Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“Agreement”) is effective as of March 1, 2011, by and
between EMMIS OPERATING COMPANY, an Indiana company (“Employer”), and RICHARD F.
CUMMINGS, a California resident (“Executive”).
RECITALS
WHEREAS, Employer and its affiliates are engaged in the ownership and operation
of certain radio stations, magazines, and related operations (together, the
“Emmis Group”); and
WHEREAS, Employer desires to employ Executive and Executive desires to be so
employed.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
covenants set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
AGREEMENT
1. Employment Status and Duties. Upon the terms and subject to the conditions
set forth in this Agreement, Employer hereby employs Executive, and Executive
hereby accepts exclusive employment with Employer. During the Term (as defined
herein), Executive shall serve as President, Emmis Radio Programming. Executive
shall have such duties, functions, authority and responsibilities as are
commensurate with such position. Executive’s services hereunder shall be
performed on an exclusive, full-time basis in a professional, diligent and
competent manner to the best of Executive’s abilities. Executive shall not
undertake any outside employment or business activities without the prior
written consent of Employer. Executive shall be permitted to serve on the board
of charitable or civic organizations so long as such services: (i) are approved
in writing in advance by Employer; and (ii) do not interfere with Executive’s
duties and obligations under this Agreement. It is understood and agreed that
the location for the performance of Executive’s duties and services pursuant to
this Agreement shall be the offices located at 3500 West Olive Avenue, Burbank,
California, or if Employer no longer maintains possession of those premises,
then such offices as may be designated by Employer in Los Angeles, California.
If Executive is elected as a Director of Emmis Communications Corporation, he
shall serve in such position without additional remuneration (unless Employer
elects to remunerate “inside directors”) but shall be entitled to the benefit of
indemnification pursuant to the terms of Section 14.12. Executive shall also
serve without additional remuneration as a director and/or officer of one (1) or
more of Employer’s subsidiaries or affiliates if appointed to such position(s)
by Employer and shall also be entitled to the benefit of indemnification
pursuant to the terms of Section 14.12.
2. Term. The term of this Agreement shall be for a period of one (1) year
commencing on March 1, 2011, unless earlier terminated in accordance with the
provisions set forth in this Agreement (the “Term”).
3. Base Salary; Auto Allowance. Upon the terms and subject to the conditions set
forth in this Agreement, Employer shall pay or cause to be paid to Executive
during the Term an annualized base salary of Four Hundred Fifty-Five Thousand
Dollars ($455,000) (the “Base Salary”), payable pursuant to Employer’s customary
payroll practices and subject to applicable taxes and withholdings as required
by law.

 

 

