than one of the
reasons described in Sections 2.2 through 2.4 below, all of your rights in
the Option shall terminate and become null and void on the earlier of the
Expiration Date or three months after the date your employment with the Company
Group terminates.  Except as specified in
Sections 2.2 through 2.4 below, in the event your employment with the Company
Group terminates for any reason, the Option shall not continue to vest after
such termination of employment.

 

 

 

2.2          Change in Control.

 

(i)              Termination
Without Cause or for Good Reason in Connection With a Change in Control Before
the Expiration Date.  If (a) the
Company Group terminates your employment without Cause within 3 months prior to
a Change in Control or two years following a Change in Control or (b) you
terminate your employment with the Company Group for Good Reason within 3
months prior to a Change in Control or two years following a Change in Control,
then the Option shall become fully exercisable on the date of the termination
of your employment relationship.

 

(ii)             Cause.  For purposes of this Agreement, the term “Cause” means when the Board determines that any of the
following has occurred: (a) willful and continued failure substantially to
perform the duties of your position (other than as a result of a termination
for Good Reason); (b) any willful act or omission constituting dishonesty,
fraud, or other malfeasance; (c) conviction of (or plea of nolo contendere to)
a felony or a misdemeanor involving theft, embezzlement, dishonesty, 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 (d) material breach of your Employment Agreement with the Company.  For purposes of this definition, no act or
failure to act will be deemed “willful” unless effected not in good faith and
without a reasonable belief that such action or failure to act was in or not opposed
to the best interests of the Company. No termination for Cause will be
effective unless made by a majority of the Board, at a meeting of the Board,
held for such purpose, where you and your counsel have an opportunity, on at
least 5 days advance written notice, to be heard before the Board.

 

(iii)            Good
Reason.  For purposes of this
Agreement, the term “Good Reason”
means (a) any diminution in your title, position, duties or responsibilities;
re-assignment of your direct reporting relationship to anyone other than the
Board; or the assignment to you of duties that are inconsistent, in a material
respect, with the scope of duties and responsibilities associated with your
position as specified in Section 2 of your Employment Agreement with the
Company; or (b) a material reduction in your base salary or target bonus
opportunity; or (c) a relocation of your principal workplace by a distance that
exceeds 50 miles; or (d) other material breach of your Employment Agreement by
the Company.

 

2.3          Termination without Cause or for
Good Reason Unrelated to a Change in Control.  If the Company Group terminates your
employment without Cause or you terminate your employment with the Company
Group for Good Reason, other than a termination in connection with a Change in Control,
then  the portion of your unvested Option
that would have become vested on the anniversary of the Date of Grant next
following the date of termination had you remained employed by the Company
Group shall immediately vest.

 

2.4          Death or Disability.  If your employment with the Company Group
terminates due to your death or Disability, then the portion of your unvested
Option that would have become vested on the anniversary of the Date of Grant
next following the date of termination had you remained employed by the Company
Group shall immediately vest.  After your
death or termination due to your Disability, you, your executors,
administrators or any person or persons to whom your Option may be transferred
by will or by the laws of descent and distribution, shall have the right at any
time prior to the termination of the Option to exercise the Option.

 

3.                                      CASHLESS EXERCISE.  Cashless exercise, in accordance with the
terms of the Plan, shall be available to you for the shares subject to the
Option.

 

2

 

4.                                      TAX WITHHOLDING.  To the extent that the receipt of the Option
or the Agreement, the vesting of the Option or the exercise of the Option
results in income to you for federal, state or local income, employment or
other tax purposes with respect to which the Company Group has a withholding
obligation, you shall deliver to the Company at the time of such receipt,
vesting or exercise, as the case may be, such amount of money as the Company
Group may require to meet its obligation under applicable tax laws or
regulations, and, if you fail to do so, the Company Group is authorized to
withhold from the shares subject to the Option or from any cash or stock
remuneration then or thereafter payable to you any tax required to be withheld
by reason of such taxable income, sufficient to satisfy the withholding
obligation based on the last per share sales price of the common stock of the
Company for the trading day immediately preceding the date that the withholding
obligation arises, as reported in the NASDAQ Composite Transactions.

