ARBITRON INC. EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.43
Execution Copy
Execution Copy
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made February 11, 2010 by and between Arbitron
Inc., a Delaware corporation (the “Company”), and Xxxxxxx X. Xxxx, an individual (“you”) (and,
together, “Parties”).
NOW THEREFORE, in consideration of your acceptance of employment, the Parties agree to be
bound by the terms contained in this Agreement as follows:
1. Engagement. Beginning January 10, 2010 (the “Effective Date”), the Company has employed
you as President and Chief Executive Officer. You will report directly to the Board of Directors
of the Company (the “Board”). You will be responsible for general management of the affairs of the
Company. You will at all times comply with all written policies of the Company then in effect.
2. Commitment. During and throughout the Employment Term, you must devote substantially all
of your full working time and attention to the Company. During the Employment Term, you must not
engage in any employment, occupation, consulting or other similar activity for direct or indirect
financial remuneration unless approved by the Board; provided, however, that you may, subject to
compliance with the notice and consent requirements set forth in the Company’s Corporate Governance
Policies and Guidelines, (i) serve in any capacity with any professional, community, industry,
civic (including governmental boards), educational or charitable organization, (ii) serve on
for-profit entity board(s) having obtained prior consent and written approval from the Board’s
Nominating and Corporate Governance Committee, and (iii) subject to the Company’s conflict of
interest policies applicable to all employees, make investments in other businesses and manage your
and your family’s personal investments and legal affairs; provided that any such activities
described in clauses (i)-(iii) above do not materially interfere with the performance of your
duties for the Company. You will perform your services under this Agreement primarily at the
Company’s headquarters in Columbia, Maryland. You understand and agree that your employment may
require travel from time to time. The Company intends to support your election as a member of the
Board so long as you remain employed as the Chief Executive Officer.
3. Employment Term. The Company hereby agrees to employ you and you hereby accept employment
with the Company upon the terms set forth in this Agreement, for the period commencing on the
Effective Date and ending on the second anniversary of the Effective Date (the “Initial Term”),
unless sooner terminated in accordance with the provisions of Section 6 (such period, as it also
may be extended, the “Employment Term”).
4. Cash and Stock Compensation.
(a) Base Salary. Beginning as of the Effective Date, you will receive a base salary at a
monthly rate of $66,666.67, annualizing to $800,000 (“Base Salary”). The Company will pay your
Base Salary in accordance with the Company’s regular payroll practices, but no less frequently than
monthly. The Board will review your Base Salary no less frequently than annually, beginning in
2011. If increased, the increased Base Salary will become the Base Salary for all purposes of this
Agreement. Your Base Salary will not be decreased without your written consent.
(b) Incentive Bonus. Upon meeting the applicable performance criteria established by the
Company’s Compensation and Human Resources Committee of the Board (the “Compensation Committee”) in
its sole discretion, you will be eligible to receive an annual incentive bonus (the “Annual Bonus”)
for a given fiscal year of the Company targeted at an amount equal to 100% of your Base Salary in
effect at the Effective Date or, for subsequent years, at the beginning of such fiscal year
(“Target Bonus”). For performance exceeding such applicable performance criteria in the sole
judgment of the Compensation Committee, the Annual Bonus will be increased to an amount in excess
of the Target Bonus up to a maximum of 200% of your Base Salary in effect at the beginning of such
fiscal year, which additional bonus amount the Compensation Committee will determine in its sole
discretion. The Annual Bonus, if any, will be paid when other executives receive their bonuses
under comparable arrangements but, in any event, between January 1 and April 30 of the year
following the year with respect to which it is earned.
(c) Equity Compensation.
