ARBITRON INC. Form of Restricted Stock Unit Agreement Granted Under the 1999 Stock Incentive Plan
Exhibit 10.2
Form of Restricted Stock Unit Agreement
Granted Under the 1999 Stock Incentive Plan
Granted Under the 1999 Stock Incentive Plan
AGREEMENT made between Arbitron Inc., a Delaware corporation (the “Company”), and
(the “Participant”).
For valuable consideration, receipt of which is acknowledged, the parties hereto agree as
follows:
1. Grant of RSUs.
On
, 20 (the “Date of Grant”) and subject to the terms and
conditions set forth
in this Agreement and in the Arbitron Inc. 1999 Stock Incentive Plan (the “Plan”), the Company has
granted to the Participant Restricted Stock Units (“RSUs”) providing the right to receive ( )
shares of common stock, $0.50 par value, of the Company (the “Shares”).
2. Vesting and Forfeiture.
(a) While the Participant remains employed, the RSUs shall vest in four (4) equal
annual installments commencing on the first anniversary of the Date of Grant, with an
additional one fourth vesting on each of the second, third, and fourth anniversaries of the
Date of Grant, subject to earlier vesting under subsection (b). The date upon which each
installment vests shall be considered a “Vesting Date” for the portion of the RSUs vesting
on that date.
(b) The Vesting Date for all unvested RSUs shall be accelerated, if applicable, to the
earliest of:
(i) The death of the Participant;
(ii) The “Disability” of the Participant (within the meaning of Proposed
Treasury Regulation Section 1.409A-3(g)(4) or any successor regulation); and
(iii) A “Change in Control” consisting of a change in ownership or effective
control of the Company (within the meaning of Proposed Treasury Regulation Section
1.409A-3(g)(5) or any successor regulation).
(c) If the Participant ceases to be employed by the Company (and any applicable
Subsidiaries) for any reason or no reason (except for death or Disability), the Participant
shall immediately and automatically forfeit all rights to any of his or her RSUs that have
Vesting Dates after the date employment ends except as an applicable employment agreement
or executive retention agreement may provide to the contrary.
3. Issuance of Shares.
Subject to the terms and conditions of this Agreement (including any Withholding Tax
obligations), as soon as practicable after a Vesting Date, the Company shall issue one or more
certificates representing the newly vested Shares to the Participant or his or her estate, or, as
directed by the Participant, a brokerage account. The Company must, in any event, issue the
applicable Shares no later than the later of (i) December 31 of the calendar year in which the
Vesting Date occurs and (ii) the fifteenth day of the third calendar month following the Vesting
Date. Until the Vesting Date, the Participant shall have no rights to any Shares or any rights
associated with such Shares, including without limitation dividend or voting rights.
4. Acceleration/ Deferral.
(a) Acceleration. In no event may the Company deliver the Shares to the
Participant earlier than an applicable Vesting Date.
(b) Deferral. In no event may the Company or the Participant defer the delivery
of the Shares beyond the date specified in Section 3 of this Agreement, unless such deferral
complies in all respects with Proposed Treasury Regulation Section 1.409A-2(b) related to
subsequent changes in the time or form of payment of nonqualified deferred compensation
arrangements, or any successor regulation.
5. Dividend Equivalent Rights.
The Participant shall receive Dividend Equivalent Rights on the Shares between the applicable
Vesting Date and the date on which Shares are distributed. “Dividend Equivalent Rights” mean a
credit to the account of the Participant, based on the number of vested RSUs then credited to the
Participant under this Agreement, equivalent to the cash, stock or other property dividends on
shares of Common Stock. Dividend Equivalent credits shall be deemed reinvested in additional RSUs
(or fractions thereof) by dividing the dollar amount of the Dividend Equivalent credit by the Fair
Market Value of a share of the Company’s common stock on the payment date of the dividend. The
resulting number of Common Stock equivalents shall be added to the number of RSUs subject to this
Agreement.