 

5.                                      NONTRANSFERABILITY.  Except as specified in this Agreement, the Option and the Agreement are
not transferable or assignable by you other than by will or the laws of descent
and distribution, and shall be exercisable during your lifetime only by
you.  You may transfer this Option to (a)
a member or members of your immediate family, (b) a revocable living trust
established by you or you and your spouse, (c) a trust under which your
immediate family members are the only beneficiaries and (d) a partnership of
which your immediate family members are the only partners.  For this purpose, “immediate family” means
your spouse, children, stepchildren, grandchildren, parents, grandparents,
siblings (including half brothers and sisters), and individuals who are family
members by adoption.  Notwithstanding any
other provision of this Agreement, such a transferee of the Option granted
under this Agreement may exercise the Option during your lifetime.

 

The assigned portion may
only be exercised by the person who acquires a proprietary interest in the
Option pursuant to the assignment by you. The terms applicable to the assigned
portion shall be the same as those in effect for the Option immediately prior to
such assignment and shall be set forth in such documents to be executed by the
assignee as the Company may deem appropriate. 
You may also designate one or more persons as the beneficiary or
beneficiaries of your outstanding Options under the Plan, and those Options
shall, in accordance with such designation, automatically be transferred to
such beneficiary or beneficiaries upon your death while holding those Options.
Such beneficiary or beneficiaries shall take the transferred Options subject to
all the terms and conditions of the Agreement, including (if applicable and
without limitation) the limited time period during which the Option may be
exercised following your death. Except for the limited transferability provided
by the foregoing, an outstanding Option under the Plan shall not be assignable
or transferable and shall be exercisable only by you during your lifetime.

 

None of the Company, its
employees or directors makes any representations or guarantees concerning the
tax consequences associated with the inclusion of this provision in this
Agreement, your transfer of the Option granted under this Agreement or, if
applicable, the transferee’s exercise of the Option.  It is your sole responsibility to seek advice
from your own tax advisors concerning those tax consequences.  You are entitled to rely upon only the tax
advice of your own tax advisors.

 

6.                                      CAPITAL ADJUSTMENTS AND REORGANIZATIONS.  The existence of the Option shall not affect
in any way the right or power of the Company or any company the stock of which
is issued pursuant to the Agreement to make or authorize any adjustment,
recapitalization, reorganization or other change in its capital structure or
its business, engage in any merger or consolidation, issue any debt or equity
securities, dissolve or liquidate, or sell, lease, exchange or otherwise
dispose of all or any part of its assets or business, or engage in any other
corporate act or proceeding.

 

7.                                      EMPLOYMENT RELATIONSHIP.  For purposes of the Agreement, you shall be
considered to be in the employment of the Company Group as long as you have an
employment relationship with the 

 

3

 

Company
Group.  The Committee shall determine any
questions as to whether and when there has been a termination of such
employment relationship, and the cause of such termination, under the Plan and
the Committee’s determination shall be final and binding on all persons.

 

8.                                      NO RIGHTS AS A STOCKHOLDER.  You shall not have any rights as a
stockholder of the Company with respect to any shares covered by the Option
until the date of the issuance of such shares following exercise of the Option
pursuant to the Agreement and payment for the shares.

 

9.                                      NOT AN EMPLOYMENT AGREEMENT.  The Agreement is not an employment agreement,
and no provision of the Agreement shall be construed or interpreted to create
an employment relationship between Grantee and the Company or any of its
Affiliates or guarantee the right to remain employed by the Company or any of
its Affiliates for any specified term.

 

10.                               SECURITIES ACT LEGEND.  If you are an officer or affiliate of the
Company under the Securities Act of 1933, you consent to the placing on any
certificate for the Shares of an appropriate legend restricting resale or other
transfer of the Shares except in accordance with such Act and all applicable
rules thereunder.

 

11.                               REGISTRATION.  The Shares that may be issued under the Plan are registered with the
Securities and Exchange Commission under a Registration Statement on Form S-8.

