exv10w2






Exhibit 10.2




EMPLOYMENT AGREEMENT




     This EMPLOYMENT AGREEMENT (“Agreement”) is effective as of March 1, 2009, by and between EMMIS
OPERATING COMPANY, an Indiana company (“Employer”), and RICHARD F. CUMMINGS, a California resident
(“Executive”).



RECITALS




     WHEREAS, Employer and its affiliates are engaged in the ownership and operation of certain
radio stations, magazines, and related operations (together, the “Emmis Group”); and



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



     NOW, THEREFORE, in consideration of the foregoing, the mutual promises and covenants set forth
in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:



AGREEMENT




     1. Employment Status and Duties. Upon the terms and subject to the conditions set
forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts exclusive
employment with Employer. During the Term (as defined herein), Executive shall serve as President,
Emmis Radio Programming. Executive shall have such duties, functions, authority and
responsibilities as are commensurate with such position. Executive’s services hereunder shall be
performed on an exclusive, full-time basis in a professional, diligent and competent manner to the
best of Executive’s abilities. Executive shall not undertake any outside employment or business
activities without the prior written consent of Employer. Executive shall be permitted to serve on
the board of charitable or civic organizations so long as such services: (i) are approved in
writing in advance by Employer; and (ii) do not interfere with Executive’s duties and obligations
under this Agreement. It is understood and agreed that the location for the performance of
Executive’s duties and services pursuant to this Agreement shall be the offices located at 3500
West Olive Avenue, Burbank, California, or if Employer no longer maintains possession of those
premises, then such offices as may be designated by Employer in Los Angeles, California. If
Executive is elected as a Director of Emmis Communications Corporation, he shall serve in such
position without additional remuneration (unless Employer elects to remunerate “inside directors”)
but shall be entitled to the benefit of indemnification pursuant to the terms of Section
15.12. Executive shall also serve without additional remuneration as a director and/or
officer of one (1) or more of Employer’s subsidiaries or affiliates if appointed to such
position(s) by Employer and shall also be entitled to the benefit of indemnification pursuant to
the terms of Section 15.12.



 









 





     2. Term. The term of this Agreement shall be for a period of one (1) year commencing
on March 1, 2009, and continuing until February 28, 2010, unless earlier terminated in accordance
with the provisions set forth in this Agreement (the “Term”).



     3. Base Salary; Auto Allowance. Upon the terms and subject to the conditions set
forth in this Agreement, Employer shall pay or cause to be paid to Executive during the Term an
annualized base salary (the “Base Salary”) of $470,000, payable pursuant to Employer’s customary
payroll practices and subject to applicable taxes and withholdings as required by law.
Notwithstanding anything to the contrary contained herein, the Base Salary may be reduced, from
time to time, by Employer without notice, provided that the annualized Base Salary cannot at any
time be less than $423,000.



     Except as otherwise set forth herein, Employer shall have no obligation to pay Executive the
Base Salary for any periods during which Executive fails or refuses to render services pursuant to
this Agreement or for any period following the expiration or termination of this Agreement. In
addition, it is understood and agreed that Employer may, at its sole election, pay up to ten
percent (10%) of Executive’s Base Salary in Shares (as defined below in Section 4.3);
provided that: (i) Executive is able to sell those Shares on substantially the same terms and
conditions applicable to Employer’s stock compensation plan in effect through 2005; and (ii) the
percentage of Executive’s Base Salary payable in Shares shall be consistent with, and the exact
number of Shares to be awarded to Executive shall be determined in the same manner as that utilized
for other senior management level employees.



     During the Term, Executive shall receive a monthly auto allowance in the amount of One
Thousand Dollars ($1,000) (subject to withholding and applicable taxes as required by law)
consistent with Employer’s policy or practices regarding such allowances, as such policy or
practices may be amended from time to time during the Term in Employer’s sole and absolute
discretion; provided, however, that in no event shall the auto allowance amount paid to Executive
pursuant to this provision be reduced.



     4. Incentive Compensation.




     4.1 Bonus Amounts. Upon the terms and subject to the conditions set forth in
this Section 4, Executive shall be eligible to receive one (1) performance bonus in
a target amount equivalent to sixty percent (60%) of Executive’s Base Salary paid during
the Term, and the exact amount of such performance bonus, if any, shall be determined on
the basis of Executive’s attainment of certain performance and financial goals to be
determined by Employer in its sole and absolute discretion.




