Document:

exv10w4

 

EXHIBIT 10.4

February 7, 2005

Michael Levitan

c/o Emmis Communications Corporation

40 Monument Circle, Suite 700

Indianapolis, IN 46204

     Re: Amendment to Employment Agreement

Dear Mickey:

     This letter shall confirm our agreement to amend your employment agreement with Emmis
Operating Company dated September 9, 2002 (the “Agreement”), upon the terms and subject to the
conditions set forth in this letter (the “Amendment”).

     Except as otherwise provided below, this Amendment is effective upon execution by you. Any
capitalized words or phrases used and not defined in this Amendment shall have the meanings
ascribed to them in the Agreement. This shall confirm that the parties have agreed as follows:

1. The Term of the Agreement has been extended through February 29, 2008. After February 28, 2005,
“Contract Year” shall mean the twelve (12) month period commencing on March 1, 2005 and on each
anniversary thereof during the Term.

2. Effective March 1, 2005, Executive’s title shall be changed to Executive Vice President – Human
Resources.

3. The Base Salary shall be increased to Two Hundred Eighty Thousand Dollars ($280,000) each
Contract Year during the Term, commencing with the Contract Year beginning March 1, 2005 (“FYE
06”).

4. After payment of any Contract Year Bonus earned for the period ending February 28, 2005, Section
6.2 shall be modified to reflect the following: Commencing with FYE 06, the target amount of the
Contract Year Bonus shall be increased to One Hundred Forty Thousand Dollars ($140,000) each
Contract Year, Exhibit A to the Agreement shall be deleted and shall be of no further force and
effect, and the third and fourth sentences of Section 6.2 shall be deleted and replaced with the
following language:

     “Employer may pay all or a portion of any Contract Year Bonus in Shares in the same manner
utilized for other senior management level employees.”

Unless subsequently changed by the Compensation Committee, the performance goals for FYE 06 shall
be:

 

 

	 	 	 	 	 	 	 
	Target Bonus	 	Performance Goal
	1.

	 	$	56,000	 	 	Domestic Radio Station Operating Income Target

	2.

	 	$	42,000	 	 	Other Emmis Operating Income Target
	3.

	 	$	42,000	 	 	Individual Performance (Discretionary)

Domestic Radio Station Operating Income and Other Emmis Operating Income, or any other applicable
performance targets or goals, shall be defined and determined by the Compensation Committee each
Contract Year. The Compensation Committee reserves the right to amend the performance goals to the
Lxtent it deems appropriate in order to take into account any material acquisition, disposition,
reorganization, recapitalization or other material transaction involving Employer or its
properties. Executive shall earn a certain percentage of each Contract Year Bonus in accordance
with the applicable bonus scale adopted by the Employer for the subject Contract Year.

5. Section 6.3 shall be deleted in its entirety and replaced with the following language:

     “6.3 Equity Incentive Compensation. Each Contract Year during the Term, beginning
with FYE 06, at such time as Employer generally awards equity incentive compensation to members of
Employer’s senior management team, Executive shall receive Four Thousand Five Hundred (4,500)
Shares (as defined below) and an option (“Option”) to acquire Fifteen Thousand (15,000) Shares. As
used herein, “Shares” shall mean shares of Class A Common Stock of Emmis Communications
Corporation. The grants of Options and Shares shall be pursuant to the terms and subject to the
conditions of the applicable Equity Incentive Plan of Employer, the Option agreement evidencing the
Option grant and the restricted stock agreement evidencing the grant of Shares. In the event of
any change in the outstanding Shares by reason of any reorganization, recapitalization,
reclassification, merger, stock split, reverse stock split, stock dividend, asset spinoff, share
combination, consolidation, or similar event, including without limitation a Separation Event, the
number and class of all Shares awarded pursuant to this Agreement or covered by an Option granted
pursuant to this Agreement (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, the Option agreement evidencing the grant of the Option and the
restricted stock agreement evidencing the grant of Shares. The determination of the Compensation
Committee shall be conclusive and binding.”

6. After the delivery of any Bonus Shares earned pursuant to Section 6.4, Section 6.4 shall be
deleted in its entirety and replaced with the following language:

     “6.4 Completion Bonus. On or about February 29, 2008, Executive shall receive Ten
Thousand (10,000) Shares (the “Completion Shares”); provided, that (i) this Agreement is in effect
on February 29, 2008 and has not been terminated for any reason (other than a breach of this
Agreement by Employer); and (ii) Executive has fully performed all of Executive’s duties and
obligations under this Agreement throughout the Term and is not in breach of any of the material
terms and conditions of this Agreement.

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The Completion Shares shall be freely transferable when delivered to Executive subject to Employer’s securities trading policy and applicable federal and
state law. Employer shall have the right, in its sole and absolute discretion, to pay to Executive
the value of the Completion Shares (in the same manner applied to other senior management level
employees) in cash in lieu of granting Executive the Completion Shares.”