 

12.                               SALE OF SECURITIES.  The Shares that may be issued under this Agreement may not be sold or
otherwise disposed of in any manner that would constitute a violation of any
applicable federal or state securities laws. 
You also agree that (a) the Company may refuse to cause the
transfer of the Shares to be registered on the stock register of the Company if
such proposed transfer would in the opinion of counsel satisfactory to the
Company constitute a violation of any applicable federal or state securities law
and (b) the Company may give related instructions to the transfer agent,
if any, to stop registration of the transfer of the Shares.

 

13.                               LIMIT OF LIABILITY.  Under no circumstances will the Company Group
be liable for any indirect, incidental, consequential or special damages
(including lost profits) of any form incurred by any person, whether or not
foreseeable and regardless of the form of the act in which such a claim may be
brought, with respect to the Plan.

 

14.                               MISCELLANEOUS.  The Agreement and the Option are
awarded pursuant to and is subject to all of the provisions of the Plan, which
are incorporated by reference herein, including all amendments to the Plan, if
any.  In the event of a conflict between
this Agreement and the Plan provisions, the Plan provisions will control.  Capitalized terms that are not defined herein
or in the Agreement shall have the meanings ascribed to such terms in the Plan.

 

By your acceptance of the Option, you agree that
the Option is granted under, governed by and subject to the terms of the Plan
and this Agreement.

 

	
   

  	
  SUPERMEDIA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

4

 

Exhibit B

 

SUPERMEDIA INC.

 

EMPLOYEE RESTRICTED STOCK AWARD
AGREEMENT

 

Peter McDonald

Grantee

 

	
  Date of Award:

  	
   

  	
  December 9, 2010

  
	
  Number of Shares:

  	
   

  	
  150,000

  
	
  General Vesting Schedule/Restricted Period:

  	
   

  	
  3 years, with vesting in installments of 1/3 on
  the anniversary date of the Date of Award in each of the years.

  

 

AWARD OF RESTRICTED STOCK

 

1.                                      GRANT OF RESTRICTED STOCK AWARD.  The Compensation Committee (the “Committee”)
of the Board of Directors (the “Board”) of
SuperMedia Inc., a Delaware corporation (the “Company”),
pursuant to the SuperMedia Inc. 2009 Long-Term Incentive Plan (the “Plan”), hereby awards to you, the
above-named Grantee, effective as of the Date of Award set forth above (the “Date of Award”), that number of shares
(the “Shares”) of the Company’s
Stock, set forth above as Restricted Stock on the following terms and
conditions:

 

During
the Restricted Period, the Shares of Restricted Stock will be evidenced by
entries in the stock register of the Company reflecting that such Shares of
Restricted Stock have been issued in your name. 
For purposes of this Agreement, the term “Restricted Period” means the period designated by the
Committee during which the Shares may not be sold, assigned, transferred,
pledged, or otherwise encumbered.

 

The
Shares that are awarded hereby to you as Restricted Stock shall be subject to
the prohibitions and restrictions set forth herein with respect to the sale or
other disposition of such Shares and the obligation to forfeit and surrender
such Shares to the Company (the “Forfeiture
Restrictions”).  The
Restricted Period and all Forfeiture Restrictions on the Restricted Stock
covered hereby shall lapse as to those shares when the shares become vested and
you meet all other terms and conditions of this Agreement.

 

2.                                      TERMINATION OF EMPLOYMENT/CHANGE IN CONTROL.  The following provisions will apply in the
event your employment with the Company and all Affiliates (collectively, the “Company Group”) terminates, or a Change in
Control occurs:

 

2.1                                 Termination Generally.  Except as specified in Sections 2.2 through
2.4 below, if your employment with the Company Group terminates before December 31,
2013 for any reason other than one of the reasons described in
Sections 2.2 through 2.4 below, the Forfeiture Restrictions then applicable
to the Shares of Restricted Stock shall not lapse and the number of Shares of
Restricted Stock then subject to the Forfeiture Restrictions shall be forfeited
to the Company on the date your employment terminates.

