STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2011

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The charge for stock-based compensation in our Condensed Consolidated Statements of Operations was as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2011		2010		2011		2010
Stock-based compensation charged	$	1,452	$	1,886	$	4,556	$	5,078
Income tax benefit recognized	—		36		—		145

A summary of option activity for the nine months ended September 30, 2011 is presented below:

	Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at January 1, 2011	2,539,062		$	35.44	4.95	$	2,189
Granted	540,000		22.36
Exercised	(23,625	)	10.23
Forfeited	(132,250	)	39.09
Outstanding at September 30, 2011	2,923,187		$	33.06	4.72	$	92
Vested or expected to vest	2,791,974		33.43		4.60	92
Exercisable at September 30, 2011	1,782,810		$	37.62	3.53	$	92

The fair value of stock options is estimated on the grant date using the Black-Scholes option-pricing model and recognized ratably over the requisite service period.

The exercise of stock options has generated a net operating loss brought forward in our Delaware subsidiary of US$ 5.2 million at January 1, 2011.  In the nine

months ended September 30, 2011 and 2010, tax benefits of US$ nil and US$ 0.3 million, respectively, were recognized in respect of the utilization of part of this loss, and were recorded as additional paid-in capital, net of US$ nil and US$ 0.1 million of transfers related to the write-off of deferred tax assets arising upon forfeitures for the periods ending September 30, 2011 and 2010, respectively. The losses are subject to examination by the tax authorities and to restriction on their utilization.

The aggregate intrinsic value (the difference between the stock price on the last day of trading of the third quarter of 2011 and the exercise prices multiplied by the number of in-the-money options) represents the total intrinsic value that would have been received by the option holders had they exercised all in-the-money options as of September 30, 2011. This amount changes based on the fair value of our common stock.  As of September 30, 2011, there was US$ 10.3 million of total unrecognized compensation expense related to options.  The expense is expected to be recognized over a weighted average period of 1.2 years.

2011 Option Grants

Pursuant to our Amended and Restated Stock Incentive Plan, options were awarded to members of staff, members of executive management and members of our Board of Directors during the nine months ended September 30, 2011.

The fair value of these option grants was estimated on the date of the grant using the Black-Scholes option-pricing model, with the following assumptions used:

Date of Option Grant	Number of Options Granted	Risk-free Interest Rate (%)	Expected Term (years)	Expected Volatility (%)	Fair Value (US$/share)	Exercise Price (US$/share)
May 16, 2011	100,000	0.93	3.0	67.6	10.06	22.38
May 16, 2011	435,000	1.83	5.3	55.7	11.23	22.38
June 14, 2011	5,000	0.79	3.0	67.5	9.01	20.11

The expected stock price volatility was calculated based on an analysis of the historical stock price volatility of our shares and those of our peers for the relevant preceding period. We consider this basis to represent the best indicator of expected volatility over the life of the option. The weighted average fair value of all the grants made in the nine months ended September 30, 2011 was US$ 10.99 per option. The fair value of the option grants made in the nine months ended September 30, 2011 (less expected forfeitures) of US$ 5.1 million is being recognized as an expense in the Condensed Consolidated Statement of Operations over the requisite service period of the awards