Employment Agreement – George Burnett

Letter of Amendment to Employment Agreement – 10/2/2005

Letter of Amendment to Employment Agreement – 12/19/2005

 

                                                                 

EXECUTION COPY

 

                              EMPLOYMENT AGREEMENT

 

         This Employment Agreement (the "Agreement"), effective as of November

8, 2002 (the "Effective Date"), is made by and between George Burnett (the

"Executive") and Dex Media, Inc., a Delaware corporation, and any of its

subsidiaries and affiliates (including without limitation Dex Media East LLC) as

may employ Executive from time to time (collectively, and together with any

successor thereto, the "Company").

 

                                    RECITALS

 

         A.       It is the desire of the Company to assure itself of the

                  services of the Executive by engaging the Executive to perform

                  services under the terms hereof.

 

         B.       The Executive desires to provide services to the Company on

                  the terms herein provided.

 

                                    AGREEMENT

 

         NOW, THEREFORE, in consideration of the foregoing and of the respective

covenants and agreements set forth below the parties hereto agree as follows:

 

1.       CERTAIN DEFINITIONS

 

         (a)      "Affiliate" shall mean, with respect to any Person, any other

                  Person directly or indirectly controlling, controlled by, or

                  under common control with, such Person where "control" shall

                  have the meaning given such term under Rule 405 of the

                  Securities Act.

 

         (b)      "Agreement" shall have the meaning set forth in the preamble

                  hereto.

 

         (c)      "Annual Base Salary" shall have the meaning set forth in

                  Section 3(a).

 

         (d)      "Board" shall mean the Board of Directors of the Company.

 

         (e)      The Company shall have "Cause" to terminate the Executive's

                  employment hereunder upon:

 

                  (i)      The Executive's willful failure to substantially

                           perform the duties set forth in this Agreement (other

                           than any such failure resulting from the Executive's

                           Disability) which is not remedied within 30 days

                           after receipt of written notice from the Company

                           specifying such failure;

 

                  (ii)     The Executive's willful failure to carry out, or

                           comply with, in any material respect any lawful and

                           reasonable directive of the Board not inconsistent

                           with the terms of this Agreement, which is not

                           remedied within 30 days after receipt of written

                           notice from the Company specifying such failure;

 

<PAGE>

 

                  (iii)    The Executive's commission at any time of any act or

                           omission that results in, or that may reasonably be

                           expected to result in, a conviction, plea of no

                           contest, or imposition of unadjudicated probation for

                           any felony or crime involving moral turpitude;

 

                  (iv)     The Executive's unlawful use (including being under

                           the influence) or possession of illegal drugs on the

                           Company's premises or while performing the

                           Executive's duties and responsibilities under this

                           Agreement; or

 

                  (v)      The Executive's commission at any time of any act of

                           fraud, embezzlement, misappropriation, material

                           misconduct, or breach of fiduciary duty against the

                           Company (or any predecessor thereto or successor

                           thereof).

 

         (f)      "Change in Control" shall mean a change in ownership or

                  control of the Company effected through a transaction or

                  series of transactions (other than an offering of Common Stock

                  to the general public through a registration statement filed

                  with the Securities and Exchange Commission) whereby any

                  "person" or related "group" of "persons" (as such terms are

                  used in Sections 13(d) and 14(d)(2) of the Exchange Act)

                  (other than the Company, any of its subsidiaries, an employee

                  benefit plan maintained by the Company or any of its

                  subsidiaries, a Principal Stockholder or a "person" that,

                  prior to such transaction, directly or indirectly controls, is

                  controlled by, or is under common control with, the Company or

                  a Principal Stockholder) directly or indirectly acquires

                  beneficial ownership (within the meaning of Rule 13d-3 under

                  the Exchange Act) of securities of the Company possessing more

                  than fifty percent (50%) of the total combined voting power of

                  the Company's securities outstanding immediately after such

                  acquisition.

 

         (g)      "Common Stock" shall mean common stock of the Company, par

                  value $0.01 per share.

 

         (h)      "Company" shall have the meaning set forth in the preamble

                  hereto.

 

         (i)      "Compensation Committee" means the Compensation Committee of

                  the Board.

 

         (j)      "Date of Termination" shall mean (i) if the Executive's

                  employment is terminated by his death, the date of his death;

                  (ii) if the Executive's employment is terminated pursuant to

                  Section 4(a)(ii) - (vi) either the date indicated in the

                  Notice of Termination or the date specified by the Company

                  pursuant to Section 4(b), whichever is earlier; (iii) if the

                  Executive's employment is terminated pursuant to Section

                  4(a)(vii) or Section 4(a)(viii), the expiration of the

                  then-applicable Term.

 

         (k)      "Dex West Transaction" shall mean the transaction contemplated

                  by the Rodney Purchase Agreement.

 

                                       2

 

<PAGE>

 

         (l)      "Directors and Officers Insurance" shall have the meaning set

                  forth in Section 13.

 

         (m)      A "Disability" shall have occurred when the Executive has been

                  unable to perform his duties because of physical or mental

                  incapacity for a period of at least 180 consecutive days as

                  determined by a medical doctor mutually agreed-upon by the

                  parties hereto.

 

         (n)      "EBITDA" for a given period shall mean the sum of (i) the

                  consolidated earnings before interest, taxes, depreciation,

                  amortization, and extraordinary items and (ii) any management

                  or similar fees charged to the Company by any Principal

                  Stockholder (but only to the extent such fees are deducted

                  from the earnings described in the preceding subsection (i)),

                  all as reflected on the Company's audited consolidated

                  financial statements for such period.

 

         (o)      "Effective Date" shall have the meaning set forth in the

                  preamble hereto.

 

         (p)      "Exchange Act" shall mean the Securities Exchange Act of 1934,

                  as amended from time to time.

 

         (q)      "Executive" shall have the meaning set forth in the preamble

                  hereto.

 

         (r)      "Executive Bonus Plan" shall mean the bonus plan to be

                  developed by the Compensation Committee which shall

                  incorporate the targets attached hereto as Exhibit A.

 

         (s)      "Extension Term" shall have the meaning set forth in Section

                  2(b).

 

         (t)      The Executive shall have "Good Reason" to resign his

                  employment upon the occurrence of any of the following:

 

                  (i)      Failure of the Company to continue the Executive in

                           the position of President and Chief Executive Officer

                           (or any other position not less senior to such

                           position);

 

                  (ii)     A material diminution in the nature or scope of the

                           Executive's responsibilities, duties or authority;

 

                  (iii)    Failure of the Company to make any material payment

                           or provide any material benefit under this Agreement;

                           or

 

                  (iv)     The Company's material breach of this Agreement or

                           any Option Agreement;

 

                  provided, however, that notwithstanding the foregoing the

                  Executive may not resign his employment for Good Reason

                  unless: (A) the Executive provides the Company with at least

                  30 days prior written notice of his intent to resign for Good

                  Reason (which notice is provided not later than the 30th day

                  following the occurrence of the event constituting Good

                  Reason); and (B) the Company has not

 

                                       3

 

<PAGE>

 

                  remedied the alleged violation(s) within the 30-day period;

                  and, provided, further, that the Executive shall not have Good

                  Reason to terminate his employment due to the failure to

                  consummate all or any portion of the Dex West Transaction; and

                  provided, further, that Executive may resign his employment

                  for Good Reason if in connection with any Change in Control

                  the purchaser does not assume the severance provisions set

                  forth in Section 5 (including corresponding definitions) (or

                  substitute substantially identical severance provisions) with

                  respect to the Executive and if Executive does not accept

                  employment with such purchaser in connection with the Change

                  in Control.