 

2.2                                 Change in Control.

 

(i)                                     Termination Without Cause or for Good Reason in Connection With a Change
in Control .  If (a) the Company Group terminates your
employment without Cause within 3 months prior to a Change in Control or two
years following a Change in Control or (b) you terminate your employment
with the Company Group for Good Reason within 3 months prior to 

 

 

a
Change in Control or two years following a Change in Control, then all
remaining Forfeiture Restrictions shall immediately lapse on the date of the
termination of your employment relationship.

 

(ii)                                  Cause.  For purposes of this Agreement, the term “Cause” means when the Board determines that any of the
following has occurred: (a) willful and continued failure substantially to
perform the duties of your position (other than as a result of a termination
for Good Reason); (b) any willful act or omission constituting dishonesty,
fraud, or other malfeasance; (c) conviction of (or plea of nolo contendere
to) a felony or a misdemeanor involving theft, embezzlement, dishonesty, 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 (d) material breach of your Employment Agreement with the
Company.  For purposes of this
definition, no act or failure to act will be deemed “willful” unless effected
not in good faith and without a reasonable belief that such action or failure
to act was in or not opposed to the best interests of the Company. No
termination for Cause will be effective unless made by a majority of the Board,
at a meeting of the Board, held for such purpose, where you and your counsel
have an opportunity, on at least 5 days advance written notice, to be heard
before the Board.

 

(iii)                               Good Reason.  For purposes of this Agreement, the term “Good Reason” means (a) any diminution in your title,
position, duties or responsibilities; re-assignment of your direct reporting
relationship to anyone other than the Board; or the assignment to you of duties
that are inconsistent, in a material respect, with the scope of duties and
responsibilities associated with your position as specified in Section 2
of your Employment Agreement with the Company; or (b) a material reduction
in your base salary or target bonus opportunity; or (c) a relocation of
your principal workplace by a distance that exceeds 50 miles; or (d) other
material breach of your Employment Agreement by the Company.

 

2.3                                 Termination without Cause or for Good Reason Unrelated to a Change in
Control.  If
the Company Group terminates your employment without Cause or you terminate
your employment with the Company Group for Good Reason, other than a
termination in connection with a Change in Control, then the portion of your
unvested Shares that would have become vested on the anniversary of the Date of
Award next following the date of termination had you remained employed by the
Company Group shall immediately vest, and all remaining Forfeiture Restrictions
with respect to those vested Shares shall lapse.

 

2.4                                 Death or Disability.  If your employment with the Company Group
terminates due to your death or Disability, then the portion of your unvested
Shares that would have become vested on the anniversary of the Date of Award
next following the date of termination had you remained employed by the Company
Group shall immediately vest.

 

3.                                      TAX WITHHOLDING.  To the extent that the receipt of the Shares
of Restricted Stock or the lapse of any Forfeiture Restrictions results in
income, wages or other compensation to you for any income, employment or other
tax purposes with respect to which the Company has a withholding obligation,
you shall deliver to the Company at the time of such receipt or lapse, as the
case may be, such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations, and, if you fail to do so,
the Company is authorized to withhold from the Shares awarded hereby or from
any cash or stock remuneration or other payment then or thereafter payable to
you any tax required to be withheld by reason of such taxable income, wages or
compensation sufficient to satisfy the withholding obligation based on the last
per share sales price of the Common Stock for the trading day immediately 

 

2

 

preceding the date that
the withholding obligation arises, as reported in the NASDAQ Composite
Transactions.

 

4.                                      NONTRANSFERABILITY.  Except as specified in this Agreement, the Shares of Restricted Stock
awarded to you under this Agreement shall not be transferable or assignable by
you other than by will or the laws of descent and distribution to the extent
then subject to Forfeiture Restrictions. 
You may transfer the Shares to (a) a member or members of your
immediate family, (b) to a revocable living trust established exclusively
for you or you and your spouse, (c) a trust under which your immediate
family members are the only beneficiaries or (d) a partnership of which
your immediate family members are the only partners.  For this purpose, “immediate family” means
your spouse, children, stepchildren, grandchildren, parents, grandparents,
siblings (including half brothers and sisters), and individuals who are family
members by adoption.

