EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (the "Agreement") is effective as of September 9,
2002, by and between EMMIS OPERATING COMPANY, an Indiana corporation ("Employer"
or "Emmis"), and MICHAEL LEVITAN, an Indiana resident ("Executive").

                                    RECITALS

     WHEREAS,  Employer and its  subsidiaries  are engaged in the  ownership and
operation  of certain  radio and  television  stations,  magazines,  and related
operations;  and

     WHEREAS,  Employer  desires  to  employ  Executive  as  an  executive,  and
Executive  desires to be so employed.

     NOW, THEREFORE, in consideration of the foregoing,  the mutual promises 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.  Upon the terms and subject to the  conditions  set
forth in this Agreement, Employer hereby employs Executive, and Executive hereby
accepts  employment with Employer.

     2. Term. The term of Executive's  employment shall commence on September 9,
2002, and continue until  February 28, 2005 (the "Term").  This Agreement  shall
expire at the end of the Term unless earlier  terminated in accordance  with the
terms of this Agreement. For purposes of this Agreement, the term "First Partial
Year" shall be defined to mean the period  commencing  on  September 9, 2002 and
ending on  February  28,  2003;  the term "First  Full  Contract  Year" shall be
defined to mean the period  commencing  on March 1, 2003 and ending on  February
29, 2004; and the term "Final Contract Year" shall be defined to mean the period
commencing  on March 1, 2004 and ending on February 28, 2005 (each,  a "Contract
Year").
<PAGE>

     3. Executive's Position, Duties and Authority.

          3.1 Position.  Employer shall employ  Executive,  and Executive  shall
     serve as an  executive  of  Employer,  and of any  successor of Employer by
     merger,  acquisition  of  substantially  all  of the  assets  or  stock  of
     Employer,  or otherwise.  Executive  shall serve as Senior Vice President -
     Human  Resources  or in such other  senior  management  positions  to which
     Employer may appoint  Executive  during the Term.

          3.2 Duties and Authority. Executive shall have such duties, functions,
     authority  and  responsibilities  as are  commensurate  with the  office(s)
     Executive  holds with the Employer during the Term.

          3.3  Directorships  and Other  Offices.  If  Executive is elected as a
     Director of Emmis Communications Corporation, Executive shall serve in such
     position  without  additional  remuneration  but shall be  entitled  to the
     benefit  of  indemnification  pursuant  to  the  terms  of  Section  15.11.
     Executive  shall  also serve  without  remuneration  as a  director  and/or
     officer  of one  or  more  of  Employer's  subsidiaries  or  affiliates  if
     appointed to such position(s) by Employer during the Term.

     4.  Full-Time  Services.  Executive's  services  pursuant to this Agreement
shall be  performed  on a  full-time  basis.  Furthermore,  Executive  shall not
undertake any outside  business  activity  without the prior written  consent of
Employer. With respect to "Courseload",  Employer's consent to permit Employee's
continued  involvement therein is conditioned upon the following:  (i) Executive
shall  continue  to  serve  in  an  advisory  capacity  only;  (ii)  Executive's
continuing  work or  involvement  shall be limited to non-work  hours or weekend
time;  and  (iii)  any  such  work  or  involvement  shall  not  interfere  with
Executive's duties and obligations under this Agreement. Executive shall also be


<PAGE>

permitted  to serve on the board of The  Chapin  Hall  Center for  Children  and
participate in the annual meeting of the White House Fellows  Organization.  All
expenses related to Executive's association with these organizations  (including
travel  expenses)  shall  be  borne  solely  by  Executive.  Executive  shall be
permitted to serve on the board of other  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.

     5.  Location  of  Employment;  Travel.  The  location  for  performance  of
Executive's services hereunder shall be the offices designated by Employer in or
near  Indianapolis,  Indiana.  Executive  shall  undertake  such  travel  as the
performance of  Executive's  duties  pursuant to this Agreement may require.

     6. Compensation.

          6.1 Base Salary.  Employer  shall pay or cause to be paid to Executive
     an  annualized  base salary  ("Base  Salary")  as follows:  Two Hundred Ten
     Thousand  Dollars  ($210,000)  during  the First  Partial  Year;  provided,
     however,  that for the period  beginning on September 9, 2002 and ending on
     November 30, 2002,  Executive  shall only be required to work four (4) days
     during each work week (Monday  through Friday) and shall receive 80% of the
     Base Salary for the First  Partial  Year during  such  period;  Two Hundred
     Twenty Thousand Dollars ($220,000) during the First Full Contract Year; and
     Two Hundred Thirty Thousand  Dollars  ($230,000)  during the Final Contract
     Year.  Employer shall pay Executive the Base Salary according to Employer's
     customary payroll  practices.  Executive  acknowledges and agrees that: (i)
     Employer may pay a portion of Executive's Base Salary in Shares (as defined
     below)  pursuant  to a plan  adopted  for  Emmis  employees  or  for  other
     executive-level  officers of  Employer;  and (ii) ten percent  (10%) of any
     Base Salary paid pursuant to this Agreement is being paid in  consideration
     of Employer's  exclusive  rights contained in Section 10 of this Agreement.
     All Base  Salary  paid  pursuant  to this  Agreement  shall be  subject  to
     withholding  for  applicable  taxes  and  as  otherwise  required  by  law.
     Executive  understands  and agrees that any time off requested  relating to
     Apple litigation shall be without pay.
<PAGE>

