<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
EMMIS COMMUNICATION CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
EMMIS COMMUNICATION CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
EMMIS COMMUNICATIONS LOGO
January 20, 2000
Dear Shareholders:
On behalf of the directors and officers of Emmis Communications
Corporation, I invite you to attend a special meeting of our shareholders on
Monday, February 21, 2000 at 10:00 a.m. at One EMMIS Plaza, 40 Monument Circle,
Indianapolis, Indiana.
As you know, the Board of Directors recently approved a 2-for-1 stock split
of our Class A and Class B Common Stock. The primary purpose of this special
meeting is to amend our Articles of Incorporation to increase the number of
authorized shares of Class A and Class B Common Stock so that we can implement
the stock split. Since we are proposing an amendment to our Articles of
Incorporation, we believe that this special meeting is also an appropriate time
to make certain other amendments to our Articles of Incorporation.
All of the proposals are explained in more detail in the notice of special
meeting and proxy statement that appear on the following pages. After reading
the proxy statement, please mark, sign and return the enclosed proxy card to
ensure that your votes on the business matters of the meeting will be recorded.
Whether or not you attend the meeting, please return your proxy card
promptly in the enclosed postage paid envelope. After returning the proxy card,
you may vote in person on all matters brought before the meeting.
We look forward to seeing you on February 21.
Sincerely,
JEFFREY H. SMULYAN
Jeffrey H. Smulyan,
President and
Chairman of the Board
<PAGE> 3
EMMIS COMMUNICATIONS CORPORATION
INDIANAPOLIS, INDIANA
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A special meeting of the shareholders of Emmis Communications Corporation
will be held on Monday, February 21, 2000, at 10:00 a.m. at One Emmis Plaza, 40
Monument Circle, Indianapolis, Indiana, to consider and vote on the following
matters:
1. An amendment to the Emmis Articles of Incorporation to increase the
authorized Class A Common Stock to 170 million shares and the authorized
Class B Common Stock to 30 million shares;
2. An amendment to the Emmis Articles of Incorporation to create a new
class of non-voting common stock with 30 million authorized shares, to
be denominated Class C Common Stock;
3. An amendment to the Emmis Articles of Incorporation to provide for a
classified Board of Directors, consisting of six to 15 directors divided
into three classes, to require cause and an 80% vote of shareholders for
the removal of directors, to require an 80% vote of shareholders to
change these provisions and to remove certain outdated material from the
Articles; and
4. The transaction of such other business as may properly come before the
meeting and any adjournments thereof.
Only shareholders of record at the close of business on January 7, 2000 are
entitled to notice of and to vote at this meeting and any adjournments thereof.
By order of the Board of Directors,
NORMAN H. GURWITZ
Norman H. Gurwitz
Secretary
Indianapolis, Indiana
January 20, 2000
<PAGE> 4
EMMIS COMMUNICATIONS CORPORATION
ONE EMMIS PLAZA
40 MONUMENT CIRCLE
INDIANAPOLIS, INDIANA 46204
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Emmis Communications Corporation of proxies to be
voted at a special meeting of shareholders to be held on Monday, February 21,
2000, and at any adjournment thereof. The approximate date of mailing this proxy
statement is January 20, 2000. The following is important information in a
question-and-answer format regarding the special meeting and this proxy
statement.
Q: WHAT AM I VOTING ON?
- An amendment to the Emmis Articles of Incorporation to increase the
authorized Class A Common Stock to 170 million shares and the authorized
Class B Common Stock to 30 million shares
- An amendment to the Emmis Articles of Incorporation to create a class of
non-voting common stock with 30 million authorized shares, to be
denominated Class C Common Stock
- An amendment to the Emmis Articles of Incorporation to provide for a
classified Board of Directors, consisting of six to 15 directors divided
into three classes, to require cause and an 80% vote of shareholders for
the removal of directors, to require an 80% vote of shareholders to
change these provisions and to remove two outdated sections of the
Articles of Incorporation describing series of preferred stock which were
redeemed when Emmis became a public company
Q: WHO IS ENTITLED TO VOTE?
Holders of either class of Emmis common stock, Class A or Class B, as of
the close of business on January 7, 2000, the record date, are entitled to vote
at the annual meeting. As of January 7, 2000, 20,487,853 shares of Class A
Common Stock and 2,369,291 shares of Class B Common Stock were issued and
outstanding.
Q: WHAT ARE THE VOTING RIGHTS OF THE CLASS A AND CLASS B COMMON STOCK?
On each matter submitted to a vote of Emmis' shareholders, each share of
Class A Common Stock is entitled to one vote and each share of Class B Common
Stock is entitled to ten votes. Generally, the Class A and Class B Common Stock
vote together as a single group. However, the two classes vote separately in
connection with the election of directors, certain "going private" transactions
and other matters as provided by law.
For this special meeting, the Class A and Class B Common Stock will vote as
separate classes on the increase in the authorized Class A Common Stock and
Class B Common Stock and on the creation of a new class of non-voting common
stock and as a single class on all other issues.
