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)

3 Months Ended

Mar. 31, 2017

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 months ended March 31, 2017 and 2016:

	Three Months Ended March 31,
	2016		2017
	(Dollars in thousands)
Stock option compensation expense included in corporate expenses	$	121	$	71
Restricted stock shares compensation expense included in corporate expenses		24		875
Stock option compensation expense included in broadcast operating expenses		28		28
Restricted stock shares compensation expense included in broadcast operating expenses		-		224
Stock option compensation expense included in digital media operating expenses		25		14
Restricted stock shares compensation expense included in digital media operating expenses		-		124
Stock option compensation expense included in publishing operating expenses		1		9
Restricted stock shares compensation expense included in publishing operating expenses		-		36
Total stock-based compensation expense, pre-tax	$	199	$	1,381
Tax benefit (expense) for stock-based compensation expense		(80)		(552)
Total stock-based compensation expense, net of tax	$	119	$	829

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 month period ending March 31, 2016:

	Three Months Ended March 31,
	2016		2017
Expected volatility		47.03%
Expected dividends		5.36%
Expected term (in years)		7.5
Risk-free interest rate		1.66%

Schedule of Stock Option Activity

Activity with respect to the company’s option awards during the three month period ending March 31, 2017 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, 2017		1,720,000	$	5.12	$	2.89	4.5 years	$	2,428
Granted
Exercised		(12,250)		4.75		2.96
Forfeited or expired		(117,250)		5.89		3.06
Outstanding at March 31, 2017		1,590,500	$	5.07	$	2.87	4.3 years	$	3,809
Exercisable at March 31, 2017		1,083,497	$	5.40	$	3.54	3.4 years	$	2,234
Expected to Vest		481,399	$	5.07	$	2.89	4.3 years	$	1,528

Schedule of Information Regarding Restricted Stock Activity

Activity with respect to the company’s restricted stock awards during the three month period ending March 31, 2017 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, 2017			$				$
Granted		178,592		7.05		0.2 years		1,331
Lapsed
Forfeited
Outstanding at March 31, 2017		178,592	$	7.05		0.2 years	$	1,331