EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Agreement (“ Agreement ”) is entered into by and between Rod Sherwood (“ Employee ”) and Westwood One, Inc. (the “ Company ”).

1. Employment. The Company hereby employs Employee, and Employee accepts such employment, and agrees to devote Employee’s full time and efforts to the interests of the Company upon the terms and conditions hereinafter set forth.

2. Term of Employment. Subject to the provisions for termination hereinafter provided, Employee’s term of employment by the Company shall commence on September 17, 2008 (the “ Effective Date ”) and shall continue in effect until the second anniversary thereof (the “ Term ”). If the Company desires not to extend this Agreement, it shall deliver written notice to Employee on or prior to the 90 ^th day immediately preceding the expiration of the Term of its intention to terminate this Agreement effective on the last day of the Term. Unless otherwise terminated pursuant hereto, if Employee continues to be employed by the Company after the Term, then Employee’s employment shall be deemed to continue until such time as either party shall deliver written notice to the other party and this Agreement shall terminate thirty (30) days after the giving of such notice. The period from the Effective Date through the date of termination is hereinafter referred to as the “ Employment Period ”.

3. Services to be Rendered by Employee.

(a) During the Employment Period, Employee shall serve as Executive Vice President and Chief Financial Officer. Employee shall report directly to the Chief Executive Officer and Chair of the Audit Committee. Employee shall perform such duties as from time to time may be delegated to Employee and will continue to perform duties as requested by the Chief Executive Officer and Chair of the Audit Committee. Employee shall devote all of Employee’s professional time, energy and ability to the proper and efficient conduct of the Company’s business; provided , however , that the foregoing shall not prevent Employee from engaging in the activities set forth on Appendix I attached this Agreement (the “ Approved Activities ”) in accordance with the terms and conditions set forth therein, so long as the Approved Activities do not, individually or in the aggregate, interfere or conflict with Employee’s performance of his duties hereunder. Employee hereby agrees that he shall promptly comply with the reasonable request made by any of the Chief Executive Officer, the Board of Directors (the “ Board ”), the Compensation Committee of the Board (the “ Compensation Committee ”), the Chair of the Audit Committee or any designee of any of the foregoing, which may be made at any time during the Employment Period upon reasonable written notice, to cease performing all or a portion of the Approved Activities to the extent that such requesting party reasonably determines that such Approved Activities or portion thereof interferes or conflicts with Employee’s performance of his duties hereunder. Employee shall observe and comply with all reasonable lawful directions and instructions by and on the part of the Chief Executive Officer, the Board or their designee and endeavor to promote the interests of the Company and not at any time do anything which may cause or tend to be likely to cause any loss or damage to the Company in business, reputation or otherwise. Employee shall be based out of the Company’s Culver City office; provided, however, Employee shall spend a minimum of two (2) weeks per month at the Company’s New York City office.

(b) The Company may from time to time call on Employee to perform services related to the business of developing and broadcasting network and syndicated radio programming and traffic, news, sports and weather reports, which may include (in the Company’s sole discretion) contributing to the day-to-day management and operation of such business, soliciting Sponsors and Affiliates (as such terms are defined in Section 11 hereof) or dealing with their accounts or other activities related to the Company’s business, as reasonably requested from time to time by the Chief Executive Officer, the President, the Board or their designee.

