Document:

EX-10.4

Exhibit 10.4

NON-QUALIFIED STOCK OPTION AGREEMENT

(Non-Employee Director Stock Options in lieu of Fees Grant)

THIS AGREEMENT is entered into and effective as of      (the “Date of Grant”), by and
between Arbitron Inc. (the “Company”) and      (the “Optionee”).

A. The Company has adopted the Arbitron Inc. 1999 Stock Incentive Plan (as may be amended or
supplemented, the “Plan”) authorizing a committee of the Board of Directors of the Company (the
“Committee”), to grant stock options to non-employee directors of the Company.

B. Pursuant to the Company’s director compensation program, the Company desires to give the
Optionee an inducement to acquire a proprietary interest in the Company and an added incentive to
advance the interests of the Company by granting to the Optionee an option to purchase shares of
common stock of the Company pursuant to the Plan.

Accordingly, the parties agree as follows:

1. Grant of Option.

The Company hereby grants to the Optionee the right, privilege and option (the “Option”) to
purchase      (     ) (the “Option Shares”) of the Company’s common stock, $0.50
par value (the “Common Stock”), according to the terms and subject to the conditions hereinafter
set forth and as set forth in the Plan.

2. Option Exercise Price.

The per share price to be paid by Optionee in the event of an exercise of the Option will be
$     .

3. Duration of Option and Time of Exercise.

3.1 Initial Period of Exercisability. Except as provided in Section 3.2 hereof, the
Option shall become fully vested and exercisable as of the Date of Grant. In no event will the
Option be exercisable after, and the Option will become void and expire as to all unexercised
Option Shares at, 5:00 p.m. (Eastern Standard Time) on the tenth anniversary of the Date of Grant
(the “Time of Option Termination”).

3.2 Termination of Service. If the Optionee’s service as a director of the Company
ceases by any reason other than Cause (as defined in Section 8 of this Agreement), the Option shall
become immediately exercisable in full and remain exercisable until the Time of Option Termination.
If the Optionee’s service as a director of the Company ceases by reason of Cause, all rights of
the Optionee under the Plan and this Agreement will immediately terminate without notice of any
kind, and the Option will no longer be exercisable.

4. Manner of Option Exercise.

4.1 Notice. This Option may be exercised by the Optionee in whole or in part from
time to time, subject to the conditions contained in the Plan and in this Agreement, by delivery,
in person, by facsimile or electronic transmission or through the mail, to the Company at its
office in Columbia, Maryland (Attention: Treasury Department), of a written notice of exercise.
Such notice must be in a form satisfactory to the Committee, must identify the Option, must specify
the number of Option Shares with respect to which the Option is being exercised, and must be signed
by the person or persons so exercising the Option. In the event that the Option is being
exercised, as provided by the Plan and Section 3.2 of this Agreement, by any person or persons
other than the Optionee, the notice must be accompanied by appropriate proof of right of such
person or persons to exercise the Option. To the extent the Optionee retains the Option Shares
purchased, as soon as practicable after the effective exercise of the Option, the Optionee will be
recorded on the stock transfer books of the Company as the owner of the Option Shares purchased,
and the Company will deliver to the Optionee one or more duly issued stock certificates evidencing
such ownership.

4.2 Payment. At the time of exercise of the Option, the Optionee must pay the total
exercise price of the Option Shares to be purchased entirely in cash (including a check, bank draft
or money order, payable to the order of the Company) or a Broker Exercise Notice.

5. Rights and Restrictions of Optionee; Transferability.

5.1 Rights as a Stockholder. The Optionee will have no rights as a stockholder unless
and until all conditions to the effective exercise of the Option (including, without limitation,
the conditions set forth in Sections 4 and 6 of this Agreement) have been satisfied.

5.2 Restrictions on Transfer. Except pursuant to testamentary will or the laws of
descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of
the Optionee in the Option prior to exercise may be assigned or transferred, or subjected to any
lien, during the lifetime of the Optionee, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise. The Optionee will, however, be entitled to designate
a beneficiary to receive the Option upon such Optionee’s death in the manner provided by the Plan,
and, in the event of the Optionee’s death, exercise of the Option (to the extent permitted pursuant
to Section 3.2 of this Agreement) may be made by the Optionee’s designated beneficiary.

