SHARE-BASED COMPENSATION (Block) | 3 Months Ended |
Mar. 31, 2014 |
Disclosure Of Compensation Related Costs Sharebased Payments Abstract | ' |
Disclosure Of Compensation Related Costs Share Based Payments Text Block | ' |
5. SHARE-BASED COMPENSATION |
Under the Entercom Equity Compensation Plan (the “Plan”), the Company is authorized to issue share-based compensation awards to key employees, directors and consultants. |
|
Restricted Stock Units (“RSUs”) Activity |
RSU Activity |
|
The following is a summary of the changes in RSUs under the Plan during the current period: |
| | | | Number | | | | | Weighted | | Aggregate | | | | |
| | | | Of | | Weighted | | Average | | Intrinsic | | | | |
| | | | Restricted | | Average | | Remaining | | Value As Of | | | | |
| | | | Stock | | Purchase | | Contractual | | March 31, | | | | |
| Period Ended | | | Units | | Price | | Term (Years) | | 2014 | | | | |
| | | | | | | | | | | | | | | | |
RSUs outstanding as of: | 31-Dec-13 | | | 1,030,486 | | | | | | | | | | | | |
RSUs awarded | | | | 666,363 | | | | | | | | | | | | |
RSUs released | | | | -270,848 | | | | | | | | | | | | |
RSUs forfeited | | | | -3,200 | | | | | | | | | | | | |
RSUs outstanding as of: | 31-Mar-14 | | | 1,422,801 | | $ | - | | 1.7 | | $ | 14,327,606 | | | | |
RSUs vested and expected | | | | | | | | | | | | | | | | |
to vest as of: | 31-Mar-14 | | | 1,311,232 | | $ | - | | 1.7 | | $ | 12,328,059 | | | | |
RSUs exercisable (vested and | | | | | | | | | | | | | | | | |
deferred) as of: | 31-Mar-14 | | | 86,996 | | $ | - | | 0 | | $ | 876,050 | | | | |
Weighted average remaining | | | | | | | | | | | | | | | | |
recognition period in years | | | | 2.4 | | | | | | | | | | | | |
Unamortized compensation | | | | | | | | | | | | | | | | |
expense, net of estimated | | | | | | | | | | | | | | | |
forfeitures | | | $ | 8,748,507 | | | | | | | | | | | | |
RSUs With Service And Market Conditions |
|
During the first quarter of 2014, the Company issued RSUs with service and market conditions. These shares vest if: (1) the Company's stock achieves certain shareholder performance targets over a defined measurement period; and (2) the employee fulfills a minimum service period. The compensation expense is recognized even if the market conditions are not satisfied and are only reversed in the event the service period is not met. These RSUs, which are included in the RSU activity table, are amortized over the longest of the explicit, implicit or derived service periods, which is one to two years, as all of the conditions need to be satisfied. |
The following table presents the changes in outstanding RSUs with market conditions: |
| | | Three Months | | Year | | | | | | | | | |
| | | Ended | | Ended | | | | | | | | | |
| | | March 31, | | December 31, | | | | | | | | | |
| | | 2014 | | 2013 | | | | | | | | | |
| | | (amounts in thousands, except per share data) | | | | | | |
| | | | | | | | | |
Reconciliation Of RSUs With Market Conditions | | | | | | | | | | | | | | | |
| Beginning of period balance | | | - | | | 200 | | | | | | | | | |
| Number of RSUs granted | | | 290 | | | - | | | | | | | | | |
| Number of RSUs forfeited | | | - | | | -200 | | | | | | | | | |
| Number of RSUs vested | | | - | | | - | | | | | | | | | |
| End of period balance | | | 290 | | | - | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Fair value of each RSU issued with market conditions | | $ | 6.9 | | $ | - | | | | | | | | | |
Valuation Of RSUs With Service And Market Conditions |
|
The fair value of RSUs with service conditions is estimated based on the market value stock price on the date of the grant. To determine the fair value of RSUs with service and market conditions, the Company used the Monte Carlo simulation lattice model. The Company's determination of the fair value was based on the number of shares granted, the Company's stock price on the date of grant and certain assumptions regarding a number of highly complex and subjective variables. If other reasonable assumptions were used, the results could differ. |
The specific assumptions used for this valuation are as follows: |
|
| Three Months Ended | | | | | | | | | | | | | | | |
| March 31, | | | | | | | | | | | | | | | |
| 2014 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Expected Volatility Structure (1) | 39% to 51% | | | | | | | | | | | | | | | |
Risk Free Interest Rate (2) | 0.1% to 0.4% | | | | | | | | | | | | | | | |
Expected Dividend Yield (3) | 0.00% | | | | | | | | | | | | | | | |
|
|
|