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Except as otherwise set forth herein, Employer shall have no obligation to pay
Executive the Base Salary for any periods during which Executive fails or
refuses to render services pursuant to this Agreement or for any period
following the expiration or termination of this Agreement. In addition, it is
understood and agreed that Employer may, at its sole election, pay up to ten
percent (10%) of Executive’s Base Salary in shares of Class A Common Stock of
Emmis Communications Corporation (the “Shares”); provided that: (i) the Shares
are registered with the U.S. Securities and Exchange Commission (the “SEC”) on a
then-effective Form S-8 or other applicable registration statement and are
issued without restriction on resale (and further provided that the Shares are
listed on a securities exchange or over-the-counter market, which does not
include listing on the “pink sheets,” at the time of issuance), subject to any
restrictions on resale under Employer’s insider trading policy or applicable
federal and state law; and (ii) the percentage of Executive’s Base Salary
payable in Shares shall be consistent with, and the exact number of Shares to be
awarded to Executive shall be determined in the same manner as, that utilized
for other senior management level employees.
During the Term, Executive shall receive a monthly auto allowance in the amount
of One Thousand Dollars ($1,000) (subject to withholding and applicable taxes as
required by law) consistent with Employer’s policy or practices regarding such
allowances, as such policy or practices may be amended from time to time during
the Term in Employer’s sole and absolute discretion; provided, however, that in
no event shall the auto allowance amount paid to Executive pursuant to this
provision be reduced.
4. Incentive Compensation.
4.1 Bonus Amounts. Upon the terms and subject to the conditions set forth in
this Section 4, Executive shall be eligible to receive one (1) performance bonus
in a target amount equivalent to sixty percent (60%) of Executive’s Base Salary
for each Contract Year, and the exact amount of such performance bonus, if any,
shall be determined on the basis of Executive’s attainment of certain
performance and financial goals to be determined by Employer in its sole and
absolute discretion.
4.2 Payment of Bonus Amounts. Employer shall pay or cause to be paid to
Executive the foregoing bonus amounts if earned according to the terms and
conditions set forth in Section 4.1; provided, that, at the end of the relevant
measuring period: (i) this Agreement is in full force and effect and has not
been terminated for any reason (other than due to a material breach of this
Agreement by Employer); and (ii) Executive is fully performing all of
Executive’s duties and obligations pursuant to this Agreement and is not in
breach of any of the material terms and conditions of this Agreement. In
addition, it is understood and agreed that Employer may, at its sole election,
pay any bonus amounts earned by Executive pursuant to this Section 4 in cash or
Shares; provided that: (i) the Shares are registered with the SEC on a
then-effective Form S-8 or other applicable registration statement and are
issued without restriction on resale (and further provided that the Shares are
listed on a securities exchange or over-the-counter market, which does not
include listing on the “pink sheets,” at the time of issuance), subject to any
restrictions on resale under Employer’s insider trading policy or applicable
federal and state law; and (ii) the percentage of Executive’s Base Salary
payable in Shares shall be consistent with, and the exact number of Shares to be
awarded to Executive shall be determined in the same manner as, that utilized
for other senior management level employees. Any bonus amounts earned by
Executive pursuant to the terms and conditions of this Section 4 shall be paid
after the end of the relevant measuring period (but in no event later than
ninety (90) days after the end of such measuring period). Any and all bonus
amounts payable by Employer to Executive pursuant to this Section 4 shall be
subject to applicable taxes and withholdings as required by law.
5. Expenses; Travel. Employer shall pay or reimburse Executive for all
reasonable expenses actually incurred or paid by Executive during the Term in
connection with the performance of Executive’s services hereunder upon
presentation of expense statements, vouchers or other supporting documentation
as Employer may require of Executive; provided such expenses are otherwise in
accordance with Employer’s policies. Executive shall undertake such travel as
may be required in the performance of Executive’s duties pursuant to this
Agreement. Under no circumstances shall the Employer’s reimbursement for
expenses incurred in a calendar year be made later than the end of the next
following calendar year; provided, however, this requirement shall not alter the
Employer’s obligation to reimburse Executive for eligible expenses on a current
basis.

 

