Exhibit 10.16

ARBITRON INC. DIRECTOR DEFERRED COMPENSATION PROCEDURES

ARTICLE 1
ESTABLISHMENT

          Pursuant to the Arbitron Inc. 1999 Stock Incentive Plan (the “Stock
Incentive Plan”), the Compensation Committee (the “Committee”) sets forth in
this document the policies and procedures for the award of deferred stock units
to Directors in lieu of the payment of Retainer Fees or Meeting Fees otherwise
payable to the Directors. This document shall be referred to as the Arbitron
Inc. Director Deferred Compensation Procedures (the “Procedures”). The
Procedures are hereby restated and ratified as of January 1, 2004.

ARTICLE 2
PARTICIPATION

          2.1. Participation

          A Director may elect to receive deferred stock units in lieu of
Retainer Fees or Meeting Fees payable with respect to an upcoming calendar year.
Elections may only be made to receive 0%, 50% or 100% of the Fees to be earned
in the upcoming year. The election must be made in writing during the enrollment
period established by the Corporate Secretary that closes prior to the calendar
year in which the Fees otherwise would be paid. The enrollment period shall be a
period of up to 60 days ending no later than December 31 of the year prior to
the calendar year in which the Fees otherwise would be paid. The election for
the upcoming year shall become irrevocable as of the close of the enrollment
period. Failure to complete an election form by December 31 will result in fees
for the upcoming year being paid entirely in cash.

          A Director who elects to receive deferred stock units under the
Procedures shall become a Participant, and the Company shall establish a
Deferred Stock Unit Account in which such deferral(s) shall be held in
accordance with these Procedures.

          A Director’s election shall specify the percentage of the Director’s
Fees converted to deferred stock units and credited to the Deferred Stock Unit
Account.

          The Company shall grant deferred stock units to a Participant at the
end of each calendar quarter in lieu of Retainer Fees or Meeting Fees that
otherwise would be paid to the Participant for his or her Board service during
such calendar quarter. The number of deferred stock units credited is determined
by dividing the amount of Fees deferred by the closing price of common stock of
the Company (“Common Stock”) on the last trading day of the calendar quarter.
For the purpose of crediting the Deferred Stock Unit Account for the quarterly
Fee deferral, fractional shares shall be rounded to the nearest whole number of
shares. The deferred stock units are fully vested and shall be credited to a
Participant’s Deferred Stock Unit Account on the date of grant.

 

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          2.2. First-Year Eligibility

          If a Director first becomes eligible to participate in accordance with
these Procedures during a calendar year (i.e., is elected to fill a vacancy on
the Board during a calendar year), notwithstanding the general requirement
stated in Section 2.1 that the election be completed and submitted before the
calendar year of commencement, an election may be submitted to the Plan
Administrator within 30 days after the Participant first becomes a Director.
However, the election will be effective only with respect to Fees earned and
payable following submission of the election to the Plan Administrator.

ARTICLE 3
PAYMENT OF DEFERRED STOCK UNIT ACCOUNT

          3.1. Termination of Board Service

          Payment of the deferred stock units shall not be made until following
the Participant’s termination of service as a Director of the Company. If the
Participant’s service as a Director of the Company ceases for any reason,
payment shall be made as previously elected by the Participant in accordance
with Section 3.2 below.

          3.2. Form and Time of Payment

          In the election that the Director completes and submits in connection
with the Procedures, which is confirmed by the Participant’s execution of the
Deferred Stock Unit Agreement (the “Agreement”), and pursuant to which he or she
becomes a Participant, the Director shall designate whether payment of his or
her Deferred Stock Unit Account is to be made as a lump sum in shares of Common
Stock or as a series of annual installments of shares of Common Stock, not to
exceed 5 such consecutive annual installments.

          If the Participant elects payment as a lump sum, payment shall
commence within 30 days after the end of the calendar quarter in which the
Participant has ceased to serve as a Director of the Company, with any
fractional shares to be distributed in cash.

          If the Participant elects payment in a series of annual installments,
payment shall commence as of January 1 of the calendar year following the year
in which the Participant has ceased to serve as a Director of the Company (or as
soon as reasonably practicable thereafter). The amount of shares paid in each
installment shall be determined by dividing the Participant’s total remaining
deferred stock units by the remaining number of installments to be paid, such
that the divisor shall be reduced by one in each subsequent year. Fractional
shares shall be rounded down to the nearest whole number, except that in the
final year in which an installment is to be paid, any fractional shares shall be
distributed in cash.

          The payment form reflected in the Participant’s Agreement shall apply
to any deferred stock units accrued to the Participant’s Deferred Stock Unit
Account under a prior deferred stock unit agreement. However, to the extent the
payment form reflected in the

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Agreement represents a change of form from the prior year(s), the Participant’s
election shall be subject to the conditions of Section 3.3 below.

