Under the Entercom Equity Compensation Plan (the “Plan”), the Company is authorized to issue share-based compensation awards to key employees, directors and consultants. The RSUs and options that have been issued generally vest over periods of up to four years. The options expire ten years from the date of grant. The Company issues new shares of Class A common stock upon the exercise of stock options and the later of vesting or issuance of RSUs.

On January 1 of each year, the number of shares of Class A common stock authorized under the Plan is automatically increased by 1.5 million, or a lesser number as may be determined by the Company's Board of Directors. On January 1, 2011, the shares available for grant automatically increased by 1.5 million to 3.1 million shares.

The Plan includes certain performance criteria for purposes of satisfying expense deduction requirements for income tax purposes. A sub-limit for RSUs was removed by shareholder vote at the Company's May 2011 shareholders' meeting.

The measurement and recognition of compensation expense, for all share-based payment awards made to employees and directors, is based on estimated fair values. The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company's consolidated statements of operations.

The Company used the straight-line single option method for recognizing compensation expense, which was reduced for estimated forfeitures based on awards ultimately expected to vest. Estimated forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table presents for the periods indicated: (1) RSUs issued, net of forfeitures; (2) the increase (decrease) to paid-in capital over the vesting period of the RSUs; (3) the number of RSUs that were both vested and released; and (4) the unamortized compensation expense, net of forfeitures, related to unvested RSUs:

	Years Ended December 31,
	2011				2010				2009
	Shares		Amount		Shares		Amount		Shares		Amount
	(amounts in thousands)

RSUs issued		445	$	4,721		1,024	$	11,361		177	$	311
RSUs forfeited		(28)		(474)		(85)		(1,242)		(92)		(2,590)
RSUs issued under OEP		-		-		-		-		712		1,188
Modification expense to existing RSUs		-		-		-		-		-		245
Net RSUs issued and increase
(decrease) to paid-in capital		417	$	4,247		939	$	10,119		797	$	(846)

RSUs vested and released		886				527				301

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	December 31,
	Period Ended		Units	Price		Term (Years)	2011

RSUs outstanding as of:	December 31, 2010		2,329,174
RSUs awarded			445,213
RSUs released			(885,878)
RSUs forfeited			(27,932)
RSUs outstanding as of:	December 31, 2011		1,860,577	$	-	1.5	$	11,442,549
RSUs vested and expected
to vest as of:	December 31, 2011		1,705,617	$	-	1.4	$	9,954,522
RSUs exercisable (vested and
deferred) as of:	December 31, 2011		86,996	$	-	0.0	$	535,025
Weighted average remaining
recognition period in years			2.1
Unamortized compensation
expense, net of estimated
forfeitures		$	8,646,401

During the fourth quarter of 2010, the Company issued RSUs with service and market conditions where these shares vest upon the performance of the Company's stock over a defined measurement period. The market condition allows for vesting of portions of the award if certain shareholder performance targets are met. 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 fulfilled.

During the first quarter of 2009, the Company modified certain RSUs with market conditions by removing the market condition. The modification expense was recognized over a revised service period.

The following table presents certain information for RSUs with market conditions for the periods indicated:

		Years Ended December 31,
		2011		2010		2009
		(amounts in thousands, except years)

RSUs Granted With Market Conditions
	Number of RSUs issued		-		300		-
	Fair value per share of RSUs issued	$	-	$	3,219	$	-
	Amortization period of grant in years		-		1.6 - 2.0		-

Reconciliation Of RSUs With Market Conditions
	Beginning of period balance		300		113		318
	Number of RSUs granted		-		300		-
	Number of RSUs forfeited		-		(57)		(25)
	Number of RSUs vested		-		(56)		-
	Number of RSUs modified to remove market conditions		-		-		(180)
	End of period balance		300		300		113

The fair value of RSUs with service conditions is estimated based on the market value stock price on the date of the grant, and the fair value of RSUs with service and market conditions is estimated using a lattice model as described below.

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 Company made assumptions with respect to the following when applying the Monte Carlo simulation model:

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 a constant maturity 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.

