Document:

Exhibit 10.1

 

Execution Version

 

DEX MEDIA, INC.

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) dated as of September 26, 2016. between Dex Media, Inc., a Delaware corporation (the “Company”), and Joe Walsh (the “Employee”).

 

W I T N E S S E T H

 

WHEREAS, the Company and the Employee entered into that certain Employment Agreement, dated as of October 14, 2014, as amended by the Amendment to Employment Agreement, dated as of May 13, 2016 (the “Prior Employment Agreement”); and

 

WHEREAS, the parties have agreed to amend and restate the Prior Employment Agreement in its entirety such that the Prior Employment Agreement shall be of no further force and effect and shall as of the date hereof be replaced and superseded by this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

		1.	POSITION AND DUTIES.

 

(a)           During the Employment Term (as defined in Section 2 hereof), the Employee shall serve as the Chief Executive Officer of the Company. In this capacity, the Employee shall have the duties, authorities and responsibilities of persons normally associated with the position of chief executive officer of similarly situated public companies, including (i) all employees reporting to the Employee or his designate (recognizing that certain employees, such as the chief compliance officer or head of internal audit, may also have a reporting line to the audit committee) and (ii) the ability to hire and fire employees (recognizing that the termination of the chief financial officer, chief accounting officer, head of internal audit and general counsel may require the approval of the audit committee or governance committee in accordance with the Company’s board of directors’ (the “Board”) policies in effect from time to time) and recognizing that the hiring or firing of any of the Employee’s direct reports will be subject to the approval of the Board acting in good faith. The Employee shall report directly to the Board.

 

(b)           During the Employment Term, the Employee shall devote the Employee’s business time, energy, business judgment, knowledge and skill and the Employee’s efforts to the performance of the Employee’s duties with the Company as his primary business obligation. The Employee shall be entitled to continue as Executive Chairman of Cambium Learning Group, his other business activities and be involved in charitable activities, to the extent that such service does not violate any applicable restrictive covenants, create a potential business conflict or prevent him from performing his duties for the Company.

 

2.             EMPLOYMENT TERM. The Company agrees to employ the Employee pursuant to the terms of this Agreement and the Employee agrees to be so employed, until December 31, 2019 (the “Initial Term”) commencing as of the date hereof (the “Effective Date”). The term of employment shall thereafter be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one year, unless either party, at least thirty (30) days prior to the expiration of the Initial Term or any extended term, shall give written notice to the other of its intention not to renew such employment term. Notwithstanding the foregoing, the Employee’s employment hereunder may be earlier terminated in accordance with Section 5 hereof, subject to Section 6 hereof. The period of time between the Effective Date and the termination of the Employee’s employment hereunder shall be referred to herein as the “Employment Term.”

 

 

3.             BASE SALARY AND BONUS.

 

(a)            BASE SALARY. The Company agrees to pay the Employee a base salary at an annual rate of $1,000,000 per year. The Employee’s Base Salary may be increased, but not decreased below its then current level, as may be determined from time to time by the Board. The base salary as determined herein and adjusted from time to time shall constitute “Base Salary” for purposes of this Agreement.

 

(b)            BONUS. Beginning with the 2017 fiscal year, Employee will be eligible during the Employment Term for an annual target bonus (an “Annual Bonus”) of one hundred percent (100%) of Employee’s Base Salary (the “Target Bonus”), based upon, and subject to the achievement of reasonable annual performance objectives established in good faith by the Board after consultation with the Employee within the first ninety (90) days of each fiscal year during the Employment Term. The bonus program shall also provide for a bonus above a threshold level and for an increased bonus for achievement above target. Annual Bonuses shall be paid no later than March 15th of the calendar year immediately following the fiscal year to which such bonuses relate. Any bonus payment earned by Employee for calendar year 2016 shall be determined under the Company’s 2016 Value Added Plan (the “VAP”).

 

4.             EMPLOYEE BENEFITS.

 

(a)            BENEFIT PLANS. During the Employment Term, the Employee shall be entitled to participate in any employee benefit plan that the Company has adopted or may adopt, maintain or contribute to for the benefit of its employees generally, subject to satisfying the applicable eligibility requirements, except to the extent such plans are duplicative of the benefits otherwise provided to Employee hereunder. The Employee’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies. Notwithstanding the foregoing, the Company may modify or terminate any employee benefit plan at any time.

 

(b)           VACATIONS. Vacation may be taken at such times and intervals as the Employee determines, subject to the business needs of the Company.

 

(c)           BUSINESS EXPENSES. Upon presentation of reasonable substantiation and documentation as the Company may specify from time to time, the Employee shall be reimbursed in accordance with the Company’s expense reimbursement policy, for all reasonable out-of-pocket business expenses incurred and paid by the Employee during the Employment Term and in connection with the performance of the Employee’s duties hereunder.

 

(d)           OFFICE. The Employee will be based in Maryland and will travel to Dallas and such other Company offices as the performance of his duties may reasonably require. The Company will pay the Employee $2,500 per month to maintain an office for the Company at the same premises that the Employee now owns and from which he currently works on behalf of the Company, including continuing to employ as a full-time employee the Employee’s current office manager (or, if necessary, an appropriate replacement) on substantially the same terms and conditions as such office manager is now currently employed.

 

(e)           LEGAL FEES. The Company shall pay or reimburse the Employee for the Employee’s reasonable legal fees incurred in negotiating and drafting this Agreement, provided that any such payment shall be made on or before March 15 of the calendar year immediately following the date hereof. 

 

(f)           EQUITY GRANT. The Employee shall promptly receive a grant of stock options to acquire 5,000,000 shares of common stock of the Company (the “Initial Options”). which grant shall be in the form of Exhibit B hereto (the “Initial Option Agreement”). The Initial Options shall have an exercise price equal to $2.04 per share. The exercise term of the Initial Options shall commence on the grant date and, unless earlier terminated, shall expire ten (10) years from the grant date. The Initial Options shall vest and become exercisable in equal monthly installments over a three year period commencing on January 1, 2017 if Employee remains employed through each applicable vesting date. Notwithstanding the preceding sentence, in the event the Employee’s employment is terminated by the Company other than for Cause or by the Employee for Good Reason, in either case within 6 months prior to or 12 months following a Change in Control, as defined below, all unvested options shall immediately vest and become exercisable as of the date of such termination (or Change of Control, if later). If Employee’s employment is terminated for any reason other than a termination by Employee without Good Reason, any vested Initial Options shall remain exercisable for one year after the Employee’s employment is terminated, and if Employee terminates employment without Good Reason, any vested Initial Options shall remain exercisable for 90 days after the Employee’s employment is terminated; provided, however, that (i) in the event the Employee’s employment is terminated by the Company for Cause, all of the Initial Options, whether vested or unvested, shall be immediately forfeited and (ii) in no event may the Initial Options be exercised after the expiration of the term of the Initial Options. The Initial Options shall be exercisable during the term in accordance with the terms of the Initial Option Agreement, The Initial Options shall be exercisable by delivery of an exercise notice in a form generally used by the Company from time to time, or in a manner and pursuant to such procedures as the Company may determine, which shall state the election to exercise the Initial Options, the number of shares with respect to which the Initial Options are being exercised, and such other representations and agreements as may be required by the Company. Payment of the exercise price and any required tax withholdings shall be by any of the following, or a combination thereof, at the election of the Employee: (a) cash; (b) check; or (c) the withholding of shares of Company common stock otherwise deliverable upon such exercise having a fair market value equal to the aggregate amount of such exercise price or tax withholding, as the case may be.

 

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For purposes of this Section 4(f), a “Change in Control” shall be deemed to have occurred if: (i) any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act, but excluding the Company or any subsidiary or affiliate, any employee benefit plan sponsored or maintained by the Company or any subsidiary or affiliate (including any trustee of such plan acting as trustee) and any Permitted Holder (as defined below), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Company representing more than 50% of the combined voting power of the Company’s then-outstanding securities, other than in connection with a merger, consolidation, recapitalization or reorganization of the Company; (ii) the consummation of a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse stock split of any class of voting securities of the Company, other than any such transaction that would result in at least 50% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after such transaction being beneficially owned in approximately the same proportion by persons who together beneficially owned at least 50% of the combined voting power of the voting securities of the Company outstanding immediately prior to such transaction; provided that, for purposes of this Section 4(f), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 50% threshold is due solely to the acquisition of voting securities by the Company or such surviving entity or any subsidiary or affiliate of the Company or such surviving entity, by an employee benefit plan of the Company or such surviving entity or of any subsidiary or affiliate of the Company or such surviving entity, or by any Permitted Holder; (iii) the stockholders of the Company approve a plan of complete liquidation of the Company, or the consummation of a sale or disposition by the Company of all or substantially all of its assets (or any transaction having a similar effect) other than to a company or entity controlled by the persons who controlled the Company immediately prior to such sale or disposition; or (iv) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board, together with any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (ii) or (iii) above) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board. Notwithstanding anything to the contrary, the consummation of an acquisition or merger transaction between the Company and YP LLC or any of its affiliates that involves all or substantially all of the assets of YP LLC will be considered a Change in Control. “Permitted Holder” shall mean Mudrick Capital Management L.P., Verto Direct Opportunity LP. Boston Patriot Battery March St. LLC. P Mudrick LTD, Mudrick Distressed Opportunity Drawdown Fund LP. Mudrick Distressed Opportunity Drawdown Fund LP. Mudrick Distressed Opportunity Specialty Fund LP. Blackwell Partners LLC - Series A. Mudrick Distressed Opportunity Fund Global LP. Paulson Credit Opportunities Master LTD, Paulson & Co. Inc., Paulson Credit Opportunities Master LTD and their respective affiliates.

 

5.             TERMINATION. The Employee’s employment and the Employment Term shall terminate on the first of the following to occur:

 

(a)            DISABILITY. Upon ten (10) days’ prior written notice by the Company to the Employee of termination due to Disability while the Employee remains Disabled. For purposes of this Agreement, “Disability” shall be defined as the Employee’s inability, as a result of physical or mental incapacity, to have performed the duties of his position for a period of six (6) consecutive months or for an aggregate of six (6) months in any twelve (12) consecutive month period. Any question as to whether Disability exists as to which the Employee and the Company cannot agree will be determined in writing by a qualified independent physician mutually acceptable to the Employee and the Company. If the Employee and the Company cannot agree as to a qualified independent physician, each will appoint such a physician and those two physicians will select a third who will make such determination in writing. The determination of Disability made in writing to the Company and the Employee will be final and conclusive for all purposes of this Agreement.

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(b)           DEATH. Automatically upon the date of death of the Employee.

 

(c)           CAUSE. Immediately upon written notice by the Company to the Employee of a termination for Cause. “Cause” shall mean:

 

(i)           the Employee’s willful misconduct with regard to the Company or his performance of his duties for the Company;

 

(ii)          the Employee’s embezzlement or misappropriation of assets of the Company (not including a good faith dispute over expense reimbursements) or fraud against the Company:

 

(iii)         the Employee’s conviction of, or guilty plea or plea of nolo contendere with respect to, a crime that constitutes a felony or a crime that constitutes a misdemeanor involving moral turpitude;

 

(iv)        the Employee’s material breach of this Agreement or any applicable restrictive covenants;

 

(v)         the Employee’s willful refusal to attempt in good faith to perform the Employee’s duties;

 

(vi)        the Employee’s willful and material violation of the Company’s generally applicable policies, including but not limited to any employment handbook and ethics code, if such violation can reasonably be expected to have a material adverse effect on the Company’s business or reputation; or

 

(vii)       the Employee’s willful and repeated failure to attempt to follow in good faith the lawful directives of the Board.

 

Provided, that with respect to any termination by reason of any of Sections 5(c)(iv) through 5(c)(vii), prior to the Employee’s termination, the Employee shall be given written notice detailing the specific Cause event, and he shall be entitled to a 30-day cure period following receipt of such notice, following which, if the Cause event in question is not cured, the Employee shall be terminated for Cause; provided, however, that the Board shall retain discretion over whether the Employee shall in any 12 month period receive additional opportunities to cure any such Cause event that is substantially the same as a previous occurrence in such 12 month period that was cured by the Employee.