(c) Employee acknowledges that Employee will have and owe fiduciary duties to the Company and its shareholders including, without limitation, the duties of care, confidentiality and loyalty. Without limiting the foregoing, effective as of the Effective Date Employee hereby represents, warrants and covenants to the Company that he (i) shall at all times during the Employment Period act in the best interests of the Company, (ii) shall at all times during the Employment Period act in the best interests of the Company’s shareholders viewed for this purpose as a single entity without regard to the interests, desires or wishes of any single shareholder, including without limitation, the interests, desires or wishes of Gores Radio Holdings, LLC (together with its affiliates, “ Gores ”), (iii) shall not, nor shall any of his immediate family members, at any time during the Employment Period act, directly or indirectly, as an agent or representative of, or otherwise perform services in any other capacity for, Gores, (iv) shall not, nor shall any of his immediate family members, at any time during the Employment Period make, directly or indirectly, any investments or contributions in the Funds (as such term is defined in Appendix II attached to this Agreement) that are not required of the other limited partners who previously elected to become participants in the Funds on the same terms and conditions set forth in such agreements that govern the applicable funds (as in effect immediately prior to the Effective Date) and (v) shall not, nor shall any of his immediate family members, at any time during the Employment Period receive or accept from Gores, or during the Employment Period enter into any agreement or promise (written or unwritten) to receive from Gores at any time following the Employment Period, in each case directly or indirectly, any compensation, remuneration, benefits, amounts or any other item of any value; provided , however , the foregoing shall not prohibit Employee from receiving or holding the amounts and rights set forth on Appendix II attached to this Agreement in accordance with the terms and conditions set forth therein.

(d)  EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS RECEIVED A COPY OF THE COMPANY’S SEXUAL HARASSMENT POLICIES AND PROCEDURES, CODE OF ETHICS AND CODE OF CONDUCT, AND UNDERSTANDS AND AGREES TO ABIDE BY SUCH POLICIES.

4. Compensation.

(a)  Base Salary. For the services to be rendered by Employee during the Employment Period, the Company shall pay Employee, and Employee agrees to accept a monthly base salary (the “ Base Salary ”) of $50,000 for the Employment Period, payable in accordance with the Company’s normal payroll practices. Employee shall be eligible for annual increases in his Base Salary in an amount of up to five percent (5%), in the sole and absolute discretion of the Compensation Committee or its designee.

(b)  Discretionary Bonus. Employee shall be eligible for an annual discretionary bonus target valued at up to $400,000 for each of calendar years 2008 (pro-rated for 2008), 2009 and 2010 (pro-rated for the period from January 1, 2010 to the last day of the Term) in the sole and absolute discretion of the Compensation Committee or its designee. The Company may use Employee’s and the Company’s achievement of financial goals as general guidelines to determine Employee’s eligibility for a discretionary bonus. Any cash component of any bonus will be payable in accordance with the Company’s normal payroll practices in the year following the year for which it is earned, but no later than the date the majority of “Comparable Employees” (as defined below) are paid, but in no event later than April 30 of the calendar year subsequent to which such bonus is earned. Employee shall not be eligible for any bonus for a calendar year, pro-rated or otherwise, if Employee is not an Employee of the Company: (i) at the end of the applicable calendar year (except, in the case of the pro-rated bonus for 2010 for which Employee must remain employed only through the last day of the Term; such bonus, the “ 2010 Pro Rata Bonus ”) or (ii) if Employee has materially breached this Agreement, which breach remains uncured in accordance with Section 6(a) hereof.

(c)  Equity Compensation. Company management hereby agrees that prior to the Effective Date, it shall recommend that the Compensation Committee grant Employee on the date soonest practicable and legally permissible on or after the Effective Date an award of equity compensation of stock options to purchase 600,000 shares of Company common stock to vest in three equal installments on each anniversary of the Effective Date, subject to the terms and conditions of the Company’s applicable equity compensation plan pursuant to which such stock option grant is made (such award, the “ 2008 Signing Award ”). The exercise price of such stock options will be the closing price of the Company’s common stock on the date of grant by the Compensation Committee.

(d)  Equity Awards. Beginning in calendar year 2010, Employee shall be eligible for such future grants of equity compensation recommended by Company management, subject to the approval of and in the sole and absolute discretion of the Compensation Committee or its designee. All equity compensation granted to Employee, including such awards made pursuant to Sections 4(c) and 4(d) hereof, shall be granted subject to the terms and conditions of the Company’s equity compensation plan, and using such form award as the Compensation Committee has approved for grants to Company employees.

