Exhibit 10.2
ARBITRON INC.
Form of 2008 CEO Restricted Stock Unit Agreement
Granted Under the 1999 Stock Incentive Plan
     AGREEMENT made between Arbitron Inc., a Delaware corporation (the
“Company”), and Stephen B. Morris (the “Participant”).
     For valuable consideration, receipt of which is acknowledged, the parties
hereto agree as follows:
     1. Grant of RSUs.
On ___, 2008 (the “Date of Grant”) and subject to the terms and conditions set
forth in this Agreement and in the Arbitron Inc. 1999 Stock Incentive Plan (the
“Plan”), the Company granted to the Participant Restricted Stock Units (“RSUs”)
providing the right to receive ___(___) shares of common stock, $0.50 par value,
of the Company (the “Shares”).
     2. Vesting and Forfeiture.
     (a) While the Participant remains employed, the RSUs shall vest in two
(2) equal annual installments commencing on December 31, 2008, with a final
vesting on December 31, 2009, subject to earlier vesting under subsection (b).
The date upon which each installment vests shall be considered a “Vesting Date”
for the portion of the RSUs vesting on that date.
     (b) The Vesting Date for all unvested RSUs shall be accelerated, if
applicable, to the earliest of:
     (i) The death of the Participant;
     (ii) The “Disability” of the Participant (within the meaning of Proposed
Treasury Regulation Section 1.409A-3(g)(4) or any successor regulation); and
     (iii) A “Change in Control” consisting of a change in ownership or
effective control of the Company (within the meaning of Treasury
Regulation Section 1.409A-3(g)(5) or any successor regulation).
     (c) If the Participant ceases to be employed by the Company (and any
applicable Subsidiaries) for any reason or no reason (except for death or
Disability), the Participant shall immediately and automatically forfeit all
rights to any of his RSUs that have Vesting Dates after the date employment ends
except as an applicable employment agreement or executive retention agreement
may provide to the contrary.
     3. Issuance of Shares.
          Subject to the terms and conditions of this Agreement (including any
Withholding Tax obligations), as soon as practicable after a Vesting Date, the
Company shall issue one or more certificates representing Fifty Percent (50%),
rounded down to the next whole Share, of the newly vested Shares (the “Initial
Tranches”) to the Participant or his estate, or, as directed by the Participant,
a brokerage account, with the remaining Shares credited to the Participant’s
account as an equivalent number of “Deferred Stock Units.” The Company must, in
any event, issue the applicable Shares in respect of the Initial Tranches no
later than the later of (i) December 31 of the calendar year in which the
applicable Vesting Date occurs and (ii) the fifteenth day of the third calendar
month following the Vesting Date. Until the Vesting Date, the Participant shall
have no rights to any Shares or any rights associated with such Shares,
including without limitation dividend or voting rights, and the Participant
shall have no voting rights with respect to Deferred Stock Units.

 

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     4. Acceleration/ Deferral.
     (a) Acceleration. In no event may the Company deliver the Shares to the
Participant earlier than an applicable Vesting Date.
     (b) Deferral. The Company shall issue Shares in payment of the Deferred
Stock Units as of or as soon as practicable after the first day of the seventh
(7th) month (the “Deferred Payment Date”) following the Participant’s separation
from service, as a lump sum in common stock of the Company (with any fractional
share paid in cash). If the Participant separates from service with the Company
and all Subsidiaries on account of death or if the Participant dies prior to
payment under the preceding sentence, the Company shall make payment as soon as
reasonably practicable following the Participant’s death, in accordance with the
beneficiary designation form filed for this benefit (or, if none, according to
the beneficiary designation form filed by the Participant with respect to his
2006 award of restricted stock) as the form may be updated from time to time
(provided that a designation specific to the Deferred Stock Units hereunder
shall take precedence over a form filed for the 2006 award). If there is a
Change in Control, then upon consummation of the Change in Control, but in no
event more than 15 days following the Change in Control, the Company shall
provide the Participant a cash payment equal to the value per share of the
consideration received in the Change in Control multiplied by the number of
Deferred Stock Units then credited to the Participant under this Agreement. In
no event may the Company or the Participant defer the delivery of the Shares
beyond the date specified in this Section 4(b), unless such deferral complies in
all respects with Treasury Regulation Section 1.409A-2(b) related to subsequent
changes in the time or form of payment of nonqualified deferred compensation
arrangements, or any successor regulation.
     5. Dividend Equivalent Rights.
          The Participant shall receive Dividend Equivalent Rights on the Shares
between the applicable Vesting Date and the date on which Shares are
distributed. “Dividend Equivalent Rights” mean a credit to the account of the
Participant, based on the number of vested RSUs or Deferred Stock Units then
credited to the Participant under this Agreement, equivalent to the cash, stock
or other property dividends on shares of Common Stock. Dividend Equivalent
credits shall be deemed reinvested in additional RSUs or Deferred Stock Units,
as applicable, (or fractions thereof) by dividing the dollar amount of the
Dividend Equivalent credit by the Fair Market Value of a share of the Company’s
common stock on the payment date of the dividend. The resulting number of Common
Stock equivalents shall be added to the number of RSUs or Deferred Stock Units
(as applicable) subject to this Agreement.

