2002 PROXY STATEMENT

DEF 14A 1 proxy.htm 2002 PROXY STATEMENT 2002 PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

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[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

EMMIS COMMUNICATIONS CORPORATION

(Name of Registrant as Specified in Its Charter)

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[Emmis Logo]

May 30, 2002

Dear Shareholder:

The directors and officers of Emmis Communications Corporation join me in
extending to you a cordial invitation to attend the annual meeting of our
shareholders. This meeting will be held on Tuesday, June 25, 2002 at 10:00 a.m.,
local time, at One Emmis Plaza, 40 Monument Circle, Indianapolis, Indiana 46204.

The formal notice of this annual meeting and the proxy statement 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.

We hope that you will attend this meeting. Whether or not you attend, we
urge you to return your proxy promptly in the postage paid envelope provided.
After returning the proxy, you may, of course, vote in person on all matters
brought before the meeting.

We look forward to seeing you on June 25th.

Sincerely,

Jeffrey H. Smulyan
Chief Executive Officer, President
and Chairman of the Board

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EMMIS COMMUNICATIONS CORPORATION
INDIANAPOLIS, INDIANA

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The annual meeting of the shareholders of Emmis Communications Corporation
will be held on Tuesday, June 25, 2002, at 10:00 a.m., local time, at One Emmis
Plaza, 40 Monument Circle, Indianapolis, Indiana 46204.

The holders of common stock will be asked to consider and to vote on the
following matters:

(1) election of two directors to Emmis' board of directors for terms of three
years;

(2) approval of the 2002 Equity Compensation Plan, as set forth in Exhibit A to
the accompanying proxy statement; and

(3) transaction of any other business that may properly come before the meeting
and any adjournments or postponements of the meeting.

We describe each of these proposals in more detail in the accompanying
proxy statement, which you should read in its entirety before voting.

Only shareholders of record at the close of business on May 4, 2002 are
entitled to notice of and to vote at this meeting and any adjournments or
postponements of this meeting. The proxy statement and proxy cards are enclosed.

By order of the Board of Directors,

Norman H. Gurwitz
Secretary
Indianapolis, Indiana
May 30, 2002

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EMMIS COMMUNICATIONS CORPORATION
ONE EMMIS PLAZA
40 MONUMENT CIRCLE
INDIANAPOLIS, INDIANA 46204

PROXY STATEMENT

In this proxy statement, Emmis Communications Corporation is referred to as
"we," "us," "our company" or "Emmis."

Questions and Answers About This Annual Meeting

Q: Why did I receive this proxy statement?

You received this proxy statement because our board of directors is
soliciting your proxy to vote at the annual meeting of shareholders. The annual
meeting will be held on Tuesday, June 25, 2002, at 10:00 a.m., local time, at
One Emmis Plaza, 40 Monument Circle, Indianapolis, Indiana 46204.

This proxy statement summarizes the information you need to know to vote on
an informed basis at the annual meeting; however, you do not need to attend the
annual meeting to vote your shares. See "How do I vote?" We expect to begin
sending this proxy statement, the attached notice of annual meeting and the
enclosed proxy card(s) on May 30, 2002 to all shareholders entitled to vote.

Q: What am I voting on?

You are being asked to consider and vote on the following:

o election of two directors to our board of directors for termsof three years;
and

o approval of the 2002 Equity Compensation Plan.

Q: Who is entitled to vote?

Holders of outstanding Class A common stock and holders of outstanding
Class B common stock as of the close of business on May 4, 2002, the record
date, are entitled to vote at the annual meeting. As of May 4, 2002, 47,845,549
shares of Class A common stock and 5,062,460 shares of Class B common stock were
issued and outstanding. As of May 4, 2002, there were no shares of Class C
common stock issued or outstanding.

Q: How do I vote?

You may attend the meeting and vote in person or you can vote by proxy. To
vote by proxy, 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 on your behalf FOR each of the nominees and FOR
approval of the Equity Compensation Plan. If you mark "abstain" on your proxy
card, your shares will be counted as present for purposes of determining the
presence of a quorum. You have the right to revoke your proxy at any time before
the meeting by either notifying our corporate secretary or returning a
later-dated proxy. You may also revoke your proxy by voting in person at the
annual meeting.

If you hold your shares through a broker, you should contact your broker to
determine the procedure by which you can vote on these proposals.

Q: What does it mean if I get more than one proxy card?

If you receive 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: What are the voting rights of the Class A common stock and the Class B common
stock?

On each matter submitted to a vote of our 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 certain directors, certain "going private"
transactions and other matters as provided by law.

At this annual meeting, the Class A and Class B common stock will vote
together on the election of directors and the approval of the 2002 Equity
Compensation Plan.

Q: Who will count the vote?

Representatives of First Union National Bank, our transfer agent, will
count the votes.

Q: What constitutes a quorum?

A majority of the combined voting power of the outstanding Class A and
Class B common stock entitled to vote at the meeting constitutes a quorum for
the annual meeting (i.e., counting one vote for each share of outstanding Class
A common stock and ten votes for each share of outstanding Class B common stock,
present in person or represented by proxy). No additional quorum requirements
apply to matters on which the holders of Class A and Class B common stock will
vote together as a single class.

Q: How many votes are needed for approval of each proposal?

Directors will be elected by a plurality of the votes cast by the holders
of existing common stock entitled to vote in the election who are present, in
person or by proxy, at the meeting. Consequently, the two director nominees
receiving the most votes of holders of Class A and Class B common stock, voting
together, will be elected to fill the two director positions. Only votes cast
for a nominee will be counted. The accompanying proxy card will be voted for all
nominees listed on the proxy unless the proxy contains instructions to the
contrary. Instructions on the accompanying proxy card to withhold authority to
vote for one or more of the nominees will result in those nominees receiving
fewer votes.

The approval of the 2002 Equity Compensation Plan requires that the number
of votes cast in favor of that proposal by holders of our outstanding common
stock exceed the number of votes cast against that proposal by holders of our
outstanding common stock.

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 affect the voting on the proposals.

Q: What percentage of stock does our significant shareholder own? How does he
intend to vote? What about all officers and directors?

Jeffrey H. Smulyan, the Chief Executive Officer, President and Chairman of
our board of directors, is our largest single shareholder, beneficially owning
1.1% of our Class A common stock and 100% of our Class B common stock as of May
4, 2002. Mr. Smulyan has informed us that he intends to vote for all of the
nominees for director and in favor of the proposal regarding the equity
compensation plan. If he does so, these proposals, on which the existing common
stock votes together as a single class, will be approved, because Mr. Smulyan
controls 54.7% of the combined voting power of our existing common stock.

All directors and officers together beneficially own approximately 4.2% of
our Class A common stock and 100% of our Class B common stock, which represents
approximately 55.6% of the combined voting power of our existing common stock.

Q: Does Emmis offer an opportunity to receive future proxy materials electronically?

Yes. If you are a shareholder of record, you may, if you wish, receive
future proxy statements and annual reports online. If you elect this feature,
you will receive either a proxy card or an e-mail message notifying you when the
materials are available, along with a web address for viewing the materials. You
may sign up for electronic delivery by marking and signing the appropriate
spaces on your proxy card or by contacting our Investor Relations Department by
e-mail at ir@emmis.com or toll-free by phone at (866) 366-4703. If you received
these materials electronically, you do not need to do anything to continue
receiving materials electronically in the future.

If you hold your shares in a brokerage account, you may also have the
opportunity to receive proxy materials electronically. Please follow the
instructions of your broker.

If you are an Emmis employee or a shareholder who has previously consented
to electronic delivery of shareholder communications, you may view this proxy
statement and our annual report at the "Investors" section of www.emmis.com.

Q: What are the benefits of electronic delivery?

Electronic delivery saves Emmis money by reducing printing and mailing
costs. It will also make it convenient for you to receive your proxy materials
online.

Q: What are the costs of electronic delivery?

Emmis charges nothing for electronic delivery. You may, of course, incur
the usual expenses associated with Internet access, such as telephone charges or
charges from your Internet service provider.

Q: May I change my mind later?

Yes. You may discontinue electronic delivery at any time. For more
information, contact our Investor Relations Department by e-mail at ir@emmis.com
or toll-free by phone at (866) 366-4703.

Q: Who can attend the Annual Meeting?

All shareholders as of May 4, 2002 can attend.

Q: What do I do if I have additional questions?

If you have any questions prior to the annual meeting, please call our
Investor Relations Department toll-free at (866) 366-4703.

Proposal 1: Election of Directors

Two directors are to be elected, none of which is designated as a "Class A
Director." Richard A. Leventhal and Lawrence B. Sorrel have been nominated for a
term of three years and until their successors have been elected and qualified.
The nominees will be elected by the Class A and Class B common stock voting
together as a single class.

Mr. Leventhal and Mr. Sorrel are members of the present board of directors.
If, at the time of this annual meeting, any nominee is unable or declines to
serve, the discretionary authority provided in the proxy may be exercised to
vote for a substitute or substitutes. The board of directors has no reason to
believe that any substitute nominee or nominees will be required.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THE ELECTION OF EACH OF THE FOLLOWING NOMINEES.

Name, Age, Principal Occupation(s) and Director
Business Experience During Past 5 Years Since
--------------------------------------- -------
Nominated for a term expiring in 2005:

Richard A. Leventhal, Age 55
1992
Mr. Leventhal co-owned and operated Top Value Fabrics, Inc., a wholesale
fabric and textile company in Carmel, Indiana, for 27 years. Mr. Leventhal is
currently President and majority owner of LMCS, LLC, an investment management
and consulting company. Mr. Leventhal is the brother-in-law of Norman H.
Gurwitz.

Lawrence B. Sorrel, Age 43 1993

Mr. Sorrel is a general partner of Welsh, Carson, Anderson &amp;amp;
Stowe, a private equity investment firm. He is Chairman of the Board of
SpectraSite Communications, Inc., an owner and operator of telecommunications
towers, and a board member of several private companies. Prior to May 1998, he
was a Managing Director of Morgan Stanley Dean Witter &amp;amp; Co.
Incorporated, where he had been employed since 1986.

Directors whose terms expire in 2004:

Jeffrey H. Smulyan, Age 55 1979

Mr. Smulyan founded Emmis in 1979 and is the Chairman of the Board of
Directors, President and Chief Executive Officer. He has held the positions of
Chairman of the Board of Directors and Chief Executive Officer since 1981 and
the position of President since 1994. Mr. Smulyan began working in radio in
1973, and has owned one or more radio stations since then. Formerly, he was also
the owner and chief executive officer of the Seattle Mariners major league
baseball team. He is chairman of the Radio Advertising Bureau, a director of The
Finish Line, a sports apparel manufacturer, and serves as a Trustee of Ball
State University. Mr. Smulyan has been chosen Radio Executive of the Year by a
radio industry group and was voted one of the Ten Most Influential Radio
Executives in the Past 20 Years in a poll in Radio and Records magazine.

Name, Age, Principal Occupation(s) and Director
Business Experience During Past 5 Years Since
--------------------------------------- -------

Greg A. Nathanson, Age 55 1998

Mr. Nathanson joined Emmis in 1998 as Television Division President. Mr.
Nathanson has over 30 years of television broadcasting experience, most recently
as President of Programming and Development for Twentieth Television from 1996
to 1998, as General Manager of KTLA-TV in Los Angeles, California from 1992 to
1996 and as President of Fox Television Stations from 1990 to 1992. Mr.
Nathanson resigned as Television Division President effective October 1, 2000,
but continues as a Director of the company.

Walter Z. Berger, Age 46 2001

Mr. Berger became Executive Vice President, Treasurer and Chief Financial
Officer of Emmis on March 1, 1999. Most recently, Mr. Berger served as Group
Vice President of the $3.3 billion Energy Marketing Division for LG&E Energy
Corporation, where he had previously served as Executive Vice President and
Chief Financial Officer. From 1992 to 1996, Mr. Berger held a number of senior
financial and operating management positions in the manufacturing, service and
energy fields. Mr. Berger, who began his career in public accounting, also spent
seven years in financial management roles at Baker Hughes, Inc. He serves on
numerous civic boards and committees.

Directors whose terms expire in 2003:

Susan B. Bayh,* Age 42 1994

Mrs. Bayh is the Commissioner of the International Joint Commission of the
United States and Canada, and also serves as a Distinguished Visiting Professor
at Butler University, positions she has held since 1994. Previously, she was an
attorney with Eli Lilly & Company. She is a director of Anthem, Inc., an
insurance company; Golden State Foods, Corvas, Cubist, Inc. and Curis Inc.

Gary L. Kaseff, Age 54 1994

Mr. Kaseff is employed as Executive Vice President and General Counsel to
Emmis, a post he has held since 1998. Before becoming general counsel, Mr.
Kaseff practiced law in Southern California. Previously, he was President of the
Seattle Mariners major league baseball team and partner with the law firm of
Epport & Kaseff.

Frank V. Sica,* Age 51 1998

Mr. Sica is a Managing Director of Soros Fund Management LLC and Managing
Partner of Soros Private Equity Partners. He is director of CSG Systems
International, Inc., a computer software company, Kohl's Corporation, a retail
company, Banco Hipotecario S.A., a bank, and JetBlue Airways, an airline
company. Prior to joining Soros in 1998, Mr. Sica had been a Managing Director
of Morgan Stanley Dean Witter & Co. Incorporated.
----------------

*Independent director elected by the holders of the Class A Common Stock
voting as a single class.

Proposal 2: APPROVAL OF 2002 EQUITY compensation PLAN

Our board of directors has adopted the Emmis Communications Corporation
2002 Equity Compensation Plan (the "2002 Plan") to provide equity compensation
in lieu of cash compensation for employees, officers, directors and independent
contractors of the company and its subsidiaries along the lines of the stock
compensation program described in the Report of the Compensation Committee, to
increase employee, officer, director and independent contractor stock ownership
opportunities and to improve the company's ability to attract and retain a team
of outstanding employees, officers, directors and independent contractors. The
following summary of the principal provisions of the 2002 Plan is qualified by
reference to the full text of the 2002 Plan which is attached to this proxy
statement as Exhibit A.