 

(d)           WITHOUT CAUSE. Immediately upon written notice by the Company to the Employee of an involuntary termination without Cause (other than for death or Disability).

 

(e)           GOOD REASON. Upon written notice by the Employee to the Company of a termination for Good Reason. “Good Reason” shall mean the occurrence of any of the following events, without the express written consent of the Employee, unless such events are fully corrected in all material respects by the Company within 30 days following written notification by the Employee to the Company of the occurrence of one of the reasons set forth below:

 

(i)          material diminution in the Employee’s duties, authorities or responsibilities or reporting lines as set forth in Section 1(a) hereof (other than temporarily while physically or mentally incapacitated or as required by applicable law), provided, however, that implementation by the Board of its authority on hiring and firing as specified in Section 1(a) shall not be a violation of this clause (i);

 

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(ii)          material diminution in Base Salary or Target Bonus; or

 

(iii)         the Company’s material breach of its obligations to the Employee under the Agreement.

 

The Employee shall provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within 90 days after the first occurrence of such circumstances, and actually terminate employment within 30 days following the expiration of the Company’s 30-day cure period described above. Otherwise, any claim of such circumstances as “Good Reason” shall be deemed irrevocably waived by the Employee.

 

(f)            WITHOUT GOOD REASON. Upon 30 days’ prior written notice by the Employee to the Company of the Employee’s voluntary termination of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier than any notice date).

 

(g)           EXPIRATION OF EMPLOYMENT TERM; NON-EXTENSION OF AGREEMENT. Upon the expiration of the Employment Term set forth in Section 2 hereof.

 

6.            CONSEQUENCES OF TERMINATION.

 

(a)           TERMINATION FOR CAUSE OR WITHOUT GOOD REASON OR AS A RESULT OF THE EMPLOYEE’S NON-RENEWAL OF THE EMPLOYMENT TERM. If the Employee’s employment is terminated (x) by the Company for Cause, (y) by the Employee without Good Reason, or (z) as a result of the Employee’s non-renewal of the Employment Term as provided in Section 2 hereof, the Company shall pay to the Employee the following (with the amounts due under Sections 6(a)(i) through 6(a)(iii) hereof to be paid within 60 days following termination of employment, or such earlier date as may be required by applicable law):

 

(i)          any unpaid Base Salary through the date of termination;

 

(ii)         reimbursement for any unreimbursed business expenses incurred through the date of termination;

 

(iii)        any accrued but unused vacation time in accordance with Company policy;

 

(iv)        except in the case of termination by the Company for Cause, any accrued unpaid bonus for the most recently completed year (or most recently completed period in the case of bonus plans covering periods shorter than a year) under the Company’s bonus plans; and

 

(v)         all other payments, benefits or fringe benefits to which the Employee shall be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this Agreement (collectively, Sections 6(a)(i) through 6(a)(v) hereof shall be hereafter referred to as the “Accrued Benefits”).

 

(b)           TERMINATION WITHOUT CAUSE, FOR GOOD REASON, BY REASON OF THE EMPLOYEE’S DEATH OR DISABILITY, OR AS A RESULT OF THE COMPANY’S NON-RENEWAL OF THE EMPLOYMENT TERM. Except as provided in Section 6(c) hereof, if the Employee’s employment is terminated (v) by the Company other than for Cause, (w) by the Employee for Good Reason, (x) as a result of the Employee’s death, (y) as a result of the Employee’s Disability, or (z) as a result of the Company’s non-renewal of the Employment Term, as provided for in Section 2 hereof, the Company shall pay or provide the Employee (or his estate, as applicable) with the following, subject to the provisions of Section 22 hereof:

 

(i)           the Accrued Benefits;

 

(ii)          a pro-rated bonus for the year (or period in the case of bonus plans covering periods shorter than a year) in which your employment terminates, such bonus to be determined based on actual performance and consistent with senior executives who remain employed with the Company, and then prorated based on the number of calendar days of such year (or period) elapsed through the date your employment is terminated, payable at the same time as bonuses are paid to other senior executives for the year (or period); and

 

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(iii)        an amount equal to one times (IX) the sum of (a) Base Salary and (b) Target Bonus, which amount shall be paid in a lump sum promptly after termination; provided that to the extent that the payment of any amount constitutes “nonqualified deferred compensation” for purposes of Code Section 409A (as defined in Section 22 hereof), any such payment scheduled to occur during the first 60 days following the termination of employment shall not be paid until the first regularly scheduled pay period following the 60th day following such termination and shall include payment of any amount that was otherwise scheduled to be paid prior thereto. Notwithstanding the foregoing, such payment shall in all events be paid prior to March 15 of the calendar year following the year of termination.

 

Payments and benefits provided in this Section 6(b) shall be in lieu of any termination or severance payments or benefits for which the Employee may be eligible under any of the plans, policies or programs of the Company or under the Worker Adjustment Retraining Notification Act of 1988 or any similar state statute or regulation.

 

(c)           TERMINATION WITHOUT CAUSE OR FOR GOOD REASON IN CONNECTION WITH A CHANGE IN CONTROL. If the Employee’s employment is terminated (x) by the Company other than for Cause, (y) by the Employee for Good Reason or (z) as a result of the Company’s non-renewal of the Employment Term, as provided for in Section 2 hereof, and in any such case, such termination occurs within the period starting six (6) months prior to a Change in Control and ending twelve (12) months following a Change in Control, Employee shall be entitled (without duplication) to (i) acceleration of the Initial Options and (ii) the payments and benefits described in Section 6(b), except that, solely in the case of an amount otherwise payable under Section 6(b)(iii), such amount shall be multiplied by 2 (i.e., an amount equal to 2 multiplied by the sum of Base Salary and Target Bonus, without duplication), and such amount shall be paid in a lump sum promptly after termination, subject to the same payment timing procedures as described in Section 6(b)(iii), provided that, if the termination is prior to the Change in Control, the amount over the amount in Section 6(b) shall be paid promptly after the Change in Control.

 

(d)           OTHER OBLIGATIONS. Upon any termination of the Employee’s employment with the Company, the Employee shall promptly resign from any position as an officer, director or fiduciary of any Company-related entity.

 

(e)            EXCLUSIVE REMEDY. The amounts payable to the Employee following termination of employment and the Employment Term hereunder pursuant to Sections 5 and 6 hereof shall be in full and complete satisfaction of the Employee’s rights under this Agreement and any other claims that the Employee may have in respect of the Employee’s employment with the Company or any of its affiliates, and the Employee acknowledges that such amounts are fair and reasonable, and are the Employee’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, with respect to the termination of the Employee’s employment hereunder or any breach of this Agreement.

 

7.             RELEASE. Any and all amounts payable and benefits or additional rights provided pursuant to this Agreement beyond the Accrued Benefits shall only be payable if the Employee delivers to the Company and does not revoke a general release of claims in favor of the Company in substantially the form attached as Exhibit A hereto. Such release shall be executed and delivered (and no longer subject to revocation, if applicable) within 60 days following termination.

 

8.             RESTRICTIVE COVENANTS.

 

(a)           CONFIDENTIALITY. During the course of the Employee’s employment with the Company, the Employee has had and will continue to have access to Confidential Information. For purposes of this Agreement, “Confidential Information” means all data, information, ideas, concepts, discoveries, trade secrets, inventions (whether or not patentable or reduced to practice), innovations, improvements, know-how, developments, techniques, methods, processes, treatments, drawings, sketches, specifications, designs, plans, patterns, models, plans and strategies, and all other confidential or proprietary information or trade secrets in any form or medium (whether merely remembered or embodied in a tangible or intangible form or medium) whether now or hereafter existing, relating to or arising from the past, current or potential business, activities and/or operations of the Company or any of its affiliates, including, without limitation, any such information relating to or concerning finances, sales, marketing, advertising, transition, promotions, pricing, personnel, customers, suppliers, vendors, raw partners and/or competitors. The Employee agrees that the Employee shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of the Employee’s duties and for the benefit of the Company as determined in good faith by the Employee, either during the period of the Employee’s employment or at any time thereafter, any Confidential Information or other confidential or proprietary information received from third parties subject to a duty on the Company’s and its subsidiaries’ and affiliates part to maintain the confidentiality of such information, and to use such information only for certain limited purposes, in each case, which shall have been obtained by the Employee during the Employee’s employment by the Company (or any predecessor). The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to the Employee: (ii) becomes generally known to the public subsequent to disclosure to the Employee through no wrongful act of the Employee or any representative of the Employee: (iii) was known to the Employee prior to his employment with the Company (the Company acknowledging that the Employee has had extensive experience in the Company’s industry); or (iv) the Employee is required to disclose by applicable law, regulation or legal process (provided that the Employee provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).

 

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(b)           NONCOMPETITION. The Employee acknowledges that (i) the Employee performs services of a unique nature for the Company that are irreplaceable, and that the Employee’s performance of such services in violation of this provision to a competing business will result in irreparable harm to the Company, (ii) the Employee has had and will continue to have access to Confidential Information which, if disclosed, would unfairly and inappropriately assist in competition against the Company or any of its affiliates, (iii) the Company and its affiliates have substantial relationships with their customers and the Employee has had and will continue to have access to these customers, and (iv) the Employee has generated and will continue to generate goodwill for the Company and its affiliates in the course of the Employee’s employment Accordingly, during the Employee’s employment hereunder and for a period of six (6) months thereafter (the “Noncompete Period”), the Employee agrees that the Employee will not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in competition with the Company or any of its subsidiaries or affiliates or in any other material business in which the Company or any of its subsidiaries or affiliates is engaged on the date of termination or in which they have planned, on or prior to such date, to be engaged in on or after such date, in any locale of any country in which the Company conducts business or otherwise engage in conduct that interferes or conflicts with the Employee’s duties to the Company or creates a potential business or fiduciary conflict. Notwithstanding the foregoing, nothing herein shall prohibit the Employee from being a passive owner of not more than three percent (3%) of the equity securities or public debt of a publicly traded corporation engaged in a business that is in competition with the Company or any of its subsidiaries or affiliates or through a private equity, venture capital or other commingled fund, so long as the Employee has no active participation in the business of such corporation. In addition, the provisions of this Section 8(b) shall not be violated by the Employee commencing employment with a subsidiary, division or unit of any entity that engages in a business in competition with the Company or any of its subsidiaries or affiliates so long as the Employee and such subsidiary, division or unit does not engage in a business in competition with the Company or any of its subsidiaries or affiliates.

 

(c)           NONSOLICITATION; NONINTERFERENCE. During the Employee’s employment with the Company and for a period of one (1) year thereafter, the Employee agrees that the Employee shall not, except in the furtherance of the Employee’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity. (A) solicit, aid or induce any employee, representative or agent of the Company or any of its subsidiaries or affiliates to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent, or (B) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company or any of its subsidiaries or affiliates and any of their respective vendors, joint venturers or licensors. An employee, representative or agent shall be deemed covered by this Section 8(c) while so employed or retained and for a period of six (6) months thereafter. The foregoing shall not be violated by general advertising not targeted at the Company’s employees, representatives or agents, serving as a reference upon request, or utilizing representatives or agents that serve multiple entities (provided that such utilization does not interfere with the Company’s relationships).