          3.3. Change of Form of Payment

          A Participant may change the form of his or her payment election in
effect under Section 3.2, contingent on the following requirements having been
satisfied:

               (a) the change must be made in writing and in the form designated
by the Plan Administrator;

               (b) the change must be made at a time when the Participant is
still a Director, and must be consistent with Section 3.2; and

               (c) the change will be voided and of no effect if made less than
one year prior to the date that the Director terminates service on the Board.

ARTICLE 4
ACCOUNTS ESTABLISHMENT

          4.1. Accounts

          A Deferred Stock Unit Account shall be established and maintained by
the Plan Administrator for each Participant, in which shall be recorded the Fees
converted to deferred stock units. The deferred stock units shall be credited to
the Deferred Stock Unit Account as of the following dates:

               (a) The deferred portion of one-fourth of the annual Retainer Fee
shall be converted into deferred stock units and credited to the Deferred Stock
Unit Account as of the last day of each calendar quarter; and

               (b) The deferred portion of any Meeting Fee shall be converted
into deferred stock units and credited to the Deferred Stock Unit Account as of
the last day of the calendar quarter in which such meeting was held.

          4.2. DSU Value

          Each deferred stock unit credited to the account represents the value
of a share of Common Stock.

          4.3. Dividend Equivalents

          Dividend Equivalents shall be credited to each deferred stock unit on
each dividend record date to the extent of dividends issued on Common Stock,
provided the record date for such dividends is on or after the end of the
quarter as of which the deferred stock units are credited to the Participant.
Such Dividend Equivalents shall themselves be converted into deferred stock
units as

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of the dividend record date by dividing the amount of the Dividend Equivalents
by the value of the Common Stock as of the applicable dividend record date. Any
such additional deferred stock units (or fraction thereof) resulting from
Dividend Equivalent credits shall be treated as deferred stock units and
credited to the Deferred Stock Unit Account, and shall be subject to the terms
and conditions of the Procedures, the Agreement, and the Stock Incentive Plan.

          4.4. Effect of Certain Transactions

          In the event of a change in the number of outstanding shares of Common
Stock by reason 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 that does not result in a Change of Control, 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 Participant, will make appropriate adjustment
(which determination shall be conclusive) as to the number and kind of
securities represented by the stock units making up the Deferred Stock Unit
Account.

          If there is a Change of Control, then, upon consummation of the Change
of Control, but in no event more than 15 days following the Change of Control,
the Company shall provide the Participant with a cash payment equal to the value
per share of the consideration received in the Change of Control multiplied by
the number of deferred stock units. Upon payment of the cash amount just
described, notwithstanding anything to the contrary in the Agreement, the
Procedures or the Stock Incentive Plan, the Agreement shall expire, and no
further payment shall be due to the Participant in respect of the Deferred Stock
Unit Account.

ARTICLE 5
SURVIVOR AND DEATH BENEFITS

          5.1. Death Benefit

          Upon the death of a participant Director, all amounts, if any,
remaining in his or her Deferred Stock Unit Account shall be distributed to the
Beneficiary designated by the Director in a lump sum as soon as practicable
following the Director’s death.

          If the designated Beneficiary does not survive the Director or dies
before receiving payment of the Director’s Deferred Stock Unit Account, payment
shall be made to the estate of the Director.

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ARTICLE 6
ADMINISTRATION

          6.1. Administration

          The Procedures shall be administered by the Committee to the same
extent as provided in Section 3 of the Stock Incentive Plan. The Committee shall
have full power and authority to administer and interpret the Procedures, to
establish procedures for administering the Procedures and to take any and all
necessary action in connection therewith. The Committee’s interpretation and
construction of the Procedures shall be conclusive and binding on all persons.

          6.2. Amendment and Termination of the Procedures

          The Committee may, in their sole discretion, amend the Procedures at
any time or from time to time, in whole or in part, and for any reason, by
written action. However, no amendment shall reduce the amount accrued in any
Deferred Stock Unit Account as of the date of such amendment.

          The Committee also may terminate the Procedures with respect to the
Participants who render services as Directors or who formerly rendered services
as Directors by written action. In the event of such termination, the Deferred
Stock Unit Accounts of participating Directors shall be paid at such times and
in such forms as shall be determined pursuant to Article 3, unless the Board of
Directors shall prescribe an earlier time or times for payment of such accounts.

ARTICLE 7
GENERAL PROVISIONS

          7.1. Alienation of Benefits

          No Deferred Stock Unit Account payable under the Procedures shall be
subject to alienation, sale, transfer, assignment, pledge, attachment,
garnishment, lien, levy or like encumbrance. The Company shall not in any manner
be liable for or subject to the debts or liabilities of any person entitled to
payment hereunder.

