YBTVA » Topics » 2. Stock-Based Compensation

This excerpt taken from the YBTVA 10-K filed Apr 22, 2009.

Stock-Based Compensation

        The Company adopted FASB Statement No. 123 (R), Share-Based Payment ("SFAS 123R"), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

        The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards

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Table of Contents


Young Broadcasting Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)


available to offset future federal and state taxable income. Accordingly, the adoption of SFAS 123R did not have any impact on the Company's consolidated statements of cash flows.

        Prior to January 1, 2006, the Company had accounted for its share-based payments to employees under FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS "123") which allowed companies to either expense the estimated fair value of stock options or to follow the intrinsic value method set forth in Account Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), but disclose the pro forma net income (loss) had the fair value of the options been expensed.

        The Company awarded 590,450 and 495,500 shares of restricted stock during 2006 and 2007, respectively, to certain officers and other eligible employees under the 2004 Equity Incentive Plan. The Company also awarded 757,291 and 636,700 deferred stock units during 2005 and 2006, respectively, to executive officers of the Company under the 2004 Equity Incentive Plan.

        The Company estimates recording additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $1.8 million and $543,000 during 2009 and 2010, respectively.

        The Company did not grant any options during 2006, 2007 and 2008. The Company had 518,017 and 425,175 stock options outstanding at December 31, 2007 and 2008, respectively.

This excerpt taken from the YBTVA 10-Q filed Nov 17, 2008.

2. Stock-Based Compensation

        On May 4, 2004, the stockholders of the Company approved the 2004 Equity Incentive Plan ("2004 Plan"). The 2004 Plan is a continuation of the 1995 Stock Option Plan and supplants the 1995 Stock Option Plan, under which no further awards will be granted. On May 6, 2008, the stockholders of the Company approved an amendment to the 2004 Plan increasing the aggregate number of shares of Common Stock for issuance under the 2004 Plan by 1,000,000 shares of common stock to 5,550,000

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Table of Contents


Young Broadcasting Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

2. Stock-Based Compensation (Continued)


shares of common stock. The Plan is administered by the Compensation Committee of the Board of Directors.

        On November 29, 2005, the Company entered into an exchange agreement with each of its executive officers (collectively, the "Exchange Agreements"). Pursuant to the Exchange Agreements, options to purchase an aggregate of 2,198,375 shares of common stock of the Company, representing all of the outstanding and unexercised stock options held by such executive officers, were cancelled and, in exchange for such cancelled options (which had a fair market value of approximately $182,000), the executive officers were awarded an aggregate of 318,791 deferred stock units (which had an aggregate value of approximately $602,000) under the 2004 Plan. The compensation expense associated with the fair market value of the deferred stock units is being recognized ratably over the three year vesting period.

        On November 30, 2005, the Company commenced an offer to all eligible employees to exchange all of their outstanding stock options. Under the terms of this offer, participating employees had the ability to exchange their outstanding options with an exercise price of less than $30.44 per share for new restricted shares that vest over a period of three years. The number of restricted shares to be received was based upon certain exchange ratios. In order to participate in this offer, employees were required to tender all of their options, regardless of when granted or the exercise price. Pursuant to the terms of the offer, tendered options with exercise prices of $30.44 or above were to be cancelled upon expiration of the offer, without the payment of any consideration. Options to purchase an aggregate of 949,776 shares of common stock were eligible for participation in the offer. The offer expired on December 30, 2005, at which time the Company accepted for exchange and cancelled options to purchase a total of 945,776 shares of common stock with a fair market value of approximately $181,000, and issued an aggregate of 158,992 restricted shares of Class A common stock, under the 2004 Plan, for an aggregate value of approximately $401,000. The compensation expense associated with the fair market value of the restricted stock issued is being recognized ratably over the three year vesting period.

        In June 2006 and June 2007, the Company awarded 636,700 and 602,968 deferred stock units, respectively, to executive officers of the Company under the 2004 Plan, with aggregate market values at the date of grant of approximately $2.3 million and $2.3 million, respectively. Deferred stock awards represent the right to receive shares of Class B common stock at the end of specified deferral periods. The deferred stock units vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non-cash compensation expense included in selling, general and administrative expenses. Upon vesting the recipients will be credited with units equivalent to shares. During the deferral period, the participants have no voting or other rights associated with stock ownership unless and until the shares are actually delivered at the end of the deferral period. The end of the deferral period for the deferred stock awards will occur after the termination of employment. Additionally, granted but unvested deferred stock units are forfeited upon termination of employment, unless for reasons of death or disability.

