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EXHIBIT 10.20
EXECUTION COPY
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective as of
November
8, 2002 (the "Effective Date"), is made by
and between Marilyn Neal (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;
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(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 her death, the date of her 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.
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(l)
"Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for a
total of three months during any six-month period as a result
of incapacity due to mental or physical illness.
(m) "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.
(n) "Effective
Date" shall have the meaning set forth in the
preamble hereto.
(o) "Exchange
Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(p)
"Executive" shall have the meaning set forth in the preamble
hereto.
(q) "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.
(r) "Extension
Term" shall have the meaning set forth in Section
2(b).
(s) The
Executive shall have "Good Reason" to resign her
employment
upon the occurrence of any of the following:
(i) Failure of
the Company to continue the Executive in
the position of Executive Vice President and Chief
Operating 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 any Option Agreement; or
(iv)
The Company's material breach of this Agreement;
provided, however, that notwithstanding the foregoing the
Executive may not resign her employment for Good Reason
unless: (A) the Executive provides the Company with at least
30 days prior written notice of her 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 remedied the alleged
violation(s) within the 30-day period; and, provided, further,
that the Executive shall not have Good Reason to terminate her
employment due to the failure to consummate all or any portion
of the Dex West Transaction; and provided, further, that
Executive may resign her employment for Good Reason if
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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.
(t) "Initial
Term" shall have the meaning set forth in Section
2(b).
(u) "Notice of
Termination" shall have the meaning set forth in
Section 4(b).
(v) "Option
Agreement" shall mean an agreement to purchase Common
Stock pursuant to the Option Plan.
(w) "Option
Plan" shall have the meaning set forth in Section
3(c).
(x) "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.
(y) "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.
(z) "Related
Agreements" shall have the meaning set forth in
Section 14.
(aa)
"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.
(bb)
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
(cc)
"Term" shall have the meaning set forth in Section 2(b).
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 the third
anniversary thereof, unless earlier terminated as provided in
Section 4. The employment term hereunder shall automatically
be extended for successive one-
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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. The Executive shall serve as Executive
Vice President and Chief Operating Officer of the Company 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 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 directly
to the Company's Chief Executive Officer. The Executive shall
devote substantially all her 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
adopted by the Company from time to time.
3. COMPENSATION AND RELATED
MATTERS
(a) Annual
Base Salary. During the Term, the Executive shall
receive a base salary at a rate of $325,000 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").
(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 her 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 her Annual Base Salary. The
Compensation Committee may, in its sole discretion, provide
that the Executive shall be paid an additional bonus amount
pursuant to the Executive Bonus Plan with respect to any
fiscal year (up to a maximum aggregate annual bonus of 100% of
Annual Base Salary).
(c) Stock
Option Plan. As of the Effective Date, the Executive
shall be granted an option to purchase 35,189 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 35,188 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).
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(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.
(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 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 her in the performance of her duties to
the Company in accordance with the Company's expense
reimbursement policy.
(g) Relocation
Expenses: In accordance with Company's applicable
relocation plans and policies, the Company shall pay or
reimburse Executive for the following reasonable, documented,
out-of-pocket expenses incurred by Executive in connection
with her relocation from her current Texas residence to the
Denver, Colorado metropolitan area: (a) travel,
transportation, meal and similar related moving expenses, (b)
closing costs, real estate commissions, attorney's fees and
other similar costs incurred in connection with Executive's
(i) purchase of any residence in the Denver, Colorado
metropolitan area and (ii) sale of her current Texas residence
and (c) the cost of temporary lodging in the Denver, Colorado
metropolitan area and the cost of weekly transportation
between Dallas, Texas and Denver, Colorado during the period
beginning on the Effective Date and ending on the earlier to
occur of (x) the first anniversary of the Effective Date and
(y) the date Executive sells her current Texas residence.
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 her 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. In that event, the
Executive's employment with the Company shall
terminate effective on the 30th day after receipt of
such notice by the Executive, provided that within
the 30 days after such
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receipt, the Executive shall not have returned to
full-time performance of her 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 em
