鶹app

Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

v3.10.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2018
Stock-Based Compensation
Stock-Based Compensation

(14)Stock-Based Compensation

鶹app—Incentive Plans

Pursuant to the 鶹app 2017 Omnibus Incentive Plan (the “2017 Plan”), the company may grant Awards to purchase shares of SeriesA, SeriesB and SeriesC 鶹app common stock. The 2017 Plan provides for Awards to be made in respect of a maximum of 50.0million shares of 鶹app common stock. Awards generally vest over 1-5 years and have a term of 7-10 years. 鶹app issues new shares upon exercise of equity awards. The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award).

In connection with the Recapitalization during 2016, all outstanding Awards with respect to 鶹app common stock (“鶹app Awards”) were adjusted pursuant to the anti-dilution provisions of the incentive plans under which the equity awards were granted, such that a holder of a 鶹app Award received new corresponding equity awards relating to shares of one or more series of 鶹app SiriusXM common stock, 鶹app Braves common stock and 鶹app Formula One common stock (collectively, the “Adjusted 鶹app Awards”).

All of the pre-Recapitalization value of the 鶹app Awards was allocated among the Adjusted 鶹app Awards.

鶹app—Grants of stock options

Awards granted in 2018, 2017 and 2016 are summarized as follows:

YearsendedDecember31,

2018

2017

2016

Options

Weighted

Options

Weighted

Options

Weighted

granted

average

granted

average

granted

average

(000's)

GDFV

(000's)

GDFV

(000's)

GDFV

SeriesC 鶹app common stock, 鶹app employees and directors (1)

NA

NA

NA

NA

10

$

8.33

SeriesC 鶹app common stock, 鶹app CEO (2)

NA

NA

NA

NA

775

$

8.91

SeriesC 鶹app SiriusXM common stock, 鶹app employees and directors (1)

33

$

11.09

263

$

10.39

415

$

7.50

SeriesC 鶹app SiriusXM common stock, 鶹app CEO (3)

633

$

11.56

920

$

8.50

NA

NA

SeriesC 鶹app Formula One common stock, 鶹app employees and directors (1)

21

$

8.99

153

$

9.42

101

$

4.89

SeriesC 鶹app Formula One common stock, 鶹app CEO (3)

139

$

8.80

171

$

8.96

NA

NA

SeriesC 鶹app Formula One common stock, Formula 1 employees (4)

1,888

$

8.64

2,015

$

8.16

NA

NA

SeriesC 鶹app Braves common stock, 鶹app employees and directors (1)

5

$

7.14

35

$

6.14

41

$

3.79

SeriesC 鶹app Braves common stock, 鶹app CEO (3)

46

$

6.44

149

$

6.02

NA

NA

(1)

Mainly vests between three and five years for employees and in one year for directors.

(2)

Grant mainly cliff vested in December 2016 and was made in connection with the CEO’s employment agreement.

(3)

Grants in 2017 mainly cliff vested in December 2017. Grants in 2018 cliff vested in December 2018 and were made in connection with the CEO’s employment agreement.

(4)

Vest monthly over one year.

In addition to the stock option grants to the 鶹app CEO, and in connection with his employment agreement, 鶹app granted performance-based restricted stock units (“RSUs”). During the years ended December31, 2018 and 2017, 鶹app granted 86 thousand and 50 thousand RSUs, respectively, of SeriesC 鶹app Formula One common stock. Such RSUs had a GDFV of $31.99 per share and $33.92 per share, respectively. During the year ended December 31, 2018, 鶹app granted 12 thousand RSUs of Series C 鶹app Braves common stock with a GDFV of $23.34 per share. During the year ended December31, 2016, 鶹app granted 39 thousand RSUs of SeriesC 鶹app common stock. Such RSUs had a GDFV of $37.76 per share. The 2018, 2017 and 2016 performance-based RSUs cliff vested in one year, subject to the satisfaction of certain performance objectives and based on an amount determined by the compensation committee. Performance objectives, which are subjective, are considered in determining the timing and amount of the compensation expense recognized. As the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The value of the grant is remeasured at each reporting period.

The Company did not grant any options to purchase SeriesA or SeriesB of 鶹app SiriusXM, 鶹app Braves or 鶹app Formula One common stock during the year ended December31, 2018.

The Company has calculated the GDFV for all of its equity classified awards using the Black-Scholes Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. For grants made in 2018, 2017 and 2016, the range of expected terms was 3.5 to 6.3 years. The volatility used in the calculation for Awards is based on the historical volatility of 鶹app’s stocks and the implied volatility of publicly traded 鶹app options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options.

The following table presents the volatilities used by the Company in the Black-Scholes Model for the 2018, 2017 and 2016 grants.

Volatility

2018 grants

鶹app options

23.5

%

-
26.0

%

2017 grants

鶹app options

22.6

%

-
29.8

%

2016 grants

鶹app options

22.6

%

-
26.8

%

鶹app—Outstanding Awards

The following tables present the number and weighted average exercise price (“WAEP”) of Awards to purchase 鶹app common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the Awards.