          6.2 Annual Incentive Compensation. Subject to the terms and conditions
     of this Section 6.2 and Exhibit A (attached hereto and made a part hereof),
     Executive shall be eligible to receive one (1) annual  performance bonus in
     a target  amount of  Thirty-Five  Thousand  Dollars  ($35,000)  (subject to
     withholding for applicable taxes and as otherwise  required by law) for the
     First  Partial  Year,  and one (1) annual  performance  bonus  during  each
     subsequent  Contract  Year in a  target  amount  of  Seventy-Five  Thousand
     Dollars  ($75,000)  (subject to  withholding  for  applicable  taxes and as
     otherwise required by law) (each, a "Contract Year Bonus") to be paid after
     the  conclusion of each such Contract Year, the exact amount of which shall
     be determined  by means of  Executive's  attainment of certain  performance
     goals as determined each Contract Year by the Compensation Committee of the
     Employer's  Board of Directors (the  "Compensation  Committee").  Executive
     acknowledges  and agrees  that,  as a material  condition  to  receiving  a
     Contract Year Bonus,  as of the end of each  respective  Contract Year: (i)
     this  Agreement  must be in effect and not  previously  terminated  for any
     reason  (other  than a breach  of this  Agreement  by  Employer);  and (ii)
     Executive must be fully  performing  Executive's  duties and obligations as
     required  hereunder  and  shall  not be in  breach  of any of the terms and
     conditions of this  Agreement.  It is understood and agreed that Emmis may,
     at its sole  election,  pay any  Contract  Year  Bonus,  if any, in cash or
     Shares.  In the event Emmis  elects  pursuant to this  Section 6.2 to pay a
     Contract Year Bonus in Shares,  the exact number of Shares to be awarded to
     Executive  shall be  determined  by dividing the total dollar amount of the
     applicable  Contract Year Bonus by the average of the reported high and low
     Share  price on a  valuation  date to be used by  Employer  in  determining
     similar  annual  incentive   compensation   awards  for  other  members  of
     Employer's senior management team (the "Valuation  Formula").  Any Contract
     Year Bonus amounts earned by Executive pursuant to the terms and conditions
     of this Section 6.2 shall be awarded promptly  following  Employer's fiscal


<PAGE>

     year  end  earnings  release  or at such  other  time as  annual  incentive
     compensation  awards  are  made  to  other  members  of  Employer's  senior
     management  team (but in no event  later  than  ninety  (90) days after the
     expiration of the applicable  Contract Year). The performance goals for the
     First Partial Year are set forth on Exhibit A. It is understood  and agreed
     that the Contract Year Bonus for the First Partial Year shall be subject to
     reduction  for  missed  work,  such  reduction  to  be  determined  in  the
     reasonable discretion of the Compensation  Committee.

          6.3 Equity Incentive Compensation.  On or about March 1, 2003, or such
     other date or dates on which Emmis awards equity incentive  compensation to
     its employees  (each,  an "Award Date"),  Executive shall receive an option
     ("Option")  to  acquire  Twenty-Five  Thousand  (25,000)  shares of Class A
     Common Stock of Emmis Communications Corporation (the "Shares") pursuant to
     the terms and subject to the conditions of the applicable  Equity Incentive
     Plan of  Employer.  Additionally,  on or about  March 1, 2004 or such other
     Award  Date(s),  Executive  shall  receive an Option to  acquire  Seventeen
     Thousand Five Hundred  (17,500) Shares pursuant to the terms and subject to
     the conditions of the applicable  Equity Incentive Plan of Employer.  It is
     understood  and agreed  that in the event of any change in the  outstanding
     Shares by  reason of any  reorganization,  recapitalization,  stock  split,
     reverse stock split, stock dividend,  share  combination,  consolidation or
     similar  event,  the number and class of Shares  awarded  pursuant  to this
     Agreement or covered by an Option granted pursuant to this Section 6.3 (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  and the Option  agreement
     evidencing the grant of the Option.  The  determination of the Compensation
     Committee shall be conclusive and binding.