The 2002 Plan permits the delivery of a maximum of 3,000,000 shares of our
common stock, of which not more than 1,500,000 shares may be delivered on
account of the exercise of options and the payment of benefits upon the exercise
of stock appreciation rights, and not more than 1,500,000 may be delivered on
account of the grant of shares of restricted stock or the award of performance
units that are paid in shares of our common stock. As of May 4, 2002, the shares
subject to the 2002 Plan had an aggregate market value of $87,030,000 based on a
closing price of $29.01 per share. If an award under the 2002 Plan expires or
terminates without being exercised in full or is forfeited, or in the case of an
award of performance units, the award is not paid in shares of common stock, the
shares of our common stock subject to the award generally become available for
new awards. If stock appreciation rights expire or terminate without being
exercised in full, such stock appreciation rights again become available for new
awards. Options, stock appreciation rights and performance units expire no more
than 10 years from date of grant.

Options. Options granted under the 2002 Plan allow participants to purchase
shares of our common stock at an exercise price determined by the Emmis
compensation committee which cannot be less than the fair market value of our
common stock on the date of the grant. Options may be granted as incentive stock
options subject to the limitations of Section 422 of the Internal Revenue Code
(the "Code"). For the purpose of complying with Section 162(m) of the Code, the
2002 Plan contains a per-participant limit of 1,000,000 on the number of shares
which may be subject to options granted during any fiscal year.

Restricted Stock. Shares of our common stock may be granted under the 2002
Plan subject to such restrictions, if any, as may be determined by the
compensation committee ("restricted stock"). Shares of restricted stock may be
subject to forfeiture if conditions established by the compensation committee
are not satisfied and are generally nontransferable until they become
nonforfeitable. Before the grant, the compensation committee determines the
purchase price, if any, of such shares of restricted stock and the restrictions,
if any, applicable to such shares. If a grantee's shares of restricted stock are
forfeited, the grantee is required to sell such shares to us at the lesser of
the purchase price, if any, paid by the grantee or the fair market value of the
shares on the date of such forfeiture. The compensation committee may accelerate
the time at which the restrictions lapse or may remove or, with the consent of
the grantee, modify the restrictions. For the purpose of complying with Section
162(m) of the Code, the 2002 Plan contains a per-participant limit on the number
of shares of restricted stock that may be awarded during any calendar year to
that number of shares with a value on the date of grant equal to the lesser of
700% of the participant's base salary or $10,000,000.

Stock Appreciation Rights. Each stock appreciation right which may be
granted under the 2002 Plan provides the grantee, upon exercise, a benefit equal
to the difference between the fair market value of one share of our common stock
on the date of the exercise and (1) in the case of a stock appreciation right
identified with a share of our common stock subject to an option, the option
exercise price of such option or such higher price specified in the grant or (2)
in the case of any other stock appreciation right, the fair market value of a
share of our common stock on the grant date or such higher price specified in
the grant. Stock appreciation rights may be granted alone, or identified with
shares of our common stock subject to options, performance units or shares of
restricted stock. The compensation committee may accelerate the exercisability
of any stock appreciation right. Benefits upon the exercise of stock
appreciation rights are payable in cash unless the compensation committee
determines that the benefits will be paid wholly or partly in shares of our
common stock. For the purpose of complying with Section 162(m) of the Code, the
2002 Plan contains a per-participant limit on the number of shares which may be
subject to stock appreciation rights granted during any fiscal year of
1,000,000.

Performance Units. Performance units may be granted under the 2002 Plan to
provide a benefit if performance goals determined by the compensation committee
are achieved during the measuring period. The compensation committee, before the
grant of a performance unit, determines the performance goals and measuring
period and assigns a performance percentage (which can exceed 100%) to each
level of attainment of the performance goals during the measuring period. The
compensation committee may modify performance goals at any time. Performance
unit benefits are payable in cash unless the compensation committee determines
that a benefit will be paid wholly or partly in shares of our common stock.
Performance units may be granted alone, or identified with shares of our common
stock subject to an option, shares of restricted stock or stock appreciation
rights. Performance units become exercisable commencing on the first day after
the end of the applicable measuring period or another date specified by the
compensation committee. The benefit for each performance unit exercised equals
the fair market value of a share of our common stock on the date of grant of the
performance unit multiplied by the "performance percentage" attained during the
measuring period for the performance unit. For the purpose of complying with
Section 162(m) of the Code, the 2002 Plan contains a per-participant limit on
the number of shares of stock that may be awarded with respect to a performance
unit during any calendar year to that number of shares with a value on the date
of grant equal to the lesser of 700% of the participant's base salary or
$10,000,000.
Other Information. Payment of the option exercise price or the purchase
price of restricted stock may be made in cash or through the exchange of shares
of our common stock owned by the grantee or by various other payment methods.
The compensation committee may allow a grantee to defer payment of the option
exercise price, the purchase price of restricted stock or any taxes associated
with a benefit provided under the 2002 Plan which is a non-cash benefit at the
time it is taxable, in accordance with such interest rates and such other terms
and conditions as it may determine, or may cause Emmis to guarantee a loan to
the grantee in an amount equal to all or part of the option exercise price, the
purchase price of restricted stock and related taxes. When permitted by the
compensation committee, a grantee may elect to have withheld shares of our
common stock to satisfy withholding tax liability with respect to the exercise
of options, stock appreciation rights or performance units or with respect to
shares of restricted stock becoming nonforfeitable. Subject to certain
limitations, the compensation committee may provide for automatic grants of
additional options for shares of our common stock equal to the number of shares
which a grantee has used to pay the exercise price of a previously granted
option and to satisfy a withholding tax liability in connection with an option
exercise. In the event of a change in control, options, stock appreciation
rights and performance units become exercisable, and all shares of restricted
stock generally become nonforfeitable. The benefit payable with respect to any
performance unit for which the measuring period has not ended is prorated based
upon the portion of the measuring period completed before the change in control.
The aggregate number of shares of our common stock, shares of restricted stock,
stock appreciation rights and stock options available pursuant to the 2002 Plan,
the number of shares covered by an award, the exercise price of options, the
fair market values used to determine stock appreciation right and performance
unit benefits and other matters related to the 2002 Plan and awards, will be
adjusted by the compensation committee to reflect any stock dividend, stock
split, share combination, merger, consolidation, asset spin-off, reorganization,
or similar event.

Options, stock appreciation rights and performance units may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent and distribution, except that the grantee
may transfer an award to:

o the spouse, child or grandchild of the grantee (provided that such family
members cannot transfer the award, except by will or by the laws of descent
and distribution upon the death of the family member);

o a trust or trusts for the immediate benefit of such immediate family
members; or

o a partnership or limited liability company of which the grantee and/or such
immediate family members are the only owners.

Awards so transferred may be exercised only upon the same terms and
conditions applicable to the original grantee, and the original grantee or his
estate will remain liable for any federal, state, city or local taxes applicable
upon the exercise of an award by a permitted transferee.

Plan Administration. The 2002 Plan is administered by the compensation
committee unless the board of directors or the compensation committee designates
another committee or subcommittee to administer the 2002 Plan. Subject to the
2002 Plan's provisions, the compensation committee has broad authority to, among
other things, determine when grants may be made (and the amounts thereof); to
interpret, and to adopt rules relating to, the 2002 Plan; to determine the terms
of the agreements relating to grants and to modify any such agreement with the
consent of the grantee, when required; and to cancel existing awards and to
substitute new ones. Because of the compensation committee's broad authority,
the type and amount of awards to be received by any specific individual, or
group of individuals, is currently indeterminable. However, not more than
1,000,000 shares of Class B common stock may be awarded to Mr. Smulyan.

Amendment and Termination. Subject to any shareholder approval requirement
of applicable law or the rules of any national securities exchange, stock market
or automated quotation service on which our common stock is listed or quoted,
the board of directors may from time to time in its discretion amend or modify
the 2002 Plan without the approval of the shareholders. The 2002 Plan will
terminate on June 25, 2012 or such earlier date as the board of directors may
determine. No termination of the 2002 Plan will affect outstanding awards.

Federal Income Tax Consequences. Upon the grant of an award (other than an
award of restricted stock that contains no restrictions) under the 2002 Plan,
the grantee does not realize any taxable income and no deduction is available
for us. Any cash received by a grantee in connection with the exercise of a
stock appreciation right or performance unit, as well as the fair market value
of any shares received in connection with the exercise of a stock appreciation
right or a performance unit, is taxable as ordinary income to the grantee.
Generally, upon exercise of an option (other than an incentive stock option),
the grantee will recognize taxable income and we are entitled to a deduction at
the time the grantee is taxed in the amount of the grantee's taxable income. In
the case of an incentive stock option, the grantee incurs no income tax
liability upon exercise (other than possible alternative minimum tax liability),
but we are generally not entitled to a tax deduction. The fair market value of
restricted stock in excess of the purchase price, if any, is taxable to the
grantee when the restrictions lapse. However, if the grantee is not prohibited
by the compensation committee from electing to be taxed on such value on the
date of grant and the grantee elects such tax treatment, the grantee is taxed on
such amount on the date of grant. We are generally entitled to a deduction at
the time the grantee is taxed in the amount of the grantee's taxable income.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE 2002
EQUITY COMPENSATION PLAN.

Security Ownership of Beneficial Owners and Management

As of May 4, 2002, there were 47,845,549 shares of our Class A common stock
and 5,062,460 shares of our Class B common stock issued and outstanding. The
Class A common stock is entitled to an aggregate of 47,845,549 votes and the
Class B common stock is entitled to an aggregate of 50,624,600 votes. The
following table shows, as of May 4, 2002, the number and percentage of shares of
our common stock held by each person known to us to own beneficially more than
five percent of the issued and outstanding common stock, by our directors and
nominees, and by our executive officers:

Class A Class B
Common Stock Common Stock
---------------------------- --------------------------
Amount and
Five Percent Shareholders, Amount and Nature Nature of
Directors and Certain of Beneficial Percent Beneficial Percent Percent of Total
Executive Officers Ownership of Class Ownership of Class Voting Power
---------------------------------------- ----------------- ---------- -------------- ---------- ----------------

Jeffrey H. Smulyan....................... 522,945 (1) 1.1% 5,662,460 (16) 100.0% 54.7%
Susan B. Bayh............................ 42,700 (2) * -- -- *
Walter Z. Berger......................... 83,736 (3) * -- -- *
Randall D. Bongarten..................... 56,528 (4) * -- -- *
Richard F. Cummings...................... 372,194 (5) * -- -- *
Norman H. Gurwitz........................ 167,726 (6) * -- -- *
Gary L. Kaseff........................... 151,540 (7) * -- -- *
Richard A. Leventhal..................... 68,800 (8) * -- -- *
Greg A. Nathanson........................ 212,764 (9) * -- -- *
Doyle L. Rose............................ 270,905 (10) * -- -- *
Frank V. Sica............................ 30,000 (11) * -- -- *
Lawrence B. Sorrel....................... 38,000 (12) * -- -- *
Mellon Financial Corporation............. 2,720,981 (13) 5.7 -- -- 2.8
Westport Asset Management, Inc........... 3,934,400 (14) 8.2 -- -- 4.0
All Officers and Directors as a Group
(12 persons)........................... 2,003,544 (15) 4.2 5,662,460 (16) 100.0% 55.6

------------------------------------

* Less than 1%.

(1) Consists of 362,089 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 of all but
3,537 held for his benefit, 259 shares held in the 401(k) Plan, 111,097
shares owned individually and 49,500 shares held by The Smulyan Family
Foundation, as to which Mr. Smulyan shares voting control.

(2) Consists of 2,700 shares owned individually and 40,000 shares represented
by stock options exercisable currently or within 60 days of May 4, 2002.

(3) Consists of 31 shares held in the 401(k) Plan, 305 shares held in the Stock
Purchase Plan, 65 shares held in the Profit Sharing Trust and 83,335 shares
represented by stock options exercisable currently or within 60 days of May
4, 2002.

(4) Consists of 5,529 shares owned individually, 331 shares held in the Profit
Sharing Trust and 50,668 shares represented by stock options exercisable
currently or within 60 days of May 4, 2002.

(5) Consists of 120,983 shares owned individually, 8,260 shares owned for the
benefit of Mr. Cummings' children, 3,537 shares held in the Profit Sharing
Trust, 246 shares held in the 401(k) Plan and 239,168 shares represented by
stock options exercisable currently or within 60 days of May 4, 2002.

(6) Consists of 36,733 shares owned jointly by Mr. Gurwitz and his spouse,
1,653 shares owned by Mr. Gurwitz's spouse, 6,822 shares owned for the
benefit of Mr. Gurwitz's children, 17,800 shares owned by a corporation of
which Mr. Gurwitz's spouse is a 50% shareholder, 2,349 shares held in the
Profit Sharing Trust, 260 shares held in the 401(k) Plan, 406 shares held
in the Stock Purchase Plan and 101,703 shares represented by stock options
exercisable currently or within 60 days of May 4, 2002.

(7) Consists of 31,766 shares owned individually by Mr. Kaseff, 3,411 shares
owned by Mr. Kaseff's spouse, 1,346 shares held by Mr. Kaseff's spouse for
the benefit of their children, 814 shares held in the Profit Sharing Trust,
and 114,203 shares represented by stock options exercisable currently or
within 60 days of May 4, 2002.

(8) Consists of 8,000 shares owned individually, 3,000 shares owned by Mr.
Leventhal's spouse, 17,800 shares owned by a corporation of which Mr.
Leventhal is a 50% shareholder and 40,000 shares represented by stock
options exercisable currently or within 60 days of May 4, 2002.

(9) Consists of 111,973 shares owned individually or jointly with his spouse,
44,000 shares owned by trusts for the benefit of Mr. Nathanson's children,
124 shares held in the Profit Sharing Trust and 56,667 shares represented
by stock options exercisable currently or within 60 days of May 4, 2002.