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     6. Restrictions Regarding Employment.
     (a) The Participant agrees that he will not take any Adverse Actions (as
defined below) against the Company or any Subsidiary from the Date of Grant
through the first anniversary of the Participant’s termination of employment
with the Company or any Subsidiary (the “Restricted Period”). The Participant
acknowledges that damages that may arise from a breach of this Section 6 may be
impossible to ascertain or prove with certainty. Notwithstanding anything in
this Agreement or the Plan to the contrary, if the Company determines in its
sole discretion that the Participant has taken Adverse Actions against the
Company or any Subsidiary at any time during the Restricted Period, in addition
to other legal remedies that may be available, (i) the Company will be entitled
to an immediate injunction from a court of competent jurisdiction to end such
Adverse Action, without further proof of damage, (ii) the Committee will have
the authority in its sole discretion to terminate immediately all rights of the
Participant under the Plan and this Agreement without notice of any kind, and
(iii) the Committee will have the authority in its sole discretion to cause a
forfeiture of any Shares acquired by the Participant upon the vesting of the
RSUs to the extent that such vesting occurred within six months prior to the
date the Participant first commences any such Adverse Actions and require the
Participant to disgorge any profits (however defined by the Committee) realized
by the Participant relating to such vested portion of the Shares. Such disgorged
profits paid to the Company must be made in cash (including check, bank draft or
money order) or, with the Committee’s consent, shares of Common Stock with a
Fair Market Value on the date of payment equal to the amount of such payment.
The Company will be entitled to withhold and deduct from future wages of the
Participant (or from other amounts that may be due and owing to the Participant
from the Company or a Subsidiary) or make other arrangements for the collection
of all amounts necessary to satisfy such payment obligation.
     (b) For purposes of this Agreement, an “Adverse Action” will mean any of
the following: (i) engaging in any commercial activity in competition with any
part of the business of the Company or any Subsidiary as conducted during the
Restricted Period for which the Participant has or had access to trade secrets
and/or confidential information; (ii) diverting or attempting to divert from the
Company or any Subsidiary any business of any kind, including, without
limitation, interference with any business relationships with suppliers,
customers, licensees, licensors, clients or contractors; (iii) participating in
the ownership, operation or control of, being employed by, or connected in any
manner with any person or entity that solicits, offers or provides any services
or products similar to those that the Company or any Subsidiary offers to its
customers or prospective customers, (iv) making, or causing or attempting to
cause any other person or entity to make, any statement, either written or oral,
or conveying any information about the Company or any Subsidiary that is
disparaging or that in any way reflects negatively on the Company or any
Subsidiary; or (v) engaging in any other activity that is hostile, contrary or
harmful to the interests of the Company or any Subsidiary, including, without
limitation, influencing or advising any person who is employed by or in the
service of the Company or any Subsidiary to leave such employment or service
with the Company or any Subsidiary or to enter into the employment or service of
any actual or prospective competitor of the Company or any Subsidiary,
influencing or advising any competitor of the Company or any Subsidiary to
employ to otherwise engage the services of any person who is employed by or in
the service of the Company or any Subsidiary, or improperly disclosing or
otherwise misusing any trade secrets or confidential information regarding the
Company or any Subsidiary.

