EXHIBIT 10.3

OPTION AGREEMENT

PURSUANT TO THE

EQUITY MEDIA HOLDINGS CORPORATION

2007 STOCK INCENTIVE PLAN

AGREEMENT (this “Agreement”), dated as of May 9, 2007, by and between Equity
Media Holdings Corporation, a Delaware Corporation, whose principal place of
business is Palm Beach County Florida (the “Company”) and Thomas M. Arnost (the
“Participant”).

Preliminary Statement

The Compensation Committee of the Board of Directors of the Company (the
“Committee”), pursuant to Equity Media Holdings Corporation 2007 Stock Incentive
Plan (the “Plan”), has authorized the granting to the Participant, as an
Eligible Individual (as defined in the Plan), of a nonqualified stock option
(the “Option”) to purchase the number of shares of the Company’s common stock,
par value $0.00001 per share (the “Common Stock”), set forth below. The parties
hereto desire to enter into this Agreement in order to set forth the terms of
the Option. Unless otherwise indicated, any capitalized term used but not
defined herein shall have the meaning ascribed to such term in the Plan. A copy
of the Plan has been delivered to the Participant. By signing and returning this
Agreement, the Participant acknowledges having received and read a copy of the
Plan and agrees to comply with the Plan, this Agreement and all applicable laws
and regulations.

Accordingly, the parties hereto agree as follows:

1. Grant of Option. Subject in all respects to the Plan and the terms and
conditions set forth herein and therein, effective as of May 9, 2007 (the “Grant
Date”), the Company hereby grants to the Participant the Option to purchase from
the Company up to 750,000 shares of Common Stock at a price per share of $4.30,
which is the Fair Market Value of the Common Stock, as determined in accordance
with the terms of the Plan. The Option shall be a nonqualified stock option. No
part of the Option granted hereby is intended to qualify as an “incentive stock
option” under Section 422 of the Internal Revenue Code of 1986, as amended.

2. Exercise. The Option shall vest in installments as provided below, which
shall be cumulative. The following table indicates each date (the “Vesting
Date”) upon or after which, subject to Section 6 of the Plan, the Participant
shall be entitled to exercise the Option with respect to the percentage of
shares of Common Stock that have vested as of such Vesting Date as indicated
below, provided that the Participant’s employment or other service with the
Company has not been terminated prior to such date:

 

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Vesting Date

  

Number of Shares

On Grant Date

   25%

One year anniversary of Grant Date

   50%

Two year anniversary of Grant Date

   75%

Three year anniversary of Grant Date

   100%

Except as specifically provided in the Plan, there shall be no proportionate or
partial vesting in the periods between the Vesting Dates and all vesting shall
occur only on the aforementioned Vesting Dates.

Notwithstanding the foregoing, if Participant’s employment is terminated by the
Company or a certain employment agreement, entered into as of May 9, 2007, by
and between Thomas M. Arnost, and the Company (the “Employment Agreement”), is
not renewed by the Company (on terms comparable to the current Employment
Agreement) after the initial 3-year term, in both instances, for any reason
other than for a reason constituting Good Cause under Section 5(b) of the
Employment Agreement, or if the Participant terminates his employment or does
not renew the Employment Agreement (on terms comparable to the current
Employment Agreement), after the initial 3-year term, in both instances, for a
reason constituting Good Cause under Section 5(c) of the Employment Agreement,
the portion of the Option unvested as of such termination or non-renewal, as
applicable, shall vest immediately upon the earlier of such termination of
employment or the expiration date of the Employment Agreement. Portion of the
Option that vests pursuant to the immediately preceding sentence, may be
exercised by the Participant at any time within a period not to exceed ninety
(90) days from the earlier of the date of termination of the Participant’s
employment or the expiration date of the Employment Agreement, but in no event
after the termination of the Option pursuant to its terms.

In the event the Participant’s employment is terminated by the Company or the
Employment Agreement is not renewed by the Company after the initial 3-year term
(on terms comparable to the current Employment Agreement), in both instances,
for a reason constituting Good Cause under Section 5(b) of the Employment
Agreement, or if the Participant terminates his employment or does not renew the
Employment Agreement after the initial 3-year term (on terms comparable to the
current Employment Agreement), in both instances, for any reason other than for
a reason constituting Good Cause under Section 5(c) of the Employment Agreement,
all remaining, unvested options shall expire immediately upon the earlier of
such termination or the expiration date of this Employment Agreement.

Any exercises of the Option by the Participant as provided above, in whole or in
part, shall be made in accordance with such procedures as the Committee shall
prescribe, including, without limitation, the filing of such written form of
exercise notice, if any, as may be promulgated by the Committee, and in
accordance with applicable tax and other laws.

Except as specifically set forth above, vesting shall occur in accordance with
the Plan.