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6. Fringe Benefits.
6.1 Vacation and Other Benefits. During each Contract Year, Executive shall be
entitled to four (4) weeks of paid vacation in accordance with Employer’s
applicable policies and procedures for executive-level employees. Executive
shall also be eligible to participate in and receive the fringe benefits
generally made available to other executive-level employees of Employer in
accordance with and to the extent that Executive is eligible under, the general
provisions of Employer’s fringe benefit plans or programs; provided, however,
Executive understands that these benefits may be increased, changed, eliminated
or added from time to time during the Term as determined in Employer’s sole and
absolute discretion.
6.2 Life and Disability Insurance. During each Contract Year, Employer agrees to
reimburse Executive in an amount not to exceed Five Thousand Dollars ($5,000)
for the annual premium associated with Executive’s purchase or maintenance of a
life or disability insurance policy or other insurance policies on the life, or
related to the care, of Executive. Executive shall be entitled to freely select
and change the beneficiary or beneficiaries under such policy or policies.
Notwithstanding anything to the contrary contained in this Agreement, Employer’s
obligations under this Section 6.2 are expressly contingent upon Executive
providing required information and taking all necessary actions required of
Executive in order to obtain and maintain the subject policy or policies,
including without limitation, passing any required physical examinations.
7. Confidential Information.
7.1 Non-Disclosure. Executive acknowledges that certain information concerning
the business of the Emmis Group and its members (including but not limited to
trade secrets and other proprietary information) is of a highly confidential
nature, and that, as a result of Executive’s employment with Employer prior to
and during the Term, Executive shall receive and develop, proprietary and
confidential information concerning the business of Employer and/or other
members of the Emmis Group which, if known to Employer’s competitors, would
damage Employer, other members of the Emmis Group and their respective
businesses. Accordingly, Executive hereby agrees that during the Term and
thereafter, Executive shall not divulge or appropriate for Executive’s own use,
or for the use or benefit of any third party (other than Employer and its
representatives, or as directed in writing by Employer), any information or
knowledge concerning the business of Employer or any other member of the Emmis
Group which is not generally available to the public other than through the
activities of Executive. Executive further agrees that, immediately upon
termination of Executive’s employment for any reason, Executive shall promptly
surrender to Employer all documents, brochures, plans, strategies, writings,
illustrations, client lists, price lists, sales, financial or marketing plans,
budgets and any and all other materials (regardless of form or character) which
Executive received from or developed on behalf of Employer or any member of the
Emmis Group in connection with Executive’s employment prior to or during the
Term. Executive acknowledges that all such materials shall remain at all times
during the Term and thereafter the sole and exclusive property of Employer and
that nothing in this Agreement shall be deemed to grant Executive any right,
title or interest in such material.
7.2 Ownership of Materials. Employer shall solely and exclusively own all rights
of every kind and nature in perpetuity and throughout the universe in: (i) the
programs and broadcasts on which Executive appears or for which Executive
renders services to Employer in any capacity; (ii) the results and proceeds of
Executive’s services pursuant to this Agreement including, without limitation,
those results and proceeds provided in connection with the creation,
development, preparation, writing, editing or production by Executive or any
employee of any member of the Emmis Group of any and all materials, properties
or elements of any and all kinds for the programs on which Executive appears or
for which Executive renders services (whether directly or indirectly); and
(iii) any business, financial, sales or marketing plans and strategies,
documents, presentations, or other similar materials, regardless of kind or
character, each of which Executive acknowledges is a work specially ordered by
Employer which

 

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shall be considered to be a “work made for hire” for Employer. Therefore,
Employer shall be the author and copyright owner of the programs on which
Executive appears or for which Executive renders services pursuant to this
Agreement, the broadcasts and tapes or recordings thereof for all purposes
without limitation of any kind, and all materials described in the immediately
preceding sentence. The exclusive legal title to all of the aforesaid works and
matters, programs, broadcasts, and materials and all secondary and derivative
rights therein, shall belong, at all times, to Employer which shall have the
right to copyright the same and apply for copyright registrations and copyright
renewal registrations and to make whatever use thereof that Employer, in its
sole and absolute discretion, deems advisable, including but not limited to
rebroadcasts of programs or use of any portions of any program in the production
or broadcast of other programs at any time, notwithstanding expiration of the
Term or termination of this Agreement for any reason.
7.3 Injunctive Relief. Executive acknowledges that Executive’s breach of this
Section 7 will cause irreparable harm and damage to Employer, the exact amount
of which will be difficult to ascertain; that the remedies at law for any such
breach would be inadequate; and that the provisions of this Section 7 have been
specifically negotiated and carefully written to prevent such irreparable harm
and damage. Accordingly, if Executive breaches this Section 7, Employer shall be
entitled to injunctive relief (including attorneys’ fees and costs) enforcing
this Section 7 to the extent reasonably necessary to protect Employer’s
legitimate interests, without posting bond or other security.
8. Non-Interference; Injunctive Relief.
8.1 Non-Interference. During the Term, and for a period of two (2) years
immediately following the expiration or early termination of the Term for any
reason, and during the Post Term Period if Executive elects part-time employment
pursuant to Section 13, Executive shall not, directly or indirectly, take any
action (or permit any action to be taken by an entity with which Executive is
associated) which has the effect of interfering with Employer’s relationship
(contractual or otherwise) with: (i) on-air talent of any member of the Emmis
Group; or (ii) any other employee of any member of the Emmis Group. Without
limiting the generality of the foregoing, Executive specifically agrees that
during such time period, neither Executive nor any entity with which Executive
is associated shall solicit, hire or engage any on-air talent or other employee
of any member of the Emmis Group or any other employee of any member of the
Emmis Group to provide services for Executive’s benefit or for the benefit of
any other business or entity, or solicit or encourage them to cease their
employment with any member of the Emmis Group for any reason.
8.2 Injunctive Relief. Executive acknowledges and agrees that the provisions of
this Section 8 have been specifically negotiated and carefully worded in
recognition of the opportunities which will be afforded to Executive by Employer
by virtue of Executive’s continued association with Employer during the Term,
and the influence that Executive has and will continue to have over Employer’s
employees, customers and suppliers. Executive further acknowledges that
Executive’s breach of Section 8.1 herein will cause irreparable harm and damage
to Employer, the exact amount of which will be difficult to ascertain; that the
remedies at law for any such breach would be inadequate; and that the provisions
of this Section 8 have been specifically negotiated and carefully written to
prevent such irreparable harm and damage. Accordingly, if Executive breaches
Section 8.1, Employer shall be entitled to injunctive relief (including
attorneys’ fees and costs) enforcing Section 8.1, to the extent reasonably
necessary to protect Employer’s legitimate interests, without posting bond or
other security. Notwithstanding anything to the contrary contained in this
Agreement, if Executive violates Section 8.1, and Employer brings legal action
for injunctive or other relief, Employer shall not, as a result of the time
involved in obtaining such relief, be deprived of the benefit of the full period
of noninterference set forth therein. Accordingly, the obligations set forth in
Section 8.1 shall have the duration set forth therein, computed from the date
such relief is granted but reduced by the time expired between the date the
restrictive period began to run and the date of the first violation of the
obligation(s) by Executive.