     4.2 Payment of Bonus Amounts. Employer shall pay or cause to be paid to
Executive the foregoing bonus amounts if earned according to the terms and conditions set
forth in Section 4.1; provided, that, at the end of the Term: (i) this Agreement
is in full force and effect and has not been terminated for any reason (other than due to a
material breach of this Agreement by Employer); and



2









 






(ii) Executive is fully performing all of Executive’s duties and obligations pursuant
to this Agreement and is not in breach of any of the material terms and conditions of this
Agreement. In addition, it is understood and agreed that Employer may, at its sole
election, pay any bonus amounts earned by Executive pursuant to this Section 4 in
cash or Shares; provided that the Shares evidencing any portion thereof shall be freely
transferable when delivered to Executive, subject to Employer’s securities trading policy
and applicable federal and state law. In the event that Employer elects pursuant to this
Section 4.2 to pay any bonus amounts in Shares, the percentage of bonus amounts
payable in Shares shall be consistent with, and the exact number of Shares to be awarded to
Executive shall be determined in the same manner as that utilized for senior management
level employees. Any bonus amounts earned by Executive pursuant to the terms and conditions
of this Section 4 shall be paid after the end of the Term (but in no event later
than ninety (90) days after the end of the Term). Any and all bonus amounts payable by
Employer to Executive pursuant to this Section 4 shall be subject to applicable
taxes and withholdings as required by law.




     4.3 Equity Incentive Compensation. At such time when Employer grants equity
incentive compensation to its senior management level employees (but in no event later than
ninety (90) days after February 28, 2009), Executive shall be granted an option (“Option”)
to acquire shares of Class A Common Stock of Emmis Communications Corporation (the
“Shares”), the exact amount of which shall be determined by Employer in its sole and
absolute discretion.




     Each Option granted pursuant to this Section 4.3 shall: (i) have an exercise
price per share equal to its Fair Market Value (as defined in the applicable Equity
Compensation Plan, or any subsequent equity compensation or similar plan adopted by Emmis
Communications Corporation and generally used to make equity-based awards to
management-level employees of the Emmis Group (the “Plan”)); (ii) notwithstanding any other
provisions in this Agreement, be granted according to the terms and subject to the
conditions of the Plan; (iii) be evidenced by a written grant agreement containing such
terms and conditions as are generally provided for other management-level employees of the
Emmis Group (including vesting requirements); and (iv) be exercisable for Shares with such
restrictive legends on the certificates in accordance with the Plan and applicable
securities laws. Options granted pursuant to this Section 4.3 are intended to
satisfy the regulatory exemption from the application of Code Section 409A for certain
options for service recipient shares, and they shall be administered accordingly.



     5. Expenses; Travel. Employer shall pay or reimburse Executive for all reasonable
expenses actually incurred or paid by Executive during the Term in connection with the performance
of Executive’s services hereunder upon presentation of expense statements, vouchers or other
supporting documentation as Employer may require of Executive; provided such expenses are otherwise
in accordance with Employer’s policies. Executive shall undertake such travel as may be required
in the



3









 




performance of Executive’s duties pursuant to this Agreement. Under no circumstances shall
the Employer’s reimbursement for expenses incurred in a calendar year be made later than the end of
the next following calendar year; provided, however, this requirement shall not alter the
Employer’s obligation to reimburse Executive for eligible expenses on a current basis.




     6. Fringe Benefits.




     6.1 Vacation and Other Benefits. 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 and to the extent that Executive is eligible
under, the general provisions of Employer’s fringe benefit plans or programs; provided,
however, Executive understands that these benefits may be increased, changed, eliminated or
added from time to time during the Term as determined in Employer’s sole and absolute
discretion.




     6.2 Life and Disability Insurance. During the Term, Employer agrees to
reimburse Executive in an amount not to exceed Five Thousand Dollars ($5,000) for the
annual premium associated with Executive’s purchase or maintenance of a life or disability
insurance policy or other insurance policies on the life, or related to the care, of
Executive. Executive shall be entitled to freely select and change the beneficiary or
beneficiaries under such policy or policies. Notwithstanding anything to the contrary
contained in this Agreement, Employer’s obligations under this Section 6.2 are
expressly contingent upon Executive providing required information and taking all necessary
actions required of Executive in order to obtain and maintain the subject policy or
policies, including without limitation, passing any required physical examinations.