7. Effective FYE 06, the dollar amount set forth in Section 6.5 shall be increased to One Thousand
Dollars ($1,000).

8. Effective March 1, 2005, Section 15.9 shall be deleted and shall be of no further force and
effect.

9. Section 11.4 shall be deleted in its entirety and replaced with the following language:

     “11.4 Change in Control. In the event of a “Change in Control”, the rights and obligations of
Executive and Employer shall be set forth in the separate Change in Control Agreement attached to
this Agreement as Exhibit B. Exhibit B supersedes and replaces in its entirety the Change in
Control Agreement previously executed by the parties. “Change in Control” shall have the meaning
ascribed to it in Exhibit B. Notwithstanding anything to the contrary contained herein or in
Exhibit B, a Change in Control shall be deemed not to have occurred if, immediately following a
Separation Event (as defined below): (i) Jeffrey H. Smulyan is Chairman or Chief Executive Officer
of Employer or any successor thereto, including without limitation, any entity established as a
result of a Separation Event (collectively, “Successor”); or (ii) Smulyan retains the ability to
vote at least fifty percent (50%) of all classes of stock of the Employer or any Successor; or
(iii) Smulyan retains the ability to elect a majority of the Board of Directors of Employer or any
Successor. “Separation Event” shall be defined as any event whereby 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.”

10. In Section 14, Gary Kaseff’s address has been changed to 3500 W. Olive Avenue, Suite 1450,
Burbank, California 91505.

11. The length of time set forth in Section 15.12(a) shall be increased to twelve (12) months.

All of the terms and conditions set forth in the Agreement shall remain unchanged and in full force
and effect unless specifically modified in this Amendment. All references to the Term or its
expiration or termination shall be adjusted to properly reflect the language set forth above. This
Amendment shall be incorporated by reference into the Agreement and made a part thereof. In the
event of any conflict between any provision of this Amendment and any provision of the Agreement,
this Amendment shall govern and control.

3

 

Please sign below where indicated to signify your acceptance of the terms and conditions set forth
in this Amendment. Should you have any questions about this Amendment, please let me know. I look
forward to much continued success together.

Sincerely,

	 	 	 
	/S/ Jeffrey H. Smulyan
	 	 
	Jeffrey H. Smulyan, Chairman and Chief Executive
	 	 
	Officer, Emmis Operating Company
	 	 

ACCEPTED AND AGREED:

	 	 	 
	/S/ Michael Levitan

	 	 
	 
	 	 
	Michael Levitan
	 	 

4exv10w5

 

EXHIBIT 10.5

EMMIS COMMUNICATIONS CORPORATION

CHANGE IN CONTROL SEVERANCE AGREEMENT

     THIS AGREEMENT is entered into as of the 7th day of February, 2005 (the “Effective Date”)
by and between EMMIS COMMUNICATIONS CORPORATION, an Indiana corporation (the “Company”), and
MICHAEL LEVITAN (“Executive”).

W I T N E S S E T H

     WHEREAS, the Company considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of the Company and its
stockholders; and

     WHEREAS, the Company recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control may arise and that such possibility may result in the departure
or distraction of management personnel to the detriment of the Company and its stockholders; and

     WHEREAS, the Compensation Committee of the “Board” (as defined in Section 1) has determined
that it is in the best interests of the Company and its stockholders to secure Executive’s
continued services and to ensure Executive’s continued and undivided dedication to his duties in
the event of any threat or occurrence of a “Change in Control” (as defined in Section 1) of the
Company; and

     WHEREAS, the Compensation Committee, at a meeting held on June 25, 2003, has authorized the
Company to enter into this Agreement.

     NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained, the Company and Executive hereby agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the
respective meanings set forth below:

        (a) “Affiliate” means, with respect to a specified person, a person that, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is under
common control with, the person specified.

        (b) “Board” means the Board of Directors of the Company.

        (c) “Bonus Amount” means the greater of (i) the highest annual incentive bonus earned by
Executive from the Company (or its Affiliates) during the last three (3) completed fiscal years of
the Company immediately preceding Executive’s Date of Termination (annualized in the event
Executive was not employed by the Company (or its Affiliates) for the whole of any such fiscal
year), or (ii) if the Date of Termination occurs before Executive has been employed for a full
fiscal year, and before the date Company generally pays bonuses to its Executives for the fiscal
year in which

 

 

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Executive’s employment commenced, the Executive’s target bonus for the fiscal year of
the Company which includes the Executive’s Date of Termination.

