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EXHIBIT 10.14
EXECUTION COPY
EMPLOYEE COST SHARING AGREEMENT
This Employee Cost Sharing Agreement (this "Agreement") by and
among
Dex Media Service LLC., a Delaware limited
liability company ("Dex Service"),
Dex Media, Inc., a Delaware corporation
("Dex Media"), Dex Media East LLC, a
Delaware limited liability company ("East")
(f/k/a SGN LLC), and Dex Media West
LLC, a Delaware limited liability Company
("West") (f/k/a GPP LLC), is effective
as of December 31, 2003 (the "Effective
Date"). Each of the signatories hereto
is individually a "Party" and collectively
the "Parties".
RECITALS
A.
Qwest Communications International Inc., a Delaware
corporation ("Qwest"), Qwest Services Corporation, a Colorado
corporation ("QSC"), Qwest Dex, Inc., a Colorado corporation
("Qwest Dex") and Dex Holdings LLC, a Delaware limited
liability company ("Buyer") have entered into that certain
Purchase Agreement (the "LLC Purchase Agreement") dated as of
August 19,
2002 pursuant to which Buyer's designee purchased
all of the outstanding limited liability company interests of
East.
B. In
connection with the LLC Purchase Agreement, Qwest, QSC,
West, and Buyer entered into that certain Purchase Agreement,
dated of even date therewith (the "LLC II Purchase
Agreement"), pursuant to which Qwest has agreed, subject to
the terms and conditions set forth therein, to: (i) contribute
certain of its assets and liabilities to West; and (ii) sell
all of the outstanding limited liability company interests of
West to Buyer following such contribution (the "Second
Closing").
C. In
connection with the Second Closing, the Parties entered
into that certain Shared Services and Employees Agreement,
dated as of September 9, 2003 (the "Shared Services and
Employees Agreement"), pursuant to which the Parties: (i) made
certain arrangements in respect of employees and allocated the
costs incurred for such employees; (ii) agreed to provide to
each other certain non-employee related services and assets
and allocated the costs incurred for such non-employee related
services and assets; (iii) allocated the revenue generated
under the
Advertising Agreement (as defined in the Shared
Services and Employees Agreement); and (iv) entered into
certain other intercompany arrangements, each in accordance
with the terms and conditions in the Shared Services and
Employees Agreement.
D. In
connection with each of the Dex East Credit Agreement and
the Dex West Credit Agreement, Dex Media and East and West,
respectively, agreed to (i) terminate the Shared Services and
Employees Agreement; (ii) establish Dex Service; and (iii)
enter into this Agreement.
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E.
During the Term, the Parties desire to make certain
arrangements in respect of certain employees as more fully
described herein and the Parties desire to allocate the costs
incurred for such employees among them in accordance with the
terms and conditions in this Agreement.
F.
During the Term, the Parties desire to enter into and
facilitate such other employee-related intercompany
arrangements in accordance with the terms and conditions in
this Agreement.
AGREEMENT
In consideration of the foregoing recitals and the mutual covenants
and
conditions contained herein, the Parties
agree, intending to be legally bound,
as follows:
ARTICLE I.
DEFINITIONS
"Actual Cost" means, with respect to any period hereunder, one
hundred
percent (100%) of the actual, direct, out
of pocket cash expenses, caused by,
incurred or otherwise arising from or
relating to (i) the Non-Management
Personnel and (ii) the Management
Personnel, in each case during such period.
"Affiliate" means a Person that directly, or indirectly through one
or
more intermediaries, controls, or is
controlled by, or is under common control
with, a specified Person. The term
"control" (including, with correlative
meanings, the terms "controlled by" and
"under common control with") means the
possession of the power to direct the
management and policies of the referenced
Person, whether through ownership
interests, by contract or otherwise.
"Agreement" has the meaning set forth in the preamble.
"Allocation Percentage" has the meaning set forth in Section
3.1.
"Annual Revenue" means for any fiscal year the aggregate revenue of
Dex
Media on a consolidated basis as reflected
on its audited financial statements
for such fiscal year.
"Benefit Plans" has the meaning set forth in Section 2.1(a).
"Buyer" has the meaning set forth in the recitals.
"Closing" has the meaning ascribed to such term in the LLC
Purchase
Agreement.
"Closing Date" has the meaning ascribed to such term in the LLC
Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and
the
related regulations and published
interpretations.
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"Dex East Credit Agreement" means that certain Credit Agreement
dated
as of November 8, 2002, as amended and
restated as of October 31, 2003, among
Dex Media, Dex Media East, Inc., East, the
lenders from time to time party
thereto and JPMorgan Chase Bank as
administrative agent, as it may be further
amended, modified or supplemented from time
to time.
"Dex Media" means Dex Media, Inc., a Delaware corporation.
"Dex Service" has the meaning set forth in the preamble.
"Dex West Credit Agreement" means that certain Credit Agreement
dated
as of September 9, 2003, as amended by the
First Amendment dated as of October
31, 2003, among Dex Media, Dex Media West,
Inc., West, the lenders from time to
time party thereto and JPMorgan Chase Bank
as administrative agent, as it may be
further amended, modified or supplemented
from time to time.
"East" has the meaning set forth in the preamble.
"East Business" means the "Transferred Business" as defined in the
LLC
Purchase Agreement.
"Eastern Territory" means the seven state territory comprised
of
Colorado, Iowa, Minnesota, Nebraska, New
Mexico, North Dakota and South Dakota
and the standard metropolitan statistical
area of El Paso, Texas.