 

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8.3 Construction. Despite the express agreement herein between the parties, in
the event that any provisions set forth in this Section 8 shall be determined by
any court or other tribunal of competent jurisdiction to be unenforceable for
any reason whatsoever, the parties agree that this Section 8 shall be
interpreted to extend only to the maximum extent as to which it may be
enforceable, and that this Section 8 shall be severable into its component
parts, all as determined by such court or tribunal.
9. Termination of Agreement by Employer for Cause.
9.1 Termination. Employer may terminate this Agreement and Executive’s
employment hereunder for Cause (as defined in Section 9.3 below) in accordance
with the terms and conditions of this Section 9. Following a determination by
Employer that Executive should be terminated for Cause, Employer shall give
written notice (the “Preliminary Notice”) to Executive specifying the grounds
for such termination, and Executive shall have ten (10) days after receipt of
the Preliminary Notice to respond to Employer in writing. If following the
expiration of such ten (10) day period Employer reaffirms its determination that
Executive should be terminated for Cause, such termination shall be effective
upon delivery by Employer to Executive of a final notice of termination (the
“Final Notice”).
9.2 Effect of Termination. In the event of termination for Cause as provided in
Section 9.1 above:
(i) Executive shall have no further obligations or liabilities hereunder except
Executive’s obligations under Sections 7 and 8, which shall survive the
termination of this Agreement, and except for any obligations arising in
connection with any conduct of Executive described in Section 9.3;
(ii) Employer shall have no further obligations or liabilities hereunder, except
that Employer shall, not later than two (2) weeks after the termination date:
(a) Pay to Executive all earned but unpaid Base Salary with respect to any
applicable pay period ending on or before the termination date; and
(b) Pay to Executive any bonus amounts which have been earned on or prior to the
termination date pursuant to Section 4, if any, but which remain unpaid as of
the termination date.
9.3 Definition of Cause. For purposes of this Agreement, “Cause” shall be
defined to mean any of the following: (i) Executive’s failure, refusal or
neglect to perform any of Executive’s material duties or obligations under this
Agreement (or any material duties assigned to Executive consistent with the
terms of this Agreement) or abide by any applicable policy of Employer, or
Executive’s breach of any material term or condition of this Agreement, and
continuation of such failure, refusal, neglect, or breach after written notice
and the expiration of a ten (10) day cure period; provided, however, that it is
not the parties’ intention that the Employer shall be required to provide
successive such notices, and in the event Employer has provided Executive with a
notice and opportunity to cure pursuant to this Section 9.3, Employer may
terminate this Agreement for a subsequent breach similar or related to the
breach for which notice was previously given or for a continuing series or
pattern of breaches (whether or not similar or related) without providing notice
and an opportunity to cure; (ii) commission of any felony or