(i) Initial Stock Awards. Subject to the Compensation Committee’s approval, on or as
soon as administratively practicable following the Effective Date, the Company will grant
you an equity award to be valued at $1.85 million on the date of grant, consisting of
$350,000 in the form of stock options and $1.5 million in the form of deferred stock units
(“DSUs”), each with respect to the Company’s common stock, par value $0.50 (the “Common
Stock”). The value for the options will be determined using the Company’s standard
Black-Scholes assumptions applied as of the date of grant and the value for the DSUs will be
determined by dividing the target value for the DSUs by the Common Stock’s fair market value
on the date of grant. The equity grants will be under the Company’s 2008 Equity
Compensation Plan (the “2008 Plan”). Assuming continued employment, the options under the
grant will vest in equal amounts on an annual basis over a three year period following the
date of grant (beginning with one-third on the first anniversary), and otherwise will
contain the Company’s customary terms and conditions for such grants, except as modified by
this Agreement. Assuming continued employment, the DSUs under the grant will vest in equal
amounts on an annual basis over a four year period following the date of grant (beginning
with 25% on the first anniversary), will result in distribution of the vested Shares of
Common Stock within the 30 day period following your termination of employment for any
reason (except for any delay required by Section 7 for compliance with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and otherwise will contain the
Company’s
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customary terms and conditions for such grants, but subject to the provisions of
Section 4(c)(iii) below.
(ii) Ongoing Grants. In addition to the awards in Section 4(c)(i), the Company will
ask the Compensation Committee to grant you long-term incentives shortly after the Effective
Date with a grant date equivalent value of $1.5 million, to be divided into the same mix of
stock options, performance-based cash, and restricted stock units (“RSUs”) as apply to other
senior executives (and with the RSUs also performance-based to the extent grants to other
senior executives are subject to performance hurdles), but with the RSUs in the form of DSUs
payable only after your separation from service and subject to the provisions of Section
4(c)(iii) below. The Company will also ask the Compensation Committee to make a grant of
long-term incentives for 2011 of similar size on or after the first anniversary of the
Effective Date, subject to the same criteria as for other members of senior management (and
subject to the Compensation Committee’s ultimate discretion with respect to making the
grants and using DSUs in place of RSUs). The Compensation Committee at its sole discretion
will consider the grant of additional compensatory stock awards in future years while you
remain employed.
(iii) Special Acceleration. The awards described in Section 4(c)(i) and (ii) will vest
and/or become exercisable in accordance with the Company’s customary terms. However, to the
extent more favorable to you (except as described for “Cause”) and to the extent that there
is no termination of options or other awards for reasons provided in the 2008 Plan, such as
a change in control of the Company, the following terms will also apply, subject, where
applicable, to Sections 6(d) (requiring a release) and 7 (relating to Section 409A):
| a) | Awards will accelerate on death or disability (as the latter is determined under Section 6(c) and except to the extent acceleration would trigger taxes under Code Section 409A), with continued exercisability of options for one year following termination of employment. | ||
| b) | On a termination by the Company without Cause or your Retirement: (x) any performance-based awards will require satisfaction of the applicable performance objectives but will not be prorated for partial years or periods of service; (y) any stock options will continue to vest as though you remained employed and remain exercisable for three years following termination of employment, and (z) any DSUs not subject to performance criteria will continue to vest as though you remained employed. | ||
| c) | Your resignation other than through Retirement will cause unvested awards to be forfeited. Vested portions of the stock options will remain exercisable for 90 days following termination in that situation. | ||
| d) | Termination for Cause will cause forfeiture of vested and unvested awards. |
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| e) | Vesting, acceleration, and other compensation may be delayed or eliminated if you would be subject to a golden parachute tax (under Code Section 4999), as set forth on Exhibit A to this Agreement. |
5. Employee Benefits.
(a) Employee Welfare and Retirement Plans. You will, to the extent eligible, be entitled to
participate at a level commensurate with your position in all employee welfare benefit and
retirement plans and programs the Company provides to its executives in accordance with the terms
thereof as in effect from time to time. You will be covered under the Company’s Director and
Officer liability insurance policy, to the same extent as other officers.
(b) Business Expenses. Upon submission of appropriate documentation in accordance with
Company policies, the Company will promptly pay, or reimburse you for, all reasonable business
expenses that you incur in performing your duties under this Agreement, including, but not limited
to, travel, entertainment, professional dues and subscriptions, as long as such expenses are
reimbursable under the Company’s policies. Any payments or expenses provided in this Section 5(b)
will be paid in accordance with Section 7(c).
