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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