10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X]    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2001

Or

[  ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to _________

Commission file number: 1-1969

ARBITRON INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware	52-0278528
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

142 West 57^th Street
New York, New York 10019
(Address of principal executive offices) (Zip Code)
(212) 887-1300
(Registrant’s telephone number, including area code)

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

      The registrant had 29,163,942 shares of Common stock, par value $0.50 per share, outstanding as of April 30, 2001.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
	Item 1. Financial Statements
		Consolidated Balance Sheets – March 31, 2001 and December 31, 2000
		Consolidated Statements of Income – Three months ended March 31, 2001 and 2000
		Consolidated Statements of Cash Flows – Three months ended March 31, 2001 and 2000
		Notes to Consolidated Financial Statements – March 31, 2001
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosure of Market Risk
PART II – OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K
Signature
Ex-10.3 Amendment to Personnel Agreement
Ex-10.8 Amendment to Credit Agreement
Ex-10.12 401(k) Plan
Ex-10.13 Executive Investment Plan
Ex-10.14 Broad Based Stock Incentive Plan
Ex-10.15 Executive Employment Agreement
Ex-10.16 Form of Indemnification Agreement

ARBITRON INC.

INDEX

				Page No.
PART I – FINANCIAL INFORMATION
	Item 1. Financial Statements
		Consolidated Balance Sheets – March 31, 2001 and
			December 31, 2000		3
		Consolidated Statements of Income – Three months
			ended March 31, 2001 and 2000		4
		Consolidated Statements of Cash Flows – Three months
			ended March 31, 2001 and 2000		5
		Notes to Consolidated Financial Statements – March 31, 2001			6
	Item 2. Management’s Discussion and Analysis of Financial
			Condition and Results of Operations		10
	Item 3. Quantitative and Qualitative Disclosure of Market Risk				14
PART II – OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K				15
Signature					17

2

PART I —FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARBITRON INC.
Consolidated Balance Sheets
March 31, 2001 and December 31, 2000
(In thousands)

			March 31,			December 31,
			2001			2000 (1)
			(unaudited)
Assets
Current assets
	Cash		$	25,000		$	3,540
	Trade accounts receivable, net of allowance for doubtful
		accounts of $1,052 in 2001 and $1,076 in 2000		17,367			19,017
	Deferred tax assets			26,612			34,731
	Prepaid expenses and other current assets			3,854			3,056
		Total current assets		72,833			60,344
Investments in affiliates				8,038			10,262
Property and equipment, net				5,677			4,844
Goodwill and other intangibles, net				13,250			13,849
Deferred tax assets				16,052			16,346
Other noncurrent assets				5,109			2,231
		Total assets	$	120,959		$	107,876
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
	Trade accounts payable		$	3,976		$	8,758
	Accrued expenses and other current liabilities			11,280			15,543
	Deferred revenue			36,041			47,833
		Total current liabilities		51,297			72,134
Noncurrent liabilities
	Long-term debt			250,000			—
	Other noncurrent liabilities			2,447			2,520
		Total liabilities		303,744			74,654
Stockholders’ equity (deficit)
	Common stock, $0.50 par value, authorized
		500,000 shares, issued 32,337 shares		16,169			—
	Additional paid-in-capital			58,328			—
	Common stock held in Treasury, 3,173 shares			(1,587	)		—
	Net (distributions to) investment of Ceridian Corporation			(255,318	)		33,361
	Accumulated other comprehensive loss			(377	)		(139	)
		Total stockholders’ equity (deficit)		(182,785	)		33,222
		Total liabilities and stockholders’ equity (deficit)	$	120,959		$	107,876

See notes to consolidated financial statements.

(1) Amounts derived from audited combined financial statements as of December 31, 2000.

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ARBITRON INC.
Consolidated Statements of Income
Three months ended March 31, 2001 and 2000
(In thousands, except per share data)
(Unaudited)

			Three Months Ended
			March 31,
			2001			2000
Revenue			$	60,190		$	55,533
Costs and expenses
	Cost of revenue			15,873			16,072
	Selling, general and administrative			11,214			10,722
	Research and development			4,696			3,301
		Total costs and expenses		31,783			30,095
Operating income				28,407			25,438
	Equity in net loss of affiliate			(1,123	)		(1,124	)
Income before interest and income tax expense				27,284			24,314
	Interest income			19			—
	Interest expense			(386	)		—
Income before income tax expense				26,917			24,314
	Income tax expense			10,622			9,604
Net income			$	16,295		$	14,710
Pro forma net income per weighted average
	common share
	Basic		$	0.56		$	0.51
	Diluted		$	0.56		$	0.51
Pro forma common shares used in calculations
	Basic weighted average common shares			29,158			28,957
	Potentially dilutive securities			153			148
		Diluted weighted average common shares		29,311			29,105

See notes to consolidated financial statements.

4

ARBITRON INC.
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2001 and 2000
(In thousands)
(Unaudited)

					Three Months Ended
					March 31,
					2001			2000
Cash flows from operating activities
	Net income				$	16,295		$	14,710
	Adjustments to reconcile net income to net cash provided
		by operating activities:
			Depreciation and amortization of property and equipment			476			475
			Other amortization			599			600
			Deferred income taxes			10,622			2,918
			Equity in net loss of affiliate			1,123			1,124
			Distributions from affiliate			1,101			750
			Bad debt expense			38			61
			Changes in operating assets and liabilities
				Trade accounts receivable		1,669			5,122
				Prepaid expenses and other assets		(688	)		(404	)
				Trade accounts payable		(4,804	)		1,128
				Accrued expenses and other current liabilities		(2,770	)		(3,898	)
				Deferred revenue		(11,796	)		(7,965	)
				Other noncurrent liabilities		(73	)		(119	)
				Net cash provided by operating activities		11,792			14,502
Cash flows from investing activities
	Additions to property and equipment					(1,461	)		(627	)
	Proceeds from disposals of property and equipment					40			—
		Net cash used in investing activities				(1,421	)		(627	)
Cash flows from financing activities
	Proceeds from issuance of long-term debt					250,000			—
	Payment of deferred financing costs					(2,983	)		—
	Net cash distributions to Ceridian Corporation					(235,958	)		(13,761	)
		Net cash provided by (used in) financing activities				11,059			(13,761	)
Effect of exchange rate changes on cash						30			—
Net increase in cash						21,460			114
Cash at beginning of period						3,540			2,255
Cash at end of period					$	25,000		$	2,369

See notes to consolidated financial statements.

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ARBITRON INC.
Notes to Consolidated Financial Statements
March 31, 2001
(In thousands, except per share data)
(Unaudited)

1. Basis of Presentation and Consolidation

Presentation

      On March 30, 2001, Ceridian Corporation (“Ceridian”) separated into two independent, publicly traded companies — New Ceridian Corporation (“New Ceridian”) and Arbitron Inc. (“Arbitron” or the “Company”). The separation was accomplished through a tax-free spin-off to the shareholders of Ceridian (the “Spin-off”) of all of the shares of common stock of a newly formed, wholly owned subsidiary corporation (New Ceridian). In connection with the Spin-off, Ceridian completed an internal reorganization so that the business of New Ceridian consists solely of the business of Ceridian’s human resource service division and subsidiaries and Comdata subsidiaries (the “New Ceridian Business”) and the business of Ceridian consists solely of the media information division and subsidiaries (the “Arbitron Business”). In addition, at the time of the Spin-off, Ceridian was renamed “Arbitron Inc.” and New Ceridian was renamed “Ceridian Corporation” (hereafter referred to as “New Ceridian”). Shares of common stock of Ceridian represent a continuing interest in the Arbitron Business.

      For purposes of, among other things, governing certain of the ongoing relations between New Ceridian and Arbitron as a result of the Spin-off, as well as to allocate certain tax, employee benefit and other liabilities arising prior to the Spin-off, the companies entered into various agreements, including a Distribution Agreement, Personnel Agreement, Tax Matters Agreement, Transition Services Agreement and Sublease Agreement.

      In general, pursuant to the terms of the Distribution Agreement, all assets of Ceridian prior to the date of the Spin-off, other than those specifically relating to the Arbitron Business, became assets of New Ceridian. The Distribution Agreement also provides for assumptions of liabilities and cross-indemnities designed to allocate generally, effective as of the date of the Spin-off, financial responsibility for all liabilities arising out of or in connection with the New Ceridian Business to New Ceridian and all liabilities arising out of or in connection with the Arbitron Business to Arbitron. In addition, New Ceridian will indemnify Arbitron for liabilities relating to past divestitures made by Ceridian to the extent these divestitures relate to all businesses other than the business of Arbitron and for liabilities relating to some of the litigation in which Ceridian is involved or its subsidiaries are involved. New Ceridian will also be liable for any claims arising from or based upon “controlling person” liability relating to the registration statement on Form 10 filed with the SEC by New Ceridian other than liabilities, if any, relating to material misstatements or omissions pertaining to the Arbitron Business, which liabilities will remain liabilities of Arbitron. Furthermore, New Ceridian will indemnify Arbitron for tax liabilities relating to matters existing on or before March 30, 2001. Liabilities contemplated under the Distribution Agreement have been included in the consolidated financial statements of Arbitron as of March 31, 2001 and December 31, 2000, except as otherwise disclosed.

      On January 31, 2001, in connection with completion of the Spin-off, Arbitron entered into a bank credit facility for $225,000 of financing. On March 29, 2001, proceeds of $200,000 were used to satisfy debt obligations of Ceridian with the remaining balance being available to Arbitron for working capital purposes. Arbitron also issued senior secured notes with an aggregate principal amount of $50,000 and distributed the proceeds realized from that issuance to New Ceridian to satisfy $50,000 of Ceridian’s debt obligations (see Note 2).

      Prior to the date of the Spin-off, New Ceridian and Arbitron entered into a Personnel Agreement to set forth the manner in which assets and liabilities under Ceridian’s employee benefit plans and other employee related liabilities will be divided between them. In general, New Ceridian is responsible for compensation and employee benefits relating to New Ceridian’s current employees and Ceridian’s former employees and Arbitron is responsible for compensation and employee benefits relating to its current employees. The Personnel Agreement also provided that substantially all unexercised Ceridian stock options outstanding at the date of the Spin-off became options to purchase Arbitron common stock or options to purchase New Ceridian common stock. Ceridian stock options held

6

ARBITRON INC.
Notes to Consolidated Financial Statements — Continued
March 31, 2001
(In thousands, except per share data)
(Unaudited)

by Arbitron employees, regardless of whether the options are vested or unvested, remained options to purchase Arbitron common stock. The number of shares and exercise price was adjusted to reflect the effect of the Spin-off and a reverse stock split. The options continue to be and became exercisable on substantially the same terms and conditions set forth in the original Ceridian benefit plans. Ceridian stock options held by New Ceridian employees and consultants, regardless of whether the options are vested or unvested, were converted into options to purchase New Ceridian common stock. The value of replacement awards will preserve, as closely as possible, the intrinsic value of awards that existed prior to the Spin-off.

      Due to the relative significance of New Ceridian as compared to Arbitron, the transaction was accounted for as a reverse Spin-off, with New Ceridian treated as the accounting successor to Ceridian for financial reporting purposes.

Consolidation

      The consolidated financial statements of Arbitron reflect the consolidated financial position, results of operations and cash flows of Arbitron Inc. and its subsidiaries: Arbitron Holdings Inc., Ceridian Infotech (India) Private Limited and CSW Research Limited.

      The financial information included herein may not necessarily reflect the financial position, results of operations and cash flows of Arbitron in the future or what they would have been had it been operated as a separate, stand-alone entity during the periods presented. In periods subsequent to the three months ended March 31, 2001, the Company’s consolidated financial statements will no longer include allocations from Ceridian.

      In periods ended prior to the Spin-off, the Company’s financial statements reflected the combined financial position and results of operations of Arbitron (The Arbitron Company, Tapscan Worldwide, and Northstar, each of which was a division of Ceridian, and CSW Research Limited and Ceridian Infotech (India) Private Limited, each of which was a wholly owned subsidiary of Ceridian).

2. Long-term Debt

Long-term debt consists of the following at March 31, 2001:

	March 31,
	2001
Senior fixed rate notes	$	50,000
Long-term revolving credit facility		200,000
	$	250,000

      On January 31, 2001, the Company entered into a $225,000 five-year revolving credit agreement with a consortium of banks (“Credit Facility”). On March 29, 2001, in connection with the Spin-off, $200,000 was drawn on the facility and distributed to Ceridian Corporation.

      The Credit Facility has two borrowing options, a Eurodollar rate option or a base rate option, as defined in the agreement. Under the Eurodollar option, the Company may elect interest periods of one, two, three or six months at the inception date and each renewal date. Borrowings under the Eurodollar option bear interest at LIBOR plus a margin of 2.00% to 2.75%. Borrowings under the base rate option bear interest at the higher of the lead lender’s prime rate or the Federal Funds rate plus 50 basis points, plus a margin of .50% to 1.25%. The specific margins, under both options, will be determined based on the Company’s ratio of indebtedness to earnings before interest,

7

ARBITRON INC.
Notes to Consolidated Financial Statements — Continued
March 31, 2001
(In thousands, except per share data)
(Unaudited)

taxes, depreciation and amortization (leverage ratio), and will be adjusted every ninety days. The agreement contains a commitment fee provision whereby the Company will be charged a fee based on the unused portion of the facility. Under the terms of the Credit Facility, the Company is required to maintain certain other financial ratios, in addition to the leverage ratio, and meet other financial conditions. The agreement restricts, among other things, the Company’s ability to sell assets, incur additional indebtedness, grant or incur liens on its assets, repay indebtedness, pay dividends, make investments or acquisitions, repurchase or redeem capital stock and engage in certain mergers or consolidations.

      Upon consummation of the Spin-off, the Company issued $50,000 of senior secured notes due January 31, 2008. In connection with the Spin-off, the Company distributed the $50,000 of note proceeds to Ceridian Corporation. The notes bear interest at a fixed rate of 9.96%.

3. Accounting for Derivatives

      Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activity (as amended by SFAS No. 138 with respect to certain interpretations) became effective for the Company in January 2001. SFAS No. 133 establishes accounting and reporting standards for derivative instruments and for hedging activities and requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. These fair value adjustments are to be included either in the determination of net income or as a component of other comprehensive income, depending on the nature of the transaction. The Company adopted SFAS No. 133, as amended, during the three month period ended March 31, 2001. The effect of adoption on the Company’s consolidated financial statements was not material.

      The Company’s initial objective for holding or issuing derivative instruments is to mitigate its exposure to interest rate risk. The Company’s strategy for minimizing interest rate exposure on variable rate debt is to lock into fixed rates of interest with pay-fixed, receive-variable interest rate swaps. The Company’s foreign operations are not significant at this time, and therefore exposure to foreign currency rate fluctuations is minimal.

      The Company entered into an interest rate swap agreement effective on March 29, 2001 to manage its exposure to fluctuations in interest rates relating to its outstanding variable rate debt. The contract’s notional amount is $200,000 at inception, and declines each quarter over the life of the contract in proportion to the Company’s estimated outstanding balance on its revolving credit agreement. Under the terms of the contract, the Company will pay a fixed rate of 5.02% and receive LIBOR, which resets every 90 days. The contract matures on March 31, 2005. The interest rate swap agreement was designated as a cash flow hedge, and was designed to be entirely effective by matching the terms of the swap agreement with the debt. The base rate for both the debt and the swap is the London Interbank Offered Rate (LIBOR) and the instruments have the same renewal dates over the lives of the instruments.

      The fair value of the cash flow hedge was recorded as a liability and the offsetting unrealized loss as of March 31, 2001 was recorded in accumulated other comprehensive income.

      The Company did not hold derivative instruments prior to January 1, 2001. The Company does not hold or issue derivative financial instruments for speculative trading purposes.

4. Pro Forma Net Income Per Common Share

      The computation of pro forma basic net income per common share for the periods presented is based upon Ceridian’s historical weighted average number of shares of Ceridian common stock outstanding. The computation of pro forma diluted net income per common share is calculated by dividing net income by the sum of Ceridian’s historical weighted average common shares outstanding and potentially dilutive Ceridian securities. Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes that the proceeds

8

ARBITRON INC.
Notes to Consolidated Financial Statements — Continued
March 31, 2001
(In thousands, except per share data)
(Unaudited)

from the exercise of all Ceridian stock options are used to repurchase Ceridian’s common stock at the average market price for the period. Options shares totaling 2,348 and 2,740 for 2001 and 2000, respectively, were not included in the computation of diluted net income per common share because the options’ exercise prices were greater than the average market price of Ceridian’s common stock. The impact of potentially dilutive securities on diluted net income per common share assumes that all of Ceridian’s historical dilutive securities were converted into Arbitron securities.

      In November 2000, Ceridian’s board of directors approved a one-for-five reverse stock split for Arbitron common stock, which was effective immediately after the Spin-off. Pro forma net income per common share and weighted average common shares outstanding included in the accompanying consolidated financial statements and related notes have been adjusted to reflect this reverse stock split.

5. Comprehensive Income

      The Company’s comprehensive income is comprised of net income, foreign currency translation adjustments and changes in unrealized gains and losses on interest rate swap agreements. The unrealized loss calculation was based on the present value of quarterly cash flows over the next five years.

      The components of comprehensive income for the three months ended March 31, 2001 and 2000 are as follows:

			March 31,			March 31,
			2001			2000
Net income			$	16,295		$	14,710
Items of other comprehensive income
	Change in foreign currency translation adjustment			50			—
	Change in unrealized loss on interest rate swap			(288	)		—
		Comprehensive income	$	16,057		$	14,710

6. Related Party Transactions

      Prior to the Spin-off on March 30, 2001, Ceridian managed Arbitron’s cash. Ceridian used a centralized cash management system to finance its operations. Cash deposits from the majority of Arbitron’s businesses were transferred to Ceridian on a daily basis. In addition, Ceridian funded the majority of Arbitron’s cash disbursements from its centralized cash management system. Net distributions to Ceridian reflect these intercompany cash activities. No interest has been credited or charged for these transactions.

      Ceridian provided certain centralized services to Arbitron. Expenses related to these services have been allocated to Arbitron based on utilization of specific services or, where an estimate could not be determined, based on Arbitron’s revenues in proportion to Ceridian’s total revenues. Management believes these allocation methods are reasonable. However, the costs of these services and benefits charged to Arbitron are not necessarily indicative of the costs that would have been incurred if Arbitron had performed these services as a separate entity. These allocations included in expenses in the consolidated statements of income totaled $151 and $2,017 for the three months ended March 31, 2001 and 2000, respectively. Beginning in January 2001, in anticipation of the Spin-off, Ceridian discontinued the majority of the centralized services that were provided to Arbitron in prior periods.

9

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The following discussion should be read in conjunction with Arbitron’s consolidated financial statements and the notes related to those consolidated financial statements contained elsewhere in this Form 10-Q.

Forward-Looking Statements

      This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements regarding Arbitron in this document that are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “likely,” “expects,” “anticipates,” “estimates,” “believes” or “plans,” or comparable terminology, are forward-looking statements based on current expectations about future events, which Arbitron has derived from the information currently available to it. These forward-looking statements involve known and unknown risks and uncertainties that may cause our results to be materially different from results implied in such forward-looking statements. These risks and uncertainties include whether we will be able to:

• realize the benefits we expect to achieve from the Spin-off;

• successfully execute our business strategies, including timely implementation of our Portable People Meter and our Webcast Ratings^SM service, as well as expansion of international operations;

• continue to benefit from further consolidation in the radio industry; and

• keep up with rapidly changing technological needs of our customer base, including creating new products and services that meet these needs.

      Additional important factors known to Arbitron that could cause forward-looking statements to turn out to be incorrect are identified and discussed from time to time in Arbitron’s filings with the Securities and Exchange Commission, including in particular the risk factors discussed under the caption “ITEM 1. BUSINESS – Business Risks” in Arbitron’s Form 10-K for the year ended December 31, 2000.

      The forward-looking statements contained in this document speak only as of the date hereof, and Arbitron undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

      Arbitron Inc. was formerly known as Ceridian Corporation. Prior to March 31, 2001, Ceridian was a publicly traded company, the principal lines of business of which were the human resource services business, the Comdata business, which provided transaction processing and regulatory compliance services for the transportation industry, and the radio audience measurement business.

      On March 30, 2001, Ceridian effected a reverse spin-off (the “Spin-off”). In connection with the Spin-off, the assets and liabilities associated with the human resource services division, human resource services and Comdata subsidiaries were transferred to a new corporation (which we call “New Ceridian” in this document). The radio audience measurement business stayed with Ceridian. Ceridian then distributed the stock of this new company to its existing stockholders. As a result, New Ceridian is now a separate publicly traded corporation. In connection with the Spin-off, Ceridian changed its name to Arbitron Inc. and effected a one-for-five reverse stock split, and New Ceridian changed its name to Ceridian Corporation.

      The information presented below relates to the business of Arbitron following the Spin-off unless the context otherwise requires. Except as context otherwise requires, the terms “Arbitron” or the “Company” as used herein shall include Arbitron Inc. and its subsidiaries.

10

      The consolidated financial statements of Arbitron reflect the consolidated financial position, results of operations and cash flows of Arbitron Inc. and its subsidiaries: Arbitron Holdings Inc., Ceridian Infotech (India) Private Limited and CSW Research Limited. The financial information included in this Form 10-Q includes expenses related to certain centralized services provided by Ceridian during the periods presented. The expenses for these services have been allocated to Arbitron based on utilization of specific services or, where an estimate could not be determined, based on Arbitron’s revenues in proportion to Ceridian’s total revenues. Management believes these allocation methods provide a rational basis for allocation. However, the costs of these services and benefits charged to Arbitron are not necessarily indicative of the costs that would have been incurred if Arbitron had performed these services as a separate entity. Accordingly, following the Spin-off, the financial results of Arbitron may be different than results for periods prior to the Spin-off.

      Arbitron’s radio audience measurement business has generally accounted for a substantial portion of its revenue. In recent years, significant consolidation of radio station ownership has tended to intensify competition within the radio industry and to intensify competition between radio and other forms of media for advertising dollars. At the same time, audiences have become more fragmented as a result of the greatly increased programming choices and entertainment and media options. Consequently, the increased competition together with the desire for more complex information have driven demand by radio broadcasters, advertising agencies and advertisers for Arbitron’s audience measurement information. In addition, although radio industry consolidation has led to the increased concentration of Arbitron’s customer base, it has also contributed to an increase in the number of stations subscribing for the ratings service as well as increases in sales of Arbitron’s analytical software applications and other services.

      Based on Arbitron’s revenue for 2000, Arbitron’s largest customer is Clear Channel Communications, Inc. A significant number of Clear Channel’s contracts (which collectively accounted for approximately 14% of Arbitron’s revenue in 2000) expired at the end of 2000. As of March 30, 2001, Clear Channel signed a contract extension that provides the Arbitron ratings survey for Winter 2001, which delivers in the second quarter, and also indicated that it did not intend to subscribe to future Arbitron ratings surveys for its stations licensed pursuant to these contracts. Arbitron is currently in negotiations with Clear Channel regarding a new license agreement for all Clear Channel stations whose contracts have expired. Arbitron’s other contracts with Clear Channel (which collectively accounted for approximately 8% of Arbitron’s revenue in 2000) expire on various dates over the next five years. Arbitron cannot make any assurances that it will retain Clear Channel or attract new customers that would replace the revenue that could be lost if Clear Channel, or any other key customer, failed to renew its agreement with Arbitron.

      Arbitron recognizes revenue for products and services over the term of the license agreement as products and services are delivered. Direct costs associated with data collection and diary processing are expensed as incurred.

      Arbitron has disclosed pro forma net income per weighted average common share for the periods presented. The computation of pro forma net income per common share is based upon Ceridian’s historical weighted average number of shares of Ceridian common stock, adjusted for a reverse stock split of one-for-five, which was effected immediately after the Spin-off. The diluted weighted average common shares used in the computation assumes that all of Ceridian’s historical dilutive securities were converted into Arbitron securities. Arbitron has also presented EBITDA as supplemental information that management of Arbitron believes may be useful to some investors in evaluating Arbitron because it is widely used as a measure to evaluate a company’s operating performance before interest expense, as well as to evaluate its operating cash flow. Net interest expense and income tax expense are added back to net income to arrive at EBIT. EBITDA is calculated by adding back net interest expense, income tax expense depreciation and amortization on property and equipment, amortization of goodwill and other tangible assets and asset impairment charges to net income. EBITDA should not be considered a substitute either for net income, as an indicator of Arbitron’s operating performance, or for cash flow, as a measure of Arbitron’s liquidity. In addition, because EBITDA is not calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.

11

Results of Operations

Comparison of the Three Months Ended March 31, 2001 to the Three Months Ended March 31, 2000

      The following table sets forth information with respect to the consolidated statements of income of Arbitron for the three months ended March 31, 2001 and 2000 (dollars in thousands, except pro forma share amounts).

Consolidated Statements of Operations
(Dollars in thousands, except pro forma per share amounts)

								Increase						Percentage of
								(Decrease)						Revenue
		2001			2000			Dollar			Percent			2001			2000
Revenue		$	60,190		$	55,533		$	4,657			8.4	%		100.0	%		100.0	%
Costs and expenses
	Cost of revenue		15,873			16,072			(199	)		(1.2	%)		26.4	%		28.9	%
	Selling, general and administrative		11,214			10,722			492			4.6	%		18.6	%		19.3	%
	Research and development costs		4,696			3,301			1,395			42.3	%		7.8	%		6.0	%
	Total costs and expenses		31,783			30,095			1,688			5.6	%		52.8	%		54.2	%
Operating income			28,407			25,438			2,969			11.7	%		47.2	%		45.8	%
	Equity in net loss of affiliate		(1,123	)		(1,124	)		1			0.1	%		(1.9	%)		(2.0	%)
Income before interest and
	income tax expense		27,284			24,314			2,970			12.2	%		45.3	%		43.8	%
	Interest income		19			—			19			100.0	%		0.0	%		0.0	%
	Interest expense		(386	)		—			(386	)		100.0	%		(0.6	%)		0.0	%
Income before income tax expense			26,917			24,314			2,603			10.7	%		44.7	%		43.8	%
	Income tax expense		10,622			9,604			1,018			10.6	%		17.6	%		17.3	%
Net income		$	16,295		$	14,710		$	1,585			10.8	%		27.1	%		26.5	%
Pro forma net income per weighted
	average common share Basic	$	0.56		$	0.51		$	0.05			9.8	%
	Diluted	$	0.56		$	0.51		$	0.05			9.8	%
Other data:
	EBITDA	$	28,359		$	25,380		$	2,979			11.7	%		47.1	%		45.7	%

      Revenue. Revenue increased 8.4% from $55.5 million during the three months ended March 31, 2000 to $60.2 million for the same period in 2001. Approximately 60% of the increase is related to an increase in the ratings subscriber base and escalations in multi-year customer contracts and contract renewals. Additionally, analytical software applications contributed approximately 21% of the increase, with the remaining growth being attributable to qualitative services and the Company’s U.K. subsidiary, which provides media, advertising, financial telecommunications and Internet research services in the United Kingdom and elsewhere in Europe.

      Cost of Revenue. Cost of revenue decreased 1.2% from $16.1 million for the three months ended March 31, 2000 to $15.9 million for the same period in 2001, and decreased as a percentage of revenue from 28.9% in 2000 to 26.4% in 2001. The dollar decrease is largely attributable to certain non-recurring production costs incurred in the first quarter of 2000.

      Selling, General and Administrative. Selling, general and administrative expenses increased 4.6% from $10.7 million for the three months ended March 31, 2000 to $11.2 million for the same period in 2001 but decreased as a percentage of revenue from 19.3% in 2000 to 18.6% in 2001. The increase in dollar amount is attributable to

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certain variable costs, including marketing expenses related to the upcoming Webcast Ratings service and selling commissions.

      Research and Development Costs. Research and development costs increased 42.3% from $3.3 million during the three months ended March 31, 2000 to $4.7 million for the same period in 2001 and increased as a percentage of revenue from 6.0% in 2000 to 7.8% in 2001. These increases are related to increased spending on new product development, primarily related to the development of the Portable People Meter (PPM) and the Webcast Ratings service.

      Operating Income. Operating income increased 11.7% from $25.4 million for the three months ended March 31, 2000 to $28.4 million for the same period in 2001. Operating margin increased from 45.8% in 2000 to 47.2% in 2001. These fluctuations are attributed primarily to the 8.4% increase in revenue while the cost of revenue decreased 1.2%.

      Equity in Net Loss of Affiliate. Equity in net loss of affiliate remained consistent for the three months ended March 31, 2001 compared to the same period in 2000.

      Interest Expense. Interest expense of $0.4 million in the three months ended March 31, 2001 is related to the long-term debt outstanding during the period. Prior to the Spin-off, the Company had no debt and therefore no interest expense.

      Income Tax Expense. Arbitron’s effective tax rate was 39.5% for the three months ended March 31, 2000 and 2001.

      Net Income. Net income increased 10.8% from $14.7 million for the three months ended March 31, 2000 to $16.3 million for the same period in 2001 as a result of the factors discussed above.

      EBITDA. EBITDA increased 11.7% from $25.4 million for the three months ended March 31, 2000 to $28.4 million for the same period in 2001.

Liquidity and Capital Resources

      Prior to the Spin-off, Arbitron participated in Ceridian’s centralized cash management system to finance its operations. Cash deposits from the majority of Arbitron’s operations were transferred to Ceridian on a daily basis and Ceridian funded Arbitron’s cash disbursements from the centralized cash management system. This cash management process, combined with the debt proceeds of $250.0 million, resulted in net distributions to Ceridian during the three months ended March 31, 2001 and 2000 of $232.1 million and $13.8 million, respectively. Accordingly, Arbitron’s net change in cash is not indicative of its liquidity or cash flow. Arbitron’s cash flow from operating activities was $11.8 million and $14.5 million, respectively, during the corresponding periods.

      Arbitron’s business is not capital intensive and, accordingly, cash used in investing activities has not been significant with the exception of business acquisitions. Additions to property and equipment during the three months ended March 31, 2001 and 2000 were $1.5 million and $0.6 million, respectively.

      On January 31, 2001, Arbitron entered into a $225 million five-year revolving credit agreement with a consortium of banks (“Credit Facility”). In connection with the Spin-off, $200 million was drawn on the facility and distributed to Ceridian.

      The Credit Facility has two borrowing options, a Eurodollar rate option or a base rate option, as defined in the agreement. Under the Eurodollar option, Arbitron may elect interest periods of one, two, three or six months at the inception date and each renewal date. Borrowings under the Eurodollar option bear interest at the London Interbank Offered Rate (LIBOR) plus a margin of 2.00 % to 2.75%. Borrowings under the base rate option bear interest at the higher of the lead lender’s prime rate or the Federal Funds rate plus 50 basis points, plus a margin of .50% to 1.25%. The specific margins, under both options, will be determined based on Arbitron’s ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (leverage ratio), and will be adjusted

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every ninety days. The agreement contains a commitment fee provision whereby Arbitron will be charged a fee based on the unused portion of the facility. Under the terms of the Credit Facility, Arbitron is required to maintain certain other financial ratios, in addition to the leverage ratio, and meet other financial conditions. The agreement restricts, among other things, Arbitron’s ability to sell assets, incur additional indebtedness, grant or incur liens on its assets, repay indebtedness, pay dividends, make investments or acquisitions, repurchase or redeem capital stock and engage in certain mergers or consolidations.

      Upon consummation of the Spin-off, Arbitron issued $50 million of senior secured notes due January 31, 2008. In connection with the Spin-off, Arbitron distributed the $50 million of note proceeds to Ceridian. The notes bear interest at a fixed rate of 9.96%.

      The Company used a derivative instrument as a hedge of its variable interest rate debt as indicated below under Item 3.

      Arbitron expects that cash flow generated from operations and available borrowings from its Credit Facility, if any, will be sufficient to support its operations for the foreseeable future.

Seasonality

      Arbitron recognizes revenue for products and services over the terms of license agreements as products and services are delivered, and expenses are recognized as incurred. Arbitron gathers radio-listening data in approximately 283 local markets in the United States and Puerto Rico. All markets are measured at least twice per year (April, May, June, “Spring Survey,” and October, November, December, “Fall Survey”). In addition, all major markets are measured two additional times per year (January, February, March, “Winter Survey,” and July, August, September “Summer Survey”). Arbitron’s revenue is generally higher in the first and third quarters as the result of the delivery of the Fall Survey and Spring Survey, respectively, to all markets compared to revenue in the second and fourth quarters when delivery of the Winter Survey and Summer Survey, respectively, is only delivered to major markets. Arbitron’s expenses are generally higher in the second and fourth quarters as the “Spring Survey” and “Fall Survey” are being conducted.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Risk

      Following the Spin-off, Arbitron’s market risk is with respect to changes in interest rates. Effective with the Spin-off, Arbitron borrowed $200 million in floating rate debt outstanding under its Credit Facility. Borrowings under the facility bear interest at LIBOR or the lender’s base rate plus an applicable margin, as defined, between 2.0% and 2.75%.

      Arbitron entered into an interest rate swap contract effective on March 29, 2001 to hedge against rate fluctuations relating to its variable rate debt. The contract’s notional amount is $200,000 at inception, and declines each quarter over the life of the contract in proportion to Arbitron’s estimated outstanding balance on its revolving credit agreement. Under the terms of the contract, Arbitron will pay a fixed rate of 5.02% and receive LIBOR, which resets every 90 days. The contract matures on March 31, 2005. As a result, Arbitron will be protected from interest rate changes.

Foreign Currency Risk

      Arbitron’s foreign operations are not significant at this time, and, therefore, Arbitron’s exposure to foreign currency risk is negligible.

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PART II – OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit No.	Description
10.1	Distribution Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.1 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.2	Personnel Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.2 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.3	Amendment to Personnel Agreement, dated April 3, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation).
10.4	Tax Matters Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.3 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.5	Transition Services Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.4 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.6	Sublease Agreement, dated as of February 14, 2001, between Arbitron Inc. (formerly known as Ceridian Corporation) and Ceridian Corporation (formerly known as New Ceridian Corporation) (Filed as Exhibit 10.5 to New Ceridian’s Registration Statement on Form 10 (SEC File No. 001-16149) and incorporated herein by reference).
10.7	Credit Agreement, dated as of January 31, 2001, by and among Arbitron Inc. and the Lenders referred to therein and Bank of America, N.A., as administrative agent (Filed as Exhibit 10.6 to Arbitron’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference).
10.8	Amendment to Credit Agreement, dated as of March 29, 2001, by and among Arbitron Inc. and the Lenders referred to therein and Bank of America, N.A., as administrative agent.
10.9	Note Purchase Agreement, dated as of January 31, 2001, by and between Arbitron Inc. and Note Holders referred to therein (Filed as Exhibit 10.7 to Arbitron’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference).
10.10	Secured Subordinated Promissory Notes maturing January 31, 2008 of Arbitron Inc. (Filed as Exhibit 10.8 to Arbitron’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference).

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10.11	Subsidiary Guaranty, dated as of January 31, 2001, of Arbitron Holdings, Inc. in favor of the Lenders referred to therein, the Swap Provider referred to therein and the Note Holders referred to therein (Filed as Exhibit 10.9 to Arbitron’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference).
10.12	Arbitron Inc. 401(k) Plan.*
10.13	Arbitron Executive Investment Plan.*
10.14	Arbitron Inc. 2001 Broad Based Stock Incentive Plan.*
10.15	Executive Employment Agreement, dated April 1, 2001, by and between Arbitron Inc. and Stephen B. Morris.*
10.16	Form of Indemnification Agreement between Arbitron Inc. and its Directors.

* Indicates management contract or compensatory plan required to be filed as an Exhibit.

(b) Reports on Form 8-K

• Ceridian filed a Current Report on Form 8-K on January 10, 2001 reporting its issuance of a press release announcing its preliminary results for 2000 and expectations for 2001.

• Ceridian filed a Current Report on Form 8-K on January 24, 2001 reporting its issuance of a press release announcing its 2000 earnings results.

• Ceridian filed a Current Report on Form 8-K on February 15, 2001 reporting its issuance of a press release reporting that the Board of Directors had set a record date and distribution date for the Arbitron reverse spin-off and that a one-for-five reverse stock split of Arbitron stock will occur after the spin-off.

• Ceridian filed a Current Report on Form 8-K on March 12, 2001 reporting its issuance of a press release announcing its fourth quarter and full year 2000 results for its Arbitron division.

• Arbitron filed a Current Report on Form 8-K on March 30, 2001 reporting that Arbitron entered into a Distribution Agreement with Ceridian Corporation (formerly New Ceridian Corporation), dated February 14, 2001 and subsequently amended on March 30, 2001.

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SIGNATURE

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ARBITRON INC

By:   /s/ WILLIAM J. WALSH   
William J. Walsh
Executive Vice President of Finance and
Planning and Chief Financial Officer

Date: May 14, 2001

17 EX-10.3 2 w48557ex10-3.txt EX-10.3 AMENDMENT TO PERSONNEL AGREEMENT 1 EXHIBIT 10.3 AMENDMENT NO. 1 TO THE PERSONNEL AGREEMENT BETWEEN ARBITRON INC. AND CERIDIAN CORPORATION THIS AMENDMENT NO. 1 TO THE PERSONNEL AGREEMENT by and between Arbitron Inc., a Delaware Corporation formerly known as Ceridian Corporation ("Arbitron"), and Ceridian Corporation, a Delaware corporation formerly known as New Ceridian Corporation ("Ceridian"), is entered into as of April 3, 2001. WHEREAS, Arbitron and Ceridian entered into a Personnel Agreement dated as of February 14, 2001 (the "Personnel Agreement"); WHEREAS, the Personnel Agreement provided for the conversion of stock options and restricted stock based on the relationship between the trading prices of Arbitron prior to the Distribution Date and Arbitron and Ceridian after the Distribution Date, so that the intrinsic value of the stock options before the Distribution Date will be equivalent to the intrinsic value of the stock options after the Distribution Date; WHEREAS, on the Distribution Date, Arbitron was removed from the S&P 500 and Ceridian was added to the S&P 400, this substantially increased the trading volume and impacted the price of Ceridian before and after the Distribution Date; WHEREAS, Arbitron and Ceridian wish to amend the Personnel Agreement to (1) adjust the stock option conversion formulas for Ceridian employees and retirees, decedents and certain other former Arbitron employees to remove the external impact of the large volume of trading in Ceridian's stock as a result of the changes in the S&P 500 and S&P 400, (2) adjust the restricted stock conversion formulas to remove the external impact of the large volume of trading in Ceridian's stock as a result of the changes in the S&P 500 and S&P 400, and (3) to adjust the Arbitron stock option formulas to reflect the fact that Arbitron traded on a post reverse spin and post reverse stock split basis after the Distribution Date; NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Section 5.4. The text of Section 5.4 shall be deleted in its entirety and be replaced with the following: "5.4 Corporation Stock Option Plans. The Corporation shall continue in effect each stock option plan under which any person holds an outstanding option to purchase shares of the Corporation's common stock after the Effective Time. Except as otherwise provided in Section 5.5, each Ceridian Option held by a person other than a New Ceridian Optionee, whether or not exercisable as of the Effective Time, shall be adjusted in accordance with the following rules. (a) The price to be paid for each share of Arbitron common stock under the option shall be equal to the product of the per share exercise price of the Ceridian 2 Option and the Arbitron Price Ratio, such product to be rounded to the nearest whole cent; and. (b) The number of shares of Arbitron common stock to be issued in the exchange shall be equal to the quotient obtained by dividing the number of shares covered by the existing Ceridian Option by the Arbitron Price Ratio; such quotient to be rounded to the nearest full share." 2. Section 5.5. The text of Section 5.5 shall be deleted in its entirety and be replaced with the following: "5.5 Retiree, Decedent and Other Options. Any Arbitron Option held by (i) a Former Arbitron Employee or Former New Ceridian Employee who was entitled to continue benefits as a retired employee of the Corporation following his or her termination of employment, (ii) a retired non-employee director of the Corporation, (iii) the successors of an individual who is deceased, or (iv) a former director of ABR Information Services, Inc. shall, notwithstanding the preceding provisions of this article, be converted to separate options to purchase common stock of Arbitron (an "Arbitron Retiree Option") and New Ceridian (a "New Ceridian Retiree Option") as follows: (a) The number of shares subject to each New Ceridian Retiree Option shall be equal to the product of (i) the number of shares subject to the related Ceridian Option and (ii) a fraction, the numerator of which is the exercise price per share of the related Ceridian Option and the denominator of which is the sum of (x) the exercise price per share of the New Ceridian retiree Option plus (y) a fraction, the numerator of which is the exercise price per share of the Arbitron Retiree Option and the denominator of which is five, which product shall be rounded to the nearest whole share. (b) The exercise price per share of each New Ceridian Retiree Option shall be equal to the product of (i) New Ceridian Post-Distribution Price and (ii) a fraction, the numerator of which is equal to the exercise price per share of the related Ceridian Option and the denominator of which is the closing price of Ceridian Common Stock on the last trading day immediately before the Distribution Date, which product shall be rounded to the nearest whole cent. (c) The number of shares subject to each Arbitron Retiree Option shall be an amount equal to the quotient of the number of shares subject to each New Ceridian Retiree Option (as determined under paragraph (a) above) divided by five, which quotient shall be rounded to the nearest whole share. (d) The exercise price per share of each Arbitron Retiree Option shall be equal to the product of (i) the Arbitron Post-Distribution Stock Price by (ii) a fraction, the numerator of which is the exercise price per share of the related Ceridian Option and the denominator of which is the closing price of Ceridian Common Stock on the last trading day immediately before the Distribution Date, which product shall be rounded to the nearest whole cent." 2 3 3. Section 5.7. The text of Section 5.7 shall be deleted in its entirety and be replaced with the following: "5.7 Option Definitions. For purposes of this Article, (a) "Arbitron Post-Distribution Price" shall be the quotient obtained by dividing the volume-weighted average price of the common stock of Arbitron during the three consecutive trading days immediately following the Distribution Date. (b) "Arbitron Price Ratio" shall be the quotient obtained by dividing the Arbitron Post-Distribution Price by the Ceridian Pre-Distribution Price. (c) "Ceridian Pre-Distribution Price" shall be the volume-weighted average price of the common stock of the Corporation during the three consecutive trading days immediately prior to the Distribution Date. (d) "New Ceridian Post-Distribution Price" shall be equal to the opening price of common stock of New Ceridian on the first trading day immediately following the Distribution Date. (e) "New Ceridian Price Ratio" shall be the quotient obtained by dividing the New Ceridian Post-Distribution Price by the closing price of Ceridian Common Stock on the last trading day immediately before the Distribution Date." 4. Section 5.9. The text of Section 5.9 shall be deleted in its entirety and be replaced with the following: "5.9 Restricted Stock. Before the Effective Time, New Ceridian shall establish (and the Corporation as sole stockholder of New Ceridian shall approve) a restricted stock plan that will benefit the New Ceridian Employees and the members of the board of directors of New Ceridian who, as of the Effective Time, hold restricted stock under one or more restricted stock plans of the Corporation. The shares of New Ceridian common stock issued as a distribution in respect of such shares of restricted stock shall remain subject to the same restrictions to which such restricted shares were subject. In addition, New Ceridian shall, to the extent that the cessation of employment or of a directorship with the Corporation at the Effective Time causes the forfeiture of any such restricted stock, provide for the distribution of shares of New Ceridian common stock to the affected persons, subject to the same restrictions to which the forfeited stock was subject, under the new restricted stock plan. The number of shares of New Ceridian common stock subject to such replacement award shall be equal to the product of (i) the number of such forfeited shares of restricted stock and/or deferred stock (adjusted for the one-for-five reverse stock split) by (ii) a fraction, the numerator of which is the Arbitron Post-Distribution Price and the denominator of which is the New Ceridian Post-Distribution Price, such product to be rounded to the nearest whole share." 3 4 5. Full Force. Except as amended pursuant to this Agreement, the Personnel Agreement shall remain in full force and effect in accordance with its original terms. 6. Definitions. To the extent a term is not defined herein, such term shall have the meaning provided for in the Personnel Agreement. 7. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written. ARBITRON INC. CERIDIAN CORPORATION By: /s/ Dolores L. Cody By: Gary M. Nelson --------------------------------------- ------------------------------- Its: Executive Vice President, Legal and Its: Vice President, General Business Affairs, Chief Legal Officer Counsel and Secretary and Secretary 4 EX-10.8 3 w48557ex10-8.txt EX-10.8 AMENDMENT TO CREDIT AGREEMENT 1 EXHIBIT 10.8 AMENDMENT TO CREDIT AGREEMENT THIS AMENDMENT TO CREDIT AGREEMENT ("Amendment"), dated as of March 29, 2001, is entered into by and among CERIDIAN CORPORATION, a Delaware corporation, (the "Borrower"), each lender from time to time party hereto (collectively, the "Lenders" and individually, a "Lender"), BANK OF AMERICA, N.A., as the Administrative Agent and L/C Issuer (the "Administrative Agent"), and FLEET NATIONAL BANK, as the Syndication Agent. RECITALS A. The Borrower, Lenders, and Administrative Agent are parties to a Credit Agreement dated as of January 31, 2001 (the "Credit Agreement") pursuant to which the Administrative Agent and the Lenders have extended certain credit facilities to the Borrower. B. The Borrower has requested that the Lenders agree to certain amendments of the Credit Agreement and the schedules thereto. C. The Lenders are willing to amend the Credit Agreement and the schedules thereto, subject to the terms and conditions of this Amendment. NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the meanings, if any, assigned to them in the Credit Agreement. 2. Amendments to Credit Agreement. (a) Section 7.07(a)(i) of the Credit Agreement shall be amended by deleting such subsection in its entirety and replacing it with the following: (i) declare and make (A) the Distribution, or (B) dividend payments or other distributions payable solely in shares of its common stock (and solely in respect of fractional shares, cash of a de minimis amount), or (C) pursuant to the terms of a shareholder rights agreement approved by Borrower's board of directors, distributions on a ratable basis to all then-existing common stock shareholders payable solely in shares of preferred stock of the Borrower, or rights or options to acquire additional shares of its common stock upon the occurrence of certain events, and provided there exists no Default or Event of Default, cash payments by the Borrower upon the redemption or purchase by the Borrower of such rights or options, not exceeding in the aggregate for all such payments from and after the Closing Date $200,000; (b) Schedule 5.21 of the Credit Agreement shall be amended by deleting it in its entirety and replacing it with Schedule 5.21 as attached hereto; 1. 2 (c) Section 6.15(a) of the Credit Agreement shall be amended by deleting the clause beginning with "provided, however," and continuing to the end of the subsection and replacing it with the following: provided, however, that (i) that if any additional Subsidiary so incorporated, created or acquired is a Foreign Subsidiary of a Subsidiary incorporated within the United States, in no event shall more than 65% of the capital stock of any such Foreign Subsidiary be required to be so pledged, and (ii) no such pledge of capital stock shall be required if such Foreign Subsidiary is a Subsidiary of another Foreign Subsidiary. 3. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders as follows: (a) No Default or Event of Default has occurred and is continuing. (b) The execution, delivery and performance by the Borrower of this Amendment have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. The Credit Agreement as amended by this Amendment constitutes the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with its respective terms, without defense, counterclaim or offset. (c) All representations and warranties of the Borrower contained in the Credit Agreement are true and correct. (d) The Borrower is entering into this Amendment on the basis of its own investigation and for its own reasons, without reliance upon the Administrative Agent and the Lenders or any other Person. 4. Effective Date. This Amendment will become effective on the date shown first above (the "Effective Date"), provided that each of the following conditions precedent is satisfied: (a) The Administrative Agent has received from the Borrower and each of the Required Lenders a duly executed original (or, if elected by the Administrative Agent, an executed facsimile copy) of this Amendment, together with a duly executed Guarantor Acknowledgment and Consent in the form attached hereto (the "Consent"). (b) The Administrative Agent has received from the Borrower and all guarantors a copy of a resolution passed by the board of directors of such corporation, certified by the Secretary or an Assistant Secretary of such corporation as being in full force and effect on the date hereof, authorizing the execution, delivery and performance of this Amendment (or the Consent, as applicable). (c) All representations and warranties contained herein are true and correct as of the Effective Date. 2. 3 5. Miscellaneous. (a) Except as herein expressly amended, all terms, covenants and provisions of the Credit Agreement are and shall remain in full force and effect and all references therein to such Credit Agreement shall henceforth refer to the Credit Agreement as amended by this Amendment. This Amendment shall be deemed incorporated into, and a part of, the Credit Agreement. (b) This Amendment shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns. No third party beneficiaries are intended in connection with this Amendment. (c) This Amendment shall be governed by and construed in accordance with the law of the State of New York. (d) This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Each of the parties hereto understands and agrees that this document (and any other document required herein) may be delivered by any party thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Administrative Agent of a facsimile transmitted document purportedly bearing the signature of a Lender or the Borrower shall bind such Lender or the Borrower, respectively, with the same force and effect as the delivery of a hard copy original. Any failure by the Administrative Agent to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Administrative Agent. (e) This Amendment, together with the Credit Agreement, contains the entire and exclusive agreement of the parties hereto with reference to the matters discussed herein and therein. This Amendment supersedes all prior drafts and communications with respect thereto. This Amendment may not be amended except in accordance with the provisions of Section 10.01 of the Credit Agreement. (f) If any term or provision of this Amendment shall be deemed prohibited by or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Amendment or the Credit Agreement, respectively. (g) The Borrower covenants to pay to or reimburse the Administrative Agent, upon demand, for all costs and expenses (including allocated costs of in-house counsel) incurred in connection with the development, preparation, negotiation, execution and delivery of this Amendment. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written. 3. 4 CERIDIAN CORPORATION By: /s/ JOHN H. GRIERSON -------------------------------------- Title: Vice President and Treasurer ----------------------------------- BANK OF AMERICA , N.A., as Administrative Agent, a Lender and L/C Issuer By: /s/ CHITT SWAMIDASAN -------------------------------------- Title: Principal ----------------------------------- FLEET NATIONAL BANK, as a Lender By: /s/ RICK ANDERSON -------------------------------------- Title: Group Manager ----------------------------------- U.S. NATIONAL ASSOCIATION, as a Lender By: /s/ ELLIOT J. JAFFEE -------------------------------------- Title: Senior Vice President ----------------------------------- THE CHASE MANHATTAN BANK, as a Lender By: /s/ CAROL A. KORNBLUTH -------------------------------------- Title: Vice President ----------------------------------- 4. 5 THE BANK OF NEW YORK, as a Lender By: /s/ KRISTEN E. TALABER -------------------------------------- Title: Vice President ----------------------------------- BNP PARIBAS, as a Lender By: -------------------------------------- Title: ----------------------------------- BEAR STEARNS CORPORATE LENDING INC., as a Lender By: -------------------------------------- Title: ----------------------------------- CITIZENS BANK OF MASSACHUSETTS, as a Lender By: /s/ ERRIN SIAGEL -------------------------------------- Title: V.P. ----------------------------------- THE ROYAL BANK OF SCOTLAND PLC, as a Lender By: /s/ LEE MORSE -------------------------------------- Title: Vice President ----------------------------------- 5. 6 GUARANTOR ACKNOWLEDGMENT AND CONSENT The undersigned, each a Guarantor with respect to Borrower's Obligations to Administrative Agent and the Lenders under the terms of the Credit Agreement, each hereby (i) acknowledge and consent to the execution, delivery and performance by Borrower of the foregoing Amendment to Credit Agreement dated as of March ___, 2001 (the "Amendment"), and (ii) reaffirm and agree that the respective Guaranty as to which each of the undersigned is party, and all other Loan Documents and agreements executed and delivered by the undersigned to Administrative Agent and the Lenders in connection with the Credit Agreement, are in full force and effect without defense, offset or counterclaim. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Credit Agreement. This Guarantor Acknowledgment and Consent may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one instrument. NEW CERIDIAN CORPORATION By: /s/ JOHN H. GRIERSON ------------------------------------- Title: Vice President and Treasurer --------------------------------- ARBITRON HOLDINGS INC. By: /s/ JOHN H. GRIERSON ------------------------------------- Title: Vice President and Treasurer --------------------------------- 6. 7 SCHEDULE 5.21 CAPITALIZATION; SUBSIDIARIES Information as of the Effectiveness Date 1. Borrower's capitalization as of the Effectiveness Date: No. shares authorized: 500,000,000 No. shares issued: 161,685,596 No. shares outstanding: 145,681,462 Please note that the shares listed above are subject to a reverse stock split at a ratio of one-for-five. The reverse stock split will be effective immediately after the Spin-Off Consummation Date. 2. Following is a list of Borrower's Subsidiaries as of the Effectiveness Date:

- ----------------------------------------------------------------------------------------------------------------------- NO. OF SHARES STATE OR OTHER PERCENTAGE OF VOTING AUTHORIZED/ JURISDICTION OF SECURITIES OWNED BY ISSUED & SUBSIDIARY ORGANIZATION IMMEDIATE PARENT OUTSTANDING - ----------------------------------------------------------------------------------------------------------------------- Arbitron Holdings Inc. (First Tier Arbitron subsidiary) formed in October 2000 Delaware 100% 1,000/1,000 - ----------------------------------------------------------------------------------------------------------------------- CSW Research Ltd. (First Tier subsidiary of 410,000/ Arbitron Holdings, Inc.) United Kingdom 100% 405,000 - ----------------------------------------------------------------------------------------------------------------------- Euro-Fieldwork Ltd. (Second Tier Arbitron subsidiary, First Tier subsidiary of CSW Research Ltd.) United Kingdom 100% 1,000/1,000 - ----------------------------------------------------------------------------------------------------------------------- Ceridian Infotech (India) Private Limited 8,400,000/ (First Tier Arbitron subsidiary) India 100% 1,712,374 - ----------------------------------------------------------------------------------------------------------------------- ABR Information Services, Inc. Florida 100% N/A - ----------------------------------------------------------------------------------------------------------------------- ABR Employer Services, Inc. Florida 100% N/A - ----------------------------------------------------------------------------------------------------------------------- ABR Properties, Inc. Florida 100% N/A - ----------------------------------------------------------------------------------------------------------------------- BMC Consultants, Inc. Colorado 100% N/A - -----------------------------------------------------------------------------------------------------------------------

7. 8

- ----------------------------------------------------------------------------------------------------------------------- NO. OF SHARES STATE OR OTHER PERCENTAGE OF VOTING AUTHORIZED/ JURISDICTION OF SECURITIES OWNED BY ISSUED & SUBSIDIARY ORGANIZATION IMMEDIATE PARENT OUTSTANDING - ----------------------------------------------------------------------------------------------------------------------- Ceridian Benefits Services, Inc. (f/k/a ABR Benefits Services, Inc.) Florida 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Ceridian Retirement Plan Services, Inc. (f/k/a ABR Retirement Plan Services, Inc.) Florida 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Charing Company, Inc. Wisconsin 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Chowning, Ltd. Wisconsin 100% N/A - ----------------------------------------------------------------------------------------------------------------------- The Barrington Group Wisconsin 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Matthews, Malone & Associates, Ltd. Arizona 100% N/A - ----------------------------------------------------------------------------------------------------------------------- MidAtlantic 401(k) Services, Inc. Virginia 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Western Pension Service Corporation California 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Ceridian Investors Advisors, Inc. (f/k/a ABR Investment Advisors, Inc.) Florida 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Arbat Middle East E.C. (held in trust) (inactive) Bahrain 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Ceridian Canada Holdings, Inc. Delaware 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Ceridian Canada Ltd. Canada 100% N/A - ----------------------------------------------------------------------------------------------------------------------- 33444651 Canada Ltd. Canada 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Ceridian Performance Partners Ltd. Canada 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Ceridian Holdings U.K. Limited United Kingdom 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Centrefile Limited United Kingdom 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Centrefile APS Limited United Kingdom 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Centrefile (Mauritius) Ltd. Mauritius 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Ceridian Performance Partners Limited United Kingdom 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Usertech UK Limited United Kingdom 100% N/A - -----------------------------------------------------------------------------------------------------------------------

8. 9

- ----------------------------------------------------------------------------------------------------------------------- NO. OF SHARES STATE OR OTHER PERCENTAGE OF VOTING AUTHORIZED/ JURISDICTION OF SECURITIES OWNED BY ISSUED & SUBSIDIARY ORGANIZATION IMMEDIATE PARENT OUTSTANDING - ----------------------------------------------------------------------------------------------------------------------- Ceridian Tax Services, Inc. California 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Comdata Network, Inc. Maryland 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Comdata Network Inc. of California California 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Comdata Telecommunications Services, Inc. Delaware 100% N/A - ----------------------------------------------------------------------------------------------------------------------- International Automated Energy Systems, Inc. Florida 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Permicom Permits Services, Inc. Canada 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Stored Value Systems, Inc. Delaware 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Computing Devices International Satellite Services, Inc. Delaware 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Partnership Group, Inc., The Pennsylvania 100% N/A - ----------------------------------------------------------------------------------------------------------------------- Plan Ware Inc. (inactive) Pennsylvania 100% N/A - ----------------------------------------------------------------------------------------------------------------------- POWERPAY.COM INC. (f/k/a Ceridian Small Business Solutions, Inc.) New Jersey 100% N/A - ----------------------------------------------------------------------------------------------------------------------- User Technology Services, Inc. New York 100% N/A - -----------------------------------------------------------------------------------------------------------------------

3. Following is a list of Borrower's Arbitron Subsidiaries as of the Effectiveness Date:

- ----------------------------------------------------------------------------------------------------------------------- SUBSIDIARY STATE OR OTHER JURISDICTION OF ORGANIZATION - ----------------------------------------------------------------------------------------------------------------------- Arbitron Holdings Inc. Delaware - ----------------------------------------------------------------------------------------------------------------------- CSW Research Limited United Kingdom - ----------------------------------------------------------------------------------------------------------------------- Euro-Fieldwork Limited United Kingdom - ----------------------------------------------------------------------------------------------------------------------- Ceridian Infotech (India) Private Limited India - -----------------------------------------------------------------------------------------------------------------------

9. 10 4. Following is a list of Borrower's Material Subsidiaries as of the Effectiveness Date:

- ---------------------------------------------------------------------------------------------------------------------- MATERIAL SUBSIDIARIES STATE OR OTHER JURISDICTION OF ORGANIZATION - ---------------------------------------------------------------------------------------------------------------------- ABR Information Services, Inc. Florida - ---------------------------------------------------------------------------------------------------------------------- Comdata Network, Inc. Maryland - ----------------------------------------------------------------------------------------------------------------------

Information as of the Spin-Off Consummation Date 1. Following is a list of Borrower's Arbitron Subsidiaries after the Spin-Off Consummation Date:

- ---------------------------------------------------------------------------------------------------------------------- NO. OF SHARES PERCENTAGE OF VOTING AUTHORIZED/ STATE OR OTHER JURISDICTION OF SECURITIES OWNED BY ISSUED & SUBSIDIARY ORGANIZATION IMMEDIATE PARENT OUTSTANDING - ---------------------------------------------------------------------------------------------------------------------- Arbitron Holdings Inc. Delaware 100% 1,000/1,000 - ---------------------------------------------------------------------------------------------------------------------- 410,000/ CSW Research Limited United Kingdom 100% 405,000 - ---------------------------------------------------------------------------------------------------------------------- Euro-Fieldwork Limited United Kingdom 100% 1,000/1,000 - ---------------------------------------------------------------------------------------------------------------------- 8,400,000/ Ceridian Infotech (India) Private Limited India 100% 1,712,374 - ----------------------------------------------------------------------------------------------------------------------

2. There will not be any Material Subsidiaries of the Borrower as of the Spin-Off Consummation Date. 10. EX-10.12 4 w48557ex10-12.txt EX-10.12 401(K) PLAN 1 EXHIBIT 10.12 ADOPTION CERTIFICATE Attached is a true, correct and complete copy of the Arbitron 401(k) Plan as adopted by Arbitron Inc. effective as of March 31, 2001. ARBITRON INC. Dated: April 2, 2001 By /s/ Dolores L. Cody ------------------- Secretary 2 ARBITRON 401(K) PLAN As Adopted Effective as of March 31, 2001 3 ARBITRON 401(K) PLAN TABLE OF CONTENTS

Page ---- ARTICLE 1. DESCRIPTION AND PURPOSE...........................................................1 1.1. Plan Name.........................................................................1 1.2. Plan Description..................................................................1 1.3. Plan Background...................................................................1 ARTICLE 2. ELIGIBILITY.......................................................................2 2.1. Entry.............................................................................2 2.2. Transfer Among Participating Employers............................................2 2.3. Multiple Employment...............................................................2 2.4. Reentry...........................................................................2 2.5. Condition of Participation........................................................2 2.6. Termination of Participation......................................................2 ARTICLE 3. CONTRIBUTIONS.....................................................................4 3.1. 401(k) Contributions..............................................................4 3.2. Matching Contributions............................................................5 3.3. Rollovers.........................................................................7 3.4. Corrective Contributions..........................................................8 ARTICLE 4. ACCOUNTS AND VALUATION............................................................9 4.1. Establishment of Accounts.........................................................9 4.2. Valuation and Account Adjustment.................................................10 4.3. Allocations Do Not Create Rights.................................................10 ARTICLE 5. PARTICIPANT INVESTMENT DIRECTION.................................................11 5.1. Establishment of Investment Funds................................................11 5.2. Contribution Investment Directions...............................................12 5.3. Transfer Among Investment Funds..................................................12 5.4. Company Stock Fund Rules.........................................................12 5.5. Ceridian Stock Fund Rules........................................................14 5.6. Investment Direction Responsibility Resides With Participants....................15 5.7. Beneficiaries and Alternate Payees...............................................15 ARTICLE 6. WITHDRAWALS DURING EMPLOYMENT AND LOANS..........................................16 6.1. Hardship Withdrawals from 401(k) Contribution Account............................16 6.2. Withdrawals After Attaining Age 59-1/2...........................................18 6.3. Withdrawals from Rollover Account................................................18 6.4. Rules for Withdrawals............................................................18 6.5. No Other In-Service Withdrawals..................................................19 6.6. Plan Loans.......................................................................19

