ARBITRON INC. EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.13
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made January 7, 2009 by and between Arbitron
Inc., a Delaware corporation (the “Company”), and Xxxxxxx X. Xxxxxxxxxx, 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 12, 2009 (the “Effective Date”), the Company will employ you
as President and Chief Executive Officer of the Company. You will report solely and directly to
the Board of Directors of the Company (the “Board”). You will have the responsibilities, duties
and authorities the Board specifies from time to time, which will be commensurate with the
president and chief executive officer of public entities of similar size and character. The Board
will appoint you as a Director in a special Board meeting before or as soon as practicable
following the Effective Date. For so long as you remain Chief Executive Officer of the Company,
the Board intends to nominate you to the Board and, if elected by the Company’s stockholders you
will serve in such capacity without additional consideration while employed. You will at all times
comply with all policies of the Company then in effect.
2. Commitment. During and throughout the Employment Term (as defined in Section 3 below), 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 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
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 discharge of your duties as the Chief
Executive Officer of the Company. You will perform your services under this Agreement at the
Company’s headquarters in Columbia, Maryland.
3. Employment Term. You are an at-will employee. Your employment with the Company under this
Agreement will begin on the Effective Date and will continue until your employment terminates (such
employment period, the “Employment Term”).
4. Cash and Stock Compensation.
(a) Base Salary. During your employment hereunder, you will receive a base salary at a
monthly rate of $41,666.67, annualizing to $500,000 (“Base Salary”). The Company
will pay your Base Salary in accordance with the Company’s regular payroll practices. The Board
will review your Base Salary no less frequently than annually. 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 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 with it is earned.
The Company will pay you the 2009 Annual Bonus in the minimum amount of $250,000 provided that you
are an employee in good standing as of December 31, 2009.
(c) Compensatory Stock Awards. Subject to the Compensation Committee’s approval, as soon as
administratively practicable on or following the Effective Date, the Company will grant you an
equity award to be valued at $1,250,000 on the date of grant, with the award divided by value into
50% stock options and 50% restricted stock units (where the value for the options is determined
using the Company’s standard Black-Scholes assumptions applied as of the date of grant and where
the value for the restricted stock units is determined by dividing the target value for the
restricted stock units by the Common Stock’s fair market value on the date of grant) (the
“Inducement Grant”), each with respect to the Company’s common stock, par value $0.50 (the “Common
Stock”). Subject to the Compensation Committee’s further approval, you will receive an additional
grant (the “First Year Grant”) prior to or in connection with the February 2009 grant cycle, valued
at $1,250,000 and divided into options and restricted stock units in the same manner as the
Inducement Grant but based on the fair market value of the Common Stock on the First Year Grant
date. Grants will be under the Company’s 1999 Stock Incentive Plan or 2008 Equity Compensation
Plan as the Compensation Committee selects (as applicable and with any successor plan, the “Stock
Plan”). Assuming continued employment, the options under the Inducement and First Year Grants will
each 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 same terms and
conditions as the Company’s standard form of nonqualified stock option agreement adopted for use
under the applicable Stock Plan, except as modified by this Agreement. Assuming continued
employment, the restricted stock units under the Inducement and First Year Grants will each 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) and otherwise will contain the same terms and conditions as the
Company’s standard form of restricted stock unit agreement adopted for use under the applicable
Stock Plan, except as modified by this Agreement. The Compensation Committee at its sole
discretion will consider the grant of additional compensatory stock awards to you no less
frequently than annually.
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(d) Relocation Expenses and Temporary Living Expenses. The Company directs you to work at its
Columbia, Maryland headquarters and will assist in relocation expenses. You agree that you will
use best efforts to relocate your primary residence during 2009. Providing that you relocate to a
residence in proximity to Columbia, Maryland, the Company will reimburse you for relocation
expenses and temporary living expenses up to a maximum of $300,000. The residual balance of
relocation expenses and temporary living expenses will expire if not used by December 31, 2010.
Qualified relocation and temporary living expenses will cover real estate commission fees and
transfer tax fees for the sale of your residence in New Jersey, moving costs, temporary housing
rental fees, moving costs, legal fees, inspection fees, mortgage financing fees for the purchase of
your new residence in proximity to the Company’s headquarters in Columbia, Maryland and applicable
gross-up for federal taxes. Without limiting the foregoing and notwithstanding any other provision
of this Agreement to the contrary, in no event will reimbursement for temporary housing rental fees
exceed $5,000 for any month. Any payments or expenses provided in this Section 4(d) will be paid
in accordance with Section 7(c). If your employment ends before December 31, 2010 (the “Relocation
Repayment Date”) as a result of your resignation or your termination for Cause, you agree to repay
a pro rata portion of the relocation expenses, with the proration determined based on the number of
days remaining between the date your employment ends and the Relocation Repayment Date as compared
with the total number of days between the Effective Date and the Relocation Repayment Date.
