Stock Option Plan - Dex Media Inc.
STOCK OPTION PLAN
OF
DEX MEDIA, INC.
Dex Media, Inc., a Delaware corporation (the "Company"), hereby adopts
this Stock Option Plan of Dex Media, Inc. The purposes of this Plan are as
follows:
(1) To further the growth, development and financial success of
the Company and its Subsidiaries (as defined herein), by providing additional
incentives to Employees, Consultants and Independent Directors (as such terms
are defined below) of the Company and its Subsidiaries who have been or will be
given responsibility for the management or administration of the Company's (or
one of its Subsidiaries') business affairs, by assisting them to become owners
of Common Stock, thereby benefiting directly from the growth, development and
financial success of the Company and its Subsidiaries.
(2) To enable the Company (and its Subsidiaries) to obtain and
retain the services of the type of professional, technical and managerial
Employees, Consultants and Independent Directors considered essential to the
long-range success of the Company (and its Subsidiaries) by providing and
offering them an opportunity to become owners of Common Stock under Options,
including, in the case of certain employees, Options that are intended to
qualify as "incentive stock options" under Section 422 of the Code (as defined
herein).
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The singular pronoun shall include the plural where the context so indicates.
Section 1.1 "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.
Section 1.2 "Board" shall mean the Board of Directors of the
Company.
Section 1.3 "Code" shall mean the Internal Revenue Code of 1986,
as amended.
Section 1.4 "Committee" shall mean the Committee appointed as
provided in Section 6.1.
Section 1.5 "Common Stock" shall mean the common stock, par value
$0.01 per share, of the Company.
Section 1.6 "Company" shall mean Dex Media, Inc., a Delaware
corporation. In addition, "Company" shall mean any corporation assuming, or
issuing new employee stock options in substitution for, Incentive Stock Options
outstanding under the Plan in a transaction to which Section 424(a) of the Code
applies.
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Section 1.7 "Consultant" shall mean any consultant or adviser if:
(a) The consultant or adviser renders bona fide services
to the Company or a Subsidiary;
(b) The services rendered by the consultant or adviser
are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company's securities; and
(c) The consultant or adviser is a natural person who has
contracted directly with the Company or a Subsidiary to render such services.
Section 1.8 "Corporate Event" shall mean, as determined by the
Committee (or by the Board, in the case of Options granted to Independent
Directors) in its sole discretion, any transaction or event described in Section
7.1(a) or any unusual or nonrecurring transaction or event affecting the
Company, any Affiliate of the Company, or the financial statements of the
Company or any Affiliate of the Company, including, but not limited to, the
consummation of the Dex West Transaction, or any change in applicable laws,
regulations, or accounting principles.
Section 1.9 "Dex West Transaction" shall mean the transaction
contemplated by that certain Rodney Purchase Agreement dated as of August 19,
2002 entered into by and among Qwest Dex, Inc., Qwest Services Corporation,
Qwest Communications International, Inc. and Dex Holdings LLC.
Section 1.10 "Director" shall mean a member of the Board.
Section 1.11 "Eligible Representative" for an Optionee shall mean
such Optionee's personal representative or such other person as is empowered
under the deceased Optionee's will or the then applicable laws of descent and
distribution to represent the Optionee hereunder.
Section 1.12 "Employee" shall mean, with respect to any entity,
any employee of such entity (as defined in accordance with the regulations and
revenue rulings then applicable under Section 3401(c) of the Code).
Section 1.13 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
Section 1.14 "Fair Market Value" of a share of Common Stock as of
a given date shall be:
(a) The closing price of a share of Common Stock on the
principal exchange on which such shares are then trading, if any (or as reported
on any composite index which includes such principal exchange), on the most
recent trading day prior to such determination date; or
(b) If Common Stock is not traded on an exchange, the
mean between the closing representative bid and asked prices for a share of
Common Stock on the most recent
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trading day prior to such determination date as reported by Nasdaq or, if Nasdaq
is not then in existence, by its successor quotation system; or
(c) If Common Stock is not publicly traded on an exchange
and not quoted on Nasdaq or a successor quotation system, the fair market value
of a share of Common Stock as determined in good faith by the Board or the
Committee.
Section 1.15 "Incentive Stock Option" shall mean an Option that
conforms to the applicable provisions of Section 422 of the Code and that is
designated as an Incentive Stock Option by the Committee.