     7. Confidential Information.




     7.1 Non-Disclosure. Executive acknowledges that certain information
concerning the business of the Emmis Group and its members (including but not limited to
trade secrets and other proprietary information) is of a highly confidential nature, and
that, as a result of Executive’s employment with Employer prior to and during the Term,
Executive shall receive and develop, proprietary and confidential information concerning
the business of Employer and/or other members of the Emmis Group which, if known to
Employer’s competitors, would damage Employer, other members of the Emmis Group and their
respective businesses. Accordingly, Executive hereby agrees that during the Term and
thereafter, Executive shall not divulge or appropriate for Executive’s own use, or for the
use or benefit of any third party (other than Employer and its representatives, or as
directed in writing by Employer), any information or knowledge concerning the business of
Employer or any other member of the Emmis Group which is not generally available to the
public other than through the



4









 






activities of Executive. Executive further agrees that, immediately upon termination
of Executive’s employment for any reason, Executive shall promptly surrender to Employer
all documents, brochures, plans, strategies, writings, illustrations, client lists, price
lists, sales, financial or marketing plans, budgets and any and all other materials
(regardless of form or character) which Executive received from or developed on behalf of
Employer or any member of the Emmis Group in connection with Executive’s employment prior
to or during the Term. Executive acknowledges that all such materials shall remain at all
times during the Term and thereafter the sole and exclusive property of Employer and that
nothing in this Agreement shall be deemed to grant Executive any right, title or interest
in such material.




     7.2 Ownership of Materials. Employer shall solely and exclusively own all
rights of every kind and nature in perpetuity and throughout the universe in: (i) the
programs and broadcasts on which Executive appears or for which Executive renders services
to Employer in any capacity; (ii) the results and proceeds of Executive’s services pursuant
to this Agreement including, without limitation, those results and proceeds provided in
connection with the creation, development, preparation, writing, editing or production by
Executive or any employee of any member of the Emmis Group of any and all materials,
properties or elements of any and all kinds for the programs on which Executive appears or
for which Executive renders services (whether directly or indirectly); and (iii) any
business, financial, sales or marketing plans and strategies, documents, presentations, or
other similar materials, regardless of kind or character, each of which Executive
acknowledges is a work specially ordered by Employer which shall be considered to be a
“work made for hire” for Employer. Therefore, Employer shall be the author and copyright
owner of the programs on which Executive appears or for which Executive renders services
pursuant to this Agreement, the broadcasts and tapes or recordings thereof for all purposes
without limitation of any kind, and all materials described in the immediately preceding
sentence. All characters developed for the programs and broadcasts during the Term shall
be solely and exclusively owned by Employer, including all right, title and interest
thereto. The exclusive legal title to all of the aforesaid works and matters, programs,
broadcasts, and materials and all secondary and derivative rights therein, shall belong, at
all times, to Employer which shall have the right to copyright the same and apply for
copyright registrations and copyright renewal registrations and to make whatever use
thereof that Employer, in its sole and absolute discretion, deems advisable, including but
not limited to rebroadcasts of programs or use of any portions of any program in the
production or broadcast of other programs at any time, notwithstanding expiration of the
Term or termination of this Agreement for any reason.




     7.3 Injunctive Relief. Executive acknowledges that Executive’s breach of this
Section 7 will cause irreparable harm and damage to Employer, the exact amount of
which will be difficult to ascertain; that the remedies at law for any such breach would be
inadequate; and that the provisions of this Section 7 have been specifically
negotiated and carefully written to prevent such irreparable harm



5









 






and damage. Accordingly, if Executive breaches this Section 7, Employer shall
be entitled to injunctive relief (including attorneys’ fees and costs) enforcing this
Section 7 to the extent reasonably necessary to protect Employer’s legitimate
interests, without posting bond or other security.



     8. Non-Interference; Injunctive Relief.




     8.1 Non-Interference. During the Term, and for a period of two (2) years
immediately following the expiration or early termination of the Term for any reason, and
during the Post Term Period if Executive elects part-time employment pursuant to
Section 13, Executive shall not, directly or indirectly, take any action (or permit
any action to be taken by an entity with which Executive is associated) which has the
effect of interfering with Employer’s relationship (contractual or otherwise) with: (i)
on-air talent of any member of the Emmis Group; or (ii) any other employee of any member of
the Emmis Group. Without limiting the generality of the foregoing, Executive specifically
agrees that during such time period, neither Executive nor any entity with which Executive
is associated shall solicit, hire or engage any on-air talent or other employee of any
member of the Emmis Group or any other employee of any member of the Emmis Group to provide
services for Executive’s benefit or for the benefit of any other business or entity, or
solicit or encourage them to cease their employment with any member of the Emmis Group for
any reason.




