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CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CCMH has granted restricted stock awards to its employees and affiliates under its equity incentive plan. These common shares are
restricted in transferability for a term of up to five years and are forfeited, except in certain circumstances, in the event the employee
terminated his or her employment or relationship with CCMH prior to the lapse of the restriction. Recipients of the restricted stock
awards were entitled to all cash dividends as of the date the award was granted.
The following table presents a summary of CCMH’s restricted stock outstanding at and restricted stock activity during the year ended
December 31, 2011 (“Price” reflects the weighted average share price at the date of grant):
CCOH Share-Based Awards
CCOH Stock Options
The Company’s subsidiary, CCOH, has granted options to purchase shares of its Class A common stock to employees and directors o
f
CCOH and its affiliates under its equity incentive plan 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 ten years and are forfeited, except in certain circumstances, in the event the
employee or director terminates his or her employment or relationship with CCOH or one of its affiliates. These options vest solely on
continued service over a period of up to five years. The equity incentive stock plan contains anti-dilutive provisions that permit an
adjustment of the number of shares of CCOH’s common stock represented by each option for any change in capitalization.
The fair value of each option awarded on CCOH common stock is estimated on the date of grant using a Black-Scholes option-pricing
model. Expected volatilities are based on historical volatility of CCOH’s stock over the expected life of the options. The expected life
of options granted represents the period of time that options granted are expected to be outstanding. CCOH uses historical data to
estimate option exercises and employee terminations within the valuation model. CCOH 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 is
based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. The following
assumptions were used to calculate the fair value of CCOH’s options on the date of grant:
99
(In thousands, except per share data)
Awards
Price
Outstanding January 1, 2011
895
$36.00
Granted
—
Vested (restriction la
p
sed)
(438)
36.00
Forfeited
(12)
36.00
Outstandin
g
, December 31, 2011
445
36.00
Years Ended December 31,
2011
2010
2009
Expected volatility
57%
58%
58%
Ex
p
ected life in
y
ears
6.3
5.5
–
7.
0
5.5
–
7.
0
Ris
k
-free interest rate
1.26%
–
2.75%
1.38%
–
3.31%
2.31%
–
3.25%
Dividend
y
ield
0%
0%
0%