        (d) “Cause” means (i) the willful and continued failure of Executive to perform substantially
his duties with the Company (other than any such failure resulting from Executive’s incapacity due
to physical or mental illness or any such failure subsequent to Executive being delivered a Notice
of Termination without Cause by the Company or delivering a Notice of Termination for Good Reason
to the Company) after a written demand for substantial performance is delivered to Executive by the
Board which specifically identifies the manner in which the Board believes that Executive has not
substantially performed Executive’s duties; provided that Executive has not cured such failure or
commenced such performance within 30 days after such demand is given to Executive, or (ii) the
willful engaging by Executive in illegal conduct or gross misconduct which is demonstrably and
materially injurious to the Company or its Affiliates. For purpose of the preceding sentence, no
act or failure to act by Executive shall be considered “willful” unless done or omitted to be done
by Executive in bad faith and without reasonable belief that Executive’s action or omission was in
the best interests of the Company. Any act, or failure to act, based upon authority given pursuant
to a resolution duly adopted by the Board, based upon the advice of counsel for the Company (or
upon the instructions of the Company’s chief executive officer or another senior officer of the
Company) shall be conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. Cause shall not exist unless and until the Company
has delivered to Executive a copy of a resolution duly adopted by three-quarters (3/4) of the
entire Board (excluding Executive if Executive is a Board member) at a meeting of the Board called
and held for such purpose (after reasonable notice to Executive and an opportunity for Executive,
together with counsel, to be heard before the Board), finding that in the good faith opinion of the
Board an event set forth in clauses (i) or (ii) has occurred and specifying the particulars thereof
in detail. The Company must notify Executive of any event constituting Cause within ninety (90)
days following the Company’s knowledge of its existence or such event shall not constitute Cause
under this Agreement.

        (e) “Change in Control” means any of the following: (i) any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (other than an Affiliate or any employee benefit plan (or any related
trust) of the Company or an Affiliate, and other than Jeffrey H. Smulyan or an Affiliate of Mr.
Smulyan) (a “Person”) becomes after the date hereof the beneficial owner of 25% or more of either
the then outstanding Stock or the combined voting power of the then outstanding voting securities
of the Company entitled to vote in the election of directors, except that no Change in Control
shall be deemed to have occurred solely by reason of any such acquisition by a corporation with
respect to which, after such acquisition, more than 60% of both the then outstanding common shares
of such corporation and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote in the election of directors are then beneficially owned, directly or
indirectly, by the persons who were the beneficial owners of the Stock and voting securities of the
Company immediately before such acquisition in substantially the same proportion as their
ownership, immediately

 

 

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before such acquisition, of the outstanding Stock and the combined voting
power of the then outstanding voting securities of the Company entitled to vote in the election of
directors; (ii) individuals who, as of the Effective Date, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the Board; provided that any
individual who becomes a director after the Effective Date whose election, or nomination for
election by the Company’s shareholders, was approved by a vote or written consent of at least
two-thirds of the directors then comprising the Incumbent Directors shall be considered as though
such individual were an Incumbent Director, but excluding, for this purpose, any such individual
whose initial assumption of office is in connection with an actual or threatened election contest
relating to the election of the directors of the Company (as such terms are used in Rule 14a-11
under the Exchange Act); (iii) the consummation of (A) a merger, reorganization or consolidation
with respect to which the individuals and entities who were the respective beneficial owners of the
Stock and voting securities of the Company immediately before such merger, reorganization or
consolidation do not, after such merger, reorganization or consolidation, beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding common shares and the
combined voting power of the then outstanding voting securities entitled to vote in the election of
directors of the corporation resulting from such merger, reorganization or consolidation, or (B)
the sale or other disposition of all or substantially all of the assets of the Company to any
Person; (iv) the approval by the shareholders of the Company of a liquidation or dissolution of the Company; or (v) such
other event(s) or circumstance(s) as are determined by the Board to constitute a Change in Control.
Notwithstanding the foregoing provisions of this definition, a Change in Control of the Company
shall be deemed not to have occurred (a) with respect to any Executive, if such Executive is, by
written agreement executed prior to such Change in Control, a participant on such Executive’s own
behalf in a transaction in which the persons (or their Affiliates) with whom such Executive has the
written agreement Acquire the Company (as defined below) and, pursuant to the written agreement,
the Executive has an equity interest in the resulting entity or a right to acquire such an equity
interest, or (b) in the event the Company separates or bifurcates its radio and television
divisions by means of merger, corporate reorganization, sale or disposition of assets, spin-off,
tax-free reorganization, or otherwise (any such separation or bifurcation, a “Separation Event”),
and, immediately thereafter, Mr. Smulyan is Chairman or Chief Executive Officer of the Company or
any successor thereto, including without limitation, either division or any entity established as a
result of a Separation Event ( a “Successor”), Mr. Smulyan retains the ability to vote at least
fifty percent (50%) of all classes of stock of the Company or any Successor, or Mr. Smulyan retains
the ability to elect a majority of the Board of Directors of the Company or any Successor.

     Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to
occur solely because any Person acquires beneficial ownership of more than 25% of the then
outstanding Stock as a result of the acquisition of the Stock by the Company which reduces the
number of shares of Stock outstanding; provided, that if after such acquisition by
the Company such person becomes the beneficial owner of additional Stock that increases the
percentage of outstanding Stock beneficially owned by such person, a Change in Control of the
Company shall then occur.

 

 

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     For the purposes of this definition, “Acquire the Company” means the acquisition of beneficial
ownership by purchase, merger, or otherwise, of either more than 50% of the Stock (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 Company or its successors; “person” means such term as used
in Rule 13d-5 of the SEC under the Exchange Act; “beneficial owner” means such term as defined in
Rule 13d-3 of the SEC under the Exchange Act; and “group” means such term as defined in Section
13(d) of the Exchange Act.

        (f) “Code” means the Internal Revenue Code of 1986, as amended, and regulations and
rulings thereunder. References to a particular section of the Code shall include references to
successor provisions.

        (g) “Date of Termination” means (1) the effective date on which Executive’s employment by the
Company terminates as specified in a prior written notice by the Company or Executive, as the case
may be, to the other, delivered pursuant to Section 10 or (2) if Executive’s employment by the
Company terminates by reason of death, the date of death of Executive.

        (h) “Disability” means termination of Executive’s employment by the Company due to Executive’s
absence from Executive’s duties with the Company on a full-time basis for at least one hundred
eighty (180) consecutive days as a result of Executive’s incapacity due to physical or mental
illness.

        (i) “Exchange Act” means the Securities Exchange Act of 1934, as amended. References to a
particular section of, or rule under, the Exchange Act shall include references to successor
provisions.

        (j) “Good Reason” means, without Executive’s express written consent, the occurrence of any of
the following events after a Change in Control:

          (i) any (A) change in the duties or responsibilities (including reporting
responsibilities) of Executive that is inconsistent in any material and adverse respect with
Executive’s position(s), duties, responsibilities or status with the Company immediately
prior to such Change in Control (including any material and adverse diminution of such duties
or responsibilities); provided, however, that Good Reason shall not be deemed
to occur upon a change in duties or responsibilities (other than reporting responsibilities)
that is solely and directly a result of the Company no longer being a publicly traded entity
and does not involve any other event set forth in this paragraph (j) or (B) material and
adverse change in Executive’s titles or offices (including, if applicable, membership on the
Board) with the Company as in effect immediately prior to such Change in Control;

          (ii) a material breach by the Company or an Affiliate of the Company of an employment
agreement to which the Executive and the Company or an Affiliate of the Company are parties;

 

 

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          (iii) a reduction by the Company in Executive’s rate of annual base salary or annual
target bonus opportunity as in effect immediately prior to such Change in Control or as the
same may be increased from time to time thereafter;

          (iv) any requirement of the Company that Executive (A) be based anywhere more than
thirty-five (35) miles from the office where Executive is located at the time of the Change
in Control, if such relocation increases Executive’s commute by more than twenty (20) miles,
or (B) travel on Company business to an extent substantially greater than the travel
obligations of Executive immediately prior to such Change in Control;

          (v) the failure of the Company to (A) continue in effect any material employee benefit
plan, compensation plan, welfare benefit plan or fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any action by the
Company which would adversely affect Executive’s participation in or reduce Executive’s
benefits under any such plan, unless Executive is permitted to participate in other plans
providing Executive with substantially equivalent benefits in the aggregate (at substantially
equivalent cost with respect to welfare benefit plans), or (B) provide Executive with paid
vacation in accordance with the most favorable vacation policies of the Company and its
Affiliates as in effect for Executive immediately prior to such Change in Control, including
the crediting of all service for which Executive had been credited under such vacation
policies prior to the Change in Control;

          (vi) any refusal by the Company to continue to permit Executive to engage in activities
not directly related to the business of the Company in which Executive was permitted to
engage prior to the Change in Control;

          (vii) any purported termination of Executive’s employment which is not effectuated
pursuant to Section 10(b) (and which will not constitute a termination hereunder); or

          (viii) the failure of the Company to obtain the assumption and, if applicable,
guarantee, agreement from any successor (and parent corporation) as contemplated in Section
9(b).

Notwithstanding anything herein to the contrary, termination of employment by Executive for
any reason during the 30-day period commencing one (1) year after the date of a Change in Control
shall constitute a termination for Good Reason. An isolated, insubstantial and inadvertent action
taken in good faith and which is remedied by the Company within ten (10) days after receipt of
notice thereof given by Executive shall not constitute Good Reason. Executive’s right to terminate
employment for Good Reason shall not be affected by Executive’s incapacity due to mental or
physical illness and Executive’s continued employment shall not constitute consent to, or a waiver
of rights

 

 

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with respect to, any event or condition constituting Good Reason; provided,
however, that Executive must provide notice of termination of employment within ninety (90)
days following Executive’s knowledge of an event constituting Good Reason or such event shall not
constitute a termination for Good Reason under this Agreement.