     8.2 Injunctive Relief. Executive acknowledges and agrees that the provisions
of this Section 8 have been specifically negotiated and carefully worded in
recognition of the opportunities which will be afforded to Executive by Employer by virtue
of Executive’s continued association with Employer during the Term, and the influence that
Executive has and will continue to have over Employer’s employees, customers and suppliers.
Executive further acknowledges that Executive’s breach of Section 8.1 herein will
cause irreparable harm and damage to Employer, the exact amount of which will be difficult
to ascertain; that the remedies at law for any such breach would be inadequate; and that
the provisions of this Section 8 have been specifically negotiated and carefully
written to prevent such irreparable harm and damage. Accordingly, if Executive breaches
Section 8.1, Employer shall be entitled to injunctive relief (including attorneys’
fees and costs) enforcing Section 8.1, to the extent reasonably necessary to
protect Employer’s legitimate interests, without posting bond or other security.
Notwithstanding anything to the contrary contained in this Agreement, if Executive violates
Section 8.1, and Employer brings legal action for injunctive or other relief,
Employer shall not, as a result of the time involved in obtaining such relief, be deprived
of the benefit of the full period of noninterference set forth therein. Accordingly, the
obligations set forth in Section 8.1 shall have the duration set forth therein,
computed from the date such relief is granted but reduced by the time expired between the
date the restrictive period began to run and the date of the first violation of the
obligation(s) by Executive.



6









 






     8.3 Construction. Despite the express agreement herein between the parties,
in the event that any provisions set forth in this Section 8 shall be determined by
any court or other tribunal of competent jurisdiction to be unenforceable for any reason
whatsoever, the parties agree that this Section 8 shall be interpreted to extend
only to the maximum extent as to which it may be enforceable, and that this Section
8 shall be severable into its component parts, all as determined by such court or
tribunal.



     9. Termination of Agreement by Employer for Cause.




     9.1 Termination. Employer may terminate this Agreement and Executive’s
employment hereunder for Cause (as defined in Section 9.3 below) in accordance with
the terms and conditions of this Section 9. Following a determination by Employer
that Executive should be terminated for Cause, Employer shall give written notice (the
“Preliminary Notice”) to Executive specifying the grounds for such termination, and
Executive shall have ten (10) days after receipt of the Preliminary Notice to respond to
Employer in writing. If following the expiration of such ten (10) day period Employer
reaffirms its determination that Executive should be terminated for Cause, such termination
shall be effective upon delivery by Employer to Executive of a final notice of termination
(the “Final Notice”).




     9.2 Effect of Termination. In the event of termination for Cause as provided in Section 9.1 above:




     (i) Executive shall have no further obligations or liabilities hereunder
except Executive’s obligations under Sections 7 and 8, which shall
survive the termination of this Agreement, and except for any obligations arising
in connection with any conduct of Executive described in Section 9.3;




     (ii) Employer shall have no further obligations or liabilities hereunder,
except that Employer shall, not later than two (2) weeks after the termination
date:




     (a) Pay to Executive all earned but unpaid Base Salary with respect
to any applicable pay period ending on or before the termination date; and




     (b) Pay to Executive any bonus amounts which have been earned on or
prior to the termination date pursuant to Section 4, if any, but
which remain unpaid as of the termination date.




     9.3 Definition of Cause. For purposes of this Agreement, “Cause” shall be
defined to mean any of the following: (i) Executive’s failure, refusal or neglect to
perform any of Executive’s material duties or obligations under this Agreement (or any
material duties assigned to Executive consistent with the terms



7









 






of this Agreement) or abide
by any applicable policy of Employer, or Executive’s breach of any material term or condition of this Agreement, and continuation of such
failure, refusal, neglect, or breach after written notice and the expiration of a ten (10)
day cure period; provided, however, that it is not the parties’ intention
that the Employer shall be required to provide successive such notices, and in the event
Employer has provided Executive with a notice and opportunity to cure pursuant to this
Section 9.3, Employer may terminate this Agreement for a subsequent breach similar
or related to the breach for which notice was previously given or for a continuing series
or pattern of breaches (whether or not similar or related) without providing notice and an
opportunity to cure; (ii) commission of any felony or any other crime involving an act of
moral turpitude which is harmful to Employer’s business or reputation; (iii) Executive’s
action or omission, or knowing allowance of actions or omissions, which are in violation of
any law or any of the rules or regulations of the Federal Communications Commission (the
“FCC”), or which otherwise jeopardize any of the licenses granted to Employer or any member
of the Emmis Group in connection with the ownership or operation of any radio 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 trade secrets or proprietary or confidential information,
as described more fully in Section 7.1; (viii) any action which brings Employer or
member of the Emmis Group into public disrepute, contempt, scandal or ridicule, and which
is harmful to Employer’s business or reputation; and (ix) any matter constituting cause or
misconduct under applicable laws.



