Share-Based Compensation

12 Months Ended

Dec. 31, 2013

We have several share-based compensation plans, including our 1998 Option Plan, the Amended and Restated 2002 Stock Plan and the Amended and Restated 2002 Non-Employee Director Stock Plan (collectively, the "Stock Plans"), that permit us to grant non-qualified options in our class A common shares or restricted share awards, to certain directors, officers and key employees of our Company.

Options granted under the Stock Plans vest over a four-year service period, unless otherwise designated by the Compensation Committee upon grant. Options expire ten years from the date of grant. We issue new shares of our class A common shares when options are exercised or from shares that we repurchased pursuant to our Board authorized share repurchase program as further described in Note 11—"Shareholders' Equity." Restricted share awards vest over a service period designated by the Compensation Committee upon grant. There were 6,787,940 shares authorized for grant under the various Stock Plans and 2,375,605 shares available for future grant as of December 31, 2013. Both the shares authorized and shares available exclude 1,552,983 shares under plans in effect prior to 2002 from which we do not intend to re-grant and consider unavailable for future grants.

The following table presents the share-based compensation expense included in our consolidated statements of operations as follows (in thousands):



	Year Ended December 31,
	2013		2012		2011
Employee share options	$	2,933	$	1,868	$	1,492
Restricted share awards	6,348		4,896		4,320
Modifications to share option agreements	93		93		364
Total share-based compensation	$	9,374	$	6,857	$	6,176

We did not capitalize any share-based compensation expense for the years ended December 31, 2013, 2012 and 2011.

We have not yet recognized compensation expense relating to unvested employee share options and restricted share awards of $2.6 million and $14 million, respectively, which will be recognized over a weighted-average future period of approximately 1.3 years and 1.7 years, respectively.

During the year ended December 31, 2013, we received $1.4 million from the exercise of share options and $0.4 million from the purchase of our class A common stock pursuant to our employee stock purchase plan ("ESPP"), which terminated upon consummation of the Merger.

Share Options

The following table provides additional information regarding our share options for the year ended December 31, 2013 as follows (in thousands, except per share data):



	Shares		Weighted- Average Exercise Price Per Share
Outstanding at the beginning of the year	4,894		$	3.42
Granted during the year	110		12.29
Exercised or converted during the year	(420	)	3.23
Forfeited during the year	(163	)	5.43
Expired during the year	(9	)	3.57
Outstanding at the end of the year	4,412		3.58
Exercisable or convertible at the end of the year	3,304		2.79

As of December 31, 2013, the weighted-average remaining contractual life of the options outstanding and the options exercisable was 6.1 years and 5.3 years, respectively. Additionally, as of December 31, 2013, the aggregate intrinsic value of the options outstanding and the options exercisable was $110.7 million and $85.5 million, respectively. The intrinsic value in the table above represents the total pre-tax intrinsic value based on our closing price as of December 31, 2013, which would have been received by the option holders had all option holders exercised their options and immediately sold their shares on that date.

The fair value of each share option grant or modification is estimated on the date of grant or modification using a Black-Scholes valuation model, which incorporates the following assumptions:



	Year Ended December 31,
	2013	2012	2011
Expected term⁽¹⁾	5 to 6 years	5 to 6 years	5 to 6 years
Expected volatility⁽²⁾	95% to 96%	98% to 99%	97% to 99%
Expected dividends	$—	$—	$—
Risk-free rate⁽³⁾	0.8% to 1.2%	0.6% to 1.1%	0.9% to 2.6%

_______________________________________________________________________________


⁽¹⁾	The expected term was estimated using our historical experience.


⁽²⁾	Expected volatility is based on historical trends for our class A common shares over the expected term.


⁽³⁾	The risk-free interest rate for each grant is equal to the U.S. Treasury yield curve in effect at the time of grant for instruments with a similar expected life.

During the years ended December 31, 2013, 2012 and 2011, we recognized share-based compensation expense for a modification to our share option agreements of $0.1 million, $0.1 million and $0.4 million, respectively, as a result of an exchange offer we completed in 2009.

Restricted Share Awards

The following table provides additional information regarding the restricted share awards for the year ended December 31, 2013 (in thousands, except per share data):



	Shares		Weighted- Average Price Per Share
Unvested at the beginning of the year	2,294		$	5.98
Granted during the year	582		18.89
Vested during the year	(960	)	6.00
Forfeited during the year	(205	)	5.87
Unvested at the end of the year	1,711		10.37

The following table provides further information for both our restricted share awards and share option awards (in thousands):



	Year Ended December 31,
	2013		2012		2011
Total fair value of options and awards granted	$	12,349	$	10,347	$	4,983
Total intrinsic value of options exercised	5,136		865		225
Total fair value of awards vested	18,050		7,718		7,522

Employee Stock Purchase Plan

As a result of the Merger, the ESPP was terminated, effective July 30, 2013. Prior to this, under the terms of our ESPP, our eligible employees could elect to have up to 10% of eligible compensation deducted from their pay to purchase our class A common stock. The purchase price of each share was 85% of the average of the high and low per share trading price of our class A common stock on the NYSE on the last trading day of each month during the offering period. During the year ended December 31, 2013, 2012 and 2011, employees purchased 42,734, 173,244 and 187,350 shares, respectively, at a weighted-average price of $10.05, $3.55 and $3.38, respectively.

