EXHIBIT 10.3

February 7, 2005

Gary Kaseff
c/o Emmis Communications Corporation
3500 W. Olive Avenue, Suite 1450
Burbank, California 91505

     Re: Amendment to Employment Agreement

Dear Gary:

     This letter shall confirm our agreement to amend your employment agreement
with Emmis Operating Company dated March 1, 2003 (the “Agreement”), upon the
terms and subject to the conditions set forth in this letter (the “Amendment”).

     Except as otherwise provided below, this Amendment is effective upon
execution by you. Any capitalized words or phrases used and not defined in this
Amendment shall have the meanings ascribed to them in the Agreement. This shall
confirm that the parties have agreed as follows:

1. The Term of the Agreement has been extended through February 29, 2008. After
February 28, 2005, “Contract Year” shall mean the twelve (12) month period
commencing on March 1, 2005 and on each anniversary thereof during the Term.

2. The Base Salary shall be increased to Four Hundred Twenty Four Thousand
Dollars ($424,000) for the Contract Year beginning March 1, 2005 (“FYE 06”),
Four Hundred Thirty Seven Thousand Five Hundred Dollars ($437,500) for the
Contract Year beginning March 1, 2006 and Four Hundred Fifty Thousand Dollars
($450,000) for the Contract Year beginning March 1, 2007.

3. After payment of any Contract Year Bonus earned for the period ending
February 28, 2005, Section 6.2 shall be modified to reflect the following: The
target amounts of the Contract Year Bonuses shall be increased to Two Hundred
Thirty Nine Thousand Dollars ($239,000) for FYE 06, Two Hundred Forty Six
Thousand Dollars ($246,000) for the Contract Year beginning March 1, 2006 and
Two Hundred Fifty Three Thousand Dollars ($253,000) for the Contract Year
beginning March 1, 2007. Commencing with FYE 06, Exhibit A to the Agreement
shall be deleted and shall be of no further force and effect, and the third and
fourth sentences of Section 6.2 shall be deleted and replaced with the following
language:

     “Employer may pay all or a portion of any Contract Year Bonus in Shares in
the same manner utilized for other senior management level employees.”

 

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Unless subsequently changed by the Compensation Committee, the performance goals
for FYE 06 shall be:

              Target Bonus   Performance Goal
1.
  $ 95,600     Domestic Radio Station Operating Income Target
2.
  $ 71,700     Other Emmis Operating Income Target
3.
  $ 71,700     Individual Performance (Discretionary)

Domestic Radio Station Operating Income and Other Emmis Operating Income, or any
other applicable performance targets or goals, shall be defined and determined
by the Compensation Committee each Contract Year. The Compensation Committee
reserves the right to amend the performance goals to the extent it deems
appropriate in order to take into account any material acquisition, disposition,
reorganization, recapitalization or other material transaction involving
Employer or its properties. Executive shall earn a certain percentage of each
Contract Year Bonus in accordance with the applicable bonus scale adopted by the
Employer for the subject Contract Year.

4. Section 6.3 shall be deleted in its entirety and replaced with the following
language:

     “6.3 Equity Incentive Compensation. Each Contract Year during the Term,
beginning with FYE 06, at such time as Employer generally awards equity
incentive compensation to members of Employer’s senior management team,
Executive shall receive Seven Thousand Five Hundred (7,500) Shares (as defined
below) and an option (“Option”) to acquire Twenty Five Thousand (25,000) Shares.
As used herein, “Shares” shall mean shares of Class A Common Stock of Emmis
Communications Corporation. The grants of Options and Shares shall be pursuant
to the terms and subject to the conditions of the applicable Equity Incentive
Plan of Employer, the Option agreements evidencing the Option grants and the
restricted stock agreements evidencing the grants of Shares. In the event of any
change in the outstanding Shares by reason of any reorganization,
recapitalization, reclassification, merger, stock split, reverse stock split,
stock dividend, asset spinoff, share combination, consolidation, or similar
event, including without limitation a Separation Event, the number and class of
all Shares awarded pursuant to this Agreement or covered by an Option granted
pursuant to this Agreement (and any applicable Option exercise price) shall be
adjusted by the Compensation Committee in its sole discretion and in accordance
with the terms of the applicable Equity Incentive Plan of Employer, the Option
agreement evidencing the grant of the Option and the restricted stock agreement
evidencing the grant of Shares. The determination of the Compensation Committee
shall be conclusive and binding.”

5. After the delivery of any Bonus Shares earned for the period ending
February 28, 2005 pursuant to Section 6.4, Section 6.4 shall be deleted in its
entirety and replaced with the following language:

     “6.4 Completion Bonus. On or about February 29, 2008, Executive shall
receive Twenty Eight Thousand Two Hundred Fifty (28,250) Shares (the “Completion
Shares”); provided, that (i) this Agreement is in effect on February 29, 2008
and has not been

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terminated for any reason (other than a breach of this Agreement by Employer);
and (ii) Executive has fully performed all of Executive’s duties and obligations
under this Agreement throughout the Term and is not in breach of any of the
material terms and conditions of this Agreement. The Completion Shares shall be
freely transferable when delivered to Executive subject to Employer’s securities
trading policy and applicable federal and state law. Employer shall have the
right, in its sole and absolute discretion, to pay to Executive the value of the
Completion Shares (in the same manner applied to other senior management level
employees) in cash in lieu of granting Executive the Completion Shares. This
Section 6.4 is expressly subject to the provisions of Sections 11.4 and 11.6
which provide for, in the situations described therein, Executive’s receipt of
the Completion Shares prior to February 29, 2008.”

6. Effective March 1, 2005, the amount of Two Hundred Twenty Five Thousand
Dollars ($225,000) set forth in Sections 11.4 and 11.6 shall be increased to Two
Hundred Forty Six Thousand Dollars ($246,000) in each Section.

7. Effective March 1, 2005, the last parenthetical phrase in the fourth sentence
of Section 11.4 and the last parenthetical phrase in the first sentence of
Section 11.6 shall be deleted and replaced with the following language:

     “(except the Options described in Section 6.3, which compensation shall not
be included in the calculation of the lump sum payment).”

8. In the third sentence of Section 11.5, the following language shall be
deleted and shall be of no further force and effect:

     “or the transaction or transactions described in the definition of Change
of Control in Exhibit B”

9. The following language shall be added to Section 11.7.2:

     “Ownership of any Shares granted to Executive (pursuant to Section 6.3 of
this Agreement or otherwise) prior to or during the Post Term Period shall
continue to vest during the Post Term Period (to the extent not already fully
vested as of the first day of the Post Term Period) in accordance with the
vesting schedule applicable to each grant in the same manner as if Executive
remained a full-time employee with Employer continuously through the expiration
of the Post Term Period.”

All of the terms and conditions set forth in the Agreement shall remain
unchanged and in full force and effect unless specifically modified in this
Amendment. All references to the Term or its expiration or termination shall be
adjusted to properly reflect the language set forth above. This Amendment shall
be incorporated by reference into the Agreement and made a part thereof. In the
event of any conflict between any provision of this Amendment and any provision
of the Agreement, this Amendment shall govern and control.

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Please sign below where indicated to signify your acceptance of the terms and
conditions set forth in this Amendment. Should you have any questions about this
Amendment, please let me know. I look forward to much continued success
together.

Sincerely,

     
/S/ Jeffrey H. Smulyan
   
 
   
Jeffrey H. Smulyan
   
Chairman and Chief Executive
   
Officer, Emmis Operating Company
   

ACCEPTED AND AGREED:

     
/S/ Gary Kaseff
   
 
   
Gary Kaseff
   

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