 

         (u)      "Initial Term" shall have the meaning set forth in Section

                  2(b).

 

         (v)      "Joint Management Agreement" shall have the meaning set forth

                  in Section 14.

 

         (w)      "Notice of Termination" shall have the meaning set forth in

                  Section 4(b).

 

         (x)      "Option Agreement" shall mean an agreement to purchase Common

                  Stock pursuant to the Option Plan.

 

         (y)      "Option Plan" shall have the meaning set forth in Section

                  3(c).

 

         (z)      "Person" shall mean an individual, partnership, corporation,

                  limited liability company, business trust, joint stock

                  company, trust, unincorporated association, joint venture,

                  governmental authority or other entity of whatever nature.

 

         (aa)     "Principal Stockholders" shall mean Carlyle Partners III, L.P.

                  a Delaware limited partnership; Welsh, Carson, Anderson &

                  Stowe IX, L.P., a Delaware limited partnership; and each of

                  their respective Affiliates.

 

         (bb)     "Related Agreements" shall have the meaning set forth in

                  Section 18.

 

         (cc)     "Rodney Purchase Agreement" shall mean that certain Purchase

                  Agreement by and among Qwest Dex, Inc., Qwest Services

                  Corporation, Qwest Communications International Inc.

                  (collectively, the "Qwest Parties") and Dex Holdings LLC,

                  dated as of August 19, 2002, pursuant to which the Qwest

                  Parties have agreed to sell all of the interests of GPP LLC

                  (as described in the Rodney Purchase Agreement) to Dex

                  Holdings LLC on the terms and conditions set forth therein.

 

         (dd)     "Securities Act" shall mean the Securities Act of 1933, as

                  amended from time to time.

 

         (ee)     "Term" shall have the meaning set forth in Section 2(b).

 

                                       4

 

<PAGE>

 

2.       EMPLOYMENT

 

         (a)      The Company shall employ the Executive and the Executive shall

                  enter the employ of the Company, for the period set forth in

                  Section 2(b), in the position set forth in Section 2(c), and

                  upon the other terms and conditions herein provided.

 

         (b)      The initial term of employment under this Agreement (the

                  "Initial Term") shall be for the period beginning on the

                  effective date of this Agreement and ending on December 31,

                  2005, unless earlier terminated as provided in Section 4. The

                  employment term hereunder shall automatically be extended for

                  successive one-year periods (each, an "Extension Term" and,

                  collectively with the Initial Term, the "Term") unless either

                  party gives notice of non-extension to the other no later than

                  90 days prior to the expiration of the then-applicable Term.

 

         (c)      Position and Duties.

 

                           (i)      The Executive shall serve as President and

                  Chief Executive Officer of the Company with such customary

                  responsibilities, duties and authority customarily associated

                  with such positions in a company the size and nature of the

                  Company as may from time to time be assigned to the Executive

                  by the Board. Such duties, responsibilities and authority may

                  include services for one or more subsidiaries or affiliates of

                  the Company including, without limitation, services for Dex

                  Media West LLC following the consummation of all or any

                  portion of the Dex West Transaction. The Executive shall

                  report to the Board. The Executive agrees to observe and

                  comply with the Company's rules and policies as adopted by the

                  Company from time to time. The Executive shall devote

                  substantially all his working time and efforts to the business

                  and affairs of the Company; provided, that it shall not be

                  considered a violation of the foregoing for the Executive to

                  (A) with the prior consent of the Board (which consent shall

                  not unreasonably be withheld), serve on corporate, industry,

                  civic or charitable boards or committees, (B) accept speaking

                  engagements and (C) manage his personal affairs, so long as

                  none of such activities significantly interferes with the

                  Executive's duties hereunder.

 

                           (ii)     As of the Effective Date, the Principal

                  Stockholders shall cause the Executive to be appointed or

                  elected to the Board. During the Term, the Board shall propose

                  the Executive for re-election to the Board and the Principal

                  Stockholders shall vote all of their shares of Common Stock in

                  favor of such re-election.

 

                           (iii)    The Executive's principal place of

                  employment shall be the Company's offices in the Denver,

                  Colorado metropolitan area.

 

3.       COMPENSATION AND RELATED MATTERS

 

         (a)      Annual Base Salary. During the Term, the Executive shall

                  receive a base salary at a rate of $450,000 per annum, which

                  shall be paid in accordance with the

 

                                       5

 

<PAGE>

 

                  customary payroll practices of the Company (the "Annual Base

                  Salary"). The rate of the Annual Base Salary shall be reviewed

                  annually by the Compensation Committee on or prior to April 4

                  of each year (beginning with April 4, 2004) during the Term

                  and may be increased, but not decreased, upon such review. The

                  Annual Base Salary shall not be decreased at any time during

                  the Term without the Executive's consent, including for the

                  purpose of determining severance benefits under Section 5

                  hereof.

 

         (b)      Annual Bonus. With respect to each of the Company's fiscal

                  years that end during the Term, the Executive shall be

                  eligible to receive an annual performance-based bonus in

                  accordance with the terms of the Executive Bonus Plan. The

                  Executive Bonus Plan shall provide that (i) if the Company

                  achieves the Bank Case EBITDA Target (as set forth on Exhibit

                  A) for an applicable fiscal year, the Executive's annual bonus

                  shall be payable in an amount equal to 35% of his Annual Base

                  Salary, and (ii) if the Company achieves the Equity Case

                  EBITDA Target (as set forth on Exhibit A) for an applicable

                  fiscal year, the Executive's annual bonus shall be payable in

                  an amount equal to 75% of his Annual Base Salary. The

                  Compensation Committee may, in its sole discretion, provide

                  that the Executive shall be paid additional bonus amount

                  pursuant to the Executive Bonus Plan with respect to any

                  fiscal year (up to maximum aggregate annual bonus of 100% of

                  Annual Base Salary). The Annual Bonus shall be paid to the

                  Executive no later than 90 days following the then applicable

                  fiscal year.

 

         (c)      Stock Option Plan. As of the Effective Date, the Executive

                  shall be granted an option to purchase 58,648 shares of Common

                  Stock, pursuant to the terms and conditions of the Stock

                  Option Plan of Dex Media, Inc. (the "Option Plan") and an

                  Option Agreement entered into by and between Dex Media, Inc.

                  and the Executive as of the date hereof in substantially the

                  form attached hereto as Exhibit B. In the event that the Dex

                  West Transaction is consummated, then as of the Closing Date

                  (as defined in the Rodney Purchase Agreement), the Executive

                  shall be granted an option to purchase 58,647 shares of Common

                  Stock, pursuant to the terms and conditions of the Option Plan

                  and an Option Agreement entered into by and between the

                  Executive and the Company (or its applicable affiliate).