        In June 2006 and June 2007, the Company awarded 590,450 and 495,500 shares, respectively, of restricted stock to certain officers and other eligible key employees under the 2004 Plan, with market values at the date of grant of approximately $2.1 million and $1.9 million, respectively. The restricted shares vest ratably in three equal annual installments beginning one year from the date of the grant

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Table of Contents


Young Broadcasting Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

2. Stock-Based Compensation (Continued)


and, as they vest, are charged to the income statement as non cash compensation expense included in the selling, general and administrative expenses. During the vesting period, the participants have voting rights and the right to receive any dividends paid with respect to such shares. Upon vesting, the restricted stock recipients will receive shares of unrestricted Class A Common stock. Additionally, granted but unvested shares are forfeited upon termination of employment, unless for reasons of death or disability.

    Stock Options

        The Company has 518,017 and 509,925 stock options outstanding at December 31, 2007 and September 30, 2008, respectively. There were no stock options issued or exercised for the nine months ended September 30, 2008

    Restricted Shares and Deferred Stock Units

        The fair value of nonvested restricted shares and deferred stock units is determined based on the closing trading price of the Company's Class A common stock on the grant date. The Company recorded non-cash compensation expense in connection with the issuance of the restricted shares and deferred stock units of approximately $1.1 million and $779,000, respectively, for the three months ended September 30, 2007and 2008, and $3.2 million and $2.8 million, respectively, for the nine months ended September 30, 2007 and 2008.

        There were 2,245,147 and 1,206,997 shares of unvested restricted and deferred stock units at December 31, 2007 and September 30, 2008, respectively, with a weighted average share price of $3.95 at both dates.

        The Company estimates recording additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $737,000 for the remainder of 2008 and approximately $1.9 million and $562,000 during 2009 and 2010, respectively.

        The Company adopted FASB Statement No. 123 (R), Share-Based Payment ("SFAS 123R"), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

        The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards available to offset future federal and state taxable income. Accordingly, the adoption of SFAS 123R did not have any impact on the Company's consolidated statements of cash flows.

This excerpt taken from the YBTVA 10-Q filed Aug 14, 2008.

2. Stock-Based Compensation

        On May 4, 2004, the stockholders of the Company approved the 2004 Equity Incentive Plan ("2004 Plan"). The 2004 Plan is a continuation of the 1995 Stock Option Plan and supplants the 1995 Stock Option Plan, under which no further awards will be granted. On May 6, 2008, the stockholders of the Company approved an amendment to the 2004 Plan increasing the aggregate number of shares of Common Stock for issuance under the 2004 Plan by 1,000,000 shares of common stock to 5,550,000 shares of common stock. The Plan is administered by the Compensation Committee of the Board of Directors.

        On November 29, 2005, the Company entered into an exchange agreement with each of its executive officers (collectively, the "Exchange Agreements"). Pursuant to the Exchange Agreements, options to purchase an aggregate of 2,198,375 shares of common stock of the Company, representing all of the outstanding and unexercised stock options held by such executive officers, were cancelled and, in exchange for such cancelled options (which had a fair market value of approximately $182,000), the executive officers were awarded an aggregate of 318,791 deferred stock units (which had an aggregate value of approximately $602,000) under the 2004 Plan. The compensation expense associated with the fair market value of the deferred stock units is being recognized ratably over the three year vesting period.

        On November 30, 2005, the Company commenced an offer to all eligible employees to exchange all of their outstanding stock options. Under the terms of this offer, participating employees had the ability to exchange their outstanding options with an exercise price of less than $30.44 per share for new restricted shares that vest over a period of three years. The number of restricted shares to be received was based upon certain exchange ratios. In order to participate in this offer, employees were required to tender all of their options, regardless of when granted or the exercise price. Pursuant to the

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Notes To Consolidated Financial Statements (Continued)

2. Stock-Based Compensation (Continued)


terms of the offer, tendered options with exercise prices of $30.44 or above were to be cancelled upon expiration of the offer, without the payment of any consideration. Options to purchase an aggregate of 949,776 shares of common stock were eligible for participation in the offer. The offer expired on December 30, 2005, at which time the Company accepted for exchange and cancelled options to purchase a total of 945,776 shares of common stock with a fair market value of approximately $181,000, and issued an aggregate of 158,992 restricted shares of Class A common stock, under the 2004 Plan, for an aggregate value of approximately $401,000. The compensation expense associated with the fair market value of the restricted stock issued is being recognized ratably over the three year vesting period.