        (k) “Qualifying Termination” means a termination of Executive’s employment (i) by the
Company other than for Cause or (ii) by Executive for Good Reason. Termination of Executive’s
employment on account of death, Disability or Retirement shall not be treated as a Qualifying
Termination.

        (l) “Retirement” means Executive’s retirement (not including any mandatory early retirement)
in accordance with the Company’s retirement policy generally applicable to its salaried employees,
as in effect immediately prior to the Change in Control, or in accordance with any retirement
arrangement established with respect to Executive with Executive’s written consent;
provided, however, that under no circumstances shall a resignation with Good Reason
be deemed a Retirement.

        (m) “SEC” means the Securities and Exchange Commission.

        (n) “Stock” means the Class A Common Stock and the Class B Common Stock of the Company, par
value $.01 per share.

        (o) “Termination Period” means the period of time beginning with a Change in Control and
ending two (2) years following such Change in Control. Notwithstanding anything in this Agreement
to the contrary, if (i) Executive’s employment is terminated prior to a Change in Control for
reasons that would have constituted a Qualifying Termination if they had occurred following a
Change in Control; (ii) Executive reasonably demonstrates that such termination (or Good Reason
event) was at the request of a Person who had indicated an intention or taken steps reasonably
calculated to effect a Change in Control, or was otherwise made in connection with a Change in
Control; and (iii) a Change in Control involving such third party or an Affiliate of such third
party (or a party competing with such third party to effectuate a Change in Control) does occur,
then for purposes of this Agreement, the date immediately prior to the date of such termination of
employment or event constituting Good Reason shall be treated as a Change in Control. For purposes
of determining the timing of payments and benefits to Executive under Section 4, the date of the
actual Change in Control shall be treated as Executive’s Date of Termination under Section l(g).

     2. Obligation of Executive. In the event of a tender or exchange offer, proxy
contest, or the execution of any agreement which, if consummated, would constitute a Change in
Control, Executive agrees not to voluntarily leave the employ of the Company, other than as a
result of Disability, Retirement or an event which would constitute Good Reason if a Change in
Control had occurred, until the Change in Control occurs or, if earlier, such tender or exchange
offer, proxy contest, or agreement is terminated or abandoned.

 

 

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     3. Term of Agreement. This Agreement shall be effective on the date hereof and shall
continue in effect until the Company shall have given three (3) years’ written notice of
cancellation; provided, that, notwithstanding the delivery of any such notice, this
Agreement shall continue in effect for a period of two (2) years after a Change in Control, if such
Change in Control shall have occurred during the term of this Agreement. Notwithstanding anything
in this Section to the contrary, this Agreement shall terminate if Executive or the Company
terminates Executive’s employment prior to a Change in Control except as provided in the second
sentence of Section 1(o).

     4. Payments Upon Termination of Employment.

        (a) Qualifying
Termination - Severance. If during the Termination Period the
employment of Executive shall terminate pursuant to a Qualifying Termination, then the Company
shall provide to Executive:

          (i) within ten (10) days following the Date of Termination a lump-sum cash amount equal
to the sum of (A) Executive’s base salary through the Date of Termination and any bonus
amounts which have become payable, to the extent not theretofore paid or deferred, (B) a pro
rata portion of Executive’s annual bonus for the fiscal year in which Executive’s Date of
Termination occurs in an amount at least equal to (1) Executive’s target bonus for such
fiscal year, multiplied by (2) a fraction, the numerator of which is the number of days in
the fiscal year in which the Date of Termination occurs through the Date of Termination and
the denominator of which is three hundred sixty-five (365), and (C) any accrued vacation pay,
in each case to the extent not theretofore paid; plus

          (ii) within ten (10) days following the Date of Termination, a lump-sum cash amount
equal to (i) three (3) times Executive’s highest annual rate of base salary during the
36-month period immediately prior to Executive’s Date of Termination plus (ii) three (3)
times Executive’s Bonus Amount.

        (b) Qualifying
Termination - Benefits. If during the Termination Period the
employment of Executive shall terminate pursuant to a Qualifying Termination, the Company shall
continue to provide, for a period of three (3) years following Executive’s Date of Termination,
Executive (and Executive’s dependents, if applicable) with the same level of medical, dental,
accident, disability and life insurance benefits upon substantially the same terms and conditions
(including contributions required by Executive for such benefits) as existed immediately prior to
Executive’s Date of Termination (or, if more favorable to Executive, as such benefits and terms and
conditions existed immediately prior to the Change in Control); provided, that, if
Executive cannot continue to participate in the Company plans providing such benefits, the Company
shall otherwise provide such benefits on the same after-tax basis as if continued participation had
been permitted. Notwithstanding the foregoing, in the event Executive becomes reemployed with
another employer and becomes eligible to receive welfare benefits from such employer, the welfare
benefits described herein shall be

