10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2010

Or

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

9705 Patuxent Woods Drive
Columbia, Maryland 21046
(Address of principal executive offices) (Zip Code)
(410) 312-8000
(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 þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer þ	Non-Accelerated Filer o	Smaller Reporting Company o
		(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     The registrant had 26,837,065 shares of common stock, par value $0.50 per share, outstanding as of July 31, 2010.

ARBITRON INC.

INDEX

	Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets — June 30, 2010, and December 31, 2009		4
Consolidated Statements of Income — Three Months Ended June 30, 2010, and 2009		5
Consolidated Statements of Income — Six Months Ended June 30, 2010, and 2009		6
Consolidated Statements of Cash Flows — Six Months Ended June 30, 2010, and 2009		7
Notes to Consolidated Financial Statements — June 30, 2010		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3. Quantitative and Qualitative Disclosures About Market Risk		38
Item 4. Controls and Procedures		38
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		39
Item 1A. Risk Factors		42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 4. (Removed and Reserved)		42
Item 5. Other Information		42
Item 6. Exhibits		43
Signature		44
EX-4.1
EX-4.2
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-31.1
EX-31.2
EX-32.1

     Arbitron owns or has the rights to various trademarks, trade names or service marks used in its radio audience measurement business and subsidiaries, including the following: the Arbitron name and logo, Arbitrends^SM, RetailDirect^®, RADAR^®, Tapscan^TM, Tapscan WorldWide^TM, LocalMotion^®, Maximi$er^®, Maximi$er^® Plus, Arbitron PD Advantage^®, SmartPlus^®, Arbitron Portable People Meter^TM, PPM^TM, Arbitron PPM^®, PPM 360^™, Marketing Resources Plus^®, MRP^SM, PrintPlus^®, MapMAKER Direct^SM, Media Professional^SM, Media Professional Plus^SM, Qualitap^SM and Schedule-It^SM.

     The trademarks Windows^® and Media Rating Council^® are the registered trademarks of others.

     We routinely post important information on our website at www.arbitron.com. Information contained on our website is not part of this quarterly report.

3

ARBITRON INC.

Consolidated Balance Sheets

(In thousands, except par value data)

	June 30,			December 31,
	2010			2009
	(Unaudited)			(Audited)
Assets
Current assets
Cash and cash equivalents	$	13,326		$	8,217
Trade accounts receivable, net of allowance for doubtful accounts of $4,076 as of June 30, 2010, and $4,708 as of December 31, 2009		56,688			52,607
Prepaid expenses and other current assets		4,786			9,373
Deferred tax assets		5,095			4,982
Total current assets		79,895			75,179
Equity and other investments		17,179			16,938
Property and equipment, net		67,686			67,903
Goodwill, net		38,500			38,500
Other intangibles, net		7,545			809
Noncurrent deferred tax assets		3,785			4,130
Other noncurrent assets		653			370
Total assets	$	215,243		$	203,829
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	11,412		$	14,463
Accrued expenses and other current liabilities		18,131			28,305
Deferred revenue		49,730			43,148
Total current liabilities		79,273			85,916
Long-term debt		68,000			68,000
Other noncurrent liabilities		20,722			19,338
Total liabilities		167,995			173,254
Commitments and contingencies		—			—
Stockholders’ equity
Preferred stock, $100.00 par value, 750 shares authorized, no shares issued		—			—
Common stock, $0.50 par value, 500,000 shares authorized, 32,338 shares issued as of June 30, 2010, and December 31, 2009		16,169			16,169
Net distributions to parent prior to March 30, 2001 spin-off		(239,042	)		(239,042	)
Retained earnings subsequent to spin-off		283,280			267,305
Common stock held in treasury, 5,638 shares as of June 30, 2010, and 5,750 shares as of December 31, 2009		(2,819	)		(2,875	)
Accumulated other comprehensive loss		(10,340	)		(10,982	)
Total stockholders’ equity		47,248			30,575
Total liabilities and stockholders’ equity	$	215,243		$	203,829

See accompanying notes to consolidated financial statements.

4

ARBITRON INC.

Consolidated Statements of Income

(In thousands, except per share data)

(unaudited)

	Three Months Ended
	June 30,
	2010		2009
Revenue	$	88,339	$	86,799
Costs and expenses
Cost of revenue		59,504		55,762
Selling, general and administrative		19,149		19,351
Research and development		9,072		10,584
Restructuring and reorganization		—		185
Total costs and expenses		87,725		85,882
Operating income		614		917
Equity in net income of affiliate		5,642		5,581
Income before interest and income tax expense		6,256		6,498
Interest income		4		14
Interest expense		254		365
Income before income tax expense		6,006		6,147
Income tax expense		2,207		2,651
Net income	$	3,799	$	3,496
Income per weighted-average common share
Basic	$	0.14	$	0.13
Diluted	$	0.14	$	0.13
Weighted-average common shares used in calculations
Basic		26,650		26,486
Potentially dilutive securities		424		169
Diluted		27,074		26,655
Dividends declared per common share outstanding	$	0.10	$	0.10

See accompanying notes to consolidated financial statements.

5

ARBITRON INC.

Consolidated Statements of Income

(In thousands, except per share data)

(unaudited)

	Six Months Ended
	June 30,
	2010		2009
Revenue	$	184,235	$	185,288
Costs and expenses
Cost of revenue		102,657		95,291
Selling, general and administrative		36,790		37,775
Research and development		18,981		19,890
Restructuring and reorganization		—		8,356
Total costs and expenses		158,428		161,312
Operating income		25,807		23,976
Equity in net income of affiliate		3,111		2,581
Income before interest and income tax expense		28,918		26,557
Interest income		6		33
Interest expense		519		698
Income before income tax expense		28,405		25,892
Income tax expense		10,858		10,055
Net income	$	17,547	$	15,837
Income per weighted-average common share
Basic	$	0.66	$	0.60
Diluted	$	0.65	$	0.60
Weighted-average common shares used in calculations
Basic		26,622		26,458
Potentially dilutive securities		377		142
Diluted		26,999		26,600
Dividends declared per common share outstanding	$	0.20	$	0.20

See accompanying notes to consolidated financial statements.

6

ARBITRON INC.

Consolidated Statements of Cash Flows

(In thousands and unaudited)

	Six Months Ended June 30,
	2010			2009
Cash flows from operating activities
Net income	$	17,547		$	15,837
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment		12,931			10,810
Amortization of intangible assets		264			71
Loss on asset disposals and impairment		1,319			1,071
Loss on retirement plan lump-sum settlements		1,212			15
Reduced tax benefits on share-based awards		(25	)		(1,437	)
Deferred income taxes		(539	)		206
Equity in net income of affiliate		(3,111	)		(2,581	)
Distributions from affiliate		4,650			5,400
Bad debt expense		60			674
Non-cash share-based compensation		3,102			4,626
Changes in operating assets and liabilities
Trade accounts receivable		(4,141	)		(15,596	)
Prepaid expenses and other current assets		3,881			1,767
Accounts payable		(398	)		(5,367	)
Accrued expenses and other current liabilities		(10,196	)		(7,075	)
Deferred revenue		6,582			(738	)
Other noncurrent liabilities		1,600			998
Net cash provided by operating activities		34,738			8,681
Cash flows from investing activities
Additions to property and equipment		(12,859	)		(16,752	)
Payments for asset acquisitions		(2,500	)		—
Purchases of equity and other investments		(1,780	)		(3,400	)
License of other intangible assets		(4,500	)		—
Net cash used in investing activities		(21,639	)		(20,152	)
Cash flows from financing activities
Proceeds from stock option exercises and stock purchase plan		1,156			738
Dividends paid to stockholders		(5,312	)		(5,284	)
Decrease in bank overdraft payables		(3,833	)		—
Borrowings under Credit Facility		10,000			33,000
Payments under Credit Facility		(10,000	)		(13,000	)
Net cash (used in) provided by financing activities		(7,989	)		15,454
Effect of exchange rate changes on cash and cash equivalents		(1	)		28
Net change in cash and cash equivalents		5,109			4,011
Cash and cash equivalents at beginning of period		8,217			8,658
Cash and cash equivalents at end of period	$	13,326		$	12,669

See accompanying notes to consolidated financial statements.

7

ARBITRON INC.

Notes to Consolidated Financial Statements
June 30, 2010

(unaudited)

1. Basis of Presentation and Consolidation

Presentation

     The accompanying unaudited consolidated financial statements of Arbitron Inc. (the “Company” or “Arbitron”) have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included and are of a normal recurring nature. The consolidated balance sheet as of December 31, 2009 was audited at that date, but all of the information and notes as of December 31, 2009 required by U.S. generally accepted accounting principles have not been included in this Form 10-Q. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Consolidation

     The consolidated financial statements of the Company for the three- and six-month periods ended June 30, 2010, reflect the consolidated financial position, results of operations and cash flows of the Company and its subsidiaries: Arbitron Holdings Inc., Astro West LLC, Ceridian Infotech (India) Private Limited, Arbitron International, LLC and Arbitron Technology Services India Private Limited. All significant intercompany balances have been eliminated in consolidation. Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to the current period’s presentation.

8

2. Long-Term Debt

     On December 20, 2006, the Company entered into an agreement with a consortium of lenders to provide up to $150.0 million of financing to the Company through a five-year, unsecured revolving credit facility (the “Credit Facility”), expiring on December 20, 2011. The agreement contains an expansion feature for the Company to increase the total financing available under the Credit Facility by up to $50.0 million to an aggregate of $200.0 million. Such increased financing would be provided by one or more existing Credit Facility lending institutions, subject to the approval of the lending banks, and/or in combination with one or more new lending institutions, subject to the approval of the Credit Facility’s administrative agent. As of both June 30, 2010, and December 31, 2009, the outstanding borrowings under the Credit Facility were $68.0 million.

     The Credit Facility has two borrowing options, a Eurodollar rate option or an alternate base rate option, as defined in the Credit Facility 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 the London Interbank Offered Rate (LIBOR) plus a margin of 0.575% to 1.25%. 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 0.00% to 0.25%. The specific margins, under both options, are determined based on the Company’s ratio of indebtedness to earnings before interest, income taxes, depreciation, amortization and non-cash share-based compensation, and is adjusted every 90 days. The Credit Facility agreement contains a facility fee provision whereby the Company is charged a fee, ranging from 0.175% to 0.25%, applied to the total amount of the commitment.

     Interest capitalized during each of the three-month periods ended June 30, 2010, and 2009, was less than $0.1 million. Non-cash amortization of deferred financing costs classified as interest expense during each of the three-month periods ended June 30, 2010, and 2009, was less than $0.1 million. The interest rate on outstanding borrowings as of June 30, 2010, and December 31, 2009, was .92% and 1.03%, respectively.

     Interest paid during the six-month periods ended June 30, 2010, and 2009, was $0.5 million and $0.6 million, respectively. Interest capitalized during each of the six-month periods ended June 30, 2010, and 2009, was less than $0.1 million. Non-cash amortization of deferred financing costs classified as interest expense during each of the six-month periods ended June 30, 2010, and 2009, was less than $0.1 million.

     The Credit Facility contains certain financial covenants, and limits, among other things, the Company’s ability to sell certain assets, incur additional indebtedness, and grant or incur liens on its assets. The material debt covenants under the Company’s Credit Facility include both a maximum leverage ratio (“leverage ratio”) and a minimum interest coverage ratio (“interest coverage ratio”). The leverage ratio is a non-GAAP financial measure equal to the amount of the Company’s consolidated total indebtedness, as defined in the Credit Facility, divided by a contractually defined adjusted Earnings Before Interest, Taxes, Depreciation and Amortization and non-cash compensation (“Consolidated EBITDA”) for the trailing 12-month period. The interest coverage ratio is a non-GAAP financial measure equal to the same contractually defined Consolidated EBITDA divided by total interest expense. Both ratios are designed as measures of the Company’s ability to meet current and future obligations. As of June 30, 2010, based upon these financial covenants, there was no default or limit on the Company’s ability to borrow the unused portion of the Credit Facility.

     The Credit Facility also contains customary events of default, including nonpayment and breach covenants. In the event of default, repayment of borrowings under the Credit Facility, as well as the payment of accrued interest and fees, could be accelerated. The Credit Facility also contains cross default provisions whereby a default on any material indebtedness, as defined in the Credit Facility, could result in the acceleration of our outstanding debt and the termination of any unused commitment under the Credit Facility. The Company currently has no outstanding debts other than those associated with borrowings under the Credit Facility. In addition, a default may result in the application of higher rates of interest on the amounts due.

9

3. Stockholders’ Equity

     Changes in stockholders’ equity for the six-month period ended June 30, 2010, were as follows (in thousands):

								Net Distributions
								to Parent			Retained			Accumulated
								Prior to			Earnings			Other			Total
	Shares		Common		Treasury			March 30, 2001			Subsequent			Comprehensive			Stockholders’
	Outstanding		Stock		Stock			Spin-off			to Spin-off			Loss			Equity
Balance as of December 31, 2009		26,588	$	16,169	$	(2,875	)	$	(239,042	)	$	267,305		$	(10,982	)	$	30,575
Net income		—		—		—			—			17,547			—			17,547
Common stock issued from treasury stock		112		—		56			—			679			—			735
Reduced tax benefits from share-based awards		—		—		—			—			(25	)		—			(25	)
Non-cash share-based compensation		—		—		—			—			3,102			—			3,102
Dividends declared		—		—		—			—			(5,328	)		—			(5,328	)
Other comprehensive income		—		—		—			—			—			642			642
Balance as of June 30, 2010		26,700	$	16,169	$	(2,819	)	$	(239,042	)	$	283,280		$	(10,340	)	$	47,248

     A quarterly cash dividend of $0.10 per common share was paid to stockholders on July 1, 2010.

10

4. Net Income per Weighted-Average Common Share

     The computations of basic and diluted net income per weighted-average common share for the three and six-month periods ended June 30, 2010, and 2009, are based on the Company’s weighted-average shares of common stock and potentially dilutive securities outstanding.

     Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes that the proceeds from the exercise of all stock options are used to repurchase the Company’s common stock at the average market price for the period. As of June 30, 2010, and 2009, there were options to purchase 2,486,862 and 2,764,049 shares, respectively, of the Company’s common stock outstanding, of which options to purchase 1,356,889 and 2,375,313 shares of the Company’s common stock, respectively, were excluded from the computation of diluted net income per weighted-average common share for the quarter ended June 30, 2010, and 2009, respectively, either because the options’ exercise prices were greater than the average market price of the Company’s common shares or assumed repurchases from proceeds from the options’ exercise were potentially antidilutive.

     The Company elected to use the short-cut method of determining its initial hypothetical tax benefit windfall pool. The assumed proceeds associated with the entire amount of tax benefits for share-based awards granted prior to January 1, 2006, were used in the diluted shares computation. For share-based awards granted subsequent to January 1, 2006, the assumed proceeds for the related excess tax benefits, if any, were also used in the diluted shares computation.

11

5. Comprehensive Income and Accumulated Other Comprehensive Loss

     The Company’s comprehensive income is comprised of net income, changes in foreign currency translation adjustments, and changes in retirement liabilities, net of tax (expense) benefits. The components of comprehensive income were as follows (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2010			2009		2010			2009
Net income	$	3,799		$	3,496	$	17,547		$	15,837
Other comprehensive income (loss):
Change in foreign currency translation adjustment		(253	)		35		(227	)		(44	)
Change in retirement liabilities, net of tax expense of $117, and $136 for the three months ended June 30, 2010, and 2009, respectively; and a tax expense of $559, and $295 for the six months ended June 30, 2010, and 2009, respectively.		184			210		869			449
Other comprehensive income (loss)		(69	)		245		642			405
Comprehensive income	$	3,730		$	3,741	$	18,189		$	16,242

The components of accumulated other comprehensive loss were as follows (in thousands):

	June 30,			December 31,
	2010			2009
Foreign currency translation adjustment	$	(537	)	$	(310	)
Retirement plan liabilities, net of taxes		(9,803	)		(10,672	)
Accumulated other comprehensive loss	$	(10,340	)	$	(10,982	)

12

6. Prepaids and Other Current Assets

     Prepaids and other current assets as of June 30, 2010, and December 31, 2009, consist of the following (in thousands):

	June 30,		December 31,
	2010		2009
Survey participant incentives and prepaid postage	$	2,880	$	2,172
Other		1,605		2,810
Insurance recovery receivables		301		4,391
Prepaids and other current assets	$	4,786	$	9,373

     During 2008, the Company became involved in two securities law civil actions and a governmental interaction primarily related to the commercialization of our Portable People Meter™ (PPM™) service, which the management of the Company believes are covered by the Company’s Directors and Officers insurance policy. As of June 30, 2010, and December 31, 2009, the Company incurred-to-date approximately $9.1 million and $8.8 million, respectively, in legal fees and costs in defense of its positions related thereto.

     The Company reported $0.3 million and $1.3 million in estimated gross insurance recoveries as reductions to selling, general and administrative expense during the six-month periods ended June 30, 2010, and 2009, respectively. These reductions partially offset the $0.3 million and $1.6 million in related legal fees recorded during the six-month periods ended June 30, 2010, and 2009, respectively. As of June 30, 2010, the Company has received $5.6 million in insurance reimbursements related to these legal actions and estimates that an additional $0.3 million of the aggregate costs and expenses are probable for recovery under its Director and Officer insurance policy.

     During 2009 and 2008, the Company incurred $2.7 million in business interruption losses and damages as a result of Hurricane Ike. As of June 30, 2010, approximately $1.6 million in insurance reimbursements were received and no subsequent insurance reimbursements are expected to be received.

7. Equity and Other Investments

     The Company’s equity and other investments consisted of the following (in thousands):

	June 30, 2010		December 31, 2009
Scarborough	$	11,999	$	13,538
Equity investments		11,999		13,538
TRA preferred stock		5,180		3,400
Other investments		5,180		3,400
Equity and other investments	$	17,179	$	16,938

     The Company’s 49.5% investment in Scarborough Research (“Scarborough”), a Delaware general partnership, is accounted for using the equity method of accounting. On May 24, 2010, the Company paid $1.8 million to increase its investment in the preferred stock of TRA Global, Inc., a Delaware corporation (“TRA”). The Company’s TRA investment is accounted for using the cost method of accounting. See Note 15 Financial Instruments for further information regarding the Company’s TRA investment as of June 30, 2010.

