The Program is looking for a class called: "javaapplication7.TelephoneDirectory"
Your class (atleast the code you pasted) is in the default package, you need to declare your classes to be in the "javaapplication7" package by adding the following statement at the top of your Java file (Even before the import statements)
package javaapplication7;
Also note your classfile will need to be in a folder called 'javaapplication7'.
If you are doing this via an IDE, then I suppose it will handle these teenie weenie details.