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Stock-Based Compensation Expense
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Expense Stock-Based Compensation Expense
Share-Based Compensation
On April 30, 2020, our shareholders approved the Cumulus Media Inc. 2020 Equity and Incentive Plan ("2020 Plan"). The 2020 Plan is substantially similar in both form and substance of the Long-term Incentive Plan ("Incentive Plan") approved by the Board, which became effective as of the Effective Date. The purpose of the 2020 Plan is intended to, among other things, help attract, motivate and retain key employees and directors and to reward them for making major contributions to the success of the Company. The 2020 Plan permits awards to be made to employees, directors, or consultants of the Company or an affiliate of the Company.
Unless otherwise determined by the Board, the Board's compensation committee will administer the 2020 Plan. The 2020 Plan generally provides for the following types of awards:
•stock options (including incentive options and nonstatutory options);
•restricted stock;
•stock appreciation rights;
•dividend equivalents;
•other stock-based awards;
•performance awards; and
•cash awards.
The aggregate number of shares of Class A common stock that may be delivered under the 2020 Plan is 2,100,000 plus one Common Share that remains available for awards pursuant to the Incentive Plan. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. The aggregate number of shares of new Class A common stock that were reserved for issuance pursuant to the Incentive Plan was 2,222,223 on a fully diluted basis. Awards could be made under the Incentive Plan for a period of ten years from June 4, 2018, subject to the right of the stockholders and the Board to terminate the Incentive Plan at any time.
If an employee's employment is terminated by the Company or its subsidiaries without cause, by the employee for good reason (each, as defined in the award agreement) or by reason of death or disability (as defined in the award agreement), such employee will become vested in an additional tranche of the unvested awards as if the employee's employment continued for one additional year following the qualifying termination date; provided, that with respect to the Chief Executive Officer and Chief Financial Officer, (i) an amount equal to 50% of the unvested components of the awards will accelerate and vest and (ii) vested Options will remain outstanding until the expiration date of such Option. If an employee's employment is terminated by the Company or its subsidiaries without cause or by the employee for good reason, in either instance at any time within the three month period immediately preceding, or the twelve month period immediately following, a change in control (as defined in the award agreement), such employee will become vested in all unvested awards. We expect to issue common shares held as either treasury stock or issue new shares upon the exercise of stock options or once shares vest pursuant to restricted stock units.
Stock Options
The Options granted to Management during fiscal year 2020 have a five year contractual term and will vest ratably over four years on the anniversary of the date of grant. The Options granted to Management on or about the Effective Date will vest 30% on or about each of the first two anniversaries of the issuance date, and 20% will vest on or about each of the third and fourth anniversaries of the issuance date. The vesting of each of the awards to Management is also subject to, among other things, each employee's continued employment with the Company.
The Options granted to each non-employee director, which have a five year contractual term, vest in four equal installments on the last day of each calendar quarter, commencing in the quarter in which the award is granted. The vesting of each of the non-employee director awards are also subject to, among other things, each non-employee director's continued role as a director with the Company. Upon a change in control, all unvested non-employee director awards will fully vest.
The following table summarizes changes in outstanding stock options during the twelve months ended December 31, 2020 and 2019, as well as stock options that are vested and expected to vest and stock options exercisable as of December 31, 2020 and 2019: 
Options Outstanding
Outstanding Stock OptionsWeighted-Average Exercise PriceWeighted-Average Remaining Contractual Term (in years)
Aggregate Intrinsic Value (in thousands) (2)
Outstanding as of December 31, 2018581,124 $25.47 4.4$— 
Granted— — — 
Exercised— — — 
Forfeited and canceled(23,826)25.70 — 
Outstanding as of December 31, 2019557,298 $25.46 3.4$— 
Exercisable as of December 31, 2019180,424 $24.97 
Outstanding as of December 31, 2019557,298 $25.46 3.4$— 
  Granted347,800 $12.89 — 
  Exercised— — — 
  Forfeited and canceled(133,984)$24.52 — 
Outstanding as of December 31, 2020771,114 $20.00 3.4$253 
Exercisable as of December 31, 2020271,103 $25.22 
(2) Amounts represent the difference between the exercise price and the fair value of common stock at each year end for all the "in-the-money" options outstanding based on the fair value per share of common stock as of each respective fiscal year end.
The per-share fair value of each stock option with service conditions only granted in 2020 was determined on the grant date using the Black-Scholes option pricing model with the following assumptions:
Grant date
2/13/20203/23/2020
Expected term (in years)3.753.75
Risk-free interest rate1.5 %1.3 %
Expected volatility46.9 %68.2 %
Expected dividend yield0 %0 %
The expected term of stock options granted represents the weighted average period that the stock options are expected to remain outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the midpoint between the vesting date and the end of the contractual term. We used the simplified method due to the lack of sufficient historical exercise data. The Company determined the expected term assumption based on estimates of the expected post-vesting holding period by employees. Expected volatility is based on the historical volatility of the Company's stock. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to the expected life of the option. The Company currently has no history or expectation of paying cash dividends on common stock.
There was $2.2 million of unrecognized compensation cost related to unvested stock options as of both December 31, 2020 and 2019. The weighted-average recognition period is 2.4 years for both periods.
RSUs
The fair value of time-based and performance-based restricted stock awards is the quoted market value of our stock on the grant date. For performance-based restricted stock awards, the Company evaluates the probability of vesting of the awards in each reporting period. In the event the Company determines it is no longer probable that the minimum performance criteria specified in the award will be achieved, all previously recognized compensation expense will be reversed in the period such a determination is made.
The following table summarizes the activities for our RSUs for the years ended December 31, 2020 and 2019 and the related weighted-average grant date fair value:
Number of RSUsWeighted-Average Grant Date Fair Value
Nonvested as of December 31, 2018477,968 $15.00 
  Granted248,155 14.16 
  Vested(239,053)15.22 
  Forfeited(12,352)14.84 
Nonvested as of December 31, 2019474,718 $14.46 
  Granted341,327 10.20 
  Vested(212,193)10.67 
  Forfeited(230,721)14.24 
Nonvested as of December 31, 2020373,131 $12.65 
As of December 31, 2020 and 2019, there was $3.5 million and $5.5 million, respectively, of unrecognized compensation cost related to unvested RSUs with a weighted-average recognition period of 1.9 years for both periods.
Stock-based compensation expense
The total stock-based compensation expense included in "Corporate expenses" in the accompanying Consolidated Statements of Operations was as follows (dollars in thousands):
    
Year Ended
December 31, 2020		Year Ended
December 31, 2019
Stock option grants$1,044 $1,326 
Restricted stock unit grants2,293 3,975 
Total expense$3,337 $5,301 
The associated tax benefits related to these stock-based compensation awards for the years ended December 31, 2020 and 2019, was $0.9 million and $1.4 million, respectively.
The Company made an accounting policy election to recognize forfeitures of share-based awards as they occur in the period of forfeiture rather than estimating the number of awards expected to be forfeited at the grant date and subsequently adjusting the estimate when awards are actually forfeited.