Q: HOW DO I VOTE?
Sign and date each proxy card you receive and return it in the prepaid
envelope. If you return your signed proxy card but do not indicate your voting
preferences, we will vote FOR the three proposals on your behalf. You have the
right to revoke your proxy any time before the meeting by either notifying
Emmis' corporate secretary or returning a later-dated proxy. You may also revoke
your proxy by voting in person at the meeting.
<PAGE> 5
Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
It means you hold shares registered in more than one account. Sign and
return ALL proxy cards to ensure that all your shares are voted.
Q: WHO WILL COUNT THE VOTE?
Representatives of First Union National Bank, Emmis' transfer agent, will
count the votes.
Q: WHAT CONSTITUTES A QUORUM?
A majority of the voting power of each of the Class A and Class B Common
Stock constitutes a quorum for the meeting.
Q: HOW MANY VOTES ARE NEEDED FOR APPROVAL OF EACH ITEM?
The approval of the amendments to the Emmis Articles of Incorporation
increasing the authorized shares and creating a new class of non-voting common
stock requires that the number of votes of each of the Class A Common Stock and
the Class B Common Stock cast in favor of the amendment exceed the number of
votes cast against the amendment. The approval of the other amendment to the
Emmis Articles of Incorporation requires that the number of votes of the Class A
Common Stock and the Class B Common Stock, voting as a single class, cast in
favor of the amendment exceed the number of votes cast against the amendment,
with each share of Class A Common Stock entitled to one vote and each share of
Class B Common Stock entitled to ten votes. Proxies submitted by brokers that do
not indicate a vote for some of the proposals because the holders do not have
discretionary voting authority and have not received instructions from the
beneficial owners on how to vote on those proposals are called "broker
non-votes." Abstentions and broker non-votes will not be voted for or against
the proposals and will not be counted as entitled to vote.
Q: WHO CAN ATTEND THE SPECIAL MEETING?
All shareholders as of January 7, 2000 can attend.
Q: WHAT PERCENTAGE OF STOCK DO THE DIRECTORS AND OFFICERS OWN?
Together, they own approximately 4.0% of the shares of Class A Common Stock
and 100.0% of the shares of Class B Common Stock. (See page 3 for details.)
Q: WHO ARE THE LARGEST PRINCIPAL SHAREHOLDERS?
Jeffrey H. Smulyan, the President and Chairman of the Board of Directors,
is the largest single shareholder of Emmis, beneficially owning 242,205 Class A
shares and 2,869,291 Class B shares as of January 7, 2000. In addition, Liberty
EMMS, Inc. (an affiliate of Liberty Media Corporation) and Mellon Bank
Corporation each beneficially own in excess of 5% of the Class A Common Stock.
(See page 3 for details.)
Q: WHEN ARE SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE 2000 ANNUAL MEETING
DUE?
Any Emmis shareholder wishing to have a proposal considered for inclusion
in the Emmis 2000 annual meeting proxy solicitation materials must set forth
such proposal in writing and file it with the Emmis corporate secretary on or
before January 25, 2000. The Emmis Board of Directors will review any
shareholder proposals that are filed as required and will determine whether such
proposals meet applicable criteria for inclusion in its 2000 annual proxy
solicitation materials or consideration at the 2000 annual meeting. In addition,
Emmis retains discretion to vote proxies on matters of which it is not properly
notified at its principal executive offices on or before April 11, 2000, and
also retains such authority under certain other circumstances.
2
<PAGE> 6
VOTING SECURITIES AND BENEFICIAL OWNERS
The following table shows, as of January 7, 2000, the number and percentage
of shares of Common Stock held by each person known to Emmis who owned
beneficially more than five percent of the issued and outstanding Emmis common
stock, by the Emmis directors and by certain executive officers:
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
------------------------- -------------------------
FIVE PERCENT SHAREHOLDERS, AMOUNT AND AMOUNT AND PERCENT
SELLING SHAREHOLDER, NATURE OF NATURE OF OF TOTAL
DIRECTORS AND CERTAIN BENEFICIAL PERCENT BENEFICIAL PERCENT VOTING
EXECUTIVE OFFICERS OWNERSHIP OF CLASS OWNERSHIP OF CLASS POWER
-------------------------- ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Jeffrey H. Smulyan....................... 242,205(1) 1.2% 2,869,291(13) 100.0% 58.8%
Susan B. Bayh............................ 15,100(2) * -- -- *
Walter Z. Berger......................... 20,000(3) * -- -- *
Richard F. Cummings...................... 113,091(4) * -- -- *
Norman H. Gurwitz........................ 108,689(5) * -- -- *
Gary L. Kaseff........................... 51,988(6) * -- -- *
Richard A. Leventhal..................... 29,500(7) * -- -- *
Doyle L. Rose............................ 94,002(8) * -- -- *
Greg A. Nathanson........................ 147,000(9) * -- -- *
Frank V. Sica............................ -- * -- -- *
Lawrence B. Sorrel....................... 4,000 * -- -- *
Liberty Media Corporation................ 2,700,000(10) 13.2 -- -- 5.5
Mellon Bank Corporation.................. 1,301,411(11) 6.4 -- -- 2.9
All Officers and Directors as a Group (11
persons)............................... 811,703(12) 4.0 2,869,291(13) 100.0 59.5
</TABLE>
- -------------------------
* Less than 1%.
