Document:

exv10w3

Exhibit 10.3

     Grant No.                

o          Participant’s Copy

o          Company’s Copy

Arbitron Inc.

2001 Broad Based Stock Incentive Plan

Performance-Based Restricted Stock Unit Agreement

To                     :

     Arbitron Inc. (the “Company”) has granted you (the “Grant”) restricted stock units (“RSUs”) as
set forth on Exhibit A to this Agreement (the “RSUs”) under its 2001 Broad Based Stock Incentive
Plan (the “Plan”), subject to the Vesting Schedule and requirements specified on Exhibit A.

     The Grant is subject in all respects to the applicable provisions of the Plan. This Agreement
does not cover all of the rules that apply to the Grant under the Plan, and the Plan defines any
capitalized terms in this Agreement that this Agreement does not define.

     In addition to the Plan’s terms and restrictions, the following terms and restrictions apply:

	 	 	 

	Vesting Schedule

	 	The Grant becomes nonforfeitable (“Vested”) as to some or all of the RSUs only as provided on Exhibit A.
	 
	 	 
	Distribution Dates

	 	You will receive a distribution of shares (the “Shares”) of Company common stock (“Common Stock”) equivalent
to your Vested RSUs as soon as practicable following the dates on which you become Vested (the “Distribution
Dates”) as provided in Exhibit A, subject to any overriding provisions in the Plan.
	 
	 	 
	Limited Status

	 	You understand and agree that the Company will not consider you a shareholder for any purpose with respect
to the Shares, unless and until the Shares have been issued to you on the Distribution Date(s). You will,
however, receive dividend equivalents (“Dividend Equivalent Rights”) with respect to the Vested RSUs,
measured using the Shares they represent, with the amounts convertible into full or fractional additional
Vested RSUs based on dividing the Dividend Equivalent Rights by the Fair Market Value (as defined in the
Plan) as of the date of dividend distribution and holding the resulting additional Vested RSUs for
distribution as provided for the RSUs with respect to which they were issued.
	 
	 	 
	Voting

	 	RSUs cannot be voted. You may not vote the Shares unless and until the Shares are distributed to you.
	 
	 	 
	Transfer 

Restrictions 

and

	 	You may not sell, assign, pledge, encumber, or otherwise transfer any
interest (“Transfer”) in the Shares until the Shares are distributed to you.
Any attempted Transfer that precedes the Distribution Date for such

 

 

	 	 	 

	Forfeiture

	 	Shares is invalid.
	 
	 	 
	 

	 	Unless the Administrator determines otherwise at any time or Exhibit A
provides otherwise, if your service with the Company terminates for any
reason before all of your RSUs are Vested, then you will forfeit such
unvested RSUs (and the Shares to which they relate) to the extent that such
RSUs do not otherwise vest as a result of the termination. The forfeited
RSUs will then immediately revert to the Company. You will receive no
payment for RSUs that you forfeit.
	 
	 	 
	 

	 	Your receipt of and retaining the RSUs and any Common Stock issued
thereunder are also subject to your compliance with the restrictive
covenants set out in Exhibit B to this award.
	 
	 	 
	Additional 

Conditions

	 	The Company may postpone issuing and delivering any Shares for so
long as the Company determines to be advisable to satisfy the following:
	to Receipt
	 	 
	 
	 	 
	 

	 	its completing or amending any securities registration or qualification of the Shares or its or your
satisfying any exemption from registration under any Federal or state law, rule, or regulation;

	 
	 	 
	 

	 	its receiving proof it considers satisfactory that a person or entity seeking to receive the Shares after
your death is entitled to do so;

	 
	 	 
	 

	 	your complying with any requests for representations under the Grant and the Plan; and

	 
	 	 
	 

	 	its or your complying with any federal, state, or local tax withholding obligations.

	 
	 	 
	Taxes and
Withholding

	 	The RSUs provide tax deferral, meaning that they are not taxable to you
until you actually receive Shares on or around each Distribution Date. You will then owe taxes at ordinary income
tax rates as of each Distribution Date at the Shares’ value.
	 
	 	 
	 

	 	The Company is required to withhold (in cash from salary or other amounts
owed you) the applicable percentage of the value of the Shares on the
Distribution Date, regardless of whether you sell them. If the Company does
not choose to do so, you agree to arrange for payment of the withholding
taxes and/or confirm that the Company is arranging for appropriate
withholding.
	 
	 	 
	Additional 

Representations 

from You

	 	If you receive Shares at a time when the Company does not have a
current registration statement (generally on Form S-8) under the Act that
covers issuances of Shares to you, you must comply with the following before the Company will release the
Shares to you. You must:

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	 	represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the
Shares for your
own account and not with a view to reselling or distributing the
Shares; and
	 
	 	 
	 

	 	agree that you will not sell, transfer, or otherwise dispose of the
Shares unless:
	 
	 	 
	 

	 	a registration statement under the Act is effective at the
time of disposition with respect to the Shares you propose to
sell, transfer, or otherwise dispose of; or

	 
	 	 
	 

	 	the Company has received an opinion of counsel or other
information and representations it considers satisfactory to
the effect that, because of Rule 144 under the Act or
otherwise, no registration under the Act is required.