          7.2. No Right to Service

          Nothing contained in the Stock Incentive Plan or these Procedures
shall be deemed to give any Director the right to be retained in the service of
the Company or to interfere with the right of the Company to remove or seek the
resignation of any Director at any time without regard to the effect that such
removal or resignation may have upon the Director under the Stock Incentive Plan
or these Procedures.

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          7.3. Unfunded Arrangement

          The Deferred Stock Units Account shall be an unfunded, unsecured,
contractual obligation of the Company. The Company shall not be required to
segregate any assets to provide payment of Deferred Stock Unit Accounts, and the
Procedures shall not be construed as providing for such segregation. Any
liability of the Company to any Participant or Beneficiary with respect to the
payment of Deferred Stock Unit Accounts shall be based solely upon any
contractual obligations created by the Procedures. Any such obligation shall not
be deemed to be secured by any pledge or other encumbrance or any Company
property. Accordingly, the Participant’s rights to payment hereunder shall be
that of an unsecured creditor.

          7.4. Miscellaneous

               (a) Construction

          Unless the contrary is plainly required by the context, wherever any
words are used herein in the masculine gender, they shall be construed as though
they were also used in the female gender, and vice versa, and wherever any words
are used herein in the singular form, they shall be construed as though they
were also used in the plural form, and vice versa.

               (b) Severability

          If any provision of the Procedures is held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts of
the Procedures, and the Procedures shall be construed and enforced as if such
illegal or invalid provision had never been included in it.

               (c) Titles and Headings Not to Control

          The titles to Articles and the headings of Sections in the Procedures
are for convenience of reference only, and in the event of any conflict, the
text of the Procedures, rather than the titles or headings, shall control.

               (d) Complete Statement of Procedures

          This document is a complete statement of the Procedures. The
Procedures may be amended, modified or terminated only in writing, subject to
any terms and conditions for amendment, modification or termination set forth in
the Stock Incentive Plan.

          7.5. Governing Law

          The Procedures shall be governed by the laws of the State of Delaware
without regard to its choice of law provisions.

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ARTICLE 8
DEFINITIONS

     In addition to those definitions set forth in Article 1 or otherwise in the
text of these Procedures, the following terms shall have the meaning assigned
below in this Article 8:

     8.1. “Beneficiary” means the person or persons designated by the Director
to receive payment of the Director’s Deferred Stock Unit Account in the event of
the death of the Director.

     8.2. “Board” means the Board of Directors of the Company

     8.3. “Change of Control” means any of the following events:

  (i)   a merger or consolidation to which the Company is a party if the
individuals and entities who were stockholders of the Company immediately prior
to the effective date of such merger or consolidation have beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total
combined voting power for election of directors of the surviving Company
immediately following the effective date of such merger or consolidation;    
(ii)   the direct or indirect beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) in the aggregate of securities of the Company
representing 51% 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; provided, however, that for
purposes hereof, any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company shall not constitute a Change of Control;     (iii)   the direct or
indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
in the aggregate of securities of the Company representing 25% 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 if such acquisition is not approved by the Board of Directors
of the Company prior to any such acquisition; provided, however, that for
purposes hereof, any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company shall not constitute a Change of Control;     (iv)   the sale of the
properties and assets of the Company, substantially as an entirety, to any
person or entity which is not a wholly-owned subsidiary of the Company;

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  (v)   the stockholders of the Company approve any plan or proposal for the
liquidation of the Company; or     (vi)   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 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 majority of the then-existing Board
of Directors. As a result, a director who no longer serves on the Board of
Directors, and who is replaced by an individual nominated or recommended for
nomination by a two-thirds vote of the remaining Board of Directors, does not
count as a loss for purposes of determining whether 70% of the members of the
Board of Directors remain in tact.

     8.4. “Director” means any member of the Board of the Company who is not
also an employee of the Company.

     8.5. “Fee” means compensation expected to be paid by the Company to a
Director for services rendered on or after the effective date, exclusive of any
reimbursement by the Company for expenses incurred by the Director related to
attendance at Board meetings or Board committee meetings.

     8.6. “Meeting Fee” means any Fee, other than a Retainer Fee, paid by the
Company to a Director as compensation for attendance at a meeting of the Board
or attendance at a meeting of a Board committee.

     8.7. “Participant” means a Director or former Director who has a Deferred
Stock Unit Account established pursuant to these Procedures.

     8.8. “Retainer Fee” means the annual retainer amount and committee chair
fee expected to be paid by the Company to a Director.

     8.9. “Deferred Stock Unit Account” means the bookkeeping account
established under these Procedures by the Company for each Participant, in which
shall be reflected amounts credited as deferred stock units.

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