          6.4. Stock Bonus.  On or after March 1, 2005,  Executive shall receive
     3,825 Shares ("Bonus Shares");  provided,  that each of the following three
     (3) conditions is met: (i) Executive has fully performed all of Executive's

<PAGE>

     duties and obligations pursuant to this Agreement; (ii) Executive is not in
     breach of any of the  terms and  conditions  of this  Agreement;  and (iii)
     Executive  and Employer  have  executed a subsequent  employment  agreement
     having a term of no less than  twenty-four  (24)  months  (the  "Subsequent
     Agreement")  effective  as of March 1, 2005.  If  Employer  elects to offer
     Executive a Subsequent  Agreement,  which election shall be at the sole and
     absolute discretion of Employer,  Employer shall use its reasonable efforts
     to propose the terms of the Subsequent Agreement to Executive  sufficiently
     in advance of the  expiration of this Agreement so as to permit the parties
     to have a reasonable  opportunity  to negotiate and execute the  Subsequent
     Agreement  prior to March 1, 2005.  In the event the  parties  execute  the
     Subsequent  Agreement and all of the required  conditions set forth in this
     Section 6.4  regarding  the granting of the Bonus Shares are met, the Bonus
     Shares shall be (i) granted to Executive as soon as reasonably  practicable
     after the execution of the Subsequent  Agreement,  but in no event prior to
     March 1, 2005,  and (ii)  freely  transferable  when  granted to  Executive
     subject to Employer's  Securities Trading Policy (e.g.,  "blackout period")
     or  applicable  federal or state law.  Notwithstanding  the  foregoing,  if
     Executive's  performance  warrants the proposal of a Subsequent  Agreement,
     but  Employer  elects not to offer  Executive a  Subsequent  Agreement  for
     reasons wholly unrelated to Executive's performance (e.g., adverse economic
     conditions,  downsizing,  or any similar issues other than those that might
     otherwise   result  in   Executive's   employment   being   terminated  for
     non-performance,  misconduct or cause),  Executive shall receive the Shares
     according to the terms of this Section 6.4.

          6.5.  Auto  Allowance.  During  the Term,  Executive  shall  receive a
     monthly auto  allowance in the amount of Seven Hundred Fifty Dollars ($750)
     (subject to withholding for applicable  taxes and as otherwise  required by
     law)  consistent  with  Employer's   policy  or  practice   regarding  such
     allowances, as such policy or practice may be changed from time to time, or
     eliminated,  during  the  Term in  Employer's  sole  discretion;  provided,
     however,  that in no event  shall the amount paid to  Executive  under this
     Section 6.5 be reduced.
<PAGE>

          6.6 Fractional  Shares. In the event that the calculation of a certain
     number of Shares awarded to Executive  pursuant to any of the provisions of
     this Section 6 results in a fractional  Share,  such fractional Share shall
     be rounded up to the nearest whole Share.

     7. Business  Expenses.  Employer  shall pay or reimburse  Executive for all
reasonable  expenses  actually  incurred by Executive  during the Term  directly
related to the performance of Executive's  services  hereunder upon presentation
of  expense  statements,  vouchers  or  similar  documentation,  or  such  other
supporting information as Employer may require of Executive.

     8. Fringe Benefits and Vacation. During each Contract Year during the Term,
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 the general  provisions of Employer's fringe benefit
plans or programs;  provided,  however  that  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.

     9. Confidential  Information.

          9.1  Non-Disclosure.  Executive  acknowledges that certain information
     concerning  the  business  of  Employer  is  of a  proprietary  and  highly
     confidential  nature,  and that as a result of Executive's  employment with
     Employer,  Executive has received and developed, and will hereafter receive
     and continue to develop,  proprietary  and other  confidential  information
     concerning the business of Employer and its subsidiaries which, if known to
     competitors of Employer, would damage Employer, its subsidiaries, and their
     respective businesses.  Accordingly, Executive agrees that, during the Term


<PAGE>

     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
     or its representatives or as specifically  directed in writing by Employer)
     any information or knowledge  concerning the business of Employer or any of
     its subsidiaries which is not generally  available to the public other than
     through the  activities of Executive.  Executive  further  agrees that upon
     termination  of  Executive's  employment  for any reason,  Executive  shall
     promptly  surrender  to  Employer  all  documents,   brochures,   writings,
     illustrations,  price  lists,  marketing  plans,  programs,  presentations,
     budgets and any other such materials (regardless of form or character) that
     Executive  received  from or developed on behalf of Employer in  connection
     with Executive's employment. Executive acknowledges that all such materials
     shall  remain  at all  times  during  and  after  the  expiration  or early
     termination  of the Term for any reason 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.