     The following table shows the investment activity and balances for each of the Company’s investments and in total for the three- and six-month periods ended as of June 30, 2010, and 2009:

13

	Summary of Investment Activity (in thousands)
	Three Months Ended								Three Months Ended
	June 30, 2010								June 30, 2009
	Scarborough			TRA		Total			Scarborough			TRA		Total
Beginning balance	$	8,057		$	3,400	$	11,457		$	8,400		$	—	$	8,400
Investment income		5,642			—		5,642			5,581			—		5,581
Distributions from investee		(1,700	)		—		(1,700	)		(1,899	)		—		(1,899	)
Cash investments		—			1,780		1,780			—			3,400		3,400
Ending balance at June 30	$	11,999		$	5,180	$	17,179		$	12,082		$	3,400	$	15,482

	Six Months Ended								Six Months Ended
	June 30, 2010								June 30, 2009
	Scarborough			TRA		Total			Scarborough			TRA		Total
Beginning balance	$	13,538		$	3,400	$	16,938		$	14,901		$	—	$	14,901
Investment income		3,111			—		3,111			2,581			—		2,581
Distributions from investee		(4,650	)		—		(4,650	)		(5,400	)		—		(5,400	)
Cash investments		—			1,780		1,780			—			3,400		3,400
Ending balance at June 30	$	11,999		$	5,180	$	17,179		$	12,082		$	3,400	$	15,482

8. Acquisitions

     During the three-month period ended March 31, 2010, the Company entered into a licensing arrangement with Digimarc Corporation (“Digimarc”) to receive a non-exclusive, worldwide and irrevocable license to a substantial portion of Digimarc’s domestic and international patent portfolio. The Company paid $4.5 million for this intangible asset, which will be amortized over 7.0 years.

     On June 15, 2010, Astro West LLC, a wholly owned subsidiary of the Company, completed the purchase of the technology portfolio, patents, and trade name from Integrated Media Measurement, Inc., now doing business as Audience Measurement Technologies, Inc. The Company paid $2.5 million for the acquisition of these assets. An appraisal of the fair value of the acquired assets will be completed in the third quarter of 2010.

9. Contingencies

     During 2009 and 2008, the Company was involved in a number of significant legal actions and governmental interactions primarily related to the commercialization of our PPM service. A contingent loss in the amount of $0.5 million for these claims is recorded within accrued expenses and other current liabilities on the Company’s consolidated balance sheet as of June 30, 2010, and December 31, 2009.

10. Restructuring and Reorganization Initiative

     During the first quarter of 2009, the Company implemented a restructuring, reorganization and expense reduction plan (the “Plan”). The Plan included reducing the Company’s full-time workforce by approximately 10 percent. The Company incurred $10.0 million of restructuring charges during 2009, related principally to severance, termination benefits, outplacement support, retirement plan settlement charges and certain other expenses that were incurred as part of the Plan. No additional charges are expected to be incurred in 2010.

14

     The following table presents additional information regarding the restructuring and reorganization activity for the three- and six-month periods ended June 30, 2010, and 2009 (in thousands):

	For the Three			For the Three
	Months Ended June			Months Ended June
Restructuring and Reorganization	30, 2010			30, 2009
Beginning liability	$	231		$	8,156
Costs incurred and charged to expense		—			185
Costs paid during the period		(219	)		(5,707	)
Ending liability as of June 30	$	12		$	2,634

	For the Six			For the Six
	Months Ended June			Months Ended
Restructuring and Reorganization	30, 2010			June 30, 2009
Beginning liability	$	482		$	—
Costs incurred and charged to expense		—			8,356
Costs paid during the period		(470	)		(5,722	)
Ending liability as of June 30	$	12		$	2,634

     The ending restructuring and reorganization liability balance noted above is recorded within the accrued expenses and other current liabilities on the Company’s consolidated balance sheet as of June 30, 2010, and December 31, 2009.

15

11. Retirement Plans

     Certain of the Company’s United States employees participate in a defined-benefit pension plan that closed to new participants effective January 1, 1995. The Company subsidizes healthcare benefits for eligible retired employees who participate in the pension plan and were hired before January 1, 1992. The Company also sponsors two nonqualified, unfunded supplemental retirement plans.

     The components of periodic benefit costs for the defined-benefit pension, postretirement and supplemental retirement plans were as follows (in thousands):

	Defined-Benefit						Postretirement				Supplemental
	Pension Plan						Plan				Retirement Plans
	Three Months						Three Months				Three Months
	Ended June 30,						Ended June 30,				Ended June 30,
	2010			2009			2010		2009		2010		2009
Service cost	$	182		$	222		$	9	$	13	$	4	$	5
Interest cost		471			477			23		23		50		72
Expected return on plan assets		(534	)		(576	)		—		—		—		—
Amortization of prior service cost (credit)		—			5			—		—		—		(3	)
Amortization of net loss		263			248			9		10		30		83
Net periodic benefit cost	$	382		$	376		$	41	$	46	$	84	$	157
Settlement and curtailment loss	$	—		$	—		$	—	$	—	$	—	$	15

	Defined-Benefit						Postretirement				Supplemental
	Pension Plan						Plan				Retirement Plans
	Six Months						Six Months				Six Months
	Ended June 30,						Ended June 30,				Ended June 30,
	2010			2009			2010		2009		2010		2009
Service cost	$	365		$	444		$	19	$	25	$	8	$	46
Interest cost		942			953			45		46		109		162
Expected return on plan assets		(1,068	)		(1,153	)		—		—		—		—
Amortization of prior service cost (credit)		—			11			—		—		—		(8	)
Amortization of net loss		526			497			18		21		72		222
Net periodic benefit cost	$	765		$	752		$	82	$	92	$	189	$	422
Settlement and curtailment loss	$	—		$	—		$	—	$	—	$	1,212	$	15

     During the six-month period ended June 30, 2010, the Company recognized a $1.2 million settlement loss as a result of a lump sum distribution paid to a supplemental retirement plan participant which exceeded the service and interest components incurred for that plan. During the six-month period ended June 30, 2009, the Company recognized a curtailment charge of less than $0.1 million related to an employee termination under the Company’s 2009 restructuring and reorganization initiative.

     The Company estimates that it will contribute $5.1 million to its defined benefit plans during 2010.

16

12. Taxes

     The effective tax rate decreased to 38.2% for the six months ended June 30, 2010, from 38.8% for the six months ended June 30, 2009, primarily to reflect the increased benefit of certain permanent deductions.

     During 2010, the Company’s net unrecognized tax benefits for certain tax contingencies increased from $2.2 million as of December 31, 2009, to $2.3 million as of June 30, 2010. If recognized, the $2.3 million in unrecognized tax benefits would reduce the Company’s effective tax rate in future periods.

     Income taxes paid for the six months ended June 30, 2010 and 2009, were $15.1 million and $12.6 million, respectively.

13. Share-Based Compensation

     The following table sets forth information with regard to the income statement recognition of share-based compensation (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Cost of revenue	$	90	$	52	$	180	$	82
Selling, general and administrative		1,886		2,649		2,808		4,504
Research and development		61		42		114		40
Share-based compensation	$	2,037	$	2,743	$	3,102	$	4,626

     There was no capitalized share-based compensation cost recorded during the six-month periods ended June 30, 2010, and 2009.

     On May 25, 2010, the Company’s shareholders approved the amended and restated 2008 Equity Compensation Plan, including an increase of 2,200,000 shares of common stock for issuance thereunder, the extension of the 2008 Plan term, and the addition of performance criteria to facilitate the granting of performance-based compensation. The maximum amount of share awards authorized to be issued under this plan is 4,700,000 shares of the Company’s common stock and of this amount, a maximum of 4,700,000 shares of the Company’s common stock are authorized to be issued for performance-based awards. The expiration date of the 2008 Equity Compensation Plan is May 25, 2020. In addition, on May 25, 2010, the Company’s shareholders approved an amendment and restatement of its compensatory Employee Stock Purchase Plan (“ESPP”) increasing the maximum number of shares of Company common stock reserved for sale under the ESPP from 850,000 to 1,100,000.

     The Company’s policy for issuing shares upon option exercise, or vesting of its share awards and/or conversion of deferred stock units under all of the Company’s stock incentive plans is to issue new shares of common stock, unless treasury stock is available at the time of exercise or conversion.

Stock Options

     Stock options awarded to employees under the 1999 and 2001 Stock Incentive Plans and the 2008 Equity Compensation Plan (referred to herein collectively as the “SIPs”) generally vest annually over a three-year period, have a 10-year term and have an exercise price of not less than the fair market value of the Company’s common stock at the date of grant. Stock options granted to directors under the SIPs generally vest on the date of grant, are generally exercisable six months after the date of grant, have a 10-year term and an exercise price not less than the fair market value of the Company’s common stock at the date of grant. For stock options granted prior to 2010, the Company’s stock option agreements generally provide for accelerated vesting if there is a change in control of the Company. Effective for stock options granted after 2009, the Company’s stock option agreements provide for accelerated vesting if (i) there is a change in control of the Company and (ii) the participant’s employment

17

terminates during the 24-month period following the effective date of the change in control for one of the reasons specified in the stock option agreement.

     The Company uses historical data to estimate future option exercises and employee terminations in order to determine the expected term of the stock option. Identified groups of optionholders that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of stock options granted represents the period of time that such stock options are expected to be outstanding. The expected term can vary for certain groups of optionholders exhibiting different behavior. The risk-free rate for periods within the contractual life of the stock option is based on the U.S. Treasury strip bond yield curve in effect at the time of grant. Expected volatilities are based on the historical volatility of the Company’s common stock. The fair value of each stock option granted to employees and nonemployee directors during the six-month periods ended June 30, 2010, and 2009, was estimated on the date of grant using a Black-Scholes stock option valuation model.

     For the three-month period ended June 30, 2010, there were no options granted. For the three-month period ended June 30, 2009, the number of stock options granted was 935,789 and the weighted-average exercise price for those stock options granted was $20.33.

     For the six-month periods ended June 30, 2010, and 2009, the number of stock options granted was 288,544 and 1,320,293, respectively, and the weighted-average exercise price for those stock options granted was $22.84 and $18.79, respectively.

     As of June 30, 2010, there was $4.2 million in total unrecognized compensation cost related to stock options granted under the SIPs. This aggregate unrecognized cost is expected to be recognized over a weighted-average period of 2.0 years. The weighted-average exercise price and weighted-average remaining contractual term for outstanding stock options as of June 30, 2010, were $30.84 and 6.98 years, respectively, and as of June 30, 2009, $29.73 and 7.74 years, respectively.

Nonvested Stock Awards

     Service awards. The Company’s nonvested service awards vest over four or five years on either a monthly or annual basis. Compensation expense is recognized on a straight-line basis using the fair market value of the Company’s common stock on the date of grant as the nonvested service awards vest. For those awards granted prior to 2010, the Company’s nonvested service awards generally provide for accelerated vesting if there is a change in control of the Company. Effective for nonvested service awards granted after 2009, the Company’s awards provide for accelerated vesting if (i) there is a change in control of the Company and (ii) the participant’s employment terminates during the 24-month period following the effective date of the change in control for one of the reasons specified in the restricted stock unit agreement.

     As of June 30, 2010, there was $3.9 million of total unrecognized compensation cost related to nonvested service awards granted under the SIPs. This aggregate unrecognized cost for nonvested service awards is expected to be recognized over a weighted-average period of 2.4 years. Additional information for the three and six-month periods ended June 30, 2010, and 2009, is noted in the following table (dollars in thousands, except per share data):

18

	Three Months		Three Months		Six Months		Six Months
	Ended June 30,		Ended June 30,		Ended June 30,		Ended June 30,
	2010		2009		2010		2009
Number of nonvested service award shares granted		—		208,910		—		310,449
Weighted average grant-date fair value per share		—	$	20.29		—	$	18.56
Fair value of service award shares vested	$	1,467	$	132	$	2,190	$	781

     Performance awards. During the six-month period ended June 30, 2010, the Company granted nonvested performance awards, which (i) were issued at the fair market value of the Company’s common stock on the date of grant, (ii) will expire without vesting if the performance measure is not satisfied by the first anniversary date of the grant, and (iii) will, if the performance measure is satisfied, vest in four equal annual installments beginning on the first anniversary date of the grant. The Company’s nonvested performance awards provide for accelerated vesting if (i) there is a change in control of the Company and (ii) the participant’s employment terminates during the 24-month period following the effective date of the change in control for one of the reasons specified in the performance-based restricted stock unit agreement.

     Compensation expense is recognized using the fair market value of the Company’s common stock on the date of grant as the nonvested performance awards vest and under the assumption that the performance goal will be achieved. If such goal is not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.

     As of June 30, 2010, there was $1.9 million of total unrecognized compensation cost related to nonvested performance awards granted under the SIPs. This aggregate unrecognized cost is expected to be recognized over a weighted-average period of 3.7 years. During the three-month period ended June 30, 2010, 39,630 shares of nonvested performance awards were granted at a weighted average grant-date fair value per share of $30.46. During the six-month period ended June 30, 2010, 91,553 shares of nonvested performance awards were granted at a weighted average grant-date fair value per share of $25.76. No such performance awards were granted during 2009. No shares of performance awards have vested as of June 30, 2010.

Deferred Stock Units

     Service award grant to CEO. A deferred stock unit service award was issued by the Company at the fair market value of the Company’s stock on the date of grant, and vests annually over a four-year period on each anniversary date of the date of grant. The deferred stock unit award is convertible, into shares of the Company’s common stock, following the holder’s termination of employment. The Company’s deferred stock unit service award provides for accelerated vesting upon termination without cause or retirement as defined in the CEO’s employment agreement.

     As of June 30, 2010, there was $1.2 million of total unrecognized compensation cost related to this deferred stock unit service award. This aggregate unrecognized cost is expected to be recognized over a weighted-average period of 1.5 years.

     Performance award grant to CEO. During the six-month period ended June 30, 2010, the Company granted a deferred stock unit performance award which (i) was issued at the fair market value of the Company’s common stock on the date of grant, (ii) will expire without vesting if the performance measure is not satisfied by the first anniversary date of the grant, (iii) will, if the performance measure is satisfied, vest in four equal annual installments beginning on the first anniversary date of the grant, and (iv) provides for accelerated vesting upon

19

termination without cause or retirement as defined in the CEO’s employment agreement. This deferred stock unit performance award is convertible to shares of the Company’s common stock, subsequent to termination of employment.

     As of June 30, 2010, there was $0.4 million of total unrecognized compensation cost related to the deferred stock unit performance award granted under the SIPs to the Company’s CEO. This aggregate unrecognized cost is expected to be recognized over a weighted-average period of 1.5 years.

     Awards for service on Board of Directors (“Board”). Deferred stock units granted for retainer fees and meeting attendance fees that the individual Board members elect to receive in the form of DSUs rather than cash vest immediately upon grant, are convertible to shares of common stock subsequent to their termination of service as a director, and are issued at the fair market value of the Company’s stock upon the date of grant. Initial grants issued to new directors vest annually over three years. Beginning in 2010, the annual grant to nonemployee directors consisted of a DSU grant, which vest annually in three equal installments over a three-year period. As of June 30, 2010, there was $0.8 million of total unrecognized compensation cost related to deferred stock units granted under the SIPs to nonemployee directors. This aggregate unrecognized cost is expected to be recognized over a weighted-average period of 2.9 years.

     Other deferred stock unit (“DSU”) information for the three- and six-month periods ended June 30, 2010, and 2009, is noted in the following table (dollars in thousands):

	Three Months		Three Months		Six Months		Six Months
	Ended June 30,		Ended June 30,		Ended June 30,		Ended June 30,
	2010		2009		2010		2009
Service DSU award granted to CEO		—		—		60,144		—
Performance DSU award granted to CEO		—		—		23,004		—
DSU awards granted for Board service and dividend equivalents		25,517		26,228		31,676		31,634
Fair value of DSU shares vested	$	41	$	74	$	84	$	154

14. Concentration Risk

     Arbitron is a leading media and marketing information services firm, primarily serving radio, cable television, advertising agencies, advertisers, retailers, out-of-home media, online media and, through the Company’s Scarborough joint venture with The Nielsen Company, broadcast television and print media. The Company’s quantitative radio audience ratings revenue and related software licensing revenue accounted for the following percentages, in the aggregate, of total Company revenue:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Quantitative radio audience estimates and related software licensing		82	%		82	%		90	%		90	%

     The Company had one customer that individually represented 19% of its annual revenue for the year ended December 31, 2009. The Company had two customers that individually represented 23% and 10% of its total

20

accounts receivable as of June 30, 2010, and one customer that individually represented 24% of its total accounts receivable as of December 31, 2009. The Company has historically experienced a high level of contract renewals.

15. Financial Instruments

     The Company believes that the fair market value of the TRA investment approximates the carrying value of $5.2 million and $3.4 million as of June 30, 2010 and December 31, 2009, respectively. On May 24, 2010, the Company paid approximately $1.8 million to purchase additional shares of preferred stock of TRA. Fair values of accounts receivable and accounts payable approximate carrying values due to their short-term nature. Due to the floating rate nature of the Company’s revolving obligation under its Credit Facility, the fair values of the $68.0 million in outstanding borrowings as of both June 30, 2010, and December 31, 2009, approximate their carrying amounts.

21

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

     The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto in this Quarterly Report on Form 10-Q.

     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 Inc. and its subsidiaries (“we,” “our,” “Arbitron” or the “Company”) in this document that are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “likely,” “expects,” “intends,” “anticipates,” “estimates,” “believes” or “plans” or comparable terminology, are forward-looking statements based on current expectations about future events, which we have derived from information currently available to us. These forward-looking statements involve known and unknown risks and uncertainties that may cause our results to be materially different from results implied by such forward-looking statements. These risks and uncertainties include, in no particular order, whether we will be able to:

• successfully maintain and promote industry usage of our services, a critical mass of broadcaster encoding, and the proper understanding of our audience measurement services and methodology in light of governmental actions, including investigation, regulation, legislation or litigation, customer or industry group activism, or adverse community or public relations efforts;

• complete the Media Rating Council, Inc. (“MRC”) audits of our local market Arbitron PPM ratings services in a timely manner and successfully obtain and/or maintain MRC accreditation for our audience measurement services;

• successfully commercialize our PPM service;

• design, recruit and maintain PPM panels that appropriately balance research quality, panel size and operational cost;

• absorb costs related to legal proceedings and governmental entity interactions and avoid any related fines, limitations or conditions on our business activities, including, without limitation, by meeting or exceeding our commitments and agreements with various governmental entities;

• successfully develop, implement and fund initiatives designed to increase sample quality;

• successfully manage the impact on costs of data collection due to lower respondent cooperation in surveys, consumer trends including a trend toward increasing incidence of cell phone households, privacy concerns, technology changes, and/or government regulations;

• provide appropriate levels of operational capacity and funding to support the more costly identification and recruitment of cell phone households into our panels and samples;

• successfully manage the impact on our business of the recent economic downturn generally, and in the advertising market, in particular, including, without limitation, the insolvency of any of our customers or the impact of such downturn on our customers’ ability to fulfill their payment obligations to us;

• compete with companies that may have financial, marketing, sales, technical or other advantages over us;

• effectively respond to rapidly changing technological needs of our customer base, including creating proprietary technology and systems to support our cell phone sampling plans, and new customer services that meet these needs in a timely manner;

• successfully execute our business strategies, including evaluating and, where appropriate, entering into potential acquisition, joint-venture or other material third-party agreements;

22

• effectively manage the impact, if any, of any further ownership shifts in the radio and advertising agency industries;

• successfully develop and implement technology solutions to encode and/or measure new forms of media content and delivery, and advertising in an increasingly competitive environment;

• successfully develop, implement, and launch our cross-platform initiatives; and

• renew contracts with key customers.