6. Termination of At-Will Employment.
(a) General. Subject in each case to the provisions of this Section 6, nothing in this
Agreement interferes with or limits in any way the Company’s right to terminate your employment at
any time, for any reason or no reason, with or without notice, and nothing in this Agreement
confers on you any right to continue in the Company’s employ. If your employment ceases for any or
no reason, you (or your estate, as applicable) will be entitled to receive (in addition to any
compensation and benefits you are entitled to receive under Section 4(c)(iii)): (i) any earned but
unpaid Base Salary through and including the date of termination of your employment, to be paid in
accordance with the Company’s regular payroll practices no later than the next regularly scheduled
pay date; (ii) any earned but unpaid Annual Bonus for the calendar year preceding the year in which
your employment ends, to be paid on the date such Annual Bonus otherwise would have been paid if
your employment had continued; (iii) unreimbursed business expenses in accordance with the
Company’s policies; to be paid in accordance with Section 7(c); (iv) the amount of any accrued but
unused paid time off; and (v) any amounts or benefits to which you are then entitled under the
terms of the benefit plans then sponsored by the Company in accordance with their terms (and not
accelerated to the extent acceleration does not satisfy Section 409A of the Code). Notwithstanding
any other provision in this Agreement to the contrary, any severance benefits to which you may be
entitled will be provided exclusively through the terms of Sections 4(c)(iii) and 6.
(b) Termination Without Cause; Retirement. If, during the Employment Term, the Company
terminates your employment without Cause or your Retirement occurs, the Company will pay to you in
cash, subject to compliance with Section 6(d):
(i) an amount equal to the Base Salary due for the remainder of the Initial Term, paid
in equal installments over the remainder of the Initial Term following the Release Effective
Date in accordance with the Company’s standard payroll policies
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and procedures, beginning no later than 30 days after the Release Effective Date
(except as Section 7 requires); provided, however, that if the last day of the 60 day period
for an effective release falls in the calendar year following the year of your date of
termination, the severance payments will be paid or begin no earlier than January 1 of such
subsequent calendar year; and
(ii) a bonus component (the “Bonus Component”). If the Annual Bonus for your year of
termination is determined under a program intended to qualify as performance-based for
purposes of Section 162(m) (an “Exempt Bonus”), you will be paid the Bonus Component under
the timing provided in Section 4(b) of this Agreement as though you had remained employed,
with the Bonus Component determined under the factors for such Annual Bonus, with such
adjustments as the Compensation Committee makes under such factors (using its negative
discretion) and with the result prorated for your months of employment during the year of
termination. If the Annual Bonus for your year of termination is not intended to be an
Exempt Bonus, the Bonus Component will be the Target Bonus paid in the timing provided in
Section 4(b) of this Agreement, prorated for your months of employment during the year of
termination. Payment under this clause (ii) will be delayed if the Release Effective Date
has not occurred by the time the Annual Bonus is due. The Bonus Component shall not be pro
rated as otherwise described in this section for a termination without Cause or Retirement
occurring before December 31, 2010.
You must continue to comply with the covenants under Sections 8 and 9 below to continue to receive
severance benefits.
(c) Death or Disability. Your employment hereunder will terminate immediately upon your
death, or if the Board, based upon appropriate medical evidence, determines you have become
physically or mentally incapacitated so as to render you incapable of performing your usual and
customary material duties even with a reasonable accommodation for a continuous period in excess of
180 days. Termination under this subsection is not covered by Section 6(b).
(d) Release Requirement. The severance in Section 6(b) and the continued vesting described in
Section 4(c)(iii)(b) will occur only after and if you sign a release of claims and separation
agreement (the “Release”) to be provided by the Company and any revocation period expires (the
“Release Effective Date”), unless, for the equity compensation in the context of a change in
control as determined by the Board, the equity compensation will not exist after the change in
control event, in which case the equity compensation will accelerate on or in connection with the
change in control, subject to your requirement to comply with the following provisions if you do
not sign the Release or it does not become irrevocable by the 60th day after your
employment ends. With respect to the continued vesting, you agree that, within 10 days after
receiving from the Company written notification that the Compensation Committee has determined that
you have received the benefits of continued vesting but have failed to meet the Release requirement
of this Section 6(d), you will pay to the Company for each share of Company stock you receive (or
become vested in) under Section 4(c)(iii)(b) whichever of the following is applicable:
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(i) For stock options, the gain equaling the excess, if any, of the fair market value
on the exercise date (as determined under the applicable equity incentive plan) of the
shares received on exercise over the exercise price paid for such shares, without regard to
any market price increase or decrease after exercise (or, if higher, the proceeds received
on disposition of the shares).
