| x                                                                                                                              | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     |
|--------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
|                                                                                                                           |                                                                                               |
| For the fiscal year ended December 31, 2012                                                                               |
|                                                                                                                           |                                                                                               |
| Or                                                                                                                             |
|                                                                                                                           |                                                                                               |
| o                                                                                                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                                                                                           |                                                                                               |
| For the transition period from ________   to  ________        |

|   |   |
|--------|--------|

| Delaware                                                      |   | 91-1957010                          |
|---------------------------------------------------------------|--------|-------------------------------------|
| (State or Other Jurisdiction ofIncorporation or Organization) |   | (I.R.S. EmployerIdentification No.) |
|                                                          |   |                                |
| Dwight D. Eisenhower Building2001 South Flint RoadSpokane, WA |   | 99224                               |
| (Address of Principal Executive Offices)                      |   | (Zip Code)                          |

|   |   |   |
|--------|--------|--------|

| Common Stock, $0.01 Par Value |   | The NASDAQ Stock Market                     |
|-------------------------------|--------|---------------------------------------------|
| (Title of Class)              |   | (Name of each exchange on which registered) |

| Large accelerated filer o                                            |   | Accelerated filer x         |
|---------------------------------------------------------------------------|--------|----------------------------------|
|                                                                      |   |                             |
| Non-accelerated filer o(Do not check if a smaller reporting company) |   | Smaller reporting company o |

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T

|     | Page                                                                                          |
|----------|-----------------------------------------------------------------------------------------------|
|     |                                                                                          |   |
| PART III | (i)                                                                                           |
|     |                                                                                          |   |
| Item 10. | Directors, Executive Officers  and Corporate Governance                             | 5 |
|     |                                                                                          |   |
| Item 11. | Executive Compensation                                                                        | 10 |
|     |                                                                                          |   |
| Item 12. | Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters | 28 |
|     |                                                                                          |   |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence                     | 31 |
|     |                                                                                          |   |
| Item 14. | Principal Accountant Fees and Services                                                        | 31 |
|     |                                                                                          |   |
| PART IV  |                                                                                          |
|     |                                                                                          |   |
| Item 15. | Exhibits, Financial Statement Schedules                                                       | 32 |
|     |                                                                                          |
|     |                                                                                          |

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| NAME                                                                                                                                                     |             | POSITION WITH COMPANY |   | AGE    |   | DIRECTORSINCE |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|-----------------------|--------|--------|--------|---------------|
| Class I Directors, whose term is scheduled to expire at the Annual Meeting to be held in 2013 (other than Debra Dulsky, who is a director nominee): |             |                  |
| Ricardo Lopez Valencia(2)(3)......................................................................                                                       | Director         |                  | 47     |   | 2007   |
| Debra Dulsky................................................................................................                                             | Director Nominee |                  | 43     |   | N/A    |
| Thomas J. Rusin(2(4)......................................................................................                                               | Director         |                  | 44     |   | 2010   |
| Class III Directors, whose term is scheduled to expire at the Annual Meeting to be held in 2014:                                                    |             |                  |
| Daniel G. Byrne(1)........................................................................................                                               | Director         |                  | 59     |   | 2005   |
| Nilofer Merchant(1) ...................................................................................                                                  | Director         |                  | 45     |   | 2011   |
| Peter H. Kamin(1) .......................................................................................                                                | Director         |                  | 51     |   | 2012   |
| Class II Directors, whose term is scheduled to expire at the Annual Meeting to be held in 2015:                                                     |             |                  |
| James M. Kalustian(2)(3) ..........................................................................                                                      | Director         |                  | 52     |   | 2006   |
| Lisa O’Dell Rapuano(2)(3) ........................................................................                                                 | Director         |                  | 47     |   | 2012   |
| Timothy M. Walsh(1) ..............................................................................                                                       | Director         |                  | 50     |   | 2012   |

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| (1) | Member of Audit Committee |
|-----|---------------------------|

| (2) | Member of Compensation Committee |
|-----|----------------------------------|

| (3) | Member of Nominating Committee |
|-----|--------------------------------|

| (4) | Not standing for election at Annual Meeting of Stockholders to be held in 2013 |
|-----|--------------------------------------------------------------------------------|

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| Audit Committee |
|-----------------|

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|   | • | No salary increases were approved for the Named Executive Officers effective in 2012 based on financial performance remaining below desired business transition expectations; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | 2012 cash incentive opportunities were reduced by approximately 50 percent of normally-targeted externally market-competitive levels for the Named Executive Officers considering the financial performance outlook for 2012; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Based on the Company’s stock price, the Compensation Committee continued with the practice established in 2011 where the value of stock awards to the Named Executive Officers was reduced, resulting in lower multiples used to determine the equity grants issued in 2012. The number of stock awards granted in 2012 was similar to the prior year. This decision was aimed at rewarding a financial rebound over a longer-term basis; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Overview of Compensation Philosophy and Guiding Principles |
|--------|------------------------------------------------------------|