(10) Consists of 24,980 shares owned individually, 3,537 shares held in the
Profit Sharing Trust, 220 shares held in the 401(k) Plan and 242,168 shares
represented by stock options exercisable currently or within 60 days of May
4, 2002.

(11) Consists entirely of shares represented by stock options exercisable
currently or within 60 days of May 4, 2002.

(12) Consists of 8,000 shares owned individually and 30,000 shares represented
by stock options exercisable currently or within 60 days of May 4, 2002.

(13) Information concerning these shares was obtained from an Amendment to
Schedule 13G filed on January 23, 2002 by Mellon Financial Corporation on
behalf of itself and Mellon Bank, N.A., each of which has a mailing address
of One Mellon Center, Pittsburgh, Pennsylvania 15258.

(14) Information concerning these shares was obtained from an Amendment to a
Schedule 13G filed February 14, 2002 by Westport Asset Management, Inc.,
which has a mailing address of 253 Riverside Avenue, Westport, Connecticut
06880.

(15) Includes 1,027,912 shares represented by stock options exercisable
currently or within 60 days of May 4, 2002 and 362,089 shares held in the
Profit Sharing Trust.

(16) Consists of 5,062,460 shares owned individually and 600,000 shares
represented by stock options exercisable currently or within 60 days of May
4, 2002.

Board of Directors' Meetings

During our last fiscal year, our board of directors held five meetings,
either in person or by telephone. Each director attended at least 75% of (1) the
total number of meetings of our board of directors held while he or she was a
director and (2) the total number of meetings held by all committees on which he
or she served. Our directors who are not officers or employees of our company
are compensated for their services at the rate of $2,000 per regular meeting
attended in person, $1,000 per regular meeting attended by phone and $500 per
committee meeting attended whether in person or by phone. Pursuant to the
Non-Employee Director Stock Option Plan, directors who are not officers or
employees of our company also are entitled to receive annually options to
purchase 10,000 shares of Class A common stock. The options are granted on the
date of our annual meeting of shareholders at the closing price of the
underlying shares on that date. In addition to her duties as a director, during
the last fiscal year we separately engaged Susan B. Bayh to continue to develop
plans for the involvement of our company and each of our stations and
publications in various charitable organizations and perform certain other
consulting services. This engagement of Mrs. Bayh as a consultant ceased as of
February 28, 2002. During the last fiscal year, Mrs. Bayh received approximately
$50,000 as compensation for such services. Nominees for election as a director
are selected by the board of directors, acting as a nominating committee. Our
board of directors currently has an audit committee and a compensation
committee.

Certain Transactions

We have periodically made interest-bearing loans to various officers and
employees. The largest aggregate amount of indebtedness outstanding at any
month-end during the last fiscal year and the approximate amount of this
indebtedness outstanding at February 28, 2002, was $1,117,296 and $1,117,296,
respectively, for Jeffrey H. Smulyan, Chairman, Chief Executive Officer and
President; $124,470 and $0, respectively, for Richard F. Cummings, Radio
Division President; $172,152 and $0, respectively, for Doyle L. Rose, former
Radio Division President; and $93,761 and $0, respectively, for Norman H.
Gurwitz, Executive Vice President - Human Resources and Secretary. These loans
bear interest at our cost of senior debt, which at May 4, 2002 was approximately
7.6% per annum. During the last fiscal year, we made payments of approximately
$258,000 to a company owned by Jeffrey H. Smulyan for our use of an airplane
owned by that company and payments of approximately $405,000 to a management
company to pay a portion of the operating and maintenance costs of the airplane.

Report of the Audit Committee

The audit committee of the board of directors assists the board in carrying
out its oversight responsibilities for Emmis' financial reporting process, audit
process and internal controls in accordance with the Audit Committee Charter. In
December 1999, the Securities and Exchange Commission and the National
Association of Securities Dealers, Inc. adopted new rules applicable to
companies with securities traded on Nasdaq. Under these rules, an audit
committee is required to: (i) adopt a formal written charter, (ii) consist of at
least three directors, each of whom meets certain independence and financial
literacy requirements, (iii) conduct quality discussions with the company's
independent auditor prior to the filing of the company's Form 10-K, (iv) ensure
that the company's independent auditors have conducted quarterly reviews of the
company's financial statements, engaging in quality discussions with the
independent auditors when appropriate, (v) disclose whether it has (A) reviewed
and discussed the company's audited financial statements for the last fiscal
year with management; (B) discussed with the company's independent auditors the
matters required to be discussed by SAS 61 (Codification for Statements on

Auditing Standards); and (C) received and discussed the written disclosures and
the letter from the company's independent auditors required by Independence
Standards Board Statement No. 1 (Independence Discussions with Audit
Committees), and (vi) disclose whether the audit committee recommended to the
board that the audited financial statements be included in the company's Form
10-K.

The audit committee has adopted a formal written charter, a copy of which
was attached as Annex II to our proxy statement for the annual meeting of
shareholders held on January 10, 2001. In addition, the committee has determined
that its members meet the literacy requirements of the new rules and was
reconstituted at the beginning of our last fiscal year to comply with the other
new structural and membership requirements before the requirements took effect
in June 2001. The committee has also made certain that Emmis' quarterly
financial statements continue to be reviewed by our independent auditors prior
to filing and put in place mechanisms to ensure that committee members are
notified whenever our independent auditors believe that significant events,
transactions or changes in accounting estimates have affected the quality of our
financial reporting. Furthermore, the committee considered whether the
additional services provided by our independent auditors as described under the
caption "Matters Relating to Independent Auditors" is compatible with
maintaining our auditors' independence. In connection with the audit for the
fiscal year ending February 28, 2002, the audit committee discussed the audited
financial statements with management and our auditors, discussed the items
required to be discussed by SAS 61 with our auditors, and received and discussed
the disclosures and letter required by Independence Standards Board Statement
No. 1. Based on these discussions and reviews, the committee members agreed that
the audited financial statements for our last fiscal year should be included in
our company's Form 10-K, and made a formal recommendation to the board to that
effect.

Arthur Andersen LLP ("Andersen") has served as Emmis' independent auditor
since 1993. Although shareholder approval of the board of directors' selection
of an independent auditor is not required by law, the board of directors has
historically solicited and obtained shareholder approval of Andersen's selection
as Emmis' independent auditor. In view of the rapid pace of ongoing developments
concerning Andersen, the audit committee has decided that it is in the best
interests of Emmis and our shareholders to defer the selection of an independent
public accounting firm to be engaged to audit Emmis' financial statements for
the fiscal year ending February 28, 2003. Accordingly, the audit committee has
not recommended yet, and the board of directors has not selected, an independent
auditor for the current fiscal year.

Based on currently available information, the audit committee plans to
evaluate all alternatives, including holding discussions with other accounting
firms. The audit committee intends to carefully consider any potential
accounting firm's qualifications as independent accountants before recommending
an independent auditor to the board for appointment. This may include a review
of the qualifications of the engagement team, the quality control procedures the
firm has established, and any issues raised by the most recent quality control
review of the firm, as well as its reputation for integrity and competence in
the fields of accounting and auditing. The audit committee also intends to
analyze matters required to be considered under the Securities and Exchange
Commission's Rules on Auditor Independence, including the nature and extent of
non-audit services, to ensure that they will not impair the independence of the
accountants.

Audit Committee Members
-----------------------

Frank V. Sica, Chair
Susan B. Bayh
Lawrence B. Sorrel

Report of the Compensation Committee

The compensation committee provides a general review of our compensation
and benefit plans to ensure that they meet our corporate objectives. The
compensation committee also establishes compensation arrangements and approves
compensation payments to Mr. Smulyan and our other executive officers, and
generally administers our various stock option, profit sharing and incentive
plans. With respect to compensation decisions affecting non-executive officers
and employees, the committee has delegated this authority to Mr. Smulyan and the
other executive officers, provided such authority is exercised in accordance
with any general parameters established by the committee. During the last fiscal
year, Richard A. Leventhal, Frank V. Sica and Lawrence B. Sorrel were members of
the compensation committee.

Policy and Performance Measures. We have historically entered into
multi-year employment agreements with certain of our executive officers. These
agreements generally provide for a base salary, annual performance bonuses, and
restricted stock and stock option awards. They also typically prohibit the
officer from directly or indirectly competing with us. The compensation
committee believes that entering into these agreements is in our best interest
because they assist us in retaining our key officers for a certain period of
time and enable us to focus the officers' efforts and energies on enhancing the
long-term value of our company to our shareholders. Because most of these
employment agreements are now expired, we are currently in discussions with our
executive officers to enter into new employment agreements. We expect that the
total compensation reflected in these employment agreements will be generally
based upon the officers' prior compensation levels, changes in duties and peer
group benchmarking surveys. In order to attract and retain highly qualified
employees, we believe overall compensation to our executive officers should be
targeted at the top third of our peer group.

None of our executive officers received salary increases or bonuses for the
fiscal year ended February 28, 2002. The committee established a bonus plan at
the beginning of the fiscal year that set for each executive officer a target
bonus and a performance goal so that 65-90% of an executive officer's target
bonus potential would be based on specified annual cash flow goals and the
remainder would be earned on a discretionary basis. A percentage of the target
bonus would then be earned depending upon the extent to which the company or an
applicable division of the company met or exceeded the specified cash flow
targets and depending upon the committee's assessment of the performance of the
executive during the year. At the end of the year, none of the cash flow goals
had been met, so the cash flow-based portions of the target bonuses were not
paid. In addition, while the committee praised the executive officers for their
efforts to guide the company through a very challenging year, the committee
determined that it was inappropriate to grant any of the discretionary bonuses.
However, the committee did authorize the write-off of loans to certain of our
executive officers (other than Mr. Smulyan) that had been outstanding and unpaid
for several years.

Stock options and stock awards were also granted to our executive officers
during the last fiscal year under our various equity incentive plans. The
options, covering from 15,000 to 50,000 shares each, were all granted at the
fair market value of our Class A common stock on the date of grant. In addition,
Messrs. Rose and Cummings each received a grant of 10,345 shares of our Class A
common stock, and Messrs. Berger and Kaseff each received a grant of 20,000
shares. The shares were issued to Messrs. Rose and Cummings upon the completion
of the fiscal year, to Mr. Berger in connection with the completion of the three
year term of his employment agreement, and to Mr. Kaseff in connection with the
completion of the three year term of a restricted stock agreement.

In December 2001, we began a stock compensation program under our 2001
Equity Incentive Plan. The program was designed to replace cash compensation
with non-cash compensation in order to improve the leverage ratios under the
indentures for our senior discount notes and senior subordinated notes, and to
further focus our employees' efforts and attention on delivering shareholder
value. Each participant in the program may elect to receive stock compensation
under the program in the form of payroll stock every two weeks or in the form of
restricted stock in January 2003. The payroll stock is awarded based on the fair
market value of our Class A common stock on the date it is issued and is only
subject to a de minimis transfer restriction. Our executive officers are
prohibited from receiving payroll stock. The restricted stock is subject to
forfeiture in the event the employee voluntarily terminates employment or is
terminated for cause prior to January 2003, and is awarded based on a discount
from the value of our Class A common stock on November 15, 2001, the date the
program was first announced. Thus, participants electing restricted stock may
receive up to 10% of their compensation in restricted stock at $13.98 per share
and may receive amounts in excess of 10% of their compensation in restricted

stock at $12.43 per share. Virtually all our executive officers elected to
receive restricted stock, most electing amounts in excess of 10% of their
compensation.

The Internal Revenue Code generally limits to $1 million the amount of
compensation that we may deduct in any year with respect to certain of our
officers. The compensation committee endeavors to structure executive
compensation so that most of that compensation will be deductible. At the same
time, the compensation committee has the authority to award compensation in
excess of the $1 million limit, regardless of whether such additional
compensation will be deductible, in cases where the compensation committee
determines that such compensation is appropriate. Compensation awards in excess
of the $1 million limit, if any, are most likely to occur in connection with
awards earned upon the completion of an executive officer's multi-year
employment or similar agreement.

Chief Executive Officer Compensation. Mr. Smulyan is employed as our chief
executive officer pursuant to an employment agreement that was amended in 1999
to extend the term to February 29, 2004 and to emphasize the performance-based
portion of Mr. Smulyan's compensation. Thus, the amendment to the employment
agreement eliminated the provision that automatically increased Mr. Smulyan's
salary by 10-15% per year and limited the increase to the rate of inflation. At
the same time, the amendment increased the potential annual bonus of Mr. Smulyan
to an amount equal to his annual salary. Mr. Smulyan was not included in the
annual bonus plan adopted by the compensation committee for the executive
officers because he waived his bonus for the year prior to the adoption of the
plan.

When Mr. Smulyan entered into the amendment to his employment agreement in
1999, the committee also granted to Mr. Smulyan options to purchase 1,000,000
shares of Class B common stock at a price per share of $28.25, the fair market
value on the date of grant. These options are not generally exercisable until
March 1, 2006. However, options to purchase 200,000 shares become exercisable at
the end of each fiscal year in which either our annual broadcast cash flow
increases from the previous year by a percentage specified in the grant
agreement or the percentage increase in the average monthly fair market value of
the Class A common stock during the fiscal year exceeds that of a specified peer
group of broadcasting companies. The committee believes that the performance
accelerated vesting feature of these options is more favorable to our company
than the option provisions contained in Mr. Smulyan's previous employment
arrangement because it creates an incentive for Mr. Smulyan to cause the company
to meet certain performance targets but does not require the company to take the
charge to earnings that we had been forced to take when options were granted
under the prior employment arrangement. Because our company did not exceed
either of the performance targets specified in the option grant agreement for
the last fiscal year, the vesting of the options to purchase 200,000 shares was
not accelerated.