(ii) For DSUs or equivalent equity, the fair market value of the shares issued to you
(or, if higher, the proceeds received on disposition of the shares); and
(iii) For any other form of award, such amount as the Compensation Committee may
determine, applying similar principles.
| Payment is due in cash or cash equivalents within ten days after the Compensation Committee provides notice to you that it is enforcing this Section. Any equity awards not already vested or exercised will then be immediately forfeited. Payment will be calculated on a gross basis, without reduction for taxes or commissions. The Compensation Committee may, but is not required to, accept retransfer of shares in lieu of cash payments. For purposes of this recoupment, the Board will determine the fair market value in good faith using either trading prices, deal prices, or other measures of value. |
(e) Definitions.
(i) Cause. For purposes of this Agreement, “Cause” means termination of your
employment because of (i) fraud; (ii) misrepresentation; (iii) theft or embezzlement of
assets of the Company; (iv) your conviction, or plea of guilty or nolo contendere to any
felony (or to a felony charge reduced to a misdemeanor), or, with respect to your
employment, to any misdemeanor (other than a traffic violation), or your intentional
violations of law involving moral turpitude; (v) material failure to follow the Company’s
conduct and ethics policies that continues for 10 days after a written demand for your
compliance that specifically identifies the manner in which it is alleged you have not
attempted in good faith to comply; and/or (vi) your continued failure to attempt in good
faith to perform your duties as reasonably assigned by the Board to you for a period of
60 days after a written demand for such performance that specifically identifies the manner
in which it is alleged you have not attempted in good faith to perform such duties. The
Company will not treat your termination of employment with the Company as a termination for
Cause for purposes of this Agreement if the termination occurred because of any act or
omission you reasonably believed in good faith to have been in, or not opposed to, the
Company’s interests.
(ii) Retirement. For purposes of this Agreement, “Retirement” means your voluntary
resignation (i) at or after the completion of the Initial Term or (ii) earlier upon your
replacement as Chief Executive Officer and your completion of a post-replacement transition
period of the shorter of 90 days or such period as the Board requests; provided, however,
that you may not initiate your resignation under clause (ii) before the Board approves your
replacement and have such resignation treated as Retirement.
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(f) Further Effect of Termination on Board and Officer Positions. If your employment ends for
any reason, you agree that you will cease immediately to hold any and all officer or director
positions you then have with the Company or any affiliate, absent a contrary direction from the
Board (which may include either a request to continue such service or a direction to cease serving
upon notice without regard to whether your employment has ended), except to the extent that you
reasonably and in good faith determine that ceasing to serve as a director would breach your
fiduciary duties to the Company or such affiliate. You hereby irrevocably appoint the Company to be
your attorney-in-fact to execute any documents and do anything in your name to effect your ceasing
to serve as a director and officer of the Company and any affiliate, should you fail to resign
following a request from the Company to do so. A written notification signed by a director or duly
authorized officer of the Company that any instrument, document or act falls within the authority
conferred by this subsection will be conclusive evidence that it does so. The Company will prepare
any documents, pay any filing fees, and bear any other expenses related to this section.
