STOCK OPTION AWARD AGREEMENT
UNDER THE
IDEARC INC. 2008 INCENTIVE COMPENSATION PLAN
AGREEMENT made as
of the 2 nd
day of June, 2008, by and between
IDEARC INC. (the “Company”) and Scott W. Klein (the
“Optionee”).
1.
Award . Pursuant to the Idearc Inc. 2008 Incentive
Compensation Plan (the “Plan”), the Company hereby
grants to the Optionee an option (the “Option”) to
purchase up to 250,000 shares of the Company’s common stock
(the “Common Stock”) at an exercise price per share of
$3.93 upon the terms and conditions set forth in this Agreement and
the Plan. A copy of the Plan is attached to this Agreement. The
Optionee is a party to that certain Employment Agreement between
the Optionee and the Company, dated May 30, 2008 (the
“Employment Agreement”). The provisions of the
Employment Agreement will govern in the event of any inconsistency
with the terms of this Agreement. Capitalized terms used but not
defined in this Agreement will have the meanings ascribed to them
by the Plan. This award is made in accordance with and in
satisfaction of the Company’s obligation under
Section 2.4 of the Employment Agreement (relating to the
initial award of a Company stock option covering 250,000 shares of
Common Stock).
2. Option
Term . Unless terminated sooner, the Option shall expire if and
to the extent it is not exercised within ten years from the date
hereof.
(a)
General . Except as otherwise provided, the Option will
become vested on May 31, 2011, subject to the Optionee’s
continuous employment with the Company or any of its subsidiaries
(“Idearc”) through such vesting date.
(b)
Special Vesting Rules . If, before the Option becomes
vested, the Optionee’s employment with Idearc terminates by
reason of the Optionee’s death, or is terminated by Idearc
without Cause or by reason of the Optionee’s Disability (as
defined in the Employment Agreement), or is terminated by the
Optionee for Good Reason pursuant to the Employment Agreement, then
the Option will thereupon become fully vested; provided, however,
that no such acceleration of vesting will apply unless, as of the
time such acceleration would otherwise occur, the Optionee has
maintained continuous compliance with the restrictive covenants set
forth in Section 8 of the Employment Agreement (the
“Restrictive Covenants”) and the Optionee has executed
and delivered to the Company a general release of claims against
the Company, its subsidiaries and any of its or their affiliates in
the form attached to the Employment Agreement as
Exhibit C.
4. Termination
of Employment . If the Optionee ceases to be employed by Idearc
for any reason other than death or Disability, then, unless sooner
terminated under the terms hereof, the vested portion of the Option
(determined with regard to any acceleration of vesting that occurs
under Section 3(b) above) will terminate if and to the extent it is
not exercised within three months after the date of the
Optionee’s termination of employment, provided, however,
that, if the Optionee’s employment is terminated by the
Company for “Cause” (as defined in the Plan), then the
Option (whether or not vested) will terminate upon the date of such
termination of employment. If the Optionee’s employment is
terminated by reason of the Optionee’s death or
Disability (or
if the Optionee’s employment is terminated by reason of
Disability and the Optionee dies within one year after such
termination of employment), then, unless sooner terminated under
the terms hereof, the vested portion of the Option will terminate
if and to the extent it is not exercised within one year after the
date of such termination of employment (or within one year after
the date of the Optionee’s death if the Optionee’s
employment is terminated by reason of Disability and the Optionee
dies within one year after such termination). The Option will be
forfeited by the Optionee and will terminate at the time of the
termination of the Optionee’s employment with Idearc if and
to the extent the Option is not or does not become vested at such
time.
5.
Exercise of Option . If the Option becomes vested, it may be
exercised in whole or in part by delivering to the Executive Vice
President — Human Resources and Employee Administration of
the Company (a) a written notice specifying the number of
whole shares of Common Stock with respect t
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