     There are a number of additional important factors that could cause actual events or our actual results to differ materially from those indicated by such forward-looking statements, including, without limitation, the factors set forth in “ITEM 1A. RISK FACTORS” in our Annual Report on Form 10-K for the year ended December 31, 2009, and elsewhere, and any subsequent periodic or current reports filed by us with the Securities and Exchange Commission (the “SEC”).

     In addition, any forward-looking statements represent our expectations only as of the day we filed this Quarterly Report with the SEC and should not be relied upon as representing our expectations as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our expectations change.

Overview

     We are a leading media and marketing information services firm primarily serving radio, advertising agencies, cable and broadcast television, advertisers, retailers, out-of-home media, online media and, through our Scarborough Research joint venture with The Nielsen Company (“Nielsen”), broadcast television and print media. We currently provide four main services:

• measuring and estimating radio audiences in local markets in the United States;

• measuring and estimating radio audiences of network radio programs and commercials;

• providing software used for accessing and analyzing our media audience and marketing information data; and

• providing consumer, shopping, and media usage information services.

     Historically, our quantitative radio audience measurement business and related software have accounted for a substantial majority of our revenue. For both of the six-month periods ended June 30, 2010, and 2009, our quantitative radio audience measurement business and related software accounted for approximately 90 percent of our revenue. We expect that for the year ending December 31, 2010, our quantitative radio audience measurement business and related software licensing will account for approximately 90 percent of our revenue.

     Quarterly fluctuations in these percentages are reflective of the seasonal delivery schedule of our quantitative radio audience measurement business and our Scarborough revenues. For further information regarding seasonality trends, see “Seasonality.”

     While we expect that our quantitative radio audience measurement business and related software licensing will continue to account for the majority of our revenue for the foreseeable future, we are actively seeking opportunities to diversify our revenue base by, among other things, leveraging the investment we have made in our PPM technology and exploring applications of the technology to both enhance and extend beyond our domestic radio audience measurement business.

23

     We are in the process of executing our previously announced plan to commercialize progressively our PPM ratings service in the largest United States radio markets, which we currently anticipate will result in commercialization of the service in 48 local markets by December 2010 (collectively, the “PPM Markets”). According to our analysis of BIA’s 2009 Investing in Radio Market Report, those broadcasters with whom we have entered into multi-year PPM agreements account for most of the total radio advertising dollars in the PPM Markets. These agreements generally provide for a higher fee for PPM-based ratings than we charge for Diary-based ratings. As a result, we expect that the percentage of our revenues derived from our radio ratings and related software is likely to increase as we commercialize the PPM service.

     Growth in revenue is expected for 2010 due to the full year impact of revenue recognized for the 33 markets in which we commercialized the PPM service prior to 2010, as well as the partial year impact related to the 15 markets in which we are scheduled to commercialize the PPM service during the latter half of 2010. However, the full revenue impact of the launch of the PPM service in each PPM Market is not expected to occur within the first year after commercialization because our customer contracts allow for phased-in pricing toward the higher PPM service rate over a period of time.

     We incur expenses to build the PPM panel in each PPM Market in the months before we commercialize the service in that market. However, we recognize PPM revenue at the higher PPM rates only when we deliver audience estimates using the PPM service. Because we did not commercialize the PPM service in any new markets during the first half of 2010 and because we incurred expenses in the first half of 2010 related to the 15 markets in which we plan to commercialize the PPM service during the second half of 2010, our results of operations were negatively impacted during the first half of 2010 to the extent of such panel expenses in advance of PPM revenues. We expect that our revenue will increase during the second half of 2010 as we begin to deliver audience estimates in the new PPM Markets and begin to recognize such revenue at the higher PPM rates.

     The election of Cumulus, Inc. (“Cumulus”) and Clear Channel Communications, Inc. (“Clear Channel”) to subscribe to a competitor’s radio ratings service in certain small to mid-sized markets in 2009 resulted in a $5.0 million negative impact on revenue we would have received for the year ended December 31, 2009 had those two customers renewed their agreements with us, and is anticipated to adversely impact our expected revenue by approximately $10.0 million in 2010. Due to the impact of the recent economic downturn on anticipated sales of discretionary services and renewals of agreements to provide ratings services, as well as the high penetration of our current services in the radio broadcasting business, we expect that our future annual organic rate of revenue growth from our quantitative Diary-based radio ratings services will be slower than historical trends.

     We continue to operate in a highly challenging business environment. Our future performance will be impacted by our ability to address a variety of challenges and opportunities in the markets and industries we serve. Such challenges and opportunities include our ability to continue to maintain and improve the quality of our PPM service, and manage increased costs for data collection, arising from, among other things, increased numbers of cell phone households, which are more expensive for us to recruit than are households with landline telephones. Our goal is to use commercially reasonable efforts to obtain and/or maintain MRC accreditation in all of our PPM Markets, and develop and implement effective and efficient technological solutions to measure cross-platform media and advertising.

     Protecting and supporting our existing customer base, and ensuring our services are competitive from a price, quality and service perspective are critical components to these overall goals, although there can be no guarantee that we will be successful in our efforts.

PPM Trends and Initiatives

     Commercialization. We currently utilize our PPM ratings service to produce radio audience estimates in 33 United States local markets. We are in the process of executing our previously announced plan to commercialize progressively our PPM ratings service in the largest United States radio markets, which we currently anticipate will result in commercialization of the service in 48 local markets by December 2010. We intend to commercialize the PPM service in 15 of these local markets during 2010. We may continue to update the timing of commercialization

24

and the composition of the PPM Markets from time to time. If the pace of the commercialization of our PPM ratings service is modified, revenue increases that we expect to receive related to the service would also be adjusted.

     Commercialization of our PPM ratings service has required and will continue to require a substantial financial investment. We believe our cash generated from operations, as well as access to our existing credit facility, is sufficient to fund such requirements. As we have previously disclosed, our ongoing efforts to support the commercialization of our PPM ratings service have had a material negative impact on our results of operations. The amount of capital required for deployment of our PPM ratings service and the impact on our results of operations will be greatly affected by the speed of the commercialization. We anticipate that PPM costs and expenses for each PPM Market will generally accelerate six to nine months in advance of the commercialization of the service in each PPM Market as we build the panels. These costs are incremental to the costs associated with our Diary-based ratings service.

     MRC Accreditation. For information regarding the status of MRC accreditation for our PPM radio ratings service, see “Item 1. Business— Radio Audience Measurement Services — Portable People Meter Ratings Service — Commercialization — Media Rating Council Accreditation” in our Annual Report on Form 10-K for the year ended December 31, 2009.

     Quality Improvement Initiatives. As we have commercialized the PPM ratings service in several PPM Markets, we have experienced and expect to continue to experience challenges in the operation of the PPM ratings service similar to those we face in the Diary-based service, including several of the challenges related to sample proportionality and response rates described below. We expect to continue to implement additional measures to address these challenges. We have announced a series of commitments concerning our PPM ratings service that we intend to implement over the next several years. We believe these steps reflect our commitment to ongoing improvement and our responsiveness to feedback from several governmental and customer entities. We believe these commitments, which we refer to, collectively, as our continuous improvement initiatives, are consistent with our ongoing efforts to obtain and maintain MRC accreditation and to generally improve our radio ratings services. These initiatives will likely require expenditures that may be material in the aggregate.

     Recent Developments. On April 22, 2010, we announced a settlement of our outstanding disputes with the PPM Coalition and its members regarding our PPM recruitment methodology. As part of the settlement, we committed to implementing substantially all of the elements of the proposal we made to the United States House of Representatives Committee on Oversight and Government Reform and also committed to further enhance our multimodal recruitment approach by implementing targeted in-person recruitment in all geographies in all PPM Markets by the end of 2011. In July 2010, we began implementing targeted in-person recruitment in a limited number of select local markets.

     On June 2, 2010, we announced that we have entered into a settlement agreement with Spanish Broadcasting System, Inc. (“SBS”). SBS has resumed encoding its broadcast signals for all of its markets that use our PPM radio ratings service, and SBS has extended its agreement with us for the use of PPM ratings in those markets.

     On June 21, 2010, we announced our new generation of audience measurement technology, the PPM 360^TM, which extends the PPM technology onto a wireless platform.

     On June 21, 2010, we also announced that we had completed the purchase of certain tangible and intangible assets of Integrated Media Measurement, Inc., now known as Audience Measurement Technologies, Inc.

Diary Trends and Initiatives

     MRC Accreditation. For information regarding the status of MRC accreditation for our Diary radio ratings service, see “Item 1. Business— Media Rating Council Accreditation” in our Annual Report on Form 10-K for the year ended December 31, 2009.

25

     Quality Improvement Initiatives. Response rates are one important measure of our effectiveness in obtaining consent from persons to participate in our surveys. Another measure often employed by users of our data to assess quality in our ratings is sample proportionality, which refers to how well the distribution of the sample for any individual survey compares to the distribution of the population in the local market. We strive to achieve representative samples. It has become increasingly difficult and more costly for us to obtain consent from persons to participate in our surveys. We must achieve a level of both sample proportionality and response rates sufficient to maintain confidence in our ratings, the support of the industry and accreditation by the MRC.

     Overall response rates for all survey research have declined over the past several decades, and Arbitron has been adversely impacted by this industry trend. We have worked to address this decline through several initiatives, including various survey incentive programs. If response rates continue to decline or the costs of recruitment initiatives significantly increase, our radio audience measurement business could be adversely affected. We believe that additional expenditures will be required in the future to research and test new measures associated with improving response rates and sample proportionality. We continue to research and test new measures to address these sample quality challenges.

     In recent years, our ability to deliver sample proportionality that matches the demographic composition of younger demographic groups has deteriorated, caused in part by the trend among some households to disconnect their landline telephones, effectively removing these households from our telephone sample frame. We increased our sample target for cell phone households in Diary markets from an average of 10 percent, as achieved in the Spring 2009 survey through Fall 2009 surveys, to an average of 15 percent across all Diary markets as of Spring 2010. In addition, effective with the Spring 2010 survey, we expanded cell phone household sampling to include households that rarely or never use their landlines. We expect this enhancement will increase our total cell phone sample frame an additional two percent.

     It is increasingly expensive for us to recruit cell phone households. Because we intend to further increase the number of cell phone households in our samples, we believe this quality improvement initiative will significantly increase our costs. We currently anticipate that the total cost of cell phone household recruitment for the PPM and Diary services will be approximately $15.0 million in 2010, which is an increase of approximately $5.0 million over 2009.

General Economic Conditions

     Our customers derive most of their revenue from transactions involving the sale or purchase of advertising. During recent challenging economic times, advertisers have reduced advertising expenditures, impacting advertising agencies and media. Although there are signs of improving economic conditions for the radio industry, advertising agencies and media companies have been and may continue to be less likely to purchase our services, which has and could continue to adversely impact our business, financial position, and operating results. For the six months ended June 30, 2010, there has been a $7.5 million aggregate decrease in revenue received from customers, including Univision, that were subscribers in the first half of 2009 but have either not subscribed or have reduced their level of subscribed services in the first half of 2010.

     Since September 2008, we have experienced an increase in the average number of days our sales have been outstanding before we have received payment, which has resulted in an increase in trade accounts receivable as compared to historical trends. Our accounts receivable remained at this elevated level throughout 2009, as well as throughout the first six months of 2010. If the economic downturn expands or is sustained for an extended period into the future, it may lead to increased incidences of customers’ inability to pay their accounts, an increase in our provision for doubtful accounts, and a further increase in collection cycles for accounts receivable or insolvency of our customers.

     We depend on a limited number of key customers for our ratings services and related software. For example, in 2009, Clear Channel represented 19 percent of our total revenue. Because many of our largest customers own and operate radio stations in markets that we expect to transition to PPM measurement, we expect that our dependence on our largest customers will continue for the foreseeable future. Additionally, although fewer contracts

26

expire in 2010 as compared to historical standards, if one or more key customers do not renew all or part of their contracts as they expire, we could experience a significant decrease in our operating results.

Legal Expenses

     Since the fourth quarter of 2008, we have incurred approximately $9.1 million in aggregate legal costs and expenses in connection with two securities law civil actions and a governmental interaction, relating primarily to the commercialization of our PPM ratings service. For additional information regarding the Company’s material legal matters, see “Item 1. — Legal Proceedings.” As of June 30, 2010, we received $5.6 million in insurance reimbursements related to these legal actions and estimated that an additional $0.3 million of the aggregate costs and expenses were probable for recovery under our Director and Officer insurance policy. We are also involved in other legal matters for which we do not expect that the legal costs and expenses will be recoverable through insurance. We can provide no assurance that we will not continue to incur legal costs and expenses at comparable or higher levels in the future. For further information regarding these legal costs, see “— Critical Accounting Policies and Estimates.”

Critical Accounting Policies and Estimates

     Critical accounting policies and estimates are those that are both important to the presentation of our financial position or results of operations, and require our most difficult, complex or subjective judgments.

     Software development costs. We capitalize software development costs with respect to significant internal use software initiatives or enhancements from the time that the preliminary project stage is completed and management considers it probable that the software will be used to perform the function intended, until the time the software is placed in service for its intended use. Once the software is placed in service, the capitalized costs are amortized over periods of three to five years. We perform an assessment quarterly to determine if it is probable that all capitalized software will be used to perform its intended function. If an impairment exists, the software cost is written down to estimated fair value. As of June 30, 2010, and December 31, 2009, our capitalized software developed for internal use had carrying amounts of $24.2 million and $23.9 million, respectively, including $13.8 million and $13.7 million, respectively, of software related to the PPM service.

     Deferred income taxes. We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year and for deferred tax assets and liabilities for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. We must make assumptions, judgments and estimates to determine the current provision for income taxes and also deferred tax assets and liabilities and any valuation allowance to be recorded against a deferred tax asset. Our assumptions, judgments, and estimates relative to the current provision for income taxes take into account current tax laws, interpretation of current tax laws and possible outcomes of current and future audits conducted by domestic and foreign tax authorities. Changes in tax law or interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in the consolidated financial statements. Our assumptions, judgments and estimates relative to the value of a deferred tax asset take into account forecasts of the amount and nature of future taxable income. Actual operating results and the underlying amount and nature of income in future years could render current assumptions, judgments and estimates of recoverable net deferred tax assets inaccurate. We believe it is more likely than not that we will realize the benefits of these deferred tax assets. Any of the assumptions, judgments and estimates mentioned above could cause actual income tax obligations to differ from estimates, thus impacting our financial position and results of operations.

     We include, in our tax calculation methodology, an assessment of the uncertainty in income taxes by establishing recognition thresholds for our tax positions. Inherent in our calculation are critical judgments by management related to the determination of the basis for our tax positions. For further information regarding our unrecognized tax benefits, see Note 12 in the Notes to Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q.

27

     Insurance Receivables. Beginning in the fourth quarter of 2008, we became involved in two securities law civil actions and a governmental interaction primarily related to the commercialization of our PPM service. We have incurred a combined total of approximately $9.1 million in legal fees and expenses in connection with these matters. As of June 30, 2010, $5.6 million in insurance reimbursements related to these legal actions was received. As of June 30, 2010, and December 31, 2009, we estimated that $0.3 million and $3.5 million, respectively, of such legal fees and expenses were probable for future receipt under our Directors and Officers insurance policy. These amounts are included in our prepaid expenses and other current assets on our balance sheet.

     As a result of Hurricane Ike in 2008, we incurred a combined total of $2.7 million of business interruption losses and damages. As of June 30, 2010, $1.6 million in insurance reimbursements related to these losses and damages was received, and no additional insurance reimbursements are expected to be received in the future regarding our Hurricane Ike losses. As of December 31, 2009, we estimated that insurance reimbursements for a portion of the expenses incurred were probable for future receipt under our insurance policy in the amount of $0.9 million. We included this estimate for our insurance claims receivable within our prepaid expenses and other current assets on our balance sheet.

28

Results of Operations

Comparison of the Three Months Ended June 30, 2010 to the Three Months Ended June 30, 2009

     The following table sets forth information with respect to our consolidated statements of income:

Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

	Three Months Ended				Increase						Percentage of
	June 30,				(Decrease)						Revenue
	2010		2009		Dollars			Percent			2010			2009
Revenue	$	88,339	$	86,799	$	1,540			1.8	%		100.0	%		100.0	%
Costs and expenses
Cost of revenue		59,504		55,762		3,742			6.7	%		67.4	%		64.2	%
Selling, general and administrative		19,149		19,351		(202	)		(1.0	%)		21.7	%		22.3	%
Research and development		9,072		10,584		(1,512	)		(14.3	%)		10.3	%		12.2	%
Restructuring and reorganization		—		185		(185	)		(100.0	%)		0.0	%		0.2	%
Total costs and expenses		87,725		85,882		1,843			2.1	%		99.3	%		98.9	%
Operating income		614		917		(303	)		(33.0	%)		0.7	%		1.1	%
Equity in net income of affiliate		5,642		5,581		61			1.1	%		6.4	%		6.4	%
Income before interest and tax expense		6,256		6,498		(242	)		(3.7	%)		7.1	%		7.5	%
Interest income		4		14		(10	)		(71.4	%)		0.0	%		0.0	%
Interest expense		254		365		(111	)		(30.4	%)		0.3	%		0.4	%
Income before income tax expense		6,006		6,147		(141	)		(2.3	%)		6.8	%		7.1	%
Income tax expense		2,207		2,651		(444	)		(16.7	%)		2.5	%		3.1	%
Net income	$	3,799	$	3,496	$	303			8.7	%		4.3	%		4.0	%
Income per weighted average common share
Basic	$	0.14	$	0.13	$	0.01			7.7	%
Diluted	$	0.14	$	0.13	$	0.01			7.7	%
Cash dividends declared per common share	$	0.10	$	0.10	$	—			—

Certain percentage amounts may not total due to rounding.

29

Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Increase
	June 30,						(Decrease)
	2010			2009			Dollars			Percent
Other data:
EBIT (1)	$	6,256		$	6,498		$	(242	)		(3.7	%)
EBITDA (1)	$	12,935		$	12,156		$	779			6.4	%
EBIT and EBITDA Reconciliation (1)
Net income	$	3,799		$	3,496		$	303			8.7	%
Income tax expense		2,207			2,651			(444	)		(16.7	%)
Interest (income)		(4	)		(14	)		10			(71.4	%)
Interest expense		254			365			(111	)		(30.4	%)
EBIT (1)		6,256			6,498			(242	)		(3.7	%)
Depreciation and amortization		6,679			5,658			1,021			18.0	%
EBITDA (1)	$	12,935		$	12,156		$	779			6.4	%

(1) EBIT (earnings before interest and income taxes) and EBITDA (earnings before interest, income taxes, depreciation and amortization) are non-GAAP financial measures that we believe are useful to investors in evaluating our results. For further discussion of these non-GAAP financial measures, see paragraph below entitled “EBIT and EBITDA.”

