DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
Emmis Communications Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[Emmis Logo]
November 10, 2010
Dear Shareholder:
The directors and officers of Emmis Communications Corporation join me in inviting you to
attend the annual meeting of our shareholders on Friday, December 17, 2010, at 11:00 a.m. local
time, at our headquarters, One Emmis Plaza, 40 Monument Circle, Indianapolis, Indiana. The formal
notice of this annual meeting and the proxy statement appear on the following pages and are
accompanied by a copy of our Form 10-K for the fiscal year ended February 28, 2010. After reading
the proxy statement and other materials, please mark, sign and return the enclosed proxy card(s) to
ensure that your votes on the business matters of the meeting will be recorded.
We hope that you will attend this meeting. Whether or not you attend, we urge you to return
your proxy promptly in the postage-paid envelope provided. After returning the proxy, you may, of
course, vote in person on all matters brought before the meeting.
We look forward to seeing you on Friday, December 17, 2010.
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Sincerely, |
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Jeffrey H. Smulyan |
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Chief Executive Officer, President |
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and Chairman of the Board |
(This page intentionally left blank)
EMMIS COMMUNICATIONS CORPORATION
INDIANAPOLIS, INDIANA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of the shareholders of Emmis Communications Corporation will be held on
Friday, December 17, 2010, at 11:00 a.m., local time, at One Emmis Plaza, 40 Monument Circle,
Indianapolis, Indiana 46204.
Holders of common stock will be asked to consider and vote on the following matters:
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election of two directors to Emmis board of directors for terms of three
years; |
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approval of the 2010 Equity Compensation Plan, as set forth in Exhibit A to the
accompanying proxy statement; |
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ratification of the selection of Ernst & Young LLP as Emmis independent
registered public accountants for the fiscal year ending February 28, 2011; and |
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transaction of any other business that may properly come before the meeting and
any adjournments or postponements of the meeting. |
We describe each of these proposals in more detail in the accompanying proxy statement, which
you should read in its entirety before voting.
Only shareholders of record at the close of business on October 27, 2010 are entitled to
notice of and to vote at this meeting and any adjournments or postponements of this meeting. The
proxy statement and proxy card(s) are enclosed.
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By order of the Board of Directors, |
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J. Scott Enright
Secretary |
Indianapolis, Indiana
November 10, 2010
TABLE OF CONTENTS
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Exhibit A: Emmis Communications Corporation 2010 Equity Compensation Plan
EMMIS COMMUNICATIONS CORPORATION
ONE EMMIS PLAZA
40 MONUMENT CIRCLE
INDIANAPOLIS, INDIANA 46204
PROXY STATEMENT
In this proxy statement, Emmis Communications Corporation is referred to as we, us,
our, our company or Emmis.
QUESTIONS AND ANSWERS ABOUT THIS ANNUAL MEETING
Q: Why did I receive this proxy statement?
As an Emmis shareholder, you received this proxy statement because our board of directors is
soliciting your proxy to vote at the annual meeting of shareholders. The annual meeting will be
held on Friday, December 17, 2010, at 11:00 a.m., local time, at One Emmis Plaza, 40 Monument
Circle, Indianapolis, Indiana 46204.
This proxy statement summarizes the information you need to know to vote on an informed basis
at the annual meeting; however, you do not need to attend the annual meeting to vote your shares.
See How do I vote? We expect to begin sending this proxy statement, the attached notice of
annual meeting and the enclosed proxy card(s) on November 10, 2010, to all shareholders entitled to
vote.
Q: What am I voting on?
You are being asked to consider and vote on the following:
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election of two directors to our board of directors for terms of three years; |
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approval of the 2010 Equity Compensation Plan, as set forth in Exhibit A to this
accompanying proxy statement; and |
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ratification of the selection of Ernst & Young LLP as our independent registered
public accountants for the fiscal year ending February 28, 2011. |
Q: Who is entitled to vote?
Holders of outstanding Class A common stock and holders of outstanding Class B common stock as
of the close of business on October 27, 2010, the record date, are entitled to vote at the annual
meeting. As of October 11, 2010, 32,913,373 shares of Class A common stock and 4,930,680 shares of
Class B common stock were issued and outstanding. As of October 11, 2010, there were no shares of
Class C common stock issued or outstanding.
Q: How do I vote?
You may attend the meeting and vote in person, or you may vote by proxy. To vote by proxy,
sign and date each proxy card you receive and return it in the prepaid envelope. If you return
your signed proxy card but do not indicate your voting preferences, we will vote on your behalf FOR
each of the nominees and FOR approval of the Equity Compensation Plan and the ratification of Ernst
& Young LLP as our independent registered public accountants. If you mark abstain on your proxy
card, your shares will be counted as present for purposes of determining the presence of a quorum.
You have the right to revoke your proxy at any time before the meeting by either notifying our
corporate secretary or returning a later-dated proxy. You may also revoke your proxy by voting in
person at the annual meeting.
If you hold your shares through a broker, you should contact your broker to determine the
procedure by which you can vote on these proposals. If your shares are held in the name of a bank,
broker or other holder of
record, you must obtain a proxy, executed in your favor, from the holder of record to be able
to vote in person at the meeting.
1
Q: What does it mean if I get more than one proxy card?
If you receive more than one proxy card, it means you hold shares registered in more than one
account. Sign and return ALL proxy cards to ensure that all your shares are voted.
Q: What are the voting rights of the common stock and the preferred stock?
Each share of Class A common stock is entitled to one vote and each share of Class B common
stock is entitled to ten votes. Generally, the holders of Class A and Class B common stock vote
together as a single group. However, the two classes vote separately in connection with the
election of certain directors, certain going private transactions and other matters as provided
by law.
At this annual meeting, the Class A and Class B common stock will vote together on the
election of two directors, the approval of the Equity Compensation Plan and the ratification of
Ernst & Young LLP as our independent registered public accountants.
Q: Who will count the vote?
Representatives of Broadridge Financial Solutions, Inc. will count the votes.
Q: What constitutes a quorum?
A majority of the combined voting power of the outstanding Class A and Class B common stock
entitled to vote at the meeting constitutes a quorum for the annual meeting (i.e., counting one
vote for each share of outstanding Class A common stock and ten votes for each share of outstanding
Class B common stock, present in person or represented by proxy).
Q: How many votes are needed for approval of each proposal?
Directors will be elected by a plurality of the votes cast by the holders of existing common
stock entitled to vote in the election who are present, in person or by proxy, at the meeting.
Consequently, the director nominees receiving the most votes of the holders of Class A and Class B
common stock, voting together, will be elected to fill two director positions. Only votes cast FOR
a nominee will be counted. The accompanying proxy card will be voted FOR all nominees listed on
the proxy unless the proxy contains instructions to the contrary. There are instructions on the
accompanying proxy card on how to withhold authority to vote for one or more of the nominees; the
result will be those nominees will receive fewer votes.
The approval of the Equity Compensation Plan and the ratification of Ernst & Young LLP as our
independent registered public accountants for the fiscal year ending February 28, 2011 requires
that the number of votes cast in favor of those proposals by holders of our outstanding Class A
common stock and Class B common stock, voting together, exceed the number of votes cast against the
proposals by such holders of our outstanding Class A common stock and Class B common stock.
Proxies submitted by brokers that do not indicate a vote for some of the proposals because the
holders do not have discretionary voting authority and have not received instructions from the
beneficial owners on how to vote on those proposals are called broker non-votes. Abstentions and
broker non-votes will not affect the voting on the proposals.
Q: What percentage of stock does our largest individual shareholder own? How does he intend to
vote? What about all executive officers and directors?
Jeffrey H. Smulyan, the Chairman, Chief Executive Officer and President, is our largest single
shareholder, beneficially owning less than 1.0% of our Class A common stock and 100% of our Class B
common stock as of October 11, 2010. Mr. Smulyan has informed us that he intends to vote for each
of the nominees for director (with respect to his Class B common stock) and in favor of the
proposals regarding the approval of the 2010 Equity
Compensation Plan and the ratification of the selection of Ernst & Young LLP. If he does so,
the election of Mr. Smulyan and Mr. Nathanson, the proposal for approval of the Equity Compensation
Plan and the proposal for ratification of the selection of Ernst & Young LLP are expected to be
approved because Mr. Smulyan controls approximately 60.0% of the combined voting power of our
outstanding common stock (not including the potential voting power of unexercised options).
2
All directors and executive officers together own outstanding Class A common stock and Class B
common stock representing approximately 61.9% of the combined voting power of our outstanding
common stock (not including the potential voting power of unexercised options).
Q: Does Emmis offer an opportunity to receive future proxy materials electronically?
Yes. If you are a shareholder of record, you may, if you wish, receive future proxy statements
and annual reports online. If you elect this feature, you will receive either a proxy card or an
e-mail message notifying you when the materials are available, along with a web address for viewing
the materials. You may sign up for electronic delivery by marking and signing the appropriate
spaces on your proxy card or by contacting our Investor Relations Department by e-mail at
ir@emmis.com or toll-free by phone at (866) 366-4703. If you received these materials
electronically, you do not need to do anything to continue receiving materials electronically in
the future.
If you hold your shares in a brokerage account, you may also have the opportunity to receive
proxy materials electronically. Please follow the instructions of your broker.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
If you are an Emmis employee or a shareholder who has previously consented to electronic delivery
of shareholder communications, or you would like to view this proxy statement and our annual report
online, they are available at the Investors section of our website (www.emmis.com).
Q: What are the benefits of electronic delivery?
Electronic delivery saves Emmis money by reducing printing and mailing costs. It will also
make it convenient for you to receive your proxy materials online.
Q: What are the costs of electronic delivery?
Emmis charges nothing for electronic delivery. You may, of course, incur the usual expenses
associated with Internet access, such as telephone charges or charges from your Internet service
provider.
Q: May I change my mind later?
Yes. You may discontinue electronic delivery at any time. For more information, contact our
Investor Relations Department by e-mail at ir@emmis.com or toll-free by phone at (866) 366-4703.
Q: Who can attend the Annual Meeting?
All shareholders as of October 27, 2010 can attend.
Q: How can I obtain directions to attend the annual meeting in person?
If you need directions to the location of the annual meeting, please contact our Investor
Relations Department by e-mail at ir@emmis.com or toll-free by phone at (866) 366-4703.
Q: What do I do if I have additional questions?
If you have any questions prior to the annual meeting, please contact our Investor Relations
Department by e-mail at ir@emmis.com or toll-free by phone at (866) 366-4703.
3
PROPOSAL 1: ELECTION OF DIRECTORS
Two directors are to be elected. Jeffrey H. Smulyan and Greg A. Nathanson have each been
nominated for a term of three years and until his successor has been elected and qualified. Mr.
Smulyan and Mr. Nathanson will be elected by the Class A and Class B common stock voting together
as a single class.
Mr. Smulyan and Mr. Nathanson are members of the present board of directors. If, at the time
of this annual meeting, any nominee is unable or declines to serve, the discretionary authority
provided in the proxy may be exercised to vote for a substitute or substitutes. The board of
directors has no reason to believe that any substitute nominee or nominees will be required.
Name, Age, Principal Occupation(s) and
Business Experience
Nominated for a term expiring in 2013:
Jeffrey H. Smulyan, Age 63
Mr. Smulyan founded Emmis in 1979 and is our Chairman, Chief Executive Officer and President.
Mr. Smulyan began working in radio in 1973, and has owned one or more radio stations since then.
Formerly, he was also the owner and chief executive officer of the Seattle Mariners Major League
Baseball team. He is former Chairman of the Radio Advertising Bureau and serves as a Trustee of
his alma mater, the University of Southern California. He was a director of The Finish Line, a
sports apparel manufacturer, until July 2008.
Greg A. Nathanson, Age 63
Mr. Nathanson served as our Television Division President before resigning in October 2000.
He is currently a media consultant. Mr. Nathanson has over 30 years of television broadcasting
experience, having served as President of Programming and Development for Twentieth Television from
1996 to 1998; as General Manager of KTLA-TV in Los Angeles, California from 1992 to 1996; and as
General Manager of the Fox television station KTTV from 1988 to 1992. In addition, he was
President of all the Fox Television stations from 1990 to 1992.
Directors whose terms expire in 2012:
Susan B. Bayh,* Age 50
Mrs. Bayh was the Commissioner of the International Joint Commission of the United States and
Canada until 2001. She served as a Distinguished Visiting Professor at the College of Business
Administration at Butler University from 1994 through 2003. Previously, she was an attorney with
Eli Lilly & Company. She is a director of Wellpoint, Inc., a Blue Cross/Blue Shield company;
Curis, Inc., a therapeutic drug development company; Dendreon Corporation, a biotechnology company;
and Dyax Corp., a biopharmaceutical company. Previously, she served as a director for Esperion
Therapeutics, Inc., Novavax, Inc., Cubist Pharmaceuticals, Inc. and MDRNA (formerly Nastech), each
of which is a pharmaceutical company.
Gary L. Kaseff, Age 62
Mr. Kaseff served as our Executive Vice President and General Counsel until his resignation in
March 2009. He remains employed by Emmis. Before becoming general counsel, Mr. Kaseff practiced
law in Southern California. Previously, he was President of the Seattle Mariners Major League
Baseball team and partner with the law firm of Epport & Kaseff.
Patrick M. Walsh, Age 43
Mr. Walsh became Executive Vice President and Chief Financial Officer of Emmis in September
2006 and added the position of Chief Operating Officer in December 2008. Mr. Walsh came to Emmis
from iBiquity Digital Corporation, the developer and licensor of HD Radio technology, where he
served as Chief Financial Officer and Senior Vice President from 2002 to 2006. Prior to joining
iBiquity, Mr. Walsh was a management consultant for McKinsey & Company, and served in various
management positions at General Motors Acceptance Corporation and Deloitte LLP.
4
Directors whose terms expire in 2011:
Richard A. Leventhal, Age 63
Mr. Leventhal is President and majority owner of LMCS, LLC, an investment, management and
consulting company. Previously, Mr. Leventhal co-owned and operated Top Value Fabrics, Inc., a
wholesale fabric and textile company in Carmel, Indiana, for 27 years.
Peter A. Lund,* Age 69
Mr. Lund is a private investor and media consultant who formerly served as Chairman and Chief
Executive Officer of Eos International, Inc., a holding company. Mr. Lund has over 40 years of
broadcasting experience and most recently served as President and Chief Executive Officer of CBS
Inc., and President and Chief Executive Officer of CBS Television and Cable. He is a director of
The DIRECTV Group, Inc., a communications company; Crown Media Holdings, Inc., an owner and
operator of cable television channels; and Eos International, Inc., a library automation and
knowledge management company.
Lawrence B. Sorrel, Age 51
Mr. Sorrel is Managing Partner and Co-CEO of Tailwind Capital Group, an independent private
equity firm that has approximately $2 billion of assets under management through private equity
funds TWCP, L.P. and Tailwind Capital Partners, L.P. and their related funds. Mr. Sorrel is also a
member of the board of directors of several private companies. Mr. Sorrel was a general partner of
Welsh, Carson, Anderson & Stowe from 1998-2002. Prior to May 1998, he was a Managing Director of
Morgan Stanley and the firms private equity affiliate, Morgan Stanley Capital Partners, where he
had been employed since 1986.
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Independent director elected by the holders of the Class A common stock voting as a single class. |
Recommendation of the Board of Directors
Our board of directors unanimously recommends that you vote FOR each of the nominees listed
above.
The Corporate Governance and Nominating Committee believes that well functioning boards
consist of a diverse collection of individuals that bring a variety of complementary skills.
Although the board of directors does not have a formal policy with regard to the consideration of
diversity in identifying directors, diversity is one of the factors that the Corporate Governance
and Nominating Committee may, pursuant to its charter, take into account in identifying director
candidates. The Corporate Governance and Nominating Committee generally considers each director
eligible for nomination in the broad context of the overall composition of our board of directors
with a view toward constituting a board that, as a body, possesses the appropriate mix of skills
and experience to oversee our business. Depending on current membership of our board of directors,
the Corporate Governance and Nominating Committee also may decide to seek or give preference to a
qualified candidate who is female or adds to the ethnic diversity of the board. The experience,
qualifications, attributes, or skills that led the Corporate Governance and Nominating Committee to
conclude that each of the members of the board of directors should serve on the board are generally
described below:
Susan B. Bayh
Mrs. Bayh is a lawyer with extensive experience in corporate governance and regulatory
matters. She has served as a director of several large and small companies in the highly-regulated
pharmaceutical and insurance industries. Her experience as a Commissioner of the International
Joint Commission of the United States and Canada also provides international relations perspective
relevant to our operations in foreign regulatory environments.
5
Gary L. Kaseff
Mr. Kaseff is a lawyer with extensive knowledge of the legal issues arising in the broadcast
and publishing industries. His professional sports management experience is also helpful in the
context of our sports broadcasting operations at certain of our radio stations.
Richard A. Leventhal
Mr. Leventhal is the former owner and operator of a small business, with experience in
financial and operational issues affecting organizations, as well as management and development
experience. He also brings the perspective to the board of a substantial segment of our local
advertisers.
Peter A. Lund
Mr. Lund has over 40 years of experience in the broadcasting industry, with particular
concentration in the ownership and operation of radio and television stations. He is also familiar
with radio and television network operations.
Greg A. Nathanson
Mr. Nathanson has extensive experience in the broadcasting industry, encompassing both
individual station and network operations. He also has an insiders view of the operation of our
company, having served as an executive officer until 2000.
Jeffrey H. Smulyan
Mr. Smulyan is the founder and Chief Executive Officer of Emmis, with extensive broadcasting
experience. His experience ranges from running an individual radio station to chairing significant
broadcast industry groups. He has developed with the Emmis team a variety of new and highly
successful radio formats that contributed to the companys rapid growth and sustained the company
during economic downturns. As our Chief Executive Officer and a recognized industry leader, Mr.
Smulyan provides the board with information about the daily operations of the company as well as
strategic insights into the broadcast industry and future trends that will likely affect the
companys operations. His experience with sports management and as a director of a retail company
are also valuable to the companys programming operations and customer relations activities.
Lawrence B. Sorrel
Mr. Sorrel has over 20 years of experience in the investment banking and private capital
industries, including the purchase, sale and financing of individual broadcast properties and
broadcasting groups. He has extensive experience in arranging and structuring financings for
enterprises worldwide, including enterprises with credit profiles similar to ours. In addition,
Mr. Sorrels experience in the private equity industry adds a long-term strategic perspective to
the boards deliberations.
Patrick M. Walsh
Mr. Walsh serves as the companys Chief Financial Officer and Chief Operating Officer. In
addition to his background in finance, accounting and operations, Mr. Walsh has experience as a
management consultant and has served in financial and operations capacities in a business that sold
technology to the radio industry. He offers the board an inside view of the companys financing
and operations along with a strategic perspective on aspects of the radio broadcasting industrys
future.