        In June 2006 and June 2007, the Company awarded 636,700 and 602,968 deferred stock units, respectively, to executive officers of the Company under the 2004 Plan, with aggregate market values at the date of grant of approximately $2.3 million and $2.3 million, respectively. Deferred stock awards represent the right to receive shares of Class B common stock at the end of specified deferral periods. The deferred stock units vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non-cash compensation expense included in selling, general and administrative expenses. Upon vesting the recipients will be credited with units equivalent to shares. During the deferral period, the participants have no voting or other rights associated with stock ownership unless and until the shares are actually delivered at the end of the deferral period. The end of the deferral period for the deferred stock awards will occur after the termination of employment. Additionally, granted but unvested deferred stock units are forfeited upon termination of employment, unless for reasons of death or disability.

        In June 2006 and June 2007, the Company awarded 590,450 and 495,500 shares, respectively, of restricted stock to certain officers and other eligible key employees under the 2004 Plan, with market values at the date of grant of approximately $2.1 million and $1.9 million, respectively. The restricted shares vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non cash compensation expense included in the selling, general and administrative expenses. During the vesting period, the participants have voting rights and the right to receive any dividends paid with respect to such shares. Upon vesting, the restricted stock recipients will receive shares of unrestricted Class A Common stock. Additionally, granted but unvested shares are forfeited upon termination of employment, unless for reasons of death or disability.

    Stock Options

        The Company has 518,017 and 509,925 stock options outstanding at December 31, 2007 and June 30, 2008, respectively.

    Restricted Shares and Deferred Stock Units

        The fair value of nonvested restricted shares and deferred stock units is determined based on the closing trading price of the Company's Class A common stock on the grant date. The Company recorded non-cash compensation expense in connection with the issuance of the restricted shares and deferred stock units of approximately $1.2 million and $1.1 million, respectively, for the three months ended June 30, 2007 and 2008, and $2.2 million and $2.1 million, respectively, for the six months ended June 30, 2007 and 2008.

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Notes To Consolidated Financial Statements (Continued)

2. Stock-Based Compensation (Continued)

        There were 2,245,147 and 1,225,594 shares of unvested restricted and deferred stock units at December 31, 2007 and June 30, 2008, respectively, with a weighted average share price of $3.95 at both dates.

        The Company estimates recording additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $1.5 million for the remainder of 2008 and approximately $1.9 million and $571,000 during 2009 and 2010, respectively.

        The Company adopted FASB Statement No. 123 (R), Share-Based Payment ("SFAS 123R"), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

        The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards available to offset future federal and state taxable income. Accordingly, the adoption of SFAS 123R did not have any impact on the Company's consolidated statements of cash flows.

This excerpt taken from the YBTVA 10-Q filed May 9, 2008.

2. Stock-Based Compensation

        On May 4, 2004, the stockholders of the Company approved the 2004 Equity Incentive Plan ("2004 Plan"). The 2004 Plan is a continuation of the 1995 Stock Option Plan and supplants the 1995 Stock Option Plan, under which no further awards will be granted. The 2004 Plan is administered by the Compensation Committee of the Board of Directors.

        On November 29, 2005, the Company entered into an exchange agreement with each of its executive officers (collectively, the "Exchange Agreements"). Pursuant to the Exchange Agreements, options to purchase an aggregate of 2,198,375 shares of common stock of the Company, representing all of the outstanding and unexercised stock options held by such executive officers, were cancelled and, in exchange for such cancelled options (which had a fair market value of approximately $182,000), the executive officers were awarded an aggregate of 318,791 deferred stock units (which had an aggregate value of approximately $602,000) under the 2004 Plan. The compensation expense associated with the fair market value of the deferred stock units ($602,000) is being recognized ratably over the three year vesting period.

        In June 2005, June 2006 and June 2007, the Company awarded 438,500, 636,700 and 602,968 deferred stock units, respectively, to executive officers of the Company under the 2004 Plan, with aggregate market values at the date of grant of approximately $2.0 million, $2.3 million and $2.3 million, respectively. Deferred stock units represent the right to receive shares of Class B common stock at the end of specified deferral periods. The deferred stock units vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non-cash compensation expense included in selling, general and administrative expenses. Upon vesting the recipients will be credited with units equivalent to shares. During the deferral period, the participants have no voting or other rights associated with stock ownership unless and until the shares are actually delivered at the end of the deferral period. The end of the deferral period for the deferred stock awards will occur after the termination of employment. Additionally, granted but unvested deferred stock units are forfeited upon termination of employment, unless for reasons of death or disability.

        In June 2005, June 2006 and June 2007, the Company awarded 432,600, 590,450 and 495,500 shares, respectively, of restricted stock to certain officers and other eligible key employees under the 2004 Plan, with market values at the date of grant of approximately $2.0 million, $2.1 million and $1.9 million, respectively. The restricted shares vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non cash compensation expense included in the selling, general and administrative expenses. During the vesting period, the participants have voting rights and the right to receive any dividends paid with respect to such shares. Upon vesting, the restricted stock recipients will receive shares of unrestricted Class A Common Stock. Additionally, granted but unvested shares are forfeited upon termination of employment, unless for reasons of death or disability.