 

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(d)           INVENTIONS. (i) The Employee acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products, developments, software, know-how, processes, techniques, methods, works of authorship and other work product, whether patentable or unpatentable, (A) that are reduced to practice, created, invented, designed, developed, contributed to or improved with the use of any Company resources and/or within the scope of the Employee’s work with the Company or that relate to the business, operations or actual or demonstrably anticipated research or development of the Company, and that are made or conceived by the Employee, solely or jointly with others, during the Employment Term, or (B) suggested by any work that the Employee performs in connection with the Company, either while performing the Employee’s duties with the Company or on the Employee’s own time, shall belong exclusively to the Company (or its designee), whether or not patent or other applications for intellectual property protection are filed thereon (the “Inventions”). The Employee will keep full and complete written records (the “Records”), in the manner prescribed by the Company, of all Inventions, and will promptly disclose all Inventions completely and in writing to the Company. The Records shall be the sole and exclusive property of the Company, and the Employee will surrender them upon the termination of the Employment Term, or upon the Company’s request. The Employee irrevocably conveys, transfers and assigns to the Company the Inventions and all patents or other intellectual property rights that may issue thereon in any and all countries, whether during or subsequent to the Employment Term, together with the right to file, in the Employee’s name or in the name of the Company (or its designee), applications for patents and equivalent rights (the “Applications”). The Employee will at any time during and subsequent to the Employment Term, make such applications, sign such papers, take all rightful oaths, and perform all other acts as may be requested from time to time by the Company to perfect, record, enforce, protect, patent or register the Company’s rights in the Inventions, all without additional compensation to the Employee from the Company, but at the Company’s expense. The Employee will also execute assignments to the Company (or its designee) of the Applications, and give the Company and its attorneys reasonable assistance (including the giving of testimony) to obtain the Inventions for the Company’s benefit all without additional compensation to the Employee from the Company, but at the Company’s expense.

 

(ii)          In addition, the Inventions will be deemed Work for Hire, as such term is defined under the copyright laws of the United States, on behalf of the Company and the Employee agrees that the Company will be the sole owner of the Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to the Employee. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, or the rights in such Inventions do not otherwise automatically vest in the Company, the Employee hereby irrevocably conveys, transfers and assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Inventions, including, without limitation, all of the Employee’s right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricted right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Inventions, known or unknown, prior to the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, the Employee hereby waives any so-called “moral rights” with respect to the Inventions. To the extent that the Employee has any rights in the results and proceeds of the Employee’s service to the Company that cannot be assigned in the manner described herein, the Employee agrees to unconditionally waive the enforcement of such rights. The Employee hereby waives any and all currently existing and future monetary rights in and to the Inventions and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to the Employee’s benefit by virtue of the Employee being an employee of or other service provider to the Company,

 

(e)            RETURN OF COMPANY PROPERTY. On the date of the Employee’s termination of employment with the Company for any reason (or at any time prior thereto at the Company’s request), the Employee shall return all property belonging to the Company or its affiliates (including, but not limited to any Company provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company). The Employee may retain the Employee’s rolodex and similar address books provided that such items only include contact information.

 

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(f)            REASONABLENESS OF COVENANTS. In signing this Agreement, the Employee gives the Company assurance that the Employee has carefully read and considered all of the terms and conditions of this Agreement, including the restraints imposed under this Section 8 hereof. The Employee agrees that these restraints are necessary for the reasonable and proper protection of the Company and its affiliates and their Confidential Information and that each and every one of the restraints is reasonable in respect to subject matter length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent the Employee from obtaining other suitable employment during the period in which the Employee is bound by the restraints. The Employee agrees that, before providing services, whether as an employee or consultant, to any entity during the period of time that the Employee is subject to the constraints in Section 8(b) hereof, the Employee will provide a copy of the relevant provisions of this Agreement (including, without limitation, this Section 8) to such entity. The Employee acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Company and its affiliates and that the Employee has sufficient assets and skills to provide a livelihood while such covenants remain in force. The Employee further covenants that the Employee will not challenge the reasonableness or enforceability of any of the covenants set forth in this Section 8. It is also agreed that each of the Company’s affiliates will have the right to enforce all of the Employee’s obligations to that affiliate under this Agreement, including without limitation pursuant to this Section 8. The Company acknowledges that, to the extent it has an obligation to pay an amount for the restrictions in Section 8(b) hereof to be valid, if it does not timely pay such amounts it will not try to assert such restrictive covenants and further, when the restrictive covenants do not apply, it shall not try to assert inevitable disclosure of Confidential Information to prevent the Employee’s activities.

 

(g)           REFORMATION. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 8 is excessive in duration or scope or is unreasonable or unenforceable under applicable law. it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the laws of that state.

 

(h)           TOLLING. In the event of any actual violation of the provisions of this Section 8, the Employee acknowledges and agrees that the applicable post-termination restrictions contained in this Section 8 shall be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

 

(i)            SURVIVAL OF PROVISIONS. The obligations contained in Sections 8 and 9 hereof shall survive the termination or expiration of the Employment Term and the Employee’s employment with the Company and shall be fully enforceable thereafter.

 

9.            COOPERATION. Upon the receipt of reasonable notice from the Company (including outside counsel), the Employee agrees that while employed by the Company and thereafter, the Employee will reasonably respond and provide information with regard to matters in which the Employee has knowledge as a result of the Employee’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and will reasonably assist the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of the Employee’s employment with the Company (collectively, the “Claims”). The foregoing shall not apply to any matter between the Company and the Employee. The Employee also agrees to promptly inform the Company (to the extent that the Employee is legally permitted to do so) if the Employee is asked to assist in any investigation of the Company or its affiliates (or their actions) or another party attempts to obtain information or documents from the Employee (other than in connection with any litigation or other proceeding in which the Employee is a party-in-opposition) with respect to matters the Employee believes in good faith to relate to any investigation of the Company or its affiliates related to his employment period, in each case, regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless legally required. During the pendency of any litigation or other proceeding involving Claims, the Employee shall not communicate with anyone (other than the Employee’s attorneys and tax and. or financial advisors and except to the extent that the Employee determines in good faith is necessary in connection with the performance of the Employee’s duties hereunder) with respect to the facts or subject matter of any pending or potential litigation or regulatory or administrative proceeding involving the Company or any of its affiliates that is a Claim without giving prior written notice to the Company or the Company’s counsel. Upon presentation of appropriate documentation, the Company shall pay or reimburse the Employee for all reasonable out-of-pocket travel, duplicating or telephonic expenses incurred by the Employee in complying with this Section 9. Any cooperation by the Employee shall take due regard of his other commitments and shall be scheduled at a time and location that will reasonably limit the inconvenience to him.

 

9

 

10.           EQUITABLE RELIEF AND OTHER REMEDIES. The Employee acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 8 or Section 9 hereof would be inadequate and in recognition of this fact, the Employee agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond or other security, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages.

 

11.           NO ASSIGNMENTS. This Agreement is personal to each of the parties hereto. Except as provided in this Section 11 hereof, no party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto. The Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company, provided that the Company shall require such successor to expressly in writing assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company and any successor to its business and or assets, which assumes and agrees to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise.

 

12.           NOTICE. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered by hand, (b) on the date of transmission, if delivered by confirmed facsimile or electronic mail, (c) on the first business day following the date of deposit, if delivered by guaranteed overnight delivery service, or (d) on the fourth business day following the date delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Employee:

 

At the address (or to the facsimile number) shown in the books and records of the Company.

 

If to the Company:

 

Dex Media, Inc.

 

2200 West Airfield Drive

 

Dallas-Fort Worth Airport, Texas 75261

 

Attention: General Counsel

 

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

13.          SECTION HEADINGS; INCONSISTENCY. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. In the event of any inconsistency between the terms of this Agreement and any form, award, plan or policy of the Company, the terms of this Agreement shall govern and control.

 

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14.          SEVERABILITY. The provisions of this Agreement shall be deemed severable. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by applicable law.

 

15.          COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

16.          ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement or the Employee’s employment with the Company, other than injunctive relief under Section 10 hereof, shall be settled exclusively by arbitration, conducted before a single arbitrator in Maryland in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association then in effect. The decision of the arbitrator will be final and binding upon the parties hereto. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The parties acknowledge and agree that in connection with any such arbitration, to the extent that the Employee prevails in said arbitration (as determined by the arbitrator), the Company shall pay all of the Employee’s costs and expenses, including, without limitation, reasonable legal fees and expenses promptly upon presentation of invoices, but in any event by March 15 of the calendar year after the award of fees by the arbitrator.

 

17.          INDEMNIFICATION. The Company hereby agrees to indemnify the Employee and hold the Employee harmless (including advancement of legal fees) to the extent provided under the By-Laws of the Company (as are currently in effect) against and in respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney’s fees), losses, and damages resulting from the Employee’s good faith performance of the Employee’s duties and obligations with the Company. This obligation shall survive the termination of the Employee’s employment with the Company.

 

18.           LIABILITY INSURANCE. The Company shall cover the Employee under directors’ and officers’ liability insurance both during and, while potential liability exists, after the term of this Agreement in the same amount and to the same extent as the Company covers its other officers and directors.

 

19.          GOVERNING LAW. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to its choice of law provisions).

 

20.          MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer or director as may be designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement together with all exhibits hereto sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes any and all prior agreements or understandings between the Employee and the Company with respect to the subject matter hereof. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

 

21.          REPRESENTATIONS. The Employee represents and warrants to the Company that (a) the Employee has the legal right to enter into this Agreement and to perform all of the obligations on the Employee’s part to be performed hereunder in accordance with its terms, and (b) the Employee is not a party to any agreement or understanding, written or oral, and is not subject to any restriction, which, in either case, could prevent the Employee from entering into this Agreement or performing all of the Employee’s duties and obligations hereunder.

 

11

 

22.          TAX MATTERS.

 

(a)           WITHHOLDING. The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

(b)           SECTION 409A COMPLIANCE.

 

(i)          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”) or be exempt therefrom and accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith or exempt therefrom. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Employee and the Company of the applicable provision without violating the provisions of Code Section 409A. The Employee acknowledges and agrees that the Company makes no representations with respect to the application of Code Section 409A or any other tax consequences to any payments hereunder.

 

(ii)         A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also 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” or like terms shall mean “separation from service.” Notwithstanding anything to the contrary in this Agreement, if the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a “separation from Service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, and (B) the date of the Employee’s death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 22(b)(ii) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(iii)        To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Employee, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided in any other taxable year.

 

(iv)        For purposes of Code Section 409A, the Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

(v)         Notwithstanding any other provision of this Agreement to the contrary, in no event shall 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.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

	 	COMPANY
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	Debra M. Ryan
	 	 	 
	 	Title:	EVP–HR
	 	 	 
	 	EMPLOYEE
	 	 
	 	Joseph Walsh
	 	Joe Walsh

 

 

EXHIBIT A

 

GENERAL RELEASE

 

I.                           , in consideration of and subject to the performance by Dex Media, Inc. (together with its subsidiaries, the “Company”), of its obligations under the Amended and Restated Employment Agreement dated as of September 26, 2016 (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company and its respective affiliates and, in their capacity related to the Company, all present, former and future managers, directors, officers, employees, successors and assigns of the Company and its affiliates and direct or indirect owners (collectively, the “Released Parties”) to the extent provided below (this “General Release”). The Released Parties are intended to be third-party beneficiaries of this General Release, and this General Release may be enforced by each of them in accordance with the terms hereof in respect of the rights granted to such Released Parties hereunder. Terms used herein but not otherwise defined shall have the meanings given to them in the Agreement.

 

1.             I understand that any payments or benefits paid or granted to me under Section 6 of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive certain of the payments and benefits specified in Section 6 of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter. Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or its affiliates.

 

2.             Except as provided in paragraphs 4 and 5 below and except for the provisions of the Agreement which expressly or by implication survive the termination of my employment with the Company. I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date that this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991: the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law. or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”).

 

3.             I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above.

 

4.             I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967, as amended which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967, as amended).

 

5.             I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any Claim, including, without limitation, reinstatement, back pay. front pay, and any form of injunctive relief Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding. Additionally, I am not waiving (i) any right to the Accrued Benefits or any severance benefits to which I am entitled under the Agreement, (ii) any claim relating to directors’ and officers’ liability insurance coverage or any right of indemnification under the Company’s organizational documents or otherwise, or (iii) my rights as an equity or security holder in the Company or its affiliates.

 

 

6.             In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state or local statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims to the maximum extent permitted by law. I further agree that I am not aware of any pending claim of the type described in paragraph 2 above as of the execution of this General Release.