6
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
As of October 11, 2010, there were 32,913,373 shares of our Class A common stock and 4,930,680
shares of our Class B common stock issued and outstanding. The holders of Class A common stock are
entitled to an aggregate of 32,913,373 votes, and the holder of Class B common stock is entitled to
an aggregate of 49,306,800 votes. The following table shows, as of October 11, 2010, the number
and percentage of shares of our common stock held by each person known to us to own beneficially
more than five percent of the issued and outstanding common stock, by the executive officers named
in the Summary Compensation Table below and our directors and nominees, and by our executive
officers and directors as a group:
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Class A |
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Class B |
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Common Stock |
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Common Stock |
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Five Percent Shareholders, |
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Amount and Nature |
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Amount and Nature |
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Directors and Certain |
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of Beneficial |
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of Beneficial |
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Percent of Total |
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Executive Officers |
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Ownership |
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of Class |
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Ownership |
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of Class |
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Voting Power |
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Jeffrey H. Smulyan |
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160,507 |
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* |
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6,101,476 |
(17) |
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100.0 |
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65.1 |
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Susan B. Bayh |
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132,374 |
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Richard F. Cummings |
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624,206 |
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1.9 |
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Paul W. Fiddick |
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183,219 |
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Gary L. Kaseff |
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554,252 |
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1.7 |
% |
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Richard A. Leventhal |
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290,095 |
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Peter A. Lund |
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249,444 |
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Greg A. Nathanson |
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470,980 |
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1.4 |
% |
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Lawrence B. Sorrel |
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293,040 |
(9) |
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|
Gary A. Thoe |
|
|
147,785 |
(10) |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
* |
|
Patrick M. Walsh |
|
|
107,042 |
(11) |
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
* |
|
Alden Global Distressed Opportunities Fund, L.P. |
|
|
4,243,578 |
(12) |
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
|
|
5.0 |
% |
Dimensional Fund Advisors LP |
|
|
1,709,568 |
(13) |
|
|
5.2 |
% |
|
|
|
|
|
|
|
|
|
|
2.1 |
% |
AQR Capital Management LLC |
|
|
2,606,387 |
(14) |
|
|
7.9 |
% |
|
|
|
|
|
|
|
|
|
|
3.1 |
% |
New Jersey Division of Investment |
|
|
2,050,000 |
(15) |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
2.5 |
% |
All Executive Officers and Directors as a Group (13 persons) |
|
|
3,361,331 |
(16) |
|
|
9.7 |
% |
|
|
6,101,476 |
(17) |
|
|
100.0 |
% |
|
|
64.1 |
% |
|
|
|
* |
|
Less than 1%. |
|
(1) |
|
Consists of 8,441 shares held in the 401(k) Plan, 9,755 shares owned individually, 11,120
shares held by Mr. Smulyan as trustee for his children over which Mr. Smulyan exercises or
shares voting control, 3,000 shares held by Mr. Smulyan as trustee for his niece over which
Mr. Smulyan exercises or shares voting control, 30,625 shares held by The Smulyan Family
Foundation, over which Mr. Smulyan shares voting control and 97,566 shares represented by
stock options exercisable currently or within 60 days of October 11, 2010. |
|
(2) |
|
Consists of 59,200 shares owned individually and 73,174 shares represented by stock options
exercisable currently or within 60 days of October 11, 2010. Of the shares owned
individually, 2,195 are restricted stock subject to forfeiture if certain conditions are not
satisfied. |
|
(3) |
|
Consists of 155,840 shares owned individually, 8,260 shares owned for the benefit of Mr.
Cummings children, 6,429 shares held in the 401(k) Plan and 453,677 shares represented by
stock options exercisable currently or within 60 days of October 11, 2010. Of the shares
owned individually, 13,171 are restricted stock subject to forfeiture if certain employment
agreement or other conditions are not satisfied. |
|
(4) |
|
Mr. Fiddick is no longer an officer of Emmis. Information concerning these shares was
obtained from the last ownership filings made by Mr. Fiddick and current share ownership
records available to Emmis in connection with employee benefit plan shares. Based on this
information, these holdings consist of 36,133 shares owned individually, 739 shares held in
the 401(k) Plan and 146,347 shares represented by stock options exercisable currently or
within 60 days of October 11, 2010. Of the shares owned individually, 6,585 are restricted
stock subject to forfeiture if certain employment agreement or other conditions are not
satisfied. |
|
(5) |
|
Consists of 134,887 shares owned individually by Mr. Kaseff, 3,411 shares owned by Mr.
Kaseffs spouse, 1,346 shares held by Mr. Kaseffs spouse for the benefit of their children,
2,395 shares held in the 401(k) Plan, and 412,213 shares represented by stock options
exercisable currently or within 60 days of October 11, 2010. Of the shares owned
individually, 10,976 are restricted stock subject to forfeiture if certain employment
agreement or other conditions are not satisfied. |
|
(6) |
|
Consists of 196,321 shares owned individually, 3,000 shares owned by Mr. Leventhals spouse,
17,600 shares owned by a corporation of which Mr. Leventhal is a 50% shareholder and 73,174
shares represented by stock options exercisable currently or within 60 days of October 11,
2010. Of the shares owned individually, 4,390 are restricted stock subject to forfeiture if
certain conditions are not satisfied. |
|
(7) |
|
Consists of 190,905 shares owned individually and 58,539 shares represented by stock options
exercisable currently or within 60 days of October 11, 2010. Of the shares owned
individually, 4,390 are restricted stock subject to forfeiture if certain conditions are not
satisfied. |
|
(8) |
|
Consists of 339,173 shares owned individually or jointly with his spouse, 44,000 shares owned
by trusts for the benefit of Mr. Nathansons children and 87,807 shares represented by stock
options exercisable currently or within 60 days of October 11, 2010. Of the shares owned
individually, 4,390 are restricted stock subject to forfeiture if certain conditions are not
satisfied. |
|
(9) |
|
Consists of 219,866 shares owned individually and 73,174 shares represented by stock options
exercisable currently or within 60 days of October 11, 2010. Of the shares owned
individually, 4,390 are restricted stock subject to forfeiture if certain conditions are not
satisfied. |
7
|
|
|
(10) |
|
Mr. Thoe is no longer employed by Emmis. Information concerning these shares was obtained
from the last ownership filings made by Mr. Thoe and current share ownership records available
to Emmis in connection with employee benefit plan shares. Based on this information, these
holdings consist of 30,664 shares owned individually, 650 shares held in the 401(k) Plan and
116,471 shares represented by stock options exercisable currently or within 60 days of October
11, 2010. Of the shares owned individually, 4,940 are restricted stock subject to forfeiture
if certain employment agreement or other conditions are not satisfied. |
|
(11) |
|
Consists of 39,608 shares owned individually, 4,017 shares held in the 401(k) Plan and 63,417
shares represented by stock options exercisable currently or within 60 days of October 11,
2010. Of the shares owned individually, 8,780 are restricted stock subject to forfeiture if
certain employment agreement or other conditions are not satisfied. |
|
(12) |
|
Information concerning these shares was obtained from a Schedule 13D filed on September 27,
2010, by Alden Global Distressed Opportunities Fund, L.P. together with two affiliates, each
of which has a mailing address of 885 Third Avenue, New York, New York 10022. The shares
shown
as beneficially owned and the calculated percentages of ownership of Class A Common Stock
and Total Voting Power include 1,406,500 shares of Class A Common Stock owned directly and
2,837,078 shares of Class A Common Stock issuable upon conversion of 1,162,737 shares of the
companys 6.25% Series A Preferred Stock. In addition, the reporting persons state that
they have contractual agreements with respect to cash-settled swaps representing economic
exposure to approximately 1,680,429 shares of Class A Common Stock, or approximately 5.1% of
the outstanding Class A Common Stock. |
|
(13) |
|
Information concerning these shares was obtained from a Form 13F Holdings Report filed on
August 6, 2010, by Dimensional Fund Advisors LP, on behalf of itself and various affiliates,
each of which has a mailing address of Palisades West, Building One, 6300 Bee Cave Road,
Austin, Texas 78746. |
|
(14) |
|
Information concerning these shares was obtained from Form 13F Holdings Report, as amended,
filed on August 16, 2010, by AQR Capital Management, LLC, which has a mailing address of Two
Greenwich Plaza, 3rd Floor, Greenwich, Connecticut 06830. |
|
(15) |
|
Information concerning these shares was obtained from combined Form 13F Holdings Reports
filed on October 25, 2010, by New Jersey Division of Investment, which has a mailing address
of 50 West State Street, 9th Floor, Trenton, New Jersey 08625. |
|
(16) |
|
Includes 1,765,417 shares represented by stock options exercisable currently or within 60
days of October 11, 2010. |
|
(17) |
|
Consists of 4,930,680 shares owned individually and 1,170,796 shares represented by stock
options exercisable currently or within 60 days of October 11, 2010. |
CORPORATE GOVERNANCE
General
Emmis aspires to the highest ethical standards for our employees, officers and directors, and
remains committed to the interests of our shareholders. We believe we can achieve these objectives
only with a plan for corporate governance that clearly defines responsibilities, sets high
standards of conduct and promotes compliance with the law. The board of directors has adopted
formal corporate governance guidelines, as well as policies and procedures designed to foster the
appropriate level of corporate governance. Some of these guidelines and procedures are discussed
below. For further information, including electronic versions of our Code of Business Conduct and
Ethics, our Corporate Governance Guidelines, our Audit Committee Charter, our Compensation
Committee Charter, our Corporate Governance and Nominating Committee Charter and our Auditor
Independence Policy, please visit the Corporate Governance section of our website (www.emmis.com)
located under the Investors heading.
Independent Directors
Our board of directors currently consists of eight members. Of these, our board has
determined that four (Mrs. Bayh and Messrs. Leventhal, Lund and Sorrel) qualify as independent
directors under the listing standards of The Nasdaq Stock Market, Inc. Emmis is a Controlled
Company as defined in the Nasdaq listing standards because more than 50% of the companys voting
power is held by one individual. The company is therefore, pursuant to Nasdaq Marketplace Rule
5615(c)(2), exempt from certain aspects of Nasdaqs listing standards relating to independent
directors. Nevertheless, as a matter of good corporate governance, the company has voluntarily
complied with such rules. The only variance in the companys practices from the Nasdaq listing
standards relating to independent directors is that one-half, rather than a majority, of the
members of the board of directors are independent directors under Nasdaq rules.
Code of Ethics
Emmis has adopted a Code of Business Conduct and Ethics to document the ethical principles and
conduct we expect from our employees, officers and directors. A copy of our Code of Business
Conduct and Ethics is available in the Corporate Governance section of our website (www.emmis.com)
located under the Investors heading.
8
Leadership Structure, Lead Director and Risk Oversight
The Emmis bylaws provide that the chairman of the board shall be the chief executive officer
of the corporation. The board believes that this structure is in the best interest of the
companys shareholders at this time because it makes the best use of the chief executive officers
extensive knowledge of the company and its industry and also facilitates communication between
management and the board of directors.
Our independent directors have appointed Susan B. Bayh as the Lead Director. In that role,
Mrs. Bayh is responsible for coordinating and leading the independent directors, presiding over
executive sessions of the independent directors and acting as a liaison between the independent
directors and the rest of the board of directors and Emmis management.
The board of directors expects the companys management to take primary responsibility for
identifying material risks the company faces and communicating them to the board, developing and
implementing appropriate risk management strategies responsive to those risks with oversight from
the board, and integrating risk management into the companys decision-making processes. The board
regularly reviews information regarding the companys credit, liquidity and operational risks as
well as strategies for addressing and managing such risks. Certain committees of the board, such
as the audit and compensation committees, are responsible for recommending actions to the board to
manage risks within their areas of responsibility. In particular, the audit committee monitors
financial, credit and liquidity risk issues, and the compensation committee monitors the companys
compensation programs so that such programs do not encourage excessive risk-taking by company
employees.
Communications with Independent Directors
Any employee, officer, shareholder or other interested party who has an interest in
communicating with the Lead Director or any other Emmis independent directors regarding any matter
may do so by directing communication to Mrs. Bayh as the Lead Director addressed to Lead Director,
c/o Corporate Secretary, Emmis Communications Corporation, One Emmis Plaza, 40 Monument Circle,
Suite 700, Indianapolis, Indiana 46204, by facsimile to (317) 684-5583, or by e-mail message to
LeadDirector@emmis.com. The communication will be delivered to the independent directors as
appropriate. For matters related to nominations or corporate governance, a communication should
specify that it is directed to the Corporate Governance and Nominating Committee. For matters
related to finance or auditing, a communication should specify that it is directed to the Audit
Committee. For matters related to compensation, a communication should specify that it is directed
to the Compensation Committee. Messages for any director or the board of directors as a whole may
be delivered through the Lead Director as well.
Certain Committees of the Board of Directors
Our board of directors currently has several committees, including an Audit Committee, a
Corporate Governance and Nominating Committee and a Compensation Committee.
Audit Committee. The Audit Committees primary responsibility is to engage our independent
auditors and otherwise to monitor and oversee the audit process. The Audit Committee also
undertakes other related responsibilities as summarized in the Report of the Audit Committee below
and detailed in the Audit Committee Charter, which is available in the Corporate Governance section
of our website (www.emmis.com) located under the Investors heading. The board of directors has
determined that the members of the Audit Committee, Richard A. Leventhal (chair), Peter A. Lund and
Lawrence B. Sorrel, are independent directors under the Securities Exchange Act of 1934 and the
Nasdaq listing standards. The board of directors has also determined that Lawrence B. Sorrel is an
Audit Committee financial expert as defined in rules adopted under the Securities Exchange Act of
1934. The Audit Committee held four meetings during the last fiscal year.
9
Corporate Governance and Nominating Committee. The Corporate Governance and Nominating
Committees primary responsibility is to assist the board of directors by (1) identifying
individuals qualified to become members of the board of directors and recommending nominees to the
board of directors for the next annual meeting of shareholders and (2) evaluating and assessing
corporate governance issues affecting Emmis. The Corporate Governance and Nominating Committee
charter is available in the Corporate Governance section of our website (www.emmis.com) located
under the Investors heading. The Corporate Governance and Nominating Committee evaluates current
members of the board of directors and potential candidates with respect to their independence,
business, strategic and financial skills, as well as overall experience in the context of the needs
of the board of directors as a whole. The Corporate Governance and Nominating Committee
concentrates its focus on candidates with the following characteristics and qualifications, though
not necessarily limited thereto:
|
|
|
Chief executive officers or senior executives, particularly those with experience in
broadcasting, finance, marketing and information technology. |
|
|
|
Individuals representing diversity in gender and ethnicity. |
|
|
|
Individuals who meet the current criteria to be considered as independent directors. |
The Corporate Governance and Nominating Committee will consider and evaluate potential
nominees submitted by holders of our Class A common stock to our corporate secretary on or before
the date for shareholder nominations specified in the Shareholder Proposals section of this proxy
statement. These potential nominees will be considered and evaluated using the same criteria as
potential nominees obtained by the Corporate Governance and Nominating Committee from other
sources.
In its assessment of each potential candidate, including those recommended by shareholders,
the Corporate Governance and Nominating Committee takes into account all factors it considers
appropriate, which may include (a) ensuring that the board of directors, as a whole, is diverse and
consists of individuals with various and relevant career experience, relevant technical skills,
industry knowledge and experience, financial expertise (including expertise that could qualify a
director as an audit committee financial expert, as that term is defined by the rules of the
SEC), local or community ties, and (b) minimum individual qualifications, including strength of
character, mature judgment, familiarity with our business and related industries, independence of
thought and an ability to work collegially. The Corporate Governance and Nominating Committee also
may consider the extent to which the candidate would fill a present need on the board of directors.
Typically, after conducting an initial evaluation of a candidate, the Corporate Governance and
Nominating Committee will interview that candidate if it believes the candidate might be suitable
to be a director and may ask the candidate to meet with other directors and management. If the
Corporate Governance and Nominating Committee believes a candidate would be a valuable addition to
the board of directors, it will recommend to the full board that candidates nomination as a
director.
The members of the Corporate Governance and Nominating Committee are Susan B. Bayh (chair) and
Richard A. Leventhal, both of whom are independent directors under Nasdaq standards. The
Corporate Governance and Nominating Committee held two meetings during the last fiscal year.
Compensation Committee. The Compensation Committee provides a general review of our
compensation and benefit plans to ensure that our corporate objectives are met, establishes
compensation arrangements and approves compensation payments to our executive officers, and
generally administers our stock option and incentive plans. The Compensation Committees charter
is available in the Corporate Governance section of our website (www.emmis.com) located under the
Investors heading. The members of the Compensation Committee are Peter A. Lund (chair), Susan B.
Bayh and Lawrence B. Sorrel, all of whom are independent directors under Nasdaq standards. The
Compensation Committee held seven meetings during the last fiscal year.
Meeting Attendance
During our last fiscal year, our board of directors held 14 meetings, either in person or by
telephone. Each director attended at least 75% of the aggregate of (1) the total number of
meetings of our board of directors held while he or she was a director and (2) the total number of
meetings held by all committees on which he or she served during the periods that he or she served
on the committee.
We believe that communication between our shareholders and the members of our board of
directors is enhanced by the opportunity for personal interaction at our annual meeting of
shareholders. Accordingly, we encourage the members of our board of directors to attend our annual
meeting of shareholders whenever possible. At our annual meeting of shareholders held on July 14,
2009, five of the eight members of our board of directors were in attendance.
10
Compensation of Directors
Directors who are not officers of Emmis are compensated for their services at the rate of
$3,000 per regular meeting attended in person, $1,500 per regular meeting attended by phone and
$2,000 per committee meeting attended, whether in person or by phone. These fees are paid in the
form of Class A common stock at the end of each calendar year. The per share price used for payment
of these fees is established using the market value of Emmis Class A common stock prior to the end
of the previous fiscal year, discounted by 20% to the extent the director attends at least 75% of
the board and committee meetings applicable to the director. In addition, each director who is not
an officer or employee of Emmis receives a $30,000 annual retainer, the chair of our Audit
Committee receives a $10,000 annual retainer, the chair of our Compensation Committee receives
a $5,000 annual retainer, the chair of our Corporate Governance and Nominating Committee receives a
$3,000 annual retainer, and the Lead Director receives a $3,000 annual retainer. These annual
retainers were paid in cash. In addition, directors who are not officers of Emmis are entitled to
receive annually 2,195 shares of restricted stock and options to purchase 7,317 shares of Class A
common stock. The options are granted on the date of our annual meeting of shareholders at the
fair market value of the underlying shares on that date and are to vest annually in three equal
installments. Restricted stock is also granted on the date of our annual meeting of shareholders
and will vest on the earlier of the end of the directors three-year term or the third anniversary
of the date of grant.
In the table below, we have set forth information regarding the compensation for the fiscal
year ended February 28, 2010, received by each of our directors as of February 28, 2010 who is not
an officer of Emmis. The dollar amounts in the table below for stock and option awards are the
grant date fair market values associated with such awards.