6. Securities Law and Other Restrictions.

Notwithstanding any other provision of the Plan or this Agreement, the Company will not be
required to issue, and the Optionee may not sell, assign, transfer or otherwise dispose of, any
Option Shares, unless (a) there is in effect with respect to the Option Shares 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 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 Option Shares, as may be deemed necessary or
advisable by the Company in order to comply with such securities law or other restrictions.

7. Change of Control.

Within 15 days following consummation of a Change of Control (as defined in the Plan plus such
other event or transaction as the Board shall determine constitutes a Change of Control), the
Company shall make a cash payment to the Optionee equal to the sum of (i) the in-the-money value of
this Option (i.e., the number of unexercised option shares multiplied by the difference between the
value per share of the consideration received in the Change of Control and the exercise price per
share), and (ii) the Black-Scholes Termination Value of this Option. Upon making such cash
payment, notwithstanding anything to the contrary in this Agreement or the Plan, this Option shall
expire, and no longer shall be exercisable.

	 	8.	 	Certain Definitions. For purposes of this Agreement, the following additional
definitions will apply:

(a) “Black-Scholes Termination Value” means the difference between (i) the Black-Scholes value
of this Option had it continued for its entire term, such value determined as of the date of the
Change of Control, using (A) a share price equal to the value per share of the consideration
received in the Change of Control transaction, (B) a volatility input equal to the measured daily
volatility for the 180 days ending on the Determination Date, and (C) an interest rate equal to the
rate on 10-year Treasury constant maturities (zero coupon bonds) for the date of consummation of
the Change of Control, as published by the Federal Reserve, and (ii) the in-the-money amount of
this Option (i.e., the number of unexercised option shares multiplied by the difference between the
value per share of the consideration received in the Change of Control and the exercise price per
share).

(b) “Cause” means (i) dishonesty, fraud, misrepresentation, theft, embezzlement or injury or
attempted injury, in each case related to the Company or any Subsidiary, (ii) any unlawful or
criminal activity of a serious nature, or (iii) any breach of duty or habitual neglect of duty.

(c) “Determination Date” means the earlier of the date one week after the date on which the
Company or the entity effecting the Change of Control first announces to the public the existence
of a definitive agreement leading to the Change of Control or the date of commencement of a tender
offer leading to the Change of Control.

9. Shares Subject to Plan.

The Option and the Option Shares granted and issued pursuant to this Agreement have been
granted and issued under, and are subject to the terms of the Plan. The terms of the Plan are
incorporated by reference in this Agreement in their entirety, and the Optionee, by execution of
this Agreement, acknowledges having received a copy of the Plan. The provisions of this Agreement
will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will
be interpreted by reference to the Plan. Except as set forth in Sections 7 and 8, in the event
that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the
Plan will prevail.

10. Miscellaneous.

10.1 Binding Effect. This Agreement will be binding upon the heirs, executors,
administrators and successors of the parties to this Agreement.

10.2 Governing Law. This Agreement and all rights and obligations under this
Agreement will be construed in accordance with the Plan and governed by the laws of the State of
Delaware, without regard to conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive laws of another jurisdiction.

10.3 Entire Agreement. This Agreement and the Plan set forth the entire agreement and
understanding of the parties to this Agreement with respect to the grant and exercise of the Option
and the administration of the Plan and supersede all prior agreements, arrangements, plans and
understandings relating to the grant and exercise of the Option and the administration of the Plan.

10.4 Amendment and Waiver. Other than as provided in the Plan, this Agreement may be
amended, waived, modified or canceled only by a written instrument executed by the parties to this
Agreement or, in the case of a waiver, by the party waiving compliance.

1

The parties to this Agreement have executed this Agreement effective the day and year first
above written.

ARBITRON INC.

