Options Granted During the Nine Months Ended September 30, 2013

Number of options

120

440

Option vesting period

1- 5 Years

Immediate

Grant price

$8.02 - $10.20

$10.40

Dividend yield

0.00%

0.00%

Expected volatility (a)

52.8% - 55.2%

53.9%

Risk-free interest rate

1.04% - 1.98%

1.62%

Expected life (years)

5.31 - 6.95 (b)

5.00 (c)

Discount for post-vesting restrictions (d)

0.0%

16.0% - 35.0%

Weighted average fair value

$4.23 - $5.38

$1.59 - $3.64

(a)

Since the Company’s historical volatility was not representative of the ongoing future business, the Company’s historical volatility was based on a combination of the Company’s volatility and the historical volatility of a peer group of companies within similar industries and similar size as the Company.

(b)

Because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for these grants, the Company utilized the simplified method in developing an estimate of the expected term of these options.

(c)

The Company considered the applicable employee groups as well as the anticipated exercise behavior over the contractual term of the award in developing an estimate of the expected term of these options. 

(d)

Because options with post-vesting restrictions create a lack of marketability, the Company discounted the market price used in the Black-Scholes option-pricing model.  The Company utilized the Finnerty model to calculate the discount.