8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 19, 2005

SAGA COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction
of incorporation) 1-11588
(Commission File Number) 38-3042953
(IRS Employer
Identification No.)

73 Kercheval Avenue
Grosse Pointe Farms, MI
(Address of Principal Executive Offices) 48236
(Zip Code)

Registrant’s telephone number, including area code: (313) 886-7070

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01. Entry into a Material Definitive Agreement.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
INDEX OF EXHIBITS
EX-10.(M) AMENDMENTS TO 1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
EX-99.1 SUMMARY STOCK OPTIONS SUBJECT TO ACCELERATED VESTING
EX-99.2 SUMMARY OF CANCELLED STOCK OPTIONS

Item 1.01. Entry into a Material Definitive Agreement.

Acceleration of Vesting of, and of Buyback and Cancellation of, Stock Options

On December 19, 2005, the Board of Directors and the Compensation Committee of the Board of Directors of Saga Communication, Inc. (the “Company”) approved the acceleration of the vesting of:

(i) all options granted under the Company’s 1992 Stock Option Plan that had not yet vested or options relating to 112,744 shares; and

(ii) all options granted to non-executive officers under the Company’s 2003 Stock Option Plan that had not yet vested or options relating to 149,219 shares.

All of such options are “out-of-the-money” (the exercise price exceeds the closing price of the stock as reported on the NYSE) as of the close of business on December 16, 2005.

As a result of the Committee’s action, the referenced options became exercisable as of the close of business on December 19, 2005, rather than the later dates when such options, would have vested. The table attached as Exhibit 99.1 summarizes the outstanding stock options held by the Company’s executive officers and all other non-executive officers that were accelerated.

On December 19, 2005, the Board of Directors and the Committee also approved an offer to buy back all options granted to executive officers under the Company’s 2003 Stock Option Plan for the payment of $0.10 per share, a price determined after consulting an independent valuation firm, in return for the cancellation of such options. All of such options are out-of-the-money as of the close of business on December 16, 2005. The table attached as Exhibit 99.2 summarizes the outstanding stock options held by the Company’s executive officers that were cancelled and the consideration paid therefor. The Company must recognize the consideration paid to such executive officers as compensation expense in 2005.

The decision to accelerate the vesting of, and to buyback and cancel, the referenced respective stock options, which the Company believes is in the best interests of stockholders, was made primarily to reduce share-based compensation expense that otherwise likely would be recorded in future periods following the Company’s anticipated adoption in the first quarter of 2006 of Statement of Financial Accounting Standards No. 123(R) entitled “Share-Based Payment: (“SFAS 123(R)”). On December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS 123(R) which requires all share-based payments to employees, including grants of employee stock options, to be valued at fair value on the date of grant, and to be expensed over the applicable vesting period. SFAS123(R) will require that compensation expense associated with stock options be recognized in the income statement of the Company rather than as a footnote disclosure. The Company must recognize compensation expense related to any awards that are not fully vested as of the effective date, January 1, 2006. Upon adoption by the Company, SFAS123(R) also will apply to options granted on or after January 1, 2006.

The Company estimates that these actions will result in a reduction of approximately $2.7 million, net of income taxes, in the Company’s share-based compensation expense that likely would have been recorded for 2006, 2007, 2008 and 2009 in the aggregate.

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1997 Non-Employee Director Stock Option Plan

     On December 19, 2005, the Board of Directors approved amendments to the 1997 Non-Employee Director Stock Option Plan attached hereto as Exhibit 10 (M). The changes to the Plan, as set forth in Exhibit 10 (M), are intended to satisfy certain requirements of the Internal Revenue Code under Section 409A relating to deferred compensation.

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Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits.

10(M)	Amendments to Saga Communications, Inc. 1997 Non-Employee Director Stock Option Plan
99.1	Summary of Stock Options Subject to Accelerated Vesting.
99.2	Summary of Cancelled Stock Options.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SAGA COMMUNICATIONS, INC.
Dated: December 23, 2005	By:	/s/ Samuel D. Bush
		Samuel D. Bush
		Senior Vice President, Chief Financial Officer and Treasurer

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INDEX OF EXHIBITS

Exhibit No.	Description
10(M)	Amendments to Saga Communications, Inc. 1997 Non-Employee Director Stock Option Plan.
99.1	Summary of Stock Options Subject to Accelerated Vesting.
99.2	Summary of Cancelled Stock Options.

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EX-10.(M)

Exhibit 10 (M)

Amendments to Saga Communications, Inc. 1997 Non-Employee Director Stock Option Plan

     (as adopted by the Board of Directors of Saga Communications, Inc. effective as of December 19, 2005.)