3. Termination. The Option shall expire on the seventh (7th) anniversary of the
date of grant of the Option or earlier as provided in the Plan, including at
such time as provided in Section 6(k) of the Plan in the event the Participant
incurs a termination of employment or other service with the Company, unless
otherwise provided in Section 2 of this Agreement.

 

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4. Restriction on Transfer of Option. The Option granted hereby is not
transferable otherwise than by will or under the applicable laws of descent and
distribution and during the lifetime of the Participant may be exercised only by
the Participant. In addition, the Option shall not be assigned, negotiated,
pledged or hypothecated in any way (whether by operation of law or otherwise),
and the Option shall not be subject to execution, attachment or similar process.
Upon any other attempt to transfer, assign, negotiate, pledge or hypothecate the
Option, or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately become null and void.

5. Rights as a Stockholder. The Participant shall have no rights as a
stockholder with respect to any shares covered by the Option until the
Participant shall have become the holder of record of the shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such shares, except as otherwise specifically
provided for in the Plan.

6. Provisions of Plan and Other Agreements Control. This Agreement is subject to
all the terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan as may be adopted by the Committee and as
may be in effect from time to time. The Plan is incorporated herein by
reference. If and to the extent that this Agreement conflicts or is inconsistent
with the terms, conditions and provisions of the Plan, the Plan shall control,
and this Agreement shall be deemed to be modified accordingly. If and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions and provisions of any employment, severance, retirement or other
similar agreement between the Company and the Participant, such other agreement
between the Company and the Participant shall control, and this Agreement shall
be deemed to be modified accordingly.

7. Competition. In consideration for the grant of the Option, and regardless of
whether the Option becomes exercisable or is exercised, the Participant agrees
he will not do any of the following, either directly or indirectly, on his own
behalf or on behalf of any other person or entity, during the Participant’s
employment with the Company or during the Applicable Non-Competition Period (as
herein defined) anywhere in the United States:

 

  (a) For purposes of this Agreement, “Competitive Activity” shall mean any
activity relating to, in respect of or in connection with, directly or
indirectly, the broadcasting industry.

 

  (b) For purposes of this Agreement, “Applicable Non-Competition Period” shall
be the greater of the one (1) year period immediately following the
Participant’s cessation of employment with the Company for any reason or the
time period during which the Participant is eligible to receive and/or is
receiving any type of payments from the Company, severance or otherwise.

 

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  (c) Own any interest in, manage, operate, control, consult for, provide
services to or for, be an officer or director of, work for, or be employed in
any capacity by, any sole proprietorship, corporation, company, partnership,
association, venture or any other business, entity, agency or organization
(whether as an the Participant, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) engages in any Competitive Activity; provided,
however, that such provision shall not apply to the Participant’s ownership of
securities of the Company or the acquisition by the Participant, solely as an
investment, of securities of any issuer that is registered under Section 12(b)
or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed
or admitted for trading on any United States national securities exchange or
that are quoted on the National Association of Securities Dealers Automated
Quotations System, or any similar system or automated dissemination of
quotations of securities prices in common use, so long as the Participant does
not control, acquire a controlling interest in, or become a member of a group
which exercises direct or indirect control of, more than five percent of any
class of capital stock of such corporation.

 

  (d) Perform services in connection with any Competitive Activity for any prior
or existing customer of the Company.

 

  (e) Divert or attempt to divert from the Company any business relationship;
interfere with any business relationship of the Company; or engage in conduct
that is contrary to the Company’s business interests.

 

  (f) Other than for the benefit of the Company during the course of the
Participant’s employment, solicit, contact, or do or accept business with any
specific prospective or existing customer, supplier, or vendor of the Company.

 

  (g) Hire, employ, or engage any employee or contractor of the Company in an
employment or business relationship with any other person or entity, or recruit,
solicit, induce or attempt to influence any employee or contractor of the
Company to terminate his/her employment or engagement with the Company. This
covenant applies as to any employee or contractor who, at the time of the
recruitment/hire, is currently employed or engaged with the Company or who was
employed or engaged with the Company within the six (6) month period preceding
the date the Participant ceases to be an employee of the Company.

8. Forfeiture of Option. Upon the exercise of the Option (or any portion
thereof), the Participant shall be deemed to have confirmed to the Company that
Participant is in compliance with all terms and conditions of the Agreement. If
Participant violates any term or condition of section 7 of this Agreement,
independent of any equitable or legal remedies that the

 

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Company may have and without limiting the Company’s right to any other equitable
or legal remedies, the Option (and any portion thereof) shall be forfeited and
the exercise of the Option (or any portion thereof), payment(s) by the
Participant and delivery of Option Shares by the Company shall be rescinded and
rendered null and void. A forfeiture under this section shall result in the
following:

 

  (a). Any unvested and any vested but unexercised portion of the Option shall
be rescinded and will not longer be available to Participant.