     Revenue. Revenue increased by 1.8% or $1.5 million for the three months ended June 30, 2010, as compared to the same period in 2009. Revenue increased, in particular, by $15.5 million due primarily to the impact of the 13 PPM Markets commercialized during the last half of 2009 and price escalators in all PPM commercialized markets, partially offset by a $13.0 million decrease related to the transition from our Diary-based ratings service. Included in the above fluctuations in revenue for our PPM and Diary-based ratings services is a $3.2 million aggregate decrease in revenue received from customers, including Univision, that were subscribers in the first half of 2009 but have either not subscribed or have reduced their level of subscribed services in the first half of 2010. Our increase in revenue for the three months ended June 30, 2010, as compared to the same period in 2009, was also partially offset by a $1.2 million decrease in PPM International revenue.

     Cost of Revenue. Cost of revenue increased by 6.7% or $3.7 million for the three months ended June 30, 2010, as compared to the same period in 2009. Cost of revenue increased primarily due to $3.3 million of increased PPM service related costs incurred to build and manage PPM panels for the 33 PPM Markets commercialized as of June 30, 2010, as well as the 15 PPM Markets scheduled to be commercialized in the latter half of 2010, as compared to the 20 PPM Markets commercialized as of June 30, 2009 and the 13 PPM Markets that commercialized in the latter half of 2009.

     Research and Development. Research and development decreased by 14.3% or $1.5 million for the three months ended June 30, 2010, as compared to the same period in 2009, primarily due to a reduction in costs incurred for various ongoing IT and Technology projects.

     EBIT and EBITDA. We believe that presenting EBIT and EBITDA, both non-GAAP financial measures, as supplemental information helps investors, analysts and others, if they so choose, in understanding and evaluating our operating performance in some of the same ways that we do because EBIT and EBITDA exclude certain items that are not directly related to our core operating performance. We reference these non-GAAP financial measures in assessing current performance and making decisions about internal budgets, resource allocation and financial goals. EBIT is calculated by deducting interest income from net income and adding back interest expense and income tax expense to net income. EBITDA is calculated by deducting interest income from net income and adding back

30

interest expense, income tax expense, and depreciation and amortization to net income. EBIT and EBITDA should not be considered substitutes either for net income, as indicators of our operating performance, or for cash flow, as measures of our liquidity. In addition, because EBIT and EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.

     EBIT decreased by 3.7% or $0.2 million for the three months ended June 30, 2010, as compared to the same period in 2009, due to an increase in net costs associated with the PPM service transition, substantially offset by costs reductions associated with research and development and the prior year restructuring and reorganization plan as previously mentioned. In contrast to the decline in EBIT, EBITDA increased by 6.4% or $0.8 million because this non-GAAP financial measure excludes depreciation and amortization, which for the three months ended June 30, 2010, increased by $1.0 million, as compared to the same period in 2009.

31

Comparison of the Six Months Ended June 30, 2010 to the Six Months Ended June 30, 2009

     The following table sets forth information with respect to our consolidated statements of income:

Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

	Six Months Ended				Increase						Percentage of
	June 30,				(Decrease)						Revenue
	2010		2009		Dollars			Percent			2010			2009
Revenue	$	184,235	$	185,288	$	(1,053	)		(0.6	%)		100.0	%		100.0	%
Costs and expenses
Cost of revenue		102,657		95,291		7,366			7.7	%		55.7	%		51.4	%
Selling, general and administrative		36,790		37,775		(985	)		(2.6	%)		20.0	%		20.4	%
Research and development		18,981		19,890		(909	)		(4.6	%)		10.3	%		10.7	%
Restructuring and reorganization		—		8,356		(8,356	)		(100.0	%)		0.0	%		4.5	%
Total costs and expenses		158,428		161,312		(2,884	)		(1.8	%)		86.0	%		87.1	%
Operating income		25,807		23,976		1,831			7.6	%		14.0	%		12.9	%
Equity in net income of affiliate		3,111		2,581		530			20.5	%		1.7	%		1.4	%
Income before interest and tax expense		28,918		26,557		2,361			8.9	%		15.7	%		14.3	%
Interest income		6		33		(27	)		(81.8	%)		0.0	%		0.0	%
Interest expense		519		698		(179	)		(25.6	%)		0.3	%		0.4	%
Income before income tax expense		28,405		25,892		2,513			9.7	%		15.4	%		14.0	%
Income tax expense		10,858		10,055		803			8.0	%		5.9	%		5.4	%
Net income	$	17,547	$	15,837	$	1,710			10.8	%		9.5	%		8.5	%
Income per weighted average common share
Basic	$	0.66	$	0.60	$	0.06			10.0	%
Diluted	$	0.65	$	0.60	$	0.05			8.3	%
Cash dividends declared per common share	$	0.20	$	0.20	$	—			—

Certain percentage amounts may not total due to rounding.

32

Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

	Six Months Ended						Increase
	June 30,						(Decrease)
	2010			2009			Dollars			Percent
Other data:
EBIT (1)	$	28,918		$	26,557		$	2,361			8.9	%
EBITDA (1)	$	42,113		$	37,438		$	4,675			12.5	%
EBIT and EBITDA Reconciliation (1)
Net income	$	17,547		$	15,837		$	1,710			10.8	%
Income tax expense		10,858			10,055			803			8.0	%
Interest (income)		(6	)		(33	)		27			(81.8	%)
Interest expense		519			698			(179	)		(25.6	%)
EBIT (1)		28,918			26,557			2,361			8.9	%
Depreciation and amortization		13,195			10,881			2,314			21.3	%
EBITDA (1)	$	42,113		$	37,438		$	4,675			12.5	%

(1) EBIT (earnings before interest and income taxes) and EBITDA (earnings before interest, income taxes, depreciation and amortization) are non-GAAP financial measures that we believe are useful to investors in evaluating our results. For further discussion of these non-GAAP financial measures, see paragraph below entitled “EBIT and EBITDA.”

     Revenue. Revenue decreased by 0.6% or $1.1 million for the six months ended June 30, 2010, as compared to the same period in 2009. Revenue decreased by $29.3 million related to the transition from our Diary-based ratings service, as well as a $4.7 million reduction in revenue associated with two customers, primarily attributable to Cumulus but also including Clear Channel, for our Diary-based radio ratings service in a limited number of small and medium-sized markets. PPM International revenue decreased by $1.7 million largely due to decreased equipment sales and royalty income. These decreases were offset by a $34.5 million increase in PPM-based ratings service revenue due to the impact of the 18 PPM Markets commercialized during the last nine months of 2009 and price escalators in all PPM commercialized markets. Included in the above fluctuations in our revenue related to the transition from our Diary-based ratings service and the commercialization of our PPM ratings service is a $7.5 million aggregate decrease in revenue received from customers, including Univision, that were subscribers in the first half of 2009 but have either not subscribed or have reduced their level of subscribed services in the first half of 2010.

     Cost of Revenue. Cost of revenue increased by 7.7% or $7.4 million for the six months ended June 30, 2010, as compared to the same period in 2009. Cost of revenue increased primarily due to $6.5 million of increased PPM service-related costs incurred to build and manage PPM panels for the 33 PPM Markets commercialized as of June 30, 2010, as well as the 15 PPM Markets scheduled to be commercialized in the latter half of 2010, as compared to the 20 PPM Markets commercialized as of June 30, 2009 and the 13 PPM Markets that commercialized in the latter half of 2009. In addition, we incurred $1.3 million of increased costs associated with our computer center. These increases were partially offset by a $1.2 million decrease for PPM International related to lower revenues. Cost of revenue is expected to continue to increase for the remainder of 2010, due to the scheduled commercialization of an additional 15 PPM Markets, as well as the costs of previously mentioned recruiting initiatives.

     Selling, General, and Administrative. Selling, general, and administrative decreased by 2.6% or $1.0 million for the six months ended June 30, 2010, as compared to the same period in 2009. Selling, general, and administrative decreased primarily due to a $1.7 million decrease in non-cash share-based compensation, a $0.9 million decrease in legal costs, net of anticipated insurance recoveries, and a $0.6 million decrease in bad debt expense for the six months ended June 30, 2010, as compared to the same period in 2009. These decreases were partially offset by a $1.2 million supplemental retirement plan settlement loss incurred during the first quarter of

33

2010 and $1.1 million in executive staff realignment charges incurred during the second quarter of 2010. For additional information regarding the settlement loss, see Note 11 in the Notes to Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q.

     Research and Development. Research and development decreased by 4.6% or $0.9 million for the six months ended June 30, 2010, as compared to the same period in 2009. Research and development decreased primarily by $0.7 million related to the development of our cross-platform services.

     Restructuring and Reorganization. During 2009, we reduced our workforce by approximately 10 percent of our full-time employees. No restructuring expenses were incurred during the six months ended June 30, 2010. During the six months ended June 30, 2009, we incurred $8.4 million of pre-tax restructuring charges, related principally to severance, termination benefits, outplacement support, and certain other expenses in connection with our restructuring plan.

     Income Tax Expense. The effective tax rate decreased to 38.2% for the six months ended June 30, 2010, from 38.8% for the six months ended June 30, 2009, primarily to reflect the increased benefit of certain permanent deductions.

     Net Income. Net income increased by 10.8% or $1.7 million for the six months ended June 30, 2010, as compared to the same period in 2009, due to the prior year implementation of our restructuring and reorganization plan, which resulted in $8.4 million of pre-tax restructuring charges incurred during the first half of 2009, as compared to no charges incurred for the same period in 2010. This favorable impact was offset by a $12.2 million revenue reduction associated with customers, including Clear Channel, Cumulus, and Univision, that were subscribers in the first half of 2009 but have either not subscribed or have reduced their level of subscribed services in the first half of 2010, as well as increased costs incurred in relation to our continuing efforts to further build and operate our PPM service panels for the 33 PPM Markets commercialized as of June 30, 2010.

     EBIT and EBITDA. We believe that presenting EBIT and EBITDA, both non-GAAP financial measures, as supplemental information helps investors, analysts and others, if they so choose, in understanding and evaluating our operating performance in some of the same ways that we do because EBIT and EBITDA exclude certain items that are not directly related to our core operating performance. We reference these non-GAAP financial measures in assessing current performance and making decisions about internal budgets, resource allocation and financial goals. EBIT is calculated by deducting interest income from net income and adding back interest expense and income tax expense to net income. EBITDA is calculated by deducting interest income from net income and adding back interest expense, income tax expense, and depreciation and amortization to net income. EBIT and EBITDA should not be considered substitutes either for net income, as indicators of our operating performance, or for cash flow, as measures of our liquidity. In addition, because EBIT and EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.

     EBIT increased by 8.9% or $2.4 million for the six months ended June 30, 2010, as compared to the same period in 2009, due to the net increase in ratings service revenue and the prior year incurrence of restructuring costs, partially offset by revenue reductions associated with customers that were subscribers in the first half of 2009 but have either not subscribed or have reduced their level of subscribed services in the first half of 2010 and the current year increase in costs associated with the PPM service transition previously mentioned. EBITDA increased by 12.5% or $4.7 million, which is higher than the EBIT increase because this non-GAAP financial measure excludes depreciation and amortization, which for the six months ended June 30, 2010, increased by $2.3 million, as compared to 2009.

34

Liquidity and Capital Resources

     Liquidity indicators

	As of June 30, 2010		As of December 31, 2009			Change
Cash and cash equivalents	$	13,326	$	8,217		$	5,109
Working capital (deficit)	$	622	$	(10,737	)	$	11,359
Working capital, excluding deferred revenue	$	50,352	$	32,411		$	17,941
Total long-term debt	$	68,000	$	68,000		$	—

     We have relied upon our cash flow from operations, supplemented by borrowings under our available revolving credit facility (“Credit Facility”) as needed, to fund our dividends, capital expenditures, contractual obligations, and share repurchases. We expect that our cash position as of June 30, 2010, cash flow generated from operations, and our Credit Facility will be sufficient to support our operations for the next 12 to 24 months. We expect to renew or replace our revolving credit facility prior to December 20, 2011, the Credit Facility’s expiration date. See “Credit Facility” for further discussion of the relevant terms and covenants.

     Operating activities. For the six months ended June 30, 2010, the net cash provided by operating activities was $34.7 million, which was primarily due to $42.1 million in EBITDA, as discussed and reconciled to net income in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.”

     Net cash provided by operating activities for the six months ended June 30, 2010, was negatively impacted by a $10.2 million decrease related to accrued expenses and other current liabilities, which was comprised primarily of a $3.6 million decrease in accrued taxes, a $2.5 million decrease in accrued Scarborough royalties which fluctuate seasonally, a $2.4 million decrease associated with a first quarter 2010 lump sum payment from our supplemental retirement plan to our former chief executive officer, and a $1.6 million decrease in payroll, bonus and benefit accruals. Net cash provided by operating activities also decreased by $4.1 million due to increased accounts receivable balances, which resulted from slower collections from our customers.

     These decreases were partially offset by a $3.9 million increase associated with decreased prepaid expenses and other assets, which resulted primarily from $4.6 million in insurance reimbursements received during the six months ended June 30, 2010, partially offset by a $0.7 million increase in prepaid survey participant incentives and prepaid postage. Net cash provided by operating activities was favorably impacted by a $1.6 million increase in noncurrent liabilities, primarily related to a $0.5 million increase in our supplemental retirement plans and a $0.5 million increase in long term accrued rent, incurred during the six months ended June 30, 2010.

     Investing activities. Net cash used in investing activities was $21.6 million and $20.2 million for the six months ended June 30, 2010, and 2009, respectively. This $1.5 million increase in cash used in investing activities was due to a $4.5 million licensing arrangement entered during the first quarter of 2010, as well as a $2.5 million asset acquisition during the second quarter of 2010, partially offset by a $3.9 million decrease in capital expenditures, primarily related to computer equipment, leasehold improvements, and software. Net cash used in investing activities were also offset by a $1.6 million decrease in purchases of equity and other investments for the six months ended June 30, 2010, as compared to the same period in 2009. For additional information regarding our affiliate investments, see Note 7 in the Notes to Consolidated Financial Statements within this Form 10-Q.

     Financing activities. Net cash used in financing activities was $8.0 million for the six months ended June 30, 2010, and net cash provided by financing activities was $15.5 million for the six months ended June 30, 2009. This approximately $23.4 million decrease in financing activities was due primarily to a net borrowing of $20.0 million of outstanding obligations under our Credit Facility during the six months ended June 30, 2009. For the first half of 2010, the amount of borrowings under our Credit Facility was equal to the amount of pay-downs. The decrease in financing activities also reflected a $3.8 million decrease in bank overdraft payables for the six months ended June 30, 2010, as compared to the same period in 2009.

35

Credit Facility

     On December 20, 2006, we entered into an agreement with a consortium of lenders to provide up to $150.0 million of financing to us through a five-year, unsecured revolving credit facility, expiring on December 20, 2011. The agreement contains an expansion feature for us to increase the total financing available under the Credit Facility by up to $50.0 million to an aggregate of $200.0 million. Such increased financing would be provided by one or more existing Credit Facility lending institutions, subject to the approval of the lending banks, and/or in combination with one or more new lending institutions, subject to the approval of the Credit Facility’s administrative agent. Interest on borrowings under the Credit Facility is calculated based on a floating rate for a duration of up to six months as selected by us.

     Our Credit Facility contains financial terms, covenants and operating restrictions that potentially restrict our financial flexibility. The material debt covenants under our Credit Facility include both a maximum leverage ratio and a minimum interest coverage ratio. The leverage ratio is a non-GAAP financial measure equal to the amount of our consolidated total indebtedness, as defined in our Credit Facility, divided by a contractually defined adjusted Earnings Before Interest, Taxes, Depreciation and Amortization and non-cash compensation (“Consolidated EBITDA”) for the trailing 12-month period. The interest coverage ratio is a non-GAAP financial measure equal to Consolidated EBITDA divided by total interest expense. Both ratios are designed as measures of our ability to meet current and future obligations. The following table presents the actual ratios and their threshold limits as defined by the Credit Facility as of June 30, 2010:

Covenant	Threshold	Actual
Maximum leverage ratio	3.0	0.69
Minimum interest coverage ratio	3.0	81

     As of June 30, 2010, based upon these financial covenants, there was no default or limit on our ability to borrow the unused portion of our Credit Facility.

     Our Credit Facility contains customary events of default, including nonpayment and breach covenants. In the event of default, repayment of borrowings under the Credit Facility could be accelerated. Our Credit Facility also contains cross default provisions whereby a default on any material indebtedness, as defined in the Credit Facility, could result in the acceleration of our outstanding debt and the termination of any unused commitment under the Credit Facility. The agreement potentially limits, among other things, our ability to sell assets, incur additional indebtedness, and grant or incur liens on our assets. Under the terms of the Credit Facility, all of our material domestic subsidiaries, if any, guarantee the commitment. Currently, we do not have any material domestic subsidiaries as defined under the terms of the Credit Facility. Although we do not believe that the terms of our Credit Facility limit the operation of our business in any material respect, the terms of the Credit Facility may restrict or prohibit our ability to raise additional debt capital when needed or could prevent us from investing in other growth initiatives. Our outstanding borrowings obligation under the Credit Facility was $68.0 million as of both June 30, 2010, and December 31, 2009. We have been in compliance with the terms of the Credit Facility since the agreement’s inception. As of July 31, 2010, we had $63.0 million in outstanding debt under the Credit Facility.

Other Liquidity Matters

     Commercialization of our PPM ratings service requires and will continue to require a substantial financial investment. We believe our cash generated from operations, as well as access to the Credit Facility, is sufficient to fund such requirements for the next 12 to 24 months. PPM costs and expenses have accelerated six to nine months in advance of the commercialization of the service in each PPM Market during the building of the panels. Cell phone household recruitment initiatives in both the Diary and PPM services will also increase our cost of revenue.

Seasonality

     We recognize revenue for services over the terms of license agreements as services are delivered, and expenses are recognized as incurred. We currently gather radio-listening data in 300 U.S. local markets, including 267 Diary markets and 33 PPM Markets. All Diary markets are measured at least twice per year (April-May-June

36

for the “Spring Survey” and October-November-December for the “Fall Survey”). In addition, we measure all major Diary markets two additional times per year (January-February-March for the “Winter Survey” and July-August-September for the “Summer Survey”). Our revenue is generally higher in the first and third quarters as a result of the delivery of the Fall Survey and Spring Survey, respectively, to all Diary markets compared to revenue in the second and fourth quarters, when delivery of the Winter Survey and Summer Survey, respectively, is made only to major Diary markets.

     The seasonality for PPM services is expected to result in higher revenue in the fourth quarter than in each of the first three quarters because the PPM service delivers surveys 13 times a year with four surveys delivered in the fourth quarter. There will be fluctuations in the depth of the seasonality pattern during the periods of transition between the services in each PPM Market. The amount of deferred revenue recorded on our balance sheet is expected to decrease as we commercialize additional PPM Markets due to the more frequent delivery of our PPM service, which is delivered 13 times a year versus the quarterly and semi-annual delivery for our Diary service.