 

         (d)      Benefits. During the Term, the Executive shall be entitled to

                  participate in employee benefit plans, programs and

                  arrangements of the Company now (or, to the extent determined

                  by the Board, hereafter) in effect which are applicable to the

                  senior executives of the Company in accordance with their

                  terms including, without limitation, the Dex Media, Inc.

                  Pension Plan and the Dex Media, Inc. 401(k) Savings Plan. Such

                  benefits shall be provided at a level and on terms and

                  conditions consistent with the Executive's position, and shall

                  be no less favorable to the Executive than those benefit

                  levels applying to other senior executives of the Company.

 

         (e)      Vacation. During the Term, the Executive shall be entitled to

                  paid vacation in accordance with the Company's vacation

                  policies applicable to senior executives

 

                                       6

 

<PAGE>

 

                  of the Company. Any vacation shall be taken at the reasonable

                  and mutual convenience of the Company and the Executive.

 

         (f)      Expenses. During the Term, the Company shall reimburse the

                  Executive for all reasonable travel and other business

                  expenses incurred by him in the performance of his duties to

                  the Company in accordance with the Company's expense

                  reimbursement policy.

 

         (g)      Legal Fees. The Company shall pay or reimburse the Executive

                  for all reasonable attorneys fees incurred by him in

                  connection with the negotiation of this Agreement and any

                  other agreements documenting his employment arrangement with

                  the Company, up to a maximum of $25,000. The Company may, in

                  its discretion, pay or reimburse the Executive for reasonable

                  legal expenses in excess of $25,000.

 

4.       TERMINATION

 

         The Executive's employment hereunder may be terminated by the Company

or the Executive, as applicable, without any breach of this Agreement only under

the following circumstances:

 

         (a)      Circumstances.

 

                  (i)      Death. The Executive's employment hereunder shall

                           terminate upon his death.

 

                  (ii)     Disability. If the Executive has incurred a

                           Disability, the Company may give the Executive

                           written notice of its intention to terminate the

                           Executive's employment, provided, however, that such

                           notice shall not be effective prior to the earlier to

                           occur of (A) the first anniversary of the date the

                           Executive incurred the Disability or (B) the

                           expiration of short-term disability benefits pursuant

                           to any applicable Company benefit plan. In that

                           event, the Executive's employment with the Company

                           shall terminate effective on the later to occur of

                           (X) the 30th day after the receipt of such notice by

                           the Executive or (Y) the earlier to occur of the

                           events described in subparagraphs (A) or (B) of this

                           Section 4(a)(ii), provided that prior to the

                           effective date of such termination, the Executive

                           shall not have returned to full-time performance of

                           his duties.

 

                  (iii)    Termination for Cause. The Company may terminate the

                           Executive's employment for Cause.

 

                  (iv)     Termination without Cause. The Company may terminate

                           the Executive's employment without Cause.

 

                  (v)      Resignation for Good Reason. The Executive may resign

                           his employment for Good Reason.

 

                                       7

 

<PAGE>

 

                  (vi)     Resignation without Good Reason. The Executive may

                           resign his employment without Good Reason upon not

                           less than 60 days advance written notice to the

                           Board.

 

                  (vii)    Non-extension of Term by the Company. The Company may

                           give notice of non-extension to the Executive

                           pursuant to Section 2(b).

 

                  (viii)   Non-extension of Term by the Executive. The Executive

                           may give notice of non-extension to the Company

                           pursuant to Section 2(b).

 

         (b)      Notice of Termination. Any termination of the Executive's

                  employment by the Company or by the Executive under this

                  Section 4 (other than termination pursuant to paragraph

                  (a)(i)) shall be communicated by a written notice to the other

                  party hereto indicating the specific termination provision in

                  this Agreement relied upon, setting forth in reasonable detail

                  the facts and circumstances claimed to provide a basis for

                  termination of the Executive's employment under the provision

                  so indicated, and specifying a Date of Termination which, if

                  submitted by the Executive, shall be at least 30 days

                  following the date of such notice (a "Notice of Termination")

                  provided, however, that the Company may, in its sole

                  discretion, change the Date of Termination to any date

                  following the Company's receipt of the Notice of Termination.

                  A Notice of Termination submitted by the Company may provide

                  for a Date of Termination on the date the Executive receives

                  the Notice of Termination, or any date thereafter elected by

                  the Company in its sole discretion. The failure by the

                  Executive or the Company to set forth in the Notice of

                  Termination any fact or circumstance which contributes to a

                  showing of Cause or Good Reason shall not waive any right of

                  the Executive or the Company hereunder or preclude the

                  Executive or the Company from asserting such fact or

                  circumstance in enforcing the Executive's or the Company's

                  rights hereunder.

 

         (c)      Company Obligations upon Termination (including due to death

                  or Disability). Upon termination of the Executive's employment

                  (including due to Executive's death or Disability), the

                  Executive (or the Executive's estate) shall be entitled to

                  receive (i) except in the event of the Executive's Disability,

                  any amount of the Executive's Annual Base Salary through the

                  Date of Termination not theretofore paid, (ii) a prorated

                  amount of the Executive's Annual Bonus based on the Company's

                  year-to-date performance through the Date of Termination in

                  relation to the performance targets set forth in the Executive

                  Bonus Plan (such amount to be determined in good faith by the

                  Compensation Committee and payable at such time as Executive's

                  Annual Bonus would otherwise have been payable pursuant to the

                  Executive Bonus Plan), (iii) any expenses owed to the

                  Executive under Section 3(f), (iv) any accrued vacation pay

                  owed to the Executive pursuant to Section 3(e), and (v) any

                  amount arising from the Executive's participation in, or

                  benefits under any employee benefit plans, programs or

                  arrangements under Section 3(d), which amounts shall be

                  payable in accordance with the terms and conditions of such

                  employee benefit plans, programs or arrangements including,

                  where applicable, any death and disability benefits (which

                  death or disability

 

                                       8

 

<PAGE>

 

                  benefits, to the extent provided by the Joint Management

                  Agreement, shall not be reduced). In the event of the

                  Executive's Disability, in lieu of Annual Base Salary during

                  such period of Disability, Executive shall be entitled to

                  receive any applicable short-term disability benefits pursuant

                  to any applicable Company benefit plan.