i 4 ARTICLE 7. VESTING AND FORFEITURES..........................................................23 7.1. Vesting..........................................................................23 7.2. Forfeiture Upon Distribution.....................................................23 7.3. Other Forfeitures................................................................25 7.4. Application of Forfeitures.......................................................25 ARTICLE 8. DISTRIBUTIONS AFTER TERMINATION..................................................27 8.1. Time of Distribution.............................................................27 8.2. Form of Distribution.............................................................28 8.3. Beneficiary Designation..........................................................28 8.4. Assignment, Alienation of Benefits...............................................30 8.5. Payment in Event of Incapacity...................................................30 8.6. Payment Satisfies Claims.........................................................30 8.7. Disposition if Distributee Cannot be Located.....................................30 8.8. Direct Rollovers and Transfers...................................................31 ARTICLE 9. CONTRIBUTION LIMITATIONS.........................................................32 9.1. 401(k) Contribution Dollar Limitation............................................32 9.2. Actual Deferral Percentage Limitations...........................................32 9.3. Actual Contribution Percentage Limitations.......................................35 9.4. Multiple Use Limitation..........................................................37 9.5. Earnings or Losses on Excess Contributions.......................................39 9.6. Annual Additions Limitation......................................................39 9.7. Administrator's Discretion.......................................................41 ARTICLE 10. ADOPTION, AMENDMENT AND TERMINATION.............................................42 10.1.Adoption by Affiliated Organizations.............................................42 10.2.Authority to Amend and Procedure.................................................42 10.3.Authority to Terminate and Procedure.............................................43 10.4.Vesting Upon Termination, Partial Termination or Discontinuance of Contributions....................................................................43 10.5.Distribution Following Termination, Partial Termination or Discontinuance of Contributions..................................................43 ARTICLE 11. PLAN ADMINISTRATION.............................................................44 11.1.Retirement Committee.............................................................44 11.2.Operation of Committee...........................................................44 11.3.Duties of Administrator..........................................................45 11.4.Delegation.......................................................................45 11.5.Reports and Records..............................................................46 11.6.Compensation.....................................................................46 11.7.Professional Assistance..........................................................46 11.8.Payment Of Administrative Costs..................................................46 11.9 Indemnification..................................................................46 11.10Claims Procedure.................................................................47 11.11Limitations on Certain Actions...................................................47 ii 5 11.12Correction of Errors.............................................................48 11.13Standards for Elections, Directions and Similar Actions..........................48 ARTICLE 12. MISCELLANEOUS...................................................................49 12.1.Merger, Consolidation, Transfer of Assets........................................49 12.2.Limited Reversion of Fund........................................................49 12.3.Top-Heavy Provisions.............................................................49 12.4.No Employment Rights Created.....................................................53 12.5.Special Provisions...............................................................53 12.6.Qualified Military Service.......................................................53 12.7.Short Plan Years.................................................................55 ARTICLE 13. DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS...................................56 13.1.Definitions......................................................................56 13.2.Construction and Interpretations.................................................64 EXHIBIT A..................................................................................A-1 iii 6 ARBITRON 401(K) PLAN ARTICLE 1 DESCRIPTION AND PURPOSE 1.1. PLAN NAME. The name of the Plan is the "Arbitron 401(k) Plan." 1.2. PLAN DESCRIPTION. The Plan is a profit sharing plan providing for 401(k) Contributions pursuant to a qualified cash or deferred arrangement and Matching Contributions. The Plan is intended to qualify under Code section 401(a) and to satisfy the requirements of Code sections 401(k) and 401(m). Although the Plan is a profit sharing plan, a Participating Employer may make contributions to the Plan even though it has no current or accumulated earnings or profits. 1.3. PLAN BACKGROUND. (a) The Company, formerly known as Ceridian Corporation, previously maintained the Ceridian 401(k) Plans. Prior to the spin-off by the Company of all of the outstanding stock of New Ceridian Corporation, a Delaware corporation and wholly owned subsidiary of the Company (the "New Ceridian Spin-off"), the Company transferred sponsorship of the Ceridian 401(k) Plans to New Ceridian Corporation. Following the New Ceridian Spin-off, the Company was renamed Arbitron Inc. and New Ceridian Corporation was renamed Ceridian Corporation. (b) The Company established the Plan effective as of March 31, 2001 and assets and liabilities under the Ceridian 401(k) Plans attributable to participants in the Ceridian 401(k) Plans who were Employees at the effective time of the New Ceridian Spin-off, and to certain participants in the Ceridian 401(k) Plans who had terminated employment prior to the effective time of the New Ceridian Spin-off, were transferred to Trust as of the Transfer Date. With respect to the participants in the Ceridian 401(k) Plans whose account balances were transferred to the Plan, the Plan is a successor to the Ceridian 401(k) Plans. 1 7 ARTICLE 2 ELIGIBILITY 2.1. ENTRY. (a) An Employee will become a Participant on the first day on or after the Effective Date on which he or she completes an Hour of Service as a Qualified Employee. (b) Notwithstanding Subsection (a), in conjunction with an acquisition, the Administrator may specify an entry date that is later than the date specified in Subsection (a) but such date may not be later than the first anniversary of the acquisition date and the later entry date must be applicable to all individuals who became Employees in connection with the acquisition. (c) An individual who, on March 31, 2001, is a former Employer or an Employee who is not a Qualified Employee and whose account under the Ceridian 401(k) Plan is transferred to the Plan in connection with the New Ceridian Spin-off will become a Participant on the effective date of the transfer, unless he or she becomes a Participant before then pursuant to Subsection (a). 2.2. TRANSFER AMONG PARTICIPATING EMPLOYERS. A Participant who transfers from one Participating Employer to another Participating Employer as a Qualified Employee will participate in the Plan for the Plan Year during which the transfer occurs on the basis of his or her separate Eligible Earnings for the Plan Year from each Participating Employer. 2.3. MULTIPLE EMPLOYMENT. A Participant who is simultaneously employed as a Qualified Employee with more than one Participating Employer will participate in the Plan as a Qualified Employee of all of his or her Participating Employers on the basis of his or her separate Eligible Earnings from each Participating Employer. 2.4. REENTRY. An Active Participant who ceases to be a Qualified Employee will resume active participation in the Plan on the first following day on which he or she completes an Hour of Service as a Qualified Employee. 2.5. CONDITION OF PARTICIPATION. Each Qualified Employee, as a condition of participation, is bound by all of the terms and conditions of the Plan and must furnish to the Administrator such pertinent information and execute such instruments as the Administrator may require. 2.6. TERMINATION OF PARTICIPATION. A Participant will cease to be a Participant as of the later of the date on which: (a) he or she ceases to be a Qualified Employee; or 2 8 (b) all benefits, if any, to which he or she is entitled under the Plan have been forfeited or distributed. 3 9 ARTICLE 3 CONTRIBUTIONS 3.1. 401(k) CONTRIBUTIONS. (a) Subject to the limitations described in Article 9, for each Plan Year an Active Participant's Participating Employer will make 401(k) Contributions on behalf of the Participant in the amount by which the Participant's Eligible Earnings from the Participating Employer for the Plan Year have been reduced in accordance with the succeeding provisions of this section. 401(k) Contributions will be paid to the Trustee as soon as administratively practicable after the date on which the Active Participant would have received the Eligible Earnings but for his or her election pursuant to this section but in no case later than the fifteenth business day of the month following the month during which the Participant would have received the Eligible Earnings but for his or her election pursuant to this section. (b) Except as provided in Subsection (c), a Participant's Eligible Earnings will be reduced in accordance with the rules in this subsection. A reference in this section to an election to make 401(k) Contributions means that the Participant has elected to have his or her Eligible Earnings reduced in consideration of the Participating Employer's obligation to make 401(k) Contributions in the same amount on the Participant's behalf. (i) An Active Participant may elect to make 401(k) Contributions in any one percent increment from one percent to a maximum percentage specified in Plan Rules and the elected percentage will automatically apply to the Active Participant's Eligible Earnings as adjusted from time to time. Plan Rules may specify a maximum percentage for Active Participants who are Highly Compensated Employees that is less than the maximum percentage specified for Active Participants who are not Highly Compensated Employees. No 401(k) Contributions will be made on behalf of a Participant with respect to a period during which he or she is not an Active Participant. (ii) An Active Participant's election to commence 401(k) Contributions pursuant to clause (i) will become effective at the time and manner specified in Plan Rules after the Administrator receives a complete and accurate election. (iii) An Active Participant may elect to change the percentage rate of his or her 401(k) Contributions. The election will become effective at the time and manner specified in Plan Rules after the Administrator receives a complete and accurate election of such change. 4 10 (iv) 401(k) Contributions for an Active Participant who makes a hardship withdrawal under Section 6.1 will be automatically suspended for the 12-month period beginning on the date of the withdrawal distribution. Following the suspension period the Active Participant may again elect 401(k) Contributions in accordance with clause (iii). (c) Elections pursuant to this section and Eligible Earnings reductions must be made in accordance with and are subject to Plan Rules. Only Eligible Earnings payable after an Active Participant's complete and accurate election has been received and become effective will be reduced pursuant to the election. If any election is not processed on a timely basis, or if, for any reason, an Active Participant's Eligible Earnings are not reduced in accordance with the Participant's election, no retroactive adjustments will be made to take into account the effect of any such delay or failure. Plan Rules, however, may permit an Active Participant to elect to make 401(k) Contributions from his or her Eligible Earnings payable during any remaining portion of the Plan Year during which the delay or failure occurred at more than the otherwise applicable maximum percentage to adjust for the effect of the delay or failure so long as the total reductions for the Plan Year do not exceed the applicable maximum percentage or the limitations described in Article 9. 3.2. MATCHING CONTRIBUTIONS. (a) Subject to Subsection (d) and the limitations described in Article 9, the Participating Employer of an Active Participant other than an SBC Participant will make a Basic Matching Contribution on behalf of the Participant for a given calendar month in an amount, if any, equal to a specified percentage of the "applicable portion," as defined in Subsection (e), of the Participant's 401(k) Contributions for the month, such percentage with respect to all months during a Plan Year to be specified by the Participating Employer. Subject to Subsection (d) and the limitations described in Article 9, if, as of the end of any month during a Plan Year, the aggregate amount of Basic Matching Contributions made on behalf of an Active Participant is less than the specified percentage of the applicable portion of the Participant's 401(k) Contributions for the portion of the Plan Year through the end of such month, the Participating Employer will make an additional Basic Matching Contribution on behalf of the Active Participant in an amount equal to the difference. An SBC Participant is not eligible to share in Basic Matching Contributions. (b) Subject to Subsection (d) and the limitations described in Article 9, the Participating Employer of an eligible Active Participant other than an SBC Participant will make a Performance-Based Matching Contribution on behalf of the Participant in an amount, if any, equal to a specified percentage of the "applicable portion," as defined in Subsection (e), of the Participant's 401(k) Contributions for the Plan Year, such percentage to be specified by the Participating Employer. (In the case of a Participant whose Accounts were transferred from a Ceridian 401(k) Plan to the Plan as of the Transfer Date as 5 11 described in Section 1.3(b), the Participant's pre-tax contributions to the Ceridian 401(k) Plan for the period from January 1, 2001 through March 30, 2001 will be treated as 401(k) Contributions to the Plan for the purpose of the Performance-Based Matching Contribution, if any, to the Plan for the 2001 Plan Year.) To be eligible to share in a Performance-Based Matching Contribution for a given Plan Year, an Active Participant must have either been: (i) Actively employed with an Affiliated Organization on the last day of the Plan Year; or (ii) On a leave of absence on the last day of the Plan Year due to (1) military or jury service which is required by applicable law to be treated as an authorized leave, or any other absence required by applicable law or contractual undertaking to be treated as an authorized leave, (2) a leave of absence authorized for medical reasons, public service, social service or educational purposes, which is granted under rules applied uniformly to all Employees, (3) any other leave of absence authorized by an Affiliated Organization, which is granted under rules applied uniformly to all Employees or (4) a layoff, but only to the extent it does not exceed six months' duration. An SBC Participant is not eligible to share in Performance-Based Matching Contributions. (c) A Participating Employer's Matching Contributions for a Plan Year will be paid to the Trustee on such date or dates during or following such Plan Year as the Participating Employer may elect but in no case more than 12 months after the end of the Plan Year. (d) No Matching Contribution will be made with respect to any portion of a Participant's 401(k) Contributions returned to the Participant pursuant to Article 9. For this purpose, 401(k) Contributions with respect to which no Matching Contributions are made for a Plan Year will be deemed to be the first such contributions returned to the Participant. If the Administrator determines that Matching Contributions that have been added to a Participant's Account should not have been added by reason of this subsection, the contributions, increased by Fund earnings or decreased by Fund losses attributable to the contributions, as determined under Section 9.5, will be subtracted from the Account as soon as administratively practicable after the determination is made and will be applied to satisfy the contribution obligations of the Participating Employer that made the excess contributions for the Plan Year for which the 6 12 excess contributions were made. If, because of the passage of time, the excess cannot be applied in this way, the excess will be allocated, in the discretion of the Administrator: (i) among the Basic Matching Accounts or Performance-Based Matching Accounts, as determined by the Administrator, of all Participants who made 401(k) Contributions for the Plan Year as Qualified Employees of the Participating Employer in proportion to such 401(k) Contributions up to the "applicable portion," as defined in Subsection (e), of the Participant's 401(k) Contributions for the Plan Year; or (ii) as a corrective contribution pursuant to Section 3.4. (e) The "applicable portion" with respect to a Participant is: (i) the portion of the Participant's 401(k) Contributions for the period in question which does not exceed three percent of his or her Eligible Earnings for the period in the case of a Participant who is a participant in the Arbitron Retirement Plan; or (ii) the portion of the Participant's 401(k) Contributions for the period in question which does not exceed six percent of his or her Eligible Earnings for the period in the case of a Participant who is not a participant in the Arbitron Retirement Plan. (f) Notwithstanding any other provision of this section to the contrary, a Participant covered by a collective bargaining agreement between his or her bargaining representative and a Participating Employer is eligible for Matching Contributions only if and to the extent provided in the collective bargaining agreement. 3.3. ROLLOVERS. (a) With the prior consent of the Administrator, an Active Participant may contribute to the Trust, in a direct rollover pursuant to Code section 401(a)(31) or within 60 days of receipt: (i) an amount paid or distributed out of an individual retirement account to which the only contributions have been one or more Eligible Rollover Distributions; or (ii) an Eligible Rollover Distribution from such a qualified plan. (b) Any contribution to the Trust pursuant to this section must be made in cash and will be added to the Participant's Rollover Account. 7 13 3.4. CORRECTIVE CONTRIBUTIONS. (a) For any Plan Year, a Participating Employer may, but is not required to, contribute to the Basic Matching Accounts of Active Participants who are not Highly Compensated Employees, or any group of such Participants identified by the Administrator, such amounts as the Participating Employer deems advisable to assist the Plan in satisfying the requirements of Section 9.2, 9.3 or 9.4, or any other requirement under the Code or Treasury Regulations, for the Plan Year. (b) Contributions pursuant to this section will be allocated in accordance with one or more of the following clauses, as determined by the Administrator. (i) Contributions pursuant to this section which are allocated pursuant to this clause (i) will be allocated among the Basic Matching Accounts of the Participants eligible to share in the allocation who made 401(k) Contributions for the Plan Year in proportion to such 401(k) Contributions up to the "applicable portion," as defined in Section 3.2(e), of the Participant's 401(k) Contributions for the Plan Year. (ii) Contributions pursuant to this section which are allocated pursuant to this clause (ii) will be allocated among the Basic Matching Accounts of Participants eligible to share in the allocation who made 401(k) Contributions for the Plan Year by starting with the eligible Participant with the lowest Eligible Earnings for the Plan Year and allocating to that Participant the maximum amount permitted by Section 9.6 and continuing successively with the eligible Participants with the next lowest Eligible Earnings for the Plan Year until the amount to be allocated pursuant to this clause (ii) has been fully allocated. (iii) Contributions pursuant to this section which are allocated pursuant to this clause (iii) will be allocated among the Basic Matching Accounts of the Participants eligible to share in the allocation who made 401(k) Contributions for the Plan Year on a per capita basis. 8 14 ARTICLE 4 ACCOUNTS AND VALUATION 4.1. ESTABLISHMENT OF ACCOUNTS. (a) For each Participant, the following Accounts will be established and maintained: (i) A 401(k) Contribution Account, to which there will be added any 401(k) Contributions made on the Participant's behalf; (ii) A Basic Matching Account, to which there will be added any Basic Matching Contributions made on the Participant's behalf; (iii) A Performance-Based Matching Account, to which there will be added any Performance-Based Matching Contributions made on the Participant's behalf; and (iv) A Rollover Account, to which there will be added any rollover contribution made by the Participant pursuant to Section 3.3. (b) In connection with the transfer of assets and liabilities from the Ceridian 401(k) Plans to the Plan as described in Section 1.3(b), a Participant's accounts under a Ceridian 401(k) Plan as of the Transfer Date will, on or as soon as administratively practicable after the Transfer Date, be added to his or her Accounts under the Plan as follows: (i) his or her "pre-tax contribution account" balance will be added to his or her 401(k) Contribution Account; (ii) his or her "basic matching account" balance will be added to his or her Basic Matching Account; (iii) his or her "performance-based matching account" balance will be added to his or her Performance-Based Matching Account; and (iv) his or her "general rollover account" balance will be added to his or her Rollover Account. (c) One or more additional accounts may be established and maintained for any Participant or group of similarly situated Participants in connection with the merger of another plan into the Plan, in which case provisions of the Plan applicable solely to such accounts will be set forth on an exhibit to the Plan in accordance with Section 12.5. 9 15 4.2. VALUATION AND ACCOUNT ADJUSTMENT. (a) Subject to Subsection (b), at such intervals as specified in Plan Rules, but at least annually, each Participant's Accounts within each investment fund established pursuant to Section 5.1 will be adjusted, in a manner determined by the Administrator to be uniform and equitable with respect to the Accounts being adjusted at the time in question, for income, expense, gains and losses of the investment fund, as well as contributions, withdrawals, loans, loan repayments, satisfaction of unpaid indebtedness in accordance with Section 6.6(d), distributions and other activity, since the last prior adjustment. (b) The portion of a Participant's Accounts invested in Company Stock, Ceridian Stock or publicly traded mutual funds will be accounted for in a uniform and equitable manner on the basis of the number of full and fractional Company Stock, Ceridian Stock or mutual fund shares credited to the Accounts. Cash dividends attributable to shares of Company Stock or publicly traded mutual fund shares will be added to Participants' Accounts on or as soon as administratively practicable after the date of payment of such dividends and will be reinvested, to the extent practicable, in full and fractional shares of Company Stock or mutual fund shares, as the case may be, as soon as administratively practicable after the dividends are received by the Trustee. Cash dividends attributable to Ceridian Stock will be added to Participants' Accounts on or as soon as administratively practicable after the date of payment of such dividends and will be invested as soon as administratively practicable after the dividends are received by the Trustee in accordance with each Participant's most recent investment directions with respect to new contributions under the Plan. Stock dividends attributable to Company Stock or Ceridian Stock will be added to Participants' Accounts in accordance with the number of full and fractional shares of Company Stock or Ceridian Stock, as the case may be, held in each Participant's Account on the date of the payment of such dividends. 4.3. ALLOCATIONS DO NOT CREATE RIGHTS. The fact that allocations are made and credited to the Accounts of a Participant does not vest in the Participant any right, title or interest in or to any portion of the Fund except at the time or times and upon the terms and conditions expressly set forth in the Plan. Notwithstanding any allocation or addition to the Account of any Participant, the issuance of any statement to the Participant or a Beneficiary of a deceased Participant or the distribution of all or a portion of any Account balance, the Administrator may direct the Account to be adjusted to the extent necessary to correct any error in the Account, whether caused by misapplication of any provision of the Plan or otherwise, and may recover from the Participant or Beneficiary the amount of any excess distribution. 10 16 ARTICLE 5 PARTICIPANT INVESTMENT DIRECTION 5.1. ESTABLISHMENT OF INVESTMENT FUNDS. (a) In order to allow each Participant to determine the manner in which his or her Accounts will be invested, the Trustee will maintain, within the Trust, three or more separate investment funds of such nature and possessing such characteristics as the Committee may specify from time to time. Each Participant's Accounts will be invested in the investment funds in the proportions directed by the Participant in accordance with the procedures set forth in Sections 5.2 and 5.3. The Committee may, from time to time, direct the Trustee to establish additional investment funds or to terminate any existing investment fund. (b) Notwithstanding any other provision of the Plan to the contrary, the Committee may direct the Trustee to suspend Participant investment activity (including such activity in connection with the withdrawals, loans and distributions) in any or all investment funds, or impose special rules or restrictions of uniform application, for a period determined by the Committee to be necessary in connection with: (i) the establishment or termination of any investment fund; (ii) the receipt by the Trustee from, or transfer by the Trustee to, another trust of account balances in connection with an acquisition or divestiture or otherwise; (iii) a change of Trustee, investment manager or recordkeeper; or (iv) such other circumstances determined by the Committee as making such suspension or special rules or restrictions necessary or appropriate. In connection with the transfer of assets and liabilities from the Ceridian 401(k) Plans to the Plan as of the Transfer Date, no transfers pursuant to Section 5.3 or withdrawals, loans or distributions will be permitted from the Effective Date through a date specified in Plan Rules. (c) In connection with the transfer of assets and liabilities from the Ceridian 401(k) Plans to the Plan as described in Section 1.3(b): (i) Any promissory note evidencing an outstanding loan to a Participant under a Ceridian 401(k) Plan will be transferred from the applicable Ceridian 401(k) Plan trust to the Trust as the successor to the applicable Ceridian 401(k) Plan trust; 11 17 (ii) Shares of Company Stock or Ceridian Stock credited to a Participant's accounts pursuant to a Ceridian 401(k) Plan will be transferred from the applicable Ceridian 401(k) Plan trust to the Trust; and (iii) Shares of any publicly traded mutual fund credited to a Participant's accounts under a Ceridian 401(k) Plan will be transferred from the applicable Ceridian 401(k) Plan trust to the Trust; subject, in each case, to a Participant's right to make transfers pursuant to Section 5.3 following the end of the period during which transfer activity is suspended in connection with the transfer of assets and liabilities from the Ceridian 401(k) Plans to the Plan. 5.2. CONTRIBUTION INVESTMENT DIRECTIONS. (a) In conjunction with a Participant's enrollment in the Plan, contributions (other than rollover contributions) will initially be invested in one investment fund designated in Plan Rules. (b) On and after a date specified in Plan Rules following a Participant's enrollment in the Plan, a Participant may direct a change in the manner in which future contributions credited to his or her Accounts will be invested among the investment funds maintained pursuant to Section 5.1. Such a direction will become effective at the time and manner specified in Plan Rules after the Trustee receives a complete and accurate direction. (c) Plan Rules will include procedures pursuant to which Participants are provided with the opportunity to obtain written confirmation of investment directions made pursuant to this section. 5.3. TRANSFER AMONG INVESTMENT FUNDS. (a) A Participant may direct the transfer of his or her Accounts among the investment funds maintained pursuant to Section 5.1. Such a direction will become effective at the time and manner specified in Plan Rules after the Trustee receives a complete and accurate direction. (b) Plan Rules will include procedures pursuant to which Participants are provided with the opportunity to obtain written confirmation of investment directions made pursuant to this section. (c) Plan Rules may impose uniform limitations and restrictions applicable to transfers into and out of specific investment funds. 5.4. COMPANY STOCK FUND RULES. (a) The Trustee will establish as one of the investment funds under Section 5.1, a fund, designated as the Company Stock Fund, which will be invested entirely in 12 18 shares of Company Stock except for cash held pending acquisition of shares of Company Stock or transfers or cash distributions from the Company Stock Fund. (b) Each Participant having an interest in the Company Stock Fund will be afforded the opportunity to direct the manner in which shares of Company Stock credited to his or her Accounts will be voted in connection with all stockholder actions of the Company. In the event of a public tender or exchange offer for shares of Company Stock, each Participant will be entitled to direct whether or not the shares of the Company Stock credited to his or her Accounts will be tendered for sale or exchange in connection with such offer. A Participant will be a "named fiduciary" within the meaning of ERISA section 403(a)(1) for the purpose of directing the voting and tendering of Company Stock credited to his or her Accounts. Voting and tender decisions will be effected in accordance with the following rules. (i) The Administrator will, prior to each meeting of the stockholders of the Company, cause to be furnished to each such Participant a copy of the proxy solicitation materials, together with a form requesting confidential directions on how the shares of Company Stock credited to his or her Accounts will be voted on each matter to be brought before such meeting. The Administrator will use his or her best efforts to ensure that each such Participant receives such information as will be distributed to stockholders of the Company in connection with any public tender or exchange offer for shares of Company Stock and that each receives a form on which confidential directions may be provided to the Trustee. (ii) The Trustee will hold all directions received from Participants pursuant to this section in strict confidence and will not disclose any such direction to any person unless the Trustee determines such disclosure is required to comply with applicable law. (iii) The Trustee will vote the number of full and fractional shares credited to each Participant's Accounts as directed by the Participant if the direction is received in time for the direction to be processed. In the case of a public tender or exchange offer, the Trustee will tender the shares credited to the Participant's Accounts if so directed by the Participant, and will not tender shares credited to the Accounts of a Participant who either directs that such shares not be tendered or does not furnish a timely direction to the Trustee. (iv) The Trustee will vote any Company Stock that has not been credited to any Participant's Account and any Company Stock with respect to which it does not receive timely directions in accordance with the provisions of the Trust Agreement. The Trustee will tender for sale or exchange in a public tender or exchange offer the same proportion of any shares not credited to an Account as it tenders of shares credited to the Accounts of Participants. 13 19 5.5. CERIDIAN STOCK FUND RULES. (a) The Trustee will establish as one of the investment funds under Section 5.1, a fund, designated as the Ceridian Stock Fund, which will be invested entirely in shares of Ceridian Stock except for cash held pending transfers or cash distributions from the Ceridian Stock Fund. (b) The Ceridian Stock Fund will be terminated as of March 30, 2002 (unless terminated sooner by the Committee pursuant to Section 5.1(b)). Any shares of Ceridian Stock remaining in the Ceridian Stock Fund on March 30, 2002 will be sold on or as soon as administratively practicable after March 30, 2002 and the net proceeds of the sale will be transferred to another investment fund designated in Plan Rules. (c) Notwithstanding Sections 5.2 and 5.3, no contributions or transfers may be made to the Ceridian Stock Fund. (d) Each Participant having an interest in the Ceridian Stock Fund will be afforded the opportunity to direct the manner in which shares of Ceridian Stock credited to his or her Accounts will be voted in connection with all stockholder actions of Ceridian Corporation. In the event of a public tender or exchange offer for shares of Ceridian Stock, each Participant will be entitled to direct whether or not the shares of Ceridian Stock credited to his or her Accounts will be tendered for sale or exchange in connection with such offer. A Participant will be a "named fiduciary" within the meaning of ERISA section 403(a)(1) for the purpose of directing the voting and tendering of Ceridian Stock credited to his or her Accounts. Voting and tender decisions will be effected in accordance with the following rules. (i) The Administrator will, prior to each meeting of the stockholders of Ceridian Corporation, cause to be furnished to each such Participant a copy of the proxy solicitation materials, together with a form requesting confidential directions on how the shares of Ceridian Stock credited to his or her Accounts will be voted on each matter to be brought before such meeting. The Administrator will use his or her best efforts to ensure that each such Participant receives such information as will be distributed to stockholders of Ceridian Corporation in connection with any public tender or exchange offer for shares of Ceridian Stock and that each receives a form on which confidential directions may be provided to the Trustee. (ii) The Trustee will hold all directions received from Participants pursuant to this section in strict confidence and will not disclose any such direction to any person unless the Trustee determines such disclosure is required to comply with applicable law. (iii) The Trustee will vote the number of full and fractional shares credited to each Participant's Accounts as directed by the Participant if the direction 14 20 is received in time for the direction to be processed. In the case of a public tender or exchange offer, the Trustee will tender the shares credited to the Participant's Accounts if so directed by the Participant, and will not tender shares credited to the Accounts of a Participant who either directs that such shares not be tendered or does not furnish a timely direction to the Trustee. (iv) The Trustee will vote any Ceridian Stock that has not been credited to any Participant's Account and any Ceridian Stock with respect to which it does not receive timely directions in accordance with the provisions of the Trust Agreement. The Trustee will tender for sale or exchange in a public tender or exchange offer the same proportion of any shares not credited to an Account as it tenders of shares credited to the Accounts of Participants. 5.6. INVESTMENT DIRECTION RESPONSIBILITY RESIDES WITH PARTICIPANTS. The Plan is intended to constitute a plan described in ERISA section 404(c). Accordingly, neither the Committee, the Administrator, the Trustee nor the Participating Employers have any authority, discretion, responsibility or liability with respect to a Participant's selection of the investment funds in which his or her Accounts will be invested, the entire authority, discretion and responsibility for, and any results attributable to, the selection being that of the Participant. 5.7. BENEFICIARIES AND ALTERNATE PAYEES. Solely for purposes of this article, the term "Participant" includes the Beneficiary of a deceased Participant and an alternate payee under a qualified domestic relations order within the meaning of Code section 414(p) unless otherwise provided in such order, but only after: (a) the Administrator has determined the identity of the Beneficiary and the amount of the Account balance to which he or she is entitled in the case of a Beneficiary of a deceased Participant; or (b) the Administrator has, in accordance with Plan Rules, made a final determination that the order is a qualified domestic relations order and all rights to contest such determination in a court of competent jurisdiction within the time prescribed by Plan Rules have expired or been exhausted in the case of an alternate payee. 15 21 ARTICLE 6 WITHDRAWALS DURING EMPLOYMENT AND LOANS 6.1. HARDSHIP WITHDRAWALS FROM 401(k) CONTRIBUTION ACCOUNT. (a) Subject to the provisions of Section 6.4, a Participant who is an Employee may make a hardship withdrawal from his or her 401(k) Contribution Account in accordance with this section. A hardship withdrawal will be permitted only if the Administrator determines that the withdrawal is made on account of an immediate and heavy financial need of the Participant and is necessary to satisfy such financial need. (b) A withdrawal will be deemed to be made on account of an immediate and heavy financial need only if it is determined by the Administrator to be on account of: (i) expenses for medical care, described in Code section 213(d), incurred or to be incurred by the Participant, the Participant's spouse or the Participant's dependent (as defined in Code section 152); (ii) costs directly related to the purchase (excluding mortgage payments) of a principal residence of the Participant; (iii) payment of tuition, related educational fees and room and board expenses for the next 12 months of post-secondary education for the Participant or his or her spouse, child or other dependent (as defined in Code section 152); or (iv) payments necessary to prevent the eviction of the Participant from his or her principal residence or foreclosure on the mortgage on the Participant's principal residence. (c) A withdrawal will be deemed to be necessary to satisfy the immediate and heavy financial need of the Participant only if the Administrator determines that each of the requirements in this subsection is satisfied. (i) The distribution is not more than the sum of the amount of the immediate and heavy financial need of the Participant plus an amount to pay any federal, state or local taxes or penalties that the Participant will incur in connection with the distribution or to satisfy withholding obligations in connection with the distribution, as determined by the Administrator in accordance with Plan Rules. (ii) The Participant has received all withdrawals and has taken all nontaxable loans available under the Plan and all other qualified plans maintained by any Affiliated Organization. 16 22 (iii) All 401(k) Contributions and all elective deferrals and after-tax employee contributions by or on behalf of the Participant under any other qualified or nonqualified plan of deferred compensation maintained by any Affiliated Organization are suspended for a period of 12 months following the date of the distribution. (iv) For the Participant's taxable year following the taxable year during which he or she received the withdrawal distribution, the amount of elective deferrals under all qualified plans maintained by any Affiliated Organization (including 401(k) Contributions pursuant to the Plan) that may be made on the Participant's behalf under Code section 402(g) is reduced by the amount of such elective deferrals made on the Participant's behalf for the taxable year during which he or she received the distribution. (d) The Administrator's determination of the existence of a Participant's financial hardship and the amount that may be withdrawn to satisfy the need created by such hardship will be made in accordance with Treasury Regulations, and is final and binding on the Participant. The Administrator may require the Participant to make representations and certifications concerning his or her entitlement to a withdrawal pursuant to this section and is entitled to rely on such representations and certifications unless the Administrator has actual knowledge to the contrary. The Administrator is not obligated to supervise or otherwise verify that amounts withdrawn are applied in the manner specified in the Participant's withdrawal application. (e) The amount of any withdrawal pursuant to this section may not exceed: (i) in the case of a Participant whose pre-tax contribution account under a Ceridian 401(k) Plan was transferred to the Plan and credited to his or her 401(k) Contribution Account, the balance of the Participant's pre-tax contribution account under the Ceridian 401(k) Plan as of December 31, 1988, increased by the amount of pre-tax contributions made on the Participant's behalf under the Ceridian 401(k) Plan for the period from January 1, 1989 through March 30, 2001 and the amount of 401(k) Contributions made on the Participant's behalf pursuant to the Plan and reduced by the amount of pre-tax contributions distributed to the Participant pursuant to the Ceridian 401(k) Plan for the period from January 1, 1989 through March 30, 2001 and the amount of 401(k) Contributions distributed to the Participant pursuant to the Plan; and (ii) in the case of any other Participant, the amount of 401(k) Contributions made on the Participant's behalf pursuant to the Plan reduced by the amount of 401(k) Contributions distributed to the Participant pursuant to the Plan. 17 23 6.2. WITHDRAWALS AFTER ATTAINING AGE 59-1/2. Subject to the provisions of Section 6.4, a Participant who is an Employee and has attained age 59-1/2 may withdraw all or any part of the vested balance of his or her Accounts. 6.3. WITHDRAWALS FROM ROLLOVER ACCOUNT. Subject to the provisions of Section 6.4, a Participant who is an Employee may withdraw all or any part of the balance of his or her Rollover Account. 6.4. RULES FOR WITHDRAWALS. (a) Applications for withdrawals must be made in accordance with and are subject to Plan Rules. (b) A Participant's withdrawal application must specify the investment fund or funds from which the withdrawal distribution is to be made and a withdrawal distribution pursuant to Section 6.2 will be made on a pro rata basis among the Participant's Accounts invested in that fund or funds. (c) A withdrawal distribution will be made as soon as administratively practicable after the Administrator's determination that the Participant is entitled to receive the withdrawal distribution. (d) All withdrawal distributions will be made in the form of a single payment. (e) To the extent that the Account from which a withdrawal distribution is made is invested in the Company Stock Fund immediately prior to the distribution, at the Participant's election, a withdrawal distribution pursuant to Section 6.2 or 6.3 (but not a withdrawal distribution pursuant to Section 6.1) may be made in whole shares of Company Stock. To the extent that the Account from which a withdrawal distribution is made is invested in the Ceridian Stock Fund immediately prior to the distribution, at the Participant's election, a withdrawal distribution pursuant to Section 6.2 or 6.3 (but not a withdrawal distribution pursuant to Section 6.1) may be made in whole shares of Ceridian Stock. All other withdrawal distributions will be made in the form of cash. (f) A Participant may not withdraw the portion of his or her Accounts consisting of a note evidencing the unpaid balance of any loan made pursuant to the Plan. (g) The provisions of Section 8.8(a) apply to any withdrawal distribution that constitutes an Eligible Rollover Distribution. (h) If a Participant who is not a participant in the Arbitron Retirement Plan makes a withdrawal pursuant to Section 6.2 from his or her Performance-Based Matching Account, and he or she does not have a fully vested interest in the Account at the time of the withdrawal, his or her vested interest in the Account after the withdrawal will be determined in accordance with Section 7.3(b). 18 24 6.5. NO OTHER IN-SERVICE WITHDRAWALS. Except as otherwise expressly provided in the Plan, a Participant may not make withdrawals from his or her Basic Matching Account or Performance-Based Matching Account prior to his or her termination of employment. 6.6. PLAN LOANS. (a) Each Participant or Beneficiary of a deceased Participant who is an Employee or is otherwise a "party in interest" within the meaning of ERISA, may borrow funds from his or her 401(k) Contribution Account and Rollover Account by submitting to the Administrator or the Administrator's designate a complete and accurate loan application, in accordance with and subject to Plan Rules, subject to the succeeding provisions of this section. (i) The amount of the loan may not cause the aggregate amount of outstanding loans to the borrower from the Plan to exceed the lesser of: (1) $50,000, reduced by the excess (if any) of (A) the highest outstanding balance of all loans to the borrower from the Plan and all other qualified plans maintained by any Affiliated Organization during the 12-month period ending on the day before the date of the loan over (B) the outstanding balance of such loans on the date of the loan; and (2) 50 percent of the aggregate balance of the borrower's 401(k) Contribution Account and Rollover Account as of the date on which the loan is made. (ii) No individual loan will be made in an amount less than $1000 and each loan must be in a multiple of $100. (iii) No borrower may have outstanding at any time more than two loans with a maturity of five years or less and one loan with a maturity of more than five years. (iv) A Borrower may not submit more than one loan application during any 30-day period. (v) No loan will be made to a Beneficiary prior to the Administrator's determination of the identity of an amount distributable to the Beneficiary. (vi) Loans will be charged first against a borrower's 401(k) Contribution Account until the balance of the 401(k) Contribution Account has been exhausted, and then against the borrower's Rollover Account. Any loan application fee charged by the Trustee or another third party will be charged against the borrower's Accounts in the same order. 19 25 (vii) Loan proceeds and any loan application fee will be obtained on a pro rata basis from the investment fund or funds in which the borrower's Accounts are then invested. (b) Each loan will bear interest on the unpaid principal balance at a rate specified by the Administrator. The Administrator will specify a reasonable rate of interest to be effective with respect to loans made during the periods beginning on the dates specified in Plan Rules, but at least each January 1 and July 1, and the rate in effect when a loan is made will remain in effect for the term of the loan except as otherwise provided in the promissory note and security agreement. Interest will accrue from the date on which the first payment is due. (c) The borrower must execute a promissory note and security agreement provided by the Administrator, which: (i) Create in the Trust a valid first lien against the borrower's entire right, title and interest in and to his or her Accounts equal to the initial amount borrowed plus accrued interest thereon; (ii) Provide for a maturity date not to exceed five years from the date of the note unless the borrower certifies to the Administrator that the proceeds of the loan will be used to acquire a principal residence of the borrower within a reasonable time after the date of the loan, in which case the maturity date may not exceed 10 years from the date of the note; and (iii) Provide for payments of principal and interest in equal installments of such frequency, not less frequently than quarterly, in such minimum amounts and for such maximum period as Plan Rules prescribe. (d) Upon the occurrence of any "event of default," the unpaid balance of any Plan loan will be accelerated. Unless the borrower repays the full amount of the outstanding balance of the loan, the outstanding balance will be satisfied from any distribution then due and from the vested balance of the borrower's Accounts that could then be distributed to the borrower or his or her Beneficiary, with a corresponding reduction in the Account balance. The date on which repayment of any remaining part of such unpaid balance is due will be extended until the first date on which the borrower or his or her Beneficiary could receive a distribution from the Plan, on which date the unpaid indebtedness will be satisfied in full and the Account will be reduced by the amount of the unpaid indebtedness. An event of default with respect to a borrower is: (1) the death of the borrower; (2) the borrower's failure to make any payment when it is due (other than as provided in Subsection (e) and taking into account any grace period specified in the promissory note executed by the borrower or in Plan Rules); (3) the borrower's termination of employment; (4) the borrower's ceasing to be an Employee (including in connection with the transfer of the borrower's employment to the purchaser of any of the assets of an Affiliated Organization or continued 20 26 employment with an organization after it ceases to be an Affiliated Organization); or (5) termination of the Plan. (e) An Employee borrower on unpaid leave of absence or layoff must continue making loan payments in accordance with his or her original loan payment schedule except as provided in this subsection. (i) If a borrower fails to make a scheduled payment during a temporary (i.e., 12 months or less) unpaid leave of absence or layoff: (1) interest will continue to accrue; (2) the borrower must repay the missed payments (and accrued interest) in one lump sum payment within 30 days after he or she resumes paid employment; and (3) payroll deductions will resume immediately upon the borrower's return to paid employment. If the borrower does not repay the missed payments (and accrued interest) by the end of the 30-day period, the loan payment schedule will be recalculated based on all unpaid principal and accrued interest as of the first day following the 30-day period and payroll deductions will be adjusted to reflect the payments owed under the recalculated loan payment schedule. (ii) If a borrower remains on unpaid leave of absence or layoff on the first anniversary of the leave or layoff, the borrower's loan payment schedule will be recalculated and the borrower must immediately begin making monthly payments by check. (iii) Any payment schedule that is recalculated pursuant to clause (i) or clause (ii) will be recalculated using the original interest rate and the period remaining in the original term of the loan. (f) The Administrator will establish a means pursuant to which a borrower who is an Employee must make loan repayments by payroll deduction and any other borrower must make loan repayments by periodic remittals to the Administrator or the Administrator's designate. A borrower who is an Employee must execute an appropriate document under which all Affiliated Organizations are authorized to deduct from the borrower's pay the amount of payments due under the terms of any loan. (g) Before making any loan, the Administrator will deliver to the borrower a clear statement of the charges involved in the proposed loan transaction. The statement will include the dollar amount of the loan, the annual rate of the finance charge and the aggregate amount of the finance charge to the date of maturity. (h) Each loan will be a loan by the Trust, but for Trust accounting purposes the loan will be deemed made from the borrower's Accounts against which the loan is charged, and the note executed by the borrower will be deemed to be an asset of those Accounts. When a loan is made, the borrower's Accounts and any investment fund from which the loan proceeds are obtained will be reduced by an amount equal to the principal balance of the loan and a Loan Account will be 21 27 established for the borrower with an initial balance equal to the principal amount of the loan. The Loan Account will be excluded for purposes of determining and allocating the net earnings (or losses) of the Trust pursuant to Section 4.2. A borrower's loan payments will be credited to the Accounts from which the loan proceeds were obtained in reverse of the order in which the loan was taken from the Accounts until the amount borrowed from the Accounts has been fully replaced by principal repayments. The Loan Account will be reduced by the amount of any principal payment on the loan. Repayments of loan principal and payments of interest will be invested as soon as administratively practicable following receipt by the Trustee in accordance with the borrower's most recent investment directions with respect to new contributions or in the absence of such a direction, in accordance with Plan Rules. (i) The outstanding balance of any loan, including any accrued interest, may be repaid in its entirety at any time without penalty. Partial prepayments will not be permitted. (j) A borrower must provide such other documents as may from time to time be required under Plan Rules. (k) Plan Rules may specify other terms and conditions as may be necessary or desirable for the administration of loans under this section. (l) Any promissory note evidencing a loan outstanding under a Ceridian 401(k) Plan that is transferred to the Plan as of the Transfer Date will, immediately after the transfer, remain outstanding in accordance with its terms but substituting the Trust for the Ceridian 401(k) Plan trust as payee of the note. 22 28 ARTICLE 7 VESTING AND FORFEITURES 7.1. VESTING. (a) A Participant always has a fully vested nonforfeitable interest in his or her 401(k) Contribution Account, Basic Matching Account and Rollover Account. (b) A Participant who is a participant in the Arbitron Retirement Plan always has a fully vested nonforfeitable interest in his or her Performance-Based Matching Account. (c) A Participant who is not a participant in the Arbitron Retirement Plan: (i) will acquire a fully vested nonforfeitable interest in his or her Performance-Based Matching Account upon attaining his or her Normal Retirement Date while he or she is, or before he or she became, an Employee; (ii) will acquire a fully vested nonforfeitable interest in his or her Performance-Based Matching Account if he or she dies or becomes Disabled while he or she is an Employee; and (iii) will acquire a vested nonforfeitable interest in his or her Performance-Based Matching Account to the extent provided in the following schedule if he or she terminates employment prior to his or her Normal Retirement Date other than by reason of his or her death or becoming Disabled.

Vested Full Years of Vesting Service Interest -------------------------------------- Less Than Two Years 0% Two Years 40% Three Years 60% Four Years 80% Five or More Years 100%

7.2. FORFEITURE UPON DISTRIBUTION. (a) If a Participant described in Section 7.1(c)(iii) receives a distribution of the entire vested balance of his or her Accounts not later than the last day of the second Plan Year following the Plan Year during which he or she terminated employment, the nonvested portion of the Participant's Performance-Based Matching Account will, at the time of such distribution, be forfeited. A Participant described in Section 7.1(c)(iii) who has no vested interest in his or her Performance-Based Matching Account when he or she terminates employment will be deemed to have received 23 29 a distribution of the entire vested balance of the Account at the time of his or her termination of employment. (b) If a Participant described in Subsection (a) resumes employment as a Qualified Employee and repays to the Trustee the full amount distributed before the earlier of (i) five years following the date of reemployment as a Qualified Employee or (ii) the date on which he or she incurs a Break in Service of five full years following the distribution, then the forfeited amount will be restored to the Participant's Performance-Based Matching Account, unadjusted for interest or any change in value occurring after the distribution. The restoration will be made from forfeitures that arise for the Plan Year for which such restoration is to be made. To the extent such forfeitures are insufficient for such purpose, the Participating Employer with whom the Participant was last employed as a Qualified Employee will contribute the amount required to restore the Account. A Participant described in the last sentence of Subsection (a) who is reemployed before incurring a Break in Service of five full years following the date of his or her termination of employment will be deemed to have repaid his or her deemed distribution upon his or her reemployment as a Qualified Employee. (c) If a Former Media Information Business Employee, as defined in Subsection (d), who received or was deemed to receive a distribution of his or her entire vested account balance under a Ceridian 401(k) Plan and forfeited the nonvested portion of his or her account balance prior to the effective time of the New Ceridian Spin-off becomes a Qualified Employee after the effective time of the New Ceridian Spin-off and repays to the Trustee the full amount distributed from the Ceridian 401(k) Plan before the earlier of (i) five years following the date of his or her employment as a Qualified Employee or (ii) the date on which he or she incurs a Break in Service of five full years following the date of the distribution from the Ceridian 401(k) Plan, then the forfeited portion of his or her account under the Ceridian 401(k) Plan will be restored in accordance with Subsection (b). A Former Media Business Employee described in the previous sentence who was deemed to receive a distribution of his or her vested account balance under the Ceridian 401(k) Plan, will be deemed to repay the deemed distribution upon his or her employment as a Qualified Employee. No other Participant may repay to the Trustee a distribution received from a Ceridian 401(k) Plan. (d) A Former Media Information Business Employee is an individual who, immediately prior to the effective time of the New Ceridian Spin-off, is a former employee of Ceridian Corporation or one of its subsidiaries who, immediately prior to his or her termination of employment, had employment duties principally related to the Media Information Business. For this purpose, Media Information Business means: (i) the provision of media and marketing research services to broadcasters, advertising agencies, advertisers, on-line webcasters and cable television in the United States, the United Kingdom, Japan and Mexico; 24 30 (ii) through a joint venture the provision of media audience and consumer retail behavior research services to cable systems, television broadcasters, magazines and newspapers; (iii) the provision of application software used to access and analyze media audience information and through a joint venture software applications to access and analyze consumer retail behavior and media usage; (iv) the business of (1) CSW Research Limited, (2) Ceridian Infotech (India) Private Limited, (3) Euro Fieldwork Limited and (4) Arbitron Holdings Inc.; (v) any other business conducted by Ceridian Corporation or its subsidiaries primarily through the use of assets treated by Ceridian Corporation or the subsidiaries as part of the Media Information Business. 7.3. OTHER FORFEITURES. (a) Except as provided in Section 7.2, the nonvested portion of the Performance-Based Matching Account of a Participant described in Section 7.1(c)(iii) will continue to be held in a separate subaccount of the Account until the Participant incurs a Break in Service of five full years, at which time the subaccount balance will be forfeited. If the Participant resumes employment with an Affiliated Organization prior to incurring a Break in Service of five full years, the subaccount will be disregarded and the balance of the subaccount will be included in the Participant's Performance-Based Matching Account balance. (b) A Participant's vested interest in his or her Performance-Based Matching Account balance following a resumption of employment in accordance with Subsection (a) at any given time will not be less than the amount "X" determined by the formula: X = P(AB + (R x D)) - (R x D), where P is the Participant's vested percentage at the time of determination; AB is the Account balance at the time of determination; D is the amount of the distribution; and R is the ratio of the Account balance at the time of determination, to the subaccount balance immediately following the distribution. 7.4. APPLICATION OF FORFEITURES. All forfeitures occurring in a Plan Year will be allocated to a forfeiture account, invested in accordance with Plan Rules and applied as follows: (a) Such forfeitures will first be applied to restore the Accounts of Participants as provided in Sections 7.2(b) and 8.7; 25 31 (b) At the direction of the Administrator, any remaining forfeitures may be used to pay expenses of administering the Plan; and (c) Any remaining forfeitures will be applied toward the amount of future Matching Contributions by the Participating Employers. 26 32 ARTICLE 8 DISTRIBUTIONS AFTER TERMINATION 8.1. TIME OF DISTRIBUTION. (a) Following a Participant's termination of employment, the Trustee will distribute to the Participant or, if the Participant has died, to his or her Beneficiary, the value of the Participant's vested interest in his or her Accounts. Subject to the remaining subsections of this section and Sections 8.2 and 8.8, distributions will be made in accordance with the following provisions. (i) If the aggregate balance of the Participant's vested interest in his or her Accounts is not more than $5000, distribution to the Participant will be made as soon as administratively practicable following the Participant's termination of employment. (ii) Except as provided in clause (i), distribution to the Participant will be made as soon as administratively practicable after the Administrator or the Administrator's designate receives the Participant's properly completed distribution request, but in no case later than the sixtieth day after the Plan Year during which the Participant terminates employment or attains age 65, whichever is later, unless the Participant elects to defer the distribution pursuant to Subsection (b). (iii) Any distribution to the Participant's Beneficiary following the Participant's death will be made as soon as administratively practicable after the Administrator receives proof of the Participant's death in form satisfactory to the Administrator. (iv) If a contribution is allocated to a Participant's Account following the Participant's termination of employment and after his or her vested Account balance has been distributed, as soon as administratively practicable after the allocation is made, the vested balance of the Account will be distributed to the Participant, or to the Participant's Beneficiary in the case of the Participant's death. (b) Subject to the provisions of the other subsections of this section, a Participant described in Subsection (a)(ii) may elect to defer commencement of his or her distribution under the Plan by providing the Administrator or the Administrator's designate a written, signed statement specifying the date on which the payment is to be made; provided that the specified date may not be later than April 1 of the calendar year following the calendar year during which the Participant attains age 70-1/2. The statement must be provided to the Administrator or the Administrator's designate not later than the thirtieth day (or such later date as Plan Rules may allow) after the Plan Year during which the Participant terminates 27 33 employment or attains age 65, whichever is later. Plan Rules may permit a Participant to modify the election in any manner determined by the Administrator to be consistent with Code section 401(a)(14) and corresponding Treasury Regulations and the other provisions of this section. (c) Notwithstanding Subsection (a), distribution to any Participant who is a "5-percent owner," within the meaning of the Code section 416, must begin not later than April 1 of the calendar year after the Participant attains age 70-1/2, whether or not the Participant has terminated employment, as if he or she had terminated employment on the last day of the Plan Year during which he or she attained age 70-1/2. After the initial distribution pursuant to this subsection and prior to the Participant's termination of employment, the Participant's entire Account balance, if any, will be distributed to the Participant not later than the last day of each Plan Year. (d) Notwithstanding any other provision of the Plan to the contrary, distributions (including payments pursuant to any annuity contract distributed pursuant to this section) will be made in accordance with regulations issued under Code section 401(a)(9), including Treasury Regulation section 401(a)(9)-2, and any provisions of the Plan reflecting Code section 401(a)(9) take precedence over any distribution options in the Plan that are inconsistent with Code section 401(a)(9). 8.2. FORM OF DISTRIBUTION. (a) Any distribution pursuant to the Plan will be made in the form of a single lump sum payment. (b) Except as provided in Subsections (c) and (d), distributions will be made in the form of cash. (c) To the extent that the Account to be distributed is invested in the Company Stock Fund immediately prior to the distribution, at the election of the Participant or Beneficiary, as the case may be, the distribution may be made in whole shares of Company Stock. (d) To the extent that the Account to be distributed is invested in the Ceridian Stock Fund immediately prior to the distribution, at the election of the Participant or Beneficiary, as the case may be, the distribution may be made in whole shares of Ceridian Stock. 8.3. BENEFICIARY DESIGNATION. (a) Each Participant may designate, on a form provided by the Administrator, one or more primary Beneficiaries or alternative Beneficiaries for all or a specified fractional part of his or her aggregate Accounts and may change or revoke any such designation from time to time. No such designation, change or revocation is effective unless executed by the Participant and received by the Administrator 28 34 during the Participant's lifetime. Subject to Subsection (d), no such change or revocation requires the consent of any person. (b) If a Participant (i) fails to designate a Beneficiary, or (ii) revokes a Beneficiary designation without naming another Beneficiary or (iii) designates one or more Beneficiaries none of whom survives the Participant, for all or any portion of the Accounts, such Accounts or portion are payable to the first class of the following classes of automatic Beneficiaries that includes a member surviving the Participant: Participant's spouse; Participant's issue, per stirpes and not per capita; Participant's parents; Participant's brothers and sisters; Representative of Participant's estate. (c) When used in this section and, unless the designation otherwise specifies, when used in a Beneficiary designation, the term "per stirpes" means in equal shares among living children and the issue (taken collectively) of each deceased child, with such issue taking by right of representation; "children" means issue of the first generation; and "issue" means all persons who are descended from the person referred to, either by legitimate birth or legal adoption. The automatic Beneficiaries specified above and, unless the designation otherwise specifies, the Beneficiaries designated by the Participant, become fixed as of the Participant's death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary, any remaining payments are payable to the representative of such Beneficiary's estate. Any designation of a Beneficiary by name that is accompanied by a description of relationship or only by statement of relationship to the Participant is effective only to designate the person or persons standing in such relationship to the Participant at the Participant's death. (d) Notwithstanding Subsection (a), no designation of a Beneficiary other than the Participant's spouse is effective unless such spouse consents to the designation. Any such consent is effective only with respect to the Beneficiary or class of Beneficiaries so designated and only with respect to the spouse who so consented. (e) Any beneficiary designation made pursuant to a Ceridian Corporation 401(k) Plan by a Participant whose accounts are transferred from the Ceridian 401(k) Plan to the Plan in connection with the New Ceridian Spin-off which remains in effect immediately prior to the transfer, will remain in effect for purposes of the Plan until changed or revoked pursuant to the Plan. For this purpose, a Beneficiary designation made by a Participant pursuant to the Plan prior to the effective date 29 35 of the transfer of the Participant's accounts from a Ceridian 401(k) Plan to the Plan in connection with the New Ceridian Spin-off will, as of the effective date of the transfer, be deemed to be a revocation of the designation made pursuant to the Ceridian 401(k) Plan. 8.4. ASSIGNMENT, ALIENATION OF BENEFITS. (a) Except as required under a qualified domestic relations order or by the terms of any loan from the Trust or to comply with a federal tax levy pursuant to Code section 6331, and except as otherwise provided in Code section 401(a)(13)(C), (i) no benefit under the Plan may in any manner be anticipated, alienated, sold, transferred, assigned, pledged, encumbered or charged, and any attempt to do so is void and (ii) no benefit under the Plan is in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled to such benefit. (b) To the extent provided in a qualified domestic relations order, distribution of benefits assigned to an alternate payee by such order may be distributed to the alternate payee in the form of a lump sum payment prior to the Participant's earliest retirement age. The terms "qualified domestic relations order," "alternate payee" and "earliest retirement age" have the meanings given in Code section 414(p). 8.5. PAYMENT IN EVENT OF INCAPACITY. If any person entitled to receive any payment under the Plan is physically, mentally or legally incapable of receiving or acknowledging receipt of the payment, and no legal representative has been appointed for such person, the Administrator in his or her discretion may (but is not required to) cause any sum otherwise payable to such person to be paid to any one or more of the following as may be chosen by the Administrator: the Beneficiaries, if any, designated by such person; the institution maintaining such person; a custodian for such person under the Uniform Transfers to Minors Act of any state; or such person's spouse, children, parents or other relatives by blood or marriage. Any such payment completely discharges all liability under the Plan to the person with respect to whom the payment is made to the extent of the payment. 8.6. PAYMENT SATISFIES CLAIMS. Any payment to or for the benefit of any Participant, or Beneficiary in accordance with the provisions of the Plan, to the extent of such payment, fully satisfies of all claims against the Trustee, the Administrator and the Participating Employers, any of whom may require the payee to execute a receipted release as a condition precedent to such payment. 8.7. DISPOSITION IF DISTRIBUTEE CANNOT BE LOCATED. If the Administrator is unable to locate a Participant or Beneficiary to whom a distribution is due, the amount that would otherwise be distributed to the Participant or Beneficiary will be forfeited, and the forfeited amount will be applied in accordance with Section 7.4. The forfeited amount will be restored to the Accounts from which the amount was forfeited, unadjusted for interest or any change in value occurring after the forfeiture, upon the Participant's or Beneficiary's claim for 30 36 the benefit. The restoration will be made through funds available pursuant to Section 7.4(a). To the extent such funds are insufficient for such purpose, the Participating Employer with whom the Participant was last employed will contribute the amount required to restore the Accounts. 8.8. DIRECT ROLLOVERS AND TRANSFERS. (a) To the extent a distribution is an Eligible Rollover Distribution, the Administrator will, if so instructed by the distributee in accordance with Plan Rules, direct the Trustee to make the distribution to an "eligible retirement plan," within the meaning of Code section 402(c)(8). Unless otherwise provided in Plan Rules, the foregoing provision will not apply (i) if the aggregate taxable distributions to be made to the distributee during the calendar year are less than $200, (ii) if less than the entire taxable amount of the distribution is to be distributed to the eligible retirement plan and the amount to be distributed to the eligible retirement plan is less than $500 or (iii) with respect to any portion of an Eligible Rollover Distribution that consists of an offset amount with respect to a Plan loan. (b) The Committee may direct the Trustee to transfer the balance of any or all of the Accounts of a Participant to the trustee of another plan if: (i) the other plan is a defined contribution plan qualified under Code section 401(a); (ii) the other plan satisfies the requirements set forth in Code sections 401(k) and 411(d)(6) with respect to the transferred Accounts to which such requirements are applicable; and (iii) the trustee of the other plan is willing to accept such transfer. 31 37 ARTICLE 9 CONTRIBUTION LIMITATIONS 9.1. 401(k) CONTRIBUTION DOLLAR LIMITATION. (a) The aggregate amount of 401(k) Contributions and other "elective deferrals" (within the meaning of Code section 402(g)(3)) under any other qualified plan maintained by an Affiliated Organization with respect to a Participant for any taxable year of the Participant may not exceed the limitation in effect for the taxable year under Code section 402(g). The limitation for any Participant who received a hardship distribution under Section 6.1 will, for the year following the year in which such distribution was made, be reduced as provided in Section 6.1(c)(iv). If the limitation is exceeded for any taxable year of the Participant, all or a portion of the excess, as specified by the Company, increased by Fund earnings or decreased by Fund losses attributable to the excess as determined under Section 9.5, will be distributed to the Participant. (b) The amount distributed pursuant to this section to a Participant who has made elective deferrals for a taxable year other than pursuant to the Plan or another qualified plan maintained by an Affiliated Organization will, to the extent of such other elective deferrals, be determined in accordance with written instructions received by the Administrator from the Participant not later than March 1 of the following taxable year. (c) A distribution made pursuant to this section may be made at any time after the excess contributions are received, but not later than April 15 of the taxable year following the taxable year to which the limitation relates. 9.2. ACTUAL DEFERRAL PERCENTAGE LIMITATIONS. (a) For each Plan Year, the Plan must satisfy the requirements of Code section 401(k)(3). (i) The Plan will satisfy the requirements of Code section 401(k)(3) for a Plan Year if, for that Plan Year, the Plan satisfies the requirements of Code section 410(b)(1) with respect to "eligible employees" and either of the following tests: (1) the "actual deferral percentage" for the Plan Year for eligible employees who are Highly Compensated Employees for the Plan Year is not more than the product of the actual deferral percentage for the Plan Year for all eligible employees who are not Highly Compensated Employees for the Plan Year, multiplied by one and one-quarter; or 32 38 (2) the excess of the actual deferral percentage for the Plan Year for eligible employees who are Highly Compensated Employees for the Plan Year over the actual deferral percentage for the Plan Year for all eligible employees who are not Highly Compensated Employees for the Plan Year is not more than two percentage points and the actual deferral percentage for the Plan Year for eligible employees who are Highly Compensated Employees for the Plan Year is not more than the product of the actual deferral percentage for the Plan Year of all eligible employees who are not Highly Compensated Employees for the Plan Year, multiplied by two. (ii) For purposes of this section and Section 9.4: (1) "eligible employee" means an Active Participant who is eligible to make 401(k) Contributions for the Plan Year in question or would be eligible but for a suspension imposed under Section 3.1(b)(iv); and (2) "actual deferral percentage," with respect to either of the two groups of eligible employees referenced above, is the average of the ratios, calculated separately for each eligible employee in the particular group, of the amount of the eligible employee's 401(k) Contributions for the Plan Year in question, to the eligible employee's Testing Wages for the Plan Year in question, or the portion of such Plan Year during which he or she was an eligible employee, as specified in Plan Rules. In computing the actual deferral percentage, the following rules apply: (A) Any 401(k) Contributions made by an eligible employee who is not a Highly Compensated Employee that are in excess of the limitation described in Section 9.1 will be excluded; (B) Any 401(k) Contributions made by an eligible employee that are distributed to the eligible employee pursuant to Section 9.6(c) will be excluded; (C) Except as otherwise provided in Treasury Regulations, 401(k) Contributions taken into account in determining the actual contribution percentage under Section 9.3(a)(ii) will be excluded; (D) To the extent permitted by Treasury Regulations and determined by the Administrator, all or any portion of any other contribution to the Plan or any other qualified plan maintained by an Affiliated Organization will be included; 33 39 (E) Elective contributions under any other plan that is aggregated with this Plan to satisfy the requirements of Code section 410(b) will be included; and (F) To the extent provided in Treasury Regulations, elective contributions made under any other qualified cash or deferred arrangement of any Affiliated Organization on behalf of any eligible Employee who is a Highly Compensated Employee will be included. (b) To the extent deemed advisable by the Administrator to comply with Code section 401(k)(3), the Administrator may, in accordance with Plan Rules, prospectively decrease a Participant's 401(k) Contributions. (c) If, for any Plan Year, the requirements of Subsection (a) are not satisfied, the Administrator will determine the amount by which 401(k) Contributions made by each Highly Compensated Employee for the Plan Year exceeds the permissible amount as determined under Subsection (a). The determination will be made by successively decreasing the rate of 401(k) Contributions for the Highly Compensated Employees who, during the Plan Year, had the greatest percentage of 401(k) Contributions to the next lower percentage, then again decreasing the percentage of such Highly Compensated Employees' 401(k) Contributions, together with the percentage of 401(k) Contributions for the Highly Compensated Employees who were already at such lower percentage, to the next lower percentage, and continuing such procedure for as many percentage decreases as the Administrator deems necessary. The Administrator may make such reductions in any amount. (d) The amount of excess 401(k) Contributions determined in accordance with Subsection (c), increased by Fund earnings or decreased by Fund losses attributable to such excess as determined under Section 9.5, will be distributed to affected Highly Compensated Employees at such time as the Administrator specifies on or following the last day of the Plan Year for which the determination is made, but in no case later than the last day of the following Plan Year. The amount to be distributed with respect to any Plan Year will be reduced by the portion of the amount, if any, distributed pursuant to Section 9.1 that is attributable to 401(k) Contributions that relate to such Plan Year, determined by assuming that 401(k) Contributions in excess of the limitation described in Section 9.1 for a given taxable year are the first contributions made for a Plan Year falling within such taxable year. Additional amounts to be distributed to each such Highly Compensated Employee will be determined by successively decreasing the amount of 401(k) Contributions for Highly Compensated Employees who, for the Plan Year, had the largest amount of 401(k) Contributions made on their behalf to the next lower amount, and continuing this procedure until an amount equal to the aggregate amount of excess 401(k) Contributions has been removed from the Accounts of the Highly Compensated Employees. 34 40 (e) To the extent required or permitted by Treasury Regulations, the Administrator will or may, as the case may be, apply the limitation described in this section separately to each group of eligible employees who are included in a unit of Employees covered by a collective bargaining agreement and those who are not included in a different unit. (f) If the Administrator elects to apply Code section 410(b)(4)(B) in determining whether the Plan satisfies either of the tests described in Section 9.2(a)(i) for a Plan Year, all eligible employees who are not Highly Compensated Employees and have not met the minimum age and service requirements of Code section 410(a)(1)(A) will be excluded from consideration. 9.3. ACTUAL CONTRIBUTION PERCENTAGE LIMITATIONS. (a) For each Plan Year, the Plan must satisfy the requirements of Code section 401(m)(2). (i) The Plan will satisfy the requirements of Code section 401(m)(2) for a Plan Year if, for that Plan Year, the Plan satisfies either of the following tests: (1) the "actual contribution percentage" for the Plan Year for "eligible employees" who are Highly Compensated Employees for the Plan Year is not more than the product of the actual contribution percentage for the Plan Year for all eligible employees who are not Highly Compensated Employees for the Plan Year, multiplied by one and one-quarter; or (2) the excess of the actual contribution percentage for the Plan Year for eligible employees who are Highly Compensated Employees for the Plan Year over the actual contribution percentage for the Plan Year for all eligible employees who are not Highly Compensated Employees for the Plan Year is not more than two percentage points and the actual contribution percentage for the Plan Year for Highly Compensated Employees for the Plan Year is not more than the product of the actual contribution percentage for the Plan Year for all eligible employees who are not Highly Compensated Employees for the Plan Year, multiplied by two. (ii) For purposes of this section and Section 9.4: (1) "eligible employee" means an Active Participant who is eligible to have Matching Contributions made on his or her behalf for the Plan Year in question or who would be eligible but for a suspension imposed under Section 3.1(b)(iv); and (2) the "actual contribution percentage" with respect to either of the two groups of eligible employees referenced above, is the average 35 41 of the ratios, calculated separately for each eligible employee in the particular group, of the aggregate amount of Matching Contributions made on behalf of the eligible employee for the Plan Year, to the eligible employee's Testing Wages for the Plan Year, or the portion of the Plan Year during which he or she was an eligible employee, as specified in Plan Rules. In computing the actual contribution percentage the following rules apply: (A) Except as otherwise provided in Treasury Regulations, Matching Contributions taken into account in determining the actual deferral percentage under Section 9.2(a)(ii) will be excluded; (B) Matching Contributions taken into account for purposes of the minimum contribution required by Section 12.3(a) will be excluded; (C) Any Matching Contributions forfeited pursuant to Section 9.6(c) will be excluded; (D) To the extent permitted by Treasury Regulations and determined by the Administrator, all or any portion of the 401(k) Contributions made by eligible employees for the Plan Year will be included; (E) To the extent permitted by Treasury Regulations and determined by the Administrator, all or any portion of any other contributions to any other qualified plan maintained by an Affiliated Organization will be included; (F) Matching contributions (within the meaning of Code section 401(m)(4)(A)) and after-tax contributions made under any other plan that is aggregated with this Plan to satisfy the requirements of Code section 410(b) will be included; and (G) To the extent required by Treasury Regulations, matching contributions (within the meaning of Code section 401(m)(4)(A)) and after-tax contributions made under any other qualified plan of any Affiliated Organization on behalf of or by any eligible employee who is a Highly Compensated Employee will be included. (b) If, for any Plan Year, the requirements of Subsection (a) are not satisfied, the Administrator will determine the amount by which Matching Contributions made on behalf of each Highly Compensated Employee for the Plan Year exceeds the permissible amount as determined under Subsection (a), such determination being 36 42 made in accordance with the procedure described in Section 9.2(c) with respect to reductions of 401(k) Contributions. (c) The amount of excess Matching Contributions determined in accordance with Subsection (b), increased by Fund earnings or decreased by Fund losses attributable to such excess as determined under Section 9.5, will be distributed to affected Highly Compensated Employees at such time as the Administrator specifies on or following the last day of the Plan Year for which the determination is made, but in no case later than the last day of the following Plan Year; provided, however, that to the extent the excess Matching Contributions would not be fully vested if retained in the Plan, such excess will be forfeited rather than distributed, and any such forfeitures will be applied as provided in Section 3.2(d). Amounts to be distributed to each such Highly Compensated Employee or forfeited will be determined by successively decreasing the amount of Matching Contributions made on behalf of Highly Compensated Employees who, for the Plan Year, had the largest amount of Matching Contributions made on their behalf to the next lower amount, and continuing this procedure until an amount equal to the aggregate amount of excess contributions has been removed from the Accounts of the Highly Compensated Employees. (d) To the extent provided in Treasury Regulations, the limitations described in this section do not apply to any group of eligible employees who are included in a unit of Employees covered by a collective bargaining agreement. (e) If the Administrator elects to apply Code section 410(b)(4)(B) in determining whether the Plan satisfies either of the tests described in Section 9.3(a)(i) for any Plan Year, all eligible employees who are not Highly Compensated Employees and have not met the minimum age and service requirements of Code section 410(a)(1)(A) will be excluded from consideration. 9.4. MULTIPLE USE LIMITATION. (a) This section applies for any Plan Year for which the sum of the actual deferral percentage for eligible employees who are Highly Compensated Employees, plus the actual contribution percentage for eligible employees who are Highly Compensated Employees, exceeds the "aggregate limit." For purposes of this subsection, the aggregate limit is the greater of: (i) The sum of: (1) the product of one and one-quarter, multiplied by the greater of (A) the actual deferral percentage for the Plan Year for eligible employees who are not Highly Compensated Employees or (B) the actual contribution percentage for the Plan Year for eligible employees who are not Highly Compensated Employees; 37 43 plus (2) the sum of two percentage points plus the lesser of the actual deferral percentage determined under item (A) of clause (1) above or the actual contribution percentage determined under item (B) of clause (1) above, with such sum in no case exceeding twice the lesser of such actual deferral percentage or actual contribution percentage; or (ii) The sum of: (1) the product of one and one-quarter, multiplied by the lesser of (A) the actual deferral percentage for the Plan Year for eligible employees who are not Highly Compensated Employees or (B) the actual contribution percentage for the Plan Year for eligible employees who are not Highly Compensated Employees; plus (2) the sum of two percentage points plus the greater of the actual deferral percentage determined under item (A) of clause (1) above or the actual contribution percentage determined under item (A) of clause (1) above, with such sum in no case exceeding twice the lesser of such actual deferral percentage or actual contribution percentage. (b) If, for any Plan Year, the calculations under Subsection (a) require that this section be applied, the Administrator will determine the amount by which Matching Contributions made on behalf of each Highly Compensated Employee for the Plan Year causes the excess amount determined under Subsection (a), such determination being made in accordance with the provisions of Section 9.3(b). At such time as the Administrator specifies on or following the last day of the Plan Year for which such determination is made, but in no case later than the last day of the following Plan Year, the excess will be corrected in accordance with Section 9.3(c). (c) To the extent provided in Treasury Regulations, the limitations described in this section do not apply to any group of eligible employees who are included in a unit of employees covered by a collective bargaining agreement. 38 44 9.5. EARNINGS OR LOSSES ON EXCESS CONTRIBUTIONS. (a) The amount of Fund earnings or losses with respect to the excess amount of contributions returned to a Highly Compensated Employee pursuant to this article is an amount equal to the product of the total earnings or losses for the Participant's Account to which the excess contributions were credited for the Plan Year with respect to which the determination is being made, multiplied by a fraction, the numerator of which is the excess amount of contributions made on the Participant's behalf to such Account for the Plan Year, and the denominator of which is the closing balance of such Account for the Plan Year, decreased by the amount of earnings added to that Account, or increased by the amount of losses charged to that Account, for the Plan Year. (b) Contributions returned pursuant to Section 9.6(c)(iii) will also include the earnings or losses attributable to such excess amount for the period between the end of the Plan Year with respect to which the determination is being made and the date on which such excess contributions are distributed to the Participant. The earnings or losses attributable to such excess amount for such period will be an amount equal to the product of ten percent of the earnings or losses attributable to such excess amount for the Plan Year, as determined in accordance with Subsection (a), multiplied by the number of calendar months during the period for which the determination is being made, with a distribution being made on or before the fifteenth day of a month being deemed to have been made on the last day of the preceding month and a distribution being made after the fifteenth day of a month being deemed to have been made on the first day of the following month. 9.6. ANNUAL ADDITIONS LIMITATION. (a) Notwithstanding any contrary provisions of the Plan, there will not be allocated to any Participant's Accounts for a Plan Year any amount that would cause the aggregate "annual additions" with respect to the Participant for the Plan Year to exceed the lesser of: (i) $30,000 (or such dollar amount, adjusted to reflect increases in the cost of living, as in effect under Code section 415(c)(1)(A) for the calendar year during which the Plan Year in question begins); and (ii) 25 percent of the Participant's Section 415 Wages for the Plan Year. (b) For purposes of Subsection (a), the "annual additions" with respect to a Participant for a Plan Year are the sum of: (i) the aggregate amount of 401(k) and Matching Contributions allocated to the Participant's Accounts under the Plan for the Plan Year (including the amount of any 401(k) or Matching Contributions distributed to the Participant or forfeited pursuant to Section 9.2(d) or 9.3(c) but excluding any 401(k) Contributions in excess of the limitation set forth in Section 39 45 9.1 that are distributed to the Participant by April 15 of the year following the year to which such contributions relate) and employer contributions, employee contributions and forfeitures allocated to the Participant's accounts under any other qualified defined contribution plan maintained by any Affiliated Organization for the Plan Year; plus (ii) the amount, if any, attributable to post-retirement medical benefits that is allocated to a separate account for the Participant as a "key employee" within the meaning of Code section 416(i), to the extent required under Code section 419A(d)(1). Unless otherwise provided in Treasury Regulations, if a 401(k) or Matching Contribution with respect to a Plan Year is made more than 30 days after the due date (including extensions) of the Company's federal income tax return for the Company's taxable year coinciding with the Plan Year or in which the Plan Year ends, the contribution will be an annual addition for the Plan Year during which the contribution is made. (c) (i) To the extent deemed advisable by the Administrator to prevent the limitation under Subsection (a) from being exceeded, the Administrator may, in accordance with Plan Rules, prospectively decrease a Participant's 401(k) Contributions. (ii) If a further reduction of contributions is required, the amount of the Matching Contribution that would otherwise be allocated to the Participant's Account will be reduced and the aggregate amount of the Matching Contribution for the Plan Year will be reduced by the same amount. (iii) If, in spite of such reduction and as a result of the allocation of forfeitures or a reasonable error in estimating the amount of the Participant's Eligible Earnings, Section 415 Wages, 401(k) Contributions or other elective deferrals within the meaning of Code section 402(g)(3) for the Plan Year, the limitation would otherwise be exceeded, then, to the extent required to prevent such excess: (1) the amount of 401(k) Contributions made by the Participant, together with earnings on such contributions, will be distributed to the Participant and any Matching Contributions attributable to the amount so distributed, together with earnings on such contributions, will be forfeited and applied as provided in Section 3.2(d); then (2) any remaining excess will be held unallocated in a suspense account and will be allocated to all other eligible Participants for the Plan Year and, to the extent necessary, subsequent Plan Years, 40 46 before Matching Contributions are made for such Plan Year or Years, and will be applied toward the amount of such contributions for such Plan Year or Years. 9.7. ADMINISTRATOR'S DISCRETION. Notwithstanding the foregoing provisions of this article, the Administrator may apply the provisions of Sections 9.1 through 9.6 in any manner permitted by Treasury Regulations that will cause the Plan to satisfy the limitations of the Code incorporated in such sections and Treasury Regulations thereunder, and the Administrator's good faith application of Treasury Regulations is binding on all Participants and Beneficiaries. 41 47 ARTICLE 10 ADOPTION, AMENDMENT AND TERMINATION 10.1. ADOPTION BY AFFILIATED ORGANIZATIONS. An Affiliated Organization may adopt this Plan and become a Participating Employer with the prior approval of the Administrator by furnishing to the Administrator a certified copy of a resolution of its Board adopting the Plan. With the consent of the Administrator, a Participating Employer may modify the provisions of the Plan applicable to its Employees. Any special provisions applicable to a Participating Employer's Employees will be set forth on an exhibit to the Plan in accordance with Section 12.5. 10.2. AUTHORITY TO AMEND AND PROCEDURE. (a) The Company reserves the right to amend the Plan at any time, to any extent. Each amendment must be stated in a written instrument approved in advance or ratified by the Company's Board and executed in the name of the Company by two authorized officers. On and after the effective date of the amendment, the Plan will be deemed to have been amended as set forth in the instrument, and all interested persons will be bound by the amendment; provided, first, that no amendment will increase the duties or liabilities of the Trustee without its written consent; and, second, that no amendment will have any retroactive effect so as to deprive any Participant, or any Beneficiary of a deceased Participant, of any benefit already accrued or vested or of any option with respect to the form of such benefit that is protected under Code section 411(d)(6), except that any amendment that is required to conform the Plan with government regulations so as to qualify the Trust for income tax exemption may be made retroactively to the Effective Date of the Plan or to any later date. (b) If the schedule for determining the extent to which benefits under the Plan are vested is changed, whether by amendment or on account of the Plan's becoming or ceasing to be a top-heavy plan, each Participant who has completed at least three years of Vesting Service may elect to have his or her vested benefits determined without regard to such change by giving written notice of such election to the Administrator within the period beginning on the date such change was adopted (or the Plan's top heavy status changed) and ending 60 days after the latest of: (i) the date such change is adopted; (ii) the date such change becomes effective; and (iii) the date the Participant is issued notice of such change by the Administrator. (c) Except as otherwise provided in an amendment permitted by Treasury Regulations, if an optional form of benefit payment protected under Code section 411(d)(6) is eliminated, each Participant may elect to have that portion of the value of his or her Accounts that was accrued as of the date of such elimination, distributed in the optional form of benefit payment that was eliminated. 42 48 (d) The provisions of the Plan in effect at the termination of a Participant's employment will, except as specifically provided otherwise in any subsequent amendment, continue to apply to such Participant. 10.3. AUTHORITY TO TERMINATE AND PROCEDURE. The Company expects to continue the Plan indefinitely but reserves the right to terminate the Plan in its entirety at any time. Each Participating Employer expects to continue its participation in the Plan indefinitely but reserves the right to cease its participation in the Plan at any time. The Plan will terminate in its entirety as of the date specified in a written instrument approved in advance or ratified by the Company's Board and executed in the name of the Company by two authorized officers. The Plan will terminate with respect to a Participating Employer as of a date specified in a written instrument approved in advance or ratified by the Participating Employer's Board and executed in the name of the Participating Employer by two authorized officers. 10.4. VESTING UPON TERMINATION, PARTIAL TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS. Upon the termination of the Plan or upon the complete discontinuance of contributions, the Accounts of each "affected employee" will vest in full. For purposes of this section, "affected employee" means a Participant or former Participant who, as of the effective date of the termination or complete discontinuance of contributions, (a) is actively employed with an Affiliated Organization or (b) has terminated employment and has neither received a distribution of his or her Accounts of the type described in Section 7.2(a) nor experienced a Break in Service of at least five full years. Upon the partial termination of the Plan, the Accounts of each Participant as to whom the Plan has been partially terminated will vest in full. 10.5. DISTRIBUTION FOLLOWING TERMINATION, PARTIAL TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS. After termination or partial termination of the Plan or the complete discontinuance of contributions under the Plan, the Trustee will continue to hold and distribute the Fund at the times and in the manner provided in Article 8 as if such event had not occurred or, if the Administrator so directs in accordance with Treasury Regulations, the Trustee will distribute to each Participant the entire balance of his or her Accounts. 43 49 ARTICLE 11 PLAN ADMINISTRATION 11.1. RETIREMENT COMMITTEE. (a) The Chief Executive Officer of the Company will appoint a Retirement Committee composed of not fewer than three members who will serve at the pleasure of the Chief Executive Officer. The Chief Executive Officer will provide to each member of the Retirement Committee a copy of a written charter outlining the responsibilities of the Committee. Each member will file his or her written acceptance of appointment with the Chief Executive Officer. A Retirement Committee member may resign by delivering his or her written resignation to the Chief Executive Officer, and any Retirement Committee member may be removed, with or without cause, by the Chief Executive Officer upon delivery of written notice of such removal to the removed member. Any such resignation or removal will be effective upon delivery of the written resignation or notice of removal, as the case may be, or upon any later date specified therein. Vacancies created by any such resignation or removal will be filled by appointment by the Chief Executive Officer; provided, that, subject to there being at least three persons serving as Retirement Committee members at all times, the Chief Executive Officer need not fill any vacancy so created. (b) The Retirement Committee is a named fiduciary for purposes of ERISA. 11.2. OPERATION OF COMMITTEE. The Committee will perform its duties in accordance with the procedures in this section. (a) The Chief Executive Officer of the Company will designate one member of the Committee to act as the chair of the Committee, and the member so designated will preside over the Committee's meetings. (b) The Committee will elect a secretary who may, but need not, be a member of the Committee. The secretary will keep minutes of the Committee's meetings and perform such other duties as may be specified from time to time by the Committee. (c) The Committee may appoint such subcommittees with such duties and powers as it may specify, and it may delegate administrative powers to one or more of its members or to such other person or entity as it may designate. (d) The Committee will meet at such times and places and upon such notice as its members may determine from time to time. A majority of the current membership of the Committee will constitute a quorum for the transaction of business, and all acts of the Committee at any meeting will require, for their validity, the affirmative vote of a majority of the current membership of the 44 50 Committee. The Committee may act without a meeting by the written authorization of a majority of the members of the Committee. (e) The Committee may adopt bylaws for the conduct of its business, provided such bylaws are not inconsistent with the provisions of this article. (f) No member of the Committee may vote with respect to a decision of the Committee relating solely to his or her own participation or benefit under the Plan. 11.3. DUTIES OF ADMINISTRATOR. The Administrator has the discretionary power and authority, and the responsibility, to: (a) Adopt rules, regulations and procedures not inconsistent with the provisions of the Plan and uniform and equitable with respect to individuals determined by the Administrator to be similarly situated at the time in question, and to revoke or modify such rules and regulations at any time; (b) Interpret, construe, apply and enforce the provisions of the Plan and any Plan Rules, including the discretionary and final power and authority to interpret, construe, apply and enforce uncertain provisions of the Plan or Plan Rules, and remedy possible ambiguities, inconsistencies, omissions and errors, and any such action taken by the Administrator in good faith is binding upon all Participants, Beneficiaries and other interested persons; (c) Determine from time to time the status of all Employees, Participants, Beneficiaries and other interested persons for purposes of the Plan; (d) Determine the rights of Employees, Participants, Beneficiaries and other interested persons to benefits under the Plan, the amount and the method and time or times of payment of the benefit; (e) Take any other actions determined by the Administrator to be necessary or advisable to in connection with the administration of the Plan; and (f) Perform any other duties delegated or assigned to the Administrator by the Committee. 11.4. DELEGATION. Except as otherwise provided in ERISA, the Committee and the Administrator may each delegate specific duties and responsibilities, including fiduciary duties and responsibilities. Such delegations may be to Employees or to other individuals, committees or entities. Any delegation may, if specifically stated, allow further delegations by the individual, committee or entity to whom or which the delegation has been made subject to and in accordance with any limitations, restrictions or conditions specified in the delegation or in any other written instrument provided by the Committee or Administrator, as the case may be, to the individual, committee or entity to whom or which the delegation has been made. Any delegation may be rescinded by the Committee or Administrator, as the case may be, at any time. Each individual, 45 51 committee or entity to whom or which a fiduciary duty or responsibility has been delegated is responsible for the exercise of such duties or responsibilities and is not responsible for the acts or failure to act of any other fiduciary. Any delegation of a fiduciary duty or responsibility must be in writing and the individual, committee or entity to whom or which the delegation is made must file his, her or its written acceptance of the delegation with the Committee or Administrator, as the case may be. 11.5. REPORTS AND RECORDS. The Administrator and those individuals, committees or entities to whom or which the Administrator has delegated fiduciary duties will keep records of all their proceedings and actions, and will maintain all such books of account, records and other data as necessary for the proper administration of the Plan and to comply with applicable law. 11.6. COMPENSATION. Neither Committee members nor the Administrator will receive compensation from the Trust for their services as such, but they are entitled to reimbursement from the Trust for all sums reasonably and necessarily expended by them in the performance of their duties. 11.7. PROFESSIONAL ASSISTANCE. The Committee and the Administrator each may retain such accounting, recordkeeping, legal, clerical and other services as may reasonably be required in the administration of the Plan, and may pay reasonable compensation for such services. The Committee and the Administrator each is entitled to rely conclusively on all tables, valuations, certificates, opinions and reports furnished to them by such persons and on all information, elections and designations furnished to them by Participants, Beneficiaries and Participating Employers. 11.8. PAYMENT OF ADMINISTRATIVE COSTS. All costs of administering the Plan may be paid by the Trustee from the Trust, but if not so paid, will be paid by the Participating Employers. 11.9. INDEMNIFICATION. (a) To the extent permitted by law, the Participating Employers jointly and severally agree to indemnify and hold harmless the members of the Committee, the Administrator and other employees, officers or directors of an Affiliated Organization to whom duties are delegated against any and all claims, losses, damages, expenses and liabilities arising from their responsibilities in connection with the Plan which are not covered by insurance (without recourse) paid for by the Participating Employers or otherwise paid or reimbursed, unless they are determined to be due to gross negligence or intentional misconduct. The Participating Employers have the right, but not the obligation, to select counsel and control the defense and settlement of any action for which an individual may be entitled to indemnification pursuant to this section. (b) An individual's right to indemnification pursuant to this section is in addition to, and independent of, the individual's right, if any, to indemnification pursuant to a Participating Employer's articles of incorporation or bylaws (or comparable governing instruments), applicable law or otherwise, but an individual is not 46 52 entitled to indemnification from all sources in an amount that exceeds his or her claims, losses, damages, expenses and liabilities. 11.10. CLAIMS PROCEDURE. The Administrator will notify a Participant in writing within 90 days of the Participant's written application for benefits of the Participant's eligibility or noneligibility for benefits under the Plan. If the Administrator determines that a Participant is not eligible for benefits or full benefits, the notice will: (a) state the specific reasons for the denial of any benefits; (b) provide a specific reference to the provision of the Plan on which the denial is based; (c) provide a description of any additional information or material necessary for the claimant to perfect the claim, and a description of why it is needed; and (d) provide an explanation of the Plan's claims review procedure and other appropriate information as to the steps to be taken if the Participant wishes to have the claim reviewed. If the Administrator determines that there are special circumstances requiring additional time to make a decision, the Administrator will notify the Participant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90-day period. If a Participant is determined by the Administrator not to be eligible for benefits or if the Participant believes that he or she or she is entitled to greater or different benefits, the Participant will be provided the opportunity to have his or her claim reviewed by the Administrator by filing a petition for review with the Administrator within 60 days after the Participant receives the notice issued by the Administrator. The petition must state the specific reasons the Participant believes he or she or she is entitled to benefits or greater or different benefits. Within 60 days after the Administrator receives the petition, the Administrator will give the Participant (and his or her counsel, if any) an opportunity to present his or her position to the Administrator orally or in writing, and the Participant (or his or her counsel) may review the pertinent documents, and the Administrator will notify the Participant of its decision in writing within said 60-day period, stating specifically the basis of the decision written in a manner calculated to be understood by the Participant and the specific provisions of the Plan on which the decision is based. If, because of the need for a hearing, the 60-day period is not sufficient, the decision may be deferred for up to another 60-day period at the election of the Administrator, but notice of this deferral must be given to the Participant. In the event of the death of a Participant, the same procedure applies to the Beneficiary of the Participant. A claimant must exhaust the procedure described in this section before pursuing the claim in any other proceeding. 11.11. LIMITATIONS ON CERTAIN ACTIONS. A Participant or Beneficiary may not commence a civil action pursuant to ERISA section 502(a)(1), with respect to a benefit under the Plan after the earlier of: (a) six years after the occurrence of the facts or circumstances that give rise to or form the basis for such action; and (b) two years from the date the Participant or Beneficiary had actual knowledge of the facts or circumstances that give rise to or form the basis for such action. 47 53 11.12. CORRECTION OF ERRORS. If the Administrator determines that, by reason of administrative error or other cause attributable to a Participating Employer, the Account of any Participant has incurred a loss, the Administrator may enter into an agreement with the Participating Employer under which the Account is fully restored and may, upon such restoration, release the Participating Employer from further responsibility. 11.13. STANDARDS FOR ELECTIONS, DIRECTIONS AND SIMILAR ACTIONS. Any election, direction, designation or similar action required of a Participant, Beneficiary or alternate payee (or any person claiming by, through or on behalf of a Participant, Beneficiary or alternate payee) pursuant to the Plan must be made in accordance with and is subject to the terms of the Plan and Plan Rules. 48 54 ARTICLE 12 MISCELLANEOUS 12.1. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. If this Plan is merged or consolidated with, or its assets or liabilities are transferred to, any other plan, each Participant will be entitled to receive a benefit immediately after such merger, consolidation or transfer (if such other plan were then terminated) that is equal to or greater than the benefit he or she would have been entitled to receive immediately before such merger, consolidation or transfer (if this Plan had then terminated but without regard to Section 10.4). 12.2. LIMITED REVERSION OF FUND. (a) Except as provided in Subsection (b), no corpus or income of the Trust will at any time revert to any Affiliated Organization or be used other than for the exclusive benefit of Participants and their Beneficiaries by paying benefits and administrative expenses of the Plan. (b) Notwithstanding any contrary provision in the Plan: (i) All contributions made by a Participating Employer to the Trustee prior to the initial determination of the Internal Revenue Service as to qualification of the Plan under Code section 401(a) and the tax exempt status of the Trust under Code section 501(a) will be repaid by the Trustee to the Participating Employer, upon the Participating Employer's written request, if the Internal Revenue Service rules that the Plan is not qualified or the Trust is not tax exempt; provided, that the Participating Employer must request such determination within a reasonable time after adoption of the Plan and the repayment by the Trustee to the Participating Employer must be made within one year after the date of denial of qualification of the Plan; and (ii) To the extent a contribution is made by a Participating Employer by a mistake of fact or a deduction is disallowed a Participating Employer under Code section 404, the Trustee will repay the contribution to the Participating Employer upon the Participating Employer's written request; provided, that such repayment must be made within one year after the mistaken payment is made or the deduction is disallowed, as the case may be. Each contribution to the Plan by a Participating Employer is expressly conditioned on such contribution's being fully deductible by the Participating Employer under Code section 404. 12.3. TOP-HEAVY PROVISIONS. (a) The provisions of this subsection will apply for any Plan Year during which the Plan is "top heavy." 49 55 (i) Notwithstanding the provisions of Article 3, no contributions will be made and allocated on behalf of any "key employee" for any Plan Year during which the Plan is top heavy unless the amount of contributions (excluding 401(k) Contributions) made and allocated for such Plan Year on behalf of each Participant who is not a key employee and who is employed with an Affiliated Organization on the last day of the Plan Year, expressed as a percentage of the Participant's Testing Wages for the Plan Year, is at least equal to the lesser of: (1) three percent; or (2) the largest percentage of such Testing Wages at which contributions (including 401(k) Contributions) are made and allocated on behalf of any key employee for such Plan Year. (ii) If, in addition to this Plan, an Affiliated Organization maintains another qualified defined contribution plan or one or more qualified defined benefit pension plans during a Plan Year, the provisions of clause (i) will be applied for such Plan Year: (1) by taking into account the employer contributions (other than elective deferrals for a non-key employee) on behalf of the Participant under all such defined contribution plans; and (2) without regard to any Participant who is not a key employee and whose accrued benefit, expressed as a single life annuity, under a defined benefit pension plan maintained by the Affiliated Organization for such Plan Year is not less than the product of (A) the Participant's average Testing Wages for the period of consecutive years not exceeding the period of consecutive years (not exceeding five) when the Participant had the highest aggregate Testing Wages, disregarding years in which the Participant fails to complete a minimum period of service as specified in Treasury Regulations, multiplied by (B) the lesser of (I) two percent per year of service, disregarding years of service beginning after the close of the last Plan Year in which such defined benefit plan was a top heavy plan or (II) 20 percent. (b) For purposes of Subsection (a), (i) (1) The Plan will be a "top-heavy plan" for a particular Plan Year if, as of the last day of the initial Plan Year or, with respect to any other 50 56 Plan Year, as of the last day of the preceding Plan Year, the aggregate of the Account balances of key employees is greater than 60 percent of the aggregate of the Account balances of all Participants. (2) For purposes of calculating the aggregate Account balances for both key employees and employees who are not key employees: (A) Any distributions made within the five-year period preceding the Plan Year for which the determination is being made, other than a distribution transferred or rolled over to a plan maintained by an Affiliated Organization, will be included; (B) Amounts transferred or rolled over from a plan not maintained by an Affiliated Organization at the initiation of the Participant will be excluded; (C) The Account balances of any key employee and any employee who is not a key employee who has not performed an Hour of Service at any time during the five-year period ending on the date as of which the determination is being made will be excluded; and (D) The terms "key employee" and "employee" include the Beneficiaries of such persons who have died. (ii) (1) Notwithstanding the provisions of clause (i), this Plan will not be a top-heavy plan if it is part of either a "required aggregation group" or a "permissive aggregation group" and such aggregation group is not top-heavy. An aggregation group will be top-heavy if the sum of the present value of accrued benefits and account balances of key employees is more than 60 percent of the sum of the present value of accrued benefits and account balances for all Participants, such accrued benefits and account balances being calculated in each case in the same manner as set forth in clause (i). (2) Each plan in a required aggregation group will be top-heavy if the group is top-heavy. No plan in a required aggregation group will be top-heavy if the group is not top-heavy. (3) If a permissive aggregation group is top-heavy, only those plans that are part of an underlying top-heavy, required aggregation group will be top-heavy. No plan in a permissive aggregation group will be top-heavy if the group is not top-heavy. 51 57 (iii) The "required aggregation group" consists of (1) each plan of an Affiliated Organization in which a key employee participates and (2) each other plan of an Affiliated Organization that enables a plan in which a key employee participates to meet the nondiscrimination requirements of Code sections 401(a)(4) or 410. (iv) A "permissive aggregation group" consists of those plans that are required to be aggregated and one or more plans (providing comparable benefits or contributions) that are not required to be aggregated, which, when taken together, satisfy the requirements of Code sections 401(a)(4) and 410. (v) For purposes of applying clauses (ii), (iii) and (iv) of this Subsection (b), any qualified defined contribution plan maintained by an Affiliated Organization at any time within the five-year period preceding the Plan Year for which the determination being made which, as of the date of such determination, has been formally terminated, has ceased crediting service for benefit accruals and vesting and has been or is distributing all plan assets to participants or their beneficiaries, will be taken into account to the extent required or permitted under such clauses and under Code section 416. (c) A "key employee" is any individual who is or was employed with an Affiliated Organization and who, at any time during the Plan Year in question or any of the preceding four Plan Years is or was: (i) An officer of the Affiliated Organization (an administrative executive in regular and continued service with the Affiliated Organization) whose Section 415 Wages for such Plan Year exceed 50 percent of the amount in effect under Code section 415(b)(1)(A) for such Plan Year, but in no case will there be taken into account more than the lesser of (a) 50 persons, or (b) the greater of (i) three persons or (ii) ten percent of the number of the Affiliated Organization's employees, excluding for purposes of determining the number of such officers, any employees described in Code section 414(q)(5); (ii) The owner of an interest in the Affiliated Organization that is not less than the interest owned by at least ten other persons employed with the Affiliated Organization; provided, that, such owner will not be a key employee solely by reason of such ownership for a Plan Year if he or she does not own more than one-half of one percent of the value of the outstanding interests of the Affiliated Organization or if the amount of his or her Section 415 Wages for such Plan Year is less than the amount in effect under Code section 415(c)(1)(A) for such Plan Year; (iii) The owner of more than five percent of the Affiliated Organization's outstanding stock or more than five percent of the total combined voting power of the Affiliated Organization's stock; or 52 58 (iv) The owner of more than one percent of the Affiliated Organization's outstanding stock or more than one percent of the total combined voting power of the Affiliated Organization's stock, whose Section 415 Wages for such Plan Year exceed $150,000. For purposes of this Subsection (c), ownership of an Affiliated Organization's stock will be determined in accordance with Code section 318; provided, that subparagraph 318(a)(2)(C) will be applied by substituting the phrase "5 percent" for the phrase "50 percent" wherever it appears in such Code section. 12.4. NO EMPLOYMENT RIGHTS CREATED. The establishment and maintenance of the Plan neither gives any Employee a right to continuing employment nor limits the right of an Affiliated Organization to discharge or otherwise deal with the Employee without regard to the effect such action might have on his or her initial or continued participation in the Plan. 12.5. SPECIAL PROVISIONS. Special provisions of the Plan applicable only to certain Participants will be set forth on an exhibit to the Plan. In the event of a conflict between the terms of the exhibit and the terms of the Plan, the exhibit controls. 12.6. QUALIFIED MILITARY SERVICE. (a) The provisions of this section apply only to an Employee who is reemployed on or after October 13, 1996 and whose reemployment rights are protected under the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA") and are intended to comply with the requirements of Code section 414(u). (b) Notwithstanding any other provisions of the Plan to the contrary, a Qualified Employee who leaves the employ of a Participating Employer for qualified military service and returns to employment with a Participating Employer will be entitled to the restoration of benefits under the Plan which would have accrued but for the Qualified Employee's absence due to qualified military service. (c) A Qualified Employee may make 401(k) Contributions for the Plan Years during which he or she would have been an Active Participant but for his or her qualified military service in accordance with Section 3.1 and the following additional rules: (i) the Qualified Employee may elect to make 401(k) Contributions, subject to the maximums in effect pursuant to Section 3.1 during the period of qualified military service; (ii) the Qualified Employee may make the election described in clause (i) at any time during the period that begins on his or her date of reemployment and has the same length as the lesser of five years or the period of the Qualified Employee's qualified military service multiplied by three; (iii) the 401(k) Contributions under this subsection are not subject to the limitations described in Section 9.2, 9.3 or 9.4. 53 59 (d) A Qualified Employee's Participating Employer will make Matching Contributions with respect to the Qualified Employee's 401(k) Contributions pursuant to Subsection (c) in the same amount as if such 401(k) Contributions had actually been made during the Participant's period of qualified military service. The Matching Contributions made pursuant to this subsection are not subject to the limitations described in Section 9.3 or 9.4. (e) The following additional rules and conditions apply with respect to qualified military service notwithstanding any contrary provision of the Plan: (i) an Employee will not be treated as having incurred a Break in Service by reason of his or her qualified military service; (ii) any period of qualified military service will be counted as Vesting Service; (iii) for purposes of determining the Qualified Employee's Eligible Earnings and Section 415 Wages, the Qualified Employee will be treated as receiving compensation from the Participating Employer with whom he or she was employed immediately before the period of qualified military service during the period of qualified military service in an amount equal to the compensation he or she would have received during such period if he or she were not in qualified military service determined based on the rate of pay the Qualified Employee would have received from the Participating Employer but for the absence due to qualified military service; provided, however, if the compensation the Qualified Employee would have received from the Participating Employer is not reasonably certain, then the Qualified Employee's rate of compensation will be equal to his or her average compensation for the 12-month period preceding the qualified military service (or, if shorter, the period of employment immediately preceding the qualified military service); (iv) contributions on behalf of the Qualified Employee will be subject to the limitations in Sections 9.1 and 9.6 with respect to the Plan Years to which such contributions relate in accordance with Treasury Regulations; (v) the Qualified Employee will not be entitled to any crediting of earnings on contributions for any period prior to actual payment to the Trust; and (vi) the Qualified Employee will not be entitled to restoration of any forfeitures which were not allocated to his or her Account as a result of his or her qualified military service. (f) For purposes of this section, "qualified military service" means any service in the uniformed services as defined in USERRA by a Qualified Employee who is entitled to reemployment rights with a Participating Employer under USERRA. 54 60 12.7. SHORT PLAN YEARS. To the extent required by and in accordance with Treasury Regulations, for any Plan Year that is less than 12 months long, the dollar limitations in effect for purposes of Code sections 401(a)(17), 414(q), 415 and 416 will be adjusted to reflect the short Plan Year. 55 61 ARTICLE 13 DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS 13.1. DEFINITIONS. The definitions set forth in this section apply in construing this instrument unless the context otherwise indicates. ACCOUNT. An "Account" with respect to a Participant is any or all of the accounts maintained on his or her behalf pursuant to Section 4.1, as the context requires. ACTIVE PARTICIPANT. An "Active Participant" is a Participant who is a Qualified Employee. ADMINISTRATOR. The "Administrator" of the Plan is an individual or committee designated by the Company. AFFILIATED ORGANIZATION. An "Affiliated Organization" is the Company and any other corporation that is a member of a controlled group of corporations (within the meaning of Code section 1563(a) without regard to Code sections 1563(a)(4) and 1563(e)(3)(C)) that includes the Company, any trade or business (whether or not incorporated) that together with the Company is under common control (within the meaning of Code section 414(c)), any member of an "affiliated service group" (within the meaning of Code section 414(m)) of which the Company is a member or any other organization that, together with the Company, is treated as a single employer pursuant to Code section 414(o) and Treasury Regulations thereunder; provided, that, for purposes of applying the limitations set forth at Section 9.6, such determination under Code section 1563(a) will be made by substituting the phrase "more than 50 percent" for the phrase "at least 80 percent" wherever it appears in such Code section. BASIC MATCHING ACCOUNT. The "Basic Matching Account" is the account established pursuant to Section 4.1(a)(ii). BASIC MATCHING CONTRIBUTIONS. "Basic Matching Contributions" means contributions made by the Participating Employers on behalf of Participants pursuant to Section 3.2(a) or 3.4. BENEFICIARY. A "Beneficiary" is a person designated or otherwise determined under the provisions of Section 8.3 as the distributee of benefits payable after the death of a Participant. A person designated as, or otherwise determined to be, a Beneficiary under the terms of the Plan has no interest in or rights under the Plan until the Participant in question has died. A Beneficiary will cease to be such on the day on which all benefits to which he, she or it is entitled under the Plan have been distributed. BOARD. The "Board" is the board of directors or comparable governing body of the Affiliated Organization in question. When the Plan provides for an action to be taken by the Board, the action may be taken by any committee or individual authorized to take such action pursuant to a proper delegation by the board of directors or comparable governing body in question. BREAK IN SERVICE. A "Break in Service" with respect to an Employee is the period commencing on the Employee's "employment severance date," as defined in clause (a)(ii) of the definition of 56 62 Vesting Service, and ending on the Employee's "reemployment commencement date," as defined in clause (a)(iii) of the definition of Vesting Service; provided, that if an Employee becomes absent on account of (a) the Employee's pregnancy, (b) the birth of the Employee's child, (c) the placement of a child with the Employee on account of the Employee's adoption of the child or (d) the Employee's caring for a child immediately following the child's birth or placement with the Employee, and the Employee furnishes to the Administrator, upon request, such information as the Administrator requires to determine the reasons for the Employee's absence or continued absence, then solely for the purpose of determining whether the Employee has incurred a Break in Service, the Employee's employment severance date will be the first anniversary of the date on which the employment severance date occurs for the purpose of determining the Employee's Vesting Service. CERIDIAN 401(k) PLAN. "Ceridian 401(k) Plan" means the Ceridian Corporation Personal Investment Plan, the Ceridian Corporation Savings and Investment Plan or both of them, as the context requires. CERIDIAN STOCK. "Ceridian Stock" means common stock issued by Ceridian Corporation. CODE. "Code" is the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes a reference to such provision, any valid ruling, regulation or authoritative pronouncement promulgated thereunder and any provision of future law that amends, supplements or supersedes the provision. COMMITTEE. The "Committee" is the Retirement Committee constituted under Article 11. COMPANY. The "Company" is Arbitron Inc. or any successor thereto. COMPANY STOCK. "Company Stock" means common stock issued by the Company. CONSENT OF SPOUSE. Whenever the consent of a Participant's spouse is required with respect to any act of the Participant, such consent will be deemed to have been obtained only if: (a) the Participant's spouse executes a written consent to such act, which consent acknowledges the effect of such act and is witnessed by a Plan representative or a notary public; or (b) the Administrator determines that no such consent can be obtained because the Participant has no spouse, because the Participant's spouse cannot be located, or because of such other circumstances as may, under Treasury Regulations, justify the lack of such consent. Any such consent by the Participant's spouse or such determination by the Administrator that such spouse's consent is not required is effective only with respect to the particular spouse of the Participant who so consented or with respect to whom such determination was made. Any such consent by the Participant's spouse to an act of the Participant under the Plan is irrevocable with respect to that act. DISABLED. A Participant will be considered to be "Disabled" only if 57 63 (a) in the case of a Participant who is participating in the Company's long-term disability plan, he or she is receiving disability benefits under such plan, or (b) in the case of any other Participant, he or she is certified as being disabled by the Social Security Administration and is receiving disability benefits under the disability provisions of the Social Security Act. EFFECTIVE DATE. The "Effective Date" of the Plan is March 31, 2001. ELIGIBLE EARNINGS. (a) Subject to Subsection (b), the "Eligible Earnings" of a Participant from a Participating Employer for any period is the amount reportable by the Participating Employer for federal income tax purposes as wages paid to the Participant for such period, increased by the amount of Eligible Earnings reductions experienced by the Participant for the period pursuant to the Plan, any cafeteria plan maintained by the Participating Employer pursuant to Code section 125 and the Arbitron Retirement Plan, to the extent such reductions are not otherwise included for that period, and decreased by any amount received by the Participant during the period as deferred income from a previous period, expatriation premium, tuition aid reimbursement, relocation allowance, restricted stock plan awards, any such amount attributable to the exercise of an option under a stock option plan maintained by a Participating Employer, any amounts representing imputed income on account of benefits pursuant to the Code, any amounts representing severance payments under the Participating Employer's severance policy and any other amounts of an unusual or nonrecurring nature, as specified in Plan Rules. (b) In no event will a Participant's Eligible Earnings for any Plan Year be taken into account to the extent it exceeds $150,000 (or such larger amount as may be permitted for the calendar year during which such Plan Year begins under Code section 401(a)(17)). ELIGIBLE ROLLOVER DISTRIBUTION. An "Eligible Rollover Distribution" is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code section 401(a)(9); the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); any hardship distribution described in Code section 401(k)(2)(B)(i)(IV); and any other amount excepted from the definition of "eligible rollover distribution" by Code section 402(c)(4). EMPLOYEE. An "Employee" is any individual who performs services for an Affiliated Organization as a common-law employee of the Affiliated Organization. ERISA. "ERISA" is the Employee Retirement Income Security Act of 1974, as amended. Any reference to a specific provision of ERISA includes a reference to such provision, any valid ruling, regulation or authoritative pronouncement promulgated thereunder and any provision of future law that amends, supplements or supersedes the provision. 58 64 401(k) CONTRIBUTION ACCOUNT. The "401(k) Contribution Account" is the account established pursuant to Section 4.1(a)(i). 401(k) CONTRIBUTIONS. "401(k) Contributions" means contributions made by Participants pursuant to Section 3.1. FUND. The "Fund" is the total of all of the assets of every kind and nature, both principal and income, held in the Trust at any particular time or, if the context so requires, one or more of the investment funds described in Section 5.1. HIGHLY COMPENSATED EMPLOYEE. (a) A "Highly Compensated Employee" with respect to a Plan Year is any employee who: (i) at any time during such Plan Year or the 12-month period preceding such Plan Year, owns or owned (or is considered as owning or having owned within the meaning of Code section 318) more than five percent of the outstanding stock of an Affiliated Organization or stock possessing more than five percent of the total combined voting power of all outstanding stock of an Affiliated Organization; or (ii) during the 12-month period preceding such Plan Year, received compensation in excess of $80,000 (or such dollar amount, adjusted to reflect increases in the cost of living, as in effect under Code section 414(q)(1)(B) for the calendar year during which the Plan Year in question begins). (b) For purposes of this section: (i) an "employee" is any individual (other than an individual who is a nonresident alien who receives no earned income (within the meaning of Code section 911(d)(2)) from an Affiliated Organization that constitutes income from sources within the United States (within the meaning of Code section 861(a)(3))) who, during the Plan Year for which the determination is being made, performs services for an Affiliated Organization as (1) a common-law employee, (2) an employee pursuant to Code section 401(c)(1) or (3) a Leased Employee; and (ii) "compensation" for any period means an employee's Section 415 Wages for the period. HOUR OF SERVICE. An "Hour of Service" with respect to an Employee is an hour for which the Employee is paid, or entitled to payment, for the performance of duties for an Affiliated Organization on or after the date on which it became an Affiliated Organization. 59 65 LEASED EMPLOYEE. A "Leased Employee" is any individual (other than an Employee) who performs services for an Affiliated Organization (or for an Affiliated Organization and "related persons" within the meaning of Code section 144(a)(3)): (a) pursuant to an agreement between an Affiliated Organization and any other person; (b) under the Affiliated Organization's primary direction and control; and (c) on a substantially full-time basis for a period of at least one year. MATCHING CONTRIBUTIONS. "Matching Contributions" means contributions made by the Participating Employers on behalf of Participants pursuant to Section 3.2 or 3.4. NEW CERIDIAN SPIN-OFF. "New Ceridian Spin-off" is defined in Section 1.3(a) of the Plan. NORMAL RETIREMENT DATE. The "Normal Retirement Date" of a Participant is the date on which he or she attains age 65. PARTICIPANT. A "Participant" is a current or former Qualified Employee who has entered the Plan pursuant to the provisions of Article 2 and who has not ceased to be a Participant pursuant to the provisions of Section 2.6. PARTICIPATING EMPLOYER. A "Participating Employer" is the Company and any other Affiliated Organization that has adopted the Plan, or all of them collectively, as the context requires, and their respective successors. An Affiliated Organization will cease to be a Participating Employer upon a termination of the Plan as to its Qualified Employees or upon its ceasing to be an Affiliated Organization. PERFORMANCE-BASED MATCHING ACCOUNT. The "Performance-Based Matching Account" is the account established pursuant to Section 4.1(a)(iii). PERFORMANCE-BASED MATCHING CONTRIBUTIONS. "Performance-Based Matching Contributions" means contributions made by Participating Employers on behalf of Participants pursuant to Section 3.2(b). PLAN. The "Plan" is that set forth in this instrument as it may be amended from time to time. PLAN RULE. A "Plan Rule" is a rule, policy, practice or procedure adopted by the Administrator. PLAN YEAR. A "Plan Year" is the 12-month period beginning on each January 1 and ending on the first following December 31. QUALIFIED EMPLOYEE. (a) Except as provided in Subsection (b), a "Qualified Employee" is an Employee who: 60 66 (i) performs services for a Participating Employer as an employee of the Participating Employer (as classified by the Participating Employer at the time the services are performed without regard to any subsequent reclassification); (ii) is paid under a domestic payroll; and (iii) performs services for the Participating Employer primarily within the United States or on a temporary foreign assignment. (b) An Employee who would otherwise be a Qualified Employee is not a Qualified Employee if he or she: (i) is a nonresident alien who receives no earned income (within the meaning of Code section 911(d)(2) from a Participating Employer that constitutes income from sources within the United States (within the meaning of Code section 861(a)(3)); (ii) is covered by a collective bargaining agreement, for whom retirement benefits were the subject of good faith bargaining between such person's representative and a Participating Employer, and is not, as a result of such bargaining, specifically covered by this Plan; or (iii) is eligible, or would be eligible but for his or her failure to satisfy any applicable minimum age, minimum service or similar requirement, to participate in any other qualified defined contribution plan maintained by an Affiliated Organization. (c) An individual who is classified by a Participating Employer as an independent contractor or as any other status in which the individual is not classified by the Participating Employer as an employee of the Participating Employer at the time services are performed is not a Qualified Employee. No judicial or administrative reclassification, or reclassification by the Participating Employer, will be applied to grant retroactive eligibility to any individual under the Plan. ROLLOVER ACCOUNT. The "Rollover Account" is the account established pursuant to Section 4.1(a)(iv). SBC PARTICIPANT. An "SBC Participant" is a Participant who is an "SBC Participant" as defined in the SBC Exhibit to the Arbitron Retirement Plan. SECTION 415 WAGES. (a) An individual's "Section 415 Wages" for any period is his or her "compensation," within the meaning of Code section 415(c)(3) and Treasury Regulations thereunder, for the period from all Affiliated Organizations. (b) The Administrator may, for any period, determine the items of remuneration that, in accordance with Treasury Regulations, will be included in Section 415 Wages for such period; provided that for each purpose under this Plan, the Administrator's determination will be uniform throughout any period. 61 67 TERMINATION OF EMPLOYMENT. (a) For purposes of the Plan, a Participant will be deemed to have terminated employment only if he or she dies, becomes Disabled or has a "separation from service" within the meaning of Code section 401(k)(2)(B)(i)(I) and Treasury Regulations thereunder. Neither transfer of employment among Affiliated Organizations nor absence from active service by reason of disability leave, other than in connection with a Participant becoming Disabled, or any other leave of absence will constitute a termination of employment. (b) A Participant who, in conjunction with a disposition by an Affiliated Organization of its interest in a subsidiary, within the meaning of Code section 401(k)(10)(A)(iii), continues employment with the subsidiary, will be considered to have terminated employment if the applicable conditions specified in Treasury Regulations under Code section 401(k)(10) are satisfied. (c) A Participant who, in conjunction with a disposition by an Affiliated Organization of substantially all of the assets used by the Affiliated Organization in a trade or business of the Affiliated Organization, within the meaning of Code section 401(k)(10)(A)(ii), transfers employment to the corporation acquiring the assets, will be considered to have terminated employment if the applicable conditions specified in Treasury Regulations under Code section 401(k)(10) are satisfied. (d) A Participant who, in conjunction with a disposition by an Affiliated Organization of its interest in a subsidiary, continues employment with the subsidiary or in conjunction with a disposition by an Affiliated Organization of substantially all of the assets used by the Affiliated Organization in a trade or business of the Affiliated Organization, transfers employment to the acquiror of such assets, will be considered to have not terminated employment if the applicable conditions specified in Treasury Regulations under Code section 401(k)(10)(A) are not satisfied. If a Participant is considered to have not terminated employment as a result of this subsection, this subsection will continue to apply in the event of any subsequent transfer of employment in conjunction with the disposition of all or any portion of a business operation of the initial acquiror or any subsequent acquirors that would not otherwise entitle the Participant to a distribution under Subsection (b) or (c). TESTING WAGES. (a) An individual's "Testing Wages" for any Plan Year is his or her Section 415 Wages for the Plan Year. (b) Notwithstanding Subsection (a), in no event will a person's Testing Wages for any Plan Year be taken into account to the extent it exceeds $150,000 (or such other larger amount as may be permitted for the calendar year during which such Plan Year begins under Code section 401(a)(17)). (c) The Administrator may, for any Plan Year, adopt any alternative definition of Testing Wages that complies with Code section 414(s) and Treasury Regulations thereunder; provided, that for each purpose under this Plan, the definition so adopted will be uniform throughout any Plan Year. 62 68 TRANSFER DATE. "Transfer Date" means the date as of which accounts under the Ceridian 401(k) Plans were transferred to the Plan in connection with the New Ceridian Spin-off. TREASURY REGULATIONS. "Treasury Regulations" mean regulations, rulings, notices and other promulgations issued under the authority of the Secretary of the Treasury that apply to, or may be relied upon in the administration of, this Plan. TRUST. The "Trust" is that created for purposes of implementing benefits under the Plan. TRUSTEE. The "Trustee" is the corporation and/or individual or individuals who from time to time is or are the duly appointed and acting trustee or trustees of the Trust. VESTING SERVICE. (a) An Employee's "Vesting Service" means the sum of his or her periods of service as an Employee with the Affiliated Organizations (measured in the case of any Affiliated Organization from the date on which it became an Affiliated Organization), commencing as of the Employee's employment commencement date or reemployment commencement date, as the case may be, and ending with the Employee's next employment severance date, as determined in accordance with the following rules: (i) an Employee's "employment commencement date" is the date on which he or she first performs an Hour of Service; (ii) for purposes of this section only, an Employee's "employment severance date" is the earlier to occur of: (1) the date on which the Employee terminates employment with all Affiliated Organizations because he or she quits, retires, is discharged or dies; or (2) the first anniversary of the first date of a period during which the Employee remains absent from service (with or without pay) with all Affiliated Organizations for any reason other than a quit, retirement, discharge or death following the employment commencement date or reemployment commencement date, as the case may be; (iii) an Employee's "reemployment commencement date" is the first date, following a period of severance from employment which is not required to be taken into account under either item (iv) or (v), on which the Employee performs an Hour of Service; (iv) if the Employee's employment is severed by reason of a quit, discharge or retirement and he or she subsequently performs an Hour of Service within 12 months following the employment severance date, the period of such severance will be taken into account; (v) if the Employee quits, is discharged or retires during an absence from service of 12 months or less for any reason other than a quit, discharge, retirement or 63 69 death and the Employee subsequently performs an Hour of Service within 12 months following the date on which such absence commenced, the period of such severance will be taken into account. (b) To the extent provided in Subsection (a), service by a Leased Employee or service by an individual with any other organization that is required to be taken into account pursuant to Code section 414(o) and Treasury Regulations thereunder will be deemed to be Vesting Service for purposes of the Plan if such Leased Employee or individual becomes an Employee. (c) Notwithstanding the foregoing provisions of this section, service completed by an Employee with an Affiliated Organization prior to the date on which it became an Affiliated Organization (or with another entity prior to the acquisition of such entity's business or assets by an Affiliated Organization) will be counted as Vesting Service only if and to the extent provided in any agreement pursuant to which it became an Affiliated Organization (or such other business or assets were acquired) or as provided by resolution of the Company's Board. 13.2. CONSTRUCTION AND INTERPRETATIONS. The rules of construction and interpretation set forth in this section apply in construing this instrument unless the context otherwise indicates. GOVERNING LAW. To the extent that state law is not preempted by provisions of ERISA, or any other laws of the United States, this Plan will be administered, construed, and enforced according to the internal, substantive laws of the State of Maryland, without regard to its conflict of laws rules. HEADINGS. The headings of articles and sections are included solely for convenience. In the case of a conflict between a heading and the text of the Plan, the text controls. NUMBER AND GENDER. Wherever appropriate, the singular number may be read as the plural, the plural may be read as the singular, and the masculine gender may be read as the feminine gender. 64 70 EXHIBIT A This exhibit contains special provisions applicable to each participant in the Arbitron Retirement Plan who has elected an enhanced retirement benefit under the Arbitron Retirement Plan with respect to which a portion of his or her 401(k) Contribution Account serves as the basis for an offset. 1. SEPARATE ACCOUNTING. The Administrator will at all times separately account on a reasonable and consistent basis for all gains, losses, withdrawals, contributions and other credits and charges with respect to the portion of a Participant's 401(k) Contribution Account that serves as a basis for an offset of any portion of his or her benefit under the Arbitron Retirement Plan. For purposes of this exhibit, such portion of the 401(k) Contribution Account is referred to as the 401(k) Contribution Offset Subaccount. 2. SPOUSAL CONSENT TO WITHDRAWALS AND LOANS. No withdrawal or loan may be made from the 401(k) Contribution Offset Subaccount unless, during the 90-day period ending on the date of the withdrawal or loan, the Participant's spouse consents to the withdrawal or loan. 3. COMPANY STOCK. No portion of the 401(k) Contribution Offset Subaccount may be invested in the Company Stock Fund. 4. FORM OF DISTRIBUTION. (a) Unless a Participant otherwise elects in accordance with the provisions of clause (c), the Trustee will, with the balance of the Participant's 401(k) Contribution Offset Subaccount, purchase and distribute to the Participant an annuity contract that provides for payments for the life of the Participant if the Participant is not married on his or her "annuity starting date," within the meaning of Code section 417(f)(2), or, if the Participant is then married, for payments for the life of the Participant, with 50 percent of the amount of such payments continuing after the Participant's death for the life of such spouse. (b) Each annuity contract purchased for a Participant will provide for payment of benefits commencing at such time and in such manner as the Participant elects; provided, that distribution of benefits under such contract must conform to the requirements of Section 8.1 of the Plan, applied as if such contract constituted the Participant's Accounts. No such contract is subject to transfer or to exchange for another annuity contract that does not conform to the requirements of this item (4). No such contract is subject to surrender or encumbrance without the consent of the Participant's spouse. (c) A Participant whose 401(k) Contribution Offset Subaccount would otherwise be paid in the form of an annuity contract described in clause (a) may elect to receive a lump sum payment in lieu of such annuity contract. The Participant's election must be in writing, in form prescribed by the Administrator; must be made within the 90-day period ending on the Participant's annuity starting date; may be revoked and a new election made any number of times during the election period; A-1 71 (d) and is not effective unless the Participant's spouse consents to such lump sum payment. (e) If a Participant dies prior to his or her annuity starting date, and is married on the date of his or her death, the Administrator will, with the balance of the Participant's 401(k) Contribution Offset Subaccount, purchase and distribute to the Participant's surviving spouse a nontransferable annuity contract that provides payments to such surviving spouse for life, commencing at such time not later than the date on which the Participant would have attained age 70-1/2 as the spouse selects; provided, that this clause (d) will not apply if - (i) the Participant's spouse elects, in a written, signed statement delivered to the Administrator prior to the purchase of the annuity contract, to receive the balance of the Participant's interest in his or her 401(k) Contribution Offset Subaccount in a lump sum payment, or (ii) the Participant elected, by a signed written statement delivered to the Administrator within the period commencing on the first day of the Plan Year in which he or she attained age 35 and ending on the date of the Participant's death, to waive the provisions of this clause (d), and the Participant's spouse consented to such election; a Participant may, at any time and any number of times, by signed written notice delivered to the Administrator during the Participant's lifetime, revoke any election made under this subclause (ii), and may make a new election following any such revocation. (f) Distribution of any annuity contract pursuant to the foregoing provisions of this item (4) satisfies in full any claims that the Participant or his or her spouse may have under the Plan, and neither the Trustee nor the Administrator will be responsible to any extent with respect to any payments to which the Participant or his or her spouse may be entitled under such annuity contract. (g) The provisions of this item (4) apply notwithstanding and supersede any designation by a married Participant of any primary Beneficiary other than his or her spouse which designation is not made either in conjunction with an election pursuant to clause (c) or (d)(ii) of this item (4), as the case may be, or thereafter with the spouse's consent. A-2 EX-10.13 5 w48557ex10-13.txt EX-10.13 EXECUTIVE INVESTMENT PLAN 1 EXHIBIT 10.13 ARBITRON EXECUTIVE INVESTMENT PLAN As Adopted Effective as of January 1, 2001 2 ARBITRON EXECUTIVE INVESTMENT PLAN TABLE OF CONTENTS