        On November 30, 2005, the Company commenced an offer to all eligible employees to exchange all of their outstanding stock options. Under the terms of this offer, participating employees had the ability to exchange their outstanding options with an exercise price of less than $30.44 per share for new restricted shares that vest over a period of three years. The number of restricted shares to be received was based upon certain exchange ratios. In order to participate in this offer, employees were

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Young Broadcasting Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

2. Stock-Based Compensation (Continued)


required to tender all of their options, regardless of when granted or the exercise price. Pursuant to the terms of the offer, tendered options with exercise prices of $30.44 or above were to be cancelled upon expiration of the offer, without the payment of any consideration. Options to purchase an aggregate of 949,776 shares of common stock were eligible for participation in the offer. The offer expired on December 30, 2005, at which time the Company accepted for exchange and cancelled options to purchase a total of 945,776 shares of Common Stock with a fair market value of approximately $181,000, and issued an aggregate of 158,992 restricted shares of Class A common stock, under the 2004 Plan, for an aggregate value of approximately $401,000. The compensation expense associated with the fair market value of the restricted stock issued ($401,000) is being recognized ratably over the three year vesting period.

    Stock Options

        The Company had 518,017 and 513,517 stock options outstanding at December 31, 2007 and March 31, 2008.

    Restricted Shares and Deferred Stock Units

        The fair value of nonvested restricted shares and deferred stock units is determined based on the closing trading price of the Company's Class A common stock on the grant date. The Company recorded non-cash compensation expense in connection with the issuance of the restricted shares and deferred stock units of approximately $1.0 million for the three months ended March 31, 2007 and 2008.

        There were 2,245,147 and 2,209,470 unvested restricted shares and deferred stock units as of December 31, 2007 and March 31, 2008, respectively, with a weighted average share price of $3.95 at both dates.

        The Company estimates it will record additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $2.5 million for the remainder of 2008 and approximately $1.9 million and $574,000 during 2009 and 2010, respectively.

        The Company adopted FASB Statement No. 123 (R), Share-Based Payment ("SFAS 123R"), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

        The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards available to offset future federal and state taxable income. Accordingly, the adoption of SFAS 123R did not have any impact on the Company's consolidated statements of cash flows.

        Prior to January 1, 2006, the Company had accounted for its share-based payments to employees under FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS "123") which allowed companies to either expense the estimated fair value of stock options or to follow the intrinsic value method set forth in Account Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), but disclose the pro forma net income (loss) had the fair value of the options been expensed.

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Young Broadcasting Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

This excerpt taken from the YBTVA 10-K filed Mar 13, 2008.

Stock-Based Compensation

        The Company adopted FASB Statement No. 123 (R), Share-Based Payment ("SFAS 123R"), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

        The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards available to offset future federal and state taxable income. Accordingly, the adoption of SFAS 123R did not have any impact on the Company's consolidated statements of cash flows.

        Prior to January 1, 2006, the Company had accounted for its share-based payments to employees under FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS "123") which allowed companies to either expense the estimated fair value of stock options or to follow the intrinsic value method set forth in Account Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), but disclose the pro forma net income (loss) had the fair value of the options been expensed.

        On November 29, 2005, the Company entered into an exchange agreement with each of its executive officers whereby options to purchase an aggregate of 2,198,375 shares of common stock of the Company, representing all of the outstanding and unexercised options held by the executive officers, were cancelled and, in exchange for such cancelled options, the executive officers were awarded an aggregate of 318,791 deferred stock units. On December 30, 2005 the Company concluded an offer to all eligible employees to exchange all of their outstanding stock options for restricted shares. In addition, the Company will incur compensation expense associated with the issuance of the restricted shares and deferred stock units. The Company estimates recording additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $3.7 million, $2.0 million and $579,000 during 2008, 2009 and 2010, respectively.

        The Company awarded 586,753, 590,450 and 495,500 shares of restricted stock during 2005, 2006 and 2007, respectively, to certain officers and other eligible employees under the 2004 Equity Incentive Plan. The Company also awarded 109,100, 757,291 and 636,700 deferred stock units during 2004, 2005 and 2006, respectively, to executive officers of the Company under the 2004 Equity Incentive Plan.

        Subsequent to the above-discussed exchange agreements and exchange offer, the Company had an aggregate of 900 outstanding unvested stock options which were fully expensed during 2006, in the amount of approximately $5,000. The Company did not grant options during 2005, 2006 or 2007. The Company had 535,417 and 518,017 stock options outstanding at December 31, 2006 and 2007, respectively.