     Pre-currency data represent PPM data that are released to clients for planning purposes in advance of the period of commercialization of the service in a local market. Once the service is commercialized, the pre-currency data then become currency and the client may use the data to buy and sell advertising. Pre-currency revenue will be recognized in the two months preceding the PPM survey release month for commercialization. The PPM service in new markets is generally commercialized and declared currency at the beginning of a quarter and the two months of pre-currency are also declared currency.

     During the first quarter of commercialization of the PPM ratings service in a market, we recognize revenue based on the delivery of both the final quarterly Diary ratings and the initial monthly PPM ratings for that market. Our expenses are generally higher in the second and fourth quarters as we conduct the Spring Survey and Fall Survey for our Diary markets. The transition from the Diary service to the PPM service in the PPM Markets has and will continue to have an impact on the seasonality of costs and expenses. PPM costs and expenses have generally accelerated six to nine months in advance of the commercialization of each market during the building of the panels. These preliminary costs are incremental to the costs associated with our Diary-based ratings service and we recognize these increased costs as incurred rather than upon the delivery of a particular survey.

     The size and seasonality of the PPM transition impact on a period to period comparison will be influenced by the timing, number, and size of individual markets contemplated in our PPM commercialization schedule, which currently includes a goal of commercializing 48 PPM Markets by the end of 2010. As we commercialize more markets, we expect that the seasonal impact will lessen. During 2010, we expect to commercialize 15 PPM Markets.

     Scarborough typically experiences losses during the first and third quarters of each year because revenue is recognized predominantly in the second and fourth quarters when the substantial majority of services are delivered. Scarborough royalty costs, which are recognized in costs of revenue, are also higher during the second and fourth quarters.

37

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

     The Company holds its cash and cash equivalents in highly liquid securities.

Foreign Currency Exchange Rate Risk

     The Company’s foreign operations are not significant and, therefore, its exposure to foreign currency risk is not material. If we expand our foreign operations, this exposure to foreign currency exchange rate changes could increase.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the most recently completed fiscal quarter. Based upon that evaluation, the Company’s President and Chief Executive Officer and the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Report.

Changes in Internal Control Over Financial Reporting

     There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarterly period ended June 30, 2010, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

38

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     We are involved, from time to time, in litigation and proceedings, including with governmental authorities, arising out of the ordinary course of business. Legal costs for services rendered in the course of these proceedings are charged to expense as they are incurred.

     On April 30, 2008, Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund filed a securities class action lawsuit in the United States District Court for the Southern District of New York on behalf of a purported Class of all purchasers of Arbitron common stock between July 19, 2007, and November 26, 2007. The plaintiff asserts that Arbitron, Stephen B. Morris (our former Chairman, President and Chief Executive Officer), and Sean R. Creamer (our Executive Vice President & Chief Financial Officer) violated federal securities laws. The plaintiff alleges misrepresentations and omissions relating, among other things, to the delay in commercialization of our PPM ratings service in November 2007, as well as stock sales during the period by company insiders who were not named as defendants and Messrs. Morris and Creamer. The plaintiff seeks class certification, compensatory damages plus interest and attorneys’ fees, among other remedies. On September 22, 2008 the plaintiff filed an Amended Class Action Complaint. On November 25, 2008, Arbitron, Mr. Morris, and Mr. Creamer each filed Motions to Dismiss the Amended Class Action Complaint. On January 23, 2009, the plaintiff filed a Memorandum of Law in Opposition to Defendants’ Motions to Dismiss the Amended Class Action Complaint. On February 23, 2009, Arbitron, Mr. Morris, and Mr. Creamer filed replies in support of their Motions to Dismiss. In September 2009, the plaintiff sought leave to file a Second Amended Class Action Complaint in lieu of oral argument on the pending Motions to Dismiss. The court granted leave to file a Second Amended Class Action Complaint and denied the pending Motions to Dismiss without prejudice. On or about October 19, 2009, the plaintiff filed a Second Amended Class Action Complaint. Briefing on motions to dismiss the Second Amended Class Action Complaint was completed in March 2010. Oral argument on the motion to dismiss is scheduled for August 2010. No decision has been issued by the Court.

39

      On February 11, 2009, Arbitron commenced an action in New York State Court against Spanish Broadcasting System, Inc., (“SBS”) for breach of an encoding agreement that requires SBS to encode its radio station signals until at least December, 2012. The parties settled the dispute and dismissed the action pursuant to a stipulation of discontinuance filed on June 1, 2010.

     On July 14, 2009, the State of Florida commenced a civil action against us in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, alleging violations of Florida consumer fraud law relating to the marketing and commercialization in Florida of our PPM ratings service. The lawsuit seeks civil

40

penalties of $10,000 for each alleged violation and an order preventing us from continuing to publish our PPM listening estimates in Florida. The Company has answered the Complaint, obtained a protective order from the court to protect the confidentiality of its documents, and has begun production of documents.

     The Company intends to defend itself and its interests vigorously against these allegations.

     We are involved from time to time in a number of judicial and administrative proceedings considered ordinary with respect to the nature of our current and past operations, including employment-related disputes, contract disputes, government proceedings, customer disputes, and tort claims. In some proceedings, the claimant seeks damages as well as other relief, which, if granted, would require substantial expenditures on our part. Some of these matters raise difficult and complex factual and legal issues, and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular action, and the jurisdiction, forum and law under which each action is pending. Because of this complexity, final disposition of some of these proceedings may not occur for several years. As such, we are not always able to estimate the amount of our possible future liabilities. There can be no certainty that we will not ultimately incur charges in excess of present or future established accruals or insurance coverage. Although occasional adverse decisions (or settlements) may occur, we believe that the likelihood that final disposition of these proceedings will, considering the merits of the claims, have a material adverse impact on our financial position or results of operations is remote.

      There were no additional material developments during the quarter ended June 30, 2010. For more information regarding the status of our legal proceedings, see “Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2009.

41

Item 1A. Risk Factors

     See Item 1A. — Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2009 for a detailed discussion of risk factors affecting Arbitron.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 4. (Removed and Reserved)

ITEM 5. OTHER INFORMATION

      On August 2, 2010, the Company and the Bank of New York Mellon (f/k/a The Bank of New York), as Rights Agent, amended the Rights Agreement, dated November 21, 2002, by executing Amendment No. 3 to the Rights Agreement (“Amendment No. 3”), which was approved by the Company’s Board of Directors. Amendment No. 3 amends the definition of “Acquiring Person” set forth in Section 1(a) of the Rights Agreement to permit each of BlackRock, Inc. or its affiliates or associates, and Pamet Capital Management, L.P., or its affiliates or associates (“Pamet Capital Management”), to own up to 20.00% of the Company’s common stock without being deemed an Acquiring Person provided that each such person, as applicable, certifies in reports under the Exchange Act that its beneficial ownership is not with a purpose or effect of changing or influencing control of the Company.

      Previously, on May 13, 2010, the Company and the Rights Agent amended the Rights Agreement by executing Amendment No. 2 to Rights Agreement (“Amendment No. 2”), which was approved by the Company’s Board of Directors. Amendment No. 2 amended the definition of Acquiring Person to remove the reference to Neuberger Berman LLC and to permit Pamet Capital Management to own up to 20.00% of the Company’s common stock without being deemed an Acquiring Person provided that it certifies in reports under the Exchange Act that the beneficial ownership is not with a purpose or effect of changing or influencing control of the Company.

42

ITEM 6. EXHIBITS

			Incorporated by Reference
Exhibit No.	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date	Filed Herewith
4.1	Amendment No. 2 to Rights Agreement, dated as of May 13, 2010, between Arbitron and The Bank of New York Mellon, as Rights Agent.					*
4.2	Amendment No. 3 to Rights Agreement, dated as of August 2, 2010, between Arbitron and The Bank of New York Mellon, as Rights Agent.					*
(10)	Executive Compensation Plans and Arrangements
10.1	Amended and Restated Arbitron Inc. 2008 Equity Compensation Plan, effective as of May 25, 2010					*
10.2	Amended Arbitron Inc. Employee Stock Purchase Plan, effective as of May 25, 2010					*
10.3	Form of Performance-Based Restricted Stock Unit Agreement Under the 2001 Broad Based Stock Incentive Plan					*
10.4	Amended and Restated Schedule of Non-Employee Director Compensation					*
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a – 14(a)					*
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a – 14(a)					*
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002					*

* Filed or furnished herewith

43

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

ARBITRON INC.
By:	/s/ SEAN R. CREAMER
	Sean R. Creamer
	Executive Vice President and Chief Financial Officer (on behalf of the registrant and as the registrant’s principal financial and principal accounting officer)
Date: August 5, 2010

44

EX-4.1

Exhibit 4.1

AMENDMENT NO. 2 TO
RIGHTS AGREEMENT

     THIS AMENDMENT NO. 2 TO RIGHTS AGREEMENT (this “Amendment No. 2”) is entered into as of May 13, 2010 between ARBITRON INC., a Delaware corporation (the “Company”), and THE BANK OF NEW YORK MELLON (f/k/a THE BANK OF NEW YORK), a New York banking corporation (the “Rights Agent”).

     WHEREAS, the Company and the Rights Agent previously entered into the Rights Agreement, dated as of November 21, 2002 (the “Rights Agreement”) and Amendment No. 1 to Rights Agreement as of January 31, 2007 (“Amendment No. 1”);

     WHEREAS, in accordance with Section 27 of the Rights Agreement, the Company desires to amend the Rights Agreement on the terms and conditions hereinafter set forth;

     WHEREAS, this Amendment No. 2 is in compliance with the terms of Section 27 of the Rights Agreement; and

     WHEREAS, for purposes of this Amendment No. 2, initially capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Rights Agreement, as amended by this Amendment No. 2.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

     1. Certain Definitions. Section 1(a) of the Rights Agreement, as amended by Amendment No. 1, is amended by deleting the text and replacing it in its entirety with the following:

(a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, or (iii) any employee benefit plan of the Company or any Subsidiary of the Company, or any Person holding shares of Common Stock for or pursuant to the terms of any such plan to the extent, and only to the extent, of such shares so held, provided, however, that the term “Acquiring Person” shall not include Pamet Capital Management, L.P. or any Affiliate or Associate of such Person (together with its Affiliates and Associates, the “Exempted Person”), but only so long as (x) the Exempted Person is the Beneficial Owner of less than 20.00% of the shares of Common Stock then outstanding, and (y) the Exempted Person reports, or is permitted to report, such Beneficial Ownership on Schedule 13G under the Exchange Act (or any comparable or successor report) (and the Exempted Person certifies in each such Schedule 13G that such Beneficial Ownership is not with a purpose or effect of changing or influencing control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect) or on Schedule 13D under the Exchange Act (or any comparable or successor report), which Schedule 13D does not state any present intention to (or reserve the right to) hold such shares of Common Stock with the purpose or effect of changing or influencing the control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect. Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition by the Company of Common Stock of the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15% or more (or in the case of the Exempted Person, 20.00% or more) of the shares of Common Stock of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 15% or more (or in the case of the Exempted Person, 20.00% or more)

of the shares of Common Stock of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional shares (other than pursuant to a stock split, stock dividend or similar transaction) of Common Stock of the Company and immediately thereafter be the Beneficial Owner of 15% or more (or in the case of the Exempted Person, 20.00% or more) of the shares of Common Stock of the Company then outstanding, then such Person shall be deemed to be an “Acquiring Person.”

In addition, notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person”, as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of shares of Common Stock so that such Person would no longer be an “Acquiring Person”, then such Person shall not be deemed an “Acquiring Person” for any purposes of this Agreement unless and until such Person shall again become an “Acquiring Person”.

     2. Benefits. Nothing in the Rights Agreement, as amended by this Amendment No. 2, shall be construed to give any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock) any legal or equitable right, remedy or claim under the Rights Agreement, as amended by this Amendment No. 2; but the Rights Agreement, as amended by this Amendment No. 2, shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of Common Stock).

     3. Severability. If any term, provision, covenant or restriction of this Amendment No. 2 is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment No. 2 shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     4. Descriptive Headings. Descriptive headings of the several Sections of this Amendment No. 2 are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

     5. Governing Law. This Amendment No. 2 shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State; provided, however, that the rights and obligations of the Rights Agent shall be governed in accordance with the laws of the State of New York.

     6. Counterparts. This Amendment No. 2 may be executed in any number of counterparts. It shall not be necessary that the signature of or on behalf of each party appears on each counterpart, but it shall be sufficient that the signature of or on behalf of each party appears on one or more of the counterparts. All counterparts shall collectively constitute a single a single agreement.

     7. Effect of Amendment. Except as expressly modified by this Amendment No. 2, the Amended Rights Agreement shall remain in full force and effect.

[Remainder of page intentionally left blank]

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed and attested, as of the day and year first above written.

Attest:		ARBITRON INC.
By:	/s/ Sean P. Mulcahy	By:	/s/ Timothy T. Smith
	Sean P. Mulcahy		Timothy T. Smith
	Deputy General Counsel		Executive Vice President and Chief Legal Officer, Legal and Business Affairs, and Secretary
Attest:		THE BANK OF NEW YORK MELLON, as Rights Agent
By:	/s/ John Boryczki	By:	/s/ Margaret B. Lloyd
	Name: John Boryczki		Name: Margaret B. Lloyd
	Title: Relationship Manager		Title: Vice President

EX-4.2

Exhibit 4.2

AMENDMENT NO. 3 TO
RIGHTS AGREEMENT

     THIS AMENDMENT NO. 3 TO RIGHTS AGREEMENT (this “Amendment No. 3”) is entered into as of August 2, 2010 between ARBITRON INC., a Delaware corporation (the “Company”), and THE BANK OF NEW YORK MELLON (f/k/a THE BANK OF NEW YORK), a New York banking corporation (the “Rights Agent”).

     WHEREAS, the Company and the Rights Agent previously entered into the Rights Agreement, dated as of November 21, 2002 (the “Rights Agreement”), Amendment No. 1 to Rights Agreement as of January 31, 2007 (“Amendment No. 1”), and Amendment No. 2 of the Rights Agreement as of May 13, 2010 (“Amendment No. 2”);

     WHEREAS, in accordance with Section 27 of the Rights Agreement, the Company desires to amend the Rights Agreement on the terms and conditions hereinafter set forth;

     WHEREAS, this Amendment No. 3 is in compliance with the terms of Section 27 of the Rights Agreement; and

     WHEREAS, for purposes of this Amendment No. 3, initially capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Rights Agreement, as amended by this Amendment No. 3.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

     1. Certain Definitions. Section 1(a) of the Rights Agreement, as amended by Amendment No. 1 and Amendment No. 2, is amended by deleting the text and replacing it in its entirety with the following:

(a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the shares of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, or (iii) any employee benefit plan of the Company or any Subsidiary of the Company, or any Person holding shares of Common Stock for or pursuant to the terms of any such plan to the extent, and only to the extent, of such shares so held, provided, however, that the term “Acquiring Person” shall not include Pamet Capital Management, L.P. or any Affiliate or Associate of such Person or BlackRock Inc. or any Affiliate or Associate of Such Person (each, an “Exempted Person”), but only so long as (x) the Exempted Person is the Beneficial Owner of less than 20.00% of the shares of Common Stock then outstanding, and (y) the Exempted Person reports, or is permitted to report, such Beneficial Ownership on Schedule 13G under the Exchange Act (or any comparable or successor report) (and the Exempted Person certifies in each such Schedule 13G that such Beneficial Ownership is not with a purpose or effect of changing or influencing control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect) or on Schedule 13D under the Exchange Act (or any comparable or successor report), which Schedule 13D does not state any present intention to (or reserve the right to) hold such shares of Common Stock with the purpose or effect of changing or influencing the control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect. Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition by the Company of Common Stock of the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15% or more (or in the case of the Exempted Person, 20.00% or more) of the shares of Common Stock of the Company then outstanding; provided,however, that if a Person shall become the Beneficial Owner of 15% or more (or in the case of the Exempted

Person, 20.00% or more) of the shares of Common Stock of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional shares (other than pursuant to a stock split, stock dividend or similar transaction) of Common Stock of the Company and immediately thereafter be the Beneficial Owner of 15% or more (or in the case of the Exempted Person, 20.00% or more) of the shares of Common Stock of the Company then outstanding, then such Person shall be deemed to be an “Acquiring Person.”

In addition, notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person”, as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of shares of Common Stock so that such Person would no longer be an “Acquiring Person”, then such Person shall not be deemed an “Acquiring Person” for any purposes of this Agreement unless and until such Person shall again become an “Acquiring Person”.

     2. Benefits. Nothing in the Rights Agreement, as amended by this Amendment No. 3, shall be construed to give any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock) any legal or equitable right, remedy or claim under the Rights Agreement, as amended by this Amendment No. 3; but the Rights Agreement, as amended by this Amendment No. 3, shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of Common Stock).

     3. Severability. If any term, provision, covenant or restriction of this Amendment No. 3 is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment No. 3 shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     4. Descriptive Headings. Descriptive headings of the several Sections of this Amendment No. 3 are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

     5. Governing Law. This Amendment No. 3 shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State; provided, however, that the rights and obligations of the Rights Agent shall be governed in accordance with the laws of the State of New York.

     6. Counterparts. This Amendment No. 3 may be executed in any number of counterparts. It shall not be necessary that the signature of or on behalf of each party appears on each counterpart, but it shall be sufficient that the signature of or on behalf of each party appears on one or more of the counterparts. All counterparts shall collectively constitute a single a single agreement.

     7. Effect of Amendment. Except as expressly modified by this Amendment No. 3, the Amended Rights Agreement shall remain in full force and effect.

[Remainder of page intentionally left blank]

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed and attested, as of the day and year first above written.

Attest:		ARBITRON INC.
By:	/s/ Sean P. Mulcahy	By:	/s/ Timothy T. Smith
	Sean P. Mulcahy		Timothy T. Smith
	Deputy General Counsel and		Executive Vice President, Business
	Assistant Secretary		Development and Strategy, Chief
			Legal Officer, and Secretary
Attest:		THE BANK OF NEW YORK MELLON, as Rights Agent
By:	/s/ John Boryczki	By:	/s/ Margaret B. Lloyd
	Name: John Boryczki		Name: Margaret B. Lloyd
	Title: Relationship Manager		Title: Vice President

EX-10.1

Exhibit 10.1

ARBITRON INC.
2008 EQUITY COMPENSATION PLAN
(Amended and Restated Effective as of May 25, 2010 (the “Amendment
and Restatement Date”))

     1. Purpose.

     The purpose of this 2008 Equity Compensation Plan (the “Plan”) of Arbitron Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to better align the interests of such persons with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” includes any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations issued thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).

     2. Eligibility.

     All of the Company’s employees, officers, and directors are eligible to be granted options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), deferred stock units (“DSUs”), other stock-based awards and cash awards as described in the Section 10(i) (each, an “Award”) under the Plan. Each person who receives an Award under the Plan is deemed a “Participant.”