Page ---- ARTICLE 1. DESCRIPTION.......................................................................1 1.1 Plan Name............................................................................1 1.2 Plan Purpose.........................................................................1 1.3 Plan Type............................................................................1 1.4 Plan Background......................................................................1 ARTICLE 2. PARTICIPATION.....................................................................2 2.1 Participation........................................................................2 2.2 Conditions of Participation..........................................................2 2.3 Termination of Participation.........................................................2 ARTICLE 3. BENEFITS..........................................................................3 3.1 Participant Accounts.................................................................3 3.2 Participant Deferral Credits.........................................................3 3.3 Earnings Credits.....................................................................3 3.4 Vesting..............................................................................5 ARTICLE 4. DISTRIBUTION......................................................................6 4.1 Distribution to Participant Before Severance or Disability...........................6 4.2 Distribution to Participant After Severance or Disability............................7 4.3 Distribution to Beneficiary.........................................................10 4.4 Nondeductibility....................................................................11 4.5 Payment in Event of Incapacity......................................................12 4.6 Suspension..........................................................................12 ARTICLE 5. SOURCE OF PAYMENTS; NATURE OF INTEREST...........................................13 5.1 Establishment of Trust..............................................................13 5.2 Source of Payments..................................................................13 5.3 Status of Plan......................................................................13 5.4 Non-assignability of Benefits.......................................................13 ARTICLE 6. AMENDMENT, TERMINATION...........................................................14 6.1 Amendment...........................................................................14 6.2 Termination of Participation........................................................14 6.3 Termination.........................................................................15 ARTICLE 7. DEFINITIONS, CONSTRUCTION AND INTERPRETATION.....................................16 7.1 Account.............................................................................16 7.2 Administrator.......................................................................16 7.3 Affiliate...........................................................................16 7.4 Board...............................................................................16 7.5 Beneficiary.........................................................................16 7.6 Code................................................................................16 7.7 Company.............................................................................16