 

7.             I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.

 

8.             I hereby acknowledge that Sections 6 through 12, 16 through 20 and 22 of the Agreement shall survive my execution of this General Release.

 

9.             I represent that I am not aware of any claim by me other than the claims that are released by this General Release. I acknowledge that I may hereafter discover claims or facts in addition to or different than those which I now know or believe to exist with respect to the subject matter of the release set forth in paragraph 2 above and which, if known or suspected at the time of entering into this General Release, may have materially affected this General Release and my decision to enter into it.

 

10.           Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof.

 

11.           Whenever possible, each provision of this General Release shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

		1.	I HAVE READ IT CAREFULLY:

 

		2.	I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT AC! OF 1967. AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964. AS AMENDED: THE EQUAL PAY ACT OF 1963. THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. AS AMENDED:

 

 

		3.	I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

		4.	I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

 

		5.	I HAVE HAD AT LEAST [21][45] DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER IT, AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL- OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED [21][45]-DAY PERIOD;

 

		6.	I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

 

		7.	I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 

		8.	I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

 

	SIGNED:	 	 	DATED:	 

 

 

EXHIBIT B

 

[insert Initial Option Agreement]

 

 

DEX MEDIA, INC. 

 

STOCK OPTION AGREEMENT

 

GRANT DATE: September 26, 2016

 

Joe Walsh

c/o Dex Media, Inc.

2200 West Airfield Drive

P.O. Box 619810

DFW Airport, TX 75261

 

Dear Joe:

 

This letter agreement (the “Agreement”) sets forth the terms and conditions of the stock option granted to you on September 26, 2016 by Dex Media, Inc. (the “Company”), in accordance with the provisions of its 2016 Stock Incentive Plan (the “Plan”).

 

Your Option (as such term is defined in paragraph 1 below) is subject to the terms and conditions set forth in the Plan, any rules and regulations adopted by the Board of Directors of the Company or the committee of the Board which administers the Plan (collectively, the “Committee”), and this Agreement, This grant is only effective if you sign and return to the Company a copy of this Agreement evidencing your agreement with the terms and conditions of your Option. Any terms used in this Agreement and not defined have the meanings set forth in the Plan.

 

		1.	Option Grant

 

You have been granted an option (the “Option”) to purchase 5,000,000 shares of the Company’s Common Stock (“Common Stock”). The Option is a “non-qualified stock option” and is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

		2.	Exercise Price

 

The price at which you may purchase the shares of Common Stock covered by the Option is $2.04 per share.

 

		3.	Term of Option

 

Your Option expires in all events on September 26, 2026 (the “Option Expiration Date”). However, your Option may terminate prior to the Option Expiration Date as provided in paragraph 7 of this Agreement upon the occurrence of one of the events described in that paragraph. Regardless of the provisions of paragraph 7, in no event can your Option be exercised after the Option Expiration Date.

 

 

		4.	Exercisability of Option

 

(a)           Unless it becomes exercisable on an earlier date as provided in paragraph 7 or 11 below, your Option will become exercisable in equal monthly installments over a three year period beginning on January 1, 2017, provided that you continue to provide service to the Company or one of its Affiliates on each such date.

 

(b)           To the extent your Option has become exercisable, you may exercise the Option to purchase all or any part of such shares at any time on or before the date the Option expires or terminates. You may only purchase a whole number of shares.

 

		5.	Manner of Exercise

 

You may exercise your Option by giving written notice to the Company (on the Exercise Agreement attached hereto as Exhibit A or any other form acceptable to the Company) of the number of shares of Common Stock desired to be purchased. The notice must be hand delivered or mailed to the Company at its headquarters office (currently 2200 West Airfield Drive, P.O. Box 619810, DFW Airport, TX 75261); Attention: Deb Ryan, EVP – Chief Human Resources Officer. The notice must be accompanied by tender in full of the exercise price, in cash (including check, bank draft, money order, or wire transfer to the order of the Company). You may also exercise your Option by payment of the exercise price in shares of Common Stock, by delivery of the documents necessary to arrange for payment of the exercise price by means of a broker-assisted cashless exercise, or by a net share exercise, subject to the terms and conditions set forth in paragraphs 6(a), 6(b) and 6(c) below. Except as provided in paragraph 8 below, your Option will be deemed exercised on the date the Exercise Agreement or other notice of exercise acceptable to the Company (with accompanying payment of the exercise price) is hand delivered or, if mailed, postmarked.

 

The shares of Common Stock you will receive upon exercise of your Option may consist of authorized but unissued shares or treasury shares of the Company, as determined from time to time by the Company’s Board of Directors.

 

		6.	Satisfaction of Exercise Price other than with Cash

 

(a)           Payment in Common Stock. If the Company is subject to the reporting requirements of the Exchange Act and the Common Stock is publicly traded at the time of your exercise, your Option may be exercised by the delivery of shares of Common Stock which you have owned for at least six months. Such shares will be valued at their Fair Market Value (as defined in the Plan) at the close of trading on the date of exercise. The stock certificates for the shares you deliver in payment of the exercise price must be duly endorsed or accompanied by appropriate stock powers. Only stock certificates issued solely in your name may be delivered. Only whole shares may be delivered. Any portion of the exercise price in excess of the fair market value of a whole number of shares must be paid in cash. If a certificate delivered in exercise of your Option evidences more shares than are needed to pay the exercise price, an appropriate replacement certificate will be issued to you for the excess shares.

 

(b)           Broker-Assisted Cashless Exercise. If the Company is subject to the reporting requirements of the Exchange Act and the Common Stock is publicly traded at the time of your exercise, you may exercise your Option by executing and delivering the documents necessary to irrevocably authorize a broker acceptable to the Company to sell shares of Common Stock (or a sufficient portion of such shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any required tax withholding resulting from such exercise.

 

 

(c)            Net Share Exercise. You may exercise your Option by delivering to the Company a written exercise notice (on the Exercise Agreement attached hereto as Exhibit A or any other form acceptable to the Company) that directs the Company to withhold a sufficient number of the shares of Common Stock acquired upon exercise to satisfy the aggregate exercise price and tax withholding obligation with respect to the shares of Common Stock to which the Option is being exercised. For purposes of this provision, the shares of Common Stock applied to satisfy the exercise price and withholding obligation shall be valued in the same manner as provided under paragraph 6(a).

 

		7.	Termination of Employment or Other Service With the Company

 

(a)           General. Except as otherwise provided by the terms of an employment agreement with the award holder, the following rules apply to your Option in the event of your death, disability, retirement, or other termination of service.

 

		(i)	Termination for Reasons Other than Cause, or Voluntary Termination Without Good Reason. If your service with the Company terminates for any reason other than termination for Cause, or by you without Good Reason, your Option will terminate one year after such termination of service or, if earlier, the Option Expiration Date. Following the termination of your service, no additional portions of your Option will become exercisable (except as provided for in clause (iv) below), and your Option will be exercisable only with respect to the number of shares which you were entitled to purchase on the date of the termination of your service.

 

		(ii)	Voluntary Termination Without Good Reason. If you terminate your service with the Company without Good Reason, your Option will terminate 90 days following such termination of employment or service with the Company, or, if earlier, the Option Expiration Date. Following the termination of your service, no additional portions of your Option will become exercisable, and your Option will be exercisable only with respect to the number of shares which you were entitled to purchase on the date of the termination of your service.

 

		(iii)	Termination for Cause. If your service with the Company is terminated for Cause, your Option, whether vested or unvested, will immediately terminate.

 

		(iv)	Termination without Cause or for Good Reason in Connection with a Change in Control. If your service with the Company is terminated by the Company without Cause or by you for Good Reason in either case within 6 months prior to or 12 months following a Change in Control, all unvested Options shall immediately vest and become exercisable as of the date of such termination of service (or Change in Control, if later). Your Option will terminate one year following such termination of service (or Change in Control, if later), or, if earlier, the Option Expiration Date.

 

 

(b)           Adjustments by the Committee. The Committee may, in its discretion, exercised before or after your termination of service with the Company, declare all or any portion of your Option immediately exercisable and/or permit all or any part of your Option to remain exercisable for such period designated by it after the time when the Option would have otherwise terminated as provided in the applicable portion of paragraph 7(a), but not beyond the expiration date of your Option as set forth in paragraph 3 above.

 

(c)           Determinations. The date and circumstances of your termination of your service with the Company and the occurrence of a Change of Control shall be determined in accordance with the requirements and procedures set forth in your employment agreement with the Company or, if you are not then party to an employment agreement with the Company, in accordance with the terms of the Plan.

 

		8.	Restrictions on Option Exercise

 

(a)           At the time of exercise of your Option, you will be required to execute appropriate documents making you subject to the Stockholder’s Agreement which, among other things, provides for certain restrictions on the transfer of Common Stock. All of the terms of the Stockholder’s Agreement are incorporated herein by reference. Notwithstanding the provisions of the Stockholder’s Agreement, the Company agrees that: (i) in connection with the exercise of drag or tag rights under the Stockholder’s Agreement, you cannot be required, without your consent, to agree to restrictive covenants more onerous to you than those contained in your employment agreement with the Company; (ii) you will be entitled to piggyback registration rights in connection with the exercise of demand registration rights under the Stockholder’s Agreement; and (iii) your use of the Company’s confidential information to the extent permitted under your employment agreement with the Company will not violate the confidentiality restrictions set forth in the Stockholder’s Agreement.

 

(b)           Without limitation of the Stockholder’s Agreement, if at the time of exercise, the Company has not had an initial public offering, then, as a condition to the exercise of your Option, you will be required to agree that the shares acquired upon exercise of your Option will be subject to such restrictions on disposition (“lock-up” provisions) as may be imposed on such shares by the Company’s underwriters in connection with the Company’s initial public offering, not to exceed 180 days.

 

(c)           Even though your Option is otherwise exercisable, your right to exercise the Option will be suspended if the Committee or the Company determines that your exercise of the Option would violate applicable laws or regulations. The suspension will last until the exercise would be lawful. Any such suspension will extend the period during which your Option may be exercised but will in no event extend the term of your Option. The Company has no obligation to register the Common Stock under federal or state securities laws.

 

(d)           Even though your Option is otherwise exercisable, the Committee or the Company may refuse to permit such exercise if it determines, in its discretion, that any of the following circumstances is present:

 

		(i)	
the shares to be acquired upon such exercise are required to be registered or qualified under any federal or state securities law, or to be listed on any securities exchange or quotation system, and such registration, qualification, or listing has not occurred;

 

		(ii)	the consent or approval of any government regulatory body is required and has not been obtained;

 

		(iii)	the satisfaction of withholding tax is required and has not occurred;

 

		(iv)	representations by you or other information is necessary or desirable in order to comply with any federal or state securities laws or regulations, and you have not provided such representations or information; or

 

		(v)	an agreement by you with respect to the disposition of shares to be acquired upon exercise of your Option is necessary or desirable in order to comply with any federal or state securities laws or regulations, or is required by the terms of this Agreement, and you have not executed such agreement.

 

(e)            In any of the circumstances described in this paragraph 8, the Committee or the Company may act either before or within ten (10) business days after your delivery of a notice of exercise, in which case your attempted exercise will have no effect.

 

(f)            The Company will take commercially reasonable steps to remedy the circumstances described in Sections 8(d)(i) or (ii), and the period during which your Option may be exercised will be extended for the period of time required to remedy such circumstance but in no event beyond the term of your Option.

 

		9.	Income Tax Withholding

 

In connection with the exercise of your Option, you will be required to pay, or make other arrangements satisfactory to the Committee, to satisfy any applicable withholding tax liability, which may include net share exercise as provided in Section 6(c). If you fail to satisfy your withholding obligation in a time and manner satisfactory to the Committee, the Company shall have the right to withhold the required amount from your salary or other amounts payable to you.