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Young Broadcasting Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

This excerpt taken from the YBTVA 10-Q filed Nov 8, 2007.

2. Stock-Based Compensation

        On May 4, 2004, the shareholders of the Company approved the 2004 Equity Incentive Plan ("2004 Plan"). The 2004 Plan is a continuation of the 1995 Stock Option Plan and supplants the 1995 Stock Option Plan, under which no further awards will be granted. The 2004 Plan is administered by the Compensation Committee of the Board of Directors.

        In June 2007, June 2006 and June 2005, the Company awarded 602,968, 636,700 and 438,500 deferred stock units, respectively, to executive officers of the Company under the 2004 Plan, with aggregate market values at the date of grant of approximately $2.3 million, $2.3 million and $2.0 million, respectively. Deferred stock awards represent the right to receive shares of Class B common stock at the end of specified deferral periods. The deferred stock awards vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non cash compensation expense included in the selling, general and administrative expenses. Upon vesting the recipients will be credited with units equivalent to shares. During the deferral period, the participants have no voting or other rights associated with stock ownership unless and until the shares are actually delivered at the end of the deferral period. The end of the deferral period for the deferred stock awards will occur after the termination of employment. Additionally, granted but unvested deferred stock units are forfeited upon termination of employment, unless for reasons of death or disability.

        On November 29, 2005, the Company entered into an exchange agreement with each of its executive officers (collectively, the "Exchange Agreements"). Pursuant to the Exchange Agreements, options to purchase an aggregate of 2,198,375 shares of common stock of the Company, representing all of the outstanding and unexercised stock options held by such executive officers, were cancelled and, in exchange for such cancelled options (which had a fair market value of approximately $182,000), the executive officers were awarded an aggregate of 318,791 deferred stock units (which had an aggregate value of approximately $602,000) under the 2004 Plan. The compensation expense associated with the fair market value of the deferred stock units ($602,000) is being recognized ratably over the three year vesting period.

        In June 2007, June 2006 and June 2005, the Company awarded 495,500, 590,450 and 432,600 shares, respectively, of restricted stock to certain officers and other eligible key employees under the

7



2004 Plan, with market values at the date of grant of approximately $1.9 million, $2.1 million and $2.0 million, respectively. The restricted shares vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non cash compensation expense included in the selling, general and administrative expenses. During the vesting period, the participants have voting rights and the right to receive all dividends paid with respect to such shares. Upon vesting, the restricted stock recipients will receive shares of unrestricted Class A Common Stock. Additionally, granted but unvested shares are forfeited upon termination of employment, unless for reasons of death or disability.

        On November 30, 2005, the Company commenced an offer to all eligible employees to exchange all of their outstanding stock options. Under the terms of this offer, participating employees had the ability to exchange their outstanding options with an exercise price of less than $30.44 per share for new restricted shares that vest over a period of three years. The number of restricted shares to be received was based upon certain exchange ratios. In order to participate in this offer, employees were required to tender all of their options, regardless of when granted or the exercise price. Pursuant to the terms of the offer, tendered options with exercise prices of $30.44 or above were to be cancelled upon expiration of the offer, without the payment of any consideration. Options to purchase an aggregate of 949,776 shares of common stock were eligible for participation in the offer. The offer expired on December 30, 2005, at which time the Company accepted for exchange and cancelled options to purchase a total of 945,776 shares of Common Stock with a fair market value of approximately $181,000, and issued an aggregate of 158,992 restricted shares of Class A common stock, under the 2004 Plan, for an aggregate value of approximately $401,000. The compensation expense associated with the fair market value of the restricted stock issued ($401,000) is being recognized ratably over the three year vesting period.

    Stock Options

        Subsequent to the above-discussed Exchange Agreements and exchange offer, the Company had an aggregate of 900 outstanding stock options that were unvested which were fully expensed during the first half of 2006, in the amount of approximately $5,000. The Company had 535,417 stock options outstanding at December 31, 2006 and September 30, 2007.

    Restricted Shares and Deferred Stock Units

        The fair value of nonvested restricted shares and deferred stock units is determined based on the closing trading price of the Company's Class A common stock on the grant date. The Company recorded non-cash compensation expense in connection with the issuance of the restricted shares and deferred stock units of approximately $1.0 million and $1.1 million, respectively, for the three months ended September 30, 2006 and 2007, and $2.4 million and $3.2 million, respectively, for the nine months ended September 30, 2006 and 2007.