          9.2 Injunctive Relief. Executive acknowledges that: Executive's breach
     of Section  9.1 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 9 have been  specifically  negotiated and carefully written to
     prevent  such  irreparable  harm  and  damage.  Accordingly,  if  Executive
     breaches  Section  9.1,  Employer  shall be entitled to  injunctive  relief
     enforcing  Section  9.1 to  the  extent  reasonably  necessary  to  protect
     Employer's  legitimate  interests,  without posting bond or other security.


     10.  Non-Interference;   Exclusive  Employment  and  Non-Competition.

          10.1  Non-Interference.  During  the Term and for a period  of one (1)
     year immediately  thereafter,  Executive shall not, directly or indirectly,
     take any  action  (or  permit any action to be taken by an entity or person
     with which  Executive is  associated)  which has the effect of  interfering
     with Employer's  relationship  (contractual or otherwise) with any employee
     of Employer or any of its  subsidiaries,  affiliates  or related  entities;

<PAGE>

     provided, however, that Executive may solicit the employment of an employee
     serving as a "direct report" to Executive;  provided,  that such person was
     recruited and hired by Executive,  and commenced  employment  with Employer
     during the last six (6) months of the Term.

          10.2 Exclusive Employment and Non-Competition.  Executive acknowledges
     the special and unique nature of Executive's  employment with Employer as a
     member of Employer's  senior  management  team, and understands  that, as a
     result of  Executive's  employment  with  Employer  prior to and during the
     Term,  Executive has gained and will continue to gain knowledge of and have
     access  to  highly  sensitive  and  valuable   information   regarding  the
     operations  of  Employer  and its  subsidiaries  and  affiliated  entities,
     including  but  not  limited  to the  proprietary  and  other  confidential
     information  described  more fully in Section 9.1.  Accordingly,  Executive
     acknowledges  Employer's  special  interest in preventing the disclosure of
     such information  through the engagement of Executive's  services by any of
     Employer's competitors following the expiration or early termination of the
     Term for any reason. Therefore,  Executive agrees that, during the Term and
     for a period of twelve (12) months immediately  following the expiration or
     early termination of the Term for any reason,  Executive shall not, without
     the prior written  approval of Employer,  engage  directly or indirectly in
     services for, or become employed by, serve as an agent or consultant to, or
     become an officer,  director,  partner,  principal or  shareholder  of, any
     corporation,  partnership  or other entity which is engaged in the radio or
     television  broadcasting  business, or the magazine publishing business, in
     any city in which  Employer  operates  or has an  interest  in any radio or
     television  station,  or magazine.  So long as Executive does not engage in
     any  other  activity  prohibited  by the  immediately  preceding  sentence,
     Executive's  ownership  of less than five  percent  (5%) of the  issued and
     outstanding   stock  of  any  corporation  whose  stock  is  traded  on  an
     established   securities  market  shall  not  constitute  competition  with

<PAGE>

     Employer for the purpose of this Section 10.2. It is understood  and agreed
     that, in the event Employer does not offer Executive reasonably  acceptable
     employment  with Employer upon the expiration of the Term, the  restriction
     set forth in this Section  10.2 shall not apply.

          10.3 Injunctive  Relief.  Executive  acknowledges  and agrees that the
     provisions  of  this  Section  10 have  been  specifically  negotiated  and
     carefully  worded in recognition of the  opportunities  which have been and
     shall be  afforded  to  Executive  by  Employer  by virtue  of  Executive's
     continued  association  with Employer and the influence  that Executive has
     and will continue to have over Employer's employees, customers and vendors.
     Executive further acknowledges that:  Executive's breach of Section 10.1 or
     10.2 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 10
     have been  specifically  negotiated  and carefully  written to prevent such
     irreparable injury and damage.  Accordingly,  if Executive breaches Section
     10.1 or 10.2,  Employer  shall be entitled to injunctive  relief  enforcing
     Section  10.1 or  10.2,  as the  case  may  be,  to the  extent  reasonably
     necessary to protect Employer's legitimate interests,  without posting bond
     or other security.  If Executive violates Section 10.1 or 10.2 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 non-interference or exclusive  employment set
     forth herein.  Accordingly,  the obligations set forth in Sections 10.1 and
     10.2 shall be deemed to 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 obligations by Executive.