 

		10.	Non-transferability of Option

 

The Option granted to you by this Agreement may be exercised only by you, and may not be assigned, pledged, or otherwise transferred by you, with the exception that in the event of your death the Option may be exercised (at any time prior to its expiration or termination as provided in paragraphs 3 and 7) by the executor or administrator of your estate or by a person who acquired the right to exercise your Option by bequest or inheritance or by reason of your death.

 

		11.	Change in Control

 

Upon a Change in Control of the Company, the Board may take such action as it in its sole discretion deems appropriate to (i) accelerate the time when awards vest and/or may be exercised, (ii) cash out outstanding awards at or immediately prior to the date of such event (by payment of the amount, if any, by which the Fair Market Value of the Common Stock at the time exceeds the exercise price of the award of Options), (iii) provide for the assumption of outstanding awards by surviving, successor or transferee corporations, and/or (iv) provide that Options shall vest and be exercisable for a period of at least 10 business days from the date of receipt of a notice from the Company of such proposed event, following the expiration of which period any unexercised Options shall terminate.

 

 

The term “Change in Control” as used in this Agreement shall mean: (i) a Change in Control (as defined in the Plan); or (ii) the consummation of an acquisition or merger transaction between the Company and YP LLC or any of its affiliates that involves all or substantially all of the assets of YP LLC will be considered a Change in Control.

 

		12.	Adjustment in Certain Events

 

In the event of specified changes in the Company’s capital structure, the Board of Directors shall make appropriate adjustment in the number and kind of shares authorized by the Plan, and the number, exercise price and kind of shares covered by outstanding awards to the extent necessary to preserve the economic intent of such award. This Agreement will continue to apply to your Option as so adjusted.

 

		13.	No Guarantee of Continued Service

 

The grant of this Option does not constitute an assurance of continued service for any period or in any way interfere with the Company’s right to terminate your service or to change the terms and conditions of your service.

 

		14.	Notices

 

Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office to the attention of Deb Ryan, EVP – Chief Human Resources Officer, and to you at the address reflected or last reflected on the Company’s payroll records. Any notice shall be delivered in person or shall be enclosed in a properly sealed and addressed envelope, registered or certified, and deposited (postage and registry or certification fee prepaid) in a government post office of mailbox or sent by nationally recognized overnight courier. Any such notice shall be given only when received, but if you are no longer employed by the Company or providing services to it, shall be deemed to have been duly given five (5) business days after the date mailed in accordance with this paragraph 14 (or, if sent for overnight delivery by a nationally recognized overnight courier, on the next business day).

 

		15.	Plan

 

The Option and all of your rights under this Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. You agree to be bound by the terms of the Plan and this Agreement. You acknowledge having read the Plan and this Agreement.

 

		16.	Administration

 

The Committee has the sole power to interpret the Plan and this Agreement and to act upon all matters relating to Options granted under the Plan. Any decision, determination, interpretation, or other action taken pursuant to the provisions of the Plan by the Committee shall be final, binding, and conclusive.

 

 

		17.	Entire Agreement; Amendment

 

This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof.

 

The Committee may from time to time amend the terms of this grant or the rules and regulations governing this grant in accordance with the terms of the Plan in effect at the time of such amendment, but no amendment which is unfavorable to you can be made without your written consent.

 

The Plan is of unlimited duration, but may be amended, terminated or discontinued by the Board of Directors of the Company at any time. However, no amendment, termination or discontinuance of the Plan will unfavorably affect this Option.

 

		18.	Effect of this Agreement

 

This Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Company.

 

		19.	Governing Law; Arbitration; Severability; Miscellaneous

 

(a)           Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to conflict of law principles thereof that would give effect to the law of another state.

 

(b)           Construction. The language of all parts of the Plan and this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the parties.

 

(c)           Limited Rights. You shall have no rights as a stockholder of the Company with respect to the Option. Your rights with respect to the shares of Common Stock delivered upon exercise of your Option after the date of such issuance are subject to the terms and conditions set forth herein.

 

(d)           Severability. If it is determined that any portion of this Agreement or the Plan is in violation of any statute or public policy, then only the portions of this Agreement or the Plan, as applicable, that violate such statute or public policy shall be stricken, and all portions of this Agreement and the Plan that do not violate any statute or public policy shall continue in full force and effect. Furthermore, it is the parties’ intent that any court order striking any portion of this Agreement and/or the Plan should modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties hereunder.

 

(e)           Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

(f)            Section Headings. The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

 

 

(g)           Death or Disability. References herein to obligations applicable to you as an optionee (excluding, for purposes of clarity, the requirement that all services that are a precondition to vesting and exercisability of the Option be performed by you) shall include references to your beneficiary or personal representative if you die or become incapacitated.

 

(h)           Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein.

 

		20.	Data Privacy

 

You expressly consent to the collection, use and transfer, in electronic or other form, of your personal data by and among the Company, its subsidiaries and affiliates, and any broker or third party assisting the Company in administering the Plan or providing recordkeeping services for the Plan, for the purpose of implementing, administering and managing participation in the Plan. You expressly waive any data privacy rights you may have with respect to such information.

 

 

This Agreement contains the formal terms and conditions of your award and accordingly should be retained in your files for future reference. Please sign below to evidence your acceptance of this Option on the terms and conditions set forth in this Agreement, and return a signed copy of this Agreement to Deb Ryan, EVP – Chief Human Resources Officer, at the Company’s Dallas headquarters.

 

	 	Very truly yours,
	 	 
	 	DEX MEDIA, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

ACCEPTANCE OF OPTION:

 

I have read, understand, and agree to the terms and provisions of this Option, including without limitation, the restrictions on my right to exercise the Option (set forth in paragraph 8).

	 	 
	 	 
	(signature of employee)	 
	 	 
	Joseph Walsh	 
	(print name)Exhibit 10.2

 

Final Version

 

Dex Media, Inc. 

2016 Stock Incentive Plan

 

SECTION 1.       Purpose

 

1.1         The purposes of the Dex Media, Inc. 2016 Stock Incentive Plan (the “Plan”) are to enable Dex Media, Inc. (the “Company”) to attract, retain and reward its employees, officers, directors, consultants and advisors, and to encourage such persons to put forth maximum efforts for the growth and success of the Company by offering them an equity interest in the Company.

 

SECTION 2.      Types of Awards

 

2.1         Awards under the Plan shall be in the form of Incentive Options, Non- Qualified Options, Stock Appreciation Rights, Restricted Stock and/or Restricted Stock Units (as such terms are defined below).

 

SECTION 3.       Definitions

 

3.1         Whenever used herein the following terms shall have the following meanings, respectively:

 

(a)            “Affiliate” shall mean any entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Company.

 

(b)            “Board” shall mean the Board of Directors of the Company.

 

(c)            “Cause” shall mean, except as otherwise specified by the terms of an employment agreement with the award holder or an award agreement evidencing an award under this Plan, conduct amounting to (1) fraud or dishonesty against the Company; (2) an award holder’s willful misconduct, repeated refusal or failure to follow the reasonable directions of the Company or the award holder’s direct supervisor, or knowing violation of law in the course of performance of the duties owed by an award holder to the Company; (3) repeated intoxication with alcohol or drugs while on the Company’s premises during regular business hours; (4) a conviction of or plea of nolo contendere to a felony or a crime involving dishonesty; or (5) a material breach or material violation of the terms of any employment or other agreement to which an award holder and the Company are parties. 

 

(d)           “Change in Control” shall have the meaning set forth in Section 14 of the Plan.

 

(e)           “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

 

 

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(f)           “Committee” shall mean the committee of the Board designated by the Board to administer the Plan, or if no committee is designated, and in any case with respect to awards to non-employee directors, the entire Board. Any such committee shall be comprised solely of one or more directors or such number of directors as may be required by applicable law.

 

(g)         “Common Stock” shall mean the Company’s Common Stock, par value $0.01. 

 

(h)         “Company” shall mean Dex Media, Inc., a Delaware corporation, and its successors.

 

(i)           “Disability” shall, with respect to a particular award holder, have the definition provided in the award holder’s agreement, or in the absence of such a definition, in an employment agreement between the award holder and the Company or its Affiliates, or in the absence of either such definition, “Disability” shall mean that the award holder is unable to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death of can be expected to last for a continuous period of not less than 12 months. The determination of whether an award holder has a Disability shall be determined under procedures established by the Committee.

  

(j)           “Effective Date” shall have the meaning set forth in Section 17 of the Plan.

 

(k)          “Employee” shall mean an employee of the Company or of any Affiliate of the Company. 

 

(l)           “Exchange Act” shall have the meaning set forth in Section 14.3(a).

 

(m)         “Fair Market Value” of the Common Stock on any date shall mean the value determined in good faith by the Committee, by formula or otherwise; provided, however, that unless the Committee determines to use a different measure:

 

(i)             If the Common Stock is readily tradable on an established securities market (as determined for purposes of Section 409A), its Fair Market Value shall be the closing sales price for such stock (on such established securities market as is determined by the Board to be the primary market for Common Stock) on the date in question (or if shares of Common Stock were not traded on such date, then on the next preceding trading day on which a sale of Common Stock occurred); and

 

(ii)            If the Common Stock is not readily tradable on an established securities market, its Fair Market Value shall be determined in accordance with Section 409A.

 

 

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(n)         “Good Reason” shall mean, except as otherwise specified by the terms of an employment agreement with the award holder or an award agreement evidencing an award under this Plan, without the award holder’s consent:

 

(i)            a material diminution in the award holder’s base salary;

 

(ii)           a material change in the geographic location of the award holder’s principal place of employment that increases the distance from the award holder’s place of residence to place of employment by more than 50 miles; or

 

(iii)           if the award holder is a party to an employment agreement with the Company or one of its Affiliates, a material breach by the Company or an Affiliate of such agreement;

 

provided, however, that in the case of the definition of Good Reason enumerated in clauses (i) – (iii), in order to satisfy such definition: (a) the award holder must provide notice to the Company (or the Affiliate that employs or retains the award holder) of the condition described in (i) – (iii) above within 90 days of the initial existence of the condition; (b) the Company must be provided 30 days after receipt of such notice to remedy the condition and fail to do so; and (c) the award holder must terminate his or her Relationship within 150 days after the initial existence of the condition.

 

(o)         “Incentive Option” shall mean a Stock Option granted under the Plan which both is designated as an Incentive Option and qualifies as an incentive stock option within the meaning of Section 422 of the Code.

 

(p)         “Non-Qualified Option” shall mean a Stock Option granted under the Plan which either is designated as a Non-Qualified Option or does not qualify as an incentive stock option within the meaning of Section 422 of the Code.

 

(q)         “Optionee” shall mean any person who has been granted a Stock Option under the Plan or who is otherwise entitled to exercise a Stock Option.

 

(r)          “Option Period” shall mean, with respect to any portion of a Stock Option, the period after such portion has become exercisable and before it has expired, terminated or been forfeited. 

 

(s)         “Permitted Holder” shall have the meaning set forth in Section 14.3.

 

(t)          “Plan” shall mean this Dex Media, Inc. 2016 Stock Incentive Plan, as may be amended from time to time.

 

(u)         “Qualified Public Offering” shall mean the initial underwritten public offering of the Company’s equity securities, which has been made pursuant to a registration statement filed with the Securities and Exchange Commission under the Securities Act.

 

 

 

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(v)        “Relationship” shall mean the status of employee, officer, director, consultant, independent contractor or advisor of the Company or any Affiliate of the Company.

 

(w)         “Restricted Stock” shall mean an award described in Section 10 of the Plan.

 

(x)          “Restricted Stock Unit” or “RSU” shall mean an award described in Section 11 of the Plan.

 

(y)         “Section 409A” shall mean Section 409A of the Code. 

 

(z)          “Securities Act” shall mean the Securities Act of 1933, as amended. 

 

(aa)       “Stock Appreciation Right” shall mean an award described in Section 9 of the Plan. 

 

(bb)       “Stock Option” shall mean an Incentive Option or a Non-Qualified Option.

 

(cc)        “Stockholders’ Agreement” shall mean the Stockholders Agreement by and among the Company and its shareholders as in effect from time to time and as may be amended from time to time.