     10. Termination of Agreement by Employer for Incapacity.




     10.1 Termination. If Executive shall become incapacitated (as defined in the
Employer’s employee handbook or, if that is not applicable, as reasonably determined by
Employer), Employer shall continue to compensate Executive under the terms of this
Agreement without diminution and otherwise without regard to such incapacity or
nonperformance of duties until Executive has been incapacitated for a cumulative period of
six (6) months, at which time Employer may, in its sole discretion, elect to terminate
Executive’s employment. The date that Executive’s employment terminates pursuant to this
section is referred to herein as the “Incapacity Termination Date.”




     10.2 Obligations after Termination. Executive shall have no further
obligations or liabilities hereunder after an Incapacity Termination Date except
Executive’s obligations under Section 7 and 8 that shall survive the
termination or expiration of this Agreement. After an Incapacity Termination Date,
Employer shall have no further obligations or liabilities hereunder except that Employer
shall, not later than two (2) weeks after an Incapacity Termination Date, pay to Executive
those amounts described in Section 9.2(ii). Nothing in this Section 10 or
in Section 11 shall affect the amount of any benefits which may be payable to
Executive under any insurance plan or policy maintained by Employer or



8









 






Executive or pursuant to any Employer company practice, plan or program applicable to other senior management level employees of the Emmis Group.



     11. Death of Executive. This Agreement shall terminate immediately upon Executive’s
death. In the event of such termination, Employer shall have no further obligations or liabilities
hereunder except that Employer shall, not later than two (2) weeks after Executive’s date of death,
pay or grant to Executive’s estate or designated beneficiary those amounts described in Section
9.2(ii).



     12. Severance. Subject to the conditions set forth in this Section 12 and
Exhibit A, in the event that Employer does not offer Executive employment upon expiration
of the Term on terms substantially similar to those contained herein (which shall include without
limitation a Base Salary that is at least ninety-five percent (95%) of the Base Salary in effect at
expiration of the Term) and Executive’s employment is terminated by Executive or Employer, Employer
shall make a lump sum severance payment to Executive in the amount of $470,000, subject to
applicable taxes and withholdings (the “Severance Payment”) not later than the later of (a) the
fourteenth day of March immediately following Executive’s termination of employment or (b) the date
which is sixty (60) days following Executive’s termination of employment. As a material condition
upon which Executive shall be entitled to receive the Severance Payment, and as an inducement to
Employer’s agreement to pay Executive the Severance Payment, Executive agrees to execute a general
release in a form acceptable to Employer upon the termination of Executive’s full-time employment.
Executive shall not be entitled to any additional severance compensation upon the termination or
expiration of this Agreement other than the Severance Payment. Executive shall not be entitled to
the Severance Payment as otherwise specified in this Agreement or if Executive’s employment is
terminated either (i) by Employer under Section 9, (ii) by reason of Executive’s incapacity
or death under Sections 10 or 11, or (iii) by Executive for any reason other than a
material breach of this Agreement by Employer. In addition, subject to the terms and conditions of
Section 13, upon Executive’s termination of employment pursuant to this Section 12,
Executive shall be entitled to continue his employment with Employer as a part-time employee during
the Post Term Period.



     13. Part-Time Employment. If Executive is entitled to the Severance Payment pursuant
to Section 12, Executive shall be entitled to continue his employment with Employer as a
part-time employee, pursuant to the terms and conditions set forth in this Section 13.
Such part-time employment shall commence upon the last day of Executive’s employment upon
termination pursuant to Section 12 and shall end on the earliest of: (i) the fourth (4th)
anniversary of its commencement, (ii) the date Executive secures full-time employment other than
with Employer or any of its “Affiliates” (as defined in Exhibit A), (iii) Executive’s
death, (iv) the date Executive becomes unable to perform the services required by Section
13.3 because of ill health or physical or mental disability as reasonably determined by a
physician selected by Employer, (v) the date thirty (30) days after Executive gives notice to
Employer of his decision to terminate his part-time employment, or (vi) the date Executive ceases
to comply with the provisions of Section 13.3, as reasonably determined by the Board of
Directors of Employer. The term of part-time employment described in the preceding sentence shall
be referred to herein as the



9









 




“Post Term Period”. In the event Executive elects to continue his employment as a part-time employee pursuant to this Section 13, the Change in Control
Agreement (Exhibit A hereto) shall become null, void and of no further force and effect as of the date Executive
commences such part-time employment. 