 

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any other crime involving an act of moral turpitude which is harmful to
Employer’s business or reputation; (iii) Executive’s action or omission, or
knowing allowance of actions or omissions, which are in violation of any law or
any of the rules or regulations of the Federal Communications Commission (the
“FCC”), or which otherwise jeopardize any of the licenses granted to Employer or
any member of the Emmis Group in connection with the ownership or operation of
any radio station; (iv) theft in any amount; (v) actual or threatened violence
against another employee or individual; (vi) sexual or other prohibited
harassment of others; (vii) unauthorized disclosure or use of trade secrets or
proprietary or confidential information, as described more fully in Section 7.1;
(viii) any action which brings Employer or member of the Emmis Group into public
disrepute, contempt, scandal or ridicule, and which is harmful to Employer’s
business or reputation; and (ix) any matter constituting cause or misconduct
under applicable laws.
10. Termination of Agreement by Employer for Incapacity.
10.1 Termination. If Executive shall become incapacitated (as defined in the
Employer’s employee handbook or, if that is not applicable, as reasonably
determined by Employer), Employer shall continue to compensate Executive under
the terms of this Agreement without diminution and otherwise without regard to
such incapacity or nonperformance of duties until Executive has been
incapacitated for a cumulative period of six (6) months, at which time Employer
may, in its sole discretion, elect to terminate Executive’s employment. The date
that Executive’s employment terminates pursuant to this section is referred to
herein as the “Incapacity Termination Date.”
10.2 Obligations after Termination. Executive shall have no further obligations
or liabilities hereunder after an Incapacity Termination Date except Executive’s
obligations under Section 7 and 8 that shall survive the termination or
expiration of this Agreement. After an Incapacity Termination Date, Employer
shall have no further obligations or liabilities hereunder except that Employer
shall, not later than two (2) weeks after an Incapacity Termination Date, pay to
Executive those amounts described in Section 9.2(ii). Nothing in this Section 10
or in Section 11 shall affect the amount of any benefits which may be payable to
Executive under any insurance plan or policy maintained by Employer or Executive
or pursuant to any Employer company practice, plan or program applicable to
other senior management level employees of the Emmis Group.
11. Death of Executive. This Agreement shall terminate immediately upon
Executive’s death. In the event of such termination, Employer shall have no
further obligations or liabilities hereunder except that Employer shall, not
later than two (2) weeks after Executive’s date of death, pay or grant to
Executive’s estate or designated beneficiary those amounts described in Section
9.2(ii).
12. Severance. Subject to the conditions set forth in this Section 12 and
Exhibit A, in the event that Employer elects not to allow this Agreement to
automatically renew pursuant to Section 2, does not offer Executive employment
upon expiration of the Term on terms substantially similar to those contained
herein (which shall include without limitation a Base Salary that is at least
ninety-five percent (95%) of the Base Salary in effect at expiration of the
Term) and Executive’s employment is terminated by Executive or Employer,
Employer shall make a lump sum severance payment to Executive in the amount of
$470,000, subject to applicable taxes and withholdings (the “Severance Payment”)
not later than the later of (a) the fourteenth day of March immediately
following Executive’s termination of employment or (b) the date which is sixty
(60) days following Executive’s termination of employment. As a material
condition upon which Executive shall be entitled to receive the Severance
Payment, and as an inducement to Employer’s agreement to pay Executive the
Severance Payment, Executive agrees to execute a general release in a form
acceptable to Employer upon the termination of Executive’s full-time employment.
Executive shall not be entitled to any additional severance compensation upon
the termination or expiration of this Agreement other than the Severance
Payment. Executive shall not be entitled to the Severance Payment as otherwise
specified in this Agreement or if Executive’s employment is terminated either
(i) by Employer under Section 9, (ii) by reason of Executive’s incapacity or
death under Sections 10 or 11, or (iii) by Executive for any reason other than a
material breach of this Agreement by Employer. In addition, subject to the terms
and conditions of Section 13, upon Executive’s termination of employment
pursuant to this Section 12, Executive shall be entitled to continue his
employment with Employer as a part-time employee during the Post Term Period.