 

SECTION 4.       Administration

 

4.1         The Plan shall be administered by the Committee. Notwithstanding anything to the contrary contained herein, only the Board shall have authority to grant awards to non-employee directors and to amend and interpret such awards.

 

4.2          The Committee shall have the following authority and discretion with respect to awards under the Plan: to grant and amend awards to eligible persons under the Plan; to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall deem advisable; to interpret the terms and provisions of the Plan and any award granted under the Plan; and to make all factual and other determinations necessary or advisable for the administration of the Plan. In particular, and without limiting its authority and powers, the Committee shall have the authority and discretion:

 

(a)           to determine eligibility and select the persons to whom awards will be granted from among those eligible;

 

(b)           to determine the number of shares of Common Stock to be covered by each award granted hereunder subject to the limitations contained herein;

Page 5

 

(c)            to determine the terms and conditions of any award granted hereunder, including, but not limited to, any vesting or other restrictions based on such continued employment, performance objectives, compliance with any restrictive covenants and such other factors as the Committee may establish, and to determine whether the performance objectives and other terms and conditions of the award have been satisfied;

 

(d)           to determine the treatment of awards upon an Employee’s retirement, Disability, death, termination for Cause, termination for Good Reason or other termination of employment or upon a non-Employee award holder’s termination of Relationship;

 

(e)           with respect to amounts equal to the amount of any dividends declared with respect to the number of shares covered by an award, to determine one or more of the following: (i) that such amounts will be paid to the award holder currently, (ii) that such amounts will be deferred and deemed to be reinvested (with such deemed investment earnings as may be determined by the Committee), (iii) that such amounts will be paid upon satisfaction of vesting requirements, and/or (iv) that the award holder has no rights with respect to such dividends, in each case, subject to any restrictions imposed by Section 409A;

 

(f)            to determine, subject to any limitations imposed under Section 409A, whether, to what extent, and under what circumstances Common Stock and other amounts payable with respect to an award will be deferred either automatically or at the election of an award holder, including providing for and determining the amount (if any) of deemed earnings on any deferred amount during any deferral period;

 

(g)           to amend the terms of any award, prospectively or retroactively; provided, however, that except as provided in Section 16.4 of the Plan, no amendment shall impair the rights of the award holder without his or her written consent; and further provided that the Committee shall give due consideration to the accounting and Section 409A consequences prior to any amendment;

 

(h)           subject to any restrictions imposed by Section 409A, to substitute new Stock Options for previously granted Stock Options, or for options granted under other plans or agreements, in each case including previously granted options having higher exercise prices;

 

(i)             to determine pursuant to a formula or otherwise the Fair Market Value of the Common Stock on a given date;

 

(j)            subject to any restrictions imposed by Section 409A and in addition to any applicable terms of the Stockholders’ Agreement, to provide that the shares of Common Stock received upon exercise of a Stock Option or otherwise under the Plan shall be subject to a right of repurchase by the Company and/or a right of first refusal, in each case subject to such terms and conditions as the Committee may specify;

 

(k)           to adopt one or more sub-plans consistent with the Plan containing such provisions as may be necessary or desirable to enable awards under the Plan to comply with the laws of other jurisdictions and/or qualify for preferred tax treatment under such laws; and

 

Page 6

 

(l)            to delegate such administrative duties as it may deem advisable to one or more of its members or to one or more Employees or agents.

 

4.3          Notwithstanding anything to the contrary contained herein (including without limitations Section 4.2 of the Plan), the duly appointed officers of the Company shall have the authority, in their discretion, to grant awards under the Plan to one or more Persons eligible under the Plan (other than any Persons whose compensation is otherwise required to be approved by the Committee pursuant to the Company’s governance documents), subject to applicable law and the terms, conditions and limitations otherwise contained in the Plan, including without limitation the maximum number of shares of Common Stock that may be issued under the Plan; provided, however, that in no case may any such officer of the Company grant an award to himself or herself.

 

4.4          All determinations and interpretations made by the Committee pursuant to the provisions of the Plan shall be made in the Committee’s sole discretion and shall be final and binding on all persons, including the Company, award holders, and any other persons who may have an interest in an award under the Plan. Determinations by the Committee under the Plan relating to the form, amount, and terms and conditions of awards need not be uniform, and may be made selectively among persons who receive or are eligible to receive awards under the Plan, whether or not such persons are similarly situated.

 

4.5          The Committee shall act either by a majority of its members at a meeting (present in person or participating by conference telephone) or by unanimous written consent.

 

4.6          No member of the Board or the Committee, nor any officer or Employee of the Company or any of its Affiliates acting on behalf of the Board or the Committee, shall be personally liable for any action, determination or interpretation taken or made with respect to the Plan or any award hereunder. The Company shall indemnify all members of the Board and the Committee and all such officers and Employees acting on their behalf, to the extent permitted by law, from and against any and all liabilities, costs and expenses incurred by such persons as a result of any act, or omission to act, in connection with the performance of such persons’ duties, responsibilities and obligations under the Plan. Notwithstanding the foregoing provisions of this Section 4.6, the Company shall not indemnify any person from or on account of any acts or omissions of such person finally adjudged to be intentional misconduct or knowing violations of law by such person or from or on account of any transaction with respect to which it is finally adjudged that such person personally received a material benefit in money, property or services to which such person was not legally entitled.

 

SECTION 5.       Stock Subject to Plan

 

5.1         The total number of shares of Common Stock which may be issued under the Plan shall be 11,100,000, of which no more than 11,100,000 shares may be issued upon the exercise of Incentive Options (both of these limits subject to adjustment as provided in Section 5.3). Such shares may consist of authorized but unissued shares or shares that have been issued and reacquired by the Company. The exercise of Stock Appreciation Rights for cash or the payment of any award in cash shall not count against this share limit.

 

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In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company or an Affiliate of property or stock of an entity, the Company may assume awards granted by such entity or grant Stock Options or other awards in substitution for awards granted by such entity or an affiliate thereof, and such assumed or substituted awards shall not count against the share limit under this Plan.

 

5.2          To the extent (i) a Stock Option is surrendered for cash or terminates without having been exercised, (ii) shares received upon exercise of a Stock Option are forfeited, (iii) shares of Restricted Stock are forfeited, (iv) an award terminates without the holder having received shares in payment of the award, (v) shares awarded are forfeited, or (vi) shares received under the Plan are repurchased by the Company at or below the price paid by the award holder, the shares subject to such award shall again be available for distribution in connection with future awards under the Plan. Shares of Common Stock equal in number to the shares surrendered in payment of the exercise price of Stock Options, and shares of Common Stock which are withheld in order to satisfy federal, state or local tax liability, shall not count against the above limit, and shall again be available for awards under the Plan.

 

5.3          In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the grant date of any award, awards granted under the Plan, the exercise price of Stock Options and the maximum number of shares of Common Stock subject to awards stated in Section 5.1 of the Plan will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such awards to the extent necessary to preserve the economic intent of such award. In the case of adjustments made pursuant to this Section 5.3, the Committee shall: (i) in the case of Incentive Stock Options, ensure that any adjustments under this Section 5.3 will not constitute a modification, extension or renewal of the Incentive Options within the meaning of Section 424(h)(3) of the Code, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, and (ii) in the case of Non-Qualified Options, ensure that any adjustments under this Section 5.3 will not constitute a modification of such Non-Qualified Options within the meaning of Section 409A.

 

The Board’s determination as to which adjustments shall be made under this Section 5.3 and the extent thereof shall be made with due regard for the accounting and Section 409A consequences, and shall be final, binding and conclusive.

 

SECTION 6.       Eligibility

 

6.1         The persons who are eligible for awards under the Plan are all Employees, officers, directors, consultants, and advisors of the Company or of any of its Affiliates, except that (i) only Employees may be granted Incentive Stock Options, and (ii) Stock Options and Stock Appreciation Rights that are not subject to the fixed date requirements of Section 409A may be granted only to Employees, officers, directors, consultants, or advisors of the Company or of an Affiliate at least 50% of whose common stock or equivalent ownership interests is directly or indirectly owned by the Company. Award recipients under the Plan shall be selected from time to time by the Committee, in its sole discretion, from among those eligible, except as otherwise permitted by Section 4.3 of the Plan. Any consultant or advisor who renders or has rendered bona fide services (other than services in connection with the offering or sale of securities of the Company or one of its Affiliates, as applicable, in a capital raising transaction or as a market maker or promoter of that entity’s securities) to the Company or one of its Affiliates shall be eligible for awards under the Plan; provided, however, that any advisor or consultant may be eligible for awards under the Plan only if such person’s participation in the Plan would not adversely affect the Company’s ability to rely on the Rule 701 exemption from registration under the Securities Act, for the offering of shares issuable under the Plan by the Company, or the Company’s compliance with any other applicable laws.

 

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SECTION 7.       Non-Qualified Options

 

7.1          Subject to the following provisions, Non-Qualified Options awarded under the Plan shall be in such form and shall have such terms and conditions as the Committee may determine:

 

(a)           Exercise Price. The exercise price per share of Common Stock purchasable under a Non-Qualified Option shall not be less than the Fair Market Value of the Common Stock on the date of the award of the Stock Option and not less than the par value of the Common Stock.

 

(b)           Option Term. The term of each Non-Qualified Option shall be fixed by the Committee; provided, however, that no Non-Qualified Option shall have a term in excess of ten years.

 

(c)            Exercisability and Vesting. Non-Qualified Options shall be exercisable and shall vest at such time or times and subject to such terms and conditions as shall be determined by the Committee. The Committee may impose different schedules for exercisability and vesting. In addition, the Committee may permit Non-Qualified Options to be exercised for Restricted Stock. The Committee may waive any exercise or vesting provisions contained in an award or accelerate the exercisability or vesting of the Non-Qualified Option at any time in whole or in part.

 

(d)           Method of Exercise. Non-Qualified Options may be exercised in whole or in part at any time during the Option Period by giving the Company notice of exercise in the form approved by the Committee (which may be written or electronic) specifying the number of shares to be purchased, accompanied by payment of the aggregate exercise price for such shares. Payment of the exercise price shall be made in such manner as the Committee may provide in the award, which may include (i) cash (including cash equivalents), (ii) delivery (either by actual delivery of the shares or by providing an affidavit attesting to the ownership of the shares together with such supporting documentation as the Committee may require) of shares of Common Stock already owned by the Optionee, (iii) application of shares subject to the Stock Option to satisfy the exercise price (“net exercise”), (iv) broker-assisted “cashless exercise,” (v) a loan from the Company (to the extent permitted by applicable law), (vi) any other manner permitted by law, or (vii) any combination of the foregoing.

 

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(e)            No Stockholder Rights. An Optionee shall have no rights to dividends or other rights of a stockholder with respect to shares subject to a Non-Qualified Option until the Optionee has duly exercised such Stock Option and a certificate for such shares has been duly issued (or the Optionee has otherwise been duly recorded as the owner of the shares on the books of the Company).

 

(f)            Termination of Employment or Relationship. Following the termination of an Optionee’s employment or other Relationship with the Company and/or its Affiliates, the Non-Qualified Option shall be exercisable to the extent determined by the Committee (but, to the extent required by California law, no less than six (6) months after a termination caused by death or Disability, and not less than thirty (30) days after a termination for any other reason (other than Cause)), but not beyond the option term. The Committee may provide different post-termination exercise provisions, which may vary based on the nature of and reason for the termination. Unless the Committee provides otherwise, a Non-Qualified Option shall terminate immediately upon the giving of notice of the termination of the award holder’s employment or other Relationship for Cause, six (6) months after the award holders termination of employment or other Relationship on account of death or Disability and thirty (30) days after the award holder’s termination of employment or other Relationship for any other reason. The Committee shall have absolute discretion to determine the date and circumstances of any termination of employment or other Relationship.