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|     |  Role of the Compensation Committee |
|---------------|------------------------------------------|

|   | Say-On Pay Proposals |
|--------|----------------------|

|   | Executive Compensation Methodology |
|--------|------------------------------------|

|   | • | The Company’s executive compensation philosophy and practices  |
|--------|---------|---------------------------------------------------------------------------|

|   | • | The Company’s performance relative to peers and industry standards  |
|--------|---------|--------------------------------------------------------------------------------|

|   | • | Success in attaining annual and long-term goals and objectives |
|--------|---------|----------------------------------------------------------------|

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|   | • | Alignment of executive interests with stockholder interests through equity-based awards and performance-based compensation  |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

|   | • | Individual and team contributions, performance and experience  |
|--------|---------|---------------------------------------------------------------------|

|   | • | Total compensation and the mix of compensation elements for each Named Executive Officer  |
|--------|---------|------------------------------------------------------------------------------------------------|

|   | • | Competitive market practices |
|--------|---------|------------------------------|

| American Public Education, Inc.  (Education Services) | Archipelago Learning, Inc.  (Education Services)           | Blue Nile, Inc.  (Internet Retail)                 | Cambium Learning Group, Inc.  (Educational Services) |
|------------------------------------------------------------|-----------------------------------------------------------------|---------------------------------------------------------|-----------------------------------------------------------|
| Capella Education Co.  (Education Services)           | Constant Contact, Inc.  (Direct Marketing)                 | DGSE Companies Inc.  (Luxury Goods)                | Educational Development Corp.  (Education Services)  |
| Gaiam, Inc.  (Catalog Retail)                         | Golfsmith International Holdings, Inc.  (Specialty Stores) | Grand Canyon Education, Inc.  (Education Services) | Joe’s Jeans, Inc.  (Luxury Goods)              |

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|  K-Swiss, Inc.  (Luxury Goods)                        | LeapFrog Enterprises, Inc.  (Leisure Products / Education Services)         | Learning Tree International, Inc.  (Education Services) | Martha Stewart Omnimedia, Inc.  (Publishing) |
|-----------------------------------------------------------------|----------------------------------------------------------------------------------|--------------------------------------------------------------|---------------------------------------------------|
| National American University Holdings, Inc.(Education Services) | People’s Educational Holdings, Inc.  (Publishing/ Education Services) | Premier Exhibitions, Inc.  (Leisure Facilities)         | Princeton Review, Inc.  (Education Services) |
| Responsys, Inc.  (Direct Marketing)                        | Rosetta Stone, Inc.  (Education Services)                                   | Scientific Learning  (Education Services)               | US Ecology, Inc.  (Other)                    |

|   | Executive Compensation Program Elements |
|--------|-----------------------------------------|

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|                            | Target and Maximum Amounts |   |      |                                              |
|---------------------------------|----------------------------|--------|-----------|---------------------------------------------------|
|                            | Under Annual Cash          |   |      | 2012 Payouts Made Under                           |
|                            | Incentive Plan Awards1     |   |      | Pre-established Targets and Individual Milestones |
|                            |                       |   |      |                                              |   |   |   |   |   |   |   |   |   |   |   |
| Name                            | DateTarget Established     |   | Target($) | Maximum($)                                        |   |   | 2012 Pre-tax Income2 |   |   | 2013Enrolled Revenue3 |   | 2013Non-traditional EnrolledRevenue4 |   |   | 2012 Returnon Invested Capital5 |
| Jeffrey D. Thomas               |                       |   |      |                                              |   |   |   |   |   |   |   |   |   |   |   |
| Former Chief Executive and      |                       |   |      |                                              |   |   |   |   |   |   |   |   |   |   |   |
| President                       | 2/16/2012                  |   |      | 187,500                                           | 375,000 |   |   | $ | 70,331 |   |   | $ | - |   | $ | 39,188 |   |   | $ | - |
| Margaret M. Thomas              |                       |   |      |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Former Executive Vice President | 2/16/2012                  |   |      | 112,500                                           | 225,000 |   |   | $ | - |   |   | $ | - |   | $ | 9,405 |   |   | $ | - |
| Anthony F. Dombrowik            |                       |   |      |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Senior Vice President           |                       |   |      |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Chief Financial Officer         |                       |   |      |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and Secretary                   | 2/16/2012                  |   |      | 72,000                                            | 144,000 |   |   | $ | 30,383 |   |   | $ | - |   | $ | 5,643 |   |   | $ | - |

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|   |   |
|--------|--------|

