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)

9 Months Ended

Sep. 30, 2020

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 nine

months

ended September 30, 2020 and 2019:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2020			2019			2020
	(Dollars in thousands)						(Dollars in thousands)
Stock option compensation expense included in unallocated corporate expenses	$	43		$	30		$	229		$	122
Restricted stock shares compensation expense included in unallocated corporate expenses		100			—			523			—
Stock option compensation expense included in broadcast operating expenses		20			32			88			106
Restricted stock shares compensation expense included in broadcast operating expenses		—			—			383			—
Stock option compensation expense included in digital media operating expenses		12			12			58			44
Stock option compensation expense included in publishing operating expenses		2			—			8			1

Total stock-based compensation expense, pre-tax	$	177		$	74		$	1,289		$	273

Tax expense for stock-based compensation expense		(46	)		(19	)		(335	)		(71	)

Total stock-based compensation expense, net of tax	$	131		$	55		$	954		$	202

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 nine

months

ended

September 30, 2020 and 2019:


	Three Months Ended			Nine Months Ended			Three Months Ended		Nine Months Ended
	September 30, 2019			September 30, 2019			September 30, 2020		September 30, 2020
Expected volatility		50.45	%		50.07	%		n/a		53.96	%
Expected dividends		15.75	%		14.91	%		n/a		7.30	%
Expected term (in years)		7.7			7.7			n/a		7.6
Risk-free interest rate		1.71	%		1.83	%		n/a		1.14	%

Schedule of Stock Option Activity

Activity with respect to the company’s option awards during the nine

months

ended September 30, 2020 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, 2020		1,860,722		$	4.39	$	2.37		3.6 years	$	—
Granted		743,000			1.37		0.35				—
Exercised		—			—		—				—
Forfeited or expired		(293,425	)		5.67		3.85			$	—

Outstanding at September 30, 2020		2,310,270		$	3.26	$	1.53		4.5 years	$	—

Exercisable at September 30, 2020		1,199,020		$	4.52	$	2.30		2.5 years	$	—

Expected to Vest		1,055,132		$	3.29	$	1.55		4.5 years	$	—

Schedule of Information Regarding Restricted Stock Activity

Activity with respect to the company’s restricted stock awards during the nine

months

ended September 30, 2020 is as follows:


Restricted Stock Awards	Shares		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, 2020		107,990	$	1.85	1.67 years	$	156
Granted		—		—	—		—
Lapsed		—		—	—		—
Forfeited		—		—	—		—

Outstanding at September 30, 2020		107,990	$	1.85	0.92 years	$	99