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EXHIBIT 10.2 Execution Copy AMENDED AND RESTATED
EMPLOYMENT AGREEMENT This AMENDED AND
RESTATED EMPLOYMENT AGREEMENT is made as of the 31st day of
December, 2008, by and between R.H. Donnelley Corporation, a
Delaware corporation (the "COMPANY"), and Steven M. Blondy
("EXECUTIVE"). WITNESSETH : WHEREAS,
Executive is presently serving as Executive Vice President and
Chief Financial Officer of the Company pursuant to an Amended and
Restated Employment Agreement dated October 3, 2005 ("PRIOR
AGREEMENT"); WHEREAS, both the
Executive and the Company wish to continue the employment
relationship on the terms and conditions set forth in this Amended
and Restated Employment Agreement (this "AGREEMENT"), which is
being executed to evidence compliance with Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder (collectively, "Section 409A");
WHEREAS,
the Compensation and Benefits Committee of the Board of Directors
of the Company has authorized the Company to enter into this
Amended and Restated Employment Agreement; and
NOW, THEREFORE, in consideration of
the premises and mutual covenants contained herein and for other
good and valuable consideration, the validity and sufficiency of
which is hereby acknowledged, the parties agree that, as of the
date hereof, the Prior Agreement is amended and restated as
follows: 1. Term of
Employment . Subject to the provisions of Section 8 of
this Agreement, Executive shall be employed by the Company for a
period (the "EMPLOYMENT TERM") commencing on the date hereof (the
"COMMENCEMENT DATE" and the "EFFECTIVE DATE") and ending on the
first anniversary of the date hereof. On the first anniversary and
each succeeding anniversary thereof, the Employment Term shall
automatically be extended for one additional year unless, not later
than ninety days prior to such anniversary, the Company or the
Executive shall have given notice of its or his intention not to
extend the Employment Term. Any such non-renewal of this Agreement
by the Company shall be treated as a termination of
Executive’s employment without Cause, as hereinafter defined.
This Agreement, in amending and restating the Prior Agreement,
shall replace and supercede the Prior Agreement as of the Effective
Date. 2. Position .
(a) Executive shall serve as Executive Vice President and
Chief Financial Officer of the Company. In such position, Executive
shall have such duties and authority commensurate with such
position and, to the extent not inconsistent with the foregoing, as
shall be determined from time to time by the Chief Executive
Officer of the Company and/or the Board. Executive shall be
employed as the senior most financial officer of the Company and
shall report directly to the Chief Executive Officer.
(b) During the Employment Term,
except as otherwise agreed in writing between the parties,
Executive will devote substantially all of his business time and
best efforts to the performance of his duties hereunder and will
not engage in any other business, profession or occupation for
compensation or otherwise which would conflict with the rendition
of such services either directly or indirectly, without the prior
written consent of the Board; provided that nothing herein shall be
deemed to preclude Executive from serving on business, civic or
charitable boards or committees, as long as such activities do not
materially interfere with the performance of Executive’s
duties hereunder. 3. Base
Salary . Company shall pay Executive an annual base salary (the
"BASE SALARY") at the initial annual rate of $500,000 payable in
equal bi-monthly installments or otherwise in accordance with the
payroll and personnel practices of the Company in effect from time
to time. Base Salary shall be reviewed annually by the Board or a
committee thereof to which the Board may from time to time have
delegated such authority (the "COMMITTEE") for possible increase
(but not decrease) in the sole discretion of the Board or the
Committee, as the case may be.
4. Bonus . With respect
to each fiscal year all or part of which is contained in the
Employment Term, Executive shall be eligible to participate in the
Company’s Annual Incentive Program under the 2005 Stock Award
and Incentive Plan or any successor program or plan thereto or
thereunder, with a target bonus opportunity of 75% of Base Salary
(not less than 55% of which shall be paid in cash without
Executive’s consent) and a maximum bonus opportunity not less
than that for which Executive was eligible on January 1, 2008
(the "BONUS"). Any Bonus paid to Executive shall be less applicable
withholdings and shall be distributed pursuant to policies as
determined by the Company, but in no event later than March 15
of the year following the year in which such Bonus was earned.