(1) Includes 162,205 shares held by Mr. Smulyan as trustee for the Emmis
Communications Corporation Profit Sharing Trust, (the "Profit Sharing
Trust") as to which Mr. Smulyan disclaims beneficial ownership.
(2) Consists of 100 shares owned individually and 15,000 shares represented by
stock options exercisable within 60 days of January 7, 2000.
(3) Consists of 20,000 shares represented by stock options exercisable within
60 days of January 7, 2000.
(4) Consists of 25,808 shares owned individually, 3,376 shares owned for the
benefit of Mr. Cummings' children, 1,707 shares held in the Profit Sharing
Trust, and 82,200 shares represented by stock options exercisable within 60
days of January 7, 2000.
(5) Consists of 11,830 shares owned jointly by Mr. Gurwitz and his spouse, 490
shares owned by Mr. Gurwitz's spouse, 2,738 shares owned for the benefit of
Mr. Gurwitz's children, 9,000 shares owned by a corporation of which Mr.
Gurwitz's spouse is a 50% owner, 1,050 shares held in the Profit Sharing
Trust, and 83,518 shares represented by stock options exercisable within 60
days of January 7, 2000.
(6) Consists of 3,274 shares owned individually by Mr. Kaseff, 1,369 shares
owned by Mr. Kaseff's spouse, 345 shares held in the Profit Sharing Trust,
and 47,000 shares represented by stock options exercisable within 60 days
of January 7, 2000.
(7) Consists of 4,000 shares owned individually, 1,500 shares owned by Mr.
Leventhal's spouse, 9,000 shares owned by a corporation of which Mr.
Leventhal is a 50% owner and 15,000 shares represented by stock options
exercisable within 60 days of January 7, 2000.
(8) Consists of 10,095 shares owned individually, 1,707 shares held in the
Profit Sharing Trust, and 82,200 shares represented by stock options
exercisable within 60 days of January 7, 2000.
(9) Consists of 100,000 shares owned individually or jointly with his spouse,
22,000 shares owned by a trust for the benefit of Mr. Nathanson's children
and 25,000 shares represented by stock options exercisable within 60 days
of January 7, 2000.
3
<PAGE> 7
(10) Information concerning these shares was obtained from a Schedule 13D filed
in November 1999 by Liberty Media Corporation, which has a mailing address
of 9197 South Peoria Street, Englewood, Colorado 80112.
(11) Information concerning these shares was obtained from an Amendment to
Schedule 13G filed in February 1999 by Mellon Bank Corporation on behalf of
itself, Boston Group Holdings, Inc. and The Boston Company, Inc., each of
which has a mailing address c/o Mellon Bank Corporation, One Mellon Bank
Center, Pittsburgh, Pennsylvania 15258.
(12) Includes 369,918 shares represented by stock options exercisable within 60
days of January 7, 2000, and 162,205 shares held in the Emmis
Communications Corporation Profit Sharing Trust.
(13) Consists of 2,369,291 shares owned individually and 500,000 shares
represented by stock options exercisable within 60 days of January 7, 2000.
4
<PAGE> 8
PROPOSAL NO. 1: AMENDMENT OF THE EMMIS ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK
The Emmis Board of Directors has proposed an increase in the number of
authorized shares of Class A Common Stock to 170 million shares from 34 million
shares and an increase in the number of authorized shares of Class B Common
Stock to 30 million shares from 6 million shares. The terms of the additional
authorized Class A Shares will be the same as those that apply to the currently
authorized Class A Shares, and the terms of the additional authorized Class B
Shares will be the same as those that apply to the currently authorized Class B
Shares. The form of the proposed amendment is shown in Exhibit A to this proxy
statement.
As of January 7, 2000, 20,487,853 shares of Class A Common Stock were
issued and outstanding. Approximately 2.3 million shares have been reserved for
issuance pursuant to various Emmis employee compensation and benefit plans, and
1.8 million shares were reserved for issuance upon conversion of the outstanding
6.25% Series A Cumulative Convertible Preferred Stock. There were, therefore, as
of January 7, 2000, 34 million shares of Class A Common Stock authorized for
issuance and approximately 24.6 million issued or reserved for issuance, leaving
approximately 9.4 million shares of authorized Class A Common Stock available
for future issuances by Emmis. In addition, as of January 7, 2000, six million
shares of Class B Common Stock were authorized for issuance and approximately
3.4 million were issued and outstanding or reserved for issuance pursuant to
various Emmis employee compensation and benefit plans. The Board believes it
would be desirable to increase the number of shares of authorized Class A Common
Stock and Class B Common Stock in order to permit a 2 for 1 stock split of the
Class A Common Stock and the Class B Common Stock which the Board has approved,
subject to the approval by shareholders of this proposal. The Board also
believes that it would be desirable to increase the number of authorized shares
of Class A Common Stock in order to make available additional shares for
possible future stock splits, stock dividends, employee benefit plan issuances,
equity financings, acquisitions and other corporate purposes. The Articles of
Incorporation prohibit any split of the Class A Common Stock unless the Class B
Common Stock is also split, so the Board has proposed a proportionate increase
in the authorized shares of Class B Common Stock as well in order to permit
future stock splits.