LIN Television

Entity Information [Line Items]

Share-Based Compensation

We have several share-based compensation plans, including the 1998 Option Plan, the Amended and Restated 2002 Stock Plan and the Amended and Restated 2002 Non-Employee Director Stock Plan (collectively, the "Stock Plans"), that permit us to grant non-qualified options in LIN LLC's class A common shares or restricted share awards, to certain directors, officers and key employees of our Company.

Options granted under the Stock Plans vest over a four-year service period, unless otherwise designated by the Compensation Committee upon grant. Options expire ten years from the date of grant. We issue new shares of LIN LLC's class A common shares when options are exercised or from shares that we repurchased pursuant to our Board authorized share repurchase program as further described in Note 11—"Shareholders' Equity." Restricted share awards vest over a service period designated by the Compensation Committee upon grant. There were 6,787,940 shares authorized for grant under the various Stock Plans and 2,375,605 shares available for future grant as of December 31, 2013. Both the shares authorized and shares available exclude 1,552,983 shares under plans in effect prior to 2002 from which we do not intend to re-grant and consider unavailable for future grants.

The following table presents the share-based compensation expense included in our consolidated statements of operations as follows (in thousands):



	Year Ended December 31,
	2013		2012		2011
Employee share options	$	2,933	$	1,868	$	1,492
Restricted share awards	6,348		4,896		4,320
Modifications to share option agreements	93		93		364
Total share-based compensation	$	9,374	$	6,857	$	6,176

We did not capitalize any share-based compensation expense for the years ended December 31, 2013, 2012 and 2011.

During the year ended December 31, 2013, we received $1.4 million from the exercise of share options and $0.4 million from the purchase of LIN TV's class A common stock pursuant to the employee stock purchase plan ("ESPP"), which terminated upon consummation of the Merger.

Share Options

The following table provides additional information regarding our share options for the year ended December 31, 2013 as follows (in thousands, except per share data):



	Shares		Weighted- Average Exercise Price Per Share
Outstanding at the beginning of the year	4,894		$	3.42
Granted during the year	110		12.29
Exercised or converted during the year	(420	)	3.23
Forfeited during the year	(163	)	5.43
Expired during the year	(9	)	3.57
Outstanding at the end of the year	4,412		3.58
Exercisable or convertible at the end of the year	3,304		2.79

The fair value of each share option grant or modification is estimated on the date of grant or modification using a Black-Scholes valuation model, which incorporates the following assumptions:



	Year Ended December 31,
	2013	2012	2011
Expected term⁽¹⁾	5 to 6 years	5 to 6 years	5 to 6 years
Expected volatility⁽²⁾	95% to 96%	98% to 99%	97% to 99%
Expected dividends	$—	$—	$—
Risk-free rate⁽³⁾	0.8% to 1.2%	0.6% to 1.1%	0.9% to 2.6%

_______________________________________________________________________________


⁽¹⁾	The expected term was estimated using our historical experience.


⁽²⁾	Expected volatility is based on historical trends for LIN LLC class A common shares over the expected term.


⁽³⁾	The risk-free interest rate for each grant is equal to the U.S. Treasury yield curve in effect at the time of grant for instruments with a similar expected life.

Restricted Share Awards

The following table provides additional information regarding the restricted share awards for the year ended December 31, 2013 (in thousands, except per share data):



	Shares		Weighted- Average Price Per Share
Unvested at the beginning of the year	2,294		$	5.98
Granted during the year	582		18.89
Vested during the year	(960	)	6.00
Forfeited during the year	(205	)	5.87
Unvested at the end of the year	1,711		10.37

The following table provides further information for both our restricted share awards and share option awards (in thousands):



	Year Ended December 31,
	2013		2012		2011
Total fair value of options and awards granted	$	12,349	$	10,347	$	4,983
Total intrinsic value of options exercised	5,136		865		225
Total fair value of awards vested	18,050		7,718		7,522

Employee Stock Purchase Plan

As a result of the Merger, the ESPP was terminated, effective July 30, 2013. Prior to this, under the terms of our ESPP, our eligible employees could elect to have up to 10% of eligible compensation deducted from their pay to purchase shares of LIN TV's class A common stock. The purchase price of each share was 85% of the average of the high and low per share trading price of LIN TV's class A common stock on the NYSE on the last trading day of each month during the offering period. During the year ended December 31, 2013, 2012 and 2011, employees purchased 42,734, 173,244 and 187,350 shares, respectively, at a weighted-average price of $10.05, $3.55 and $3.38, respectively.

- 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+ Details