Compensation Committee Members
------------------------------

Richard A. Leventhal
Frank V. Sica
Lawrence B. Sorrel

COMPENSATION TABLES

The following table sets forth the compensation awarded to, earned by, or
paid to the chief executive officer and the four most highly compensated
executive officers other than the chief executive officer and an additional
former officer (collectively, the "Named Executive Officers") during each of the
last three fiscal years. All stock information in the following tables has been
restated for the two-for-one stock split that occurred in February 2000.

Summary Compensation Table

Long-Term
Compensation
Annual Compensation Awards
--------------------------------------- ----------------------------
Securities
Fiscal Restricted Underlying All
Name and Year Ended Stock Options/ Other
Principal Position February 28 (29) Salary (2) Bonus (3) Awards(4) SARs Compensation
------------------------------------ ---------------- ---------- ---------- ------------ ----------- --------------

JEFFREY H. SMULYAN...................... 2002 $ 753,472 $ -- $ 30,053 (5) -- $ 117,600 (7)
Chief Executive Officer, President 2001 782,324 -- -- -- 119,400
And Chairman of the Board 2000 765,175 911,137 -- 1,200,000 130,000

RANDALL D. BONGARTEN.................... 2002 $ 434,962 $ -- $ -- 50,000 $ --
Television Division President 2001 371,113 52,012 -- 15,000 --
2000 325,962 50,000 -- 24,000 --

RICHARD F. CUMMINGS..................... 2002 $ 433,817 $ -- $ 277,453 (6) 50,000 $ 124,470 (8)
Radio Division President 2001 434,665 137,844 814,275 -- --
2000 460,781 479,593 -- -- -- --

WALTER Z. BERGER........................ 2002 $ 340,972 $ -- $ 536,400 (6) 50,000 $ --
Executive Vice President, Chief 2001 340,972 87,519 -- 40,000 65,109
Financial Officer and Treasurer 2000 342,192 119,745 -- 40,000 86,307

GARY L. KASEFF.......................... 2002 $ 340,972 $ -- $ 536,400 (6) 40,000 $ --
Executive Vice President and General 2001 340,972 87,519 -- 40,000 --
Counsel 2000 338,532 119,745 -- 40,000 --

DOYLE L. ROSE........................... 2002 $ 433,808 $ -- $ 277,453 (6) 50,000 $ 172,152 (8)
Former Radio Division President (1) 2001 434,665 137,844 814,275 -- --
2000 460,781 479,593 -- -- --

------------------------------------

(1) Mr. Rose was no longer an executive officer at the end of the last fiscal
year.

(2) Pursuant to the deferred issuance option under our equity compensation
program, Messrs. Bongarten, Cummings, Berger and Kaseff elected to forego
payment of $10,038, $16,654, $13,077 and $13,077, respectively, in salary
during the fiscal year ended February 28, 2002 and to receive instead
shares of common stock issued in January 2003 at an issue price of $13.98
per share (with respect to the first 10% of cash compensation foregone) or
$12.43 per share (with respect to cash compensation foregone in excess of
10%). See "Report of the Compensation Committee."

(3) Includes both cash and stock bonuses.

(4) An aggregate of 173,702 shares of restricted stock were outstanding as of
February 28, 2002, with a value of $4,658,688 based on the $26.82 closing
price of the Class A Common Stock as of that date. All of such shares were
issued under the stock compensation program discussed in the "Report of the
Compensation Committee." The only such shares held by a Named Executive
Officer were 12,333 shares held by Mr. Smulyan, with a value of $330,771.
To the extent we pay any dividends on our common stock, outstanding shares
of restricted stock would be entitled to such dividends.

(5) Represents 2,283 shares issued pursuant to our equity compensation program
in lieu of salary for the fiscal year. See "Report of the Compensation
Committee."

(6) Includes 10,345 shares of restricted stock for each of Mr. Cummings and Mr.
Rose and 20,000 shares of restricted stock for each of Mr. Berger and Mr.
Kaseff, as to which all restrictions have lapsed.

(7) Represents the value of premiums accrued by us on a split-dollar life
insurance policy.

(8) Represents forgiveness of a loan.

Option/SAR Grants in Last Fiscal Year

Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
------------------------------------------------------------------------ ----------------------------------

Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base
Name Granted (#) Fiscal Year Price ($/Share) Expiration Date 5% 10%
--------------------- -------------- ----------------- ------------------ --------------- ------------ ------------
Jeffrey H. Smulyan -- -- $ -- -- $ -- $ --
Randall D. Bongarten 50,000 5.0% 29.00 2/28/11 938,000 2,475,000
Richard F. Cummings 50,000 5.0% 29.00 2/28/11 938,000 2,475,000
Walter Z. Berger 50,000 5.0% 29.00 2/28/11 938,000 2,475,000
Gary L. Kaseff 40,000 4.0% 29.00 2/28/11 750,400 1,980,000
Doyle L. Rose 50,000 5.0% 29.00 2/28/11 938,000 2,475,000

Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option /SAR Values

Number Of Securities Underlying
Unexercised Options/SARs At Value of Unexercised In-the-Money
Fiscal Year End Options/SARs at Fiscal Year End
-------------------------------- ------------------------------------
Shares
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------------ ----------- ----------- ----------- ------------ ------------ ---------------
Jeffrey H. Smulyan -- $ -- 600,000 800,000 $ 5,874,000 $ --
Randall D. Bongarten -- -- 50,667 38,333 98,940 --
Richard F. Cummings 9,600 183,888 239,167 33,333 1,503,975 --
Walter Z. Berger -- -- 83,334 46,666 164,900 --
Gary L. Kaseff 9,998 44,955 114,203 39,999 335,871 --
Doyle L. Rose........... 9,600 183,888 239,167 33,333 1,503,975 --

Equity compensation Plan Information

The following table gives information about our common stock that may be
issued upon the exercise of options, warrants and rights under all of our
existing equity compensation plans as of February 28, 2002. These plans include
the 1994 Equity Incentive Plan, the 1995 Equity Incentive Plan, the Non-Employee
Director Stock Option Plan, the 1997 Equity Incentive Plan, the 1999 Equity
Incentive Plan, the 2001 Equity Incentive Plan and the Employee Stock Purchase
Plan. Our shareholders have approved all of these plans. The table does not
include information about the proposed 2002 Equity Compensation Plan which has
not yet been approved by shareholders.

Number of Securities Remaining
Number of Securities to Weighted-Average Available for Future Issuance
beIssued Upon Exercise Exercise Price of under Equity Compensation Plans
of Outstanding Options, Outstanding Options, (Excluding Securities
Warrants and Rights Warrants and Rights Reflected in Column (a))
Plan Category (a) (b) (c)
------------- --------------------- ----------------------- ------------------------------
Equity Compensation Plans Approved by Security
Holders.................................... 5,515,713 (1) 25.39 (1) 2,753,615 (2)
Equity Compensation Plans Not Approved by
Security Holders........................... -- -- --
Total............................................ 5,515,713 (1) 25.39 (1) 2,753,615 (2)
-------------------
(1) Includes 762,200 shares estimated to be issuable in 2003 to employees in
lieu of current salary pursuant to contract rights under our stock
compensation program. See "Report of the Compensation Committee." The exact
number and price of shares to be issued depends upon actual compensation
during the period prior to issuance and changes in our share price and
cannot be determined at this time. Thus, the weighted averages in Column B
do not reflect these shares. The amount in Column A excludes obligations
under employment contracts to issue bonus shares in the future.

(2) Includes 338,846 shares available under the initial authorization for the
Employee Stock Purchase Plan. The number of shares reserved for issuance
under this plan is automatically increased on the first day of each fiscal
year beginning March 1, 2002, by the lesser of 0.5% of the common shares
outstanding on the last day of the immediately preceding fiscal year or a
lesser amount determined by our board of directors. On March 6, 2002,
options were granted to employees for an additional 958,667 shares.

Employment Agreements

During the fiscal year ended February 28, 1994, we entered into a five-year
employment agreement with Jeffrey H. Smulyan pursuant to which Mr. Smulyan was
employed as chairman of the board of directors and chief executive officer. This
employment agreement expired by its terms on February 28, 1999. We and Mr.
Smulyan entered into an amendment to the employment agreement effective March 1,
1999 which extended the term to February 29, 2004. Mr. Smulyan's base
compensation during the last fiscal year was approximately $782,000. The amended
agreement basically limited future annual increases of his salary to the rate of
inflation. In addition, the agreement as amended provides for annual bonuses to
be set by our board of directors ranging from a minimum of $50,000 up to a
maximum of 100% of Mr. Smulyan's annual base salary (plus an adjustment for
inflation). Mr. Smulyan also received options to purchase 1,000,000 shares of
common stock (after adjustment for the stock split) at a price per share of
$28.25 pursuant to the agreement. Under the agreement, Mr. Smulyan retains the
right to participate in all our employee benefit plans for which he is otherwise
eligible. The agreement with Mr. Smulyan is subject to termination by our board
of directors or by Mr. Smulyan, either without cause or for cause, at any time
upon notice. In the event we terminate Mr. Smulyan's employment without cause
(as defined in the agreement) or in the event Mr. Smulyan terminates his
employment for good reason (as defined in the agreement), Mr. Smulyan is
entitled to receive the present value of the applicable base and incentive
compensation through a date five years after the date of termination. In
addition, the agreement entitles Mr. Smulyan to certain termination benefits
upon disability, death or a change in control (as defined in the agreement) of
our company. Following a termination of Mr. Smulyan's employment, other than a
termination by us without cause (as defined in the agreement) or a termination
by Mr. Smulyan with good reason (as defined in the agreement), Mr. Smulyan is
prohibited from engaging in a business in competition with us for a period of
two years after the date of termination.

Our employment agreements with Richard F. Cummings and Doyle L. Rose
expired on February 28, 2001, and our employment agreement with Walter Z. Berger
expired on February 28, 2002. We are currently in discussions regarding new
employment agreements with Mr. Cummings and Mr. Berger. Mr. Rose is no longer an
officer, and we have entered into a consulting arrangement with him.

Performance Graph

The following line graph compares the yearly percentage change in the
cumulative total shareholder return on the Class A common stock with the
cumulative total return of the Nasdaq Stock Market Index and the cumulative
total return of the Nasdaq Telecommunications Stock Market Index (an index
containing performance data of radio, telephone, telegraph, television and cable
television companies) from February 28, 1997, to the fiscal year ended February
28, 2002. The performance graph assumes that an investment of $100 was made in
the Class A common stock and in each index on February 28, 1997 and that all
dividends were reinvested.

[GRAPH OMITTED]

Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02
Emmis................................. $100 $143 $134 $233 $153 $155
Nasdaq Stock Market................... $100 $137 $178 $364 $166 $135
Nasdaq Telecommunications............. $100 $171 $278 $475 $185 $ 89

Shareholder Proposals

Any of our shareholders wishing to have a proposal considered for inclusion
in our 2003 proxy solicitation materials must set forth such proposal in writing
and file it with our corporate secretary on or before the close of business on
January 30, 2003. In addition, our by-laws provide that any shareholder wishing
to nominate a candidate for director or propose other business at the Annual
Meeting must give us written notice 60 days before the meeting, and the notice
must provide certain other information as described in the by-laws. Copies of
the by-laws are available to shareholders free of charge upon request to our
corporate secretary. Our 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 our 2003 proxy solicitation materials
or consideration at the 2003 annual meeting. In addition, we retain discretion
to vote proxies on matters of which we are not properly notified at our
principal executive offices on or before the close of business on April 15,
2003, and also retain that authority under certain other circumstances.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our officers and directors, and persons who own more than 10% of existing common
stock, to file with the Securities and Exchange Commission reports detailing
their ownership of existing common stock and changes in such ownership.

Officers, directors and greater than 10% shareholders are required by Commission
regulations to furnish us with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to us, we believe
that during the last fiscal year all officers, directors and greater than 10%
shareholders complied with the filing requirements of Section 16(a).

MATTERS RELATING TO INDEPENDENT Auditors

Our financial statements for the fiscal year ended February 28, 2002 were
certified by Arthur Andersen LLP. Representatives of Arthur Andersen LLP are
expected to attend the annual meeting with the opportunity to make a statement
if they desire to do so, and will be available to respond to appropriate
questions.

For the fiscal year ended February 28, 2002, Arthur Andersen billed us for
professional services as follows:

Audit fees and fees for quarterly reviews of consolidated
financial statements.................................................................. $ 325,000
Financial information systems design and implementation fees................................ 135,000
All other fees:
Tax consultation...................................................................... $208,000
Public and private debt and equity offerings.......................................... 192,000
Audit-related consultation on potential separation of
radio and television divisions.................................................. 143,000
Statutory audits of foreign subsidiaries.............................................. 129,000
Other audit-related services.......................................................... 77,000
---------
Total other fees...................................................................... 749,000
-----------
Total fees paid to auditors................................................................. $1,209,000
===========

Annual Report

A copy of our Annual Report for the year ended February 28, 2002 was sent
to all of our shareholders of record as of May 4, 2002. The Annual Report is not
to be considered as proxy solicitation material.

Other Matters

Our board of directors knows of no other matters to be brought before this
annual meeting. However, if other matters should come before the meeting, it is
the intention of each person named in the proxy to vote such proxy in accordance
with his or her judgment on such matters.

Expenses of Solicitation

The entire expense of soliciting proxies, including preparing, assembling,
printing and mailing the proxy form and the material used in the solicitation of
proxies, will be paid by us. Solicitations may be made in person, or by mail,
telephone, facsimile or other means of electronic communication by our
directors, officers and other employees and none of those persons will receive
any additional compensation in connection with the solicitation. We also 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 those record holders for their reasonable expenses incurred
in doing so.
Householding of Proxy Materials

In December of 2000, the Securities and Exchange Commission adopted new
rules that permit companies and intermediaries (e.g., brokers) to satisfy the
delivery requirements for proxy statements with respect to two or more security
holders sharing the same address by delivering a single proxy statement

addressed to those security holders. This process, which is commonly referred to
as "householding," potentially means extra convenience for security holders and
cost savings for companies.

