Salem Media Group, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

STOCK INCENTIVE PLAN (Tables)

STOCK INCENTIVE PLAN (Tables)

12 Months Ended

Dec. 31, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation Expense Recognized

The following table reflects the components of stock-based compensation expense recognized in the Consolidated Statements of Operations for the years ended December 31, 2011, 2012 and 2013:


	Year Ended December 31,
	2011			2012			2013
	(Dollars in thousands)
Stock option compensation expense included in corporate expenses	$	603		$	933		$	766
Restricted stock shares compensation expense included in corporate expenses		4			—			481
Stock option compensation expense included in broadcast operating expenses		281			305			302
Stock option compensation expense included in Internet operating expenses		52			111			253
Stock option compensation expense included in publishing operating expenses		10			19			47

Total stock-based compensation expense, pre-tax	$	950		$	1,368		$	1,849

Tax benefit (expense) from stock-based compensation expense		(220	)		(579	)		(740	)

Total stock-based compensation expense, net of tax	$	730		$	789		$	1,109

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 and restricted shares using the Black-Scholes valuation model were as follows for the years ended December 31, 2011, 2012 and 2013:


	Year Ended December 31,
	2011			2012			2013
Expected volatility		101.49	%		102.37	%		100.78	%
Expected dividends		0.0	%		5.07	%		2.05	%
Expected term (in years)		7.5			8.2			6.6
Risk-free interest rate		1.64	%		1.66	%		1.06	%

Stock Option

Stock option information with respect to the company’s stock-based equity plans during the three years ended December 31, 2013 is as follows (Dollars in thousands, except weighted average exercise price and weighted average grant date fair value):


Options	Shares			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2011		1,151,998		$	6.83	$	5.36	5.0 years	$	748
Granted		630,000			2.43		2.05			116
Exercised		(41,112	)		0.59		0.42			125
Forfeited or expired		(100,494	)		11.47		7.72			22

Outstanding at December 31, 2011		1,640,392		$	5.01	$	4.07	5.2 years	$	584

Exercisable at December 31, 2011		655,228			7.56		5.47	2.9 years		414

Expected to Vest		980,189		$	3.31	$	3.13	6.8 years	$	170
Outstanding at January 1, 2012		1,640,392		$	5.01	$	4.07	5.2 years	$	584
Granted		626,000			2.74		1.51			1,704
Exercised		(261,205	)		1.57		1.28			910
Forfeited or expired		(78,088	)		14.06		8.03			10,824

Outstanding at December 31, 2012		1,927,099		$	4.37	$	3.45	5.4 years	$	3,899

Exercisable at December 31, 2012		707,024			6.58		5.41	2.9 years		1,004

Expected to Vest		1,158,461		$	3.09	$	2.32	6.8 years	$	2,749
Outstanding at January 1, 2013		1,927,099		$	4.37	$	3.45	5.4 years	$	3,899
Granted		735,750			6.93		4.90			1,303
Exercised		(410,983	)		3.46		2.47			1,883
Forfeited or expired		(89,799	)		12.30		7.43			72

Outstanding at December 31, 2013		2,162,067		$	5.09	$	3.57	5.5 years	$	8,491

Exercisable at December 31, 2013		514,751			6.29		4.52	2.7 years		1,919

Expected to Vest		1,564,128		$	4.71	$	3.28	6.4 years	$	6,240

Information Regarding Restricted Stock

Information regarding the company’s restricted stock during the years ended December 31, 2011 and 2013 is as follows:


Restricted Stock	Shares			Weighted Average Grant Date Fair Value
Non-Vested at January 1, 2011		10,000		$	2.03
Granted
Lapsed		(10,000	)		2.03
Forfeited		—

Non-Vested at December 31, 2011		—		$	—

Non-Vested at January 1, 2013		—		$	—
Granted		79,810			6.02
Lapsed		(79,810	)		6.02
Forfeited		—			—

Non-Vested at December 31, 2013		—		$	—

Additional Information Regarding Options Outstanding

Additional information regarding options outstanding as of December 31, 2013, is as follows:


Range of Exercise Prices	Options		Weighted Average Contractual Life Remaining (Years)		Weighted Average Exercise Price		Exercisable Options		Weighted Average Exercise Price
$0.36 - $ 3.00		997,166		5.9	$	2.51		196,000	$	2.00
$3.01 - $ 6.00		289,625		3.9		5.15		171,725		5.17
$6.01 - $ 9.00		728,250		6.5		6.93		—		—
$9.01 - $ 12.00		70,050		1.2		11.80		70,050		11.80
$12.01 - $ 15.00		58,475		0.9		13.88		58,475		13.88
$15.01 - $ 18.00		13,876		0.4		16.75		13,876		16.75
$18.01 - $ 21.00		4,625		0.9		18.89		4,625		18.89
$21.01 - $ 24.00		—		—		—		—		—
$24.01 - $ 25.50		—		—		—		—		—

$0.36 - $ 25.50		2,162,067		5.5	$	5.09		514,751	$	6.29