          10.4  Construction.  Despite  the  express  agreement  herein  between
     Employer and  Executive,  in the event that any of the provisions set forth
     in this Section 10 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 10 shall be  interpreted  to extend only to
     the maximum extent as to which it may be enforceable, and that this Section
     10 shall be severable into its component  parts,  all as determined by such
     court or tribunal.
<PAGE>

     11. Termination of Agreement.

          11.1  Termination  of Agreement  by Employer  for Cause.  Employer may
     terminate this Agreement and Executive's employment hereunder for Cause (as
     defined in Section 11.3 below) in accordance  with the terms and conditions
     of this Section 11.  Following a  determination  by Employer that Executive
     should be  terminated  for Cause,  Employer  shall give  written  notice to
     Executive  specifying the grounds for such  termination  (the  "Preliminary
     Notice"),  and  Executive  shall  have five (5) days  after  receipt of the
     Preliminary  Notice to respond in writing.  If following the  expiration of
     such  five  (5)  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").

          11.2  Effect of  Termination  by Employer  for Cause.  In the event of
     termination  for Cause as provided in Section  11.1  above:

               (i) Executive  shall have no further  obligations  or liabilities
          hereunder,  except  Executive's  obligations  under  Section 9 and 10,
          which shall survive the termination of this  Agreement.

               (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 unpaid Base Salary with respect to
               any  applicable  pay period  ending on or before the  termination
               date;  and

                    (b) Pay to Executive any Contract Year Bonus,  if any, which
               Executive  earned for a Contract  Year  ending on or prior to the
               termination  date  pursuant to Section 6.2 but which is unpaid as
               of the termination  date.
<PAGE>

          11.3  Definition  of Cause.  For purposes of this  Agreement,  "Cause"
     shall be defined to mean any of the  following:  (i) any action or omission
     by Executive  involving willful or repeated failure,  neglect or refusal to
     perform any of Executive's  obligations under this Agreement (or any duties
     assigned to Executive consistent with the terms of this Agreement) or abide
     by any applicable policy of Employer, and continuation of such breach after
     written notice and the expiration of a ten (10) day cure period;  provided,
     however,  that it is not the  parties'  intention  that  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 11.3, 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  or  an  opportunity  to  cure;  (ii)
     commission of, or the bringing of charges against Executive for, any felony
     or any other crime involving an act of moral turpitude;  (iii)  Executive's
     action or omission, or knowing allowance of actions or omissions, which are
     in  violation  of any  law or the  rules  and  regulations  of the  Federal
     Communications  Commission (the "FCC"), or which otherwise  jeopardizes any
     license granted to Employer or any of Employer's subsidiaries or affiliates
     in  connection  with the  ownership or operation of any radio or television
     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 proprietary
     or confidential  information,  including without limitation the information
     described  more  fully in Section  9.1;  (viii)  any  action  which  brings
     Employer  or any of  Employer's  subsidiaries  or  affiliates  into  public
     disrepute,  contempt, scandal or ridicule; and (ix) any matter constituting
     cause or gross  misconduct  under  applicable  laws.

          11.4 Termination by Employer Following a Change in Control.  If, after

<PAGE>

     any Change in Control (as defined below),  Employer terminates  Executive's
     employment  other  than for  Cause or  because  Executive  dies or  becomes
     Disabled,  or if, after any Change in Control,  Employer otherwise breaches
     any  material  provision  of this  Agreement  and fails to cure such breach
     within ten (10) business days after receiving written notice of such breach
     from Executive (which material provisions shall include Sections 3.1 or 5),
     then: (i) Employer shall pay to Executive the Base Salary under Section 6.1
     attributable  to the  remainder  of the Term and the full  portion  of each
     Contract  Year Bonus for the remainder of the Term as if each such Contract
     Year Bonus had been awarded by the  Compensation  Committee;  (ii) Employer
     shall grant to Executive any Option  required to be granted under the terms
     of  Section 6.3  prior to such date but not yet  granted  as of such  date;
     (iii)  Employer  shall  pay to  Executive  in cash  the fair  market  value
     (determined using the  Black-Scholes  option pricing method) of any Options
     not granted as of such date to which  Executive  would have  otherwise been
     entitled  over the  remainder of the Term  (assuming a grant price equal to
     the Fair Market Value per share on such date);  and (iv) Executive shall be
     released  from the  restrictions  set forth in Section 10. Any  payments or
     grants  required  above  shall be made by  Employer  not later than two (2)
     weeks after such termination date or the expiration of such cure period for
     which any material breach remains uncured.  For purposes of this Agreement,
     the term "Change in Control"  shall be defined to mean the  acquisition  by
     any person or group  (other than  Jeffrey H. Smulyan or a group of which he
     is an  affiliate  and an active  participant)  of  beneficial  ownership by
     purchase,  merger, or otherwise,  of either more than 50% of all classes of
     stock of  Employer  (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 Employer or its  successors;  "person" shall mean such
     term as used in Rule 13d-5 of the SEC under the Exchange Act; "group" shall
     mean such term as defined in Section 13(d) of the Exchange Act; "beneficial
     owner" shall mean such term as defined in  Rule 13d-3  of the SEC under the