Section 1.16 "Independent Director" shall mean a member of the
Board who is not an Employee of the Company or any of its Subsidiaries.
Section 1.17 "Initial Public Offering" shall mean the first
issuance by the Company of any class of common equity securities that is
required to be registered (other than on a Form S-8) under Section 12 of the
Exchange Act.
Section 1.18 "Non-Qualified Stock Option" shall mean an Option
which is not an "incentive stock option" within the meaning of Section 422 of
the Code.
Section 1.19 "Officer" shall mean an officer of the Company, as
defined in Rule 16a-l(f) under the Exchange Act, as such Rule may be amended
from time to time.
Section 1.20 "Option" shall mean an option granted under the Plan
to purchase Common Stock. An Option shall, as determined by the Committee, be
either an Incentive Stock Option or a Non-Qualified Stock Option; provided,
however, that any Option granted to an individual who is not an Employee of the
Company or one of its Subsidiaries shall be a Non-Qualified Stock Option.
Section 1.21 "Optionee" shall mean an Employee, Consultant or
Independent Director to whom an Option is granted under the Plan.
Section 1.22 "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.
Section 1.23 "Plan" shall mean this Stock Option Plan of Dex
Media, Inc., as amended from time to time.
Section 1.24 "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.
Section 1.25 "Rule 16b-3" shall mean that certain Rule 16b-3
promulgated under the Exchange Act, as such Rule may be amended from time to
time.
Section 1.26 "Securities Act" shall mean the Securities Act of
1933, as amended.
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Section 1.27 "Stock Option Agreement" shall have the meaning set
forth in Section 4.1
Section 1.28 "Stockholders Agreement" shall mean an agreement by
and between the Optionee and the Company which contains certain restrictions and
limitations applicable to the shares of Common Stock acquired upon Option
exercise (and/or to other shares of Common Stock, if any, held by the Optionee
during the term of such agreement), the terms of which shall be determined by
the Board in its discretion.
Section 1.29 "Subsidiary" of any entity shall mean any corporation
in an unbroken chain of corporations beginning with such entity if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
Section 1.30 "Termination of Consultancy" shall mean the time when
the engagement of an Optionee as a Consultant to the Company or a Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, by resignation, discharge, death or retirement, but excluding a
termination where there is a simultaneous commencement of employment with the
Company or any Subsidiary. The Committee, in its sole discretion, shall
determine the effect of all matters and questions relating to Termination of
Consultancy.
Section 1.31 "Termination of Directorship" shall mean the time
when an Optionee who is an Independent Director ceases to be a Director for any
reason, including but not by way of limitation, a termination by resignation,
failure to be elected or appointed, death or retirement. The Board, in its sole
discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship.
Section 1.32 "Termination of Employment" shall mean the time when
the employee-employer relationship between an Optionee and the Company (or one
of its Subsidiaries) is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death or retirement, but excluding a termination where there is a
simultaneous reemployment by the Company (or one of its Subsidiaries). The
Committee shall determine the effect of all matters and questions relating to
Termination of Employment, including, but not by way of limitation, the question
of whether a Termination of Employment resulted from a discharge for good cause,
and all questions of whether a particular leave of absence constitutes a
Termination of Employment; provided, however, that, with respect to Incentive
Stock Options, a leave of absence shall constitute a Termination of Employment
if, and to the extent that, such leave of absence interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under Section 442(a)(2) of the Code.
ARTICLE II.
SHARES SUBJECT TO PLAN
Section 2.1 Shares Subject to Plan. The shares of stock subject
to Options shall be shares of Common Stock. Subject to Section 7.1, the
aggregate number of such shares which may be issued upon exercise of Options
shall not exceed 234,591 shares of Common Stock.
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Section 2.2 Unexercised Options. If any Option (or portion
thereof) expires or is canceled without having been fully exercised, the number
of shares subject to such Option (or portion thereof) but as to which such
Option was not exercised prior to its expiration or cancellation may again be
optioned hereunder, subject to the limitations of Section 2.1.
ARTICLE III.
GRANTING OF OPTIONS
Section 3.1 Eligibility. Subject to Section 3.2, any (a) Employee
of the Company or one of its Subsidiaries; (b) Consultant; or (c) Independent
Director shall be eligible to be granted Options.