i 3 7.8 Cross Reference.....................................................................17 7.9 Disability..........................................................................17 7.10 ERISA...............................................................................17 7.11 Governing Law.......................................................................17 7.12 Headings............................................................................17 7.13 Number and Gender...................................................................17 7.14 Participant.........................................................................17 7.15 Participating Employer..............................................................18 7.16 Plan................................................................................18 7.17 Plan Rules..........................................................................18 7.18 Prior Plan..........................................................................18 7.19 Retirement..........................................................................18 7.20 Severance...........................................................................18 7.21 Trust...............................................................................18 7.22 Trustee.............................................................................18 7.23 Unforeseeable Emergency.............................................................19 7.24 Valuation Date......................................................................19 ARTICLE 8. ADMINISTRATION...................................................................20 8.1 Administrator.......................................................................20 8.2 Plan Rules and Regulations..........................................................20 8.3 Administrator's Discretion..........................................................20 8.4 Specialist's Assistance.............................................................20 8.5 Indemnification.....................................................................20 8.6 Benefit Claim Procedure.............................................................21 8.7 Disputes............................................................................21 ARTICLE 9. MISCELLANEOUS....................................................................23 9.1 Withholding and Offsets.............................................................23 9.2 Other Benefits......................................................................23 9.3 No Warranties Regarding Tax Treatment...............................................23 9.4 No Rights to Continued Service Created..............................................23 9.5 Special Provisions..................................................................23 9.6 Successors..........................................................................23 ii 4 ARBITRON EXECUTIVE INVESTMENT PLAN ARTICLE 1. DESCRIPTION 1.1 PLAN NAME. The name of the Plan is the "Arbitron Executive Investment Plan." 1.2 PLAN PURPOSE. The purpose of the Plan is to provide Participants who, as of December 31, 2000, were participants in the Prior Plan with (a) the benefits to which they were entitled under the Prior Plan as of December 31, 2000 (other than benefits scheduled to be distributed pursuant to the Prior Plan on January 1, 2001) and (b) deferral credits relating to the 2000 plan year under the Prior Plan that would have otherwise been credited to the Participant's account under the Prior Plan as of a date after December 31, 2000, such as deferral credits relating to elections pursuant to the Prior Plan to defer annual bonuses earned during the 2000 plan year and otherwise payable during the first calendar quarter of 2001. 1.3 PLAN TYPE. The Plan is an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees. It is intended that the Plan is exempt from the provisions of Parts 2, 3 and 4 of Subtitle B of Title I of ERISA by operation of sections 201(2), 301(a)(3) and 401(a)(4) thereof, respectively, and from the provisions of Title IV of ERISA, to the extent otherwise applicable, by operation of section 4021(b)(6) thereof. The Plan is also intended to be unfunded for tax purposes. The Plan will be construed and administered in a manner that is consistent with and gives effect to the foregoing. 1.4 PLAN BACKGROUND. (a) The Company adopted the Prior Plan effective as of January 1, 1995. (b) Effective as of January 1, 1999, the Prior Plan was restated and the name of the Prior Plan was changed from the Ceridian Corporation Deferred Compensation Plan to the Ceridian Corporation Executive Investment Plan. (c) Effective as of January 1, 2001, the Company established the Plan and the account balances of the Participants under the Prior Plan as of the close of business on December 31, 2000 (other than the portion of such account balances, if any, scheduled to be distributed pursuant to the Prior Plan on January 1, 2001) were credited to their Accounts under the Plan as of January 1, 2001. 1 5 ARTICLE 2. PARTICIPATION 2.1 PARTICIPATION. Participation in the Plan is limited to those individuals whose account balances under the Prior Plan as of the close of business on December 31, 2000 (other than the portion of such account balances, if any, scheduled to be distributed pursuant to the Prior Plan on January 1, 2001) were credited to their Accounts under the Plan as of January 1, 2001. No one else is eligible to participate in the Plan. 2.2 CONDITIONS OF PARTICIPATION. Each Participant, as a condition of participation in the Plan, is bound by all the terms and conditions of the Plan and the Plan Rules, and must furnish to the Administrator such pertinent information and execute such election forms and other instruments as the Administrator or Plan Rules may require by such dates as the Administrator or Plan Rules may establish. All elections, directions, designations and similar actions required in connection with the Plan must be made in accordance with and are subject to the terms of the Plan and Plan Rules. 2.3 TERMINATION OF PARTICIPATION. A Participant will cease to be a Participant as of the date on which his or her entire Account balance has been distributed. 2 6 ARTICLE 3. BENEFITS 3.1 PARTICIPANT ACCOUNTS. (a) Participant Accounts. For each Participant, the Administrator will establish and maintain an Account. Effective as of January 1, 2001, a Participant's Account will be credited with an amount equal to the balance of his or her account under the Prior Plan as of the close of business on December 31, 2000 (other than the portion of such account, if any, scheduled to be distributed pursuant to the Prior Plan on January 1, 2001). (b) Subaccounts. (i) Prime Rate Earnings Method. The portion of a Participant's Account balance with respect to which earnings credits are made pursuant to Section 3.3(g) will be credited to a separate subaccount within the Account if deferrals were credited to the Participant's account pursuant to Section 3.2 of the Prior Plan for any plan year beginning after December 31, 1998. (ii) Grandfathered Distribution Elections. If a Participant made distribution elections under the provisions of the Prior Plan in effect prior to January 1, 1999 pursuant to which distributions are scheduled to be made or to begin before January 1, 2001, the Administrator will maintain separate subaccounts within the Participant's Account each of which will evidence amounts credited to the Account pursuant to any such election with respect to which the Participant has elected an identical form and timing of distribution. 3.2 PARTICIPANT DEFERRAL CREDITS. (a) Prior Plan Deferral Credits. If a Participant made a deferral election pursuant to the Prior Plan relating to base compensation or annual bonus earned during 2000 for which the deferral credit would have been made to the Participant's account under the Prior Plan as of a date after December 31, 2000, the credit will instead be made to his or her Account as of the same date and in the same amount that the credit would have been made under the Prior Plan. (b) No Other Deferral Credits. No other deferral credits will be made pursuant to the Plan. 3.3 EARNINGS CREDITS. (a) Designation of Investment Funds. The Administrator will designate two or more investment funds which will serve as the basis for determining adjustments pursuant to this section. The Administrator may, from time to time, designate additional investment funds or eliminate any previously designated investment 3 7 funds. The designation or elimination of a fund pursuant to this subsection is not a Plan amendment. The Administrator will not be responsible in any manner to any Participant or other person for any damages, losses, liabilities, costs or expenses of any kind arising in connection with any designation or elimination of an investment fund. (b) Change in Direction for Existing Account Balance. A Participant may direct a change in the manner in which his or her existing Account balance is deemed to be invested among the investment funds designated pursuant to Subsection (a). The direction will be effective on or as soon as administratively practicable after the first day of the calendar month that first follows by at least 10 days (or such shorter period as Plan Rules may allow) the date on which the Administrator receives the direction from the Participant. (c) Account Adjustment. The Administrator will cause Participants' Accounts to be separately adjusted as of each Valuation Date, in a manner determined by the Administrator to be uniform and equitable, to reflect the income, expense, gains, losses, fees and the like that would have resulted since the last Valuation Date had the Participant's investment directions pursuant to this section actually been implemented. To the extent determined by the Administrator to be necessary in conjunction with any distribution pursuant to the Plan, the Administrator will cause the Account from which the distribution is to be made to be adjusted to reflect a good faith estimate by the Administrator of any fees and other expenditures payable after the date of the distribution in connection with deemed investment activity in the Account through and including the date of the distribution. Any such estimate is binding on the Participating Employer and the person to whom the distribution is made. (d) Administrator's Obligations and Responsibilities. The sole obligation of the Administrator with respect to the designation or elimination of any investment fund designated pursuant to Subsection (a) is to act in accordance with the express terms of Subsection (a). By way of example and without limiting the previous sentence, the Administrator is not required, and no course of conduct will cause it to be required, to investigate or monitor any designated fund to any extent or for any purpose or to take or refrain from taking any action with respect to a fund because of any aspect of the performance of the fund. The designation of a limited number of investment funds is solely for administrative convenience and in no way reflects any endorsement of any such funds by the Administrator. (e) Deemed Investment. Trust assets are not required to be invested in accordance with a Participant's directions and the balance of all Accounts pursuant to the Plan will be determined pursuant to this section and other applicable sections of the Plan without regard to the actual amount of Trust assets. (f) Participant Responsibilities. Each Participant is solely responsible for any and all consequences of his or her investment directions made pursuant to this section. Neither any Participating Employer, any of its directors, officers or employees nor 4 8 the Administrator has any responsibility to any Participant or other person for any damages, losses, liabilities, costs or expenses of any kind arising in connection with any investment direction made by the Participant pursuant to this section. (g) Prime Rate Method. (i) General. The entire portion of a Participant's Account attributable to deferral credits under the Prior Plan for plan years ending before January 1, 1999 will be credited with earnings in accordance with clause (ii) unless the Participant elected otherwise in accordance with Section 3.4(i) of the Prior Plan. (ii) Method. As of the last day of each calendar month, the Administrator will, in accordance with Plan Rules, credit the Account of each Participant to whom this clause applies with earnings in an amount equal to the "applicable percentage" of the average daily balance of the Account for the month. The applicable percentage for a given month is the monthly equivalent of the annual prime rate of interest in effect on the first banking day of the month as reported in The Wall Street Journal or other national financial publication selected by the Administrator. 3.4 VESTING. Each Participant always has a fully vested nonforfeitable interest in his or her Account. 5 9 ARTICLE 4. DISTRIBUTION 4.1 DISTRIBUTION TO PARTICIPANT BEFORE SEVERANCE OR DISABILITY. (a) In-Service Distributions. (i) If a Participant elected pursuant to Section 4.1(a) of the Prior Plan to receive a distribution of all or any portion of his or her Prior Plan account as of a specified date or dates after January 1, 2001 and prior to his or her Severance date or Disability, the election will apply to the Participant's Account pursuant to the Plan. (ii) A Participant will be provided with one opportunity to elect to either delay or cancel each date specified in an election described in clause (i). An election pursuant to this clause will not be valid and will not have any effect unless it is made on a properly completed form received by the Administrator before the first day of the calendar year immediately preceding the calendar year that includes the distribution date originally specified. If the Participant made such an election pursuant to Section 4.1(a)(iii) of the Prior Plan before January 1, 2001, the election will apply to the Participant's Account pursuant to the Plan and the Participant is not eligible to make an election pursuant to this clause (ii). (iii) If the Participant experiences a Severance or Disability before a specified date, the Participant's election pursuant to this subsection will become ineffective on his or her Severance date or Disability and distribution of his or her remaining Account balance will be made pursuant to Section 4.2 or 4.3, as the case may be. (iv) Any distribution pursuant to this subsection will be made in a lump sum cash payment on or as soon as administratively practicable after the date specified by the Participant. If the Participant elected a specific dollar amount, the amount of the distribution will be the specified amount or the balance of the Participant's Account as of the Valuation Date coinciding with or immediately preceding the date on which the payment is made (reduced by the amount of any other distribution from the Account after that Valuation Date), whichever is less. If the Participant elected a specific percentage of the Account, the amount of the distribution will be the specified percentage of the Participant's Account as of the Valuation Date coinciding with or immediately preceding the date on which the payment is made (reduced by the amount of any other distribution from the Account after that Valuation Date). (b) Withdrawals Due to Unforeseeable Emergency. Prior to a Participant's Severance date or Disability, a distribution will be made to a Participant from his or her Account if the Participant submits a written distribution request to the 6 10 Administrator and the Administrator determines that the Participant has experienced an Unforeseeable Emergency. The amount of the distribution may not exceed the lesser of (i) the amount necessary to satisfy the emergency, as determined by the Administrator, and (ii) the balance of the Participant's Account as of the Valuation Date coinciding with or immediately preceding the date of the distribution (reduced by the amount of any other distribution from the Account after that Valuation Date). The distribution will be made in the form of a lump sum cash payment as soon as administratively practicable after the Administrator's determination that the Participant has experienced an Unforeseeable Emergency. (c) Accelerated Distribution. Prior to a Participant's Severance date or Disability, the Participant may elect to receive a distribution in an amount equal to 90 percent of his or her Account balance as of the Valuation Date coinciding with or immediately preceding the date on which the payment is made (reduced by the amount of any other distribution from the Account after that Valuation Date), and the remaining 10 percent balance of the Account will be permanently forfeited as of that Valuation Date. The distribution will be made in the form of a lump sum cash payment as soon as administratively practicable after the Participant's properly completed written election is filed with the Administrator. (d) Reduction of Account Balance. The balance of the Participant's Account will be reduced (but not below zero) by the amount of the distribution as of the beginning of the next day after the Valuation Date coinciding with or last preceding the date of the distribution. 4.2 DISTRIBUTION TO PARTICIPANT AFTER SEVERANCE OR DISABILITY. (a) Time. Distribution to a Participant will be made or commence on or as soon as administratively practicable after the date of the Participant's Retirement, Disability or other Severance. (b) Form. (i) Severance Before Retirement or Disability. Upon a Participant's Severance before his or her Retirement or Disability, distribution to the Participant will be made in the form of a lump sum cash payment. (ii) Retirement or Disability. Upon a Participant's Retirement or Disability, distribution to the Participant will be made in the form of a lump sum cash payment unless (1) the Participant made a written election, on a form provided by the Administrator, to receive his or her distribution in the form of five, 10 or 15 annual installment cash payments and (2) his or her properly completed election form is filed with the Administrator before the first day of the calendar year immediately preceding the calendar year that includes his or her Retirement or Disability. Not more than once during any 12-month period, a Participant may change an election made 7 11 pursuant to this subsection, but the change will not be valid and will not have any effect unless it is made on a properly completed form received by the Administrator before the first day of the calendar year immediately preceding the calendar year that includes the Participant's Retirement or Disability. Until an election becomes effective, it will have no effect on any prior election whether or not such prior election became effective before or after the Administrator received the later election. When an election becomes effective, it will automatically supersede any prior election then in effect. An election or change made pursuant to Section 4.2(b)(ii) of the Prior Plan will be deemed to be an election or change made pursuant to this Section 4.2(b)(ii). (c) Amount. (i) Lump Sum. The amount of a lump sum payment from a Participant's Account will be equal to the balance of the Account as of the Valuation Date coinciding with or immediately preceding the date on which the payment is made (reduced by the amount of any other distribution from the Account after that Valuation Date). (ii) Installments. The amount of an installment payment from a Participant's Account will be determined by dividing the balance of the Account as of the Valuation Date coinciding with or immediately preceding the date on which the payment is made (reduced by the amount of any other distribution from the Account after that Valuation Date) by the total number of remaining payments (including the current payment). The undistributed portion of an Account distributed in the form of installment payments will continue to be credited with earnings in accordance with Section 3.3. (d) Special Rules. The provisions of this subsection apply notwithstanding Subsection (a), (b) or (c) or any election by a Participant to the contrary. (i) Divestitures. (1) If some or all of the assets of a Participating Employer are sold or otherwise disposed of to an unrelated third party, the Administrator may, but is not required to, cause to be distributed the Account of any Participant whose employment with all Affiliates is terminated in connection with the sale or disposition unless the acquirer adopts a successor plan which is substantially similar to the Plan in all material respects and expressly assumes the Participating Employer's obligation to provide benefits to the Participant, in which case the Participating Employer will cease to have any obligation to provide benefits to the Participant pursuant to the Plan as of the effective date of the assumption. Any such distribution will be made in the form of a lump sum cash payment 8 12 as soon as administratively practicable after the date of the sale or disposition. The amount of the payment will be determined in accordance with Subsection (c). (2) If a Participating Employer ceases to be an Affiliate, unless otherwise provided in an agreement between an Affiliate and the Participating Employer or an Affiliate and an unrelated third-party acquirer: (A) a Participant who is employed with the Participating Employer or (B) a Participant who is not employed with the Participating Employer but has an Account balance attributable to service with the Participating Employer will not become entitled to his or her Account balance attributable to service with the Participating Employer solely as a result of the cessation and the Participating Employer will, after the date on which it ceases to be an Affiliate, continue to be solely responsible to provide benefits to the Participant at least equal to the balance of the Account as of the effective date of the cessation and as thereafter increased by deferral credits relating to the period before the effective date and earnings credits pursuant to Section 3.3. (ii) Withdrawals Due to Unforeseeable Emergency. If a Participant is receiving installment payments, a distribution will be made to a Participant from his or her Account if the Participant submits a written distribution request to the Administrator and the Administrator determines that the Participant has experienced an Unforeseeable Emergency. The amount of the distribution may not exceed the lesser of (a) the amount necessary to satisfy the emergency, as determined by the Administrator, and (b) the balance of the Participant's Account as of the Valuation Date coinciding with or immediately preceding the date of the distribution (reduced by the amount of any other distribution from the Account after that Valuation Date). The distribution will be made in the form of a lump sum cash payment as soon as administratively practicable after the Administrator's determination that the Participant has experienced an Unforeseeable Emergency. (iii) Accelerated Distribution. If a Participant is receiving installment payments, the Participant may elect to receive a distribution in an amount equal to 90 percent of his or her Account balance as of the Valuation Date coinciding with or immediately preceding the date on which the payment is made (reduced by the amount of any other distribution from the Account after that Valuation Date), and the remaining 10 percent balance of the Account will be permanently forfeited as of that Valuation Date. 9 13 The distribution will be made in the form of a lump sum cash payment as soon as administratively practicable after the Participant's properly completed written election is filed with the Administrator. (e) Reduction of Account Balance. The balance of the Account from which a distribution is made will be reduced (but not below zero) by the amount of the distribution as of the beginning of the next day after the Valuation Date coinciding with or last preceding the date of the distribution. 4.3 DISTRIBUTION TO BENEFICIARY. (a) Time. Distribution to a Beneficiary will be made as soon as administratively practicable after the date on which the Administrator receives notice of the Participant's death and determines that the Beneficiary is entitled to receive the distribution. (b) Form. Distribution to the Participant's Beneficiary will be made in the form of a lump sum cash payment whether or not payments had commenced to the Participant in the form of installments prior to his or her death. (c) Amount. The amount of a lump sum payment will be equal to the balance of the Participant's Account as of the Valuation Date coinciding with or immediately preceding the date on which the payment is made (reduced by the amount of any other distribution from the Account after that Valuation Date). In addition, if the Participant dies before his or her Severance date or Disability and the Administrator determines that the death is not attributable to the Participant's suicide committed during the first calendar year beginning after December 31, 1998 for which deferrals were credited to the Participant's account under the Prior Plan or are credited to the Participant's Account under the Plan pursuant to Section 3.2(a) or the next following calendar year, the Beneficiary will also receive an amount equal to twice the Participant's total deferrals pursuant to the Prior Plan and the Plan for all years (exclusive of earnings on the deferrals). If there are multiple Beneficiaries, the total amount distributed will be divided among the Beneficiaries as directed by the Participant in the Beneficiary designation. (d) Reduction of Account Balance. The balance of the Account from which a distribution is made will be reduced (but not below zero) by the amount of the distribution as of the beginning of the next day after the Valuation Date coinciding with or immediately preceding the date of the distribution. (e) Beneficiary Designation. (i) Each Participant may designate, on a form furnished by the Administrator, one or more primary Beneficiaries or alternative Beneficiaries to receive all or a specified part of his or her Account, and the additional amount described in Subsection (c), after his or her death, and the Participant may change or revoke any such designation from time to time. No such 10 14 designation, change or revocation is effective unless executed by the Participant and received by the Administrator during the Participant's lifetime. No designation of a Beneficiary other than the Participant's spouse is effective unless the spouse consents to the designation or the Administrator determines that spousal consent cannot be obtained because the spouse cannot reasonably be located or is legally incapable of consenting. The consent must be in writing, must acknowledge the effect of the election and must be witnessed by a notary public. The consent is effective only with respect to the Beneficiary or class of Beneficiaries so designated and only with respect to the spouse who so consented. (ii) If a Participant-- (1) fails to designate a Beneficiary, or (2) revokes a Beneficiary designation without naming another Beneficiary, or (3) designates one or more Beneficiaries, none of whom survives the Participant or exists at the time in question, for all or any portion of his or her Account, such Account or portion will be paid to the Participant's surviving spouse or, if the Participant is not survived by a spouse, to the representative of the Participant's estate. (iii) The automatic Beneficiaries specified above and, unless the designation otherwise specifies, the Beneficiaries designated by the Participant, become fixed as of the Participant's death so that, if a Beneficiary survives the Participant but dies before the receipt of the payment due such Beneficiary, the payment will be made to the representative of such Beneficiary's estate. Any designation of a Beneficiary by name that is accompanied by a description of relationship or only by statement of relationship to the Participant is effective only to designate the person or persons standing in such relationship to the Participant at the Participant's death. (iv) A beneficiary designation made pursuant to the provisions of the Prior Plan and in effect at the close of business on December 31, 2000 will remain in effect under the Plan until changed or revoked pursuant to the Plan. 4.4 NONDEDUCTIBILITY. If the Company determines in good faith that there is a reasonable likelihood that any compensation paid to a Participant by an Affiliate for a taxable year of the Affiliate would not be deductible by the Affiliate solely by reason of the limitation under Code section 162(m), to the extent deemed necessary by the Company to ensure that the entire amount of any distribution to the Participant pursuant to the Plan is deductible, notwithstanding any other provision of the Plan 11 15 or any election by the Participant to the contrary, all or any portion of the distribution may be deferred. Any amounts deferred pursuant to this section will continue to be credited with earnings in accordance with Section 3.3. The deferred amounts and earnings thereon will be distributed to the Participant, or to his or her Beneficiary in the case of the Participant's death, at the earliest possible date, as determined by the Company in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Affiliate during which the distribution is made will not be limited by Code section 162(m). 4.5 PAYMENT IN EVENT OF INCAPACITY. If any individual entitled to receive any payment under the Plan is, in the judgment of the Administrator, physically, mentally or legally incapable of receiving or acknowledging receipt of the payment, and no legal representative has been appointed for the individual, the Administrator may (but is not required to) cause the payment to be made to any one or more of the following as may be chosen by the Administrator: the Beneficiary (in the case of the incapacity of a Participant); the institution maintaining the individual; a custodian for the individual under the Uniform Transfers to Minors Act of any state; or the individual's spouse, children, parents, or other relatives by blood or marriage. The Administrator is not required to see to the proper application of any such payment and the payment completely discharges all claims under the Plan against the Participating Employer, the Plan and Trust to the extent of the payment. 4.6 SUSPENSION. If a Participant who is receiving installment payments again becomes an employee of an Affiliate, the installment payments will stop. The remaining balance of the Participant's Account will be distributed upon the Participant's subsequent Severance or Disability in accordance with Article 4 without regard to any election made pursuant to Section 4.2(b)(ii) prior to the Participant's last preceding Retirement or Disability. 12 16 ARTICLE 5. SOURCE OF PAYMENTS; NATURE OF INTEREST 5.1 ESTABLISHMENT OF TRUST. A Participating Employer may establish a Trust, or may be covered by a Trust established by another Participating Employer, with an independent corporate trustee. The Trust must (a) be a grantor trust with respect to which the Participating Employer is treated as the grantor for purposes of Code section 677, (b) not cause the Plan to be funded for purposes of Title I of ERISA and (c) provide that the Trust assets will, upon the insolvency of a Participating Employer, be used to satisfy claims of the Participating Employer's general creditors. The Participating Employers may from time to time transfer to the Trust cash, marketable securities or other property acceptable to the Trustee in accordance with the terms of the Trust. 5.2 SOURCE OF PAYMENTS. (a) Each Participating Employer will pay, from its general assets, the portion of any benefit pursuant to Article 4 or Section 6.3 or 6.4 attributable to a Participant's Account with respect to that Participating Employer, and all costs, charges and expenses relating thereto. (b) The Trustee will make distributions to Participants and Beneficiaries from the Trust in satisfaction of a Participating Employer's obligations under the Plan in accordance with the terms of the Trust. The Participating Employer is responsible for paying any benefits attributable to a Participant's Account with respect to that Participating Employer that are not paid by the Trust. 5.3 STATUS OF PLAN. Nothing contained in the Plan or Trust is to be construed as providing for assets to be held for the benefit of any Participant or any other person or persons to whom benefits are to be paid pursuant to the terms of the Plan, the Participant's or other person's only interest under the Plan being the right to receive benefits in accordance with the terms of the Plan. The Trust is established only for the convenience of the Participating Employers and the Participants, and no Participant has any interest in the assets of the Trust. To the extent the Participant or any other person acquires a right to receive benefits under the Plan or the Trust, such right is no greater than the right of any unsecured general creditor of the Participating Employer. 5.4 NON-ASSIGNABILITY OF BENEFITS. The benefits payable under the Plan and the right to receive future benefits under the Plan may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered or subjected to any charge or legal process. 13 17 ARTICLE 6. AMENDMENT, TERMINATION 6.1 AMENDMENT. (a) Right. The Company reserves the right to amend the Plan at any time to any extent that it may deem advisable. (b) Method. To be effective, an amendment must be stated in a written instrument approved in advance or ratified by the Company's Board and executed in the name of the Company by two of its officers. (c) Binding Effect. An amendment adopted in accordance with Subsection (b) is binding on all interested parties as of the effective date stated in the amendment; provided, however, that no amendment may retroactively deprive any Participant, or the Beneficiary of a deceased Participant, of any benefit to which he or she is entitled under the terms of the Plan in effect immediately prior to the effective date of the amendment or the date on which the amendment is adopted, whichever is later. (d) Prime Rate Investment Fund. An amendment which changes the method of crediting earnings described in Section 3.3(g)(ii) will be effective only if the Company's Board determines in good faith that on the date on which the amendment is approved by the Board, it is reasonably likely that, in the long run, the new method will not result in materially lower earnings credits than the method described in Section 3.3(g)(ii). (e) Applicability to Participants Who Have Experienced a Severance or Disability. The provisions of the Plan in effect on a Participant's Severance date or Disability will, except as otherwise expressly provided by a subsequent amendment, continue to apply to such Participant. 6.2 TERMINATION OF PARTICIPATION. Notwithstanding any other provision of the Plan to the contrary, if determined by the Administrator to be necessary to ensure that the Plan is exempt from ERISA to the extent contemplated by Section 1.3, or upon the Administrator's determination that a Participant's interest in the Plan has been or is likely to be includable in the Participant's gross income for federal income tax purposes prior to the actual payment of benefits pursuant to the Plan, the Administrator may take any or all of the following steps: (a) terminate the Participant's future participation in the Plan; (b) cause the Participant's entire interest in the Plan to be distributed to the Participant in the form of an immediate lump sum cash payment in an amount determined in accordance with Section 4.2(c); and/or 14 18 (c) transfer the benefits that would otherwise be payable pursuant to the Plan for all or any of the Participants to a new plan that is similar in all material respects (other than those which require the action in question to be taken.) 6.3 TERMINATION. The Company reserves the right to terminate the Plan in its entirety at any time. Each Participating Employer reserves the right to cease its participation in the Plan at any time. The Plan will terminate in its entirety or with respect to a particular Participating Employer as of the date specified by the Company or such Participating Employer in a written instrument adopted in the same manner as an amendment. Upon the termination of the Plan in its entirety or with respect to any Participating Employer, the Company or Participating Employer, as the case may be, will either cause (a) any benefits to which Participants have become entitled prior to the effective date of the termination to continue to be paid in accordance with the provisions of Article 4 or (b) the entire interest in the Plan of any or all Participants, or the Beneficiaries of any or all deceased Participants, to be distributed in the form of an immediate lump sum cash payment in an amount determined in accordance with Section 4.2(c). 15 19 ARTICLE 7. DEFINITIONS, CONSTRUCTION AND INTERPRETATION The definitions and rules of construction and interpretation set forth in this article apply in construing the Plan unless the context otherwise indicates. 7.1 ACCOUNT. "Account" means the bookkeeping account maintained with respect to a Participant pursuant to Section 3.1. 7.2 ADMINISTRATOR. "Administrator" means the Company or the person to whom administrative duties are delegated pursuant to the provisions of Section 8.1, as the context requires. 7.3 AFFILIATE. "Affiliate" means the Company and any corporation at least a majority of whose outstanding securities ordinarily having the right to vote at elections of directors is owned, directly or indirectly, by the Company. 7.4 BOARD. "Board" means the board of directors of the Affiliate in question. When the Plan provides for an action to be taken by the Board, the action may be taken by any committee or individual authorized to take such action pursuant to a proper delegation by the board of directors in question. 7.5 BENEFICIARY. "Beneficiary" with respect to a Participant is the person designated or otherwise determined under the provisions of Section 4.3(e) as the distributee of benefits payable after the Participant's death. A person designated or otherwise determined to be a Beneficiary under the terms of the Plan has no interest in or right under the Plan until the Participant in question has died. A Beneficiary will cease to be such on the day on which all benefits to which he, she or it is entitled under the Plan have been distributed. 7.6 CODE. "Code" means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes a reference to that provision as it may be amended from time to time and to any successor provision. 7.7 COMPANY. "Company" means Ceridian Corporation, a Delaware corporation, to be renamed Arbitron Inc. 16 20 7.8 CROSS REFERENCE. References within a section of the Plan to a particular subsection refer to that subsection within the same section and references within a section or subsection to a particular clause refer to that clause within the same section or subsection, as the case may be. 7.9 DISABILITY. "Disability" means a disability for which a Participant is receiving disability benefits pursuant to a long-term disability plan maintained by an Affiliate or as a result of which the Participant is certified as being disabled by the Social Security Administration and is receiving disability benefits under the disability provisions of the Social Security Act. The Participant must provide the Administrator with proof of his or her Disability that is satisfactory to the Administrator. For purposes of the Plan, a Disability occurs on the date following the Administrator's receipt of such proof on which the Administrator determines that the Participant has experienced a Disability. 7.10 ERISA. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. Any reference to a specific provision of ERISA includes a reference to that provision as it may be amended from time to time and to any successor provision. 7.11 GOVERNING LAW. To the extent that state law is not preempted by the provisions of ERISA, or any other laws of the United States, all questions pertaining to the construction, validity, effect and enforcement of the Plan will be determined in accordance with the internal, substantive laws of the State of Minnesota without regard to the conflict of law rules of the State of Minnesota or any other jurisdiction. 7.12 HEADINGS. The headings of articles and sections are included solely for convenience of reference; if there exists any conflict between such headings and the text of the Plan, the text will control. 7.13 NUMBER AND GENDER. Wherever appropriate, the singular may be read as the plural, the plural may be read as the singular and one gender may be read as the other gender. 7.14 PARTICIPANT. "Participant" means an individual who (a) on December 31, 2000, was a participant in the Prior Plan and whose account balance under the Prior Plan as of the close of business on December 31, 2000 (other than the portion of such account balance, if any, scheduled to be distributed pursuant to the Prior Plan on January 1, 2001) was credited to his or her Account as of January 1, 2001 and (b) has not ceased to be a Participant pursuant to Section 2.3. 17 21 7.15 PARTICIPATING EMPLOYER. "Participating Employer" means the Company and any other Affiliate that has adopted the Plan, or all of them collectively, as the context requires. An Affiliate will cease to be a Participating Employer upon a termination of the Plan as to its employees and the satisfaction in full of all of its obligations under the Plan or upon its ceasing to be an Affiliate. 7.16 PLAN. "Plan" means the Arbitron Executive Investment Plan, as from time to time amended or restated. 7.17 PLAN RULES. "Plan Rules" are rules, policies, practices or procedures adopted by the Administrator pursuant to Section 8.2. 7.18 PRIOR PLAN. "Prior Plan" means the Ceridian Corporation Executive Investment Plan. 7.19 RETIREMENT. "Retirement" means a Participant's Severance after his or her (a) attainment of age 65 or (b) attainment of age 55 and completion of at least 15 years of "vesting service" (within the meaning of the Company's 401(k) Plan as in effect at the time in question). 7.20 SEVERANCE. "Severance" means the date on which a Participant has completely severed his or her employment relationship with all Affiliates. 7.21 TRUST. "Trust" means any trust or trusts established by a Participating Employer pursuant to Section 5.1. 7.22 TRUSTEE. "Trustee" means the independent corporate trustee or trustees that at the relevant time has or have been appointed to act as Trustee of the Trust. 18 22 7.23 UNFORESEEABLE EMERGENCY. "Unforeseeable Emergency" means an unanticipated emergency that is caused by an event beyond the Participant's or Beneficiary's control resulting in a severe financial hardship that cannot be satisfied through other means. The existence of an unforeseeable emergency will be determined by the Administrator. 7.24 VALUATION DATE. "Valuation Date" means, prior to the first Valuation Date in calendar year 2001, the close of business on December 31, 2000 with respect to a Participant's account balance under the Prior Plan credited to his or her Account as of January 1, 2001, and, thereafter, the last day of each calendar month on which the New York Stock Exchange is open for regular business and any interim dates selected by the Administrator. 19 23 ARTICLE 8. ADMINISTRATION 8.1 ADMINISTRATOR. The general administration of the Plan and the duty to carry out its provisions is vested in the Company. The Company may delegate such duty or any portion thereof to a named person or persons and may from time to time revoke such authority and delegate it to another person or persons. 8.2 PLAN RULES AND REGULATIONS. The Administrator has the discretionary power and authority to make such Plan Rules as the Administrator determines to be consistent with the terms, and necessary or advisable in connection with the administration, of the Plan and to modify or rescind any such Plan Rules. 8.3 ADMINISTRATOR'S DISCRETION. The Administrator has the discretionary power and authority to make all determinations necessary for administration of the Plan, except those determinations that the Plan requires others to make, and to construe, interpret, apply and enforce the provisions of the Plan and Plan Rules whenever necessary to carry out its intent and purpose and to facilitate its administration, including, without limitation, the discretionary power and authority to remedy ambiguities, inconsistencies, omissions and erroneous benefit calculations. In the exercise of its discretionary power and authority, the Administrator will treat all similarly situated persons uniformly. 8.4 SPECIALIST'S ASSISTANCE. The Administrator may retain such actuarial, accounting, legal, clerical and other services as may reasonably be required in the administration of the Plan, and may pay reasonable compensation for such services. All costs of administering the Plan will be paid by the Participating Employers. 8.5 INDEMNIFICATION. The Participating Employers jointly and severally agree to indemnify and hold harmless, to the extent permitted by law, each director, officer, and employee of any Affiliates against any and all liabilities, losses, costs and expenses (including legal fees) of every kind and nature that may be imposed on, incurred by, or asserted against such person at any time by reason of such person's services in connection with the Plan, but only if such person did not act dishonestly or in bad faith or in willful violation of the law or regulations under which such liability, loss, cost or expense arises. The Participating Employers have the right, but not the obligation, to select counsel and control the defense and settlement of any action for which a person may be entitled to indemnification under this provision. 20 24 8.6 BENEFIT CLAIM PROCEDURE. (a) If a request for a benefit by a Participant or Beneficiary of a deceased Participant is denied in whole or in part, he or she may, not later than 30 days after the denial, file with the Administrator a written claim objecting to the denial. (b) The Administrator, not later than 90 days after receipt of such claim, will render a written decision to the claimant on the claim. If the claim is denied, in whole or in part, such decision will include the reason or reasons for the denial; a reference to the Plan provisions on which the denial is based; a description of any additional material or information, if any, necessary for the claimant to perfect his or her claim; an explanation as to why such information or material is necessary; and an explanation of the Plan's claim procedure. (c) The claimant may file with the Administrator, not later than 60 days after receiving the Administrator's written decision, a written notice of request for review of the Administrator's decision, and the claimant or his or her representative may thereafter review relevant Plan documents which relate to the claim and may submit written comments to the Administrator. (d) Not later than 60 days after receipt of such review request, the Administrator will render a written decision on the claim, which decision will include the specific reasons for the decision, including a reference to the Plan's specific provisions where appropriate. (e) The foregoing 90- and 60-day periods during which the Administrator must respond to the claimant may be extended by up to an additional 90- or 60 days, respectively, if special circumstances beyond the Administrator's control so require and notice of such extension is given to the claimant prior to the expiration of such initial 90- or 60-day period, as the case may be. (f) A Participant or Beneficiary must exhaust the procedure described in this section before making any claim of entitlement to benefits pursuant to the Plan in any court or other proceeding. 8.7 DISPUTES. (a) In the case of a dispute between a Participant or his or her Beneficiary and a Participating Employer, the Administrator or other person relating to or arising from the Plan, the United States District Court for the District of Minnesota is a proper venue for any action initiated by or against the Participating Employer, Administrator or other person and such court will have personal jurisdiction over any Participant or Beneficiary named in the action. (b) Regardless of where an action relating to or arising from the participation in the Plan by any Participant is pending, the law as stated and applied by the United States Court of Appeals for the Eighth Circuit or the United States District Court for the District of Minnesota will apply to and control all actions relating to the 21 25 Plan brought against the Plan, a Participating Employer, the Administrator or any other person or against any such Participant or his or her Beneficiary. 22 26 ARTICLE 9. MISCELLANEOUS 9.1 WITHHOLDING AND OFFSETS. The Participating Employers and the Trustee retain the right to withhold from any compensation, deferral and/or benefit payment pursuant to the Plan, any and all income, employment, excise and other tax as the Participating Employers or Trustee deems necessary and the Participating Employers may offset against amounts then payable to a Participant or Beneficiary under the Plan any amounts then owing to the Participating Employers by such Participant or Beneficiary. 9.2 OTHER BENEFITS. Neither amounts deferred nor amounts paid pursuant to the Plan constitute salary or compensation for the purpose of computing benefits under any other benefit plan, practice, policy or procedure of a Participating Employer unless otherwise expressly provided thereunder. 9.3 NO WARRANTIES REGARDING TAX TREATMENT. The Participating Employers make no warranties regarding the tax treatment to any person of any deferrals or payments made pursuant to the Plan and each Participant will hold the Administrator and the Participating Employers and their officers, directors, employees, agents and advisors harmless from any liability resulting from any tax position taken in good faith in connection with the Plan. 9.4 NO RIGHTS TO CONTINUED SERVICE CREATED. Neither the establishment of nor participation in the Plan gives any individual the right to continued employment or limits the right of the Participating Employer to discharge, transfer, demote, modify terms and conditions of employment or otherwise deal with any individual without regard to the effect which such action might have on him or her with respect to the Plan. 9.5 SPECIAL PROVISIONS. Special provisions of the Plan applicable only to certain Participants may be set forth on an exhibit to the Plan adopted in the same manner as an amendment to the Plan. In the event of a conflict between the terms of the exhibit and the terms of the Plan, the exhibit controls. Except as otherwise expressly provided in the exhibit, the generally applicable terms of the Plan control all matters not covered by the exhibit. 9.6 SUCCESSORS. Except as otherwise expressly provided in the Plan, all obligations of the Participating Employers under the Plan are binding on any successor to the Participating Employer whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise of all or substantially all of the business and/or assets of the Participating Employer. 23 EX-10.14 6 w48557ex10-14.txt EX-10.14 BROAD BASED STOCK INCENTIVE PLAN 1 EXHIBIT 10.14 ARBITRON INC. 2001 BROAD BASED STOCK INCENTIVE PLAN 1. Purpose of Plan. The purpose of the Arbitron Inc. 2001 Broad Based Stock Incentive Plan (the "Plan") is to advance the interests of Arbitron Inc., a Delaware corporation (the "Company") and its Subsidiaries to attract and retain persons of ability to perform services for the Company and its Subsidiaries by providing an incentive to such individuals through equity participation in the Company and by rewarding such individuals who contribute to the achievement by the Company of its economic objectives. 2. Definitions. The following terms will have the meanings set forth below, unless the context clearly otherwise requires: 2.1 "Board" means the Board of Directors of the Company. 2.2 "Broker Exercise Notice" means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to deliver stock certificates to be issued upon such exercise directly to such broker or dealer. 2.3 "Code" means the Internal Revenue Code of 1986, as amended. 2.4 "Committee" means the group of individuals administering the Plan, as provided in Section 3 of the Plan. 2.5 "Common Stock" means the common stock of the Company, par value $0.50 per share, or the number and kind of shares of stock or other securities into which such Common Stock may be changed in accordance with Section 4.4 of the Plan. 2.6 "Disability" means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code. 2.7 "Eligible Recipients" means (i) all employees (including, without limitation, officers and directors who are also employees) of the Company or any Subsidiary and any non-employee directors, consultants and independent contractors of the Company or any Subsidiary. 2.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended. 2.9 "Fair Market Value" means, with respect to the Common Stock as of any date, the closing market price per share of the Common Stock at the end of the regular trading session, which as of the effective date of this Plan is 4:00 p.m. New York city time, as reported on the New York Stock Exchange Composite Tape on that date (or, if no shares were traded or quoted on such date, as 1 2 of the next preceding date on which there was such a trade or quote) or such other methodology as the Committee deems appropriate. 2.10 "Incentive Award" means an Optionor Restricted Stock Award granted to an Eligible Recipient pursuant to the Plan. 2.11 "Option" means a Non-Statutory Stock Option granted to an Eligible Recipient pursuant to Section 6 of the Plan. 2.12 "Participant" means an Eligible Recipient who receives one or more Incentive Awards under the Plan. 2.13 "Previously Acquired Shares" means shares of Common Stock that are already owned by the Participant or, with respect to any Incentive Award, that are to be issued upon the grant, exercise or vesting of such Incentive Award. 2.14 "Restricted Stock Award" means an award of Common Stock or Stock Units granted to an Eligible Recipient pursuant to Section 7 of the Plan that is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of such Section 7. 2.15 "Retirement" means the termination (other than for cause or by reason of death or Disability) of a Participant's employment or other service on or after the date on which the Participant has attained the age of 55 and has 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 the Participant, provided that if the Participant is not covered by any such plan or practice, the Participant will be deemed to be covered by the Company's plan or practice for purposes of this determination). 2.16 "Securities Act" means the Securities Act of 1933, as amended. 2.17 "Stock Unit" means a bookkeeping entry representing the equivalent of one share of Common Stock that is payable in the form of Common Stock, cash or any combination of the foregoing. 2.18 "Subsidiary" means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Committee. 2.19 "Tax Date" means the date any withholding tax obligation arises under the Code for a Participant with respect to an Incentive Award. 3. Plan Administration. 3.1 The Committee. So long as the Company has a class of its equity securities registered under Section 12 of the Exchange Act, the Plan will be administered by a committee (the "Committee") consisting solely of not less than two members of the Board who are "Non-Employee Directors" within the meaning of Rule 16b-3 under the Exchange Act. To the extent consistent with corporate law, the Committee may delegate to any directors or officers of the Company the duties, power and authority of the Committee under the Plan pursuant to such conditions or limitations as 2 3 the Committee may establish; provided, however, that only the Committee may exercise such duties, power and authority with respect to Eligible Recipients who are subject to Section 16 of the Exchange Act. Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Incentive Award granted under the Plan. 3.2 Authority of the Committee. (a) In accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of Incentive Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including, without limitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent of the Incentive Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Incentive Award, any exercise price, the manner in which Incentive Awards will vest or become exercisable and whether Incentive Awards will be granted in tandem with other Incentive Awards) and the form of written agreement, if any, evidencing such Incentive Award; (iii) the time or times when Incentive Awards will be granted; (iv) the duration of each Incentive Award; and (v) the restrictions and other conditions to which the payment or vesting of Incentive Awards may be subject. In addition, the Committee will have the authority under the Plan in its sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock, Stock Units or any combination of the foregoing. (b) Except as otherwise provided in the remainder of this Section 3.2(b), the Committee will have the authority under the Plan to amend or modify the terms of any outstanding Incentive Award in any manner, including, without limitation, the authority to modify the number of shares or other terms and conditions of an Incentive Award, extend the term of an Incentive Award or accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an Incentive Award; provided, however that the amended or modified terms are permitted by the Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or modification. (c) In the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other similar change in corporate structure or shares, (ii) any purchase, acquisition, sale or disposition of a significant amount of assets or a significant business, (iii) any change in accounting principles or practices, or (iv) any other similar change, in each case with respect to the Company (or any Subsidiary or division thereof) or any other entity whose performance is relevant to the grant or vesting of an Incentive Award, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) may, without the consent of any affected Participant, amend or modify the grant or vesting criteria of any outstanding Incentive Award that is based in whole or in part on the financial performance of the Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the Company or such other entity will be substantially the same (in the sole discretion of the Committee or the board of 3 4 directors of the surviving corporation) following such event as prior to such event; provided, however, that the amended or modified terms are permitted by the Plan as then in effect. (d) The Committee may permit or require the deferral of any payment, issuance or other settlement of an Incentive Award subject to such rules and procedures as the Committee may establish, including the conversion of such payment, issuance or other settlement into Options or Stock Units and the payment or crediting of interest, dividends or dividend equivalents. 4. Shares Available for Issuance. 4.1 Maximum Number of Shares Available. Subject to adjustment as provided in Section 4.4 of the Plan, the maximum number of shares of Common Stock that will be available for issuance under the Plan will be 1,000,000 shares. The shares available for issuance under the Plan may, at the election of the Committee, be either treasury shares or shares authorized but unissued, and, if treasury shares are used, all references in the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury. 4.2 Calculation of Shares Available. Shares of Common Stock that are issued under the Plan or that are subject to outstanding Incentive Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan. To the extent that any shares of Common Stock that are subject to an Incentive Award under the Plan (a) are not issued to a Participant due to the fact that such Incentive Award lapses, expires, is forfeited or for any reason is terminated unexercised or unvested, or is settled or paid in cash or (b) are used to satisfy any exercise price or withholding obligations, such shares will automatically again become available for issuance under the Plan. In addition, to the extent that a Participant tenders (either by actual delivery or by attestation) shares of Common Stock already owned by the Participant to the Company in satisfaction of any exercise price or withholding tax obligations, such shares will automatically again become available for issuance under the Plan. 4.3 Additional Limitations. Notwithstanding any other provisions of the Plan to the contrary and subject, in each case, to adjustment as provided in Section 4.4 of the Plan, no more than 300,000 shares of Common Stock may be issued under the Plan with respect to Restricted Stock Awards that are not granted in lieu of cash compensation that would otherwise be payable to Participants. 4.4 Adjustments to Shares and Incentive Awards. 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 similar 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) will make appropriate adjustments (which determination will be conclusive) as to the number and kind of securities or other property (including cash) available for issuance or payment under the Plan and, in order to prevent dilution or enlargement of the rights of Participants, (a) the number and kind of securities or other property (including cash) subject to outstanding Options, and (b) the exercise price of outstanding Options. 4 5 5. Participation. Participants in the Plan will include those Eligible Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement of economic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from time to time one or more Incentive Awards, singly or in combination or in tandem with other Incentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will be the date of any related agreement with the Participant. 6. Options. 6.1 Grant. An Eligible Recipient may be granted one or more Options under the Plan, and such Options will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion and reflected in the award agreement evidencing such Option. 6.2 Exercise Price. The per share price to be paid by a Participant upon exercise of an Option will be determined by the Committee in its discretion at the time of the Option grant; provided, however, that such price will not be less than 100% of the Fair Market Value of one share of Common Stock on the date of grant. 6.3 Exercisability and Duration. An Option will become exercisable at such times and in such installments as may be determined by the Committee in its sole discretion at the time of grant. An Option will expire five (5) years after the date of grant unless otherwise provided in the award agreement evidencing the Option. 6.4 Payment of Exercise Price. The total purchase price of the shares to be purchased upon exercise of an Option will be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by tender of a Broker Exercise Notice, Previously Acquired Shares (including through delivery of a written attestation of ownership of such Previously Acquired Shares if permitted, and on terms acceptable, to the Committee in its sole discretion), a full recourse promissory note (on terms acceptable to the Committee in its sole discretion) or by a combination of such methods. 6.5 Manner of Exercise. An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through the mail of written notice of exercise to the Company, and by paying in full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.4 of the Plan. 7. Restricted Stock Awards. 7.1 Grant. An Eligible Recipient may be granted one or more Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions, consistent with the provisions of the Plan, as may be determined by the Committee in its sole discretion and reflected in the award agreement evidencing such Restricted Stock Award. The Committee may impose such restrictions or conditions, not inconsistent with the provisions of the 5 6 Plan, to the vesting of such Restricted Stock Awards as it deems appropriate, including, without limitation, that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain period or that the Participant or the Company (or any Subsidiary or division thereof) satisfy certain performance criteria. 7.2 Rights as a Stockholder; Transferability. Except as provided in Sections 7.1, 7.3 and 13.3 of the Plan, a Participant will have all voting, dividend, liquidation and other rights with respect to shares of Common Stock issued to the Participant as a Restricted Stock Award under this Section 7 upon the Participant becoming the holder of record of such shares as if such Participant were a holder of record of shares of unrestricted Common Stock. 7.3 Dividends and Distributions. Unless the Committee determines otherwise in its sole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grant or at any time after the grant of the Restricted Stock Award), any dividends or distributions (including regular quarterly cash dividends) paid with respect to shares of Common Stock subject to the unvested portion of a Restricted Stock Award will be subject to the same restrictions as the shares to which such dividends or distributions relate and will be paid currently to the Participant. In the event the Committee determines not to pay such dividends or distributions currently, the Committee will determine in its sole discretion whether any interest will be paid on such dividends or distributions. In addition, the Committee, in its sole discretion, may require such dividends and distributions to be reinvested (and in such case the Participants consent to such reinvestment) in shares of Common Stock that will be subject to the same restrictions as the shares to which such dividends or distributions relate. 7.4 Enforcement of Restrictions. To enforce the restrictions referred to in this Section 7, the Committee may (a) place a legend on the stock certificates referring to such restrictions and may require Participants, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or (b) maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company's transfer agent for its Common Stock. 8. Effect of Termination of Employment or Other Service. The Committee will have the authority, in its sole discretion, to determine the effect that termination of a Participant's employment or other service with the Company and all Subsidiaries, whether due to death, Disability, Retirement or any other reason, will have on outstanding Incentive Awards then held by such Participant. 9. Payment of Withholding Taxes. 9.1 General Rules. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts which may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to an Incentive Award, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an Incentive Award, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action with respect to an Incentive Award. 9.2 Special Rules. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in 6 7 part, any legally required withholding or employment-related tax obligation described in Section 9.1 of the Plan by electing to tender Previously Acquired Shares, a Broker Exercise Notice or a promissory note (on terms acceptable to the Committee in its sole discretion), or by a combination of such methods. 10. Change of Control. 10.1 Effect of a Change of Control. The Committee will have the authority, in its sole discretion, to determine whether a change of control of the Company has or will occur, and the effect that any change of control of the Company will have on outstanding Incentive Awards then held by such Participant. 10.2 Authority to Modify Change of Control Provisions. Prior to a change of control of the Company, unless otherwise provided in the agreement evidencing the Incentive Award, the Participant will have no rights under this Section 10, and the Committee will have the authority, in its sole discretion, to rescind, modify or amend the provisions of this Section 10 without the consent of any Participant. 11. Rights of Eligible Recipients and Participants; Transferability. 11.1 Employment or Service. Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue in the employ or service of the Company or any Subsidiary. 11.2 Rights as a Stockholder. As a holder of Incentive Awards (other than Restricted Stock Awards), a Participant will have no rights as a stockholder unless and until such Incentive Awards are exercised for, or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares. Except as otherwise provided in the Plan, no adjustment will be made for dividends or distributions with respect to such Incentive Awards as to which there is a record date preceding the date the Participant becomes the holder of record of such shares, except as the Committee may determine in its discretion. 11.3 Restrictions on Transfer. Except pursuant to testamentary will or the laws of descent and distribution and except as expressly permitted by Section 11.3 of the Plan, no right or interest of any Participant in an Incentive Award prior to the exercise or vesting of such Incentive Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. A Participant will, however, be entitled to designate a beneficiary to receive an Incentive Award upon such Participant's death. In the event of a Participant's death, payment of any amounts due under the Plan will be made to, and exercise of any Options (to the extent permitted pursuant to Section 8of the Plan) will be made by, the Participant's designated beneficiary. For purposes of the Plan, a "designated beneficiary" will be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee will require in its sole discretion. If a Participant fails to designate a beneficiary, or if the designated beneficiary does not survive the Participant or dies before the designated beneficiary's exercise of all rights under the Plan, payment of any amounts due under the Plan will be made to, and exercise of any Options (to the extent permitted pursuant to Section 8 of the Plan) may be made by, the Participant's personal representative. 7 8 11.4 Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other compensation arrangements as the Board may deem necessary or desirable. 12. Securities Law and Other Restrictions. Notwithstanding any other provision of the Plan or any agreements entered into pursuant to the Plan, the Company will not be required to issue any shares of Common Stock under this Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable state securities laws or an exemption from such registration under the Securities Act and applicable state securities laws, and (b) there has been obtained any other consent, approval or permit from any other regulatory body which 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 shares of Common Stock, as may be deemed necessary or advisable by the Company in order to comply with such securities law or other restrictions. 13. Plan Amendment, Modification and Termination. The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Incentive Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company. No termination, suspension or amendment of the Plan may adversely affect any outstanding Incentive Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Section 4.4 and Section 10 of the Plan. 14. Effective Date and Duration of the Plan. The Plan is effective as of March 30, 2001, the date it was adopted by the Board. The Plan will terminate at midnight on March 29, 2011, and may be terminated prior thereto by Board action, and no Incentive Award will be granted after such termination. Incentive Awards outstanding upon termination of the Plan may continue to vest, or become free of restrictions, in accordance with their terms. 15. Miscellaneous. 15.1 Governing Law. The validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the laws of the State of Maryland. 15.2 Successors and Assigns. The Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Company and the Participants. 8 EX-10.15 7 w48557ex10-15.txt EX-10.15 EXECUTIVE EMPLOYMENT AGREEMENT 1 EXHIBIT 10.15 ARBITRON INC. EXECUTIVE EMPLOYMENT AGREEMENT PARTIES ARBITRON INC. (A DELAWARE CORPORATION) 142 W. 57TH STREET NEW YORK, NY 10019-3300 AND STEPHEN B. MORRIS ("EXECUTIVE") DATE: APRIL 1, 2001 RECITALS A. Arbitron wishes to obtain the services of Executive for the duration of this Agreement, and Executive wishes to provide his services for such period. B. Arbitron desires reasonable protection of Arbitron's Confidential Information (as defined below). C. Arbitron desires assurance that Executive will not compete with Arbitron, engage in recruitment of Arbitron's employees or make disparaging statements about Arbitron after termination of employment, and Executive is willing to refrain from such competition, recruitment and disparagement. D. Executive desires to be assured of a minimum Base Salary (as defined below) from Arbitron for Executive's services for the term of this Agreement (unless terminated earlier pursuant to the terms of this Agreement). E. It is expressly recognized by the parties that Executive's acceptance of, and continuance in, Executive's position with Arbitron and agreement to be bound by the terms of this Agreement represents a substantial commitment to Arbitron in terms of Executive's personal and professional career and a foregoing of present and future career options by Executive, for all of which Arbitron receives substantial value. F. The parties recognize that a Change of Control (as defined below) may result in material alteration or diminishment of Executive's position and responsibilities and substantially 1 2 frustrate the purpose of Executive's commitment to Arbitron and forebearance of career options. G. The parties recognize that in light of the above-described commitment and forebearance of career options, it is essential that, for the benefit of Arbitron and its stockholders, provision be made for a Change of Control Termination (as defined below) in order to enable Executive to accept and effectively continue in Executive's position in the face of inherently disruptive circumstances arising from the possibility of a Change of Control of the Parent Corporation (as defined below), although no such change is now contemplated or foreseen. H. The parties wish to replace any and all prior agreements and undertakings with respect to Executive's employment and Change of Control occurrences and compensation. NOW, THEREFORE, in consideration of Executive's acceptance of and continuance in Executive's employment for the term of this Agreement and the parties' agreement to be bound by the terms contained herein, the parties agree as follows: ARTICLE I DEFINITIONS 1.01 "BASE SALARY" shall mean regular cash compensation paid on a periodic basis exclusive of benefits, bonuses or incentive payments. 1.02 "BOARD" shall mean the Board of Directors of Parent Corporation. 1.03 "ARBITRON" shall mean ARBITRON INC. and, except as otherwise provided in Section 8.02 of Article VIII, (a) any Subsidiary (as that term is defined in Section 1.07); and (b) any successor in interest by way of consolidation, operation of law, merger or otherwise. 1.04 "CONFIDENTIAL INFORMATION" shall mean information or material of Arbitron which 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, whether or not the underlying details are in the public domain, including: (a) information or material relating to Arbitron 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, 2 3 engineering, development, manufacturing, purchasing, accounting, or marketing activities; (b) information or material relating to Arbitron'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 Arbitron's software, products or services; (c) information on or material relating to Arbitron which when received is marked as "proprietary," "private," or "confidential;" (d) trade secrets of Arbitron; (e) software of Arbitron 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), programming languages, interfaces, visual displays, technical documentation, user manuals, data files and databases of Arbitron; and (f) any similar information of the type described above which Arbitron obtained from another party and which Arbitron treats as or designates as being proprietary, private or confidential, whether or not owned or developed by Arbitron. Notwithstanding the foregoing, "Confidential Information" does not include any information which is properly published or in the public domain; provided, however, that information which is published by or with the aid of Executive 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. 1.05 "DISABILITY" shall mean the inability of Executive to perform his duties under this Agreement because of illness or incapacity for a continuous period of six months. 1.06 "PARENT CORPORATION" shall mean ARBITRON INC. and, except as otherwise provided in Section 8.02 of Article VIII, any successor in interest by way of consolidation, operation of law, merger or otherwise. "Parent Corporation" shall not include any Subsidiary. 1.07 "SUBSIDIARY" shall mean: (a) any corporation at least a majority of whose securities having ordinary voting power for the election of directors (other than securities having such power only by reason of the occurrence of a contingency) is at the time owned by Parent Corporation and/or one or more Subsidiaries; and (b) any division or business unit (or portion thereof) of Parent Corporation or a corporation described in clause (a) of this Section 1.07. 3 4 ARTICLE II EMPLOYMENT, DUTIES AND TERM 2.01 EMPLOYMENT. Upon the terms and conditions set forth in this Agreement, Arbitron hereby employs Executive, and Executive accepts such employment. 2.02 DUTIES. Executive shall devote hisfull-time and best efforts to Arbitron and to fulfilling the duties of hisposition as President and Chief Executive Officer, and member of the Arbitron Board of Directors.. Executive shall comply with Arbitron's policies and procedures to the extent they are not inconsistent with this Agreement in which case the provisions of this Agreement prevail. 2.03 TERM. Subject to the provisions of Articles IV and VII, this Agreement and Executive's employment shall continue until the later of: (a) April 1, 2004; and (b) two years after a Change of Control which occurs prior to April 1, 2004 ("Initial Term"). Upon expiration of the Initial Term and subject to the provisions of Articles IV, VII and VIII, this Agreement and Executive's employment shall be automatically extended for successive three year periods. ARTICLE III COMPENSATION AND EXPENSES 3.01 BASE SALARY. For all services rendered under this Agreement during the term of this Agreement, Arbitron shall pay Executive a minimum Base Salary at the annual rate of $435,000.If Executive's salary is increased from time to time during the term of this Agreement, the increased amount shall be the Base Salary for the remainder of the term. 3.02 BONUS AND INCENTIVE. Bonus or incentive compensation shall be at the sole discretion of Arbitron. Except as otherwise provided in Article VII, Arbitron shall have the right, in accordance with their terms, to alter, amend or eliminate any bonus or incentive plans, or Executive's participation therein, without compensation to Executive. 3.03 VACATION. The Executive shall be entitled to six weeks of annual vacation for each year of active employment with Arbitron. 3.04 BUSINESS EXPENSES. Arbitron shall, consistent with its policies in effect from time to time, bear all ordinary and necessary business expenses incurred by Executive in performing his duties as an employee of Arbitron, provided that Executive accounts promptly for such expenses to Arbitron in the manner prescribed from time to time by Arbitron. 3.05 SUPPLEMENTAL RETIREMENT BENEFIT. 4 5 (a) ENTITLEMENT. (1) TERMINATION OF EMPLOYMENT. Subject to Sections 3.05(a)(2), 3.05(a)(3) and 3.05(a)(4), Executive shall be entitled to a supplemental retirement benefit pursuant to this Section 3.05 following his termination of employment with Arbitron at any time for any reason. (2) FORFEITURE. Executive or his surviving spouse, as the case may be, shall not be entitled to receive or retain a supplemental retirement benefit pursuant to this Section 3.05 if (A) Executive's employment with Arbitron terminates or is terminated for any reason prior to his attainment of age 62 and (B) Executive breached or breaches any of his obligations arising under Article VI of this Agreement. If, after Executive or his surviving spouse, as the case may be, has received a benefit pursuant to this Section 3.05, Arbitron determines that Executive is not entitled to the benefit, Executive or his surviving spouse, as the case may be, shall promptly repay to Arbitron the benefit payment previously received pursuant to this Section 3.05 together with interest on such payment for the period beginning on the date on which it was paid to Executive or his surviving spouse, as the case may be, and ending on the date on which it is repaid to Arbitron at the prime rate of interest (or such comparable index as may be adopted) established from time to time by the Bank of America National Trust and Savings Association, New York, New York, or its successor in interest, as in effect from time to time during the period in question. (3) DEATH. Except as provided in Section 3.05(d), no benefit shall be paid pursuant to this Section 3.05 to Executive or any other person if Executive's employment with Arbitron terminates because of Executive's death or if Executive dies after his termination of employment with Arbitron but before his supplemental retirement benefit pursuant to this Section 3.05 is paid to Executive. (4) OTHER CONDITIONS. As a condition to receiving any benefit pursuant to this Section 3.05, Executive or his surviving spouse, as the case may be, agrees to provide to Arbitron on a timely basis any such information as Arbitron may reasonably request to determine the entitlement of Executive or his surviving spouse, as the case may be, to a benefit pursuant to this Section 3.05 or the amount or timing of the benefit payment or to resolve any other issue or assist Arbitron in making any determination regarding the benefit. (b) COMMENCEMENT AND FORM. The benefit pursuant to this Section 3.05 shall be paid on or as soon as administratively practicable after the Determination Date in the form of a lump sum cash payment. (c) AMOUNT. 5 6 (1) DETERMINATION DATE ON OR AFTER AGE 60. If the Determination Date is on or after the date on which Executive attains age 60, the amount of Executive's benefit pursuant to this Section 3.05 shall be a lump sum amount that is actuarially equivalent to a monthly benefit, paid in the Normal Form and commencing as of the Determination Date, equal to one-twelfth of the excess of: (A) the sum of (i) the product of Executive's Final Average Pay multiplied by his Years of Service through the calendar year during which he attains age 62 (or, if earlier, through the date on which he terminates employment) multiplied by .025 plus (ii) the product of Executive's Final Average Pay multiplied by his Years of Service, if any, following the calendar year during which he attains age 62 multiplied by .0167; over (B) the Offset Amount. (2) DETERMINATION DATE BEFORE AGE 60. If the Determination Date is before the date on which Executive attains age 60, the amount of Executive's benefit pursuant to this Section 3.05 shall be a lump sum amount that is actuarially equivalent to a monthly benefit, paid in the Normal Form and commencing as of the Determination Date, equal to one-twelfth of the excess of: (A) the product of Executive's Final Average Pay multiplied by his Years of Service multiplied by .025, reduced by one-fourth of one percent for each month by which the Determination Date precedes the first day of the month coinciding with or next following the date on which Executive attains age 60; over (C) the Offset Amount. (3) ACTUARIAL EQUIVALENCE. For the purpose of this Section 3.05(c), actuarial equivalence for a given Determination Date shall be based on the annual interest rate on 30-year Treasury securities for the month of November of the calendar year immediately preceding the calendar year that includes the Determination Date, as determined in accordance with published guidance from the Internal Revenue Service pursuant to Section 417(e)(3) of the Code (as defined in Section 7.1(e)) and mortality rates per the "applicable mortality table" published in Revenue 6 7 Ruling 95-6 or other applicable guidance from the Internal Revenue Service pursuant to Section 417(e)(3) of the Code in effect as of the Determination Date. (d) DEATH BENEFITS. (1) DEATH BEFORE DETERMINATION DATE. If Executive dies before the Determination Date, his surviving spouse, if any, shall, subject to Sections 3.05(a)(2) and 3.05(a)(4), be entitled to a surviving spouse benefit. The benefit shall be paid to Executive's surviving spouse on or as soon as administratively practicable after the Determination Date in the form of a lump sum cash payment. The amount of the surviving spouse benefit pursuant to this Section 3.05(d)(1) shall be equal to fifty percent (50%) of the amount of the supplemental retirement benefit that would have been paid to Executive pursuant to this Section 3.05 had he terminated employment on the date of his death (or, if earlier, on the actual date on which he terminated employment) and lived until he received his supplemental retirement benefit. If Executive's surviving spouse dies after becoming entitled to a surviving spouse benefit pursuant to this Section 3.05(d)(1) but before the benefit is paid to the surviving spouse, the benefit shall be paid to the surviving spouse's estate at the same time the benefit would have been paid to the surviving spouse had she lived. (2) DEATH ON OR AFTER DETERMINATION DATE. If Executive dies on or after the Determination Date but before payment of his supplemental retirement benefit pursuant to this Section 3.05, the benefit that would have been paid to Executive had he lived shall, subject to Sections 3.05(a)(2) and 3.05(a)(4), be paid to Executive's estate at the same time the benefit would have been paid to Executive had he lived. (e) NONASSIGNABILITY. The benefit pursuant to this Section 3.05 and the right to receive a future benefit pursuant to this Section 3.05 may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered or subjected to any charge or legal process. (f) RABBI TRUST. Arbitron may, but is not required to, provide for payment of the benefit pursuant to this Section 3.05 through a trust. The trust must (1) be a grantor trust with respect to which Arbitron is treated as the grantor, (2) not cause benefits under this Section 3.05 to be funded for federal income tax purposes or for purposes of the Employee Retirement Income Security Act of 1974, as amended, and (3) provide that trust assets will, upon Arbitron's insolvency, be used to satisfy the claims of Arbitron's general creditors. If Arbitron elects to provide benefits through such a trust, neither Executive nor his surviving spouse shall have any interest in the assets of the trust. (g) NATURE OF INTEREST. Nothing contained in this Section 3.05 is to be construed as providing for assets to be held for the benefit of Executive or his surviving spouse. If Executive or his surviving spouse acquires a right to receive benefit payments pursuant to 7 8 this Section 3.05, that right is no greater than the right of any unsecured general creditor of Arbitron. (h) DETERMINATIONS. Arbitron shall make all determinations as to entitlement, amount and timing of any benefit payment pursuant to this Section 3.05. Arbitron shall have discretionary power and authority to interpret, construe, apply, enforce and otherwise administer the terms of this Section 3.05 and any reasonable determination made by Arbitron in good faith shall be binding and conclusive on Executive and his surviving spouse. Any determination by Arbitron denying a claim by Executive or his surviving spouse shall be stated in writing and shall set forth the specific reason for the denial. Arbitron shall afford a reasonable opportunity to the claimant for a full and fair review of the determination denying the claim. A claimant must exhaust the procedure described in this Section 3.05(h) before pursuing the claim in any other proceeding. (i) SPECIAL DEFINITIONS. The definitions set forth in this Section 3.05(i) apply in construing this Section 3.05 unless the context otherwise indicates. Other terms used in this Section 3.05 have the meanings ascribed to them in Article I of this Agreement. In addition, the general provisions of Article VIII of this Agreement apply to this Section 3.05 unless the context otherwise indicates. (1) "ARBITRON" means, for purposes of Sections 3.05(a)(4), 3.05(f), 3.05(g) and 3.05(h), Arbitron Inc. and any successor in interest by way of consolidation, operation of law, merger or otherwise, but not any Subsidiary. (2) "DETERMINATION DATE means the first day of the fourth calendar month following Executive's termination of employment with Arbitron. (3) "FINAL AVERAGE PAY" means Executive's "final average pay" as defined in the Retirement Plan but determined by disregarding any part of the definition of final average pay in the Retirement Plan that is included for the purpose of complying with Section 401(a)(17) of the Code (within the meaning of Section 7.01(e)). If the Retirement Plan is terminated effective as of a date that is before the date on which Executive terminates employment with Arbitron, the previous sentence shall be applied after the effective date of the termination of the Retirement Plan based on the definition of final average pay in effect under the Retirement Plan on the effective date of the termination of the Retirement Plan as if the Retirement Plan had continued in effect. (4) "NORMAL FORM" means monthly payments to Executive for his life with the last payment made for the month during which Executive dies and with no death benefits payable to any person. (5) "OFFSET AMOUNT" means the annual benefit to which Executive would be entitled under the "offset plans" if his benefit under the offset plans commenced as of the Determination Date and was paid in the Normal Form, based on the terms of the 8 9 offset plans in effect and applicable to Executive on the Determination Date or, if earlier, as of the effective date of the termination of an offset plan. If the Determination Date is before the earliest date on which Executive's benefit could commence under an offset plan, the Offset Amount with respect to that offset plan shall be determined by calculating the Offset Amount as of the earliest date on which Executive's benefit could commence under the offset plan and then reducing that benefit by one fourth of one percent for each month by which the offset date precedes the earliest date on which Executive's benefit could commence under the offset plan. The Offset Amount shall be determined without regard to the actual timing of commencement and form of Executive's benefit pursuant to the offset plans. For the purpose of this Section 3.05(i)(5), the offset plans are the Retirement Plan, the Arbitron Inc. Benefit Equalization Plan and any defined benefit pension plan maintained by any previous employer of Executive which was or is operated by such previous employer as a qualified plan pursuant to Section 401(a) of the Code (within the meaning of Section 7.01(e)), or any successor to any such plans. (6) "RETIREMENT PLAN" means the Arbitron Inc. Retirement Plan as from time to time amended. (7) "YEARS OF SERVICE" means (A) each calendar year from and including 1994 through and including 2000 and (B) each calendar year after 2000 and before 2010 during any part of which Executive is an employee of Arbitron (as classified by Arbitron at the time without regard to any subsequent retroactive reclassification). Executive shall not be credited with any Years of Service for any period of employment with Arbitron after 2009. ARTICLE IV EARLY TERMINATION 4.01 EARLY TERMINATION. This Article shall not apply to a Change of Control Termination which is governed solely by the provisions of Article VII, and does not alter the respective continuing obligations of the parties pursuant to Articles V, VI, and IX. 4.02 TERMINATION FOR CAUSE. Arbitron may terminate this Agreement and Executive's employment immediately for cause. For the purpose hereof "cause" means: (a) fraud; (b) misrepresentation; (c) theft or embezzlement of Arbitron assets; 9 10 (d) intentional violations of law involving moral turpitude; (e) failure to follow Arbitron's conduct and ethics policies; and/or (f) the continued failure by Executive to attempt in good faith to perform his duties as reasonably assigned to Executive pursuant to Section 2.02 of Article II of this Agreement for a period of 60 days after a written demand for such performance which specifically identifies the manner in which it is alleged Executive has not attempted in good faith to perform such duties. In the event of termination for cause pursuant to this Section 4.02, Executive shall be paid at the usual rate of Executive's annual Base Salary through the date of termination specified in any written notice of termination. 4.03 TERMINATION WITHOUT CAUSE. Either Executive or Arbitron may terminate this Agreement and Executive's employment without cause on at least 75 days' written notice. In the event of termination of this Agreement and of Executive's employment pursuant to this Section 4.03, compensation shall be paid as follows: (a) if the notice of termination is given by Executive, Executive shall be paid at the usual rate of his annual Base Salary through the 75 day notice period; (b) if the notice of termination is given by Arbitron, (1) Executive shall be paid at the usual rate of hisannual Base Salary through the 75 day notice period, however, Arbitron shall have the option of making termination of the Agreement and Executive's employment effective immediately upon notice in which case Executive shall be paid a lump sum representing the value of 75 days worth of salary; and (2) Executive shall receive, starting within 15 days after the end of the 75 day notice period, two years' Base Salary payable, at the sole discretion of Arbitron, in either the form of a lump sum payment or on a regular payroll period basis. In addition, Executive shall receive the bonus, if any, to which Executive would otherwise have become entitled under all applicable Arbitron bonus plans in effect at the time of termination of this Agreement had Executive remained continuously employed for the full fiscal year in which termination occurred and continued to perform his duties in the same manner as they were performed immediately prior to termination, multiplied by a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which termination occurred and the denominator of which is 12. This bonus amount shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. In addition, for a period of two years following termination pursuant to this Section 4.03(b), the Executive would be entitled to receive from Arbitron the same or equivalent health, dental, accidental death and dismemberment, short and long-term disability, life insurance coverages, and all other insurance policies and health and welfare benefits programs, policies or arrangements, at the same levels and coverages as Executive was receiving on 10 11 the day immediately prior to his termination. Executive shall be required to pay no more for the above mentioned benefits than he paid as an active employee, or if provided by Arbitron at no cost to employee on the day immediately prior to Executive's termination, they shall continue to be made available to Executive on this basis.In addition, Arbitron shall provide or make arrangements for reasonable outplacement services for Executive based on his level within Arbitron. (c) In the event that termination occurs pursuant to Section 4.03(b), in order to receive the payments specified therein, Arbitron shall require the Executive to execute a release, similar to that attached as Exhibit A, of all claims against Arbitron. 4.04 TERMINATION IN THE EVENT OF DEATH OR DISABILITY. This Agreement shall terminate in the event of death or disability of Executive. (a) In the event of Executive's death, Arbitron shall pay an amount equal to 12 months of Base Salary at the rate in effect at the time of Executive's death plus the amount Executive would have received in annual incentive plan bonus for the year in which the death occurs had "target" goals been achieved. Such amount shall be paid (1) to the beneficiary or beneficiaries designated in writing to Arbitron by Executive, (2) in the absence of such designation to the surviving spouse, or (3) if there is no surviving spouse, or such surviving spouse disclaims all or any part, then the full amount, or such disclaimed portion, shall be paid to the executor, administrator or other personal representative of Executive's estate. The amount shall be paid as a lump sum as soon as practicable following Arbitron's receipt of notice of Executive's death. All such payments shall be in addition to any payments due pursuant to Section 4.04(c) below. (b) In the event of Executive's disability, Base Salary shall be terminated as of the end of the month in which the last day of the six-month period of Executive's inability to perform his duties occurs. (c) In the event of termination by reason of Executive's death or disability, Arbitron shall pay to Executive any amount equal to (1) the amount Executive would have received in annual incentive plan bonus for the year in which termination occurs had "target" goals been achieved, multiplied by (2) a fraction, the numerator of which shall be the number of whole months Executive was employed in the year in which the death or disability occurred and the denominator of which is 12. The amount payable pursuant to this Section 4.04(c) shall be paid within 15 days after the date such bonus would have been paid had Executive remained employed for the full fiscal year. 11 12 4.05 RETIREMENT. (a) Executive may terminate this Agreement and Executive's employment as a result of Executive's decision to retire from Arbitron. Executive shall provide Arbitron with at least 75 days' written notice of the date upon which Executive intends to retire. Executive shall be paid at the usual rate of his annual Base Salary through the date of retirement stipulated in the written notice. (b) In the event that Executive terminates this Agreement as a result of Executive's decision to retire from Arbitron and Executive is at least 55 years of age with five or more years of service to Arbitron, then Executive (and anyone entitled to claim under or through Executive) shall, until age 65, be entitled to receive from Arbitron the same or equivalent health, dental, accidental death and dismemberment, short and long-term disability, life insurance coverages, and all other insurance policies and health and welfare benefits programs, policies or arrangements, at the same levels and coverages as Executive was receiving on the day immediately prior to his retirement. Executive shall be required to pay no more for the above mentioned benefits than he paid as an active employee, or if provided by Arbitron at no cost to employees on the day immediately prior to Executive's retirement, they shall continue to be made available to Executive on this basis. 4.06 ENTIRE TERMINATION PAYMENT. The compensation provided for in this Article IV for early termination of this Agreement and termination pursuant to this Article IV shall constitute Executive's sole remedy for such termination. Executive shall not be entitled to any other termination or severance payment which may be payable to Executive under any other agreement between Executive and Arbitron. ARTICLE V CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT 5.01 CONFIDENTIALITY. Executive will not, during the term or after the termination or expiration of this Agreement or his/her employment, publish, disclose, or utilize in any manner any Confidential Information obtained while employed by Arbitron. If Executive leaves the employ of Arbitron, Executive will not, without Arbitron's prior written consent, retain or take away any drawing, writing or other record in any form containing any Confidential Information. 5.02 BUSINESS CONDUCT AND ETHICS. During the term of employment with Arbitron, Executive will engage in no activity or employment which may conflict with the interest of Arbitron, and will comply with Arbitron's policies and guidelines pertaining to business conduct and ethics. 12 13 5.03 DISCLOSURE. Executive will disclose promptly in writing to Arbitron all inventions, discoveries, software, writings and other works of authorship which are conceived, made, discovered, or written jointly or singly on Arbitron time or on Executive's own time, providing the invention, improvement, discovery, software, writing or other work of authorship is capable of being used by Arbitron in the normal course of business, and all such inventions, improvements, discoveries, software, writings and other works of authorship shall belong solely to Arbitron. 5.04 INSTRUMENTS OF ASSIGNMENT. Executive will sign and execute all instruments of assignment and other papers to evidence vestiture of Executive's entire right, title and interest in such inventions, improvements, discoveries, software, writings or other works of authorship in Arbitron, at the request and the expense of Arbitron, and Executive will do all acts and sign all instruments of assignment and other papers Arbitron may reasonably request relating to applications for patents, patents, copyrights, and the enforcement and protection thereof. If Executive is 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 conceived, developed or reduced to practice by Executive, Executive agrees to do so, and if Executive leaves the employ of Arbitron, Arbitron shall pay Executive at a rate mutually agreeable to Executive and Arbitron, plus reasonable traveling or other expenses. 5.05 EXECUTIVE'S DECLARATION. Executive has no inventions, data bases, improvements, discoveries, software, writings or other works of authorship useful to Arbitron in the normal course of business, which were conceived, made or written prior to the date of this Agreement and which are excluded from this Agreement. 5.06 SURVIVAL. The obligations of this Article V shall survive the expiration or termination of this Agreement and Executive's employment. ARTICLE VI NON-COMPETITION, NON-RECRUITMENT, AND NON-DISPARAGEMENT 6.01 GENERAL. The parties hereto recognize and agree that (a) Executive is a senior executive of Arbitron and is a key executive of Arbitron, (b) Executive has received, and will in the future receive, substantial amounts of Confidential Information, (c) Arbitron's business is conducted on a worldwide basis, and (d) provision for non-competition, non-recruitment and non-disparagement obligations by Executive is critical to Arbitron's continued economic well-being and protection of Arbitron's Confidential Information. In light of these considerations, this Article VI sets forth the terms and conditions of Executive's obligations of non-competition, non-recruitment and non-disparagement subsequent to the termination of this Agreement and/or Executive's employment for any reason. 13 14 6.02 NON-COMPETITION. (a) Unless the obligation is waived or limited by Arbitron in accordance with subsection (b) of this Section 6.02, Executive agrees that for a period of 18 months following termination of employment for any reason ("Non-Compete Period"), Executive 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 Arbitron's business as conducted as of the date of such termination of employment or with any part of Arbitron's contemplated business with respect to which Executive has Confidential Information. For purposes of this subsection (a), "shareholder" shall not include beneficial ownership of less than five percent (5%) of the 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 subsection (a), "Arbitron's business" shall include business conducted by Arbitron or its affiliates and any partnership or joint venture in which Arbitron or its affiliates is a partner or joint venturer; provided that, "affiliate" as used in this sentence shall not include any corporation in which Arbitron has ownership of less than fifteen percent (15%) of the voting stock. (b) At its sole option Arbitron may, by written notice to Executive at any time within the Non-Compete Period, waive or limit the time and/or geographic area in which Executive cannot engage in competitive activity. (c) During the Non-Compete Period, prior to accepting employment with or agreeing to provide consulting services to, any firm or entity which offers competitive products or services, Executive shall give 30 days prior written notice to Arbitron. Such written notice shall describe the firm and the employment or consulting services to be rendered to the firm or entity, and shall include a copy of the written offer of employment or engagement of consulting services. Arbitron's failure to respond or object to such notice shall not in any way constitute acquiescence or waiver of Arbitron's rights under this Article VI. (d) In the event Executive has provided notice to Arbitron pursuant to subsection (c) of this Section 6.02 and has not accepted employment with or agreed to provide consulting services to, any firm or entity directly as a result of his non-competition obligation pursuant to this Section 6.02, Arbitron shall pay Executive an amount equal to the usual rate of Executive's Base Salary in effect at the time of termination on a regular payroll period basis until the end of the Non-Compete Period. There shall be credited against Arbitron's obligation to make such payments any other payments made by Arbitron to Executive pursuant to Article IV of this Agreement. In the event that Arbitron elects, pursuant to subsection (b) of this Section 6.02, to waive all or any portion of the non-competition obligation set forth in subsection (a) hereof, no payment shall be required by Arbitron with respect to the portion of the Non-Compete Period which has been waived. 14 15 (e) In the event Executive fails to provide notice to Arbitron pursuant to subsection (c) of this Section 6.02 and/or in anyway violates its non-competition obligation pursuant to Section 6.02, Arbitron may enforce all of its rights and remedies provided to it under this Agreement, in law and in equity, and Executive shall be deemed to have expressly waived any rights he or she may have had to payments under subsection (d) of this Section 6.02. 6.03 NON-RECRUITMENT. For a period of three years following termination of employment for any reason, Executive will not initiate or actively participate in any other employer's recruitment or hiring of Arbitron employees. This provision shall not preclude Executive from responding to a request (other than by Executive's employer) for a reference with respect to an individual's employment qualifications. 6.04 NON-DISPARAGEMENT. Executive will not, during the term or after the termination or expiration of this Agreement or Executive's employment, make disparaging statements, in any form, about Arbitron, its officers, directors, agents, employees, products or services which Executive knows, or has reason to believe, are false or misleading. 6.05 SURVIVAL. The obligations of this Article VI shall survive the expiration or termination of this Agreement and Executive's employment. ARTICLE VII CHANGE OF CONTROL 7.01 DEFINITIONS. For purposes of this Article VII, the following definitions shall be applied: (a) "BENEFIT PLAN" means any formal or informal plan, program or other arrangement heretofore or hereafter adopted by Arbitron for the direct or indirect provision of compensation to Executive (including groups or classes of participants or beneficiaries of which Executive is a member), whether or not such compensation is deferred, is in the form of cash or other property or rights, or is in the form of a benefit to or for Executive. (b) "CHANGE OF CONTROL" shall mean any of the following events: (1) a merger or consolidation to which Parent Corporation is a party if the individuals and entities who were stockholders of Parent Corporation immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power for election of 15 16 directors of the surviving corporation immediately following the effective date of such merger or consolidation; or (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) in the aggregate of securities of Parent Corporation representing twenty-five percent (25%) or more of the total combined voting power of Parent Corporation'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 of hereof, the following acquisitions shall not constitute a Change of Control: (A) any acquisition by Parent Corporation, or (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Parent Corporation or any corporation controlled by Parent Corporation; or (3) the sale of the properties and assets of Parent Corporation, substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary of Parent Corporation; or (4) the stockholders of Parent Corporation approve any plan or proposal for the liquidation of Parent Corporation; or (5) 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 seventy percent (70%) majority of the Board. For purposes of this clause, "Continuity 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 (2/3) majority of the then-existing Board; or (6) such other event or transaction as the Board shall determine constitutes a Change of Control. (c) "CHANGE OF CONTROL COMPENSATION" means any payment or benefit (including any transfer of property) in the nature of compensation, to or for the benefit of Executive under this Agreement or any Other Agreement or Benefit Plan, which is considered to be contingent on a Change of Control for purposes of Section 280G of the Code. (d) "CHANGE OF CONTROL TERMINATION" means, with respect to Executive, either of the following events occurring within two years after a Change of Control: (1) Termination of Executive's employment by Arbitron for any reason other than (A) fraud, (B) misrepresentation, (C) theft or 16 17 embezzlement of Arbitron assets, (D) intentional violations of law involving moral turpitude, or (E) failure to follow Arbitron's conduct and ethics policies; or (2) Termination of employment with Arbitron by Executive pursuant to Section 7.02 of this Article VII. A Change of Control Termination by Executive shall not, however, include termination by reason of death or Disability. (e) "CODE" means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code shall include the corresponding section of such Code as from time to time amended. (f) "GOOD REASON" means a good faith determination by Executive, in Executive's sole and absolute judgment, that any one or more of the following events has occurred, without Executive's express written consent, after a Change of Control: (1) A change in Executive's reporting responsibilities, titles or offices as in effect immediately prior to the Change of Control, or any removal of Executive from, or any failure to re-elect Executive to, any of such positions, which has the effect of materially diminishing Executive's responsibility or authority; (2) A reduction by Arbitron in Executive's Base Salary as in effect immediately prior to the Change of Control or as the same may be increased from time to time thereafter; (3) Arbitron requiring Executive to be based anywhere other than within 50miles of Executive's job location at the time of the Change of Control; (4) Without replacement by plans, programs, or arrangements which, taken as a whole, provide benefits to Executive at least reasonably comparable to those discontinued or adversely affected, (A) the failure by Arbitron to continue in effect, within its maximum stated term, any pension, bonus, incentive, stock ownership, purchase, option, life insurance, health, accident, disability, or any other employee compensation or benefit plan, program or arrangement, in which Executive is participating immediately prior to a Change of Control; or (B) the taking of any action by Arbitron that would materially adversely affect Executive's participation or materially reduce Executive's benefits under any of such plans, programs or arrangements; 17 18 (5) The failure by Arbitron to provide office space, furniture, and secretarial support at least comparable to that provided Executive immediately prior to the Change of Control or the taking of any similar action by Arbitron that would materially adversely affect the working conditions in or under which Executive performs his employment duties; or (6) Any material breach of this Agreement by Arbitron. (g) "OTHER AGREEMENTS" means any agreement, contract or understanding heretofore or hereafter entered into between Executive and Arbitron for the direct or indirect provision of compensation to Executive. 7.02 CHANGE OF CONTROL TERMINATION RIGHT. For a period of two years following a Change of Control that occurred during the term of this Agreement, Executive shall have the right, at any time and within Executive's sole discretion, to terminate employment with Arbitron for Good Reason. Such termination shall be accomplished by, and effective upon, Executive giving written notice to Arbitron of Executive's decision to terminate. Except as otherwise expressly provided in this Agreement, upon the exercise of said right, all obligations and duties of Executive under this Agreement shall be of no further force and effect. 7.03 CHANGE OF CONTROL TERMINATION PAYMENT. (a) In the event of a Change of Control Termination that occurred during the term of this Agreement, then, and without further action by the Board, Compensation Committee or otherwise, Arbitron shall, within five days of such termination, make a lump sum payment to Executive in an amount equal to three times the sum of (i) 12 months of Base Salary at the rate in effect at the time of Executive's termination, (ii) the bonus, if any, that Executive would have received under all applicable Arbitron bonus plans for the year in which the termination occurs at the higher of the target award applicable to the year in which the termination occurs or the average of the actual bonuses paid for the last three fiscal years, and (iii) the annual perquisite cash adder Executive would have received in the year in which the termination occurs. (b) In addition to the payments made pursuant to Section 7.03(a) hereof, in the event of a Change of Control Termination that occurred during the term of this Agreement, then, and without further action by the Board, Compensation Committee or otherwise, Arbitron shall provide to Executive a pension supplement equivalent to the difference, if any, between: (i) the monthly benefits to which Executive would have been entitled under the defined benefit pension plan or plans in which Executive participates immediately prior to the Change of Control Termination which includes an additional three years of age and service; and (ii) 18 19 the amount to which Executive is, in fact, entitled under such defined benefit pension plan or plans. (c) In addition to the payments pursuant to Section 7.03(a) and Section 7.03(b), in the event of a Change of Control Termination that occurred during the term of this Agreement, then, and without further action by the Board, Compensation Committee or otherwise in determining Executive's supplemental retirement benefit pursuant to Section 3.05: (1) An additional three years of age and an additional three Years of Service shall be added to Executive's actual age and Years of Service (the additional Years of Service shall not be limited by the final sentence of Section 3.05(i)(9)); and (2) the benefit shall not be reduced for commencement before age 60 pursuant to Section 3.05(c)(2), if applicable. (d) Neither the payments made pursuant to Section 7.03(a), the pension supplement provided pursuant to Section 7.03(b), or the additional supplemental retirement benefits provided pursuant to Section 3.05 due to the adjustments pursuant to Section 7.03(c) nor any other compensation to be provided to Executive by Arbitron pursuant to this Agreement or any other agreement or Benefit Plan which may be considered Change of Control Compensation shall be subject to any limitation on Change of Control Compensation which may otherwise be expressed in any such agreement or Benefit Plan. 7.04 TAX REIMBURSEMENT. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payments or distributions by Arbitron to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any payments required under this Section 7.04) (collectively, the "Payments") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that, after payment by Executive of all taxes (and any interest or penalties imposed with respect to such taxes), including any income taxes and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (b) Subject to the provisions of Section 7.04(d), all determinations required to be made under this Section 7.04, including whether and when a Gross-Up Payment is 19 20 required and the amount such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Arbitron's external auditors (the "Accounting Firm"), which shall provide detailed supporting calculations both to Arbitron and Executive within 15 business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by Arbitron. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the "Accounting Firm" hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Arbitron. Any Gross-Up Payment, as determined pursuant to this Section 7.04, shall be paid by Arbitron to Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Arbitron and Executive. (c) As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which should have been made by Arbitron will not have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Arbitron exhausts its remedies pursuant to Section 7.04(d) and Executive thereafter is required to make a payment of any additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Arbitron to or for the benefit of Executive. (d) Executive shall notify Arbitron in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by Arbitron of any Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after Executive knows of such claim and shall apprise Arbitron of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty-day period following the date on which it gives such notice to Arbitron (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Arbitron notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall: (i) give Arbitron any information reasonably requested by Arbitron relating to such claim; (ii) take such action in connection with contesting such claim as Arbitron shall reasonably request in writing from time to time, including accepting legal representation with respect 20 21 to such claim by an attorney reasonably selected by Arbitron; (iii) cooperate with Arbitron in good faith in order to effectively contest such claim; and (iv) permit Arbitron to participate in any proceedings relating to such claim; provided, however, that Arbitron shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 7.04(d), Arbitron shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Arbitron shall determine; provided further, however, that if Arbitron directs Executive to pay such claim and sue for a refund, Arbitron shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Arbitron's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (e) If, after the receipt by Executive of an amount advanced by Arbitron pursuant to Section 7.04(d), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Arbitron's complying with the requirements of Section 7.04(d)) promptly pay to Arbitron the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by Arbitron pursuant to Section 7.04(d), a determination is made that Executive shall not be entitled to any refund with respect to such claim and Arbitron does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty days after 21 22 such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 7.05 INTEREST. In the event Arbitron does not make timely payment in full of the Change of Control Termination payment described in Section 7.03, Executive shall be entitled to receive interest on any unpaid amount at the lower of: (a) the prime rate of interest (or such comparable index as may be adopted) established from time to time by the Bank of America National Trust and Savings Association, New York, New York or its successor in interest; or (b) the maximum rate permitted under Section 280G(d)(4) of the Internal Revenue Code. 7.06 ATTORNEYS' FEES. In the event Executive incurs any legal expense to enforce or defend his rights under this Article VII of this Agreement, or to recover damages for breach thereof, Executive shall be entitled to recover from Arbitron any expenses for attorneys' fees and disbursements incurred. 7.07 BENEFITS CONTINUATION. In the event of a Change of Control Termination, Executive (and anyone entitled to claim under or through Executive) shall, until age 65, be entitled to receive from Arbitron the same or equivalent health, dental, accidental death and dismemberment, short and long-term disability, life insurance coverages, and all other insurance policies and health and welfare benefits programs, policies or arrangements, at the same levels and coverages as Executive was receiving on the day immediately prior to the Change of Control at a cost not to exceed the amount Executive would continue to pay had hecontinued to be an active employee of Arbitron. To the extent that election of continuation of any of such coverages, programs, policies, or arrangements is made available to employees terminating at age 55 with 15 or more years of service, Executive shall be required to pay no more for continuation than is required of such employees on the day immediately prior to the Change of Control. If no such continuation program is available, Executive shall be required to pay no more than he paid as an active employee, or if provided by Arbitron at no cost to employees on the day immediately prior to the Change of Control, they shall continue to be made available to Executive on this basis. ARTICLE VIII GENERAL PROVISIONS 8.01 NO ADEQUATE REMEDY. The parties declare that it is impossible to measure in money the damages which will accrue to either party by reason of a failure to perform any of the obligations under this Agreement and therefore injunctive relief is appropriate. Therefore, if either party shall institute any action or proceeding to enforce the provisions hereof, such party against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such party shall not urge in 22 23 any such action or proceeding the claim or defense that such party has an adequate remedy at law. 8.02 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Parent Corporation and each Subsidiary, whether by way of merger, consolidation, operation of law, assignment, purchase or other acquisition of substantially all of the assets or business of Arbitron, and any such successor or assign shall absolutely and unconditionally assume all of Arbitron's obligations hereunder. 8.03 NOTICES. All notices, requests and demands given to or made pursuant hereto shall, except as otherwise specified herein, be in writing and be delivered or mailed to any such party at its address: (a) ARBITRON INC. 9705 Patuxent Woods Drive Columbia, Maryland 21046 Attention: VP & Chief Legal Officer (b) In the case of Executive shall be: At the address listed on the last page of this Agreement. Either party may, by notice hereunder, designate a changed address. Any notice, if mailed properly addressed, postage prepaid, registered or certified mail, shall be deemed dispatched on the registered date or that stamped on the certified mail receipt, and shall be deemed received within the second business day thereafter or when it is actually received, whichever is sooner. 8.04 CAPTIONS. The various headings or captions in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. 8.05 GOVERNING LAW. The validity, construction and performance of this Agreement shall be governed by the laws of the State of New York and any and every legal proceeding arising out of or in connection with this Agreement shall be brought exclusively in the appropriate courts of the State of New York, each of the parties hereby consenting to the exclusive jurisdiction of said courts for this purpose. The parties hereto expressly recognize and agree that the implementation of this Governing Law provision is essential in light of the fact that Parent Corporation's corporate headquarters and its principal executive offices are located within the State of New York, and there is a critical need for uniformity in the interpretation and enforcement of the employment agreements between Arbitron and its senior executives. 8.06 CONSTRUCTION. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall 23 24 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. 8.07 WAIVERS. No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law. 8.08 MODIFICATION. Any changes or amendments to this Agreement must be in writing and signed by both parties. 8.09 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and understanding between the parties hereto in reference to all the matters herein agreed upon. This Agreement replaces in full all prior employment agreements or understandings of the parties hereto, and any and all such prior agreements or understandings are hereby rescinded by mutual agreement. IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. EXECUTIVE ARBITRON INC. /s/ Stephen B. Morris By: /s/ Lawrence Perlman - --------------------------- ------------------------------------ Stephen B. Morris Lawrence Perlman Title: Chair, Compensation and Human ----------------------------- Resources Committee ------------------- Address: - ----------------------- - ----------------------- - ----------------------- 24 EX-10.16 8 w48557ex10-16.txt EX-10.16 FORM OF INDEMNIFICATION AGREEMENT 1 EXHIBIT 10.16 INDEMNIFICATION AGREEMENT This Agreement, made and entered into as of the 30th day of March, 2001, ("Agreement"), by and between Arbitron Inc., a Delaware corporation ("Company"), and __________________ ("Indemnitee"): WHEREAS, highly competent persons may be reluctant to serve publicly-held corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of such corporations; and WHEREAS, the Board of Directors of the Company has determined that difficulties in attracting and retaining such persons are detrimental to the best interests of the Company's stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future; and WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified; NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows: ARTICLE I DEFINITIONS For purposes of this Agreement the following terms shall have the meaning given here: 1.01 "Board" shall mean the Board of Directors of the Company. 1.02 "Change of Control" shall mean any of the following events: (a) Unless approved by the affirmative vote of at least two-thirds (2/3) of those members of the Board who are in office immediately prior to the event(s) and who are not employees of the Company: 2 (l) the merger or consolidation of the Company with, or the sale of all or substantially all of the assets of the Company to, any person or entity or group of associated persons or entities; or (2) the direct or indirect beneficial ownership in the aggregate of securities of the Company representing twenty percent (20%) 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, not affiliated (within the meaning of the Securities Act of 1933) with the Company as of the date of this Agreement; or (3) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company. (b) A change in the composition of the Board at any time during any consecutive twenty-four (24) month period such that the "Continuity Directors" cease for any reason to constitute at least a seventy percent (70%) majority of the Board. For purposes of this clause (b), "Continuity Directors" means those members of the Board who either: (1) were directors at the beginning of such consecutive twenty-four (24) month period; or (2) were elected by, or on the nomination or recommendation of, at least a two-thirds (2/3) majority (consisting of at least eight directors) of the then-existing Board. 1.03 "Corporate Status" describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the express written request of the Company. 1.04 "Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. 1.05 "Effective Date" means March 30, 2001. - 2 - 3 1.06 "Enterprise" shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary. 1.07 "Expenses" shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding. 1.08 "Good Faith" shall mean Indemnitee having acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal Proceeding, having had no reasonable cause to believe Indemnitee's conduct was unlawful. 1.09 "Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. 1.10 "Proceeding" includes any action, suit, arbitration, alternate dispute resolution mechanism. investigation, administrative hearing or any other actual, threatened or completed proceeding whether civil, criminal, administrative or investigative, other than one initiated by Indemnitee. For purposes of the foregoing sentence, a "Proceeding" shall not be deemed to have been initiated by Indemnitee where Indemnitee seeks pursuant to Article VIII of this Agreement to enforce Indemnitee's rights under this Agreement. ARTICLE II TERM OF AGREEMENT This Agreement shall continue until and terminate upon the later of: (i) 10 years after the date that Indemnitee shall have ceased to serve as a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the express written request of the Company; or (ii) the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or - 3 - 4 advancement of expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Article VIII of this Agreement relating thereto. ARTICLE III SERVICES BY INDEMNITEE, NOTICE OF PROCEEDINGS 3.01 Services. Indemnitee agrees to serve as a director. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). 3.02 Notice of Proceeding. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. ARTICLE IV INDEMNIFICATION 4.01 In General. In connection with any Proceeding, the Company shall indemnify, and advance Expenses, to Indemnitee as provided in this Agreement and to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may thereafter from time to time permit. 4.02 Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4.02 if, by reason of Indemnitee's Corporate Status. Indemnitee is, or is threatened to be made, a party to any Proceeding, other than a Proceeding by or in the right of the Company. Indemnitee shall be indemnified against Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in Good Faith. 4.03 Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4.03 if, by reason of Indemnitee's Corporate Status, Indemnitee is, or is threatened to be made, a party to any Proceeding brought by or in the right of the Company to procure a judgment in its favor. Indemnitee shall be indemnified against Expenses, judgments, penalties, and amounts paid in settlement, actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with such Proceeding if Indemnitee acted in Good Faith. Notwithstanding the foregoing, no such indemnification shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company if applicable law prohibits such indemnification; provided, however, that, if applicable law so permits, indemnification shall nevertheless be made by the Company in such event if and only to the extent that - 4 - 5 the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine. 4.04 Indemnification of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee's Corporate Status, a party to and is successful, on the merits otherwise, in any Proceeding, Indemnitee shall be indemnified to the maximum extent permitted by law, against all Expenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee to the maximum extent permitted by law, against all Expenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 4.04 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter, so long as there has been no finding (either adjudicated or pursuant to Article VI) that Indemnitee did not act in Good Faith. 4.05 Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee's Corporate Status, a witness in any Proceeding. Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. ARTICLE V ADVANCEMENT OF EXPENSES Notwithstanding any provision to the contrary in Article VI, the Company shall advance all reasonable Expenses which, by reason of Indemnitee's Corporate Status, were incurred by or on behalf of Indemnitee in connection with any Proceeding, within twenty days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advance and undertakings to repay pursuant to this Article V shall be unsecured and interest free. - 5 - 6 ARTICLE VI PROCEDURES FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION 6.01 Initial request. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall promptly advise the Board in writing that Indemnitee has requested indemnification. 6.02 Method of Determination. A determination (if required by applicable law) with respect to Indemnitee's entitlement to indemnification shall be made as follows: (a) if a Change in Control has occurred, unless Indemnitee shall request in writing that such determination be made in accordance with clause (b) of this Section 6.02, the determination shall be made by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; (b) if a Change of Control has not occurred, and subject to Section 6.05, the determination shall be made by the Board by a majority vote of a quorum consisting of Disinterested Directors. In the event that a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, the determination shall be made by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee. 6.03 Selection, Payment, Discharge, of Independent Counsel. In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6.02 of this Agreement, the Independent Counsel shall be selected, paid, and discharged in the following manner: (a) If a Change of Control has not occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected. (b) If a Change of Control has occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event clause (a) of this section shall apply), and Indemnitee shall give written - 6 - 7 notice to the Company advising it of the identity of the Independent Counsel so selected. (c) Following the initial selection described in clauses (a) and (b) of this Section 6.03, Indemnitee or the Company, as the case may be, may, within 7 days after such written notice of selection has been given, deliver to the other party a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of independent Counsel as defined in Section 1.09 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit. (d) Either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction if the parties have been unable to agree on the selection of Independent Counsel within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6.01 of this Agreement. Such petition may request a determination whether an objection to the party's selection is without merit and/or seek the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate. A person so appointed shall act as Independent Counsel under Section 6.02 of this Agreement. (e) The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6.03, regardless of the manner in which such Independent Counsel was selected or appointed. (f) Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 8.01 (C) of this Agreement. Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing). - 7 - 8 6.04 Cooperation. Indemnitee shall cooperate with the person, persons or entity making the determination with respect to Indemnitee's entitlement to indemnification under this Agreement, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Costs or expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. 6.05 Payment. If it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. ARTICLE VII PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS 7.01 Burden of Proof. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 6.01 of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. 7.02 Effect of Other Proceedings. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in Good Faith. 7.03 Reliance as Safe Harbor. For purposes of any determination of Good Faith, Indemnitee shall be deemed to have acted in Good Faith if Indemnitee's action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. The provisions of this Section 7.03 shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. - 8 - 9 7.04 Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for Purposes of determining the right to indemnification under this Agreement. ARTICLE VIII REMEDIES OF INDEMNITEE 8.01 Application. This Article VIII shall apply in the event of a Dispute. For purposes of this Article, "Dispute", shall mean any of the following events: (a) a determination is made pursuant to Article VI of this Agreement that Indemnitee is not entitled to indemnification under this Agreement; (b) advancement of Expenses is not timely made pursuant to Article V of this Agreement; (c) the determination of entitlement to be made pursuant to Section 6.02 of this Agreement has not been made within 90 days after receipt by the Company of the request for indemnification; (d) payment of indemnification is not made pursuant to Section 4.05 of this Agreement within ten (10) days after receipt by the Company of a written request therefor; or (e) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Article VI of this Agreement. 8.02 Adjudication. In the event of a Dispute, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee's entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee's option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 8.02. The Company shall not oppose Indemnitee's right to seek any such adjudication or award in arbitration. 8.03 De Novo Review. In the event that a determination shall have been made pursuant to Article VI of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this - 9 - 10 Article VIII shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any such proceeding or arbitration, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be. 8.04 Company Bound. If a determination shall have been made or deemed to have been made pursuant to Article VI of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration absent (i) a misstatement by Indemnitee of a material fact or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law. 8.05 Procedures Valid. The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Article VIII that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. 8.06 Expenses of Adjudication. In the event that Indemnitee, pursuant to this Article VIII, seeks a judicial adjudication of or an award in arbitration to enforce Indemnitee's rights under, or to recover damages for breach of this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 1.07 of this Agreement) actually and reasonably incurred by Indemnitee in such adjudication or arbitration, but only if Indemnitee prevails therein. If it shall be determined in such adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such adjudication or arbitration shall be appropriately prorated. ARTICLE IX NON-EXCLUSIVITY, INSURANCE, SUBROGATION 9.01 Non-Exclusivity. The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-Laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration, rescission or replacement of this Agreement or any provision hereof shall be effective as to Indemnitee with respect to any action taken or omitted by such Indemnitee in Indemnitee's Corporate Status prior to such amendment, alteration, rescission or replacement. - 10 - 11 9.02 Insurance. The Company may maintain an insurance policy or policies against liability arising out of this Agreement or otherwise. 9.03 Subrogation. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. 9.04 No Duplicative Payment. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. ARTICLE X GENERAL PROVISIONS 10.01 Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee's heirs, executors and administrators. 10.02 Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 10.03 No Adequate Remedy. The parties declare that it is impossible to measure in money the damages which will accrue to either party by reason of a failure to perform any of the obligations under this Agreement. Therefore, if either party shall institute any action or proceeding to enforce the provisions hereof, such party against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such party shall not urge in any such - 11 - 12 action or proceeding the claim or defense that the other party has an adequate remedy at law. 10.04 Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 10.05 Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. 10.06 Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions thereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 10.07 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: If to Indemnitee, to: As shown with Indemnitee's Signature below. If to the Company to: Arbitron Inc. 142 West 57th Street New York, New York 10019 Attn: Office of the General Counsel or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be. 10.08 Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the state of Delaware without application of the conflict of laws principles thereof. 10.09 Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto in reference to all the matters herein agreed upon. This Agreement replaces in full all prior indemnification agreements or understandings of the parties hereto, and any all such prior agreements or understandings are hereby rescinded by mutual agreement. - 12 - 13 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. ATTEST: ARBITRON INC. By: By: ------------------------- ---------------------------- Its: ------------------------------- ------------------------------- Address: ------------------------------- ------------------------------- ------------------------------- ------------------------------- - 13 - -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.3

   1
                                                                    EXHIBIT 10.3

                                 AMENDMENT NO. 1
                           TO THE PERSONNEL AGREEMENT
                                     BETWEEN
                                  ARBITRON INC.
                                       AND
                              CERIDIAN CORPORATION


THIS AMENDMENT NO. 1 TO THE PERSONNEL AGREEMENT by and between Arbitron Inc., a
Delaware Corporation formerly known as Ceridian Corporation ("Arbitron"), and
Ceridian Corporation, a Delaware corporation formerly known as New Ceridian
Corporation ("Ceridian"), is entered into as of April 3, 2001.

WHEREAS, Arbitron and Ceridian entered into a Personnel Agreement dated as of
February 14, 2001 (the "Personnel Agreement");

WHEREAS, the Personnel Agreement provided for the conversion of stock options
and restricted stock based on the relationship between the trading prices of
Arbitron prior to the Distribution Date and Arbitron and Ceridian after the
Distribution Date, so that the intrinsic value of the stock options before the
Distribution Date will be equivalent to the intrinsic value of the stock options
after the Distribution Date;

WHEREAS, on the Distribution Date, Arbitron was removed from the S&P 500 and
Ceridian was added to the S&P 400, this substantially increased the trading
volume and impacted the price of Ceridian before and after the Distribution
Date;

WHEREAS, Arbitron and Ceridian wish to amend the Personnel Agreement to (1)
adjust the stock option conversion formulas for Ceridian employees and retirees,
decedents and certain other former Arbitron employees to remove the external
impact of the large volume of trading in Ceridian's stock as a result of the
changes in the S&P 500 and S&P 400, (2) adjust the restricted stock conversion
formulas to remove the external impact of the large volume of trading in
Ceridian's stock as a result of the changes in the S&P 500 and S&P 400, and (3)
to adjust the Arbitron stock option formulas to reflect the fact that Arbitron
traded on a post reverse spin and post reverse stock split basis after the
Distribution Date;

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

1.      Section 5.4.  The text of Section 5.4 shall be deleted in its entirety
        and be replaced with the following:

        "5.4 Corporation Stock Option Plans. The Corporation shall continue in
        effect each stock option plan under which any person holds an
        outstanding option to purchase shares of the Corporation's common stock
        after the Effective Time. Except as otherwise provided in Section 5.5,
        each Ceridian Option held by a person other than a New Ceridian
        Optionee, whether or not exercisable as of the Effective Time, shall be
        adjusted in accordance with the following rules.

               (a) The price to be paid for each share of Arbitron common stock
               under the option shall be equal to the product of the per share
               exercise price of the Ceridian
   2

               Option and the Arbitron Price Ratio, such product to be rounded
               to the nearest whole cent; and.

               (b) The number of shares of Arbitron common stock to be issued in
               the exchange shall be equal to the quotient obtained by dividing
               the number of shares covered by the existing Ceridian Option by
               the Arbitron Price Ratio; such quotient to be rounded to the
               nearest full share."

2.      Section 5.5.  The text of Section 5.5 shall be deleted in its entirety
        and be replaced with the following:

        "5.5   Retiree, Decedent and Other Options. Any Arbitron Option held by
        (i) a Former Arbitron Employee or Former New Ceridian Employee who was
        entitled to continue benefits as a retired employee of the Corporation
        following his or her termination of employment, (ii) a retired
        non-employee director of the Corporation, (iii) the successors of an
        individual who is deceased, or (iv) a former director of ABR Information
        Services, Inc. shall, notwithstanding the preceding provisions of this
        article, be converted to separate options to purchase common stock of
        Arbitron (an "Arbitron Retiree Option") and New Ceridian (a "New
        Ceridian Retiree Option") as follows:

               (a) The number of shares subject to each New Ceridian Retiree
               Option shall be equal to the product of (i) the number of shares
               subject to the related Ceridian Option and (ii) a fraction, the
               numerator of which is the exercise price per share of the related
               Ceridian Option and the denominator of which is the sum of (x)
               the exercise price per share of the New Ceridian retiree Option
               plus (y) a fraction, the numerator of which is the exercise price
               per share of the Arbitron Retiree Option and the denominator of
               which is five, which product shall be rounded to the nearest
               whole share.

               (b) The exercise price per share of each New Ceridian Retiree
               Option shall be equal to the product of (i) New Ceridian
               Post-Distribution Price and (ii) a fraction, the numerator of
               which is equal to the exercise price per share of the related
               Ceridian Option and the denominator of which is the closing price
               of Ceridian Common Stock on the last trading day immediately
               before the Distribution Date, which product shall be rounded to
               the nearest whole cent.

               (c) The number of shares subject to each Arbitron Retiree Option
               shall be an amount equal to the quotient of the number of shares
               subject to each New Ceridian Retiree Option (as determined under
               paragraph (a) above) divided by five, which quotient shall be
               rounded to the nearest whole share.

               (d) The exercise price per share of each Arbitron Retiree Option
               shall be equal to the product of (i) the Arbitron
               Post-Distribution Stock Price by (ii) a fraction, the numerator
               of which is the exercise price per share of the related Ceridian
               Option and the denominator of which is the closing price of
               Ceridian Common Stock on the last trading day immediately before
               the Distribution Date, which product shall be rounded to the
               nearest whole cent."


