ARBITRON INC. 2008 EQUITY
COMPENSATION PLAN
NON-STATUTORY STOCK OPTION AGREEMENT
Annual Director Grant
THIS AGREEMENT
evidences the grant by Arbitron Inc. (the “Company”) on
, 20___(the “Date of Grant”) to [Name] (the
“Optionee”) of an option to purchase shares of the
Company’s common stock.
A. The
Company has adopted the Arbitron Inc. 2008 Equity Compensation Plan
(as may be amended or supplemented, the “Plan”)
authorizing the Board of Directors of the Company, or a committee
as provided for in the Plan (the Board or such a committee to be
referred to as the “Committee”), to grant stock options
to employees and directors of the Company and its Subsidiaries (as
defined in the Plan).
B. The
Company desires to give the Optionee an inducement to acquire a
proprietary interest in the Company and an added incentive to
advance the interests of the Company by granting to the Optionee an
option to purchase shares of common stock of the Company pursuant
to the Plan.
Accordingly, the
parties agree as follows:
The Company has
granted to the Optionee the right, privilege and option (the
“Option”) to purchase [Shares] shares (the
“Option Shares”) of the Company’s common stock,
$0.50 par value (the “Common Stock”), according to the
terms and subject to the conditions hereinafter set forth and as
set forth in the Plan. The Option is not intended to be an
incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the
“Code”).
2. Option
Exercise Price .
The per share
price to be paid by Optionee in the event of an exercise of the
Option will be $___ .
3. Duration
of Option and Time of Exercise .
3.1 Period of
Exercisability . The Option shall become exercisable as to 100%
of the Option Shares on the six month anniversary of the Date of
Grant, assuming the Optionee’s continued service on the Board
or service as an employee through such six month anniversary. The
Option will become void and expire as to all unexercised Option
Shares at, 5:00 p.m. (Eastern Standard Time) on the tenth
anniversary of the Date of Grant (the “Time of Option
Termination”).
(a) Impact of
Change in Control . If a Change in Control Event (as defined in
Section 9 of this Agreement) of the Company occurs before the
Option is fully exercisable, the Option will become fully
exercisable and will remain exercisable, except as the Committee determines otherwise in
connection with the Change in Control Event. In addition, if a
Change in Control Event of the Company occurs, the Committee, in
its sole discretion and without the consent of the Optionee, may
determine that the Optionee will receive, with respect to some or
all of the Option Shares, as of the effective date of any such
Change in Control Event of the Company, cash in an amount equal to
the excess of the Fair Market Value (as defined in the Plan) of
such Option Shares as determined by taking into account such Change
in Control Event of the Company over the option exercise price per
share of the Option.
(b) Authority
to Modify Change in Control Provisions . Prior to a Change in
Control Event, the Optionee will have no rights under this
Section 3.2, and the Committee will have the authority, in its
sole discretion, to rescind, modify, or amend this Section 3.2
without the consent of the Optionee.
4. Manner of
Option Exercise .
4.1 Notice
. This Option may be exercised by the Optionee in whole or in part
from time to time, subject to the conditions contained in the Plan
and in this Agreement, by delivery, in person, by facsimile or
electronic transmission or through the mail, to the Company at its
principal executive office in Columbia, Maryland (Attention:
Corporate Secretary), of a written notice of exercise. Such notice
must be in a form satisfactory to the Committee, must identify the
Option, must specify the number of Option Shares with respect to
which the Option is being exercised, and must be signed by the
person or persons so exercising the Option. In the event that the
Option is being exercised, as provided by the Plan and
Section 3.2 of this Agreement, by any person or persons other
than the Optionee, the notice must be accompanied by appropriate
proof of right of such person or persons to exercise the Option. If
the Optionee retains the Option Shares purchased, as soon as
practicable after the effective exercise of the Option, the
Optionee will be recorded on the stock transfer books of the
Company as the owner of the Option Shares purchased.
4.2 Payment
. At the time of exercise of the Option, the Optionee must pay the
total exercise price of the Option Shares to be purchased entirely
in cash (including a check, bank draft or money order, payable to
the order of the Company), though a cashless exercise as
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