 

 

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secondary to such benefits during the period of Executive’s
eligibility, but only to the extent that the Company reimburses Executive for any increased cost
and provides any additional benefits necessary to give Executive the benefits provided hereunder.
For two years following the Executive’s Date of Termination (or such shorter period ending upon the
subsequent employment of Executive at a level of service commensurate with Executive’s positions
with the Company on the Date of Termination), Executive shall be provided with outplacement
services from a provider selected by the Company and at the Company’s expense. In addition, the
Company may make such additional payments, and provide such additional benefits, to Executive as
the Company and Executive may agree in writing, or to which the Executive may be entitled under the
compensation and benefit plans, policies, and arrangements of the Company.

        (c) Nonqualifying Termination. If during the Termination Period the employment of
Executive shall terminate other than by reason of a Qualifying Termination, then the Company shall
pay to Executive within thirty (30) days following the Date of Termination, a lump-sum cash amount
equal to the sum of Executive’s base salary through the Date of Termination and any bonus amounts
which have become payable, to the extent not theretofore paid or deferred, and any accrued vacation
pay, to the extent not theretofore paid. The Company may make such additional payments, and
provide such additional benefits, to
Executive as the Company and Executive may agree in writing, and the Company shall provide the
Executive with those payments and benefits to which Executive may be entitled under the
compensation and benefit plans, policies, and arrangements of the Company, or any employment
agreement with the Company or an Affiliate of the Company.

        (d) Stock Options. In the event of a Change in Control, all options to purchase
Company stock held by Executive (“Options”) which are not fully vested and exercisable shall become
fully vested and exercisable as of a time established by the Board, which shall be no later than a
time preceding the Change in Control which allows Executive to exercise the Options and cause the
stock acquired thereby to participate in the Change in Control transaction. If the Change in
Control transaction is structured such that stock participating therein at one time is or may be
treated differently than stock participating therein at a different time (e.g., a tender
offer followed by a squeeze-out merger), the Board shall interpret this paragraph (d) to provide
for the required vesting acceleration in a manner designed to allow Executive to exercise the
Options and cause the stock acquired thereby to participate in the earliest portion of the Change
in Control transaction. If the consummation of a Change in Control transaction is uncertain
(e.g., a tender offer in which the tender of a minimum number of shares is a condition to
closing, or a voted merger or proxy contest in which a minimum number of votes is a condition to
closing), the Board shall apply this paragraph (d) by using its best efforts to determine if and
when the Change in Control transaction is likely to close, and proceeding accordingly. To the
extent necessary to implement this Section 4(d), each stock option agreement reflecting the
Options, and each stock option plan relating to each such stock option agreement, if any, shall be
deemed amended.

 

 

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     5. Certain Additional Payments by the Company.

        (a) If it is determined (as hereafter provided) that any payment or distribution by the
Company to or for the benefit of Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without limitation any stock option,
stock appreciation right or similar right, or the lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax
imposed by state or local law, or any interest or penalties with respect to such excise tax (such
tax or taxes, together with any such interest and penalties, are hereafter collectively referred to
as the “Excise Tax”), then Executive will be entitled to receive an additional payment or payments
(a “Gross-Up Payment”) in an amount such that, after payment by Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.

        (b) Subject to the provisions of Section 5(f) hereof, all determinations required to be made
under this Section 5, including whether an Excise Tax is payable by Executive and the amount of
such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
will be made by a nationally recognized firm of certified public accountants (the “Accounting
Firm”) selected by Executive in his sole discretion. Executive will direct the Accounting Firm to
submit its determination and detailed supporting calculations to both the Company and Executive
within 15 calendar days after the date of Executive’s termination of employment, if applicable, and
any other such time or times as may be requested by the Company or Executive. If the Accounting
Firm determines that any Excise Tax is payable by Executive, the Company will pay the required
Gross-Up Payment to Executive within five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no Excise Tax is payable by Executive,
it will, at the same time as it makes such determination, furnish Executive with an opinion
that he has substantial authority not to report any Excise Tax on his federal, state, local income
or other tax return. Subject to the provisions of this Section 5, any determination by the
Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and
Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of similar uncertainty regarding applicable state
or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should have been made (an
“Underpayment”), consistent with the calculations required to be made hereunder. In the event that
an Underpayment is made and the Company exhausts or fails to pursue its remedies pursuant to
Section 5(f) hereof and Executive thereafter is required to make a payment of any Excise Tax,
Executive will direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations to both the Company
and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company
to, or for the benefit of, Executive within five business days after receipt of such determination
and calculations.

 

 

  10

        (c) The Company and Executive will each provide the Accounting Firm access to and copies of
any books, records and documents in the possession of the Company or Executive, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determination contemplated by Section 5(b)
hereof.

