v3.3.1.900

SHARE-BASED COMPENSATION (Block) | 12 Months Ended
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Dec. 31, 2015
Disclosure Of Compensation Related Costs Sharebased Payments Abstract |
Disclosure Of Compensation Related Costs Share Based Payments Text Block | 13. 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. 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 aut horized 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. The Board of Directors elected to forego the January 1, 2015 and January 1, 2016 increase in the share s available for grant. As of December 31, 2015, the shares available for grant were 2.5 million shares. The Plan includes certain performance criteria for purposes of satisfying expense deduction requirements for income tax purposes. Accounting For Share-Based Compensation 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 fair value is determined at the time of grant: (1) using the Company’s stock price for RSUs; and (2) using the Black Scholes model for options. 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 consolid ated statements of operations. Estimated forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. 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 |  | December 31,
| Period Ended |  |  | Units |  | Price |  | Term (Years) |  | 2015
RSUs outstanding as of: | December 31, 2014 |  |  | 1,258,685 |  |  |  |  |  |  |  |
RSUs awarded |  |  |  | 795,693 |  |  |  |  |  |  |  |
RSUs released |  |  |  | (406,463) |  |  |  |  |  |  |  |
RSUs forfeited |  |  |  | (57,498) |  |  |  |  |  |  |  |
RSUs outstanding as of: | December 31, 2015 |  |  | 1,590,417 |  | $ | - |  | 1.1 |  | $ | 18,051,233
RSUs vested and expected |  |  |  |  |  |  |  |  |  |  |  |
to vest as of: | December 31, 2015 |  |  | 1,512,428 |  | $ | - |  | 1.0 |  | $ | 16,242,396
RSUs exercisable (vested and |  |  |  |  |  |  |  |  |  |  |  |
deferred) as of: | December 31, 2015 |  |  | 81,380 |  | $ | - |  | - |  | $ | 923,663
Weighted average remaining |  |  |  |  |  |  |  |  |  |  |  |
recognition period in years |  |  |  | 1.8 |  |  |  |  |  |  |  |
Unamortized compensation |  |  |  |  |  |  |  |  |  |  |  |
expense, net of estimated |  |  |  |  |  |  |  |  |  |  |
forfeitures |  |  | $ | 7,988,821 |  |  |  |  |  |  |  |
The following table presents additional information on RSU activity:
|  | Years Ended December 31,
|  | 2015 |  | 2014 |  | 2013
|  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount
|  | (amounts in thousands, except per share)
RSUs issued |  |  | 796 |  | $ | 9,045 |  |  | 685 |  | $ | 5,754 |  |  | 361 |  | $ | 2,906
RSUs forfeited - service based |  |  | (58) |  |  | (709) |  |  | (47) |  |  | (727) |  |  | (64) |  |  | (685)
RSUs forfeited - market based |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (200) |  |  | (2,110)
Net RSUs issued and increase |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(decrease) to paid-in capital |  |  | 738 |  | $ | 8,336 |  |  | 638 |  | $ | 5,027 |  |  | 97 |  | $ | 111
Weighted average grant date |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
fair value per share |  | $ | 11.36 |  |  |  |  | $ | 8.40 |  |  |  |  | $ | 8.05 |  |  |
Fair value of shares vested per share |  | $ | 11.85 |  |  |  |  | $ | 10.58 |  |  |  |  | $ | 8.76 |  |  |
RSUs vested and released |  |  | 406 |  |  |  |  |  | 410 |  |  |  |  |  | 547 |  |  |
RSUs With Service And Market Conditions T he Company issued RSUs with service and market conditions that are included in the table above. These shares vest if: (1) the Company’s stock achieves certain shareholder performance targets ov er 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, as all of the conditions ne ed to be satisfied. These RSUs are amortized over the longest of the explicit, implicit or derived service periods, which range from one to two years. The following table presents the changes in outstanding RSUs with market conditions:
