What The Emmis Shareholder Meeting is About

9-4-2012

Now that a court has ruled in favor of Emmis, the company will hold a shareholder meeting Tuesday at Emmis headquarters in Indianapolis. The meeting is being held so shareholders can vote on amendments to the preferred stock. The first of seven amendments to be considered would be to remove Emmis' obligation to pay preferred shareholders back dividends. Emmis sued the preferred shareholders hoping for the result that was handed down by the judge on Friday before moving forward with the vote that will take place today.

A majority of the Emmis Board believes the amendments will have a positive impact on Emmis' capital structure. It's been reported that preferred shareholders are owed about $34 million in dividends, dating back to 2008. More specifically, according to an SEC filing, the Emmis Board believes the amendments will provide Emmis with greater flexibility in recapitalizing and improving its balance sheet; enhance the value of the common stock and reduce debt. Emmis has been aggressively selling radio stations and its magazine business to reduce debt.

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Court Sides With Emmis in Shareholder Case

A U.S. District Court has denied a request for a preliminary injunction by a group of Emmis preferred shareholders who claimed, among other things, that Emmis should not have bought back preferred stock without first paying dividends. The company stopped paying dividends on the preferred stock in 2008. Smulyan tells Radio Ink he is very very pleased." An Emmis shareholder meeting is scheduled for next week. It was postponed until a judge made a ruling in this case. The court said the plaintiffs failed to demonstrate that they'd have a reasonable likelihood of prevailing in court with their contention that Emmis violated the law and its own articles of incorporation, and therefore their request "failed to meet any of the threshold requirements for injunctive relief." The ruling says, "At this preliminary stage of the litigation, Plaintiffs have failed to show that Defendants? actions contravened either the [Indiana Business Corporation Law] or the relevant federal securities disclosure laws."

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No Ruling Yet in Emmis Shareholder Fight

8-1-2012

Bloomberg reports that a federal judge will hear more arguments today after Emmis CEO Jeff Smulyan, COO Pat Walsh and representatives from the preferred shareholders group testified Tuesday. The investors want the judge to block an August 14th shareholder meeting from taking place. It's at that meeting where millions of dollars in preferred stock dividends might be wiped away. Smulyan told the judge he did not have plans to take the company private, which is one of the accusations being made by the preferred shareholders. They are also worried they are about two weeks away from losing millions of dollars. 

According to Bloomberg, Emmis attorney Richard Kempf said, ?Emmis management is fulfilling its responsibility. It?s impossible for every constituency to be satisfied.? Smulyan testified he did not have plans to take the company private. He tried that and doesn't want to go down that road again. ?I?m worn out from two years ago. I just don?t want to do it. I can?t foresee a situation in which that would change.?

John Barrett from Core partners told the court that Walsh warned him last year Corre risked its investment being rendered worthless if it didn?t participate in the swaps program, according to the Bloomberg report. Barrett said he came away from that conversation believing Walsh had effectively said, ?I?m going to annihilate you.? When asked about that conversation, Walsh said he did not attempt to threaten Barrett ?There?s no coercion. I?m not allowed to coerce."

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Crucial Emmis Shareholder Meeting Monday

4-2-2012

Emmis Communications will hold a shareholder meeting Monday at 11AM Indy time at the Emmis HQ building at One Emmis Plaza. The special meeting is being held for holders of Emmis? common stock to consider and vote upon a proposal to approve the 2012 Retention Plan and Trust Agreement and for holders of Emmis? 6.25% Series A Cumulative Convertible Preferred Stock to vote to elect a director to fill the vacancy created by the resignation of Joseph Siegelbaum in November 2011. Here are more details about why this meeting is taking place and a link to a New York Times article that takes an unfavorable look at what Emmis is attempting to do. The Times piece is called: "A Strategy to Vote Dead Shares."

The Emmis board of directors has adopted the 2012 Retention Plan and Trust Agreement because "a majority of the board of directors believes that adoption of the 2012 Retention Plan and the entry into the Voting and Transfer Restriction Agreement described below will provide Emmis with flexibility to amend the terms of the Preferred Stock that are set forth in the Articles of Incorporation, which amendment is being proposed pursuant to the preliminary proxy statement on Schedule 14A filed by Emmis with the SEC on March 13, 2012, as the same may be amended from time to time.  In addition, our board of directors believes the 2012 Retention Plan will increase employee stock ownership opportunities, improve Emmis? ability to retain a team of outstanding employees, and compensate employees for prior reductions in base salaries, a lack of merit increases for the current year and the increase in the employees? share of benefit costs. No executive officers or part time employees will be eligible to participate in the 2012 Retention Plan."

READ THE NEW YORK TIMES ARTICLE CALLED "A STRATEGY TO VOTE DEAD SHARES."
Here is Emmis' response to the Times article. "This morning the New York Times wrote about the company's dispute with its dissident preferred shareholders. Unfortunately, the story does not fully represent Emmis' stance, which has not wavered: we offered a transparent process to all our preferred shareholders, including the few remaining holdouts. Holders of the vast majority of preferred shares saw the offer as fair and reasonable and accepted it."

If the 2012 Retention Plan is approved, the Trustee and the Trust will enter into a Voting and Transfer Restriction Agreement with Emmis, pursuant to which Emmis will have the right to direct the vote of 400,000 shares of Preferred Stock contributed to the Trust under the 2012 Retention Plan.  In addition, the Voting and Transfer Restriction Agreement will provide the company the right to repurchase the Preferred Stock contributed to the Trust in exchange for the number of shares of Class A Common Stock into which the contributed Preferred Stock is convertible at the time the repurchase right is exercised. 

EMMIS SUES PREFERRED SHAREHOLDERS

Emmis has already entered into total return swaps and voting agreements with certain other holders of Preferred Stock, and, giving effect to the entry into the Voting and Transfer Restriction Agreement with the Trustee of the Trust, Emmis will have the right to direct the vote of 1,884,679 shares of Preferred Stock, representing approximately 66.8% of the outstanding Preferred Stock (including the shares of Preferred Stock to be issued under the 2012 Retention Plan). Emmis intends to direct the vote of the above-described shares of Preferred Stock in favor of the proposals to adopt the Charter Amendments.

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Clear Channel, Entercom Announce Results Of Shareholder Meetings

May 19, 2011: Clear Channel Communications parent CC Media Holdings held its annual shareholders' meeting on Tuesday, with shareholders electing 12 nominees to the board of directors, including former CEO Mark Mays and former president/CFO Randall Mays.

Additionally, an advisory vote was held on how often the company should hold advisory votes on its executive compensation. A majority of shareholders voted that such votes should be held every three years, and the board is taking the advice and will include the vote in proxy materials every three years -- until the next advisory vote on the frequency of advisory votes is due. The SEC requires a vote at least once every six years.

Entercom Communications also held its shareholders' meeting on May 17, electing its board and getting shareholder approval for an amendment to the company's equity compensation plan. Entercom's shareholders also voted to hold an advisory vote on executive compensation every three years.

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