(e) Tax Preparation and Financial Planning. The Company will pay you an annual allowance of
$10,000 for tax preparation and financial planning. Any payments or expenses provided in this
Section 4(e) will be paid in accordance with Section 7(c).
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 Company
policies.
(b) Business Expenses. Upon submission of appropriate documentation in accordance with its
policies , the Company will promptly pay to 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).
(c) Paid Time Off. You will be entitled to paid time off in accordance with the standard
written policies of the Company with regard to executives.
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 due to
death or for any other reason or for no reason, you will be entitled to receive (in addition to any
compensation and benefits you are entitled to receive under Section 6(b) or 6(c) below): (i) any
earned but unpaid Base Salary through and including the date of termination of
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your employment, (ii) any earned but unpaid Annual Bonus, (iii) unreimbursed business expenses in
accordance with the Company’s policies; (iv) unpaid relocation or temporary living expenses
incurred as of such date (subject to the requirements of Section 4(d)); 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 Internal Revenue Code of 1986, as amended (“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 this
Section 6 of this Agreement.
(b) Termination Without Cause. If, during the Employment Term, the Company terminates your
employment without Cause (defined below), you will be entitled to the following severance benefits:
(i) Cash Severance. The Company will pay to you in cash (i) an amount equal to two
times your Base Salary, paid in equal installments over a 24 month period following the
Effective Release Date (as defined below) in accordance with the Company’s standard payroll
policies and procedures and in a manner not inconsistent with Section 7 hereof, and (ii) a
bonus component (the “Bonus Component”). If you are terminated without cause during 2009,
the Bonus Component will be $500,000. If, for subsequent years, the Annual Bonus for your
year of termination is determined by the Compensation Committee under a program intended to
qualify as performance-based for purposes of Section 162(m) of the Code (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, but without the exercise by the Compensation Committee of
negative discretion as provided in Treas. Reg. § 1.162-27(e)(2)(iii)(A) (with the
expectation, if all performance factors are satisfied, that the Bonus Component would be two
times Target Bonus). If the Annual Bonus for your year of termination is not intended to be
an Exempt Bonus, the Bonus Component will be two times Target Bonus paid in the timing
provided in Section 4(b) of this Agreement.
(ii) Benefits. The Company will also pay the full cost of the health care premiums
otherwise payable by you upon your election of health care continuation coverage for
yourself and your qualified beneficiaries as provided under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) until the earlier of 18 months or your ceasing to
qualify for COBRA coverage (such as by obtaining subsequent coverage).
(iii) Release. To receive any severance benefits provided for under this Agreement or
otherwise, you must deliver to the Company of a general release of claims on the form the
Company provides, which must become irrevocable within 60 days following the date of your
termination of employment. Benefits will be paid or commence no later than 30 days after
such release becomes effective (except for delays described above for the Bonus Component);
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 commence no earlier than January 1 of such subsequent calendar year. The
date on which your release of claims
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becomes effective is the “Effective Release Date.” You must continue to comply with the
covenants under Sections 8 and 9 below to continue to receive severance benefits.
(c) Change in Control. If, within 12 months following a Change in Control, your employment
ends on a termination without Cause, in addition to the compensation and benefits described in
Section 2(b)(i) and (ii) above and subject to the release required under Section 2(b)(iii), any
outstanding equity compensation awards will fully and immediately vest and, as applicable, become
exercisable, provided that the Board will have the right to suspend exercises or sales with respect
to such equity compensation pending satisfaction of the release requirement, and provided that the
vesting will not accelerate the distribution of shares underlying equity awards if such
acceleration would trigger taxation under Section 409A(a)(1)(B). The treatment in this Section
6(c) applies notwithstanding any contrary provisions in the applicable Stock Plan or any award
agreement. For the purpose of this Agreement, “Change of Control” means:
(i) consummation of a merger or consolidation to which the Company is a party if the
individuals and entities who were stockholders of the Company immediately before the
effective date of such merger or consolidation have beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) of less than 50% of the total combined voting power for
election of directors of the surviving Company immediately following the effective date of
such merger or consolidation; or
(ii) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) in the aggregate of securities of the Company representing 51% or more of the
total combined voting power of the Company’s then issued and outstanding securities by any
person or entity, or group of associated persons or entities acting in concert; provided,
however, that for purposes hereof, any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by the Company
will not constitute a Change of Control; or
(iii) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) in the aggregate of securities of the Company representing 25% or more of the
total combined voting power of the Company’s then issued and outstanding securities by any
person or entity, or group of associated persons or entities acting in concert if such
acquisition is not approved by the Board before any such acquisition; provided, however ,
that for purposes hereof, any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the Company will not
constitute a Change of Control; or
(iv) consummation of the sale of the properties and assets of the Company,
substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary
of the Company; or
(v) the liquidation of the Company is consummated; or
(vi) a change in the composition of the Board at any time during any consecutive
24-month period such that the Continuity Directors cease for any reason to constitute at
least a 70 % majority of the Board. For purposes of this clause, “Continuity
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Directors” means those members of the Board who either (A) were directors at the
beginning of such consecutive 24-month period, or (B) were elected by, or on the nomination
or recommendation of, at least a two-thirds majority of the then-existing Board.