7. Effect of Section 409A of the Code.
(a) Six Month Delay. For purposes of this Agreement, a termination of employment shall mean a
“separation from service” as defined in Section 409A of the Code. If and to the extent any portion
of any payment, compensation or other benefit provided to you in connection with your separation
from service (as defined in Section 409A of Code) is determined to constitute “nonqualified
deferred compensation” within the meaning of Section 409A and you are a specified employee as
defined in Section 409A(a)(2)(B)(i) of the Code, as determined by the Company in accordance with
its procedures, by which determination you hereby agree that you are bound, such portion of the
payment, compensation or other benefit will not be paid before the earlier of (i) the day that is
six months plus one day after the date of separation from service (as determined under Section
409A) or (ii) the tenth (10th) day after the date of your death (as applicable, the “New Payment
Date”). The aggregate of any payments that otherwise would have been paid to you during the period
between the date of separation from service and the New Payment Date will be paid to you in a lump
sum in the first payroll period beginning after such New Payment Date (together with simple
interest at the short-term AFR in effect on the date your employment ended), and any remaining
payments will be paid on their original schedule.
(b) General 409A Principles. For purposes of this Agreement, each amount to be paid or
benefit to be provided will be construed as a separate identified payment for purposes of Section
409A, and any payments that are due within the “short term deferral period” as defined in Section
409A or are paid in a manner covered by Treas. Reg. Section 1.409A-1(b)(9)(iii) will not be treated
as deferred compensation unless applicable law requires otherwise. Neither the Company nor you
will have the right to accelerate or defer the delivery of any such payments or benefits except to
the extent specifically permitted or required by Section 409A. This Agreement is intended to
comply with the provisions of Section 409A and this Agreement will, to the extent practicable, be
construed in accordance therewith. Terms defined in this Agreement will have the meanings given
such terms under Section 409A if and to the extent required to comply with Section 409A. In any
event, the Company makes no representations or warranty and will have no liability to you or any
other person, other than with respect to payments made by the Company in violation of the
provisions of this Agreement, if
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any provisions of or payments under this Agreement are determined to constitute deferred
compensation subject to Code Section 409A but not to satisfy the conditions of that section.
(c) Expense Timing. Payments with respect to reimbursements of business expenses will be made
in the ordinary course of business and in any case on or before the last day of the calendar year
following the calendar year in which the relevant expense is incurred. The amount of expenses
eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar
year. The right to reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit.
8. Confidentiality, Disclosure, and Assignment
(a) Confidentiality. You will not, during or after the Employment Period, publish, disclose,
or utilize in any manner any Confidential Information obtained while employed by the Company other
than on the Company’s behalf. If your employment with the Company ends, you will not, without the
Company’s prior written consent, retain or take away any drawing, writing, or other record in any
form containing any Confidential Information. For purposes of this Agreement, “Confidential
Information” means information or material of the Company that is not generally available to or
used by others unaffiliated with the Company, or the utility or value of which is not generally
known or recognized as standard practice, whether or not the underlying details are in the public
domain, including:
(i) information or material relating to the Company and its business as conducted or
anticipated to be conducted; business plans; operations; past, current or anticipated
software, products or services; customers or prospective customers; or research,
engineering, development, manufacturing, purchasing, accounting, or marketing activities;
(ii) information or material relating to the Company’s inventions, improvements,
discoveries, “know-how,” technological developments, or unpublished writings or other works
of authorship, or to the materials, apparatus, processes, formulae, plans or methods used in
the development, manufacture or marketing of the Company’s software, products or services;
(iii) information on or material relating to the Company that when received is marked
as “proprietary,” “private,” or “confidential”;
(iv) the Company’s trade secrets;
(v) software of the Company in various stages of development, including computer
programs in source code and binary code form, software designs, specifications, programming
aids (including “library subroutines” and productivity tools), interfaces, visual displays,
technical documentation, user manuals, data files and databases of the Company; and
(vi) any similar information of the type described above that the Company obtained from
another party and that the Company treats as or designates as
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being proprietary, private or confidential, whether or not owned or developed by the
Company.
Notwithstanding the foregoing, “Confidential Information” does not include any information that is
properly published or in the public domain; provided, however, that information that is published
by or with your aid outside the scope of employment or contrary to the requirements of this
Agreement will not be considered to have been properly published, and therefore will not be in the
public domain for purposes of this Agreement.
(b) Business Conduct and Ethics. During your employment with the Company, you will not engage
in any activity that may conflict with the Company’s interests, and you will comply with the
Company’s policies and guidelines pertaining to business conduct and ethics.