     3. Administration and Delegation.

     (a) Administration by Board of Directors. The Plan will be administered by the Board. The Board has the authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it considers advisable. The Board may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it considers expedient to carry the Plan into effect and will be the sole and final judge of such expediency. All decisions by the Board may be made in the Board’s sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.

     (b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or officers. Until and to the extent the Board determines otherwise, the Compensation and Human Resources Committee of the Board shall constitute the Committee.

     (c) Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Awards (subject to any limitations under the Plan) to employees or officers of the Company or any of its present or future subsidiary corporations and to exercise such other powers under the Plan as the Board may determine, provided that the Board must fix the terms of the Awards to be granted by such officers (including the exercise price of such Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to Awards that the officers may grant; provided further, however, that no officer will be authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange Act).

     (d) Awards to Non-Employee Directors. Discretionary Awards to non-employee directors will only be granted and administered by a Committee, all of the members of which are independent as defined by Section 303A.02 of the New York Stock Exchange Listed Company Manual.

     4. Stock Available for Awards.

     (a) Number of Shares; Share Counting.

     (1) Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to 4,700,000 shares of common stock, $0.50 par value per share, of the Company (the “Common Stock”). Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

     (2) Share Counting. For purposes of counting the number of shares available for the grant of Awards under the Plan and under the sublimits contained in Sections 4(b)(2), 4(b)(3), 4(b)(4), and 7(b)(1) with respect to vesting of Restricted Stock Awards, (i) all shares of Common Stock covered by independent SARs must be counted against the number of shares available for the grant of Awards; (ii) if any Award (A) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part or (B) results in any Common Stock not being issued, the unused Common Stock covered by such Award will again be available for the grant of Awards; provided, however, in the case of Incentive Stock Options, the foregoing will be subject to any limitations under the Code; and provided further, in the case of independent SARs, that only the number of shares issued in settlement of a stock-settled SAR will be counted against the shares available under the Plan and against the sublimits listed in the first clause of this Section and (iii) shares of Common Stock delivered (either by actual delivery or attestation) to the Company by a Participant to (A) purchase shares of Common Stock upon the exercise of an Award or (B) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall be added back to the number of shares available for the future grant of Awards.

     (b) Sub-limits. Subject to adjustment under Section 9, the following sub-limits on the number of shares subject to Awards will apply:

     (1) Section 162(m) Per-Participant Limits. The maximum number of shares of Common Stock with respect to which Options and SARs may be granted to any Participant under the Plan will be 700,000 in the aggregate during any period of three consecutive fiscal years of the Company. For purposes of the foregoing limit, the combination of an Option in tandem with a SAR (as each is hereafter defined) will be treated as a single Award. The maximum number of shares of Common Stock with regard to which Awards other than Options and SARs that are intended to qualify as “performance-based compensation” under Code Section 162(m) may be granted to any Participant under the Plan will be 500,000 during any period of three consecutive fiscal years of the Company. The per Participant limits described in this Section 4(b)(1) will be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder (“Section 162(m)”).

     (2) Limit on Incentive Stock Options. The maximum number of shares with respect to which Incentive Stock Options may be granted is 4,700,000.

     (c) Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards whether granted under the Plan or otherwise do not count against the overall share limit set forth in Section 4(a)(1) or any sublimits contained in the Plan, except as may be required by reason of Section 422 and related provisions of the Code or by the applicable listing requirements.

     5. Stock Options.

2

     (a) General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. An Option that is not intended to be an Incentive Stock Option (as hereinafter defined) will be designated a “Non-statutory Stock Option.”

     (b) Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) will only be granted to employees of Arbitron Inc., any of Arbitron Inc.’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and will be subject to and will be construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board, including without limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.

     (c) Exercise Price. The Board will establish the exercise price of each Option and specify the exercise price in the applicable option agreement. Except for substitute Awards described in Section 4(c), the exercise price will be not less than 100% of the Fair Market Value (as defined below) on the date the Option is granted; provided that if the Board approves the grant of an Option with an exercise price to be determined on a future date, the exercise price will be not less than 100% of the Fair Market Value on such future date.

     “Fair Market Value” of a share of Common Stock for purposes of the Plan will be determined as follows:

     (1) if the Common Stock trades on a national securities exchange, the closing sale price (for the primary trading session) on the date of grant; or

     (2) if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices as reported by an authorized OTCBB market data vendor as listed on the OTCBB website (otcbb.com) on the date of grant; or

     (3) if the Common Stock is not publicly traded, the Board will determine the Fair Market Value for purposes of the Plan using any measure of value it determines to be appropriate (including, as it considers appropriate, relying on appraisals) in a manner consistent with the valuation principles under Code Section 409A, except as the Board or Committee may expressly determine otherwise.

     For any date that is not a trading day, the Fair Market Value of a share of Common Stock for such date will be determined by using the closing sale price or average of the bid and asked prices, as appropriate, for the immediately preceding trading day and with the timing in the clauses above adjusted accordingly. The Board can substitute a particular time of day or other measure of “closing sale price” or “bid and asked prices” if appropriate because of exchange or market procedures or can, in its sole discretion, use weighted averages either on a daily basis or such longer period as complies with Code Section 409A.

     The Board has sole discretion to determine the Fair Market Value for purposes of this Plan, and all Awards are conditioned on the participants’ agreement that the Administrator’s determination is conclusive and binding even though others might make a different determination.

     (d) Duration of Options. Each Option will be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement; provided, however, that no Option will be granted with a term in excess of 10 years.

     (e) Exercise of Option. Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board, together with payment in full as specified in Section 5(f) for the number of shares for which

3

the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.

     (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan will be paid for as follows:

     (1) in cash or by check, payable to the order of the Company;

     (2) except as may otherwise be provided in the applicable option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

     (3) to the extent provided for in the applicable option agreement or approved by the Board, in its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their Fair Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

     (4) to the extent permitted by applicable law and provided for in the applicable option agreement or approved by the Board, in its sole discretion, by payment of such other lawful consideration as the Board may determine; or

     (5) by any combination of the above permitted forms of payment.

     (g) Limitation on Repricing. Unless such action is approved by the Company’s stockholders: (1) no outstanding Option granted under the Plan may be amended to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option (other than adjustments pursuant to Section 9) and (2) the Board may not cancel any outstanding option (whether or not granted under the Plan) and grant in substitution therefor either new Awards under the Plan covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled option or cash.

     (h) No Dividend Equivalents. No option will provide for the payment or accrual of the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”).

     6. Stock Appreciation Rights.

     (a) General. The Board may grant Awards consisting of SARs entitling the holder, upon exercise, to receive an amount of Common Stock determined in whole or in part by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Common Stock over the measurement price established pursuant to Section 6(c). The date as of which such appreciation is determined will be the exercise date.

     (b) Grants. SARs may be granted in tandem with, or independently of, Options granted under the Plan.

     (c) Measurement Price. The Board will establish the measurement price of each SAR and specify it in the applicable SAR agreement. Except for substitute Awards described in Section 4(c), the measurement price must not be less than 100% of the Fair Market Value on the date the SAR is granted; provided that if the Board approves the grant of a SAR with an exercise price to be determined on a future date, the exercise price must be not less than 100% of the Fair Market Value on such future date.

4

     (d) Duration of SARs. Each SAR will be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable SAR agreement; provided, however, that no SAR will be granted with a term in excess of 10 years.

     (e) Exercise of SARs. SARs may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board, together with any other documents required by the Board.

     (f) Limitation on Repricing. Unless such action is approved by the Company’s stockholders: (1) no outstanding SAR granted under the Plan may be amended to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding SAR (other than adjustments pursuant to Section 9) and (2) the Board may not cancel any outstanding SAR (whether or not granted under the Plan) and grant in substitution therefor either new Awards under the Plan covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled SAR or cash.

     (g) Dividend Equivalents. No SAR will provide for the payment or accrual of Dividend Equivalents.

     7. Restricted Stock; Restricted Stock Units.

     (a) General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient if conditions specified by the Board in the applicable Award are not satisfied before the end of the applicable restriction period or periods established by the Board for such Award. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive shares of Common Stock or cash to be delivered at the time such Award vests (“Restricted Stock Units”) or at a future date (“Deferred Stock Units”), (Restricted Stock, Restricted Stock Units, and Deferred Stock Units are each referred to herein as a “Restricted Stock Award”).

     (b) Limitations on Vesting. Restricted Stock Awards that vest solely based on the passage of time will be zero percent vested before the first anniversary of the date of grant, no more than one-third vested before the second anniversary of the date of grant, and no more than two-thirds vested before the third anniversary of the date of grant. Restricted Stock Awards that do not vest solely based on the passage of time will not vest before the first anniversary of the date of grant (or, in the case of Awards to non-employee directors, if earlier, the date of the first annual meeting held after the date of grant). Notwithstanding any other provision of this Plan (other than Section 10(i), if applicable), the Board may, in its discretion, either at the time a Restricted Stock Award is made or at any time thereafter, waive its right to repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify any part or all of the restrictions applicable to the Restricted Stock Award, provided that the Board may only exercise such rights in the event of death, disability or retirement of the Participant; or a merger, consolidation, sale, reorganization, recapitalization, or change in control of the Company. The limitations of this Section 7(b) will not apply to (y) Performance Awards granted pursuant to Section 10(i) or (z) Restricted Stock Awards granted, in the aggregate, for up to 10% of the maximum number of authorized shares set forth in Section 4(a)(1).

     (c) Terms and Conditions for All Restricted Stock Awards. The Board will determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any.

     (d) Additional Provisions Relating to Restricted Stock.

     (1) Dividends. Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the Board. Unless otherwise provided by the Board, if any dividends or distributions are paid in shares, or consist of a dividend or distribution to holders of Common Stock other than an ordinary cash dividend, the  shares, cash or other

5

property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. Each dividend payment will be made no later than the end of the calendar year in which the dividends are paid to shareholders of that class of stock or, if later, the 15th day of the third month following the date the dividends are paid to shareholders of that class of stock. Notwithstanding the foregoing, dividends payable with respect to shares of Restricted Stock constituting Performance Awards shall only be delivered when the restrictions on the shares to which the dividends relate lapse.

     (2) Stock Certificates. The Company may require that any stock certificates issued in respect of shares of Restricted Stock must be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) will deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective designation by a Participant, “Designated Beneficiary” means the Participant’s estate.

     (e) Additional Provisions Relating to Restricted Stock Units and Deferred Stock Units.

     (1) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant will be entitled to receive from the Company one share of Common Stock or an amount of cash equal to the Fair Market Value of one share of Common Stock, as determined by the Board and provided in the applicable Award agreement. The Board may, in its discretion, provide that settlement of Restricted Stock Units will be deferred, on a mandatory basis or at the election of the Participant and become a Deferred Stock Unit.

     (2) Voting Rights. A Participant will have no voting rights with respect to any Restricted Stock Units or Deferred Stock Units.

     (3) Dividend Equivalents. To the extent provided by the Board, in its sole discretion, a grant of Restricted Stock Units or Deferred Stock Units may provide Participants with Dividend Equivalents. Dividend Equivalents may be paid currently or credited to an account for the Participants, may be settled in cash and/or shares of Common Stock and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units or Deferred Stock Units with respect to which paid, as determined by the Board in its sole discretion, subject in each case to such terms and conditions as the Board establishes, in each case to be set forth in the applicable Award agreement. Notwithstanding the foregoing, Dividend Equivalents (if any) associated with Performance Awards shall be accumulated and paid only as and to the extent the related shares underlying the Performance Awards are issued.

6

     8. Other Stock-Based Awards.

     (a) General. Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“Other Stock-Based Awards”), including without limitation Awards entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other Stock-Based Awards will also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board determines.

     (b) Terms and Conditions. Subject to the provisions of the Plan, the Board will determine the terms and conditions of each Other Stock-Based Award, including any purchase price applicable thereto; provided however, that Other Stock-Based Awards shall be subject to the limitations of Section 7(b) and the requirement in Section 7(a)(3) regarding accumulation of dividend equivalents with respect to Performance Awards.

     9. Adjustments for Changes in Common Stock and Certain Other Events.

     (a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan, (ii) the sub-limits and share counting rules set forth in Sections 4(a) and 4(b) and 7(b)(1) with respect to vesting of Restricted Stock Awards, (iii) the number and class of securities and exercise price per share of each outstanding Option, (iv) the share- and per-share provisions and the exercise price of each SAR, (v) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award and (vi) the share- and per-share-related provisions and the purchase price, if any, of each outstanding Other Stock-Based Award, must be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of the foregoing, if the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend will be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

     (b) Reorganization Events.

     (1) Definition. A “Reorganization Event” means: (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (b) any exchange of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange transaction or (c) any liquidation or dissolution of the Company.

     (2) Consequences of a Reorganization Event on Awards Other than Restricted Stock Awards. In connection with a Reorganization Event, the Board may take any one or more of the following actions as to all or any (or any portion of) outstanding Awards other than Restricted Stock Awards on such terms as the Board determines: (i) provide that Awards must be assumed, or substantially equivalent Awards must be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a Participant, provide that the Participant’s unexercised Awards will terminate immediately before the consummation of such Reorganization Event unless exercised by the Participant within a specified period following the date of such notice, (iii) provide that outstanding Awards will become exercisable, realizable, or deliverable, or restrictions applicable to an Award will lapse, in whole or in part before or upon such Reorganization Event, (iv) in the event of a Reorganization Event under the

7

terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to a Participant equal to the excess, if any, of (A) the Acquisition Price times the number of shares of Common Stock subject to the Participant’s Awards (to the extent the exercise price does not exceed the Acquisition Price) over (B) the aggregate exercise price of all such outstanding Awards and any applicable tax withholdings, in exchange for the termination of such Awards, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards will convert into the right to receive liquidation proceeds (if applicable, net of the exercise price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 9(b), the Board will not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.

     For purposes of clause (i) above, an Option will be considered assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase, for each share of Common Stock subject to the Option immediately before the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately before the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in value (as determined by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

     (3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the repurchase and other rights of the Company under each outstanding Restricted Stock Award will inure to the benefit of the Company’s successor and will, unless the Board determines otherwise, apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Stock Awards then outstanding will automatically be deemed terminated or satisfied.

     (c) Change in Control Events.

     (1) Definition. Except to the extent defined differently in an Award, a “Change in Control Event” means:

     (i) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d 3 promulgated under the Exchange Act) 25% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions will not constitute a Change in Control Event: (1) any acquisition directly from the Company or (2) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (c) of this definition; or

8

     (ii) such time as the Continuing Directors (as defined below) do not constitute at least a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (x) who was a member of the Board on the date of the initial adoption of this Plan by the Board or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that this clause (y) excludes any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or

     (iii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately before such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which includes, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately before such Business Combination and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 25% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed before the Business Combination); or

     (iv) the liquidation or dissolution of the Company.

     (2) Effect on Awards. Notwithstanding the provisions of Section 9(b), except as provided otherwise in an individual agreement governing an Award, in the event of a Change in Control Event:

     (i) for the portion of each Award that continues in effect or is assumed or for which substantially equivalent awards are substituted (as provided in Section 9(b)(2)), then Award or the substituted Award shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the shares (or other consideration) at the time represented by such continuing, assumed or substituted portion of the Award, immediately upon termination of the Participant’s employment or other service relationship if such employment or service relationship is terminated by the successor company or the Company without “cause” or voluntarily by the Participant with “good reason” (in each case as defined in the applicable agreement governing the Award) within twenty-four (24) months after the Change in Control Event; and

     (ii) for the portion of each Award that does not continue in effect and is neither assumed nor substituted, such portion of the Award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the shares (or other consideration) at the time represented by such portion of the Award, immediately prior to the effective date of the Change in Control Event, provided that the Participant’s employment or service relationship has not terminated prior to such date.

9

     10. General Provisions Applicable to Awards.

     (a) Transferability of Awards. Awards cannot be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant; provided, however, that the Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if, with respect to such proposed transferee, the Company would be eligible to use a Form S-8 for the registration of the sale of the Common Stock subject to such Award under the Securities Act of 1933, as amended; provided, further, that the Company will not be required to recognize any such transfer until such time as the Participant and such permitted transferee must, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee will be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, include references to authorized transferees.

     (b) Documentation. Each Award will be evidenced in such form (written, electronic or otherwise) as the Board determines. Each Award may contain terms and conditions in addition to those set forth in the Plan.

     (c) Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

     (d) Termination of Status. The Board may determine the effect on an Award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.

     (e) Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on exercise or release from forfeiture of an Award or, if the Company so requires, at the same time as is payment of the exercise price unless the Company determines otherwise. If provided for in an Award or approved by the Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery (either by actual delivery or attestation) of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

     (f) Amendment of Award. Except as otherwise provided in Section 5(g) with respect to repricings, Section 7(b)(1) with respect to vesting of Restricted Stock Awards, Section 10(i) with respect to Performance Awards or Section 11(d) with respect to actions requiring shareholder approval, the Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option. The Participant’s consent to such action will be required unless (i) the Board determines that the action, taking into account any related action, would not

10

materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 9 hereof.

     (g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

     (h) Acceleration. Except as otherwise provided in Section 10(i) with respect to Performance Awards or Section 11(d) with respect to actions requiring shareholder approval, and subject to Section 7(b), the Board may at any time provide that any Award will become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

     (i) Performance Awards.

     (1) Grants. Restricted Stock Awards, Other Stock-Based Awards and Cash Awards under the Plan may be made subject to the achievement of performance goals pursuant to this Section 10(i) (“Performance Awards”), subject to the limit in Section 4(b)(1) on shares covered by such grants. Subject to Section 10(i)(4), no Performance Awards will vest before the first anniversary of the date of grant. Performance Awards can also provide for cash payments of up to $5,000,000 per fiscal year per individual.

     (2) Committee. Grants of Performance Awards to any Covered Employee intended to qualify as “performance-based compensation” under Section 162(m) (“Performance-Based Compensation”) must be made only by a Committee (or subcommittee of a Committee) comprised solely of two or more directors eligible to serve on a committee making Awards qualifying as “performance-based compensation” under Section 162(m). In the case of such Awards granted to Covered Employees, references to the Board or to a Committee will be treated as referring to such Committee or subcommittee. “Covered Employee” means any person who is, or whom the Committee, in its discretion, determines may be, a “covered employee” under Section 162(m)(3) of the Code.