2010 DIRECTOR COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or |
|
|
Stock |
|
|
Option |
|
|
All Other |
|
|
|
|
Name |
|
Paid in Cash |
|
|
Awards (1)(2) |
|
|
Awards (3) |
|
|
Compensation (4) |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan B. Bayh |
|
$ |
36,000 |
|
|
$ |
160,645 |
|
|
$ |
1,627 |
|
|
$ |
|
|
|
$ |
162,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary L. Kaseff |
|
|
30,000 |
|
|
|
84,000 |
|
|
|
|
|
|
|
1,253,745 |
|
|
|
1,337,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard A. Leventhal |
|
|
40,000 |
|
|
|
162,645 |
|
|
|
1,627 |
|
|
|
|
|
|
|
164,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter A. Lund |
|
|
35,000 |
|
|
|
162,645 |
|
|
|
1,627 |
|
|
|
|
|
|
|
164,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence B. Sorrel |
|
|
30,000 |
|
|
|
186,645 |
|
|
|
1,627 |
|
|
|
|
|
|
|
188,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greg A. Nathanson |
|
|
30,000 |
|
|
|
90,645 |
|
|
|
1,627 |
|
|
|
|
|
|
|
92,272 |
|
|
|
|
(1) |
|
On July 14, 2009, each director named in the table above other than Mr. Kaseff received a
grant of 2,195 restricted shares, having an aggregate date of grant fair value of $645. In
the following table we set forth for each named director the number of unrestricted shares the
director received on January 4, 2010, for meeting fees for the fiscal year ended 2010: |
|
|
|
|
|
Name |
|
Shares |
|
Mrs. Bayh |
|
|
129,032 |
|
Mr. Kaseff |
|
|
67,742 |
|
Mr. Leventhal |
|
|
130,645 |
|
Mr. Lund |
|
|
130,645 |
|
Mr. Sorrel |
|
|
150,000 |
|
Mr. Nathanson |
|
|
72,581 |
|
|
|
|
(2) |
|
At February 28, 2010, each named director other than Mrs. Bayh, Mr. Kaseff and Mr. Nathanson
held restricted stock awards for an aggregate of 4,390 shares, having an aggregate fair market
value of $3,951. Mrs. Bayh and Mr. Nathanson each held 6,585 restricted shares having a fair
market value of $5,927. As of February 28, 2010, Mr. Kaseff had not received any restricted
stock awards in his capacity as a director. Restricted stock awards vest on the earlier of
the end of the directors three-year term or the third anniversary of the date of grant. With
respect to Mrs. Bayh and Mr. Nathanson, 2,195 restricted shares vested on July 11, 2010, 2,195
will vest on the earlier of July 15, 2011, or the day before the companys annual meeting for
fiscal year 2011, and 2,195 will vest on the earlier of July 14, 2012, or the day before the
companys annual meeting for fiscal year 2012. With respect to each of Messrs. Leventhal,
Lund and Sorrel, 2,195 restricted shares will vest on the earlier of July 15, 2011, or the day
before the companys annual meeting for fiscal year 2011, and 2,195 will vest on the earlier
of July 14, 2012, or the day before the companys annual meeting for fiscal year 2012. |
11
|
|
|
(3) |
|
In the following table we have set forth information regarding options held by each named
director as of February 28, 2010. Options vest on the earlier of the dates shown, or the day
before the annual meeting for the fiscal year in which the date shown falls. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
|
|
|
|
|
|
|
|
|
Underlying |
|
|
Option Exercise |
|
|
Option Expiration |
|
|
|
Name |
|
Options # |
|
|
Price $ |
|
|
Date |
|
|
Option Vesting Date |
Mrs. Bayh |
|
|
7,317 |
|
|
|
0.28 |
|
|
|
7/14/19 |
|
|
1/3 on each of 7/14/10, 11 & 12 |
|
|
|
7,317 |
|
|
|
1.70 |
|
|
|
7/15/18 |
|
|
1/3 on each of 7/15/09, 10 & 11 |
|
|
|
7,317 |
|
|
|
8.84 |
|
|
|
7/11/17 |
|
|
1/3 on each of 7/11/08, 09 & 10 |
|
|
|
7,317 |
|
|
|
8.71 |
|
|
|
2/13/17 |
|
|
Fully Vested |
|
|
|
7,317 |
|
|
|
12.19 |
|
|
|
7/13/15 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
14.21 |
|
|
|
6/30/14 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
15.48 |
|
|
|
6/5/13 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
13.56 |
|
|
|
6/24/12 |
|
|
Fully Vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Kaseff |
|
|
175,000 |
|
|
|
0.295 |
|
|
|
3/2/19 |
|
|
1/3 on each of 3/2/10, 11 & 12 |
|
|
|
36,587 |
|
|
|
2.95 |
|
|
|
3/1/18 |
|
|
1/3 on each of 3/1/09, 10 & 11 |
|
|
|
36,587 |
|
|
|
8.21 |
|
|
|
3/1/17 |
|
|
1/3 on each of 3/1/08, 09 & 10 |
|
|
|
36,587 |
|
|
|
11.17 |
|
|
|
3/1/16 |
|
|
Fully Vested |
|
|
|
36,587 |
|
|
|
12.81 |
|
|
|
3/1/15 |
|
|
Fully Vested |
|
|
|
73,174 |
|
|
|
17.45 |
|
|
|
3/1/14 |
|
|
Fully Vested |
|
|
|
73,174 |
|
|
|
11.22 |
|
|
|
3/4/13 |
|
|
Fully Vested |
|
|
|
73,174 |
|
|
|
19.90 |
|
|
|
3/1/12 |
|
|
Fully Vested |
|
|
|
58,539 |
|
|
|
19.82 |
|
|
|
3/1/11 |
|
|
Fully Vested |
|
|
|
58,539 |
|
|
|
24.18 |
|
|
|
3/1/10 |
|
|
Fully Vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Leventhal |
|
|
7,317 |
|
|
|
0.28 |
|
|
|
7/14/19 |
|
|
1/3 on each of 7/14/10, 11 & 12 |
|
|
|
7,317 |
|
|
|
1.70 |
|
|
|
7/15/18 |
|
|
1/3 on each of 7/15/09, 10 & 11 |
|
|
|
7,317 |
|
|
|
8.84 |
|
|
|
7/11/17 |
|
|
1/3 on each of 7/11/08, 09 & 10 |
|
|
|
7,317 |
|
|
|
8.71 |
|
|
|
2/13/17 |
|
|
Fully Vested |
|
|
|
7,317 |
|
|
|
12.19 |
|
|
|
7/13/15 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
14.21 |
|
|
|
6/30/14 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
15.48 |
|
|
|
6/5/13 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
13.56 |
|
|
|
6/24/12 |
|
|
Fully Vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Lund |
|
|
7,317 |
|
|
|
0.28 |
|
|
|
7/14/19 |
|
|
1/3 on each of 7/14/10, 11 & 12 |
|
|
|
7,317 |
|
|
|
1.70 |
|
|
|
7/15/18 |
|
|
1/3 on each of 7/15/09, 10 & 11 |
|
|
|
7,317 |
|
|
|
8.84 |
|
|
|
7/11/17 |
|
|
1/3 on each of 7/11/08, 09 & 10 |
|
|
|
7,317 |
|
|
|
8.71 |
|
|
|
2/13/17 |
|
|
Fully Vested |
|
|
|
7,317 |
|
|
|
12.19 |
|
|
|
7/13/15 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
14.21 |
|
|
|
6/30/14 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
15.48 |
|
|
|
6/5/13 |
|
|
Fully Vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Nathanson |
|
|
7,317 |
|
|
|
0.28 |
|
|
|
7/14/19 |
|
|
1/3 on each of 7/14/10, 11 & 12 |
|
|
|
7,317 |
|
|
|
1.70 |
|
|
|
7/15/18 |
|
|
1/3 on each of 7/15/09, 10 & 11 |
|
|
|
7,317 |
|
|
|
8.84 |
|
|
|
7/11/17 |
|
|
1/3 on each of 7/11/08, 09 & 10 |
|
|
|
7,317 |
|
|
|
8.71 |
|
|
|
2/13/17 |
|
|
Fully Vested |
|
|
|
7,317 |
|
|
|
12.19 |
|
|
|
7/13/15 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
14.21 |
|
|
|
6/30/14 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
15.48 |
|
|
|
6/5/13 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
13.56 |
|
|
|
6/24/12 |
|
|
Fully Vested |
|
|
|
14,634 |
|
|
|
19.82 |
|
|
|
8/01/11 |
|
|
Fully Vested |
|
|
|
14,634 |
|
|
|
24.18 |
|
|
|
3/01/10 |
|
|
Fully Vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Sorrel |
|
|
7,317 |
|
|
|
0.28 |
|
|
|
7/14/19 |
|
|
1/3 on each of 7/14/10, 11 & 12 |
|
|
|
7,317 |
|
|
|
1.70 |
|
|
|
7/15/18 |
|
|
1/3 on each of 7/15/09, 10 & 11 |
|
|
|
7,317 |
|
|
|
8.84 |
|
|
|
7/11/17 |
|
|
1/3 on each of 7/11/08, 09 & 10 |
|
|
|
7,317 |
|
|
|
8.71 |
|
|
|
2/13/17 |
|
|
Fully Vested |
|
|
|
7,317 |
|
|
|
12.19 |
|
|
|
7/13/15 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
14.21 |
|
|
|
6/30/14 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
15.48 |
|
|
|
6/05/13 |
|
|
Fully Vested |
|
|
|
14,635 |
|
|
|
13.56 |
|
|
|
6/24/12 |
|
|
Fully Vested |
|
|
|
(4) |
|
For Mr. Kaseff, who was an employee but not an officer during the fiscal year ended 2010,
this total included a 401(k) match in the amount of $398 and severance payments in the amount
of $1,253,347. |
12
Certain Transactions
Although Emmis no longer makes loans to executive officers and directors, we currently have a
loan outstanding to Jeffrey H. Smulyan, our Chairman, Chief Executive Officer and President, that
is grandfathered under the Sarbanes-Oxley Act of 2002. The amount outstanding on this loan at
February 28, 2010 was $1,048,818, which was also the largest amount outstanding on this loan at any
month-end during fiscal 2010. The amount outstanding on the loan at February 28, 2009 was
$1,010,592, which was also the largest amount outstanding on this loan at any month-end during
fiscal 2009. This loan bears interest at our cost of senior debt, which at February 28, 2010 was
approximately 7.6% per annum and at February 28, 2009 was approximately 4.76% per annum.
Prior to 2002, Emmis had made certain life insurance premium payments for the benefit of Mr.
Smulyan. The company discontinued making such payments in 2001; however, pursuant to a Split
Dollar Life Insurance Agreement and Limited Collateral Assignment dated November 2, 1997, Emmis
retains the right, upon Mr. Smulyans death, resignation or termination of employment, to recover
all of the premium payments it has made, which total $1,119,000.
The sister of Mr. Leventhal owns Simon Seyz, an Indianapolis business that provides corporate
gifts and specialty items. In fiscal 2009 and 2010, Emmis made purchases from Simon Seyz of
approximately $149,970 and approximately $31,668, respectively.
Review and Approval of Related Party Transactions
Our board of directors has adopted a written policy for review, approval and monitoring of
transactions between the company and related parties. Related parties are directors, executive
officers, nominees to become a director, any person beneficially owning more than 5% of any class
of our stock, immediate family members of any of the foregoing, and any entity in which any of the
forgoing persons is employed or is a general partner or principal or in which the person has a 10%
or greater beneficial ownership interest. The policy covers transactions involving amounts
exceeding $120,000 in which a related party had, has or will have a direct or indirect interest.
Procedures. The related party is required to notify our legal department of the facts and
circumstances of any proposed related party transaction. The legal department makes an initial
determination of whether the transaction is subject to the policy. If the legal department
determines that the policy is applicable, the transaction is referred to our Audit Committee.
Either the Audit Committee, or the chair of the Audit Committee between Audit Committee meetings,
considers the facts and circumstances of the proposed transaction and determines whether to approve
the transaction. The Audit Committee or the chair, as the case may be, considers, among other
things:
|
|
|
The benefits of the transaction to the company; |
|
|
|
The impact of the transaction on a directors independence; |
|
|
|
The availability of other sources for comparable products or services; |
|
|
|
The terms of the transaction; and |
|
|
|
The terms available to unrelated third parties. |
13
The Audit Committee may seek bids, quotes or independent valuations from third parties in
connection with assessing a related party transaction. The Audit Committee or the chair may approve
only transactions that they determine are in, or are not inconsistent with, the best interest of
the company.
Ratification. If a transaction that was not a related party transaction when it was entered
into becomes a related party transaction, or our CEO, CFO or general counsel become aware that a
transaction that was not approved is a related party transaction, they must promptly submit the
transaction for review by the Audit Committee, or the chair of the Audit Committee between Audit
Committee meetings.
Annual Review. From time to time, the Audit Committee will review previously approved related
party transactions that have a remaining term of six months or more or remaining amounts involved
in excess of $120,000. Based on the factors described above, the Audit Committee determines whether
to continue, modify or terminate the transaction.
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee shall not be deemed incorporated by reference by
any general statement incorporating by reference this proxy statement into any of our filings under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except
to the extent that we specifically incorporate this information by reference, and shall not
otherwise be deemed filed under such Acts.
The Audit Committee is a separately-designated, standing committee established in accordance
with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. It is composed of
three directors whom the board of directors has determined are independent directors as defined
by Nasdaq listing standards. The Audit Committees responsibilities are set forth in its written
charter approved by the board of directors. The charter is reviewed annually by the Audit
Committee. A copy of the Audit Committee charter may be found in the Corporate
Governance section of our website (www.emmis.com) located under the Investors heading. As
required by Nasdaq listing standards, the Audit Committee has determined that its charter is
adequate. The Audit Committee has also determined that its members meet the financial literacy
requirements of Nasdaq listing standards.
Management is responsible for the companys internal controls and the financial reporting
process. The independent registered public accountants are responsible for performing an
independent audit of the companys consolidated financial statements in accordance with auditing
standards generally accepted in the United States of America and to issue a report on them. The
Audit Committees responsibility is to engage the independent auditor and otherwise to monitor and
oversee these processes. For the fiscal year ended February 28, 2010, the Audit Committee engaged
Ernst & Young LLP to serve as the companys independent auditor.
The Audit Committee has met and held discussions with management and Ernst & Young LLP.
Management represented to the Audit Committee that the companys consolidated financial statements
as of and for the fiscal year ended February 28, 2010 were prepared in accordance with accounting
principles generally accepted in the United States of America, and the Audit Committee has reviewed
and discussed these consolidated financial statements with management. The Audit Committee
discussed with the independent registered public accountants matters required to be discussed by
Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU
section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The board of directors, upon the recommendation of the Audit Committee, has adopted an Auditor
Independence Policy that, among other things, prohibits the companys independent auditor from
performing certain non-audit services for the company, requires prior approval of the Audit
Committee for any services provided by the companys independent auditor, limits the hiring by the
company of former employees of the companys independent auditor who have worked on the Emmis
account and requires enhanced disclosure both to the Audit Committee and to shareholders of matters
related to auditor independence.
14
The Audit Committee has received the written disclosures and the letter from Ernst & Young LLP
required by applicable requirements of the Public Company Accounting Oversight Board regarding
Ernst & Youngs communications with the Audit Committee concerning independence, and the Audit
Committee has discussed with the independent registered public accountants that firms
independence. In addition, the Audit Committee (or the chairman of the Audit Committee with
respect to engagements of less than $100,000) approves in advance all engagements of the companys
independent auditor. The Audit Committee determined that Ernst & Youngs provision of non-audit
services to the company as described in Matters Relating to Independent Registered Public
Accountants is compatible with maintaining that firms independence.
Based on these discussions and reviews, the Audit Committee determined that the audited
financial statements for the companys last fiscal year should be included in our companys Form
10-K, and made a formal recommendation to the board of directors to that effect.
Richard A. Leventhal
Peter A. Lund
Lawrence B. Sorrel
15
COMPENSATION TABLES
The following table sets forth the compensation awarded to, earned by, or paid to the chief
executive officer, the two most highly compensated executive officers other than the chief
executive officer and two other individuals who were not executive officers at the end of the 2010
fiscal year (collectively, the Named Executive Officers) during the fiscal years ended February
28, 2010, February 28, 2009 and February 29, 2008.
2010 SUMMARY COMPENSATION TABLE (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
Incentive Plan |
|
|
All Other |
|
|
|
|
|
|
|
|
|
|
Salary (3) |
|
|
Bonus (4)(5) |
|
|
Awards (6) |
|
|
Awards (6) |
|
|
Compensation (4) |
|
|
Compensation (7) |
|
|
Total |
|
Name and Principal Position |
|
Year |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
Jeffrey H. Smulyan, Chief |
|
|
2010 |
|
|
|
613,322 |
|
|
|
407,384 |
|
|
|
|
|
|
|
27,181 |
|
|
|
|
|
|
|
39,483 |
|
|
|
1,087,370 |
|
Executive Officer |
|
|
2009 |
|
|
|
459,711 |
|
|
|
438,213 |
|
|
|
|
|
|
|
212,791 |
|
|
|
|
|
|
|
65,844 |
|
|
|
1,176,559 |
|
|
|
|
2008 |
|
|
|
1 |
|
|
|
339,375 |
|
|
|
|
|
|
|
619,056 |
|
|
|
|
|
|
|
73,391 |
|
|
|
1,031,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patrick M. Walsh, |
|
|
2010 |
|
|
|
387,051 |
|
|
|
326,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,378 |
|
|
|
730,544 |
|
Executive Vice President, |
|
|
2009 |
|
|
|
214,912 |
|
|
|
427,989 |
|
|
|
25,901 |
|
|
|
103,332 |
|
|
|
|
|
|
|
18,474 |
|
|
|
790,608 |
|
Chief Financial Officer and |
|
|
2008 |
|
|
|
400,000 |
|
|
|
60,000 |
|
|
|
72,962 |
|
|
|
123,808 |
|
|
|
|
|
|
|
110,268 |
|
|
|
767,038 |
|
Chief Operating Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard F. Cummings, |
|
|
2010 |
|
|
|
330,327 |
|
|
|
274,277 |
|
|
|
|
|
|
|
89,381 |
|
|
|
|
|
|
|
12,000 |
|
|
|
705,985 |
|
President Radio |
|
|
2009 |
|
|
|
264,231 |
|
|
|
236,288 |
|
|
|
38,854 |
|
|
|
63,836 |
|
|
|
|
|
|
|
18,074 |
|
|
|
621,283 |
|
Programming |
|
|
2008 |
|
|
|
495,000 |
|
|
|
102,450 |
|
|
|
109,451 |
|
|
|
185,714 |
|
|
|
|
|
|
|
19,074 |
|
|
|
911,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul W. Fiddick, |
|
|
2010 |
|
|
|
174,626 |
|
|
|
80,219 |
|
|
|
|
|
|
|
56,183 |
|
|
|
|
|
|
|
575,008 |
|
|
|
886,036 |
|
Former International |
|
|
2009 |
|
|
|
193,942 |
|
|
|
172,500 |
|
|
|
19,426 |
|
|
|
31,918 |
|
|
|
196,686 |
|
|
|
1,000 |
|
|
|
615,472 |
|
Division President |
|
|
2008 |
|
|
|
350,000 |
|
|
|
242,583 |
|
|
|
54,271 |
|
|
|
92,587 |
|
|
|
|
|
|
|
6,111 |
|
|
|
745,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary A. Thoe, |
|
|
2010 |
|
|
|
137,172 |
|
|
|
61,047 |
|
|
|
|
|
|
|
35,753 |
|
|
|
|
|
|
|
547,613 |
|
|
|
781,585 |
|
Former President
Publishing Division (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
We have adjusted the exercise prices and numbers of shares subject to options referred to in
this and the following tables and accompanying text and footnotes for the effect of the $4.00
per share special dividend we paid on November 22, 2006. We have also adjusted the numbers of
restricted shares granted or to be granted after that date to reflect a 2 for 1 stock split in
2000. The shares we refer to in this and the following tables are Class A common shares of the
company, except with respect to Mr. Smulyan, whose shares are Class B common shares for fiscal
2008, and Class A shares for fiscal 2009 and 2010. |
|
(2) |
|
Mr. Thoe was not a named executive officer prior to the fiscal year ended 2010. |
|
(3) |
|
In fiscal 2008, Mr. Smulyan elected to voluntarily forgo all but $1 of his contractual base
salary of $905,000. |
|
(4) |
|
Under our 2008 Corporate Incentive Plan, we paid discretionary performance bonuses and
non-equity incentive plan awards to executive officers in stock valued at the fair market
value of the companys shares on the day the shares are issued. The number of shares issued
to each executive officer under the plan, is as follows: Mr. Smulyan, 102,841; Mr. Walsh,
18,182; Mr. Cummings, 31,045; and Mr. Fiddick, 73,510. Under our 2009 Corporate Incentive
Plan and 2010 Corporate Incentive Plan, no executive officer received a discretionary
performance bonus for the fiscal years ended 2009 or 2010. During the fiscal year ended 2010,
Mr. Smulyan received a $200,000 cash signing bonus in connection with his new employment
agreement. |
|
(5) |
|
Under our TV Proceeds Quarterly Bonus Program, Emmis paid quarterly bonuses to certain
employees to offset salary reductions. All of our executive officers participated in the TV
Proceeds Quarterly Bonus Program. Effective September 1, 2008, we reduced to approximately
$15,000 the salaries of certain of our highly compensated employees, including our named
executive officers, in order to increase defined consolidated operating cash flow under our
Credit Agreement. Under the TV Proceeds Quarterly Bonus Program, the company paid the
employees affected by the salary reduction quarterly bonuses in amounts equivalent to the
forgone salary. The bonus was paid at the beginning of each fiscal quarter either (i) in cash
out of the net proceeds from the sale of WVUE-TV if certain performance targets from a prior
quarter were met, or (ii) in shares of the Companys Class A common stock under the companys
2004 Equity Compensation Plan if the performance targets were not met. In fiscal 2009 and
2010, all amounts paid under the TV Proceeds Quarterly Bonus Program were paid in cash. The
TV Proceeds Quarterly Bonus Plan was terminated as of June 1, 2009. The amount paid in fiscal
2009 to each executive officer under the TV Proceeds Quarterly Bonus Program was as follows:
Mr. Smulyan, $438,213; Mr. Walsh,
$221,589; Mr. Cummings, $236,288; and Mr. Fiddick, $172,500. The amount paid in fiscal 2010 to
each executive officer under the TV Proceeds Quarterly Bonus Program was as follows: Mr.
Smulyan, $207,384; Mr. Walsh, $126,115; Mr. Cummings, $109,277; Mr. Fiddick, $80,219; and Mr.