(d) Termination for Cause.
(i) General. If, during the Employment Term, the Company terminates your employment
for Cause, you will be entitled only to the payments described in Section 6(a) (excluding,
on a termination for Cause, clause (ii) of Section 6(a)). You will have no further right to
receive any other compensation or benefits after such termination or resignation of
employment, except as determined in accordance with the terms of the employee benefit plans
or programs of the Company or as required by law.
(ii) 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; 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.
(e) 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 duties as President and Chief Executive Officer of the Company for a continuous period in
excess of 180 days. Employment termination under this subsection is not covered by Section 6(b) or
6(c).
(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. You hereby irrevocably appoint the Company to be your attorney to
execute any documents to effect your ceasing to serve as a director and officer of the Company and
any subsidiary, 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 clause 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.
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7. Effect of Section 409A of the Code.
(a) Six Month Delay. 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 on such New Payment Date, 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 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 the Agreement will, to the
extent practicable, be construed in accordance therewith. Terms defined in the 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 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
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 during a calendar year may
not affect the expenses eligible for reimbursement in any other calendar year.
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. If
you leave the Company’s employ, 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, or the utility or
value of which is not generally known or recognized as standard practice, including:
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(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 being proprietary, private or
confidential, whether or not 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 the 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 written jointly or singly on Company time or on your own time, providing 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
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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 you
leave the Company’s employ, 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) Your Declaration. Except as provided in this subsection, you have no inventions, data
bases, improvements, discoveries, software, writings or other works of authorship useful to the
Company in the normal course of business that you conceived, made or wrote before the date of this
Agreement and that are excluded from this Agreement. The excepted invention is your US Patent
20050068938 covering Internet Enhanced Cordless Phone (the “Patent”). If the Board determines in
reasonable exercise of its business judgment that the Patent is necessary or convenient for the
operation of the Company’s business in the ordinary course you agree to negotiate in good faith,
and to seek agreement with your two co-patent holders in such negotiations with the Company
regarding a world-wide, non-exclusive, royalty-free license covering the Company’s use of the
Patent.
(f) Survival. The obligations of this Section 8 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 the President and
Chief Executive Officer of the Company and will be a key executive of the Company, (b) you 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 the longest of 12 months following the
cessation of employment for any reason not covered by Section 6(b) or 6(c), 18 months if
Section 6(b) applies, and 24 months if Section 6(c) applies (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
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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 not less than one third of the voting equity. For purposes of
this Section 9, competitors of the Company currently include but are not limited to GfK AG,
IMM, Inc., The Xxxxxxx Company B.V., Xxxxxx Xxxxxx Sofres PLC, 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.
(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 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.
(iv) If you fail to provide notice to the Company under Section 9(b)(iii) and/or in any
way violate your non-competition obligation under Section 9(b), the Company may enforce all
of its rights and remedies provided to it under this Agreement, in law and in equity,
without the requirement to post a bond, and you will be deemed to have expressly waived any
rights you may have had to payments under Sections 6(b) or 6(c) or acceleration under
Section 6(c).
(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) Mutual 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. The Company’s officers and directors will not, during your
employment or after the termination or expiration of this Agreement, make disparaging statements,
in any form, about you that they know, or have reason to believe, are false or misleading.
(e) Survival. The obligations of this Section 9 survive the expiration or termination of this
Agreement and your employment.
10. Miscellaneous.
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(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 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
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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 you and will inure to the benefit of
(i) your heirs, beneficiaries, executors and legal representatives upon your death and (ii) 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. As used herein, “successor” will mean any firm, 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(g) 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 consistent with the rules for transfers to
“family members” as defined in Securities Act Form S-8. 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.
(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 of
the Board.
(g) Survivorship. The respective rights and obligations of Company and you hereunder will
survive any termination of your employment to the extent necessary to the intended preservation of
such rights and obligations.
(h) 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.
(i) 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 required by law
or authorized by you with respect to payments made to you in connection with your employment
hereunder.
(j) 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.
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(j) 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.
(k) 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/ Xxxxxxx X. Xxxx
|
|||
| Xxxxxxx X. Xxxx | ||||
| Chair of Compensation and Human Resources Committee | ||||
| EXECUTIVE: | ||||
| /s/ Xxxxxxx X. Xxxxxxxxxx
|
||||
| Xxxxxxx X. Xxxxxxxxxx | ||||
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