5. Additional
Compensation . As further compensation, Executive will be
eligible for participation in all other bonuses, long-term
incentive compensation and stock options and other equity
participation arrangements made available generally to senior
executives of the Company, on terms and conditions no less
favorable than those offered to other senior executives of the
Company, and at no less attractive a level in the aggregate as that
for which he is eligible on the Effective Date.
6. Employee Benefits .
During the Employment Term, Executive shall be eligible for
employee benefits (including perquisites, fringe benefits,
vacation, pension and profit sharing plan participation and life,
health, accident and disability insurance) made available generally
to senior executives of the Company, on terms and conditions no
less favorable than those offered to other senior executives of the
Company, and at no less attractive a level in the aggregate as that
for which he is eligible on the Effective Date. Notwithstanding the
immediately preceding sentence, Executive acknowledges that,
effective December 31, 2008, as part of the unified employee
retirement savings strategy, the Company will freeze the R.H.
Donnelley Corporation Retirement Plan and the R.H. Donnelley
Pension Benefit Equalization Plan. As of the date, all pension plan
benefit accruals for participants in these defined benefit plans
(including Executive) will cease, although plan balances will
remain intact and interest credits will continue going forward in
accordance with the plans, as will service credit for vesting and
retirement eligibility.
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7. Business Expenses
. Reasonable travel, entertainment and other business expenses
incurred by Executive in the performance of his duties hereunder
shall be reimbursed by the Company in accordance with Company
policies in effect from time to time, provided, however, that all
such reimbursements shall be made by March 15 of the year
following the year in which the expenses were incurred.
8. Termination of
Employment . Each of Executive and the Company may terminate
the employment of Executive hereunder at any time in accordance
with this Section 8. Executive’s entitlements hereunder
in the event of any such termination shall be as set forth in this
Section 8. The provisions of this Section 8 (and any related
provision of Section 10) shall survive any non-renewal of this
Agreement by the Company pursuant to Section 1. With respect
to any termination of employment (voluntary or otherwise), any and
all (i) accrued but unused vacation shall be paid in the
regular payroll check following the Date of Termination, and
(ii) earned but unpaid bonus (with respect to any full
performance period) will be paid at the same time such bonuses are
generally distributed to current employees, but no later than
March 15 of the year following the year in which the bonus was
earned. (a) For Cause by the
Company . If Executive’s employment is terminated by the
Company for Cause (as defined in Section 9(a) herein), he shall be
entitled to receive his Base Salary through the Date of Termination
(as defined in Section 8(g)(ii) herein). All other benefits
due Executive following Executive’s termination of employment
pursuant to this Section 8(a) shall be determined in accordance
with the then-existing plans, policies and practices of the
Company. (b) Death or
Disability . Executive’s employment hereunder shall
terminate upon his death and may be terminated by the Company upon
his Disability (as defined in Section 9(c) herein) during the
Employment Term. Upon termination of Executive’s employment
hereunder upon the Executive’s Disability or death, Executive
or his estate (as the case may be) shall be entitled to receive
Base Salary through the Date of Termination, plus a pro-rata
portion of the target Bonus, based on the number of whole or
partial months from the beginning of the bonus period to the Date
of Termination. Such pro-rata Bonus shall be payable in a lump sum
(less applicable withholdings) when such awards are generally
distributed to current employees for the current fiscal year, but
no later than March 15 of the year following the year in which
the Bonus was earned. In addition, if Executive’s employment
is terminated as a result of a Disability, Executive shall be
entitled to be reimbursed for the additional costs to Executive,
including any additional tax costs associated with such
reimbursements, of continuing health, medical and dental benefits
under COBRA at a level equivalent (e.g., family coverage versus
employee only) to those benefits in which he participated prior to
the Termination Date for a period of twenty nine (29) months from
the Termination Date ("COBRA Benefit Continuation Period") or, if
COBRA is not available or is not adequate, the actual costs
associated with any other coverage that may be necessary to obtain
such equivalent coverage; provided that such costs are consistent
with the costs generally available on a competitive basis for such
coverage. Following the end of the 29-month COBRA Benefit
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Continuation Period, and continuing until Executive reaches the
age of 65 or is no longer subject to a Disability, whichever date
is earlier, Executive shall also be entitled to be reimbursed for
the additional actual costs, including any additional tax costs
associated with such reimbursements, of obtaining such equivalent
health, medical and dental insurance coverage through an insurance
policy or policies he purchases on his own; provided that such
costs are consistent with the costs generally available on a
competitive basis for such coverage. Executive shall bear full
responsibility for applying for COBRA coverage and for obtaining
coverage under any other insurance policy subject to reimbursement
under this Section 8(b), and nothing herein shall constitute a
guarantee of COBRA continuation coverage or benefits or a guarantee
of eligibility for health or dental insurance coverage.