Section 3.2 Qualification of Incentive Stock Options.
Notwithstanding Section 3.1, no Incentive Stock Option shall be granted to any
person who is not an Employee of the Company or one of its Subsidiaries.
Section 3.3 Granting of Options to Employees and Consultants
(a) The Committee shall from time to time:
(i) Select from among the Employees and
Consultants of the Company and any of its Subsidiaries (including those to whom
Options have been previously granted under the Plan) such of them as in its
opinion should be granted Options;
(ii) Determine the number of shares to be subject
to such Options granted to such Employees and Consultants and, subject to
Section 3.2, determine whether such Options are to be Incentive Stock Options or
Non-Qualified Stock Options; and
(iii) Determine the terms and conditions of such
Options, consistent with the Plan.
(b) Upon the selection of an Employee or Consultant of
the Company or any of its Subsidiaries to be granted an Option pursuant to
Section 3.3(a), the Committee shall instruct the corporate secretary or another
authorized Officer of the Company to issue such Option and may impose such
conditions on the grant of such Option as it deems appropriate. Without limiting
the generality of the preceding sentence, the Committee may require as a
condition to the grant of an Option to such an Employee or Consultant that such
Employee or Consultant surrender for cancellation some or all of the unexercised
Options which have been previously granted to him or her. An Option the grant of
which is conditioned upon such surrender may have an Option price lower (or
higher) than the Option price of the surrendered Option, may cover the same (or
a lesser or greater) number of shares as the surrendered Option, may contain
such other terms as the Committee deems appropriate and shall be exercisable in
accordance with its terms, without regard to the number of shares, price, period
of exercisability or any other term or condition of the surrendered Option.
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Section 3.4 Granting of Option to Independent Directors
(a) The Board shall from time to time:
(i) Select from among the Independent Directors
(including those to whom Options have previously been granted under the Plan)
such of them as in its opinion should be granted Options;
(ii) Determine the number of shares to be subject
to such Options granted to such selected Independent Directors; and
(iii) Determine the terms and conditions of such
Options, consistent with the Plan; provided, however, that all Options granted
to Independent Directors shall be Non-Qualified Stock Options.
(b) Upon the selection of an Independent Director to be
granted an Option pursuant to Section 3.4(a), the Board shall instruct the
corporate secretary or another authorized Officer of the Company to issue such
Option and may impose such conditions on the grant of such Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Board may require as a condition to the grant of an Option to an Independent
Director that the Independent Director surrender for cancellation some or all of
the unexercised Options which have been previously granted to him or her. An
Option the grant of which is conditioned upon such surrender may have an Option
price lower (or higher) than the Option price of the surrendered Option, may
cover the same (or a lesser or greater) number of shares as the surrendered
Option, may contain such other terms as the Board deems appropriate and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, period of exercisability or any other term or condition of the
surrendered Option.
ARTICLE IV.
TERMS OF OPTIONS
Section 4.1 Stock Option Agreement. Each Option shall be
evidenced by a written Stock Option Agreement, which shall be executed by the
Optionee and an authorized Officer of the Company and which shall contain such
terms and conditions as the Committee (or the Board, in the case of Options
granted to Independent Directors) shall determine, consistent with the Plan.
Stock Option Agreements evidencing Incentive Stock Options shall contain such
terms and conditions as may be necessary to qualify such Options as "incentive
stock options" within the meaning of Section 422 of the Code.
Section 4.2 Exercisability of Options
(a) Each Option shall become exercisable according to the
terms of the applicable Stock Option Agreement; provided, however, that by a
resolution adopted after an Option is granted the Committee (or the Board, in
the case of Options granted to Independent Directors) may, on such terms and
conditions as it may determine to be appropriate, accelerate the time at which
such Option or any portion thereof may be exercised.
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(b) Except as otherwise provided in the applicable Stock
Option Agreement, no portion of an Option which is unexercisable at Termination
of Employment or Termination of Directorship, as applicable, shall thereafter
become exercisable.
(c) To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company or any
Subsidiary thereof) exceeds $100,000, such options shall be treated and taxable
as Non-Qualified Stock Options. The rule set forth in the preceding sentence
shall be applied by taking options into account in the order in which they were
granted, and the stock issued upon exercise of options shall designate whether
such stock was acquired upon exercise of an Incentive Stock Option. For purposes
of these rules, the Fair Market Value of stock shall be determined as of the
date of grant of the Option granted with respect to such stock.
