Exhibit 10.32
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“ Agreement ”) is entered into as of
January 2, 2007 (the “ Effective Date ”),
by and between John S. Fischer (the “ Executive
”) and Local Insight Media, LLC, a Delaware limited liability
company (the “ Company ,” which term includes
any subsidiary, affiliate or successor of Local Insight Media, LLC
that may employ Executive from time to time).
RECITALS
WHEREAS, the Company desires to
assure itself of the services of the Executive by engaging the
Executive to perform services on the terms and subject to the
conditions set out in this Agreement; and
WHEREAS, the Executive desires to
provide services to the Company on the terms and subject to the
conditions set out in this Agreement;
NOW, THEREFORE, in consideration of
the foregoing and of the respective covenants and agreements set
forth below, the parties hereto agree as follows:
ARTICLE I.
DEFINED TERMS
1.1 Previously Defined Terms
. As used herein, each term defined in the first paragraph or
Recitals of this Agreement shall have the meaning set forth
above.
1.2 Definitions . As used
herein, the following terms shall have the following respective
meanings:
(a) “ Affiliate ”
means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control
with, such Person. As used in the preceding sentence,
“control” has the meaning given such term under Rule
405 of the Securities Act of 1933, as amended.
(b) “ Annual Base
Salary ” has the meaning set forth in
Section 3.1 .
(c) “ Annual Bonus
” has the meaning set forth in Section 3.2
.
(d) “ Board ”
means 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 thirty
(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 thirty
(30) days after receipt of written notice from the Company
specifying such failure;
(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
” means a change in ownership or control of the Company
effected through a transaction or series of transactions (other
than an offering of equity securities of the Company 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 Securities Exchange
Act of 1934, as amended) (other than the Company, any of its
subsidiaries, any employee benefit plan maintained by the Company
or any of its subsidiaries, any Principal Member or any
“person” that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control
with, the Company or a Principal Member) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) 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) “ Compensation
Committee ” means the Compensation Committee of the
Board.
(h) “ Competitive
Entity ” means any Person or Affiliate thereof engaged in
any of the following activities: (i) publishing, distributing
and/or selling advertisements in directory products or services in
any medium, whether in tangible media (e.g., paper directories or
CD-ROM), electronic media (e.g., Internet) or digital media (e.g.,
PDA download); (ii) publishing, marketing, distributing and/or
selling advertising in any ancillary directories, tourist guides,
business-to-business directories, community directories or other
products published by the Company or any of its subsidiaries or
Affiliates; or (iii) any other line of business in which the
Company or any of its subsidiaries or Affiliates becomes engaged at
any time during the Term.
(i) “ Date of
Termination ” means: (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 Sections 4.1(b)-(f) , either the date indicated
in the Notice of Termination or the date specified by the Company
pursuant to Section 4.2 , whichever is earlier; or
(iii) if the Executive’s employment is terminated
pursuant to Sections 4.1(g) or Section 4.1(h) ,
the expiration of the then-current Term.
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(j) “ Disability
” means the absence of the Executive from the
Executive’s duties with the Company on a full-time basis for
a total of three (3) months during any six (6)-month period as
a result of incapacity due to physical or mental
illness.
(k) “ Equity Plan
” has the meaning set forth in Section 3.6.
(l) “ Executive Bonus
Plan ” means the Company’s bonus plan, as the same
may be amended from time to time.
(m) The Executive shall have “
Good Reason ” to resign his employment upon the
occurrence of any of the following without his prior written
consent: (i) the Company’s failure to make any material
payment or provide any material benefit under this Agreement or its
material breach of this Agreement or (ii) any of the following
during the period beginning on the date of a Change in Control and
ending on the first anniversary thereof: (A) a material
reduction in the Executive’s Annual Base Salary or Annual
Bonus opportunity; (B) a material diminution in the nature or
scope of the Executive’s duties, responsibilities or
authority; or (C) relocation of the Executive’s
principal office to a location that is more than 25 miles from the
Company’s current location; provided , however
, that, notwithstanding the foregoing, the Executive may not resign
his employment for Good Reason unless: (X) the Executive
provides the Company with at least thirty (30) days prior
written notice of his intent to resign for Good Reason (which
notice is provided not later than the thirtieth (30th) day
following the occurrence of the event constituting Good Reason) and
(Y) the Company has not remedied the alleged violation(s)
within such thirty (30)-day period.