Thoe, $61,047. |
16
|
|
|
(6) |
|
A discussion of the assumptions used in calculating these values may be found in Note 4 to
our audited financial statements beginning on page 72 of our annual report on Form 10-K for
the fiscal year ended February 28, 2010 for fiscal year 2010 awards, in Note 5 to our audited
financial statements beginning on page 78 of our annual report on Form 10-K for the fiscal
year ended February 28, 2009 for fiscal year 2009 awards and in Note 5 to our audited
financial statements beginning on page 79 of our annual report on Form 10-K for the fiscal
year ended February 29, 2008 for fiscal year 2008 awards. |
|
(7) |
|
The following table sets forth the items comprising All Other Compensation for each named
executive officer. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites |
|
|
|
|
|
|
|
|
|
|
Contributions |
|
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
and Other |
|
|
|
|
|
|
|
|
|
|
to Retirement |
|
|
Paid on |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal |
|
|
Tax |
|
|
Insurance |
|
|
and |
|
|
Restricted |
|
|
Severance |
|
|
|
|
|
|
|
|
|
|
Benefits (A) |
|
|
Reimbursements |
|
|
Premiums (B) |
|
|
401(k) Plans |
|
|
Stock (C) |
|
|
Payments |
|
|
|
|
Name |
|
Year |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
Total ($) |
|
Jeffrey H. Smulyan |
|
|
2010 |
|
|
|
27,655 |
|
|
|
201 |
|
|
|
10,000 |
|
|
|
1,627 |
|
|
|
|
|
|
|
|
|
|
|
39,483 |
|
|
|
|
2009 |
|
|
|
64,144 |
|
|
|
700 |
|
|
|
|
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
65,844 |
|
|
|
|
2008 |
|
|
|
70,794 |
|
|
|
759 |
|
|
|
|
|
|
|
1,838 |
|
|
|
|
|
|
|
|
|
|
|
73,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patrick M. Walsh |
|
|
2010 |
|
|
|
13,218 |
|
|
|
110 |
|
|
|
1,896 |
|
|
|
2,154 |
|
|
|
|
|
|
|
|
|
|
|
17,378 |
|
|
|
|
2009 |
|
|
|
13,793 |
|
|
|
61 |
|
|
|
3,620 |
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
18,474 |
|
|
|
|
2008 |
|
|
|
83,741 |
|
|
|
24,124 |
|
|
|
403 |
|
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
|
110,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard F. Cummings |
|
|
2010 |
|
|
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000 |
|
|
|
|
2009 |
|
|
|
12,000 |
|
|
|
74 |
|
|
|
5,000 |
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
18,074 |
|
|
|
|
2008 |
|
|
|
12,000 |
|
|
|
74 |
|
|
|
5,000 |
|
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
|
19,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul W. Fiddick |
|
|
2010 |
|
|
|
9,000 |
|
|
|
|
|
|
|
|
|
|
|
7,260 |
|
|
|
46,089 |
|
|
|
512,659 |
|
|
|
575,008 |
|
|
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
1,000 |
|
|
|
|
2008 |
|
|
|
4,051 |
|
|
|
60 |
|
|
|
|
|
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
|
6,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary A. Thoe |
|
|
2010 |
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
546,613 |
|
|
|
547,613 |
|
|
|
|
(A) |
|
Perquisites and other personal benefits for named executive officers other than Mr. Fiddick
includes an automobile allowance. The 2008 figures for Mr. Walsh include relocation expenses,
including approximately $8,000 of relocation expenses that were over and above the amount
included in Mr. Walshs contract. This additional amount, which was approved by the
Compensation Committee, was reimbursement for unanticipated rent and travel expenses incurred
by Mr. Walsh due to a delay in selling his primary residence. The 2008 and 2009 figures for
Messrs. Smulyan and Walsh include the incremental cost to the company of personal use of the
companys airplane. From time to time, family members and guests of the named executives
accompanied the executives on business flights on the companys airplane, at no incremental
cost to the company. |
|
(B) |
|
The company paid premiums for life, disability or long-term care insurance for Messrs. Walsh
and Cummings. |
|
(C) |
|
The figure shown reflects dividends paid on restricted shares held by the named executive
that were not included in the calculation of compensation expense set forth in the Stock
Awards column above. |
17
Employment Agreements
Effective March 1, 2008, we entered into a one-year employment agreement with Mr. Smulyan, who
serves as our Chairman, Chief Executive Officer and President, which automatically renews each year
following the initial one-year term for additional one-year terms unless either the company or Mr.
Smulyan provides the other with written notice of non-renewal prior to December 31 of the
then-current term. When neither the company nor Mr. Smulyan delivered such notice of non-renewal
prior to December 31, 2008, the employment agreement automatically renewed for an additional
one-year term ending February 28, 2010. Mr. Smulyans base salary for the initial term of the
employment agreement was $905,000; however, effective December 1, 2008, Mr. Smulyan consented to a
3% decrease to his base salary and waived any increase provided for in the employment agreement for
the one-year term ending February 28, 2010. He also agreed to an additional 5% decrease to his
base salary for the fiscal year ended February 28, 2010. Mr. Smulyans base salary upon any
subsequent annual renewal will increase at a rate equal to the greater of 3%, the annual percentage
increase in the CPI [All Urban Consumers-U.S Cities Average, all items (1982/84 = 100) as published
by the Bureau of Labor Statistics, U.S. Department of Labor] or such other amount as approved by
our Compensation Committee. Mr. Smulyans annual incentive compensation target is 125% of his base
salary and will be paid, if at all, based upon achievement of certain performance goals to be
determined by our Compensation Committee. The company retains the right to pay any annual
incentive compensation in cash or shares of our Class A common stock. Each year the agreement
remains in effect, Mr. Smulyan is entitled to receive an option to acquire 146,349 shares of our
Class A common stock. Mr. Smulyan will continue to receive an automobile allowance of $24,000
annually and will continue to be reimbursed for up to $10,000 per year in premiums for life and
disability insurance and retains the right to participate in all of our employee benefit plans for
which he is otherwise eligible.
Effective December 15, 2009, we entered into a new three-year employment agreement with Mr.
Smulyan, who serves as our Chairman, Chief Executive Officer and President. The term of the
agreement commenced on March 1, 2010. Mr. Smulyans base salary will be reduced from $833,957 to
$792,259 for the first year, then increase to $825,000 for the second year, and $850,000 for the
third year. Mr. Smulyan will receive a $200,000 signing bonus in connection with execution of the
agreement, as well as performance units having a value, if earned, of $700,000. The performance
units will be earned quarterly during the first year of the term, depending upon whether the
company meets certain consolidated EBITDA requirements set forth in the Emmis Operating Company
senior credit agreement. Both the signing bonus and any earned performance units will be repayable
to the company in full in the event that Mr. Smulyan is terminated for cause or resigns without
good reason prior to completion of the term. Mr. Smulyans employment agreement will automatically
renew each year following the initial three-year term for additional one-year terms unless either
the company or Mr. Smulyan provides the other with written notice of non-renewal prior to December
31 of the final year of the initial or subsequent term, as applicable. Mr. Smulyans base salary
upon any such annual renewal will increase by $25,000. Mr. Smulyans annual incentive compensation
target remains 125% of his base salary and will be paid, if at all, based upon achievement of
certain performance goals to be determined by our compensation committee. The company retains the
right to pay any annual incentive compensation in cash, forgiveness of indebtedness or shares of
our Class A common stock. Mr. Smulyan will not be entitled to stock options during the first year
of the term, but will be entitled to receive an option to acquire 150,000 shares of our Class A
common stock in each of the second and third years of the term, as well as in any additional
one-year renewal term. Mr. Smulyan will continue to receive an automobile allowance and will
continue to be reimbursed for up to $10,000 per year in premiums for life and disability insurance
and retains the right to participate in all of our employee benefit plans for which he is otherwise
eligible.
Effective December 15, 2008, we entered into an employment agreement with Patrick Walsh, who
serves as Chief Financial Officer and Chief Operating Officer of the company, extending his
employment through September 3, 2011. Under the terms of his employment agreement, Mr. Walshs
annual base compensation for the first year of the employment agreement is $540,000, and is
$556,200 for the remainder of the term. However, Mr. Walsh agreed to a 5% decrease to his base
salary for the fiscal year ended February 28, 2010. Mr. Walshs annual incentive compensation
targets for fiscal years 2010, 2011, and 2012 are 100% of his base compensation. In the event that
Mr. Walshs employment terminates upon expiration of the employment agreement, Mr. Walshs annual
incentive compensation for fiscal year 2012 will be pro-rated based upon the seven months he will
have been employed during the 2012 fiscal year. The award of annual incentive compensation is to be
based upon achievement of certain performance goals to be determined each year by our Compensation
Committee, and the company retains the right to pay any annual incentive compensation in cash or
shares of our common stock. For the remainder of the 2009 fiscal year, Mr. Walshs annual
incentive compensation target was $400,000, with $200,000 to be earned based upon the performance
goals established in the spring under his prior employment agreement, $100,000 to be earned
depending upon the extent to which the company met certain radio station operating income
targets during the fiscal year, and the final $100,000 to be earned in the discretion of the
Compensation Committee based upon Mr. Walshs performance in transitioning to his new position.
Since Mr. Walsh continued to be employed as of September 3, 2009, his existing completion bonus of
20,000 shares of our common stock and $200,000 was awarded and paid as previously provided under
his previous employment agreement. Mr. Walsh is also scheduled to receive a completion bonus upon
the expiration of the agreement equal to at least 100% of his annual base compensation minus
$200,000, with additional targets (inclusive of the minimum completion bonus amount) of $750,000
and $1,100,000 based upon certain levels of total shareholder return set forth in the employment
agreement. Mr. Walsh will receive an automobile allowance of $12,000 annually and will be
reimbursed for up to $5,000 per year in premiums for life and disability insurance and retains the
right to participate in all of our employee benefit plans for which he is otherwise eligible.
18
Effective March 1, 2008, we entered into a one-year employment agreement with Mr. Cummings,
which automatically renews each year following the initial one-year term for additional one-year
terms unless either the company or Mr. Cummings provides the other with written notice of
non-renewal prior to December 31 of the then-current term. Prior to December 31, 2008, the
company delivered such notice of non-renewal to Mr. Cummings; and, therefore, the employment
agreement terminated as of February 28, 2009. Under the employment agreement, Mr. Cummings was
eligible for a completion bonus payable upon his continued employment for a period through February
28, 2011 in an amount equal to Mr. Cummings average annual base salary over such three-year
period. The employment agreement provided that, in the event that, prior to expiration of such
three-year term, the company elected not to renew the employment agreement, Mr. Cummings was
entitled to a pro-rata portion of such completion bonus. Effective March 1, 2009, we entered into
a one-year employment agreement with Mr. Cummings to serve as President Emmis Radio Programming.
On March 2, 2010, we entered into a new one-year employment agreement with Mr. Cummings to
serve as President of Emmis Radio Programming, effective March 1, 2010. Mr. Cummings employment
agreement will automatically renew each year following the initial one-year term for additional
one-year terms unless either the company or Mr. Cummings provides the other with written notice of
non-renewal prior to December 31 of the initial or subsequent term, as applicable. Under the
agreement, Mr. Cummings base salary is $446,500 and his annual incentive compensation target is
60% of his base salary. The annual incentive bonus will be paid, if at all, based upon achievement
of certain performance goals to be determined by the company. The company retains the right to pay
such annual incentive compensation in cash or shares of our Class A common stock. Mr. Cummings will
continue to receive an automobile allowance and will continue to be reimbursed for up to $5,000 per
year in premiums for life or other insurance and retains the right to participate in all of our
employee benefit plans for which he is otherwise eligible. He will also be entitled to severance
equal to his previous base salary in the event he is not offered substantially similar employment
upon the expiration of the term and his employment terminates. If he is entitled to severance, Mr.
Cummings will be offered a four year part-time programming role with total payments over the four
years of $530,000. The switch from full-time to part-time employment is designed to constitute a
separation from service within the meaning of section 409A of the Internal Revenue Code.
Effective March 1, 2009, we entered into a one-year employment agreement with Paul W. Fiddick,
who served as our President International Division, which automatically renews each year
following the initial one-year term for additional one-year terms unless either the company or Mr.
Fiddick provides the other with written notice of non-renewal prior to December 31 of the
then-current term. Mr. Fiddicks base salary for the initial term of the employment agreement was
$360,000. However, Mr. Fiddick agreed to a 5% decrease in his annual base salary for the fiscal
year ended February 28, 2010. Mr. Fiddicks base salary upon any subsequent annual renewal would
have increased at a rate equal to the greater of 3%, the annual percentage increase in the CPI (All
Urban Consumers-U.S Cities Average, all items (1982/84 = 100) as published by the Bureau of Labor
Statistics, U.S. Department of Labor) or such other amount as approved by our Compensation
Committee. Mr. Fiddicks annual incentive compensation target was 58.33% of his base salary and was
to be paid, if at all, based upon achievement of certain performance goals to be determined each
year by our Compensation Committee. The company retained the right to pay any annual incentive
compensation in cash or shares of our Class A common stock. Each year the agreement remained in
effect, Mr. Fiddick was entitled to receive an option to acquire 21,952 shares of our Class A
common stock and 6,585 restricted shares of our Class A common stock. Mr. Fiddick was also
eligible for a completion bonus payable upon his continued employment for a period through February
29, 2012 in an amount equal to Mr. Fiddicks average annual base salary over such three-year
period. In the event that, prior to expiration of such three-year term, Mr. Fiddick died or became
disabled, the company terminated Mr. Fiddicks employment other than for Cause (as defined in the
agreement) or the company elected not to renew the employment agreement, Mr. Fiddick
was entitled to a pro-rata portion of such completion bonus. Mr. Fiddick was to continue to
receive an automobile allowance of $12,000 annually and retained the right to participate in all of
our employee benefit plans for which he was otherwise eligible.
19
Effective December 15, 2009, we entered into an agreement with Mr. Fiddick under which he
resigned as International Division President and terminated his employment agreement dated March 1,
2009 and his change in control severance agreement dated January 1, 2008. Under the agreement, Mr.
Fiddick received a lump sum payment of approximately $509,000. While Mr. Fiddick no longer has day
to day involvement in the operations of our international radio stations, he will continue as a
director of Emmis International, providing strategic advisory services with respect to our
international division in a manner that is designed to constitute a separation from service
within the meaning of section 409A of the Internal Revenue Code.
Effective March 1, 2008, we entered into a one-year employment agreement with Gary A. Thoe,
who served as our President Publishing Division until December 2009. Mr. Thoes base salary was
$275,000. Mr. Thoes employment agreement automatically renewed each year following the initial
one-year term for additional one-year terms unless either the company or Mr. Thoe provided the
other with written notice of non-renewal prior to December 31 of the initial or subsequent term, as
applicable. Mr. Thoes base salary upon any annual renewal was to increase at a rate equal to the
greater of 3%, the annual percentage increase in the CPI (All Urban Consumers-U.S Cities Average,
all items (1982/84 = 100) as published by the Bureau of Labor Statistics, U.S. Department of Labor)
or such other amount as approved by our Compensation Committee. Mr. Thoes annual incentive
compensation target was 45.45% of his base salary and was to be paid, if at all, based upon
achievement of certain performance goals to be determined each year by our Compensation Committee.
The company retained the right to pay any annual incentive compensation in cash or shares of our
Class A common stock. Each year the agreement remained in effect, Mr. Thoe was entitled to receive
an option to acquire 12,806 shares of our Class A common stock and a grant of 4,940 restricted
shares of Class A common stock. Mr. Thoe was also eligible for a completion bonus payable upon his
continued employment for a period through February 28, 2011 in an amount equal to Mr. Thoes
average annual base salary over such three-year period. In the event that, prior to expiration of
such three-year term, Mr. Thoe died or became disabled, the company terminated Mr. Thoes
employment other than for Cause (as defined in the agreement) or the company elected not to renew
the employment agreement, Mr. Thoe was entitled to a pro-rata portion of such completion bonus. Mr.
Thoe was to continue to receive an automobile allowance and retained the right to participate in
all of our employee benefit plans for which he was otherwise eligible.
In December, 2009, we entered into an agreement with Mr. Thoe under which his employment
agreement and his change in control severance agreement were terminated. Under the agreement, Mr.
Thoe received a lump sum payment of approximately $547,000.
20
2010 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Value of |
|
|
|
Number of |
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
Shares or |
|
|
Shares or |
|
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
Units of |
|
|
Units of |
|
|
|
Underlying |
|
|
Underlying |
|
|
Option |
|
|
|
|
|
|
Stock That |
|
|
Stock That |
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Exercise |
|
|
Option |
|
|
Have Not |
|
|
Have Not |
|
|
|
Options |
|
|
Options (1) |
|
|
Price |
|
|
Expiration |
|
|
Vested |
|
|
Vested (4) |
|
Name |
|
(#) |
|
|
(#) |
|
|
($) |
|
|
Date |
|
|
(#) |
|
|
($) |
|
|
|
Exercisable |
|
|
Unexercisable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey H. Smulyan |
|
|
|
|
|
|
150,000 |
|
|
|
0.295 |
|
|
|
3/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000 |
|
|
|
1.14 |
|
|
|
11/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
48,783 |
|
|
|
97,566 |
|
|
|
2.95 |
|
|
|
3/01/18 |
|
|
|
|
|
|
|
|
|
|
|
|
97,566 |
|
|
|
48,783 |
|
|
|
8.21 |
|
|
|
3/01/17 |
|
|
|
|
|
|
|
|
|
|
|
|
292,699 |
|
|
|
|
|
|
|
11.17 |
|
|
|
3/01/16 |
|
|
|
|
|
|
|
|
|
|
|
|
292,699 |
|
|
|
|
|
|
|
12.81 |
|
|
|
3/01/15 |
|
|
|
|
|
|
|
|
|
|
|
|
439,049 |
|
|
|
|
|
|
|
17.45 |
|
|
|
3/01/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patrick M. Walsh |
|
|
|
|
|
|
250,000 |
|
|
|
0.425 |
|
|
|
12/15/18 |
|
|
|
|
|
|
|
|
|
|
|
|
9,756 |
|
|
|
19,513 |
|
|
|
2.95 |
|
|
|
3/01/18 |
|
|
|
|
|
|
|
|
|
|
|
|
19,513 |
|
|
|
9,756 |
|
|
|
8.21 |
|
|
|
3/01/17 |
|
|
|
|
|
|
|
|
|
|
|
|
14,635 |
|
|
|
|
|
|
|
8.30 |
|
|
|
9/04/16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,780 |
(2) |
|
|
7,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,780 |
(3) |
|
|
7,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard F. Cummings |
|
|
|
|
|
|
87,500 |
|
|
|
0.295 |
|
|
|
3/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,500 |
|
|
|
1.14 |
|
|
|
11/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
14,635 |
|
|
|
29,269 |
|
|
|
2.95 |
|
|
|
3/01/18 |
|
|
|
|
|
|
|
|
|
|
|
|
29,269 |
|
|
|
14,635 |
|
|
|
8.21 |
|
|
|
3/01/17 |
|
|
|
|
|
|
|
|
|
|
|
|
43,904 |
|
|
|
|
|
|
|
11.17 |
|
|
|
3/01/16 |
|
|
|
|
|
|
|
|
|
|
|
|
43,904 |
|
|
|
|
|
|
|
12.81 |
|
|
|
3/01/15 |
|
|
|
|
|
|
|
|
|
|
|
|
73,174 |
|
|
|
|
|
|
|
17.45 |
|
|
|
3/01/14 |
|
|
|
|
|
|
|
|
|
|
|
|
73,174 |
|
|
|
|
|
|
|
11.22 |
|
|
|
3/04/13 |
|
|
|
|
|
|
|
|
|
|
|
|
73,174 |
|
|
|
|
|
|
|
19.90 |
|
|
|
3/06/12 |
|
|
|
|
|
|
|
|
|
|
|
|
73,174 |
|
|
|
|
|
|
|
19.82 |
|
|
|
3/01/11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,171 |
(2) |
|
|
11,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,171 |
(3) |
|
|
11,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul W. Fiddick |
|
|
|
|
|
|
55,000 |
|
|
|
0.295 |
|
|
|
3/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000 |
|
|
|
1.14 |
|
|
|
11/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
13,169 |
|
|
|
26,339 |
|
|
|
2.95 |
|
|
|
3/01/18 |
|
|
|
|
|
|
|
|
|
|
|
|
14,634 |
|
|
|
7,318 |
|
|
|
8.21 |
|
|
|
3/01/17 |
|
|
|
|
|
|
|
|
|
|
|
|
21,952 |
|
|
|
|
|
|
|
11.17 |
|
|
|
3/01/16 |
|
|
|
|
|
|
|
|
|
|
|
|
38,416 |
|
|
|
|
|
|
|
12.81 |
|
|
|
3/01/15 |
|
|
|
|
|
|
|
|
|
|
|
|
38,416 |
|
|
|
|
|
|
|
17.45 |
|
|
|
3/01/14 |
|
|
|
|
|
|
|
|
|
|
|
|
10,976 |
|
|
|
|
|
|
|
11.22 |
|
|
|
3/04/13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,585 |
(2) |
|
|
5,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,585 |
(3) |
|
|
5,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary A. Thoe |
|
|
|
|
|
|
35,000 |
|
|
|
0.295 |
|
|
|
3/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000 |
|
|
|
1.14 |
|
|
|
11/02/19 |
|
|
|
|
|
|
|
|
|
|
|
|
4,269 |
|
|
|
8,537 |
|
|
|
2.95 |
|
|
|
3/01/18 |
|
|
|
|
|
|
|
|
|
|
|
|
8,537 |
|
|
|
4,269 |
|
|
|
8.21 |
|
|
|
3/01/17 |
|
|
|
|
|
|
|
|
|
|
|
|
10,976 |
|
|
|
|
|
|
|
11.17 |
|
|
|
3/01/16 |
|
|
|
|
|
|
|
|
|
|
|
|
10,976 |
|
|
|
|
|
|
|
12.81 |
|
|
|
3/01/15 |
|
|
|
|
|
|
|
|
|
|
|
|
21,952 |
|
|
|
|
|
|
|
17.45 |
|
|
|
3/01/14 |
|
|
|
|
|
|
|
|
|
|
|
|
21,952 |
|
|
|
|
|
|
|
11.22 |
|
|
|
3/04/13 |
|
|
|
|
|
|
|
|
|
|
|
|
14,634 |
|
|
|
|
|
|
|
19.90 |
|
|
|
3/06/12 |
|
|
|
|
|
|
|
|
|
|
|
|
14,634 |
|
|
|
|
|
|
|
19.82 |
|
|
|
3/01/11 |
|
|
|
|
|
|
|
|
|
|
|
|
14,634 |
|
|
|
|
|
|
|
24.18 |
|
|
|
3/01/10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,940 |
(2) |
|
|
4,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,842 |
(3) |
|
|
3,458 |
|
|
|
|
(1) |
|
Options expiring 3/01/18 became exercisable 1/3 on March 1, 2009, and 1/3 on March 1, 2010,
and will become exercisable 1/3 on March 1, 2011. Options expiring 3/01/17 became exercisable
1/3 on March 1, 2008, 1/3 on March 1, 2009, and 1/3 on March 1, 2010. Options expiring
3/01/16 became exercisable 1/3 on March 1, 2007, 1/3 on March 1, 2008, and 1/3 on March 1,
2009. Options expiring 3/2/19 and 11/2/19 become exercisable on March 2, 2012. Mr. Walshs
options expiring 9/04/16 became exercisable 1/3 on
September 4, 2007, 1/3 on September 4, 2008, and 1/3 on September 4, 2009. Mr. Walshs options
expiring 12/15/18 will become exercisable on September 3, 2011. |
21
|
|
|
(2) |
|
Shares vest on March 1, 2011. |
|
(3) |
|
Shares vested on March 1, 2010. |
|
(4) |
|
Calculated based on the $0.90 per share closing market price of our shares on February 26,
2010. |
Retirement Plan
Emmis sponsors a Section 401(k) retirement savings plan that is available to substantially all
employees age 18 years and older who have at least 30 days of service. Employees may make pretax
contributions to the plans up to 50% of their compensation, not to exceed the annual limit
prescribed by the Internal Revenue Service (IRS). Emmis may make discretionary matching
contributions to the plans in the form of cash or shares of our Class A common stock. During the
year ended February 29, 2008, we elected to match annual employee 401(k) contributions up to a
maximum of $2,000 per employee, one-half of the contribution made in Emmis stock. During the year
ended February 28, 2009, we suspended the cash match, but continued to make the discretionary stock
match. During the year ended February 28, 2010, we also suspended the discretionary stock match.
