鶹app

Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.5.0.2
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2016
Share-based Compensation [Abstract]
Stock-Based Compensation

(3)Stock-Based Compensation

鶹app grants, to certain of its directors, employees and employees of its subsidiaries, restricted stock, restricted stock units and stock options to purchase shares of its common stock (collectively, "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 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). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date.

In connection with the Recapitalization, 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 of 鶹app SiriusXM common stock (a “鶹app Sirius XM Award”), 鶹app Braves common stock (a “鶹app Braves Award”) and 鶹app Media common stock (a “鶹app Media Award”) (collectively, the “Adjusted 鶹app Awards”).

The exercise prices and number of shares subject to the Adjusted 鶹app Awards were determined based on 1) the exercise prices and number of shares subject to the 鶹app Award, 2) the distribution ratios, 3) the pre-Recapitalization trading price of 鶹app common stock and 4) the post-Recapitalization trading prices of 鶹app SiriusXM common stock, 鶹app Braves common stock and 鶹app Media common stock, such that all of the pre-Recapitalization value of the 鶹app Awards was allocated among the Adjusted 鶹app Awards.

Included in the accompanying condensed consolidated statements of operations are the following amounts of stock-based compensation, a portion of which relates to SIRIUS XM, as discussed below:

Three months ended

Nine months ended

September 30,

September 30,

2016

2015

2016

2015

(amountsinmillions)

Cost of subscriber services:

Programming and content

$
6

5

14

13

Customer service and billing

1

1

3

4

Other

1

2

3

6

Other operating expense

3

5

9

13

Selling, general and administrative

30

43

80

111

$
41

56

109

147

In connection with our CEO’s employment agreement, 鶹app granted approximately 775 thousand options of Series C 鶹app common stock and 39 thousand performance-based restricted stock units of Series C 鶹app common stock. Such options and restricted stock units had a grant-date fair value of $8.91 per share and $37.76 per share, respectively. These options mainly vest on December 31, 2016, and the performance-based restricted stock units cliff vest in one year, subject to satisfaction of certain performance objectives. 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.

Also during the nine months endedSeptember 30, 2016, 鶹app granted 100 thousand, 371 thousand and 36 thousand options to purchase shares of Series C common stock of 鶹app Media, 鶹app SiriusXM and 鶹app Braves, respectively. Such options had a weighted average grant-date fair value (“GDFV”) of $4.90, $7.45 and $3.58 per share, respectively, and vests 50% each on December 31, 2019 and 2020.

The Company did not grant anyoptions to purchase SeriesA or SeriesB of 鶹app Media, 鶹app SiriusXM or 鶹app Braves common stock during the nine months endedSeptember 30, 2016.

鶹app calculates the GDFV for all of its equity classified awards and the subsequent remeasurement of its liability classified and certain performance-based awards using the Black-Scholes Model. 鶹app estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of 鶹app common stock and the implied volatility of publicly traded 鶹app options. 鶹app uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject Awards.

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 and certain Awards of employees of Starz.

鶹app Media

SeriesA

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2016

2,360

$
23.36

Granted

—

$

—

Exercised

(194)

$
20.72

Forfeited/Cancelled

—

$

—

Recapitalization adjustment

(1,682)

$
10.64

Outstanding at September 30, 2016

484

$
11.55

2.5

years

$
8

Exercisable at September 30, 2016

465

$
11.51

2.4

years

$
8

SeriesC

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2016

10,613

$
30.09

Granted

876

$
35.77

Exercised

(443)

$
20.66

Forfeited/Cancelled

(1)

$
36.95

Recapitalization adjustment

(8,351)

$
14.08

Outstanding at September 30, 2016

2,694

$
14.98

4.7

years

$
35

Exercisable at September 30, 2016

1,096

$
12.03

2.9

years

$
18

鶹app SiriusXM

SeriesA

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2016

—

$

—

Recapitalization adjustment

2,235

$
19.33

Granted

—

$

—

Exercised

(119)

$
18.70

Forfeited/Cancelled

—

$

—

Outstanding at September 30, 2016

2,116

$
19.36

2.5

years

$
31

Exercisable at September 30, 2016

2,033

$
19.27

2.4

years

$
30

SeriesC

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2016

—

$

—

Recapitalization adjustment

11,154

$
25.34

Granted

371

$
31.72

Exercised

(177)

$
19.40

Forfeited/Cancelled

(3)

$
30.39

Outstanding at September 30, 2016

11,345

$
25.64

4.6

years

$
88

Exercisable at September 30, 2016

4,843

$
20.60

2.9

years

$
62

鶹app Braves

SeriesA

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2016

—

$

—

Recapitalization adjustment

207

$
11.30

Granted

—

$

—

Exercised

(18)

$
11.42

Forfeited/Cancelled

—

$

—

Outstanding at September 30, 2016

189

$
11.29

2.5

years

$
1

Exercisable at September 30, 2016

182

$
11.25

2.4

years

$
1

SeriesC

Weighted

Aggregate

average

intrinsic

鶹app

remaining

value

Awards(000's)

WAEP

life

(millions)

Outstanding at January1, 2016

—

$

—

Recapitalization adjustment

1,071

$
14.74

Granted

36

$
15.27

Exercised

(38)

$
11.19

Forfeited/Cancelled

—

$

—

Outstanding at September 30, 2016

1,069

$
14.88

4.7

years

$
3

Exercisable at September 30, 2016

430

$
12.06

2.9

years

$
2

As of September 30, 2016, the total unrecognized compensation cost related to unvested Awards was approximately $49 million.Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 2.8years.

As of September 30, 2016, 鶹app reserved 3.2 million, 13.5 million and 1.3 million shares of Series A and Series C common stock of 鶹app Media, 鶹app SiriusXM and 鶹app Braves, respectively, for issuance under exercise privileges of outstanding stock Awards.

SIRIUS XM - Stock-based Compensation

SIRIUS XM granted various types of stock awards to its employees and members of its board of directors during the nine months endedSeptember 30, 2016. As of September 30, 2016, SIRIUS XM has approximately 345 million options outstanding of which approximately 138 million are exercisable, each with a weighted-average exercise price per share of $3.47 and $2.80, respectively. The aggregate intrinsic value of SIRIUS XM options outstanding and exercisable as of September 30, 2016 is $244 million and $189 million, respectively. The stock-based compensation expense related to SIRIUS XM was $30 million and $41 million for the three months endedSeptember 30, 2016 and 2015, respectively, and $78 million and $115 million for the nine months endedSeptember 30, 2016 and 2015, respectively. As of September 30, 2016, the total unrecognized compensation cost related to unvested SIRIUS XM stock options and restricted stock units was $282 million. The SIRIUS XM unrecognized compensation cost will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 2.7years.