Reimbursements under this Section 8(b) shall be made on a monthly
basis but no later than the last day of the calendar year following
the year in which the expenses were incurred. Under no
circumstances will Executive be entitled to a cash payment in lieu
of reimbursements for the actual costs of premiums for health or
dental coverage hereunder. The amount of expenses eligible for
reimbursement during any calendar year shall not be affected by the
amount of expenses eligible for reimbursement in any other calendar
year. (c) Termination Not
Following a Change in Control . If, during the Employment Term
and prior to a Change in Control (as defined in Section 9(b)
herein) or more than two years after a Change in Control,
Executive’s employment is terminated by the Company without
Cause, or by Executive under subclauses (i), (ii) or
(iii) of the definition of Good Reason (as defined in Section
9(d) herein), Executive shall be entitled to the following:
(i) Base Salary through the Date of
Termination at the rate in effect at the time of Notice of
Termination, as defined in Section 8(g)(i) herein, is given,
or if higher, at the rate in effect immediately prior to the event
or circumstance leading to the termination of employment, plus a
pro-rata (based on number of days employed during calendar year
divided by 360) portion of the target Bonus, plus all other amounts
to which Executive is entitled under any then-existing compensation
or benefit plan of the Company. Such pro-rata Bonus shall be
payable in lump sum (less applicable withholdings) when such awards
are generally distributed to current employees for the current
fiscal year, but no later than March 15 of the year following
the year in which the Bonus was earned.
(ii) In lieu of any further salary
payments to Executive for periods subsequent to the Date of
Termination, the Company shall pay as severance pay a severance
payment (the "SEVERANCE PAYMENT") equal to two times the sum of
(A) Base Salary at the rate in effect on the date Notice of
Termination is given, or if higher, at the rate in effect
immediately prior to the event or circumstance leading to the
termination of employment, plus (B) target Bonus at the rate
in effect on the date of the Notice of Termination is given, or if
higher, at the rate in effect immediately prior to the event or
circumstance leading to the termination of employment without
Cause. The Severance Payment shall be paid in lump-sum, without
reduction for time value of money, within seven (7) calendar
days following the effective date of the General Release executed
by Executive under
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Section 8(h) of this Agreement, but in no event later than
seventy four (74) days after the Date of Termination.
(iii) Reimbursement for the
additional costs to Executive, including any additional tax costs
associated with such reimbursements, of obtaining health, medical
and dental insurance and long term disability insurance benefits
equivalent (e.g., for health, medical and dental, family coverage
versus employee only) to the plans in which he participated prior
to the Date of Termination for a period of two (2) years, or,
if sooner, until comparable insurance coverage is available to
Executive in connection with subsequent employment or
self-employment, as follows: (aa) the Company shall reimburse
Executive for the additional costs in continuing group health,
medical and dental benefits under COBRA for a period of eighteen
(18) months from the Termination Date ("COBRA Benefit Continuation
Period") or, if COBRA is not available or is not adequate, the
actual costs associated with any other coverage that may be
necessary to obtain such equivalent coverage, provided that such
costs are consistent with the costs generally available on a
competitive basis for such coverage; (bb) for the period
immediately following the end of the 18-month COBRA Benefit
Continuation Period (the "Post-COBRA Period"), and continuing until
the end of the two (2) year period, Executive shall also be
entitled to be reimbursed for the additional actual costs of
obtaining equivalent health, medical and dental insurance coverage
through an insurance policy or policies he purchases on his own,
provided that such costs are consistent with the costs generally
available on a competitive basis for such coverage; and
(cc) for the two (2) year period following the Date of
Termination, the Company shall reimburse Executive for the actual
costs incurred by Executive in obtaining an individual long term
disability insurance policy equivalent in coverage to that elected
by Executive at the time of the Notice of Termination, provided
that such costs are consistent with the costs generally available
on a competitive basis for such coverage.