 

5.       SEVERANCE PAYMENTS

 

         (a)      Termination without Cause, resignation for Good Reason, or

                  non-extension of the Term by the Company. If the Executive's

                  employment shall terminate without Cause pursuant to Section

                  4(a)(iv), for Good Reason pursuant to Section 4(a)(v), or

                  pursuant to non-extension of the Term by the Company pursuant

                  to Section 4(a)(vii), the Company shall, subject to the

                  Executive's execution of a general waiver and release of

                  claims agreement in the Company's customary form:

 

                  (i)      Continue to pay to the Executive his base salary as

                           described in Section 3(a), in accordance with the

                           Company's regular payroll practices, during the

                           period beginning on the Date of Termination and

                           ending on the earliest to occur of (A) the 18-month

                           anniversary of the Date of Termination; or (B) the

                           first date that the Executive violates any covenant

                           contained in Section 6, 7 or 8; and

 

                  (ii)     To the extent permitted by the Company's applicable

                           health and welfare benefit plans and programs,

                           continue for 18 months the Executive's coverage under

                           the Company's health and welfare benefit plans and

                           programs in which the Executive was entitled to

                           participate immediately prior to the Date of

                           Termination (or, if the Company amends, replaces or

                           terminates any such plan or program following such

                           Date of Termination, the Company medical and dental

                           plans provided to similarly situated employees), as

                           if the Executive were an active employee during such

                           time, subject to standard employee contributions by

                           the Executive as are required under such plans.

 

         (b)      Survival. The expiration or termination of the Term shall not

                  impair the rights or obligations of any party hereto, which

                  shall have accrued prior to such expiration or termination.

 

6.       NON-COMPETITION; NON-SOLICITATION

 

         (a)      The Executive shall not, at any time during the Term or during

                  the 18-month period following the Date of Termination (the

                  "Restricted Period"):

 

                  (i)      Directly or indirectly engage in, have any equity

                           interest in, or manage or operate (whether as

                           director, officer, employee, agent, representative,

                           partner, security holder, consultant or otherwise)

                           any of the following

 

                                       9

 

<PAGE>

 

                           entities, or any subsidiary thereof, or any successor

                           thereto (the "Competitive Entities"):

 

                                    (A)      Verizon Information Services, a

                                             division of Verizon Communications

                                             Inc.

 

                                    (B)      BellSouth Advertising & Publishing

                                             Corporation (including L. M. Berry)

 

                                    (C)      Southwestern Bell Yellow Pages, a

                                             division of SBC Communications Inc.

 

                                    (D)      Alltel Publishing, a division of

                                             Alltel Corporation

 

                                    (E)      R. H. Donnelley Inc. (including

                                             Sprint Publishing & Advertising)

 

                                    (F)      TransWestern Publishing Company LLC

 

                                    (G)      Yell Group PLC

 

                                    (H)      Yellow Pages Group Company

 

                                    (I)      White Directory Publishers, Inc.

 

                           provided, however, that the Executive shall be

                           permitted to acquire a passive stock or equity

                           interest in such entity provided the stock or other

                           equity interest acquired is not more than five

                           percent (5%) of the outstanding interest in such

                           entity; and provided, further, that, notwithstanding

                           the foregoing, at no time during the Restricted

                           Period may the Executive directly or indirectly

                           engage in, have any equity interest in, or manage or

                           operate (whether as director, officer, employee,

                           agent, representative, partner, security holder,

                           consultant or otherwise) any parent entity or other

                           Affiliate of any of the Competitive Entities to the

                           extent that such parent entity or other Affiliate

                           engages in (or the Executive's services therefor

                           relate to) telephone directory publishing, marketing

                           or advertising (or any other business directly

                           engaged in by the Company during the Restricted

                           Period).

 

                  (ii)     Directly or indirectly solicit, on his own behalf or

                           on behalf of any other person or entity, the services

                           of any individual who is (or, at any time during the

                           previous two years, was) an employee of the Company

                           (other than an individual who was within the previous

                           two years his personal assistant or secretary), or

                           solicit any of the Company's then employees to

                           terminate employment with the Company; or

 

                  (iii)    Directly or indirectly, on his own behalf or on

                           behalf of any other person or entity, recruit or

                           otherwise solicit or induce any customer, subscriber

                           or

 

                                       10

 

<PAGE>

 

                           supplier of the Company to terminate its employment

                           or arrangement with the Company, otherwise change its

                           relationship with the Company, or establish any

                           relationship with the Executive or any of his

                           affiliates for any business purpose deemed

                           competitive with the business of the Company.

 

         (b)      In the event the terms of this Section 6 shall be determined

                  by any court of competent jurisdiction to be unenforceable by

                  reason of its extending for too great a period of time or over

                  too great a geographical area or by reason of its being too

                  extensive in any other respect, it will be interpreted to

                  extend only over the maximum period of time for which it may

                  be enforceable, over the maximum geographical area as to which

                  it may be enforceable, or to the maximum extent in all other

                  respects as to which it may be enforceable, all as determined

                  by such court in such action.

 

         (c)      As used in this Section 6, the term "Company" shall include

                  the Company, its parent, related entities, and any of its

                  direct or indirect subsidiaries.

 

         (d)      The restrictions set forth in Sections 6(a)(i) and (iii) above

                  shall expire prior to the end of the Restricted Period if,

                  following the Executive's Termination of Employment, the

                  Company breaches any of its material obligations to the

                  Executive hereunder, which breach is not fully cured following

                  30 days written notice from the Executive to the Company

                  requesting cure of such breach.

 

         (e)      The provisions contained in Section 6(a) may be altered and/or

                  waived with the prior written consent of the Board or the

                  Compensation Committee.

 

7.       NONDISCLOSURE OF PROPRIETARY INFORMATION

 

         (a)      Except as required in the faithful performance of the

                  Executive's duties hereunder or pursuant to Section 7(c), the

                  Executive shall, during the Term and after the Date of

                  Termination, maintain in confidence and shall not directly or

                  indirectly, use, disseminate, disclose or publish, or use for

                  his benefit or the benefit of any person, firm, corporation or

                  other entity any confidential or proprietary information or

                  trade secrets of or relating to the Company, including,

                  without limitation, information with respect to the Company's

                  operations, processes, protocols, products, inventions,

                  business practices, finances, principals, vendors, suppliers,

                  customers, potential customers, marketing methods, costs,

                  prices, contractual relationships, regulatory status,

                  compensation paid to employees or other terms of employment

                  ("Proprietary Information"), or deliver to any person, firm,

                  corporation or other entity any document, record, notebook,

                  computer program or similar repository of or containing any

                  such Proprietary Information. The Executive's obligation to

                  maintain and not use, disseminate, disclose or publish, or use

                  for his benefit or the benefit of any person, firm,

                  corporation or other entity any Proprietary Information after

                  the Date of Termination will continue so long as such

                  Proprietary Information is not, or has not by legitimate means

                  become, generally known and in the public domain (other than

                  by means

 

                                       11

 

<PAGE>

 

                  of the Executive's direct or indirect disclosure of such

                  Proprietary Information) and is continued to be maintained as

                  Proprietary Information by the Company. The parties hereby

                  stipulate and agree that as between them, the Proprietary

                  Information identified herein is important, material and

                  affects the successful conduct of the businesses of the

                  Company (and any successor or assignee of the Company).