 

  (b). Participant will return to Company any stock certificates for any Option
Share purchased under the Option within 30 calendar days of a demand from the
Company.

 

  (c). The profits or proceeds from the sale by Participant of Option Shares
shall revert to the Company and Participant shall tender any such profits or
proceeds within 30 days of a demand from Company.

 

  (d). The Company will return to Participant any payments made to Company for
purchase of Option Shares. Said payment by Company shall be made
contemporaneously with return of stock certificates and/or profits or proceeds
by Participant to Company.

9. Injunction. In addition to the remedies states above, it is recognized and
hereby acknowledged by the parties hereto that a breach by the Participant of
any of the covenants contained in Section 7 of this Agreement will cause
irreparable harm and damage to the Company, the monetary amount of which may be
virtually impossible to ascertain. As a result, the Participant recognizes and
hereby acknowledges that the Company shall be entitled to an injunction from a
court of competent jurisdiction enjoining and restraining any violation of any
or all of the covenants contained in Section 7 of this Agreement by the
Participant or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.

10. Material Provisions. The Participant specifically recognizes and affirms
that the aforementioned covenants are material and important terms of this
Agreement, and the Participant further agrees that should all or any part or
application of any subdivision of Section 7 of this Agreement be held or found
invalid or unenforceable for any reason whatsoever by a court of competent
jurisdiction in an action between the Participant and the Company, then any
unvested and any vested but unexercised portion of the Option shall be rescinded
and will not longer be available to Participant, and the Company shall be
entitled to receive from the Participant any stock certificates for any Option
Share purchased under the Option within 30 calendar days of a demand from the
Company. If Employee has sold, transferred, or otherwise disposed of any shares
of Stock obtained under this Option, the Company shall be entitled to receive
from the Participant the difference between the Option Price paid by the
Participant and the fair market value of the shares of Stock on the date of such
sale, transfer, or other disposition.

 

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11. Withholding. In connection with the exercise of the Option, the Participant
agrees (a) to pay to the Company, or make arrangements satisfactory to the
Company regarding payment of, any federal, state or local, domestic or foreign
taxes of any kind required by law to be withheld with respect to such exercise,
and (b) that the Company shall, to the extent permitted by law, have the right
to deduct from any payment of any kind otherwise due to the Participant any
federal, state or local taxes of any kind required by law to be withheld with
respect to the exercise of the Option.

12. Notices. Any notice or communication given hereunder shall be in writing and
shall be deemed to have been duly given when delivered in person, or by United
States mail, to the appropriate party at the address set forth below (or such
other address as the party shall from time to time specify):

If to the Company, to:

Equity Media Holdings Corporation

1 Shackleford Drive, Suite 400

Little Rock, Arkansas 72211

Attention: General Counsel

If to the Participant, to:

the address indicated after his or her signature at the end of this Agreement.

13. Governing Law. This Agreement shall be governed by the laws of the State of
Florida without regard to any conflicts of law rules.

14. Jurisdiction and Venue. The parties agree to submit to the exclusive
jurisdiction of the State of Florida; agree that any such dispute shall be heard
by a JUDGE AND NOT A JURY; agree that any suit shall be brought exclusively in
any state or federal court of competent jurisdiction in Palm Beach County,
Florida, which shall be the sole and exclusive forum for any court proceedings;
and agree that the prevailing party shall be entitled to an award of reasonable
attorneys’ fees and costs.

15. Waiver of Jury Trial. The parties hereby knowingly, voluntarily and
intentionally waive any right that they may have to a trial by jury in respect
of any litigation based hereon, or arising out of, under or in connection with
this Agreement and any agreement, document or instrument contemplated to be
executed in connection herewith, or any course of conduct, course of dealing
statements (whether verbal or written) or actions of any party hereto.

16. No Obligation to Continue Employment or Other Service. This Agreement does
not guarantee that the Company will employ or otherwise retain the services of
the Participant for any specific time period, nor does it modify in any respect
the Company’s right to terminate or modify the Participant’s employment, nature
of other service or compensation.

 

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17. Survival. The provisions of Sections 7 through 10 and 13 through 15 shall
survive the expiration or termination of the Participant’s employment and shall
survive the expiration or termination of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.

 

  Equity Media Holdings Corporation   By:                                      
                                                                    

Name:                                     
                                                             

 

Title:                                     
                                                               

 

ACCEPTANCE BY PARTICIPANT:

                                        
                                                                           

Participant’s Signature

    Date    

Home Address:        

(please print)

 

                                                                               
                                

  Street                                             
                                                                           

City

 

State

  Zip Code  

 

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