                                       2

   3

3.      Section 5.7.  The text of Section 5.7 shall be deleted in its entirety
        and be replaced with the following:

        "5.7   Option Definitions.  For purposes of this Article,

               (a) "Arbitron Post-Distribution Price" shall be the quotient
               obtained by dividing the volume-weighted average price of the
               common stock of Arbitron during the three consecutive trading
               days immediately following the Distribution Date.

               (b) "Arbitron Price Ratio" shall be the quotient obtained by
               dividing the Arbitron Post-Distribution Price by the Ceridian
               Pre-Distribution Price.

               (c) "Ceridian Pre-Distribution Price" shall be the
               volume-weighted average price of the common stock of the
               Corporation during the three consecutive trading days immediately
               prior to the Distribution Date.

               (d) "New Ceridian Post-Distribution Price" shall be equal to the
               opening price of common stock of New Ceridian on the first
               trading day immediately following the Distribution Date.

               (e) "New Ceridian Price Ratio" shall be the quotient obtained by
               dividing the New Ceridian Post-Distribution Price by the closing
               price of Ceridian Common Stock on the last trading day
               immediately before the Distribution Date."

4.      Section 5.9.  The text of Section 5.9 shall be deleted in its entirety
        and be replaced with the following:

        "5.9   Restricted Stock.  Before the Effective Time, New Ceridian shall
               establish (and the Corporation as sole stockholder of New
               Ceridian shall approve) a restricted stock plan that will benefit
               the New Ceridian Employees and the members of the board of
               directors of New Ceridian who, as of the Effective Time, hold
               restricted stock under one or more restricted stock plans of the
               Corporation. The shares of New Ceridian common stock issued as a
               distribution in respect of such shares of restricted stock shall
               remain subject to the same restrictions to which such restricted
               shares were subject. In addition, New Ceridian shall, to the
               extent that the cessation of employment or of a directorship with
               the Corporation at the Effective Time causes the forfeiture of
               any such restricted stock, provide for the distribution of shares
               of New Ceridian common stock to the affected persons, subject to
               the same restrictions to which the forfeited stock was subject,
               under the new restricted stock plan. The number of shares of New
               Ceridian common stock subject to such replacement award shall be
               equal to the product of (i) the number of such forfeited shares
               of restricted stock and/or deferred stock (adjusted for the
               one-for-five reverse stock split) by (ii) a fraction, the
               numerator of which is the Arbitron Post-Distribution Price and
               the denominator of which is the New Ceridian Post-Distribution
               Price, such product to be rounded to the nearest whole share."


                                       3

   4

5.      Full Force. Except as amended pursuant to this Agreement, the Personnel
        Agreement shall remain in full force and effect in accordance with its
        original terms.

6.      Definitions. To the extent a term is not defined herein, such term shall
        have the meaning provided for in the Personnel Agreement.

7.      Counterparts. This Agreement may be executed in one or more
        counterparts, all of which shall be considered one and the same
        agreement, and shall become effective when one or more such counterparts
        have been signed by each of the parties and delivered to the other
        party.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

                                                
ARBITRON INC.                                      CERIDIAN CORPORATION


By:  /s/ Dolores L. Cody                           By:  Gary M. Nelson
     ---------------------------------------            -------------------------------

Its:  Executive Vice President, Legal and          Its:    Vice President, General
      Business Affairs, Chief Legal Officer                Counsel and Secretary
      and Secretary






                                       4

EX-10.8

   1
                                                                   EXHIBIT 10.8

                        AMENDMENT TO CREDIT AGREEMENT


         THIS AMENDMENT TO CREDIT AGREEMENT ("Amendment"), dated as of March
29, 2001, is entered into by and among CERIDIAN CORPORATION, a Delaware
corporation, (the "Borrower"), each lender from time to time party hereto
(collectively, the "Lenders" and individually, a "Lender"), BANK OF AMERICA,
N.A., as the Administrative Agent and L/C Issuer (the "Administrative Agent"),
and FLEET NATIONAL BANK, as the Syndication Agent.

                                   RECITALS

         A.       The Borrower, Lenders, and Administrative Agent are parties
to a Credit Agreement dated as of January 31, 2001 (the "Credit Agreement")
pursuant to which the Administrative Agent and the Lenders have extended
certain credit facilities to the Borrower.

         B.       The Borrower has requested that the Lenders agree to certain
amendments of the Credit Agreement and the schedules thereto.

         C.       The Lenders are willing to amend the Credit Agreement and
the schedules thereto, subject to the terms and conditions of this Amendment.

         NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:

         1.       Defined Terms.  Unless otherwise defined herein, capitalized
terms used herein shall have the meanings, if any, assigned to them in the
Credit Agreement.

         2.       Amendments to Credit Agreement.

                  (a)      Section 7.07(a)(i) of the Credit Agreement shall be
amended by deleting such subsection in its entirety and replacing it with the
following:

                           (i)      declare and make (A) the Distribution, or
                  (B) dividend payments or other distributions payable solely
                  in shares of its common stock (and solely in respect of
                  fractional shares, cash of a de minimis amount), or (C)
                  pursuant to the terms of a shareholder rights agreement
                  approved by Borrower's board of directors, distributions on
                  a ratable basis to all then-existing common stock
                  shareholders payable solely in shares of preferred stock of
                  the Borrower, or rights or options to acquire additional
                  shares of its common stock upon the occurrence of certain
                  events, and provided there exists no Default or Event of
                  Default, cash payments by the Borrower upon the redemption
                  or purchase by the Borrower of such rights or options, not
                  exceeding in the aggregate for all such payments from and
                  after the Closing Date $200,000;

                  (b)      Schedule 5.21 of the Credit Agreement shall be
amended by deleting it in its entirety and replacing it with Schedule 5.21 as
attached hereto;

                                      1.

   2

                  (c)      Section 6.15(a) of the Credit Agreement shall be
amended by deleting the clause beginning with "provided, however," and
continuing to the end of the subsection and replacing it with the following:

                  provided, however, that (i) that if any additional
                  Subsidiary so incorporated, created or acquired is a Foreign
                  Subsidiary of a Subsidiary incorporated within the United
                  States, in no event shall more than 65% of the capital stock
                  of any such Foreign Subsidiary be required to be so pledged,
                  and (ii) no such pledge of capital stock shall be required
                  if such Foreign Subsidiary is a Subsidiary of another
                  Foreign Subsidiary.

         3.       Representations and Warranties.  The Borrower hereby
represents and warrants to the Administrative Agent and the Lenders as
follows:

                  (a)      No Default or Event of Default has occurred and is
continuing.

                  (b)      The execution, delivery and performance by the
Borrower of this Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any registration
with, consent or approval of, notice to or action by, any Person (including
any Governmental Authority) in order to be effective and enforceable. The
Credit Agreement as amended by this Amendment constitutes the legal, valid and
binding obligations of the Borrower, enforceable against it in accordance with
its respective terms, without defense, counterclaim or offset.

                  (c)      All representations and warranties of the Borrower
contained in the Credit Agreement are true and correct.

                  (d)      The Borrower is entering into this Amendment on the
basis of its own investigation and for its own reasons, without reliance upon
the Administrative Agent and the Lenders or any other Person.

         4.       Effective Date.  This Amendment will become effective on the
date shown first above (the "Effective Date"), provided that each of the
following conditions precedent is satisfied:

                  (a)      The Administrative Agent has received from the
Borrower and each of the Required Lenders a duly executed original (or, if
elected by the Administrative Agent, an executed facsimile copy) of this
Amendment, together with a duly executed Guarantor Acknowledgment and Consent
in the form attached hereto (the "Consent").

                  (b)      The Administrative Agent has received from the
Borrower and all guarantors a copy of a resolution passed by the board of
directors of such corporation, certified by the Secretary or an Assistant
Secretary of such corporation as being in full force and effect on the date
hereof, authorizing the execution, delivery and performance of this Amendment
(or the Consent, as applicable).

                  (c)      All representations and warranties contained herein
are true and correct as of the Effective Date.

                                      2.

   3

         5.       Miscellaneous.

                  (a)      Except as herein expressly amended, all terms,
covenants and provisions of the Credit Agreement are and shall remain in full
force and effect and all references therein to such Credit Agreement shall
henceforth refer to the Credit Agreement as amended by this Amendment. This
Amendment shall be deemed incorporated into, and a part of, the Credit
Agreement.

                  (b)      This Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Amendment.

                  (c)      This Amendment shall be governed by and construed in
accordance with the law of the State of New York.

                  (d)      This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Administrative Agent of a facsimile transmitted document
purportedly bearing the signature of a Lender or the Borrower shall bind such
Lender or the Borrower, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Administrative Agent to
receive the hard copy executed original of such document shall not diminish the
binding effect of receipt of the facsimile transmitted executed original of such
document of the party whose hard copy page was not received by the
Administrative Agent.

                  (e)      This Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.

                  (f)      If any term or provision of this Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Amendment or
the Credit Agreement, respectively.

                  (g)      The Borrower covenants to pay to or reimburse the
Administrative Agent, upon demand, for all costs and expenses (including
allocated costs of in-house counsel) incurred in connection with the
development, preparation, negotiation, execution and delivery of this Amendment.

         IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.

                                      3.

   4




                                      CERIDIAN CORPORATION


                                      By: /s/ JOHN H. GRIERSON
                                         --------------------------------------

                                      Title: Vice President and Treasurer
                                            -----------------------------------


                                      BANK OF AMERICA , N.A., as
                                      Administrative Agent, a Lender and L/C
                                      Issuer


                                      By: /s/ CHITT SWAMIDASAN
                                         --------------------------------------

                                      Title: Principal
                                            -----------------------------------


                                      FLEET NATIONAL BANK,  as a Lender

                                      By: /s/ RICK ANDERSON
                                         --------------------------------------

                                      Title: Group Manager
                                            -----------------------------------

                                      U.S. NATIONAL ASSOCIATION, as a Lender


                                      By: /s/ ELLIOT J. JAFFEE
                                         --------------------------------------

                                      Title: Senior Vice President
                                            -----------------------------------

                                      THE CHASE MANHATTAN BANK, as a Lender


                                      By: /s/ CAROL A. KORNBLUTH
                                         --------------------------------------

                                      Title: Vice President
                                            -----------------------------------

                                      4.

   5



                                      THE BANK OF NEW YORK, as a Lender

                                      By: /s/ KRISTEN E. TALABER
                                         --------------------------------------

                                      Title: Vice President
                                            -----------------------------------


                                      BNP PARIBAS, as a Lender


                                      By:
                                         --------------------------------------

                                      Title:
                                            -----------------------------------

                                      BEAR STEARNS CORPORATE LENDING INC., as
                                      a Lender

                                      By:
                                         --------------------------------------

                                      Title:
                                            -----------------------------------

                                      CITIZENS BANK OF MASSACHUSETTS, as a
                                      Lender


                                      By: /s/ ERRIN SIAGEL
                                         --------------------------------------

                                      Title: V.P.
                                            -----------------------------------

                                      THE ROYAL BANK OF SCOTLAND PLC, as a
                                      Lender


                                      By: /s/ LEE MORSE
                                         --------------------------------------

                                      Title: Vice President
                                            -----------------------------------


                                      5.


   6








                     GUARANTOR ACKNOWLEDGMENT AND CONSENT



         The undersigned, each a Guarantor with respect to Borrower's
Obligations to Administrative Agent and the Lenders under the terms of the
Credit Agreement, each hereby (i) acknowledge and consent to the execution,
delivery and performance by Borrower of the foregoing Amendment to Credit
Agreement dated as of March ___, 2001 (the "Amendment"), and (ii) reaffirm and
agree that the respective Guaranty as to which each of the undersigned is
party, and all other Loan Documents and agreements executed and delivered by
the undersigned to Administrative Agent and the Lenders in connection with the
Credit Agreement, are in full force and effect without defense, offset or
counterclaim.

         All capitalized terms used herein and not otherwise defined shall
have the meanings assigned to them in the Credit Agreement.

         This Guarantor Acknowledgment and Consent may be executed in any
number of counterparts, each of which shall be deemed an original, but all
such counterparts together shall constitute but one instrument.



                                   NEW CERIDIAN CORPORATION

                                   By: /s/ JOHN H. GRIERSON
                                      -------------------------------------

                                   Title: Vice President and Treasurer
                                          ---------------------------------

                                   ARBITRON HOLDINGS INC.

                                   By: /s/ JOHN H. GRIERSON
                                      -------------------------------------

                                   Title: Vice President and Treasurer
                                          ---------------------------------


                                      6.

   7


                                                                  SCHEDULE 5.21

                         CAPITALIZATION; SUBSIDIARIES


                   Information as of the Effectiveness Date

         1.       Borrower's capitalization as of the Effectiveness Date:

                  No. shares authorized: 500,000,000

                  No. shares issued: 161,685,596

                  No. shares outstanding: 145,681,462

                  Please note that the shares listed above are subject to a
reverse stock split at a ratio of one-for-five. The reverse stock split will
be effective immediately after the Spin-Off Consummation Date.



         2.       Following is a list of Borrower's Subsidiaries as of the
                  Effectiveness Date:




- -----------------------------------------------------------------------------------------------------------------------
                                                                                                       NO. OF SHARES
                                                     STATE OR OTHER          PERCENTAGE OF VOTING       AUTHORIZED/
                                                    JURISDICTION OF          SECURITIES OWNED BY         ISSUED &
SUBSIDIARY                                            ORGANIZATION             IMMEDIATE PARENT         OUTSTANDING
- -----------------------------------------------------------------------------------------------------------------------
                                                                                            
Arbitron Holdings Inc. (First Tier Arbitron
subsidiary) formed in October 2000             Delaware                    100%                      1,000/1,000
- -----------------------------------------------------------------------------------------------------------------------
CSW Research Ltd. (First Tier subsidiary of                                                          410,000/
Arbitron Holdings, Inc.)                       United Kingdom              100%                      405,000
- -----------------------------------------------------------------------------------------------------------------------
Euro-Fieldwork Ltd. (Second Tier Arbitron
subsidiary, First Tier subsidiary of CSW
Research Ltd.)                                 United Kingdom              100%                      1,000/1,000
- -----------------------------------------------------------------------------------------------------------------------
Ceridian Infotech (India) Private Limited                                                            8,400,000/
(First Tier Arbitron subsidiary)               India                       100%                      1,712,374
- -----------------------------------------------------------------------------------------------------------------------
ABR Information Services, Inc.                 Florida                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     ABR Employer Services, Inc.               Florida                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     ABR Properties, Inc.                      Florida                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     BMC Consultants, Inc.                     Colorado                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------


                                      7.

   8



- -----------------------------------------------------------------------------------------------------------------------
                                                                                                       NO. OF SHARES
                                                     STATE OR OTHER          PERCENTAGE OF VOTING       AUTHORIZED/
                                                    JURISDICTION OF          SECURITIES OWNED BY         ISSUED &
SUBSIDIARY                                            ORGANIZATION             IMMEDIATE PARENT         OUTSTANDING
- -----------------------------------------------------------------------------------------------------------------------
                                                                                            
     Ceridian Benefits Services, Inc.
     (f/k/a ABR Benefits Services, Inc.)       Florida                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Ceridian Retirement Plan Services, Inc.
     (f/k/a ABR Retirement Plan Services,
     Inc.)                                     Florida                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Charing Company, Inc.                     Wisconsin                   100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Chowning, Ltd.                            Wisconsin                   100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
         The Barrington Group                  Wisconsin                   100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Matthews, Malone & Associates, Ltd.       Arizona                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     MidAtlantic 401(k) Services, Inc.         Virginia                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Western Pension Service Corporation       California                  100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
         Ceridian Investors Advisors, Inc.
         (f/k/a ABR Investment Advisors,
         Inc.)                                 Florida                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
Arbat Middle East E.C. (held in trust)
(inactive)                                     Bahrain                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
Ceridian Canada Holdings, Inc.                 Delaware                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Ceridian Canada Ltd.                      Canada                      100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
         33444651 Canada Ltd.                  Canada                      100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Ceridian Performance Partners Ltd.        Canada                      100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
Ceridian Holdings U.K. Limited                 United Kingdom              100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Centrefile Limited                        United Kingdom              100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
         Centrefile APS Limited                United Kingdom              100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
         Centrefile (Mauritius) Ltd.           Mauritius                   100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Ceridian Performance Partners Limited     United Kingdom              100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
         Usertech UK Limited                   United Kingdom              100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------


                                      8.

   9



- -----------------------------------------------------------------------------------------------------------------------
                                                                                                       NO. OF SHARES
                                                     STATE OR OTHER          PERCENTAGE OF VOTING       AUTHORIZED/
                                                    JURISDICTION OF          SECURITIES OWNED BY         ISSUED &
SUBSIDIARY                                            ORGANIZATION             IMMEDIATE PARENT         OUTSTANDING
- -----------------------------------------------------------------------------------------------------------------------
                                                                                            
Ceridian Tax Services, Inc.                    California                  100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
Comdata Network, Inc.                          Maryland                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Comdata Network Inc. of California        California                  100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Comdata Telecommunications Services,
     Inc.                                      Delaware                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     International Automated Energy Systems,
     Inc.                                      Florida                     100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Permicom Permits Services, Inc.           Canada                      100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
     Stored Value Systems, Inc.                Delaware                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
Computing Devices International Satellite
Services, Inc.                                 Delaware                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
Partnership Group, Inc., The                   Pennsylvania                100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
Plan Ware Inc. (inactive)                      Pennsylvania                100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
POWERPAY.COM INC.
(f/k/a Ceridian Small Business Solutions,
Inc.)                                          New Jersey                  100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------
User Technology Services, Inc.                 New York                    100%                      N/A
- -----------------------------------------------------------------------------------------------------------------------



3.       Following is a list of Borrower's Arbitron Subsidiaries as of the
Effectiveness Date:



- -----------------------------------------------------------------------------------------------------------------------
SUBSIDIARY                                                          STATE OR OTHER JURISDICTION OF ORGANIZATION
- -----------------------------------------------------------------------------------------------------------------------
                                                          
Arbitron Holdings Inc.                                       Delaware
- -----------------------------------------------------------------------------------------------------------------------
     CSW Research Limited                                    United Kingdom
- -----------------------------------------------------------------------------------------------------------------------
         Euro-Fieldwork Limited                              United Kingdom
- -----------------------------------------------------------------------------------------------------------------------
Ceridian Infotech (India) Private Limited                    India
- -----------------------------------------------------------------------------------------------------------------------


                                      9.

   10

4.       Following is a list of Borrower's Material Subsidiaries as of the
Effectiveness Date:



- ----------------------------------------------------------------------------------------------------------------------
MATERIAL SUBSIDIARIES                                        STATE OR OTHER JURISDICTION OF ORGANIZATION
- ----------------------------------------------------------------------------------------------------------------------
                                                          
ABR Information Services, Inc.                               Florida
- ----------------------------------------------------------------------------------------------------------------------
Comdata Network, Inc.                                        Maryland
- ----------------------------------------------------------------------------------------------------------------------



               Information as of the Spin-Off Consummation Date

1.       Following is a list of Borrower's Arbitron Subsidiaries after the
Spin-Off Consummation Date:



- ----------------------------------------------------------------------------------------------------------------------
                                                                                                     NO. OF SHARES
                                                                           PERCENTAGE OF VOTING       AUTHORIZED/
                                       STATE OR OTHER JURISDICTION OF      SECURITIES OWNED BY          ISSUED &
SUBSIDIARY                                       ORGANIZATION                IMMEDIATE PARENT         OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------
                                                                                          
Arbitron Holdings Inc.                 Delaware                          100%                      1,000/1,000
- ----------------------------------------------------------------------------------------------------------------------
                                                                                                   410,000/
     CSW Research Limited              United Kingdom                    100%                      405,000
- ----------------------------------------------------------------------------------------------------------------------
         Euro-Fieldwork Limited        United Kingdom                    100%                      1,000/1,000
- ----------------------------------------------------------------------------------------------------------------------
                                                                                                   8,400,000/
Ceridian Infotech (India) Private
Limited                                India                             100%                      1,712,374
- ----------------------------------------------------------------------------------------------------------------------



2.       There will not be any Material Subsidiaries of the Borrower as of the
Spin-Off Consummation Date.


                                     10.

EX-10.12

   1

                                                                   EXHIBIT 10.12

                              ADOPTION CERTIFICATE


Attached is a true, correct and complete copy of the Arbitron 401(k) Plan as
adopted by Arbitron Inc. effective as of March 31, 2001.

                                                   ARBITRON INC.


Dated:  April 2, 2001                              By  /s/ Dolores L. Cody
                                                       -------------------
                                                       Secretary

   2









                              ARBITRON 401(K) PLAN










                                       As Adopted Effective as of March 31, 2001

   3



                              ARBITRON 401(K) PLAN


                                TABLE OF CONTENTS




                                                                                          Page
                                                                                          ----

                                                                                        
ARTICLE 1. DESCRIPTION AND PURPOSE...........................................................1
      1.1. Plan Name.........................................................................1
      1.2. Plan Description..................................................................1
      1.3. Plan Background...................................................................1

ARTICLE 2. ELIGIBILITY.......................................................................2
      2.1. Entry.............................................................................2
      2.2. Transfer Among Participating Employers............................................2
      2.3. Multiple Employment...............................................................2
      2.4. Reentry...........................................................................2
      2.5. Condition of Participation........................................................2
      2.6. Termination of Participation......................................................2

ARTICLE 3. CONTRIBUTIONS.....................................................................4
      3.1. 401(k) Contributions..............................................................4
      3.2. Matching Contributions............................................................5
      3.3. Rollovers.........................................................................7
      3.4. Corrective Contributions..........................................................8

ARTICLE 4. ACCOUNTS AND VALUATION............................................................9
      4.1. Establishment of Accounts.........................................................9
      4.2. Valuation and Account Adjustment.................................................10
      4.3. Allocations Do Not Create Rights.................................................10

ARTICLE 5. PARTICIPANT INVESTMENT DIRECTION.................................................11
      5.1. Establishment of Investment Funds................................................11
      5.2. Contribution Investment Directions...............................................12
      5.3. Transfer Among Investment Funds..................................................12
      5.4. Company Stock Fund Rules.........................................................12
      5.5. Ceridian Stock Fund Rules........................................................14
      5.6. Investment Direction Responsibility Resides With Participants....................15
      5.7. Beneficiaries and Alternate Payees...............................................15

ARTICLE 6. WITHDRAWALS DURING EMPLOYMENT AND LOANS..........................................16
      6.1. Hardship Withdrawals from 401(k) Contribution Account............................16
      6.2. Withdrawals After Attaining Age 59-1/2...........................................18
      6.3. Withdrawals from Rollover Account................................................18
      6.4. Rules for Withdrawals............................................................18
      6.5. No Other In-Service Withdrawals..................................................19
      6.6. Plan Loans.......................................................................19



                                       i
   4

                                                                                        
ARTICLE 7. VESTING AND FORFEITURES..........................................................23
      7.1. Vesting..........................................................................23
      7.2. Forfeiture Upon Distribution.....................................................23
      7.3. Other Forfeitures................................................................25
      7.4. Application of Forfeitures.......................................................25

ARTICLE 8. DISTRIBUTIONS AFTER TERMINATION..................................................27
      8.1. Time of Distribution.............................................................27
      8.2. Form of Distribution.............................................................28
      8.3. Beneficiary Designation..........................................................28
      8.4. Assignment, Alienation of Benefits...............................................30
      8.5. Payment in Event of Incapacity...................................................30
      8.6. Payment Satisfies Claims.........................................................30
      8.7. Disposition if Distributee Cannot be Located.....................................30
      8.8. Direct Rollovers and Transfers...................................................31

ARTICLE 9. CONTRIBUTION LIMITATIONS.........................................................32
      9.1. 401(k) Contribution Dollar Limitation............................................32
      9.2. Actual Deferral Percentage Limitations...........................................32
      9.3. Actual Contribution Percentage Limitations.......................................35
      9.4. Multiple Use Limitation..........................................................37
      9.5. Earnings or Losses on Excess Contributions.......................................39
      9.6. Annual Additions Limitation......................................................39
      9.7. Administrator's Discretion.......................................................41

ARTICLE 10. ADOPTION, AMENDMENT AND TERMINATION.............................................42
      10.1.Adoption by Affiliated Organizations.............................................42
      10.2.Authority to Amend and Procedure.................................................42
      10.3.Authority to Terminate and Procedure.............................................43
      10.4.Vesting Upon Termination, Partial Termination or Discontinuance of
           Contributions....................................................................43
      10.5.Distribution Following Termination, Partial Termination or
           Discontinuance of Contributions..................................................43

ARTICLE 11. PLAN ADMINISTRATION.............................................................44
      11.1.Retirement Committee.............................................................44
      11.2.Operation of Committee...........................................................44
      11.3.Duties of Administrator..........................................................45
      11.4.Delegation.......................................................................45
      11.5.Reports and Records..............................................................46
      11.6.Compensation.....................................................................46
      11.7.Professional Assistance..........................................................46
      11.8.Payment Of Administrative Costs..................................................46
      11.9 Indemnification..................................................................46
      11.10Claims Procedure.................................................................47
      11.11Limitations on Certain Actions...................................................47




                                       ii
   5


                                                                                        
      11.12Correction of Errors.............................................................48
      11.13Standards for Elections, Directions and Similar Actions..........................48

ARTICLE 12. MISCELLANEOUS...................................................................49
      12.1.Merger, Consolidation, Transfer of Assets........................................49
      12.2.Limited Reversion of Fund........................................................49
      12.3.Top-Heavy Provisions.............................................................49
      12.4.No Employment Rights Created.....................................................53
      12.5.Special Provisions...............................................................53
      12.6.Qualified Military Service.......................................................53
      12.7.Short Plan Years.................................................................55

ARTICLE 13. DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS...................................56
      13.1.Definitions......................................................................56
      13.2.Construction and Interpretations.................................................64

EXHIBIT A..................................................................................A-1




                                      iii
   6



                              ARBITRON 401(K) PLAN


                                   ARTICLE 1

                             DESCRIPTION AND PURPOSE

1.1.    PLAN NAME.  The name of the Plan is the "Arbitron 401(k) Plan."

1.2.    PLAN DESCRIPTION. The Plan is a profit sharing plan providing for 401(k)
        Contributions pursuant to a qualified cash or deferred arrangement and
        Matching Contributions. The Plan is intended to qualify under Code
        section 401(a) and to satisfy the requirements of Code sections 401(k)
        and 401(m). Although the Plan is a profit sharing plan, a Participating
        Employer may make contributions to the Plan even though it has no
        current or accumulated earnings or profits.

1.3.    PLAN BACKGROUND.

        (a)     The Company, formerly known as Ceridian Corporation, previously
                maintained the Ceridian 401(k) Plans. Prior to the spin-off by
                the Company of all of the outstanding stock of New Ceridian
                Corporation, a Delaware corporation and wholly owned subsidiary
                of the Company (the "New Ceridian Spin-off"), the Company
                transferred sponsorship of the Ceridian 401(k) Plans to New
                Ceridian Corporation. Following the New Ceridian Spin-off, the
                Company was renamed Arbitron Inc. and New Ceridian Corporation
                was renamed Ceridian Corporation.

        (b)     The Company established the Plan effective as of March 31, 2001
                and assets and liabilities under the Ceridian 401(k) Plans
                attributable to participants in the Ceridian 401(k) Plans who
                were Employees at the effective time of the New Ceridian
                Spin-off, and to certain participants in the Ceridian 401(k)
                Plans who had terminated employment prior to the effective time
                of the New Ceridian Spin-off, were transferred to Trust as of
                the Transfer Date. With respect to the participants in the
                Ceridian 401(k) Plans whose account balances were transferred to
                the Plan, the Plan is a successor to the Ceridian 401(k) Plans.



                                       1
   7




                                   ARTICLE 2

                                   ELIGIBILITY

2.1.    ENTRY.

        (a)     An Employee will become a Participant on the first day on or
                after the Effective Date on which he or she completes an Hour of
                Service as a Qualified Employee.

        (b)     Notwithstanding Subsection (a), in conjunction with an
                acquisition, the Administrator may specify an entry date that is
                later than the date specified in Subsection (a) but such date
                may not be later than the first anniversary of the acquisition
                date and the later entry date must be applicable to all
                individuals who became Employees in connection with the
                acquisition.

        (c)     An individual who, on March 31, 2001, is a former Employer or an
                Employee who is not a Qualified Employee and whose account under
                the Ceridian 401(k) Plan is transferred to the Plan in
                connection with the New Ceridian Spin-off will become a
                Participant on the effective date of the transfer, unless he or
                she becomes a Participant before then pursuant to Subsection
                (a).

2.2.    TRANSFER AMONG PARTICIPATING EMPLOYERS. A Participant who transfers from
        one Participating Employer to another Participating Employer as a
        Qualified Employee will participate in the Plan for the Plan Year during
        which the transfer occurs on the basis of his or her separate Eligible
        Earnings for the Plan Year from each Participating Employer.

2.3.    MULTIPLE EMPLOYMENT. A Participant who is simultaneously employed as a
        Qualified Employee with more than one Participating Employer will
        participate in the Plan as a Qualified Employee of all of his or her
        Participating Employers on the basis of his or her separate Eligible
        Earnings from each Participating Employer.

2.4.    REENTRY. An Active Participant who ceases to be a Qualified Employee
        will resume active participation in the Plan on the first following day
        on which he or she completes an Hour of Service as a Qualified Employee.

2.5.    CONDITION OF PARTICIPATION. Each Qualified Employee, as a condition of
        participation, is bound by all of the terms and conditions of the Plan
        and must furnish to the Administrator such pertinent information and
        execute such instruments as the Administrator may require.

2.6.    TERMINATION OF PARTICIPATION. A Participant will cease to be a
        Participant as of the later of the date on which:

        (a)     he or she ceases to be a Qualified Employee; or



                                       2
   8

        (b)     all benefits, if any, to which he or she is entitled under the
                Plan have been forfeited or distributed.



                                       3
   9


                                   ARTICLE 3

                                  CONTRIBUTIONS

3.1.    401(k) CONTRIBUTIONS.

        (a)     Subject to the limitations described in Article 9, for each Plan
                Year an Active Participant's Participating Employer will make
                401(k) Contributions on behalf of the Participant in the amount
                by which the Participant's Eligible Earnings from the
                Participating Employer for the Plan Year have been reduced in
                accordance with the succeeding provisions of this section.
                401(k) Contributions will be paid to the Trustee as soon as
                administratively practicable after the date on which the Active
                Participant would have received the Eligible Earnings but for
                his or her election pursuant to this section but in no case
                later than the fifteenth business day of the month following the
                month during which the Participant would have received the
                Eligible Earnings but for his or her election pursuant to this
                section.

        (b)     Except as provided in Subsection (c), a Participant's Eligible
                Earnings will be reduced in accordance with the rules in this
                subsection. A reference in this section to an election to make
                401(k) Contributions means that the Participant has elected to
                have his or her Eligible Earnings reduced in consideration of
                the Participating Employer's obligation to make 401(k)
                Contributions in the same amount on the Participant's behalf.

                (i)     An Active Participant may elect to make 401(k)
                        Contributions in any one percent increment from one
                        percent to a maximum percentage specified in Plan Rules
                        and the elected percentage will automatically apply to
                        the Active Participant's Eligible Earnings as adjusted
                        from time to time. Plan Rules may specify a maximum
                        percentage for Active Participants who are Highly
                        Compensated Employees that is less than the maximum
                        percentage specified for Active Participants who are not
                        Highly Compensated Employees. No 401(k) Contributions
                        will be made on behalf of a Participant with respect to
                        a period during which he or she is not an Active
                        Participant.

                (ii)    An Active Participant's election to commence 401(k)
                        Contributions pursuant to clause (i) will become
                        effective at the time and manner specified in Plan Rules
                        after the Administrator receives a complete and accurate
                        election.

                (iii)   An Active Participant may elect to change the percentage
                        rate of his or her 401(k) Contributions. The election
                        will become effective at the time and manner specified
                        in Plan Rules after the Administrator receives a
                        complete and accurate election of such change.



                                       4
   10

                (iv)    401(k) Contributions for an Active Participant who makes
                        a hardship withdrawal under Section 6.1 will be
                        automatically suspended for the 12-month period
                        beginning on the date of the withdrawal distribution.
                        Following the suspension period the Active Participant
                        may again elect 401(k) Contributions in accordance with
                        clause (iii).

        (c)     Elections pursuant to this section and Eligible Earnings
                reductions must be made in accordance with and are subject to
                Plan Rules. Only Eligible Earnings payable after an Active
                Participant's complete and accurate election has been received
                and become effective will be reduced pursuant to the election.
                If any election is not processed on a timely basis, or if, for
                any reason, an Active Participant's Eligible Earnings are not
                reduced in accordance with the Participant's election, no
                retroactive adjustments will be made to take into account the
                effect of any such delay or failure. Plan Rules, however, may
                permit an Active Participant to elect to make 401(k)
                Contributions from his or her Eligible Earnings payable during
                any remaining portion of the Plan Year during which the delay or
                failure occurred at more than the otherwise applicable maximum
                percentage to adjust for the effect of the delay or failure so
                long as the total reductions for the Plan Year do not exceed the
                applicable maximum percentage or the limitations described in
                Article 9.

3.2.    MATCHING CONTRIBUTIONS.

        (a)     Subject to Subsection (d) and the limitations described in
                Article 9, the Participating Employer of an Active Participant
                other than an SBC Participant will make a Basic Matching
                Contribution on behalf of the Participant for a given calendar
                month in an amount, if any, equal to a specified percentage of
                the "applicable portion," as defined in Subsection (e), of the
                Participant's 401(k) Contributions for the month, such
                percentage with respect to all months during a Plan Year to be
                specified by the Participating Employer. Subject to Subsection
                (d) and the limitations described in Article 9, if, as of the
                end of any month during a Plan Year, the aggregate amount of
                Basic Matching Contributions made on behalf of an Active
                Participant is less than the specified percentage of the
                applicable portion of the Participant's 401(k) Contributions for
                the portion of the Plan Year through the end of such month, the
                Participating Employer will make an additional Basic Matching
                Contribution on behalf of the Active Participant in an amount
                equal to the difference. An SBC Participant is not eligible to
                share in Basic Matching Contributions.

        (b)     Subject to Subsection (d) and the limitations described in
                Article 9, the Participating Employer of an eligible Active
                Participant other than an SBC Participant will make a
                Performance-Based Matching Contribution on behalf of the
                Participant in an amount, if any, equal to a specified
                percentage of the "applicable portion," as defined in Subsection
                (e), of the Participant's 401(k) Contributions for the Plan
                Year, such percentage to be specified by the Participating
                Employer. (In the case of a Participant whose Accounts were
                transferred from a Ceridian 401(k) Plan to the Plan as of the
                Transfer Date as



                                       5
   11

                described in Section 1.3(b), the Participant's pre-tax
                contributions to the Ceridian 401(k) Plan for the period from
                January 1, 2001 through March 30, 2001 will be treated as 401(k)
                Contributions to the Plan for the purpose of the
                Performance-Based Matching Contribution, if any, to the Plan for
                the 2001 Plan Year.) To be eligible to share in a
                Performance-Based Matching Contribution for a given Plan Year,
                an Active Participant must have either been:

                (i)     Actively employed with an Affiliated Organization on the
                        last day of the Plan Year; or

                (ii)    On a leave of absence on the last day of the Plan Year
                        due to

                        (1)     military or jury service which is required by
                                applicable law to be treated as an authorized
                                leave, or any other absence required by
                                applicable law or contractual undertaking to be
                                treated as an authorized leave,

                        (2)     a leave of absence authorized for medical
                                reasons, public service, social service or
                                educational purposes, which is granted under
                                rules applied uniformly to all Employees,

                        (3)     any other leave of absence authorized by an
                                Affiliated Organization, which is granted under
                                rules applied uniformly to all Employees or

                        (4)     a layoff, but only to the extent it does not
                                exceed six months' duration.

                An SBC Participant is not eligible to share in Performance-Based
                Matching Contributions.

        (c)     A Participating Employer's Matching Contributions for a Plan
                Year will be paid to the Trustee on such date or dates during or
                following such Plan Year as the Participating Employer may elect
                but in no case more than 12 months after the end of the Plan
                Year.

        (d)     No Matching Contribution will be made with respect to any
                portion of a Participant's 401(k) Contributions returned to the
                Participant pursuant to Article 9. For this purpose, 401(k)
                Contributions with respect to which no Matching Contributions
                are made for a Plan Year will be deemed to be the first such
                contributions returned to the Participant. If the Administrator
                determines that Matching Contributions that have been added to a
                Participant's Account should not have been added by reason of
                this subsection, the contributions, increased by Fund earnings
                or decreased by Fund losses attributable to the contributions,
                as determined under Section 9.5, will be subtracted from the
                Account as soon as administratively practicable after the
                determination is made and will be applied to satisfy the
                contribution obligations of the Participating Employer that made
                the excess contributions for the Plan Year for which the



                                       6
   12

                excess contributions were made. If, because of the passage of
                time, the excess cannot be applied in this way, the excess will
                be allocated, in the discretion of the Administrator:

                (i)     among the Basic Matching Accounts or Performance-Based
                        Matching Accounts, as determined by the Administrator,
                        of all Participants who made 401(k) Contributions for
                        the Plan Year as Qualified Employees of the
                        Participating Employer in proportion to such 401(k)
                        Contributions up to the "applicable portion," as defined
                        in Subsection (e), of the Participant's 401(k)
                        Contributions for the Plan Year; or

                (ii)    as a corrective contribution pursuant to Section 3.4.

        (e)     The "applicable portion" with respect to a Participant is:

                (i)     the portion of the Participant's 401(k) Contributions
                        for the period in question which does not exceed three
                        percent of his or her Eligible Earnings for the period
                        in the case of a Participant who is a participant in the
                        Arbitron Retirement Plan; or

                (ii)    the portion of the Participant's 401(k) Contributions
                        for the period in question which does not exceed six
                        percent of his or her Eligible Earnings for the period
                        in the case of a Participant who is not a participant in
                        the Arbitron Retirement Plan.

        (f)     Notwithstanding any other provision of this section to the
                contrary, a Participant covered by a collective bargaining
                agreement between his or her bargaining representative and a
                Participating Employer is eligible for Matching Contributions
                only if and to the extent provided in the collective bargaining
                agreement.

3.3.    ROLLOVERS.

        (a)     With the prior consent of the Administrator, an Active
                Participant may contribute to the Trust, in a direct rollover
                pursuant to Code section 401(a)(31) or within 60 days of
                receipt:

                (i)     an amount paid or distributed out of an individual
                        retirement account to which the only contributions have
                        been one or more Eligible Rollover Distributions; or

                (ii)    an Eligible Rollover Distribution from such a qualified
                        plan.

        (b)     Any contribution to the Trust pursuant to this section must be
                made in cash and will be added to the Participant's Rollover
                Account.



                                       7
   13

3.4.    CORRECTIVE CONTRIBUTIONS.

        (a)     For any Plan Year, a Participating Employer may, but is not
                required to, contribute to the Basic Matching Accounts of Active
                Participants who are not Highly Compensated Employees, or any
                group of such Participants identified by the Administrator, such
                amounts as the Participating Employer deems advisable to assist
                the Plan in satisfying the requirements of Section 9.2, 9.3 or
                9.4, or any other requirement under the Code or Treasury
                Regulations, for the Plan Year.

        (b)     Contributions pursuant to this section will be allocated in
                accordance with one or more of the following clauses, as
                determined by the Administrator.

                (i)     Contributions pursuant to this section which are
                        allocated pursuant to this clause (i) will be allocated
                        among the Basic Matching Accounts of the Participants
                        eligible to share in the allocation who made 401(k)
                        Contributions for the Plan Year in proportion to such
                        401(k) Contributions up to the "applicable portion," as
                        defined in Section 3.2(e), of the Participant's 401(k)
                        Contributions for the Plan Year.

                (ii)    Contributions pursuant to this section which are
                        allocated pursuant to this clause (ii) will be allocated
                        among the Basic Matching Accounts of Participants
                        eligible to share in the allocation who made 401(k)
                        Contributions for the Plan Year by starting with the
                        eligible Participant with the lowest Eligible Earnings
                        for the Plan Year and allocating to that Participant the
                        maximum amount permitted by Section 9.6 and continuing
                        successively with the eligible Participants with the
                        next lowest Eligible Earnings for the Plan Year until
                        the amount to be allocated pursuant to this clause (ii)
                        has been fully allocated.

                (iii)   Contributions pursuant to this section which are
                        allocated pursuant to this clause (iii) will be
                        allocated among the Basic Matching Accounts of the
                        Participants eligible to share in the allocation who
                        made 401(k) Contributions for the Plan Year on a per
                        capita basis.



                                       8
   14




                                   ARTICLE 4

                             ACCOUNTS AND VALUATION

4.1.    ESTABLISHMENT OF ACCOUNTS.

        (a)     For each Participant, the following Accounts will be established
                and maintained:

                (i)     A 401(k) Contribution Account, to which there will be
                        added any 401(k) Contributions made on the Participant's
                        behalf;

                (ii)    A Basic Matching Account, to which there will be added
                        any Basic Matching Contributions made on the
                        Participant's behalf;

                (iii)   A Performance-Based Matching Account, to which there
                        will be added any Performance-Based Matching
                        Contributions made on the Participant's behalf; and

                (iv)    A Rollover Account, to which there will be added any
                        rollover contribution made by the Participant pursuant
                        to Section 3.3.

        (b)     In connection with the transfer of assets and liabilities from
                the Ceridian 401(k) Plans to the Plan as described in Section
                1.3(b), a Participant's accounts under a Ceridian 401(k) Plan as
                of the Transfer Date will, on or as soon as administratively
                practicable after the Transfer Date, be added to his or her
                Accounts under the Plan as follows:

                (i)     his or her "pre-tax contribution account" balance will
                        be added to his or her 401(k) Contribution Account;

                (ii)    his or her "basic matching account" balance will be
                        added to his or her Basic Matching Account;

                (iii)   his or her "performance-based matching account" balance
                        will be added to his or her Performance-Based Matching
                        Account; and

                (iv)    his or her "general rollover account" balance will be
                        added to his or her Rollover Account.

        (c)     One or more additional accounts may be established and
                maintained for any Participant or group of similarly situated
                Participants in connection with the merger of another plan into
                the Plan, in which case provisions of the Plan applicable solely
                to such accounts will be set forth on an exhibit to the Plan in
                accordance with Section 12.5.



                                       9
   15

4.2.    VALUATION AND ACCOUNT ADJUSTMENT.

        (a)     Subject to Subsection (b), at such intervals as specified in
                Plan Rules, but at least annually, each Participant's Accounts
                within each investment fund established pursuant to Section 5.1
                will be adjusted, in a manner determined by the Administrator to
                be uniform and equitable with respect to the Accounts being
                adjusted at the time in question, for income, expense, gains and
                losses of the investment fund, as well as contributions,
                withdrawals, loans, loan repayments, satisfaction of unpaid
                indebtedness in accordance with Section 6.6(d), distributions
                and other activity, since the last prior adjustment.

        (b)     The portion of a Participant's Accounts invested in Company
                Stock, Ceridian Stock or publicly traded mutual funds will be
                accounted for in a uniform and equitable manner on the basis of
                the number of full and fractional Company Stock, Ceridian Stock
                or mutual fund shares credited to the Accounts. Cash dividends
                attributable to shares of Company Stock or publicly traded
                mutual fund shares will be added to Participants' Accounts on or
                as soon as administratively practicable after the date of
                payment of such dividends and will be reinvested, to the extent
                practicable, in full and fractional shares of Company Stock or
                mutual fund shares, as the case may be, as soon as
                administratively practicable after the dividends are received by
                the Trustee. Cash dividends attributable to Ceridian Stock will
                be added to Participants' Accounts on or as soon as
                administratively practicable after the date of payment of such
                dividends and will be invested as soon as administratively
                practicable after the dividends are received by the Trustee in
                accordance with each Participant's most recent investment
                directions with respect to new contributions under the Plan.
                Stock dividends attributable to Company Stock or Ceridian Stock
                will be added to Participants' Accounts in accordance with the
                number of full and fractional shares of Company Stock or
                Ceridian Stock, as the case may be, held in each Participant's
                Account on the date of the payment of such dividends.

4.3.    ALLOCATIONS DO NOT CREATE RIGHTS. The fact that allocations are made and
        credited to the Accounts of a Participant does not vest in the
        Participant any right, title or interest in or to any portion of the
        Fund except at the time or times and upon the terms and conditions
        expressly set forth in the Plan. Notwithstanding any allocation or
        addition to the Account of any Participant, the issuance of any
        statement to the Participant or a Beneficiary of a deceased Participant
        or the distribution of all or a portion of any Account balance, the
        Administrator may direct the Account to be adjusted to the extent
        necessary to correct any error in the Account, whether caused by
        misapplication of any provision of the Plan or otherwise, and may
        recover from the Participant or Beneficiary the amount of any excess
        distribution.



                                       10
   16



                                   ARTICLE 5

                        PARTICIPANT INVESTMENT DIRECTION

5.1.    ESTABLISHMENT OF INVESTMENT FUNDS.

        (a)     In order to allow each Participant to determine the manner in
                which his or her Accounts will be invested, the Trustee will
                maintain, within the Trust, three or more separate investment
                funds of such nature and possessing such characteristics as the
                Committee may specify from time to time. Each Participant's
                Accounts will be invested in the investment funds in the
                proportions directed by the Participant in accordance with the
                procedures set forth in Sections 5.2 and 5.3. The Committee may,
                from time to time, direct the Trustee to establish additional
                investment funds or to terminate any existing investment fund.

        (b)     Notwithstanding any other provision of the Plan to the contrary,
                the Committee may direct the Trustee to suspend Participant
                investment activity (including such activity in connection with
                the withdrawals, loans and distributions) in any or all
                investment funds, or impose special rules or restrictions of
                uniform application, for a period determined by the Committee to
                be necessary in connection with:

                (i)     the establishment or termination of any investment fund;

                (ii)    the receipt by the Trustee from, or transfer by the
                        Trustee to, another trust of account balances in
                        connection with an acquisition or divestiture or
                        otherwise;

                (iii)   a change of Trustee, investment manager or recordkeeper;
                        or

                (iv)    such other circumstances determined by the Committee as
                        making such suspension or special rules or restrictions
                        necessary or appropriate.

                In connection with the transfer of assets and liabilities from
                the Ceridian 401(k) Plans to the Plan as of the Transfer Date,
                no transfers pursuant to Section 5.3 or withdrawals, loans or
                distributions will be permitted from the Effective Date through
                a date specified in Plan Rules.

        (c)     In connection with the transfer of assets and liabilities from
                the Ceridian 401(k) Plans to the Plan as described in Section
                1.3(b):

                (i)     Any promissory note evidencing an outstanding loan to a
                        Participant under a Ceridian 401(k) Plan will be
                        transferred from the applicable Ceridian 401(k) Plan
                        trust to the Trust as the successor to the applicable
                        Ceridian 401(k) Plan trust;



                                       11
   17


                (ii)    Shares of Company Stock or Ceridian Stock credited to a
                        Participant's accounts pursuant to a Ceridian 401(k)
                        Plan will be transferred from the applicable Ceridian
                        401(k) Plan trust to the Trust; and

                (iii)   Shares of any publicly traded mutual fund credited to a
                        Participant's accounts under a Ceridian 401(k) Plan will
                        be transferred from the applicable Ceridian 401(k) Plan
                        trust to the Trust;

                subject, in each case, to a Participant's right to make
                transfers pursuant to Section 5.3 following the end of the
                period during which transfer activity is suspended in connection
                with the transfer of assets and liabilities from the Ceridian
                401(k) Plans to the Plan.

5.2.    CONTRIBUTION INVESTMENT DIRECTIONS.

        (a)     In conjunction with a Participant's enrollment in the Plan,
                contributions (other than rollover contributions) will initially
                be invested in one investment fund designated in Plan Rules.

        (b)     On and after a date specified in Plan Rules following a
                Participant's enrollment in the Plan, a Participant may direct a
                change in the manner in which future contributions credited to
                his or her Accounts will be invested among the investment funds
                maintained pursuant to Section 5.1. Such a direction will become
                effective at the time and manner specified in Plan Rules after
                the Trustee receives a complete and accurate direction.

        (c)     Plan Rules will include procedures pursuant to which
                Participants are provided with the opportunity to obtain written
                confirmation of investment directions made pursuant to this
                section.

5.3.    TRANSFER AMONG INVESTMENT FUNDS.

        (a)     A Participant may direct the transfer of his or her Accounts
                among the investment funds maintained pursuant to Section 5.1.
                Such a direction will become effective at the time and manner
                specified in Plan Rules after the Trustee receives a complete
                and accurate direction.

        (b)     Plan Rules will include procedures pursuant to which
                Participants are provided with the opportunity to obtain written
                confirmation of investment directions made pursuant to this
                section.

        (c)     Plan Rules may impose uniform limitations and restrictions
                applicable to transfers into and out of specific investment
                funds.

5.4.    COMPANY STOCK FUND RULES.

        (a)     The Trustee will establish as one of the investment funds under
                Section 5.1, a fund, designated as the Company Stock Fund, which
                will be invested entirely in


                                       12
   18


                shares of Company Stock except for cash held pending acquisition
                of shares of Company Stock or transfers or cash distributions
                from the Company Stock Fund.

        (b)     Each Participant having an interest in the Company Stock Fund
                will be afforded the opportunity to direct the manner in which
                shares of Company Stock credited to his or her Accounts will be
                voted in connection with all stockholder actions of the Company.
                In the event of a public tender or exchange offer for shares of
                Company Stock, each Participant will be entitled to direct
                whether or not the shares of the Company Stock credited to his
                or her Accounts will be tendered for sale or exchange in
                connection with such offer. A Participant will be a "named
                fiduciary" within the meaning of ERISA section 403(a)(1) for the
                purpose of directing the voting and tendering of Company Stock
                credited to his or her Accounts. Voting and tender decisions
                will be effected in accordance with the following rules.

                (i)     The Administrator will, prior to each meeting of the
                        stockholders of the Company, cause to be furnished to
                        each such Participant a copy of the proxy solicitation
                        materials, together with a form requesting confidential
                        directions on how the shares of Company Stock credited
                        to his or her Accounts will be voted on each matter to
                        be brought before such meeting. The Administrator will
                        use his or her best efforts to ensure that each such
                        Participant receives such information as will be
                        distributed to stockholders of the Company in connection
                        with any public tender or exchange offer for shares of
                        Company Stock and that each receives a form on which
                        confidential directions may be provided to the Trustee.

                (ii)    The Trustee will hold all directions received from
                        Participants pursuant to this section in strict
                        confidence and will not disclose any such direction to
                        any person unless the Trustee determines such disclosure
                        is required to comply with applicable law.

                (iii)   The Trustee will vote the number of full and fractional
                        shares credited to each Participant's Accounts as
                        directed by the Participant if the direction is received
                        in time for the direction to be processed. In the case
                        of a public tender or exchange offer, the Trustee will
                        tender the shares credited to the Participant's Accounts
                        if so directed by the Participant, and will not tender
                        shares credited to the Accounts of a Participant who
                        either directs that such shares not be tendered or does
                        not furnish a timely direction to the Trustee.

                (iv)    The Trustee will vote any Company Stock that has not
                        been credited to any Participant's Account and any
                        Company Stock with respect to which it does not receive
                        timely directions in accordance with the provisions of
                        the Trust Agreement. The Trustee will tender for sale or
                        exchange in a public tender or exchange offer the same
                        proportion of any shares not credited to an Account as
                        it tenders of shares credited to the Accounts of
                        Participants.



                                       13
   19


5.5.    CERIDIAN STOCK FUND RULES.

        (a)     The Trustee will establish as one of the investment funds under
                Section 5.1, a fund, designated as the Ceridian Stock Fund,
                which will be invested entirely in shares of Ceridian Stock
                except for cash held pending transfers or cash distributions
                from the Ceridian Stock Fund.

        (b)     The Ceridian Stock Fund will be terminated as of March 30, 2002
                (unless terminated sooner by the Committee pursuant to Section
                5.1(b)). Any shares of Ceridian Stock remaining in the Ceridian
                Stock Fund on March 30, 2002 will be sold on or as soon as
                administratively practicable after March 30, 2002 and the net
                proceeds of the sale will be transferred to another investment
                fund designated in Plan Rules.

        (c)     Notwithstanding Sections 5.2 and 5.3, no contributions or
                transfers may be made to the Ceridian Stock Fund.

        (d)     Each Participant having an interest in the Ceridian Stock Fund
                will be afforded the opportunity to direct the manner in which
                shares of Ceridian Stock credited to his or her Accounts will be
                voted in connection with all stockholder actions of Ceridian
                Corporation. In the event of a public tender or exchange offer
                for shares of Ceridian Stock, each Participant will be entitled
                to direct whether or not the shares of Ceridian Stock credited
                to his or her Accounts will be tendered for sale or exchange in
                connection with such offer. A Participant will be a "named
                fiduciary" within the meaning of ERISA section 403(a)(1) for the
                purpose of directing the voting and tendering of Ceridian Stock
                credited to his or her Accounts. Voting and tender decisions
                will be effected in accordance with the following rules.

                (i)     The Administrator will, prior to each meeting of the
                        stockholders of Ceridian Corporation, cause to be
                        furnished to each such Participant a copy of the proxy
                        solicitation materials, together with a form requesting
                        confidential directions on how the shares of Ceridian
                        Stock credited to his or her Accounts will be voted on
                        each matter to be brought before such meeting. The
                        Administrator will use his or her best efforts to ensure
                        that each such Participant receives such information as
                        will be distributed to stockholders of Ceridian
                        Corporation in connection with any public tender or
                        exchange offer for shares of Ceridian Stock and that
                        each receives a form on which confidential directions
                        may be provided to the Trustee.

                (ii)    The Trustee will hold all directions received from
                        Participants pursuant to this section in strict
                        confidence and will not disclose any such direction to
                        any person unless the Trustee determines such disclosure
                        is required to comply with applicable law.

                (iii)   The Trustee will vote the number of full and fractional
                        shares credited to each Participant's Accounts as
                        directed by the Participant if the direction


                                       14
   20


                        is received in time for the direction to be processed.
                        In the case of a public tender or exchange offer, the
                        Trustee will tender the shares credited to the
                        Participant's Accounts if so directed by the
                        Participant, and will not tender shares credited to the
                        Accounts of a Participant who either directs that such
                        shares not be tendered or does not furnish a timely
                        direction to the Trustee.

                (iv)    The Trustee will vote any Ceridian Stock that has not
                        been credited to any Participant's Account and any
                        Ceridian Stock with respect to which it does not receive
                        timely directions in accordance with the provisions of
                        the Trust Agreement. The Trustee will tender for sale or
                        exchange in a public tender or exchange offer the same
                        proportion of any shares not credited to an Account as
                        it tenders of shares credited to the Accounts of
                        Participants.

5.6.    INVESTMENT DIRECTION RESPONSIBILITY RESIDES WITH PARTICIPANTS. The Plan
        is intended to constitute a plan described in ERISA section 404(c).
        Accordingly, neither the Committee, the Administrator, the Trustee nor
        the Participating Employers have any authority, discretion,
        responsibility or liability with respect to a Participant's selection of
        the investment funds in which his or her Accounts will be invested, the
        entire authority, discretion and responsibility for, and any results
        attributable to, the selection being that of the Participant.

5.7.    BENEFICIARIES AND ALTERNATE PAYEES. Solely for purposes of this article,
        the term "Participant" includes the Beneficiary of a deceased
        Participant and an alternate payee under a qualified domestic relations
        order within the meaning of Code section 414(p) unless otherwise
        provided in such order, but only after:

        (a)     the Administrator has determined the identity of the Beneficiary
                and the amount of the Account balance to which he or she is
                entitled in the case of a Beneficiary of a deceased Participant;
                or

        (b)     the Administrator has, in accordance with Plan Rules, made a
                final determination that the order is a qualified domestic
                relations order and all rights to contest such determination in
                a court of competent jurisdiction within the time prescribed by
                Plan Rules have expired or been exhausted in the case of an
                alternate payee.



                                       15
   21


                                   ARTICLE 6

                     WITHDRAWALS DURING EMPLOYMENT AND LOANS

6.1.    HARDSHIP WITHDRAWALS FROM 401(k) CONTRIBUTION ACCOUNT.

        (a)     Subject to the provisions of Section 6.4, a Participant who is
                an Employee may make a hardship withdrawal from his or her
                401(k) Contribution Account in accordance with this section. A
                hardship withdrawal will be permitted only if the Administrator
                determines that the withdrawal is made on account of an
                immediate and heavy financial need of the Participant and is
                necessary to satisfy such financial need.

        (b)     A withdrawal will be deemed to be made on account of an
                immediate and heavy financial need only if it is determined by
                the Administrator to be on account of:

                (i)     expenses for medical care, described in Code section
                        213(d), incurred or to be incurred by the Participant,
                        the Participant's spouse or the Participant's dependent
                        (as defined in Code section 152);

                (ii)    costs directly related to the purchase (excluding
                        mortgage payments) of a principal residence of the
                        Participant;

                (iii)   payment of tuition, related educational fees and room
                        and board expenses for the next 12 months of
                        post-secondary education for the Participant or his or
                        her spouse, child or other dependent (as defined in Code
                        section 152); or

                (iv)    payments necessary to prevent the eviction of the
                        Participant from his or her principal residence or
                        foreclosure on the mortgage on the Participant's
                        principal residence.

        (c)     A withdrawal will be deemed to be necessary to satisfy the
                immediate and heavy financial need of the Participant only if
                the Administrator determines that each of the requirements in
                this subsection is satisfied.

                (i)     The distribution is not more than the sum of the amount
                        of the immediate and heavy financial need of the
                        Participant plus an amount to pay any federal, state or
                        local taxes or penalties that the Participant will incur
                        in connection with the distribution or to satisfy
                        withholding obligations in connection with the
                        distribution, as determined by the Administrator in
                        accordance with Plan Rules.

                (ii)    The Participant has received all withdrawals and has
                        taken all nontaxable loans available under the Plan and
                        all other qualified plans maintained by any Affiliated
                        Organization.



                                       16
   22

                (iii)   All 401(k) Contributions and all elective deferrals and
                        after-tax employee contributions by or on behalf of the
                        Participant under any other qualified or nonqualified
                        plan of deferred compensation maintained by any
                        Affiliated Organization are suspended for a period of 12
                        months following the date of the distribution.

                (iv)    For the Participant's taxable year following the taxable
                        year during which he or she received the withdrawal
                        distribution, the amount of elective deferrals under all
                        qualified plans maintained by any Affiliated
                        Organization (including 401(k) Contributions pursuant to
                        the Plan) that may be made on the Participant's behalf
                        under Code section 402(g) is reduced by the amount of
                        such elective deferrals made on the Participant's behalf
                        for the taxable year during which he or she received the
                        distribution.

        (d)     The Administrator's determination of the existence of a
                Participant's financial hardship and the amount that may be
                withdrawn to satisfy the need created by such hardship will be
                made in accordance with Treasury Regulations, and is final and
                binding on the Participant. The Administrator may require the
                Participant to make representations and certifications
                concerning his or her entitlement to a withdrawal pursuant to
                this section and is entitled to rely on such representations and
                certifications unless the Administrator has actual knowledge to
                the contrary. The Administrator is not obligated to supervise or
                otherwise verify that amounts withdrawn are applied in the
                manner specified in the Participant's withdrawal application.

        (e)     The amount of any withdrawal pursuant to this section may not
                exceed:

                (i)     in the case of a Participant whose pre-tax contribution
                        account under a Ceridian 401(k) Plan was transferred to
                        the Plan and credited to his or her 401(k) Contribution
                        Account, the balance of the Participant's pre-tax
                        contribution account under the Ceridian 401(k) Plan as
                        of December 31, 1988, increased by the amount of pre-tax
                        contributions made on the Participant's behalf under the
                        Ceridian 401(k) Plan for the period from January 1, 1989
                        through March 30, 2001 and the amount of 401(k)
                        Contributions made on the Participant's behalf pursuant
                        to the Plan and reduced by the amount of pre-tax
                        contributions distributed to the Participant pursuant to
                        the Ceridian 401(k) Plan for the period from January 1,
                        1989 through March 30, 2001 and the amount of 401(k)
                        Contributions distributed to the Participant pursuant to
                        the Plan; and

                (ii)    in the case of any other Participant, the amount of
                        401(k) Contributions made on the Participant's behalf
                        pursuant to the Plan reduced by the amount of 401(k)
                        Contributions distributed to the Participant pursuant to
                        the Plan.



                                       17
   23

6.2.    WITHDRAWALS AFTER ATTAINING AGE 59-1/2. Subject to the provisions of
        Section 6.4, a Participant who is an Employee and has attained age
        59-1/2 may withdraw all or any part of the vested balance of his or her
        Accounts.

6.3.    WITHDRAWALS FROM ROLLOVER ACCOUNT. Subject to the provisions of Section
        6.4, a Participant who is an Employee may withdraw all or any part of
        the balance of his or her Rollover Account.

6.4.    RULES FOR WITHDRAWALS.

        (a)     Applications for withdrawals must be made in accordance with and
                are subject to Plan Rules.

        (b)     A Participant's withdrawal application must specify the
                investment fund or funds from which the withdrawal distribution
                is to be made and a withdrawal distribution pursuant to Section
                6.2 will be made on a pro rata basis among the Participant's
                Accounts invested in that fund or funds.

        (c)     A withdrawal distribution will be made as soon as
                administratively practicable after the Administrator's
                determination that the Participant is entitled to receive the
                withdrawal distribution.

        (d)     All withdrawal distributions will be made in the form of a
                single payment.

        (e)     To the extent that the Account from which a withdrawal
                distribution is made is invested in the Company Stock Fund
                immediately prior to the distribution, at the Participant's
                election, a withdrawal distribution pursuant to Section 6.2 or
                6.3 (but not a withdrawal distribution pursuant to Section 6.1)
                may be made in whole shares of Company Stock. To the extent that
                the Account from which a withdrawal distribution is made is
                invested in the Ceridian Stock Fund immediately prior to the
                distribution, at the Participant's election, a withdrawal
                distribution pursuant to Section 6.2 or 6.3 (but not a
                withdrawal distribution pursuant to Section 6.1) may be made in
                whole shares of Ceridian Stock. All other withdrawal
                distributions will be made in the form of cash.

        (f)     A Participant may not withdraw the portion of his or her
                Accounts consisting of a note evidencing the unpaid balance of
                any loan made pursuant to the Plan.

        (g)     The provisions of Section 8.8(a) apply to any withdrawal
                distribution that constitutes an Eligible Rollover Distribution.

        (h)     If a Participant who is not a participant in the Arbitron
                Retirement Plan makes a withdrawal pursuant to Section 6.2 from
                his or her Performance-Based Matching Account, and he or she
                does not have a fully vested interest in the Account at the time
                of the withdrawal, his or her vested interest in the Account
                after the withdrawal will be determined in accordance with
                Section 7.3(b).



                                       18
   24

6.5.    NO OTHER IN-SERVICE WITHDRAWALS. Except as otherwise expressly provided
        in the Plan, a Participant may not make withdrawals from his or her
        Basic Matching Account or Performance-Based Matching Account prior to
        his or her termination of employment.

6.6.    PLAN LOANS.

        (a)     Each Participant or Beneficiary of a deceased Participant who is
                an Employee or is otherwise a "party in interest" within the
                meaning of ERISA, may borrow funds from his or her 401(k)
                Contribution Account and Rollover Account by submitting to the
                Administrator or the Administrator's designate a complete and
                accurate loan application, in accordance with and subject to
                Plan Rules, subject to the succeeding provisions of this
                section.

                (i)     The amount of the loan may not cause the aggregate
                        amount of outstanding loans to the borrower from the
                        Plan to exceed the lesser of:

                        (1)     $50,000, reduced by the excess (if any) of (A)
                                the highest outstanding balance of all loans to
                                the borrower from the Plan and all other
                                qualified plans maintained by any Affiliated
                                Organization during the 12-month period ending
                                on the day before the date of the loan over (B)
                                the outstanding balance of such loans on the
                                date of the loan; and

                        (2)     50 percent of the aggregate balance of the
                                borrower's 401(k) Contribution Account and
                                Rollover Account as of the date on which the
                                loan is made.

                (ii)    No individual loan will be made in an amount less than
                        $1000 and each loan must be in a multiple of $100.

                (iii)   No borrower may have outstanding at any time more than
                        two loans with a maturity of five years or less and one
                        loan with a maturity of more than five years.

                (iv)    A Borrower may not submit more than one loan application
                        during any 30-day period.

                (v)     No loan will be made to a Beneficiary prior to the
                        Administrator's determination of the identity of an
                        amount distributable to the Beneficiary.

                (vi)    Loans will be charged first against a borrower's 401(k)
                        Contribution Account until the balance of the 401(k)
                        Contribution Account has been exhausted, and then
                        against the borrower's Rollover Account. Any loan
                        application fee charged by the Trustee or another third
                        party will be charged against the borrower's Accounts in
                        the same order.



                                       19
   25

                (vii)   Loan proceeds and any loan application fee will be
                        obtained on a pro rata basis from the investment fund or
                        funds in which the borrower's Accounts are then
                        invested.

        (b)     Each loan will bear interest on the unpaid principal balance at
                a rate specified by the Administrator. The Administrator will
                specify a reasonable rate of interest to be effective with
                respect to loans made during the periods beginning on the dates
                specified in Plan Rules, but at least each January 1 and July 1,
                and the rate in effect when a loan is made will remain in effect
                for the term of the loan except as otherwise provided in the
                promissory note and security agreement. Interest will accrue
                from the date on which the first payment is due.

        (c)     The borrower must execute a promissory note and security
                agreement provided by the Administrator, which:

                (i)     Create in the Trust a valid first lien against the
                        borrower's entire right, title and interest in and to
                        his or her Accounts equal to the initial amount borrowed
                        plus accrued interest thereon;

                (ii)    Provide for a maturity date not to exceed five years
                        from the date of the note unless the borrower certifies
                        to the Administrator that the proceeds of the loan will
                        be used to acquire a principal residence of the borrower
                        within a reasonable time after the date of the loan, in
                        which case the maturity date may not exceed 10 years
                        from the date of the note; and

                (iii)   Provide for payments of principal and interest in equal
                        installments of such frequency, not less frequently than
                        quarterly, in such minimum amounts and for such maximum
                        period as Plan Rules prescribe.

        (d)     Upon the occurrence of any "event of default," the unpaid
                balance of any Plan loan will be accelerated. Unless the
                borrower repays the full amount of the outstanding balance of
                the loan, the outstanding balance will be satisfied from any
                distribution then due and from the vested balance of the
                borrower's Accounts that could then be distributed to the
                borrower or his or her Beneficiary, with a corresponding
                reduction in the Account balance. The date on which repayment of
                any remaining part of such unpaid balance is due will be
                extended until the first date on which the borrower or his or
                her Beneficiary could receive a distribution from the Plan, on
                which date the unpaid indebtedness will be satisfied in full and
                the Account will be reduced by the amount of the unpaid
                indebtedness. An event of default with respect to a borrower is:
                (1) the death of the borrower; (2) the borrower's failure to
                make any payment when it is due (other than as provided in
                Subsection (e) and taking into account any grace period
                specified in the promissory note executed by the borrower or in
                Plan Rules); (3) the borrower's termination of employment; (4)
                the borrower's ceasing to be an Employee (including in
                connection with the transfer of the borrower's employment to the
                purchaser of any of the assets of an Affiliated Organization or
                continued



                                       20
   26

                employment with an organization after it ceases to be an
                Affiliated Organization); or (5) termination of the Plan.

        (e)     An Employee borrower on unpaid leave of absence or layoff must
                continue making loan payments in accordance with his or her
                original loan payment schedule except as provided in this
                subsection.

                (i)     If a borrower fails to make a scheduled payment during a
                        temporary (i.e., 12 months or less) unpaid leave of
                        absence or layoff: (1) interest will continue to accrue;
                        (2) the borrower must repay the missed payments (and
                        accrued interest) in one lump sum payment within 30 days
                        after he or she resumes paid employment; and (3) payroll
                        deductions will resume immediately upon the borrower's
                        return to paid employment. If the borrower does not
                        repay the missed payments (and accrued interest) by the
                        end of the 30-day period, the loan payment schedule will
                        be recalculated based on all unpaid principal and
                        accrued interest as of the first day following the
                        30-day period and payroll deductions will be adjusted to
                        reflect the payments owed under the recalculated loan
                        payment schedule.

                (ii)    If a borrower remains on unpaid leave of absence or
                        layoff on the first anniversary of the leave or layoff,
                        the borrower's loan payment schedule will be
                        recalculated and the borrower must immediately begin
                        making monthly payments by check.

                (iii)   Any payment schedule that is recalculated pursuant to
                        clause (i) or clause (ii) will be recalculated using the
                        original interest rate and the period remaining in the
                        original term of the loan.

        (f)     The Administrator will establish a means pursuant to which a
                borrower who is an Employee must make loan repayments by payroll
                deduction and any other borrower must make loan repayments by
                periodic remittals to the Administrator or the Administrator's
                designate. A borrower who is an Employee must execute an
                appropriate document under which all Affiliated Organizations
                are authorized to deduct from the borrower's pay the amount of
                payments due under the terms of any loan.

        (g)     Before making any loan, the Administrator will deliver to the
                borrower a clear statement of the charges involved in the
                proposed loan transaction. The statement will include the dollar
                amount of the loan, the annual rate of the finance charge and
                the aggregate amount of the finance charge to the date of
                maturity.

        (h)     Each loan will be a loan by the Trust, but for Trust accounting
                purposes the loan will be deemed made from the borrower's
                Accounts against which the loan is charged, and the note
                executed by the borrower will be deemed to be an asset of those
                Accounts. When a loan is made, the borrower's Accounts and any
                investment fund from which the loan proceeds are obtained will
                be reduced by an amount equal to the principal balance of the
                loan and a Loan Account will be



                                       21
   27

                established for the borrower with an initial balance equal to
                the principal amount of the loan. The Loan Account will be
                excluded for purposes of determining and allocating the net
                earnings (or losses) of the Trust pursuant to Section 4.2. A
                borrower's loan payments will be credited to the Accounts from
                which the loan proceeds were obtained in reverse of the order in
                which the loan was taken from the Accounts until the amount
                borrowed from the Accounts has been fully replaced by principal
                repayments. The Loan Account will be reduced by the amount of
                any principal payment on the loan. Repayments of loan principal
                and payments of interest will be invested as soon as
                administratively practicable following receipt by the Trustee in
                accordance with the borrower's most recent investment directions
                with respect to new contributions or in the absence of such a
                direction, in accordance with Plan Rules.

        (i)     The outstanding balance of any loan, including any accrued
                interest, may be repaid in its entirety at any time without
                penalty. Partial prepayments will not be permitted.

        (j)     A borrower must provide such other documents as may from time to
                time be required under Plan Rules.

        (k)     Plan Rules may specify other terms and conditions as may be
                necessary or desirable for the administration of loans under
                this section.

        (l)     Any promissory note evidencing a loan outstanding under a
                Ceridian 401(k) Plan that is transferred to the Plan as of the
                Transfer Date will, immediately after the transfer, remain
                outstanding in accordance with its terms but substituting the
                Trust for the Ceridian 401(k) Plan trust as payee of the note.



                                       22
   28



                                   ARTICLE 7

                             VESTING AND FORFEITURES

7.1.    VESTING.

        (a)     A Participant always has a fully vested nonforfeitable interest
                in his or her 401(k) Contribution Account, Basic Matching
                Account and Rollover Account.

        (b)     A Participant who is a participant in the Arbitron Retirement
                Plan always has a fully vested nonforfeitable interest in his or
                her Performance-Based Matching Account.

        (c)     A Participant who is not a participant in the Arbitron
                Retirement Plan:

                (i)     will acquire a fully vested nonforfeitable interest in
                        his or her Performance-Based Matching Account upon
                        attaining his or her Normal Retirement Date while he or
                        she is, or before he or she became, an Employee;

                (ii)    will acquire a fully vested nonforfeitable interest in
                        his or her Performance-Based Matching Account if he or
                        she dies or becomes Disabled while he or she is an
                        Employee; and

                (iii)   will acquire a vested nonforfeitable interest in his or
                        her Performance-Based Matching Account to the extent
                        provided in the following schedule if he or she
                        terminates employment prior to his or her Normal
                        Retirement Date other than by reason of his or her death
                        or becoming Disabled.



                                                                     Vested
                             Full Years of Vesting Service Interest
                             --------------------------------------

                                                                  
                             Less Than Two Years                       0%
                             Two Years                                40%
                             Three Years                              60%
                             Four Years                               80%
                             Five or More Years                      100%


7.2.    FORFEITURE UPON DISTRIBUTION.

        (a)     If a Participant described in Section 7.1(c)(iii) receives a
                distribution of the entire vested balance of his or her Accounts
                not later than the last day of the second Plan Year following
                the Plan Year during which he or she terminated employment, the
                nonvested portion of the Participant's Performance-Based
                Matching Account will, at the time of such distribution, be
                forfeited. A Participant described in Section 7.1(c)(iii) who
                has no vested interest in his or her Performance-Based Matching
                Account when he or she terminates employment will be deemed to
                have received



                                       23
   29

                a distribution of the entire vested balance of the Account at
                the time of his or her termination of employment.

        (b)     If a Participant described in Subsection (a) resumes employment
                as a Qualified Employee and repays to the Trustee the full
                amount distributed before the earlier of (i) five years
                following the date of reemployment as a Qualified Employee or
                (ii) the date on which he or she incurs a Break in Service of
                five full years following the distribution, then the forfeited
                amount will be restored to the Participant's Performance-Based
                Matching Account, unadjusted for interest or any change in value
                occurring after the distribution. The restoration will be made
                from forfeitures that arise for the Plan Year for which such
                restoration is to be made. To the extent such forfeitures are
                insufficient for such purpose, the Participating Employer with
                whom the Participant was last employed as a Qualified Employee
                will contribute the amount required to restore the Account. A
                Participant described in the last sentence of Subsection (a) who
                is reemployed before incurring a Break in Service of five full
                years following the date of his or her termination of employment
                will be deemed to have repaid his or her deemed distribution
                upon his or her reemployment as a Qualified Employee.