     13.1 During each year of the Post Term Period, Employer shall pay to Executive total
annual compensation equal to $132,500 (“Part-Time Compensation”). Part-Time Compensation
shall be paid by Employer in accordance with Employer’s customary payroll practices. In
addition, during the Post Term Period, Executive and his dependents (as such term is
defined in the applicable health plan of Employer) may continue to participate in
Employer’s health plan, to the extent permitted under the terms of such plan and at the
expense of Employer, except for any premium co-payment or other similar amounts for which
Executive would have otherwise been responsible pursuant to the terms of such plan. In the
event that the terms of Employer’s health plan do not at any time during the Post Term
Period permit Executive and/or his dependents to continue to participate in such plan,
Employer shall reimburse Executive for the cost of securing substantially comparable health
care coverage for Executive and his dependents. During the Post Term Period, no other
compensation or benefits shall be payable or provided by Employer other than those
described in this Section 13.




     13.2 Any option granted to Executive prior to the Post Term Period under the Plan
(other than any plan intended to qualify under Section 423(b) of the Code and provided that
no provision hereof may supersede the terms of any plan of Employer) shall continue to vest
and become exercisable during the Post Term Period to the extent not already exercisable as
of the first day of the Post Term Period in accordance with the applicable vesting schedule
of each such option, and shall remain outstanding through the earlier of: (a) 30 days
following the last day of the Post Term Period or (b) the last day of the applicable option
term provided under the applicable award agreement pursuant to which each such option was
awarded. Ownership of any Shares granted to Executive (pursuant to Section 4.3 of
this Agreement or otherwise) prior to the Post Term Period shall continue to vest during
the Post Term Period (to the extent not already fully vested as of the first day of the
Post Term Period) in accordance with the vesting schedule applicable to each grant in the
same manner as if Executive remained a full-time employee with Employer continuously
through the expiration of the Post Term Period.




     13.3 During the Post Term Period, Executive shall make himself available to Employer
to complete such reasonable projects and assignments as may be assigned to him by the Chief
Executive Officer or Chief Financial Officer/Chief Operating Officer of Employer and/or
Emmis Communications Corporation or any successor in interest thereto. Without limiting
the generality of the foregoing, Executive shall provide consulting services relative to
operations, programming, ratings, personnel and budget. The parties intend that the
transition from full-time to part-time employment shall constitute a



10









 






“separation from service” within the meaning of Internal Revenue Code Section 409A(a)(2)(B)(i). Therefore,
notwithstanding anything to the contrary contained herein, in no event will Executive be required or permitted to provide more than
twenty (20) hours of service during any calendar month pursuant to this Section 13.
Subject to the terms and conditions of this Section 13, Employer shall have no
obligation to pay Executive the Part-Time Compensation for any periods during which
Executive fails or refuses to render services pursuant to this Section 13.
Employer shall reimburse Executive for all reasonable expenses actually incurred by
Executive directly related to the performance of the services contemplated by this
Section 13 upon presentation of expense statements, vouchers or similar
documentation, or such other supporting information as Employer may require of Executive.
In addition, no later than ten (10) days following the first day of the Post Term Period,
Executive shall resign as a director of Employer and each of its Affiliates, as applicable.




     13.4 Notwithstanding anything in the Agreement to the contrary, Employer and Executive
hereby agree and acknowledge that solely for purposes of Sections 7 and 8
(Confidential Information; Non-Interference), the Term shall include the Post Term Period.



     14. Adjustments for Changes in Capitalization of Employer. In the event of any change
in Employer’s outstanding Shares during the Term by reason of any reorganization, recapitalization,
reclassification, merger, stock split, reverse stock split, stock dividend, asset spin-off, share
combination, consolidation, or other event, the number and class of Shares and/or Options and/or
restricted Shares awarded pursuant to Section 4 (and any applicable Option exercise price)
shall be adjusted by the Compensation Committee of the Board of Directors of Emmis Communications
Corporation (the “Compensation Committee”) in its sole and absolute discretion and, if applicable,
in accordance with the terms of the Plan, the Option agreement evidencing the grant of the Option,
and the restricted stock agreement evidencing the grant of restricted Shares. The determination of
the Compensation Committee shall be conclusive and binding. All adjustments pursuant to this
Section shall be made in a manner that does not result in taxation to the Executive under Code
Section 409A.