This year, in accordance with the notice we sent you last year, we will be
"householding" our proxy materials. A number of brokers with accountholders who
are Emmis shareholders will be "householding" our proxy materials as well. As
indicated in the notices previously provided, a single proxy statement will be
delivered to multiple shareholders sharing an address unless contrary
instructions have been received from an affected shareholder. Once you have
received notice from your broker or us that communications to your address will
be "householded," it will continue until you are notified otherwise or until you
revoke your consent. If, at any time, you no longer wish to participate in
"householding" and would prefer to receive a separate proxy statement, please
notify your broker if you hold your Emmis shares through a broker, or notify us
directly if you are a shareholder of record by sending us an e-mail at
ir@emmis.com, calling us toll-free at 1-866-Emmis-03 (1-866-366-4703) or writing
to us at Emmis Communications Corporation, Investor Relations, One Emmis Plaza,
40 Monument Circle, Indianapolis, Indiana 46204.

If you currently receive multiple copies of the proxy statement at your
address and would like to request "householding" of your communications, you
should contact your broker or, if you are a direct holder of Emmis shares, you
should submit a written request to First Union National Bank, our transfer
agent, at First Union National Bank, Shareholder Services, 3C3, 1525 West W.T.
Harris Boulevard, Charlotte, North Carolina 28288-1153.

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Exhibit A

EMMIS COMMUNICATIONS CORPORATION
2002 EQUITY COMPENSATION PLAN

1. Purpose. The primary purposes of the Plan are to provide equity
compensation in lieu of cash compensation for employees, officers, directors and
independent contractors of the Company and its subsidiaries, to increase
employee, officer, director and independent contractor stock ownership
opportunities and to improve the Company's ability to attract and retain a team
of outstanding employees, officers, directors and independent contractors.

2. Definitions. As used in the Plan, terms defined parenthetically
immediately after their use have the respective meanings provided by such
definitions and the terms set forth below have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):

"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.
"Award" means Options, shares of Restricted Stock, Stock Appreciation
Rights or Performance Units granted under the Plan.

"Award Agreement" has the meaning specified in Section 4(b)(vi).

"Board" means the Board of Directors of the Company.

"Cause" means, unless otherwise determined by the Committee, conviction of
the Grantee of any felony or other crime involving dishonesty, fraud or moral
turpitude, or the Grantee's habitual neglect of his duties; provided, however,
that if a Grantee is subject to an employment agreement with the Company or a
Subsidiary, or has a Personal Services Contract , "cause" shall mean any breach
of such agreement or contract by the Grantee giving the Company or a Subsidiary
the right to terminate the agreement or contract.

"Change in Control" means any of the following: (i) any person or group
(other than a Subsidiary or any employee benefit plan (or any related trust) of
the Company or a Subsidiary, and other than Jeffrey H. Smulyan or an Affiliate
of Mr. Smulyan) becomes after the Effective Date 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 (A) no such person or group shall be deemed
to own beneficially any securities acquired directly from the Company pursuant
to a written agreement with the Company unless such person or group subsequently
becomes the beneficial owner of additional Stock or voting securities of the
Company other than pursuant to a written agreement with the Company, and (B) 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
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) approval by the
shareholders of the Company 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

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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, (B) a liquidation or dissolution of the Company
or (C) the sale or other disposition of all or substantially all of the assets
of the Company; or (iv) such other event(s) or circumstance(s) as are determined
by the Committee 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 with respect to any Grantee, if such
Grantee is, by written agreement executed prior to such Change in Control, a
participant on such Grantee's own behalf in a transaction in which the persons
(or their Affiliates) with whom such Grantee has the written agreement Acquire
the Company (as defined below) and, pursuant to the written agreement, the
Grantee has an equity interest in the resulting entity or a right to acquire
such an equity interest.

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.

"Class A Common Stock" means the Class A Common Stock of the Company, par
value $.01 per share.

"Class B Common Stock" means the Class B Common Stock of the Company, par
value $.01 per share.

"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.

"Committee" means the Compensation Committee of the Board or such other
committee or subcommittee appointed by the Board or the Compensation Committee.

"Company" means Emmis Communications Corporation, an Indiana corporation.

"Disability" means, with respect to the exercise of an incentive stock
option after Termination of Employment, a disability within the meaning of
Section 22(e)(3) of the Code, and for all other purposes, a mental or physical
condition which, in the opinion of the Committee, renders a Grantee unable or
incompetent to carry out the job responsibilities which such Grantee held or the
tasks to which such Grantee was assigned at the time disability was incurred,
and which is expected to be permanent or for an indefinite duration.

"Effective Date" means June 25, 2002.

"Eligible Transferee" has the meaning specified in Section 12(b).

"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.

"Fair Market Value" of any security of the Company means, as of any
applicable date: (i) if the security is listed for trading on a national
securities exchange or on the NASDAQ Stock Market, the average of the highest
and lowest trading prices of the security as reported by such exchange or market
on such date, or if no reported sales occurred on such date, on the first
preceding date on which a reported sale of the security shall have occurred, or
(ii) if the security is not listed for trading on a national securities exchange
or on the NASDAQ Stock Market, or if the Committee determines that another
measurement method is more appropriate to implement one or more of the purposes
of the Plan, the fair market value of the security as determined in good faith
by the Committee.

"Grant Date" means the date of grant of an Award determined in accordance
with Section 6.

"Grantee" means an individual or Personal Service Corporation that has been
granted an Award.

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"Immediate Family Member" or "Immediate Family Members" means the spouse,
the children or the grandchildren of a Grantee.

"Incentive Stock Option" means an Award under Section 7(b).

"including" means "including, without limitation."

"Measuring Period" has the meaning specified in Section 10(a)(i)(B).

"Option" means an Award under Section 7.

"Option Price" means the per share purchase price of (i) Stock subject to
an Option or (ii) Restricted Stock subject to an Option.

"Parent" means any corporation, partnership or limited liability company
(other than the Company) in an unbroken chain of corporations, partnerships or
limited liability companies ending with the Company, if at the time of the
granting of an Award under the Plan, each of such corporations, partnerships or
limited liability companies other than the Company owns stock, general
partnership interests or membership interests, as the case may be, possessing a
majority of the total combined voting power of all classes of stock, general
partnership interests or membership interests, as the case may be (whether at
all times or only so long as no senior class of securities has such voting power
by reason of any contingency), in one of the other corporations, partnerships or
limited liability companies in such chain

"Performance Goals" has the meaning specified in Section 10(a)(i).

"Performance Percentage" has the meaning specified in Section 10(a)(i)(C).

"Performance Units" means units established by the Committee for purposes
of granting an Award under Section 10.

"Personal Services Contract" means any written contract or agreement
pursuant to which a corporation, partnership, limited liability company or other
entity is to provide to the Company or a Subsidiary the services of one or more
individuals.
"Personal Service Corporation" means a corporation, partnership, limited
liability company or other entity that has a Personal Services Contract in
effect.

"Plan" means the Emmis Communications Corporation 2002 Equity Compensation
Plan.

"Prior Plans" means the Emmis Broadcasting Corporation 1986 Stock Incentive
Plan, the Emmis Broadcasting Corporation 1992 Stock Option Plan, the Emmis
Broadcasting Corporation 1994 Equity Incentive Plan, the Emmis Broadcasting
Corporation 1997 Equity Incentive Plan and the Emmis Communications Corporation
1999 Equity Incentive Plan.

"Reload Option" has the meaning specified in Section 7(c).

"Restricted Stock" means Stock awarded pursuant to Section 8.

"SEC" means the Securities and Exchange Commission.

"Stock" means the Class A Common Stock and the Class B Common Stock.

"Stock Appreciation Rights" means Awards under Section 9.

"Subsidiary" means any corporation, partnership or limited liability
company (other than the Company) in an unbroken chain of corporations beginning
with the Company if, at the time of the granting of an Award under the Plan,

A-3

each of the corporations, partnerships or limited liability companies other than
the last corporation, partnership or limited liability company in the unbroken
chain owns stock, general partnership interests or membership interests, as the
case may be, possessing a majority of the total combined voting power of all
classes of stock, general partnership interests or membership interests, as the
case may be (whether at all times or only so long as no senior class of
securities has such voting power by reason of any contingency), in one of the
other corporations, partnerships or limited liability companies in such chain.

"Termination of Employment" means a cessation of a business relationship
with the Company or its Subsidiaries which occurs (a) with respect to an
employee of the Company or a Subsidiary, the first day an individual is for any
reason entitled to severance payments under the Company's or any Subsidiary's
personnel policies or is no longer employed by the Company or any of its
Subsidiaries, or, with respect to an individual who is an employee of a
corporation constituting a Subsidiary, the first day such corporation is no
longer a Subsidiary, (b) with respect to a director of the Company, the first
day he or she ceases to be a director of the Company, (c) with respect to an
independent contractor of the Company or a Subsidiary, the first day the
independent contractor is no longer providing, and is not expected by the
Company to provide, services to the Company or a subsidiary, or, (d) with
respect to a Personal Service Corporation, the first day after the Personal
Service Contract has expired or terminated and is not expected by the Company to
be extended or renewed. Notwithstanding the foregoing, a Termination of
Employment pursuant to any of clauses (a) through (d) shall not be deemed to
occur with respect to any Options that are vested on the date on which a
Termination of Employment would otherwise be deemed to have occurred so long as
a Grantee continues to provide services to the Company or a Subsidiary in one or
more of the capacities specified in clauses (a) through (d) above.

3. Scope of the Plan.

(a) Number of Shares. Subject to Section 3(c), an aggregate of three
million (3,000,000) shares of Stock is hereby made available and is reserved for
delivery, of which not more than one and one half million (1,500,000) shares of
Stock may be delivered on account of the exercise of Options and the payment of
benefits upon the exercise of Stock Appreciation Rights, and not more than one
and one half million (1,500,000) shares of Stock may be delivered on account of
the grant of Restricted Stock or the Award of Performance Units that are paid in
shares of Stock. Subject to the foregoing limit, shares of Stock held as
treasury shares may also be used for or in connection with Awards. No more than
one million (1,000,000) shares of Class B Common Stock shall be available for
grant and issuance under the Plan. Awards of or pertaining to shares of Class B
Common Stock may be granted only to Jeffrey H. Smulyan or an Affiliate of
Smulyan (as defined in the Company's Articles of Incorporation, as amended from
time to time). Issuance of either Class A Common Stock or Class B Common Stock
as or pursuant to an Award shall reduce the shares available for grant and
issuance under the Plan.

(b) Limit on Awards. Subject to Section 3(a) as to the maximum number of
shares of Stock available for delivery in connection with Awards and Sections
3(c) and 27, the maximum number of Awards that may be granted to each Grantee in
each calendar year during any part of which the Plan is in effect shall be as
follows:

(i) With respect to Stock subject to Options, 1,000,000 shares;

(ii) With respect to Stock subject to Stock Appreciation Rights, 1,000,000
shares;

(iii) With respect to Restricted Stock (not issued in payment of an Award
of Performance Units), that number of shares of Stock whose value
equals the lesser of (A) 700% of such Grantee's base salary and bonus
for such year or (B) $10,000,000 (based on the Fair Market Value of
Stock on the date the award is granted, not the date the Award vests
or is paid);

(iv) With respect to Awards of Performance Units, that number of shares
of Stock whose value equals the lesser of (A) 700% of such Grantee's
base salary and bonus for such year or (B) $10,000,000 (based on the
Fair Market Value of Stock on the date the Award is granted, not the
date the Award is earned or paid).

A-4

shall expire or terminate for any reason without having been exercised in full
or shall be forfeited, shares of Stock available for such Award or any portion
thereof (including restricted stock) and stock appreciation rights associated
with such Award shall become available for other Awards. If a Grantee pays all
or part of the exercise price, if any, associated with an Award by the transfer
of Stock or the surrender (including by attestation) of all or part of an Award
(including the Award being exercised), such Stock will also be available for
grant under this Plan, without reducing the number of shares of Stock available
in any calendar year for grant of Awards.

4. Administration.

(a) General. The Plan shall be administered by the Committee, which shall
consist of persons who are appointed by the Board. Notwithstanding the
requirements contained in the immediately preceding sentence, the Board or the
Committee may, in its discretion, delegate to a committee or subcommittee of the
Board or the Committee any or all of the authority and responsibility of the
Committee. Such other committee or subcommittee may consist of two or more
directors who may, but need not, be officers or employees of the Company or of
any of its Subsidiaries. To the extent that the Board or the Committee has
delegated to such other committee or subcommittee the authority and
responsibility of the Committee pursuant to the foregoing, all references to the
Committee in the Plan shall be to such other committee or subcommittee.
Notwithstanding the foregoing, the Board shall at all times have the right to
make Awards, administer the Plan, and otherwise exercise the authority of the
Committee under the Plan, and to the extent the Board does so, references to the
Committee in the Plan shall be to the Board.

(b) Authority of the Committee. The Committee shall have full power and
final authority, in its discretion, but subject to the express provisions of the
Plan, as follows: (i) to select Grantees, (ii) to grant Awards, (iii) to
determine (A) when Awards may be granted, (B) whether or not specific Stock
Appreciation Rights shall be identified with a specific Option, specific shares
of Restricted Stock, or specific Performance Units and, if so, whether they
shall be exercisable cumulatively with, or alternatively to, such Option, shares
of Restricted Stock, or Performance Units, and (C) whether or not specific
Performance Units shall be identified with a specific Option, specific shares of
Restricted Stock, or specific Stock Appreciation Rights under the Plan or any
Prior Plan and, if so, whether they shall be exercisable cumulatively with, or
alternatively to, such Option, shares of Restricted Stock, or Stock Appreciation
Rights, (iv) to interpret the Plan and to make all determinations necessary or
advisable for the administration of the Plan, (v) to prescribe, amend, and
rescind rules relating to the Plan, including rules with respect to the
exercisability and nonforfeitability of Awards upon the Termination of
Employment of a Grantee, (vi) to determine the terms and provisions of any
written agreement by which an Award may be granted ("Award Agreements") and, to
modify any such Award Agreement at any time, with the consent of the Grantee
when required, (vii) to accelerate the exercisability of, and to accelerate or
waive any or all of the restrictions and conditions applicable to, any Award,
(viii) to make such adjustments or modifications to Awards to Grantees working
outside the United States as are necessary and advisable to fulfill the purposes
of the Plan, (ix) to impose such additional conditions, restrictions, and
limitations upon the grant, exercise or retention of Awards as the Committee
may, before or concurrently with the grant thereof, deem appropriate, including
requiring simultaneous exercise of related identified Options, Stock
Appreciation Rights, and Performance Units and limiting the percentage of
Options, Stock Appreciation Rights, and Performance Units which may from time to
time be exercised by a Grantee, and (x) to require Awards to be transferred to a
non-grantor trust for the benefit of the Grantee.

