ARBITRON INC. 2008 EQUITY
COMPENSATION PLAN
NON-STATUTORY STOCK OPTION AGREEMENT
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 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 Initial
Period of Exercisability . Except as provided in
Sections 3.2 and 3.3 hereof, the Option shall become
exercisable with respect to one-third of the Option Shares on each
of the first, second and third anniversaries of the Date of Grant,
assuming the Optionee’s continued employment. The foregoing
rights to exercise the Option will be cumulative with respect to
the Option Shares becoming exercisable on each such date, but in no
event will the Option be exercisable after, and 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”).
3.2 Termination
of Employment .
(a) Termination
Due to Death, Disability, or Retirement . In the event the
Optionee’s employment with the Company and all Subsidiaries
is terminated by reason of death or disability or ends with
Retirement, the Option will become immediately exercisable in full
and remain
exercisable
until the [earlier of the first anniversary of such employment
termination or the] Time of Option Termination.
(b) Termination
for Reasons Other Than Death, Disability, or Retirement . In
the event that the Optionee’s employment with the Company and
all Subsidiaries is terminated for any reason other than death,
disability, or Retirement or the Optionee is in the employ of a
Subsidiary and the Subsidiary ceases to be a Subsidiary of the
Company (unless the Optionee continues in the employ of the Company
or another Subsidiary), all rights of the Optionee under the Plan
and this Agreement will immediately terminate without notice of any
kind, and the Option will no longer be exercisable; provided,
however, that, if such termination is due to any reason other than
termination by the Company or any Subsidiary for Cause (as defined
in Section 9 of this Agreement), the Option will remain
exercisable to the extent exercisable as of such termination for a
period of three months after such termination (but in no event
after 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 the Option
will become exercisable as provided in any then applicable
employment or retention agreement by and between the Company and
the Optionee and will remain exercisable until the first
anniversary of the date the Option becomes exercisable, if at
all, 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 3.3, and the Committee will have the authority, in its
sole discretion, to rescind, modify, or amend this Section 3.3
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.
2
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 described
in Section 5(f)(2) of the Plan, by such other method approved
by the Committee, or by a combination of such methods.
5. Rights
and Restrictions of Optionee; Transferability .
5.1
Employment . Nothing in this Agreement will interfere with
or limit in any way the right of the Company or any Subsidiary to
terminate the employment of the Optionee at any time, nor confer
upon the Optionee any right to continue in the employ of the
Company or any Subsidiary at any particular position or rate of pay
or for any particular period of time.
5.2 Rights as a
Stockholder; Effect on Running the Business . The Optionee will
have no rights as a stockholder unless and until all conditions to
the effective exercise of the Option (including, without
limitation, the conditions set forth in Sections 4 and 6 of
this Agreement) have been satisfied and the Optionee has become the
holder of record of such shares. No adjustment will be made for
dividends or distributions with respect to the Option Shares as to
which there is a record date preceding the date the Optionee
becomes the holder of record of such Option Shares, except as may
otherwise be provided in the Plan or determined by the Committee in
its sole discretion. The Optionee understands and agrees that the
existence of an Option will not affect in any way the right or
power of the Company or its stockholders to make or authorize any
adjustments, recapitalizations, reorganizations, or other changes
in the Company’s capital structure or its business, or any
merger or consolidation of the Company, or any issuance of
bonds
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