(c) Disclosure. You will disclose promptly in writing to the Company all inventions,
discoveries, software, writings and other works of authorship that you conceived, made, discovered,
or wrote jointly or singly on Company time or on your own time during the period of your employment
by the Company, provided that the invention, improvement, discovery, software, writing or other
work of authorship is capable of being used by the Company in the normal course of business, and
all such inventions, improvements, discoveries, software, writings and other works of authorship
shall belong solely to the Company.
(d) Instruments of Assignment. You will sign and execute all instruments of assignment and
other papers to evidence vestiture of your entire right, title and interest in such inventions,
improvements, discoveries, software, writings or other works of authorship in the Company, at the
Company’s request and expense, and you will do all acts and sign all instruments of assignment and
other papers the Company may reasonably request relating to applications for patents, patents,
copyrights, and the enforcement and protection thereof. If you are needed, at any time, to give
testimony, evidence, or opinions in any litigation or proceeding involving any patents or
copyrights or applications for patents or copyrights, both domestic and foreign, relating to
inventions, improvements, discoveries, software, writings or other works of authorship you
conceived, developed or reduced to practice, you hereby agree to do so, and if your employment
ends, the Company will pay you at an hourly rate mutually agreeable to the Company and you, plus
reasonable traveling or other expenses, subject to Section 7(c) of this Agreement.
(e) Additional Post-Employment Provisions. When your employment ends, you must (x) cease and
not thereafter commence use of any Confidential Information or intellectual property (including any
patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other
source indicator) if such property is owned or exclusively used by the Company; (y) immediately
destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any
form or medium (including memoranda, books, papers, plans, computer files, letters and other data)
in your possession or control (including any of the foregoing stored or located in your office,
home, laptop or other computer, whether or not Company property) that contain Confidential
Information or otherwise relate to the business of the Company, except that you may retain only
those portions of any personal notes, notebooks and diaries that do not contain Confidential
Information; and (z) notify and
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fully cooperate with the Company regarding the delivery or destruction of any other
Confidential Information of which you are or become aware to the extent such information is in your
possession or control. Notwithstanding anything elsewhere to the contrary, you may retain (and not
destroy) (x) information showing your compensation or relating to reimbursement of expenses that
you reasonably believe are necessary for tax purposes and (y) copies of plans, programs, policies
and arrangements of, or other agreements with, the Company addressing your compensation or
employment or termination thereof.
(f) Survival. The obligations of this Section 8 (except for Section 8(b)) will survive the
expiration or termination of this Agreement and your employment.
9. Non-Competition, Non-Recruitment, and Non-Disparagement.
(a) General. The Parties recognize and agree that (a) you are becoming a senior executive of
the Company, (b) you have received and will in the future receive substantial amounts of the
Company’s Confidential Information, (c) the Company’s business is conducted on a worldwide basis,
and (d) provision for non-competition, non-recruitment and non-disparagement obligations by you is
critical to the Company’s continued economic well-being and protection of the Company’s
Confidential Information. In light of these considerations, this Section 9 sets forth the terms
and conditions of your obligations of non-competition, non-recruitment, and non-disparagement
during and subsequent to the termination of this Agreement and/or the cessation of your employment
for any reason.
(b) Non-Competition.
(i) Unless the Company waives or limits the obligation in accordance with Section
9(b)(ii), you agree that during employment and for 12 months following your cessation of
employment for any reason (the “Noncompete Period”), you will not directly or indirectly,
alone or as a partner, officer, director, shareholder or employee of any other firm or
entity, engage in any commercial activity in competition with any part of the Company’s
business as conducted as of the date of such termination of employment or with any part of
the Company’s contemplated business with respect to which you have Confidential Information.
For purposes of this clause (i), “shareholder” does not include beneficial ownership of
less than 5% of the combined voting power of all issued and outstanding voting securities of
a publicly held corporation whose stock is traded on a major stock exchange. Also for
purposes of this clause (i), “the Company’s business” includes business conducted by the
Company, its subsidiaries, or any partnership or joint venture in which the Company directly
or indirectly has ownership of at least one third of the voting equity. The Noncompete
Period will be further extended by any period of time during which you are in violation of
Section 9(b). For purposes of this Section 9, competitors of the Company currently include
but are not limited to GfK AG, Integrated Media Measurement, Inc., The Xxxxxxx Company B.V.,
and WPP PLC.
