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, 2021

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 September 30, 2021 and 2020:

	Three Months Ended September 30,						Nine Months Ended September 30,

	2020			2021			2020			2021

	(Dollars in thousands)						(Dollars in thousands)
Stock option compensation expense included in unallocated corporate expenses	$	30		$	23		$	122		$	75
Stock option compensation expense included in broadcast operating expenses		32			31			106			92
Stock option compensation expense included in digital media operating expenses		12			24			44			73
Stock option compensation expense included in publishing operating expenses		—			—			1			—

Total stock-based compensation expense, pre-tax	$	74		$	78		$	273		$	240

Tax expense for stock-based compensation expense		(19	)		(20	)		(71	)		(62	)

Total stock-based compensation expense, net of tax	$	55		$	58		$	202		$	178

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-month periods ended September 30, 2021 and 2020:

	Three Months Ended		Nine Months Ended			Three Months Ended			Nine Months Ended
	September 30, 2020		September 30, 2020			September 30, 2021			September 30, 2021
Expected volatility		n/a		53.96	%		79.99	%		75.98	%
Expected dividends		n/a		7.30	%		0.00	%		0.00	%
Expected term (in years)		n/a		7.6			8.0			7.8
Risk-free interest rate		n/a		1.14	%		1.27			1.03	%

Schedule of Stock Option Activity

Activity with respect to the company’s option awards during the nine-month period ended September 30, 2021 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, 2021		2,291,020		$	3.23	$	1.52		4.3 years	$	—
Granted		270,000			2.14		1.55				—
Exercised		(192,507	)		2.11		0.97				200
Forfeited or expired		(157,446	)		6.73		4.74				—

Outstanding at September 30, 2021		2,211,067		$	2.95	$	1.34		4.4 years	$	2,484

Exercisable at September 30, 2021		1,209,942		$	3.84	$	1.75		2.6 years	$	640

Expected to Vest		950,568		$	2.97	$	1.35		4.3 years	$	2,391

Schedule of Information Regarding Restricted Stock Activity

Activity with respect to the company’s restricted stock awards during the nine-month period ended September 30, 2021 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, 2021		107,990		$	1.85		1.67 years	$	112
Granted		—			—		—		—
Lapsed		(41,323	)		2.42		—		100
Forfeited		—			—		—		—

Outstanding at September 30, 2021		66,667		$	1.50		0.02 years	$	247