Section 4.3 Option Price The price of the shares subject to each
Option shall be set by the Committee (or the Board, in the case of Options
granted to Independent Directors); provided, however, that in the case of an
Incentive Stock Option, the price per share shall be not less than 100% of the
Fair Market Value of such shares on the date such Option is granted; and
provided, further, that in the case of an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company, the price per share shall
not be less than 110% of the Fair Market Value of such shares on the date such
Incentive Stock Option is granted.
Section 4.4 Expiration of Options. No Option may be exercised to
any extent by anyone after the first to occur of the following events:
(a) The expiration of ten years from the date the Option
was granted; or
(b) With respect to an Incentive Stock Option in the case
of an Optionee owning (within the meaning of Section 424(d) of the Code), at the
time the Incentive Stock Option was granted, more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary, the
expiration of five years from the date the Incentive Stock Option was granted.
Section 4.5 At-Will Employment. Nothing in the Plan or in any
Stock Option Agreement hereunder shall confer upon any Optionee any right to
continue in the employ of, or as a Consultant for, the Company or any
Subsidiary, or shall interfere with or restrict in any way the rights of the
Company and any Subsidiary, which are hereby expressly reserved, to discharge
any Optionee at any time for any reason whatsoever, with or without cause,
except to the extent expressly provided otherwise in a written agreement between
the Optionee and the Company or any Subsidiary.
ARTICLE V.
EXERCISE OF OPTIONS
Section 5.1 Person Eligible to Exercise. During the lifetime of
the Optionee, only he or she may exercise an Option (or any portion thereof);
provided, however, that the Optionee's
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Eligible Representative may exercise his or her Option during the period of the
Optionee's disability (as defined in Section 22(e)(3) of the Code)
notwithstanding that an Option so exercised may not qualify as an Incentive
Stock Option. After the death of the Optionee, any exercisable portion of an
Option may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement, be exercised by his or her
Eligible Representative.
Section 5.2 Partial Exercise. At any time and from time to time
prior to the time when the Option becomes unexercisable under the Plan or the
applicable Stock Option Agreement, the exercisable portion of an Option may be
exercised in whole or in part; provided, however, that the Company shall not be
required to issue fractional shares and the Committee (or the Board, in the case
of Options granted to Independent Directors) may, by the terms of the Option,
require any partial exercise to exceed a specified minimum number of shares.
Section 5.3 Manner of Exercise. An exercisable Option, or any
exercisable portion thereof, may be exercised solely by delivery to the
corporate secretary of all of the following prior to the time when such Option
or such portion becomes unexercisable under the Plan or the applicable Stock
Option Agreement:
(a) Notice in writing signed by the Optionee or his or
her Eligible Representative, stating that such Option or portion is exercised,
and specifically stating the number of shares with respect to which the Option
is being exercised;
(b) A copy of the Stockholders Agreement signed by the
Optionee or Eligible Representative, as applicable;
(c) Full payment for the shares with respect to which
such Option or portion is thereby exercised:
(i) In cash or by personal, certified, or bank
cashier check; or
(ii) With the consent of the Committee (or the
Board, in the case of Options to Independent Directors), (A) shares of Common
Stock which have been owned by the Optionee for at least six months duly
endorsed for transfer to the Company with a Fair Market Value on the date of
delivery equal to the aggregate exercise price of the Option or exercised
portion thereof; (B) except with respect to Incentive Stock Options, shares of
the Common Stock issuable to the Optionee upon exercise of the Option, with a
Fair Market Value on the date of Option exercise equal to the aggregate Option
price of the shares with respect to which such Option or portion is thereby
exercised; (C) following an Initial Public Offering, delivery of a notice that
the Optionee has placed a market sell order with a broker with respect to shares
of Common Stock then issuable upon exercise of the Option, and that the broker
has been directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of the Option exercise price; or (D) any combination
of the consideration listed in this subsection (c);
(d) The payment to the Company (in cash or by personal,
certified or bank cashier or by any other means of payment approved by the
Committee) of all amounts necessary to satisfy any and all federal, state and
local tax withholding requirements arising in connection with the exercise of
the Option;
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(e) Such representations and documents as the Committee
(or the Board, in the case of Options granted to Independent Directors) deems
necessary or advisable to effect compliance with all applicable provisions of
the Securities Act, Exchange Act and any other federal or state securities laws
or regulations. The Committee (or the Board, in the case of Options granted to
Independent Directors) may, in its sole discretion, also take whatever
additional actions it deems appropriate to effect such compliance including,
without limitation, placing legends on share certificates and issuing
stop-transfer orders to transfer agents and registrars; and
(f) In the event that the Option or portion thereof shall
be exercised pursuant to Section 5.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the Option or portion thereof.