鶹app SiriusXM

SeriesA

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(in millions)

Outstanding at January1, 2018

1,626

$

19.78

Granted

—

$

—

Exercised

(223)

$

19.43

Forfeited/Cancelled

—

$

—

Outstanding at December 31, 2018

1,403

$

19.84

1.0

year

$

24

Exercisable at December31, 2018

1,399

$

19.81

1.0

year

$

24

SeriesC

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(in millions)

Outstanding at January1, 2018

11,328

$

27.66

Granted

666

$

42.34

Exercised

(497)

$

19.81

Forfeited/Cancelled

(2)

$

38.77

Outstanding at December 31, 2018

11,495

$

28.85

3.3

years

$

98

Exercisable at December31, 2018

8,039

$

28.25

3.1

years

$

74

鶹app Formula One

SeriesA

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(in millions)

Outstanding at January1, 2018

400

$

11.69

Granted

—

$

—

Exercised

(40)

$

11.50

Forfeited/Cancelled

—

$

—

Outstanding at December 31, 2018

360

$

11.71

1.0

year

$

6

Exercisable at December31, 2018

360

$

11.70

1.0

year

$

6

SeriesC

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(in millions)

Outstanding at January1, 2018

4,760

$

24.59

Granted

2,048

$

31.55

Exercised

(123)

$

13.83

Forfeited/Cancelled

(1)

$

34.84

Outstanding at December 31, 2018

6,684

$

26.92

4.7

years

$

35

Exercisable at December31, 2018

4,911

$

27.58

4.6

years

$

24

鶹app Braves

SeriesA

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(in millions)

Outstanding at January1, 2018

179

$

11.43

Granted

—

$

—

Exercised

(2)

$

11.00

Forfeited/Cancelled

—

$

—

Outstanding at December 31, 2018

177

$

11.44

1.0

year

$

2

Exercisable at December31, 2018

177

$

11.42

1.0

year

$

2

SeriesC

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(in millions)

Outstanding at January1, 2018

1,231

$

16.27

Granted

51

$

23.54

Exercised

(6)

$

11.97

Forfeited/Cancelled

—

$

—

Outstanding at December 31, 2018

1,276

$

16.58

3.2

years

$

11

Exercisable at December31, 2018

926

$

16.33

3.0

years

$

8

There were no outstanding SeriesB options to purchase shares of SeriesB 鶹app SiriusXM common stock, 鶹app Formula One common stock or 鶹app Braves common stock during 2018.

As of December31, 2018, the total unrecognized compensation cost related to unvested 鶹app Awards was approximately $22million. Such amount will be recognized in the Company’s consolidated statements of operations over a weighted average period of approximately 1.3years.

As of December31, 2018, 12.9million, 7.0million and 1.5million shares of SeriesA and SeriesC 鶹app SiriusXM, 鶹app Formula One and 鶹app Braves common stock, respectively, were reserved for issuance under exercise privileges of outstanding stock Awards.

ٲ̧

The aggregate intrinsic value of all options exercised during the years ended December31, 2018, 2017 and 2016 was $22million, $31million and $24million, respectively.

鶹app—Restricted Stock

The Company had approximately 218 thousand,211 thousand and 46 thousand unvested restricted shares of 鶹app SiriusXM, 鶹app Formula One, and 鶹app Braves common stock, respectively, held by certain directors, officers and employees of the Company as of December31, 2018. These SeriesA and SeriesC unvested restricted shares of 鶹app SiriusXM common stock, 鶹app Formula One common stock and 鶹app Braves common stock had a weighted average GDFV of $26.74,$28.79, and $20.16 per share, respectively.

The aggregate fair value of all restricted shares of 鶹app common stock that vested during the years ended December31, 2018, 2017 and 2016 was $9million, $85million and $7million, respectively.

SIRIUSXM—Stock-based Compensation

During the years ended December31, 2018, 2017 and 2016, SIRIUSXM granted various types of stock awards to its employees and members of its board of directors. Stock-based awards are generally subject to a graded vesting requirement, which is generally three to four years from the grant date.Stock options generally expire ten years from the date of grant.Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the third anniversary of the grant date. SIRIUSXM calculates the grant-date fair value for all of its equity classified awards and any subsequent remeasurement of its liability classified awards using the Black-Scholes Model. The weighted average volatility applied to the fair value determination of SIRIUSXM’s option grants during 2018, 2017 and 2016 was 23%, 24%and 22%, respectively. During the year ended December31, 2018, SIRIUSXM granted approximately 31.7million stock options with a weighted-average exercise price of $6.59 per share and a grant date fair value of $1.45 per share. As of December31, 2018, SIRIUSXM has approximately 243.4million options outstanding of which approximately 143.8million are exercisable, each with a weighted-average exercise price per share of $4.22 and $3.60, respectively. The aggregate intrinsic value of these outstanding and exercisable options was $392million and $303million, respectively. During the year ended December31, 2018, SIRIUSXM granted approximately 17.5million RSUs and PRSUs with a grant date fair value of $6.40 per share. The stock-based compensation related to SIRIUSXM stock options and restricted stock awards was $133million, $124million and $109million for the years ended December31, 2018, 2017, and 2016, respectively. As of December31, 2018, the total unrecognized compensation cost related to unvested SIRIUSXM stock options was $254million. The SIRIUSXM unrecognized compensation cost will be recognized in the Company’s consolidated statements of operations over a weighted average period of approximately 1.8 years.