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, 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 and nine month periods ended September 30, 2017 and 2016:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2017		2016		2017
	(Dollars in thousands)
Stock option compensation expense included in corporate expenses	$	94	$	27	$	296	$	126
Restricted stock shares compensation expense included in corporate expenses				225		24		1,100
Stock option compensation expense included in broadcast operating expenses		19		7		67		41
Restricted stock shares compensation expense included in broadcast operating expenses								224
Stock option compensation expense included in digital media operating expenses		12		6		51		25
Restricted stock shares compensation expense included in digital media operating expenses								124
Stock option compensation expense included in publishing operating expenses		9		3		20		17
Restricted stock shares compensation expense included in publishing operating expenses								36
Total stock-based compensation expense, pre-tax	$	134	$	268	$	458	$	1,693
Tax benefit (expense) for stock-based compensation expense		(54)		(107)		(183)		(677)
Total stock-based compensation expense, net of tax	$	80	$	161	$	275	$	1,016

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, 2016:

	Three Months Ended	Nine Months Ended
	September 30, 2016	September 30, 2016
Expected volatility	n/a		47.03	%
Expected dividends	n/a		5.36	%
Expected term (in years)	n/a		7.4
Risk-free interest rate	n/a		1.64	%

Schedule of Stock Option Activity

Activity with respect to the company’s option awards during the nine month period ended September 30, 2017 is as follows:

							Weighted Average	Aggregate
			Weighted Average		Weighted Average		Remaining Contractual	Intrinsic
Options	Shares		Exercise Price		Grant Date Fair Value		Term	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		(122,413)		4.09		2.04
Forfeited or expired		(143,125)		5.85		2.99
Outstanding at September 30, 2017		1,454,462	$	5.18	$	2.95	3.9 years	$	2,292
Exercisable at September 30, 2017		954,959	$	5.63	$	3.76	2.9 years	$	1,146
Expected to Vest		474,278	$	5.19	$	2.97	3.9 years	$	1,115

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, 2017 is as follows:

			Weighted Average		Weighted Average Remaining	Aggregate
Restricted Stock Awards	Shares		Grant Date Fair Value		Contractual Term	Intrinsic Value

	(Dollars in thousands, except weighted average exercise price and weighted average grant date fair value)
Outstanding at January 1, 2017			$			$
Granted		211,658		7.01	0.2 years		1,484
Lapse of restrictions		(178,592)		7.05			1,259
Forfeited
Outstanding at September 30, 2017		33,066	$	6.80	0.2 years	$	225