Section 5.4 Conditions to Issuance of Stock Certificates. The
shares of stock issuable and deliverable upon the exercise of an Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. A certificate of
shares will be delivered to the Optionee at the Company's principal place of
business within thirty days of receipt by the Company of the written notice and
payment, unless an earlier date is agreed upon. Notwithstanding the above, the
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on any and
all stock exchanges on which such class of stock is then listed;
(b) The execution by the Optionee and delivery to the
Company of a Stockholders Agreement in the Company's customary form;
(c) The completion of any registration or other
qualification of such shares under any state or federal law or under the rulings
or regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Committee (or the Board, in the case of
Options granted to Independent Directors) shall, in its sole discretion, deem
necessary or advisable;
(d) The obtaining of any approval or other clearance from
any state or federal governmental agency which the Committee (or the Board, in
the case of Options granted to Independent Directors) shall, in its sole
discretion, determine to be necessary or advisable; and
(e) The payment to the Company of all amounts which it is
required to withhold under federal, state or local law in connection with the
exercise of the Option.
Section 5.5 Rights as Stockholders. The holder of an Option shall
not be, nor have any of the rights or privileges of, a stockholder of the
Company in respect of any shares purchasable upon the exercise of any part of an
Option unless and until such holder has signed a Stockholders Agreement and
certificates representing such shares have been issued by the Company to such
holder.
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Section 5.6 Transfer Restrictions. Shares acquired upon exercise
of an Option shall be subject to the terms and conditions of a Stockholders
Agreement. In addition, the Committee (or the Board, in the case of Options
granted to Independent Directors), in its sole discretion, may impose further
restrictions on the transferability of the shares purchasable upon the exercise
of an Option as it deems appropriate. Any such restriction shall be set forth in
the respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares. The Committee may require the Employee to give the
Company prompt notice of any disposition of shares of stock, acquired by
exercise of an Incentive Stock Option, within two years from the date of
granting such Option or one year after the transfer of such shares to such
Employee. The Committee may direct that the certificates evidencing shares
acquired by exercise of an Incentive Stock Option refer to such requirement.
ARTICLE VI.
ADMINISTRATION
Section 6.1 Committee. Prior to an Initial Public Offering, the
Committee shall be the Compensation Committee of the Board. Following an Initial
Public Offering, if any, the full Board shall administer the Plan unless and
until there is appointed a Compensation Committee (or another committee or a
subcommittee of the Board assuming the functions of the Committee under the
Plan) that shall consist solely of two or more Independent Directors appointed
by and holding office at the pleasure of the Board, each of whom is both a
"non-employee director" as defined by Rule 16b-3 and an "outside director" for
purposes of Section 162(m) of the Code. Appointment of Committee members shall
be effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
be filled by the Board in its sole discretion. Any action required or permitted
to be taken by the Committee hereunder or under any Stock Option Agreement may
be taken by the Board.
Section 6.2 Delegation of Authority. The Committee may, but need
not, from time to time delegate some or all of its authority to grant Options
under the Plan to a committee or subcommittee consisting of one or more members
of the Committee or of one or more Officers of the Company; provided, however,
that the Committee may not delegate its authority to grant Options to
individuals (a) who are subject on the date of the grant to the reporting rules
under Section 16(a) of the Exchange Act, (b) whose compensation the Committee
determines is, or may become, subject to the deduction limitations set forth in
Section 162(m) of the Code or (c) who are Officers of the Company who are
delegated authority by the Committee hereunder. Any delegation hereunder shall
be subject to the restrictions and limits that the Committee specifies at the
time of such delegation, and the Committee may at any time rescind the authority
so delegated or appoint a new delegatee. At all times, the delegatee appointed
under this Section 6.2 shall serve in such capacity at the pleasure of the
Committee.