        There were 2,176,679 and 2,407,367 unvested restricted shares and deferred stock units as of December 31, 2006 and September 30, 2007, respectively, with a weighted average share price of $4.13 and $3.70, respectively.

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        The Company estimates recording additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $1.1 million for the remainder of 2007 and approximately $3.7 million, $2.0 million and $583,000 during 2008, 2009, and 2010, respectively.

        During the first quarter of 2006, the Company adopted FASB Statement No. 123 (R), Share-Based Payment ("SFAS 123R"), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

        The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards available to offset future federal and state taxable income. Accordingly, the adoption of SFAS 123R did not have any impact on the Company's consolidated statements of cash flows.

        Prior to January 1, 2006, the Company had accounted for its share-based payments to employees under FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS "123"), which allowed companies to either expense the estimated fair value of stock options or to follow the intrinsic value method set forth in Account Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), but disclose the pro forma net income (loss) had the fair value of the options been expensed.

This excerpt taken from the YBTVA 10-Q filed May 22, 2007.

2.   Stock-Based Compensation

On May 4, 2004, the shareholders of the Company approved the 2004 Equity Incentive Plan (“2004 Plan”).  The 2004 Plan is a continuation of the 1995 Stock Option Plan and supplants the 1995 Stock Option Plan, under which no further awards will be granted.  The 2004 Plan is administered by the Compensation Committee of the Board of Directors.

In June 2006, June 2005 and May 2004, the Company awarded 636,700, 438,500 and 109,100 deferred stock units, respectively, to executive officers of the Company under the 2004 Plan, with aggregate market values at the date of grant of approximately $2.3 million, $2.0 million and $1.8 million, respectively.  Deferred stock awards represent the right to receive shares of Class B common stock at the end of specified deferral periods. The deferred stock awards vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non-cash compensation expense included in selling, general and administrative expenses.  Upon vesting the recipients will be credited with units equivalent to shares.  During the deferral period,

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the participants have no voting or other rights associated with stock ownership unless and until the shares are actually delivered at the end of the deferral period. The end of the deferral period for the deferred stock awards will occur after the termination of employment.  Additionally, granted but unvested deferred stock units are forfeited upon termination of employment, unless for reasons of death or disability.

On November 29, 2005, the Company entered into an exchange agreement with each of its executive officers (collectively, the “Exchange Agreements”). Pursuant to the Exchange Agreements, options to purchase an aggregate of 2,198,375 shares of common stock of the Company, representing all of the outstanding and unexercised stock options held by such executive officers, were cancelled and, in exchange for such cancelled options (which had a fair market value of approximately $182,000), the executive officers were awarded an aggregate of 318,791 deferred stock units (which had an aggregate value of approximately $602,000) under the 2004 Plan.  The compensation expense associated with the fair market value of the deferred stock units ($602,000) is being recognized ratably over the three year vesting period.

In June 2006, June 2005 and May 2004, the Company awarded 590,450, 432,600 and 102,954 shares, respectively, of restricted stock to certain officers and other eligible key employees under the 2004 Equity Incentive Plan, with market values at the date of grant of approximately $2.1 million, $2.0 million and $1.7 million, respectively.  The restricted shares vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non cash compensation expense included in the selling, general and administrative expenses.  During the vesting period, the participants have voting rights and the right to receive all dividends paid with respect to such shares.  Upon vesting, the restricted stock recipients will receive shares of unrestricted Class A Common Stock.  Additionally, granted but unvested shares are forfeited upon termination of employment, unless for reasons of death or disability.

On November 30, 2005, the Company commenced an offer to all eligible employees to exchange all of their outstanding stock options. Under the terms of this offer, participating employees had the ability to exchange their outstanding options with an exercise price of less than $30.44 per share for new restricted shares that vest over a period of three years. The number of restricted shares to be received was based upon certain exchange ratios. In order to participate in this offer, employees were required to tender all of their options, regardless of when granted or the exercise price. Pursuant to the terms of the offer, tendered options with exercise prices of $30.44 or above were to be cancelled upon expiration of the offer, without the payment of any consideration.  Options to purchase an aggregate of 949,776 shares of common stock were eligible for participation in the offer. The offer expired on December 30, 2005, at which time the Company accepted for exchange and cancelled options to purchase a total of 945,776 shares of Common Stock with a fair market value of approximately $181,000, and issued an aggregate of 158,992 restricted shares of Class A common stock, under the 2004 Plan, for an aggregate value of approximately $401,000.  The compensation expense associated with the fair market value of the restricted stock issued ($401,000) is being recognized ratably over the three year vesting period.