(e)  Benefits. During the Employment Period, Employee shall accrue vacation on a monthly basis and at a rate of four (4) weeks per year (pro-rated for partial years). Except as expressly set forth herein, any vacation time shall be subject to prevailing practice and/or policies of the Company in regard to vacations for its employees. Employee shall be entitled to participate in all benefits plans that may be established by the Company for employees that report directly to the Chief Executive Officer (such employees, “ Comparable Employees ”), subject to the terms and conditions of such plans, provided that in the event that Employee shall have elected COBRA coverage with his prior employer, the Company shall reimburse Employee for any such COBRA payments made by him during the first 90 days of the Term.

(f)  Signing Bonus. In addition to the other amounts due hereunder, Company agrees to pay Employee within 30 days of the Effective Date, the amount of $15,000 as a signing bonus.

(g)  Total Compensation. Employee agrees and acknowledges by his signature hereto that the compensation set forth in this Section 4 constitutes all of the compensation payable to Employee for his services hereunder and that no other compensation shall be due to Employee hereunder.

5. Expenses. Subject to compliance by Employee with such policies regarding expenses and expense reimbursement as may be adopted from time to time by the Company, the Company shall reimburse Employee, or cause Employee to be reimbursed, in cash for all reasonable expenses in accordance with the Company’s reimbursement policy as in effect from time to time.

6. Termination of Employment.

(a) During the Employment Period, the Company shall have the right to terminate the employment of Employee hereunder immediately by giving notice thereof to Employee if any of the following has occurred, which notice shall state the circumstances or events constituting Cause (each, a “ Cause Event ”); provided , that , in the case of clauses (i) through (iii) of this Section 6(a), Employee shall be given a reasonable opportunity to cure, but in no event more than ten (10) business days, to the extent such act or failure to act is curable:

For purposes of this Section 6(a), no act or failure to act on the part of Employee shall be considered “willful” unless it is done, or omitted to be done, by Employee in bad faith or without a reasonable basis for belief that such act or failure to act is in the best interests of the Company.

(b) Employee’s employment with the Company shall automatically terminate (without notice to Employee’s estate) upon the death of Employee. Employee’s employment with the Company may be terminated upon ten (10) day’s prior written notice by the Company to Employee upon Employee’s Disability. For purposes of this Agreement, the term “Disability” means Employee’s inability, by reason of physical disability or other incapacity (as may be defined in applicable disability insurance policies), to carry out or to perform the duties required of Employee hereunder for a continuous period of 90 days or for a non-continuous period of 180 days in the aggregate in any 365-day period; provided , however , that Employee’s compensation during any period in which Employee is unable to perform the duties required of Employee hereunder shall be reduced in accordance with the Company’s policies and by any disability payments (excluding any reimbursements for medical expenses and the like) which Employee is entitled to receive under group or other disability insurance policies of the Company during such period.

(c) In the event of any termination of Employee’s employment by the Company other than pursuant to Section 6(a) or 6(b) (provided that the benefit described in clause (ii) below shall not be paid in the event of a termination of employment by the Company upon a Cause Event), Employee (or Employee’s estate, as the case may be) shall be entitled to receive (i) the Base Salary herein provided prorated to the date of termination paid in accordance with the Company’s normal payroll practices, (ii) subject to the terms of Section 4(b) hereof, any annual discretionary bonus earned for any completed calendar year immediately preceding the date of termination, but not yet paid (except in the case of a termination by the Company other than pursuant to Section 6(a) or 6(b) in calendar year 2010 in which case the terms of Section 6(d) hereof relating to the 2010 Pro Rata Bonus shall apply); (iii) subject to the terms of Section 5 hereof, reimbursement for any business expenses properly incurred and paid prior to and including the date of termination; (iv) Employee’s then current entitlement, if any, under the Company’s employee benefit plans and programs, including payment for any accrued and unused vacation paid or provided in accordance with the terms and conditions of the applicable plan or program; and (v) no other compensation. The parties agree that the payments set forth in this Section 6(c) constitute all of Company’s obligations, monetary or otherwise, to Employee under the terms of this Agreement in the event of Employee’s termination pursuant to Section 6(a) or 6(b). Additionally, if Employee is terminated pursuant to Section 6(a), notwithstanding Section 6(c)(iii) above, all of Employee’s equity compensation (including, without limitation, any granted pursuant to this Agreement or otherwise), vested and unvested, shall terminate and expire, except in the case of vested stock options which Employee has exercised prior to the date of termination (for the avoidance of doubt, all vested equity compensation (except for stock options which have been exercised) shall be forfeited in the event of a termination pursuant to Section 6(a)). Notwithstanding the foregoing, in the case of a termination pursuant to Sections 6(d) or 6(e), additional payments shall be due as expressly set forth below.