Executive shall bear full
responsibility for applying for COBRA coverage and for obtaining
coverage under any other insurance policy subject to reimbursement
under this Section 8(c)(iii), and nothing herein shall
constitute a guarantee of COBRA continuation coverage or benefits
or a guarantee of eligibility for health, dental or long term
disability insurance coverage. Reimbursements under this
Section 8(c)(iii) shall be made on a monthly basis but in no
event later than the last day of the calendar year following the
year in which the expenses were incurred. Under no circumstances
will Executive be entitled to a cash payment or other benefit in
lieu of reimbursements for the actual costs of premiums for health,
dental or long term disability coverage hereunder. The amount of
expenses eligible for reimbursement during any calendar year shall
not be affected by the amount of expenses eligible for
reimbursement in any other calendar year. Executive shall provide
the Company with notice of any subsequent employment or
self-employment under which equivalent health, dental or disability
insurance becomes available within thirty (30) days of
commencement.
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(iv) Reimbursement for the actual
costs incurred by Executive, including any additional tax costs
associated with such reimbursements, in obtaining term life
insurance coverage equivalent in coverage to that elected by
Executive at the time of the Notice of Termination, following the
Date of Termination and continuing until the last day of the second
calendar year beginning after the Date of Termination, or, if
sooner, until comparable life insurance coverage is available to
Executive in connection with subsequent employment or
self-employment. Executive shall bear full responsibility for
applying for life insurance coverage subject to reimbursement under
this Section 8(c)(iv), and nothing herein shall constitute a
guarantee of eligibility for life insurance coverage.
Reimbursements under this Section 8(c)(iv) shall be made on a
monthly basis but in no event later than the last day of the
calendar year following the year in which the expenses were
incurred. Under no circumstances will Executive be entitled to a
cash payment or other benefit in lieu of reimbursements for the
actual costs of premiums for term life insurance coverage
hereunder. The amount of expenses eligible for reimbursement during
any calendar year shall not be affected by the amount of expenses
eligible for reimbursement in any other calendar year. Executive
shall provide the Company with notice of any subsequent employment
or self-employment under which equivalent life insurance coverage
becomes available within thirty (30) days of commencement such
employment. (d) Termination Within
Two Years Following a Change in Control . If, during the
Employment Term and within two years following a Change in Control,
Executive’s employment is terminated by the Company without
Cause, or by the Executive for Good Reason, as hereinafter defined,
Executive shall be entitled to the payments and benefits set forth
in Section 8(c), except that for purposes of this
Section 8(d), references in such Section to "two times" or
"two years" shall be changed to "three times" and "three years." In
addition, Executive shall be entitled to receive the following:
(i) for the three years following termination of employment
or, if sooner, until subsequently employed or self-employed,
reimbursements, including any additional tax costs associated with
such reimbursements, for Executive’s expenses (aa) for
dues for continuing the health club and country club memberships,
if any, provided to him by the Company prior to the Date of
Termination, (bb) relating to financial planning services, up
to a maximum amount per year equal to the average of such amounts
paid to Executive for the two (2) calendar years preceding the
Date of Termination, and (cc) actual expenses in replacing any
other perquisites and similar benefits Executive was receiving
immediately prior to the Termination Date, up to a maximum amount
per year equal to one hundred and twenty percent (120%) of such
amounts paid to Executive during the two (2) calendar years
preceding the Date of Termination; and (ii) during the two
year period following the Date of Termination reimbursement of
expenses relating to outplacement services, subject to a maximum
total reimbursement of $25,000. In connection with reimbursements
under Section 8(d)(i)(aa) and (bb), under no circumstances
will Executive be entitled to a cash payment or other benefit in
lieu of such reimbursements and the amount of expenses eligible for
reimbursement during any calendar year shall not be affected by the
amount of expenses eligible for reimbursement in any other calendar
year.