<PAGE>

     Exchange Act; and  "affiliate"  shall mean such term as defined in Rule 144
     of the SEC  under  the  Securities  Act.  Notwithstanding  anything  to the
     contrary contained in this Agreement, it is expressly understood and agreed
     that: (i) in the event  Employer  elects to separate or bifurcate its radio
     and television divisions by means of merger, corporate reorganization, sale
     or disposition of assets, spin off, tax-free  reorganization,  or otherwise
     (each, a "Separation  Event"),  such Separation Event shall not be deemed a
     Change in Control for purposes of this Section 11.4; (ii) in no event shall
     any payment made to Executive  pursuant to the terms and conditions of this
     Section  11.4  be  less  than  the  equivalent  of  one  (1)  year's  total
     compensation  owed to  Executive  for the  Contract  Year during which such
     payment is required to be made to Executive;  and (iii) Executive shall not
     be  eligible to receive a  Severance  Payment (as defined in Section  15.12
     below) if  Executive  receives any payment  pursuant to this Section  11.4.
     Furthermore,  in the event the Compensation  Committee  develops a separate
     Change of Control or similar  agreement  for senior  executive  officers of
     Employer,  and such  agreement  is  offered  to  Executive  (the  "Proposed
     Agreement"),  Executive  shall  have the  option to either  (i)  accept the
     Proposed Agreement,  in which case this Section 11.4 shall be superseded by
     the  Proposed  Agreement  and no longer be of any force or effect,  or (ii)
     reject the Proposed Agreement, in which case this Section 11.4 shall remain
     unaffected   and  in  full  force  and  effect   according  to  its  terms.


     12.Disability.

          12.1 Termination of Employment. If Executive shall become Disabled (as
     defined in Section 12.2),  Employer shall continue to compensate  Executive
     under the terms of this Agreement without  diminution and otherwise without
     regard to such disability or  nonperformance  of duties until Executive has
     been  disabled  for a  cumulative  period of six (6) months,  at which time
     Employer  may,  in its  sole  discretion,  elect to  terminate  Executive's

<PAGE>

     employment. If Employer elects to terminate Executive's employment pursuant
     to this Section 12.1, the date on which Executive's  employment  terminates
     shall be  referred to herein as the  "Disability  Termination  Date".

          12.2  Definition  of  Disability.  Executive  shall be  deemed to have
     become  "Disabled"  for purposes of this Agreement if, during the Term, due
     to ill health,  physical or mental  disability,  or for other causes beyond
     Executive's reasonable control, Executive shall have been unable to perform
     Executive's  duties  hereunder  as  reasonably  determined  by a  physician
     selected by Employer.

          12.3  Obligations  after  Termination.  Unless Employer  exercises its
     option under Section 12.5 below to reinstate  Executive to Executive's full
     compensation,  duties, functions,  responsibilities and authority hereunder
     for the  balance  of the  original  Term,  Executive  shall have no further
     obligations or liabilities  hereunder after a Disability  Termination  Date
     except Executive's  obligations under Sections 9 and 10 which shall survive
     the termination of the Term. After a Disability  Termination Date, Employer
     shall have no  further  obligations  or  liabilities  hereunder  except its
     obligations  under Section 12.4 which shall also survive the termination of
     the Term.

          12.4 Payment of Unpaid Amounts after Termination.  Employer shall, not
     later  than two (2)  weeks  after a  Disability  Termination  Date,  pay to
     Executive: (i) all unpaid Base Salary with respect to any pay period ending
     on or before the Disability  Termination  Date; plus (ii) any Contract Year
     Bonus,  if any,  earned by Executive for a Contract Year ending on or prior
     to the  Disability  Termination  Date  pursuant to Section 6.2 but which is
     unpaid as of the Disability  Termination Date; provided,  however,  that in
     the event a  Disability  Termination  Date  occurs at least six (6)  months
     after the  commencement of a Contract Year during the Term,  Employer shall
     pay to  Executive a pro-rated  portion of the  Contract  Year Bonus for the
     Contract Year during which the  Disability  Termination  Date occurs,  such
     amount to be  determined  in the sole  discretion  of Employer,  so long as
     Executive is not  reinstated  during such Contract Year pursuant to Section
     12.5.
<PAGE>

          12.5  Reinstatement.  If during the original Term and  subsequent to a
     Disability   Termination  Date,   Executive  shall  fully  recover  from  a
     disability,  Employer shall have the right  (exercisable  within sixty (60)
     days after written  notice from  Executive of such  recovery),  but not the
     obligation,  to reinstate Executive to employment hereunder for the balance
     of the original  Term. In the event of such  reinstatement,  Employer shall
     pay  Executive at  Executive's  full level of  compensation  hereunder  and
     otherwise  employ  Executive in accordance with the terms and provisions of
     this Agreement.