(ii) At its sole option the Company may, by written notice to you at any time within
the Noncompete Period, waive or limit the time and/or geographic area in which you cannot
engage in competitive activity.
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(iii) During the Noncompete Period, before accepting employment with or agreeing to
provide consulting services to, any firm or entity that offers competitive products or
services, you must give 30 days’ prior written notice to the Company. Such written notice
must be sent by certified mail, return receipt requested (attention: Office of the Chief
Legal Officer with a required copy to the Chair of Compensation Committee), must describe
the firm or entity and the employment or consulting services to be rendered to the firm or
entity, and must include a copy of the written offer of employment or engagement of
consulting services. The Company must respond or object to such notice within 30 days after
receipt, and the absence of a response will constitute acquiescence or waiver of the
Company’s rights under this Section 9.
(c) Non-Recruitment. During employment and for a period of 12 months following cessation of
employment for any reason, you will not initiate or actively participate in any other employer’s
recruitment or hiring of the Company’s employees.
(d) Non-Disparagement. You will not, during employment or after the termination or expiration
of this Agreement, make disparaging statements, in any form, about the Company, its officers,
directors, agents, employees, products or services that you know, or have reason to believe, are
false or misleading.
(e) Enforcement. If you fail to provide notice to the Company under Section 9(b)(iii) and/or
in any way violate your obligations under Section 9, the Company may enforce all of its rights and
remedies provided to it under this Agreement, or in law and in equity, without the requirement to
post a bond, including without limitation ceasing any further payments to you under this Agreement,
and you will be deemed to have expressly waived any rights you may have had to payments under
Section 4(c)(iii).
(f) Survival. The obligations of this Section 9 survive the expiration or termination of this
Agreement and your employment.
10. Miscellaneous.
(a) Notices. All notices, demands, requests or other communications required or permitted to
be given or made hereunder must be in writing and must be delivered, telecopied or mailed by first
class registered or certified mail, postage prepaid, addressed as follows:
| If to the Company: | Arbitron Inc. Office of Chief Legal Officer |
|||
| 0000 Xxxxxxxx Xxxxx Xxxxx | ||||
| Xxxxxxxx, XX 00000 | ||||
| If to you: | At your last address on file with the Company |
or to such other address as either party may designate in a notice to the other. Each notice,
demand, request or other communication that is given or made in the manner described above will be
treated as sufficiently given or made for all purposes three days after it is deposited in the
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U.S. certified mail, postage prepaid, acceptance confirmation or at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, the answer back or the affidavit of
messenger being deemed conclusive evidence of such delivery) or at such time as delivery is refused
by the addressee upon presentation.
(b) No Mitigation/No Offset. You are not required to seek other employment or otherwise
mitigate the value of any severance benefits contemplated by this Agreement, nor will any such
benefits be reduced by any earnings or benefits that you may receive from any other source. The
amounts payable hereunder will not be subject to setoff, counterclaim, recoupment, defense or other
right which the Company may have against you or others. Notwithstanding any other provision of
this Agreement, any sum or sums paid under this Agreement will be in lieu of any amounts to which
you may otherwise be entitled under the terms of any severance plan, policy, program, agreement or
other arrangement sponsored by the Company or an affiliate of the Company.
(c) Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE
WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING ARISING
IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE RELEASE IT CONTEMPLATES,
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, THE
PARTIES AGREE THAT ANY PARTY MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE
OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR
RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS RELEASE OR TO
ANY OF THE MATTERS CONTEMPLATED UNDER THIS AGREEMENT, RELATING TO YOUR EMPLOYMENT, OR COVERED BY
THE CONTEMPLATED RELEASE.