The following table presents for the periods indicated: (1) the range of option exercise prices for options issued, which options were all issued at an exercise price of not less than market value; (2) number of options granted, which generally vest over a four-year period and expire ten years from the date of grant; (3) the weighted average fair value of each option granted; (4) the intrinsic value of options exercised; (5) cash received from options exercised; and (6) the accumulated unrecognized compensation costs related to unvested stock options, net of forfeitures, that are expected to be amortized in future periods over a weighted average period that is identified in another table under Note 11.

	Years Ended December 31,
Other Option Disclosures	2011				2010				2009
	(amounts in thousands, except per share amounts)

	Price Range				Price Range				Price Range
Price range of options issued	$	-	$	-	$	12.08	$	12.08	$	1.34	$	6.62

	Shares				Shares				Shares
Number of options issued		-				3				1,086
Fair value of options issued	$	-			$	7.84			$	0.78

	Amount				Amount				Amount
Intrinsic value of options exercised	$	528			$	899			$	-
Tax benefit from options exercised, before
impact of valuation allowance	$	209			$	355			$	-
Cash received from exercise price of
options exercised	$	72			$	130			$	-

The following table presents the option activity during the current year ended December 31, 2011 under the Company's stock option plan:

						Weighted	Intrinsic
				Weighted		Average	Value
				Average		Remaining	As of
		Number of		Exercise		Contractual	December 31,
	Period Ended	Options		Price		Term (Years)	2011

Options outstanding as of:	December 31, 2010		983,150	$	3.02
Options granted			-		-
Options exercised			(53,625)		1.34
Options forfeited			(38,030)		1.46
Options expired			(15,470)		22.32
Outstanding as of:	December 31, 2011		876,025	$	2.84	6.9	$	3,876,728

Options vested and expected to vest as of:	December 31, 2011		855,248	$	2.87	6.9	$	3,781,429
Options vested and exercisable as of:	December 31, 2011		395,734	$	4.33	6.6	$	1,651,041
Weighted average remaining
recognition period in years			1.1
Unamortized compensation expense, net of
estimated forfeitures		$	213,999

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
				December 31,	Contractual	Exercise		December 31,	Exercise
Exercise Prices				2011	Life	Price		2011	Price
$	1.34	$	1.34	802,775	7.0	$	1.34	341,653	$	1.34
$	2.02	$	12.08	51,750	6.9	$	9.25	32,581	$	9.71
$	33.90	$	47.77	8,500	2.7	$	36.86	8,500	$	36.86
$	48.00	$	48.21	13,000	0.4	$	48.03	13,000	$	48.03
$	1.34	$	48.21	876,025	6.9	$	2.84	395,734	$	4.33

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:

	Option Valuation Estimates
	Years Ended December 31,
	2011	2010	2009
Expected life (years)	no options issued	6.3	6.3
Expected volatility factor (%)	no options issued	69.2%	54.9% to 68.0%
Risk-free interest rate (%)	no options issued	3.0%	2.2% to 3.3%
Expected dividend yield (%)	no options issued	0.0%	0.0%

The Company's determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company's stock price, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company's expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. The Company's stock options have certain characteristics that are different from traded options, and changes in the subjective assumptions could affect the estimated value.

For options granted, the Company used the Black-Scholes option-pricing model and determined: (1) the term by using the simplified plain-vanilla method as the Company's employee exercise history may not be indicative for estimating future exercises ; (2) a historical volatility over a period commensurate with the expected term, with the observation of the volatility on a daily basis; (3) a risk-free interest rate that was consistent with the expected term of the stock options and based on the U.S. Treasury yield curve in effect at the time of the grant; and (4) an annual dividend yield based upon the Company's most recent quarterly dividend at the time of grant.

Stock-based compensation expense consisted primarily of RSU awards. The following table summarizes recognized stock-based compensation expense related to: (1) awards of RSUs and employee stock options; and (2) purchases under the employee stock purchase plan until such plan expired on March 31, 2009:

	Years Ended December 31,
	2011		2010		2009
		(amounts in thousands)

Station operating expenses	$	776	$	1,357	$	1,976
Corporate general and administrative expenses		6,895		4,171		4,912
Stock-based compensation expense included in operating expenses		7,671		5,528		6,888
Income tax benefit (net of a valuation allowance in prior years)		2,107		-		-
Total stock-based compensation expense, net of income tax benefit	$	5,564	$	5,528	$	6,888