          12.6 No Reduction.  Amounts payable  pursuant to this Section 12 shall
     not be reduced by the value of any benefits  payable to Executive under any
     disability  insurance  plan  or  policy.

     13. Death of Executive.

          13.1   Termination  of  Agreement.   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
     its  obligations   under  Section  13.2  below  which  shall  survive  such
     termination.

          13.2 Compensation.  Employer shall, not later than two (2) weeks after
     Executive's  date  of  death,  pay  to  Executive's  estate  or  designated
     beneficiary  all unpaid Base Salary and Contract Year Bonus amounts  earned
     by Executive,  if any, with respect to any pay period or Contract  Year, as
     the case may be,  ending on or before  Executive's  date of death.

          13.3 No Reduction.  Amounts payable  pursuant to this Section 13 shall
     not be reduced by the value of any benefits  payable to Executive's  estate
     or designated  beneficiaries  under any  applicable  life insurance plan or
     policy.

          13.4 Death after  Termination.  In the event that Executive dies after
     termination  of this  Agreement  pursuant to Sections 11 or 12, all amounts
     required to be paid by Employer  prior to  Executive's  death in connection
     with such  termination  that remain unpaid as of Executive's  date of death
     shall be paid to Executive's estate or designated beneficiary.
<PAGE>

     14.  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 duly  given if  delivered  personally  or sent by prepaid
telegram,  or mailed  first-class,  postage prepaid,  by registered or certified
mail, 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.: David O. Barrett, Esq.

                        With a copy to:

                           Gary L. Kaseff, Esq.
                           15821 Ventura Blvd.
                           Suite 685
                           Encino, California 91436

                    (ii)  If  to  Executive,   to  Executive's  address  on  the
               personnel records of Employer.

     15. Miscellaneous.

          15.1  Governing  Law.  This  Agreement  shall be  deemed  to have been
     entered  into in the  State of  Indiana  and  shall  be  governed  by,  and
     construed and enforced in accordance with, the laws of the State of Indiana
     without  regard to its  choice of law  provisions.

          15.2  Arbitration.  The parties agree that any controversy or claim of
     either  party  hereto  arising  out  of or in  any  way  relating  to  this
     Agreement,  or  breach  thereof,  shall be  settled  by final  and  binding
     arbitration  in  Indianapolis,  Indiana in accordance  with the  applicable
     rules of the American Arbitration  Association,  and that judgment upon any
     award rendered may be entered by the  prevailing  party in any court having
     jurisdiction  thereof.  The  parties  agree  to  share  equally  all  costs
     associated with any arbitration;  provided,  however, that each party shall
     be responsible for its own attorneys' fees and expenses.


<PAGE>

          15.3 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 or conditions of this Agreement.

          15.4 Entire Agreement;  Merger.  This Agreement  (including Exhibit A)
     sets forth the entire  agreement and  understanding of the parties relating
     to  the  subject  matter  herein,  and  supersedes  all  prior  agreements,
     arrangements  and  understandings,  written or oral,  between the  parties,
     which are merged herein.

          15.5 Successors and Assigns.  This Agreement,  and Executive's  rights
     and  obligations  hereunder,  may not be assigned by Executive  without the
     prior written consent of Employer, which consent may be granted or withheld
     in  Employer's  sole  and  absolute  discretion;  provided,  however,  that
     Executive may designate  pursuant to Section 15.7 one 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 subsidiary,  affiliate or related entity,
     or any third party by way of merger, corporate reorganization,  acquisition
     of substantially all of the assets or stock of Employer, or otherwise.

          15.6 Amendments;  Waivers. 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.  The failure of either party
     at any time or times 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.
<PAGE>

          15.7  Beneficiaries.  Whenever this Agreement provides for any payment
     to Executive's estate, such payment may be made instead to such beneficiary
     or  beneficiaries  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  or  beneficiaries  by  written  notice to
     Employer  (and  to any  applicable  insurance  company).