|  |  | Years Ended December 31,
|  |  | 2015 |  | 2014 |  | 2013
|  |  | (amounts in thousands, except per share data)
Reconciliation Of RSUs With Market Conditions |  |  |  |  |  |  |  |  |
| Beginning of period balance |  |  | 290 |  |  | - |  |  | 200
| Number of RSUs granted |  |  | 165 |  |  | 290 |  |  | -
| Number of RSUs forfeited |  |  | - |  |  | - |  |  | (200)
| Number of RSUs vested |  |  | (65) |  |  | - |  |  | -
| End of period balance |  |  | 390 |  |  | 290 |  |  | -
| Average fair value of RSUs issued with market |  |  |  |  |  |  |  |  |
| conditions |  | $ | 8.39 |  | $ | 6.90 |  | $ | -
The fair value of RSUs with service conditions is estimated using the Company’s closing 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 these valuations are as follows:
| Years Ended
| December 31,
| 2015 |  | 2014
Expected Volatility Structure (1) | 34% to 39% |  | 33% to 42%
Risk Free Interest Rate (2) | 0.1% to 1.1% |  | 0.1% to 0.4%
Dividend Yield (3) | 0.0% |  | 0.0%
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 the Treasury bond rate as of the date of grant. Dividend Yield - The Company c alculated the dividend yield at the time of grant based upon the Company’s most recent history of not paying a dividend on its common stock. RSUs With Service And Performance Conditions In addition to the RSUs included in the table above summarizing the activity in RSUs under the Plan, the Company issued RSUs with both service and performance conditions. Vesting of performance-based awards, if any, is dependent upon the achievement of certain performance targets. If the performance standards are not achieved, all unvested shares will expire and any accrued expense will be reversed. The Company determines the requisite service period on a cas e-by-case basis to determine the expense recognition period for non-vested performance based RSUs. The fair value is determined based upon the closing price of the Company’s common stock on the date of grant. The Company applies a quarterly probability as sessment in computing its non-cash compensation expense and any change in the estimate is reflected as a cumulative adjustment to expense in the quarter of the change. The following table reflects the activity of RSUs with service and performance condit ions:
|  |  | Years Ended December 31,
|  |  | 2015 |  | 2014 |  | 2013
|  |  | (amounts in thousands, except per share data)
Reconciliation Of RSUs With Performance Conditions |  |  |  |  |  |  |  |  |
| Beginning of period balance |  |  | 8 |  |  | - |  |  | -
| Number of RSUs granted |  |  | 21 |  |  | 11 |  |  | -
| Number of RSUs that did not meet criteria |  |  | - |  |  | (3) |  |  | -
| Number of RSUs vested |  |  | - |  |  | - |  |  | -
| End of period balance |  |  | 29 |  |  | 8 |  |  | -
| Average fair value of RSUs issued with performance |  |  |  |  |  |  |  |  |
| conditions |  | $ | 11.11 |  | $ | 9.60 |  | $ | -
As of December 31, 2015, no non-cash compensation expense was accrued. Option Activity The following table presents the option activity during the current year ended under the Plan:
|  |  |  |  |  |  |  |  | Weighted |  | Intrinsic
|  |  |  |  |  | Weighted |  | Average |  | Value
|  |  |  |  |  | Average |  | Remaining |  | As Of
|  |  | Number Of |  | Exercise |  | Contractual |  | December 31,
| Period Ended |  | Options |  | Price |  | Term (Years) |  | 2015
Options outstanding as of: | December 31, 2014 |  |  | 486,675 |  | $ | 2.11 |  |  |  |  |
Options granted |  |  |  | - |  |  | - |  |  |  |  |
Options exercised |  |  |  | (11,750) |  |  | 3.02 |  |  |  |  |
Options forfeited |  |  |  | (3,750) |  |  | 8.72 |  |  |  |  |
Options expired |  |  |  | (4,250) |  |  | 13.63 |  |  |  |  |