Section 6.3 Duties and Powers of the Committee. It shall be the
duty of the Committee to conduct the general administration of the Plan in
accordance with its provisions. The Committee shall have the power to interpret
the Plan and the Options and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. Notwithstanding the foregoing, the
full Board, acting by a majority of its members in office, shall conduct the
general administration of the Plan
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with respect to Options granted to Independent Directors. Any such
interpretations and rules in regard to Incentive Stock Options shall be
consistent with the terms and conditions applicable to "incentive stock options"
within the meaning of Section 422 of the Code. All determinations and decisions
made by the Committee under any provision of the Plan or of any Option granted
thereunder shall be final, conclusive and binding on all persons.
Section 6.4 Compensation, Professional Assistance, Good Faith
Actions. The members of the Committee shall receive such compensation, if any,
for their services hereunder as may be determined by the Board. All expenses and
liabilities incurred by the members of the Committee or the Board in connection
with the administration of the Plan shall be borne by the Company. The Committee
or the Board may employ attorneys, consultants, accountants, appraisers, brokers
or other persons. The Committee, the Company and its Officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Committee and the Board in good faith shall be final and binding upon all
Optionees, the Company and all other interested persons. No member of the Board
shall be personally liable for any action, determination or interpretation made
in good faith with respect to the Plan or the Options, and all members of the
Board shall be fully protected by the Company in respect to any such action,
determination or interpretation.
ARTICLE VII.
OTHER PROVISIONS
Section 7.1 Changes in Common Stock; Disposition of Assets and
Corporate Events
(a) Subject to Section 7.1(d), in the event that the
Committee (or the Board, in the case of Options granted to Independent
Directors) determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Committee's
sole discretion (or in the case of Options granted to Independent Directors, the
Board's sole discretion), affects the Common Stock such that an adjustment is
determined by the Committee (or the Board, in the case of Options granted to
Independent Directors) to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Option, then the Committee (or the Board,
in the case of Options granted to Independent Directors) shall, in such manner
as it may deem equitable, adjust any or all of:
(i) The number and kind of shares of Common
Stock (or other securities or property) with respect to which Options may be
granted under the Plan (including, but not limited to, adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which may be
issued);
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(ii) The number and kind of shares of Common
Stock (or other securities or property) subject to outstanding Options;
(iii) The exercise price with respect to any
Option; and
(iv) The financial or other "targets" specified
in each Stock Option Agreement for determining the exercisability of Options.
(b) Subject to Section 7.1(d) and the terms of
outstanding Stock Option Agreements, upon the occurrence of a Corporate Event,
the Committee (or the Board, in the case of options granted to Independent
Directors), in its sole discretion, is hereby authorized to take any one or more
of the following actions whenever the Committee (or the Board, in the case of
Options granted to Independent Directors) determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Option under this Plan, to facilitate such Corporate Event or to give
effect to such changes in laws, regulations or principles:
(i) In its sole discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in the case
of Options granted to Independent Directors) may provide, either by the terms of
the applicable Stock Option Agreement or by action taken prior to the occurrence
of such Corporate Event and either automatically or upon the Optionee's request,
for either the purchase of any such Option for an amount of cash, securities, or
other property equal to the amount that could have been attained upon the
exercise of the vested portion of such Option (and such additional portion of
the Option as the Board or Committee may determine) immediately prior to the
occurrence of such transaction or event, or the replacement of such vested (and
other) portion of such Option with other rights or property selected by the
Committee (or the Board, in the case of Options granted to Independent
Directors) in its sole discretion;
(ii) In its sole discretion, the Committee (or
the Board, in the case of Options granted to Independent Directors) may provide,
either by the terms of the applicable Stock Option Agreement or by action taken
prior to the occurrence of such Corporate Event, that the Option (or any portion
thereof) cannot be exercised after such event;
(iii) In its sole discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in the case
of Options granted to Independent Directors) may provide, either by the terms of
the applicable Stock Option Agreement or by action taken prior to the occurrence
of such Corporate Event, that for a specified period of time prior to such
Corporate Event, such Option shall be exercisable as to all shares covered
thereby or a specified portion of such shares, notwithstanding anything to the
contrary in this Plan or the applicable Stock Option Agreement;
(iv) In its sole discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in the case
of Options granted to Independent Directors) may provide, either by the terms of
the applicable Stock Option Agreement or by action taken prior to the occurrence
of such Corporate Event, that upon such event, such Option (or any portion
thereof) be assumed by the successor or survivor corporation, or a parent or
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subsidiary thereof (including without limitation any common parent of the
Company and any other company or companies), or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof (including without
limitation any common parent of the Company and any other company or companies),
with appropriate adjustments as to the number and kind of shares and prices; and
(v) In its sole discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in the case
of Options granted to Independent Directors) may make adjustments in the number
and type of shares of Common Stock (or other securities or property) subject to
outstanding Options (or any portion thereof) and/or in the terms and conditions
of (including the exercise price), and the criteria included in, outstanding
Options and Options which may be granted in the future.