        (c)     If a Former Media Information Business Employee, as defined in
                Subsection (d), who received or was deemed to receive a
                distribution of his or her entire vested account balance under a
                Ceridian 401(k) Plan and forfeited the nonvested portion of his
                or her account balance prior to the effective time of the New
                Ceridian Spin-off becomes a Qualified Employee after the
                effective time of the New Ceridian Spin-off and repays to the
                Trustee the full amount distributed from the Ceridian 401(k)
                Plan before the earlier of (i) five years following the date of
                his or her employment as a Qualified Employee or (ii) the date
                on which he or she incurs a Break in Service of five full years
                following the date of the distribution from the Ceridian 401(k)
                Plan, then the forfeited portion of his or her account under the
                Ceridian 401(k) Plan will be restored in accordance with
                Subsection (b). A Former Media Business Employee described in
                the previous sentence who was deemed to receive a distribution
                of his or her vested account balance under the Ceridian 401(k)
                Plan, will be deemed to repay the deemed distribution upon his
                or her employment as a Qualified Employee. No other Participant
                may repay to the Trustee a distribution received from a Ceridian
                401(k) Plan.

        (d)     A Former Media Information Business Employee is an individual
                who, immediately prior to the effective time of the New Ceridian
                Spin-off, is a former employee of Ceridian Corporation or one of
                its subsidiaries who, immediately prior to his or her
                termination of employment, had employment duties principally
                related to the Media Information Business. For this purpose,
                Media Information Business means:

                (i)     the provision of media and marketing research services
                        to broadcasters, advertising agencies, advertisers,
                        on-line webcasters and cable television in the United
                        States, the United Kingdom, Japan and Mexico;



                                       24
   30

               (ii)     through a joint venture the provision of media audience
                        and consumer retail behavior research services to cable
                        systems, television broadcasters, magazines and
                        newspapers;

                (iii)   the provision of application software used to access and
                        analyze media audience information and through a joint
                        venture software applications to access and analyze
                        consumer retail behavior and media usage;

                (iv)    the business of

                        (1)     CSW Research Limited,

                        (2)     Ceridian Infotech (India) Private Limited,

                        (3)     Euro Fieldwork Limited and

                        (4)     Arbitron Holdings Inc.;

                (v)     any other business conducted by Ceridian Corporation or
                        its subsidiaries primarily through the use of assets
                        treated by Ceridian Corporation or the subsidiaries as
                        part of the Media Information Business.

7.3.    OTHER FORFEITURES.

        (a)     Except as provided in Section 7.2, the nonvested portion of the
                Performance-Based Matching Account of a Participant described in
                Section 7.1(c)(iii) will continue to be held in a separate
                subaccount of the Account until the Participant incurs a Break
                in Service of five full years, at which time the subaccount
                balance will be forfeited. If the Participant resumes employment
                with an Affiliated Organization prior to incurring a Break in
                Service of five full years, the subaccount will be disregarded
                and the balance of the subaccount will be included in the
                Participant's Performance-Based Matching Account balance.

        (b)     A Participant's vested interest in his or her Performance-Based
                Matching Account balance following a resumption of employment in
                accordance with Subsection (a) at any given time will not be
                less than the amount "X" determined by the formula: X = P(AB +
                (R x D)) - (R x D), where P is the Participant's vested
                percentage at the time of determination; AB is the Account
                balance at the time of determination; D is the amount of the
                distribution; and R is the ratio of the Account balance at the
                time of determination, to the subaccount balance immediately
                following the distribution.

7.4.    APPLICATION OF FORFEITURES. All forfeitures occurring in a Plan Year
        will be allocated to a forfeiture account, invested in accordance with
        Plan Rules and applied as follows:

        (a)     Such forfeitures will first be applied to restore the Accounts
                of Participants as provided in Sections 7.2(b) and 8.7;



                                       25
   31

        (b)     At the direction of the Administrator, any remaining forfeitures
                may be used to pay expenses of administering the Plan; and

        (c)     Any remaining forfeitures will be applied toward the amount of
                future Matching Contributions by the Participating Employers.


                                       26
   32



                                   ARTICLE 8

                         DISTRIBUTIONS AFTER TERMINATION

8.1.    TIME OF DISTRIBUTION.

        (a)     Following a Participant's termination of employment, the Trustee
                will distribute to the Participant or, if the Participant has
                died, to his or her Beneficiary, the value of the Participant's
                vested interest in his or her Accounts. Subject to the remaining
                subsections of this section and Sections 8.2 and 8.8,
                distributions will be made in accordance with the following
                provisions.

                (i)     If the aggregate balance of the Participant's vested
                        interest in his or her Accounts is not more than $5000,
                        distribution to the Participant will be made as soon as
                        administratively practicable following the Participant's
                        termination of employment.

                (ii)    Except as provided in clause (i), distribution to the
                        Participant will be made as soon as administratively
                        practicable after the Administrator or the
                        Administrator's designate receives the Participant's
                        properly completed distribution request, but in no case
                        later than the sixtieth day after the Plan Year during
                        which the Participant terminates employment or attains
                        age 65, whichever is later, unless the Participant
                        elects to defer the distribution pursuant to Subsection
                        (b).

                (iii)   Any distribution to the Participant's Beneficiary
                        following the Participant's death will be made as soon
                        as administratively practicable after the Administrator
                        receives proof of the Participant's death in form
                        satisfactory to the Administrator.

                (iv)    If a contribution is allocated to a Participant's
                        Account following the Participant's termination of
                        employment and after his or her vested Account balance
                        has been distributed, as soon as administratively
                        practicable after the allocation is made, the vested
                        balance of the Account will be distributed to the
                        Participant, or to the Participant's Beneficiary in the
                        case of the Participant's death.

        (b)     Subject to the provisions of the other subsections of this
                section, a Participant described in Subsection (a)(ii) may elect
                to defer commencement of his or her distribution under the Plan
                by providing the Administrator or the Administrator's designate
                a written, signed statement specifying the date on which the
                payment is to be made; provided that the specified date may not
                be later than April 1 of the calendar year following the
                calendar year during which the Participant attains age 70-1/2.
                The statement must be provided to the Administrator or the
                Administrator's designate not later than the thirtieth day (or
                such later date as Plan Rules may allow) after the Plan Year
                during which the Participant terminates



                                       27
   33


                employment or attains age 65, whichever is later. Plan Rules may
                permit a Participant to modify the election in any manner
                determined by the Administrator to be consistent with Code
                section 401(a)(14) and corresponding Treasury Regulations and
                the other provisions of this section.

        (c)     Notwithstanding Subsection (a), distribution to any Participant
                who is a "5-percent owner," within the meaning of the Code
                section 416, must begin not later than April 1 of the calendar
                year after the Participant attains age 70-1/2, whether or not
                the Participant has terminated employment, as if he or she had
                terminated employment on the last day of the Plan Year during
                which he or she attained age 70-1/2. After the initial
                distribution pursuant to this subsection and prior to the
                Participant's termination of employment, the Participant's
                entire Account balance, if any, will be distributed to the
                Participant not later than the last day of each Plan Year.

        (d)     Notwithstanding any other provision of the Plan to the contrary,
                distributions (including payments pursuant to any annuity
                contract distributed pursuant to this section) will be made in
                accordance with regulations issued under Code section 401(a)(9),
                including Treasury Regulation section 401(a)(9)-2, and any
                provisions of the Plan reflecting Code section 401(a)(9) take
                precedence over any distribution options in the Plan that are
                inconsistent with Code section 401(a)(9).

8.2.    FORM OF DISTRIBUTION.

        (a)     Any distribution pursuant to the Plan will be made in the form
                of a single lump sum payment.

        (b)     Except as provided in Subsections (c) and (d), distributions
                will be made in the form of cash.

        (c)     To the extent that the Account to be distributed is invested in
                the Company Stock Fund immediately prior to the distribution, at
                the election of the Participant or Beneficiary, as the case may
                be, the distribution may be made in whole shares of Company
                Stock.

        (d)     To the extent that the Account to be distributed is invested in
                the Ceridian Stock Fund immediately prior to the distribution,
                at the election of the Participant or Beneficiary, as the case
                may be, the distribution may be made in whole shares of Ceridian
                Stock.

8.3.    BENEFICIARY DESIGNATION.

        (a)     Each Participant may designate, on a form provided by the
                Administrator, one or more primary Beneficiaries or alternative
                Beneficiaries for all or a specified fractional part of his or
                her aggregate Accounts and may change or revoke any such
                designation from time to time. No such designation, change or
                revocation is effective unless executed by the Participant and
                received by the Administrator



                                       28
   34

                during the Participant's lifetime. Subject to Subsection (d), no
                such change or revocation requires the consent of any person.

        (b)     If a Participant

                (i)     fails to designate a Beneficiary, or

                (ii)    revokes a Beneficiary designation without naming another
                        Beneficiary or

                (iii)   designates one or more Beneficiaries none of whom
                        survives the Participant,

                for all or any portion of the Accounts, such Accounts or portion
                are payable to the first class of the following classes of
                automatic Beneficiaries that includes a member surviving the
                Participant:

                        Participant's spouse;
                        Participant's issue, per stirpes and not per capita;
                        Participant's parents;
                        Participant's brothers and sisters;
                        Representative of Participant's estate.

        (c)     When used in this section and, unless the designation otherwise
                specifies, when used in a Beneficiary designation, the term "per
                stirpes" means in equal shares among living children and the
                issue (taken collectively) of each deceased child, with such
                issue taking by right of representation; "children" means issue
                of the first generation; and "issue" means all persons who are
                descended from the person referred to, either by legitimate
                birth or legal adoption. The automatic Beneficiaries specified
                above and, unless the designation otherwise specifies, the
                Beneficiaries designated by the Participant, become fixed as of
                the Participant's death so that, if a Beneficiary survives the
                Participant but dies before the receipt of all payments due such
                Beneficiary, any remaining payments are payable to the
                representative of such Beneficiary's estate. Any designation of
                a Beneficiary by name that is accompanied by a description of
                relationship or only by statement of relationship to the
                Participant is effective only to designate the person or persons
                standing in such relationship to the Participant at the
                Participant's death.

        (d)     Notwithstanding Subsection (a), no designation of a Beneficiary
                other than the Participant's spouse is effective unless such
                spouse consents to the designation. Any such consent is
                effective only with respect to the Beneficiary or class of
                Beneficiaries so designated and only with respect to the spouse
                who so consented.

        (e)     Any beneficiary designation made pursuant to a Ceridian
                Corporation 401(k) Plan by a Participant whose accounts are
                transferred from the Ceridian 401(k) Plan to the Plan in
                connection with the New Ceridian Spin-off which remains in
                effect immediately prior to the transfer, will remain in effect
                for purposes of the Plan until changed or revoked pursuant to
                the Plan. For this purpose, a Beneficiary designation made by a
                Participant pursuant to the Plan prior to the effective date



                                       29
   35


                of the transfer of the Participant's accounts from a Ceridian
                401(k) Plan to the Plan in connection with the New Ceridian
                Spin-off will, as of the effective date of the transfer, be
                deemed to be a revocation of the designation made pursuant to
                the Ceridian 401(k) Plan.

8.4.    ASSIGNMENT, ALIENATION OF BENEFITS.

        (a)     Except as required under a qualified domestic relations order or
                by the terms of any loan from the Trust or to comply with a
                federal tax levy pursuant to Code section 6331, and except as
                otherwise provided in Code section 401(a)(13)(C), (i) no benefit
                under the Plan may in any manner be anticipated, alienated,
                sold, transferred, assigned, pledged, encumbered or charged, and
                any attempt to do so is void and (ii) no benefit under the Plan
                is in any manner liable for or subject to the debts, contracts,
                liabilities, engagements or torts of the person entitled to such
                benefit.

        (b)     To the extent provided in a qualified domestic relations order,
                distribution of benefits assigned to an alternate payee by such
                order may be distributed to the alternate payee in the form of a
                lump sum payment prior to the Participant's earliest retirement
                age. The terms "qualified domestic relations order," "alternate
                payee" and "earliest retirement age" have the meanings given in
                Code section 414(p).

8.5.    PAYMENT IN EVENT OF INCAPACITY. If any person entitled to receive any
        payment under the Plan is physically, mentally or legally incapable of
        receiving or acknowledging receipt of the payment, and no legal
        representative has been appointed for such person, the Administrator in
        his or her discretion may (but is not required to) cause any sum
        otherwise payable to such person to be paid to any one or more of the
        following as may be chosen by the Administrator: the Beneficiaries, if
        any, designated by such person; the institution maintaining such person;
        a custodian for such person under the Uniform Transfers to Minors Act of
        any state; or such person's spouse, children, parents or other relatives
        by blood or marriage. Any such payment completely discharges all
        liability under the Plan to the person with respect to whom the payment
        is made to the extent of the payment.

8.6.    PAYMENT SATISFIES CLAIMS. Any payment to or for the benefit of any
        Participant, or Beneficiary in accordance with the provisions of the
        Plan, to the extent of such payment, fully satisfies of all claims
        against the Trustee, the Administrator and the Participating Employers,
        any of whom may require the payee to execute a receipted release as a
        condition precedent to such payment.

8.7.    DISPOSITION IF DISTRIBUTEE CANNOT BE LOCATED. If the Administrator is
        unable to locate a Participant or Beneficiary to whom a distribution is
        due, the amount that would otherwise be distributed to the Participant
        or Beneficiary will be forfeited, and the forfeited amount will be
        applied in accordance with Section 7.4. The forfeited amount will be
        restored to the Accounts from which the amount was forfeited, unadjusted
        for interest or any change in value occurring after the forfeiture, upon
        the Participant's or Beneficiary's claim for



                                       30
   36

        the benefit. The restoration will be made through funds available
        pursuant to Section 7.4(a). To the extent such funds are insufficient
        for such purpose, the Participating Employer with whom the Participant
        was last employed will contribute the amount required to restore the
        Accounts.

8.8.    DIRECT ROLLOVERS AND TRANSFERS.

        (a)     To the extent a distribution is an Eligible Rollover
                Distribution, the Administrator will, if so instructed by the
                distributee in accordance with Plan Rules, direct the Trustee to
                make the distribution to an "eligible retirement plan," within
                the meaning of Code section 402(c)(8). Unless otherwise provided
                in Plan Rules, the foregoing provision will not apply (i) if the
                aggregate taxable distributions to be made to the distributee
                during the calendar year are less than $200, (ii) if less than
                the entire taxable amount of the distribution is to be
                distributed to the eligible retirement plan and the amount to be
                distributed to the eligible retirement plan is less than $500 or
                (iii) with respect to any portion of an Eligible Rollover
                Distribution that consists of an offset amount with respect to a
                Plan loan.

        (b)     The Committee may direct the Trustee to transfer the balance of
                any or all of the Accounts of a Participant to the trustee of
                another plan if:

                (i)     the other plan is a defined contribution plan qualified
                        under Code section 401(a);

                (ii)    the other plan satisfies the requirements set forth in
                        Code sections 401(k) and 411(d)(6) with respect to the
                        transferred Accounts to which such requirements are
                        applicable; and

                (iii)   the trustee of the other plan is willing to accept such
                        transfer.


                                       31
   37



                                   ARTICLE 9

                            CONTRIBUTION LIMITATIONS

9.1.    401(k) CONTRIBUTION DOLLAR LIMITATION.

        (a)     The aggregate amount of 401(k) Contributions and other "elective
                deferrals" (within the meaning of Code section 402(g)(3)) under
                any other qualified plan maintained by an Affiliated
                Organization with respect to a Participant for any taxable year
                of the Participant may not exceed the limitation in effect for
                the taxable year under Code section 402(g). The limitation for
                any Participant who received a hardship distribution under
                Section 6.1 will, for the year following the year in which such
                distribution was made, be reduced as provided in Section
                6.1(c)(iv). If the limitation is exceeded for any taxable year
                of the Participant, all or a portion of the excess, as specified
                by the Company, increased by Fund earnings or decreased by Fund
                losses attributable to the excess as determined under Section
                9.5, will be distributed to the Participant.

        (b)     The amount distributed pursuant to this section to a Participant
                who has made elective deferrals for a taxable year other than
                pursuant to the Plan or another qualified plan maintained by an
                Affiliated Organization will, to the extent of such other
                elective deferrals, be determined in accordance with written
                instructions received by the Administrator from the Participant
                not later than March 1 of the following taxable year.

        (c)     A distribution made pursuant to this section may be made at any
                time after the excess contributions are received, but not later
                than April 15 of the taxable year following the taxable year to
                which the limitation relates.

9.2.    ACTUAL DEFERRAL PERCENTAGE LIMITATIONS.

        (a)     For each Plan Year, the Plan must satisfy the requirements of
                Code section 401(k)(3).

                (i)     The Plan will satisfy the requirements of Code section
                        401(k)(3) for a Plan Year if, for that Plan Year, the
                        Plan satisfies the requirements of Code section
                        410(b)(1) with respect to "eligible employees" and
                        either of the following tests:

                        (1)     the "actual deferral percentage" for the Plan
                                Year for eligible employees who are Highly
                                Compensated Employees for the Plan Year is not
                                more than the product of the actual deferral
                                percentage for the Plan Year for all eligible
                                employees who are not Highly Compensated
                                Employees for the Plan Year, multiplied by one
                                and one-quarter; or



                                       32
   38

                        (2)     the excess of the actual deferral percentage for
                                the Plan Year for eligible employees who are
                                Highly Compensated Employees for the Plan Year
                                over the actual deferral percentage for the Plan
                                Year for all eligible employees who are not
                                Highly Compensated Employees for the Plan Year
                                is not more than two percentage points and the
                                actual deferral percentage for the Plan Year for
                                eligible employees who are Highly Compensated
                                Employees for the Plan Year is not more than the
                                product of the actual deferral percentage for
                                the Plan Year of all eligible employees who are
                                not Highly Compensated Employees for the Plan
                                Year, multiplied by two.

                (ii)    For purposes of this section and Section 9.4:

                        (1)     "eligible employee" means an Active Participant
                                who is eligible to make 401(k) Contributions for
                                the Plan Year in question or would be eligible
                                but for a suspension imposed under Section
                                3.1(b)(iv); and

                        (2)     "actual deferral percentage," with respect to
                                either of the two groups of eligible employees
                                referenced above, is the average of the ratios,
                                calculated separately for each eligible employee
                                in the particular group, of the amount of the
                                eligible employee's 401(k) Contributions for the
                                Plan Year in question, to the eligible
                                employee's Testing Wages for the Plan Year in
                                question, or the portion of such Plan Year
                                during which he or she was an eligible employee,
                                as specified in Plan Rules. In computing the
                                actual deferral percentage, the following rules
                                apply:

                                (A)     Any 401(k) Contributions made by an
                                        eligible employee who is not a Highly
                                        Compensated Employee that are in excess
                                        of the limitation described in Section
                                        9.1 will be excluded;

                                (B)     Any 401(k) Contributions made by an
                                        eligible employee that are distributed
                                        to the eligible employee pursuant to
                                        Section 9.6(c) will be excluded;

                                (C)     Except as otherwise provided in Treasury
                                        Regulations, 401(k) Contributions taken
                                        into account in determining the actual
                                        contribution percentage under Section
                                        9.3(a)(ii) will be excluded;

                                (D)     To the extent permitted by Treasury
                                        Regulations and determined by the
                                        Administrator, all or any portion of any
                                        other contribution to the Plan or any
                                        other qualified plan maintained by an
                                        Affiliated Organization will be
                                        included;



                                       33
   39

                                (E)     Elective contributions under any other
                                        plan that is aggregated with this Plan
                                        to satisfy the requirements of Code
                                        section 410(b) will be included; and

                                (F)     To the extent provided in Treasury
                                        Regulations, elective contributions made
                                        under any other qualified cash or
                                        deferred arrangement of any Affiliated
                                        Organization on behalf of any eligible
                                        Employee who is a Highly Compensated
                                        Employee will be included.

        (b)     To the extent deemed advisable by the Administrator to comply
                with Code section 401(k)(3), the Administrator may, in
                accordance with Plan Rules, prospectively decrease a
                Participant's 401(k) Contributions.

        (c)     If, for any Plan Year, the requirements of Subsection (a) are
                not satisfied, the Administrator will determine the amount by
                which 401(k) Contributions made by each Highly Compensated
                Employee for the Plan Year exceeds the permissible amount as
                determined under Subsection (a). The determination will be made
                by successively decreasing the rate of 401(k) Contributions for
                the Highly Compensated Employees who, during the Plan Year, had
                the greatest percentage of 401(k) Contributions to the next
                lower percentage, then again decreasing the percentage of such
                Highly Compensated Employees' 401(k) Contributions, together
                with the percentage of 401(k) Contributions for the Highly
                Compensated Employees who were already at such lower percentage,
                to the next lower percentage, and continuing such procedure for
                as many percentage decreases as the Administrator deems
                necessary. The Administrator may make such reductions in any
                amount.

        (d)     The amount of excess 401(k) Contributions determined in
                accordance with Subsection (c), increased by Fund earnings or
                decreased by Fund losses attributable to such excess as
                determined under Section 9.5, will be distributed to affected
                Highly Compensated Employees at such time as the Administrator
                specifies on or following the last day of the Plan Year for
                which the determination is made, but in no case later than the
                last day of the following Plan Year. The amount to be
                distributed with respect to any Plan Year will be reduced by the
                portion of the amount, if any, distributed pursuant to Section
                9.1 that is attributable to 401(k) Contributions that relate to
                such Plan Year, determined by assuming that 401(k) Contributions
                in excess of the limitation described in Section 9.1 for a given
                taxable year are the first contributions made for a Plan Year
                falling within such taxable year. Additional amounts to be
                distributed to each such Highly Compensated Employee will be
                determined by successively decreasing the amount of 401(k)
                Contributions for Highly Compensated Employees who, for the Plan
                Year, had the largest amount of 401(k) Contributions made on
                their behalf to the next lower amount, and continuing this
                procedure until an amount equal to the aggregate amount of
                excess 401(k) Contributions has been removed from the Accounts
                of the Highly Compensated Employees.



                                       34
   40


        (e)     To the extent required or permitted by Treasury Regulations, the
                Administrator will or may, as the case may be, apply the
                limitation described in this section separately to each group of
                eligible employees who are included in a unit of Employees
                covered by a collective bargaining agreement and those who are
                not included in a different unit.

        (f)     If the Administrator elects to apply Code section 410(b)(4)(B)
                in determining whether the Plan satisfies either of the tests
                described in Section 9.2(a)(i) for a Plan Year, all eligible
                employees who are not Highly Compensated Employees and have not
                met the minimum age and service requirements of Code section
                410(a)(1)(A) will be excluded from consideration.

9.3.    ACTUAL CONTRIBUTION PERCENTAGE LIMITATIONS.

        (a)     For each Plan Year, the Plan must satisfy the requirements of
                Code section 401(m)(2).

                (i)     The Plan will satisfy the requirements of Code section
                        401(m)(2) for a Plan Year if, for that Plan Year, the
                        Plan satisfies either of the following tests:

                        (1)     the "actual contribution percentage" for the
                                Plan Year for "eligible employees" who are
                                Highly Compensated Employees for the Plan Year
                                is not more than the product of the actual
                                contribution percentage for the Plan Year for
                                all eligible employees who are not Highly
                                Compensated Employees for the Plan Year,
                                multiplied by one and one-quarter; or

                        (2)     the excess of the actual contribution percentage
                                for the Plan Year for eligible employees who are
                                Highly Compensated Employees for the Plan Year
                                over the actual contribution percentage for the
                                Plan Year for all eligible employees who are not
                                Highly Compensated Employees for the Plan Year
                                is not more than two percentage points and the
                                actual contribution percentage for the Plan Year
                                for Highly Compensated Employees for the Plan
                                Year is not more than the product of the actual
                                contribution percentage for the Plan Year for
                                all eligible employees who are not Highly
                                Compensated Employees for the Plan Year,
                                multiplied by two.

                (ii)    For purposes of this section and Section 9.4:

                        (1)     "eligible employee" means an Active Participant
                                who is eligible to have Matching Contributions
                                made on his or her behalf for the Plan Year in
                                question or who would be eligible but for a
                                suspension imposed under Section 3.1(b)(iv); and

                        (2)     the "actual contribution percentage" with
                                respect to either of the two groups of eligible
                                employees referenced above, is the average



                                       35
   41


                                of the ratios, calculated separately for each
                                eligible employee in the particular group, of
                                the aggregate amount of Matching Contributions
                                made on behalf of the eligible employee for the
                                Plan Year, to the eligible employee's Testing
                                Wages for the Plan Year, or the portion of the
                                Plan Year during which he or she was an eligible
                                employee, as specified in Plan Rules. In
                                computing the actual contribution percentage the
                                following rules apply:

                                (A)     Except as otherwise provided in Treasury
                                        Regulations, Matching Contributions
                                        taken into account in determining the
                                        actual deferral percentage under Section
                                        9.2(a)(ii) will be excluded;

                                (B)     Matching Contributions taken into
                                        account for purposes of the minimum
                                        contribution required by Section 12.3(a)
                                        will be excluded;

                                (C)     Any Matching Contributions forfeited
                                        pursuant to Section 9.6(c) will be
                                        excluded;

                                (D)     To the extent permitted by Treasury
                                        Regulations and determined by the
                                        Administrator, all or any portion of the
                                        401(k) Contributions made by eligible
                                        employees for the Plan Year will be
                                        included;

                                (E)     To the extent permitted by Treasury
                                        Regulations and determined by the
                                        Administrator, all or any portion of any
                                        other contributions to any other
                                        qualified plan maintained by an
                                        Affiliated Organization will be
                                        included;

                                (F)     Matching contributions (within the
                                        meaning of Code section 401(m)(4)(A))
                                        and after-tax contributions made under
                                        any other plan that is aggregated with
                                        this Plan to satisfy the requirements of
                                        Code section 410(b) will be included;
                                        and

                                (G)     To the extent required by Treasury
                                        Regulations, matching contributions
                                        (within the meaning of Code section
                                        401(m)(4)(A)) and after-tax
                                        contributions made under any other
                                        qualified plan of any Affiliated
                                        Organization on behalf of or by any
                                        eligible employee who is a Highly
                                        Compensated Employee will be included.

        (b)     If, for any Plan Year, the requirements of Subsection (a) are
                not satisfied, the Administrator will determine the amount by
                which Matching Contributions made on behalf of each Highly
                Compensated Employee for the Plan Year exceeds the permissible
                amount as determined under Subsection (a), such determination
                being



                                       36
   42


                made in accordance with the procedure described in Section
                9.2(c) with respect to reductions of 401(k) Contributions.

        (c)     The amount of excess Matching Contributions determined in
                accordance with Subsection (b), increased by Fund earnings or
                decreased by Fund losses attributable to such excess as
                determined under Section 9.5, will be distributed to affected
                Highly Compensated Employees at such time as the Administrator
                specifies on or following the last day of the Plan Year for
                which the determination is made, but in no case later than the
                last day of the following Plan Year; provided, however, that to
                the extent the excess Matching Contributions would not be fully
                vested if retained in the Plan, such excess will be forfeited
                rather than distributed, and any such forfeitures will be
                applied as provided in Section 3.2(d). Amounts to be distributed
                to each such Highly Compensated Employee or forfeited will be
                determined by successively decreasing the amount of Matching
                Contributions made on behalf of Highly Compensated Employees
                who, for the Plan Year, had the largest amount of Matching
                Contributions made on their behalf to the next lower amount, and
                continuing this procedure until an amount equal to the aggregate
                amount of excess contributions has been removed from the
                Accounts of the Highly Compensated Employees.

        (d)     To the extent provided in Treasury Regulations, the limitations
                described in this section do not apply to any group of eligible
                employees who are included in a unit of Employees covered by a
                collective bargaining agreement.

        (e)     If the Administrator elects to apply Code section 410(b)(4)(B)
                in determining whether the Plan satisfies either of the tests
                described in Section 9.3(a)(i) for any Plan Year, all eligible
                employees who are not Highly Compensated Employees and have not
                met the minimum age and service requirements of Code section
                410(a)(1)(A) will be excluded from consideration.

9.4.    MULTIPLE USE LIMITATION.

        (a)     This section applies for any Plan Year for which the sum of the
                actual deferral percentage for eligible employees who are Highly
                Compensated Employees, plus the actual contribution percentage
                for eligible employees who are Highly Compensated Employees,
                exceeds the "aggregate limit." For purposes of this subsection,
                the aggregate limit is the greater of:

                (i)     The sum of:

                        (1)     the product of one and one-quarter, multiplied
                                by the greater of

                                (A)     the actual deferral percentage for the
                                        Plan Year for eligible employees who are
                                        not Highly Compensated Employees or

                                (B)     the actual contribution percentage for
                                        the Plan Year for eligible employees who
                                        are not Highly Compensated Employees;



                                       37
   43

                        plus

                        (2)     the sum of two percentage points plus the lesser
                                of the actual deferral percentage determined
                                under item (A) of clause (1) above or the actual
                                contribution percentage determined under item
                                (B) of clause (1) above, with such sum in no
                                case exceeding twice the lesser of such actual
                                deferral percentage or actual contribution
                                percentage;

                or

                (ii)    The sum of:

                        (1)     the product of one and one-quarter, multiplied
                                by the lesser of

                                (A)     the actual deferral percentage for the
                                        Plan Year for eligible employees who are
                                        not Highly Compensated Employees or

                                (B)     the actual contribution percentage for
                                        the Plan Year for eligible employees who
                                        are not Highly Compensated Employees;

                        plus

                        (2)     the sum of two percentage points plus the
                                greater of the actual deferral percentage
                                determined under item (A) of clause (1) above or
                                the actual contribution percentage determined
                                under item (A) of clause (1) above, with such
                                sum in no case exceeding twice the lesser of
                                such actual deferral percentage or actual
                                contribution percentage.

        (b)     If, for any Plan Year, the calculations under Subsection (a)
                require that this section be applied, the Administrator will
                determine the amount by which Matching Contributions made on
                behalf of each Highly Compensated Employee for the Plan Year
                causes the excess amount determined under Subsection (a), such
                determination being made in accordance with the provisions of
                Section 9.3(b). At such time as the Administrator specifies on
                or following the last day of the Plan Year for which such
                determination is made, but in no case later than the last day of
                the following Plan Year, the excess will be corrected in
                accordance with Section 9.3(c).

        (c)     To the extent provided in Treasury Regulations, the limitations
                described in this section do not apply to any group of eligible
                employees who are included in a unit of employees covered by a
                collective bargaining agreement.



                                       38
   44

9.5.    EARNINGS OR LOSSES ON EXCESS CONTRIBUTIONS.

        (a)     The amount of Fund earnings or losses with respect to the excess
                amount of contributions returned to a Highly Compensated
                Employee pursuant to this article is an amount equal to the
                product of the total earnings or losses for the Participant's
                Account to which the excess contributions were credited for the
                Plan Year with respect to which the determination is being made,
                multiplied by a fraction, the numerator of which is the excess
                amount of contributions made on the Participant's behalf to such
                Account for the Plan Year, and the denominator of which is the
                closing balance of such Account for the Plan Year, decreased by
                the amount of earnings added to that Account, or increased by
                the amount of losses charged to that Account, for the Plan Year.

        (b)     Contributions returned pursuant to Section 9.6(c)(iii) will also
                include the earnings or losses attributable to such excess
                amount for the period between the end of the Plan Year with
                respect to which the determination is being made and the date on
                which such excess contributions are distributed to the
                Participant. The earnings or losses attributable to such excess
                amount for such period will be an amount equal to the product of
                ten percent of the earnings or losses attributable to such
                excess amount for the Plan Year, as determined in accordance
                with Subsection (a), multiplied by the number of calendar months
                during the period for which the determination is being made,
                with a distribution being made on or before the fifteenth day of
                a month being deemed to have been made on the last day of the
                preceding month and a distribution being made after the
                fifteenth day of a month being deemed to have been made on the
                first day of the following month.

9.6.    ANNUAL ADDITIONS LIMITATION.

        (a)     Notwithstanding any contrary provisions of the Plan, there will
                not be allocated to any Participant's Accounts for a Plan Year
                any amount that would cause the aggregate "annual additions"
                with respect to the Participant for the Plan Year to exceed the
                lesser of:

                (i)     $30,000 (or such dollar amount, adjusted to reflect
                        increases in the cost of living, as in effect under Code
                        section 415(c)(1)(A) for the calendar year during which
                        the Plan Year in question begins); and

                (ii)    25 percent of the Participant's Section 415 Wages for
                        the Plan Year.

        (b)     For purposes of Subsection (a), the "annual additions" with
                respect to a Participant for a Plan Year are the sum of:

                (i)     the aggregate amount of 401(k) and Matching
                        Contributions allocated to the Participant's Accounts
                        under the Plan for the Plan Year (including the amount
                        of any 401(k) or Matching Contributions distributed to
                        the Participant or forfeited pursuant to Section 9.2(d)
                        or 9.3(c) but excluding any 401(k) Contributions in
                        excess of the limitation set forth in Section



                                       39
   45

                        9.1 that are distributed to the Participant by April 15
                        of the year following the year to which such
                        contributions relate) and employer contributions,
                        employee contributions and forfeitures allocated to the
                        Participant's accounts under any other qualified defined
                        contribution plan maintained by any Affiliated
                        Organization for the Plan Year; plus

                (ii)    the amount, if any, attributable to post-retirement
                        medical benefits that is allocated to a separate account
                        for the Participant as a "key employee" within the
                        meaning of Code section 416(i), to the extent required
                        under Code section 419A(d)(1).

                Unless otherwise provided in Treasury Regulations, if a 401(k)
                or Matching Contribution with respect to a Plan Year is made
                more than 30 days after the due date (including extensions) of
                the Company's federal income tax return for the Company's
                taxable year coinciding with the Plan Year or in which the Plan
                Year ends, the contribution will be an annual addition for the
                Plan Year during which the contribution is made.

        (c)

                (i)     To the extent deemed advisable by the Administrator to
                        prevent the limitation under Subsection (a) from being
                        exceeded, the Administrator may, in accordance with Plan
                        Rules, prospectively decrease a Participant's 401(k)
                        Contributions.

                (ii)    If a further reduction of contributions is required, the
                        amount of the Matching Contribution that would otherwise
                        be allocated to the Participant's Account will be
                        reduced and the aggregate amount of the Matching
                        Contribution for the Plan Year will be reduced by the
                        same amount.

                (iii)   If, in spite of such reduction and as a result of the
                        allocation of forfeitures or a reasonable error in
                        estimating the amount of the Participant's Eligible
                        Earnings, Section 415 Wages, 401(k) Contributions or
                        other elective deferrals within the meaning of Code
                        section 402(g)(3) for the Plan Year, the limitation
                        would otherwise be exceeded, then, to the extent
                        required to prevent such excess:

                        (1)     the amount of 401(k) Contributions made by the
                                Participant, together with earnings on such
                                contributions, will be distributed to the
                                Participant and any Matching Contributions
                                attributable to the amount so distributed,
                                together with earnings on such contributions,
                                will be forfeited and applied as provided in
                                Section 3.2(d); then

                        (2)     any remaining excess will be held unallocated in
                                a suspense account and will be allocated to all
                                other eligible Participants for the Plan Year
                                and, to the extent necessary, subsequent Plan
                                Years,



                                       40
   46


                                before Matching Contributions are made for such
                                Plan Year or Years, and will be applied toward
                                the amount of such contributions for such Plan
                                Year or Years.

9.7.    ADMINISTRATOR'S DISCRETION. Notwithstanding the foregoing provisions of
        this article, the Administrator may apply the provisions of Sections 9.1
        through 9.6 in any manner permitted by Treasury Regulations that will
        cause the Plan to satisfy the limitations of the Code incorporated in
        such sections and Treasury Regulations thereunder, and the
        Administrator's good faith application of Treasury Regulations is
        binding on all Participants and Beneficiaries.



                                       41
   47



                                   ARTICLE 10

                       ADOPTION, AMENDMENT AND TERMINATION

10.1.   ADOPTION BY AFFILIATED ORGANIZATIONS. An Affiliated Organization may
        adopt this Plan and become a Participating Employer with the prior
        approval of the Administrator by furnishing to the Administrator a
        certified copy of a resolution of its Board adopting the Plan. With the
        consent of the Administrator, a Participating Employer may modify the
        provisions of the Plan applicable to its Employees. Any special
        provisions applicable to a Participating Employer's Employees will be
        set forth on an exhibit to the Plan in accordance with Section 12.5.

10.2.   AUTHORITY TO AMEND AND PROCEDURE.

        (a)     The Company reserves the right to amend the Plan at any time, to
                any extent. Each amendment must be stated in a written
                instrument approved in advance or ratified by the Company's
                Board and executed in the name of the Company by two authorized
                officers. On and after the effective date of the amendment, the
                Plan will be deemed to have been amended as set forth in the
                instrument, and all interested persons will be bound by the
                amendment; provided, first, that no amendment will increase the
                duties or liabilities of the Trustee without its written
                consent; and, second, that no amendment will have any
                retroactive effect so as to deprive any Participant, or any
                Beneficiary of a deceased Participant, of any benefit already
                accrued or vested or of any option with respect to the form of
                such benefit that is protected under Code section 411(d)(6),
                except that any amendment that is required to conform the Plan
                with government regulations so as to qualify the Trust for
                income tax exemption may be made retroactively to the Effective
                Date of the Plan or to any later date.

        (b)     If the schedule for determining the extent to which benefits
                under the Plan are vested is changed, whether by amendment or on
                account of the Plan's becoming or ceasing to be a top-heavy
                plan, each Participant who has completed at least three years of
                Vesting Service may elect to have his or her vested benefits
                determined without regard to such change by giving written
                notice of such election to the Administrator within the period
                beginning on the date such change was adopted (or the Plan's top
                heavy status changed) and ending 60 days after the latest of:
                (i) the date such change is adopted; (ii) the date such change
                becomes effective; and (iii) the date the Participant is issued
                notice of such change by the Administrator.

        (c)     Except as otherwise provided in an amendment permitted by
                Treasury Regulations, if an optional form of benefit payment
                protected under Code section 411(d)(6) is eliminated, each
                Participant may elect to have that portion of the value of his
                or her Accounts that was accrued as of the date of such
                elimination, distributed in the optional form of benefit payment
                that was eliminated.



                                       42
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        (d)     The provisions of the Plan in effect at the termination of a
                Participant's employment will, except as specifically provided
                otherwise in any subsequent amendment, continue to apply to such
                Participant.

10.3.   AUTHORITY TO TERMINATE AND PROCEDURE. The Company expects to continue
        the Plan indefinitely but reserves the right to terminate the Plan in
        its entirety at any time. Each Participating Employer expects to
        continue its participation in the Plan indefinitely but reserves the
        right to cease its participation in the Plan at any time. The Plan will
        terminate in its entirety as of the date specified in a written
        instrument approved in advance or ratified by the Company's Board and
        executed in the name of the Company by two authorized officers. The Plan
        will terminate with respect to a Participating Employer as of a date
        specified in a written instrument approved in advance or ratified by the
        Participating Employer's Board and executed in the name of the
        Participating Employer by two authorized officers.

10.4.   VESTING UPON TERMINATION, PARTIAL TERMINATION OR DISCONTINUANCE OF
        CONTRIBUTIONS. Upon the termination of the Plan or upon the complete
        discontinuance of contributions, the Accounts of each "affected
        employee" will vest in full. For purposes of this section, "affected
        employee" means a Participant or former Participant who, as of the
        effective date of the termination or complete discontinuance of
        contributions, (a) is actively employed with an Affiliated Organization
        or (b) has terminated employment and has neither received a distribution
        of his or her Accounts of the type described in Section 7.2(a) nor
        experienced a Break in Service of at least five full years. Upon the
        partial termination of the Plan, the Accounts of each Participant as to
        whom the Plan has been partially terminated will vest in full.

10.5.   DISTRIBUTION FOLLOWING TERMINATION, PARTIAL TERMINATION OR
        DISCONTINUANCE OF CONTRIBUTIONS. After termination or partial
        termination of the Plan or the complete discontinuance of contributions
        under the Plan, the Trustee will continue to hold and distribute the
        Fund at the times and in the manner provided in Article 8 as if such
        event had not occurred or, if the Administrator so directs in accordance
        with Treasury Regulations, the Trustee will distribute to each
        Participant the entire balance of his or her Accounts.



                                       43
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                                   ARTICLE 11

                               PLAN ADMINISTRATION

11.1.   RETIREMENT COMMITTEE.

        (a)     The Chief Executive Officer of the Company will appoint a
                Retirement Committee composed of not fewer than three members
                who will serve at the pleasure of the Chief Executive Officer.
                The Chief Executive Officer will provide to each member of the
                Retirement Committee a copy of a written charter outlining the
                responsibilities of the Committee. Each member will file his or
                her written acceptance of appointment with the Chief Executive
                Officer. A Retirement Committee member may resign by delivering
                his or her written resignation to the Chief Executive Officer,
                and any Retirement Committee member may be removed, with or
                without cause, by the Chief Executive Officer upon delivery of
                written notice of such removal to the removed member. Any such
                resignation or removal will be effective upon delivery of the
                written resignation or notice of removal, as the case may be, or
                upon any later date specified therein. Vacancies created by any
                such resignation or removal will be filled by appointment by the
                Chief Executive Officer; provided, that, subject to there being
                at least three persons serving as Retirement Committee members
                at all times, the Chief Executive Officer need not fill any
                vacancy so created.

        (b)     The Retirement Committee is a named fiduciary for purposes of
                ERISA.

11.2.   OPERATION OF COMMITTEE. The Committee will perform its duties in
        accordance with the procedures in this section.

        (a)     The Chief Executive Officer of the Company will designate one
                member of the Committee to act as the chair of the Committee,
                and the member so designated will preside over the Committee's
                meetings.

        (b)     The Committee will elect a secretary who may, but need not, be a
                member of the Committee. The secretary will keep minutes of the
                Committee's meetings and perform such other duties as may be
                specified from time to time by the Committee.

        (c)     The Committee may appoint such subcommittees with such duties
                and powers as it may specify, and it may delegate administrative
                powers to one or more of its members or to such other person or
                entity as it may designate.

        (d)     The Committee will meet at such times and places and upon such
                notice as its members may determine from time to time. A
                majority of the current membership of the Committee will
                constitute a quorum for the transaction of business, and all
                acts of the Committee at any meeting will require, for their
                validity, the affirmative vote of a majority of the current
                membership of the



                                       44
   50

                Committee. The Committee may act without a meeting by the
                written authorization of a majority of the members of the
                Committee.

        (e)     The Committee may adopt bylaws for the conduct of its business,
                provided such bylaws are not inconsistent with the provisions of
                this article.

        (f)     No member of the Committee may vote with respect to a decision
                of the Committee relating solely to his or her own participation
                or benefit under the Plan.

11.3.   DUTIES OF ADMINISTRATOR. The Administrator has the discretionary power
        and authority, and the responsibility, to:

        (a)     Adopt rules, regulations and procedures not inconsistent with
                the provisions of the Plan and uniform and equitable with
                respect to individuals determined by the Administrator to be
                similarly situated at the time in question, and to revoke or
                modify such rules and regulations at any time;

        (b)     Interpret, construe, apply and enforce the provisions of the
                Plan and any Plan Rules, including the discretionary and final
                power and authority to interpret, construe, apply and enforce
                uncertain provisions of the Plan or Plan Rules, and remedy
                possible ambiguities, inconsistencies, omissions and errors, and
                any such action taken by the Administrator in good faith is
                binding upon all Participants, Beneficiaries and other
                interested persons;

        (c)     Determine from time to time the status of all Employees,
                Participants, Beneficiaries and other interested persons for
                purposes of the Plan;

        (d)     Determine the rights of Employees, Participants, Beneficiaries
                and other interested persons to benefits under the Plan, the
                amount and the method and time or times of payment of the
                benefit;

        (e)     Take any other actions determined by the Administrator to be
                necessary or advisable to in connection with the administration
                of the Plan; and

        (f)     Perform any other duties delegated or assigned to the
                Administrator by the Committee.

11.4.   DELEGATION. Except as otherwise provided in ERISA, the Committee and the
        Administrator may each delegate specific duties and responsibilities,
        including fiduciary duties and responsibilities. Such delegations may be
        to Employees or to other individuals, committees or entities. Any
        delegation may, if specifically stated, allow further delegations by the
        individual, committee or entity to whom or which the delegation has been
        made subject to and in accordance with any limitations, restrictions or
        conditions specified in the delegation or in any other written
        instrument provided by the Committee or Administrator, as the case may
        be, to the individual, committee or entity to whom or which the
        delegation has been made. Any delegation may be rescinded by the
        Committee or Administrator, as the case may be, at any time. Each
        individual,



                                       45
   51
        committee or entity to whom or which a fiduciary duty or responsibility
        has been delegated is responsible for the exercise of such duties or
        responsibilities and is not responsible for the acts or failure to act
        of any other fiduciary. Any delegation of a fiduciary duty or
        responsibility must be in writing and the individual, committee or
        entity to whom or which the delegation is made must file his, her or its
        written acceptance of the delegation with the Committee or
        Administrator, as the case may be.

11.5.   REPORTS AND RECORDS. The Administrator and those individuals, committees
        or entities to whom or which the Administrator has delegated fiduciary
        duties will keep records of all their proceedings and actions, and will
        maintain all such books of account, records and other data as necessary
        for the proper administration of the Plan and to comply with applicable
        law.

11.6.   COMPENSATION. Neither Committee members nor the Administrator will
        receive compensation from the Trust for their services as such, but they
        are entitled to reimbursement from the Trust for all sums reasonably and
        necessarily expended by them in the performance of their duties.

11.7.   PROFESSIONAL ASSISTANCE. The Committee and the Administrator each may
        retain such accounting, recordkeeping, legal, clerical and other
        services as may reasonably be required in the administration of the
        Plan, and may pay reasonable compensation for such services. The
        Committee and the Administrator each is entitled to rely conclusively on
        all tables, valuations, certificates, opinions and reports furnished to
        them by such persons and on all information, elections and designations
        furnished to them by Participants, Beneficiaries and Participating
        Employers.

11.8.   PAYMENT OF ADMINISTRATIVE COSTS. All costs of administering the Plan may
        be paid by the Trustee from the Trust, but if not so paid, will be paid
        by the Participating Employers.

11.9.   INDEMNIFICATION.

        (a)     To the extent permitted by law, the Participating Employers
                jointly and severally agree to indemnify and hold harmless the
                members of the Committee, the Administrator and other employees,
                officers or directors of an Affiliated Organization to whom
                duties are delegated against any and all claims, losses,
                damages, expenses and liabilities arising from their
                responsibilities in connection with the Plan which are not
                covered by insurance (without recourse) paid for by the
                Participating Employers or otherwise paid or reimbursed, unless
                they are determined to be due to gross negligence or intentional
                misconduct. The Participating Employers have the right, but not
                the obligation, to select counsel and control the defense and
                settlement of any action for which an individual may be entitled
                to indemnification pursuant to this section.

        (b)     An individual's right to indemnification pursuant to this
                section is in addition to, and independent of, the individual's
                right, if any, to indemnification pursuant to a Participating
                Employer's articles of incorporation or bylaws (or comparable
                governing instruments), applicable law or otherwise, but an
                individual is not



                                       46
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                entitled to indemnification from all sources in an amount that
                exceeds his or her claims, losses, damages, expenses and
                liabilities.

11.10.  CLAIMS PROCEDURE. The Administrator will notify a Participant in writing
        within 90 days of the Participant's written application for benefits of
        the Participant's eligibility or noneligibility for benefits under the
        Plan. If the Administrator determines that a Participant is not eligible
        for benefits or full benefits, the notice will: (a) state the specific
        reasons for the denial of any benefits; (b) provide a specific reference
        to the provision of the Plan on which the denial is based; (c) provide a
        description of any additional information or material necessary for the
        claimant to perfect the claim, and a description of why it is needed;
        and (d) provide an explanation of the Plan's claims review procedure and
        other appropriate information as to the steps to be taken if the
        Participant wishes to have the claim reviewed. If the Administrator
        determines that there are special circumstances requiring additional
        time to make a decision, the Administrator will notify the Participant
        of the special circumstances and the date by which a decision is
        expected to be made, and may extend the time for up to an additional
        90-day period. If a Participant is determined by the Administrator not
        to be eligible for benefits or if the Participant believes that he or
        she or she is entitled to greater or different benefits, the Participant
        will be provided the opportunity to have his or her claim reviewed by
        the Administrator by filing a petition for review with the Administrator
        within 60 days after the Participant receives the notice issued by the
        Administrator. The petition must state the specific reasons the
        Participant believes he or she or she is entitled to benefits or greater
        or different benefits. Within 60 days after the Administrator receives
        the petition, the Administrator will give the Participant (and his or
        her counsel, if any) an opportunity to present his or her position to
        the Administrator orally or in writing, and the Participant (or his or
        her counsel) may review the pertinent documents, and the Administrator
        will notify the Participant of its decision in writing within said
        60-day period, stating specifically the basis of the decision written in
        a manner calculated to be understood by the Participant and the specific
        provisions of the Plan on which the decision is based. If, because of
        the need for a hearing, the 60-day period is not sufficient, the
        decision may be deferred for up to another 60-day period at the election
        of the Administrator, but notice of this deferral must be given to the
        Participant. In the event of the death of a Participant, the same
        procedure applies to the Beneficiary of the Participant. A claimant must
        exhaust the procedure described in this section before pursuing the
        claim in any other proceeding.

11.11.  LIMITATIONS ON CERTAIN ACTIONS. A Participant or Beneficiary may not
        commence a civil action pursuant to ERISA section 502(a)(1), with
        respect to a benefit under the Plan after the earlier of:

        (a)     six years after the occurrence of the facts or circumstances
                that give rise to or form the basis for such action; and

        (b)     two years from the date the Participant or Beneficiary had
                actual knowledge of the facts or circumstances that give rise to
                or form the basis for such action.



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11.12.  CORRECTION OF ERRORS. If the Administrator determines that, by reason of
        administrative error or other cause attributable to a Participating
        Employer, the Account of any Participant has incurred a loss, the
        Administrator may enter into an agreement with the Participating
        Employer under which the Account is fully restored and may, upon such
        restoration, release the Participating Employer from further
        responsibility.

11.13.  STANDARDS FOR ELECTIONS, DIRECTIONS AND SIMILAR ACTIONS. Any election,
        direction, designation or similar action required of a Participant,
        Beneficiary or alternate payee (or any person claiming by, through or on
        behalf of a Participant, Beneficiary or alternate payee) pursuant to the
        Plan must be made in accordance with and is subject to the terms of the
        Plan and Plan Rules.



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                                   ARTICLE 12

                                  MISCELLANEOUS

12.1.   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. If this Plan is merged or
        consolidated with, or its assets or liabilities are transferred to, any
        other plan, each Participant will be entitled to receive a benefit
        immediately after such merger, consolidation or transfer (if such other
        plan were then terminated) that is equal to or greater than the benefit
        he or she would have been entitled to receive immediately before such
        merger, consolidation or transfer (if this Plan had then terminated but
        without regard to Section 10.4).

12.2.   LIMITED REVERSION OF FUND.

        (a)     Except as provided in Subsection (b), no corpus or income of the
                Trust will at any time revert to any Affiliated Organization or
                be used other than for the exclusive benefit of Participants and
                their Beneficiaries by paying benefits and administrative
                expenses of the Plan.

        (b)     Notwithstanding any contrary provision in the Plan:

                (i)     All contributions made by a Participating Employer to
                        the Trustee prior to the initial determination of the
                        Internal Revenue Service as to qualification of the Plan
                        under Code section 401(a) and the tax exempt status of
                        the Trust under Code section 501(a) will be repaid by
                        the Trustee to the Participating Employer, upon the
                        Participating Employer's written request, if the
                        Internal Revenue Service rules that the Plan is not
                        qualified or the Trust is not tax exempt; provided, that
                        the Participating Employer must request such
                        determination within a reasonable time after adoption of
                        the Plan and the repayment by the Trustee to the
                        Participating Employer must be made within one year
                        after the date of denial of qualification of the Plan;
                        and

                (ii)    To the extent a contribution is made by a Participating
                        Employer by a mistake of fact or a deduction is
                        disallowed a Participating Employer under Code section
                        404, the Trustee will repay the contribution to the
                        Participating Employer upon the Participating Employer's
                        written request; provided, that such repayment must be
                        made within one year after the mistaken payment is made
                        or the deduction is disallowed, as the case may be. Each
                        contribution to the Plan by a Participating Employer is
                        expressly conditioned on such contribution's being fully
                        deductible by the Participating Employer under Code
                        section 404.

12.3.   TOP-HEAVY PROVISIONS.

        (a)     The provisions of this subsection will apply for any Plan Year
                during which the Plan is "top heavy."



                                       49
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                (i)     Notwithstanding the provisions of Article 3, no
                        contributions will be made and allocated on behalf of
                        any "key employee" for any Plan Year during which the
                        Plan is top heavy unless the amount of contributions
                        (excluding 401(k) Contributions) made and allocated for
                        such Plan Year on behalf of each Participant who is not
                        a key employee and who is employed with an Affiliated
                        Organization on the last day of the Plan Year, expressed
                        as a percentage of the Participant's Testing Wages for
                        the Plan Year, is at least equal to the lesser of:

                        (1)     three percent; or

                        (2)     the largest percentage of such Testing Wages at
                                which contributions (including 401(k)
                                Contributions) are made and allocated on behalf
                                of any key employee for such Plan Year.

                (ii)    If, in addition to this Plan, an Affiliated Organization
                        maintains another qualified defined contribution plan or
                        one or more qualified defined benefit pension plans
                        during a Plan Year, the provisions of clause (i) will be
                        applied for such Plan Year:

                        (1)     by taking into account the employer
                                contributions (other than elective deferrals for
                                a non-key employee) on behalf of the Participant
                                under all such defined contribution plans; and

                        (2)     without regard to any Participant who is not a
                                key employee and whose accrued benefit,
                                expressed as a single life annuity, under a
                                defined benefit pension plan maintained by the
                                Affiliated Organization for such Plan Year is
                                not less than the product of

                                (A)     the Participant's average Testing Wages
                                        for the period of consecutive years not
                                        exceeding the period of consecutive
                                        years (not exceeding five) when the
                                        Participant had the highest aggregate
                                        Testing Wages, disregarding years in
                                        which the Participant fails to complete
                                        a minimum period of service as specified
                                        in Treasury Regulations, multiplied by

                                (B)     the lesser of (I) two percent per year
                                        of service, disregarding years of
                                        service beginning after the close of the
                                        last Plan Year in which such defined
                                        benefit plan was a top heavy plan or
                                        (II) 20 percent.

        (b)     For purposes of Subsection (a),

                (i)

                        (1)     The Plan will be a "top-heavy plan" for a
                                particular Plan Year if, as of the last day of
                                the initial Plan Year or, with respect to any
                                other



                                       50
   56

                                Plan Year, as of the last day of the preceding
                                Plan Year, the aggregate of the Account balances
                                of key employees is greater than 60 percent of
                                the aggregate of the Account balances of all
                                Participants.

                        (2)     For purposes of calculating the aggregate
                                Account balances for both key employees and
                                employees who are not key employees:

                                (A)     Any distributions made within the
                                        five-year period preceding the Plan Year
                                        for which the determination is being
                                        made, other than a distribution
                                        transferred or rolled over to a plan
                                        maintained by an Affiliated
                                        Organization, will be included;

                                (B)     Amounts transferred or rolled over from
                                        a plan not maintained by an Affiliated
                                        Organization at the initiation of the
                                        Participant will be excluded;

                                (C)     The Account balances of any key employee
                                        and any employee who is not a key
                                        employee who has not performed an Hour
                                        of Service at any time during the
                                        five-year period ending on the date as
                                        of which the determination is being made
                                        will be excluded; and

                                (D)     The terms "key employee" and "employee"
                                        include the Beneficiaries of such
                                        persons who have died.

                (ii)

                        (1)     Notwithstanding the provisions of clause (i),
                                this Plan will not be a top-heavy plan if it is
                                part of either a "required aggregation group" or
                                a "permissive aggregation group" and such
                                aggregation group is not top-heavy. An
                                aggregation group will be top-heavy if the sum
                                of the present value of accrued benefits and
                                account balances of key employees is more than
                                60 percent of the sum of the present value of
                                accrued benefits and account balances for all
                                Participants, such accrued benefits and account
                                balances being calculated in each case in the
                                same manner as set forth in clause (i).

                        (2)     Each plan in a required aggregation group will
                                be top-heavy if the group is top-heavy. No plan
                                in a required aggregation group will be
                                top-heavy if the group is not top-heavy.

                        (3)     If a permissive aggregation group is top-heavy,
                                only those plans that are part of an underlying
                                top-heavy, required aggregation group will be
                                top-heavy. No plan in a permissive aggregation
                                group will be top-heavy if the group is not
                                top-heavy.



                                       51
   57

                (iii)   The "required aggregation group" consists of (1) each
                        plan of an Affiliated Organization in which a key
                        employee participates and (2) each other plan of an
                        Affiliated Organization that enables a plan in which a
                        key employee participates to meet the nondiscrimination
                        requirements of Code sections 401(a)(4) or 410.

                (iv)    A "permissive aggregation group" consists of those plans
                        that are required to be aggregated and one or more plans
                        (providing comparable benefits or contributions) that
                        are not required to be aggregated, which, when taken
                        together, satisfy the requirements of Code sections
                        401(a)(4) and 410.

                (v)     For purposes of applying clauses (ii), (iii) and (iv) of
                        this Subsection (b), any qualified defined contribution
                        plan maintained by an Affiliated Organization at any
                        time within the five-year period preceding the Plan Year
                        for which the determination being made which, as of the
                        date of such determination, has been formally
                        terminated, has ceased crediting service for benefit
                        accruals and vesting and has been or is distributing all
                        plan assets to participants or their beneficiaries, will
                        be taken into account to the extent required or
                        permitted under such clauses and under Code section 416.

        (c)     A "key employee" is any individual who is or was employed with
                an Affiliated Organization and who, at any time during the Plan
                Year in question or any of the preceding four Plan Years is or
                was:

                (i)     An officer of the Affiliated Organization (an
                        administrative executive in regular and continued
                        service with the Affiliated Organization) whose Section
                        415 Wages for such Plan Year exceed 50 percent of the
                        amount in effect under Code section 415(b)(1)(A) for
                        such Plan Year, but in no case will there be taken into
                        account more than the lesser of (a) 50 persons, or (b)
                        the greater of (i) three persons or (ii) ten percent of
                        the number of the Affiliated Organization's employees,
                        excluding for purposes of determining the number of such
                        officers, any employees described in Code section
                        414(q)(5);

                (ii)    The owner of an interest in the Affiliated Organization
                        that is not less than the interest owned by at least ten
                        other persons employed with the Affiliated Organization;
                        provided, that, such owner will not be a key employee
                        solely by reason of such ownership for a Plan Year if he
                        or she does not own more than one-half of one percent of
                        the value of the outstanding interests of the Affiliated
                        Organization or if the amount of his or her Section 415
                        Wages for such Plan Year is less than the amount in
                        effect under Code section 415(c)(1)(A) for such Plan
                        Year;

                (iii)   The owner of more than five percent of the Affiliated
                        Organization's outstanding stock or more than five
                        percent of the total combined voting power of the
                        Affiliated Organization's stock; or



                                       52
   58

                (iv)    The owner of more than one percent of the Affiliated
                        Organization's outstanding stock or more than one
                        percent of the total combined voting power of the
                        Affiliated Organization's stock, whose Section 415 Wages
                        for such Plan Year exceed $150,000.

                For purposes of this Subsection (c), ownership of an Affiliated
                Organization's stock will be determined in accordance with Code
                section 318; provided, that subparagraph 318(a)(2)(C) will be
                applied by substituting the phrase "5 percent" for the phrase
                "50 percent" wherever it appears in such Code section.

12.4.   NO EMPLOYMENT RIGHTS CREATED. The establishment and maintenance of the
        Plan neither gives any Employee a right to continuing employment nor
        limits the right of an Affiliated Organization to discharge or otherwise
        deal with the Employee without regard to the effect such action might
        have on his or her initial or continued participation in the Plan.

12.5.   SPECIAL PROVISIONS. Special provisions of the Plan applicable only to
        certain Participants will be set forth on an exhibit to the Plan. In the
        event of a conflict between the terms of the exhibit and the terms of
        the Plan, the exhibit controls.

12.6.   QUALIFIED MILITARY SERVICE.

        (a)     The provisions of this section apply only to an Employee who is
                reemployed on or after October 13, 1996 and whose reemployment
                rights are protected under the Uniformed Services Employment and
                Reemployment Rights Act of 1994 ("USERRA") and are intended to
                comply with the requirements of Code section 414(u).

        (b)     Notwithstanding any other provisions of the Plan to the
                contrary, a Qualified Employee who leaves the employ of a
                Participating Employer for qualified military service and
                returns to employment with a Participating Employer will be
                entitled to the restoration of benefits under the Plan which
                would have accrued but for the Qualified Employee's absence due
                to qualified military service.

        (c)     A Qualified Employee may make 401(k) Contributions for the Plan
                Years during which he or she would have been an Active
                Participant but for his or her qualified military service in
                accordance with Section 3.1 and the following additional rules:

                (i)     the Qualified Employee may elect to make 401(k)
                        Contributions, subject to the maximums in effect
                        pursuant to Section 3.1 during the period of qualified
                        military service;

                (ii)    the Qualified Employee may make the election described
                        in clause (i) at any time during the period that begins
                        on his or her date of reemployment and has the same
                        length as the lesser of five years or the period of the
                        Qualified Employee's qualified military service
                        multiplied by three;

                (iii)   the 401(k) Contributions under this subsection are not
                        subject to the limitations described in Section 9.2, 9.3
                        or 9.4.



                                       53
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        (d)     A Qualified Employee's Participating Employer will make Matching
                Contributions with respect to the Qualified Employee's 401(k)
                Contributions pursuant to Subsection (c) in the same amount as
                if such 401(k) Contributions had actually been made during the
                Participant's period of qualified military service. The Matching
                Contributions made pursuant to this subsection are not subject
                to the limitations described in Section 9.3 or 9.4.

        (e)     The following additional rules and conditions apply with respect
                to qualified military service notwithstanding any contrary
                provision of the Plan:

                (i)     an Employee will not be treated as having incurred a
                        Break in Service by reason of his or her qualified
                        military service;

                (ii)    any period of qualified military service will be counted
                        as Vesting Service;

                (iii)   for purposes of determining the Qualified Employee's
                        Eligible Earnings and Section 415 Wages, the Qualified
                        Employee will be treated as receiving compensation from
                        the Participating Employer with whom he or she was
                        employed immediately before the period of qualified
                        military service during the period of qualified military
                        service in an amount equal to the compensation he or she
                        would have received during such period if he or she were
                        not in qualified military service determined based on
                        the rate of pay the Qualified Employee would have
                        received from the Participating Employer but for the
                        absence due to qualified military service; provided,
                        however, if the compensation the Qualified Employee
                        would have received from the Participating Employer is
                        not reasonably certain, then the Qualified Employee's
                        rate of compensation will be equal to his or her average
                        compensation for the 12-month period preceding the
                        qualified military service (or, if shorter, the period
                        of employment immediately preceding the qualified
                        military service);

                (iv)    contributions on behalf of the Qualified Employee will
                        be subject to the limitations in Sections 9.1 and 9.6
                        with respect to the Plan Years to which such
                        contributions relate in accordance with Treasury
                        Regulations;

                (v)     the Qualified Employee will not be entitled to any
                        crediting of earnings on contributions for any period
                        prior to actual payment to the Trust; and

                (vi)    the Qualified Employee will not be entitled to
                        restoration of any forfeitures which were not allocated
                        to his or her Account as a result of his or her
                        qualified military service.

        (f)     For purposes of this section, "qualified military service" means
                any service in the uniformed services as defined in USERRA by a
                Qualified Employee who is entitled to reemployment rights with a
                Participating Employer under USERRA.



                                       54
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12.7.   SHORT PLAN YEARS. To the extent required by and in accordance with
        Treasury Regulations, for any Plan Year that is less than 12 months
        long, the dollar limitations in effect for purposes of Code sections
        401(a)(17), 414(q), 415 and 416 will be adjusted to reflect the short
        Plan Year.


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   61



                                   ARTICLE 13

                  DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS

13.1.   DEFINITIONS. The definitions set forth in this section apply in
        construing this instrument unless the context otherwise indicates.

ACCOUNT. An "Account" with respect to a Participant is any or all of the
accounts maintained on his or her behalf pursuant to Section 4.1, as the context
requires.

ACTIVE PARTICIPANT. An "Active Participant" is a Participant who is a Qualified
Employee.

ADMINISTRATOR. The "Administrator" of the Plan is an individual or committee
designated by the Company.

AFFILIATED ORGANIZATION. An "Affiliated Organization" is the Company and any
other corporation that is a member of a controlled group of corporations (within
the meaning of Code section 1563(a) without regard to Code sections 1563(a)(4)
and 1563(e)(3)(C)) that includes the Company, any trade or business (whether or
not incorporated) that together with the Company is under common control (within
the meaning of Code section 414(c)), any member of an "affiliated service group"
(within the meaning of Code section 414(m)) of which the Company is a member or
any other organization that, together with the Company, is treated as a single
employer pursuant to Code section 414(o) and Treasury Regulations thereunder;
provided, that, for purposes of applying the limitations set forth at Section
9.6, such determination under Code section 1563(a) will be made by substituting
the phrase "more than 50 percent" for the phrase "at least 80 percent" wherever
it appears in such Code section.

BASIC MATCHING ACCOUNT. The "Basic Matching Account" is the account established
pursuant to Section 4.1(a)(ii).

BASIC MATCHING CONTRIBUTIONS. "Basic Matching Contributions" means contributions
made by the Participating Employers on behalf of Participants pursuant to
Section 3.2(a) or 3.4.

BENEFICIARY. A "Beneficiary" is a person designated or otherwise determined
under the provisions of Section 8.3 as the distributee of benefits payable after
the death of a Participant. A person designated as, or otherwise determined to
be, a Beneficiary under the terms of the Plan has no interest in or rights under
the Plan until the Participant in question has died. A Beneficiary will cease to
be such on the day on which all benefits to which he, she or it is entitled
under the Plan have been distributed.

BOARD. The "Board" is the board of directors or comparable governing body of the
Affiliated Organization in question. When the Plan provides for an action to be
taken by the Board, the action may be taken by any committee or individual
authorized to take such action pursuant to a proper delegation by the board of
directors or comparable governing body in question.

BREAK IN SERVICE. A "Break in Service" with respect to an Employee is the period
commencing on the Employee's "employment severance date," as defined in clause
(a)(ii) of the definition of



                                       56
   62
Vesting Service, and ending on the Employee's "reemployment commencement date,"
as defined in clause (a)(iii) of the definition of Vesting Service; provided,
that if an Employee becomes absent on account of (a) the Employee's pregnancy,
(b) the birth of the Employee's child, (c) the placement of a child with the
Employee on account of the Employee's adoption of the child or (d) the
Employee's caring for a child immediately following the child's birth or
placement with the Employee, and the Employee furnishes to the Administrator,
upon request, such information as the Administrator requires to determine the
reasons for the Employee's absence or continued absence, then solely for the
purpose of determining whether the Employee has incurred a Break in Service, the
Employee's employment severance date will be the first anniversary of the date
on which the employment severance date occurs for the purpose of determining the
Employee's Vesting Service.

CERIDIAN 401(k) PLAN. "Ceridian 401(k) Plan" means the Ceridian Corporation
Personal Investment Plan, the Ceridian Corporation Savings and Investment Plan
or both of them, as the context requires.

CERIDIAN STOCK. "Ceridian Stock" means common stock issued by Ceridian
Corporation.

CODE. "Code" is the Internal Revenue Code of 1986, as amended. Any reference to
a specific provision of the Code includes a reference to such provision, any
valid ruling, regulation or authoritative pronouncement promulgated thereunder
and any provision of future law that amends, supplements or supersedes the
provision.

COMMITTEE. The "Committee" is the Retirement Committee constituted under Article
11.

COMPANY. The "Company" is Arbitron Inc. or any successor thereto.

COMPANY STOCK. "Company Stock" means common stock issued by the Company.

CONSENT OF SPOUSE. Whenever the consent of a Participant's spouse is required
with respect to any act of the Participant, such consent will be deemed to have
been obtained only if:

        (a)     the Participant's spouse executes a written consent to such act,
which consent acknowledges the effect of such act and is witnessed by a Plan
representative or a notary public; or

        (b)     the Administrator determines that no such consent can be
obtained because the Participant has no spouse, because the Participant's spouse
cannot be located, or because of such other circumstances as may, under Treasury
Regulations, justify the lack of such consent.

Any such consent by the Participant's spouse or such determination by the
Administrator that such spouse's consent is not required is effective only with
respect to the particular spouse of the Participant who so consented or with
respect to whom such determination was made. Any such consent by the
Participant's spouse to an act of the Participant under the Plan is irrevocable
with respect to that act.

DISABLED. A Participant will be considered to be "Disabled" only if



                                       57
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        (a)     in the case of a Participant who is participating in the
Company's long-term disability plan, he or she is receiving disability benefits
under such plan, or

        (b)     in the case of any other Participant, he or she is certified as
being disabled by the Social Security Administration and is receiving disability
benefits under the disability provisions of the Social Security Act.

EFFECTIVE DATE. The "Effective Date" of the Plan is March 31, 2001.

ELIGIBLE EARNINGS.

        (a)     Subject to Subsection (b), the "Eligible Earnings" of a
Participant from a Participating Employer for any period is the amount
reportable by the Participating Employer for federal income tax purposes as
wages paid to the Participant for such period, increased by the amount of
Eligible Earnings reductions experienced by the Participant for the period
pursuant to the Plan, any cafeteria plan maintained by the Participating
Employer pursuant to Code section 125 and the Arbitron Retirement Plan, to the
extent such reductions are not otherwise included for that period, and decreased
by any amount received by the Participant during the period as deferred income
from a previous period, expatriation premium, tuition aid reimbursement,
relocation allowance, restricted stock plan awards, any such amount attributable
to the exercise of an option under a stock option plan maintained by a
Participating Employer, any amounts representing imputed income on account of
benefits pursuant to the Code, any amounts representing severance payments under
the Participating Employer's severance policy and any other amounts of an
unusual or nonrecurring nature, as specified in Plan Rules.

        (b)     In no event will a Participant's Eligible Earnings for any Plan
Year be taken into account to the extent it exceeds $150,000 (or such larger
amount as may be permitted for the calendar year during which such Plan Year
begins under Code section 401(a)(17)).

ELIGIBLE ROLLOVER DISTRIBUTION. An "Eligible Rollover Distribution" is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under Code section 401(a)(9); the portion of any distribution that is
not includable in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities); any hardship
distribution described in Code section 401(k)(2)(B)(i)(IV); and any other amount
excepted from the definition of "eligible rollover distribution" by Code section
402(c)(4).

EMPLOYEE. An "Employee" is any individual who performs services for an
Affiliated Organization as a common-law employee of the Affiliated Organization.

ERISA. "ERISA" is the Employee Retirement Income Security Act of 1974, as
amended. Any reference to a specific provision of ERISA includes a reference to
such provision, any valid ruling, regulation or authoritative pronouncement
promulgated thereunder and any provision of future law that amends, supplements
or supersedes the provision.



                                       58
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401(k) CONTRIBUTION ACCOUNT. The "401(k) Contribution Account" is the account
established pursuant to Section 4.1(a)(i).

401(k) CONTRIBUTIONS. "401(k) Contributions" means contributions made by
Participants pursuant to Section 3.1.

FUND. The "Fund" is the total of all of the assets of every kind and nature,
both principal and income, held in the Trust at any particular time or, if the
context so requires, one or more of the investment funds described in Section
5.1.

HIGHLY COMPENSATED EMPLOYEE.

        (a)     A "Highly Compensated Employee" with respect to a Plan Year is
any employee who:

                (i)     at any time during such Plan Year or the 12-month period
        preceding such Plan Year, owns or owned (or is considered as owning or
        having owned within the meaning of Code section 318) more than five
        percent of the outstanding stock of an Affiliated Organization or stock
        possessing more than five percent of the total combined voting power of
        all outstanding stock of an Affiliated Organization; or

                (ii)    during the 12-month period preceding such Plan Year,
        received compensation in excess of $80,000 (or such dollar amount,
        adjusted to reflect increases in the cost of living, as in effect under
        Code section 414(q)(1)(B) for the calendar year during which the Plan
        Year in question begins).

        (b)     For purposes of this section:

                (i)     an "employee" is any individual (other than an
        individual who is a nonresident alien who receives no earned income
        (within the meaning of Code section 911(d)(2)) from an Affiliated
        Organization that constitutes income from sources within the United
        States (within the meaning of Code section 861(a)(3))) who, during the
        Plan Year for which the determination is being made, performs services
        for an Affiliated Organization as

                        (1)     a common-law employee,

                        (2)     an employee pursuant to Code section 401(c)(1)
                                or

                        (3)     a Leased Employee; and

                (ii)    "compensation" for any period means an employee's
        Section 415 Wages for the period.

HOUR OF SERVICE. An "Hour of Service" with respect to an Employee is an hour for
which the Employee is paid, or entitled to payment, for the performance of
duties for an Affiliated Organization on or after the date on which it became an
Affiliated Organization.



                                       59
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LEASED EMPLOYEE. A "Leased Employee" is any individual (other than an Employee)
who performs services for an Affiliated Organization (or for an Affiliated
Organization and "related persons" within the meaning of Code section
144(a)(3)):

        (a)     pursuant to an agreement between an Affiliated Organization and
any other person;

        (b)     under the Affiliated Organization's primary direction and
control; and

        (c)     on a substantially full-time basis for a period of at least one
year.

MATCHING CONTRIBUTIONS. "Matching Contributions" means contributions made by the
Participating Employers on behalf of Participants pursuant to Section 3.2 or
3.4.

NEW CERIDIAN SPIN-OFF. "New Ceridian Spin-off" is defined in Section 1.3(a) of
the Plan.

NORMAL RETIREMENT DATE. The "Normal Retirement Date" of a Participant is the
date on which he or she attains age 65.

PARTICIPANT. A "Participant" is a current or former Qualified Employee who has
entered the Plan pursuant to the provisions of Article 2 and who has not ceased
to be a Participant pursuant to the provisions of Section 2.6.

PARTICIPATING EMPLOYER. A "Participating Employer" is the Company and any other
Affiliated Organization that has adopted the Plan, or all of them collectively,
as the context requires, and their respective successors. An Affiliated
Organization will cease to be a Participating Employer upon a termination of the
Plan as to its Qualified Employees or upon its ceasing to be an Affiliated
Organization.