	 
	 	 
	Additional 

Restriction

	 	You will not receive the Shares if issuing the Shares would violate any
applicable federal or state securities laws or other laws or regulations.
	 
	 	 
	No Effect on 

Employment 

or Other 

Relationship

	 	Nothing in this Agreement restricts the Company’s rights or those of any
of its affiliates to terminate your employment or other relationship at any
time, with or without cause. The termination of your relationship, whether
by the Company or any of its affiliates or otherwise, and regardless of the reason for such termination, has
the consequences provided for under the Plan and any applicable employment or severance agreement or plan.
	 
	 	 
	No Effect on 

Running Business

	 	You understand and agree that the existence of the RSU 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, debentures, preferred or other stock,
with preference ahead of or convertible into, or otherwise affecting the Company’s common stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether or not of a similar character to those
described above.
	 
	 	 
	Section 409A

	 	This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code and
must be construed consistently with that section. Notwithstanding anything in the Plan or this Agreement to
the contrary, if the Vested portion is increased in connection with your “separation from service” within the
meaning of Section 409A, as determined by the Company), other than due to death, and if (x) you are then a
“specified employee” within the meaning of Section 409A at the time of such separation from service (as
determined by the Company, by which determination you agree you are bound) and

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	 	(y) the payment under such
accelerated RSUs will result in the imposition of additional tax under Section 409A if paid to you within the
six month period following your
separation from service, then the payment under such accelerated RSUs will
not be made until the earlier of (i) the date six months and one day
following the date of your separation from service or (ii) the
10th day after your date of death, and will be paid within 10
days thereafter. Neither the Company nor you shall 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. In any
event, the Company makes no representations or warranty and shall have no
liability to you or any other person, 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.
	 
	 	 
	Unsecured 

Creditor

	 	This Agreement creates a contractual obligation on the part of the
Company to make payment under the RSUs credited to your account at the time provided
for in this Agreement. Neither you nor any other party claiming an interest in deferred
compensation hereunder shall have any interest whatsoever in any specific assets of the
Company. Your right to receive payments hereunder is that of an unsecured general creditor
of Company.
	 
	 	 
	Additional 

Restrictions

	 	Any acceleration, vesting, or extension under this Grant is subject, as
applicable, to the 280G provisions in Exhibit C hereto and to compliance with
any requirement that otherwise applies to you to provide a release of claims.
	 
	 	 
	Governing Law

	 	The laws of the State of Delaware will govern all matters relating to this
Agreement, without regard to the principles of conflict of laws.
	 
	 	 
	Notices

	 	Any notice you give to the Company must follow the procedures then in effect. If no
other procedures apply, you must send your notice in writing by hand or by mail to the
office of the Company’s Secretary. If mailed, you should address it to the Company’s
Secretary at the Company’s then corporate headquarters, unless the Company directs
participants to send notices to another corporate department or to a third party
administrator or specifies another method of transmitting notice. The Company and the
Administrator will address any notices to you at your office or home address as reflected on
the Company’s personnel or other business records. You and the Company may change the
address for notice by like notice to the other, and the Company can also change the address
for notice by general announcements to participants.

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	Plan Governs

	 	Wherever a conflict may arise between the terms of this Agreement and the terms
of the Plan, the terms of the Plan will control.

	 	 	 	 	 
	 	Arbitron Inc.

 	 
	Date:                                         	By:  	 	 
	 	 	 	 
	 	 	 	 

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ACKNOWLEDGMENT

     I acknowledge I received a copy of the Plan. I represent that I have read and am familiar
with the Plan’s terms. I accept the Grant subject to all of the terms and provisions of this
Agreement and of the Plan under which the Grant is made, as the Plan may be amended in accordance
with its terms. I agree to accept as binding, conclusive, and final all decisions or
interpretations of the Administrator concerning any questions arising under the Plan with respect
to the Grant.

	 	 	 	 	 
	 	 	 
	Date:                                         	  	 	 
	 	 	 
	 	 	Name:  	 	 
	 	 	 	 
	 

     No one may sell, transfer, or distribute the securities covered by the Grant without an
effective registration statement relating thereto or an opinion of counsel satisfactory to the
Company or other information and representations satisfactory to the Company that such registration
is not required.

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Grant No.                

Arbitron Inc.

2001 Broad Based Stock Incentive Plan

Performance-Based Restricted Stock Unit

Exhibit A

Recipient Information:

	 	 	 	 	 

	Name:

	 	 

	 	 
	 
	 	 	 	 
	Signature: X

	 	 
	 	 

Grant Information:

RSUs:                                                                  Date of Grant:    
                                                         

	 	 	 

	Vesting Schedule
	 	 
	 
	 	 
	Performance Condition

	 	The Grant will expire without Vesting if the one-year
performance goal (the “Performance Goal”) is not satisfied by the first
anniversary of the Date of Grant. The Compensation Committee will have the
full and sole discretion to determine whether the Company has met the
Performance Goal and how each of its components is calculated. The Performance
Goal is specified on Schedule I to this Exhibit A.