 

(g)           Non-transferability. Unless otherwise provided by the Committee, (i) Non-Qualified Options shall not be transferable by the Optionee, other than by will or by the laws of descent and distribution, and (ii) during the Optionee’s lifetime, all Non-Qualified Options shall be exercisable only by such Optionee. The Committee may permit the transfer of Non-Qualified Options to such other transferees and on such terms and conditions as may be determined by the Committee (except that such discretion shall be limited to the extent require by California Law).

 

(h)           Surrender Rights. The Committee may provide that Non-Qualified Options may be surrendered for cash upon any terms and conditions set by the Committee.

 

7.2          Substitute Options. Notwithstanding the provisions of Section 7.1 of the Plan, in connection with a merger or consolidation of an entity with the Company or one of its Affiliates or the acquisition by the Company or one of its Affiliates of property or stock of an entity, the Committee may grant Non-Qualified Options in substitution for any stock options granted by such entity or an affiliate thereof. Such substitute Non-Qualified Options may be granted on such terms, as the Committee deems appropriate in the circumstances, notwithstanding any limitations on Non-Qualified Options contained in other provisions of this Section 7, but giving due consideration to accounting and Section 409A consequences.

 

SECTION 8.       Incentive Options

 

8.1          Subject to the following provisions, Incentive Options awarded under the Plan shall be in such form and shall have such terms and conditions as the Committee may determine:

 

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(a)            Exercise Price. The exercise price per share of Common Stock purchasable under an Incentive Option shall not be less than the Fair Market Value of the Common Stock on the date of the award of the Incentive Option. No Incentive Option granted to an Employee who at the time of grant owns (within the meaning of Code Section 424(d)) more than 10% of the total combined voting power of all classes of stock of the Company or any of its Affiliates shall have an exercise price which is less than 110% of the Fair Market Value of the Common Stock on the date of the award of the Incentive Option.

 

(b)           Option Term. No Incentive Option shall have a term in excess of ten years. No Incentive Option granted to an Employee who at the time of grant owns (within the meaning of Code Section 424(d)) more than 10% of the total combined voting power of all classes of stock of the Company or any of its Affiliates shall have a term in excess of five years.

 

(c)            Exercisability. Incentive Options shall be exercisable and shall vest at such time or times and subject to such terms and conditions as shall be determined by the Committee. The Committee may impose different schedules for exercisability and vesting. In addition, the Committee may permit Incentive Options to be exercised for Restricted Stock. The Committee may waive any exercise or vesting provisions contained in an award or accelerate the exercisability or vesting of the Incentive Option at any time in whole or in part. Notwithstanding the provisions of this paragraph (c), the aggregate Fair Market Value (determined as of the time the Incentive Option is granted) of the shares with respect to which Incentive Options (granted under the Plan and any other plans of the Company and its Affiliates) are exercisable for the first time by an Optionee in any calendar year shall not exceed $100,000. 

 

(d)           Method of Exercise. Incentive Options may be exercised in whole or in part at any time during the Option Period by giving the Company notice of exercise in the form approved by the Committee (which may be written or electronic) specifying the number of shares to be purchased, accompanied by payment of the aggregate exercise price for such shares. Payment of the exercise price shall be made in such manner as the Committee may provide in the award, which may include (i) cash (including cash equivalents), (ii) delivery (either by actual delivery of the shares or by providing an affidavit attesting to the ownership of the shares together with such supporting documentation as the Committee may require) of shares of Common Stock already owned by the Optionee, (iii) application of shares subject to the Stock Option to satisfy the exercise price (“net exercise”), (iv) broker-assisted “cashless exercise,” (v) a loan from the Company (to the extent permitted by applicable law), (vi) any other manner permitted by law, or (vii) any combination of the foregoing.

 

(e)            No Stockholder Rights. An Optionee shall have no rights to dividends or other rights of a stockholder with respect to shares subject to an Incentive Option until the Optionee has duly exercised such Incentive Option and a certificate for such shares has been duly issued (or the Optionee has otherwise been duly recorded as the owner of the shares on the books of the Company).

 

(f)             Termination of Employment. Following the termination of an Employee’s employment with the Company and/or its Affiliates, the Incentive Option shall be exercisable to the extent determined by the Committee (but, to the extent required by California law, not less than six (6) months after a termination caused by death or Disability, and not less than thirty (30) days after a termination for any other reason (other than Cause)), but not beyond the option term. The Committee may provide different post-termination exercise provisions, which may vary based on the nature of and reason for the termination, and may permit an Incentive Option to be exercised at a time following termination of employment when it is no longer entitled to tax treatment as an incentive stock option. Unless the Committee provides otherwise, an Incentive Option shall terminate immediately upon the giving of notice of the termination of the award holder’s employment for Cause, six (6) months after the award holders termination of employment or other Relationship on account of death or Disability and thirty (30) days after the award holder’s termination of employment for any other reason. The Committee shall have absolute discretion to determine the date and circumstances of any termination of employment.

 

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(g)           Non-transferability. Incentive Options shall not be transferable by the Optionee, other than by will or by the laws of descent and distribution. During the Optionee’s lifetime, all Incentive Options shall be exercisable only by such Optionee.

 

(h)           Surrender Rights. The Committee may provide that Incentive Options may be surrendered for cash upon any terms and conditions set by the Committee.

 

(i)             Last Grant Date. No Incentive Option shall be granted more than ten years from the earlier of the date of adoption of the Plan by the Board or approval of the Plan by the Company’s stockholders.

 

(j)             Notification of Disqualifying Disposition. Each recipient of an Incentive Option who disposes of any shares of Common Stock acquired upon exercise of an Incentive Option within two years of the date of exercise shall notify the Company promptly after such disposition.

 

8.2         Amendment of Incentive Option into Non-Qualified Option. Notwithstanding the foregoing provisions, if permitted under Section 4.2(g) of the Plan, the Committee may, with the consent of the Optionee, amend an Incentive Option in a manner that would cause loss of Incentive Option status, provided the Stock Option as so amended satisfies the requirements of Section 7 of the Plan.

 

8.3          Substitute Options. Notwithstanding the provisions of Section 8.1 of the Plan, in connection with a merger or consolidation of an entity with the Company or one of its Affiliates or the acquisition by the Company or one of its Affiliates of property or stock of an entity, the Committee may grant Incentive Options in substitution for any incentive stock options granted by such entity or an affiliate thereof, subject to the requirements of Treasury Regulation 1.424-1 and giving due consideration to accounting and Section 409A consequences.

 

SECTION 9.       Stock Appreciation Rights

 

9.1         A Stock Appreciation Right shall entitle the holder thereof to receive, for each share as to which the award is granted, payment of an amount (in cash, shares of Common Stock, or a combination thereof, as determined by the Committee) equal in value to the excess of the Fair Market Value of a share of Common Stock on the date of exercise or settlement over a base amount specified by the Committee. Any such award shall specify the number of shares of Common Stock as to which the Stock Appreciation Right is granted, and shall be in such form and shall have such terms and conditions as the Committee may determine, giving due consideration to accounting and Section 409A consequences. A Stock Appreciation Right shall not be transferable by the holder, other than by will or by the laws of descent and distribution, and during the award holder’s lifetime, all Stock Appreciation Rights shall be exercisable only by such holder. The Committee may permit the transfer of Stock Appreciation Rights to such other transferees and on such terms and conditions as may be determined by the Committee (except that such discretion shall be limited to the extent required by California law.)

 

 

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SECTION 10.     Restricted Stock

 

10.1        Subject to the following provisions, all awards of Restricted Stock shall be in such form and shall have such terms and conditions as the Committee may determine:

 

(a)            The Restricted Stock award shall specify the number of shares of Restricted Stock to be awarded, the price, if any, to be paid by the recipient of the Restricted Stock and the date or dates on which, or the conditions upon the satisfaction of which, the Restricted Stock will vest. The grant and/or the vesting of Restricted Stock may be conditioned upon the completion of a specified period of service with the Company and/or its Affiliates, upon the attainment of specified performance objectives or upon such other criteria as the Committee may determine.

 

(b)           Stock certificates representing the Restricted Stock awarded under the Plan (if issued) shall be registered in the award holder’s name, but the Committee may direct that such certificates be held by the Company on behalf of the award holder and that the award holder deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock. Except as may be permitted by the Committee (with such discretion limited to the extent required by California law), no share of Restricted Stock may be sold, transferred, assigned, pledged or otherwise encumbered by the award holder until such share has vested in accordance with the terms of the Restricted Stock award. At the time Restricted Stock vests, a certificate for such vested shares shall be delivered to the award holder (or his or her estate in the event of death), free of all restrictions (other than those set forth in Section 13) or, if stock certificates are not issued by the Company, the vesting of such shares shall be duly recorded on the books of the Company.

 

(c)           The Committee may provide that the award holder shall have the right to vote and/or receive dividends on Restricted Stock, and may determine the vesting and payment provisions applicable to such dividends in accordance with Section 4.2(e) of the Plan. Unless the Committee provides otherwise, Common Stock or other securities received as a dividend on, or in connection with a stock split of, Restricted Stock shall be subject to the same restrictions as the Restricted Stock.

 

(d)           Except as may be provided by the Committee, in the event of an award holder’s termination of employment or other Relationship before all of his or her Restricted Stock has vested, or in the event any conditions to the vesting of Restricted Stock have not been satisfied prior to any deadline for the satisfaction of such conditions set forth in the award, the shares of Restricted Stock which have not vested shall be forfeited, and the Committee may provide that (i) any purchase price paid by the award holder shall be returned to the award holder or (ii) a cash payment equal to the Restricted Stock’s Fair Market Value on the date of forfeiture, if lower, shall be paid to the award holder.

 

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(e)            The Committee may waive, in whole or in part, any or all of the conditions to receipt of, or restrictions with respect to, any or all of the award holder’s Restricted Stock.

 

(f)            To the extent permitted by law, an election under Section 83(b) of the Code may be made by an award holder that is subject to U.S. federal income tax (in the award holder’s discretion) with respect to such award in connection with the grant of an award of Restricted Stock.

 

SECTION 11.     Restricted Stock Units

 

11.1        A Restricted Stock Unit entitles the award holder to receive one share of Common Stock (or the Fair Market Value of a share in cash) at a specified time. Subject to the following provisions, all awards of Restricted Stock Units shall be in such form and shall have such terms and conditions as the Committee may determine:

 

(a)           The award shall specify the number of Restricted Stock Units and the date or dates on which such RSUs shall be settled. The Committee may condition the grant or vesting of RSUs upon the completion of a specified period of service with the Company and/or its Affiliates, upon the attainment of specified performance objectives, or upon such other criteria as the Committee may determine. The Committee may provide that the settlement of RSUs shall occur upon vesting or at a later date, and may permit the award holder to elect the settlement date (giving due regard to the requirements of Section 409A).

 

(b)           An award holder shall have no voting rights or other rights of a stockholder with respect to Restricted Stock Units. The Committee may provide for the payment of dividend equivalents with respect to a Restricted Stock Unit award, and may determine the vesting and payment provisions applicable to such dividend equivalents in accordance with Section 4.2(e) of the Plan.

 

(c)            Except as may be provided by the Committee (with such discretion limited to the extent required by California law and giving due regard to the requirements of Section 409A), RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered prior to their settlement date.

 

(d)           At the settlement date, the award holder (or his or her estate in the event of death) shall receive (i) certificates for the number of shares of Common Stock equal to the number of shares covered by the RSU award (or, if stock certificates are not issued by the Company, the recording of ownership of such shares on the books of the Company), (ii) cash equal to the Fair Market Value of such Common Stock on the settlement date, or (iii) a combination of shares and cash, as the Committee may determine.

 

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(e)            Except as may be provided by the Committee, in the event of an award holder’s termination of employment or other Relationship before an RSU has vested, his or her RSU award shall be forfeited.

 

(f)            The Committee may waive, in whole or in part, any or all of the conditions to receipt of, or restrictions with respect to, an RSU award, giving due regard to the limitations imposed by Section 409A.

