exv10w1



 






Exhibit 10.1




EMMIS COMMUNICATIONS CORPORATION

OPTION GRANT AGREEMENT




Grant Notice




      Emmis Communications Corporation has granted you an Option to purchase Emmis Stock, subject to
the terms and conditions of the Plan referred to below and the attached Agreement Regarding Terms
and Conditions of Grant, all of which are incorporated into this Notice by reference. Unless you
reject this Option by delivering a written rejection notice to Emmis within 120 days after the
Grant Date shown below, you will be deemed to have accepted it and agreed to the attached terms and
conditions. A prospectus for the Plan is located on the Emmis Intranet at “www.inside.emmis.com”.



	 	 	 
	Optionee:
	 	 

	 	 	 

	 
	 	 

	Grant Number:
	 	 

	 	 	 

	 
	 	 

	Grant Date:
	 	 

	 	 	 

	 
	 	 

	Plan:
	 	2004 Equity Compensation Plan

	 
	 	 

	Total Option Shares Granted:
	 	 

	 	 	 

	 
	 	 

	Option Price Per Share:
	 	$

	 	 	 

	 
	 	 

	Type of Option:
	 	[Incentive Stock Option]

	 	 	[Non-Qualified Stock Option]

	 
	 	 

	Expiration Date:
	 	Ten Years from the Grant Date

	 
	 	 

	Vesting Schedule:
	 	Option for ___Option Shares first exercisable on the first
anniversary of the Grant Date

	 
	 	 

	 	 	Option for___additional Option Shares first
exercisable on the second anniversary of the Grant
Date

	 
	 	 

	 	 	Option for___additional Option Shares first
exercisable on the third anniversary of the Grant
Date







 








 





Agreement Regarding Terms and Conditions of Grant




      This is an Award Agreement under the Emmis Communications Corporation plan shown in the
attached Notice of Grant (referred to as the “Plan”). It is dated as of the Grant Date shown
in the attached Notice of Grant and is between Emmis Communications Corporation and you as the
Optionee named in the Notice of Grant. Capitalized terms used in this Agreement that are not
defined in this Agreement have the meanings given to them in the Plan.



      The attached Notice of Grant includes several important terms that are used in this
Agreement. We refer to the Option Price per Share shown in the Notice of Grant as the
“Exercise Price.” We refer to the Expiration Date shown in the Notice of Grant as the
“Expiration Date.” We refer to a number of shares of Emmis Class A Common Stock (or Class B
Common Stock, in the case of Jeffrey H. Smulyan) shown as the Total Option Shares Granted in
the Notice of Grant as the “Option Shares.” We refer to the option of the type shown as the
Type of Option in the Notice of Grant to purchase the Option Shares for the Exercise Price
under these terms and conditions as the “Option,” and any Option Shares purchased under the
Option as “Purchased Shares.”



      1. Grant of Option. Subject to the terms of this Agreement and the Plan, Emmis
hereby grants to you the Option to purchase the Option Shares at the Exercise Price and in the
manner and subject to the conditions provided in this Agreement.



      2. Exercise of Option.



      (a) The Option is not exercisable after the Expiration Date. You may exercise the Option
in whole or in part (as to a whole number of Option Shares) at any time on or before the
Expiration Date as to any Option Shares which have vested under the Vesting Schedule shown in
the Notice of Grant.



      (b) You may exercise this Option by giving Emmis written notice specifying the number of
Option Shares you want to purchase. The notice must be in the form prescribed by the
Committee and be directed to Emmis at its principal executive offices. The date of exercise,
which is referred to as the “Exercise Date,” is the date on which your notice is received by
Emmis.



      (c) You may not exercise this Option unless your exercise is in compliance with all
applicable federal and state securities laws, as they are in effect on the date of exercise.
You may not exercise the Option as to fewer than 100 Option Shares unless you exercise it as
to all Option Shares as to which the Option can be exercised at that time.



      (d) Except to the extent you use the “sale and remittance” procedure described in this
subsection (d), you must pay the Exercise Price for the Purchased Shares on the Exercise Date.
If the Plan allows you to pay the Exercise Price other than in cash at the time you exercise
the Option, then you may also pay the Exercise Price in one of the following ways:




	 	(1)  	in shares of Emmis Stock that you have held for at least six months, each
valued at Fair Market Value on the Exercise Date (including through a procedure
where you attest to your ownership of the shares in a form acceptable to the
Committee);
	 
	 	(2)  	with the approval of the Committee, in shares of restricted Emmis Stock
that you have held for at least six months, each valued at Fair Market Value on the
Exercise Date;
	 