(d) Severability. Each provision of this Agreement must be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement. Moreover, if a court of competent jurisdiction
determines any of the provisions contained in this Agreement to be unenforceable because the
provision is excessively broad in scope, whether as to duration, activity, geographic application,
subject or otherwise, it will be construed, by limiting or reducing it to the extent legally
permitted, so as to be enforceable to the extent compatible with then applicable law to achieve the
intent of the Parties.
(e) Assignment. This Agreement will be binding upon and will inure to the benefit of your
heirs, beneficiaries, executors and legal representatives upon your death and this Agreement will
be binding upon any legal successor of the Company. Any legal successor of the Company will be
treated as substituted for the Company under the terms of this Agreement for all purposes. You
specifically agree that any assignment may include rights under the restrictive covenants of
Sections 8 and 9. As used herein, “successor” will mean any person, firm,
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corporation or other business entity that at any time, whether by purchase or merger or
otherwise, directly or indirectly acquires all or substantially all of the assets or business of
the Company.
None of your rights to receive any form of compensation payable under this Agreement will be
assignable or transferable except through a testamentary disposition or by the laws of descent and
distribution upon your death or as provided in Section 10(h) hereof. Any attempted assignment,
transfer, conveyance or other disposition (other than as aforesaid) of any interest in your rights
to receive any form of compensation hereunder will be null and void; provided, however, that
notwithstanding the foregoing, you will be allowed to transfer vested shares subject to stock
options or the vested portion of other equity awards (other than incentive stock options within the
meaning of Section 422 of the Code) consistent with the rules for transfers to “family members” as
defined in Securities Act Form S-8.
(f) No Oral Modification, Cancellation or Discharge. This Agreement may only be amended,
canceled or discharged in writing signed both by you and the Chair of the Compensation Committee.
(g) Other Agreements. You hereby represent that your performance of all the terms of this
Agreement and the performance of your duties as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge or data acquired by
you in confidence or in trust prior to your employment with the Company and that you will not
disclose to the Company or induce the Company to use any confidential or proprietary information,
knowledge or material belonging to any previous employer or others. You also represent that you
are not a party to or subject to any restrictive covenants, legal restrictions, policies,
commitments or other agreements in favor of any entity or person that would in any way preclude,
inhibit, impair or limit your ability to perform your obligations under this Agreement, including
non-competition agreements or non-solicitation agreements, and you further represent that your
performance of the duties and obligations under this Agreement does not violate the terms of any
agreement to which you are a party. You agree that you will not enter into any agreement or
commitment or agree to any policy that would prevent or hinder your performance of duties and
obligations under this Agreement.
(h) Survivorship. The respective rights and obligations of the Company and you hereunder will
survive any termination of your employment to the extent necessary to the intended preservation of
such rights and obligations.
(i) Beneficiaries. You will be entitled, to the extent applicable law permits, to select and
change the beneficiary or beneficiaries to receive any compensation or benefit payable hereunder
upon your death by giving the Company written notice thereof in a manner consistent with the terms
of any applicable plan documents. If you die, severance then due or other amounts due hereunder
will be paid to your designated beneficiary or beneficiaries, or, if none are designated or none
survive you, your estate.
(j) Withholding. The Company will be entitled to withhold, or cause to be withheld, any
amount of federal, state, city or other withholding taxes or other amounts either
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required by law or authorized by you with respect to payments made to you in connection with
your employment.
(k) Company Policies. References in the Agreement to Company policies and procedures are to
those policies as they may be amended from time to time by the Company.
(l) Governing Law. This Agreement must be construed, interpreted, and governed in accordance
with the laws of Maryland, without reference to rules relating to conflicts of law.
(m) Entire Agreement. This Agreement and any documents referred to herein represent the
entire agreement of the Parties and will supersede any and all previous contracts, arrangements or
understandings between the Company and you.
Signatures on Page Following
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and you have
hereunto set your hand, as of the day and year first above written, to be effective as of the
Effective Date.
| ARBITRON INC.: | ||||
By:
|
/s/ Xxxxxx Xxxxxxxxx
|
|||
| Chairman of the Board of Directors | ||||
| EXECUTIVE: | ||||
| /s/ Xxxxxxx X. Xxxx
|
||||
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