(n) “ Initial Term
” has the meaning set forth in Section 2.2
.
(o) “ Invention ”
means any idea, invention, discovery, trademark, service mark,
improvement, process, design, software program, technique,
configuration, methodology, know-how, original work of authorship
or other innovation of any kind (whether or not patentable,
copyrightable or subject to other legal protection) made,
developed, conceived of or reduced to practice by Executive, either
alone or jointly with others, during the term of Executive’s
employment with the Company (whether or not made, developed,
conceived of or reduced to practice during Executive’s normal
working hours or while at the Company’s offices) which:
(i) arises from or results to any work performed by Executive
for the Company; (ii) relates to the Company’s business,
operations or processes; or (iii) is made with or using the
Company’s equipment, supplies, facilities or Proprietary
Information.
(p) “ Notice of
Termination ” has the meaning set forth in
Section 4.2 .
(q) “ Person ”
means 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.
(r) “ Principal Members
” means Welsh, Carson, Anderson & Stowe X, L.P., a
Delaware limited partnership, and each of its
Affiliates.
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(s) “ Proprietary
Information ” means all information or materials of a
confidential or proprietary nature which Executive receives during
the course of his employment with the Company or through the use of
any of the Company’s facilities or resources, including,
without limitation, the following: (i) all information or
materials (whether in paper or electronic form or otherwise stored
or recorded) relating to the business or operations of the Company
or any of its subsidiaries or Affiliates, including, without
limitation, business plans and strategies, business processes and
procedures, financial information, marketing plans and studies,
cost information, price information, quoting procedures, customer
and supplier lists, contracts with third parties, purchasing
information, correspondence, computer system passwords, employee
records, compensation paid to employees and other terms of
employment; (ii) all information or materials relating to any
software program, invention or technology of the Company or any of
its subsidiaries or Affiliates, including, without limitation,
source and object codes, algorithms, schematics, flowcharts, logic
diagrams, designs, coding sheets, techniques, specifications,
technical information, test data, know-how, worksheets and related
documentation and manuals; (iii) all other information or
materials relating to the business or activities of the Company or
any of its subsidiaries or Affiliates which are not generally known
to the public (including, without limitation, any information that
is marked “Confidential” or “Proprietary”);
and (iv) all information or materials received by the Company
or any of its subsidiaries or Affiliates from any third party
subject to a duty to maintain the confidentiality thereof and to
use such information or materials only for certain limited
purposes. Notwithstanding the foregoing, the term
“Proprietary Information” shall not include information
which: (i) is or becomes generally available to the public
other than as a result of a disclosure by Executive or
(ii) was known to Executive at the time of disclosure as shown
by his records in existence at the time of disclosure.
(t) “ Related
Agreements ” has the meaning set forth in
Section 11.5 .
(u) “ Restricted Period
” has the meaning set forth in Section 6.1
.
(v) “ Section 409A
” means Section 409A of the United States Internal
Revenue Code of 1986, as amended, and the Department of Treasury
regulations and other interpretive guidance issued with respect
thereto.
(w) “ Term ” has
the meaning set forth in Section 2.2 .
ARTICLE II.
EMPLOYMENT
2.1 Employment of Executive .
The Company hereby agrees to employ the Executive, and the
Executive agrees to enter into the employ of the Company, on the
terms and subject to the conditions herein provided.