By

Its

	 	 	 	 	 
	By execution of this Agreement,	 	OPTIONEE
	the Optionee acknowledges having
	received a copy of the Plan.
	 	 	 	 	(Signature)

(Name and Address)

Social Security Number:

2EX-10.5

Exhibit 10.5

DEFERRED STOCK UNIT AGREEMENT

(Non-Employee Director Stock-for-Fees Deferred Stock Unit)

THIS AGREEMENT is entered into and effective as of      , by and between Arbitron
Inc. (the “Company”) and      (the “Participant”).

A. The Company has adopted the Arbitron Inc. 1999 Stock Incentive Plan (as may be amended or
supplemented, the “Plan”) authorizing the Board of Directors of the Company, or a committee as
provided for in the Plan (the Board or such a committee to be referred to as the “Committee”), to
award deferred stock units to non-employee directors of the Company.

B. Pursuant to the Company’s program permitting directors to receive deferred stock units
under the Plan in lieu of director’s fees, the Company hereby awards to the Participant on
     , stock units representing shares of the Company’s common stock, and payable following
termination of the Participant’s Board service as further described herein.

Accordingly, the parties agree as follows:

1. Deferred Stock Units.

The Company hereby awards the Participant      stock units representing the same number
of shares of the Company’s common stock, $0.50 par value (the “Deferred Stock Units”), according to
the terms and subject to the conditions hereinafter set forth, as set forth in the Plan, and the
policies and procedures concerning the award of deferred stock units set forth in the Arbitron,
Inc. Director Deferred Compensation Plan (the “Policy”). The number of deferred stock units
subject to this Agreement may increase based on Dividend Equivalent credits made pursuant to
Section 4. Any such additional Deferred Stock Units (or fraction thereof) resulting from Dividend
Equivalent credits shall be treated as Deferred Stock Units and shall be subject to the terms and
conditions of this Agreement, the Plan and the Policy. Payment of the Deferred Stock Units shall
be made as described below in Section 2.

2. Vesting and Payment of Deferred Stock Units.

2.1 Vesting. The Deferred Stock Units are fully vested.

2.2 Termination of 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 as follows:

	 	 	 	 ̈ Within 30 days after the end of the calendar quarter in which the
Participant has ceased to serve as a director of the Company, as a lump sum payment in
 shares of common stock of the Company (“Common Stock”) and with any fractional shares
to be distributed in cash.

	 	 	 	 ̈ Commencing 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), in      annual installments (not to exceed 5) of
 shares of Common Stock. 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 Company has checked the box that applies to the Participant under this Agreement.)

By execution of this Agreement, the Participant acknowledges that the payment form reflected
above in this Agreement also applies to any Deferred Stock Units accrued to the Participant’s
account under a prior deferred stock unit agreement and supercedes any previously elected payment
form. However, to the extent, the payment form reflected above represents a change of form from
the prior year(s), the Participant’s election shall be subject to the conditions of Section 3.

3. Election to Change Payment Form.

A Participant may change the form of his or her payment election in effect under Section 2 of
this Agreement, contingent on the following requirements having been satisfied: (a) the change must
be made in writing and in the form designated by the Company; (b) the change must be made at a time
when the Participant is still a director for the Company, and must be consistent with Section 2 of
this Agreement; and (c) the Participant recognizes that 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 of
Directors.

4. Rights and Restrictions of Participant; Transferability.

4.1 Rights as a Stockholder. The Participant will have no rights as a stockholder
unless and until the Participant has become the holder of record of shares of Common Stock
following payment in Common Stock after terminating service as a director of the Company.
Notwithstanding the preceding, the Participant shall be credited with Dividend Equivalents on
deferred stock units credited for his or her benefit to the extent of dividends issued on Common
Stock, provided the record date for such dividend is on or after the end of the quarter as of which
the stock units are credited to the Participant.