Emmis discretionary contributions to the plan for continuing operations totaled $1.7 million, $0.9
million and $0 for the years ended February 29, 2008, February 28, 2009 and February 28, 2010,
respectively. In April 2010, we reinstated the stock match, retroactive to January 1, 2010, with a
revised matching formula. In May 2010, we discontinued the stock match and began making all
matching contributions in cash.
Potential Payments upon Termination or Change in Control
The employment agreements we entered into with Messrs. Smulyan, Cummings, Walsh, Fiddick and
Thoe provide for certain payments and benefits to the named executive officer in the event that
executive officer is terminated by the company without cause, and/or terminates his own
employment with good reason. Mr. Smulyan is also entitled to certain payments upon his death or
disability.
We have also entered into a Change in Control Severance Agreement with each of the executives
named in the preceding tables. Each such agreement provides that if the executives employment is
terminated by the company within two years after a change in control of the company (or, in certain
instances, in anticipation of a change in control), other than for cause, or is terminated by the
executive for good reason, the executive is entitled to (1) a payment equal to the executives base
salary through the termination date, plus a pro-rata portion of the executives target bonus for
the year and accrued vacation pay; (2) a severance payment equal in the case of Messrs. Smulyan,
Walsh and Cummings to three times, and in the case of Messrs. Fiddick and Thoe to 1.5 times, the
executives highest annual base salary and highest annual incentive bonus during the preceding
three years; (3) continued accident and life insurance benefits for three years; (4) reimbursement
for COBRA premiums for continuation of medical and dental benefits for 18 months and reimbursement
for private medical and dental benefits of an equivalent level for 18 months following termination
of the COBRA reimbursement; and (5) if the payments to the executive exceed certain limits,
additional tax gross up payments to compensate the executive for the excise tax imposed by
section 4999 of the Internal Revenue Code; provided, however that the amount of the gross up
payment may be reduced by up to 10% if such reduction would prevent payment of the excise tax. In
each case, the executive is obligated not to voluntarily leave employment with Emmis during the
pendency of (and prior to the consummation or abandonment of) a change in control other than as a
result of disability, retirement or an event that would constitute good reason if the
change-of-control had occurred. In addition, under our 2004 Equity Compensation Plan, all
outstanding restricted shares held by the executive vest immediately upon a change in control.
22
Under the Change in Control Severance Agreement, change in control, cause and good reason are
defined as follows:
Change in Control. A change in control of the company occurs if:
|
|
|
any individual, entity or group other than Mr. Smulyan or his affiliates becomes the
beneficial owner of 35% or more of the companys outstanding shares, or of the voting power
of the outstanding shares; |
|
|
|
|
the current members of the board of directors of the company (or persons approved by
two-thirds of the current directors) cease to constitute at least a majority of the board; |
|
|
|
|
the company is a party to a merger that results in less than 60% of the outstanding
shares or voting power of the surviving corporation being held by persons who were not our
shareholders immediately prior to the merger; |
|
|
|
|
our shareholders approve a liquidation or dissolution of the company; or |
|
|
|
|
any other event is determined by our board to constitute a change in control. |
|
|
|
|
Cause. Cause generally means: |
|
|
|
|
the willful and continual failure of the executive to perform substantially his duties;
or |
|
|
|
|
the willful engaging in illegal conduct or gross misconduct which is materially
injurious to the company. |
|
|
|
|
Good Reason. Good Reason generally means: |
|
|
|
|
any materially adverse change in the duties or responsibilities of the executive; |
|
|
|
|
a material breach by the company of the executives employment agreement or Change in
Control Severance Agreement; |
|
|
|
|
a material reduction or series of reductions that result in the executives annual base
salary being decreased by more than 5%; |
|
|
|
|
any requirement that the executive relocate more than 35 miles from the office where the
executive works; and |
|
|
|
|
except with respect to Mr. Fiddick and Mr. Thoe, voluntary termination by the executive
during a 30-day period commencing one year after the occurrence of a change in control. |
In addition to the occurrence of one of more of the events constituting Good Reason set
forth above, in order to resign his employment, each of the executives named above is also required
to give the company notice of the occurrence of any such event (except during the 30-day period
commencing one year after the occurrence of a change in control, which is not so limited) within 90
days of such occurrence; and the company has the right to cure such occurrence within 30 days of
such notice.
When the companys board of directors determines that it is in the best interest of the
company, the company may negotiate severance arrangements with a departing executive in addition to
or in place of the arrangements described above. Circumstances under which the board may negotiate
additional or different severance arrangements include but are not limited to:
|
|
|
to avoid or settle litigation with the executive; |
|
|
|
to reduce an adverse financial effect on the company; |
|
|
|
to reduce adverse tax consequences on the executive; or |
|
|
|
to reward meritorious service by the executive. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and
directors, and persons who own more than 10% of existing common stock, to file with the Securities
and Exchange Commission reports detailing their ownership of existing common stock and changes in
such ownership. Officers, directors and greater-than-10% shareholders are required by Commission
regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on review
of the copies of such forms furnished to us, we believe that during the last fiscal year all
officers, directors and greater-than-10% shareholders complied with the filing requirements of
Section 16(a), except that (1) Mr. Smulyan filed one late Form 4 report on November 4, 2009 with
respect to a disposition on July 13, 2009 from the Emmis 401(k) plan on his behalf; (2) each of Mr.
Kaseff, Mr. Cummings, Mr. Fiddick, Mr. Levitan and Mr. Thoe filed one late Form 4 report on March
9, 2009 with respect to a withholding of shares on March 2, 2009 under an Emmis employee benefit
plan; (3) Mr. Thoe filed one late Form 4 report on February 17, 2010 with respect to a sale of
shares on February 12, 2010; (4) Mrs. Bayh filed one late Form 4 report on February
1, 2010 with respect to sales of shares on January 14, 2010 and January 15, 2010; and (5) Mr.
Leventhal filed one late Form 4 report on February 1, 2010 with respect to a sale of shares on
January 15, 2010.
23
PROPOSAL 2: APPROVAL OF 2010 EQUITY COMPENSATION PLAN
Our board of directors has adopted the Emmis Communications Corporation 2010 Equity
Compensation Plan (the 2010 Plan) to increase employee, officer, director and independent
contractor stock ownership opportunities and to improve the companys ability to attract and retain
a team of outstanding employees, officers, directors and independent contractors. The following
summary of the principal provisions of the 2010 Plan is qualified by reference to the full text of
the 2010 Plan which is attached to this proxy statement as Exhibit A.
The 2010 Plan permits the delivery of a maximum of 2,000,000 shares of our common stock, plus
any unused shares of common stock available under our 2004 Equity Compensation Plan, which as of
November 1, 2020 was another 930,847 shares, and shares subject to awards under that prior plan
that would again become available for new grants under the terms of such plan if that plan were
still in effect. This prior plan will be terminated as of the effective date of the 2010 Plan.
The board of directors included 2,000,000 new shares under the 2010 Plan based on the expectation
that these shares would service Emmis stock compensation program and other equity compensation
needs for approximately three years. Emmis also decided to incorporate all shares remaining
available for issuance under the prior 2004 plan into the 2010 Plan so that their issuance would be
governed by the newer 2010 Plan, which provides greater administrative consistency. The inclusion
of these additional shares from the prior plan does not increase the total number of shares
available for awards because the shares would otherwise remain available for awards under the terms
of the prior plan.
As of October 11, 2010, the 2,000,000 new shares subject to the 2010 Plan had an aggregate
market value of $1,600,000 based on a closing price of $0.80 per share. Including the shares
estimated to be carried over to the 2010 Plan from the prior plans being terminated, the shares
subject to the 2010 Plan as of its effective date would have an aggregate market value of
$2,344,678 based on the October 11, 2010 closing price. If all or part of any award under the 2010
Plan expires or terminates without being exercised in full, is forfeited or is withheld for taxes,
or in the case of an award of performance units, the award is not paid in shares of common stock,
such shares of our common stock subject to the award generally become available for new awards.
Options, stock appreciation rights and performance units expire no more than 10 years from date of
grant.
Options. Options granted under the 2010 Plan allow participants to purchase shares of our
common stock at an exercise price determined by the Emmis Compensation Committee which cannot be
less than the fair market value of our common stock on the date of the grant. Options may be
granted as incentive stock options subject to the limitations of Section 422 of the Internal
Revenue Code (the Code). For the purpose of complying with Section 162(m) of the Code, the 2010
Plan contains a per-participant limit of 300,000 on the number of shares which may be subject to
options granted during any calendar year.
Restricted Stock. Shares of our common stock may be granted under the 2010 Plan subject to
such restrictions, if any, as may be determined by the Compensation Committee (restricted stock).
Shares of restricted stock may be subject to forfeiture if conditions established by the
Compensation Committee are not satisfied and are generally nontransferable until they become
nonforfeitable. Before the grant, the Compensation Committee determines the purchase price, if
any, of such shares of restricted stock and the restrictions, if any, applicable to such shares.
If a grantees shares of restricted stock are forfeited, the grantee is required to sell such
shares to us at the lesser of the purchase price, if any, paid by the grantee or the fair market
value of the shares on the date of such forfeiture. The Compensation Committee may accelerate the
time at which the restrictions lapse or may remove or, with the consent of the grantee, modify the
restrictions. For the purpose of complying with Section 162(m) of the Code, the 2010 Plan contains
a per-participant limit on the number of shares of restricted stock that may be awarded during any
calendar year. That limit is the number of shares having a value on the date of grant equal to the
lesser of 500% of the participants base salary or $5,000,000. This limit does not apply, however,
to restricted stock issued in payment of an award of performance units or issued in lieu of cash
compensation under a stock compensation-type program.
24
Stock Appreciation Rights. Each stock appreciation right which may be granted under the 2010
Plan provides the grantee, upon exercise, a benefit equal to the difference between the fair market
value of one share of our common stock on the date of the exercise and (1) in the case of a stock
appreciation right identified with a share
of our common stock subject to an option, the option exercise price of such option or such
higher price specified in the grant or (2) in the case of any other stock appreciation right, the
fair market value of a share of our common stock on the grant date or such higher price specified
in the grant. Stock appreciation rights may be granted alone, or identified with shares of our
common stock subject to options, performance units or shares of restricted stock. The Compensation
Committee may accelerate the exercisability of any stock appreciation right. Benefits upon the
exercise of stock appreciation rights are payable in cash unless the Compensation Committee
determines that the benefits will be paid wholly or partly in shares of our common stock. For the
purpose of complying with Section 162(m) of the Code, the 2010 Plan contains a per-participant
limit of 300,000 on the number of shares which may be subject to stock appreciation rights granted
during any calendar year.
Performance Units. Performance units may be granted under the 2010 Plan to provide a benefit
if performance goals determined by the Compensation Committee are achieved during the measuring
period. The Compensation Committee, before the grant of a performance unit, determines the
performance goals and measuring period and assigns a performance percentage (which can exceed 100%)
to each level of attainment of the performance goals during the measuring period. The Compensation
Committee may modify performance goals at any time. Performance unit benefits are payable in cash
unless the Compensation Committee determines that a benefit will be paid wholly or partly in shares
of our common stock. Performance units only reduce the number of shares available for grant or
issuance under the 2010 Plan to the extent that the performance unit award is paid in stock.
Performance unit awards are payable after the end of the fiscal year in which the measuring period
ends following a certification by the Compensation Committee of the extent to which the applicable
performance goals have been achieved. The benefit for each performance unit awarded equals the
fair market value of a share of our common stock on the date of grant of the performance unit
multiplied by the performance percentage attained during the measuring period for the performance
unit. For the purpose of complying with Section 162(m) of the Code, the 2010 Plan contains a
per-participant limit on the number of shares of stock that may be awarded with respect to a
performance unit during any calendar year. That limit is the number of shares having a value on
the date of grant equal to the lesser of 500% of the participants base salary or $5,000,000.
Other Information. Payment of the option exercise price or the purchase price of restricted
stock may be made in cash or through the exchange of shares of our common stock owned by the
grantee or by various other payment methods. When permitted by the Compensation Committee, a
grantee may elect to have withheld shares of our common stock to satisfy withholding tax liability
with respect to the exercise of options, stock appreciation rights or performance units or with
respect to shares of restricted stock becoming nonforfeitable. In the event of a change in
control, options, stock appreciation rights and performance units become exercisable, and all
shares of restricted stock generally become nonforfeitable. The benefit payable with respect to
any performance unit for which the measuring period has not ended is prorated based upon the
portion of the measuring period completed before the change in control. The aggregate number of
shares of our common stock, shares of restricted stock, stock appreciation rights and stock options
available pursuant to the 2010 Plan, the number of shares covered by an award, the exercise price
of options, the fair market values used to determine stock appreciation right and performance unit
benefits and other matters related to the 2010 Plan and awards, will be adjusted by the
Compensation Committee to reflect any stock dividend, stock split, share combination, merger,
consolidation, asset spin-off, reorganization, or similar event.
Options, stock appreciation rights and performance units may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent
and distribution or as permitted by the Compensation Committee, except that the grantee may
transfer an award by gift or pursuant to a domestic relations order to:
|
|
|
a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law of the grantee, including adoptive
relationships, or any person sharing the grantees household (other than a tenant or
employee); |
25
|
|
|
a trust in which these persons have more than 50% of the beneficial interest; |
|
|
|
a foundation in which these persons (or the grantee) control the management of
assets; or |
|
|
|
any other entity in which these persons (or the grantee) own more than 50% of the
voting interests. |
Awards so transferred may be exercised only upon the same terms and conditions applicable to the
original grantee, and the original grantee or his estate will remain liable for any federal, state,
city or local taxes applicable upon the exercise of an award by a permitted transferee. Such a
transferee cannot transfer the award, except by will or by the laws of descent and distribution
upon the death of the transferee.
Plan Administration. The 2010 Plan is administered by the Compensation Committee unless the
board of directors or the Compensation Committee designates another committee or subcommittee to
administer the 2010 Plan. Subject to the 2010 Plans provisions, the Compensation Committee has
broad authority to, among other things, determine when grants may be made (and the amounts
thereof); to interpret, and to adopt rules relating to, the 2010 Plan; to determine the terms of
the agreements relating to grants and to modify any such agreement with the consent of the grantee,
when required; and to cancel existing awards and to substitute new ones. Because of the
Compensation Committees broad authority, the type and amount of awards to be received by any
specific individual, or group of individuals, is currently indeterminable. However, not more than
1,000,000 shares of the 2,000,000 new shares of common stock added by the 2010 Plan may be awarded
to Mr. Smulyan as Class B common stock.
Amendment and Termination. Subject to any shareholder approval requirement of applicable law
or the rules of any national securities exchange, stock market or automated quotation service on
which our common stock is listed or quoted, the board of directors may from time to time in its
discretion amend or modify the 2010 Plan without the approval of the shareholders. The 2010 Plan
will terminate on March 1, 2020 or such earlier date as the board of directors may determine. No
termination of the 2010 Plan will affect outstanding awards.
Federal Income Tax Consequences. Upon the grant of an award (other than an award of
restricted stock that contains no restrictions) under the 2010 Plan, the grantee does not realize
any taxable income and no deduction is available for us. Any cash received by a grantee in
connection with the exercise of a stock appreciation right or performance unit, as well as the fair
market value of any shares received in connection with the exercise of a stock appreciation right
or a performance unit, is taxable as ordinary income to the grantee. Generally, upon exercise of
an option (other than an incentive stock option), the grantee will recognize taxable income and we
are entitled to a deduction at the time the grantee is taxed in the amount of the grantees taxable
income. In the case of an incentive stock option, the grantee incurs no income tax liability upon
exercise (other than possible alternative minimum tax liability), but we are generally not entitled
to a tax deduction. The fair market value of restricted stock in excess of the purchase price, if
any, is taxable to the grantee when the restrictions lapse. However, if the grantee is not
prohibited by the Compensation Committee from electing to be taxed on such value on the date of
grant and the grantee elects such tax treatment, the grantee is taxed on such amount on the date of
grant. We are generally entitled to a deduction at the time the grantee is taxed in the amount of
the grantees taxable income. The 2010 Plan contains provisions preventing any award from
constituting deferred compensation within the meaning of Section 409A of the Code.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE 2010 EQUITY
COMPENSATION PLAN.
