Enom 2010 Annual Report Download - page 69

Table of Contents
of the award. In addition, the recognition of stock-based compensation expense is impacted by estimated forfeiture rates.
Because our common stock was not publicly traded since our inception through the year ended December 31, 2010, we estimated the expected volatility
of our awards from the historical volatility of selected public companies within the Internet and media industry with comparable characteristics to us,
including similarity in size, lines of business, market capitalization, revenue and financial leverage. From our inception through December 31, 2008, the
weighted average expected life of options was calculated using the simplified method as prescribed under guidance by the SEC. This decision was based on
the lack of relevant historical data due to our limited experience and the lack of an active market for our common stock. Effective January 1, 2009, we
calculated the weighted average expected life of our options based upon our historical experience of option exercises combined with estimates of the post-
vesting holding period. The risk free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to
the expected life of the option. The expected dividend rate is zero based on the fact that we currently have no history or expectation of paying cash dividends
on our common stock. The forfeiture rate is established based on the historical average period of time that options were outstanding and adjusted for expected
changes in future exercise patterns.
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