SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2012

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

12. SHARE-BASED COMPENSATION

The Company issues RSUs to its employees under the GFI Group Inc. 2008 Equity Incentive Plan, which was approved by the Company’s stockholders on June 11, 2008 (as amended, the “2008 Equity Incentive Plan”). The 2008 Equity Incentive Plan was subsequently amended at each of the Company’s annual stockholders meetings since the Plan was initially approved in order to increase the number of shares of common stock available for grant under the Plan. Prior to June 11, 2008, the Company issued RSUs under the GFI Group Inc. 2004 Equity Incentive Plan (the “2004 Equity Incentive Plan”).

The 2008 Equity Incentive Plan permits the grant of non-qualified stock options, incentive stock options, stock appreciation rights, shares of restricted stock, restricted stock units and performance units to employees, non-employee directors or consultants. The Company issues shares from authorized but unissued shares and authorized and issued shares reacquired and held as treasury shares, which are reserved for issuance upon the vesting of RSUs granted pursuant to the 2008 Equity Incentive Plan. As of December 31, 2012, there were 11,200,253 shares of common stock available for future grants of awards under this plan. The fair value of RSUs is based on the closing price of the Company’s common stock on the date of grant and is recorded as compensation expense over the service period, net of estimated forfeitures.

The following is a summary of RSU transactions under both the 2008 Equity Incentive Plan and the 2004 Equity Incentive Plan:

	RSUs		Weighted-Average Grant Date Fair Value
Outstanding December 31, 2009	10,208,185		$	5.57
Granted	8,128,286		5.50
Vested	(3,075,790	)	7.46
Cancelled	(715,544	)	5.50
Outstanding December 31, 2010	14,545,137		5.14
Granted	9,250,544		4.74
Vested	(5,095,883	)	5.38
Cancelled	(742,072	)	5.69
Outstanding December 31, 2011	17,957,726		4.84
Granted	8,354,723		3.55
Vested	(6,476,243	)	4.87
Cancelled	(482,824	)	4.84
Outstanding December 31, 2012	19,353,382		$	4.27

The weighted average grant-date fair value of RSUs granted during 2012 was $3.55 per unit, compared with $4.74 per unit for the same period in the prior year. Total compensation expense and related income tax benefits recognized in relation to RSUs is as follows:

	For the Year Ended December 31,
	2012		2011		2010
Compensation expense	$	32,385	$	32,772	$	26,674
Income tax benefits	$	9,838	$	11,011	$	4,926

The Company has modified the vesting terms of RSU grants for certain employees in connection with the termination of their employment. As a result of these modifications, the Company recorded incremental compensation expense totaling $255, $2,210 and $66 during 2012, 2011, and 2010, respectively.

At December 31, 2012, total unrecognized compensation cost related to the RSUs prior to the consideration of expected forfeitures was approximately $56,873 and is expected to be recognized over a weighted-average period of 1.74 years. The total fair value of RSUs that vested during the years ended December 31, 2012, 2011 and 2010 was $31,514, $27,407 and $22,950, respectively.

As of December 31, 2012, the Company had stock options outstanding under two plans: the GFI Group 2002 Stock Option Plan (the “GFI Group 2002 Plan”) and the GFInet Inc. 2000 Stock Option Plan (the “GFInet 2000 Plan”). No additional grants will be made under these plans. Under each plan: options were granted to employees, non-employee directors or consultants to the Company; both incentive and non-qualified stock options were available for grant; options were issued with terms up to ten years from date of grant; and options were generally issued with an exercise price equal to or greater than the fair market value at the time the option was granted. In addition to these terms, both the GFI Group 2002 Plan and the GFInet 2000 Plan contained events that had to occur prior to any options becoming exercisable. Under both plans, the options became exercisable upon the completion of the Company’s initial public offering, which occurred in January 2005. Options outstanding under both plans are exercisable for shares of the Company’s common stock. The Company issues shares from the authorized but unissued shares reserved for issuance under the GFI Group 2002 Plan or the GFInet 2000 Plan, respectively, upon the exercise of option grants under such plans.

The following is a summary of stock options outstanding under both the GFI Group 2002 Plan and the GFInet 2000 Plan:

	GFI Group 2002 Plan					GFInet 2000 Plan
	Options		Weighted Average Exercise Price		Weighted Average Contractual Term	Options		Weighted Average Exercise Price		Weighted Average Contractual Term
Outstanding December 31, 2009	641,436		$	3.31		313,572		$	3.19
Exercised	(30,420	)	2.97			(205,960	)	2.69
Cancelled	(4,212	)	2.97			(11,364	)	5.68
Outstanding December 31, 2010	606,804		3.33			96,248		3.95
Exercised	(4,212	)	2.97			(23,884	)	2.62
Cancelled	(16,844	)	5.25			—		—
Expired	—		—			(55,520	)	4.82
Outstanding December 31, 2011	585,748		3.28			16,844		2.97
Exercised	(10,528	)	2.97			—		—
Outstanding December 31, 2012	575,220		$	3.29	1.13	16,844		$	2.97	0.99
Exercisable at December 31, 2012	575,220		$	3.29	1.13	16,844		$	2.97	0.99

As of December 31, 2012, 2011, and 2010, there was no unrecognized compensation cost related to stock options.

The total intrinsic value of options exercised for the years ended December 31, 2012, 2011 and 2010 was $2, $52 and $661, respectively. Additionally, the total intrinsic value of options outstanding and exercisable at December 31, 2012 was $139.