 

The terms applicable to the assigned Shares shall
be the same as those in effect for the Shares immediately prior to such
assignment and shall be set forth in such documents to be executed by the
assignee as the Committee may deem appropriate. 
You may also designate one or more persons as the beneficiary or
beneficiaries of your Shares of Restricted Stock under the Plan, and those
Shares shall, in accordance with such designation, automatically be transferred
to such beneficiary or beneficiaries upon your death while holding those
Shares. Such beneficiary or beneficiaries shall take the transferred Shares of
Restricted Stock subject to all the terms and conditions of the Agreement.
Except for the limited transferability provided by the foregoing, outstanding
Shares of Restricted Stock under the Plan shall not be assignable or
transferable to the extent then subject to Forfeiture Restrictions.

 

None of the Company, its employees or directors
makes any representations or guarantees concerning the tax consequences
associated with the inclusion of this provision in the Agreement or your
transfer of the Shares of Restricted Stock. 
It is your sole responsibility to seek advice from your own tax advisors
concerning those tax consequences.  You
are entitled to rely upon only the tax advice of your own tax advisors.

 

5.                                      SALE OF SECURITIES.  Shares awarded hereby that are no longer subject to Forfeiture
Restrictions may not be sold or otherwise disposed of in any manner that would
constitute a violation of any applicable federal or state securities laws.  You also agree that (a) the Company may
refuse to cause the transfer of the Shares to be registered on the stock
register of the Company if such proposed transfer would in the opinion of
counsel satisfactory to the Company constitute a violation of any applicable
federal or state securities law and (b) the Company may give related
instructions to the transfer agent, if any, to stop registration of the
transfer of the Shares.  .

 

6.                                      CAPITAL ADJUSTMENTS AND REORGANIZATIONS.  The existence of the Shares of Restricted
Stock shall not affect in any way the right or power of the Company or any
company the stock of which is awarded pursuant to this Agreement to make or
authorize any adjustment, recapitalization, reorganization or other change in
its capital structure or its business, engage in any merger or consolidation,
issue any debt or equity securities, dissolve or liquidate, or sell, lease,
exchange or otherwise dispose of all or any part of its assets or business, or
engage in any other corporate act or proceeding.

 

7.                                      RIGHTS REGARDING DISTRIBUTIONS MADE BY THE COMPANY
DURING THE RESTRICTED PERIOD.  During the Restricted Period,
(a) any securities of the Company distributed by the Company in respect of
the Shares of Restricted Stock will be evidenced by entries in the appropriate
securities register of the Company reflecting that such securities of the
Company, if any, have been issued in your name (the “Retained Company Securities”) and (b) any securities of
any company other than the Company or any other property (other than regular
cash dividends) distributed 

 

3

 

by the Company in respect
of the Shares of Restricted Stock will be evidenced in your name by such
certificates or in such other manner as the Company determines (the “Retained Other Securities and Property”)
and may bear a restrictive legend to the effect that ownership of such Retained
Other Securities and Property and the enjoyment of all rights appurtenant
thereto, are subject to the restrictions, terms, and conditions provided in the
Plan and this Agreement.  The Retained
Company Securities and the Retained Other Securities and Property
(collectively, the “Retained Distributions”)
shall be subject to the same restrictions, terms and conditions as are
applicable to the Shares of Restricted Stock.

 