(c) Determinations of the Committee; No Liability. The determination of the
Committee on all matters relating to the Plan or any Award Agreement shall be
conclusive and final. No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Award.

5. Eligibility. Awards may be granted to or for the benefit of any current
or former employee, officer, director, Personal Service Corporation or
independent contractor of the Company or any of its Subsidiaries. In selecting
the Grantees to whom Awards may be granted, as well as in determining the number
of shares of Stock subject to and the other terms and conditions applicable to
each Award, the Committee shall take into consideration such factors as it deems
relevant in promoting the purposes of the Plan.

A-5

6. General Terms and Conditions of Grants.

(a) Grant Date. The Grant Date of an Award shall be the date on which the
Committee grants the Award or such other date as the Committee may determine.

(b) Maximum Term. The term of each Award (subject to Section 7(b) and 7(c)
with respect to Incentive Stock Options and Reload Options, respectively) shall
be a period of not more than ten (10) years from the Grant Date, and shall be
subject to earlier termination as herein provided.

7. Options.

(a) Grant of Options and Option Price. The Committee may grant an Option
containing such terms, conditions and restrictions as the Committee deems
appropriate (including but not limited to a reload option); provided, however,
that the Option Price of any Option shall not be less than the Fair Market Value
of the Stock on the Grant Date.
(b) Grant of Incentive Stock Options. Without limiting the generality of
the foregoing, the Committee may designate that an Option shall be made subject
to restrictions that permit it to qualify as an "incentive stock option" under
the requirements of Section 422 of the Code. Notwithstanding the foregoing and
Section 4(b)(vi), the Committee may, without the consent of the Grantee, at any
time before the exercise of an Option (whether or not an Incentive Stock
Option), take any action necessary to prevent such option from being treated as
an Incentive Stock Option.

(c) Grant of Reload Options. The Committee may from time to time, in its
discretion, adopt a policy, which policy shall not remain in effect for longer
than 12 months at a time, but which may be adopted for successive 12-month
periods, under which each Grantee who exercises while the policy is in effect an
Option for shares of Stock which have a Fair Market Value on the date of
exercise equal to not less than 100% (or such greater percentage set forth in
the policy) of the Option Price for such Options ("Exercised Options") and pays
the Option Price with shares of Stock, shall be granted, subject to Section 3,
additional Options ("Reload Options") in an amount equal to the sum ("Reload
Number") of the number of shares of Stock tendered to exercise the Exercised
Options plus, if so provided by the Committee, the number of shares of Stock, if
any, retained by the Company in connection with the exercise of the Exercised
Options to satisfy any federal, state or local tax withholding requirements. The
Committee may, in its discretion, provide that the Reload Option policy shall
not apply to Options which would expire within such period as the Committee
determines, in its discretion, from the effective date of the policy.

(d) Terms and Conditions for Reload Options. Reload Options shall be
subject to the following terms and conditions: (i) the Grant Date for each
Reload Option shall be the date of exercise of the Exercised Option to which it
relates; (ii) the Reload Option may be exercised at any time during the
unexpired term of the Exercised Option (subject to earlier termination thereof
as provided in the Plan and in the applicable Award Agreement); and (iii) the
terms of the Reload Option shall be the same as the terms of the Exercised
Option to which it relates, except that the Option Price shall be the Fair
Market Value of the Stock on the Grant Date of the Reload Option;

(e) Exercise of Options. Each Option shall be exercised, in whole or in
part, by delivery to the Company of written notice of intent to purchase a
specific number of shares of Stock subject to the Option. The Option Price of
any shares of Stock or shares of restricted stock as to which an Option shall be
exercised shall be paid in full at the time of the exercise. Payment may, at the
election of the Grantee, be made in any one or any combination of the following:
(i) cash; (ii) shares of Stock that have been held by the Grantee for at least
six months, each valued at the Fair Market Value on the date of exercise
(including through an attestation procedure); (iii) with the approval of the
Committee, shares of restricted stock that have been held by the Grantee for at
least six months, each valued at the Fair Market Value of a share of Stock on
the date of exercise; (iv) by waiver of compensation due or accrued to the
Grantee for services rendered; (v) with the consent of the Committee, by tender
of property; (vi) provided that a public market for the Stock exists: (A)
through a "same day sale" commitment from the Grantee and a broker-dealer that
is a member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the Grantee irrevocably elects to exercise the Option and to sell a
portion of the Stock so purchased in order to pay for the Option, and whereby

A-6

the NASD Dealer irrevocably commits upon receipt of such Stock to forward the
Option Price directly to the Company; or (B) through a "margin" commitment from
the Grantee and an NASD Dealer whereby the Grantee irrevocably elects to
exercise the Option and to pledge the Stock so purchased to the NASD Dealer in a
margin account as security for a loan from the NASD Dealer in the amount of the
Option Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Stock to forward the Option Price directly to the Company; or (C) through
any other procedure pursuant to which the Grantee delivers to the Company a
properly executed exercise notice and instructions to deliver the resulting
Stock to a stock broker that are intended to satisfy the provisions of Section
220. 3(e)(4) of Regulation T issued by the Board of Governors of the Federal
Reserve System as in effect from time to time; (vii) in the discretion of the
Committee and to the extent permitted by law, in accordance with Section 14;
(viii) by the surrender of all or part of the Option being exercised, or (ix)
such other payment method or procedure as the Committee may approve.

(f) Use of Restricted Stock to Pay Option Price. If restricted stock
("Tendered Restricted Stock") is used to pay the Option Price for Stock subject
to an Option, then a number of shares of Stock acquired on exercise of the
Option equal to the number of shares of Tendered Restricted Stock shall, unless
the Committee provides otherwise, be subject to the same restrictions as the
Tendered Restricted Stock, determined as of the date of exercise of the Option.
If the Option Price for restricted stock subject to an Option is paid with
Tendered Restricted Stock, and if the Committee determines that the restricted
stock acquired on exercise of the Option is subject to restrictions that cause
it to have a greater risk of forfeiture than the Tendered Restricted Stock, then
notwithstanding the preceding sentence, all the restricted stock acquired on
exercise of the Option shall, unless the Committee provides otherwise, be
subject to such restrictions.

8. Restricted Stock.

(a) Grant of Shares of Restricted Stock. Before the grant of any shares of
Restricted Stock, the Committee shall determine, in its discretion: (i) the per
share purchase price of such shares (which may be zero), and (ii) the
restrictions, if any, applicable to such grant; provided, however, that if the
per share purchase price is zero, the consideration for the shares shall be
deemed to be prior service to the Company or its Subsidiaries unless the
Committee specifies other consideration.

(b) Exercise. Payment of the purchase price (if greater than zero) for
shares of Restricted Stock shall be made in full by the Grantee before the
delivery of such shares. Such payment may, at the election of the Grantee and
unless the Committee otherwise provides in the Award Agreement, be made in any
one or any combination of the following: (i) cash, (ii) Stock valued at its Fair
Market Value on the date of payment, or (iii) shares of Restricted Stock, each
valued at the Fair Market Value of a share of Stock on the date of payment;
provided that: (A) in the discretion of the Committee and to the extent
permitted by law, payment may also be made in accordance with Section 14; and
(B) if the purchase price for Restricted Stock ("New Restricted Stock") is paid
with shares of restricted stock ("Old Restricted Stock"), the restrictions
applicable to the New Restricted Stock shall be the same as if the Grantee had
paid for the New Restricted Stock in cash unless, in the judgment of the
Committee, the Old Restricted Stock was subject to a greater risk of forfeiture,
in which case a number of shares of New Restricted Stock equal to the number of
shares of Old Restricted Stock tendered in payment for New Restricted Stock
shall, unless the Committee provides otherwise, be subject to the same
restrictions as the Old Restricted Stock, determined immediately before such
payment.

(c) Forfeiture. The Committee may, but need not, provide that all or any
portion of a Grantee's Award of Restricted Stock shall be forfeited: (i) upon
the Grantee's Termination of Employment within a specified time period after the
Grant Date, (ii) if the Company or the Grantee does not achieve specified
performance goals within a specified time period after the Grant Date and before
the Grantee's Termination of Employment, or (iii) on such other event(s) or
circumstance(s) as the Committee deems appropriate.

(d) Effect of Forfeiture. If a share of Restricted Stock is forfeited,
then: (i) the Grantee shall be deemed to have resold such share of Restricted
Stock to the Company at the lesser of (A) the purchase price paid by the Grantee
(such purchase price shall be deemed to be zero dollars ($0) if no purchase
price was paid) or (B) the Fair Market Value of a share of Stock on the date of
such forfeiture; (ii) the Company shall pay to the Grantee the amount determined
under clause (i) of this sentence as soon as is administratively practical; and
(iii) such share of Restricted Stock shall cease to be outstanding, and shall no
longer confer on the Grantee thereof any rights as a shareholder of the Company,

A-7

from and after the date of the Company's tender of the payment specified in
clause (ii) of this sentence, whether or not such tender is accepted by the
Grantee.

(e) Certificates. Any share of Restricted Stock which is subject to
forfeiture shall be held (together with a stock power executed in blank by the
Grantee if requested by the Committee) in escrow by the Secretary of the Company
until such shares become nonforfeitable or are forfeited and shall, if requested
by the Committee, bear an appropriate legend specifying that such share is
non-transferable and subject to the restrictions set forth in the Plan. If any
shares of Restricted Stock become nonforfeitable, the Company shall cause
certificates for such shares to be issued or reissued without such legend.

9. Stock Appreciation Rights.

(a) Grant of Stock Appreciation Rights. When granted, Stock Appreciation
Rights may, but need not, be identified with shares of Stock subject to a
specific Option, specific shares of Restricted Stock, or specific Performance
Units of the Grantee (including any Option, shares of Restricted Stock, or
Performance Units granted on or before the Grant Date of the Stock Appreciation
Rights) in a number equal to or different from the number of Stock Appreciation
Rights so granted. If Stock Appreciation Rights are identified with shares of
Stock subject to an Option, shares of Restricted Stock, or Performance Units,
then, unless otherwise provided in the applicable Award Agreement, the Grantee's
associated Stock Appreciation Rights shall terminate upon (i) the expiration,
termination, forfeiture, or cancellation of such Option, shares of Restricted
Stock, or Performance Units, (ii) the exercise of such Option or Performance
Units, or (iii) the nonforfeitability of such shares of Restricted Stock.

(b) Exercise of Stock Appreciation Rights. Each Stock Appreciation Right
shall be exercisable to the extent the Option with which it is identified, if
any, may be exercised, to the extent the Restricted Stock with which it is
identified, if any, is nonforfeitable, or to the extent the Performance Unit
with which it is identified, if any, may be exercised, unless otherwise provided
by the Committee. Stock Appreciation Rights shall be exercised by delivery to
the Company of written notice of intent to exercise a specific number of Stock
Appreciation Rights. Unless otherwise provided in the applicable Award
Agreement, the exercise of Stock Appreciation Rights which are identified with
shares subject to an Option, shares of Restricted Stock, or Performance Units
shall result in the cancellation or forfeiture of such Option, shares of
Restricted Stock, or Performance Units, as the case may be, to the extent of
such exercise.

(c) Benefit for Stock Appreciation Rights. The benefit for each Stock
Appreciation Right exercised shall be equal to the difference between: (i) the
Fair Market Value of a share of Stock on the date of such exercise and (ii) an
amount equal to: (A) for any Stock Appreciation Right identified with an Option,
the Option Price of such Option, unless the Committee in the grant of the Stock
Appreciation Right specified a higher amount, or (B) for any other Stock
Appreciation Right, the Fair Market Value of a share of Stock on the Grant Date
of such Stock Appreciation Right, unless the Committee in the grant of the Stock
Appreciation Right specified a higher amount; provided that the Committee, in
its discretion, may provide that the benefit for any Stock Appreciation Right
shall not exceed a stated percentage (which may exceed 100%) of the Fair Market
Value of a share of Stock on such Grant Date. The benefit upon the exercise of a
Stock Appreciation Right shall be payable in cash, except that the Committee,
with respect to any particular exercise, may, in its discretion, pay benefits
wholly or partly in Stock.

10. Performance Units.

(a) Grant of Performance Units.

(i) In connection with the grant of any Performance Unit, the Committee
shall: (A) determine performance goals ("Performance Goals") applicable to such
grant, (B) designate a period for the measurement of the extent to which
Performance Goals are attained, which period may begin prior to the Grant Date
(the "Measuring Period"), and (C) assign a "Performance Percentage" to each
level of attainment of Performance Goals during the Measuring Period, with the
percentage applicable to minimum attainment being zero percent (0%) and the
percentage applicable to maximum attainment (which may exceed 100%) to be
determined by the Committee from time to time.

