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SHARE-BASED COMPENSATION (Block)
9 Months Ended
Sep. 30, 2011
Disclosure Of Compensation Related Costs Sharebased Payments Abstract 
Disclosure Of Compensation Related Costs Share Based Payments Text Block

11.       SHARE-BASED COMPENSATION

Equity Compensation Plan

 

       Under the Entercom Equity Compensation Plan (the “Plan”), the Company is authorized to issue share-based compensation awards to key employees, directors and consultants.

 

RSU Activity

The following is a summary of the changes in RSUs under the Company's Plan during the current period:

 

    Number    Weighted Aggregate
    Of Weighted Average Intrinsic
    Restricted  Average Remaining Value As Of
    Stock Purchase Contractual September 30,
 Period Ended  Units Price Term (Years) 2011
             
RSUs outstanding as of: December 31, 2010   2,329,174        
RSUs awarded    445,213        
RSUs released    (868,211)        
RSUs forfeited    (23,057)        
RSUs outstanding as of: September 30, 2011   1,883,119 $ - 1.7 $ 9,886,375
RSUs vested and expected            
to vest as of:September 30, 2011   1,698,384 $ - 1.7 $ 8,459,788
RSUs exercisable (vested and             
deferred) as of:September 30, 2011   86,996 $ - 0.0 $ 456,729
Weighted average remaining             
recognition period in years   2.3        
Unamortized compensation             
expense, net of estimated           
forfeitures   $ 10,016,230        

Options

 

Option Activity

 

       The following table presents for the periods indicated: (1) the intrinsic value of options exercised; (2) cash received from options exercised; and (3) the tax benefit from options exercised, before the impact of a valuation allowance:

 

       
  Nine Months Ended September 30,
Other Option Disclosures 2011 2010
  (amounts in thousands)
       
Intrinsic value of options exercised $ 520 $ 811
Tax benefit from options exercised, before impact of      
valuation allowance $ 198 $ 320
Cash received from exercise price of options exercised $ 69 $ 115

The following table presents the option activity during the current period under the Company's stock option plan:

         Weighted Intrinsic
      Weighted Average Value
      Average Remaining As of
   Number of Exercise Contractual September 30,
 Period Ended Options Price Term (Years) 2011
             
Options outstanding as of:December 31, 2010   983,150 $ 3.02     
Options granted    -   -     
Options exercised    (51,750)   1.34     
Options forfeited    (24,530)   1.52     
Options expired    (13,345)   25.62     
Outstanding as of:September 30, 2011   893,525 $ 2.82 7.2 $ 3,212,430
             
Options vested and expected to vest as of:September 30, 2011   863,656 $ 2.86 7.2 $ 3,101,022
Options vested and exercisable as of:September 30, 2011   397,484 $ 4.29 7.0 $ 1,353,818
Weighted average remaining            
recognition period in years   1.4        
Unamortized compensation expense, net of            
estimated forfeitures  $ 276,376        

       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
      Outstanding Remaining  Average Exercisable  Average
      September 30, Contractual Exercise September 30, Exercise
Exercise Prices 2011 Life Price 2011 Price
$ 1.34 $1.34  819,650  7.4 $ 1.34  345,028 $ 1.34
$ 2.02 $12.08  52,375  7.0 $ 9.16  30,956 $ 9.80
$ 33.90 $47.77  8,500  2.9 $ 36.86  8,500 $ 36.86
$ 48.00 $48.21  13,000  0.6 $ 48.03  13,000 $ 48.03
       893,525  7.2 $ 2.82  397,484 $ 4.29

Valuation Of Options

 

       The fair value of each option grant, using the Black-Scholes option-pricing model, was estimated on the date of each grant. The following table presents the range of the assumptions used to determine the fair value over the periods indicated:

 

 Nine Months Ended September 30,
 2011 2010
Expected life (years)no options issued 6.3
Expected volatility factor (%)no options issued 69.2%
Risk-free interest rate (%)no options issued 3.0%
Expected dividend yield (%)no options issued 0.0%

Recognized Non-Cash Compensation Expense

 

       The following summarizes recognized stock-based compensation expense related to awards of RSUs and employee stock options:

  Nine Months Ended
       
  September 30,
  2011 2010
   (amounts in thousands)
Station operating expenses $ 550 $ 965
Corporate general and administrative expenses   5,676   3,349
Stock-based compensation expense included in operating expenses   6,226   4,314
Income tax benefit (net of a fully reserved valuation allowance for prior year)   (1,613)   -
Total $ 4,613 $ 4,314

  Three Months Ended
       
  September 30,
  2011 2010
  
Station operating expenses $ 223 $ 397
Corporate general and administrative expenses   1,337   815
Stock-based compensation expense included in operating expenses   1,560   1,212
Income tax benefit (net of a fully reserved valuation allowance for prior year)   (464)   -
Total $ 1,096 $ 1,212

       For all of the above periods, stock-based compensation expense consisted primarily of RSU awards.

 

Windfall Tax Benefit Or Paid-In Capital Pool Account

              

A deferred tax asset is recorded as a result of recognizing share-based compensation expense. A current income tax deduction arises at the time an RSU vests (together with any applicable dividend equivalent payments) and/or a stock option is exercised. If the current income tax deduction is greater than the associated deferred tax asset, the difference creates a windfall tax benefit, which is recorded in financing activities in the consolidated statement of cash flows. A windfall tax benefit is not recognized for book purposes, however, until it is realized.

 

In the event the current income tax deduction is less than the associated deferred tax asset, the difference is charged to the windfall tax benefit account; otherwise, the shortfall is charged to income tax expense (before a valuation adjustment, if applicable). The amount of the Company's windfall tax benefit account was $1.3 million as of September 30, 2011. Based upon outstanding awards, this amount will be available in the windfall tax benefit account to absorb any future shortfalls.