 

         (b)      Upon termination of the Executive's employment with the

                  Company for any reason, the Executive will promptly deliver to

                  the Company all correspondence, drawings, manuals, letters,

                  notes, notebooks, reports, programs, plans, proposals,

                  financial documents, or any other documents concerning the

                  Company's customers, business plans, marketing strategies,

                  products or processes. Notwithstanding the foregoing, the

                  Executive may retain documents relating to his personal

                  compensation and entitlements, provided that such documents

                  are retained solely for personal use and are not disclosed to

                  anyone other than the Executive.

 

         (c)      The Executive may respond to a lawful and valid subpoena or

                  other legal process but shall give the Company the earliest

                  possible notice thereof, shall, as much in advance of the

                  return date as possible, make available to the Company and its

                  counsel the documents and other information sought and shall

                  assist such counsel in resisting or otherwise responding to

                  such process.

 

         (d)      The Executive agrees not to disparage the Company, any of its

                  products or practices, or any of its directors, officers,

                  agents, representatives, stockholders or affiliates, either

                  orally or in writing, at any time; provided, that the

                  Executive may confer in confidence with his legal

                  representatives and make truthful statements as required by

                  law.

 

         (e)      The Company agrees to instruct the members of the Board and

                  the executive officers of the Company not to disparage the

                  Executive, either orally or in writing, at any time; provided,

                  that, the Company may confer in confidence with its legal

                  representatives and make truthful statements as required by

                  law.

 

         (f)      As used in this Section 7, the term "Company" shall include

                  the Company, its parent, related entities, and any of its

                  direct or indirect subsidiaries.

 

8.       NON-DISPARAGEMENT

 

         Each of the parties agrees that, during and following the Term, he or

it will not disparage or denigrate to any person any aspect of his or its past

relationship with the other, nor the character of the other or the other's

agents, representatives, products, or operating methods, whether past, present,

or future.

 

                                       12

 

<PAGE>

 

9.       INJUNCTIVE RELIEF

 

         It is recognized and acknowledged by the Executive that a breach of the

covenants contained in Sections 6, 7 and 8 will cause irreparable damage to

Company and its goodwill, the exact amount of which will be difficult or

impossible to ascertain, and that the remedies at law for any such breach will

be inadequate. Accordingly, the Executive agrees that in the event of a breach

of any of the covenants contained in Sections 6, 7 and 8, in addition to any

other remedy which may be available at law or in equity, the Company will be

entitled to specific performance and injunctive relief.

 

10.      PARACHUTE TAXES

 

         The Company shall use its best reasonable efforts to secure the

approval of any payment or benefits paid or provided to the Executive in

connection with the Executive's employment with the Company in such a fashion

that the Executive is not required to pay an excise tax under Section 4999 of

the Code with respect to any such payment or benefit.

 

11.      ASSIGNMENT AND SUCCESSORS

 

         The Company may assign its rights and obligations under this Agreement

to any entity, including any successor to all or substantially all the assets of

the Company, by merger or otherwise, and may assign or encumber this Agreement

and its rights hereunder as security for indebtedness of the Company and its

affiliates. The Executive may not assign his rights or obligations under this

Agreement to any individual or entity. This Agreement shall be binding upon and

inure to the benefit of the Company, the Executive and their respective

successors, assigns, personnel and legal representatives, executors,

administrators, heirs, distributees, devisees, and legatees, as applicable.

 

12.      INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES

 

         During the Term and so long as the Executive has not breached any of

his obligations set forth in Sections 6, 7 and 8, the Company shall indemnify

the Executive to the fullest extent permitted by the laws of the State of

Delaware, as in effect at the time of the subject act or omission, and shall

advance to the Executive reasonable attorneys' fees and expenses as such fees

and expenses are incurred (subject to an undertaking from the Executive to repay

such advances if it shall be finally determined by a judicial decision which is

not subject to further appeal that the Executive was not entitled to the

reimbursement of such fees and expenses). During the Term, the Executive shall

be entitled to the protection of any insurance policies the Company shall elect

to maintain generally for the benefit of its directors and officers ("Directors

and Officers Insurance") against all costs, charges and expenses incurred or

sustained by him in connection with any action, suit or proceeding to which he

may be made a party by reason of his being or having been a director, officer or

employee of the Company or any of its subsidiaries or his serving or having

served any other enterprise as a director, officer or employee at the request of

the Company (other than any dispute, claim or controversy arising under or

relating to this Agreement). Provided there is no non-de minimis incremental

cost to the Company, for six years following the Date of Termination the

Executive shall be entitled to continued coverage

 

                                       13

 

<PAGE>

 

under Directors and Officers Insurance no less favorable than that (if any)

provided to any other present or former director or officer of the Company.

 

13.      JOINT MANAGEMENT AGREEMENT

 

         Notwithstanding any other provision of this Agreement (a) the

Executive's employment shall be subject to the terms and conditions of the Joint

Management Agreement attached hereto as Exhibit C (the "Joint Management

Agreement"), and (b) during the term of the Joint Management Agreement the

Company shall pay to the Executive an annualized base salary in the amount equal

to the excess of (i) $450,000 over (ii) the amount of the annual base salary

paid to the Executive by Qwest Dex, Inc. and its affiliates. This Agreement

shall remain in effect upon the terms and conditions described herein following

the closing of the Dex West Transaction (or, as applicable, following the time

that it is determined that all or any portion of the Dex West Transaction will

not be consummated).

 

14.      GOVERNING LAW

 

         This Agreement shall be governed, construed, interpreted and enforced

in accordance with the substantive laws of the state of Delaware, without

reference to the principles of conflicts of law of Delaware or any other

jurisdiction, and where applicable, the laws of the United States.

 

15.      VALIDITY

 

         The invalidity or unenforceability of any provision or provisions of

this Agreement shall not affect the validity or enforceability of any other

provision of this Agreement, which shall remain in full force and effect.

 

16.      NOTICES

 

         Any notice, request, claim, demand, document and other communication

hereunder to any party shall be effective upon receipt (or refusal of receipt)

and shall be in writing and delivered personally or sent by telex, telecopy, or

certified or registered mail, postage prepaid, as follows:

 

         (a)      If to the Company:

 

                  Dex Media, Inc.

                  198 Inverness Drive West

                  Englewood, CO 80112

                  Fax.: (303) 784-1964

                  Attn: Vice President of Human Resources

 

                  with copies to:

 

 

                  The Carlyle Group            Welsh, Carson, Anderson & Stowe

                  520 Madison Avenue           320 Park Avenue

                  41st Floor                   Suite 2500

 

                                       14

 

<PAGE>

 

                  New York, New York 10022     New York, New York 10022

                  Fax: (212) 381-4901          Fax: (212) 893-9562

                  Attn: James A. Attwood       Attn: Anthony J. de Nicola

 

                  and a copy to:

 

                  Latham & Watkins, LLP

                  885 Third Avenue

                  New York, New York 10022-4802

                  Fax:  (212) 751-4864

                  Attn:  R. Ronald Hopkinson

 

         (b)      If to the Executive, to the address set forth on the signature

                  page hereto

 

or at any other address as any party shall have specified by notice in writing

to the other party.