 

SECTION 12.     Tax Withholding

 

12.1       Each award holder shall, no later than the date as of which an amount with respect to an award first becomes includible in such person’s gross income for applicable tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, an amount sufficient to satisfy any federal, state, local or other withholding tax liability with respect to the award. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company (and, where applicable, its Affiliates), shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the award holder.

 

12.2       To the extent permitted by the Committee, and subject to such terms and conditions as the Committee may provide, an Employee may elect to have withholding obligations for federal, state and local taxes, including payroll taxes, with respect to an award payable in Common Stock satisfied by (i) having the Company withhold from the unrestricted shares otherwise deliverable to such person shares of Common Stock having a value equal to such withholding obligation with respect to the award or (ii) delivering to the Company shares of unrestricted Common Stock. Alternatively, the Committee may require that a portion of the shares of Common Stock otherwise deliverable to an Employee be applied to satisfy the minimum statutory withholding obligation with respect to the award.

 

SECTION 13.     Restrictions on Exercise of Awards and Transfer of Shares

 

13.1       If at any time the Committee determines that the sale or delivery of Common Stock under the Plan is or may in the circumstances be unlawful under the laws or regulations of any applicable jurisdiction, the right to exercise any award or receive any Restricted Stock or Common Stock shall be suspended until the Committee determines that such sale or delivery is lawful. No such suspension shall extend the term of any award. Except as may be provided in the Stockholders’ Agreement, the Company shall have no obligation to effect any registration or qualification of the Common Stock under federal or state laws or to compensate the award holder for any loss caused by the implementation of this Section.

 

13.2        Any person exercising an award or receiving Restricted Stock or Common Stock shall make such representations (including representations to the effect that such person will not dispose of the Common Stock so acquired in violation of federal and state securities laws) and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Stock in compliance with applicable federal and state securities laws. The Committee may refuse to permit exercise of an award or delivery of Restricted Stock or Common Stock until such representations and information have been provided.

 

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13.3          In connection with the grant, vesting and/or exercise of any award under the Plan, the Committee will require an award holder to execute and become a party to the Stockholders’ Agreement as a condition of such grant, vesting and/or exercise. The Stockholders’ Agreement may contain restrictions on the transferability of shares of Common Stock acquired under the Plan (such as the right of first refusal or a prohibition on transfer) and such shares may be subject to call rights and drag-along rights in favor of the Company.

 

13.4         As a condition to the exercise of an award or delivery of Restricted Stock or Common Stock prior to the Company’s initial public offering, the award holder may be required by the Committee to agree to such restrictions on the sale or other transfer of the Common Stock acquired under the Plan as may be requested by the Company or its underwriters at the time of its initial public offering.

 

13.5         As a condition to the exercise of an Incentive Option, the award holder shall be required to agree to notify the Company of any disposition of the shares acquired on exercise which occurs within two years of the date of exercise.

 

13.6          The Committee may provide, at the time of grant (or by amendment with the award holder’s consent), that an award and/or Common Stock acquired under the Plan shall be forfeited, including after exercise or vesting, if, during the period of an award holder’s employment or other Relationship with the Company and/or its Affiliates or within two years after termination of such employment or Relationship, the award holder engages in any of the conduct described below (“Disqualifying Conduct”). Disqualifying Conduct shall mean (i) the award holder’s performance of service for a competitor of the Company and/or its Affiliates, including service as an Employee, director, or consultant, or the award holder’s establishing of a business that competes with the Company and/or its Affiliates, (ii) the award holder’s solicitation of Employees or customers of the Company and/or its Affiliates, (iii) the award holder’s improper use or disclosure of confidential information of the Company and/or its Affiliates, or (iv) the award holder’s engaging in any other conduct described in the definition of “Cause” in Section 3.1(c) of the Plan. Upon any forfeiture under this Section 13.6 of Common Stock for which the award holder has paid an exercise price or purchase price, the Company shall repurchase such Common Stock at the lower of the Fair Market Value of the Common Stock on the date of repurchase or the exercise or purchase price paid for such Common Stock by the award holder. Except as provided in the preceding sentence, no amount shall be paid to an award holder upon the forfeiture of an award under this Section 13.6.

 

13.7          Unless the Committee determines otherwise, certificates for the shares of Common Stock acquired under the Plan shall be registered in the name of the award holder, but held by the Company, and shall be transferable only to the Company, until such time as the shares are no longer subject to the Company’s repurchase rights under the Plan or under any stockholders agreement. Issuance of such certificates shall be conditioned on delivery by the award holder of a stock power to the Company, endorsed in blank, with respect to such shares. Alternatively, the Committee may provide for the issuance of the stock certificates to the award holder, in which case the Company may place an appropriate legend on the certificates evidencing the Company’s repurchase rights and any transfer restrictions on such shares, and may issue stop transfer instructions in respect thereof.

 

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SECTION 14.     Change in Control

 

14.1        The Committee shall have the authority to determine the treatment of awards in the event of a Change in Control of the Company or the Affiliate which employs the award holder.

 

14.2        Upon the dissolution or liquidation of the Company or upon any reorganization, merger, or consolidation as a result of which the Company is not the surviving corporation (or survives as a wholly-owned subsidiary of another corporation), or upon a sale of substantially all the assets of the Company, the Board may take such action as it in its discretion deems appropriate (taking into account Section 409A and any effect on accounting treatment) to (i) accelerate the time when awards vest and/or may be exercised, (ii) cash out outstanding awards at or immediately prior to the date of such event (by payment of the Fair Market Value of the Common Stock at the time in the case of restricted stock and restricted stock unit awards and by payment of the amount, if any, by which the Fair Market Value of the Common Stock at the time exceeds the exercise price or base price of the award in the case of Stock Options and Stock Appreciation Rights), (iii) provide for the assumption of outstanding awards by surviving, successor or transferee corporations, (iv) provide that Stock Options shall vest and be exercisable for a period of at least 10 business days from the date of receipt of a notice from the Company of such proposed event, following the expiration of which period any unexercised Stock Options shall terminate, or (v) make such other changes as it deems advisable, in its sole discretion.

 

14.3        Unless otherwise provided by the Committee, a Change in Control of the Company is deemed to have occurred upon any of the following events:

 

(a)           any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act, but excluding the Company or any subsidiary or affiliate, any employee benefit plan sponsored or maintained by the Company or any subsidiary or affiliate (including any trustee of such plan acting as trustee) and any Permitted Holder (as defined below), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Company representing more than 50% of the combined voting power of the Company’s then- outstanding securities, other than in connection with a merger, consolidation, recapitalization or reorganization of the Company;

 

(b)           the consummation of a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse stock split of any class of voting securities of the Company, other than any such transaction that would result in at least 50% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after such transaction being beneficially owned in approximately the same proportion by persons who together beneficially owned at least 50% of the combined voting power of the voting securities of the Company outstanding immediately prior to such transaction; provided that, for purposes of this Section 14.3(b), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 50% threshold is due solely to the acquisition of voting securities by the Company or such surviving entity or any subsidiary or affiliate of the Company or such surviving entity, by an employee benefit plan of the Company or such surviving entity or of any subsidiary or affiliate of the Company or such surviving entity, or by any Permitted Holder;

 

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(c)            the stockholders of the Company approve a plan of complete liquidation of the Company, or the consummation of a sale or disposition by the Company of all or substantially all of its assets (or any transaction having a similar effect) unless at least 50% of the total voting power represented by the voting securities of the acquiring company outstanding immediately after such transaction are beneficially owned in approximately the same proportion by persons who together beneficially owned at least 50% of the combined voting power of the voting securities of the Company outstanding immediately prior to such transaction; provided that, for purposes of this Section 14.3(c), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 50% threshold is due solely to the acquisition of voting securities by the Company or such acquiring company or any subsidiary or affiliate of the Company or such acquiring company, by an employee benefit plan of the Company or such acquiring company or of any subsidiary or affiliate of the Company or such acquiring company, or by any Permitted Holder; or

 

(d)           during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board, together with any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (b) or (c) above) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board.

 

“Permitted Holder” shall mean Mudrick Capital Management L.P., Verto Direct Opportunity LP, Boston Patriot Battery March St. LLC, P Mudrick LTD, Mudrick Distressed Opportunity Drawdown Fund LP, Mudrick Distressed Opportunity Drawdown Fund LP, Mudrick Distressed Opportunity Specialty Fund LP, Blackwell Partners LLC – Series A, Mudrick Distressed Opportunity Fund Global LP, Paulson Credit Opportunities Master LTD, Paulson & Co. Inc., Paulson Credit Opportunities Master LTD and their respective affiliates.

 

SECTION 15.     General Provisions

 

15.1        Nothing in the Plan, or in any award shall confer upon any award holder any rights with respect to continuation of his or her employment by or other Relationship with the Company and/or its Affiliates, or interfere in any way with the rights of any such company to terminate such employment or other Relationship.

 

15.2        Nothing set forth in this Plan shall prevent the Board from adopting additional compensation arrangements.

 

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15.3          To the extent permitted by Section 409A and other applicable law, the Company and/or its Affiliates shall have the right to offset amounts payable under this Plan or under any award against any amounts owed to the Company and/or its Affiliates by the award holder. By accepting any award granted hereunder, an award holder agrees to any deduction or setoff under this Section 15.3.

 

15.4           Section 409A. All awards granted under the Plan are intended to be exempt from the requirements of Section 409A or, if not exempt, to satisfy the requirements of Section 409A, and the provisions of the Plan and any award granted under the Plan shall be construed in a manner consistent therewith. Notwithstanding any provision of the Plan or an award to the contrary, any amounts payable under the Plan on account of termination of employment to an award holder who is a “specified employee” within the meaning of Section 409A, as determined by the Committee in accordance with Section 409A, which constitute “deferred compensation” within the meaning of Section 409A and which are otherwise scheduled to be paid during the first six months following the award holder’s termination of employment (other than any payments that are permitted under Section 409A to be paid within six months following termination of employment of a specified employee) shall be suspended until the six-month anniversary of the award holder’s termination of employment, at which time all payments that were suspended shall be paid to the award holder in a lump sum.

 

15.5          Although the Company may endeavor to qualify an award for favorable tax treatment (e.g. incentive stock options under Section 422 of the Code) or to avoid adverse tax treatment (e.g. under Section 409A of the Code), the Company makes no representation that the desired tax treatment will be available and expressly disclaims any liability for the failure to maintain favorable or avoid unfavorable tax treatment.

 

SECTION 16.     Amendments and Termination

 

16.1         No award shall be granted under the Plan after September 8, 2026. The Board may discontinue the Plan at any time and may amend it from time to time, in each case after consideration of the consequences under Section 409A. Except as provided in Section 16.2 of the Plan, no amendment or discontinuation of the Plan shall adversely affect any award previously granted without the award holder’s written consent. Amendments may be made without stockholder approval except (i) as required to satisfy applicable laws or regulations, or the requirements of any stock exchange or market on which the Common Stock is listed or traded, or (ii) if such action would (except for in Section 5.3 of the Plan) increase the total number of shares of Common Stock reserved for purposes of the Plan.

 

16.2         Notwithstanding any other provision of the Plan or of any award, the Board shall have the right, in its sole discretion, to terminate the Plan and all outstanding awards, and to distribute, pay or settle all outstanding awards (based on the Fair Market Value of the Common Stock at the time of such settlement) without the consent of stockholders or award holders, subject to compliance with any applicable requirements of Section 409A.

 

16.3          The Committee may amend the terms of any award, prospectively or retroactively, subject to the limitations set forth in Section 4.2(g) of the Plan.

 

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16.4         Notwithstanding any other provision of the Plan or of any award, the Committee shall have the right, in its sole discretion, to amend the Plan and all outstanding awards without the consent of stockholders or award holders to the extent the Committee determines that such amendment is necessary or appropriate to exempt the Plan or an award from, or to comply with, Section 409A.

 

SECTION 17.     Effective Date of Plan

 

17.1         The Plan shall be effective on September 8, 2016, subject to approval by the Company’s stockholders within 12 months of such date.

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