        (d) The federal, state and local income or other tax returns filed by Executive will be
prepared and filed on a consistent basis with the determination of the Accounting Firm with respect
to the Excise Tax payable by Executive. Executive will make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with
any amendments) of his federal income tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by the Company, evidencing such payment.
If prior to the filing of Executive’s federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment
should be reduced, Executive will within five business days pay to the Company the amount of such
reduction.

        (e) The fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by Sections 5(b) and (d) hereof will be borne by the
Company. If such fees and expenses are initially advanced by Executive, the Company will reimburse
Executive the full amount of such fees and expenses within five business days after receipt from
Executive of a statement therefor and reasonable evidence of his payment thereof.

        (f) Executive will notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of a Gross-Up Payment. Such
notification will be given as promptly as practicable but no later than 10 business days after
Executive actually receives notice of such claim and Executive will further apprise the Company of
the nature of such claim and the date on which such claim is requested to be paid (in each case, to
the extent known by Executive). Executive will not pay such claim prior to the earlier of (i) the
expiration of the 30-calendar-day period following the date on which he gives such notice to the
Company and (ii) the date that any payment of amount with respect to such claim is due. If the
Company notifies Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive will:

          (i) provide the Company with any written records or documents in his possession relating
to such claim reasonably requested by the Company;

          (ii) take such action in connection with contesting such claim as the Company will
reasonably request in writing from time to time, including without limitation accepting legal
representation with respect to such claim by an attorney competent in respect of the subject
matter and reasonably selected by the Company;

 

 

  11

          (iii) cooperate with the Company in good faith in order effectively to contest such
claim; and

          (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company will bear and pay directly all costs and expenses
(including interest and penalties) incurred in connection with such contest and will indemnify and
hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of such representation
and payment of costs and expenses. Without limiting the foregoing provisions of this Section 5(f),
the Company will control all proceedings taken in connection with the contest of any claim
contemplated by this Section 5(f) and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim (provided that Executive may participate therein at his own cost and expense) and
may, at its option, either direct Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company will determine; provided, however, that if the Company
directs Executive to pay the tax claimed and sue for a refund, the Company will advance the amount
of such payment to Executive on an interest-free basis and will indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties
with respect thereto, imposed with respect to such advance; and provided further, however, that any
extension of the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which the contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of any such contested claim will be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive will be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

        (g) If, after the receipt by Executive of an amount advanced by the Company pursuant to
Section 5(f) hereof, Executive receives any refund with respect to such claim, Executive will
(subject to the Company’s complying with the requirements of Section 5(f) hereof) promptly pay to
the Company the amount of such refund (together with any interest paid or credited thereon after
any taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 5(f) hereof, a determination is made that Executive will not be
entitled to any refund with respect to such claim and the Company does not notify Executive in
writing of its intent to contest such denial or refund prior to the expiration of 30 calendar days
after such determination, then such advance will be forgiven and will not be required to be repaid
and the amount of such advance will offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid pursuant to this Section 5.

     6. Withholding Taxes. The Company may withhold from all payments due to Executive (or
his beneficiary or estate) hereunder all taxes which, by

 

 

  12

applicable federal, state, local or other law, the Company is required to withhold therefrom. In the case of the withholding of an Excise
Tax, such withholding shall be consistent with any determination made under Section 5.

     7. Reimbursement of Expenses. If any contest or dispute shall arise under this
Agreement involving termination of Executive’s employment with the Company or involving the failure
or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse
Executive, on a current basis, for all reasonable legal fees and expenses, if any, incurred by
Executive in connection with such contest or dispute (regardless of the result thereof);
provided, however, Executive shall be required to repay any such amounts to the
Company to the extent that a court or an arbitration panel issues a final order from which no
appeal can be taken, or with respect to which the time period to appeal has expired, setting forth
that Executive has not wholly or partially prevailed on at least one material issue in dispute.

     8. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle Executive
to continued employment with the Company or its Subsidiaries, and if Executive’s employment with
the Company shall terminate prior to a Change in Control, Executive shall have no further rights
under this Agreement (except as otherwise provided hereunder); provided, however,
that any termination of Executive’s employment during the Termination Period shall be subject to
all of the provisions of this Agreement.

     9. Successors; Binding Agreement.

        (a) This Agreement shall not be terminated by any Change in Control or other merger,
consolidation, statutory share exchange, sale of substantially all the assets or similar form of
corporate transaction involving the Company (a “Business Combination”). In the event of any
Business Combination, the provisions of this Agreement shall be binding upon the surviving
corporation, and such surviving corporation shall be treated as the Company hereunder.