PROPOSAL 3: RATIFICATION OF SELECTION OF REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee, a committee of the board of directors, has appointed Ernst & Young LLP to
serve as our independent registered public accountants for the fiscal year ending February 28,
2011, subject to ratification by the holders of our common stock. Our financial statements for the
fiscal year ended February 28, 2010 were certified by Ernst & Young LLP. Representatives of Ernst
& Young LLP are expected to attend the annual meeting with the opportunity to make a statement if
they desire to do so, and will be available to respond to appropriate questions.
26
If shareholders do not ratify the selection of Ernst & Young LLP as our independent registered
public accountants, or if prior to the 2010 annual meeting of shareholders Ernst & Young LLP ceases
to act as our independent registered public accountants, then the Audit Committee will reconsider
the selection of independent registered public accountants.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF ERNST &
YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.
MATTERS RELATING TO INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Fees Paid to Independent Registered Public Accountants
The following table sets forth the fees (including cost reimbursements) paid to Ernst & Young
LLP for the fiscal years ended February 28, 2010 and February 28, 2009, for various categories of
professional services they performed as our independent registered public accountants.
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|
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|
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Year ended February 28, |
|
|
|
2010 |
|
|
2009 |
|
Audit Fees (1) |
|
$ |
854,700 |
|
|
$ |
907,986 |
|
Tax Fees: |
|
|
|
|
|
|
|
|
Tax Consulting and Advisory Services |
|
|
44,550 |
|
|
|
22,064 |
|
|
|
|
|
|
|
|
Total Tax Fees |
|
|
44,550 |
|
|
|
22,064 |
|
All Other Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees |
|
$ |
899,250 |
|
|
$ |
930,050 |
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|
|
|
|
|
|
|
|
|
(1) |
|
Includes annual financial statement and internal controls audits and limited
quarterly review services, statutory audits of foreign subsidiaries and providing
consents for SEC filings and other services that are normally provided by the
independent registered public accountants in connection with statutory and regulatory
filings or engagements. |
Engagement of the Independent Registered Public Accountants and Approval of Services
During the fiscal years ended February 28, 2009 and 2010, prior to engaging the independent
registered public accountants to render the above services and pursuant to its charter, the Audit
Committee approved the engagement for each of the services and determined that the provision of
such services by the independent registered public accountants was compatible with the maintenance
of Ernst & Youngs independence in the conduct of its auditing services. Under its current
charter, it is the policy of the Audit Committee (or in certain instances, the chairman of the
Audit Committee) to pre-approve the retention of the independent registered public accountants for
any audit services and for any non-audit services, including tax services. No services were
performed during the fiscal year ended February 28, 2010, under the de minimis exception in Rule
2-01(c) (7)(i)(C) of Regulation S-X.
SHAREHOLDER PROPOSALS
Any of our shareholders wishing to have a proposal considered for inclusion in our 2011 proxy
solicitation materials must set forth such proposal in writing and file it with our corporate
secretary on or before the close of business on July 14, 2011 if we do not hold our annual meeting
more than 30 days earlier in 2011 than in 2010. However if, as we anticipate, we hold our 2011
annual meeting more than 30 days before December 17, 2011, then the deadline will be 10 days after
our first public announcement of the annual meeting date. The notice must provide certain specific
information as described in our by-laws. Copies of the by-laws are available to shareholders free
of charge upon request to our corporate secretary. Our board of directors will review any
shareholder proposals that are filed as required and, with the assistance of the companys
secretary, will determine whether such proposals meet applicable criteria for inclusion in our 2011
proxy solicitation materials or consideration at the 2011 annual meeting. In addition, we retain
discretion to vote proxies on matters of which we are not properly notified at our principal
executive offices on or before the close of business on the applicable 2011 shareholder proposal
filing deadline, and also retain that authority under certain other circumstances.
27
ANNUAL REPORT
A copy of our Annual Report on Form 10-K for the year ended February 28, 2010, was sent to all
of our shareholders of record as of October 27, 2010, and is available in the Investors section of
our website
(www.emmis.com). Certain shareholders who have previously given us their consent to receive
materials electronically did not receive a physical copy of the Annual Report and can access the
Annual Report from the Investors section of our website (www.emmis.com). The Annual Report is not
to be considered as proxy solicitation material.
OTHER MATTERS
Our board of directors knows of no other matters to be brought before this annual meeting.
However, if other matters should come before the meeting, it is the intention of each person named
in the proxy to vote such proxy in accordance with his or her judgment on such matters.
NON-INCORPORATION OF CERTAIN MATTERS
The Report of the Audit Committee and the information on the Emmis website do not constitute
soliciting material and should not be deemed filed or incorporated by reference into any other
Emmis filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent Emmis specifically incorporates the respective Report or website information therein by
reference.
EXPENSES OF SOLICITATION
The entire expense of soliciting proxies, including preparing, assembling, printing and
mailing the proxy form and the material used in the solicitation of proxies, will be paid by us.
Solicitations may be made in person or by mail, telephone, facsimile or other means of electronic
communication by our directors, officers and other employees, and none of those persons will
receive any additional compensation in connection with the solicitation. We also will request
record holders of shares beneficially owned by others to forward this proxy statement and related
materials to the beneficial owners of such shares, and will reimburse those record holders for
their reasonable expenses incurred in doing so.
HOUSEHOLDING OF PROXY MATERIALS
We have adopted a procedure permitted by Securities and Exchange Commission rules that is
commonly referred to as householding. Under this procedure, a single proxy statement and annual
report are delivered to multiple shareholders sharing an address unless we receive contrary
instructions from any shareholder at that address. We will continue to send a separate proxy card
to each shareholder of record. We have adopted this procedure because we believe it reduces the
volume of duplicate information shareholders receive and helps to reduce our printing and postage
costs. A number of brokers with account holders who are Emmis shareholders will be householding
our proxy materials and annual reports as well.
If, at any time, you no longer wish to participate in householding and would prefer to
receive a separate proxy statement and annual report, please notify your broker if you hold your
Emmis shares through a broker, or notify us directly if you are a shareholder of record by sending
us an e-mail at ir@emmis.com, calling us toll-free at 1-866-366-4703 or writing to us at Emmis
Communications Corporation, Investor Relations, One Emmis Plaza, 40 Monument Circle, Indianapolis,
Indiana 46204.
If you currently receive multiple copies of our proxy statement and annual report at your
address and would like to request householding of your communications, you should contact your
broker, or, if you are a record holder of Emmis shares, you should submit a written request to our
transfer agent, American Stock Transfer & Trust Company, Operations Center, 6201 15th
Avenue, Brooklyn, New York 11219.
28
Exhibit A
EMMIS COMMUNICATIONS CORPORATION
2010 EQUITY COMPENSATION PLAN
1. Purpose. The primary purposes of the Plan are to provide equity compensation in lieu of
cash compensation for employees, officers, directors and independent contractors of the Company and
its subsidiaries, to increase employee, officer, director and independent contractor stock
ownership opportunities and to improve the Companys ability to attract and retain a team of
outstanding employees, officers, directors and independent contractors.
2. Definitions. As used in the Plan, terms defined parenthetically immediately after their
use have the respective meanings provided by such definitions and the terms set forth below have
the following meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
Affiliate means, with respect to a specified person, a person that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under common control with,
the person specified.
Award means Options, shares of Restricted Stock, Stock Appreciation Rights or Performance
Units granted under the Plan.
Award Agreement has the meaning specified in Section 4(b)(vi).
Board means the Board of Directors of the Company.
Cause means, unless otherwise determined by the Committee, conviction of the Grantee of any
felony or other crime involving dishonesty, fraud or moral turpitude, or the Grantees habitual
neglect of his duties; provided, however, that if a Grantee is subject to an employment agreement
with the Company or a Subsidiary, or has a Personal Services Contract, cause shall mean any
breach of such agreement or contract by the Grantee giving the Company or a Subsidiary the right to
terminate the agreement or contract.
Change in Control means any of the following: (i) any person or group (other than a
Subsidiary or any employee benefit plan (or any related trust) of the Company or a Subsidiary, and
other than Jeffrey H. Smulyan or an Affiliate of Mr. Smulyan) becomes after the Effective Date the
beneficial owner of 35% or more of either the then outstanding Stock or the combined voting power
of the then outstanding voting securities of the Company entitled to vote in the election of
directors, except that (A) no such person or group shall be deemed to own beneficially any
securities acquired directly from the Company pursuant to a written agreement with the Company
unless such person or group subsequently becomes the beneficial owner of additional Stock or voting
securities of the Company other than pursuant to a written agreement with the Company, and (B) no
Change in Control shall be deemed to have occurred solely by reason of any such acquisition by a
corporation with respect to which, after such acquisition, more than 60% of both the then
outstanding common shares of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote in the election of directors are then
beneficially owned, directly or indirectly, by the persons who were the beneficial owners of the
Stock and voting securities of the Company immediately before such acquisition in substantially the
same proportion as their ownership, immediately before such acquisition, of the outstanding Stock
and the combined voting power of the then outstanding voting securities of the Company entitled to
vote in the election of directors; (ii) individuals who, as of the Effective Date, constitute the
Board (the Incumbent Directors) cease for any reason to constitute at least a majority of the
Board; provided that any individual who becomes a director after the Effective Date whose election,
or nomination for election by the Companys shareholders, was approved by a vote or written consent
of at least two-thirds of the directors then comprising the Incumbent Directors shall be considered
as though such individual were an Incumbent Director, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company (as such terms are used
in Rule 14a-11 under the Exchange Act); (iii) approval by the shareholders of the Company of (A) a
merger, reorganization or consolidation with respect to which the individuals and entities who were
the respective beneficial owners of the Stock and voting securities of the Company immediately
before such merger,
reorganization or consolidation do not, after such merger, reorganization or consolidation,
beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding
common shares and the combined voting power of the then outstanding voting securities entitled to
vote in the election of directors of the corporation resulting from such merger, reorganization or
consolidation, (B) a liquidation or dissolution of the Company or (C) the sale or other disposition
of all or substantially all of the assets of the Company; or (iv) such other event(s) or
circumstance(s) as are determined by the Committee to constitute a Change in Control.
Notwithstanding the foregoing provisions of this definition, a Change in Control of the Company
shall be deemed not to have occurred with respect to any Grantee, if such Grantee is, by written
agreement executed prior to such Change in Control, a participant on such Grantees own behalf in a
transaction in which the persons (or their Affiliates) with whom such Grantee has the written
agreement Acquire the Company (as defined below) and, pursuant to the written agreement, the
Grantee has an equity interest in the resulting entity or a right to acquire such an equity
interest.
A-1
For the purposes of this definition, Acquire the Company means the acquisition of beneficial
ownership by purchase, merger, or otherwise, of either more than 50% of the Stock (such percentage
to be computed in accordance with Rule 13d-3(d)(1)(i) of the SEC under the Exchange Act) or
substantially all of the assets of the Company or its successors; person means such term as used
in Rule 13d-5 of the SEC under the Exchange Act; beneficial owner means such term as defined in
Rule 13d-3 of the SEC under the Exchange Act; and group means such term as defined in Section
13(d) of the Exchange Act.
Class A Common Stock means the Class A Common Stock of the Company, par value $.01 per
share.
Class B Common Stock means the Class B Common Stock of the Company, par value $.01 per
share.
Code means the Internal Revenue Code of 1986, as amended, and regulations and rulings
thereunder. References to a particular section of the Code shall include references to successor
provisions.
Committee means the Compensation Committee of the Board or such other committee or
subcommittee appointed by the Board or the Compensation Committee.
Company means Emmis Communications Corporation, an Indiana corporation.
Disability means, with respect to the exercise of an incentive stock option after
Termination of Employment, a disability within the meaning of Section 22(e)(3) of the Code, and for
all other purposes, a mental or physical condition which, in the opinion of the Committee, renders
a Grantee unable or incompetent to carry out the job responsibilities which such Grantee held or
the tasks to which such Grantee was assigned at the time disability was incurred, and which is
expected to be permanent or for an indefinite duration.
Effective Date means March 1, 2010.
Eligible Transferee has the meaning specified in Section 12(b).
Exchange Act means the Securities Exchange Act of 1934, as amended. References to a
particular section of, or rule under, the Exchange Act shall include references to successor
provisions.
Fair Market Value of any security of the Company means, as of any applicable date: (i) if
the security is listed for trading on a national securities exchange or on the NASDAQ Stock Market,
the closing price of the security as reported by such exchange or market on such date, or if no
reported sales occurred on such date, on the first preceding date on which a reported sale of the
security shall have occurred, or (ii) if the security is not listed for trading on a national
securities exchange or on the NASDAQ Stock Market, the fair market value of the security as
determined by the Committee using the reasonable application of a reasonable valuation method.
Family Member of a Grantee means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law of the Grantee, including adoptive
relationships, any person sharing the Grantees household (other than a tenant or employee), a
trust in which these persons have more than fifty percent (50%) of the beneficial
interest, a foundation in which these persons (or the Grantee) control the management of assets,
and any other entity in which these persons (or the Grantee) own more than fifty percent (50%) of
the voting interests.
A-2
Grant Date means the date of grant of an Award determined in accordance with Section 6.
Grantee means an individual or Personal Service Corporation that has been granted an Award.
Incentive Stock Option means an Award under Section 7(b).
including means including, without limitation.
Measuring Period has the meaning specified in Section 10(a)(i)(B).
Option means an Award under Section 7.
Option Price means the per share purchase price of (i) Stock subject to an Option or (ii)
Restricted Stock subject to an Option.
Parent means any corporation, partnership or limited liability company (other than the
Company) in an unbroken chain of corporations, partnerships or limited liability companies ending
with the Company, if at the time of the granting of an Award under the Plan, each of such
corporations, partnerships or limited liability companies other than the Company owns stock,
general partnership interests or membership interests, as the case may be, possessing a majority of
the total combined voting power of all classes of stock, general partnership interests or
membership interests, as the case may be (whether at all times or only so long as no senior class
of securities has such voting power by reason of any contingency), in one of the other
corporations, partnerships or limited liability companies in such chain.
Performance Goals has the meaning specified in Section 10(a)(i).
Performance Percentage has the meaning specified in Section 10(a)(i)(C).
Performance Units means units established by the Committee for purposes of granting an Award
under Section 10.
Personal Services Contract means any written contract or agreement pursuant to which a
corporation, partnership, limited liability company or other entity is to provide to the Company or
a Subsidiary the services of one or more individuals.
Personal Service Corporation means a corporation, partnership, limited liability company or
other entity that has a Personal Services Contract in effect.
Plan means the Emmis Communications Corporation 2010 Equity Compensation Plan.
Prior Plans means the Emmis Communications Corporation 2004 Equity Compensation Plan and any
Prior Plans as defined in the Emmis Communications Corporation 2004 Equity Compensation Plan.
Restricted Stock means Stock awarded pursuant to Section 8.
SEC means the Securities and Exchange Commission.
Stock means the Class A Common Stock and the Class B Common Stock.
Stock Appreciation Rights means Awards under Section 9.
A-3
Subsidiary means any corporation, partnership or limited liability company (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at the time of the
granting of an Award under the
Plan, each of the corporations, partnerships or limited liability companies other than the last
corporation, partnership or limited liability company in the unbroken chain owns stock, general
partnership interests or membership interests, as the case may be, possessing a majority of the
total combined voting power of all classes of stock, general partnership interests or membership
interests, as the case may be (whether at all times or only so long as no senior class of
securities has such voting power by reason of any contingency), in one of the other corporations,
partnerships or limited liability companies in such chain.
Termination of Employment means a cessation of a business relationship with the Company or
its Subsidiaries which occurs (a) with respect to an employee of the Company or a Subsidiary, the
first day an individual is for any reason entitled to severance payments under the Companys or any
Subsidiarys personnel policies or is no longer employed by the Company or any of its Subsidiaries,
or, with respect to an individual who is an employee of a corporation constituting a Subsidiary,
the first day such corporation is no longer a Subsidiary, (b) with respect to a director of the
Company, the first day he or she ceases to be a director of the Company, (c) with respect to an
independent contractor of the Company or a Subsidiary, the first day the independent contractor is
no longer providing, and is not expected by the Company to provide, services to the Company or a
subsidiary, or, (d) with respect to a Personal Service Corporation, the first day after the
Personal Service Contract has expired or terminated and is not expected by the Company to be
extended or renewed. Notwithstanding the foregoing, a Termination of Employment pursuant to any of
clauses (a) through (d) shall not be deemed to occur with respect to any Options that are vested on
the date on which a Termination of Employment would otherwise be deemed to have occurred so long as
a Grantee continues to provide services to the Company or a Subsidiary in one or more of the
capacities specified in clauses (a) through (d) above.
3. Scope of the Plan.
(a) Number of Shares. Subject to Section 3(c), an aggregate of two million (2,000,000) shares
of Stock plus the number of shares of Stock described in Section 3(d) is hereby made available and
is reserved for delivery Subject to the foregoing limit, shares of Stock held as treasury shares
may also be used for or in connection with Awards. Performance units issued under the Plan shall
only reduce the number of shares available for grant or issuance under the Plan to the extent that
the Performance Unit. Award is paid in stock or the Performance Units are identified with specific
Options, Restricted Stock or Stock Appreciation Rights. No more than one million (1,000,000)
shares of Class B common stock shall be available for grant and issuance under the Plan from the
two million (2,000,000) additional shares of stock authorized for delivery under the Plan. Awards
of or pertaining to shares of Class B Common Stock may be granted only to Jeffrey H. Smulyan or an
Affiliate of Smulyan (as defined in the Companys Second Amended and Restated Articles of
Incorporation, as amended from time to time). Issuance of either Class A Common Stock or Class B
Common Stock as or pursuant to an Award shall reduce the shares available for grant and issuance
under the Plan.
(b) Limit on Awards. Subject to Section 3(a) as to the maximum number of shares of Stock
available for delivery in connection with Awards and Sections 3(c) and 26, the maximum number of
Awards that may be granted to each Grantee in each calendar year during any part of which the Plan
is in effect shall be as follows:
|
(i) |
|
With respect to Stock subject to Options, 300,000 shares; |
|
|
(ii) |
|
With respect to Stock subject to Stock Appreciation Rights, 300,000 shares; |
|
(iii) |
|
With respect to Restricted Stock (other than Restricted Stock issued in
payment of an Award of Performance Units or issued in lieu of cash compensation under a
stock compensation-type program), that number of shares of Stock whose value equals the
lesser of (A) 500% of such Grantees base salary and bonus for such year or (B)
$5,000,000 (based on the Fair Market Value of Stock on the date the award is granted,
not the date the Award vests or is paid); |
|
(iv) |
|
With respect to Awards of Performance Units, that number of shares of Stock
whose value equals the lesser of (A) 500% of such Grantees base salary and bonus for
such year or (B) $5,000,000 (based on the Fair Market Value of Stock on the date the
Award is granted, not the date the Award is earned or paid). |
A-4
(c) Re-Use of Shares. If and to the extent an Award or any portion thereof shall expire or
terminate for any reason without having been exercised in full or shall be forfeited, shares of
Stock available for such Award or any portion thereof (including restricted stock) and stock
appreciation rights associated with such Award shall become available for other Awards. If a
Grantee pays all or part of the exercise price or tax withholding, if any, associated with an Award
by the transfer of Stock or the withholding or surrender (including by attestation) of all or part
of an Award (including the Award being exercised), such Stock will also be available for grant
under this Plan, without reducing the number of shares of Stock available in any calendar year for
grant of Awards.
(d) Addition of Stock from Prior Plans. In addition to the shares of Stock reserved for
issuance under Section 3(a), the number of shares of Stock which were reserved for issuance under
any of the Prior Plans but which are not subject to any outstanding awards under such plan as of
the Effective Date shall be available for issuance under Awards granted under this Plan. Further,
after the Effective Date, if any shares of Stock subject to awards granted under any Prior Plans
would again become available for new grants under the terms of such plan if such plan were still in
effect, then those shares of Stock will be available for the purpose of granting Awards under this
Plan, thereby increasing the number of shares of Stock available for issuance under this Plan as
determined under the first sentence of Section 3(a). Any such shares of Stock will not be
available for future awards under the terms of the Prior Plans. If this Plan is approved or
ratified by the shareholders of the Company in accordance with Section 26, the Prior Plans are
terminated as of the Effective Date for purposes of granting additional awards, although awards
outstanding under such Prior Plans remain in effect in accordance with such Prior Plans and any
applicable award agreements.