     15. Miscellaneous.




     15.1 Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Indiana without regard to its conflict
of law principles.




     15.2 Internal Revenue Code Section 409A. This Agreement is intended to comply
with Section 409A, and it is intended that no amounts payable hereunder shall be subject to
tax under Section 409A. Employer shall use commercially reasonable efforts to comply with
Section 409A with respect to payments of benefits hereunder. To the extent required by
Code Section 409A(a)(2)(B)(i) and the regulations thereunder, if Executive is a “specified
employee” for purposes of such Section, payments on account of Executive’s



11









 






separation from service shall be delayed to the earliest date permissible under Code Section
409A(a)(2)(B)(i). For purposes of this Agreement, “termination of employment”, “terminates employment”, or any variation of such term shall mean
“separation from service” within the meaning of Code Section 409A(a)(2)(B)(i).




     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 and conditions of this Agreement.




     15.4 Entire Agreement. This Agreement shall supersede and replace, in all
respects, any prior employment agreement entered into between the parties, including
without limitation the employment agreement effective as of March 1, 2008, as amended by
the amendment of employment agreement executed in December, 2008 (“2008 employment
agreement”), and any such agreement shall immediately terminate and be of no further force
or effect. For purposes of the preceding sentence, any change in control, restricted
stock, option, and other benefits-related agreement shall not constitute a “prior
employment agreement.” No later than April 1, 2009, in full satisfaction of all its
obligations under Section 4.4 of the 2008 employment agreement, Employer shall make a cash
payment to Executive in the amount of $165,000, subject to applicable taxes and
withholdings required by law. No completion bonus, or portion thereof, whether described
in section 4.4 of the 2008 employment agreement or otherwise, shall be payable by Employer
in connection with Executive’s continued employment after February 28, 2009.




     15.5 Assignment. This Agreement, and Executive’s rights and obligations
hereunder, may not be assigned by Executive to any third party; provided,
however, that Executive may designate pursuant to Section 15.7 one (1) or
more beneficiaries to receive any amounts that would otherwise be payable hereunder to
Executive’s estate. Employer may assign all or any portion of its rights and obligations
hereunder to any other member of the Emmis Group or to any successor or assignee of
Employer pursuant to a reorganization, recapitalization, merger, consolidation, sale of
substantially all of the assets or stock of Employer, or otherwise.




     15.6 Amendments; Waivers. Except as expressly provided in the following
sentence, this Agreement cannot be changed, modified or amended, and no provision or
requirement hereof may be waived, without the written consent of Executive and Employer.
Employer may amend this Agreement to the extent that Employer reasonably determines that
such change is necessary to comply with Code Section 409A and further guidance thereunder,
provided that such change does not reduce the amounts payable to Executive hereunder. The
failure of a party at any time to require performance of any provision hereof shall in no
manner affect the right of such party at a later time to enforce such provision. No waiver
by a party of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such



12









 






breach or a waiver of the breach of any other term or covenant contained in this Agreement.




     15.7 Beneficiaries. Whenever this Agreement provides for any payment to
Executive’s estate, such payment may be made instead to such beneficiary as Executive may
have designated in a writing filed with Employer. Executive shall have the right to revoke
any such designation and to re-designate a beneficiary by written notice to Employer (or to
any applicable insurance company).




     15.8 Notices. All notices, requests, consents and other communications,
required or permitted to be given hereunder, shall be made in writing and shall be deemed
to have been made as of: (a) the date that is three (3) days after the date of mailing, if
sent via the U.S. postal service, first-class, postage-prepaid, (b) the date that is the
next date upon which an overnight delivery service (Federal Express, UPS or DHL only) will
make such delivery, if sent via such overnight delivery service, first-class, postage
prepaid, or (c) the date such delivery is made, if delivered in person to the notice party
specified below. Such notice shall be delivered as follows (or to such other or
additional address as either party shall designate by notice in writing to the other in
accordance herewith):




          (i) If to Employer:


Ian D. Arnold, Esq.