        (b) The Company agrees that in connection with any Business Combination, it will cause any
successor entity to the Company unconditionally to assume (and for any parent corporation in such
Business Combination to guarantee), by written instrument delivered to Executive (or his
beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to
obtain such assumption and guarantee prior to the effectiveness of any such Business Combination
that constitutes a Change in Control, shall be a breach of this Agreement and shall constitute Good
Reason hereunder and shall entitle Executive to compensation and other benefits from the Company in
the same amount and on the same terms as Executive would be entitled hereunder if Executive’s
employment were terminated following a Change in Control by reason of a Qualifying Termination.
For purposes of implementing the foregoing, the date on which any such Business Combination becomes
effective shall be deemed the date Good Reason occurs, and shall be the Date of Termination if
requested by Executive.

 

 

  13

        (c) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive shall die while any amounts would be payable to Executive hereunder had
Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to such person or persons appointed in writing by
Executive to receive such amounts or, if no person is so appointed, to Executive’s estate.

     10. Notice. (a) For purposes of this Agreement, all notices and other communications
required or permitted hereunder shall be in writing and shall be deemed to have been duly given
when actually received or, if mailed, three days after mailing by registered or certified mail,
return receipt requested, or one business day after mailing by a nationally recognized express mail
delivery service with instructions for next-day delivery, addressed as follows:

     If to the Executive, to the Executive’s principal residence as reflected in the records
of the Company.

	 	 	 
	

	 	If to the Company:
	 
	 	 
	

	 	Emmis Communications Corporation
	

	 	40 Monument Circle
	

	 	Suite 700
	

	 	Indianapolis, Indiana 46204
	

	 	Attn.: General Counsel

or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

        (b) A written notice of Executive’s Date of Termination by the Company or Executive, as the
case may be, to the other, shall (i) indicate the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s employment under the
provision so indicated and (iii) specify the termination date (which date shall be not less than
fifteen (15) (thirty (30), if termination is by the Company for Disability) nor more than sixty
(60) days after the giving of such notice). The failure by Executive or the Company to set forth
in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or preclude Executive or the
Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights
hereunder.

     11. Full Settlement; Resolution of Disputes. The Company’s obligation to make any
payments and provide any benefits pursuant to this Agreement and otherwise to perform its
obligations hereunder shall be in lieu and in full settlement

 

 

  14

of all other severance payments to Executive under any other severance or employment agreement between Executive and the Company, and
any severance plan of the Company; provided, however, that if any such other
agreement or plan would provide Executive with a greater payment or more or longer benefits in
respect of any particular item described hereunder (e.g., severance, welfare benefits), then
Executive shall receive such particular item of payment and/or benefit pursuant to such other
agreement or plan, in lieu of receiving that particular item pursuant to this Agreement.The
Company’s obligations hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against Executive or others. In
no event shall Executive be obligated to seek other employment or take other action by way of
mitigation of the amounts payable and benefits provided to Executive under any of the provisions of
this Agreement and, except as provided in Section 4(b), such amounts shall not be reduced whether
or not Executive obtains other employment. 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 by three arbitrators 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 Company shall bear all costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section.

     12. Employment by Subsidiaries. Employment by the Company for purposes of this
Agreement shall include employment by any Affiliate.

     13. Survival. The respective obligations and benefits afforded to the Company and
Executive as provided in Sections 4 (to the extent that payments or benefits are owed as a result
of a termination of employment that occurs during the term of this Agreement), 5 (to the extent that Payments
are made to Executive as a result of a Change in Control that occurs during the term of this
Agreement), 6, 7, 9(c) and 11 shall survive the termination of this Agreement.

     14. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF INDIANA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, OF SUCH
PRINCIPLES OF ANY OTHER JURISDICTION WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF INDIANA. THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION
OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS
AGREEMENT, WHICH OTHER PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.

     15. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which together shall constitute one and the same instrument.

 

 

  15

     16. Miscellaneous. No provision of this Agreement may be modified or waived unless
such modification or waiver is agreed to in writing and signed by Executive and by a duly
authorized officer of the Company. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by Executive or the Company to
insist upon strict compliance with any provision of this Agreement or to assert any right Executive
or the Company may have hereunder, including, without limitation, the right of Executive to
terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement. Except as otherwise specifically provided
herein, the rights of, and benefits payable to, Executive, his estate or his beneficiaries pursuant
to this Agreement are in addition to any rights of, or benefits payable to, Executive, his estate
or his beneficiaries under any other employee benefit plan or compensation program of the Company.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly
authorized officer of the Company and Executive has executed this Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 
	 
	 	EMMIS COMMUNICATIONS CORPORATION
	 

	 
	 	By:	 	/S/ Jeffrey H. Smulyan	 	 
	

	 	 	 	 	 	 
	 	 	Title: Chairman and CEO
	 
	 	 	 	 	 	 
	 	 	MICHAEL LEVITAN
	 
	 	 	 	 	 	 
	 	 	/S/ Michael Levitan
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Date: February 7, 2005

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