6. Restrictions Regarding Employment.
(a) The Participant agrees that he or she will not take any Adverse Actions (as defined
below) against the Company or any Subsidiary from the Date of Grant through the first
anniversary of the Participant’s termination of employment with the Company or any
Subsidiary (the “Restricted Period”). The Participant acknowledges that damages that may
arise from a breach of this Section 6 may be impossible to ascertain or prove with
certainty. Notwithstanding anything in this Agreement or the Plan to the contrary, if the
Company determines in its sole discretion that the Participant has taken Adverse Actions
against the Company or any Subsidiary at any time during the Restricted Period, in addition
to other legal remedies that may be available, (i) the Company will be entitled to an
immediate injunction from a court of competent jurisdiction to end such Adverse
Action, without further proof of damage, (ii) the Committee will have the authority in
its sole discretion to terminate immediately all rights of the Participant under the Plan
and
- 2 -
this Agreement without notice of any kind, and (iii) the Committee will have the authority
in its sole discretion to cause a forfeiture of any Shares acquired by the Participant upon
the vesting of the RSUs to the extent that such vesting occurred within six months prior to
the date the Participant first commences any such Adverse Actions and require the
Participant to disgorge any profits (however defined by the Committee) realized by the
Participant relating to such vested portion of the Shares. Such disgorged profits paid to
the Company must be made in cash (including check, bank draft or money order) or, with the
Committee’s consent, shares of Common Stock with a Fair Market Value on the date of payment
equal to the amount of such payment. The Company will be entitled to withhold and deduct
from future wages of the Participant (or from other amounts that may be due and owing to the
Participant from the Company or a Subsidiary) or make other arrangements for the collection
of all amounts necessary to satisfy such payment obligation.
(b) For purposes of this Agreement, an “Adverse Action” will mean any of the following:
(i) engaging in any commercial activity in competition with any part of the business of the
Company or any Subsidiary as conducted during the Restricted Period for which the
Participant has or had access to trade secrets and/or confidential information; (ii)
diverting or attempting to divert from the Company or any Subsidiary any business of any
kind, including, without limitation, interference with any business relationships with
suppliers, customers, licensees, licensors, clients or contractors; (iii) participating in
the ownership, operation or control of, being employed by, or connected in any manner with
any person or entity that solicits, offers or provides any services or products similar to
those that the Company or any Subsidiary offers to its customers or prospective customers,
(iv) making, or causing or attempting to cause any other person or entity to make, any
statement, either written or oral, or conveying any information about the Company or any
Subsidiary that is disparaging or that in any way reflects negatively on the Company or any
Subsidiary; or (v) engaging in any other activity that is hostile, contrary or harmful to
the interests of the Company or any Subsidiary, including, without limitation, influencing
or advising any person who is employed by or in the service of the Company or any Subsidiary
to leave such employment or service with the Company or any Subsidiary or to enter into the
employment or service of any actual or prospective competitor of the Company or any
Subsidiary, influencing or advising any competitor of the Company or any Subsidiary to
employ to otherwise engage the services of any person who is employed by or in the service
of the Company or any Subsidiary, or improperly disclosing or otherwise misusing any trade
secrets or confidential information regarding the Company or any Subsidiary.
(c) Should any provision of this Section 6 of the Agreement be held invalid or illegal,
such illegality shall not invalidate the whole of this Section 6 of the Agreement, but,
rather, the Agreement shall be construed as if it did not contain the illegal part or
narrowed to permit its enforcement, and the rights and obligations of the parties shall be
construed and enforced accordingly. In furtherance of and not in limitation of the
foregoing, the Participant expressly agrees that should the duration of or business
activities covered by, any provision of this Agreement be in excess of that which is valid
or enforceable under applicable law, then such provision shall be construed to cover only
that duration, extent or activities that may validly or enforceably be covered. The
Participant acknowledges the uncertainty of the law in this respect and expressly
stipulates that this Agreement shall be construed in a manner that renders its provisions
valid and enforceable to the maximum extent (not exceeding its express terms) possible under
applicable law. This Section 6 of the Agreement does not replace and is in addition to any
other agreements the Participant may have with the Company or any of its Subsidiaries on the
matters addressed herein.
- 3 -
7. Transferability.
This Agreement may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of (whether by operation of law or otherwise) (collectively, a “transfer”), except that
this Agreement may be transferred by the laws of descent and distribution or as otherwise permitted
under the Plan. The Participant may only transfer the Shares that may be issued pursuant to this
Agreement following a Vesting Date that covers them.
8. Withholding Taxes.
(a) The Participant has reviewed with the Participant’s own tax advisors the federal,
state, local and foreign tax consequences of this investment and the transactions
contemplated by this Agreement. The Participant is relying solely on such advisors and not
on any statements or representations of the Company or any of its agents.
(b) The Company’s obligation to deliver Shares to the Participant upon the vesting of
the RSUs shall be subject to the satisfaction of all income tax (including federal, state
and local taxes), social insurance, payroll tax, payment on account or other tax related
withholding requirements (“Withholding Taxes”).