PERFORMANCE-BASED MATCHING ACCOUNT. The "Performance-Based Matching Account" is
the account established pursuant to Section 4.1(a)(iii).

PERFORMANCE-BASED MATCHING CONTRIBUTIONS. "Performance-Based Matching
Contributions" means contributions made by Participating Employers on behalf of
Participants pursuant to Section 3.2(b).

PLAN. The "Plan" is that set forth in this instrument as it may be amended from
time to time.

PLAN RULE. A "Plan Rule" is a rule, policy, practice or procedure adopted by the
Administrator.

PLAN YEAR. A "Plan Year" is the 12-month period beginning on each January 1 and
ending on the first following December 31.

QUALIFIED EMPLOYEE.

        (a)     Except as provided in Subsection (b), a "Qualified Employee" is
an Employee who:



                                       60
   66

                (i)     performs services for a Participating Employer as an
        employee of the Participating Employer (as classified by the
        Participating Employer at the time the services are performed without
        regard to any subsequent reclassification);

                (ii)    is paid under a domestic payroll; and

                (iii)   performs services for the Participating Employer
        primarily within the United States or on a temporary foreign assignment.

        (b)     An Employee who would otherwise be a Qualified Employee is not a
Qualified Employee if he or she:

                (i)     is a nonresident alien who receives no earned income
        (within the meaning of Code section 911(d)(2) from a Participating
        Employer that constitutes income from sources within the United States
        (within the meaning of Code section 861(a)(3));

                (ii)    is covered by a collective bargaining agreement, for
        whom retirement benefits were the subject of good faith bargaining
        between such person's representative and a Participating Employer, and
        is not, as a result of such bargaining, specifically covered by this
        Plan; or

                (iii)   is eligible, or would be eligible but for his or her
        failure to satisfy any applicable minimum age, minimum service or
        similar requirement, to participate in any other qualified defined
        contribution plan maintained by an Affiliated Organization.

        (c)     An individual who is classified by a Participating Employer as
an independent contractor or as any other status in which the individual is not
classified by the Participating Employer as an employee of the Participating
Employer at the time services are performed is not a Qualified Employee. No
judicial or administrative reclassification, or reclassification by the
Participating Employer, will be applied to grant retroactive eligibility to any
individual under the Plan.

ROLLOVER ACCOUNT. The "Rollover Account" is the account established pursuant to
Section 4.1(a)(iv).

SBC PARTICIPANT. An "SBC Participant" is a Participant who is an "SBC
Participant" as defined in the SBC Exhibit to the Arbitron Retirement Plan.

SECTION 415 WAGES.

        (a)     An individual's "Section 415 Wages" for any period is his or her
"compensation," within the meaning of Code section 415(c)(3) and Treasury
Regulations thereunder, for the period from all Affiliated Organizations.

        (b)     The Administrator may, for any period, determine the items of
remuneration that, in accordance with Treasury Regulations, will be included in
Section 415 Wages for such period; provided that for each purpose under this
Plan, the Administrator's determination will be uniform throughout any period.



                                       61
   67

TERMINATION OF EMPLOYMENT.

        (a)     For purposes of the Plan, a Participant will be deemed to have
terminated employment only if he or she dies, becomes Disabled or has a
"separation from service" within the meaning of Code section 401(k)(2)(B)(i)(I)
and Treasury Regulations thereunder. Neither transfer of employment among
Affiliated Organizations nor absence from active service by reason of disability
leave, other than in connection with a Participant becoming Disabled, or any
other leave of absence will constitute a termination of employment.

        (b)     A Participant who, in conjunction with a disposition by an
Affiliated Organization of its interest in a subsidiary, within the meaning of
Code section 401(k)(10)(A)(iii), continues employment with the subsidiary, will
be considered to have terminated employment if the applicable conditions
specified in Treasury Regulations under Code section 401(k)(10) are satisfied.

        (c)     A Participant who, in conjunction with a disposition by an
Affiliated Organization of substantially all of the assets used by the
Affiliated Organization in a trade or business of the Affiliated Organization,
within the meaning of Code section 401(k)(10)(A)(ii), transfers employment to
the corporation acquiring the assets, will be considered to have terminated
employment if the applicable conditions specified in Treasury Regulations under
Code section 401(k)(10) are satisfied.

        (d)     A Participant who, in conjunction with a disposition by an
Affiliated Organization of its interest in a subsidiary, continues employment
with the subsidiary or in conjunction with a disposition by an Affiliated
Organization of substantially all of the assets used by the Affiliated
Organization in a trade or business of the Affiliated Organization, transfers
employment to the acquiror of such assets, will be considered to have not
terminated employment if the applicable conditions specified in Treasury
Regulations under Code section 401(k)(10)(A) are not satisfied. If a Participant
is considered to have not terminated employment as a result of this subsection,
this subsection will continue to apply in the event of any subsequent transfer
of employment in conjunction with the disposition of all or any portion of a
business operation of the initial acquiror or any subsequent acquirors that
would not otherwise entitle the Participant to a distribution under Subsection
(b) or (c).

TESTING WAGES.

        (a)     An individual's "Testing Wages" for any Plan Year is his or her
Section 415 Wages for the Plan Year.

        (b)     Notwithstanding Subsection (a), in no event will a person's
Testing Wages for any Plan Year be taken into account to the extent it exceeds
$150,000 (or such other larger amount as may be permitted for the calendar year
during which such Plan Year begins under Code section 401(a)(17)).

        (c)     The Administrator may, for any Plan Year, adopt any alternative
definition of Testing Wages that complies with Code section 414(s) and Treasury
Regulations thereunder; provided, that for each purpose under this Plan, the
definition so adopted will be uniform throughout any Plan Year.



                                       62
   68


TRANSFER DATE. "Transfer Date" means the date as of which accounts under the
Ceridian 401(k) Plans were transferred to the Plan in connection with the New
Ceridian Spin-off.

TREASURY REGULATIONS. "Treasury Regulations" mean regulations, rulings, notices
and other promulgations issued under the authority of the Secretary of the
Treasury that apply to, or may be relied upon in the administration of, this
Plan.

TRUST. The "Trust" is that created for purposes of implementing benefits under
the Plan.

TRUSTEE. The "Trustee" is the corporation and/or individual or individuals who
from time to time is or are the duly appointed and acting trustee or trustees of
the Trust.

VESTING SERVICE.

        (a)     An Employee's "Vesting Service" means the sum of his or her
periods of service as an Employee with the Affiliated Organizations (measured in
the case of any Affiliated Organization from the date on which it became an
Affiliated Organization), commencing as of the Employee's employment
commencement date or reemployment commencement date, as the case may be, and
ending with the Employee's next employment severance date, as determined in
accordance with the following rules:

                (i)     an Employee's "employment commencement date" is the date
        on which he or she first performs an Hour of Service;

                (ii)    for purposes of this section only, an Employee's
        "employment severance date" is the earlier to occur of:

                        (1)     the date on which the Employee terminates
                employment with all Affiliated Organizations because he or she
                quits, retires, is discharged or dies; or

                        (2)     the first anniversary of the first date of a
                period during which the Employee remains absent from service
                (with or without pay) with all Affiliated Organizations for any
                reason other than a quit, retirement, discharge or death
                following the employment commencement date or reemployment
                commencement date, as the case may be;

                (iii)   an Employee's "reemployment commencement date" is the
        first date, following a period of severance from employment which is not
        required to be taken into account under either item (iv) or (v), on
        which the Employee performs an Hour of Service;

                (iv)    if the Employee's employment is severed by reason of a
        quit, discharge or retirement and he or she subsequently performs an
        Hour of Service within 12 months following the employment severance
        date, the period of such severance will be taken into account;

                (v)     if the Employee quits, is discharged or retires during
        an absence from service of 12 months or less for any reason other than a
        quit, discharge, retirement or



                                       63
   69

        death and the Employee subsequently performs an Hour of Service within
        12 months following the date on which such absence commenced, the period
        of such severance will be taken into account.

        (b)     To the extent provided in Subsection (a), service by a Leased
Employee or service by an individual with any other organization that is
required to be taken into account pursuant to Code section 414(o) and Treasury
Regulations thereunder will be deemed to be Vesting Service for purposes of the
Plan if such Leased Employee or individual becomes an Employee.

        (c)     Notwithstanding the foregoing provisions of this section,
service completed by an Employee with an Affiliated Organization prior to the
date on which it became an Affiliated Organization (or with another entity prior
to the acquisition of such entity's business or assets by an Affiliated
Organization) will be counted as Vesting Service only if and to the extent
provided in any agreement pursuant to which it became an Affiliated Organization
(or such other business or assets were acquired) or as provided by resolution of
the Company's Board.

13.2.   CONSTRUCTION AND INTERPRETATIONS. The rules of construction and
        interpretation set forth in this section apply in construing this
        instrument unless the context otherwise indicates.

GOVERNING LAW. To the extent that state law is not preempted by provisions of
ERISA, or any other laws of the United States, this Plan will be administered,
construed, and enforced according to the internal, substantive laws of the State
of Maryland, without regard to its conflict of laws rules.

HEADINGS. The headings of articles and sections are included solely for
convenience. In the case of a conflict between a heading and the text of the
Plan, the text controls.

NUMBER AND GENDER. Wherever appropriate, the singular number may be read as the
plural, the plural may be read as the singular, and the masculine gender may be
read as the feminine gender.



                                       64
   70


                                    EXHIBIT A

This exhibit contains special provisions applicable to each participant in the
Arbitron Retirement Plan who has elected an enhanced retirement benefit under
the Arbitron Retirement Plan with respect to which a portion of his or her
401(k) Contribution Account serves as the basis for an offset.

1.      SEPARATE ACCOUNTING. The Administrator will at all times separately
        account on a reasonable and consistent basis for all gains, losses,
        withdrawals, contributions and other credits and charges with respect to
        the portion of a Participant's 401(k) Contribution Account that serves
        as a basis for an offset of any portion of his or her benefit under the
        Arbitron Retirement Plan. For purposes of this exhibit, such portion of
        the 401(k) Contribution Account is referred to as the 401(k)
        Contribution Offset Subaccount.

2.      SPOUSAL CONSENT TO WITHDRAWALS AND LOANS. No withdrawal or loan may be
        made from the 401(k) Contribution Offset Subaccount unless, during the
        90-day period ending on the date of the withdrawal or loan, the
        Participant's spouse consents to the withdrawal or loan.

3.      COMPANY STOCK. No portion of the 401(k) Contribution Offset Subaccount
        may be invested in the Company Stock Fund.

4.      FORM OF DISTRIBUTION.

        (a)     Unless a Participant otherwise elects in accordance with the
                provisions of clause (c), the Trustee will, with the balance of
                the Participant's 401(k) Contribution Offset Subaccount,
                purchase and distribute to the Participant an annuity contract
                that provides for payments for the life of the Participant if
                the Participant is not married on his or her "annuity starting
                date," within the meaning of Code section 417(f)(2), or, if the
                Participant is then married, for payments for the life of the
                Participant, with 50 percent of the amount of such payments
                continuing after the Participant's death for the life of such
                spouse.

        (b)     Each annuity contract purchased for a Participant will provide
                for payment of benefits commencing at such time and in such
                manner as the Participant elects; provided, that distribution of
                benefits under such contract must conform to the requirements of
                Section 8.1 of the Plan, applied as if such contract constituted
                the Participant's Accounts. No such contract is subject to
                transfer or to exchange for another annuity contract that does
                not conform to the requirements of this item (4). No such
                contract is subject to surrender or encumbrance without the
                consent of the Participant's spouse.

        (c)     A Participant whose 401(k) Contribution Offset Subaccount would
                otherwise be paid in the form of an annuity contract described
                in clause (a) may elect to receive a lump sum payment in lieu of
                such annuity contract. The Participant's election must be in
                writing, in form prescribed by the Administrator; must be made
                within the 90-day period ending on the Participant's annuity
                starting date; may be revoked and a new election made any number
                of times during the election period;



                                      A-1
   71

        (d)     and is not effective unless the Participant's spouse consents to
                such lump sum payment.

        (e)     If a Participant dies prior to his or her annuity starting date,
                and is married on the date of his or her death, the
                Administrator will, with the balance of the Participant's 401(k)
                Contribution Offset Subaccount, purchase and distribute to the
                Participant's surviving spouse a nontransferable annuity
                contract that provides payments to such surviving spouse for
                life, commencing at such time not later than the date on which
                the Participant would have attained age 70-1/2 as the spouse
                selects; provided, that this clause (d) will not apply if -

                (i)     the Participant's spouse elects, in a written, signed
                        statement delivered to the Administrator prior to the
                        purchase of the annuity contract, to receive the balance
                        of the Participant's interest in his or her 401(k)
                        Contribution Offset Subaccount in a lump sum payment, or

                (ii)    the Participant elected, by a signed written statement
                        delivered to the Administrator within the period
                        commencing on the first day of the Plan Year in which he
                        or she attained age 35 and ending on the date of the
                        Participant's death, to waive the provisions of this
                        clause (d), and the Participant's spouse consented to
                        such election; a Participant may, at any time and any
                        number of times, by signed written notice delivered to
                        the Administrator during the Participant's lifetime,
                        revoke any election made under this subclause (ii), and
                        may make a new election following any such revocation.

        (f)     Distribution of any annuity contract pursuant to the foregoing
                provisions of this item (4) satisfies in full any claims that
                the Participant or his or her spouse may have under the Plan,
                and neither the Trustee nor the Administrator will be
                responsible to any extent with respect to any payments to which
                the Participant or his or her spouse may be entitled under such
                annuity contract.

        (g)     The provisions of this item (4) apply notwithstanding and
                supersede any designation by a married Participant of any
                primary Beneficiary other than his or her spouse which
                designation is not made either in conjunction with an election
                pursuant to clause (c) or (d)(ii) of this item (4), as the case
                may be, or thereafter with the spouse's consent.



                                      A-2

EX-10.13

   1
                                                                   EXHIBIT 10.13



                       ARBITRON EXECUTIVE INVESTMENT PLAN






























                                      As Adopted Effective as of January 1, 2001

   2


                       ARBITRON EXECUTIVE INVESTMENT PLAN

                                TABLE OF CONTENTS


                                                                                          Page
                                                                                          ----
                                                                                       
ARTICLE 1. DESCRIPTION.......................................................................1
   1.1  Plan Name............................................................................1
   1.2  Plan Purpose.........................................................................1
   1.3  Plan Type............................................................................1
   1.4  Plan Background......................................................................1

ARTICLE 2. PARTICIPATION.....................................................................2
   2.1  Participation........................................................................2
   2.2  Conditions of Participation..........................................................2
   2.3  Termination of Participation.........................................................2

ARTICLE 3. BENEFITS..........................................................................3
   3.1  Participant Accounts.................................................................3
   3.2  Participant Deferral Credits.........................................................3
   3.3  Earnings Credits.....................................................................3
   3.4  Vesting..............................................................................5

ARTICLE 4. DISTRIBUTION......................................................................6
   4.1  Distribution to Participant Before Severance or Disability...........................6
   4.2  Distribution to Participant After Severance or Disability............................7
   4.3  Distribution to Beneficiary.........................................................10
   4.4  Nondeductibility....................................................................11
   4.5  Payment in Event of Incapacity......................................................12
   4.6  Suspension..........................................................................12

ARTICLE 5. SOURCE OF PAYMENTS; NATURE OF INTEREST...........................................13
   5.1  Establishment of Trust..............................................................13
   5.2  Source of Payments..................................................................13
   5.3  Status of Plan......................................................................13
   5.4  Non-assignability of Benefits.......................................................13

ARTICLE 6. AMENDMENT, TERMINATION...........................................................14
   6.1  Amendment...........................................................................14
   6.2  Termination of Participation........................................................14
   6.3  Termination.........................................................................15

ARTICLE 7. DEFINITIONS, CONSTRUCTION AND INTERPRETATION.....................................16
   7.1  Account.............................................................................16
   7.2  Administrator.......................................................................16
   7.3  Affiliate...........................................................................16
   7.4  Board...............................................................................16
   7.5  Beneficiary.........................................................................16
   7.6  Code................................................................................16
   7.7  Company.............................................................................16



                                       i

   3


                                                                                       
   7.8  Cross Reference.....................................................................17
   7.9  Disability..........................................................................17
   7.10 ERISA...............................................................................17
   7.11 Governing Law.......................................................................17
   7.12 Headings............................................................................17
   7.13 Number and Gender...................................................................17
   7.14 Participant.........................................................................17
   7.15 Participating Employer..............................................................18
   7.16 Plan................................................................................18
   7.17 Plan Rules..........................................................................18
   7.18 Prior Plan..........................................................................18
   7.19 Retirement..........................................................................18
   7.20 Severance...........................................................................18
   7.21 Trust...............................................................................18
   7.22 Trustee.............................................................................18
   7.23 Unforeseeable Emergency.............................................................19
   7.24 Valuation Date......................................................................19

ARTICLE 8. ADMINISTRATION...................................................................20
   8.1  Administrator.......................................................................20
   8.2  Plan Rules and Regulations..........................................................20
   8.3  Administrator's Discretion..........................................................20
   8.4  Specialist's Assistance.............................................................20
   8.5  Indemnification.....................................................................20
   8.6  Benefit Claim Procedure.............................................................21
   8.7  Disputes............................................................................21

ARTICLE 9. MISCELLANEOUS....................................................................23
   9.1  Withholding and Offsets.............................................................23
   9.2  Other Benefits......................................................................23
   9.3  No Warranties Regarding Tax Treatment...............................................23
   9.4  No Rights to Continued Service Created..............................................23
   9.5  Special Provisions..................................................................23
   9.6  Successors..........................................................................23




                                       ii

   4

                       ARBITRON EXECUTIVE INVESTMENT PLAN


                                   ARTICLE 1.
                                  DESCRIPTION

1.1     PLAN NAME.

        The name of the Plan is the "Arbitron Executive Investment Plan."

1.2     PLAN PURPOSE.

        The purpose of the Plan is to provide Participants who, as of December
31, 2000, were participants in the Prior Plan with

        (a)    the benefits to which they were entitled under the Prior Plan as
               of December 31, 2000 (other than benefits scheduled to be
               distributed pursuant to the Prior Plan on January 1, 2001) and

        (b)    deferral credits relating to the 2000 plan year under the Prior
               Plan that would have otherwise been credited to the Participant's
               account under the Prior Plan as of a date after December 31,
               2000, such as deferral credits relating to elections pursuant to
               the Prior Plan to defer annual bonuses earned during the 2000
               plan year and otherwise payable during the first calendar quarter
               of 2001.

1.3     PLAN TYPE.

        The Plan is an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees. It is intended that the Plan is exempt from the
provisions of Parts 2, 3 and 4 of Subtitle B of Title I of ERISA by operation of
sections 201(2), 301(a)(3) and 401(a)(4) thereof, respectively, and from the
provisions of Title IV of ERISA, to the extent otherwise applicable, by
operation of section 4021(b)(6) thereof. The Plan is also intended to be
unfunded for tax purposes. The Plan will be construed and administered in a
manner that is consistent with and gives effect to the foregoing.

1.4     PLAN BACKGROUND.

        (a)    The Company adopted the Prior Plan effective as of
               January 1, 1995.

        (b)    Effective as of January 1, 1999, the Prior Plan was restated and
               the name of the Prior Plan was changed from the Ceridian
               Corporation Deferred Compensation Plan to the Ceridian
               Corporation Executive Investment Plan.

        (c)    Effective as of January 1, 2001, the Company established the Plan
               and the account balances of the Participants under the Prior Plan
               as of the close of business on December 31, 2000 (other than the
               portion of such account balances, if any, scheduled to be
               distributed pursuant to the Prior Plan on January 1, 2001) were
               credited to their Accounts under the Plan as of January 1, 2001.


                                       1
   5


                                   ARTICLE 2.
                                  PARTICIPATION

2.1     PARTICIPATION.

        Participation in the Plan is limited to those individuals whose account
balances under the Prior Plan as of the close of business on December 31, 2000
(other than the portion of such account balances, if any, scheduled to be
distributed pursuant to the Prior Plan on January 1, 2001) were credited to
their Accounts under the Plan as of January 1, 2001. No one else is eligible to
participate in the Plan.

2.2     CONDITIONS OF PARTICIPATION.

        Each Participant, as a condition of participation in the Plan, is bound
by all the terms and conditions of the Plan and the Plan Rules, and must furnish
to the Administrator such pertinent information and execute such election forms
and other instruments as the Administrator or Plan Rules may require by such
dates as the Administrator or Plan Rules may establish. All elections,
directions, designations and similar actions required in connection with the
Plan must be made in accordance with and are subject to the terms of the Plan
and Plan Rules.

2.3     TERMINATION OF PARTICIPATION.

        A Participant will cease to be a Participant as of the date on which his
or her entire Account balance has been distributed.


                                       2

   6

                                   ARTICLE 3.
                                    BENEFITS

3.1     PARTICIPANT ACCOUNTS.

        (a)    Participant Accounts. For each Participant, the Administrator
               will establish and maintain an Account. Effective as of January
               1, 2001, a Participant's Account will be credited with an amount
               equal to the balance of his or her account under the Prior Plan
               as of the close of business on December 31, 2000 (other than the
               portion of such account, if any, scheduled to be distributed
               pursuant to the Prior Plan on January 1, 2001).

        (b)    Subaccounts.

               (i)    Prime Rate Earnings Method. The portion of a Participant's
                      Account balance with respect to which earnings credits are
                      made pursuant to Section 3.3(g) will be credited to a
                      separate subaccount within the Account if deferrals were
                      credited to the Participant's account pursuant to Section
                      3.2 of the Prior Plan for any plan year beginning after
                      December 31, 1998.

               (ii)   Grandfathered Distribution Elections. If a Participant
                      made distribution elections under the provisions of the
                      Prior Plan in effect prior to January 1, 1999 pursuant to
                      which distributions are scheduled to be made or to begin
                      before January 1, 2001, the Administrator will maintain
                      separate subaccounts within the Participant's Account each
                      of which will evidence amounts credited to the Account
                      pursuant to any such election with respect to which the
                      Participant has elected an identical form and timing of
                      distribution.

3.2     PARTICIPANT DEFERRAL CREDITS.

        (a)    Prior Plan Deferral Credits. If a Participant made a deferral
               election pursuant to the Prior Plan relating to base compensation
               or annual bonus earned during 2000 for which the deferral credit
               would have been made to the Participant's account under the Prior
               Plan as of a date after December 31, 2000, the credit will
               instead be made to his or her Account as of the same date and in
               the same amount that the credit would have been made under the
               Prior Plan.

        (b)    No Other Deferral Credits.  No other deferral credits will be
               made pursuant to the Plan.


3.3     EARNINGS CREDITS.

        (a)    Designation of Investment Funds.  The Administrator will
               designate two or more investment funds which will serve as the
               basis for determining adjustments pursuant to this section. The
               Administrator may, from time to time, designate additional
               investment funds or eliminate any previously designated
               investment

                                       3

   7

               funds. The designation or elimination of a fund pursuant to this
               subsection is not a Plan amendment. The Administrator will not be
               responsible in any manner to any Participant or other person for
               any damages, losses, liabilities, costs or expenses of any kind
               arising in connection with any designation or elimination of an
               investment fund.

        (b)    Change in Direction for Existing Account Balance. A Participant
               may direct a change in the manner in which his or her existing
               Account balance is deemed to be invested among the investment
               funds designated pursuant to Subsection (a). The direction will
               be effective on or as soon as administratively practicable after
               the first day of the calendar month that first follows by at
               least 10 days (or such shorter period as Plan Rules may allow)
               the date on which the Administrator receives the direction from
               the Participant.

        (c)    Account Adjustment.  The Administrator will cause Participants'
               Accounts to be separately adjusted as of each Valuation Date, in
               a manner determined by the Administrator to be uniform and
               equitable, to reflect the income, expense, gains, losses, fees
               and the like that would have resulted since the last Valuation
               Date had the Participant's investment directions pursuant to this
               section actually been implemented. To the extent determined by
               the Administrator to be necessary in conjunction with any
               distribution pursuant to the Plan, the Administrator will cause
               the Account from which the distribution is to be made to be
               adjusted to reflect a good faith estimate by the Administrator of
               any fees and other expenditures payable after the date of the
               distribution in connection with deemed investment activity in the
               Account through and including the date of the distribution. Any
               such estimate is binding on the Participating Employer and the
               person to whom the distribution is made.

        (d)    Administrator's Obligations and Responsibilities.  The sole
               obligation of the Administrator with respect to the designation
               or elimination of any investment fund designated pursuant to
               Subsection (a) is to act in accordance with the express terms of
               Subsection (a). By way of example and without limiting the
               previous sentence, the Administrator is not required, and no
               course of conduct will cause it to be required, to investigate or
               monitor any designated fund to any extent or for any purpose or
               to take or refrain from taking any action with respect to a fund
               because of any aspect of the performance of the fund. The
               designation of a limited number of investment funds is solely for
               administrative convenience and in no way reflects any endorsement
               of any such funds by the Administrator.

        (e)    Deemed Investment. Trust assets are not required to be invested
               in accordance with a Participant's directions and the balance of
               all Accounts pursuant to the Plan will be determined pursuant to
               this section and other applicable sections of the Plan without
               regard to the actual amount of Trust assets.

        (f)    Participant Responsibilities. Each Participant is solely
               responsible for any and all consequences of his or her investment
               directions made pursuant to this section. Neither any
               Participating Employer, any of its directors, officers or
               employees nor


                                       4

   8

               the Administrator has any responsibility to any Participant or
               other person for any damages, losses, liabilities, costs or
               expenses of any kind arising in connection with any investment
               direction made by the Participant pursuant to this section.

        (g)    Prime Rate Method.

               (i)    General. The entire portion of a Participant's Account
                      attributable to deferral credits under the Prior Plan for
                      plan years ending before January 1, 1999 will be credited
                      with earnings in accordance with clause (ii) unless the
                      Participant elected otherwise in accordance with Section
                      3.4(i) of the Prior Plan.

               (ii)   Method. As of the last day of each calendar month, the
                      Administrator will, in accordance with Plan Rules, credit
                      the Account of each Participant to whom this clause
                      applies with earnings in an amount equal to the
                      "applicable percentage" of the average daily balance of
                      the Account for the month. The applicable percentage for a
                      given month is the monthly equivalent of the annual prime
                      rate of interest in effect on the first banking day of the
                      month as reported in The Wall Street Journal or other
                      national financial publication selected by the
                      Administrator.

3.4     VESTING.

        Each Participant always has a fully vested nonforfeitable interest in
his or her Account.


                                       5

   9

                                   ARTICLE 4.
                                  DISTRIBUTION

4.1     DISTRIBUTION TO PARTICIPANT BEFORE SEVERANCE OR DISABILITY.

        (a)    In-Service Distributions.

               (i)    If a Participant elected pursuant to Section 4.1(a) of the
                      Prior Plan to receive a distribution of all or any portion
                      of his or her Prior Plan account as of a specified date or
                      dates after January 1, 2001 and prior to his or her
                      Severance date or Disability, the election will apply to
                      the Participant's Account pursuant to the Plan.

               (ii)   A Participant will be provided with one opportunity to
                      elect to either delay or cancel each date specified in an
                      election described in clause (i). An election pursuant to
                      this clause will not be valid and will not have any effect
                      unless it is made on a properly completed form received by
                      the Administrator before the first day of the calendar
                      year immediately preceding the calendar year that includes
                      the distribution date originally specified. If the
                      Participant made such an election pursuant to Section
                      4.1(a)(iii) of the Prior Plan before January 1, 2001, the
                      election will apply to the Participant's Account pursuant
                      to the Plan and the Participant is not eligible to make an
                      election pursuant to this clause (ii).

               (iii)  If the Participant experiences a Severance or Disability
                      before a specified date, the Participant's election
                      pursuant to this subsection will become ineffective on his
                      or her Severance date or Disability and distribution of
                      his or her remaining Account balance will be made pursuant
                      to Section 4.2 or 4.3, as the case may be.

               (iv)   Any distribution pursuant to this subsection will be made
                      in a lump sum cash payment on or as soon as
                      administratively practicable after the date specified by
                      the Participant. If the Participant elected a specific
                      dollar amount, the amount of the distribution will be the
                      specified amount or the balance of the Participant's
                      Account as of the Valuation Date coinciding with or
                      immediately preceding the date on which the payment is
                      made (reduced by the amount of any other distribution from
                      the Account after that Valuation Date), whichever is less.
                      If the Participant elected a specific percentage of the
                      Account, the amount of the distribution will be the
                      specified percentage of the Participant's Account as of
                      the Valuation Date coinciding with or immediately
                      preceding the date on which the payment is made (reduced
                      by the amount of any other distribution from the Account
                      after that Valuation Date).

        (b)    Withdrawals Due to Unforeseeable Emergency.  Prior to a
               Participant's Severance date or Disability, a distribution will
               be made to a Participant from his or her Account if the
               Participant submits a written distribution request to the


                                       6

   10

               Administrator and the Administrator determines that the
               Participant has experienced an Unforeseeable Emergency. The
               amount of the distribution may not exceed the lesser of (i) the
               amount necessary to satisfy the emergency, as determined by the
               Administrator, and (ii) the balance of the Participant's Account
               as of the Valuation Date coinciding with or immediately preceding
               the date of the distribution (reduced by the amount of any other
               distribution from the Account after that Valuation Date). The
               distribution will be made in the form of a lump sum cash payment
               as soon as administratively practicable after the Administrator's
               determination that the Participant has experienced an
               Unforeseeable Emergency.

        (c)    Accelerated Distribution.  Prior to a Participant's Severance
               date or Disability, the Participant may elect to receive a
               distribution in an amount equal to 90 percent of his or her
               Account balance as of the Valuation Date coinciding with or
               immediately preceding the date on which the payment is made
               (reduced by the amount of any other distribution from the Account
               after that Valuation Date), and the remaining 10 percent balance
               of the Account will be permanently forfeited as of that Valuation
               Date. The distribution will be made in the form of a lump sum
               cash payment as soon as administratively practicable after the
               Participant's properly completed written election is filed with
               the Administrator.

        (d)    Reduction of Account Balance. The balance of the Participant's
               Account will be reduced (but not below zero) by the amount of the
               distribution as of the beginning of the next day after the
               Valuation Date coinciding with or last preceding the date of the
               distribution.

4.2     DISTRIBUTION TO PARTICIPANT AFTER SEVERANCE OR DISABILITY.

        (a)    Time.  Distribution to a Participant will be made or commence on
               or as soon as administratively practicable after the date of the
               Participant's Retirement, Disability or other Severance.

        (b)    Form.

               (i)    Severance Before Retirement or Disability.  Upon a
                      Participant's Severance before his or her Retirement or
                      Disability, distribution to the Participant will be made
                      in the form of a lump sum cash payment.

               (ii)   Retirement or Disability.  Upon a Participant's Retirement
                      or Disability, distribution to the Participant will be
                      made in the form of a lump sum cash payment unless (1) the
                      Participant made a written election, on a form provided by
                      the Administrator, to receive his or her distribution in
                      the form of five, 10 or 15 annual installment cash
                      payments and (2) his or her properly completed election
                      form is filed with the Administrator before the first day
                      of the calendar year immediately preceding the calendar
                      year that includes his or her Retirement or Disability.
                      Not more than once during any 12-month period, a
                      Participant may change an election made

                                       7

   11

                      pursuant to this subsection, but the change will not be
                      valid and will not have any effect unless it is made on a
                      properly completed form received by the Administrator
                      before the first day of the calendar year immediately
                      preceding the calendar year that includes the
                      Participant's Retirement or Disability. Until an election
                      becomes effective, it will have no effect on any prior
                      election whether or not such prior election became
                      effective before or after the Administrator received the
                      later election. When an election becomes effective, it
                      will automatically supersede any prior election then in
                      effect. An election or change made pursuant to Section
                      4.2(b)(ii) of the Prior Plan will be deemed to be an
                      election or change made pursuant to this Section
                      4.2(b)(ii).

        (c)    Amount.

               (i)    Lump Sum. The amount of a lump sum payment from a
                      Participant's Account will be equal to the balance of the
                      Account as of the Valuation Date coinciding with or
                      immediately preceding the date on which the payment is
                      made (reduced by the amount of any other distribution from
                      the Account after that Valuation Date).

               (ii)   Installments. The amount of an installment payment from a
                      Participant's Account will be determined by dividing the
                      balance of the Account as of the Valuation Date coinciding
                      with or immediately preceding the date on which the
                      payment is made (reduced by the amount of any other
                      distribution from the Account after that Valuation Date)
                      by the total number of remaining payments (including the
                      current payment). The undistributed portion of an Account
                      distributed in the form of installment payments will
                      continue to be credited with earnings in accordance with
                      Section 3.3.

        (d)    Special Rules.  The provisions of this subsection apply
               notwithstanding Subsection (a), (b) or (c) or any election by a
               Participant to the contrary.

               (i)    Divestitures.

                      (1)    If some or all of the assets of a Participating
                             Employer are sold or otherwise disposed of to an
                             unrelated third party, the Administrator may, but
                             is not required to, cause to be distributed the
                             Account of any Participant whose employment with
                             all Affiliates is terminated in connection with the
                             sale or disposition unless the acquirer adopts a
                             successor plan which is substantially similar to
                             the Plan in all material respects and expressly
                             assumes the Participating Employer's obligation to
                             provide benefits to the Participant, in which case
                             the Participating Employer will cease to have any
                             obligation to provide benefits to the Participant
                             pursuant to the Plan as of the effective date of
                             the assumption. Any such distribution will be made
                             in the form of a lump sum cash payment

                                       8

   12

                             as soon as administratively practicable after the
                             date of the sale or disposition. The amount of the
                             payment will be determined in accordance with
                             Subsection (c).

                      (2)    If a Participating Employer ceases to be an
                             Affiliate, unless otherwise provided in an
                             agreement between an Affiliate and the
                             Participating Employer or an Affiliate and an
                             unrelated third-party acquirer:

                             (A)    a Participant who is employed with the
                                    Participating Employer or

                             (B)    a Participant who is not employed with the
                                    Participating Employer but has an Account
                                    balance attributable to service with the
                                    Participating Employer

                             will not become entitled to his or her Account
                             balance attributable to service with the
                             Participating Employer solely as a result of the
                             cessation and the Participating Employer will,
                             after the date on which it ceases to be an
                             Affiliate, continue to be solely responsible to
                             provide benefits to the Participant at least equal
                             to the balance of the Account as of the effective
                             date of the cessation and as thereafter increased
                             by deferral credits relating to the period before
                             the effective date and earnings credits pursuant to
                             Section 3.3.

               (ii)   Withdrawals Due to Unforeseeable Emergency.  If a
                      Participant is receiving installment payments, a
                      distribution will be made to a Participant from his or her
                      Account if the Participant submits a written distribution
                      request to the Administrator and the Administrator
                      determines that the Participant has experienced an
                      Unforeseeable Emergency. The amount of the distribution
                      may not exceed the lesser of (a) the amount necessary to
                      satisfy the emergency, as determined by the Administrator,
                      and (b) the balance of the Participant's Account as of the
                      Valuation Date coinciding with or immediately preceding
                      the date of the distribution (reduced by the amount of any
                      other distribution from the Account after that Valuation
                      Date). The distribution will be made in the form of a lump
                      sum cash payment as soon as administratively practicable
                      after the Administrator's determination that the
                      Participant has experienced an Unforeseeable Emergency.

               (iii)  Accelerated Distribution.  If a Participant is receiving
                      installment payments, the Participant may elect to receive
                      a distribution in an amount equal to 90 percent of his or
                      her Account balance as of the Valuation Date coinciding
                      with or immediately preceding the date on which the
                      payment is made (reduced by the amount of any other
                      distribution from the Account after that Valuation Date),
                      and the remaining 10 percent balance of the Account will
                      be permanently forfeited as of that Valuation Date.


                                       9

   13

                      The distribution will be made in the form of a lump sum
                      cash payment as soon as administratively practicable after
                      the Participant's properly completed written election is
                      filed with the Administrator.

        (e)    Reduction of Account Balance. The balance of the Account from
               which a distribution is made will be reduced (but not below zero)
               by the amount of the distribution as of the beginning of the next
               day after the Valuation Date coinciding with or last preceding
               the date of the distribution.

4.3     DISTRIBUTION TO BENEFICIARY.

        (a)    Time. Distribution to a Beneficiary will be made as soon as
               administratively practicable after the date on which the
               Administrator receives notice of the Participant's death and
               determines that the Beneficiary is entitled to receive the
               distribution.

        (b)    Form. Distribution to the Participant's Beneficiary will be made
               in the form of a lump sum cash payment whether or not payments
               had commenced to the Participant in the form of installments
               prior to his or her death.

        (c)    Amount.  The amount of a lump sum payment will be equal to the
               balance of the Participant's Account as of the Valuation Date
               coinciding with or immediately preceding the date on which the
               payment is made (reduced by the amount of any other distribution
               from the Account after that Valuation Date). In addition, if the
               Participant dies before his or her Severance date or Disability
               and the Administrator determines that the death is not
               attributable to the Participant's suicide committed during the
               first calendar year beginning after December 31, 1998 for which
               deferrals were credited to the Participant's account under the
               Prior Plan or are credited to the Participant's Account under the
               Plan pursuant to Section 3.2(a) or the next following calendar
               year, the Beneficiary will also receive an amount equal to twice
               the Participant's total deferrals pursuant to the Prior Plan and
               the Plan for all years (exclusive of earnings on the deferrals).
               If there are multiple Beneficiaries, the total amount distributed
               will be divided among the Beneficiaries as directed by the
               Participant in the Beneficiary designation.

        (d)    Reduction of Account Balance. The balance of the Account from
               which a distribution is made will be reduced (but not below zero)
               by the amount of the distribution as of the beginning of the next
               day after the Valuation Date coinciding with or immediately
               preceding the date of the distribution.

        (e)    Beneficiary Designation.

               (i)    Each Participant may designate, on a form furnished by
                      the Administrator, one or more primary Beneficiaries or
                      alternative Beneficiaries to receive all or a specified
                      part of his or her Account, and the additional amount
                      described in Subsection (c), after his or her death, and
                      the Participant may change or revoke any such designation
                      from time to time. No such



                                       10

   14

                      designation, change or revocation is effective unless
                      executed by the Participant and received by the
                      Administrator during the Participant's lifetime. No
                      designation of a Beneficiary other than the Participant's
                      spouse is effective unless the spouse consents to the
                      designation or the Administrator determines that spousal
                      consent cannot be obtained because the spouse cannot
                      reasonably be located or is legally incapable of
                      consenting. The consent must be in writing, must
                      acknowledge the effect of the election and must be
                      witnessed by a notary public. The consent is effective
                      only with respect to the Beneficiary or class of
                      Beneficiaries so designated and only with respect to the
                      spouse who so consented.

               (ii)   If a Participant--

                      (1)    fails to designate a Beneficiary, or

                      (2)    revokes a Beneficiary designation without naming
                             another Beneficiary, or

                      (3)    designates one or more Beneficiaries, none of whom
                             survives the Participant or exists at the time in
                             question,

                      for all or any portion of his or her Account, such Account
                      or portion will be paid to the Participant's surviving
                      spouse or, if the Participant is not survived by a spouse,
                      to the representative of the Participant's estate.

               (iii)  The automatic Beneficiaries specified above and, unless
                      the designation otherwise specifies, the Beneficiaries
                      designated by the Participant, become fixed as of the
                      Participant's death so that, if a Beneficiary survives the
                      Participant but dies before the receipt of the payment due
                      such Beneficiary, the payment will be made to the
                      representative of such Beneficiary's estate. Any
                      designation of a Beneficiary by name that is accompanied
                      by a description of relationship or only by statement of
                      relationship to the Participant is effective only to
                      designate the person or persons standing in such
                      relationship to the Participant at the Participant's
                      death.

               (iv)   A beneficiary designation made pursuant to the provisions
                      of the Prior Plan and in effect at the close of business
                      on December 31, 2000 will remain in effect under the Plan
                      until changed or revoked pursuant to the Plan.

4.4     NONDEDUCTIBILITY.

        If the Company determines in good faith that there is a reasonable
likelihood that any compensation paid to a Participant by an Affiliate for a
taxable year of the Affiliate would not be deductible by the Affiliate solely by
reason of the limitation under Code section 162(m), to the extent deemed
necessary by the Company to ensure that the entire amount of any distribution to
the Participant pursuant to the Plan is deductible, notwithstanding any other
provision of the Plan

                                       11

   15

or any election by the Participant to the contrary, all or any portion of the
distribution may be deferred. Any amounts deferred pursuant to this section will
continue to be credited with earnings in accordance with Section 3.3. The
deferred amounts and earnings thereon will be distributed to the Participant, or
to his or her Beneficiary in the case of the Participant's death, at the
earliest possible date, as determined by the Company in good faith, on which the
deductibility of compensation paid or payable to the Participant for the taxable
year of the Affiliate during which the distribution is made will not be limited
by Code section 162(m).

4.5     PAYMENT IN EVENT OF INCAPACITY.

        If any individual entitled to receive any payment under the Plan is, in
the judgment of the Administrator, physically, mentally or legally incapable of
receiving or acknowledging receipt of the payment, and no legal representative
has been appointed for the individual, the Administrator may (but is not
required to) cause the payment to be made to any one or more of the following as
may be chosen by the Administrator: the Beneficiary (in the case of the
incapacity of a Participant); the institution maintaining the individual; a
custodian for the individual under the Uniform Transfers to Minors Act of any
state; or the individual's spouse, children, parents, or other relatives by
blood or marriage. The Administrator is not required to see to the proper
application of any such payment and the payment completely discharges all claims
under the Plan against the Participating Employer, the Plan and Trust to the
extent of the payment.

4.6     SUSPENSION.

        If a Participant who is receiving installment payments again becomes an
employee of an Affiliate, the installment payments will stop. The remaining
balance of the Participant's Account will be distributed upon the Participant's
subsequent Severance or Disability in accordance with Article 4 without regard
to any election made pursuant to Section 4.2(b)(ii) prior to the Participant's
last preceding Retirement or Disability.


                                       12

   16

                                   ARTICLE 5.
                     SOURCE OF PAYMENTS; NATURE OF INTEREST

5.1     ESTABLISHMENT OF TRUST.

        A Participating Employer may establish a Trust, or may be covered by a
Trust established by another Participating Employer, with an independent
corporate trustee. The Trust must (a) be a grantor trust with respect to which
the Participating Employer is treated as the grantor for purposes of Code
section 677, (b) not cause the Plan to be funded for purposes of Title I of
ERISA and (c) provide that the Trust assets will, upon the insolvency of a
Participating Employer, be used to satisfy claims of the Participating
Employer's general creditors. The Participating Employers may from time to time
transfer to the Trust cash, marketable securities or other property acceptable
to the Trustee in accordance with the terms of the Trust.

5.2     SOURCE OF PAYMENTS.

        (a)    Each Participating Employer will pay, from its general assets,
               the portion of any benefit pursuant to Article 4 or Section 6.3
               or 6.4 attributable to a Participant's Account with respect to
               that Participating Employer, and all costs, charges and expenses
               relating thereto.

        (b)    The Trustee will make distributions to Participants and
               Beneficiaries from the Trust in satisfaction of a Participating
               Employer's obligations under the Plan in accordance with the
               terms of the Trust. The Participating Employer is responsible for
               paying any benefits attributable to a Participant's Account with
               respect to that Participating Employer that are not paid by the
               Trust.

5.3     STATUS OF PLAN.

        Nothing contained in the Plan or Trust is to be construed as providing
for assets to be held for the benefit of any Participant or any other person or
persons to whom benefits are to be paid pursuant to the terms of the Plan, the
Participant's or other person's only interest under the Plan being the right to
receive benefits in accordance with the terms of the Plan. The Trust is
established only for the convenience of the Participating Employers and the
Participants, and no Participant has any interest in the assets of the Trust. To
the extent the Participant or any other person acquires a right to receive
benefits under the Plan or the Trust, such right is no greater than the right of
any unsecured general creditor of the Participating Employer.

5.4     NON-ASSIGNABILITY OF BENEFITS.

        The benefits payable under the Plan and the right to receive future
benefits under the Plan may not be anticipated, alienated, sold, transferred,
assigned, pledged, encumbered or subjected to any charge or legal process.


                                       13

   17

                                   ARTICLE 6.
                             AMENDMENT, TERMINATION

6.1     AMENDMENT.

        (a)    Right.  The Company reserves the right to amend the Plan at any
               time to any extent that it may deem advisable.

        (b)    Method. To be effective, an amendment must be stated in a written
               instrument approved in advance or ratified by the Company's Board
               and executed in the name of the Company by two of its officers.

        (c)    Binding Effect. An amendment adopted in accordance with
               Subsection (b) is binding on all interested parties as of the
               effective date stated in the amendment; provided, however, that
               no amendment may retroactively deprive any Participant, or the
               Beneficiary of a deceased Participant, of any benefit to which he
               or she is entitled under the terms of the Plan in effect
               immediately prior to the effective date of the amendment or the
               date on which the amendment is adopted, whichever is later.

        (d)    Prime Rate Investment Fund. An amendment which changes the method
               of crediting earnings described in Section 3.3(g)(ii) will be
               effective only if the Company's Board determines in good faith
               that on the date on which the amendment is approved by the Board,
               it is reasonably likely that, in the long run, the new method
               will not result in materially lower earnings credits than the
               method described in Section 3.3(g)(ii).

        (e)    Applicability to Participants Who Have Experienced a Severance or
               Disability. The provisions of the Plan in effect on a
               Participant's Severance date or Disability will, except as
               otherwise expressly provided by a subsequent amendment, continue
               to apply to such Participant.

6.2     TERMINATION OF PARTICIPATION.

        Notwithstanding any other provision of the Plan to the contrary, if
determined by the Administrator to be necessary to ensure that the Plan is
exempt from ERISA to the extent contemplated by Section 1.3, or upon the
Administrator's determination that a Participant's interest in the Plan has been
or is likely to be includable in the Participant's gross income for federal
income tax purposes prior to the actual payment of benefits pursuant to the
Plan, the Administrator may take any or all of the following steps:

        (a)    terminate the Participant's future participation in the Plan;

        (b)    cause the Participant's entire interest in the Plan to be
               distributed to the Participant in the form of an immediate lump
               sum cash payment in an amount determined in accordance with
               Section 4.2(c); and/or


                                       14

   18

        (c)    transfer the benefits that would otherwise be payable pursuant to
               the Plan for all or any of the Participants to a new plan that is
               similar in all material respects (other than those which require
               the action in question to be taken.)

6.3     TERMINATION.

        The Company reserves the right to terminate the Plan in its entirety at
any time. Each Participating Employer reserves the right to cease its
participation in the Plan at any time. The Plan will terminate in its entirety
or with respect to a particular Participating Employer as of the date specified
by the Company or such Participating Employer in a written instrument adopted in
the same manner as an amendment. Upon the termination of the Plan in its
entirety or with respect to any Participating Employer, the Company or
Participating Employer, as the case may be, will either cause (a) any benefits
to which Participants have become entitled prior to the effective date of the
termination to continue to be paid in accordance with the provisions of Article
4 or (b) the entire interest in the Plan of any or all Participants, or the
Beneficiaries of any or all deceased Participants, to be distributed in the form
of an immediate lump sum cash payment in an amount determined in accordance with
Section 4.2(c).


                                       15

   19

                                   ARTICLE 7.
                  DEFINITIONS, CONSTRUCTION AND INTERPRETATION

        The definitions and rules of construction and interpretation set forth
in this article apply in construing the Plan unless the context otherwise
indicates.

7.1     ACCOUNT.

        "Account" means the bookkeeping account maintained with respect to a
Participant pursuant to Section 3.1.

7.2     ADMINISTRATOR.

        "Administrator" means the Company or the person to whom administrative
duties are delegated pursuant to the provisions of Section 8.1, as the context
requires.

7.3     AFFILIATE.

        "Affiliate" means the Company and any corporation at least a majority of
whose outstanding securities ordinarily having the right to vote at elections of
directors is owned, directly or indirectly, by the Company.

7.4     BOARD.

        "Board" means the board of directors of the Affiliate in question. When
the Plan provides for an action to be taken by the Board, the action may be
taken by any committee or individual authorized to take such action pursuant to
a proper delegation by the board of directors in question.

7.5     BENEFICIARY.

        "Beneficiary" with respect to a Participant is the person designated or
otherwise determined under the provisions of Section 4.3(e) as the distributee
of benefits payable after the Participant's death. A person designated or
otherwise determined to be a Beneficiary under the terms of the Plan has no
interest in or right under the Plan until the Participant in question has died.
A Beneficiary will cease to be such on the day on which all benefits to which
he, she or it is entitled under the Plan have been distributed.

7.6     CODE.

        "Code" means the Internal Revenue Code of 1986, as amended. Any
reference to a specific provision of the Code includes a reference to that
provision as it may be amended from time to time and to any successor provision.

7.7     COMPANY.

        "Company" means Ceridian Corporation, a Delaware corporation, to be
renamed Arbitron Inc.


                                       16

   20

7.8     CROSS REFERENCE.

        References within a section of the Plan to a particular subsection refer
to that subsection within the same section and references within a section or
subsection to a particular clause refer to that clause within the same section
or subsection, as the case may be.

7.9     DISABILITY.

        "Disability" means a disability for which a Participant is receiving
disability benefits pursuant to a long-term disability plan maintained by an
Affiliate or as a result of which the Participant is certified as being disabled
by the Social Security Administration and is receiving disability benefits under
the disability provisions of the Social Security Act. The Participant must
provide the Administrator with proof of his or her Disability that is
satisfactory to the Administrator. For purposes of the Plan, a Disability occurs
on the date following the Administrator's receipt of such proof on which the
Administrator determines that the Participant has experienced a Disability.

7.10    ERISA.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. Any reference to a specific provision of ERISA includes a reference to
that provision as it may be amended from time to time and to any successor
provision.

7.11    GOVERNING LAW.

        To the extent that state law is not preempted by the provisions of
ERISA, or any other laws of the United States, all questions pertaining to the
construction, validity, effect and enforcement of the Plan will be determined in
accordance with the internal, substantive laws of the State of Minnesota without
regard to the conflict of law rules of the State of Minnesota or any other
jurisdiction.

7.12    HEADINGS.

        The headings of articles and sections are included solely for
convenience of reference; if there exists any conflict between such headings and
the text of the Plan, the text will control.

7.13    NUMBER AND GENDER.

        Wherever appropriate, the singular may be read as the plural, the plural
may be read as the singular and one gender may be read as the other gender.

7.14    PARTICIPANT.

        "Participant" means an individual who (a) on December 31, 2000, was a
participant in the Prior Plan and whose account balance under the Prior Plan as
of the close of business on December 31, 2000 (other than the portion of such
account balance, if any, scheduled to be distributed pursuant to the Prior Plan
on January 1, 2001) was credited to his or her Account as of January 1, 2001 and
(b) has not ceased to be a Participant pursuant to Section 2.3.


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7.15    PARTICIPATING EMPLOYER.

        "Participating Employer" means the Company and any other Affiliate that
has adopted the Plan, or all of them collectively, as the context requires. An
Affiliate will cease to be a Participating Employer upon a termination of the
Plan as to its employees and the satisfaction in full of all of its obligations
under the Plan or upon its ceasing to be an Affiliate.

7.16    PLAN.

        "Plan" means the Arbitron Executive Investment Plan, as from time to
time amended or restated.

7.17    PLAN RULES.

        "Plan Rules" are rules, policies, practices or procedures adopted by the
Administrator pursuant to Section 8.2.

7.18    PRIOR PLAN.

        "Prior Plan" means the Ceridian Corporation Executive Investment Plan.

7.19    RETIREMENT.

        "Retirement" means a Participant's Severance after his or her

        (a)    attainment of age 65 or

        (b)    attainment of age 55 and completion of at least 15 years of
               "vesting service" (within the meaning of the Company's 401(k)
               Plan as in effect at the time in question).

7.20    SEVERANCE.

        "Severance" means the date on which a Participant has completely severed
his or her employment relationship with all Affiliates.

7.21    TRUST.

        "Trust" means any trust or trusts established by a Participating
Employer pursuant to Section 5.1.

7.22    TRUSTEE.

        "Trustee" means the independent corporate trustee or trustees that at
the relevant time has or have been appointed to act as Trustee of the Trust.


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7.23    UNFORESEEABLE EMERGENCY.

        "Unforeseeable Emergency" means an unanticipated emergency that is
caused by an event beyond the Participant's or Beneficiary's control resulting
in a severe financial hardship that cannot be satisfied through other means. The
existence of an unforeseeable emergency will be determined by the Administrator.

7.24    VALUATION DATE.

        "Valuation Date" means, prior to the first Valuation Date in calendar
year 2001, the close of business on December 31, 2000 with respect to a
Participant's account balance under the Prior Plan credited to his or her
Account as of January 1, 2001, and, thereafter, the last day of each calendar
month on which the New York Stock Exchange is open for regular business and any
interim dates selected by the Administrator.


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                                   ARTICLE 8.
                                 ADMINISTRATION

8.1     ADMINISTRATOR.

        The general administration of the Plan and the duty to carry out its
provisions is vested in the Company. The Company may delegate such duty or any
portion thereof to a named person or persons and may from time to time revoke
such authority and delegate it to another person or persons.

8.2     PLAN RULES AND REGULATIONS.

        The Administrator has the discretionary power and authority to make such
Plan Rules as the Administrator determines to be consistent with the terms, and
necessary or advisable in connection with the administration, of the Plan and to
modify or rescind any such Plan Rules.

8.3     ADMINISTRATOR'S DISCRETION.

        The Administrator has the discretionary power and authority to make all
determinations necessary for administration of the Plan, except those
determinations that the Plan requires others to make, and to construe,
interpret, apply and enforce the provisions of the Plan and Plan Rules whenever
necessary to carry out its intent and purpose and to facilitate its
administration, including, without limitation, the discretionary power and
authority to remedy ambiguities, inconsistencies, omissions and erroneous
benefit calculations. In the exercise of its discretionary power and authority,
the Administrator will treat all similarly situated persons uniformly.

8.4     SPECIALIST'S ASSISTANCE.

        The Administrator may retain such actuarial, accounting, legal, clerical
and other services as may reasonably be required in the administration of the
Plan, and may pay reasonable compensation for such services. All costs of
administering the Plan will be paid by the Participating Employers.

8.5     INDEMNIFICATION.

        The Participating Employers jointly and severally agree to indemnify and
hold harmless, to the extent permitted by law, each director, officer, and
employee of any Affiliates against any and all liabilities, losses, costs and
expenses (including legal fees) of every kind and nature that may be imposed on,
incurred by, or asserted against such person at any time by reason of such
person's services in connection with the Plan, but only if such person did not
act dishonestly or in bad faith or in willful violation of the law or
regulations under which such liability, loss, cost or expense arises. The
Participating Employers have the right, but not the obligation, to select
counsel and control the defense and settlement of any action for which a person
may be entitled to indemnification under this provision.


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8.6     BENEFIT CLAIM PROCEDURE.

        (a)    If a request for a benefit by a Participant or Beneficiary of a
               deceased Participant is denied in whole or in part, he or she
               may, not later than 30 days after the denial, file with the
               Administrator a written claim objecting to the denial.

        (b)    The Administrator, not later than 90 days after receipt of such
               claim, will render a written decision to the claimant on the
               claim. If the claim is denied, in whole or in part, such decision
               will include the reason or reasons for the denial; a reference to
               the Plan provisions on which the denial is based; a description
               of any additional material or information, if any, necessary for
               the claimant to perfect his or her claim; an explanation as to
               why such information or material is necessary; and an explanation
               of the Plan's claim procedure.

        (c)    The claimant may file with the Administrator, not later than 60
               days after receiving the Administrator's written decision, a
               written notice of request for review of the Administrator's
               decision, and the claimant or his or her representative may
               thereafter review relevant Plan documents which relate to the
               claim and may submit written comments to the Administrator.

        (d)    Not later than 60 days after receipt of such review request, the
               Administrator will render a written decision on the claim, which
               decision will include the specific reasons for the decision,
               including a reference to the Plan's specific provisions where
               appropriate.

        (e)    The foregoing 90- and 60-day periods during which the
               Administrator must respond to the claimant may be extended by up
               to an additional 90- or 60 days, respectively, if special
               circumstances beyond the Administrator's control so require and
               notice of such extension is given to the claimant prior to the
               expiration of such initial 90- or 60-day period, as the case may
               be.

        (f)    A Participant or Beneficiary must exhaust the procedure described
               in this section before making any claim of entitlement to
               benefits pursuant to the Plan in any court or other proceeding.

8.7     DISPUTES.

        (a)    In the case of a dispute between a Participant or his or her
               Beneficiary and a Participating Employer, the Administrator or
               other person relating to or arising from the Plan, the United
               States District Court for the District of Minnesota is a proper
               venue for any action initiated by or against the Participating
               Employer, Administrator or other person and such court will have
               personal jurisdiction over any Participant or Beneficiary named
               in the action.

        (b)    Regardless of where an action relating to or arising from the
               participation in the Plan by any Participant is pending, the law
               as stated and applied by the United States Court of Appeals for
               the Eighth Circuit or the United States District Court for the
               District of Minnesota will apply to and control all actions
               relating to the


                                       21

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               Plan brought against the Plan, a Participating Employer, the
               Administrator or any other person or against any such Participant
               or his or her Beneficiary.



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                                   ARTICLE 9.
                                  MISCELLANEOUS

9.1     WITHHOLDING AND OFFSETS.

        The Participating Employers and the Trustee retain the right to withhold
from any compensation, deferral and/or benefit payment pursuant to the Plan, any
and all income, employment, excise and other tax as the Participating Employers
or Trustee deems necessary and the Participating Employers may offset against
amounts then payable to a Participant or Beneficiary under the Plan any amounts
then owing to the Participating Employers by such Participant or Beneficiary.

9.2     OTHER BENEFITS.

        Neither amounts deferred nor amounts paid pursuant to the Plan
constitute salary or compensation for the purpose of computing benefits under
any other benefit plan, practice, policy or procedure of a Participating
Employer unless otherwise expressly provided thereunder.

9.3     NO WARRANTIES REGARDING TAX TREATMENT.

        The Participating Employers make no warranties regarding the tax
treatment to any person of any deferrals or payments made pursuant to the Plan
and each Participant will hold the Administrator and the Participating Employers
and their officers, directors, employees, agents and advisors harmless from any
liability resulting from any tax position taken in good faith in connection with
the Plan.

9.4     NO RIGHTS TO CONTINUED SERVICE CREATED.

        Neither the establishment of nor participation in the Plan gives any
individual the right to continued employment or limits the right of the
Participating Employer to discharge, transfer, demote, modify terms and
conditions of employment or otherwise deal with any individual without regard to
the effect which such action might have on him or her with respect to the Plan.

9.5     SPECIAL PROVISIONS.

        Special provisions of the Plan applicable only to certain Participants
may be set forth on an exhibit to the Plan adopted in the same manner as an
amendment to the Plan. In the event of a conflict between the terms of the
exhibit and the terms of the Plan, the exhibit controls. Except as otherwise
expressly provided in the exhibit, the generally applicable terms of the Plan
control all matters not covered by the exhibit.

9.6     SUCCESSORS.

        Except as otherwise expressly provided in the Plan, all obligations of
the Participating Employers under the Plan are binding on any successor to the
Participating Employer whether the existence of such successor is the result of
a direct or indirect purchase, merger, consolidation or otherwise of all or
substantially all of the business and/or assets of the Participating Employer.


                                       23

EX-10.14

   1
                                                                   EXHIBIT 10.14

                                  ARBITRON INC.
                      2001 BROAD BASED STOCK INCENTIVE PLAN

1.      Purpose of Plan.

        The purpose of the Arbitron Inc. 2001 Broad Based Stock Incentive Plan
(the "Plan") is to advance the interests of Arbitron Inc., a Delaware
corporation (the "Company") and its Subsidiaries to attract and retain persons
of ability to perform services for the Company and its Subsidiaries by providing
an incentive to such individuals through equity participation in the Company and
by rewarding such individuals who contribute to the achievement by the Company
of its economic objectives.

2.      Definitions.

        The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:

        2.1    "Board" means the Board of Directors of the Company.

        2.2    "Broker Exercise Notice" means a written notice pursuant to
which a Participant, upon exercise of an Option, irrevocably instructs a broker
or dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.

        2.3    "Code" means the Internal Revenue Code of 1986, as amended.

        2.4    "Committee" means the group of individuals administering the
Plan, as provided in Section 3 of the Plan.

        2.5    "Common Stock" means the common stock of the Company, par value
$0.50 per share, or the number and kind of shares of stock or other securities
into which such Common Stock may be changed in accordance with Section 4.4 of
the Plan.

        2.6    "Disability" means the disability of the Participant such as
would entitle the Participant to receive disability income benefits pursuant to
the long-term disability plan of the Company or Subsidiary then covering the
Participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of Section
22(e)(3) of the Code.

        2.7    "Eligible Recipients" means (i) all employees (including, without
limitation, officers and directors who are also employees) of the Company or any
Subsidiary and any non-employee directors, consultants and independent
contractors of the Company or any Subsidiary.

        2.8    "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

        2.9    "Fair Market Value" means, with respect to the Common Stock as of
any date, the closing market price per share of the Common Stock at the end of
the regular trading session, which as of the effective date of this Plan is 4:00
p.m. New York city time, as reported on the New York Stock Exchange Composite
Tape on that date (or, if no shares were traded or quoted on such date, as


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of the next preceding date on which there was such a trade or quote) or such
other methodology as the Committee deems appropriate.

        2.10   "Incentive Award" means an Optionor Restricted Stock Award
granted to an Eligible Recipient pursuant to the Plan.

        2.11   "Option" means a Non-Statutory Stock Option granted to an
Eligible Recipient pursuant to Section 6 of the Plan.

        2.12   "Participant" means an Eligible Recipient who receives one or
more Incentive Awards under the Plan.

        2.13   "Previously Acquired Shares" means shares of Common Stock that
are already owned by the Participant or, with respect to any Incentive Award,
that are to be issued upon the grant, exercise or vesting of such Incentive
Award.

        2.14   "Restricted Stock Award" means an award of Common Stock or Stock
Units granted to an Eligible Recipient pursuant to Section 7 of the Plan that is
subject to the restrictions on transferability and the risk of forfeiture
imposed by the provisions of such Section 7.

        2.15   "Retirement" means the termination (other than for cause or by
reason of death or Disability) of a Participant's employment or other service on
or after the date on which the Participant has attained the age of 55 and has
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 the Participant,
provided that if the Participant is not covered by any such plan or practice,
the Participant will be deemed to be covered by the Company's plan or practice
for purposes of this determination).

        2.16   "Securities Act" means the Securities Act of 1933, as amended.

        2.17   "Stock Unit" means a bookkeeping entry representing the
equivalent of one share of Common Stock that is payable in the form of Common
Stock, cash or any combination of the foregoing.

        2.18   "Subsidiary" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.

        2.19   "Tax Date" means the date any withholding tax obligation arises
under the Code for a Participant with respect to an Incentive Award.

3.      Plan Administration.

        3.1 The Committee. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, the Plan will be
administered by a committee (the "Committee") consisting solely of not less than
two members of the Board who are "Non-Employee Directors" within the meaning of
Rule 16b-3 under the Exchange Act. To the extent consistent with corporate law,
the Committee may delegate to any directors or officers of the Company the
duties, power and authority of the Committee under the Plan pursuant to such
conditions or limitations as

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the Committee may establish; provided, however, that only the Committee may
exercise such duties, power and authority with respect to Eligible Recipients
who are subject to Section 16 of the Exchange Act. Each determination,
interpretation or other action made or taken by the Committee pursuant to the
provisions of the Plan will be conclusive and binding for all purposes and on
all persons, and no member of the Committee will be liable for any action or
determination made in good faith with respect to the Plan or any Incentive Award
granted under the Plan.

        3.2    Authority of the Committee.

               (a)    In accordance with and subject to the provisions of the
        Plan, the Committee will have the authority to determine all provisions
        of Incentive Awards as the Committee may deem necessary or desirable and
        as consistent with the terms of the Plan, including, without limitation,
        the following: (i) the Eligible Recipients to be selected as
        Participants; (ii) the nature and extent of the Incentive Awards to be
        made to each Participant (including the number of shares of Common Stock
        to be subject to each Incentive Award, any exercise price, the manner in
        which Incentive Awards will vest or become exercisable and whether
        Incentive Awards will be granted in tandem with other Incentive Awards)
        and the form of written agreement, if any, evidencing such Incentive
        Award; (iii) the time or times when Incentive Awards will be granted;
        (iv) the duration of each Incentive Award; and (v) the restrictions and
        other conditions to which the payment or vesting of Incentive Awards may
        be subject. In addition, the Committee will have the authority under the
        Plan in its sole discretion to pay the economic value of any Incentive
        Award in the form of cash, Common Stock, Stock Units or any combination
        of the foregoing.

               (b)    Except as otherwise provided in the remainder of this
        Section 3.2(b), the Committee will have the authority under the Plan to
        amend or modify the terms of any outstanding Incentive Award in any
        manner, including, without limitation, the authority to modify the
        number of shares or other terms and conditions of an Incentive Award,
        extend the term of an Incentive Award or accelerate the exercisability
        or vesting or otherwise terminate any restrictions relating to an
        Incentive Award; provided, however that the amended or modified terms
        are permitted by the Plan as then in effect and that any Participant
        adversely affected by such amended or modified terms has consented to
        such amendment or modification.

               (c)    In the event of (i) any reorganization, merger,
        consolidation, recapitalization, liquidation, reclassification, stock
        dividend, stock split, combination of shares, rights offering,
        extraordinary dividend or divestiture (including a spin-off) or any
        other similar change in corporate structure or shares, (ii) any
        purchase, acquisition, sale or disposition of a significant amount of
        assets or a significant business, (iii) any change in accounting
        principles or practices, or (iv) any other similar change, in each case
        with respect to the Company (or any Subsidiary or division thereof) or
        any other entity whose performance is relevant to the grant or vesting
        of an Incentive Award, the Committee (or, if the Company is not the
        surviving corporation in any such transaction, the board of directors of
        the surviving corporation) may, without the consent of any affected
        Participant, amend or modify the grant or vesting criteria of any
        outstanding Incentive Award that is based in whole or in part on the
        financial performance of the Company (or any Subsidiary or division
        thereof) or such other entity so as equitably to reflect such event,
        with the desired result that the criteria for evaluating such financial
        performance of the Company or such other entity will be substantially
        the same (in the sole discretion of the Committee or the board of

                                       3

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        directors of the surviving corporation) following such event as prior to
        such event; provided, however, that the amended or modified terms are
        permitted by the Plan as then in effect.

               (d)    The Committee may permit or require the deferral of any
        payment, issuance or other settlement of an Incentive Award subject to
        such rules and procedures as the Committee may establish, including the
        conversion of such payment, issuance or other settlement into Options or
        Stock Units and the payment or crediting of interest, dividends or
        dividend equivalents.

4.      Shares Available for Issuance.

        4.1    Maximum Number of Shares Available. Subject to adjustment as
provided in Section 4.4 of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be 1,000,000
shares. The shares available for issuance under the Plan may, at the election of
the Committee, be either treasury shares or shares authorized but unissued, and,
if treasury shares are used, all references in the Plan to the issuance of
shares will, for corporate law purposes, be deemed to mean the transfer of
shares from treasury.

        4.2    Calculation of Shares Available. Shares of Common Stock that are
issued under the Plan or that are subject to outstanding Incentive Awards will
be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. To the extent that any shares of Common
Stock that are subject to an Incentive Award under the Plan (a) are not issued
to a Participant due to the fact that such Incentive Award lapses, expires, is
forfeited or for any reason is terminated unexercised or unvested, or is settled
or paid in cash or (b) are used to satisfy any exercise price or withholding
obligations, such shares will automatically again become available for issuance
under the Plan. In addition, to the extent that a Participant tenders (either by
actual delivery or by attestation) shares of Common Stock already owned by the
Participant to the Company in satisfaction of any exercise price or withholding
tax obligations, such shares will automatically again become available for
issuance under the Plan.

        4.3    Additional Limitations. Notwithstanding any other provisions of
the Plan to the contrary and subject, in each case, to adjustment as provided in
Section 4.4 of the Plan, no more than 300,000 shares of Common Stock may be
issued under the Plan with respect to Restricted Stock Awards that are not
granted in lieu of cash compensation that would otherwise be payable to
Participants.

        4.4    Adjustments to Shares and Incentive Awards. 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 similar 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) will make
appropriate adjustments (which determination will be conclusive) as to the
number and kind of securities or other property (including cash) available for
issuance or payment under the Plan and, in order to prevent dilution or
enlargement of the rights of Participants, (a) the number and kind of securities
or other property (including cash) subject to outstanding Options, and (b) the
exercise price of outstanding Options.


                                       4

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5.      Participation.

        Participants in the Plan will include those Eligible Recipients who, in
the judgment of the Committee, have contributed, are contributing or are
expected to contribute to the achievement of economic objectives of the Company
or its Subsidiaries. Eligible Recipients may be granted from time to time one or
more Incentive Awards, singly or in combination or in tandem with other
Incentive Awards, as may be determined by the Committee in its sole discretion.
Incentive Awards will be deemed to be granted as of the date specified in the
grant resolution of the Committee, which date will be the date of any related
agreement with the Participant.

6.      Options.

        6.1    Grant. An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion and reflected in the award agreement evidencing
such Option.

        6.2    Exercise Price. The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in its discretion
at the time of the Option grant; provided, however, that such price will not be
less than 100% of the Fair Market Value of one share of Common Stock on the date
of grant.

        6.3    Exercisability and Duration. An Option will become exercisable at
such times and in such installments as may be determined by the Committee in its
sole discretion at the time of grant. An Option will expire five (5) years after
the date of grant unless otherwise provided in the award agreement evidencing
the Option.

        6.4    Payment of Exercise Price. The total purchase price of the shares
to be purchased upon exercise of an Option will be paid entirely in cash
(including check, bank draft or money order); provided, however, that the
Committee, in its sole discretion and upon terms and conditions established by
the Committee, may allow such payments to be made, in whole or in part, by
tender of a Broker Exercise Notice, Previously Acquired Shares (including
through delivery of a written attestation of ownership of such Previously
Acquired Shares if permitted, and on terms acceptable, to the Committee in its
sole discretion), a full recourse promissory note (on terms acceptable to the
Committee in its sole discretion) or by a combination of such methods.

        6.5    Manner of Exercise. An Option may be exercised by a Participant
in whole or in part from time to time, subject to the conditions contained in
the Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission or through the mail of written notice of
exercise to the Company, and by paying in full the total exercise price for the
shares of Common Stock to be purchased in accordance with Section 6.4 of the
Plan.

7.      Restricted Stock Awards.

        7.1    Grant. An Eligible Recipient may be granted one or more
Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be
subject to such terms and conditions, consistent with the provisions of the
Plan, as may be determined by the Committee in its sole discretion and reflected
in the award agreement evidencing such Restricted Stock Award. The Committee may
impose such restrictions or conditions, not inconsistent with the provisions of
the


                                       5

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Plan, to the vesting of such Restricted Stock Awards as it deems appropriate,
including, without limitation, that the Participant remain in the continuous
employ or service of the Company or a Subsidiary for a certain period or that
the Participant or the Company (or any Subsidiary or division thereof) satisfy
certain performance criteria.

        7.2    Rights as a Stockholder; Transferability. Except as provided in
Sections 7.1, 7.3 and 13.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common Stock
issued to the Participant as a Restricted Stock Award under this Section 7 upon
the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.

        7.3    Dividends and Distributions. Unless the Committee determines
otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant of
the Restricted Stock Award), any dividends or distributions (including regular
quarterly cash dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will be subject to the same
restrictions as the shares to which such dividends or distributions relate and
will be paid currently to the Participant. In the event the Committee determines
not to pay such dividends or distributions currently, the Committee will
determine in its sole discretion whether any interest will be paid on such
dividends or distributions. In addition, the Committee, in its sole discretion,
may require such dividends and distributions to be reinvested (and in such case
the Participants consent to such reinvestment) in shares of Common Stock that
will be subject to the same restrictions as the shares to which such dividends
or distributions relate.

        7.4    Enforcement of Restrictions. To enforce the restrictions referred
to in this Section 7, the Committee may (a) place a legend on the stock
certificates referring to such restrictions and may require Participants, until
the restrictions have lapsed, to keep the stock certificates, together with duly
endorsed stock powers, in the custody of the Company or its transfer agent, or
(b) maintain evidence of stock ownership, together with duly endorsed stock
powers, in a certificateless book-entry stock account with the Company's
transfer agent for its Common Stock.

8.      Effect of Termination of Employment or Other Service. The Committee will
have the authority, in its sole discretion, to determine the effect that
termination of a Participant's employment or other service with the Company and
all Subsidiaries, whether due to death, Disability, Retirement or any other
reason, will have on outstanding Incentive Awards then held by such Participant.

9.      Payment of Withholding Taxes.

        9.1    General Rules. The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts which may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all federal, state and local withholding and employment-related
tax requirements attributable to an Incentive Award, including, without
limitation, the grant, exercise or vesting of, or payment of dividends with
respect to, an Incentive Award, or (b) require the Participant promptly to remit
the amount of such withholding to the Company before taking any action with
respect to an Incentive Award.

        9.2    Special Rules. The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in


                                       6

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part, any legally required withholding or employment-related tax obligation
described in Section 9.1 of the Plan by electing to tender Previously Acquired
Shares, a Broker Exercise Notice or a promissory note (on terms acceptable to
the Committee in its sole discretion), or by a combination of such methods.

10.     Change of Control.

        10.1   Effect of a Change of Control. The Committee will have the
authority, in its sole discretion, to determine whether a change of control of
the Company has or will occur, and the effect that any change of control of the
Company will have on outstanding Incentive Awards then held by such Participant.

        10.2   Authority to Modify Change of Control Provisions. Prior to a
change of control of the Company, unless otherwise provided in the agreement
evidencing the Incentive Award, the Participant will have no rights under this
Section 10, and the Committee will have the authority, in its sole discretion,
to rescind, modify or amend the provisions of this Section 10 without the
consent of any Participant.

11.     Rights of Eligible Recipients and Participants; Transferability.

        11.1   Employment or Service. Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.

        11.2   Rights as a Stockholder. As a holder of Incentive Awards (other
than Restricted Stock Awards), a Participant will have no rights as a
stockholder unless and until such Incentive Awards are exercised for, or paid in
the form of, shares of Common Stock and the Participant becomes the holder of
record of such shares. Except as otherwise provided in the Plan, no adjustment
will be made for dividends or distributions with respect to such Incentive
Awards as to which there is a record date preceding the date the Participant
becomes the holder of record of such shares, except as the Committee may
determine in its discretion.

