R.H.
Donnelley Corporation
2009 Long-Term Incentive
Program
For Executive
Officers
1.1
Purposes . The purposes of this 2009 Long-Term
Incentive Program for Executive Officers, as established by R.H.
Donnelley Corporation, a Delaware corporation (the
“Company”), are (i) to provide incentive
compensation to Executive Officers (as defined below) and certain
other employees of the Company and its subsidiaries and affiliates
based on the achievement of performance goals designated by the
Compensation and Benefits Committee of the Company’s Board of
Directors (the “Committee”) pursuant to the
Company’s 2005 Stock Award and Incentive Plan, (ii) to
advance the interests of the Company and its stockholders by
attracting and retaining highly competent Executive Officers and
employees and (iii) to motivate such persons to act in the
long-term best interests of the Company and its
stockholders.
1.2
Certain Definitions . For purposes of the Program,
the following capitalized terms shall have the respective meanings
set forth below. Capitalized terms not defined herein shall have
the respective meanings specified in the Plan. For purposes of the
Program, references to employment by the Company shall also mean
employment by a subsidiary or an affiliate of the
Company.
(a) “Annual
Base Salary” means the annual base salary of a Participant
for the 2009 Fiscal Year.
(b) “Award
Notice” means a written notice from the Company to the
recipient of a Long-Term Incentive Award hereunder setting forth
the terms and conditions of such Long-Term Incentive
Award.
(c) “Beneficiary”
means the legal representatives of the Participant’s estate
entitled by will or the laws of descent and distribution to receive
the benefits under a Participant’s Long-Term Incentive Award
upon a Participant’s death, provided that, if and to the
extent authorized by the Committee, a Participant may be permitted
to designate a Beneficiary, in which case the
“Beneficiary” instead will be the person, persons,
trust or trusts (if any are then surviving) which have been
designated by the Participant in his or her most recent written and
duly filed beneficiary designation to receive the benefits
specified under the Participant’s Long-Term Incentive Award
upon such Participant’s death. Unless otherwise determined by
the Committee, any designation of a Beneficiary other than a
Participant’s spouse shall be subject to the written consent
of such spouse.
(d) “Board”
means the Company’s Board of Directors.
(e) “Cause”
shall have the meaning defined in any employment agreement or
severance agreement between the Participant and the Company, then
in effect or, if no such agreement is then in effect,
“Cause” shall mean (i) the Participant’s
willful and continued failure substantially to perform the duties
of his or her position with the Company after notice and
opportunity to cure; (ii) any willful act or omission by the
Participant constituting dishonesty, fraud or other malfeasance,
which in any such case is demonstrably injurious to the
financial
condition or
business reputation of the Company or its subsidiaries or
affiliates; (iii) an act that constitutes misconduct resulting in a
restatement of the Company’s financial statements due to
material non-compliance with any financial reporting requirement
within the meaning of Section 304 of The Sarbanes-Oxley Act of
2002, as amended; or (iv) a felony conviction in a court of
law under the laws of the United States or any state thereof or any
other jurisdiction in which the Company its subsidiaries or
affiliates conduct business which materially impairs the value of
the Participant’s service to the Company; provided ,
however , that for purposes of this definition, no act or
failure to act shall be deemed “willful” unless
effected by the Participant not in good faith and without a
reasonable belief that such action or failure to act was in or not
opposed to the Company’s best interests, and no act or
failure to act shall be deemed “willful” if it results
from any incapacity of the Participant due to physical or mental
illness.
(f) “Cumulative
Free Cash Flow” means the sum of the Free Cash Flow for the
Company’s 2009, 2010 and 2011 Fiscal Years.
(g) “Disability”
shall have the meaning defined for such term in the long-term
disability plan of the Company, as in effect from time to
time.
(h) “Executive
Officer” means an officer of the Company who is subject to
Section 16 of the Securities Exchange Act of 1934, as
amended.
(i) “Fiscal
Year” means each consecutive twelve-month period beginning
January 1 and ending December 31.
(j) “Free
Cash Flow” means cash flow from operations minus
(i) capital expenditures and (ii) fees and other expenses
directly related to the cost of restructuring, as determined by the
Committee and, to the extent applicable, as reported in the
Company’s audited financial statements.
(k) “Good
Reason” shall have the meaning defined in any employment
agreement or severance agreement between the Participant and the
Company, then in effect or, if no such agreement is then in effect,
“Good Reason” shall mean (i) any material
diminution in the Participant’s annual base salary with the
Company; (ii) any material diminution in the
Participant’s authority, duties or responsibilities with the
Company; or (iii) any material change in the geographic
location at which the Participant must perform services for the
Company; provided , however , that the Participant
must notify the Company of his or her intention to terminate the
Participant’s employment by written notice to the Company
within ninety (90) days of the initial existence of such event
and the Company shall have thirty (30) days to cure such event
after receipt of such notice.
(l) “Long-Term
Incentive Award” means an award conferring a right,
contingent upon the attainment of specified Performance Measures
within the Performance Period, to receive cash, as determined by
the Committee or as evidenced in the Award Notice relating to such
Long-Term Incentive Award.
(m) “Participant”
means a person holding an outstanding Long-Term Incentive Award
granted under the Program.
2
(n) “Payment
Date” means the date the Participant or the
Participant’s Beneficiary, as the case may be, receives
payment, if any, with respect to all or a portion of such
Participant’s Long-Term Incentive Award in accordance with
Section 2.2(d).
(o) “Performance
Measures” means the performance measures designated by the
Committee pursuant to the terms of the Plan as a condition to the
earning of a Long-Term Incentive Award granted
hereunder.
(p) “Performance
Period” means the Company’s 2009, 2010 and 2011 Fiscal
Years with respect to which the Performance Measures applicable to
a Long-Term Incentive Award shall be measured.
(q) “Plan”
means the R.H. Donnelley Corporation 2005 Stock Award and Incentive
Plan, as amended from time to time.
(r) “Program”
means this R.H. Donnelley Corporation 2009 Long-Term Incentive
Program for Executive Officers, as amended from time to
time.
(s) “Successful
Restructuring” means any restructuring, reorganization and/or
recapitalization of all or a significant portion of the
Company’s outstanding indebtedness (including bank debt,
inclusive of letters of credit, bond debt, and other on and off
balance sheet indebtedness, trade claims, leases (both on and off
balance sheet) and other litigation-related claims and obligations,
unfunded pension and retiree medical liabilities, or other
liabilities (collectively, the “Existing Obligations”)
that is achieved, without limitation, through (i) a
solicitation of waivers and consents from the holders of all or a
significant portion of the Existing Obligations; (ii) rescheduling
of the maturities of all or a significant portion of the Existing
Obligations; (iii) a change in interest rates;
(iv) repurchase, settlement or forgiveness of all or a
significant portion of the Existing Obligations;
(v) conversion of all or a significant portion of the Existing
Obligations into equity; (vi) an exchange offer involving the
issuance of new securities in exchange for all or a significant
portion of the Existing Obligations; (vii) the issuance of new
securities; (viii) the sale or disposition of existing
securities or assets; and/or (ix) other similar transaction or
series of transactions; provided , however , that in
the event the restructuring, reorganization and/or recapitalization
of all or a significant portion of the Existing Obligations is to
be accomplished through a filing by the Company pursuant
to
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