We use the Black-Scholes model as opposed to a lattice pricing model because employee exercise patterns are not relevant to  this plan. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life is  based on the approximate number of days in the quarter assuming the option was issued on the first day of the quarter. The  expected volatility is based on our historical stock prices over the previous 90-day period. The annual dividend yield is based on  the annual dividend per share divided by the share price on the grant date.  The stock-based compensation expense recorded related to the ESPP for the years ended December 31, 2010, 2009 and 2008  was $0.2 million, $0.3 million and $0.2 million, respectively. Less than 0.2 million shares were issued to employees during the year  ended December 31, 2010. Match. The Sinclair Broadcast Group, Inc. 401(k) Profit Sharing Plan and Trust (the 401(k) Plan) is available as a benefit for  our eligible employees. Contributions made to the 401(k) Plan include an employee elected salary reduction amount, company- matching contributions (the Match) and an additional discretionary amount determined each year by the Board of Directors. The  Match and any additional discretionary contributions may be made using our Class A Common Stock if the Board of Directors so  chooses. Typically, we make the Match using our Class A Common Stock. The value of the Match is based on the level of elective deferrals into the 401(k) plan. The amount of shares of our Class A  Common Stock used to make the Match is determined using the closing price on or about March 1 st  of each year for the previous  calendar year’s Match. The Match is discretionary and is equal to a maximum of 50% of elective deferrals by eligible employees,  capped at 4% of the employee’s total cash compensation. For the years ended December 31, 2010, 2009 and 2008, we recorded  $1.5 million, zero and $2.0 million, respectively, of compensation expense related to the Match. We did not make a 401(k) plan  Match in 2009.  SARs. On March 12, 2010, 300,000 SARs were granted to David Smith, our President and Chief Executive Officer, pursuant  to the LTIP. The base value of each SAR is $5.75 per share, which was the closing price of our Class A Common Stock on the  grant date. The SARs had a grant date fair value of $1.6 million. On April 1, 2008, 350,000 SARs were granted to David Smith,  pursuant to the LTIP. The base value of each SAR is $8.94 per share, which was the closing price of our Class A Common Stock  on the grant date. The SARs had a grant date fair value of $0.5 million. No SARs were granted in 2009. The SARs have a 10- year term and vest immediately. As of December 31, 2010, 850,000 SARs were outstanding. We valued the SARs using the  Black-Scholes model and the following assumptions:  For the years ended December 31, 2010 and 2008, we recorded compensation expense of $1.6 million and $0.5 million,  respectively, related to these grants. During 2009 and 2008, these SARs had no effect on the shares used in our basic and diluted  loss per share. During 2010, SARs had a dilutive effect on our earnings per share. In 2011, David Smith exercised 650,000 of his  SARs for 237,947 shares. As of February 28, 2011, 200,000 SARs were outstanding.  Subsidiary Stock Awards . From time to time, we grant subsidiary stock awards to employees. The subsidiary stock is typically in  the form of a membership interest in a consolidated limited liability company, not traded on a public exchange and valued based  on the estimated fair value of the subsidiary. Fair value is typically estimated using discounted cash flow models and appraisals. These stock awards vest immediately. For the year ended December 31, 2008, we recorded compensation expense of $2.5 million  related to these awards. We did not issue any subsidiary stock awards in 2010 or 2009. These awards have no effect on the shares  used in our basic and diluted earnings per share. Stock Grants to Non-Employee Directors. In addition to directors fees paid, on the date of each of our annual meetings of  shareholders, each non-employee director receives a grant of shares of Class A Common Stock pursuant to the LTIP. In 2010,  2009 and 2008, each non-employee director received 5,000 shares, respectively. On June 3, 2010, June 4, 2009 and May 15, 2008,  we granted 25,000 shares that had a fair value of $6.61 per share, 25,000 shares that had a fair value of $2.09 per share and 25,000  shares that had a fair value of $9.28 per share, respectively. The fair value assumes the closing value of the stock on the date of  grant. We recorded an expense of $0.2 million, less than $0.1 million and $0.2 million on the date of grant for the years ended  December 31, 2010, 2009 and 2008, respectively. Additionally, these shares are included in the total shares outstanding, which  results in a dilutive effect on our basic and diluted earnings (loss) per share.  40    Sinclair Broadcast Group  2010 2008 Risk-free interest rate  3.85%  4.25%  Expected life  10 years  10 years  Expected volatility  110.38%  46.10%  Annual dividend yield  0.00%  9.23% 