4. Administration.
(a) General. The Plan shall be administered by the Committee, which shall consist of persons
who are appointed by the Board. Notwithstanding the requirements contained in the immediately
preceding sentence, the Board or the Committee may, in its discretion, delegate to a committee or
subcommittee of the Board or the Committee any or all of the authority and responsibility of the
Committee. Such other committee or subcommittee may consist of two or more directors who may, but
need not, be officers or employees of the Company or of any of its Subsidiaries. To the extent
that the Board or the Committee has delegated to such other committee or subcommittee the authority
and responsibility of the Committee pursuant to the foregoing, all references to the Committee in
the Plan shall be to such other committee or subcommittee. Notwithstanding the foregoing, the
Board shall at all times have the right to make Awards, administer the Plan, and otherwise exercise
the authority of the Committee under the Plan, and to the extent the Board does so, references to
the Committee in the Plan shall be to the Board.
(b) Authority of the Committee. The Committee shall have full power and final authority, in
its discretion, but subject to the express provisions of the Plan, as follows: (i) to select
Grantees, (ii) to grant Awards, (iii) to determine (A) when Awards may be granted, (B) whether or
not specific Stock Appreciation Rights shall be identified with a specific Option, specific shares
of Restricted Stock, or specific Performance Units and, if so, whether they shall be exercisable
cumulatively with, or alternatively to, such Option, shares of Restricted Stock, or Performance
Units, and (C) whether or not specific Performance Units shall be identified with a specific
Option, specific shares of Restricted Stock, or specific Stock Appreciation Rights under the Plan
or any Prior Plan and, if so, whether they shall be exercisable cumulatively with, or alternatively
to, such Option, shares of Restricted Stock, or Stock Appreciation Rights, (iv) to interpret the
Plan and to make all determinations necessary or advisable for the administration of the Plan, (v)
to prescribe, amend, and rescind rules relating to the Plan, including rules with respect to the
exercisability and nonforfeitability of Awards upon the Termination of Employment of a Grantee,
(vi) to determine the terms and provisions of any written agreement by which an Award may be
granted (Award Agreements) and, to modify any such Award Agreement at any time, with the consent
of the Grantee when required, (vii) to accelerate the exercisability of, and to accelerate or waive
any or all of the restrictions and conditions applicable to, any Award, (viii) to make such
adjustments or modifications to Awards to Grantees working outside the United States as are
necessary and advisable to fulfill the purposes of the Plan, (ix) to impose such additional
conditions, restrictions, and limitations upon the grant, exercise or retention of Awards as the
Committee may, before or concurrently with the grant thereof, deem appropriate, including requiring
simultaneous exercise of related identified Options, Stock Appreciation Rights, and Performance
Units and limiting the percentage of Options, Stock Appreciation Rights, and Performance Units
which may from time to time be
exercised by a Grantee, and (x) to require Awards to be transferred to a non-grantor trust for the
benefit of the Grantee.
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(c) Determinations of the Committee; No Liability. The determination of the Committee on all
matters relating to the Plan or any Award Agreement shall be conclusive and final. No member of
the Committee shall be liable for any action or determination made in good faith with respect to
the Plan or any Award.
5. Eligibility. Awards may be granted to or for the benefit of any current or former
employee, officer, director, Personal Service Corporation, or independent contractor of the Company
or its Subsidiaries; provided, however, that Awards of Options, Restricted Stock, or Stock
Appreciation Rights may only be granted to persons with respect to whom the Company is an eligible
issuer as defined in Treas. Reg. §1.409A-1(b)(5)(iii)(E). In selecting the Grantees to whom
Awards may be granted, as well as in determining the number of shares of Stock subject to and the
other terms and conditions applicable to each Award, the Committee shall take into consideration
such factors as it deems relevant in promoting the purposes of the Plan.
6. General Terms and Conditions of Grants.
(a) Grant Date. The Grant Date of an Award shall be the date on which the Committee grants
the Award.
(b) Maximum Term. The term of each Award (subject to Section 7(b) with respect to Incentive
Stock Options) shall be a period of not more than ten (10) years from the Grant Date, and shall be
subject to earlier termination as herein provided.
(c) Tandem Awards. A Grantee may, if otherwise eligible, be granted additional Awards in any
combination.
7. Options.
(a) Grant of Options and Option Price. The Committee may grant an Option containing such
terms, conditions and restrictions as the Committee deems appropriate; provided, however, that the
Option Price of any Option shall not be less than the Fair Market Value of the Stock on the Grant
Date.
(b) Grant of Incentive Stock Options. Without limiting the generality of the foregoing, the
Committee may designate that an Option shall be made subject to restrictions that permit it to
qualify as an incentive stock option under the requirements of Section 422 of the Code.
Notwithstanding the foregoing and Section 4(b)(vi), the Committee may, without the consent of the
Grantee, at any time before the exercise of an Option (whether or not an Incentive Stock Option),
take any action necessary to prevent such option from being treated as an Incentive Stock Option.
(c) Exercise of Options. Each Option shall be exercised, in whole or in part, by delivery to
the Company of written notice of intent to purchase a specific number of shares of Stock subject to
the Option. The Option Price of any shares of Stock or shares of restricted stock as to which an
Option shall be exercised shall be paid in full at the time of the exercise. Payment may, at the
election of the Grantee, be made in any one or any combination of the following: (i) cash; (ii)
shares of Stock that have been held by the Grantee for at least six months, each valued at the Fair
Market Value on the date of exercise (including through an attestation procedure); (iii) with the
approval of the Committee, shares of restricted stock that have been held by the Grantee for at
least six months, each valued at the Fair Market Value of a share of Stock on the date of exercise;
(iv) by waiver of compensation due or accrued to the Grantee for services rendered; (v) with the
consent of the Committee, by tender of property; (vi) provided that a public market for the Stock
exists: (A) through a same day sale commitment from the Grantee and a broker-dealer that is a
member of the National Association of Securities Dealers (an NASD Dealer) whereby the Grantee
irrevocably elects to exercise the Option and to sell a portion of the Stock so purchased in order
to pay for the Option, and whereby the NASD Dealer irrevocably commits upon receipt of such Stock
to forward the Option Price directly to the Company; or (B) through a margin commitment from the
Grantee and an NASD Dealer whereby the Grantee irrevocably elects to exercise the Option and to
pledge the Stock so purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Option Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Stock to forward the Option Price directly to the Company; or (C) through any
other procedure pursuant to which the Grantee delivers to the Company a properly executed
exercise notice and instructions to deliver the resulting Stock to a stock broker that are intended
to satisfy the provisions of Section 220.3(e)(4) of Regulation T issued by the Board of Governors
of the Federal Reserve System as in effect from time to time; (vii) by the surrender of all or part
of the Option being exercised, or (viii) such other payment method or procedure as the Committee
may approve.
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(f) Use of Restricted Stock to Pay Option Price. If restricted stock (Tendered Restricted
Stock) is used to pay the Option Price for Stock subject to an Option, then a number of shares of
Stock acquired on exercise of the Option equal to the number of shares of Tendered Restricted Stock
shall, unless the Committee provides otherwise, be subject to the same restrictions as the Tendered
Restricted Stock, determined as of the date of exercise of the Option. If the Option Price for
restricted stock subject to an Option is paid with Tendered Restricted Stock, and if the Committee
determines that the restricted stock acquired on exercise of the Option is subject to restrictions
that cause it to have a greater risk of forfeiture than the Tendered Restricted Stock, then
notwithstanding the preceding sentence, all the restricted stock acquired on exercise of the Option
shall, unless the Committee provides otherwise, be subject to such restrictions.
8. Restricted Stock.
(a) Grant of Shares of Restricted Stock. Before the grant of any shares of Restricted Stock,
the Committee shall determine, in its discretion: (i) the per share purchase price of such shares
(which may be zero), and (ii) the restrictions, if any, applicable to such grant; provided,
however, that if the per share purchase price is zero, the consideration for the shares shall be
deemed to be prior service to the Company or its Subsidiaries unless the Committee specifies other
consideration.
(b) Exercise. Payment of the purchase price (if greater than zero) for shares of Restricted
Stock shall be made in full by the Grantee before the delivery of such shares. Such payment may,
at the election of the Grantee and unless the Committee otherwise provides in the Award Agreement,
be made in any one or any combination of the following: (i) cash, (ii) Stock valued at its Fair
Market Value on the date of payment, or (iii) shares of Restricted Stock, each valued at the Fair
Market Value of a share of Stock on the date of payment; provided that, if the purchase price for
Restricted Stock (New Restricted Stock) is paid with shares of restricted stock (Old Restricted
Stock), the restrictions applicable to the New Restricted Stock shall be the same as if the
Grantee had paid for the New Restricted Stock in cash unless, in the judgment of the Committee, the
Old Restricted Stock was subject to a greater risk of forfeiture, in which case a number of shares
of New Restricted Stock equal to the number of shares of Old Restricted Stock tendered in payment
for New Restricted Stock shall, unless the Committee provides otherwise, be subject to the same
restrictions as the Old Restricted Stock, determined immediately before such payment.
(c) Forfeiture. The Committee may, but need not, provide that all or any portion of a
Grantees Award of Restricted Stock shall be forfeited: (i) upon the Grantees Termination of
Employment within a specified time period after the Grant Date, (ii) if the Company or the Grantee
does not achieve specified performance goals within a specified time period after the Grant Date
and before the Grantees Termination of Employment, or (iii) on such other event(s) or
circumstance(s) as the Committee deems appropriate.
(d) Effect of Forfeiture. If a share of Restricted Stock is forfeited, then: (i) the Grantee
shall be deemed to have resold such share of Restricted Stock to the Company at the lesser of (A)
the purchase price paid by the Grantee (such purchase price shall be deemed to be zero dollars ($0)
if no purchase price was paid) or (B) the Fair Market Value of a share of Stock on the date of such
forfeiture; (ii) the Company shall pay to the Grantee the amount determined under clause (i) of
this sentence as soon as is administratively practical; and (iii) such share of Restricted Stock
shall cease to be outstanding, and shall no longer confer on the Grantee thereof any rights as a
shareholder of the Company, from and after the date of the Companys tender of the payment
specified in clause (ii) of this sentence, whether or not such tender is accepted by the Grantee.
(e) Certificates. Any share of Restricted Stock which is subject to forfeiture shall be held
(together with a stock power executed in blank by the Grantee if requested by the Committee) in
escrow by the Secretary of the Company until such shares become nonforfeitable or are forfeited and
shall, if requested by the Committee, bear an appropriate legend specifying that such share is
non-transferable and subject to the restrictions set forth in the Plan. If any shares of
Restricted Stock become nonforfeitable, the Company shall cause such shares to be issued or
reissued without such legend.
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9. Stock Appreciation Rights.
(a) Grant of Stock Appreciation Rights. When granted, Stock Appreciation Rights may, but need
not, be identified with shares of Stock subject to a specific Option, specific shares of Restricted
Stock, or specific Performance Units of the Grantee (including any Option, shares of Restricted
Stock, or Performance Units granted on or before the Grant Date of the Stock Appreciation Rights)
in a number equal to or different from the number of Stock Appreciation Rights so granted. If
Stock Appreciation Rights are identified with shares of Stock subject to an Option, shares of
Restricted Stock, or Performance Units, then, unless otherwise provided in the applicable Award
Agreement, the Grantees associated Stock Appreciation Rights shall terminate upon (i) the
expiration, termination, forfeiture, or cancellation of such Option, shares of Restricted Stock, or
Performance Units, (ii) the exercise of such Option or Performance Units, or (iii) the
nonforfeitability of such shares of Restricted Stock.
(b) Exercise of Stock Appreciation Rights. Each Stock Appreciation Right shall be exercisable
to the extent the Option with which it is identified, if any, may be exercised, to the extent the
Restricted Stock with which it is identified, if any, is nonforfeitable, or to the extent the
Performance Unit with which it is identified, if any, may be exercised, unless otherwise provided
by the Committee. Stock Appreciation Rights shall be exercised by delivery to the Company of
written notice of intent to exercise a specific number of Stock Appreciation Rights. Unless
otherwise provided in the applicable Award Agreement, the exercise of Stock Appreciation Rights
which are identified with shares subject to an Option, shares of Restricted Stock, or Performance
Units shall result in the cancellation or forfeiture of such Option, shares of Restricted Stock, or
Performance Units, as the case may be, to the extent of such exercise.
(c) Benefit for Stock Appreciation Rights. The benefit for each Stock Appreciation Right
exercised shall be equal to the difference between: (i) the Fair Market Value of a share of Stock
on the date of such exercise and (ii) an amount equal to: (A) for any Stock Appreciation Right
identified with an Option, the Option Price of such Option, unless the Committee in the grant of
the Stock Appreciation Right specified a higher amount, or (B) for any other Stock Appreciation
Right, the Fair Market Value of a share of Stock on the Grant Date of such Stock Appreciation
Right, unless the Committee in the grant of the Stock Appreciation Right specified a higher amount;
provided that the Committee, in its discretion, may provide that the benefit for any Stock
Appreciation Right shall not exceed a stated percentage (which may exceed 100%) of the Fair Market
Value of a share of Stock on such Grant Date. The benefit upon the exercise of a Stock
Appreciation Right shall be payable in cash, except that the Committee, with respect to any
particular exercise, may, in its discretion, pay benefits wholly or partly in Stock.
10. Performance Units.
(a) Grant of Performance Units.
(i) In connection with the grant of any Performance Unit, the Committee shall: (A)
determine performance goals (Performance Goals) applicable to such grant, (B) designate a
period for the measurement of the extent to which Performance Goals are attained, which period
may begin prior to the Grant Date (the Measuring Period), and (C) assign a Performance
Percentage to each level of attainment of Performance Goals during the Measuring Period, with
the percentage applicable to minimum attainment being zero percent (0%) and the percentage
applicable to maximum attainment (which may exceed 100%) to be determined by the Committee from
time to time.
(ii) In establishing Performance Goals, the Committee may consider such performance factor
or factors as it deems appropriate, including share price, revenue, net revenue, EBITDA,
Adjusted EBITDA; EBITDA before certain charges, net income EBITDA, Adjusted EBITDA, EBITDA
before certain changes, cash flow (whether pre-tax or after tax), growth in net income or cash
flow, earnings per share, growth of earnings per share, market share, market penetration, return
on equity, return on assets, return on capital; or Aribtron or other ratings. The Performance
Goals may include minimum and optimum objectives, a single set of objectives or multiple sets of
objectives. The Committee may, at any time, in its discretion, modify Performance Goals in
order to facilitate their attainment for any reason, including recognition of unusual or
nonrecurring events affecting the Company or a Subsidiary or changes in applicable laws,
regulations or accounting principles. If a
Grantee is promoted, demoted, or transferred to a different business unit of the Company during
a performance period, the Committee may adjust or eliminate the Performance Goals as it deems
appropriate.
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(b) Benefit of Performance Units. Except as otherwise provided in Section 13, the benefit for
each Performance Unit shall be an amount equal to the product of (i) the Fair Market Value of a
Share of Stock on the Grant Date of the Performance Unit multiplied by (ii) the Performance
Percentage attained during the Measuring Period for such Performance Unit.
(c) Form and Timing of Payment. As soon as practicable following the completion of the
Measuring Period applicable to outstanding Performance units, the Committee will certify in writing
the extent to which the applicable Performance Goals have been attained and the resulting final
value of the Award earned by each Grantee of Performance Units for that Measuring Period. Payment
of the benefit for a Grantees Performance Units shall be made by the fifteenth (15th)
day of the third (3rd) month following the end of the calendar year or Companys fiscal
year (whichever ends later) in which the Measuring Period ends for such Performance Units. The
benefit shall be payable in cash, except that the Committee, with respect to any particular Award
of Performance Units, may, in its discretion, pay the benefit wholly or partly in Stock. The
number of shares of Stock payable in lieu of cash shall be determined by valuing the Stock at its
Fair Market Value on the business day next preceding the date on which such benefit is to be paid.
(d) Termination of Employment. If a Grantee has a Termination of Employment for any reason
prior to the end of the Measuring Period with respect to an Award of Performance Units, the Grantee
shall forfeit any and all right to payment of any benefit with respect to such Performance Units.
11. No Employment Rights. Neither the establishment of the Plan, nor the granting of any Award
shall be construed to (i) give any Grantee the right to remain employed by or affiliated with the
Company or any of its Subsidiaries or to any benefits not specifically provided by the Award
Agreement, or (ii) in any manner modify the right of the Company or any of its Subsidiaries to
modify, amend, or terminate this Plan or any of its employee benefit plans. No obligation of the
Company or any of its Subsidiaries as to the length of any Grantees employment by or affiliation
with the Company or any Subsidiary shall be implied by the terms of the Plan, any grant of an Award
hereunder or any Award Agreement. The Company and its Subsidiaries reserve the same rights to
terminate employment of or sever its relationship with any Grantee as existed before the Grant
Date.
12. Non-Transferability.
(a) Except as permitted by the Committee in writing or as provided in the applicable Award
Agreement, each Award (other than Restricted Stock) granted hereunder shall by its terms not be
assignable or transferable other than by will or the laws of descent and distribution and may be
exercised, during the Grantees lifetime, only by the Grantee. Each share of Restricted Stock
shall be non-transferable until such share becomes nonforfeitable.
(b) Notwithstanding the provisions of subsection (a), a Grantee may transfer an award through
a gift or a domestic relations order, otherwise than for value, to a Family Member (any recipient
in such a transfer, an Eligible Transferee). For purposes of this subsection (b), the following
transactions are not transfers for value: (i) a transfer under a domestic relations order in
settlement of marital property rights; and (ii) a transfer to an entity in which more than fifty
percent (50%) of the voting interests are owned by Family Members (or the Grantee) in exchange for
an interest in the entity. An Award that is transferred to a Family Member shall not be
transferable by such Family Member, except for (i) a transfer to another Family Member of the
original Grantee, or (ii) a transfer by such Family Members will or by the laws of descent and
distribution upon the death of the Family Member.
(c) In the event that a Grantee transfers an Award to an Eligible Transferee under this
Section 12, the Award transferred to the Eligible Transferee must be exercised by such Eligible
Transferee and, in the event of the death of such Eligible Transferee, by such Eligible
Transferees executor or administrator only in the same manner, to the same extent and under the
same circumstances (including, without limitation, the time period within which the Award must be
exercised) as the Grantee or, in the event of the Grantees death, the executor or administrator of
the Grantees estate, could have exercised such Award. The Grantee, or in the event of the
Grantees death, the Grantees estate, shall remain liable for all federal, state, city and local
taxes applicable upon the exercise of an Award by an Eligible Transferee.
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13. Effects of a Change in Control. The terms and provisions of this Section 13 shall apply
upon the occurrence of a Change in Control only if the Committee shall have determined that this
Section 13 shall be applicable. The Committee shall give written notice to the Grantees of such a
determination and the date on which such determination is made. After the occurrence of a Change
in Control following the date on which such determination is made, then:
(a) General. Subject to Section 17 but notwithstanding Section 11 or any other provisions of
the Plan: (i) all Options, Stock Appreciation Rights, and Performance Units granted under the Plan
shall immediately be fully exercisable; and (ii) all shares of Restricted Stock shall immediately
be nonforfeitable and freely transferable.
(b) Benefit. The benefit, if any, payable with respect to any Performance Unit for which the
Measuring Period has not ended shall be equal to the product of: (i) the Fair Market Value of a
share of Stock on the Grant Date of the Performance Unit multiplied successively by each of the
following; (ii) a fraction, the numerator of which is the number of months (including as a whole
month any partial month) that have elapsed since the beginning of such Measuring Period until the
date of such Change in Control, and the denominator of which is the number of months (including as
a whole month any partial month) in the Measuring Period; and (iii) a percentage equal to the
greater of (A) the target percentage, if any, specified in the applicable Award Agreement, or (B)
the maximum percentage, if any, that would be earned under the terms of the applicable Award
Agreement assuming that such rate at which the performance goals have been achieved as of the date
of the Change in Control would continue until the end of the Measuring Period.