          15.8 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;  and (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.
     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,  shareholders,
     agents,  attorneys,  insurers and representatives  (the "Emmis Group") from
     and  against  any and  all  losses,  costs,  damages,  expenses  (including
     attorneys' fees and expenses),  liabilities and claims,  arising out of, in
     connection with, or in any way related to Executive's  breach of any of the
     representations or warranties contained in this Section 15.8 or Executive's
     breach  of any of the  material  terms  or  conditions  contained  in  this
     Agreement.
<PAGE>

          15.9  No  Obligation  to  Utilize  Services.  Employer  shall  not  be
     obligated to utilize  Executive's  services nor use the results or products
     of such  services even if Executive is not in default  hereunder.  Employer
     may at  any  time  during  the  Term,  for  any  reason,  elect  not to use
     Executive's  services or have any further  obligations  to Executive  under
     this Agreement except as provided in the next sentence.  If Employer elects
     not to use  Executive's  services as permitted  herein,  Executive shall be
     paid Executive's full  compensation as described more fully in Section 6 at
     the times and in the  installments as provided  therein as if Executive had
     fulfilled  Executive's  obligations  hereunder through the remainder of the
     Term. Furthermore,  it is understood and agreed that, in the event Employer
     elects  not to use  Executive's  services  as  permitted  pursuant  to this
     Section 15.9,  Executive  shall be eligible to receive a Severance  Payment
     after the  expiration of the Term subject to the terms and  conditions  set
     forth in Section  15.12 below.

          15.10  Change in Fiscal  Year.  If Employer  changes its fiscal  year,
     Employer  shall make such  adjustments  to the  various  dates and  amounts
     included  herein  or in  any  plan  or  program  referenced  herein  as are
     necessary or appropriate; provided, however, that the end of the Term shall
     in no event be  extended  beyond the  expiration  of the Term  without  the
     written consent of the parties.

          15.11  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

<PAGE>

     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.

          15.12 Subsequent Employment by Employer. Subject to the conditions set
     forth in the  last  sentence  of this  Section  15.12,  in the  event  that
     Employer does not offer  Executive  reasonably  acceptable  employment with
     Employer upon the  expiration of the Term,  Employer shall continue to make
     regular payments of Executive's Base Salary for either: (a) six (6) months;
     or (b) until such time as Executive commences subsequent  employment with a
     new  employer,  whichever  first occurs (the  "Severance  Payment").  It is
     understood and agreed that, as a material  condition  upon which  Executive
     shall be entitled to receive the  Severance  Payment,  Executive  agrees to
     promptly  notify  Employer of the  commencement  date upon which  Executive
     begins subsequent  employment with a new employer. It is further understood
     and agreed that 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
     11, (ii) by reason of  Executive's  disability or death under Section 12 or
     13, or (iii) by Executive  for any reason  other than a material  breach of
     this Agreement by Employer.


<PAGE>

     IN WITNESS WHEREOF,  the parties,  intending to be legally bound, have duly
executed this Agreement as of the date first written above.

                          EMMIS OPERATING COMPANY
                          ("Employer")



                          By:      /s/ Jeffrey H. Smulyan
                                       Jeffrey H. Smulyan
                               Chairman of the Board and Chief Executive Officer


                          MICHAEL LEVITAN
                          ("Executive")


                          By:      /s/ Michael Levitan
                                       Michael Levitan
<PAGE>

                                    EXHIBIT A

                  Calculation of Annual Incentive Compensation

     Pursuant  to  Section  6.2,  for the First  Partial  Year  during the Term,
Executive shall be eligible to receive a performance bonus in a target amount of
Thirty-Five  Thousand  Dollars  ($35,000)  upon the  attainment of the following
performance goals (the "Performance Goals"):

                  Target Bonus     Performance Goal

         1.       $14,000          Domestic Radio Cash Flow
         2.       $10,500          Other Emmis Cash Flow
         3.       $10,500          Discretionary

     Executive's  attainment of the Performance Goals shall be determined in the
sole and absolute  discretion  of the  Compensation  Committee  based on certain
performance  targets  established by the Compensation  Committee  related to the
broadcast cash flow of Employer's  radio  division,  television  division and/or
other  operating  units of Employer  as reported by the  Employer in its filings
with the United States Securities and Exchange Commission.  For purposes of this
Exhibit A, "Domestic Radio Cash Flow" shall be defined as the combined broadcast
cash flow for all of Employers domestic radio stations;  "Other Emmis Cash Flow"
shall be defined as the combined cash flow for Employer's  television  division,
publishing  division and  international  radio operations.  Discretionary  bonus
amounts shall be awarded by the Compensation  Committee in its sole and absolute
discretion.   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.  It is
understood and agreed that the Performance  Goals for each  subsequent  Contract
Year  during  the Term,  and the  corresponding  performance  targets,  shall be
determined by the  Compensation  Committee on or about the  commencement of each
respective Contract Year.


     Executive shall earn a percentage of each Contract Year Bonus in accordance
with the  following  scale  depending  upon the extent to which the  Performance
Goals are attained:

Percentage of Performance Goal Attained     Percentage of Target Bonus Earned
105% or more                                         120% maximum
100%                                                 100%
95%                                                   80%
90%                                                   70%
less than 90%                                          0%