Stock-Based Compensation Expense

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

On April 26, 2023, the Company's stockholders approved an amendment and restatement (the “Amendment”) of the Cumulus Media Inc. 2020 Equity and Incentive Plan (as amended, the “2020 Plan”). Pursuant to the Amendment, the number of shares of Class A common stock reserved for issuance under the Plan was increased by 700,000 shares for an aggregate number of 2,800,000 shares of Class A common stock. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. Awards can be made under the 2020 Plan for a period of ten years from April 26, 2023, subject to the right of the stockholders and the Board to terminate the 2020 Plan at any time. 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.

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, 2023 and 2022, as well as stock options that are vested and expected to vest and stock options exercisable as of December 31, 2023 and 2022:


	Options Outstanding
	Outstanding Stock Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands) (1)
Outstanding as of December 31, 2021	735,895	$	19.91	2.3	$	405
Granted	—	—			—
Exercised	—	—			—
Forfeited and canceled	(19,640)	$	22.88		—

Outstanding as of December 31, 2022	716,255	$	19.83	1.2	$	103
Exercisable as of December 31, 2022	559,505	$	21.82	0.9	$	51


Outstanding as of December 31, 2022	716,255	$	19.83	1.2	$	103
Granted	—	—			—
Exercised	—	—			—
Forfeited and canceled	(402,755)	$	25.37		—

Outstanding as of December 31, 2023	313,500	$	12.70	1.1	$	49
Exercisable as of December 31, 2023	235,125	$	12.70	1.1	$	37


(1) 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.

Unrecognized compensation cost related to unvested stock options is not material as of December 31, 2023. There was $0.4 million of unrecognized compensation cost related to unvested stock options as of December 31, 2022. The weighted-average recognition period is 0.1 years and 0.6 years for each period, respectively.

RSUs

Time-based RSUs granted to Management typically vest ratably over four years on the anniversary of the date of grant. Time-based RSUs granted to non-employee directors typically vest in four equal installments on the last day of each calendar quarter, commencing in the quarter in which the award is granted. Performance-based RSUs vest equally over a four-year period based upon annual EBITDA performance goals, which are established by the Board of Directors at the beginning of each year. Performance-based RSUs vesting in any year may be earned in a range of 0% to 100% of the initial shares awarded.

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, 2023 and 2022 and the related weighted-average grant date fair value:


	Number of RSUs	Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2021	829,521	$	10.59
Granted	624,553	10.30
Vested	(390,108)	10.91
Forfeited	(11,187)	11.29
Nonvested as of December 31, 2022	1,052,779	$	10.29
Granted	971,362	4.89
Vested	(603,926)	9.12
Forfeited	(62,953)	5.49
Nonvested as of December 31, 2023	1,357,262	$	7.17

As of December 31, 2023 and 2022, there was $5.9 million and $6.3 million, respectively, of unrecognized compensation cost related to unvested RSUs with a weighted-average recognition period of 1.2 years for each period.

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, 2023		Year Ended December 31, 2022
Stock option grants	$	375	$	623
Restricted stock unit grants	4,895		5,606
Total expense	$	5,270	$	6,229

The associated tax benefits related to these stock-based compensation awards for the years ended December 31, 2023 and 2022, was $1.4 million and $1.6 million, respectively.

The Company elected 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.