     1. New Sections 3.2 and 3.3 are inserted to read as follows, and the remaining subsections of Section 3 are renumbered accordingly:

3.2	“’Change in Effective Control of the Company’ has the meaning as provided in Prop. Treas. Reg. § 1.409A-3(g)(5)(vi) or applicable final regulation promulgated under § 409A of the Internal Revenue Code of 1986.”
3.3	“’Change in a Substantial Portion of the Assets of the Company’ has the meaning as provided in Prop. Treas. Reg. § 1.409A-3(g)(5)(vii) or applicable final regulation promulgated under § 409A of the Internal Revenue Code of 1986.”

     2. Section 5.3 of the Plan is amended to read in it entirety as follows:

     “Vesting. An Option shall vest immediately upon its grant; provided, however, that any Option granted prior to the date of shareholder approval of this Plan as referred to in Section 2.2 hereof shall not vest and become exercisable until the date of such shareholder approval.

     3. A new Section 5.4 is inserted to read as follows and the remaining subsections of Section 5 are renumbered accordingly:

     “Exercise. An Option shall become exercisable at the election of a Director according to Election I, Election II or Election III as provided in this Section 5.4. Such elections shall be in writing and delivered to the Board no later than December 31 of the year before the year in which the Director earns a retainer to which such Option is related, and such election shall become irrevocable on such December 31. Directors may elect that an Option shall become exercisable: Election I, upon the date it is granted, Election II, upon the first to occur of the following events, (a) the date upon which the Director resigns or is no longer a member of the Board, (b) the date of a Change in Effective Control of the Company or the date of a Change in a Substantial Portion of the Assets of the Company, (c) the death of the Director, (d) the expiration of a number of years, specified by the Director in his or her written election, after the date an Option is granted, or (e) the date twelve months before the Option would otherwise expire under Section 5.5(1), or Election III, upon the first to occur of the following events, (a) the date upon which the Director resigns or is no longer a member of the Board, (b) the date of a Change in Effective Control of the Company or the date of a Change in a Substantial Portion of the Assets of the Company, (c) the death of the Director, or (d) the date twelve months before the Option would otherwise expire under Section 5.5(1). If a Director makes no election, he or she shall be deemed to have opted for Election III.

     4. Section 5.5 of the Plan is amended to read in it entirety as follows:

     “Expiration. Each Option shall expire and no longer be exercisable upon the first to occur of, (1) the date which is ten years from the date upon which the Option is granted, or (2) the March 16^th following the calendar year in which the Option first becomes exercisable as provided in Section 5.4 hereof.”

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EX-99.1

Exhibit 99.1

Summary of Stock Options Subject to Accelerated Vesting

		Aggregate number of
		shares issuable upon		Weighted average
		acceleration of		exercise price per
1992 Stock Option Plan	Title	unvested stock options		share
Edward K. Christian	President and Chief Executive Officer		4,636	$	14.24
Samuel Bush	Senior Vice President and Chief Financial Officer		3,469		14.24
Warren Lada	Senior Vice President - - Operations		3,689		14.24
Steven Goldstein	Executive Vice President and Group Program Director		18,984		18.47
Marcia Lobaito	Senior Vice President, Corp. Secretary		9,455		18.28
Catherine Bobinski	VP/Controller, Chief Accounting Officer		9,301		18.24
Subtotal of Stock Options of Executive Officers			49,534	$	17.38
Non Executive Officers			63,210	$	18.10
Total of Stock Options from 1992 Stock Option Plan			112,744	$	17.78
2003 Stock Option Plan
Non-Executive Officers			149,219	$	19.27

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EX-99.2

Exhibit 99.2

Summary of Cancelled Stock Options

		Aggregate number of		Weighted average		Consideration
		stock options		exercise price per
	Title	cancelled		share *
Edward K. Christian	President and Chief Executive Officer		339,343	$	19.22	$	33,934.30
Samuel Bush	Senior Vice President and Chief Financial Officer		141,272	$	19.22		14,127.20
Warren Lada	Senior Vice President — Operations		144,215	$	19.22		14,421,50
Steven Goldstein	Executive Vice President and Group Program Director		149,278	$	19.22		14,927.80
Marcia Lobaito	Senior Vice President, Corp. Secretary		53,213	$	19.22		5,321.30
Catherine Bobinski	VP/Controller, Chief Accounting Officer		51,800	$	19.22		5,180.00
Total			879,121	$	19.22	$	87,912.10

     *The options were exercisable in 20% increments on March 1, 2004, 2005, 2006, 2007 and 2008, respectively, provided that the fair market value of Class A Common Stock attained $30.95 per share (subject to adjustment for stock splits, stock dividends or other similar change in common stock) on or before June 2, 2008 and either (i) remained at or above such value for 10 consecutive trading days, or (ii) averaged at or above such value for a period of 20 consecutive trading days. If a Change of Control (as defined in the Option Plan) occurred, these options would have become immediately exercisable.

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