Emmis has no specific plans currently calling for issuance of any of the
additional shares of Common Stock, other than as described above. The rules of
The Nasdaq Stock Market currently require shareholder approval of issuances of
Class A Common Stock under certain circumstances. In other instances, the
issuance of additional shares of authorized Class A Common Stock or Class B
Common Stock would be within the discretion of the Board of Directors, without
the requirement of further action by shareholders. Under the Emmis Articles of
Incorporation, shareholders do not have preemptive rights. While the issuance of
shares in certain instances may have the effect of forestalling a hostile
takeover, the Board does not intend or view the increase in authorized Class A
Common Stock and Class B Common Stock as an anti-takeover measure, nor is Emmis
aware of any proposed or contemplated transaction of this type.
Approval of the proposal will be determined by whether the votes cast by
holders of Class A Common Stock for the proposal exceed those cast against by
holders of Class A Common Stock and whether the votes cast by holders of Class B
Common Stock for the proposal exceed those cast against by holders of Class B
Common Stock. Under applicable Indiana law, in determining whether this proposal
has received the requisite number of affirmative votes, abstentions and broker
non-votes will not be voted for or against the proposals and will not be counted
as entitled to vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN
FAVOR OF THIS PROPOSAL.
5
<PAGE> 9
PROPOSAL NO. 2: AMENDMENT OF THE EMMIS ARTICLES OF
INCORPORATION TO CREATE A CLASS OF NON-VOTING COMMON STOCK
The Emmis Board of Directors has proposed the creation of a new class of
Common Stock, to be known as Class C Common Stock, with 30 million shares
authorized for issuance. The terms of the Class C Common Stock will be the same
as those that apply to the Class A Common Stock, except that the Class C Shares
will have no right to vote on any matter except as required by law. The form of
the proposed amendment is shown in Exhibit A to this proxy statement.
As an owner and operator of broadcasting properties, Emmis is subject to
rules of the Federal Communications Commission which limit the number of radio
and television stations one broadcaster may own or operate in a designated
market area. For purposes of determining the number of stations a broadcaster
owns, the FCC rules add to the broadcaster's total any stations owned in the
market by certain significant holders of voting stock.
An affiliate of Liberty Media Corporation recently purchased 2.7 million
shares of Class A Common Stock. Although both Emmis and Liberty Media believe
that none of Liberty Media's broadcasting properties will be attributed to Emmis
and none of the Emmis broadcasting properties will be attributed to Liberty
Media under the FCC's rules, the purchase agreement between Emmis and Liberty
Media provides for the exchange of Liberty Media's shares of Class A Common
Stock for shares of Emmis nonvoting common stock in the event the FCC does
attribute ownership of one party's broadcasting properties to the other and
certain other measures described in the agreement are not sufficient to avoid
the attribution.
The Board of Directors has proposed the creation of the nonvoting Class C
Common Stock in order to provide for the contingency in the Liberty Media
agreement that Emmis would need to exchange shares of Class C Common Stock for
outstanding shares of Class A Common Stock. The board has proposed sufficient
authorized shares of Class C Common Stock to account for possible stock splits
as described in Proposal No. 1 above. Emmis has no specific plans currently
calling for issuance of any shares of Class C Common Stock other than under the
Liberty Media agreement. However, in the event the Board of Directors later
determines that some or all of the Class C Common Stock is not needed under the
Liberty Media agreement, it would have the discretion to issue shares of Class C
Common Stock to others, without the requirement of further action by
shareholders. While the issuance of shares in certain instances may have the
effect of forestalling a hostile takeover, the Board does not intend or view the
creation of Class C Common Stock as an anti-takeover measure, nor is Emmis aware
of any proposed or contemplated transaction of this type.
Approval of the proposal will be determined by whether the votes cast by
holders of Class A Common Stock for the proposal exceed those cast against by
holders of Class A Common Stock and whether the votes cast by holders of Class B
Common Stock for the proposal exceed those cast against by holders of Class B
Common Stock. Under applicable Indiana law, in determining whether this proposal
has received the requisite number of affirmative votes, abstentions and broker
non-votes will not be voted for or against the proposals and will not be counted
as entitled to vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN
FAVOR OF THIS PROPOSAL.
