Equity-Based Compensation

9 Months Ended

Sep. 30, 2011

Equity-Based Compensation

Equity-Based Compensation

Note 13 Equity-Based Compensation

As discussed in Note 1, Organization and Summary of Significant Accounting Policies, on April 18, 2011, stockholders representing a majority of the Company’s outstanding common stock removed seven members of our Board and filled all eight vacancies with new members.  This constituted a change in control as defined under the 2010 Plan.  As a result of the change in control, the vesting of certain stock option and RSU awards was accelerated.

Subsequent to the accelerated vesting, we offered employees with vested RSUs the option to withhold for taxes at a rate in excess of the statutory minimum.  Under ASC Topic 718, Compensation - Stock Compensation, if an amount in excess of the minimum statutory requirement is withheld, or may be withheld at the employee’s discretion, the entire award shall be classified and accounted for as a liability.  Therefore, as of June 30, 2011, we reclassified approximately $4.3 from paid-in capital to other current liabilities in our consolidated balance sheet.  We settled this liability in the three months ended September 30, 2011.

For the three months ended September 30, 2011 and 2010, we recognized stock-based compensation expense of $0.2 and $1.9, respectively.  For the nine months ended September 30, 2011, we recognized stock-based compensation expense of $16.7, which consisted of $12.4, net of forfeitures, specifically for the accelerated vesting; along with $2.8 for normal course vesting and $1.5 for the quarterly mark-to-market on liability-classified RSUs.  For the periods February 20 to September 30, 2010 and January 1 to February 19, 2010, we recognized stock-based compensation expense of $6.1 and $0.2, respectively.

During the nine months ended September 30, 2011, there were approximately 474,000 stock options and approximately 123,000 RSUs granted to certain directors and employees of our Company.

A summary of stock option activity under the 2010 Plan for the nine months ended September 30, 2011 was as follows:

	Successor Company
	Shares (000’s)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)
Options
Outstanding at December 31, 2010	1,304		$	17.44
Granted	474		41.67
Forfeited or expired	(54	)	17.42
Exercised	(532	)	17.42
Outstanding at September 30, 2011	1,192		$	27.09	6.6
Vested or expected to vest at September 30, 2011	1,192
Exercisable at September 30, 2011	1,131		$	27.32	6.4

The weighted average fair value of options granted during the three and nine months ended September 30, 2011 was $0.01 and $2.42 per share, respectively.

A summary of RSUs activity under the 2010 Plan for the nine months ended September 30, 2011 was as follows:

	Successor Company
	RSUs
	Shares (000’s)		Weighted Average Grant-Date Fair Value
Nonvested at December 31, 2010	587		$	17.46
Granted	123		17.29
Vested	(506	)	17.62
Forfeited	(150	)	14.93
Nonvested at September 30, 2011	54		$	22.80