	 
	 	 
	Service Condition

	 	If the Performance Goal is met, the Grant
will become Vested as to one-fourth of the RSUs on
each of the four one year anniversaries of the
Date of Grant (each a “Vesting Date”), assuming
you remain a service provider to the Company
through those dates.

	 
	 	 
	Grant Expiration Rules

	 	Except as otherwise provided in an employment,
retention, or other individual agreement covering
you, you will forfeit any unvested portions of the
Grant immediately when you cease to be employed by
(or a member of the Board of) the Company for
reasons other than death or Disability or
Retirement. If your employment ends for death or
Disability, you will become fully Vested at that
date. If your employment ends on your Retirement,
you will continue to Vest in the Grant as though
you had remained employed and subject to
achievement of the Performance Goal.
	 
	 	 
	Definitions

	 	“Cause” will have the meaning set forth in any employment or other agreement or
policy applicable to you or, if no

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	 	such agreement or policy exists, will mean (i) dishonesty,
fraud, misrepresentation, theft, embezzlement or injury or
attempted injury, in each case related to the Company or any
Subsidiary, (ii) any unlawful or criminal activity of a
serious nature, (iii) any breach of duty, habitual neglect of
duty or unreasonable job performance, or (iv) any material
breach of any employment, service, confidentiality or
noncompete agreement entered into with the Company or any
Subsidiary.

	 
	 	 
	 

	 	“Disability” means your disability such as would entitle you
to receive disability income benefits pursuant to the
long-term disability plan of the Company or Subsidiary then
covering you or, if no such plan exists or is applicable to
you, your permanent and total disability within the meaning
of Section 22(e)(3) of the Code; provided, however, that the
disability must also comply with the requirements of Treas.
Reg. § 1.409A-3(i)(4).

	 
	 	 
	 

	 	“Retirement” means the termination (other than for Cause or
by reason of death or Disability) of your employment or other
service on or after the date on which you have attained the
age of 55 and have completed 10 years of continuous service
to the Company or any Subsidiary (such period of service to
be determined in accordance with the retirement/pension plan
or practice of the Company or Subsidiary then covering you,
provided that if you are not covered by any such plan or
practice, you will be deemed to be covered by the Company’s
plan or practice for purposes of this determination).

	 
	 	 
	Change of Control

	 	If a Change of Control Event (as defined in the Company’s 2008 Equity
Compensation Plan) occurs before the final Distribution Date and the Change of Control
Event also would be an event described in Treas. Reg. Section 1.409A-3(i)(5), any
unvested RSUs you then hold will Vest as provided in this paragraph. A Change of
Control Event that does not comport with that regulation will not cause full Vesting
unless otherwise permitted by Section 409A. Subject to the foregoing rules, if a
Change of Control Event occurs and the RSU is not assumed or replaced, it shall
immediately become fully Vested. Also subject to the foregoing rules, if the RSU is
assumed or replaced, Vesting fully accelerates if, within 24 months following the
closing of the Change of Control Event, the Company terminates your employment without
Cause or, if your employment or other individual agreement provides for resignation for
“Good Reason,” you resign for Good Reason during the same period.
	 
	 	 
	 

	 	If a Change of Control Event occurs before the first anniversary of
the Date of Grant, the Performance Goal will be deemed to have been
met.

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	Distribution Dates

	 	The Distribution Date for Shares will be the date the Company selects within 90
days following each applicable Vesting Date.

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Exhibit 10.4

Arbitron Inc. 2010 Board of Director Compensation

The Arbitron Non-Employee Board of Directors receive the following compensation for 2010:

	 	 	 

	Annual Retainer Fee

	 	$30,000
	 
	 	 
	Independent Chairman of the Board

Additional Annual Retainer

	 	$85,000
	 
	 	 
	Committee Chair Retainer

	 	Audit Committee: $20,000

Technology Strategy Committee:
	 

	 	$20,000

Growth Strategy Committee:
one-time
 grant of 15,000 stock
options

Other Committees: $10,000
	 
	 	 
	Board Meeting Fees (In person or by 

telephone)

	 	$1,500
	 
	 	 
	Committee Meeting Fees (In person)

	 	$1,500
	 
	 	 
	Committee Meeting Fees (By telephone)

	 	$750
	 
	 	 
	Initial Deferred Stock Unit Award

	 	Each newly elected non-employee
director will receive a
one-time grant of 4,500
deferred stock units, which
deferred stock units will vest
in three equal installments of
1,500 deferred stock units over
a three-year period and will be
payable no sooner than six
months following the director’s
termination of service as a
director of the Company.
	 
	 	 
	Annual Deferred Stock Unit Awards

	 	Beginning the annual meeting
after initial election to the
board of directors, each
continuing non-employee
director will receive an annual
grant of $100,000 worth of
deferred stock units, which
deferred stock units will vest
in three equal installments
over a three-year period and
will be payable no sooner than
six months following the
director’s termination of
service as a director of the
Company.

All cash retainer fees and meeting fees payable to non-employee directors may be paid, at the
election of each director, in the form of deferred stock units, in lieu of cash.

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