Stock Options

As a result of the above-discussed Exchange Agreements and exchange offer, the Company had an aggregate of 900 outstanding stock options that were unvested which were fully expensed during the three months ended March 31, 2006, in the amount of approximately $5,000.  The Company had 535,417 stock options outstanding at December 31, 2006 and March 31, 2007.

Restricted Shares and Deferred Stock Units

The fair value of nonvested restricted shares and deferred stock units is determined based on the closing trading price of the Company’s Class A common stock on the grant date. The Company recorded non-cash compensation expense in connection with the issuance of the restricted shares and deferred stock units of approximately $582,000 and $999,000, respectively, for the three months ended March 31, 2006 and 2007.

There were 2,176,679 and 2,141,672 unvested restricted shares and deferred stock units as of December 31, 2006 and March 31, 2007, respectively, with a weighted average share price of $4.13 at both dates.

7




 

The Company estimates it will record additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $2.4 million for the remainder of 2007 and approximately $2.4 million and $727,000 during 2008 and 2009, respectively.

During the first quarter of 2006, the Company adopted FASB Statement No. 123 (R), Share-Based Payment (“SFAS 123R”), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value.  The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards available to offset future federal and state taxable income.  Accordingly, the adoption of SFAS 123R did not have any impact on the Company’s consolidated statements of cash flows.

Prior to January 1, 2006, the Company had accounted for its share-based payments to employees under FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS “123”) which allowed companies to either expense the estimated fair value of stock options or to follow the intrinsic value method set forth in Account Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”), but disclose the pro forma net income (loss) had the fair value of the options been expensed.

This excerpt taken from the YBTVA 10-Q filed May 8, 2007.

2.   Stock-Based Compensation

On May 4, 2004, the shareholders of the Company approved the 2004 Equity Incentive Plan (“2004 Plan”).  The 2004 Plan is a continuation of the 1995 Stock Option Plan and supplants the 1995 Stock Option Plan, under which no further awards will be granted.  The 2004 Plan is administered by the Compensation Committee of the Board of Directors.

In June 2006, June 2005 and May 2004, the Company awarded 636,700, 438,500 and 109,100 deferred stock units, respectively, to executive officers of the Company under the 2004 Plan, with aggregate market values at the date of grant of approximately $2.3 million, $2.0 million and $1.8 million, respectively.  Deferred stock awards represent the right to receive shares of Class B common stock at the end of specified deferral periods. The deferred stock awards vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non-cash compensation expense included in selling, general and administrative expenses.  Upon vesting the recipients will be credited with units equivalent to shares.  During the deferral period,

6




the participants have no voting or other rights associated with stock ownership unless and until the shares are actually delivered at the end of the deferral period. The end of the deferral period for the deferred stock awards will occur after the termination of employment.  Additionally, granted but unvested deferred stock units are forfeited upon termination of employment, unless for reasons of death or disability.

On November 29, 2005, the Company entered into an exchange agreement with each of its executive officers (collectively, the “Exchange Agreements”). Pursuant to the Exchange Agreements, options to purchase an aggregate of 2,198,375 shares of common stock of the Company, representing all of the outstanding and unexercised stock options held by such executive officers, were cancelled and, in exchange for such cancelled options (which had a fair market value of approximately $182,000), the executive officers were awarded an aggregate of 318,791 deferred stock units (which had an aggregate value of approximately $602,000) under the 2004 Plan.  The compensation expense associated with the fair market value of the deferred stock units ($602,000) is being recognized ratably over the three year vesting period.

In June 2006, June 2005 and May 2004, the Company awarded 590,450, 432,600 and 102,954 shares, respectively, of restricted stock to certain officers and other eligible key employees under the 2004 Equity Incentive Plan, with market values at the date of grant of approximately $2.1 million, $2.0 million and $1.7 million, respectively.  The restricted shares vest ratably in three equal annual installments beginning one year from the date of the grant and, as they vest, are charged to the income statement as non cash compensation expense included in the selling, general and administrative expenses.  During the vesting period, the participants have voting rights and the right to receive all dividends paid with respect to such shares.  Upon vesting, the restricted stock recipients will receive shares of unrestricted Class A Common Stock.  Additionally, granted but unvested shares are forfeited upon termination of employment, unless for reasons of death or disability.