"Effective Date" has the meaning set forth in the preamble.
"Governmental Entity" means any government or any regulatory
agency,
bureau, board, commission, court,
department, official, political subdivision,
tribunal or other instrumentality of any
government, whether federal, state or
local, domestic or foreign.
"Indemnified Party" has the meaning set forth in Section 6.2.
"Indemnifying Party" has the meaning set forth in Section 6.2.
"Liabilities" means any cost, liability, indebtedness,
obligation,
co-obligation, commitment, expense, claim,
deficiency, guaranty or endorsement
of or by any Person of any nature (whether
direct or indirect, known or unknown,
absolute or contingent, liquidated or
unliquidated, due or to become due,
accrued or unaccrued, matured or
unmatured).
"LLC Purchase Agreement" has the meaning set forth in the
recitals.
"LLC II Purchase Agreement" has the meaning set forth in the
recitals.
"Loss" means any cost, damage, disbursement, expense, liability,
loss,
obligation, penalty or settlement,
including interest or other carrying costs,
legal, accounting and other professional
fees and expenses incurred in the
investigation, collection, prosecution
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and defense of claims and amounts paid in
settlement, that may be imposed on or
otherwise incurred or suffered by the
referenced Person; provided, however, that
the term "Loss" will not be deemed to
include any special, exemplary or punitive
damages, except to the extent such damages
are incurred as a result of third
party claims.
"Management Personnel" means those certain individuals listed
on
Exhibit A, as it may be amended from time
to time by Dex Service.
"Monthly Report" has the meaning set forth in Section 4.2.
"Non-Management Personnel" means those certain individuals
employed
from time to time in connection with the
East Business and/or the West Business,
other than the Management Personnel.
"Notice of Claim" has the meaning set forth in Section 6.2.
"Party" or "Parties" has the meaning set forth in the preamble.
"Person" means an association, a corporation, an individual, a
partnership, a limited liability company, a
trust or any other entity or
organization, including a Governmental
Entity.
"QSC" has the meaning set forth in the recitals.
"Qwest" has the meaning set forth in the recitals.
"Second Closing" has the meaning set forth in the recitals.
"Subsidiary" means, with respect to any Person, any Person in
which
such Person has a direct or indirect equity
ownership interest in excess of 50%.
"Tax" or "Taxes" means all taxes and assessments with respect to
the
Management Personnel, the Non-Management
Personnel and/or the Benefit Plans, as
applicable.
"Term" has the meaning set forth in Section 5.1.
"West" has the meaning set forth in the preamble.
"West Business" means the "Rodney Transferred Business" as such
term is
defined in the LLC II Purchase
Agreement.
"Western Territory" means the seven state territory comprised
of
Arizona, Idaho, Montana, Wyoming, Oregon,
Utah and Washington.
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ARTICLE II.
EMPLOYEE MATTERS
2.1
Non-Management Personnel.
(a) During the
Term, unless otherwise agreed to in
writing by the parties Dex Service shall be
the employer of all of the
Non-Management Personnel. During the Term:
(i) Dex Service shall maintain all of
the Non-Management Personnel on its payroll
at the applicable rate of pay for
each of the Non-Management Personnel; (ii)
all of the Non-Management Personnel
shall continue to participate in the group
health insurance, life insurance, and
other employee benefit plans of Dex
Service, Dex Media, or any of their
respective Affiliates (the "Benefit
Plans"), on the terms and conditions set
forth in the Benefit Plans; and (iii) Dex
Service, Dex Media or an Affiliate
thereof, as applicable, shall (A) pay all
premiums and other contributions with
respect to the Benefit Plans as they apply
to the Non-Management Personnel, (B)
pay all Taxes and assessments due with
respect to the Non-Management Personnel
and/or the Benefit Plans, and (C) comply
with employer obligations with respect
to the Non-Management Personnel under
applicable federal, state and local laws
and regulations (including without
limitation any obligation to maintain
workers' compensation insurance,
unemployment insurance, disability insurance or
any similar insurance coverage with respect
to the Non-Management Personnel).
(b) Dex
Service shall be entitled to receive promptly
from Dex Media and/or any of its
Subsidiaries (including, without limitation,
East and West) all information necessary
for Dex Service to maintain the
Non-Management Personnel on its payroll, to
pay wages to the Non-Management
Personnel in accordance with applicable
laws, and to maintain the Non-Management
Personnel in the applicable Benefit Plans,
including without limitation,
information with respect to: (i) hours
worked; (ii) sick, personal or vacation
time used; or (iii) leaves of absence.
(c) Dex
Service shall make the Non-Management Personnel
available to West and/or to East, as
applicable, to perform services identical
in all material respects to the services
provided by Non-Management Personnel
with respect to the West Business and/or
the East Business, as the case may be,
immediately prior to the Effective Date (as
such services may be revised from
time). Dex Service shall use its reasonable
best efforts to ensure that the
Non-Management Personnel perform such
services.
(d) The
Non-Management Personnel shall use and be granted
full rights to the West assets and the East
assets, as applicable, to perform
the trade or business of West and the trade
or business of East, respectively.
2.2 Management
Personnel. Notwithstanding any other
provision of this Agreement, the Management
Personnel shall be employed by Dex
Media (and any of its direct or indirect
Subsidiaries as may employ the
Management Personnel from time to time
(including without
