Salem Media Group, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

STOCK INCENTIVE PLAN (Tables)

STOCK INCENTIVE PLAN (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock-Based Compensation Expense Recognized

The following table reflects the components of stock-based compensation expense recognized in the Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 2018 and 2017:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2018			2017			2018
	(Dollars in thousands)						(Dollars in thousands)
Stock option compensation expense included in unallocated corporate expenses	$	28		$	76		$	99		$	100
Restricted stock shares compensation expense included in unallocated corporate expenses		—			—			875			—
Stock option compensation expense included in broadcast operating expenses		6			29			34			42
Restricted stock shares compensation expense included in broadcast operating expenses		—			—			224			—
Stock option compensation expense included in digital media operating expenses		5			18			19			23
Restricted stock shares compensation expense included in digital media operating expenses		—			—			124			—
Stock option compensation expense included in publishing operating expenses		5			3			14			7
Restricted stock shares compensation expense included in publishing operating expenses		—			—			36			—
Total stock-based compensation expense, pre-tax	$	44		$	126		$	1,425		$	172
Tax expense for stock-based compensation expense		(18	)		(33	)		(570	)		(45	)
Total stock-based compensation expense, net of tax	$	26		$	93		$	855		$	127

Schedule of Weighted-Average Assumptions Used to Estimate Fair Value of Stock Options and Restricted Stock Awards using Black-Scholes Option Valuation Model

The weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes valuation model were as follows for the three and six month periods ended June 30, 2018:

	Three Months Ended June 30, 2018			Six Months Ended June 30, 2018
Expected volatility		41.82	%		41.84	%
Expected dividends		8.0	%		7.89	%
Expected term (in years)		7.4			7.4
Risk-free interest rate		2.95	%		2.93	%

Schedule of Stock Option Activity

Activity with respect to the company’s option awards during the six month period ended June 30, 2018 is as follows:

Options	Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(Dollars in thousands, except weighted average exercise price and weighted average grant date fair value)
Outstanding at January 1, 2018		1,428,462		$	5.20	$	2.96	3.7 years	$	653
Granted		642,000			3.30		1.86
Exercised		(8,750	)		2.61		2.18		$	12
Forfeited or expired		(50,625	)		5.04		3.56		$	11
Outstanding at June 30, 2018		2,011,087		$	4.61	$	2.60	4.5 years	$	2,156
Exercisable at June 30, 2018		1,085,331		$	5.44	$	3.36	2.7 years	$	742
Expected to Vest		879,005		$	4.63	$	2.62	4.5 years	$	1,351