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(ii) In establishing Performance Goals, the Committee may consider such
performance factor or factors as it deems appropriate, including share price,
revenue, net revenue, EBITDA, EBITDA before certain charges, net income, cash
flow (whether pre-tax or after tax), growth in net income or cash flow, earnings
per share, growth of earnings per share, market share, market penetration,
return on equity, return on assets, or return on capital. The Performance Goals
may include minimum and optimum objectives, a single set of objectives or
multiple sets of objectives. The Committee may, at any time, in its discretion,
modify Performance Goals in order to facilitate their attainment for any reason,
including recognition of unusual or nonrecurring events affecting the Company or
a Subsidiary or changes in applicable laws, regulations or accounting
principles. If a Grantee is promoted, demoted or transferred to a different
business unit of the Company during a performance period, the Committee may
adjust or eliminate the Performance Goals as it deems appropriate.

(iii) When granted, Performance Units may, but need not, be identified with
shares of Stock subject to a specific Option, specific shares of Restricted
Stock, or specific Stock Appreciation Rights of the Grantee granted under the
Plan or any Prior Plan in a number equal to or different from the number of the
Performance Units so granted. If Performance Units are identified with shares of
Stock subject to an Option, shares of Restricted Stock, or Stock Appreciation
Rights, then, unless otherwise provided in the applicable Award Agreement, the
Grantee's associated Performance Units shall terminate upon (A) the expiration,
termination, forfeiture, or cancellation of such Option, shares of Restricted
Stock, or Stock Appreciation Rights, (B) the exercise of such Option or Stock
Appreciation Rights, or (C) the nonforfeitability of such shares of Restricted
Stock.

(b) Exercise of Performance Units. Subject to Sections 13 and 18 and such
terms and conditions as the Committee may impose, if, with respect to any
Performance Unit, the minimum Performance Goals have been achieved during the
applicable Measuring Period, then such Performance Unit shall be exercisable
commencing on the first day after the end of the applicable Measuring Period or
such other date specified by the Committee. Performance Units shall be exercised
by delivery to the Company of written notice of intent to exercise a specific
number of Performance Units; provided, however, that Performance Units not
identified with an Option, shares of Restricted Stock, or Stock Appreciation
Rights shall be deemed exercised on the date on which they first become
exercisable unless another date is specified by the Committee in the grant of
the Performance Unit or in the determination of whether the Performance Goals
were met. After completion of the Measuring Period, the Committee shall certify
in writing the extent to which the Performance Goals and other material terms
applicable to such Award are attained. Unless and until the Committee so
certifies, the Award shall not be paid. Unless otherwise provided for in the
applicable Award Agreement, the exercise of Performance Units which are
identified with an Option, shares of Restricted Stock, or Stock Appreciation
Rights shall result in the cancellation or forfeiture of such Option, shares of
Restricted Stock, or Stock Appreciation Rights, as the case may be, to the
extent of such exercise.

(c) Benefit of Performance Unit. The benefit for each Performance Unit
exercised shall be an amount equal to the product of: (i) the Fair Market Value
of a share of Stock on the Grant Date of the Performance Unit multiplied by (ii)
the Performance Percentage attained during the Measuring Period for such
Performance Unit.

(d) Payment. The benefit upon the exercise of a Performance Unit shall be
payable as soon as is administratively practicable after the later of (i) the
date the Grantee exercises or is deemed to exercise such Performance Unit, or
(ii) the date (or dates in the event of installment payments) as provided in the
applicable Award Agreement. Such benefit shall be payable in cash, except that
the Committee, with respect to any particular exercise, may, in its discretion,
pay benefits wholly or partly in Stock. The number of shares of Stock payable in
lieu of cash shall be determined by valuing the Stock at its Fair Market Value
on the business day next preceding the date such benefit is to be paid.

11. No Employment Rights. Neither the establishment of the Plan, nor the
granting of any Award shall be construed to (i) give any Grantee the right to
remain employed by or affiliated with the Company or any of its Subsidiaries or
to any benefits not specifically provided by the Award Agreement, or (ii) in any
manner modify the right of the Company or any of its Subsidiaries to modify,
amend, or terminate this Plan or any of its employee benefit plans. No
obligation of the Company or any of its Subsidiaries as to the length of any
Grantee's employment by or affiliation with the Company or any Subsidiary shall
be implied by the terms of the Plan, any grant of an Award hereunder or any

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Award Agreement. The Company and its Subsidiaries reserve the same rights to
terminate employment of or sever its relationship with any Grantee as existed
before the Grant Date.

12. Non-Transferability.

(a) Except as permitted by the Committee in writing, each Award (other than
Restricted Stock) granted hereunder shall by its terms not be assignable or
transferable other than by will or the laws of descent and distribution and may
be exercised, during the Grantee's lifetime, only by the Grantee. Each share of
Restricted Stock shall be non-transferable until such share becomes
nonforfeitable.

(b) Notwithstanding the provisions of subsection (a), a Grantee may
transfer an Award to (i) Immediate Family Members; (ii) a trust or trusts for
the exclusive benefit of Immediate Family Members; or (iii) a partnership or
limited liability company in which the Grantee and/or the Immediate Family
Members of the Grantee are the only equity owners (collectively, "Eligible
Transferees"). An Award that is transferred to an Immediate Family Member shall
not be transferable by such Immediate Family Member, except for any transfer by
such Immediate Family Member's will or by the laws of descent and distribution
upon the death of the Immediate Family Member.

(c) In the event that a Grantee transfers an Award to an Eligible
Transferee under this Section 12, the Award transferred to the Eligible
Transferee must be exercised by such Eligible Transferee and, in the event of
the death of such Eligible Transferee, by such Eligible Transferee's executor or
administrator only in the same manner, to the same extent and under the same
circumstances (including, without limitation, the time period within which the
Award must be exercised) as the Grantee or, in the event of the Grantee's death,
the executor or administrator of the Grantee's estate, could have exercised such
Award. The Grantee, or in the event of the Grantee's death, the Grantee's
estate, shall remain liable for all federal, state, city and local taxes
applicable upon the exercise of an Award by an Eligible Transferee.

13. Effects of a Change in Control. The terms and provisions of this
Section 13 shall apply upon the occurrence of a Change in Control only if the
Committee shall have determined that this Section 13 shall be applicable. The
Committee shall give written notice to the Grantees of such a determination and
the date on which such determination is made. After the occurrence of a Change
in Control following the date on which such determination is made, then:

(a) General. Subject to Section 18 but notwithstanding Section 11 or any
other provisions of the Plan: (i) all Options, Stock Appreciation Rights, and
Performance Units granted under the Plan shall immediately be fully exercisable;
and (ii) all shares of Restricted Stock shall immediately be nonforfeitable and
freely transferable.

(b) Benefit. The benefit, if any, payable with respect to any Performance
Unit for which the Measuring Period has not ended shall be equal to the product
of: (i) the Fair Market Value of a share of Stock on the Grant Date of the
Performance Unit multiplied successively by each of the following; (ii) a
fraction, the numerator of which is the number of months (including as a whole
month any partial month) that have elapsed since the beginning of such Measuring
Period until the date of such Change in Control, and the denominator of which is
the number of months (including as a whole month any partial month) in the
Measuring Period; and (iii) a percentage equal to the greater of (A) the target
percentage, if any, specified in the applicable Award Agreement, or (B) the
maximum percentage, if any, that would be earned under the terms of the
applicable Award Agreement assuming that such rate at which the performance
goals have been achieved as of the date of the Change in Control would continue
until the end of the Measuring Period.

14. Loans and Guarantees. The Committee may, in its discretion:

(i) allow a Grantee to defer payment to the Company of all or any portion
of (i) the Option Price of an Option, (ii) the purchase price of a share of
Restricted Stock, or (iii) any taxes associated with a benefit hereunder which
is not a cash benefit at the time such benefit is so taxable, or

(ii) cause the Company to guarantee a loan from a third party to the
Grantee, in an amount equal to all or any portion of such Option Price, purchase

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price, or any related taxes. Any such payment deferral or guarantee by the
Company pursuant to this Section 14 shall be on a secured or unsecured basis for
such periods, at such interest rates, and on such other terms and conditions as
the Committee may determine. Notwithstanding the foregoing, a Grantee shall not
be entitled to defer the payment of such Option Price, purchase price, or any
related taxes unless the Grantee (i) enters into a binding obligation to pay the
deferred amount and (ii) pays upon exercise of an Option or grant of shares of
Restricted Stock, as the case may be, an amount equal to or greater than the
aggregate par value of all shares of Stock or Restricted Stock (other than
treasury shares) to be then delivered. If the Committee has permitted a payment
deferral or caused the Company to guarantee a loan pursuant to this Section 14,
then the Committee may, in its discretion, require the immediate payment of such
deferred amount or the immediate release of such guarantee upon the Grantee's
Termination of Employment or upon the Grantee's sale or other transfer of the
Grantee's shares of Stock purchased pursuant to such deferral or guarantee.

15. Notification under Section 83(b). If the Committee has not, on the
Grant Date or any later date, prohibited such Grantee from making the following
election, and a Grantee shall, in connection with the exercise of any Option, or
the grant of any share of Restricted Stock, make the election permitted under
Section 83(b) of the Code (i.e., an election to include in such Grantee's gross
income in the year of transfer the amounts specified in Section 83(b) of the
Code), such Grantee shall notify the Company of such election within 10 days of
filing notice of the election with the Internal Revenue Service, in addition to
any filing and notification required pursuant to regulations issued under the
authority of Section 83(b) of the Code.

16. Mandatory Withholding Taxes. Whenever under the Plan, cash or shares of
Stock are to be delivered upon exercise or payment of an Award or upon a share
of Restricted Stock becoming nonforfeitable, or any other event with respect to
rights and benefits hereunder, the Company shall be entitled to require as a
condition of delivery (i) that the Grantee remit an amount sufficient to satisfy
all federal, state and local withholding tax requirements related thereto, (ii)
the withholding of such sums from compensation otherwise due to the Grantee or
from any shares of Stock due to the Grantee under the Plan, or (iii) any
combination of the foregoing.

17. Elective Share Withholding.

(a) Election by Grantee. Subject to Section 17(b) and unless prohibited by
the Award Agreement, a Grantee may elect the withholding ("Share Withholding")
by the Company of a portion of the shares of Stock otherwise deliverable to such
Grantee upon the exercise or payment of an Award or upon a share of Restricted
Stock's becoming nonforfeitable (each a "Taxable Event") having a Fair Market
Value equal to: (i) the minimum amount necessary to satisfy required federal,
state, or local withholding tax liability attributable to the Taxable Event; or
(ii) with the Committee's prior approval, a greater amount, not to exceed the
estimated total amount of such Grantee's tax liability with respect to the
Taxable Event.

(b) Restrictions. Each Share Withholding election by a Grantee shall be
made in writing in a form acceptable to the Committee and shall be subject to
the following restrictions: (i) a Grantee's right to make such an election shall
be subject to the Committee's right to revoke such right at any time before the
Grantee's election if the Committee has reserved the right to do so in the Award
Agreement; (ii) the Grantee's election must be made before the date (the "Tax
Date") on which the amount of tax to be withheld is determined; (iii) the
Grantee's election shall be irrevocable by the Grantee; and (iv) in the event
that the Tax Date is deferred until six months after the delivery of Stock under
Section 83(b) of the Code, the Grantee shall receive the full amount of Stock
with respect to which the exercise occurs, but such Grantee shall be
unconditionally obligated to tender back to the Company the proper number of
shares of Stock on the Tax Date.

18. Termination of Employment.

(a) Restricted Stock. Except as otherwise provided by the Committee on or
after the Grant Date, a Grantee's shares of Restricted Stock that are
forfeitable shall be forfeited upon the Grantee's Termination of Employment.

(b) Other Awards. If the Grantee has a Termination of Employment for Cause,
any unexercised Option, Stock Appreciation Right, or Performance Unit shall
terminate upon the Grantee's Termination of Employment. If the Grantee has a
Termination of Employment for any reason other than Cause, then any unexercised
Option, Stock Appreciation Right, or Performance Unit, to the extent exercisable
on the date of the Grantee's Termination of Employment, may be exercised in
whole or in part, not later than the later of (A) the 180th day following the

A-11

Grantee's Termination of Employment or (B) the 30th day following the last day
for which the Grantee is entitled to severance payments under the Company's or
any Subsidiary's personnel policies, except that: (i) if the Grantee's
Termination of Employment is caused by the death of the Grantee, then any
unexercised Option, Stock Appreciation Right, or Performance Unit, shall vest on
the date of the Grantee's death, and may be exercised, in whole or in part, at
any time within one year after the Grantee's death by the Grantee's personal
representative or by the person to whom the Option, Stock Appreciation Right, or
Performance Unit is transferred by will or the applicable laws of descent and
distribution; (ii) if the Grantee's Termination of Employment is on account of
the Disability of the Grantee, then any unexercised Option, Stock Appreciation
Right, or Performance Unit shall vest on the date of the Termination of
Employment and may be exercised, in whole or in part, as if such Termination of
Employment had not occurred; provided that, if the Grantee dies after such
Termination of Employment, such Option, Stock Appreciation Right, or Performance
Unit may be exercised, to the extent exercisable on the date of the Grantee's
death, by the deceased Grantee's personal representative or by the person to
whom the Option, Stock Appreciation Right, or Performance Unit is transferred by
will or the applicable laws of descent and distribution within one year after
the Grantee's death, and (iii) if the Grantee's Termination of Employment
results from a sale of the station, magazine or other property at which Grantee
is employed or to which Grantee provides services, then any unvested Option that
was scheduled to vest within one year after the Termination of Employment shall
vest on the date of such Termination of Employment.