8.                                      RIGHTS WITH RESPECT TO SHARES OF RESTRICTED STOCK AND
RETAINED DISTRIBUTIONS DURING RESTRICTED PERIOD.  You shall have the right to vote the Shares
of Restricted Stock awarded to you and to receive and retain all regular cash
dividends (which will be paid currently and in no case later than the end of
the calendar year in which the dividends are paid to the holders of the Common
Stock or, if later, the 15th day of the third month following the date the
dividends are paid to the holders of the Common Stock), and to exercise all
other rights, powers and privileges of a holder of the Common Stock, with
respect to such Shares of Restricted Stock, with the exception that
(a) you shall not be entitled to have custody of such Shares of Restricted
Stock until the Forfeiture Restrictions applicable thereto shall have lapsed,
(b) the Company shall retain custody of all Retained Distributions made or
declared with respect to the Shares of Restricted Stock until such time, if ever,
as the Forfeiture Restrictions applicable to the Shares of Restricted Stock
with respect to which such Retained Distributions shall have been made, paid,
or declared shall have lapsed, and such Retained Distributions shall not bear
interest or be segregated in separate accounts and (c) you may not sell,
assign, transfer, pledge, exchange, encumber, or dispose of the Shares of
Restricted Stock or any Retained Distributions during the Restricted
Period.  During the Restricted Period,
the Company may, in its sole discretion, issue certificates for some or all of
the Shares of Restricted Stock, in which case all such certificates shall be
delivered to the Corporate Secretary of the Company or to such other depository
as may be designated by the Committee as a depository for safekeeping until the
forfeiture of such Shares of Restricted Stock occurs or the Forfeiture
Restrictions lapse.  When requested by
the Company, you shall execute such stock powers or other instruments of
assignment as the Company requests relating to transfer to the Company of all
or any portion of such Shares of Restricted Stock and any Retained
Distributions that are forfeited in accordance with the Plan and this
Agreement.

 

9.                                      EMPLOYMENT RELATIONSHIP.  For purposes of this Agreement, you shall be
considered to be in the employment of the Company Group as long as you have an
employment relationship with the Company Group. 
The Committee shall determine any questions as to whether and when there
has been a termination of such employment relationship, and the cause of such
termination, under the Plan and the Committee’s determination shall be final
and binding on all persons.

 

10.                               SECTION 83(B) ELECTION.  You shall not exercise the election permitted
under Section 83(b) of the Code with respect to the Shares of
Restricted Stock without the written approval of the Chief Financial Officer or
General Counsel of the Company.

 

11.                               NOT AN EMPLOYMENT AGREEMENT.  This Agreement is not an employment
agreement, and no provision of this Agreement shall be construed or interpreted
to create an employment relationship between you and the Company or any
Affiliate or guarantee the right to remain employed by the Company or any
Affiliate for any specified term.

 

12.                               SECURITIES ACT LEGEND.  If you are an officer or affiliate of the
Company under the Securities Act of 1933, you consent to the placing on any
certificate for the Shares of an appropriate legend restricting resale or other
transfer of the Shares except in accordance with such Act and all applicable rules thereunder.

 

4

 

13.                               REGISTRATION.  The Shares that may be issued under the Plan
are registered with the Securities and Exchange Commission under a Registration
Statement on Form S-8.

 

14.                               LIMIT OF LIABILITY.  Under no circumstances will the Company or
any Affiliate be liable for any indirect, incidental, consequential or special
damages (including lost profits) of any form incurred by any person, whether or
not foreseeable and regardless of the form of the act in which such a claim may
be brought, with respect to the Plan.

 

15.                               MISCELLANEOUS.  This Agreement is awarded
pursuant to and is subject to all of the provisions of the Plan, including
amendments to the Plan, if any.  In the
event of a conflict between this Agreement and the Plan provisions, the Plan
provisions will control.  The term “you” and “your”
refer to the Grantee named in this Agreement. 
Capitalized terms that are not defined herein shall have the meanings
ascribed to such terms in the Plan.

 

In accepting the award of Shares of Restricted
Stock set forth in this Agreement you accept and agree to be bound by all the
terms and conditions of the Plan and this Agreement.

 

 

	
   

  	
  SUPERMEDIA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

5

 

Exhibit C

 

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 SuperMedia 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(h) of
the Employment Agreement by and between the Company and the Executive dated December 9,
2010 (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.

 

2.1           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 or
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 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.

 

2.2           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.

 

2.3           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.
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 

 

2

 

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.

 

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.

 

7.1           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.

 

7.2           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.

 

7.3           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.

 

7.4           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.

 

7.5           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.

 

3

 

7.6           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.

 

7.7           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:

  
	
   

  	
   

  
	
   

  	
  SUPERMEDIA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
				

 

4

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