SHARE BASED PAYMENTS

The amounts recorded as share based compensation expense consist of stock option and restricted stock grants, common stock issued to employees and directors in lieu of cash payments, and Preferred Stock contributed to the 2012 Retention Plan.

Stock Option Awards

The Company has granted options to purchase its common stock to employees and directors of the Company under various stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding 10 years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with the Company. Generally, these options either vest annually over 3 years (one-third each year for 3 years), or cliff vest at the end of 3 years. The Company issues new shares upon the exercise of stock options.

The fair value of each option awarded is estimated on the date of grant using a Black-Scholes option-pricing model and expensed on a straight-line basis over the vesting period. Expected volatilities are based on historical volatility of the Company’s stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The Company includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk-free interest rate for periods within the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the years ended February 28, 2013, 2014 and 2015:



	For the Years Ended February 28,
	2013	2014	2015
Risk-Free Interest Rate:	0.5% - 0.7%	0.6% - 1.5%	1.2% - 1.5%
Expected Dividend Yield:	0%	0%	0%
Expected Life (Years):	4.2	4.3	4.3
Expected Volatility:	128.9% – 131.4%	80.4% - 115.9%	69.0% - 73.9%

The following table presents a summary of the Company’s stock options outstanding at February 28, 2015, and stock option activity during the year ended February 28, 2015 (“Price” reflects the weighted average exercise price per share):



	Options	Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding, beginning of period	6,984,605	$	3.74
Granted	571,219	2.90
Exercised (1)	794,768	0.57
Forfeited	40,000	0.70
Expired	996,610	17.28
Outstanding, end of period	5,724,446	1.76		6.6	$	5,060
Exercisable, end of period	2,557,363	2.00		5.2	$	2,447


(1)	The Company did not record an income tax benefit related to option exercises in the years ended February 28, 2013, 2014 and 2015. Cash received from option exercises during the years ended February 2013, 2014 and 2015 was $0.3 million, $0.3 million and $0.4 million, respectively.

The weighted average grant date fair value of options granted during the years ended February 28, 2014 and 2015, was $1.67 and $1.64, respectively.

A summary of the Company’s nonvested options at February 28, 2015, and changes during the year ended February 28, 2015, is presented below:



	Options	Weighted Average Grant Date Fair Value
Nonvested, beginning of period	3,325,481	$	0.98
Granted	571,219	1.64
Vested	689,617	1.07
Forfeited	40,000	0.57
Nonvested, end of period	3,167,083	1.08

There were 3.0 million shares available for future grants under the Company’s various equity plans at February 28, 2015 (1.9 million shares under the 2012 Equity Compensation Plan and 1.1 million shares under other plans). The vesting dates of outstanding options at February 28, 2015 range from March 2015 to March 2018, and expiration dates range from March 2015 to September 2024.

Restricted Stock Awards

The Company grants restricted stock awards to directors annually, and periodically grants restricted stock to employees in connection with employment agreements. Awards to directors are granted on the date of our annual meeting of shareholders and vest on the earlier of (i) the completion of the director’s 3-year term or (ii) the third anniversary of the date of grant. Restricted stock award grants are granted out of the Company’s 2012 Equity Compensation Plan. The Company may also award, out of the Company’s 2012 Equity Compensation Plan, stock to settle certain bonuses and other compensation that otherwise would be paid in cash. Any restrictions on these shares may be immediately lapsed on the grant date.

On January 16, 2013, the Company commenced an option exchange program whereby optionees holding certain fully-vested underwater stock options were given the opportunity to exchange those stock options into restricted stock with a one-year vesting term. The exchange ratios were intended to result in little to no incremental accounting cost to the Company because the fair value of the options was measured immediately prior to the exchange and compared to the fair value of the restricted stock exchanged. The exchange offer closed February 15, 2013. Pursuant to the exchange offer and based on participant elections, approximately 2.2 million stock options were canceled and approximately 0.5 million shares of restricted stock were issued. These shares of restricted stock vested February 19, 2014. The exchange resulted in less than $0.1 million of incremental accounting cost during the years ended February 28, 2013 and 2014.

The following table presents a summary of the Company’s restricted stock grants outstanding at February 28, 2015, and restricted stock activity during the year ended February 28, 2015 (“Price” reflects the weighted average share price at the date of grant):



	Awards	Price
Grants outstanding, beginning of period	590,544	$	1.79
Granted	1,437,429	3.18
Vested (restriction lapsed)	1,350,339	3.03
Forfeited	—	—
Grants outstanding, end of period	677,634	2.26

The total grant date fair value of shares vested during the years ended February 28, 2013, 2014 and 2015, was $1.4 million, $2.2 million and $4.1 million, respectively.

Recognized Non-Cash Compensation Expense

The following table summarizes stock-based compensation expense and related tax benefits recognized by the Company in the years ended February 28, 2013, 2014 and 2015:



	Year Ended February 28,
	2013		2014		2015
Station operating expenses	$	852	$	2,236	$	720
Corporate expenses	2,090		2,648		2,093
Stock-based compensation expense included in operating expenses	2,942		4,884		2,813
Tax benefit	—		1,954		—
Recognized stock-based compensation expense, net of tax	$	2,942	$	2,930	$	2,813

As of February 28, 2015, there was $2.1 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 1.6 years.