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     (c) Should any provision of this Section 6 of the Agreement be held invalid
or illegal, such illegality shall not invalidate the whole of this Section 6 of
the Agreement, but, rather, the Agreement shall be construed as if it did not
contain the illegal part or narrowed to permit its enforcement, and the rights
and obligations of the parties shall be construed and enforced accordingly. In
furtherance of and not in limitation of the foregoing, the Participant expressly
agrees that should the duration of or business activities covered by, any
provision of this Agreement be in excess of that which is valid or enforceable
under applicable law, then such provision shall be construed to cover only that
duration, extent or activities that may validly or enforceably be covered. The
Participant acknowledges the uncertainty of the law in this respect and
expressly stipulates that this Agreement shall be construed in a manner that
renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law. This Section 6 of
the Agreement does not replace and is in addition to any other agreements the
Participant may have with the Company or any of its Subsidiaries on the matters
addressed herein.
     7. Transferability.
          This Agreement may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of (whether by operation of law or otherwise)
(collectively, a “transfer”), except that this Agreement may be transferred by
the laws of descent and distribution or as otherwise permitted under the Plan.
The Participant may only transfer the Shares that may be issued pursuant to this
Agreement following a Vesting Date (or, for Deferred Stock Units, the Deferred
Payment Date) that covers them.
     8. Withholding Taxes.
     (a) The Participant has reviewed with the Participant’s own tax advisors
the federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by this Agreement. The Participant is relying
solely on such advisors and not on any statements or representations of the
Company or any of its agents.
     (b) The Company’s obligation to deliver Shares to the Participant upon the
vesting of the RSUs shall be subject to the satisfaction of all income tax
(including federal, state and local taxes), social insurance, payroll tax,
payment on account or other tax related withholding requirements (“Withholding
Taxes”). FICA taxes will be withheld from other compensation due to the
Participant with respect to RSUs that become credited as Deferred Stock Units.
     (c) The Participant acknowledges and agrees that the Company has the right
to deduct from payments of any kind otherwise due to the Participant any
Withholding Taxes to be withheld with respect to the transactions contemplated
by this Agreement, including the vesting of the Shares.
     9. Securities Laws.
          Notwithstanding any other provision of the Plan or this Agreement, the
Company will not be required to issue, and the Executive may not sell, assign,
transfer or otherwise dispose of, any shares of Common Stock received as payment
of the RSUs, unless (a) there is in effect with respect to the shares of Common
Stock received as payment of the RSUs a
registration statement under the Securities Act of 1933, as amended, and any
applicable state or foreign securities laws or an exemption from such
registration, and (b) there has been obtained any other consent, approval or
permit from any other regulatory body that the Committee, in its sole
discretion, deems necessary or advisable. The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing Common Stock received as payment of the RSUs, as may be deemed
necessary or advisable by the Company to comply with such securities law or
other restrictions.

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     10. Adjustments.
          In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or extraordinary dividend
(including a spin-off), or any other change in the corporate structure or shares
of the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation), in order to prevent dilution or enlargement of the rights of the
Grantee, shall make equitable adjustments (which adjustments will be conclusive)
as to the number and kind of securities or other property (including cash)
covered by this grant of RSUs and any related Deferred Stock Units.
     11. Provisions of the Plan.
This Agreement is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this Agreement. Any undefined terms are
defined in the Plan.
     12. Miscellaneous.
     (a) Section 409A. This Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code and shall be construed
consistently therewith.
     (b) Unsecured Creditor. This Agreement shall create a contractual
obligation on the part of Company to make payment of the RSUs and Deferred Stock
Units credited to the account of the Participant at the time provided for in
this Agreement. Neither the Participant nor any other party claiming an interest
in deferred compensation hereunder shall have any interest whatsoever in any
specific assets of the Company. The Executive’s right to receive payments
hereunder shall be that of an unsecured general creditor of Company.
     (c) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
     (d) Waiver. Any provision for the benefit of the Company contained in this
Agreement may be waived, either generally or in any particular instance, by the
Board of Directors of the Company or the Committee.
     (e) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 7 of this
Agreement.

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     (f) Notice. All notices required or permitted hereunder shall be in writing
and deemed effectively given upon personal delivery or five calendar days after
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party hereto at the address shown
beneath his, her, or its respective signature to this Agreement, or at such
other address or addresses as either party shall designate to the other in
accordance with this Section 12(f).
     (g) Entire Agreement. This Agreement and the Plan constitute the entire
agreement between the parties, and supersedes all prior agreements and
understandings, relating to the subject matter of this Agreement.
     (h) Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Participant.
     (i) Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the internal laws of the State of Delaware without
regard to any applicable conflicts of laws.
     (j) Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to participation in the Plan, RSUs granted under
the Plan or future RSUs that may be granted under the Plan by electronic means
or to request the Participant’s consent to participate in the Plan by electronic
means. The Participant hereby consents to receive such documents by electronic
delivery and, if requested, to agree to participate in the Plan through an
on-line or electronic system established and maintained by the Company or
another third party designated by the Company.
     (k) Participant’s Acknowledgments. The Participant acknowledges that he:
(i) has read this Agreement; (ii) has been represented in the preparation,
negotiation and execution of this Agreement by legal counsel of the
Participant’s own choice or has voluntarily declined to seek such counsel;
(iii) understands the terms and consequences of this Agreement; (iv) is fully
aware of the legal and binding effect of this Agreement; and (v) understands
that the law firm of Wilmer Cutler Pickering Hale and Dorr LLP is acting as
counsel to the Company in connection with the transactions contemplated by the
Agreement, and is not acting as counsel for the Participant.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date last indicated below.

                          ARBITRON INC.    
 
               
 
  Date:                     , 2008   By:        
 
         
 
Name:    
 
          Title:    
 
               
 
  Date:                     , 2008   By:        
 
               
 
          Stephen B. Morris    

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