 

17.      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 Agreement.

 

18.      ENTIRE AGREEMENT

 

         The terms of this Agreement and the other agreements and instruments

contemplated hereby or referred to herein (collectively the "Related

Agreements") are intended by the parties to be the final expression of their

agreement with respect to the employment of the Executive by the Company and may

not be contradicted by evidence of any prior or contemporaneous agreement

(including without limitation any Term Sheet or similar agreement entered into

between the Company and the Executive). The parties further intend that this

Agreement and the Related Agreements shall constitute the complete and exclusive

statement of their terms and that no extrinsic evidence whatsoever may be

introduced in any judicial, administrative, or other legal proceeding to vary

the terms of this Agreement and the Related Agreements.

 

19.      AMENDMENTS; WAIVERS

 

         This Agreement may not be modified, amended, or terminated except by an

instrument in writing, signed by the Executive and a duly authorized officer of

Company which expressly identifies the amended provision of this Agreement. By

an instrument in writing similarly executed and similarly identifying the waived

compliance, the Executive or a duly authorized officer of the Company may waive

compliance by the other party or parties with any provision of this Agreement

that such other party was or is obligated to comply with or perform, provided,

however, that such waiver shall not operate as a waiver of, or estoppel with

respect to, any other or subsequent failure. No failure to exercise and no delay

in exercising any right, remedy, or power hereunder preclude any other or

further exercise of any other right, remedy, or power provided herein or by law

or in equity.

 

                                       15

 

<PAGE>

 

20.      NO INCONSISTENT ACTIONS

 

         The parties hereto shall not voluntarily undertake or fail to undertake

any action or course of action inconsistent with the provisions or essential

intent of this Agreement. Furthermore, it is the intent of the parties hereto to

act in a fair and reasonable manner with respect to the interpretation and

application of the provisions of this Agreement.

 

21.      CONSTRUCTION

 

         This Agreement shall be deemed drafted equally by both the parties. Its

language shall be construed as a whole and according to its fair meaning. Any

presumption or principle that the language is to be construed against any party

shall not apply. The headings in this Agreement are only for convenience and are

not intended to affect construction or interpretation. Any references to

paragraphs, subparagraphs, sections or subsections are to those parts of this

Agreement, unless the context clearly indicates to the contrary. Also, unless

the context clearly indicates to the contrary, (a) the plural includes the

singular and the singular includes the plural; (b) "and" and "or" are each used

both conjunctively and disjunctively; (c) "any," "all," "each," or "every" means

"any and all," and "each and every"; (d) "includes" and "including" are each

"without limitation"; (e) "herein," "hereof," "hereunder" and other similar

compounds of the word "here" refer to the entire Agreement and not to any

particular paragraph, subparagraph, section or subsection; and (f) all pronouns

and any variations thereof shall be deemed to refer to the masculine, feminine,

neuter, singular or plural as the identity of the entities or persons referred

to may require.

 

22.      ARBITRATION

 

         Any dispute or controversy arising under or in connection with this

Agreement shall be settled exclusively by arbitration, conducted before an

arbitrator in New York, New York in accordance with the rules of the American

Arbitration Association then in effect. Judgment may be entered on the

arbitration award in any court having jurisdiction, provided, however, that the

Company shall be entitled to seek a restraining order or injunction in any court

of competent jurisdiction to prevent any continuation of any violation of the

provisions of Sections 6, 7 and 8 of the Agreement and the Executive hereby

consents that such restraining order or injunction may be granted without

requiring the Company to post a bond. Only individuals who are (a) lawyers

engaged full-time in the practice of law; and (b) on the AAA register of

arbitrators shall be selected as an arbitrator. Within 20 days of the conclusion

of the arbitration hearing, the arbitrator shall prepare written findings of

fact and conclusions of law. It is mutually agreed that the written decision of

the arbitrator shall be valid, binding, final and non-appealable, provided

however, that the parties hereto agree that the arbitrator shall not be

empowered to award punitive damages against any party to such arbitration. The

arbitrator shall require the non-prevailing party to pay the arbitrator's full

fees and expenses or, if in the arbitrator's opinion there is no prevailing

party, the arbitrator's fees and expenses will be borne equally by the parties

thereto. In the event action is brought to enforce the provisions of this

Agreement pursuant to this Section 22, (x) if the Executive prevails in such

action, the Company shall be required to pay the reasonable attorney's fees and

expenses of the Executive and (y) if the Company prevails in such action or if,

in the opinion of the court or arbitrator deciding such action, there is no

prevailing party, each party shall pay his or its own attorney's fees and

expenses.

 

                                       16

 

<PAGE>

 

23.      ENFORCEMENT

 

         If any provision of this Agreement is held to be illegal, invalid or

unenforceable under present or future laws effective during the term of this

Agreement, such provision shall be fully severable; this Agreement shall be

construed and enforced as if such illegal, invalid or unenforceable provision

had never comprised a portion of this Agreement; and the remaining provisions of

this Agreement shall remain in full force and effect and shall not be affected

by the illegal, invalid or unenforceable provision or by its severance from this

Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable

provision there shall be added automatically as part of this Agreement a

provision as similar in terms to such illegal, invalid or unenforceable

provision as may be possible and be legal, valid and enforceable.

 

24.      WITHHOLDING

 

         The Company shall be entitled to withhold from any amounts payable

under this Agreement any federal, state, local or foreign withholding or other

taxes or charges which the Company is required to withhold. The Company shall be

entitled to rely on an opinion of counsel if any questions as to the amount or

requirement of withholding shall arise.

 

25.      EMPLOYEE ACKNOWLEDGEMENT

 

         The Executive acknowledges that he has read and understands this

Agreement, is fully aware of its legal effect, has not acted in reliance upon

any representations or promises made by the Company other than those contained

in writing herein, and has entered into this Agreement freely based on his own

judgment.

 

26.      DESIGNATION OF BENEFICIARIES

 

         The Executive shall be entitled to elect beneficiaries with respect to

any applicable benefits or payments provided or referenced hereunder pursuant to

the Company's beneficiary designation form customarily applicable to any such

benefits or payments.

 

                            [signature page follows]

 

                                       17

 

<PAGE>

 

         IN WITNESS WHEREOF, the parties have executed this Agreement on the

date and year first above written.