2.2 Term .
The initial term of employment under this Agreement (the “
Initial Term ”) shall be for the period beginning on
the Effective Date and ending on the third (3
rd
) anniversary
thereof, unless earlier terminated as provided in
Section 4 . This Agreement shall automatically be
extended for successive one (1)-year periods unless either party
gives notice of non-extension to the other party no later than
ninety (90) days prior to the expiration of the then-current
term. The Initial Term and all such extension terms are
collectively referred to herein as the “ Term
.”
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2.3 Position and Duties . The
Executive shall serve as the Company’s General Counsel with
such customary responsibilities, duties and authority 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. The Executive
shall report directly to the Company’s President and Chief
Executive Officer or his delegate. The Executive shall devote
substantially all his working time and efforts to the business and
affairs of the Company. The Executive agrees to observe and comply
with the Company’s rules and policies, as the same may be
adopted and amended from time to time.
ARTICLE III.
COMPENSATION AND RELATED
MATTERS
3.1 Annual Base Salary .
During the Term, the Executive shall receive a base salary at a
rate of $225,000.00 per annum, which shall be paid in accordance
with the customary payroll practices of the Company, subject to
increase as determined by the Compensation Committee (the “
Annual Base Salary ”).
3.2 Bonuses . With respect to
each of the Company’s fiscal years that ends during the Term,
beginning with the fiscal year ending December 31, 2007, the
Executive shall be eligible to receive an annual performance-based
bonus (the “ Annual Bonus ”). If: (i) the
Company achieves certain threshold targets (as established by the
Compensation Committee in its discretion in accordance with the
terms of the Executive Bonus Plan) for the applicable fiscal year,
the Executive’s Annual Bonus shall be seventy percent
(70%) of his Annual Base Salary and (ii) the Company
achieves certain projected “stretch” targets (as
established by the Compensation Committee in its discretion in
accordance with the terms of the Executive Bonus Plan) for the
applicable fiscal year, the Executive’s Annual Bonus shall be
up to one hundred five percent (105%) of his Annual Base
Salary.
3.3 Benefits . During the
Term, the Executive shall be entitled to participate in such
employee benefit plans, programs and arrangements which are
applicable to the Company’s senior executives as may be
adopted by the Company from time to time, subject to the terms and
conditions of the applicable employee benefit plan, program or
arrangement.
3.4 Vacation . During the
Term, the Executive shall be entitled to paid vacation in
accordance with the Company’s vacation policies applicable to
executives of the Company. Any vacation shall be taken at the
reasonable and mutual convenience of the Company and the
Executive.
3.5 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.
3.6 Equity Compensation . The
Executive shall be eligible to participate in such equity-based
compensation plans or programs as may be adopted by the Company
from time to time (each, an “ Equity Plan ”) at
such level and in such amounts as may be determined by the Board or
the Compensation Committee in its sole discretion, subject to the
terms and conditions of the applicable Equity Plan and any award
agreement entered into thereunder.
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ARTICLE IV.
TERMINATION
4.1 Circumstances . During
the Term, 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) The Executive’s employment
hereunder shall terminate upon his death.
(b) If the Executive
has incurred a Disability, the Company may give the Executive
written notice of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with
the Company shall terminate effective on the thirtieth (30
th
) day after
the receipt of such notice by the Executive, provided that prior to
the effective date of such termination the Executive shall not have
returned to full-time performance of his duties.
(c) The Company may terminate the
Executive’s employment for Cause.
(d) The Company may terminate the
Executive’s employment without Cause.
(e) The Executive may resign his
employment for Good Reason.
(f) The Executive may resign his
employment without Good Reason.
(g) The Company may give notice of
non-extension to the Executive pursuant to
Section 2.2.
(h) The Executive may give notice of
non-extension to the Company pursuant to
Section 2.2.
4.2 Notice of Termination .
Any termination of the Executive’s employment by the Company
or by the Executive pursuant to this Section 4 (other
than termination due to death pursuant to
Section 4.1(a) ) shall be communicated by a written
notice to the other party hereto. Such written notice shall:
(i) indicate the specific termination provision in this
Agreement relied upon; (ii) set forth in reasonable detail the
facts and circumstances claimed to provide a bas