On November 30, 2005, the Company commenced an offer to all eligible employees to exchange all of their outstanding stock options. Under the terms of this offer, participating employees had the ability to exchange their outstanding options with an exercise price of less than $30.44 per share for new restricted shares that vest over a period of three years. The number of restricted shares to be received was based upon certain exchange ratios. In order to participate in this offer, employees were required to tender all of their options, regardless of when granted or the exercise price. Pursuant to the terms of the offer, tendered options with exercise prices of $30.44 or above were to be cancelled upon expiration of the offer, without the payment of any consideration.  Options to purchase an aggregate of 949,776 shares of common stock were eligible for participation in the offer. The offer expired on December 30, 2005, at which time the Company accepted for exchange and cancelled options to purchase a total of 945,776 shares of Common Stock with a fair market value of approximately $181,000, and issued an aggregate of 158,992 restricted shares of Class A common stock, under the 2004 Plan, for an aggregate value of approximately $401,000.  The compensation expense associated with the fair market value of the restricted stock issued ($401,000) is being recognized ratably over the three year vesting period.

Stock Options

As a result of the above-discussed Exchange Agreements and exchange offer, the Company had an aggregate of 900 outstanding stock options that were unvested which were fully expensed during the three months ended March 31, 2006, in the amount of approximately $5,000.  The Company had 535,417 stock options outstanding at December 31, 2006 and March 31, 2007.

Restricted Shares and Deferred Stock Units

The fair value of nonvested restricted shares and deferred stock units is determined based on the closing trading price of the Company’s Class A common stock on the grant date. The Company recorded non-cash compensation expense in connection with the issuance of the restricted shares and deferred stock units of approximately $582,000 and $999,000, respectively, for the three months ended March 31, 2006 and 2007.

There were 2,176,679 and 2,141,672 unvested restricted shares and deferred stock units as of December 31, 2006 and March 31, 2007, respectively, with a weighted average share price of $4.13 at both dates.

7




 

The Company estimates it will record additional compensation expense relating to previously issued restricted shares and deferred stock units of approximately $2.4 million for the remainder of 2007 and approximately $2.4 million and $727,000 during 2008 and 2009, respectively.

During the first quarter of 2006, the Company adopted FASB Statement No. 123 (R), Share-Based Payment (“SFAS 123R”), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value.  The Company adopted SFAS 123R using the modified prospective method, and consequently has not retroactively adjusted results from prior periods.

The Company does not currently recognize tax benefits resulting from tax deductions in excess of the compensation costs recognized because of the federal and state net operating loss carryforwards available to offset future federal and state taxable income.  Accordingly, the adoption of SFAS 123R did not have any impact on the Company’s consolidated statements of cash flows.

Prior to January 1, 2006, the Company had accounted for its share-based payments to employees under FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS “123”) which allowed companies to either expense the estimated fair value of stock options or to follow the intrinsic value method set forth in Account Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”), but disclose the pro forma net income (loss) had the fair value of the options been expensed.

This excerpt taken from the YBTVA 10-Q filed May 6, 2005.

2.     Stock-Based Compensation

 

The Company follows the provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation (“Statement 123”). The provisions of Statement 123 allow companies to either expense the estimated fair value of stock options or to continue to follow the intrinsic value method set forth in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”), but disclose the pro forma effects on net income (loss) had the fair value of the options been expensed. The Company has elected to continue to apply APB 25 in accounting for its stock option incentive plans.

 

In accordance with APB 25 and related interpretations, compensation expense for stock options is recognized in income based on the excess, if any, of the quoted market price of the stock at the grant date of the award or other measurement date over the amount an employee must pay to acquire the stock. Generally, the exercise price for stock options granted to employees equals or exceeds the fair market value of the Company’s common stock at the date of grant, thereby resulting in no recognition of compensation expense by the Company.  In addition, no compensation expense is recorded for purchases under the Employee Stock Purchase Plan (“ESPP”) in accordance with APB 25.  For awards that generate compensation expense as defined under APB 25, the Company calculates the amount of compensation expense and recognizes the expense over the vesting period of the award.

 

6



 

The following table illustrates the effect on net loss and earnings per share if the Company had applied the fair value recognition provisions of Statement 123.

 

 

 

Three Months Ended

 

 

 

March 31,

 

(dollars in thousands, except per share data)

 

2004

 

2005

 

Net loss-as reported

 

$

(21,302

)

$

(19,351

)

Add stock based employee compensation expense included in reported net loss

 

830

 

 

Deduct total stock-based employee compensation expense determined under fair value based method

 

929

 

858

 

Net loss-pro forma

 

$

21,401

 

$

20,209

 

Net loss per basic and diluted common share-as reported

 

$

(1.07

)

$

(0.97

)

Net loss per basic and diluted common share-pro forma

 

$

(1.08

)

$

(1.01

)

 

In December 2004, the FASB issued Statement No. 123(R), Share-Based Payment (“SFAS 123(R)”), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. Companies are required to implement SFAS 123(R) at the beginning of their next fiscal year that begins on or after June 15, 2005.  Accordingly, the Company expects to adopt Statement 123 (R) for the fiscal year beginning January 1, 2006.

 

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