STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

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

STOCK-BASED COMPENSATION

 STOCK-BASED COMPENSATION

7,500,000 shares have been authorized for issuance in respect of equity awards under our Amended and Restated Stock Incentive Plan (the "Plan"). Under the Plan, awards are made to employees at the discretion of the Compensation Committee and to directors pursuant to an annual automatic grant under the Plan or at the discretion of the Board of Directors.

The charge for stock-based compensation in our consolidated statements of operations was as follows:

	For the Three Months Ended March 31,
	2013		2012
Stock-based compensation charged	$	994	$	1,087

Stock Options

A summary of option activity for the three months ended March 31, 2013 is presented below:

	Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at January 1, 2013	2,219,625		$	31.51	4.06	$	—
Forfeited	(24,375	)	38.85
Outstanding at March 31, 2013	2,195,250		$	31.43	3.81	$	—
Vested or expected to vest	2,123,869		31.72		3.74	—
Exercisable at March 31, 2013	1,679,622		$	33.92	3.25	$	—

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 aggregate intrinsic value (the difference between the stock price on the last day of trading of the first quarter of 2013 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 at March 31, 2013. This amount changes based on the fair value of our common stock. As at March 31, 2013, there was US$ 4.1 million of total unrecognized compensation expense related to options.  

At the annual general meeting of CME Ltd. on June 13, 2012, the shareholders approved an employee option exchange program whereby up to 1.7 million options may be exchanged for up to 0.8 million RSUs. While we have yet to set the terms of any such exchange and can not be assured of the number of options likely to be tendered, if we complete the exchange program we expect the number of outstanding options to decrease significantly.

Restricted Stock Units

Pursuant to the Plan, we may grant RSUs to our employees and non-employee directors. Each RSU represents a right to receive one share of Class A common stock of the Company for each RSU that vests in accordance with the vesting schedule, generally between one to four years from the date of grant. Upon vesting, shares of Class A common stock are issued from authorized but unissued shares. Holders of RSU awards are not entitled to receive cash dividend equivalents. The grant date fair value of RSUs is calculated as the closing price of shares of our Class A common stock on the date of grant.

The following table summarizes information about unvested RSUs as at March 31, 2013:

	Number of Shares/Units	Weighted- Average Grant Date Fair Value
Unvested at December 31, 2012	584,000	5.61
Granted	—	—
Vested	—	—
Forfeited	—	—
Unvested at March 31, 2013	584,000	5.61

As at March 31, 2013, the intrinsic value of unvested RSUs was US$ 2.5 million. Total unrecognized compensation expense related to unvested RSUs as at March 31, 2013 was US$ 2.0 million and is expected to be recognized over a weighted-average period of 1.5 years.