(c) Subject to Section 7.1(d), the Committee (or the
Board, in the case of Options granted to Independent Directors) may, in its sole
discretion, include such further provisions and limitations in any Stock Option
Agreement as it may deem equitable and in the best interests of the Company and
its Affiliates.
(d) With respect to Incentive Stock Options, no
adjustment or action described in this Section 7.1 or in any other provision of
the Plan shall be authorized to the extent that such adjustment or action would
cause the Plan to violate Section 422(b)(1) of the Code or any successor
provisions thereto, unless the Committee determines that the Plan and/or the
Options are not to comply with Section 422(b)(1) of the Code. The number of
shares of Common Stock subject to any Option shall always be rounded up to the
next higher whole number.
Section 7.2 Options Not Transferable. No Option or interest or
right therein or part thereof shall be liable for the debts, contracts or
engagements of the Optionee or his or her successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law, by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect;
provided, however, that nothing in this Section 7.2 shall prevent transfers by
will or by the applicable laws of descent and distribution.
Section 7.3 Amendment, Suspension or Termination of the Plan. The
Plan may be wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board or the Committee.
However, without stockholder approval within 12 months before or after such
action no action of the Board or the Committee may, except as provided in
Section 7.1, increase any limit imposed in Section 2.1 on the maximum number of
shares which may be issued on exercise of Options, reduce the minimum Option
price requirements of Section 4.3(a), or extend the limit imposed in this
Section 7.3 on the period during which options may be granted. Except as
provided by Section 7.1, neither the amendment, suspension nor termination of
the Plan shall, without the consent of the holder of the Option, alter or impair
any rights or obligations under any Option theretofore granted. No Option may be
granted during any period of suspension nor after termination of the Plan, and
in
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no event may any Option be granted under this Plan after the expiration of ten
years from the date the Plan is adopted by the Board.
Section 7.4 Effect of Plan Upon Other Option and Compensation
Plans. The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Affiliate. Nothing in this Plan
shall be construed to limit the right of the Company or any Affiliate (a) to
establish any other forms of incentives or compensation for directors or
employees of the Company (or any Affiliate); or (b) to grant or assume options
otherwise than under this Plan in connection with any proper corporate purpose,
including, but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, firm or
association.
Section 7.5 Approval of Plan by Stockholders. This Plan will be
submitted for the approval of the Company's stockholders within 12 months after
the date of the Board's initial adoption of this Plan. No Option may be
exercised to any extent by anyone unless and until the Plan is so approved by
the stockholders, and if such approval has not been obtained by the end of said
12-month period, the Plan and all Options theretofore granted shall thereupon be
canceled and become null and void.
Section 7.6 Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan.
Section 7.7 Conformity to Securities Laws. The Plan is intended
to conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder to the extent the Company or any
Optionee is subject to the provisions thereof. Notwithstanding anything herein
to the contrary, the Plan shall be administered, and Options shall be granted
and may be exercised, only in such a manner as to conform to such laws, rules
and regulations. To the extent permitted by applicable law, the Plan and Options
granted hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
Section 7.8 Governing Law. To the extent not preempted by federal
law, the Plan shall be construed in accordance with and governed by the laws of
the state of Delaware.
Section 7.9 Severability. In the event any portion of the Plan or
any action taken pursuant thereto shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provisions had not been included, and the illegal or invalid action shall be
null and void.
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* * * * *
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of Dex Media, Inc. as of November 8, 2002.
Executed as of February 27, 2003.
/s/ George Burnett
---------------------------
Officer
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