	 	(3)  	by waiver of compensation due or accrued to you for services rendered;
	 
	 	(4)  	with the consent of the Committee, by transferring property to Emmis;
	 
	 	(5)  	provided that a public market for the Stock exists:










 








 











	 	(A)  	through a “same day sale” commitment from you and a
broker-dealer that is a member of the National Association of Securities
Dealers (referred to as an “NASD Dealer”) in which you irrevocably elect to
exercise the Option and to sell a portion of the Stock you purchase in order
to pay for the Option, and in which the NASD Dealer irrevocably commits upon
receipt of that Stock to forward the Exercise Price directly to Emmis; or
	 
	 	(B)  	through a “margin” commitment from you and an NASD Dealer in
which you irrevocably elect to exercise the Option and to pledge the Stock
you have purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the Exercise Price, and in which
the NASD Dealer irrevocably commits upon receipt of that Stock to forward the
Exercise Price directly to Emmis; or
	 
	 	(C)  	through any other procedure pursuant to which you deliver to
Emmis a properly executed exercise notice and instructions to deliver the
resulting Stock to a stock broker that are intended to satisfy the provisions
of Section 220.3(e)(4) of Regulation T issued by the Board of Governors of
the Federal Reserve System as in effect from time to time;






	 	(6)  	by the surrender of all or part of the Option being exercised, or
	 
	 	(7)  	such other payment method or procedure as the Committee may approve.





      Emmis’ obligation to deliver the Purchased Shares pursuant to subsection 2(d)(5)
described above is conditioned upon receiving sufficient funds to cover the Exercise Price and
tax withholding obligations described in this Agreement.



      3. Non-Transferability of this Option. This Option may not be assigned,
encumbered, or transferred except, (a) in the event of your death, by will or the laws of
descent and distribution, or (b) to an Eligible Transferee as provided in the Plan. This
Option is exercisable during your lifetime only by you or, if transferred to an Eligible
Transferee, by that Eligible Transferee as provided in the Plan. The provisions of this
Option will be binding upon, inure to the benefit of, and be enforceable by you and Emmis, by
the successors and assigns of Emmis, and by your heirs, legatees and personal representatives.



      4. Termination of Employment.



      (a) If you have a Termination of Employment, any part of the Option that is not then
vested shall be forfeited, unless the Termination of Employment is: (i) due to your death; or
(ii) due to your Disability; or (iii) effected by Emmis or a Subsidiary due to the elimination
of your position (other than in connection with the sale or
disposition of one or more stations, magazines or
other business units); or (iv) effected by Emmis or a Subsidiary in connection with the sale
or disposition of one or more stations, magazines or other business units; or (v) due to your Retirement (as
defined below). However, the provisions of this Section does not limit the authority of the
Committee to declare the Option fully vested whenever the Committee may determine that such
action is appropriate pursuant to the Plan or this Agreement.



      (b) If you have a Termination of Employment due to your death, Disability or Retirement,
or that is effected by Emmis in connection with the sale or
disposition of one or more stations, magazines or
other business units, the unvested part of the Option shall vest in its entirety immediately
prior to such Termination of Employment. For purposes of this Agreement, “Retirement” shall
mean a Termination of Employment other than for Cause at a time when (a) the sum of your
service to
Emmis plus your age is not less than sixty-five years, (b) your age is not less than
fifty-five years, and (c) you have provided not less than ten years of service to Emmis.



 








 





      (c) If you have a Termination of Employment that is effected by Emmis or a Subsidiary due
to the elimination of your position (other than in connection with
the sale or disposition of one or more stations, magazines or other
business units), then any part of the Option that is scheduled to vest
within one year of such Termination of Employment shall vest immediately prior to such
Termination of Employment.



      5. The Plan. The terms of this Agreement are subject to the terms of the Plan.
In the case of any conflict between the terms of this Agreement and the terms of the Plan, the
terms of the Plan control. You acknowledge receipt of a copy of the Plan and represent (a)
that you are familiar with the terms and provisions of the Plan, (b) that you have reviewed
the Plan and this Agreement in their entirety, and (c) that you have had an opportunity to
obtain the advice of counsel prior to signing this Agreement and fully understand all
provisions of the Option. You agree to accept as binding, conclusive and final all decisions
or interpretations of the Committee upon any questions arising under the Plan or this
Agreement.



      6. No Shareholder Rights; No Guaranty of Employment. You do not have any of the
rights of a shareholder with respect to the Option Shares until the Option Shares are issued
or transferred to you after the exercise of the Option. Nothing in this Agreement confers or
will confer on you any right to continue in the employment of Emmis, or remain affiliated with
Emmis or any of its Subsidiaries, or to continue as an officer or director of Emmis, and
nothing in this Agreement interferes with Emmis’ right to terminate your employment at any
time, with or without cause.



