On December 16, 2008, a resolution was passed during the 2008 annual general meeting of shareholders approving the Company to repurchase of its Class A ordinary shares represented by American depositary shares (“ADSs”) before the end of 2009. The repurchases can be made from time to time in the open market or in negotiated transactions subject to market conditions, the trading price of ADSs and other factors. As part of its share repurchase program, the Company entered into two separate share repurchase arrangements with a financial institution as follows:

(a) In December 2008, the Company entered into a structured share repurchase program which requires the Company to make an upfront cash payment in exchange for the right to receive the Company’s own ordinary shares or cash at the expiration of the agreement, depending on the closing price of the Company’s ordinary share at the maturity date. Upon settlement of the structured share repurchase program, the Company either (i) receives the upfront cash payment returned with a premium if the closing market price of the Company’s ordinary share is at or above a predetermined price or (ii) a predetermined number of the Company’s ordinary shares if the closing market price is below the predetermined price. Pursuant to the structured share repurchase program, the Company made an upfront payment of US$10 million to the financial institution on December 24, 2008. The upfront cash payment was recorded in shareholders’ equity as a reduction to additional paid-in capital in accordance with EITF Issue No. 00-19,Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. The settlement either in the form of cash or shares by the financial institution at the maturity date will be treated as an equity transaction by the Company.

(b) In December 2008, the Company also entered into a preset share repurchase program which engages the financial institution to act as a broker on behalf of the Company to repurchase ADSs in the open market based on a predetermined quantity and price range. Pursuant to the preset share repurchase program, the Company made an upfront payment of US$10 million to the financial institution on December 31, 2008 to repurchase up to an aggregate of US$10 million of ADSs during an agreed period. The Company may cancel the preset repurchase program with the financial institution at any time so long as the Company provides a three-day notice to the financial institution. The upfront US$10 million cash has no restriction otherwise and can be withdrawn by the Company at any time. The repurchased shares are considered cancelled under Cayman Islands law and the difference between the par value and the repurchase price is debited to retained earnings.