6
<PAGE> 10
PROPOSAL NO. 3: AMENDMENT OF THE EMMIS ARTICLES OF
INCORPORATION TO CLASSIFY THE BOARD OF DIRECTORS
AND TO MAKE CERTAIN OTHER CHANGES
General. The Emmis Board of Directors has proposed an amendment to the
Emmis Amended and Restated Articles of Incorporation which would make the
following changes:
- Provide for a Board of Directors with no less than six and no more than
fifteen members, with the exact number of directors established from time
to time by the Board of Directors in the Emmis By-Laws
- Divide the Board of Directors into three classes, with the number of
directors in each class to be as nearly equal as possible, and provide
for the election of one class at each annual meeting to serve three-year
terms
- Provide that a director may be removed only for cause and only by the
affirmative vote of shareholders representing at least 80% of the votes
entitled to be cast for the election of that Director
- Prohibit the amendment or repeal of the article concerning directors, or
the adoption of a provision inconsistent with that article, without the
affirmative vote of the holders of shares representing at least 80% of
the votes entitled to be cast for the election of directors
- Eliminate Sections 8.2 and 8.3 of the Amended and Restated Articles of
Incorporation, which describe two series of preferred stock that were
converted into Class A Common Stock and redeemed, respectively, upon the
closing of the Emmis initial public offering in 1994
This amendment will have no application to directors elected pursuant to special
voting rights of one or more series of Emmis preferred stock. Election and
removal of these directors is governed by voting rights specifically granted to
holders of such preferred stock and by rights provided in the Indiana Business
Corporation Law. The form of the proposed amendment is shown in Exhibit A to
this proxy statement.
Classification of Directors. Currently, the articles of incorporation
provide for the election of all directors at each annual meeting to serve until
the next annual meeting. If the proposed amendment is adopted, at the 2000
annual meeting approximately one-third of the directors will be elected for a
one-year term, approximately one-third of the directors will be elected for a
two-year term and approximately one-third of the directors will be elected for a
three-year term. The Class A Directors will be placed into separate classes.
The board of directors believes that a staggered board of directors will
tend to promote continuity in management because at least two-thirds of the
directors at any time will have prior experience as directors of Emmis and
in-depth knowledge of Emmis and its business. While Emmis has not experienced
difficulties in the past due to lack of continuity in management, the board of
directors believes that the unprecedented changes currently occurring in the
broadcasting industry, including increased competition and evolving
technologies, make such continuity and the long-term strategic planning it
allows especially important.
Staggered terms for members of the board of directors also would moderate
the pace of changes in the board of directors by extending the time required to
elect a majority of directors from one to two years. It would be impossible for
shareholders to change a majority of the directors at any annual meeting should
they consider such a change desirable, unless they control sufficient
shareholder and director votes to change this provision of the articles of
incorporation. This may have an antitakeover effect.
Removal of Directors. Another provision of the proposed amendment would
permit any director to be removed only for cause and only by the affirmative
vote of shareholders representing at least 80% of the votes entitled to be cast
for the election of that director at a meeting of shareholders called for that
purpose. The proposed provision defines cause as conviction of a felony by a
court of competent jurisdiction, or an adjudication by a court of competent
jurisdiction of negligence or misconduct in the performance of a duty to Emmis
in a matter of substantial importance to Emmis. The articles of incorporation
currently contain no provision on removal of directors, and Indiana law provides
that in the absence of such a provision in the articles of incorporation,
shareholders representing a majority of the votes entitled to be cast for a
director may remove that director with or without cause. If the amendment is
adopted, Class A Directors will only be
7
<PAGE> 11
entitled to be removed for cause by the affirmative vote of shareholders
representing at least 80% of the Class A Common Stock entitled to vote at a
meeting of shareholders called for that purpose.
This provision is consistent with, and supportive of, the concept of a
classified board of directors because it tends to moderate the pace of any
change in the board of directors and promote continuity of management. The board
of directors believes that directors, all of whom are elected by the
shareholders for specified terms, should be removed from office before the
expiration of their respective terms only if dissatisfaction with their
performance is widely shared by the shareholders and only in certain specified
circumstances. Directors are required to act in the best interest of Emmis and
its shareholders. If the holder of a simple majority of the votes represented by
the common stock were able to remove directors at will, directors might have
difficulty fulfilling their responsibilities to Emmis and to all of the
shareholders.
A general effect of this provision would be to prevent shareholders from
removing directors (as opposed to defeating their re-election) unless the
shareholders control at least 80% of the votes for election of directors and are
able to base the removal on cause. Therefore, the provision will make it more
difficult to acquire operating control of Emmis and may also discourage takeover
attempts.
Amendment or Repeal. The proposed amendment to the articles of
incorporation also provides that the provisions relating to the Board of
Directors may not be amended or repealed, and no inconsistent provision may be
adopted, without the affirmative vote of the holders of shares representing at
least 80% of the votes entitled to be cast for the election of directors at a
meeting of shareholders called for the purpose of such amendment, repeal or
adoption of an inconsistent provision. The effect of this provision is to
prevent a simple majority of the votes entitled to be cast for amendment of the
articles of incorporation from nullifying the effect of the provisions in the
proposed amendment.