     (3) Performance Measures. For any Award that is intended to qualify as Performance-Based Compensation, the Committee must specify that the degree of granting, vesting and/or payout must be subject to the achievement of one or more objective performance measures established by the Committee, which will be based on the relative or absolute attainment of specified levels of one or any combination of the following: (i) change in share price; (ii) operating earnings, operating profit margins, earnings before interest, taxes, depreciation, or amortization, net earnings, earnings per share (basic or diluted) or other measure of earnings; (iii) total stockholder return; (iv) operating margin; (v) gross margin; (vi) balance sheet performance, including debt, long or short term, inventory, accounts payable or receivable, working capital, or shareholders’ equity; (vii) return measures, including return on invested capital, sales, assets, investment or equity; (viii) days’ sales outstanding; (ix) operating income; (x) net operating income; (xi) pre-tax profit; (xii) cash flow, including cash flow from operations, investing, or financing activities, before or after dividends, investments, or capital expenditures; (xiii) revenue; (xiv) expenses, including cost of goods sold, operating expenses, marketing and administrative expense, research and development, restructuring or other special or unusual items, interest, tax expense, or other measures of savings; (xv) earnings before interest, taxes and depreciation; (xvi) economic value created or added; (xvii) market share; (xviii) sales or net sales; (xix) sales or net sales of particular products; (xx) gross profits; (xxi) net income; (xxii) inventory turns; (xxiii) revenue per employee; and (xxiv) implementation or completion of critical projects involving acquisitions, divestitures, process improvements, product or production quality, attainment of other strategic objectives relating to market penetration, geographic expansion, product development, regulatory or quality performance, innovation or research goals. Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external

11

measure of the selected performance criteria and may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated. The Committee may specify that such performance measures will be adjusted to exclude any one or more of (i) extraordinary items, (ii) gains or losses on the dispositions of discontinued operations, (iii) the cumulative effects of changes in accounting principles, (iv) the writedown of any asset, and (v) charges for restructuring and rationalization programs. Such performance measures: (i) may vary by Participant and may be different for different Awards; (ii) may be particular to a Participant or the department, branch, line of business, subsidiary or other unit in which the Participant works and may cover such period as may be specified by the Committee; and (iii) will be set by the Committee within the time period prescribed by, and will otherwise comply with the requirements of, Section 162(m). Awards that are not intended to qualify as Performance-Based Compensation may be based on these or such other performance measures as the Board may determine.

     (4) Adjustments. Notwithstanding any provision of the Plan, with respect to any Performance Award that is intended to qualify as Performance-Based Compensation, the Committee may adjust downwards, but not upwards, the cash or number of Shares payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance measures except in the case of the death or disability of the Participant or a change in control of the Company.

     (5) Other. The Committee will have the power to impose such other restrictions on Performance Awards as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for Performance-Based Compensation.

     11. Miscellaneous

     (a) No Right To Employment or Other Status. No person will have any claim or right to be granted an Award, and the grant of an Award must not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

     (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares.

     (c) Effective Date and Term of Plan. The Plan as restated will become effective on the date the Plan is approved by the Company’s stockholders (the “Effective Date”). No Awards will be granted under the Plan after the expiration of 10 years from the Amendment and Restatement Date, but Awards previously granted may extend beyond that date.

     (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time provided that (i) to the extent required by Section 162(m), no Award granted to a Participant that is intended to comply with Section 162(m) after the date of such amendment will become exercisable, realizable or vested, as applicable to such Award, unless and until the Company’s stockholders approve such amendment if required by Section 162(m) (including the vote required under Section 162(m)); and (ii) no amendment that would require stockholder approval under the rules of the New York Stock Exchange (“NYSE”) may be made effective unless and until the Company’s stockholders approve such amendment. In addition, if at any time the approval of the Company’s stockholders is required as to any other modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 11(d) will apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment does not materially and adversely affect the rights of Participants under the Plan.

     (e) Provisions for Foreign Participants. The Board may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan

12

to recognize differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

     (f) Compliance with Code Section 409A. The Company will have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant or for any action taken by the Board.

     (g) Governing Law. The provisions of the Plan and all Awards made hereunder will be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

13

EX-10.2

Exhibit 10.2

ARBITRON INC.
EMPLOYEE STOCK PURCHASE PLAN
(Amended and Restated as of May 25, 2010)

     1. Purpose of Plan.

     The purpose of the Arbitron Inc. Employee Stock Purchase Plan (the “Plan”) is to advance the interests of Arbitron Inc., a Delaware corporation formerly known as Ceridian Corporation (the “Company”), and its stockholders by providing employees of the Company and certain of its subsidiaries with an opportunity to acquire an ownership interest in the Company through the purchase of common stock of the Company on favorable terms through payroll deductions. It is the intention of the Company that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), and provisions of the Plan shall be construed consistent with such intention.

     2. Definitions.

     The following terms will have the meanings set forth below, unless the context clearly otherwise requires:

     2.1 “Agent” means the party or parties designated by the Company to provide Share Accounts and certain administrative services in connection with the Plan.

     2.2 “Applicable Dollar Limitation” means the maximum amount that a Participant can accrue for purposes of purchases within any one calendar year as provided under Section 423(b)(8) of the Code (i.e., $25,000 as of May 25, 2010).

     2.3 “Board” means the Board of Directors of the Company or any committee thereof to which the Board of Directors has delegated authority with respect to the Plan.

     2.4 “Common Stock” means the common stock, par value $.50 per share, of the Company, or the number and kind of shares of stock or other securities into which such common stock may be changed in accordance with Section 11 of the Plan.

     2.5 “Committee” means the Compensation and Human Resources Committee of the Board, or such successor committee that meets the criteria specified in Section 3.

     2.6 “Contribution Account” means an account established for each Participant to which payroll deductions under the Plan are credited in accordance with Section 7.

     2.7 “Designated Subsidiary” means a Subsidiary that has been designated by the Board from time to time, in its sole discretion, as eligible to participate in the Plan.

     2.8 “Employee” means any person, including an officer, who is employed on a full-time or part-time basis by a Participating Employer.

     2.9 “Ending Date” means the last day of each Offering Period.

     2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     2.11 “Fair Market Value” means, with respect to the Common Stock, as of any date:

     (a) if the Common Stock trades on a national securities exchange, the closing sale price (for the primary trading session) on the date of grant; or

     (b) if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices as reported by an authorized OTCBB market data vendor as listed on the OTCBB website (otcbb.com) on the date of grant; or

     (c) if the Common Stock is not publicly traded, the Committee will determine the Fair Market Value for purposes of the Plan using any measure of value it determines to be appropriate (including, as it considers appropriate, relying on appraisals) in a manner consistent with the requirements of Section 423 of the Code.

     For any date that is not a trading day, the Fair Market Value of a share of Common Stock for such date will be determined by using the closing sale price or average of the bid and asked prices, as appropriate, for the immediately preceding trading day and with the timing in the clauses above adjusted accordingly. The Committee can substitute a particular time of day or other measure of “closing sale price” or “bid and asked prices” if appropriate because of exchange or market procedures or can, in its sole discretion, use weighted averages either on a daily basis or such longer period as complies with Section 423 of the Code.

     2.12 “Grant Date” means the first day of each Offering Period.

     2.13 “Insider” means any Employee who is subject to Section 16 of the Exchange Act.

     2.14 “Offering Period” means each three-month period beginning on March 16 and ending on June 15, or beginning on June 16 and ending on September 15, or beginning on September 16 and ending on December 15, or beginning on December 16 and ending on March 15.

     2.15 “Participant” means an eligible Employee who elects to participate in the Plan in accordance with Section 6.

     2.16 “Participating Employer” means the Company and any Designated Subsidiary that has elected to participate in the Plan.

     2.17 “Share Account” means the brokerage account established by the Agent for each Participant to which shares of Common Stock purchased under the Plan are credited in accordance with Section 9. The Share Account will be established pursuant to a separate agreement between each Participant and the Agent.

     2.18 “Subsidiary” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.

     3. Administration.

     The Plan shall be administered by the Committee (or any successor thereto appointed by the Board consisting of not less than three members, all of whom must be members of the Board who are “Non-Employee Directors” as defined in Rule 16b-3 under the Exchange Act). Members of the Committee shall be appointed from time to time by the Board, shall serve at the pleasure of the Board, and may resign at any time upon written notice to the Board. A majority of the members of the Committee shall constitute a quorum. The Committee shall act by majority approval of the members, but action may be taken by the Committee without a meeting if unanimous written consent is given. In accordance with and subject to the provisions of the Plan, the Committee shall have authority to interpret the Plan, to make, amend and rescind rules and regulations regarding the Plan (including rules and regulations intended to insure that operation of the Plan complies with Section 16 of the Exchange Act), and to make all other determinations necessary or advisable in administering the Plan, all of which determinations shall be final and binding upon all persons. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. 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 the Committee may establish; provided, however, that only the Committee may exercise such duties, power and authority with respect to Insiders. The Committee may request advice or assistance or retain the services of such other persons as are necessary for the proper administration of the Plan.

     4. Eligibility.

     Any person who is (a) an Employee on the last day of the calendar month immediately preceding a Grant Date, (b) is not on long-term disability or unpaid leave status at that time, and (c) has reached the age of majority in the state or province in which he or she resides shall be eligible to participate in the Plan for the Offering Period beginning on such Grant Date, subject to the limitations imposed by Section 423(b) of the Code.

2

     5. Offering Periods.

     Options to purchase shares of Common Stock shall be granted to Participants under the Plan through a series of consecutive Offering Periods. The first Offering Period under the Plan began on September 16, 1995. Offering Periods under the Plan shall continue until either (a) the Committee decides, in its sole discretion, to cancel future Offering Periods because the Common Stock remaining available under the Plan is insufficient to grant options to all eligible Employees, or (b) the Plan is terminated in accordance with Section 17 below. Notwithstanding the foregoing, and without limiting the authority of the Committee under Section 3, 11.2 and 17 of the Plan, the Committee, in its sole discretion, may (a) accelerate the Ending Date of the then current Offering Period and provide for the exercise of Options thereunder by Participants in accordance with Section 9 of the Plan, or (b) accelerate the Ending Date of the then current Offering Period and provide that all payroll deductions credited to the accounts of Participants will be paid to Participants as soon as practicable after such Ending Date and that all Options for such Offering Period will automatically be canceled and will no longer be exercisable.

     6. Participation.

     Participation in the Plan is voluntary. An eligible Employee may become a Participant in the Plan by completing an enrollment form provided by the Company authorizing payroll deductions and the establishment of a Share Account, and filing the enrollment form with the Company’s Organization Effectiveness department not later than the last business day of the month immediately preceding the Grant Date of the first Offering Period in which the Participant wishes to participate. Any election to participate must be made in a manner that complies with the Company’s Insider Trading Policy.

     7. Payroll Deductions.

     7.1 Each Employee electing to participate in the Plan shall designate on the enrollment form the amount of money which he or she wishes to have deducted from his or her paycheck each pay day to purchase Common Stock pursuant to the Plan. The aggregate amount of such payroll deductions shall not be less than $25.00 per month, and shall not be more than 85% of one quarter of the Applicable Dollar Limitation (currently, $5,312.50 (85% of $6,250)) per Offering Period, pro-rated equally over the number of pay days applicable to a Participant during each such Offering Period. Deductions for Plan purposes will not be withheld from compensation amounts, such as annual bonus or gain sharing payments, that are not part of a Participant’s normal and recurring compensation each payday.

     7.2 Payroll deductions for a Participant shall commence on the first pay day on or after the Grant Date of the applicable Offering Period and shall continue until the termination date of the Plan, unless participation in the Plan is sooner terminated as provided in Section 10, the deduction amount is increased or decreased by the Participant as provided in Section 7.4, deductions are suspended as provided in Section 7.4 or the Offering Period is adjusted by the Committee as provided in Section 5. Except for a Participant’s rights to change the amount of, suspend or discontinue deductions pursuant to Sections 7.4 and 10, the same deduction amount shall be utilized for each pay day during subsequent Offering Periods, whether or not the Participant’s compensation level increases or decreases. If the pay period of any Participant changes, such as from weekly to semi-monthly, an appropriate adjustment shall be made to the deduction amount for each pay day corresponding to the new pay period, if necessary, so as to ensure the deduction of the proper amount as specified by the Participant in his or her enrollment form for that Offering Period.

     7.3 All payroll deductions authorized by a Participant shall be credited to the Participant’s Contribution Account. A Participant may not make any separate cash payment or contribution to such Contribution Account. Contribution Accounts shall be solely for bookkeeping purposes, and no separate fund or trust shall be established for payroll deductions. Until utilized to purchase shares of Common Stock, funds from payroll deductions shall be held as part of the Participating Employers’ general assets, and the Participating Employers shall not be obligated to segregate such funds. No interest shall accrue on a Participant’s payroll deductions under the Plan.

     7.4 No increases or decreases in the amount of payroll deductions for a Participant may be made during an Offering Period. A Participant may increase or decrease the amount of his or her payroll deductions under the Plan, or may suspend such payroll deductions, for subsequent Offering Periods by completing a change form and filing it with the Company’s Organization Effectiveness department not later than the last business day of the month immediately preceding the Grant Date for the Offering Period as of which such increase, decrease or suspension is to be effective. Any change to the payroll deductions must be made in a manner that complies with the Company’s Insider Trading Policy.

3

     7.5 Payroll deductions which are authorized by Participants who are paid other than in U.S. currency shall be withheld in Contribution Accounts in the country in which such Participant is employed until exercise of an option granted hereunder. Upon exercise of the option granted to such Participant, the amount so withheld shall be converted into U.S. dollars on the basis of the rate of exchange, as published in the Wall Street Journal or provided by a generally recognized source, for such currency into U.S. dollars as of the business day immediately preceding the Ending Date for such Offering Period. The purchase price shall thereupon be paid to the Company in U.S. dollars following such conversion, the extent to which the Participant may exercise an option therefore being dependent, in part, upon the applicable rate of currency exchange. If, as a result of fluctuations in the exchange rate between the U.S. dollar and a foreign currency during an Offering Period, a Participant who is paid in such foreign currency has less than the minimum permitted amount deducted during an Offering Period, the amount deducted will, nevertheless, be used to purchase Common Stock in accordance with the Plan.

     8. Grant of Option.

     8.1 Subject to Section 8.2, on each Grant Date, each eligible Employee who is then a Participant shall be granted (by operation of the Plan) an option to purchase the number of whole and fractional shares (computed to the fourth decimal place) of Common Stock equal to the lesser of (a) the amount determined by dividing the amount of payroll deductions credited to his or her Contribution Account during the Offering Period beginning on such Grant Date by the Purchase Price specified in the following sentence, or (b) the amount determined by dividing one quarter of the Applicable Dollar Limitation (currently $6,250) by the Fair Market Value of one share of Common Stock on the applicable Grant Date. The purchase price per share of such shares (the “Purchase Price”) shall be the lesser of (i) 85% of the Fair Market Value of one share of Common Stock on the applicable Grant Date, or (ii) 85% of the Fair Market Value of one share of Common Stock on the applicable Ending Date.

     8.2 Despite any provisions of the Plan that may provide or suggest otherwise:

     (a) no Employee shall be granted an option under the Plan to the extent that immediately after the grant, such Employee (or any other person whose stock ownership would be attributed to such Employee pursuant to Section 424(d) of the Code) would own shares of Common Stock and/or hold outstanding options to purchase shares of Common Stock that would in the aggregate represent 5% or more of the total combined voting power or value of all classes of shares of the Company or of any Subsidiary;

     (b) no Employee shall be granted an option under the Plan to the extent that the Employee’s rights to purchase shares of Common Stock under all “employee stock purchase plans” (within the meaning of Section 423 of the Code) of the Company and its Subsidiaries would accrue (i.e., become exercisable) at a rate that exceeds the Applicable Dollar Limitation of Fair Market Value of such shares of Common Stock (determined at the time such option is granted, which is the Grant Date) for each calendar year in which such option is outstanding at any time; or

     (c) no Participant may purchase more than 6,000 shares of Common Stock under the Plan in any given Offering Period.

     9. Exercise of Option.

     9.1 Unless a Participant withdraws from the Plan pursuant to Section 10, his or her option for the purchase of shares of Common Stock granted for an Offering Period will be exercised automatically and in full at the applicable Purchase Price as soon as practicable following the Ending Date of such Offering Period. If the full amount credited to a Participant’s Contribution Account during an Offering Period is not required to exercise such Participant’s option for that Offering Period in full (due to the applicability of clause (b) of Section 8.1 and/or fluctuations in the exchange rate between the U.S. dollar and the foreign currency in which such Participant is paid), the amount not required to exercise such option shall promptly be refunded to the Participant following the Ending Date of such Offering Period.

     9.2 No Participant (or any person claiming through such Participant) shall have any interest in any Common Stock subject to an option under the Plan until such option has been exercised and the shares of Common Stock purchased, at which point such Participant shall have all of the rights and privileges of a stockholder of the Company with respect to shares purchased under the Plan. During his or her lifetime, a Participant’s option to purchase shares of Common Stock under the Plan is exercisable only by the Participant.

     9.3 Shares of Common Stock purchased pursuant to the exercise of options hereunder shall be held in Share Accounts maintained for and in the name of each Participant by the Agent, such Agent or its nominee to be the record holder of such shares for the benefit of the Participant. The Agent shall provide each Participant with a quarterly statement of his or her Share Account.

4

     9.4 Dividends paid with respect to shares credited to each Share Account will be themselves credited to such Account and, if paid in cash, will automatically be reinvested in whole and fractional shares of Common Stock.

     9.5 A Participant may request that the Agent cause a stock certificate representing some or all of the number of whole shares of Common Stock credited to the Participant’s Share Account be issued in the name of the Participant. The Agent shall cause such certificate to be issued as soon as practicable after its receipt of such request and the payment by the Participant of any applicable issuance fees. From and after the date of the issuance of any such certificate, the number of shares credited to the Participant’s Share Account shall be reduced by the number of shares represented by such certificate, and the Participant shall thereafter be the record holder of the shares represented by such certificate.

     10. Withdrawal; Termination of Employment.

     10.1 A Participant may terminate his or her participation in the Plan and withdraw all, but not less than all, of the payroll deductions credited to his or her Contribution Account under the Plan at any time on or before the last business day of an Offering Period by giving written notice to the Company. The timing of any withdrawal must comply with the Company’s Insider Trading Policy. The notice shall (a) state that the Participant wishes to terminate participation in the Plan, (b) specify the withdrawal date, and (c) request the withdrawal of all of the Participant’s payroll deductions held under the Plan. All of the Participant’s payroll deductions credited to his or her Contribution Account will be paid to the Participant as soon as practicable after the withdrawal date specified in the notice of withdrawal (or, if no such date is specified, as soon as practicable after receipt of the notice of withdrawal), the Participant’s option for such Offering Period will be automatically canceled, and no further payroll deductions for the purchase of shares of Common Stock will be made for such Offering Period or for any subsequent Offering Period, except pursuant to a re-enrollment in the Plan as provided in Section 10.2.