        11.3   Restrictions on Transfer. Except pursuant to testamentary will or
the laws of descent and distribution and except as expressly permitted by
Section 11.3 of the Plan, no right or interest of any Participant in an
Incentive Award prior to the exercise or vesting of such Incentive Award will be
assignable or transferable, or subjected to any lien, during the lifetime of the
Participant, either voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise. A Participant will, however, be entitled to
designate a beneficiary to receive an Incentive Award upon such Participant's
death. In the event of a Participant's death, payment of any amounts due under
the Plan will be made to, and exercise of any Options (to the extent permitted
pursuant to Section 8of the Plan) will be made by, the Participant's designated
beneficiary. For purposes of the Plan, a "designated beneficiary" will be the
beneficiary or beneficiaries designated by the Participant in a writing filed
with the Committee in such form and at such time as the Committee will require
in its sole discretion. If a Participant fails to designate a beneficiary, or if
the designated beneficiary does not survive the Participant or dies before the
designated beneficiary's exercise of all rights under the Plan, payment of any
amounts due under the Plan will be made to, and exercise of any Options (to the
extent permitted pursuant to Section 8 of the Plan) may be made by, the
Participant's personal representative.

                                       7
   8

        11.4   Non-Exclusivity of the Plan. Nothing contained in the Plan is
intended to modify or rescind any previously approved compensation plans or
programs of the Company or create any limitations on the power or authority of
the Board to adopt such additional or other compensation arrangements as the
Board may deem necessary or desirable.

12.     Securities Law and Other Restrictions.

        Notwithstanding any other provision of the Plan or any agreements
entered into pursuant to the Plan, the Company will not be required to issue any
shares of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state securities laws or an exemption from such registration under
the Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which 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 shares of Common Stock, as may be
deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.

13.     Plan Amendment, Modification and Termination.

        The Board may suspend or terminate the Plan or any portion thereof at
any time, and may amend the Plan from time to time in such respects as the Board
may deem advisable in order that Incentive Awards under the Plan will conform to
any change in applicable laws or regulations or in any other respect the Board
may deem to be in the best interests of the Company. No termination, suspension
or amendment of the Plan may adversely affect any outstanding Incentive Award
without the consent of the affected Participant; provided, however, that this
sentence will not impair the right of the Committee to take whatever action it
deems appropriate under Section 4.4 and Section 10 of the Plan.

14.     Effective Date and Duration of the Plan.

        The Plan is effective as of March 30, 2001, the date it was adopted by
the Board. The Plan will terminate at midnight on March 29, 2011, and may be
terminated prior thereto by Board action, and no Incentive Award will be granted
after such termination. Incentive Awards outstanding upon termination of the
Plan may continue to vest, or become free of restrictions, in accordance with
their terms.

15.     Miscellaneous.

        15.1   Governing Law. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Maryland.

        15.2   Successors and Assigns. The Plan will be binding upon and inure
to the benefit of the successors and permitted assigns of the Company and the
Participants.

                                      8

EX-10.15

   1
                                                                  EXHIBIT 10.15


                                ARBITRON INC.

                        EXECUTIVE EMPLOYMENT AGREEMENT

PARTIES

                    ARBITRON INC. (A DELAWARE CORPORATION)
                              142 W. 57TH STREET
                           NEW YORK, NY 10019-3300

                                     AND

                              STEPHEN B. MORRIS
                                ("EXECUTIVE")


DATE:        APRIL 1, 2001

RECITALS

A.       Arbitron wishes to obtain the services of Executive for the duration
         of this Agreement, and Executive wishes to provide his services for
         such period.

B.       Arbitron desires reasonable protection of Arbitron's Confidential
         Information (as defined below).

C.       Arbitron desires assurance that Executive will not compete with
         Arbitron, engage in recruitment of Arbitron's employees or make
         disparaging statements about Arbitron after termination of
         employment, and Executive is willing to refrain from such
         competition, recruitment and disparagement.

D.       Executive desires to be assured of a minimum Base Salary (as defined
         below) from Arbitron for Executive's services for the term of this
         Agreement (unless terminated earlier pursuant to the terms of this
         Agreement).

E.       It is expressly recognized by the parties that Executive's acceptance
         of, and continuance in, Executive's position with Arbitron and
         agreement to be bound by the terms of this Agreement represents a
         substantial commitment to Arbitron in terms of Executive's personal
         and professional career and a foregoing of present and future career
         options by Executive, for all of which Arbitron receives substantial
         value.

F.       The parties recognize that a Change of Control (as defined below) may
         result in material alteration or diminishment of Executive's position
         and responsibilities and substantially

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         frustrate the purpose of Executive's commitment to Arbitron and
         forebearance of career options.

G.       The parties recognize that in light of the above-described commitment
         and forebearance of career options, it is essential that, for the
         benefit of Arbitron and its stockholders, provision be made for a
         Change of Control Termination (as defined below) in order to enable
         Executive to accept and effectively continue in Executive's position
         in the face of inherently disruptive circumstances arising from the
         possibility of a Change of Control of the Parent Corporation (as
         defined below), although no such change is now contemplated or
         foreseen.

H.       The parties wish to replace any and all prior agreements and
         undertakings with respect to Executive's employment and Change of
         Control occurrences and compensation.

NOW, THEREFORE, in consideration of Executive's acceptance of and continuance
in Executive's employment for the term of this Agreement and the parties'
agreement to be bound by the terms contained herein, the parties agree as
follows:

                                  ARTICLE I

                                 DEFINITIONS

1.01     "BASE SALARY" shall mean regular cash compensation paid on a periodic
         basis exclusive of benefits, bonuses or incentive payments.

1.02     "BOARD" shall mean the Board of Directors of Parent Corporation.

1.03     "ARBITRON" shall mean ARBITRON INC. and, except as otherwise provided
         in Section 8.02 of Article VIII,

         (a)      any Subsidiary (as that term is defined in Section 1.07);
                  and

         (b)      any successor in interest by way of consolidation, operation
                  of law, merger or otherwise.

1.04     "CONFIDENTIAL INFORMATION" shall mean information or material of
         Arbitron which 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, whether or not the underlying details are in the
         public domain, including:

         (a)      information or material relating to Arbitron 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,

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                  engineering, development, manufacturing, purchasing,
                  accounting, or marketing activities;

         (b)      information or material relating to Arbitron'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 Arbitron's software, products or
                  services;

         (c)      information on or material relating to Arbitron which when
                  received is marked as "proprietary," "private," or
                  "confidential;"

         (d)      trade secrets of Arbitron;

         (e)      software of Arbitron 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),
                  programming languages, interfaces, visual displays,
                  technical documentation, user manuals, data files and
                  databases of Arbitron; and

         (f)      any similar information of the type described above which
                  Arbitron obtained from another party and which Arbitron
                  treats as or designates as being proprietary, private or
                  confidential, whether or not owned or developed by Arbitron.

         Notwithstanding the foregoing, "Confidential Information" does not
         include any information which is properly published or in the public
         domain; provided, however, that information which is published by or
         with the aid of Executive 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.

1.05     "DISABILITY" shall mean the inability of Executive to perform his
         duties under this Agreement because of illness or incapacity for a
         continuous period of six months.

1.06     "PARENT CORPORATION" shall mean ARBITRON INC. and, except as
         otherwise provided in Section 8.02 of Article VIII, any successor in
         interest by way of consolidation, operation of law, merger or
         otherwise.  "Parent Corporation" shall not include any Subsidiary.

1.07     "SUBSIDIARY" shall mean: (a) any corporation at least a majority of
         whose securities having ordinary voting power for the election of
         directors (other than securities having such power only by reason of
         the occurrence of a contingency) is at the time owned by Parent
         Corporation and/or one or more Subsidiaries; and (b) any division or
         business unit (or portion thereof) of Parent Corporation or a
         corporation described in clause (a) of this Section 1.07.


                                      3

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                                  ARTICLE II

                         EMPLOYMENT, DUTIES AND TERM

2.01     EMPLOYMENT.  Upon the terms and conditions set forth in this
         Agreement, Arbitron hereby employs Executive, and Executive accepts
         such employment.

2.02     DUTIES. Executive shall devote hisfull-time and best efforts to
         Arbitron and to fulfilling the duties of hisposition as President and
         Chief Executive Officer, and member of the Arbitron Board of
         Directors.. Executive shall comply with Arbitron's policies and
         procedures to the extent they are not inconsistent with this
         Agreement in which case the provisions of this Agreement prevail.

2.03     TERM. Subject to the provisions of Articles IV and VII, this
         Agreement and Executive's employment shall continue until the later
         of: (a) April 1, 2004; and (b) two years after a Change of Control
         which occurs prior to April 1, 2004 ("Initial Term"). Upon expiration
         of the Initial Term and subject to the provisions of Articles IV, VII
         and VIII, this Agreement and Executive's employment shall be
         automatically extended for successive three year periods.


                                 ARTICLE III

                          COMPENSATION AND EXPENSES

3.01     BASE SALARY. For all services rendered under this Agreement during
         the term of this Agreement, Arbitron shall pay Executive a minimum
         Base Salary at the annual rate of $435,000.If Executive's salary is
         increased from time to time during the term of this Agreement, the
         increased amount shall be the Base Salary for the remainder of the
         term.

3.02     BONUS AND INCENTIVE. Bonus or incentive compensation shall be at the
         sole discretion of Arbitron. Except as otherwise provided in Article
         VII, Arbitron shall have the right, in accordance with their terms,
         to alter, amend or eliminate any bonus or incentive plans, or
         Executive's participation therein, without compensation to Executive.

3.03     VACATION. The Executive shall be entitled to six weeks of annual
         vacation for each year of active employment with Arbitron.

3.04     BUSINESS EXPENSES. Arbitron shall, consistent with its policies in
         effect from time to time, bear all ordinary and necessary business
         expenses incurred by Executive in performing his duties as an
         employee of Arbitron, provided that Executive accounts promptly for
         such expenses to Arbitron in the manner prescribed from time to time
         by Arbitron.

3.05     SUPPLEMENTAL RETIREMENT BENEFIT.

                                      4

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(a)      ENTITLEMENT.

         (1)      TERMINATION OF EMPLOYMENT. Subject to Sections 3.05(a)(2),
                  3.05(a)(3) and 3.05(a)(4), Executive shall be entitled to a
                  supplemental retirement benefit pursuant to this Section
                  3.05 following his termination of employment with Arbitron
                  at any time for any reason.

         (2)      FORFEITURE. Executive or his surviving spouse, as the case
                  may be, shall not be entitled to receive or retain a
                  supplemental retirement benefit pursuant to this Section
                  3.05 if (A) Executive's employment with Arbitron terminates
                  or is terminated for any reason prior to his attainment of
                  age 62 and (B) Executive breached or breaches any of his
                  obligations arising under Article VI of this Agreement. If,
                  after Executive or his surviving spouse, as the case may be,
                  has received a benefit pursuant to this Section 3.05,
                  Arbitron determines that Executive is not entitled to the
                  benefit, Executive or his surviving spouse, as the case may
                  be, shall promptly repay to Arbitron the benefit payment
                  previously received pursuant to this Section 3.05 together
                  with interest on such payment for the period beginning on
                  the date on which it was paid to Executive or his surviving
                  spouse, as the case may be, and ending on the date on which
                  it is repaid to Arbitron at the prime rate of interest (or
                  such comparable index as may be adopted) established from
                  time to time by the Bank of America National Trust and
                  Savings Association, New York, New York, or its successor in
                  interest, as in effect from time to time during the period
                  in question.

         (3)      DEATH. Except as provided in Section 3.05(d), no benefit
                  shall be paid pursuant to this Section 3.05 to Executive or
                  any other person if Executive's employment with Arbitron
                  terminates because of Executive's death or if Executive dies
                  after his termination of employment with Arbitron but before
                  his supplemental retirement benefit pursuant to this Section
                  3.05 is paid to Executive.

         (4)      OTHER CONDITIONS. As a condition to receiving any benefit
                  pursuant to this Section 3.05, Executive or his surviving
                  spouse, as the case may be, agrees to provide to Arbitron on
                  a timely basis any such information as Arbitron may
                  reasonably request to determine the entitlement of Executive
                  or his surviving spouse, as the case may be, to a benefit
                  pursuant to this Section 3.05 or the amount or timing of the
                  benefit payment or to resolve any other issue or assist
                  Arbitron in making any determination regarding the benefit.

(b)      COMMENCEMENT AND FORM. The benefit pursuant to this Section 3.05
         shall be paid on or as soon as administratively practicable after the
         Determination Date in the form of a lump sum cash payment.

(c)      AMOUNT.

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         (1)      DETERMINATION DATE ON OR AFTER AGE 60. If the Determination
                  Date is on or after the date on which Executive attains age
                  60, the amount of Executive's benefit pursuant to this
                  Section 3.05 shall be a lump sum amount that is actuarially
                  equivalent to a monthly benefit, paid in the Normal Form and
                  commencing as of the Determination Date, equal to
                  one-twelfth of the excess of:

                  (A)      the sum of

                           (i)      the product of Executive's Final Average
                                    Pay multiplied by his Years of Service
                                    through the calendar year during which he
                                    attains age 62 (or, if earlier, through
                                    the date on which he terminates
                                    employment) multiplied by .025 plus

                           (ii)     the product of Executive's Final Average
                                    Pay multiplied by his Years of Service, if
                                    any, following the calendar year during
                                    which he attains age 62 multiplied by
                                    .0167; over

                  (B)      the Offset Amount.

         (2)      DETERMINATION DATE BEFORE AGE 60. If the Determination Date
                  is before the date on which Executive attains age 60, the
                  amount of Executive's benefit pursuant to this Section 3.05
                  shall be a lump sum amount that is actuarially equivalent to
                  a monthly benefit, paid in the Normal Form and commencing as
                  of the Determination Date, equal to one-twelfth of the
                  excess of:

                  (A)      the product of Executive's Final Average Pay
                           multiplied by his Years of Service multiplied by
                           .025, reduced by one-fourth of one percent for each
                           month by which the Determination Date precedes the
                           first day of the month coinciding with or next
                           following the date on which Executive attains age
                           60;

                           over

                  (C)      the Offset Amount.

         (3)      ACTUARIAL EQUIVALENCE. For the purpose of this Section
                  3.05(c), actuarial equivalence for a given Determination
                  Date shall be based on the annual interest rate on 30-year
                  Treasury securities for the month of November of the
                  calendar year immediately preceding the calendar year that
                  includes the Determination Date, as determined in accordance
                  with published guidance from the Internal Revenue Service
                  pursuant to Section 417(e)(3) of the Code (as defined in
                  Section 7.1(e)) and mortality rates per the "applicable
                  mortality table" published in Revenue

                                      6

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                  Ruling 95-6 or other applicable guidance from the Internal
                  Revenue Service pursuant to Section 417(e)(3) of the Code in
                  effect as of the Determination Date.

(d)      DEATH BENEFITS.

         (1)      DEATH BEFORE DETERMINATION DATE.  If Executive dies before
                  the Determination Date, his surviving spouse, if any, shall,
                  subject to Sections 3.05(a)(2) and 3.05(a)(4), be entitled
                  to a surviving spouse benefit.  The benefit shall be paid to
                  Executive's surviving spouse on or as soon as
                  administratively practicable after the Determination Date in
                  the form of a lump sum cash payment.  The amount of the
                  surviving spouse benefit pursuant to this Section 3.05(d)(1)
                  shall be equal to fifty percent (50%) of the amount of the
                  supplemental retirement benefit that would have been paid to
                  Executive pursuant to this Section 3.05 had he terminated
                  employment on the date of his death (or, if earlier, on the
                  actual date on which he terminated employment) and lived
                  until he received his supplemental retirement benefit.  If
                  Executive's surviving spouse dies after becoming entitled to
                  a surviving spouse benefit pursuant to this Section
                  3.05(d)(1) but before the benefit is paid to the surviving
                  spouse, the benefit shall be paid to the surviving spouse's
                  estate at the same time the benefit would have been paid to
                  the surviving spouse had she lived.


         (2)      DEATH ON OR AFTER DETERMINATION DATE. If Executive dies on
                  or after the Determination Date but before payment of his
                  supplemental retirement benefit pursuant to this Section
                  3.05, the benefit that would have been paid to Executive had
                  he lived shall, subject to Sections 3.05(a)(2) and
                  3.05(a)(4), be paid to Executive's estate at the same time
                  the benefit would have been paid to Executive had he lived.

(e)      NONASSIGNABILITY. The benefit pursuant to this Section 3.05 and the
         right to receive a future benefit pursuant to this Section 3.05 may
         not be anticipated, alienated, sold, transferred, assigned, pledged,
         encumbered or subjected to any charge or legal process.

(f)      RABBI TRUST. Arbitron may, but is not required to, provide for
         payment of the benefit pursuant to this Section 3.05 through a trust.
         The trust must (1) be a grantor trust with respect to which Arbitron
         is treated as the grantor, (2) not cause benefits under this Section
         3.05 to be funded for federal income tax purposes or for purposes of
         the Employee Retirement Income Security Act of 1974, as amended, and
         (3) provide that trust assets will, upon Arbitron's insolvency, be
         used to satisfy the claims of Arbitron's general creditors. If
         Arbitron elects to provide benefits through such a trust, neither
         Executive nor his surviving spouse shall have any interest in the
         assets of the trust.

(g)      NATURE OF INTEREST. Nothing contained in this Section 3.05 is to be
         construed as providing for assets to be held for the benefit of
         Executive or his surviving spouse. If Executive or his surviving
         spouse acquires a right to receive benefit payments pursuant to

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         this Section 3.05, that right is no greater than the right of any
         unsecured general creditor of Arbitron.

(h)      DETERMINATIONS. Arbitron shall make all determinations as to
         entitlement, amount and timing of any benefit payment pursuant to
         this Section 3.05. Arbitron shall have discretionary power and
         authority to interpret, construe, apply, enforce and otherwise
         administer the terms of this Section 3.05 and any reasonable
         determination made by Arbitron in good faith shall be binding and
         conclusive on Executive and his surviving spouse. Any determination
         by Arbitron denying a claim by Executive or his surviving spouse
         shall be stated in writing and shall set forth the specific reason
         for the denial. Arbitron shall afford a reasonable opportunity to the
         claimant for a full and fair review of the determination denying the
         claim. A claimant must exhaust the procedure described in this
         Section 3.05(h) before pursuing the claim in any other proceeding.

(i)      SPECIAL DEFINITIONS. The definitions set forth in this Section
         3.05(i) apply in construing this Section 3.05 unless the context
         otherwise indicates. Other terms used in this Section 3.05 have the
         meanings ascribed to them in Article I of this Agreement. In
         addition, the general provisions of Article VIII of this Agreement
         apply to this Section 3.05 unless the context otherwise indicates.

         (1)      "ARBITRON" means, for purposes of Sections 3.05(a)(4),
                  3.05(f), 3.05(g) and 3.05(h), Arbitron Inc. and any
                  successor in interest by way of consolidation, operation of
                  law, merger or otherwise, but not any Subsidiary.

         (2)      "DETERMINATION DATE means the first day of the fourth
                  calendar month following Executive's termination of
                  employment with Arbitron.

         (3)      "FINAL AVERAGE PAY" means Executive's "final average pay" as
                  defined in the Retirement Plan but determined by
                  disregarding any part of the definition of final average pay
                  in the Retirement Plan that is included for the purpose of
                  complying with Section 401(a)(17) of the Code (within the
                  meaning of Section 7.01(e)). If the Retirement Plan is
                  terminated effective as of a date that is before the date on
                  which Executive terminates employment with Arbitron, the
                  previous sentence shall be applied after the effective date
                  of the termination of the Retirement Plan based on the
                  definition of final average pay in effect under the
                  Retirement Plan on the effective date of the termination of
                  the Retirement Plan as if the Retirement Plan had continued
                  in effect.

         (4)      "NORMAL FORM" means monthly payments to Executive for his
                  life with the last payment made for the month during which
                  Executive dies and with no death benefits payable to any
                  person.

         (5)      "OFFSET AMOUNT" means the annual benefit to which Executive
                  would be entitled under the "offset plans" if his benefit
                  under the offset plans commenced as of the Determination
                  Date and was paid in the Normal Form, based on the terms of
                  the

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                  offset plans in effect and applicable to Executive on the
                  Determination Date or, if earlier, as of the effective date
                  of the termination of an offset plan. If the Determination
                  Date is before the earliest date on which Executive's
                  benefit could commence under an offset plan, the Offset
                  Amount with respect to that offset plan shall be determined
                  by calculating the Offset Amount as of the earliest date on
                  which Executive's benefit could commence under the offset
                  plan and then reducing that benefit by one fourth of one
                  percent for each month by which the offset date precedes the
                  earliest date on which Executive's benefit could commence
                  under the offset plan. The Offset Amount shall be determined
                  without regard to the actual timing of commencement and form
                  of Executive's benefit pursuant to the offset plans. For the
                  purpose of this Section 3.05(i)(5), the offset plans are the
                  Retirement Plan, the Arbitron Inc. Benefit Equalization Plan
                  and any defined benefit pension plan maintained by any
                  previous employer of Executive which was or is operated by
                  such previous employer as a qualified plan pursuant to
                  Section 401(a) of the Code (within the meaning of Section
                  7.01(e)), or any successor to any such plans.

         (6)      "RETIREMENT PLAN" means the Arbitron Inc. Retirement Plan as
                  from time to time amended.

         (7)      "YEARS OF SERVICE" means (A) each calendar year from and
                  including 1994 through and including 2000 and (B) each
                  calendar year after 2000 and before 2010 during any part of
                  which Executive is an employee of Arbitron (as classified by
                  Arbitron at the time without regard to any subsequent
                  retroactive reclassification). Executive shall not be
                  credited with any Years of Service for any period of
                  employment with Arbitron after 2009.


                                  ARTICLE IV

                              EARLY TERMINATION

4.01     EARLY TERMINATION. This Article shall not apply to a Change of
         Control Termination which is governed solely by the provisions of
         Article VII, and does not alter the respective continuing obligations
         of the parties pursuant to Articles V, VI, and IX.

4.02     TERMINATION FOR CAUSE.  Arbitron may terminate this Agreement and
         Executive's employment immediately for cause.  For the purpose hereof
         "cause" means:

         (a)      fraud;

         (b)      misrepresentation;

         (c)      theft or embezzlement of Arbitron assets;

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         (d)      intentional violations of law involving moral turpitude;

         (e)      failure to follow Arbitron's conduct and ethics policies;
                  and/or

         (f)      the continued failure by Executive to attempt in good faith
                  to perform his duties as reasonably assigned to Executive
                  pursuant to Section 2.02 of Article II of this Agreement for
                  a period of 60 days after a written demand for such
                  performance which specifically identifies the manner in
                  which it is alleged Executive has not attempted in good
                  faith to perform such duties.

         In the event of termination for cause pursuant to this Section 4.02,
         Executive shall be paid at the usual rate of Executive's annual Base
         Salary through the date of termination specified in any written notice
         of termination.

4.03     TERMINATION WITHOUT CAUSE. Either Executive or Arbitron may terminate
         this Agreement and Executive's employment without cause on at least
         75 days' written notice. In the event of termination of this
         Agreement and of Executive's employment pursuant to this Section
         4.03, compensation shall be paid as follows:

         (a)      if the notice of termination is given by Executive,
                  Executive shall be paid at the usual rate of his annual Base
                  Salary through the 75 day notice period;

         (b)      if the notice of termination is given by Arbitron, (1)
                  Executive shall be paid at the usual rate of hisannual Base
                  Salary through the 75 day notice period, however, Arbitron
                  shall have the option of making termination of the Agreement
                  and Executive's employment effective immediately upon notice
                  in which case Executive shall be paid a lump sum
                  representing the value of 75 days worth of salary; and (2)
                  Executive shall receive, starting within 15 days after the
                  end of the 75 day notice period, two years' Base Salary
                  payable, at the sole discretion of Arbitron, in either the
                  form of a lump sum payment or on a regular payroll period
                  basis.  In addition, Executive shall receive the bonus, if
                  any, to which Executive would otherwise have become entitled
                  under all applicable Arbitron bonus plans in effect at the
                  time of termination of this Agreement had Executive remained
                  continuously employed for the full fiscal year in which
                  termination occurred and continued to perform his duties in
                  the same manner as they were performed immediately prior to
                  termination, multiplied by a fraction, the numerator of
                  which shall be the number of whole months Executive was
                  employed in the year in which termination occurred and the
                  denominator of which is 12. This bonus amount shall be paid
                  within 15 days after the date such bonus would have been
                  paid had Executive remained employed for the full fiscal
                  year. In addition, for a period of two years following
                  termination pursuant to this Section 4.03(b), the Executive
                  would be entitled to receive from Arbitron the same or
                  equivalent health, dental, accidental death and
                  dismemberment, short and long-term disability, life
                  insurance coverages, and all other insurance policies and
                  health and welfare benefits programs, policies or
                  arrangements, at the same levels and coverages as Executive
                  was receiving on

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                  the day immediately prior to his termination.  Executive
                  shall be required to pay no more for the above mentioned
                  benefits than he paid as an active employee, or if provided
                  by Arbitron at no cost to employee on the day immediately
                  prior to Executive's termination, they shall continue to be
                  made available to Executive on this basis.In addition,
                  Arbitron shall provide or make arrangements for reasonable
                  outplacement services for Executive based on his level
                  within Arbitron.

         (c)      In the event that termination occurs pursuant to Section
                  4.03(b), in order to receive the payments specified therein,
                  Arbitron shall require the Executive to execute a release,
                  similar to that attached as Exhibit A, of all claims against
                  Arbitron.

4.04     TERMINATION IN THE EVENT OF DEATH OR DISABILITY.  This Agreement
         shall terminate in the event of death or disability of Executive.

         (a)      In the event of Executive's death, Arbitron shall pay an
                  amount equal to 12 months of Base Salary at the rate in
                  effect at the time of Executive's death plus the amount
                  Executive would have received in annual incentive plan bonus
                  for the year in which the death occurs had "target" goals
                  been achieved.  Such amount shall be paid (1) to the
                  beneficiary or beneficiaries designated in writing to
                  Arbitron by Executive, (2) in the absence of such
                  designation to the surviving spouse, or (3) if there is no
                  surviving spouse, or such surviving spouse disclaims all or
                  any part, then the full amount, or such disclaimed portion,
                  shall be paid to the executor, administrator or other
                  personal representative of Executive's estate.  The amount
                  shall be paid as a lump sum as soon as practicable following
                  Arbitron's receipt of notice of Executive's death.  All such
                  payments shall be in addition to any payments due pursuant
                  to Section 4.04(c) below.

         (b)      In the event of Executive's disability, Base Salary shall be
                  terminated as of the end of the month in which the last day
                  of the six-month period of Executive's inability to perform
                  his duties occurs.

         (c)      In the event of termination by reason of Executive's death
                  or disability, Arbitron shall pay to Executive any amount
                  equal to (1) the amount Executive would have received in
                  annual incentive plan bonus for the year in which
                  termination occurs had "target" goals been achieved,
                  multiplied by (2) a fraction, the numerator of which shall
                  be the number of whole months Executive was employed in the
                  year in which the death or disability occurred and the
                  denominator of which is 12. The amount payable pursuant to
                  this Section 4.04(c) shall be paid within 15 days after the
                  date such bonus would have been paid had Executive remained
                  employed for the full fiscal year.

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4.05     RETIREMENT.

         (a)      Executive may terminate this Agreement and Executive's
                  employment as a result of Executive's decision to retire
                  from Arbitron. Executive shall provide Arbitron with at
                  least 75 days' written notice of the date upon which
                  Executive intends to retire. Executive shall be paid at the
                  usual rate of his annual Base Salary through the date of
                  retirement stipulated in the written notice.

         (b)      In the event that Executive terminates this Agreement as a
                  result of Executive's decision to retire from Arbitron and
                  Executive is at least 55 years of age with five or more
                  years of service to Arbitron, then Executive (and anyone
                  entitled to claim under or through Executive) shall, until
                  age 65, be entitled to receive from Arbitron the same or
                  equivalent health, dental, accidental death and
                  dismemberment, short and long-term disability, life
                  insurance coverages, and all other insurance policies and
                  health and welfare benefits programs, policies or
                  arrangements, at the same levels and coverages as Executive
                  was receiving on the day immediately prior to his
                  retirement.  Executive shall be required to pay no more for
                  the above mentioned benefits than he paid as an active
                  employee, or if provided by Arbitron at no cost to employees
                  on the day immediately prior to Executive's retirement, they
                  shall continue to be made available to Executive on this
                  basis.

4.06     ENTIRE TERMINATION PAYMENT. The compensation provided for in this
         Article IV for early termination of this Agreement and termination
         pursuant to this Article IV shall constitute Executive's sole remedy
         for such termination. Executive shall not be entitled to any other
         termination or severance payment which may be payable to Executive
         under any other agreement between Executive and Arbitron.


                                  ARTICLE V

                  CONFIDENTIALITY, DISCLOSURE AND ASSIGNMENT

5.01     CONFIDENTIALITY. Executive will not, during the term or after the
         termination or expiration of this Agreement or his/her employment,
         publish, disclose, or utilize in any manner any Confidential
         Information obtained while employed by Arbitron. If Executive leaves
         the employ of Arbitron, Executive will not, without Arbitron's prior
         written consent, retain or take away any drawing, writing or other
         record in any form containing any Confidential Information.

5.02     BUSINESS CONDUCT AND ETHICS. During the term of employment with
         Arbitron, Executive will engage in no activity or employment which
         may conflict with the interest of Arbitron, and will comply with
         Arbitron's policies and guidelines pertaining to business conduct and
         ethics.


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5.03     DISCLOSURE. Executive will disclose promptly in writing to Arbitron
         all inventions, discoveries, software, writings and other works of
         authorship which are conceived, made, discovered, or written jointly
         or singly on Arbitron time or on Executive's own time, providing the
         invention, improvement, discovery, software, writing or other work of
         authorship is capable of being used by Arbitron in the normal course
         of business, and all such inventions, improvements, discoveries,
         software, writings and other works of authorship shall belong solely
         to Arbitron.

5.04     INSTRUMENTS OF ASSIGNMENT. Executive will sign and execute all
         instruments of assignment and other papers to evidence vestiture of
         Executive's entire right, title and interest in such inventions,
         improvements, discoveries, software, writings or other works of
         authorship in Arbitron, at the request and the expense of Arbitron,
         and Executive will do all acts and sign all instruments of assignment
         and other papers Arbitron may reasonably request relating to
         applications for patents, patents, copyrights, and the enforcement
         and protection thereof. If Executive is 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 conceived, developed or reduced to practice by Executive,
         Executive agrees to do so, and if Executive leaves the employ of
         Arbitron, Arbitron shall pay Executive at a rate mutually agreeable
         to Executive and Arbitron, plus reasonable traveling or other
         expenses.

5.05     EXECUTIVE'S DECLARATION. Executive has no inventions, data bases,
         improvements, discoveries, software, writings or other works of
         authorship useful to Arbitron in the normal course of business, which
         were conceived, made or written prior to the date of this Agreement
         and which are excluded from this Agreement.

5.06     SURVIVAL.  The obligations of this Article V shall survive the
         expiration or termination of this Agreement and Executive's
         employment.


                                  ARTICLE VI

           NON-COMPETITION, NON-RECRUITMENT, AND NON-DISPARAGEMENT

6.01     GENERAL. The parties hereto recognize and agree that (a) Executive is
         a senior executive of Arbitron and is a key executive of Arbitron,
         (b) Executive has received, and will in the future receive,
         substantial amounts of Confidential Information, (c) Arbitron's
         business is conducted on a worldwide basis, and (d) provision for
         non-competition, non-recruitment and non-disparagement obligations by
         Executive is critical to Arbitron's continued economic well-being and
         protection of Arbitron's Confidential Information. In light of these
         considerations, this Article VI sets forth the terms and conditions
         of Executive's obligations of non-competition, non-recruitment and
         non-disparagement subsequent to the termination of this Agreement
         and/or Executive's employment for any reason.

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6.02     NON-COMPETITION.

         (a)      Unless the obligation is waived or limited by Arbitron in
                  accordance with subsection (b) of this Section 6.02,
                  Executive agrees that for a period of 18 months following
                  termination of employment for any reason ("Non-Compete
                  Period"), Executive 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 Arbitron's business
                  as conducted as of the date of such termination of
                  employment or with any part of Arbitron's contemplated
                  business with respect to which Executive has Confidential
                  Information.  For purposes of this subsection (a),
                  "shareholder" shall not include beneficial ownership of less
                  than five percent (5%) of the 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 subsection (a), "Arbitron's
                  business" shall include business conducted by Arbitron or
                  its affiliates and any partnership or joint venture in which
                  Arbitron or its affiliates is a partner or joint venturer;
                  provided that, "affiliate" as used in this sentence shall
                  not include any corporation in which Arbitron has ownership
                  of less than fifteen percent (15%) of the voting stock.

         (b)      At its sole option Arbitron may, by written notice to
                  Executive at any time within the Non-Compete Period, waive
                  or limit the time and/or geographic area in which Executive
                  cannot engage in competitive activity.

         (c)      During the Non-Compete Period, prior to accepting employment
                  with or agreeing to provide consulting services to, any firm
                  or entity which offers competitive products or services,
                  Executive shall give 30 days prior written notice to
                  Arbitron. Such written notice shall describe the firm and
                  the employment or consulting services to be rendered to the
                  firm or entity, and shall include a copy of the written
                  offer of employment or engagement of consulting services.
                  Arbitron's failure to respond or object to such notice shall
                  not in any way constitute acquiescence or waiver of
                  Arbitron's rights under this Article VI.

         (d)      In the event Executive has provided notice to Arbitron
                  pursuant to subsection (c) of this Section 6.02 and has not
                  accepted employment with or agreed to provide consulting
                  services to, any firm or entity directly as a result of his
                  non-competition obligation pursuant to this Section 6.02,
                  Arbitron shall pay Executive an amount equal to the usual
                  rate of Executive's Base Salary in effect at the time of
                  termination on a regular payroll period basis until the end
                  of the Non-Compete Period.  There shall be credited against
                  Arbitron's obligation to make such payments any other
                  payments made by Arbitron to Executive pursuant to Article
                  IV of this Agreement.  In the event that Arbitron elects,
                  pursuant to subsection (b) of this Section 6.02, to waive
                  all or any portion of the non-competition obligation set
                  forth in subsection (a) hereof, no payment shall be required
                  by Arbitron with respect to the portion of the Non-Compete
                  Period which has been waived.

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         (e)      In the event Executive fails to provide notice to Arbitron
                  pursuant to subsection (c) of this Section 6.02 and/or in
                  anyway violates its non-competition obligation pursuant to
                  Section 6.02, Arbitron may enforce all of its rights and
                  remedies provided to it under this Agreement, in law and in
                  equity, and Executive shall be deemed to have expressly
                  waived any rights he or she may have had to payments under
                  subsection (d) of this Section 6.02.

6.03     NON-RECRUITMENT. For a period of three years following termination of
         employment for any reason, Executive will not initiate or actively
         participate in any other employer's recruitment or hiring of Arbitron
         employees. This provision shall not preclude Executive from
         responding to a request (other than by Executive's employer) for a
         reference with respect to an individual's employment qualifications.

6.04     NON-DISPARAGEMENT. Executive will not, during the term or after the
         termination or expiration of this Agreement or Executive's
         employment, make disparaging statements, in any form, about Arbitron,
         its officers, directors, agents, employees, products or services
         which Executive knows, or has reason to believe, are false or
         misleading.

6.05     SURVIVAL.  The obligations of this Article VI shall survive the
         expiration or termination of this Agreement and Executive's
         employment.


                                 ARTICLE VII

                              CHANGE OF CONTROL

7.01     DEFINITIONS.  For purposes of this Article VII, the following
         definitions shall be applied:

         (a)      "BENEFIT PLAN" means any formal or informal plan, program or
                  other arrangement heretofore or hereafter adopted by
                  Arbitron for the direct or indirect provision of
                  compensation to Executive (including groups or classes of
                  participants or beneficiaries of which Executive is a
                  member), whether or not such compensation is deferred, is in
                  the form of cash or other property or rights, or is in the
                  form of a benefit to or for Executive.

         (b)      "CHANGE OF CONTROL" shall mean any of the following events:

                           (1)      a merger or consolidation to which Parent
                                    Corporation is a party if the individuals
                                    and entities who were stockholders of
                                    Parent Corporation immediately prior to
                                    the effective date of such merger or
                                    consolidation have beneficial ownership
                                    (as defined in Rule 13d-3 under the
                                    Securities Exchange Act of 1934) of less
                                    than fifty percent (50%) of the total
                                    combined voting power for election of

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                                    directors of the surviving corporation
                                    immediately following the effective date
                                    of such merger or consolidation; or

                           (2)      the direct or indirect beneficial
                                    ownership (as defined in Rule 13d-3 under
                                    the Securities Exchange Act of 1934) in
                                    the aggregate of securities of Parent
                                    Corporation representing twenty-five
                                    percent (25%) or more of the total
                                    combined voting power of Parent
                                    Corporation'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 of hereof, the following
                                    acquisitions shall not constitute a Change
                                    of Control: (A) any acquisition by Parent
                                    Corporation, or (B) any acquisition by any
                                    employee benefit plan (or related trust)
                                    sponsored or maintained by Parent
                                    Corporation or any corporation controlled
                                    by Parent Corporation; or

                           (3)      the sale of the properties and assets of
                                    Parent Corporation, substantially as an
                                    entirety, to any person or entity which is
                                    not a wholly-owned subsidiary of Parent
                                    Corporation; or

                           (4)      the stockholders of Parent Corporation
                                    approve any plan or proposal for the
                                    liquidation of Parent Corporation; or

                           (5)      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 seventy percent
                                    (70%) majority of the Board. For purposes
                                    of this clause, "Continuity 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 (2/3) majority of the
                                    then-existing Board; or

                           (6)      such other event or transaction as the
                                    Board shall determine constitutes a Change
                                    of Control.

         (c)      "CHANGE OF CONTROL COMPENSATION" means any payment or
                  benefit (including any transfer of property) in the nature
                  of compensation, to or for the benefit of Executive under
                  this Agreement or any Other Agreement or Benefit Plan, which
                  is considered to be contingent on a Change of Control for
                  purposes of Section 280G of the Code.

         (d)      "CHANGE OF CONTROL TERMINATION" means, with respect to
                  Executive, either of the following events occurring within
                  two years after a Change of Control:

                           (1)      Termination of Executive's employment by
                                    Arbitron for any reason other than (A)
                                    fraud, (B) misrepresentation, (C) theft or

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                                    embezzlement of Arbitron assets, (D)
                                    intentional violations of law involving
                                    moral turpitude, or (E) failure to follow
                                    Arbitron's conduct and ethics policies; or

                           (2)      Termination of employment with Arbitron by
                                    Executive pursuant to Section 7.02 of this
                                    Article VII.

                  A Change of Control Termination by Executive shall not,
                  however, include termination by reason of death or
                  Disability.

         (e)      "CODE" means the Internal Revenue Code of 1986, as amended.
                  Any reference to a section of the Code shall include the
                  corresponding section of such Code as from time to time
                  amended.

         (f)      "GOOD REASON" means a good faith determination by Executive,
                  in Executive's sole and absolute judgment, that any one or
                  more of the following events has occurred, without
                  Executive's express written consent, after a Change of
                  Control:

                           (1)      A change in Executive's reporting
                                    responsibilities, titles or offices as in
                                    effect immediately prior to the Change of
                                    Control, or any removal of Executive from,
                                    or any failure to re-elect Executive to,
                                    any of such positions, which has the
                                    effect of materially diminishing
                                    Executive's responsibility or authority;

                           (2)      A reduction by Arbitron in Executive's
                                    Base Salary as in effect immediately prior
                                    to the Change of Control or as the same
                                    may be increased from time to time
                                    thereafter;

                           (3)      Arbitron requiring Executive to be based
                                    anywhere other than within 50miles of
                                    Executive's job location at the time of
                                    the Change of Control;

                           (4)      Without replacement by plans, programs, or
                                    arrangements which, taken as a whole,
                                    provide benefits to Executive at least
                                    reasonably comparable to those
                                    discontinued or adversely affected, (A)
                                    the failure by Arbitron to continue in
                                    effect, within its maximum stated term,
                                    any pension, bonus, incentive, stock
                                    ownership, purchase, option, life
                                    insurance, health, accident, disability,
                                    or any other employee compensation or
                                    benefit plan, program or arrangement, in
                                    which Executive is participating
                                    immediately prior to a Change of Control;
                                    or (B) the taking of any action by
                                    Arbitron that would materially adversely
                                    affect Executive's participation or
                                    materially reduce Executive's benefits
                                    under any of such plans, programs or
                                    arrangements;

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                           (5)      The failure by Arbitron to provide office
                                    space, furniture, and secretarial support
                                    at least comparable to that provided
                                    Executive immediately prior to the Change
                                    of Control or the taking of any similar
                                    action by Arbitron that would materially
                                    adversely affect the working conditions in
                                    or under which Executive performs his
                                    employment duties; or

                           (6)      Any material breach of this Agreement by
                                    Arbitron.

         (g)      "OTHER AGREEMENTS" means any agreement, contract or
                  understanding heretofore or hereafter entered into between
                  Executive and Arbitron for the direct or indirect provision
                  of compensation to Executive.

7.02     CHANGE OF CONTROL TERMINATION RIGHT. For a period of two years
         following a Change of Control that occurred during the term of this
         Agreement, Executive shall have the right, at any time and within
         Executive's sole discretion, to terminate employment with Arbitron
         for Good Reason. Such termination shall be accomplished by, and
         effective upon, Executive giving written notice to Arbitron of
         Executive's decision to terminate. Except as otherwise expressly
         provided in this Agreement, upon the exercise of said right, all
         obligations and duties of Executive under this Agreement shall be of
         no further force and effect.

7.03     CHANGE OF CONTROL TERMINATION PAYMENT.

         (a)      In the event of a Change of Control Termination that
                  occurred during the term of this Agreement, then, and
                  without further action by the Board, Compensation Committee
                  or otherwise, Arbitron shall, within five days of such
                  termination, make a lump sum payment to Executive in an
                  amount equal to three times the sum of (i) 12 months of Base
                  Salary at the rate in effect at the time of Executive's
                  termination, (ii) the bonus, if any, that Executive would
                  have received under all applicable Arbitron bonus plans for
                  the year in which the termination occurs at the higher of
                  the target award applicable to the year in which the
                  termination occurs or the average of the actual bonuses paid
                  for the last three fiscal years, and (iii) the annual
                  perquisite cash adder Executive would have received in the
                  year in which the termination occurs.

         (b)      In addition to the payments made pursuant to Section 7.03(a)
                  hereof, in the event of a Change of Control Termination that
                  occurred during the term of this Agreement, then, and
                  without further action by the Board, Compensation Committee
                  or otherwise, Arbitron shall provide to Executive a pension
                  supplement equivalent to the difference, if any, between:
                  (i) the monthly benefits to which Executive would have been
                  entitled under the defined benefit pension plan or plans in
                  which Executive participates immediately prior to the Change
                  of Control Termination which includes an additional three
                  years of age and service; and (ii)

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                  the amount to which Executive is, in fact, entitled under
                  such defined benefit pension plan or plans.

         (c)      In addition to the payments pursuant to Section 7.03(a) and
                  Section 7.03(b), in the event of a Change of Control
                  Termination that occurred during the term of this Agreement,
                  then, and without further action by the Board, Compensation
                  Committee or otherwise in determining Executive's
                  supplemental retirement benefit pursuant to Section 3.05:

                  (1)      An additional three years of age and an additional
                           three Years of Service shall be added to
                           Executive's actual age and Years of Service (the
                           additional Years of Service shall not be limited by
                           the final sentence of Section 3.05(i)(9)); and

                  (2)      the benefit shall not be reduced for commencement
                           before age 60 pursuant to Section 3.05(c)(2), if
                           applicable.

         (d)      Neither the payments made pursuant to Section 7.03(a), the
                  pension supplement provided pursuant to Section 7.03(b), or
                  the additional supplemental retirement benefits provided
                  pursuant to Section 3.05 due to the adjustments pursuant to
                  Section 7.03(c) nor any other compensation to be provided to
                  Executive by Arbitron pursuant to this Agreement or any
                  other agreement or Benefit Plan which may be considered
                  Change of Control Compensation shall be subject to any
                  limitation on Change of Control Compensation which may
                  otherwise be expressed in any such agreement or Benefit
                  Plan.

7.04     TAX REIMBURSEMENT.

         (a)      Anything in this Agreement to the contrary notwithstanding,
                  in the event it shall be determined that any payments or
                  distributions by Arbitron to or for the benefit of Executive
                  (whether paid or payable or distributed or distributable
                  pursuant to the terms of this Agreement or otherwise, but
                  determined without regard to any payments required under
                  this Section 7.04) (collectively, the "Payments") would be
                  subject to the excise tax imposed by Section 4999 of the
                  Code or any interest or penalties are incurred by Executive
                  with respect to such excise tax (such excise tax, together
                  with any such interest and penalties, are hereinafter
                  collectively referred to as the "Excise Tax"), then
                  Executive shall be entitled to receive an additional payment
                  (a "Gross-Up Payment") in an amount such that, after payment
                  by Executive of all taxes (and any interest or penalties
                  imposed with respect to such taxes), including any income
                  taxes and Excise Tax imposed upon the Gross-Up Payment,
                  Executive retains an amount of the Gross-Up Payment equal to
                  the Excise Tax imposed upon the Payments.

         (b)      Subject to the provisions of Section 7.04(d), all
                  determinations required to be made under this Section 7.04,
                  including whether and when a Gross-Up Payment is

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                  required and the amount such Gross-Up Payment and the
                  assumptions to be utilized in arriving at such
                  determination, shall be made by Arbitron's external auditors
                  (the "Accounting Firm"), which shall provide detailed
                  supporting calculations both to Arbitron and Executive
                  within 15 business days of the receipt of notice from
                  Executive that there has been a Payment, or such earlier
                  time as is requested by Arbitron.  In the event that the
                  Accounting Firm is serving as accountant or auditor for the
                  individual, entity or group effecting the Change of Control,
                  Executive shall appoint another nationally recognized
                  accounting firm to make the determinations required
                  hereunder (which accounting firm shall then be referred to
                  as the "Accounting Firm" hereunder).  All fees and expenses
                  of the Accounting Firm shall be borne solely by Arbitron.
                  Any Gross-Up Payment, as determined pursuant to this Section
                  7.04, shall be paid by Arbitron to Executive within five
                  days of the receipt of the Accounting Firm's determination.
                  Any determination by the Accounting Firm shall be binding
                  upon Arbitron and Executive.

         (c)      As a result of uncertainty in the application of Section
                  4999 of the Code at the time of the initial determination by
                  the Accounting Firm hereunder, it is possible that Gross-Up
                  Payments which should have been made by Arbitron will not
                  have been made ("Underpayment"), consistent with the
                  calculations required to be made hereunder. In the event
                  that Arbitron exhausts its remedies pursuant to Section
                  7.04(d) and Executive thereafter is required to make a
                  payment of any additional Excise Tax, the Accounting Firm
                  shall determine the amount of the Underpayment that has
                  occurred and any such Underpayment shall be promptly paid by
                  Arbitron to or for the benefit of Executive.

         (d)      Executive shall notify Arbitron in writing of any claim by
                  the Internal Revenue Service or any other taxing authority
                  that, if successful, would require the payment by Arbitron
                  of any Gross-Up Payment.  Such notification shall be given
                  as soon as practicable but no later than ten business days
                  after Executive knows of such claim and shall apprise
                  Arbitron of the nature of such claim and the date on which
                  such claim is requested to be paid. Executive shall not pay
                  such claim prior to the expiration of the thirty-day period
                  following the date on which it gives such notice to Arbitron
                  (or such shorter period ending on the date that any payment
                  of taxes with respect to such claim is due).  If Arbitron
                  notifies Executive in writing prior to the expiration of
                  such period that it desires to contest such claim, Executive
                  shall:

                                    (i)     give Arbitron any information
                                            reasonably requested by Arbitron
                                            relating to such claim;

                                    (ii)    take such action in connection
                                            with contesting such claim as
                                            Arbitron shall reasonably request
                                            in writing from time to time,
                                            including accepting legal
                                            representation with respect


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                                            to such claim by an attorney
                                            reasonably selected by Arbitron;

                                    (iii)   cooperate with Arbitron in good
                                            faith in order to effectively
                                            contest such claim; and

                                    (iv)    permit Arbitron to participate in
                                            any proceedings relating to such
                                            claim;

                  provided, however, that Arbitron shall bear and pay directly
                  all costs and expenses (including additional interest and
                  penalties) incurred in connection with such contest and
                  shall indemnify and hold Executive harmless, on an after-tax
                  basis, for any Excise Tax or income tax (including interest
                  and penalties with respect thereto) imposed as a result of
                  such representation and payment of costs and expenses.
                  Without limitation on the foregoing provisions of this
                  Section 7.04(d), Arbitron shall control all proceedings
                  taken in connection with such contest and, at its sole
                  option, may pursue or forego any and all administrative
                  appeals, proceedings, hearings and conferences with the
                  taxing authority in respect of such claim and may, at its
                  sole option, either direct Executive to pay the tax claimed
                  and sue for a refund or contest the claim in any permissible
                  manner, and Executive agrees to prosecute such contest to a
                  determination before any administrative tribunal, in a court
                  of initial jurisdiction and in one or more appellate courts,
                  as Arbitron shall determine; provided further, however, that
                  if Arbitron directs Executive to pay such claim and sue for
                  a refund, Arbitron shall advance the amount of such payment
                  to Executive on an interest-free basis and shall indemnify
                  and hold Executive harmless, on an after-tax basis, from any
                  Excise Tax or income tax (including interest or penalties
                  with respect thereto) imposed with respect to such advance
                  or with respect to any imputed income with respect to such
                  advance; and provided further that any extension of the
                  statute of limitations relating to payment of taxes for the
                  taxable year of Executive with respect to which such
                  contested amount is claimed to be due is limited solely to
                  such contested amount. Furthermore, Arbitron's control of
                  the contest shall be limited to issues with respect to which
                  a Gross-Up Payment would be payable hereunder and Executive
                  shall be entitled to settle or contest, as the case may be,
                  any other issue raised by the Internal Revenue Service or
                  any other taxing authority.

         (e)      If, after the receipt by Executive of an amount advanced by
                  Arbitron pursuant to Section 7.04(d), Executive becomes
                  entitled to receive any refund with respect to such claim,
                  Executive shall (subject to Arbitron's complying with the
                  requirements of Section 7.04(d)) promptly pay to Arbitron
                  the amount of such refund (together with any interest paid
                  or credited thereon after taxes applicable thereto).  If,
                  after the receipt by Executive of an amount advanced by
                  Arbitron pursuant to Section 7.04(d), a determination is
                  made that Executive shall not be entitled to any refund with
                  respect to such claim and Arbitron does not notify Executive
                  in writing of its intent to contest such denial of refund
                  prior to the expiration of thirty days after

                                      21

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                  such determination, then such advance shall be forgiven and
                  shall not be required to be repaid and the amount of such
                  advance shall offset, to the extent thereof, the amount of
                  Gross-Up Payment required to be paid.

7.05     INTEREST. In the event Arbitron does not make timely payment in full
         of the Change of Control Termination payment described in Section
         7.03, Executive shall be entitled to receive interest on any unpaid
         amount at the lower of: (a) the prime rate of interest (or such
         comparable index as may be adopted) established from time to time by
         the Bank of America National Trust and Savings Association, New York,
         New York or its successor in interest; or (b) the maximum rate
         permitted under Section 280G(d)(4) of the Internal Revenue Code.

7.06     ATTORNEYS' FEES. In the event Executive incurs any legal expense to
         enforce or defend his rights under this Article VII of this
         Agreement, or to recover damages for breach thereof, Executive shall
         be entitled to recover from Arbitron any expenses for attorneys' fees
         and disbursements incurred.

7.07     BENEFITS CONTINUATION. In the event of a Change of Control
         Termination, Executive (and anyone entitled to claim under or through
         Executive) shall, until age 65, be entitled to receive from Arbitron
         the same or equivalent health, dental, accidental death and
         dismemberment, short and long-term disability, life insurance
         coverages, and all other insurance policies and health and welfare
         benefits programs, policies or arrangements, at the same levels and
         coverages as Executive was receiving on the day immediately prior to
         the Change of Control at a cost not to exceed the amount Executive
         would continue to pay had hecontinued to be an active employee of
         Arbitron. To the extent that election of continuation of any of such
         coverages, programs, policies, or arrangements is made available to
         employees terminating at age 55 with 15 or more years of service,
         Executive shall be required to pay no more for continuation than is
         required of such employees on the day immediately prior to the Change
         of Control. If no such continuation program is available, Executive
         shall be required to pay no more than he paid as an active employee,
         or if provided by Arbitron at no cost to employees on the day
         immediately prior to the Change of Control, they shall continue to be
         made available to Executive on this basis.


                                 ARTICLE VIII

                              GENERAL PROVISIONS

8.01     NO ADEQUATE REMEDY. The parties declare that it is impossible to
         measure in money the damages which will accrue to either party by
         reason of a failure to perform any of the obligations under this
         Agreement and therefore injunctive relief is appropriate. Therefore,
         if either party shall institute any action or proceeding to enforce
         the provisions hereof, such party against whom such action or
         proceeding is brought hereby waives the claim or defense that such
         party has an adequate remedy at law, and such party shall not urge in

                                      22

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         any such action or proceeding the claim or defense that such party
         has an adequate remedy at law.

8.02     SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
         inure to the benefit of the successors and assigns of Parent
         Corporation and each Subsidiary, whether by way of merger,
         consolidation, operation of law, assignment, purchase or other
         acquisition of substantially all of the assets or business of
         Arbitron, and any such successor or assign shall absolutely and
         unconditionally assume all of Arbitron's obligations hereunder.

8.03     NOTICES. All notices, requests and demands given to or made pursuant
         hereto shall, except as otherwise specified herein, be in writing and
         be delivered or mailed to any such party at its address:

         (a)      ARBITRON INC.
                  9705 Patuxent Woods Drive
                  Columbia, Maryland 21046
                  Attention:  VP & Chief Legal Officer

         (b)      In the case of Executive shall be:

                  At the address listed on the last page of this Agreement.

                  Either party may, by notice hereunder, designate a changed
                  address. Any notice, if mailed properly addressed, postage
                  prepaid, registered or certified mail, shall be deemed
                  dispatched on the registered date or that stamped on the
                  certified mail receipt, and shall be deemed received within
                  the second business day thereafter or when it is actually
                  received, whichever is sooner.

8.04     CAPTIONS.  The various headings or captions in this Agreement are for
         convenience only and shall not affect the meaning or interpretation
         of this Agreement.

8.05     GOVERNING LAW. The validity, construction and performance of this
         Agreement shall be governed by the laws of the State of New York and
         any and every legal proceeding arising out of or in connection with
         this Agreement shall be brought exclusively in the appropriate courts
         of the State of New York, each of the parties hereby consenting to
         the exclusive jurisdiction of said courts for this purpose. The
         parties hereto expressly recognize and agree that the implementation
         of this Governing Law provision is essential in light of the fact
         that Parent Corporation's corporate headquarters and its principal
         executive offices are located within the State of New York, and there
         is a critical need for uniformity in the interpretation and
         enforcement of the employment agreements between Arbitron and its
         senior executives.

8.06     CONSTRUCTION. Wherever possible, each provision of this Agreement
         shall be interpreted in such manner as to be effective and valid
         under applicable law, but if any provision of this Agreement shall be
         prohibited by or invalid under applicable law, such provision shall


                                      23

   24

         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.

8.07     WAIVERS. No failure on the part of either party to exercise, and no
         delay in exercising, any right or remedy hereunder shall operate as a
         waiver thereof; nor shall any single or partial exercise of any right
         or remedy hereunder preclude any other or further exercise thereof or
         the exercise of any other right or remedy granted hereby or by any
         related document or by law.

8.08     MODIFICATION.  Any changes or amendments to this Agreement must be in
         writing and signed by both parties.

8.09     ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
         understanding between the parties hereto in reference to all the
         matters herein agreed upon. This Agreement replaces in full all prior
         employment agreements or understandings of the parties hereto, and
         any and all such prior agreements or understandings are hereby
         rescinded by mutual agreement.

IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.


EXECUTIVE                           ARBITRON INC.

/s/ Stephen B. Morris               By:  /s/ Lawrence Perlman
- ---------------------------              ------------------------------------
Stephen B. Morris                         Lawrence Perlman

                                    Title:     Chair, Compensation and Human
                                               -----------------------------
                                               Resources Committee
                                               -------------------

Address:

- -----------------------

- -----------------------

- -----------------------


                                       24

EX-10.16

   1
                                                                  EXHIBIT 10.16

                          INDEMNIFICATION AGREEMENT


                  This Agreement, made and entered into as of the 30th day of
March, 2001, ("Agreement"), by and between Arbitron Inc., a Delaware
corporation ("Company"), and __________________ ("Indemnitee"):

                  WHEREAS, highly competent persons may be reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate
indemnification against risks of claims and actions against them arising out
of their service to and activities on behalf of such corporations; and

                  WHEREAS, the Board of Directors of the Company has
determined that difficulties in attracting and retaining such persons are
detrimental to the best interests of the Company's stockholders and that the
Company should act to assure such persons that there will be increased
certainty of such protection in the future; and

                  WHEREAS, it is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify such persons to the
fullest extent permitted by applicable law so that they will serve or continue
to serve the Company free from undue concern that they will not be so
indemnified; and

                  WHEREAS, Indemnitee is willing to serve, continue to serve
and to take on additional service for or on behalf of the Company on the
condition that Indemnitee be so indemnified;

                  NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, the Company and Indemnitee do hereby covenant and
agree as follows:

                                  ARTICLE I
                                 DEFINITIONS

         For purposes of this Agreement the following terms shall have the
meaning given here:

         1.01     "Board" shall mean the Board of Directors of the Company.

         1.02     "Change of Control" shall mean any of the following events:

                  (a)      Unless approved by the affirmative vote of at least
                           two-thirds (2/3) of those members of the Board who
                           are in office immediately prior to the event(s) and
                           who are not employees of the Company:


   2

                           (l)      the merger or consolidation of the Company
                                    with, or the sale of all or substantially
                                    all of the assets of the Company to, any
                                    person or entity or group of associated
                                    persons or entities; or

                           (2)      the direct or indirect beneficial
                                    ownership in the aggregate of securities
                                    of the Company representing twenty percent
                                    (20%) 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, not affiliated
                                    (within the meaning of the Securities Act
                                    of 1933) with the Company as of the date
                                    of this Agreement; or

                           (3)      the stockholders of the Company approve
                                    any plan or proposal for the liquidation
                                    or dissolution of the Company.

                  (b)      A change in the composition of the Board at any
                           time during any consecutive twenty-four (24) month
                           period such that the "Continuity Directors" cease
                           for any reason to constitute at least a seventy
                           percent (70%) majority of the Board. For purposes
                           of this clause (b), "Continuity Directors" means
                           those members of the Board who either:

                           (1)      were directors at the beginning of such
                                    consecutive twenty-four (24) month period;
                                    or

                           (2)      were elected by, or on the nomination or
                                    recommendation of, at least a two-thirds
                                    (2/3) majority (consisting of at least
                                    eight directors) of the then-existing
                                    Board.

         1.03     "Corporate Status" describes the status of a person who is
or was a director, officer, employee, agent or fiduciary of the Company or of
any other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person is or was serving at the express
written request of the Company.

         1.04     "Disinterested Director" means a director of the Company who
is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.

         1.05     "Effective Date" means March 30, 2001.


                                    - 2 -

   3


         1.06     "Enterprise" shall mean the Company and any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the express written
request of the Company as a director, officer, employee, agent or fiduciary.

         1.07     "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.

         1.08     "Good Faith" shall mean Indemnitee having acted in good
faith and in a manner Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal
Proceeding, having had no reasonable cause to believe Indemnitee's conduct was
unlawful.

         1.09     "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the
Company or Indemnitee in any matter material to either such party, or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement.

         1.10     "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism. investigation, administrative hearing
or any other actual, threatened or completed proceeding whether civil,
criminal, administrative or investigative, other than one initiated by
Indemnitee. For purposes of the foregoing sentence, a "Proceeding" shall not
be deemed to have been initiated by Indemnitee where Indemnitee seeks pursuant
to Article VIII of this Agreement to enforce Indemnitee's rights under this
Agreement.

                                  ARTICLE II
                              TERM OF AGREEMENT

         This Agreement shall continue until and terminate upon the later of:
(i) 10 years after the date that Indemnitee shall have ceased to serve as a
director, officer, employee, agent or fiduciary of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which Indemnitee served at the express written request of the
Company; or (ii) the final termination of all pending Proceedings in respect
of which Indemnitee is granted rights of indemnification or

                                    - 3 -
   4
advancement of expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Article VIII of this Agreement relating thereto.

                                 ARTICLE III
                SERVICES BY INDEMNITEE, NOTICE OF PROCEEDINGS

         3.01     Services. Indemnitee agrees to serve as a director.
Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by
operation of law).

         3.02     Notice of Proceeding. Indemnitee agrees promptly to notify
the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses covered hereunder.

                                  ARTICLE IV
                               INDEMNIFICATION

         4.01     In General. In connection with any Proceeding, the Company
shall indemnify, and advance Expenses, to Indemnitee as provided in this
Agreement and to the fullest extent permitted by applicable law in effect on
the date hereof and to such greater extent as applicable law may thereafter
from time to time permit.

         4.02     Proceedings Other Than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 4.02 if, by reason of Indemnitee's Corporate Status.
Indemnitee is, or is threatened to be made, a party to any Proceeding, other
than a Proceeding by or in the right of the Company. Indemnitee shall be
indemnified against Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in Good Faith.

         4.03     Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section
4.03 if, by reason of Indemnitee's Corporate Status, Indemnitee is, or is
threatened to be made, a party to any Proceeding brought by or in the right of
the Company to procure a judgment in its favor. Indemnitee shall be
indemnified against Expenses, judgments, penalties, and amounts paid in
settlement, actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection with such Proceeding if Indemnitee acted in Good Faith.
Notwithstanding the foregoing, no such indemnification shall be made in
respect of any claim, issue or matter in such Proceeding as to which
Indemnitee shall have been adjudged to be liable to the Company if applicable
law prohibits such indemnification; provided, however, that, if applicable law
so permits, indemnification shall nevertheless be made by the Company in such
event if and only to the extent that

                                    - 4 -

   5

the Court of Chancery of the State of Delaware, or the court in which such
Proceeding shall have been brought or is pending, shall determine.

         4.04     Indemnification of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of Indemnitee's Corporate Status, a party
to and is successful, on the merits otherwise, in any Proceeding, Indemnitee
shall be indemnified to the maximum extent permitted by law, against all
Expenses, judgments, penalties, fines, and amounts paid in settlement,
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee to the maximum extent permitted by law, against all
Expenses, judgments, penalties, fines, and amounts paid in settlement,
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection with each successfully resolved claim, issue or matter. For
purposes of this Section 4.04 and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue
or matter, so long as there has been no finding (either adjudicated or
pursuant to Article VI) that Indemnitee did not act in Good Faith.

         4.05     Indemnification for Expenses of a Witness. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's Corporate Status, a witness in any Proceeding.
Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee's behalf in connection therewith.

                                  ARTICLE V
                           ADVANCEMENT OF EXPENSES

         Notwithstanding any provision to the contrary in Article VI, the
Company shall advance all reasonable Expenses which, by reason of Indemnitee's
Corporate Status, were incurred by or on behalf of Indemnitee in connection
with any Proceeding, within twenty days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or advances,
whether prior to or after final disposition of such Proceeding. Such statement
or statements shall reasonably evidence the Expenses incurred by Indemnitee
and shall include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advance and undertakings to repay pursuant to this Article V
shall be unsecured and interest free.

                                    - 5 -

   6


                                  ARTICLE VI
                       PROCEDURES FOR DETERMINATION OF
                        ENTITLEMENT TO INDEMNIFICATION

         6.01     Initial request. To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and
to what extent Indemnitee is entitled to indemnification. The Secretary of the
Company shall promptly advise the Board in writing that Indemnitee has
requested indemnification.

         6.02     Method of Determination.  A determination (if required by
applicable law) with respect to Indemnitee's entitlement to indemnification
shall be made as follows:

                  (a)      if a Change in Control has occurred, unless
                           Indemnitee shall request in writing that such
                           determination be made in accordance with clause (b)
                           of this Section 6.02, the determination shall be
                           made by Independent Counsel in a written opinion to
                           the Board, a copy of which shall be delivered to
                           Indemnitee;

                  (b)      if a Change of Control has not occurred, and
                           subject to Section 6.05, the determination shall be
                           made by the Board by a majority vote of a quorum
                           consisting of Disinterested Directors. In the event
                           that a quorum of the Board consisting of
                           Disinterested Directors is not obtainable or, even
                           if obtainable, such quorum of Disinterested
                           Directors so directs, the determination shall be
                           made by Independent Counsel in a written opinion to
                           the Board, a copy of which shall be delivered to
                           Indemnitee.

         6.03     Selection, Payment, Discharge, of Independent Counsel. In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 6.02 of this Agreement, the
Independent Counsel shall be selected, paid, and discharged in the following
manner:

                  (a)      If a Change of Control has not occurred, the
                           Independent Counsel shall be selected by the Board,
                           and the Company shall give written notice to
                           Indemnitee advising Indemnitee of the identity of
                           the Independent Counsel so selected.

                  (b)      If a Change of Control has occurred, the
                           Independent Counsel shall be selected by Indemnitee
                           (unless Indemnitee shall request that such
                           selection be made by the Board, in which event
                           clause (a) of this section shall apply), and
                           Indemnitee shall give written


                                    - 6 -

   7


                           notice to the Company advising it of the identity
                           of the Independent Counsel so selected.

                  (c)      Following the initial selection described in
                           clauses (a) and (b) of this Section 6.03,
                           Indemnitee or the Company, as the case may be, may,
                           within 7 days after such written notice of
                           selection has been given, deliver to the other
                           party a written objection to such selection.  Such
                           objection may be asserted only on the ground that
                           the Independent Counsel so selected does not meet
                           the requirements of independent Counsel as defined
                           in Section 1.09 of this Agreement, and the
                           objection shall set forth with particularity the
                           factual basis of such assertion.  Absent a proper
                           and timely objection, the person so selected shall
                           act as Independent Counsel.  If such written
                           objection is made, the Independent Counsel so
                           selected may not serve as Independent Counsel
                           unless and until a court has determined that such
                           objection is without merit.

                  (d)      Either the Company or Indemnitee may petition the
                           Court of Chancery of the State of Delaware or other
                           court of competent jurisdiction if the parties have
                           been unable to agree on the selection of
                           Independent Counsel within 20 days after submission
                           by Indemnitee of a written request for
                           indemnification pursuant to Section 6.01 of this
                           Agreement.  Such petition may request a
                           determination whether an objection to the party's
                           selection is without merit and/or seek the
                           appointment as Independent Counsel of a person
                           selected by the Court or by such other person as
                           the Court shall designate.  A person so appointed
                           shall act as Independent Counsel under Section 6.02
                           of this Agreement.

                  (e)      The Company shall pay any and all reasonable fees
                           and expenses of Independent Counsel incurred by
                           such Independent Counsel in connection with acting
                           pursuant to this Agreement, and the Company shall
                           pay all reasonable fees and expenses incident to
                           the procedures of this Section 6.03, regardless of
                           the manner in which such Independent Counsel was
                           selected or appointed.

                  (f)      Upon the due commencement of any judicial
                           proceeding or arbitration pursuant to Section 8.01
                           (C) of this Agreement. Independent Counsel shall be
                           discharged and relieved of any further
                           responsibility in such capacity (subject to the
                           applicable standards of professional conduct then
                           prevailing).


                                    - 7 -

   8


         6.04     Cooperation. Indemnitee shall cooperate with the person,
persons or entity making the determination with respect to Indemnitee's
entitlement to indemnification under this Agreement, including providing to
such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any Costs or expenses (including attorneys'
fees and disbursements) incurred by Indemnitee in so cooperating with the
person, persons or entity making such determination shall be borne by the
company (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.

         6.05     Payment. If it is determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination.

                                 ARTICLE VII
                PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS

         7.01     Burden of Proof. In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or entity
making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 6.01 of this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any
determination contrary to that presumption.

         7.02     Effect of Other Proceedings. The termination of any
Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in Good Faith.

         7.03     Reliance as Safe Harbor. For purposes of any determination
of Good Faith, Indemnitee shall be deemed to have acted in Good Faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Enterprise. The provisions of this Section 7.03 shall not be deemed to be
exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in this Agreement.

                                    - 8 -

   9

         7.04     Actions of Others. The knowledge and/or actions, or failure
to act, of any director, officer, agent or employee of the Enterprise shall
not be imputed to Indemnitee for Purposes of determining the right to
indemnification under this Agreement.

                                 ARTICLE VIII
                            REMEDIES OF INDEMNITEE

         8.01     Application.  This Article VIII shall apply in the event of
a Dispute.  For purposes of this Article, "Dispute", shall mean any of the
following events:

                  (a)      a determination is made pursuant to Article VI of
                           this Agreement that Indemnitee is not entitled to
                           indemnification under this Agreement;

                  (b)      advancement of Expenses is not timely made pursuant
                           to Article V of this Agreement;

                  (c)      the determination of entitlement to be made
                           pursuant to Section 6.02 of this Agreement has not
                           been made within 90 days after receipt by the
                           Company of the request for indemnification;

                  (d)      payment of indemnification is not made pursuant to
                           Section 4.05 of this Agreement within ten (10) days
                           after receipt by the Company of a written request
                           therefor; or

                  (e)      payment of indemnification is not made within ten
                           (10) days after a determination has been made that
                           Indemnitee is entitled to indemnification or such
                           determination is deemed to have been made pursuant
                           to Article VI of this Agreement.

         8.02     Adjudication. In the event of a Dispute, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State of Delaware,
or in any other court of competent jurisdiction, of Indemnitee's entitlement
to such indemnification or advancement of Expenses. Alternatively, Indemnitee,
at Indemnitee's option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this
Section 8.02. The Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.

         8.03     De Novo Review. In the event that a determination shall have
been made pursuant to Article VI of this Agreement that Indemnitee is not
entitled to indemnification, any judicial proceeding or arbitration commenced
pursuant to this

                                    - 9 -

   10


Article VIII shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any such proceeding or arbitration, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

         8.04     Company Bound. If a determination shall have been made or
deemed to have been made pursuant to Article VI of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration absent (i) a
misstatement by Indemnitee of a material fact or an omission of a material
fact necessary to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law.

         8.05     Procedures Valid. The Company shall be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this
Article VIII that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement.


         8.06     Expenses of Adjudication. In the event that Indemnitee,
pursuant to this Article VIII, seeks a judicial adjudication of or an award in
arbitration to enforce Indemnitee's rights under, or to recover damages for
breach of this Agreement, Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any and all expenses
(of the types described in the definition of Expenses in Section 1.07 of this
Agreement) actually and reasonably incurred by Indemnitee in such adjudication
or arbitration, but only if Indemnitee prevails therein. If it shall be
determined in such adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of expenses
sought, the expenses incurred by Indemnitee in connection with such
adjudication or arbitration shall be appropriately prorated.

                                  ARTICLE IX
                   NON-EXCLUSIVITY, INSURANCE, SUBROGATION

         9.01     Non-Exclusivity. The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Certificate of Incorporation, the By-Laws,
any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration, rescission or replacement of this
Agreement or any provision hereof shall be effective as to Indemnitee with
respect to any action taken or omitted by such Indemnitee in Indemnitee's
Corporate Status prior to such amendment, alteration, rescission or
replacement.

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         9.02     Insurance.  The Company may maintain an insurance policy or
policies against liability arising out of this Agreement or otherwise.

         9.03     Subrogation. In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

         9.04     No Duplicative Payment. The Company shall not be liable
under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.

                                  ARTICLE X
                              GENERAL PROVISIONS

         10.01    Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee's heirs, executors and administrators.

         10.02    Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever:

                  (a)      the validity, legality and enforceability of the
                           remaining provisions of this Agreement (including
                           without limitation, each portion of any Section of
                           this Agreement containing any such provision held
                           to be invalid, illegal or unenforceable, that is
                           not itself invalid, illegal or unenforceable) shall
                           not in any way be affected or impaired thereby, and

                  (b)      to the fullest extent possible, the provisions of
                           this Agreement (including, without limitation, each
                           portion of any Section of this Agreement containing
                           any such provision held to be invalid, illegal or
                           unenforceable, that is not itself invalid, illegal
                           or unenforceable) shall be construed so as to give
                           effect to the intent manifested by the provision
                           held invalid, illegal or unenforceable.

         10.03    No Adequate Remedy. The parties declare that it is
impossible to measure in money the damages which will accrue to either party
by reason of a failure to perform any of the obligations under this Agreement.
Therefore, if either party shall institute any action or proceeding to enforce
the provisions hereof, such party against whom such action or proceeding is
brought hereby waives the claim or defense that such party has an adequate
remedy at law, and such party shall not urge in any such

                                    - 11 -

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action or proceeding the claim or defense that the other party has an adequate
remedy at law.

         10.04    Identical Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of
this Agreement.

         10.05    Headings. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to constitute part
of this Agreement or to affect the construction thereof.

         10.06    Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
thereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

         10.07    Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom
said notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

          If to Indemnitee, to:     As shown with Indemnitee's Signature below.

          If to the Company to:     Arbitron Inc.
                                    142 West 57th Street
                                    New York, New York 10019
                                    Attn: Office of the General Counsel

or to such other address as may have been furnished to Indemnitee by the
Company or to the Company by Indemnitee, as the case may be.

         10.08    Governing Law. The parties agree that this Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the
state of Delaware without application of the conflict of laws principles
thereof.

         10.09    Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties hereto in reference to all the
matters herein agreed upon. This Agreement replaces in full all prior
indemnification agreements or understandings of the parties hereto, and any
all such prior agreements or understandings are hereby rescinded by mutual
agreement.

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                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.


ATTEST:                             ARBITRON INC.


By:                                 By:
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                                    Its:



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                     Address:
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