Elimination of Outdated Provisions. Prior to its initial public offering in
1994, Emmis had two series of preferred stock outstanding. Under Indiana law,
the terms of these series of preferred stock were established by amendments to
the Emmis Articles of Incorporation, and they are currently contained in
Sections 8.2 and 8.3. One series of this preferred stock was converted into
Class A Common Stock upon the closing of the initial public offering, and the
other series was redeemed with a portion of the offering proceeds. Thus, neither
series of preferred stock has been outstanding since 1994, and the Board of
Directors has proposed the elimination of Sections 8.2 and 8.3 of the Amended
and Restated Articles of Incorporation. This change will have no effect on the
outstanding 6.25% Series A Cumulative Convertible Preferred Stock, the terms of
which are contained in a different part of the Amended and Restated Articles of
Incorporation.
Vote Required to Approve. Approval of the proposal will be determined by
whether the votes cast by holders of Class A Common Stock and Class B Common
Stock, voting as a single class, for the proposal exceed those cast against by
holders of Class A Common Stock and Class B Common Stock. Each share of Class A
Common Stock is entitled to one vote on this proposal and each share of Class B
Common Stock is entitled to ten votes. Under applicable Indiana law, in
determining whether this proposal has received the requisite number of
affirmative votes, abstentions and broker non-votes will not be voted for or
against the proposals and will not be counted as entitled to vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE IN
FAVOR OF THIS PROPOSAL.
EXPENSES OF SOLICITATION
The entire expense of preparing, assembling, printing and mailing the proxy
form and the material used in the solicitation of proxies will be paid by Emmis.
Emmis does not expect that the solicitation will be made by specially engaged
employees or paid solicitors. Although Emmis might use such employees or
solicitors if it deems them necessary, no arrangements or contracts have been
made with any such employees or solicitors as of the date of this statement. In
addition to the use of the mails, solicitation may be made by telephone,
telegraph, electronic mail, cable or personal interview. Emmis will request
record holders of shares beneficially owned by others to forward this proxy
statement and related materials to the beneficial owners of such shares, and
will reimburse such record holders for their reasonable expenses incurred in
doing so.
8
<PAGE> 12
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this proxy statement, and later information that we
file with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until the date of the Special Meeting.
- Our Annual Report on Form 10-K (file no. 0-23264) for the fiscal year
ended February 28, 1999.
- Our Quarterly Reports on Form 10-Q (file no. 0-23264) of the fiscal
quarters ended May 31, 1999, August 31, 1999 and November 30, 1999.
- Our Current Reports on Form 8-K (file no. 0-23264) filed March 15, 1999
and May 6, 1999, and an amendment on Form 8-K/A (file no. 0-23264) filed
May 6, 1999.
- Our Current Reports on Form 8-K (file no. 0-23264) filed May 7, 1998 and
December 2, 1998, and an amendment on Form 8-K/A (file no. 0-23264) filed
September 29, 1998.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. Whether or not you
attend the meeting, we urge you to execute and return the proxy.
For the Board of Directors,
JEFFREY H. SMULYAN
Jeffrey H. Smulyan
Chairman
January 20, 2000
9
<PAGE> 13
EXHIBIT A
PROPOSED AMENDMENTS TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
-------------------------
THE DEFINITION OF "COMMON SHARES" IN ARTICLE III OF THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION IS AMENDED TO READ AS FOLLOWS:
"Common Shares" has the meaning defined in Section 6.1(b) SECTION 6.1(C).
ARTICLE III OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION IS
AMENDED TO ADD THE FOLLOWING DEFINITION:
"CLASS C SHARES" HAS THE MEANING DEFINED IN SECTION 6.1(C).
------------------------
SECTION 6.1 OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION IS AMENDED TO
READ AS FOLLOWS:
6.1. Authorized Shares. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is fifty TWO
HUNDRED FORTY million (50,000,000) (240,000,000), consisting of the following:
(a) Thirty-four ONE HUNDRED SEVENTY MILLION (34,000,000) (170,000,000)
shares of Class A Common Stock, par value $.01 per share (the "Class A
Shares");
(b) Six THIRTY MILLION (6,000,000) (30,000,000) shares of Class B
Common Stock, par value $.01 per share (the "Class B Shares" and together
with the Class A Shares and the Class B Shares, the "Common Shares"); and
(C) THIRTY MILLION (30,000,000) SHARES OF CLASS C COMMON STOCK, PAR
VALUE $.01 PER SHARE (THE "CLASS C SHARES" AND TOGETHER WITH THE CLASS A
SHARES AND THE CLASS B SHARES, THE "COMMON SHARES"); AND
(d) Ten million (10,000,000) shares of serial Preferred Stock, par
value $.01 per share (the "Preferred Stock").
------------------------
SECTION 7.2(A) IS AMENDED TO READ AS FOLLOWS:
(a) General. When, as and if dividends are declared by the Corporation's
board of directors (the "Board of Directors"), whether payable in cash,
securities of the Corporation or other property, the holders of Common Shares
shall be entitled, in accordance with the number of Common Shares held by each,
to share equally in and to receive all such dividends, except that if dividends
are declared that are payable in Common Shares, such stock dividends shall be
payable at the same rate on each class of Common Shares and shall be payable
only in Class A Shares to holders of Class A Shares, and in Class B Shares to
holders of Class B Shares AND IN CLASS C SHARES TO HOLDERS OF CLASS C SHARES.
