Quarterly report pursuant to Section 13 or 15(d)

Stock Incentive Plan

v3.21.2
Stock Incentive Plan
9 Months Ended
Sep. 30, 2021
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Incentive Plan
NOTE 15. STOCK INCENTIVE PLAN
Our Amended and Restated 1999 Stock Incentive Plan (the “Plan”) provides for grants of equity-based awards to employees,
non-employee
directors and officers, and advisors (“Eligible Persons”). A maximum of 8,000,000 shares are authorized under the Plan. Insiders may participate in plans established pursuant to Rule
10b5-1
under the Exchange Act that allow them to exercise awards subject to
pre-established
criteria.
We recognize
non-cash
stock-based compensation expense based on the estimated fair value of awards in accordance with FASB ASC Topic 718 “
Compensation—Stock Compensation
.” Stock-based compensation expense fluctuates over time as a result of the vesting periods for outstanding awards and the number of awards that actually vest. 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
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Stock Option and Restricted Stock Grants
Eligible employees may receive incentive and
non-qualified
stock option awards that allow the recipient to purchase shares of our common stock at a set price, not to be less than the closing market price on the date of award, for no consideration payable by the recipient. The related number of shares underlying the stock option is fixed at the time of the grant. Options generally vest over a four-year period with a maximum term of five years from the vesting date.
The Plan also allows for awards of restricted stock that contain transfer restrictions under which they cannot be sold, pledged, transferred or assigned until the period specified in the award, generally from one to five years. Restricted stock awards are independent of option grants and are granted at no cost to the recipient other than applicable taxes owed by the recipient. The awards are considered issued and outstanding from the date of grant.
The fair value of each award is estimated as of the date of the grant using the Black-Scholes valuation model. The expected volatility reflects the consideration of the historical volatility of our common stock as determined by the closing price over a six to
ten-year
term commensurate with the expected term of the award. Expected dividends reflect the amount of quarterly distributions authorized and declared on our Class A and Class B common stock as of the grant date. The expected term of the awards is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rates for periods within the expected term of the award are based on the U.S. Treasury yield curve in effect during the period the options were granted. We have used historical data to estimate future forfeiture rates to apply against the gross amount of compensation expense determined using the valuation model. These estimates have approximated our actual forfeiture rates.
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
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
 
    
 
 
                                    
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
 
    
 
 
                            
The aggregate intrinsic value represents the difference between the company’s closing stock price on September 30, 2021 of $3.71 and the option exercise price of the shares for stock options that were in the money, multiplied by the number of shares underlying such options. The total fair value of options vested during the periods ended September 30, 2021 and 2020 was $0.3 million and $0.4 million, respectively.
As of September 30, 2021, there was $22,000 of total unrecognized compensation cost related to
non-vested
stock option awards. This cost is expected to be recognized over a weighted-average period of 2.3 years.