exv10w2



 




Exhibit
10.2






2006 OUTSIDE DIRECTOR STOCK COMPENSATION PROGRAM

UNDER THE

EMMIS COMMUNICATIONS CORPORATION

2004 EQUITY COMPENSATION PLAN




	 	 	 
	Section 1.

	 	Introduction and Purpose. To address business
conditions and to further align our directors’ interests with
those of our shareholders Emmis Communications Corporation is
instituting this 2006 Outside Director Stock Compensation
Program (the “Program”) under the Emmis Communications
Corporation 2004 Equity Compensation Plan (the “Plan”).
	 
	 	 
	Section 2.

	 	Award. Pursuant to the authority under the Plan, the
Board of Directors hereby authorizes and awards, effective on
the first business day after the end of the Award Year,
Restricted Stock to Participants in accordance with the terms
set forth below (sometimes referred to as the “Award” or
“Awards”).
	 
	 	 
	Section 3.

	 	Definitions.
	 
	 	 
	 

	 	“Award Year” means January 1, 2006 through December 31, 2006,
and each calendar year thereafter.
	 
	 	 
	 

	 	“Board of Directors” means the Board of Directors of Emmis Communications
Corporation.
	 
	 	 
	 

	 	“Company” means Emmis Communications Corporation.
	 
	 	 
	 

	 	“Director” means a person who is a member of the Board of Directors.
	 
	 	 
	 

	 	“Emmis” means Emmis Communications Corporation and its Subsidiaries, as defined by
the Plan, that are generally included in its United States’ payroll system.
	 
	 	 
	 

	 	“Emmis Stock”, “Share” or “Stock” means the Class A Common Stock of Emmis
Communications Corporation.
	 
	 	 
	 

	 	“Initial Value” means the lower of (i) the VWAP on November 1, 2005 and (ii) the
VWAP on the first trading day immediately preceding the beginning of the Award Year
or (iii) the average VWAP during the first 45 days of that Award Year.
	 
	 	 
	 

	 	“Participant” means a Director who is not an employee of the Company or its
subsidiaries.
	 
	 	 
	 

	 	“Plan” means the 2004 Equity Compensation Plan sponsored by the Company.
	 
	 	 
	 

	 	“Program” means this 2006 Outside Director Stock Compensation Program.






 









 






	 	 	 
	 

	 	“Program Compensation” means the sum of all directors fees payable to each
Participant during the Award Year in accordance with outside director compensation
policies in effect from time to time.
	 
	 	 
	 

	 	“Restricted Stock” means the award of Stock issued under this Program.
	 
	 	 
	 

	 	“Securities Trading Policy” means the policy established by the Board of Directors
of the Company from time to time that specifies, among other things, the times when
an Emmis employee may buy or sell Emmis Stock.
	 
	 	 
	 

	 	“VWAP” means the Volume Weighted Average Price per share of Emmis Stock as of the
end of a trading day as calculated by Bloomberg, L.P. or such other organization
designated by the Company; provided, however, that if there are no shares of Emmis
Stock traded on the NASDAQ/NMS on such date, the VWAP shall mean the volume weighted
average price per share of Emmis Stock as of the end of the previous trading day on
which shares of Emmis Stock were traded on the NASDAQ/NMS.
	 
	 	 
	Section 4.

	 	Restricted Stock.







	 	(a)	 	Restricted Stock Agreement. Each Participant will
receive a Restricted Stock Agreement providing for the issuance of Restricted
Stock to the Participant after the end of the Award Year. Subject to the terms
of the Restricted Stock Agreement, the number of shares of Restricted Stock to
be issued to the Participant will equal the sum of Shares determined under
Subsection 4(b). Such Restricted Stock will be issued as soon as
administratively practicable after the end of the Award Year. So long as a
Participant is not in possession of material non-public information and the
Securities Trading Policy does not prohibit the Participant from buying or
selling Emmis Stock, the Participant may sell the Restricted Stock upon
issuance after the end of the Award Year. Pursuant to the authority under the
Plan, the purchase price for Restricted Stock under this Program shall be zero
($0) and the Restricted Stock shall be issued without restriction as to resale.
	 