 

                                            COMPANY

 

                                            By:    /s/ Scott Pomeroy

                                                --------------------------------

                                                Name: Scott Pomeroy

                                                Title: Vice President

 

                                            EXECUTIVE

 

                                            By:    /s/ George Burnett

                                                --------------------------------

                                                George Burnett

 

<PAGE>

 

                                                                       EXHIBIT A

 

                              EXECUTIVE BONUS PLAN

 

                           ANNUAL BONUS EBITDA TARGETS

 

                                  ($ MILLIONS)

 

                             YEAR ENDING DECEMBER 31

 

DEX

 

<TABLE>

<CAPTION>

PROJECTED EBITDA SUMMARY*                2003            2004           2005            2006            2007

-------------------------                ----            ----           ----            ----            ----

<S>                                      <C>             <C>            <C>            <C>             <C>

BANK CASE

 

Dex East EBITDA                          $364            $365           $373           $  383          $  394

 

 

Dex EBITDA                               $906            $917           $939           $  966          $  996

 

 

EQUITY CASE

 

Dex East EBITDA                          $369            $378           $393           $  411          $  430

 

 

Dex EBITDA                               $913            $942           $976           $1,020          $1,069

</TABLE>

 

---------------------------

*        With respect to each calendar year ending prior to the closing of the

Dex West Transaction, the respective Bank Case and Equity Case "Dex East EBITDA"

targets shall apply. With respect to the calendar year in which the closing of

the Dex West Transaction occurs and each calendar year thereafter, the

respective Bank Case and Equity Case "Dex EBITDA" targets shall apply for

purposes of this Agreement. In the event that the Dex West Transaction is not

consummated, the respective Bank Case and Equity Case "Dex East EBITDA" targets

shall apply with respect to all calendar years for purposes of this Agreement.

EBITDA targets shall be adjusted as appropriate to reflect acquisitions,

divestitures and other recapitalizations (other than the Dex West Transaction).

 

<PAGE>

 

                                                                       EXHIBIT B

 

                               [OPTION AGREEMENT]

 

<PAGE>

 

                                                                       EXHIBIT C

 

                          [JOINT MANAGEMENT AGREEMENT]

 

                                       21

 

Back to Top

 

 

October 2, 2005

 

Mr. George Burnett
c/o Dex Media, Inc.
198 Inverness Drive West
Englewood, CO 80112

 

     Re: Employment and Option Agreement Amendment

 

Dear George:

 

     This Letter Agreement confirms the understanding reached between you and Dex Media, Inc., a Delaware corporation (together with any successor thereto, the “Company”), regarding the terms of your continued employment with the Company. This Letter Agreement constitutes an amendment to that certain Employment Agreement by and between you and the Company, originally entered into as of November 8, 2002, and as amended and restated as of July 15, 2004 (the “Employment Agreement”), and an amendment to all Option Agreements by and between you and the Company (the “Option Agreements”) including without limitation those certain Option Agreements dated as of November 8, 2002, September 9, 2003, and November 11, 2003, in each case as amended prior to the date hereof. Capitalized terms used in this Letter Agreement and not defined herein shall have the meaning given such terms in the Employment Agreement or Option Agreements, as applicable. This Letter Agreement shall be effective immediately prior to the consummation of the transaction (the “Merger”) evidenced by that certain Agreement and Plan of Merger dated as of October 3, 2005 by and among the Company, R.H. Donnelley Corporation (“Donnelley”) and Forward Acquisition Corp., a wholly owned subsidiary of Donnelley. In the event that the Merger is not consummated, this Letter Agreement shall be void ab initio.

     1. Termination of Employment. Notwithstanding anything to the contrary in the Employment Agreement, if on or prior to the fourth anniversary of the Effective Time (as defined in the Merger Agreement) your employment with the Company is terminated (either by you or by the Company) for any reason or you cease for any reason to continue in the position of the Chairman of the Board of Donnelley, the Company shall (subject to your entering into a waiver and release of claims agreement in the Company’s customary form):

     (a) Pay to you a lump sum cash amount equal to the product of (i) the sum of (A) your then-current Annual Base Salary (which shall not be less than $475,000) and (B) your then-current target annual bonus (which shall not be less than 75% of your Annual Base Salary) and (ii) 1.5; and

     (b) Provide that you will be eligible to continue to receive health and welfare benefits from the Company for three years following your termination of employment (for which you will pay full premium costs). Following the expiration of such three year period, you shall be eligible to elect to receive COBRA continuation coverage under the Company’s applicable group health plan in accordance with the Company’s customary terms and procedures.

 


 

     For the avoidance of doubt, you and the Company acknowledge and agree that the payments and benefits described in this Paragraph 1 shall be made in lieu of, and not in addition to, the payments and benefits described in Section 5 of the Employment Agreement.

     2. Stock Options. Notwithstanding anything to the contrary in any Option Agreement (a) all options evidenced by the Option Agreements (the “Options”) will become vested and exercisable with respect to all shares of the Company’s common stock covered thereby immediately prior to the Effective Time, subject to the consummation of the Merger, (b) each Option outstanding immediately prior to the Effective Time will be converted into a fully vested Donnelley option with an economic value that is substantially identical to the value of the Options immediately prior to the Effective Time and (c) each such Option shall expire on the first to occur of (i) the tenth anniversary of the Grant Date thereof, (ii) the first anniversary of your termination of employment due to death or disability, or (iii) the 15th day of the third month following the date of your termination of employment for any reason other than death or disability (or December 31 of the calendar year in which such termination of employment occurs, if later).

     3. Assignment and Successors. As of the Effective Time, the Company shall assign, and Donnelley shall assume, all rights and obligations under this Agreement, the Employment Agreement and the Option Agreements. If Donnelley does not so assume this Agreement, the Employment Agreement and the Option Agreements, the Company shall provide you with the payments and benefits described in Paragraph 1 of this Letter Agreement immediately prior to the Effective Time.

     4. Section 409A. You and the Company acknowledge and agree that, to the extent applicable, this Letter Agreement, the Employment Agreement and the Option Agreements shall be interpreted in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Department of Treasury regulations and other interpretive guidance issued thereunder. Notwithstanding any provision of this Letter Agreement, the Employment Agreement or the Option Agreements to the contrary, in the event that any amounts payable to you could reasonably be expected to be immediately taxable to you under Section 409A of the Code and related Department of Treasury guidance, you and the Company shall cooperate in good faith and shall take such reasonable actions as may be necessary or appropriate to comply with the requirements of Section 409A of the Code and related Department of Treasury guidance. You and the Company acknowledge and agree that, to the extent provided by the Merger Agreement, the conversion of your Options pursuant to Section 2.4 of the Merger Agreement may be adjusted as necessary or appropriate to comply with Section 409A of the Code and to preserve the intended tax treatment of the Options.

5. 280G Excise Tax Gross-Up

     (a) If it is determined by the nationally recognized United States public accounting firm used by the Company immediately prior to any Change of Control (or such other nationally recognized United States public accounting firm as may be agreed to in writing by you and the Company) (the “Auditors”) that any payment or benefit made or provided to you in connection with this Letter Agreement or otherwise (including without limitation any Option or other equity compensation award vesting) (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then the Company shall pay to you, prior to the time the Parachute Tax is payable with respect to such Payment, an additional payment (a “Gross-Up Payment”) an amount such that, after you pay all taxes (including any Parachute Tax) imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to the Parachute Tax imposed upon the Payment. The amount of any Gross-Up Payment shall be determined by the Auditors, subject

 


 

to adjustment, as necessary, as a result of any Internal Revenue Service position. For purposes of making the calculations required by this Letter Agreement, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, provided that the Auditors’ determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). To the extent that the Company obtains a written opinion from the Auditors with respect to Parachute Tax issues, the Company shall direct the Auditors to extend such opinion to you (to the extent that such extension is permitted by the Auditors).