------------------------
SECTION 7.4(A) IS AMENDED TO READ AS FOLLOWS:
(a) General. The holders of the Class A Shares and the Class B Shares shall
vote as a single class in all matters submitted to a vote of the shareholders,
with each Class A Share being entitled to one vote and each Class B Share being
entitled to ten votes, except (i) for the election of directors, which shall be
governed by Subsections (b) and (c) below, (ii) with respect to any Going
Private Transaction described in Subsection (e) below, which shall be governed
by such Subsection, and (iii) as otherwise provided by law. THE HOLDERS OF THE
CLASS C SHARES HAVE NO RIGHT TO VOTE ON ANY MATTER EXCEPT AS OTHERWISE PROVIDED
BY LAW.
------------------------
SECTION 7.5 IS AMENDED TO READ AS FOLLOWS:
7.5. Issuance of Common Shares. Each new issuance of Common Shares after
the Effective Date shall be an issuance of Class A Shares OR CLASS C SHARES
unless (i) the Common Shares are issued to Smulyan or
A-1
<PAGE> 14
(ii) the Common Shares are issued or subject to a Qualified Voting Trust. In
each event described in clauses (i) or (ii) above, each Common Share issued
shall be a Class B Share.
------------------------
SECTION 7.7 IS AMENDED TO READ AS FOLLOWS:
7.7. Consideration on Merger, Consolidation, etc. In any merger,
consolidation or business combination, the consideration to be received per
share by the holders of Class A Shares, and Class B Shares AND CLASS C SHARES
must be identical for each class of stock, except that in any such transaction
in which shares of common stock are to be distributed, such shares may differ as
to voting rights to the extent that the voting rights provided in these Restated
Articles differ between the Class A Shares, and the Class B Shares AND THE CLASS
C SHARES.
------------------------
ARTICLE VIII IS AMENDED TO DELETE SECTIONS 8.2 AND 8.3.
------------------------
ARTICLE IX IS AMENDED TO READ AS FOLLOWS:
ARTICLE IX
BOARD OF DIRECTORS
The number of directors constituting the Board of Directors as of the
Effective Date shall be nine (9). Thereafter, the number of directors shall be
fixed by the By-Laws of the Corporation.
9.1 NUMBER OF DIRECTORS. THE NUMBER OF DIRECTORS CONSTITUTING THE BOARD OF
DIRECTORS SHALL BE FIXED BY THE BY-LAWS OF THE CORPORATION AND SHALL BE NOT LESS
THAN SIX (6) AND NOT MORE THAN FIFTEEN (15). NO AMENDMENT TO THE BY-LAWS
DECREASING THE NUMBER OF DIRECTORS SHALL HAVE THE EFFECT OF SHORTENING THE TERM
OF ANY INCUMBENT DIRECTOR.
9.2 CLASSES AND TERM OF OFFICE. EFFECTIVE AS OF THE ANNUAL MEETING OF
SHAREHOLDERS IN 2000, THE BOARD OF DIRECTORS SHALL BE DIVIDED INTO THREE (3)
CLASSES, DESIGNATED CLASS I, CLASS II AND CLASS III, AS NEARLY EQUAL IN NUMBER
AS POSSIBLE. THE NUMBER OF CLASS A DIRECTORS IN EACH CLASS SHALL ALSO BE AS
NEARLY EQUAL IN NUMBER AS POSSIBLE. THE INITIAL TERM OF OFFICE OF DIRECTORS IN
CLASS I WILL EXPIRE AT THE ANNUAL MEETING OF SHAREHOLDERS IN 2001. THE INITIAL
TERM OF OFFICE OF DIRECTORS IN CLASS II WILL EXPIRE AT THE ANNUAL MEETING OF
SHAREHOLDERS IN 2002. THE INITIAL TERM OF OFFICE OF DIRECTORS IN CLASS III WILL
EXPIRE AT THE ANNUAL MEETING OF SHAREHOLDERS IN 2003. AT EACH ANNUAL ELECTION
BEGINNING AT THE ANNUAL MEETING OF SHAREHOLDERS IN 2001, THE SUCCESSORS TO THE
CLASS OF DIRECTORS WHOSE TERM THEN EXPIRES SHALL BE ELECTED TO HOLD OFFICE FOR A
TERM OF THREE (3) YEARS AND UNTIL HIS OR HER SUCCESSOR IS ELECTED AND QUALIFIES
OR UNTIL HIS OR HER EARLIER RESIGNATION, REMOVAL FROM OFFICE OR DEATH. THIS
SECTION DOES NOT APPLY TO ANY DIRECTORS ELECTED PURSUANT TO SPECIAL VOTING
RIGHTS OF ONE OR MORE SERIES OF PREFERRED STOCK.