Corporate Counsel

Emmis Communications Corporation

40 Monument Circle, Suite 700

Indianapolis, Indiana 46204



With a copy to:



Gary L. Kaseff, Esq.

Executive Vice President and General Counsel

Emmis Communications Corporation

3500 W. Olive Avenue, Suite 1450

Burbank, CA 91505





     (ii) If to Executive, to Executive at Executive’s address in the personnel
records of Employer.




     15.9 Change in Fiscal Year. If, at any time during the Term, Employer changes
its fiscal year, Employer shall make such adjustments to the various dates



13









 






and target amounts included herein as are necessary or appropriate, provided that no such change shall
affect the date on which any amount is payable hereunder.




     15.10 Executive’s Warranty and Indemnity. Executive hereby represents and
warrants that Executive: (i) has the full and unqualified right to enter into and fully
perform this Agreement according to each and every term and condition contained herein;
(ii) has not made any agreement, contractual obligation, or commitment in contravention of
any of the terms and conditions of this Agreement or which would prevent Executive from
performing according to any of the terms and conditions contained herein; and (iii) has not
entered into any agreement with any prior employer or other person, corporation or entity
which would in any way adversely affect Executive’s or Employer’s right to enter into this
Agreement. Furthermore, Executive hereby agrees to fully indemnify and hold harmless
Employer and each of its subsidiaries, affiliates and related entities, and each of their
respective officers, directors, employees, agents, attorneys, shareholders, insurers and
representatives from and against any and all losses, costs, damages, expenses (including
attorneys’ fees and expenses), liabilities and claims, arising from, in connection with, or
in any way related to Executive’s breach of any of the representations or warranties
contained in this Section 15.10.




     15.11 Venue. Any action to enforce, challenge or construe the terms or making
of this Agreement or to recover for its breach shall be litigated exclusively in a state
court located in Marion County, Indiana, except that the Employer may elect, at its sole
and absolute discretion, to litigate the action in the county or state where any breach by
Executive occurred or where Executive can be found. Executive acknowledges and agrees that
this venue provision is an essential provision of this Agreement and Executive hereby
waives any defense of lack of personal jurisdiction or improper venue.




     15.12 Indemnification. Executive shall be entitled to the benefit of the
indemnification provisions set forth in Employer’s Amended and Restated Articles of
Incorporation and/or By-Laws, or any applicable corporate resolution, as the same may be
amended from time to time during the Term (not including any limiting amendments or
additions, but including any amendments or additions that add to or broaden the protection
afforded to Executive at the time of execution of this Agreement) to the fullest extent
permitted by applicable law. Additionally, Employer shall cause Executive to be
indemnified in accordance with Chapter 37 of the Indiana Business Corporation Law (the
“IBCL”), as the same may be amended from time to time during the Term, to the fullest
extent permitted by the IBCL as required to make Executive whole in connection with any
indemnifiable loss, cost or expense incurred in Executive’s performance of Executive’s
duties and obligations pursuant to this Agreement. Employer shall also maintain during the
Term an insurance policy providing directors’ and officers’ liability coverage in a
commercially reasonable amount. It is understood that the foregoing indemnification
obligations shall survive the expiration or termination of the Term.



14









 






     15.13 Change in Control. Effective as of January 1, 2008, Executive and Emmis
Communications Corporation have entered into that certain Emmis Communications Corporation
Change in Control Severance Agreement (the “CIC Agreement”) attached hereto as Exhibit A. In the event of a “Change in
Control” (as defined in the CIC Agreement), the rights and obligations of Executive and
Employer shall be set forth in the CIC Agreement. Notwithstanding the preceding provisions
or any provision of Exhibit A, Employer shall have the right to amend the CIC
Agreement to the extent that it reasonably deems such amendment necessary to comply with
the requirements of Code Section 409A.



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




	 	 	 	 	 
	 	EMMIS OPERATING COMPANY
(“Employer”)

 	 
	 	By:  	/s/ Jeffrey H. Smulyan
 	 
	 	 	Jeffrey H. Smulyan 	 
	 	 	Chief Executive Officer 	 
	 
	 	RICHARD F. CUMMINGS

(“Executive”)

 	 
	 	/s/ Richard F. Cummings
 	 
	 	Richard F. Cummings 	 
	 	 	 



15









 






	 	 	 	 	 



Exhibit A




Change in Control Agreement



The Emmis Communications Corporation Change in Control Severance Agreement between Emmis
Communications Corporation and Richard F. Cummings effective January 1, 2008 is hereby incorporated
by reference.