4.2 Restrictions on Transfer. Except pursuant to testamentary will or the laws of
descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of
the Participant to payment of the Deferred Stock Units may be assigned or transferred, or subjected
to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly
or indirectly, by operation of law or otherwise. The Participant will, however, be entitled to
designate a beneficiary to receive the payment of the Deferred Stock Units after such Participant’s
death in the manner provided by the Policy.

5. Securities Law and Other Restrictions.

Notwithstanding any other provision of the Plan or this Agreement, the Company will not be
required to issue, and the Participant may not sell, assign, transfer or otherwise dispose of, any
shares of Common Stock received as payment of the Deferred Stock Units, unless (a) there is in
effect with respect to the shares of Common Stock received as payment of the Deferred Stock Units 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 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 Common Stock received as payment of the
Deferred Stock Units, as may be deemed necessary or advisable by the Company in order to comply
with such securities law or other restrictions.

6. Change of Control.

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 this agreement, the Plan or the Policy, this
agreement shall expire, and no further payment shall be due to the Participant in respect of the
Deferred Stock Units.

7. 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 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 will be conclusive) as to the
number and kind of securities represented by the stock units making up the Deferred Stock Units.

8. Certain Definitions. For purposes of this Agreement, the following additional
definitions will apply:

(a) “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;

	 	(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.

(b) “Dividend Equivalent” means a credit to the account of a Participant, based on the
number of Deferred Stock Units subject to 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 shares of Deferred Stock Units (or fractions thereof) and
shall be added to the number of Deferred Stock Units subject to this Agreement.

9. Subject to Plan.

The Deferred Stock Units issued under this Agreement have been issued subject to the terms of
the Plan, as supplemented by the Policy. The terms of the Plan and the Policy are incorporated by
reference in this Agreement in their entirety, and the Participant, by execution of this Agreement,
acknowledges having received a copy of the Plan and the Policy. The provisions of this Agreement
will be interpreted as to be consistent with the Plan and the Policy, and any ambiguities in this
Agreement will be interpreted by reference to the Plan. Except as set forth in Sections 6 and 8,
in the event that any provision of this Agreement is inconsistent with the terms of the Plan, the
terms of the Plan will prevail.

10. Miscellaneous.

10.1 Director as Unsecured Creditor. This Agreement shall create a contractual
obligation on the part of Company to make payment of the Deferred Stock Units credited to the
account of the Participant at the time provided for hereinabove. Neither the Participant nor any
other party claiming an interest in deferred compensation hereunder shall have any interest
whatsoever in any specific assets of Company. The Participant’s right to receive payments
hereunder shall be that of an unsecured general creditor of Company.

10.2 Payment Rights Nontransferable. The rights and interests of the Participant and
any beneficiary of the Participant under this Agreement may not be sold, pledged, hypothecated,
assigned or transferred in any manner, either voluntarily or involuntarily by operation of law,
other than by the Participant pursuant to a beneficiary designation in accordance with the Policy.

10.3 Binding Effect. This Agreement will be binding upon the heirs, executors,
administrators and successors of the parties to this Agreement.

10.4 Governing Law. This Agreement and all rights and obligations under this
Agreement will be construed in accordance with the Plan and governed by the laws of the State of
Delaware, without regard to conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive laws of another jurisdiction.

10.5 Entire Agreement. This Agreement, the Plan, and the Policy set forth the entire
agreement and understanding of the parties to this Agreement with respect to the terms and
conditions applicable to the Deferred Stock Units and supersede all prior agreements, arrangements,
plans, and understandings relating to the Deferred Stock Units and the administration of the Plan
and the Policy.

10.6 Amendment and Waiver. Other than as provided in the Plan, this Agreement may be
amended, waived, modified or canceled only by a written instrument executed by the parties to this
Agreement or, in the case of a waiver, by the party waiving compliance.

The parties to this Agreement have executed this Agreement effective the day and year first
above written.

ARBITRON INC.

By

Its

	 	 	 	 	 
	By execution of this Agreement,	 	PARTICIPANT
	the Participant acknowledges having
	received a copy of the Plan and the Policy.
	 	 	 	 	(Signature)

(Name and Address)

Social Security Number:

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