9.3 REMOVAL OF DIRECTORS.
(A) A DIRECTOR OTHER THAN A CLASS A DIRECTOR MAY BE REMOVED BY THE
SHAREHOLDERS ONLY FOR CAUSE AND ONLY IF THE REMOVAL HAS BEEN APPROVED BY AN 80%
MAJORITY OF THE COMBINED VOTING POWER OF THE SHARES ENTITLED TO VOTE FOR THE
ELECTION OF SUCH DIRECTOR, CAST AT A SPECIAL MEETING OF THE SHAREHOLDERS CALLED
FOR THAT PURPOSE. A CLASS A DIRECTOR MAY BE REMOVED BY THE HOLDERS OF CLASS A
SHARES AS PROVIDED IN SECTION 7.4(B) ONLY FOR CAUSE AND ONLY IF THE REMOVAL HAS
BEEN APPROVED BY THE HOLDERS OF AN 80% MAJORITY OF THE CLASS A SHARES, CAST AT A
SPECIAL MEETING OF THE SHAREHOLDERS CALLED FOR THAT PURPOSE. CAUSE FOR REMOVAL
EXISTS ONLY IF:
(1) THE DIRECTOR WHOSE REMOVAL IS PROPOSED HAS BEEN CONVICTED OF A
FELONY BY A COURT OF COMPETENT JURISDICTION AND THE CONVICTION IS NO LONGER
SUBJECT TO DIRECT APPEAL; OR
(2) THE DIRECTOR WHOSE REMOVAL IS PROPOSED HAS BEEN ADJUDICATED BY A
COURT OF COMPETENT JURISDICTION TO BE LIABLE FOR NEGLIGENCE OR MISCONDUCT
IN THE PERFORMANCE OF HIS DUTY TO THE CORPORATION IN A MATTER OF
SUBSTANTIAL IMPORTANCE TO THE CORPORATION, AND THE ADJUDICATION IS NOT
LONGER SUBJECT TO DIRECT APPEAL.
A-2
<PAGE> 15
(B) THIS SECTION DOES NOT APPLY TO ANY DIRECTORS ELECTED PURSUANT TO
SPECIAL VOTING RIGHTS OF ONE OR MORE SERIES OF PREFERRED STOCK.
9.4 AMENDMENT OR REPEAL OF THIS ARTICLE. NOTWITHSTANDING ANY OTHER
PROVISION OF THESE ARTICLES OR THE BY-LAWS OF THE CORPORATION, AND IN ADDITION
TO ANY OTHER PROCEDURE SPECIFIED UNDER INDIANA LAW, ANY AMENDMENT OR REPEAL OF
OR ADOPTION OF A PROVISION INCONSISTENT WITH ANY PROVISION IN THIS ARTICLE IX IS
NOT EFFECTIVE UNLESS IT IS APPROVED BY AT LEAST AN 80% MAJORITY OF THE COMBINED
VOTING POWER OF THE OUTSTANDING COMMON SHARES.
A-3
<PAGE> 16
[EMMIS COMMUNICATIONS LOGO]
- FOLD AND DETACH HERE -
- --------------------------------------------------------------------------------
EMMIS COMMUNICATIONS CORPORATION
40 MONUMENT CIRCLE
INDIANAPOLIS, INDIANA 46204
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints Jeffrey H. Smulyan, Norman H. Gurwitz and Gary
L. Kaseff, and each of them, attorneys-in-fact and proxies, with full power of
substitution, to vote as designated below all shares of Class A Common Stock of
Emmis Communications Corporation which the undersigned would be entitled to vote
if personally present at the special meeting of Shareholders to be held on
February 21, 2000, at 10:00 a.m., and at any adjournment thereof.
1. PROPOSAL TO AMEND THE EMMIS ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED SHARES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. PROPOSAL TO AMEND THE EMMIS ARTICLES OF INCORPORATION TO CREATE A CLASS OF
NON-VOTING COMMON STOCK.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO AMEND THE EMMIS ARTICLES OF INCORPORATION TO CLASSIFY THE BOARD
OF DIRECTORS AND MAKE CERTAIN OTHER CHANGES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(continued on other side)
<PAGE> 17
- FOLD AND DETACH HERE -
- --------------------------------------------------------------------------------
This Proxy is solicited on behalf of the Board of Directors of the Company. This
proxy when properly executed will be voted in the manner directed herein by the
undersigned shareholders. If no direction is made, this proxy will be voted FOR
Proposals 1, 2 and 3.
The undersigned acknowledges receipt from Emmis Communications Corporation,
prior to the execution of this proxy, of notice of the meeting and a proxy
statement.
Dated: , 2000
-----------------------
-----------------------------------
(Signature)
-----------------------------------
(Signature if held jointly)
Please sign exactly as name appears
to the left. When shares are held
as joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title. If a
corporation, please sign in full
corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
IMPORTANT: Please mark, sign, date
and return the proxy card promptly
using the enclosed envelope.
REVOCABLE PROXY