Options outstanding as of: | December 31, 2015 |  |  | 466,925 |  | $ | 1.93 |  | 3.1 |  | $ | 4,401,204
Options vested and expected to |  |  |  |  |  |  |  |  |  |  |  |
vest as of: | December 31, 2015 |  |  | 466,925 |  | $ | 1.93 |  | 3.1 |  | $ | 4,401,204
Options vested and exercisable as of: | December 31, 2015 |  |  | 466,925 |  | $ | 1.93 |  | 3.1 |  | $ | 4,401,204
Weighted average remaining |  |  |  |  |  |  |  |  |  |  |  |
recognition period in years |  |  |  | - |  |  |  |  |  |  |  |
Unamortized compensation expense, |  |  |  |  |  |  |  |  |  |  |  |
net of estimated forfeitures |  |  | $ | 10,307 |  |  |  |  |  |  |  |
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 |  | December 31, |  | Contractual |  | Exercise |  | December 31, |  | Exercise
From |  | To |  | 2015 |  | Life |  | Price |  | 2015 |  | Price
$ | 1.34 |  | $ | 1.34 |  | 432,925 |  | 3.1 |  | $ | 1.34 |  | 432,925 |  | $ | 1.34
$ | 2.02 |  | $ | 11.78 |  | 34,000 |  | 2.7 |  | $ | 9.50 |  | 34,000 |  | $ | 9.50
$ | 1.34 |  | $ | 11.78 |  | 466,925 |  | 3.1 |  | $ | 1.93 |  | 466,925 |  | $ | 1.93
The following table provides summary information on the granting and vesting of options:
|  | Years Ended December 31,
Option Issuance And Exercise Data |  | 2015 |  | 2014 |  | 2013
|  | (amounts in thousands except for per share and years)
|  | From |  | To |  | From |  | To |  | From |  | To
Exercise price range of options issued |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 8.72 |  | $ | 8.72
Upon vesting, period to exercise in years |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1 |  |  | 10
Fair value per share upon grant |  | $ | - |  |  |  |  | $ | - |  |  |  |  | $ | 6.07 |  |  |
Fair value per share upon exercise |  | $ | 8.57 |  |  |  |  | $ | 8.99 |  |  |  |  | $ | 7.15 |  |  |
Intrinsic value of options exercised |  | $ | 101 |  |  |  |  | $ | 517 |  |  |  |  | $ | 1,228 |  |  |
Tax benefit from options exercised (1) |  | $ | 38 |  |  |  |  | $ | 196 |  |  |  |  | $ | 466 |  |  |
Cash received from exercise price of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
options exercised |  | $ | 35 |  |  |  |  | $ | 82 |  |  |  |  | $ | 245 |  |  |
Number of options granted |  |  | - |  |  |  |  |  | - |  |  |  |  |  | 5 |  |  |
(1) Amount excludes impact from suspended income tax benefits and/or valuation allowances. (1) Amount excludes impact from suspended income tax benefits and/or valuation allowances. Valuation Of Options The Company estimates the fair value of option awards on the date of grant using an option-pricing model. 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. 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. The following table presents the range of the assumptions used to determine the fair value:
| Option Valuation Estimates
| Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Expected life (years) |  | no options issued |  | no options issued |  | 6.3
Expected volatility factor (%) |  |  | 78.8
Risk-free interest rate (%) |  |  | 2.0
Expected dividend yield (%) |  |  | -
Recognized Non-Cash Stock-Based Compensation Expense The following non-cash stock-based compensation expense, which is comprised primarily of RSUs, is included in each of the respective line items in our statement of operations:
|  | Years Ended December 31,
|  | 2015 |  | 2014 |  | 2013
|  |  | (amounts in thousands)
Station operating expenses |  | $ | 1,259 |  | $ | 919 |  | $ | 766
Corporate general and administrative expenses |  |  | 4,265 |  |  | 4,313 |  |  | 3,504
Stock-based compensation expense included in operating expenses |  |  | 5,524 |  |  | 5,232 |  |  | 4,270
Income tax benefit (1) |  |  | 2,036 |  |  | 1,502 |  |  | 1,080
Net stock-based compensation expense |  | $ | 3,488 |  | $ | 3,730 |  | $ | 3,190

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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