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For purposes of this Agreement,
termination of employment after the commencement of negotiations
with a potential acquiror or business combination partner but prior
to an actual Change of Control shall be deemed to be a termination
of employment within two years following a Change in Control if
such negotiations subsequently result in a transaction with such
acquiror or business combination partner which constitutes a Change
in Control ("Look-Back CIC"). Executive shall be entitled to such
additional benefits as the result of a Look-Back CIC under this
Section 8(b) only if the Change in Control transaction occurs
within two (2) years following the Date of Termination. Any
additional payments due to Executive as the result of the Look-Back
CIC shall be payable to Executive in a lump sum (less applicable
withholdings) within ten (10) calendar days following the
effective date of the General Release under Section 8(h), but
in no event later than seventy four (74) days following such
Change in Control. (e)
Retirement . If during the Employment Term, Executive
retires at normal retirement age under the Company’s
qualified pension plan or any successor plan, Executive shall be
entitled to the payments and benefits specified in Section 8(b) as
if his employment had terminated as a result of Disability.
(f) Voluntary Termination of
Employment . If during the Employment Term, Executive
terminates his employment under circumstances other than those
specified elsewhere in this Section 8, Executive shall be
entitled to the payments and benefits specified in
Section 8(a). (g) Notice and
Date of Termination . (i) Any purported termination of
employment by the Company or by Executive shall be communicated by
written Notice of Termination to the other party hereto in
accordance with Section 17(i) hereof. For purposes of this
Agreement, a "NOTICE OF TERMINATION" shall mean a notice which
shall indicate (by reference to specific Section and sub-section
numbers and letters, for example, Section 8(d)) the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision
so indicated. If the event or circumstance on which the proposed
termination of employment is based is susceptible of cure, the
Notice of Termination shall not be deemed effective until Executive
or the Company, as the case may be, has had at least 30 days
to effect such cure, and unless such event or circumstance persists
at the end of such cure period. In the event Executive wishes to
terminate his employment for Good Reason, as defined in
Section 9(d), Executive must provide a Notice of Termination
to the Company describing the condition giving rise to Good Reason
within ninety (90) days following the occurrence of the
condition giving rise to Good Reason. Executive may only exercise
his rights to terminate for Good Reason thereafter if the Company
does not cure such condition within thirty (30) days following
the receipt of such written notice from Executive, and Executive
resigns from the Company within two (2) years following the
initial existence of such condition.
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(ii) "DATE OF TERMINATION" shall
mean (A) if employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that
Executive shall not have returned to the full-time performance of
his duties during such thirty (30) day period), (B) if
employment is terminated by reason of death, the date of death, and
(C) if employment is terminated for any other reason, subject
to the effectiveness of notice and "cure" provisions of clause
(i) above, the date specified in the Notice of Termination
(which, in the case of a termination of employment by the Company
for Cause shall not be less than ten (10) days after the date
such Notice of Termination is given); provided that if within
thirty (30) days after any Notice of Termination is given the
party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree
of a court of competent jurisdiction (which is not appealable or
the time for appeal therefrom having expired and no appeal having
been perfected); provided further that the Date of Termination
shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the
resolution of such dispute with reasonable diligence; and provided,
further that in the event Executive gives Notice of Termination for
Good Reason based upon any matter referred to in clause
(ii) of the definition of Good Reason, and it is thereafter
determined that said grounds do not constitute Good Reason, then so
long as Executive reasonably believed in good faith that he had
grounds for termination of employment for Good Reason, the Company
may not terminate Executive’s employment for Cause based upon
such matters. (h) Release of
Claims . Any provision of this Agreement to the contrary
notwithsta
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