14. Notification under Section 83(b). If the Committee has not, on the Grant Date or any
later date, prohibited such Grantee from making the following election, and a Grantee shall, in
connection with the exercise of any Option, or the grant of any share of Restricted Stock, make the
election permitted under Section 83(b) of the Code (i.e., an election to include in such Grantees
gross income in the year of transfer the amounts specified in Section 83(b) of the Code), such
Grantee shall notify the Company of such election within 10 days of filing notice of the election
with the Internal Revenue Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Section 83(b) of the Code.
15. Mandatory Withholding Taxes. Whenever under the Plan, cash or shares of Stock are to be
delivered upon exercise or payment of an Award or upon a share of Restricted Stock becoming
nonforfeitable, or any other event with respect to rights and benefits hereunder, the Company shall
be entitled to require as a condition of delivery (i) that the Grantee remit an amount sufficient
to satisfy all federal, state and local withholding tax requirements related thereto, (ii) the
withholding of such sums from compensation otherwise due to the Grantee or from any shares of Stock
due to the Grantee under the Plan, or (iii) any combination of the foregoing.
16. Elective Share Withholding.
(a) Election by Grantee. Subject to Section 16(b) and unless prohibited by the Award
Agreement, a Grantee may elect the withholding (Share Withholding) by the Company of a portion of
the shares of Stock otherwise deliverable to such Grantee upon the exercise or payment of an Award
or upon a share of Restricted Stocks becoming nonforfeitable (each a Taxable Event) having a
Fair Market Value equal to: (i) the minimum amount necessary to satisfy required federal, state,
or local withholding tax liability attributable to the Taxable Event; or (ii) with the Committees
prior approval, a greater amount, not to exceed the estimated total amount of such Grantees tax
liability with respect to the Taxable Event.
(b) Restrictions. Each Share Withholding election by a Grantee shall be made in writing in a
form acceptable to the Committee and shall be subject to the following restrictions: (i) a
Grantees right to make such an election shall be subject to the Committees right to revoke such
right at any time before the Grantees election if the Committee has reserved the right to do so in
the Award Agreement; (ii) the Grantees election must be made before the date (the Tax Date) on
which the amount of tax to be withheld is determined; (iii) the Grantees election shall be
irrevocable by the Grantee; and (iv) in the event that the Tax Date is deferred until six months
after the delivery of Stock under Section 83(b) of the Code, the Grantee shall receive the full
amount of Stock with respect to which the exercise occurs, but such Grantee shall be
unconditionally obligated to tender back to the Company the proper number of shares of Stock on the
Tax Date.
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17. Termination of Employment.
(a) Restricted Stock. Except as otherwise provided by the Committee on or after the Grant
Date, a Grantees shares of Restricted Stock that are forfeitable shall be forfeited upon the
Grantees Termination of Employment.
(b) Options and Stock Appreciation Rights. If a Grantee has a Termination of Employment for
Cause, any unexercised Option or Stock Appreciation Right shall terminate upon the Grantees
Termination of Employment. If the Grantee has a Termination of Employment for any reason other
than Cause, then any unexercised Option or Stock Appreciation Right, to the extent exercisable on
the date of the Grantees Termination of Employment, may be exercised in whole or in part, not
later than the later of (A) the 180th day following the date of the Grantees Termination of
Employment or (B) the 30th day following the last day for which the Grantee is entitled to
severance payments under the Companys or any Subsidiarys personnel policies, except that (i) if
the Grantees Termination of Employment is caused by the death of the Grantee, then any unexercised
Option or Stock Appreciation Right shall vest on the date of the Grantees death, and may be
exercised, in whole or in part, at any time within one year after the Grantees death by the
Grantees personal representative or by the person to whom the Option or Stock Appreciation Right
is transferred by will or the applicable laws of descent and distribution; (ii) if the Grantees
Termination of Employment is on account of the Disability of the Grantee, then any unexercised
Option or Stock Appreciation Right shall vest on the date of the Termination of Employment and may
be exercised, in whole or in part, as if such Termination of Employment had not occurred; provided
that, if the Grantee dies after such Termination of Employment, such Option or Stock Appreciation
Right may be exercised, to the extent exercisable on the date of the Grantees death, by the
deceased Grantees personal representative or by the person to whom the Option or Stock
Appreciation Right is transferred by will or the applicable laws of descent and distribution within
one year after the Grantees death, and (iii) if the Grantees Termination of Employment results
from a sale of the station, magazine or other property at which the Grantee is employed or to which
the Grantee provides services, then any unvested Option that was scheduled to vest within one year
after the Termination of Employment shall vest on the date of such Termination of Employment.
(c) Exceptions at the Discretion of the Committee. If the Grantee has a Termination of
Employment for any reason other than Cause, the Committee may provide on or after the Grant Date
(including after a Grantees Termination of Employment, but before the expiration of the term
specified in the applicable Award Agreement) for one or more of the following: (i) that any
unexercised Option or Stock Appreciation Right, to the extent exercisable on the date of such
Termination of Employment, may be exercised, in whole or in part, at any time within a period
specified by the Committee after the date of such Termination of Employment; (ii) that any Option
or Stock Appreciation Right that is not exercisable on or before the date of such Termination of
Employment (A) will continue to become exercisable, as if such Termination of Employment had not
occurred, after such date for a period specified by the Committee and (B) to the extent such Option
or Stock Appreciation Right has become exercisable during such period, may be exercised, in whole
or in part, at or before the end of such period; (iii) that any share of Restricted Stock that has
not become nonforfeitable on or before the date of such Termination of Employment may become
nonforfeitable as if such Termination of Employment had not occurred after such date for a period
specified by the Committee; or (iv) that if the Grantee dies after such Termination of Employment
and before the expiration of the period specified under clause (i) or (ii) of this Section 17(c),
such Option or Stock Appreciation Right may be exercised by the deceased Grantees personal
representative or by the person to whom the Option or Stock Appreciation Right is transferred by
will or the applicable laws of descent and distribution within the specified period after the
Grantees Termination of Employment, or, if later, within 180 days after the Grantees death;
provided that if such rights are granted, the Committee may thereafter take actions to limit such
rights, but only if such limitation is consented to by the Grantee.
(d) Maximum Extension. Notwithstanding the foregoing, no Award shall be exercisable beyond
the lesser of ten (10) years from the Grant Date or the maximum term permitted under the original
Award Agreement.
18. Substituted Awards. If the Committee cancels any Award (granted under this Plan, any
prior equity incentive plan(s) of the Company, or any plan of any entity acquired by the Company or
any of its Subsidiaries), and a new Award is substituted for the canceled Award, then the Committee
may, in its discretion, determine the terms and conditions of the new Award,; provided that (i) the
new Award shall not contain any terms or conditions that would cause the Award to constitute
deferred compensation under Code Section 409A, and (ii) no Award shall be
canceled without the consent of the Grantee if the terms and conditions of the new Award to be
substituted are not at least as favorable as the terms and conditions of the Award to be canceled.
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19. Securities Law Matters.
(a) Legend and Investment Representation. If the Committee deems necessary to comply with the
Securities Act of 1933, or any rules, regulations or other requirements of the SEC or any stock
exchange or automated quotation system, the Committee may require a written investment intent
representation by the Grantee and may require that a restrictive legend be affixed to certificates
for shares of Stock, or that the Stock be subject to such stock transfer orders and other
restrictions as the Committee may deem necessary or advisable.
(b) Postponement by Committee. If based upon the opinion of counsel for the Company, the
Committee determines that the exercise or nonforfeitability of, or delivery of benefits pursuant
to, any Award would violate any applicable provision of (i) federal or state securities law or (ii)
the listing requirements of any national securities exchange or the requirements of any automated
quotation system on which are listed or quoted any of the Companys equity securities, then the
Committee may postpone any such exercise, nonforfeitability or delivery, as the case may be, but
the Company shall use reasonable and good faith efforts to cause such exercise, nonforfeitability
or delivery to comply with all such provisions at the earliest practicable date. The Committees
authority under this Section 19(b) shall expire on the date of the first Change in Control to which
Section 13 applies.
(c) No Obligation to Register or List. The Company shall be under no obligation to register
the Stock with the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation system, and the
Company shall have no liability for any inability or failure to do so.
20. Funding. Benefits payable under the Plan to any person shall be paid directly by the
Company. The Company shall not be required to fund, or otherwise segregate assets to be used for
payment of, benefits under the Plan.
21. Rights as a Shareholder. A Grantee shall not, by reason of any Award (other than
Restricted Stock) have any right as a shareholder of the Company with respect to the shares of
Stock which may be deliverable upon exercise or payment of such Award until such shares have been
delivered to such Grantee. Shares of Restricted Stock held by a Grantee or held in escrow by the
Company or by an agent of the Company shall confer on the Grantee all rights of a shareholder of
the Company, except as otherwise provided in the Plan. The Committee, in its discretion, at the
time of grant of Restricted Stock, may permit or require the payment of cash dividends thereon to
be deferred and, if the Committee so determines, reinvested in additional Restricted Stock to the
extent shares are available under Section 3, or otherwise reinvested. Stock dividends and deferred
cash dividends issued with respect to Restricted Stock shall be treated as additional shares of
Restricted Stock that are subject to the same restrictions and other terms as apply to the shares
with respect to which such dividends are issued. The Committee may, in its discretion, provide for
crediting to and payment of interest on deferred cash dividends.
22. Escrow; Pledge of Shares. To enforce any restrictions on a Grantees Stock, the Committee
may issue the shares in book entry form subject to the applicable restriction or require the
Grantee to deposit all certificates representing such Stock, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in blank, with the
Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such restrictions to be
placed on the certificates.
23. Nature of Payments. Unless otherwise determined by the Committee, any and all grants,
payments of cash, or deliveries of shares of Stock hereunder shall constitute special incentive
payments to the Grantee and shall not be taken into account in computing the amount of salary or
compensation of the Grantee for the purposes of determining any pension, retirement, death or other
benefits under (i) any pension, retirement, profit-sharing, bonus, life insurance or other employee
benefit plan of the Company or any of its Subsidiaries, or (ii) any agreement between the Company
or any Subsidiary, on the one hand, and the Grantee, on the other hand, except as such plan or
agreement shall otherwise expressly provide.
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24. Non-Uniform Determinations. The Committees determinations under the Plan need not be
uniform and may be made by the Committee selectively among persons who receive, or are eligible to
receive, Awards (whether or not such persons are similarly situated). Without limiting the
generality of the foregoing, the Committee shall be entitled, among other things, to make
non-uniform and selective determinations and to enter into non-uniform and selective Award
Agreements as to (i) the identity of the Grantees, (ii) the terms and provisions of Awards, and
(iii) the treatment, under Section 17, of Terminations of Employment. Notwithstanding the
foregoing, the Committees interpretation of Plan provisions shall be uniform as to similarly
situated Grantees.
25. Adjustments. The Committee shall make equitable adjustment of: (i) the aggregate numbers
of shares of Stock, shares of Restricted Stock and Stock Appreciation Rights, available under
Sections 3(a) and 3(b), (ii) the number of shares of Stock or shares of Restricted Stock covered by
an Award, (iii) the Option Price, (iv) the Fair Market Value of Stock to be used to determine the
amount of the benefit payable upon exercise of Stock Appreciation Rights or Performance Units, and
(v) all other matters relating to the Plan and any Awards, including the type of securities or
property, if any, to be paid in connection with any Award, all in such manner as may be determined
by the Committee in its discretion in order to prevent dilution or enlargement of the rights of any
Grantee pursuant to any Award under the Plan, to reflect a stock dividend, stock split, reverse
stock split, share combination, recapitalization, reclassification, merger, consolidation, asset
spin-off, reorganization, or similar event of or by the Company.
26. Adoption and Shareholder Approval. The Plan shall be approved or ratified by the
shareholders of the Company (excluding holders of Stock issued pursuant to this Plan), consistent
with applicable laws, including but not limited to Section 162(m)(4)(C) (ii) of the Code, within 12
months before or after the Effective Date. Upon the Effective Date, Awards may be granted pursuant
to the Plan; provided, however, that: (i) no Option may be exercised prior to initial shareholder
approval of the Plan; (ii) no Option granted pursuant to an increase in the number of shares of
Stock approved by the Board shall be exercised prior to the time such increase has been approved by
the shareholders of the Company; and (iii) in the event that shareholder approval is not obtained
within the time period provided herein, all Awards granted hereunder shall be canceled, any Stock
issued pursuant to any Award shall be canceled and any purchase of Stock hereunder shall be
rescinded.
27. Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board, the submission
of the Plan to the shareholders of the Company for approval, nor any provision of the Plan shall be
construed as creating any limitations on the power of the Board or the Committee to adopt such
additional compensation arrangements as it may deem desirable, including the granting of stock
options and bonuses otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
28. Amendment and Termination of the Plan. Subject to any applicable shareholder approval
requirements of applicable law or the rules of any national securities exchange, stock market or
automated quotation service on which the Stock is listed or quoted, the Plan may be amended by the
Board at any time and in any respect, except that there shall be no amendment to permit option
repricing without shareholder approval. The Plan may also be terminated at any time by the Board
and shall terminate automatically on the tenth anniversary of the Effective Date unless earlier
terminated by the Board. No amendment or termination of this Plan shall adversely affect any Award
granted prior to the date of such amendment or termination without the written consent of the
Grantee.
29. Weekends and Holidays. Unless this Section prevents an Option designed to qualify as an
Incentive Stock Option under Section 422 of the Code from qualifying as an Incentive Stock Option
under Section 422 of the Code or prevents an Award designed to qualify as performance-based
compensation under Section 162(m) of the Code from qualifying as performance-based compensation
under Section 162(m) of the Code, if any day on which action under the Plan must be taken falls on
a Saturday, Sunday or holiday recognized as an official holiday of the Company, such action may be
taken on the next succeeding day not a Saturday, Sunday or holiday.
30. Foreign Grantees. Without amending the Plan, Awards may be granted to Grantees who are
foreign nationals or employed outside the United States or both, on such terms and conditions
different from those specified in the Plan as may, in the judgment of the Committee, be necessary
or desirable to further the purposes of the Plan.
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31. Interpretation under Section 162(m). Notwithstanding any provision of the Plan to the
contrary, the Plan is intended to give the Committee the authority to grant Awards hereunder that
qualify as performance-based
compensation under Code Section 162(m)(4)(C) and that do not so qualify. Every provision of the
Plan shall be administered, interpreted and construed to carry out such intention and any provision
that cannot be so administered, interpreted and construed shall to that extent be disregarded; and
any provision of the Plan that would prevent an Award that the Committee intends to qualify as
performance-based pay under Code Section 162(m)(4)(C) from so qualifying shall be administered,
interpreted and construed to carry out such intent and any provision that cannot be so
administered, interpreted and construed shall to that extent be disregarded.
32. Applicable Law. The validity, construction, interpretation and administration of the Plan
and of any determinations or decisions made thereunder, and the rights of all persons having or
claiming to have any interest therein or thereunder, shall be governed by, and determined
exclusively in accordance with, the laws of the State of Indiana, but without giving effect to the
principles of conflicts of laws thereof. Without limiting the generality of the foregoing, the
period within which any action arising under or in connection with the Plan must be commenced shall
be governed by the laws of the State of Indiana, without giving effect to the principles of
conflicts of laws thereof, irrespective of the place where the act or omission complained of took
place and of the residence of any party to such action and irrespective of the place where the
action may be brought.
33. Construction. The use of the masculine gender shall also include within its meaning the
feminine. The use of the singular shall include within its meaning the plural and vice versa.
34. Code Section 409A. All Awards under the Plan are intended to be exempt from the
provisions of Code Section 409A, either under Treas. Reg. §1.409A-1(b)(4), in the case of
Performance Units, or under Treas. Reg. 1.409A-1(b)(5), in the case of all other Awards. Every
provision of the Plan shall be administered, interpreted, and construed to carry out such
intention, and any provision that cannot be so administered, interpreted, and construed shall to
that extent be disregarded. In the event that, notwithstanding such intent, an Award granted
hereunder constitutes deferred compensation within the meaning of Code Section 409A, then,
notwithstanding any other provision of the Plan or the applicable Award Agreement, (i) any amount
that is payable under such Award on account of separation from service to a specified employee,
as defined in Code Section 409A(a)(2)(B)(i), will not be paid earlier than the date that is six (6)
months following the specified employees separation from service; (ii) the determination of which
individuals are specified employees will be made in accordance with such rules and practices,
consistent with Code Section 409A and interpretive regulations, as are established from time to
time by the Board of Directors, or its designee, in its discretion (iii) the Grantee will not be
treated as having terminated employment or service until that individual has incurred a separation
from service within the meaning of Code Section 409A; (iv) no event will be treated as a Change in
Control with respect to that Award unless it constitutes a change in the ownership or effective
control of the Company, or in the ownership of a substantial portion of the assets of the Company,
within the meaning of Code Section 409A(a)(2)(A)(v); (v) no acceleration of payment will be
permitted with respect to the Award; and (vi) to the extent any other terms of the Plan or the
applicable Award Agreement would subject the Grantee to gross income inclusion, interest, or
additional tax pursuant to Code Section 409A, those terms are to that extent superseded by, and
shall be adjusted to the minimum extent necessary to satisfy, the applicable Code Section 409A
standards.
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ELECTRONIC ACCESS TO FUTURE DOCUMENTS
We are pleased to offer our shareholders the option to access shareholder communications (for
example, annual reports and proxy statements) from us or on our behalf over the Internet, instead
of receiving those documents in printed form. Your participation is completely voluntary. If you
give your consent, we will notify you when material is available over the Internet and provide you
with the Internet location where the material is available. Once you give your consent, it will
remain in effect until you inform us otherwise.
To give your consent, check the box located at the bottom of the attached proxy card. You may also
give your consent by telephone or e-mail as described in the proxy statement.
To enable us to send you notification of shareholder communications by e-mail, please provide your
e-mail address in the space at the bottom of the attached proxy card. There is no cost to you for
this service other than any charges you may incur from your Internet provider, telephone company
and/or cable company. If you have already consented to electronic delivery, you need not consent
again.
If you are an Emmis employee or a shareholder who has previously consented to electronic delivery
of shareholder communications and have received this proxy card without an accompanying proxy
statement and annual report, you may view those documents at the Investors section of www.emmis.com.
▼ FOLD AND DETACH HERE ▼
EMMIS COMMUNICATIONS CORPORATION
40 Monument Circle
Indianapolis, Indiana 46204
This Proxy is Solicited on Behalf of the Emmis Communications Corporation Board of Directors
The
undersigned hereby appoints J. Scott Enright and Patrick M.
Walsh, attorneys-in-fact and proxies, with full power of
substitution (the Proxy), to vote as designated below all shares of Class A Common Stock of Emmis
Communications Corporation which the undersigned would be entitled to vote if personally present at
the annual meeting of Shareholders to be held on December 17, 2010, at 11:00 a.m., and at any
adjournment thereof.
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ELECTION OF DIRECTORS FOR A TERM OF THREE YEARS. |
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o FOR all nominees listed below (except as written below) o WITHHOLD AUTHORITY to vote for all nominees |
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Nominees: Jeffrey H. Smulyan and Greg A. Nathanson |
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(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominees name in the space below.) |
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PROPOSAL TO APPROVE THE 2010 EQUITY COMPENSATION PLAN. |
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o FOR
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o AGAINST
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o ABSTAIN |
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PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS. |
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o FOR
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o AGAINST
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o ABSTAIN |
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In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. |
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I consent to access future shareholder communications released
after December 17, 2010 over the Internet as described above and
in the proxy statement. My e-mail address is:
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(continued on other side)
▼ FOLD AND DETACH HERE ▼
This proxy is solicited on behalf of the Emmis Communications Corporation Board of Directors. This
proxy when properly executed will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted FOR Proposals 1, 2 and 3.
The undersigned acknowledges receipt, prior to the execution of this proxy, of notice of the
meeting, a proxy statement, and an annual report to shareholders.
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Dated: , 2010 |
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(Signature)
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(Signature if held jointly) |
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Please sign exactly as your name appears below.
When shares are held as joint tenants, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give
a full title. If a corporation, please sign in
full the corporate name by the president or
other authorized officer. If a partnership,
please sign in partnership name by authorized
person. |
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IMPORTANT: Please mark, sign, date and return
the proxy card promptly using the enclosed
envelope |
REVOCABLE PROXY