Expected Volatility Term Structure - The Company estimated the volatility term structure using: (1) the historical volatility of its stock; and (2) the implied volatility provided by its traded options from a trailing month's average of the closing bid-ask price quotes. |
|
|
|
Risk-Free Interest Rate - The Company estimated the risk-free interest rate based upon the implied yield available on U.S. Treasury issues using Treasury bond rate as of the date of grant. |
|
|
|
Expected Dividend Yield - The Company calculated the expected dividend yield at the time of grant based upon the Company's most recent history and the Company's stock price on the date of grant. |
|
|
|
Options |
|
Option Activity |
|
The following table provides summary information related to the exercise of stock options: |
| | Three Months Ended March 31, | | | | | | | | | | |
Option Exercise Data | | 2014 | | 2013 | | | | | | | | | | |
| | (amounts in thousands) | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Intrinsic value of options exercised | | $ | 135 | | $ | 537 | | | | | | | | | | |
Tax benefit from options exercised (1) | | $ | 51 | | $ | 204 | | | | | | | | | | |
Cash received from exercise price of options exercised | | $ | 26 | | $ | 130 | | | | | | | | | | |
|
|
Amount excludes impact from suspended income tax benefits and/or valuation allowances. |
|
The following table presents the option activity during the current period under the Plan: |
| | | | | | | | | Weighted | | Intrinsic | | | | |
| | | | | | Weighted | | Average | | Value | | | | |
| | | | | | Average | | Remaining | | As Of | | | | |
| | | Number Of | | Exercise | | Contractual | | March 31, | | | | |
| Period Ended | | Options | | Price | | Term (Years) | | 2014 | | | | |
| | | | | | | | | | | | | | | | |
Options outstanding as of: | 31-Dec-13 | | | 557,550 | | $ | 2.58 | | | | | | | | | |
Options granted | | | | - | | | - | | | | | | | | | |
Options exercised | | | | -15,750 | | | 1.66 | | | | | | | | | |
Options forfeited | | | | - | | | - | | | | | | | | | |
Options expired | | | | -4,500 | | | 22.17 | | | | | | | | | |
Options outstanding as of: | 31-Mar-14 | | | 537,300 | | $ | 2.44 | | 4.8 | | $ | 4,307,640 | | | | |
| | | | | | | | | | | | | | | | |
Options vested and expected to vest as of: | 31-Mar-14 | | | 536,846 | | $ | 2.44 | | 4.8 | | $ | 4,307,026 | | | | |
Options vested and exercisable as of: | 31-Mar-14 | | | 532,300 | | $ | 2.38 | | 4.8 | | $ | 4,300,890 | | | | |
Weighted average remaining | | | | | | | | | | | | | | | | |
recognition period in years | | | | 3.4 | | | | | | | | | | | | |
Unamortized compensation expense, | | | | | | | | | | | | | | | | |
net of estimated forfeitures | | | $ | 22,331 | | | | | | | | | | | | |
The following table summarizes significant ranges of outstanding and exercisable options as of the current period: |
| | | | | | Options Outstanding | | Options Exercisable |
| | | | | | Number Of | | Weighted | | | | | Number Of | | | |
| | | | | | Options | | Average | | Weighted | | Options | | Weighted |
Range Of | | Outstanding | | Remaining | | Average | | Exercisable | | Average |
Exercise Prices | | March 31, | | Contractual | | Exercise | | March 31, | | Exercise |
From | | To | | 2014 | | Life | | Price | | 2014 | | Price |
$ | 1.34 | | $ | 1.34 | | 483,925 | | 4.9 | | $ | 1.34 | | 483,925 | | $ | 1.34 |
$ | 2.02 | | $ | 8.72 | | 21,000 | | 6.4 | | $ | 6.12 | | 16,000 | | $ | 5.31 |
$ | 10.9 | | $ | 11.69 | | 19,375 | | 3.9 | | $ | 11.45 | | 19,375 | | $ | 11.45 |
$ | 11.78 | | $ | 35.05 | | 13,000 | | 2.2 | | $ | 24.13 | | 13,000 | | $ | 24.13 |
$ | 1.34 | | $ | 35.05 | | 537,300 | | 4.8 | | $ | 2.44 | | 532,300 | | $ | 2.38 |
Recognized Non-Cash Stock-Based Compensation Expense |
|
The following summarizes recognized non-cash stock-based compensation expense, which consists primarily of RSUs: |
| | Three Months Ended | | | | | | | |
| | March 31, | | | | | | | |
| | 2014 | | 2013 | | | | | | | | | | |
| | | (amounts in thousands) | | | | | | | |
| | | | | | | | | | | | | | | | |
Station operating expenses | | $ | 135 | | $ | 155 | | | | | | | | | | |
Corporate general and administrative expenses | | | 1,073 | | | 987 | | | | | | | | | | |
Stock-based compensation expense included in operating expenses | | | 1,208 | | | 1,142 | | | | | | | | | | |
Income tax benefit (1) | | | 353 | | | 316 | | | | | | | | | | |
Net stock-based compensation expense | | $ | 855 | | $ | 826 | | | | | | | | | | |
(1) Amount excludes impact from suspended income tax benefits and/or valuation allowances. |
|