(c) The Participant acknowledges and agrees that the Company has the right to deduct
from payments of any kind otherwise due to the Participant any Withholding Taxes to be
withheld with respect to the transactions contemplated by this Agreement, including the
vesting of the Shares.
9. Securities Laws.
Notwithstanding any other provision of the Plan or this Agreement, the Company will not be
required to issue, and the Executive may not sell, assign, transfer or otherwise dispose of, any
shares of Common Stock received as payment of the RSUs, unless (a) there is in effect with respect
to the shares of Common Stock received as payment of the RSUs a registration statement under the
Securities Act of 1933, as amended, and any applicable state or foreign securities laws or an
exemption from such registration, and (b) there has been obtained any other consent, approval or
permit from any other regulatory body that the Committee, in its sole discretion, deems necessary
or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of any legends on
certificates representing Common Stock received as payment of the RSUs, as may be deemed necessary
or advisable by the Company to comply with such securities law or other restrictions.
- 4 -
10. Adjustments.
In the event of any reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture
or extraordinary dividend (including a spin-off), or any other change in the corporate structure or
shares of the Company, the Committee (or, if the Company is not the surviving corporation in any
such transaction, the board of directors of the surviving corporation), in order to prevent
dilution or enlargement of the rights of the Grantee, shall make equitable adjustments (which
adjustments will be conclusive) as to the number and kind of securities or other property
(including cash) covered by this grant of RSUs.
11. Provisions of the Plan.
This Agreement is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this Agreement. Any undefined terms are defined in the Plan.
12. Miscellaneous.
(a) Section 409A. This Agreement is intended to comply with the requirements of
Section 409A of the Internal Revenue Code and shall be construed consistently therewith.
(b) Unsecured Creditor. This Agreement shall create a contractual obligation on
the part of Company to make payment of the RSUs credited to the account of the Participant
at the time provided for in this Agreement. Neither the Participant nor any other party
claiming an interest in deferred compensation hereunder shall have any interest whatsoever
in any specific assets of the Company. The Executive’s right to receive payments hereunder
shall be that of an unsecured general creditor of Company.
(c) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, and each other provision of this Agreement shall be severable and enforceable to
the extent permitted by law.
(d) Waiver. Any provision for the benefit of the Company contained in this
Agreement may be waived, either generally or in any particular instance, by the Board of
Directors of the Company or the Committee.
(e) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Participant and their respective heirs, executors,
administrators, legal representatives, successors and assigns, subject to the restrictions
on transfer set forth in Section 7 of this Agreement.
(f) Notice. All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five calendar days after deposit in the
United States Post Office, by registered or certified mail, postage prepaid, addressed to
the other party hereto at the address shown beneath his, her, or its respective
signature to this Agreement, or at such other address or addresses as either party shall
designate to the other in accordance with this Section 12(f).
- 5 -
(g) Entire Agreement. This Agreement and the Plan constitute the entire
agreement between the parties, and supersedes all prior agreements and understandings,
relating to the subject matter of this Agreement.
(h) Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Participant.
(i) Governing Law. This Agreement shall be construed, interpreted and enforced
in accordance with the internal laws of the State of Delaware without regard to any
applicable conflicts of laws.
(j) Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to participation in the Plan, RSUs granted under the Plan or
future RSUs that may be granted under the Plan by electronic means or to request the
Participant’s consent to participate in the Plan by electronic means. The Participant hereby
consents to receive such documents by electronic delivery and, if requested, to agree to
participate in the Plan through an on-line or electronic system established and maintained
by the Company or another third party designated by the Company.
(k) Participant’s Acknowledgments. The Participant acknowledges that he or she:
(i) has read this Agreement; (ii) has been represented in the preparation, negotiation and
execution of this Agreement by legal counsel of the Participant’s own choice or has
voluntarily declined to seek such counsel; (iii) understands the terms and consequences of
this Agreement; (iv) is fully aware of the legal and binding effect of this Agreement; and
(v) understands that the law firm of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP is acting as
counsel to the Company in connection with the transactions contemplated by the Agreement,
and is not acting as counsel for the Participant.
- 6 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date last
indicated below.
| ARBITRON INC. | ||||||||
Date:
|
By: | |||||||
| Name: | ||||||||
| Title: | ||||||||
Date:
|
By: | |||||||
| [Name of Participant] | ||||||||
- 7 -