 

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13. Part-Time Employment. If Executive is entitled to the Severance Payment
pursuant to Section 12, Executive shall be entitled to continue his employment
with Employer as a part-time employee, pursuant to the terms and conditions set
forth in this Section 13. Such part-time employment shall commence upon the last
day of Executive’s employment upon termination pursuant to Section 12 and shall
end on the earliest of: (i) the fourth (4th) anniversary of its commencement,
(ii) the date Executive secures full-time employment other than with Employer or
any of its “Affiliates” (as defined in Exhibit A), (iii) Executive’s death,
(iv) the date Executive becomes unable to perform the services required by
Section 13.3 because of ill health or physical or mental disability as
reasonably determined by a physician selected by Employer, (v) the date thirty
(30) days after Executive gives notice to Employer of his decision to terminate
his part-time employment, or (vi) the date Executive ceases to comply with the
provisions of Section 13.3, as reasonably determined by the Board of Directors
of Employer. The term of part-time employment described in the preceding
sentence shall be referred to herein as the “Post Term Period”. In the event
Executive elects to continue his employment as a part-time employee pursuant to
this Section 13, the Change in Control Agreement (Exhibit A hereto) shall become
null, void and of no further force and effect as of the date Executive commences
such part-time employment.
13.1 During each year of the Post Term Period, Employer shall pay to Executive
total annual compensation equal to $132,500 (“Part-Time Compensation”).
Part-Time Compensation shall be paid by Employer in accordance with Employer’s
customary payroll practices. In addition, during the Post Term Period, Executive
and his dependents (as such term is defined in the applicable health plan of
Employer) may continue to participate in Employer’s health plan, to the extent
permitted under the terms of such plan and at the expense of Employer, except
for any premium co-payment or other similar amounts for which Executive would
have otherwise been responsible pursuant to the terms of such plan. In the event
that the terms of Employer’s health plan do not at any time during the Post Term
Period permit Executive and/or his dependents to continue to participate in such
plan, Employer shall reimburse Executive for the cost of securing substantially
comparable health care coverage for Executive and his dependents. During the
Post Term Period, no other compensation or benefits shall be payable or provided
by Employer other than those described in this Section 13.
13.2 Any option granted to Executive prior to the Post Term Period under the
Plan (other than any plan intended to qualify under Section 423(b) of the Code
and provided that no provision hereof may supersede the terms of any plan of
Employer) shall continue to vest and become exercisable during the Post Term
Period to the extent not already exercisable as of the first day of the Post
Term Period in accordance with the applicable vesting schedule of each such
option, and shall remain outstanding through the earlier of: (a) 30 days
following the last day of the Post Term Period or (b) the last day of the
applicable option term provided under the applicable award agreement pursuant to
which each such option was awarded. Ownership of any Shares granted to Executive
(pursuant to Section 4.3 of this Agreement or otherwise) prior to 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.

 