     (b) The federal tax returns filed by you (and any filing made by a consolidated tax group which includes the Company) shall be prepared and filed on a basis consistent with the determination of the Auditors with respect to the Parachute Tax payable by you. You shall make proper payment of the amount of any Parachute Tax based on such determination, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of your federal income tax return as filed with the Internal Revenue Service, and such other documents reasonably requested by the Company, evidencing such payment, provided that any information unrelated to the Parachute Tax may be deleted from the copies of the returns and documents delivered to the Company. If, after the Company’s payment to you of the Gross-Up Payment, the Auditors determine in good faith that the amount of the Gross-Up Payment should be reduced or increased, or a determination is made by the Internal Revenue Service that would make the prior Gross-Up Payment amount not accurate, then within ten (10) business days of such determination, you shall pay to the Company the amount of any such reduction, or the Company shall pay to you the amount of any such increase; provided, however, that in no event shall you have any such refund obligation if it is determined by the Company that to do so would be a violation of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further, that if you have prior thereto paid such amounts to the Internal Revenue Service, such refund shall be due only to the extent that a refund of such amount is received by you; and provided, further, that (i) the fees and expenses of the Auditors (and any other legal and accounting fees) incurred for services rendered, in connection with the Auditors’ determination of the Parachute Tax or any challenge by the Internal Revenue Service or other taxing authority relating to such determination shall be paid by the Company and (ii) the Company shall indemnify and hold you harmless on an after-tax basis for any interest and penalties imposed upon you to the extent that such interest and penalties are related to the Auditors’ determination of the Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the contrary herein, your rights under this Paragraph 5 shall survive the termination of your employment for any reason and the termination or expiration of this Letter Agreement for any reason.

     6. Employment and Option Agreements. You and the Company acknowledge and agree that, except as provided by this Letter Agreement, the Employment Agreement and the Option Agreements shall remain in full force and effect.

     7. Further Assurances. You and the Company agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the terms of this Letter Agreement.

[signature page follows]

 


 

     Please indicate your acceptance of the terms and provisions of this Letter Agreement by signing both copies of this Letter Agreement and returning one copy to me. The other copy is for your files. By signing below, you acknowledge and agree that you have carefully read this Letter Agreement in its entirety; fully understand and agree to its terms and provisions; and intend and agree that it be final and legally binding on you and the Company. This Letter Agreement shall be governed and construed under the internal laws of the State of Delaware and may be executed in several counterparts.

 

 

 

 

 

 

Very truly yours,
 

 

 

/s/ SCOTT BONTEMPO  

 

 

Name:  

Scott Bontempo 

 

 

Title:  

Senior Vice President, Human Resources 

 

 

Agreed and Accepted:

/s/ GEORGE BURNETT          
George Burnett

 

Back to Top

 

 

 

 

 

 

 

 

(DEX MEDIA LOGO)

 


198 Inverness Drive West
Englewood
, CO 80112

December 19, 2005

George A. Burnett
c/o Dex Media, Inc.
198 Inverness Drive West
Englewood, CO 80112

 

Re: 409A Amendment to Amended and Restated Employment Agreement

 

     This Letter Agreement confirms the understanding reached between you and Dex Media, Inc., a Delaware corporation (together with any successor thereto, the “Company”) to amend the terms of your continued employment with the Company to address the impact of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”). This Letter Agreement constitutes an amendment to that certain Amended and Restated Employment Agreement, dated as of July 15, 2004 (the “Employment Agreement”), as amended by that certain letter agreement between you and the Company, dated October 2, 2005 (the “First Letter Amendment”). This Letter Agreement is intended to comply in good faith with Section 409A and the regulations and other Treasury Department guidance promulgated thereunder. This Letter Agreement shall be effective immediately prior to the consummation of the transactions (the “Merger”) evidenced by that certain Agreement and Plan of Merger by and among the Company, R.H. Donnelley Corporation (“Donnelley”) and Forward Acquisition Corp., a wholly owned subsidiary of Donnelley (the “Merger Agreement”). In the event that the Merger is not consummated, this Letter Agreement shall be void ab initio. Capitalized terms used in this Letter Agreement and not defined herein shall have the meaning given such terms in the Employment Agreement or the First Letter Amendment, as applicable.

1.

 

409A Amendment. You agree that your Employment Agreement, as amended by the First Letter Amendment, will be hereby amended as follows:

     Notwithstanding anything to the contrary in your Employment Agreement or in the First Letter Amendment, if, upon the advice of its counsel, the Company determines that any payments or benefits to be provided to you pursuant to Section 1 of the First Letter Amendment (the “Severance Payments”) is or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A (“409A Taxes”) if provided at the time otherwise required under Section 1 of the First Letter Amendment, then:

     (a) Payment of the Severance Payments shall be delayed until the date that is six months after the date of your “separation from service” (as such term is defined under Section 409A) with the Company, or such shorter period that, in the

 


 

opinion of such counsel, is sufficient to avoid the imposition of 409A Taxes (the “Payment Delay Period”).

     (b) The Severance Payments that are subject to the Payment Delay Period shall be increased by an amount equal to interest on such payments for the Payment Delay Period at a rate equal to the short-term Applicable Federal Rate published by the Internal Revenue Service that is applicable during the Payment Delay Period, as compounded semi-annually.

     For the avoidance of doubt, in the event that upon the advice of its counsel, the Company determines that the Severance Payments shall not be subject to a Payment Delay Period, then the full amount of the Severance Payments will be paid to you in lump sum on or prior to the 30th day following the date of your termination of employment.

2.

 

Employment and Option Agreements. You and the Company acknowledge and agree that, except as provided by this Letter Agreement, the Employment Agreement and the First Letter Amendment shall remain in full force and effect.

 

 

 

3.

 

Further Assurances. You and the Company agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the terms of this Letter Agreement.

[signature page follows]

 


 

     Please indicate your acceptance of the terms and provisions of this Letter Agreement by signing both copies of this Letter Agreement and returning one copy to me. The other copy is for your files. By signing below, you acknowledge and agree that you have carefully read this Letter Agreement in its entirety; fully understand and agree to its terms and provisions; and intend and agree that it be final and legally binding on you and the Company. This Letter Agreement shall be governed and construed under the internal laws of the State of Delaware and may be executed in several counterparts.

 

 

 

 

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

 

/s/ SCOTT BONTEMPO 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name: Scott Bontempo

 

 

 

 

Title: Senior Vice President - Human Resources

 

 

 

 

 

 

 

 

 

 

Agreed and Accepted:

 

 

 

 

 

 

 

 

 

/s/ GEORGE A. BURNETT 

 

 

 

 

 

 

 

 

 

George A. Burnett