(c) Exceptions at the Discretion of the Committee. If the Grantee has a
Termination of Employment for any reason other than Cause, the Committee may
provide on or after the Grant Date (including after a Grantee's Termination of
Employment, but before the expiration of the term specified in the applicable
Award Agreement) for one or more of the following: (i) that any unexercised
Option, Stock Appreciation Right, or Performance Unit, to the extent exercisable
on the date of such Termination of Employment, may be exercised, in whole or in
part, at any time within a period specified by the Committee after the date of
such Termination of Employment; (ii) that any Option, Stock Appreciation Right,
or Performance Unit which is not exercisable on or before the date of such
Termination of Employment (A) will continue to become exercisable, as if such
Termination of Employment had not occurred, after such date for a period
specified by the Committee and (B) to the extent such Option, Stock Appreciation
Right, or Performance Unit has become exercisable during such period, may be
exercised, in whole or in part, at or before the end of such period; (iii) that
any share of Restricted Stock that has not become nonforfeitable on or before
the date of such Termination of Employment may become nonforfeitable as if such
Termination of Employment had not occurred after such date for a period
specified by the Committee; or (iv) that if the Grantee dies after such
Termination of Employment and before the expiration of the period specified
under clause (i) or (ii) of this Section 18(c), such Option, Stock Appreciation
Right, or Performance Unit may be exercised by the deceased Grantee's personal
representative or by the person to whom the Option, Stock Appreciation Right, or
Performance Unit is transferred by will or the applicable laws of descent and
distribution within the specified period after the Grantee's Termination of
Employment, or, if later, within 180 days after the Grantee's death; provided
that if such rights are granted, the Committee may thereafter take actions to
limit such rights but only if such limitation is consented to by the Grantee.

(d) Maximum Extension. Notwithstanding the foregoing, no Award shall be
exercisable beyond the maximum term permitted under the original Award Agreement
unless the Committee explicitly extends such original term, in which case such
term shall not be extended beyond the maximum term permitted by the Plan.

19. Substituted Awards. If the Committee cancels any Award (granted under
this Plan, any prior equity incentive plan(s) of the Company, or any plan of any
entity acquired by the Company or any of its Subsidiaries), and a new Award is
substituted therefore, then the Committee may, in its discretion, determine the
terms and conditions of such new Award and may, in its discretion, provide that
the grant date of the canceled Award shall be the date used to determine the
earliest date or dates for exercising the new substituted Award so that the
Grantee may exercise the substituted Award at the same time as if the Grantee
had held the substituted Award since the grant date of the canceled Award;
provided that no award shall be canceled without the consent of the Grantee if
the terms and conditions of the new Award to be substituted are not at least as
favorable as the terms and conditions of the award to be canceled.

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20. Securities Law Matters.

(a) Legend and Investment Representation. If the Committee deems necessary
to comply with the Securities Act of 1933, or any rules, regulations or other
requirements of the SEC or any stock exchange or automated quotation system, the
Committee may require a written investment intent representation by the Grantee
and may require that a restrictive legend be affixed to certificates for shares
of Stock, or that the Stock be subject to such stock transfer orders and other
restrictions as the Committee may deem necessary or advisable.

(b) Postponement by Committee. If based upon the opinion of counsel for the
Company, the Committee determines that the exercise or nonforfeitability of, or
delivery of benefits pursuant to, any Award would violate any applicable
provision of (i) federal or state securities law or (ii) the listing
requirements of any national securities exchange or the requirements of any
automated quotation system on which are listed or quoted any of the Company's
equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as the case may be, but the Company shall use
reasonable and good faith efforts to cause such exercise, nonforfeitability or
delivery to comply with all such provisions at the earliest practicable date.
The Committee's authority under this Section 20(b) shall expire on the date of
the first Change in Control to which Section 13 applies.

(c) No Obligation to Register or List. The Company shall be under no
obligation to register the Stock with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company shall have
no liability for any inability or failure to do so.

21. Funding. Benefits payable under the Plan to any person shall be paid
directly by the Company. The Company shall not be required to fund, or otherwise
segregate assets to be used for payment of, benefits under the Plan.

22. Rights as a Shareholder. A Grantee shall not, by reason of any Award
(other than Restricted Stock) have any right as a shareholder of the Company
with respect to the shares of Stock which may be deliverable upon exercise or
payment of such Award until such shares have been delivered to such Grantee.
Shares of Restricted Stock held by a Grantee or held in escrow by the Company or
by an agent of the Company shall confer on the Grantee all rights of a
shareholder of the Company, except as otherwise provided in the Plan. The
Committee, in its discretion, at the time of grant of Restricted Stock, may
permit or require the payment of cash dividends thereon to be deferred and, if
the Committee so determines, reinvested in additional Restricted Stock to the
extent shares are available under Section 3, or otherwise reinvested. Stock
dividends and deferred cash dividends issued with respect to Restricted Stock
shall be treated as additional shares of Restricted Stock that are subject to
the same restrictions and other terms as apply to the shares with respect to
which such dividends are issued. The Committee may, in its discretion, provide
for crediting to and payment of interest on deferred cash dividends.

23. Escrow; Pledge of Shares. To enforce any restrictions on a Grantee's
Stock, the Committee may require the Grantee to deposit all certificates
representing such Stock, together with stock powers or other instruments of
transfer approved by the Committee, appropriately endorsed in blank, with the
Company or an agent designated by the Company to hold in escrow until such
restrictions have lapsed or terminated, and the Committee may cause a legend or
legends referencing such restrictions to be placed on the certificates. Any
Grantee who is permitted to execute a promissory note as partial or full
consideration for the purchase of Stock under the Plan shall be required to
pledge and deposit with the Company all or part of the Stock so purchased as
collateral to secure the payment of the Grantee's obligation to the Company
under the promissory note; provided, however, that the Committee may require or
accept other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company shall have full recourse against the
Grantee under the promissory note notwithstanding any pledge of the Grantee's
Stock or other collateral. In connection with any pledge of the Stock, the
Grantee shall be required to execute and deliver a written pledge agreement in
such form as the Committee shall from time to time approve. The Stock purchased
with the promissory note may be released from the pledge on a pro rata basis as
the promissory note is paid.

24. Nature of Payments. Unless otherwise determined by the Committee, any
and all grants, payments of cash, or deliveries of shares of Stock hereunder
shall constitute special incentive payments to the Grantee and shall not be
taken into account in computing the amount of salary or compensation of the

A-13

Grantee for the purposes of determining any pension, retirement, death or other
benefits under (i) any pension, retirement, profit-sharing, bonus, life
insurance or other employee benefit plan of the Company or any of its
Subsidiaries, or (ii) any agreement between the Company or any Subsidiary, on
the one hand, and the Grantee, on the other hand, except as such plan or
agreement shall otherwise expressly provide.

25. Non-Uniform Determinations. The Committee's determinations under the
Plan need not be uniform and may be made by the Committee selectively among
persons who receive, or are eligible to receive, Awards (whether or not such
persons are similarly situated). Without limiting the generality of the
foregoing, the Committee shall be entitled, among other things, to make
non-uniform and selective determinations and to enter into non-uniform and
selective Award Agreements as to (i) the identity of the Grantees, (ii) the
terms and provisions of Awards, and (iii) the treatment, under Section 18, of
Terminations of Employment. Notwithstanding the foregoing, the Committee's
interpretation of Plan provisions shall be uniform as to similarly situated
Grantees.

26. Adjustments. The Committee shall make equitable adjustment of: (i) the
aggregate numbers of shares of Stock, shares of Restricted Stock and Stock
Appreciation Rights, available under Sections 3(a) and 3(b), (ii) the number of
shares of Stock or shares of Restricted Stock covered by an Award, (iii) the
Option Price, (iv) the Fair Market Value of Stock to be used to determine the
amount of the benefit payable upon exercise of Stock Appreciation Rights or
Performance Units, and (v) all other matters relating to the Plan and any
Awards, including the type of securities or property, if any, to be paid in
connection with any Award, all in such manner as may be determined by the
Committee in its discretion in order to prevent dilution or enlargement of the
rights of any Grantee pursuant to any Award under the Plan, to reflect a stock
dividend, stock split, reverse stock split, share combination, recapitalization,
reclassification, merger, consolidation, asset spin-off, reorganization, or
similar event of or by the Company.

27. Adoption and Shareholder Approval. The Plan shall be approved or
ratified by the shareholders of the Company (excluding holders of Stock issued
pursuant to this Plan), consistent with applicable laws, including but not
limited to Section 162(m)(4)(C) (ii) of the Code, within 12 months before or
after the Effective Date. Upon the Effective Date, Awards may be granted
pursuant to the Plan; provided, however, that: (i) no Option may be exercised
prior to initial shareholder approval of the Plan; (ii) no Option granted
pursuant to an increase in the number of shares of Stock approved by the Board
shall be exercised prior to the time such increase has been approved by the
shareholders of the Company; and (iii) in the event that shareholder approval is
not obtained within the time period provided herein, all Awards granted
hereunder shall be canceled, any Stock issued pursuant to any Award shall be
canceled and any purchase of Stock hereunder shall be rescinded.

28. Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board, the submission of the Plan to the shareholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board or the Committee to adopt such additional
compensation arrangements as it may deem desirable, including the granting of
stock options and bonuses otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific cases.

29. Amendment and Termination of the Plan. Subject to any applicable
shareholder approval requirements of applicable law or the rules of any national
securities exchange, stock market or automated quotation service on which the
Stock is listed or quoted, the Plan may be amended by the Board at any time and
in any respect. The Plan may also be terminated at any time by the Board and
shall terminate automatically on the tenth anniversary of the Effective Date
unless earlier terminated by the Board. No amendment or termination of this Plan
shall adversely affect any Award granted prior to the date of such amendment or
termination without the written consent of the Grantee.

30. Weekends and Holidays. Unless this Section prevents an Option designed
to qualify as an Incentive Stock Option under Section 422 of the Code from
qualifying as an Incentive Stock Option under Section 422 of the Code or
prevents an Award designed to qualify as performance-based compensation under
Section 162(m) of the Code from qualifying as performance-based compensation
under Section 162(m) of the Code, if any day on which action under the Plan must
be taken falls on a Saturday, Sunday or holiday recognized as an official
holiday of the Company, such action may be taken on the next succeeding day not
a Saturday, Sunday or holiday.

A-14

31. Foreign Grantees. Without amending the Plan, Awards may be granted to
Grantees who are foreign nationals or employed outside the United States or
both, on such terms and conditions different from those specified in the Plan as
may, in the judgment of the Committee, be necessary or desirable to further the
purposes of the Plan.

32. Interpretation under Section 162(m). Notwithstanding any provision of
the Plan to the contrary, the Plan is intended to give the Committee the
authority to grant Awards hereunder that qualify as performance-based
compensation under Code Section 162(m)(4)(C) and that do not so qualify. Every
provision of the Plan shall be administered, interpreted and construed to carry
out such intention and any provision that cannot be so administered, interpreted
and construed shall to that extent be disregarded; and any provision of the Plan
that would prevent an Award that the Committee intends to qualify as
performance-based pay under Code Section 162(m)(4)(C) from so qualifying shall
be administered, interpreted and construed to carry out such intent and any
provision that cannot be so administered, interpreted and construed shall to
that extent be disregarded.

33. Applicable Law. The validity, construction, interpretation and
administration of the Plan and of any determinations or decisions made
thereunder, and the rights of all persons having or claiming to have any
interest therein or thereunder, shall be governed by, and determined exclusively
in accordance with, the laws of the State of Indiana, but without giving effect
to the principles of conflicts of laws thereof. Without limiting the generality
of the foregoing, the period within which any action arising under or in
connection with the Plan must be commenced shall be governed by the laws of the
State of Indiana, without giving effect to the principles of conflicts of laws
thereof, irrespective of the place where the act or omission complained of took
place and of the residence of any party to such action and irrespective of the
place where the action may be brought.

34. Construction. The use of the masculine gender shall also include within
its meaning the feminine. The use of the singular shall include within its
meaning the plural and vice versa.

A-15

[LOGO]

ELECTRONIC ACCESS TO FUTURE DOCUMENTS

We are pleased to offer our shareholders the option to access future shareholder
communications (for example, annual reports and proxy statements) from us or on
our behalf over the Internet, instead of receiving those documents in printed
form. Your participation is completely voluntary. If you give your consent, we
will notify you when material is available over the Internet and provide you
with the Internet location where the material is available. Once you give your
consent, it will remain in effect until you inform us otherwise.

To give your consent, check the box located at the bottom of the attached proxy
card. You may also give your consent by telephone or e-mail as described in the
proxy statement.

To enable us to send you notification of shareholder communications by e-mail,
please provide your e-mail address in the space at the bottom of the attached
proxy card. There is no cost to you for this service other than any charges you
may incur from your Internet provider, telephone company and/or cable company.

If you are an Emmis employee or a shareholder who has previously consented to
electronic delivery of shareholder communications and have received this proxy
card without an accompanying proxy statement and annual report, you may view
those documents at the "Investors" section of www.emmis.com.

FOLD AND DETACH HERE

EMMIS COMMUNICATIONS CORPORATION
40 Monument Circle
Indianapolis, Indiana 46204

This Proxy is Solicited on Behalf of the Emmis Communications Corporation Board of Directors

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 annual meeting of Shareholders to be held on June
25, 2002, at 10:00 a.m., and at any adjournment thereof.

1. ELECTION OF DIRECTORS FOR A TERM OF THREE YEARS.
[ ] FOR all nominees listed below (except as written below) [ ] WITHHOLD AUTHORITY to vote for all nominees

Nominees: Richard A. Leventhal, Lawrence B. Sorrel

(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space below.)

2. PROPOSAL TO APPROVE THE EMMIS COMMUNICATIONS CORPORATION 2002 EQUITY COMPENSATION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

[ ] I consent to access future shareholder communications released after
June 30, 2002 over the Internet as described above and in the proxy
statement. My e-mail address is:
---------------------------------------------------------------------------

(continued on other side)

FOLD AND DETACH HERE

This proxy is solicited on behalf of the Emmis Communications Corporation Board
of Directors. 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 and 2.

The undersigned acknowledges receipt, prior to the execution of this proxy, of
notice of the meeting, a proxy statement, and an annual report to shareholders.

Dated:_________________________________________, 2002

-----------------------------------------------------
(Signature)

-----------------------------------------------------
(Signature if held jointly)

Please sign exactly as name appears below. 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