Emmis Communications Corp. has missed dividend payments for six consecutive quarters, putting its preferred stockholders in line to elect two new directors to the company’s board.

The Indianapolis-based media company disclosed the upcoming change in its governance structure Thursday in a filing with the Securities and Exchange Commission. In a telephone interview Friday morning, Emmis General Counsel and Secretary J. Scott Enright said the company owes its preferred stockholders about $14 million in missed dividends. A missed payment Thursday triggered the board expansion.

Emmis' board currently has eight seats. As a result of its missed dividends, holders of the company's 3 million or so preferred shares have until the end of the day April 26 to nominate candidates to fill two new board positions. Preferred shareholders will vote exclusively on the two seats at Emmis' annual meeting July 14, with one vote per share owned.

Enright said the two candidates who get the most votes will be added to the Emmis board and will serve one-year terms.  Nominees are eligible for consideration so long as their service doesn’t create SEC ownership conflicts. Emmis' corporate governance guidelines prohibit directors from serving on more than six other public company boards; forbid them from holding interest in other broadcasters that would cause Emmis to violate FCC ownership limits; and require them not to be older than 70.

The two new board seats would be eliminated as soon as Emmis becomes current on its dividends, Enright said. The two new directors will receive the same compensation as other board members.

“They’ll be full-fledged members of the board of directors,” Enright said. “They’ll be up for re-election every year until we take care of the dividend arrearage.”

The new directors will have their first opportunity to influence Emmis direction at a board meeting immediately after the company’s annual meeting, Enright said.

Emmis lost $309.2 million in the fiscal year ended Feb. 28, 2009. The company has not yet disclosed full results for its latest fiscal year.