Note 6: Long-term Incentive Plan

A. H. Belo sponsors a long-term incentive plan (the “Plan”) under which 8,000,000 shares of the Company’s Series A and Series B common stock are authorized for equity-based awards. Awards may be granted to A. H. Belo employees and outside directors in the form of non-qualified stock options, incentive stock options, restricted share awards, restricted stock units (“RSUs”), performance shares, performance units or stock appreciation rights. In addition, stock options may be accompanied by full and limited stock appreciation rights. Rights and limited stock appreciation rights may also be issued without accompanying stock options. Awards under the Plan were also granted to holders of stock options issued by A. H. Belo’s former parent company in connection with the Company’s separation from its former parent in 2008. Due to the expiration of the Plan on February 8, 2018, A. H. Belo implemented, and shareholders approved, a new long-term incentive plan (the “2017 Plan”) under which an additional 8,000,000 shares of the Company’s Series A and Series B common stock are authorized for equity-based awards. Like its predecessor plan, awards under the 2017 Plan may be granted to A. H. Belo employees and outside directors in the form of non-qualified stock options, incentive stock options, restricted share awards, RSUs, performance shares, performance units or stock appreciation rights.

Stock Options. No options have been granted since 2009. As of December 31, 2018, there were no outstanding options and all compensation expense associated with stock options has been fully recognized.

The table below sets forth a summary of stock option activity under the Plan.



	Number of Options	Weighted Average Exercise Price
Outstanding at December 31, 2017	100,344	$	6.46
Canceled	(97,344)		6.60
Exercised	(3,000)		2.05
Outstanding at December 31, 2018	—		—

The aggregate intrinsic value of options exercised in 2018 was $7. No options were exercised in 2017.

Restricted Stock Units. The Company issued RSUs under the Plan and the 2017 Plan to its officers and directors. The RSUs had service and/or performance conditions and, subject to retirement eligibility, vested over a period of up to three years. Vested RSUs were redeemed 60 percent in A. H. Belo Series A common stock and 40 percent in cash. On December 6, 2018, the board of directors approved the accelerated vesting and payout, and conversion to cash of all outstanding RSUs previously granted to the Company’s officers and directors under the Plan and the 2017 Plan.

Award agreements for an aggregate of 607,553 outstanding RSUs held by officers and directors were amended to provide for accelerated vesting, to the extent not already vested, as of December 10, 2018, and for accelerated payment entirely in cash. Each RSU was valued at an amount equal to the closing market price of a share of Series A Common Stock on the New York Stock Exchange on December 10, 2018. The total aggregate value of the RSUs being accelerated is approximately $2,521. RSUs held by officers not subject to the requirements of Code Section 409A were paid on December 21, 2018, and officers and directors subject to Code Section 409A will be paid on the earlier of (i) December 11, 2019 or (ii) applicable date established under the award agreement. As of December 31, 2018, there were no outstanding RSUs and the liability for the cash payments to be made in 2019, was $1,795, included in other accrued expense in the Consolidated Balance Sheet.

The table below sets forth a summary of RSU activity under the Company’s long-term incentive plans.


	Total RSUs	Issuance of Common Stock	RSUs Redeemed in Cash	Cash Payments at Closing Price of Stock			Weighted Average Price on Date of Grant
Non-vested at December 31, 2017	224,053						$	6.07
Granted	348,455							5.05
Canceled	(3,711)							6.06
Vested and outstanding	(184,774)							5.38
Vested and issued	(114,248)	68,543	45,705	$	235			6.29
Accelerated vesting and converted to cash	(269,775)			$	1,120	(a)		5.13
Non-vested at December 31, 2018	—							—

(a)

A portion of the cash payments will be paid in 2019 for officers and directors subject to Code Section 409A.

In 2018, the Company issued 82,693 shares of Series A common stock and 55,128 shares were redeemed in cash for RSUs that were previously vested as of December 31, 2017. There were 290,825 RSUs vested and outstanding as of December 31, 2017.

Compensation Expense. Prior to the amended award agreements, A. H. Belo recognized compensation expense for awards granted under the Company’s long-term incentive plans over the vesting period of the award. The fair value of RSU grants was determined using the closing trading price of the Company’s Series A common stock on the grant date. As a result of the amended award agreements, all compensation expense related to previously granted RSUs has been fully recognized as of December 31, 2018. Additionally, the shareholders’ equity component of the compensation expense was reversed since the awards were converted to cash. Compensation expense related to granted RSUs is set forth in the table below.



Years Ended December 31,	RSUs Redeemable in Stock		RSUs Redeemable in Cash		Total RSU Awards Expense
2018	$	(605)	$	3,005	$	2,400
2017		944		654		1,598