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13.3 During the Post Term Period, Executive shall make himself available to
Employer to complete such reasonable projects and assignments as may be assigned
to him by the Chief Executive Officer or Chief Financial Officer/Chief Operating
Officer of Employer and/or Emmis Communications Corporation or any successor in
interest thereto. Without limiting the generality of the foregoing, Executive
shall provide consulting services relative to operations, programming, ratings,
personnel and budget. The parties intend that the transition from full-time to
part-time employment shall constitute a “separation from service” within the
meaning of Internal Revenue Code Section 409A(a)(2)(B)(i). Therefore,
notwithstanding anything to the contrary contained herein, in no event will
Executive be required or permitted to provide more than twenty (20) hours of
service during any calendar month pursuant to this Section 13. Subject to the
terms and conditions of this Section 13, Employer shall have no obligation to
pay Executive the Part-Time Compensation for any periods during which Executive
fails or refuses to render services pursuant to this Section 13. Employer shall
reimburse Executive for all reasonable expenses actually incurred by Executive
directly related to the performance of the services contemplated by this
Section 13 upon presentation of expense statements, vouchers or similar
documentation, or such other supporting information as Employer may require of
Executive. In addition, no later than ten (10) days following the first day of
the Post Term Period, Executive shall resign as a director of Employer and each
of its Affiliates, as applicable.
13.4 Notwithstanding anything in the Agreement to the contrary, Employer and
Executive hereby agree and acknowledge that solely for purposes of Sections 7
and 8 (Confidential Information; Non-Interference), the Term shall include the
Post Term Period.
14. Miscellaneous.
14.1 Governing Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Indiana without regard to its
conflict of law principles.
14.2 Section 409A. This Agreement is intended to comply with Internal Revenue
Code Section 409A(a)(2)(B)(i) and the regulations thereunder (collectively,
“Section 409A”), and it is intended that no amounts payable hereunder shall be
subject to tax under Section 409A. Employer shall use commercially reasonable
efforts to comply with Section 409A with respect to payments of benefits
hereunderTo the extent required by Section 409A, if Executive is a “specified
employee” for purposes of such Section, payments on account of Executive’s
separation from service shall be delayed to the earliest date permissible under
Section 409A. For purposes of this Agreement, “termination of employment,”
“terminates employment,” or any variation of such term shall mean “separation
from service” within the meaning of Section 409A.
14.3 Captions. The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of any of the
terms and conditions of this Agreement.
14.4 Entire Agreement. This Agreement shall supersede and replace, in all
respects, any prior employment agreement entered into between the parties, and
any such agreements shall immediately terminate and be of no further force or
effect. For purposes of the preceding sentence, any change in control,
restricted stock, option, and other benefits-related agreement shall not
constitute a “prior employment agreement.”
14.5 Assignment. This Agreement, and Executive’s rights and obligations
hereunder, may not be assigned by Executive to any third party; provided,
however, that Executive may designate pursuant to Section 14.7 one (1) or more
beneficiaries to receive any amounts that would otherwise be payable hereunder
to Executive’s estate. Employer may assign all or any portion of its rights and
obligations hereunder to any other member of the Emmis Group or to any successor
or assignee of Employer pursuant to a reorganization, recapitalization, merger,
consolidation, sale of substantially all of the assets or stock of Employer, or
otherwise.

 