(d) The Company may terminate Employee’s employment hereunder during the Term effective at any time upon written notice to Employee. In the event that during the Term: (I) the Company terminates Employee’s employment other than pursuant to Section 6(a) or 6(b) during the first year of the Term or (II) Employee is terminated other than pursuant to Section 6(a) or 6(b) in connection with a “Change in Control” (as defined in Section 11), subject in all cases to Employee’s executing and providing to the Company within 60 days following the date of termination a fully effective waiver and general release substantially in the form attached as Exhibit A hereto, which may be modified for changes in law and for consistency with the Company’s standard form required for other senior officers of the Company from time to time which the Company shall provide to the Employee within seven (7) days following the effective date of termination: (x) the Company shall pay Employee: (A) the lesser of (the lesser of (i) or (ii), the “ Termination Amount ”): (i) remaining Base Salary due to Employee through the end of the Term, to be paid in equal payments over the remainder of the Term on a schedule that mirrors the Company’s then effective payroll practices and (ii) one times the annual Base Salary to be paid in equal installments over a one-year period on a schedule that mirrors the Company’s then effective payroll practices and (B) the 2010 Pro Rata Bonus to the extent such termination occurs in calendar year 2010, payable in accordance with the timing set forth in Section 4(b) hereof; provided , however , that in the case the six-month delay set forth in Section 17(b) shall apply to the Termination Amount to the extent it exceeds the Separation Pay Limit (as defined in Section 17(b)) and that to the extent the Termination Amount does not exceed the Separation Pay Limit, the first payment of the Termination Amount shall be made on the first Company payroll date on or after the 60 ^th day after the date of termination, which first payment shall include payment of any amounts that would otherwise be due prior

thereto; (y) if Employee is terminated prior to the first anniversary of the Effective Date, one third (1/3) of the 2008 Signing Award shall vest effective on the date of termination and shall be exercisable for the longer of: (i) the date of termination through the first anniversary of the Effective Date and (ii) ninety (90) days from the date of termination; and (z) if Employee is terminated upon or within twenty-four (24) months following a Change in Control (as defined below) of the Company, all outstanding equity awards held by Employee shall become fully vested and immediately exercisable and shall remain exercisable in accordance with the terms and conditions of the applicable equity plan and award agreements under which they were granted. For the avoidance of doubt, it is understood and agreed that notwithstanding anything contained herein to the contrary, Employee shall have no duty to mitigate in the event that Company exercises its rights pursuant to this Section 6(d). Notwithstanding the foregoing, if either (I) the Company terminates Employee’s employment other than pursuant to Section 6(a) or 6(b) during the second year of the Term, or (II) Employee elects to terminate his employment for Good Reason as expressly described in Section 6(e) below, instead of the Termination Amount set forth in clause (x) above, the Company shall pay Employee: (A) one times the annual Base Salary to be paid in equal installments over the one-year period on a schedule that mirrors the Company’s then effective payroll practices if Employee is terminated at any time during the second year of the Term and (B) the 2010 Pro Rata Bonus to the extent such termination occurs in calendar year 2010, payable in accordance with the timing set forth in Section 4(b) hereof; provided , however , that in the case of (i) or (ii) the six-month delay set forth in Section 17(b) shall apply to such amounts to the extent they exceed the Separation Pay Limit (as defined in Section 17(b)) and that to the extent the Termination Amount does not exceed the Separation Pay Limit, the first payment of the Termination Amount shall be made on the first Company payroll date on or after the 60 ^th day after the date of termination, which first payment shall include payment of any amounts that would otherwise be due prior thereto. For the avoidance of doubt, clause (z) shall also apply to such termination to the extent applicable.