      7. Effect of Change of Control. Notwithstanding the Vesting Schedule shown in
the Notice of Grant, this Option immediately becomes fully exercisable on the date on which
the Committee so determines in connection with a Change in Control.



      8. Withholding Tax. If cash or shares of Emmis Stock are to be delivered upon
exercise of this Option, Emmis is entitled to require as a condition of delivery (a) that you
pay an amount sufficient to satisfy all federal, state and local withholding tax requirements
related to the exercise of the Option, (b) the withholding of such sums from compensation
otherwise due to you or from any Purchased Shares due to you under the Plan, or (c) any
combination of (a) and (b). The Committee reserves the right to revoke your right under the
Plan to elect to have Option Shares withheld to satisfy your withholding tax liability.



      9. Successors and Assigns. Except to the extent otherwise provided in the Plan,
the benefits of this Agreement are applicable to, and this Agreement is binding upon, Emmis
and its successors and anyone to whom Emmis legally assigns it and you, anyone to whom you
legally assign it and the legal representatives, heir and beneficiaries of your estate.



      10. Compliance with Laws and Regulations.



      (a) Your exercise of the Option and the issuance of the Option Shares upon your exercise
is subject to compliance by Emmis and you with all applicable requirements of law, including
but not limited to federal and state securities laws, and with all applicable regulations of
The Nasdaq Stock Market (or any stock exchange, if applicable) on which the Purchased Shares
may be designated or listed for trading at the time of your exercise and issuance of the
Purchased Shares.



      (b) If Emmis determines that it needs to obtain approval from any regulatory body in
order to issue and sell any Option Share under the Option and cannot get that approval, Emmis
is not liable for not issuing and selling the Option Shares under this Option to the extent
that approval was not obtained. Emmis, however, will use its best efforts to obtain all such
approvals.



 








 





      (c) If this Option is shown under Type of Option in the Notice of Grant as an incentive
stock option, then it is intended to be an “incentive stock option” within the meaning of
Section 422 of the Internal Revenue Code and will in all respects be interpreted and construed
as to be consistent with this intention.



      11. Adjustments for Changes in Capitalization. If Emmis is involved in any
reorganization, reclassification, recapitalization, stock split, reverse stock split, stock
dividend, share combination, merger, consolidation, asset spin-off or similar event, the
Committee will make equitable adjustments of (a) the aggregate number of shares of Stock
available under the Plan, (b) the number of shares of Stock covered by an Option, (c) the
Exercise Price, and (d) all other matters relating to the Plan and any Option, all in such
manner as may be determined by the Committee in its discretion, in order to prevent dilution
or enlargement of your rights under this Option. The Committee’s determination is conclusive
in these matters.



      12. Notice of Disqualifying Disposition of ISO Shares. If this Option is shown
under Type of Option in the Notice of Grant as an incentive stock option and is exercised
prior to your death, and if you (or your heirs, beneficiaries or personal representatives)
sell or otherwise dispose of any of the Purchased Shares on or before the later of (a) two
years after the Grant Date or (b) one year after the date of exercise of this Option, you (or
any such heirs, beneficiaries or personal representatives) are required to promptly notify
Emmis of the sale or other disposition. The notice must specify the number of Purchased
Shares sold or otherwise disposed of and be directed to Emmis at its principal executive
offices.



      13. Amendment. Subject to any shareholder approval requirements of applicable
law or the rules of any national securities exchange, stock market or automated quotation
service on which the Stock is listed or quoted, the Committee has complete and
exclusive power and authority to amend or modify this Agreement (and Emmis has the power and
authority to amend or modify the Plan) at any time and in any respect, except that no such
amendment or modification can adversely affect, in any material respect, any of your rights
with respect to this Option, unless you consent in writing to the amendment or modification.



      14. Entire Agreement; Governing Law; Attorneys’ Fees. The Plan is incorporated
into this Agreement by reference as if it appeared here in full. The Plan and this Agreement
together make up the entire agreement of Emmis and you with respect to the subject matter of
this Agreement and supersede in their entirety all prior promises and agreements of Emmis and
you with respect to the subject matter of this Agreement. The Option must be exercised in
accordance with any administrative regulations the Committee adopts from time to time. The
Option and this Agreement are to be construed, administered and governed in all respects under
and by the internal laws (but not the choice of law rules) of the State of Indiana. Each of
Emmis and you hereby submits to jurisdiction before any state or federal court of record in
Marion County, Indiana.