     10.2 If a Participant’s suspension of payroll deductions under the Plan pursuant to Section 7.4 continues for four consecutive Offering Periods, such suspension shall be deemed an election by the Participant to terminate his or her participation in the Plan, and such termination shall be effective as of the Ending Date of the fourth consecutive Offering Period during which no payroll deductions occurred. If, for any reason, a Participant’s net pay after withholding taxes and other applicable deductions not related to the Plan (such as for health and welfare benefits) each pay day becomes less than the amount the Participant has designated be deducted each pay day for contribution to the Plan, such occurrence shall be deemed an election by the Participant to terminate his or her participation in the Plan, and such termination shall be effective immediately. Following such termination, all of the Participant’s payroll deductions credited to his or her Contribution Account will be paid to the Participant as soon as practicable, the Participant’s option for such Offering Period will be automatically canceled, and no further payroll deductions for the purchase of shares of Common Stock will be made for such Offering Period or for any subsequent Offering Period, except pursuant to a re-enrollment in the Plan as provided in Section 10.4.

     10.3 Upon termination of a Participant’s employment with all Participating Employers for any reason, including retirement or death, his or her participation in the Plan will automatically cease and the payroll deductions accumulated in his or her Contribution Account will be returned to the Participant as soon as practicable after such employment termination or, in the case of death, to the person or persons entitled thereto under Section 12 below, and the Participant’s option for the current Offering Period will be automatically canceled. For purposes of the Plan, the termination date of employment shall be the Participant’s last date of actual employment and shall not include any period during which such Participant receives any severance payments. A transfer of employment between the Company and a Designated Subsidiary or between one Designated Subsidiary and another Designated Subsidiary, or leave of absence approved by the Participating Employer, shall not be deemed a termination of employment under this Section 10.3.

     10.4 A Participant’s termination of participation in the Plan pursuant to Section 10.1 or 10.2 will not have any effect upon his or her eligibility to participate in a subsequent Offering Period by completing and filing a new enrollment form in accordance with Section 6 or in any similar plan that may hereafter be adopted by the Company.

     11. Stock Subject to the Plan.

     11.1 The maximum number of shares of Common Stock that shall be reserved for sale under the Plan shall be 1,100,000 shares, subject to adjustment as provided in Sections 11.2 and 11.3. The shares to be sold to Participants under the Plan may be, at the election of the Company, either treasury shares or shares authorized but unissued. If the total number of shares of Common Stock that would otherwise be subject to options granted pursuant to Section 8 on any Ending Date exceeds the number of shares then available under

5

the Plan (after deduction of all shares for which options have been exercised or are then outstanding), the Committee shall make a pro rata allocation of the shares of Common Stock remaining available for issuance in as uniform and equitable a manner as is practicable, as determined in the Committee’s sole discretion. In such event, the Company shall give written notice of such reduction of the number of shares subject to the option to each Participant affected thereby and shall return any excess funds accumulated in each Participant’s Contribution Account as soon as practicable after the Ending Date of such Offering Period.

     11.2 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 each outstanding option, and (b) the Purchase Price of outstanding options.

     11.3 Subject to the following provisions of this Section 11.3, if the Company is the surviving corporation in any reorganization, merger or consolidation with or involving one or more other corporations, each outstanding option under the Plan shall apply to the amount and kind of securities to which a holder of the number of shares of Common Stock subject to such option would have been entitled immediately following such reorganization, merger or consolidation, with a corresponding proportionate adjustment of the Purchase Price. If there is a (a) dissolution or liquidation of the Company, (b) merger, consolidation or reorganization of the Company with one or more other corporations in which the Company is not the surviving corporation, (c) sale of all or substantially all of the assets of the Company to another person or entity, or (d) transaction (including a merger or reorganization in which the Company is the surviving corporation) approved by the Board that results in any person or entity owning more than 50% of the combined voting power of all classes of stock of the Company, then the Plan and all options outstanding thereunder shall terminate, except as provided in the following sentence. If provision is made in writing in connection with such transaction for the continuation of the Plan and either the assumption of the options theretofore granted or the substitution for such options of new options covering the stock of a successor corporation (or a parent or subsidiary thereof), in either case with appropriate adjustments as to the number and kinds of shares and exercise prices, then the Plan shall continue in the manner and under the terms provided. If the Plan is terminated as provided in this Section 11.3, the current Offering Period shall be deemed to have ended as of a date selected by the Committee prior to such termination, and the options of each Participant then outstanding shall be deemed to have been automatically exercised in accordance with Section 9.1 on such last trading day. The Committee shall cause written notice to be sent of an event that will result in such a termination to all Participants not later than the time the Company gives notice thereof to its stockholders. Adjustments under this Section 11.3 shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.

     12. Designation of Beneficiary.

     12.1 A Participant may file a written designation of a beneficiary who is to receive a cash refund of the amount, if any, from the Participant’s Contribution Account under the Plan in the event of such Participant’s death at a time when cash is held for his or her account. Disposition of shares of Common Stock in a Participant’s Share Account upon the Participant’s death shall be in accordance with the agreement governing the Share Account.

     12.2 A designation of beneficiary pursuant to Section 12.1 may be changed by the Participant at any time by written notice. In the event of the death of a Participant in the absence of a valid designation of a beneficiary who is living at the time of such Participant’s death, the Company shall deliver such cash to the executor or administrator of the estate of the Participant; or, if no such executor or administrator has been appointed (to the knowledge of the Company), the Company in its discretion, may deliver such cash to the spouse or to any one or more dependents or relatives of the Participant; or, if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

     13. No Right to Employment.

     Nothing in the Plan will interfere with or limit in any way the right of the Company or any Participating Employer to terminate the employment of any Employee or Participant at any time, nor confer upon any Employee or Participant any right to continue in the employ of the Company or any Participating Employer.

6

     14. Rights As a Stockholder.

     As a holder of an Option under the Plan, a Participant will have no rights as a stockholder unless and until such Option is exercised and the Participant becomes the holder of record of shares of Common Stock. Except as otherwise provided in the Plan, no adjustment will be made for dividends or distributions with respect to Options 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 sole discretion.

     15. Transferability.

     Neither payroll deductions credited to a Participant’s Contribution Account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws of descent and distribution) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect.

     16. No Right to Employment.

     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 the Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Options 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 or foreign securities laws or an exemption from such registration under the Securities Act and applicable state or foreign securities laws, 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 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.

     17. Amendment or 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 Options 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; provided, however, that no amendments to the Plan will be effective without approval of the stockholders of the Company if stockholder approval of the amendment is then required pursuant to Section 423 of the Code or the rules of any stock exchange or similar regulatory body. Upon termination of the Plan, the Committee, in its sole discretion, may take any of the actions described in Section 5 of the Plan.

     18. Notices.

     All notices or other communications by a Participant to the Company in connection with the Plan shall be deemed to have been duly given when received by the Company’s Organization Effectiveness department or by any other person designated by the Company for the receipt of such notices or other communications, in the form and at the location specified by the Company.

     19. Effective Date of Plan.

     The Plan was originally effective on June 29, 1995, subject to stockholder approval, which was obtained on May 8, 1996. The Plan has been subsequently amended. This 2010 amendment and restatement will be effective only on and after stockholder approval.

     20. Miscellaneous.

     The headings to sections of the Plan have been included for convenience of reference only. The Plan shall be interpreted and construed in accordance with the laws of the State of Delaware. References in the Plan to “$” or “dollars” shall be deemed to refer to United States dollars unless the context clearly indicates otherwise.

7

EX-10.3

Exhibit 10.3

     Grant No.                

o          Participant’s Copy

o          Company’s Copy

Arbitron Inc.
2001 Broad Based Stock Incentive Plan
Performance-Based Restricted Stock Unit Agreement

To                     :

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

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

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

Vesting Schedule	The Grant becomes nonforfeitable (“Vested”) as to some or all of the RSUs only as provided on Exhibit A.
Distribution Dates	You will receive a distribution of shares (the “Shares”) of Company common stock (“Common Stock”) equivalent to your Vested RSUs as soon as practicable following the dates on which you become Vested (the “Distribution Dates”) as provided in Exhibit A, subject to any overriding provisions in the Plan.
Limited Status	You understand and agree that the Company will not consider you a shareholder for any purpose with respect to the Shares, unless and until the Shares have been issued to you on the Distribution Date(s). You will, however, receive dividend equivalents (“Dividend Equivalent Rights”) with respect to the Vested RSUs, measured using the Shares they represent, with the amounts convertible into full or fractional additional Vested RSUs based on dividing the Dividend Equivalent Rights by the Fair Market Value (as defined in the Plan) as of the date of dividend distribution and holding the resulting additional Vested RSUs for distribution as provided for the RSUs with respect to which they were issued.
Voting	RSUs cannot be voted. You may not vote the Shares unless and until the Shares are distributed to you.
Transfer Restrictions and	You may not sell, assign, pledge, encumber, or otherwise transfer any interest (“Transfer”) in the Shares until the Shares are distributed to you. Any attempted Transfer that precedes the Distribution Date for such

Forfeiture	Shares is invalid.
	Unless the Administrator determines otherwise at any time or Exhibit A provides otherwise, if your service with the Company terminates for any reason before all of your RSUs are Vested, then you will forfeit such unvested RSUs (and the Shares to which they relate) to the extent that such RSUs do not otherwise vest as a result of the termination. The forfeited RSUs will then immediately revert to the Company. You will receive no payment for RSUs that you forfeit.
	Your receipt of and retaining the RSUs and any Common Stock issued thereunder are also subject to your compliance with the restrictive covenants set out in Exhibit B to this award.
Additional Conditions	The Company may postpone issuing and delivering any Shares for so long as the Company determines to be advisable to satisfy the following:
to Receipt
	its completing or amending any securities registration or qualification of the Shares or its or your satisfying any exemption from registration under any Federal or state law, rule, or regulation;
	its receiving proof it considers satisfactory that a person or entity seeking to receive the Shares after your death is entitled to do so;
	your complying with any requests for representations under the Grant and the Plan; and
	its or your complying with any federal, state, or local tax withholding obligations.
Taxes and Withholding	The RSUs provide tax deferral, meaning that they are not taxable to you until you actually receive Shares on or around each Distribution Date. You will then owe taxes at ordinary income tax rates as of each Distribution Date at the Shares’ value.
	The Company is required to withhold (in cash from salary or other amounts owed you) the applicable percentage of the value of the Shares on the Distribution Date, regardless of whether you sell them. If the Company does not choose to do so, you agree to arrange for payment of the withholding taxes and/or confirm that the Company is arranging for appropriate withholding.
Additional Representations from You	If you receive Shares at a time when the Company does not have a current registration statement (generally on Form S-8) under the Act that covers issuances of Shares to you, you must comply with the following before the Company will release the Shares to you. You must:

-2-

	represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the Shares for your own account and not with a view to reselling or distributing the Shares; and
	agree that you will not sell, transfer, or otherwise dispose of the Shares unless:
	a registration statement under the Act is effective at the time of disposition with respect to the Shares you propose to sell, transfer, or otherwise dispose of; or
	the Company has received an opinion of counsel or other information and representations it considers satisfactory to the effect that, because of Rule 144 under the Act or otherwise, no registration under the Act is required.
Additional Restriction	You will not receive the Shares if issuing the Shares would violate any applicable federal or state securities laws or other laws or regulations.
No Effect on Employment or Other Relationship	Nothing in this Agreement restricts the Company’s rights or those of any of its affiliates to terminate your employment or other relationship at any time, with or without cause. The termination of your relationship, whether by the Company or any of its affiliates or otherwise, and regardless of the reason for such termination, has the consequences provided for under the Plan and any applicable employment or severance agreement or plan.
No Effect on Running Business	You understand and agree that the existence of the RSU will not affect in any way the right or power of the Company or its stockholders to make or authorize any adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stock, with preference ahead of or convertible into, or otherwise affecting the Company’s common stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether or not of a similar character to those described above.
Section 409A	This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code and must be construed consistently with that section. Notwithstanding anything in the Plan or this Agreement to the contrary, if the Vested portion is increased in connection with your “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) you are then a “specified employee” within the meaning of Section 409A at the time of such separation from service (as determined by the Company, by which determination you agree you are bound) and

-3-

	(y) the payment under such accelerated RSUs will result in the imposition of additional tax under Section 409A if paid to you within the six month period following your separation from service, then the payment under such accelerated RSUs will not be made until the earlier of (i) the date six months and one day following the date of your separation from service or (ii) the 10th day after your date of death, and will be paid within 10 days thereafter. Neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. In any event, the Company makes no representations or warranty and shall have no liability to you or any other person, if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.
Unsecured Creditor	This Agreement creates a contractual obligation on the part of the Company to make payment under the RSUs credited to your account at the time provided for in this Agreement. Neither you nor any other party claiming an interest in deferred compensation hereunder shall have any interest whatsoever in any specific assets of the Company. Your right to receive payments hereunder is that of an unsecured general creditor of Company.
Additional Restrictions	Any acceleration, vesting, or extension under this Grant is subject, as applicable, to the 280G provisions in Exhibit C hereto and to compliance with any requirement that otherwise applies to you to provide a release of claims.
Governing Law	The laws of the State of Delaware will govern all matters relating to this Agreement, without regard to the principles of conflict of laws.
Notices	Any notice you give to the Company must follow the procedures then in effect. If no other procedures apply, you must send your notice in writing by hand or by mail to the office of the Company’s Secretary. If mailed, you should address it to the Company’s Secretary at the Company’s then corporate headquarters, unless the Company directs participants to send notices to another corporate department or to a third party administrator or specifies another method of transmitting notice. The Company and the Administrator will address any notices to you at your office or home address as reflected on the Company’s personnel or other business records. You and the Company may change the address for notice by like notice to the other, and the Company can also change the address for notice by general announcements to participants.

-4-

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

	Arbitron Inc.
Date:	By:

-5-

ACKNOWLEDGMENT

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

Date:
	Name:

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

-6-

Grant No.                

Arbitron Inc.
2001 Broad Based Stock Incentive Plan
Performance-Based Restricted Stock Unit

Exhibit A

Recipient Information:

Name:

Signature: X

Grant Information:

RSUs:                                                                  Date of Grant:                                                              

Vesting Schedule
Performance Condition	The Grant will expire without Vesting if the one-year performance goal (the “Performance Goal”) is not satisfied by the first anniversary of the Date of Grant. The Compensation Committee will have the full and sole discretion to determine whether the Company has met the Performance Goal and how each of its components is calculated. The Performance Goal is specified on Schedule I to this Exhibit A.
Service Condition	If the Performance Goal is met, the Grant will become Vested as to one-fourth of the RSUs on each of the four one year anniversaries of the Date of Grant (each a “Vesting Date”), assuming you remain a service provider to the Company through those dates.
Grant Expiration Rules	Except as otherwise provided in an employment, retention, or other individual agreement covering you, you will forfeit any unvested portions of the Grant immediately when you cease to be employed by (or a member of the Board of) the Company for reasons other than death or Disability or Retirement. If your employment ends for death or Disability, you will become fully Vested at that date. If your employment ends on your Retirement, you will continue to Vest in the Grant as though you had remained employed and subject to achievement of the Performance Goal.
Definitions	“Cause” will have the meaning set forth in any employment or other agreement or policy applicable to you or, if no

-7-

	such agreement or policy exists, will mean (i) dishonesty, fraud, misrepresentation, theft, embezzlement or injury or attempted injury, in each case related to the Company or any Subsidiary, (ii) any unlawful or criminal activity of a serious nature, (iii) any breach of duty, habitual neglect of duty or unreasonable job performance, or (iv) any material breach of any employment, service, confidentiality or noncompete agreement entered into with the Company or any Subsidiary.
	“Disability” means your disability such as would entitle you to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering you or, if no such plan exists or is applicable to you, your permanent and total disability within the meaning of Section 22(e)(3) of the Code; provided, however, that the disability must also comply with the requirements of Treas. Reg. § 1.409A-3(i)(4).
	“Retirement” means the termination (other than for Cause or by reason of death or Disability) of your employment or other service on or after the date on which you have attained the age of 55 and have completed 10 years of continuous service to the Company or any Subsidiary (such period of service to be determined in accordance with the retirement/pension plan or practice of the Company or Subsidiary then covering you, provided that if you are not covered by any such plan or practice, you will be deemed to be covered by the Company’s plan or practice for purposes of this determination).
Change of Control	If a Change of Control Event (as defined in the Company’s 2008 Equity Compensation Plan) occurs before the final Distribution Date and the Change of Control Event also would be an event described in Treas. Reg. Section 1.409A-3(i)(5), any unvested RSUs you then hold will Vest as provided in this paragraph. A Change of Control Event that does not comport with that regulation will not cause full Vesting unless otherwise permitted by Section 409A. Subject to the foregoing rules, if a Change of Control Event occurs and the RSU is not assumed or replaced, it shall immediately become fully Vested. Also subject to the foregoing rules, if the RSU is assumed or replaced, Vesting fully accelerates if, within 24 months following the closing of the Change of Control Event, the Company terminates your employment without Cause or, if your employment or other individual agreement provides for resignation for “Good Reason,” you resign for Good Reason during the same period.
	If a Change of Control Event occurs before the first anniversary of the Date of Grant, the Performance Goal will be deemed to have been met.

-8-

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

-9-

EX-10.4

Exhibit 10.4

Arbitron Inc. 2010 Board of Director Compensation

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

Annual Retainer Fee	$30,000
Independent Chairman of the Board Additional Annual Retainer	$85,000
Committee Chair Retainer	Audit Committee: $20,000 Technology Strategy Committee:
	$20,000 Growth Strategy Committee: one-time grant of 15,000 stock options Other Committees: $10,000
Board Meeting Fees (In person or by telephone)	$1,500
Committee Meeting Fees (In person)	$1,500
Committee Meeting Fees (By telephone)	$750
Initial Deferred Stock Unit Award	Each newly elected non-employee director will receive a one-time grant of 4,500 deferred stock units, which deferred stock units will vest in three equal installments of 1,500 deferred stock units over a three-year period and will be payable no sooner than six months following the director’s termination of service as a director of the Company.
Annual Deferred Stock Unit Awards	Beginning the annual meeting after initial election to the board of directors, each continuing non-employee director will receive an annual grant of $100,000 worth of deferred stock units, which deferred stock units will vest in three equal installments over a three-year period and will be payable no sooner than six months following the director’s termination of service as a director of the Company.

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

EX-31.1

Exhibit 31.1

302(a) CERTIFICATION

I, William T. Kerr, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arbitron Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2010

/s/ William T. Kerr  

William T. Kerr  

Chief Executive Officer, President, and Director 

EX-31.2

Exhibit 31.2

302(a) CERTIFICATION

I, Sean R. Creamer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arbitron Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2010

/s/ Sean R. Creamer  

Sean R. Creamer 

Executive Vice President and Chief Financial Officer 

EX-32.1

Exhibit 32.1

WRITTEN STATEMENT OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
(18 U.S.C. Section 1350)

The undersigned, the Chief Executive Officer and the Chief Financial Officer of Arbitron Inc. (the “Company”), each hereby certifies that, to his knowledge, on the date hereof:

(a)	the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2010, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(b)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William T. Kerr  

William T. Kerr 

Chief Executive Officer  

Date: August 5, 2010

/s/ Sean R. Creamer  

Sean R. Creamer 

Chief Financial Officer  

Date: August 5, 2010