	 	(b)	 	Number of Shares. The number of Shares of Restricted
Stock awarded to a Participant under this Section shall equal the Participant’s
Program Compensation for the Award Year divided by the Initial Value, provided
that if the Participant has attended, in person or by phone, at least 75% of
all of the meetings of the Board of Directors and of any Board of Directors’
Committees on which the Participant serves, the Participant’s Program
Compensation shall be divided by 80% of the Initial Value. The actual number
of Shares will be rounded up to the nearest full share.




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	 	(c)	 	Forfeiture.






	 	(i)	 	A Participant shall forfeit any and all rights
under this Section and the Company shall not issue any Restricted Stock
hereunder if the Participant is removed for Cause from the Board of
Directors prior to the last day of the applicable Award Year. In all
other cases in which the Participant ceases to be a Director, the
number of Shares of Restricted Stock that Emmis will issue to the
Participant will include all retainers for the applicable year, as well
as fees for meetings during the Award Year attended prior to the date
the Participant ceased to be a Director. If a Participant ceases to be
a Director for any reason other than removal for Cause, Emmis will
deliver to the Participant or, in the event of death, the Participant’s
estate, a certificate for the prorated Shares of Emmis Stock promptly
after the Participant, or the Participant’s estate, pays Emmis any
applicable taxes and other withholdings as required by law.
	 
	 	(ii)	 	Solely for purposes of grants of Restricted
Stock under this Program, “Cause” means the conviction of the
Participant of (or the admission by the Participant of the commission
of ) any felony or other crime involving dishonesty, fraud or moral
turpitude, or the Participant’s habitual neglect of duties; provided
that in either event, the action involved must have had a detrimental
effect on Emmis.





	 	 	 
	Section 5.

	 	Incorporation of Equity Incentive Plan by Reference.
	 
	 	 
	 

	 	The adoption of this Program is not an amendment to the Plan.
Instead, it represents the exercise of discretionary authority
of the Board of Directors to make “Awards” of “Restricted
Stock” under Section 8 of the Plan by setting forth the terms
and conditions under which certain “Awards” are made under the
Plan. All of the terms and conditions of the Plan are
incorporated by reference in this Program and each Award
hereunder
	 
	 	 
	Section 6.

	 	Miscellaneous.







	 	(a)	 	Administration. The Compensation Committee of the Board
of Directors or its designee have the express authority under this Program to:






	 	(i)	 	carry out the general administration of the Program;
	 
	 	(ii)	 	cause to be prepared all forms necessary or appropriate for the administration of the Program;
	 
	 	(iii)	 	keep appropriate books and records;
	 
	 	(iv)	 	determine amounts to be disbursed to Participants and others under the provisions of the Program;




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	 	(v)	 	determine, consistent with the provisions of
this instrument and the Plan, all questions of eligibility, rights, and
status of Participants and others under this Program; and
	 
	 	(vi)	 	interpret, with discretionary authority, the
provisions of this Program and to resolve, with discretionary
authority, all disputed questions of Program interpretation and benefit
eligibility, consistent with the terms of the applicable Plan;






	 	(b)	 	Relationship. Notwithstanding any other provision of
this Program, this Program and action taken pursuant to it shall not be deemed
or construed to establish a trust or fiduciary relationship of any kind between
or among Emmis, the Participant, or any other persons.
	 
	 	(c)	 	Tax Withholding. The Company may withhold from any
payment due hereunder any taxes required to be withheld under applicable
federal, state, or local tax laws or regulations.
	 
	 	(d)	 	Tax Liability. The Company does not expressly or
impliedly guarantee any federal, state or local tax consequences of
participation in the Program.
	 
	 	(e)	 	Amendment. The Board of Directors reserves to itself
and the Compensation Committee thereof, singly, the right to amend the Program
at any time as it deems appropriate in its sole discretion. No amendment shall
reduce any benefits accrued under the Program prior to the date the amendment
was duly authorized.
	 
	 	(f)	 	Termination. The Board of Directors reserves to itself
and the Compensation Committee thereof, singly, the right to terminate the
Program at any time as it deems appropriate in its sole discretion.






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