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14.6 Amendments; Waivers. Except as expressly provided in the following
sentence, this Agreement cannot be changed, modified or amended, and no
provision or requirement hereof may be waived, without the written consent of
Executive and Employer. Employer may amend this Agreement to the extent that
Employer reasonably determines that such change is necessary to comply with
Section 409A and further guidance thereunder, provided that such change does not
reduce the amounts payable to Executive hereunder. The failure of a party at any
time to require performance of any provision hereof shall in no manner affect
the right of such party at a later time to enforce such provision. No waiver by
a party of the breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach or a
waiver of the breach of any other term or covenant contained in this Agreement.
14.7 Beneficiaries. Whenever this Agreement provides for any payment to
Executive’s estate, such payment may be made instead to such beneficiary as
Executive may have designated in a writing filed with Employer. Executive shall
have the right to revoke any such designation and to re-designate a beneficiary
by written notice to Employer (or to any applicable insurance company).
14.8 Notices. All notices, requests, consents and other communications, required
or permitted to be given hereunder, shall be made in writing and shall be deemed
to have been made as of: (a) the date that is three (3) days after the date of
mailing, if sent via the U.S. postal service, first-class, postage-prepaid,
(b) the date that is the next date upon which an overnight delivery service
(Federal Express, UPS or DHL only) will make such delivery, if sent via such
overnight delivery service, first-class, postage prepaid, (c) the date such
delivery is made, if delivered in person to the notice party specified below, or
(d) the date such delivery is made, if delivered via email. Such notice shall be
delivered as follows (or to such other or additional address as either party
shall designate by notice in writing to the other in accordance herewith):
(i) If to Employer:
Emmis Communications Corporation
40 Monument Circle, Suite 700
Indianapolis, Indiana 46204
Attn: Chief Operating Officer
With a copy to:
Emmis Communications Corporation
40 Monument Circle, Suite 700
Indianapolis, Indiana 46204
Attn: Legal Department
(ii) If to Executive, to Executive at Executive’s address in the personnel
records of Employer.
14.9 Change in Fiscal Year. If, at any time during the Term, Employer changes
its fiscal year, Employer shall make such adjustments to the various dates and
target amounts included herein as are necessary or appropriate, provided that no
such change shall affect the date on which any amount is payable hereunder.
14.10 Executive’s Warranty and Indemnity. Executive hereby represents and
warrants that Executive: (i) has the full and unqualified right to enter into
and fully perform this Agreement according to each and every term and condition
contained herein; (ii) has not made any agreement, contractual obligation, or
commitment in contravention of any of the terms and conditions of this Agreement
or which would prevent Executive from performing according to any of the terms
and conditions contained herein; and (iii) has not entered into any agreement
with any prior employer or other person, corporation or entity which would in
any way adversely affect Executive’s or Employer’s right to enter into this
Agreement. Furthermore, Executive hereby agrees to fully indemnify and hold
harmless Employer and each of its subsidiaries, affiliates and related entities,
and each of their respective officers, directors, employees, agents, attorneys,
shareholders, insurers and representatives from and against any and all losses,
costs, damages, expenses (including attorneys’ fees and expenses), liabilities
and claims, arising from, in connection with, or in any way related to
Executive’s breach of any of the representations or warranties contained in this
Section 14.10.

 

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14.11 Venue. Any action to enforce, challenge or construe the terms or making of
this Agreement or to recover for its breach shall be litigated exclusively in a
state court located in Marion County, Indiana, except that the Employer may
elect, at its sole and absolute discretion, to litigate the action in the county
or state where any breach by Executive occurred or where Executive can be found.
Executive acknowledges and agrees that this venue provision is an essential
provision of this Agreement and Executive hereby waives any defense of lack of
personal jurisdiction or improper venue.
14.12 Indemnification. Executive shall be entitled to the benefit of the
indemnification provisions set forth in Employer’s Amended and Restated Articles
of Incorporation and/or By-Laws, or any applicable corporate resolution, as the
same may be amended from time to time during the Term (not including any
limiting amendments or additions, but including any amendments or additions that
add to or broaden the protection afforded to Executive at the time of execution
of this Agreement) to the fullest extent permitted by applicable law.
Additionally, Employer shall cause Executive to be indemnified in accordance
with Chapter 37 of the Indiana Business Corporation Law (the “IBCL”), as the
same may be amended from time to time during the Term, to the fullest extent
permitted by the IBCL as required to make Executive whole in connection with any
indemnifiable loss, cost or expense incurred in Executive’s performance of
Executive’s duties and obligations pursuant to this Agreement. Employer shall
also maintain during the Term an insurance policy providing directors’ and
officers’ liability coverage in a commercially reasonable amount. It is
understood that the foregoing indemnification obligations shall survive the
expiration or termination of the Term.
14.13 Change in Control. Effective as of January 1, 2008, Executive and Emmis
Communications Corporation have entered into that certain Emmis Communications
Corporation Change in Control Severance Agreement (the “CIC Agreement”). In the
event of a “Change in Control” (as defined in the CIC Agreement), the rights and
obligations of Executive and Employer shall be set forth in the CIC Agreement.
Notwithstanding the preceding provisions, Employer shall have the right to amend
the CIC Agreement to the extent that it reasonably deems such amendment
necessary to comply with the requirements of Section 409A.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.

            EMMIS OPERATING COMPANY (“Employer”)
      By:   /s/ Jeffrey H. Smulyan         Jeffrey H. Smulyan        Chief
Executive Officer        RICHARD F. CUMMINGS
(“Executive”)
      /s/ Richard F. Cummings       Richard F. Cumming   

 

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