| (1) | The amounts in these columns include the target and maximum amounts for each Named Executive Officer under individual incentive compensation plans as approved by the Compensation Committee. The plans have a payout at 50% of target for meeting minimum acceptable levels for each goal, and no payments are made for performance below the target levels. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (2) | Achievement of 2012 Pre-tax Income for Mr. Thomas and Mr. Dombrowik was based on consolidated pre-tax income before special items in excess of $2.0 million up to a maximum payout at $6.0 million. This goal represented 50% and 45% of target for Mr. Thomas and Mr. Dombrowik, respectively. Pre-tax income before special items is a non-generally accepted accounting principles (“GAAP”) method of determining income which the Company believes better reflects results by excluding certain expenses such as severance payments and certain legal fees. Consolidated pre-tax income before special items for the year ended December 31, 2012 was $3.75 million. Achievement of 2012 Pre-tax Income for Mrs. Thomas was based on pre-tax income before special items for our largest operating subsidiary, Ambassador Programs, Inc. (“Ambassador Programs”) in excess of $10.2 million up to a maximum of $14.2 million. This goal represented 60% of target for Mrs. Thomas. The minimum payout threshold was not met in 2012 for Mrs. Thomas.  |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Achievement of 2013 Enrolled Revenue for Mr. Thomas and Mr. Dombrowik was based on consolidated 2013 enrolled revenue as of December 31, 2012 in excess of $140.0 million up to a maximum payout at $200.0 million. This goal represented 25% and 15% of target for Mr. Thomas and Mr. Dombrowik, respectively. Mrs. Thomas’ achievement threshold was based on enrolled revenue for Ambassador Programs in excess of $147.0 million up to a maximum of $187.0 million. This goal represented 20% of target for Mrs. Thomas. The minimum payout thresholds were not met in 2012.  |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Achievement of 2013 Non-traditional Enrolled Revenue for Mr. Thomas, Mrs. Thomas, and Mr. Dombrowik was based on 2013 enrolled revenue from non-direct mail sources as of December 31, 2012 in excess of $14.0 million up to a maximum payout at $54.0 million. This goal represented 25%, 20%, and 15% of target for Mr. Thomas, Mrs. Thomas, and Mr. Dombrowik, respectively. Non-traditional enrolled revenue as of December 31, 2012 was $14.9 million. Additionally, a special opportunity incentive goal was established for Mr. Thomas in line with achieving specific objectives set forth by the Compensation Committee. Mr. Thomas was assigned a special opportunity goal related to achievement of 2013 Non-Traditional Enrolled Revenue, listed above, resulting in an additional payout for meeting the minimum threshold for this goal. This goal represented an additional 25% of target for Mr. Thomas.   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Achievement of 2012 return on invested capital of the Company’s core product lines was set at a minimum rate of return of 1.3 up to a maximum payout at 1.7. This goal was provided for Mr. Dombrowik as 25% of target opportunity. The minimum payout threshold was not met in 2012. Additionally, a special opportunity incentive goal was established for Mrs. Thomas in line with achieving specific objectives set forth by the Compensation Committee. Mrs. Thomas was assigned an additional special opportunity goal related to return on invested capital of the Company’s core product lines set at a minimum rate of return of 1.3 up to a maximum payout at 1.7. This goal represented an additional 25% of target for Mrs Thomas. The minimum payout  threshold was not met in 2012 for Mrs. Thomas. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | Mr. Thomas exhibited high individual focus in leading the Company’s efforts to identify new strategic initiatives and continuing to aggressively build a change team to drive non-mail, digital and multi-channel marketing initiatives;  |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Mr. Thomas’ salary has not increased since 2004; and  |
|--------|---------|------------------------------------------------------------------|

|   | • | Objective of providing a competitive total compensation package that considers the decline in financial performance yet rewards continued progress in the long-term.  |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Mrs. Thomas implemented digital and non-mail marketing strategies which continues to improve lead generation, customer service and support and improve customer acquisition costs in the long-term; and  |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Objective of providing a competitive total compensation package that considers the decline in financial performance yet rewards continued progress in the long-term.  |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Mr. Dombrowik successfully managed expenses in the face of a complex financial market and declining Company performance, returning dividends to stockholders and maintaining profitability.  |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Mr. Dombrowik supported the continued acceleration of change in the business and championed the transition from a direct mail marketing model towards a multi-channel marketing model. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |  Severance Benefits. |
|--------|---------------------------|

|   | Total Compensation Mix |
|--------|------------------------|

|   | Impact of Accounting and Tax on the Form of Compensation |
|--------|----------------------------------------------------------|

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| Name                   | Year   | Salary ($) | Stock Awards1 ($) | OptionAwards2 ($) | Non-EquityIncentive Plan Compensation($) | All OtherCompensation3($) | Total ($) |
|------------------------|--------|------------|-------------------|-------------------|------------------------------------------|---------------------------|-----------|
| Jeffrey D.             | 2012   | 400,000    | 140,751           | 141,113           | 109,519                                  | 4,250                     | 795,633   |
| Thomas4,               |   |       |              |              |                                     |                      |      |
| Former Chief Executive | 2011   | 400,000    | 205,457           | 160,396           | -                                        | 4,125                     | 769,978   |
| Officer and            |   |       |              |              |                                     |                      |      |
| President              | 2010   | 400,000    | 500,005           | 500,001           | -                                        | 4,558                     | 1,404,564 |
|                   |   |       |              |              |                                     |                      |      |
| Margaret M.            | 2012   | 300,000    | 55,013            | 55,154            | 9,405                                    | 2,715                     | 422,287   |
| Thomas5,               |   |       |              |              |                                     |                      |      |
| Former Executive Vice  | 2011   | 300,000    | 61,635            | 48,119            | 36,987                                   | 2,638                     | 449,379   |
| President              |   |       |              |              |                                     |                      |      |
|                   | 2010   | 300,000    | 149,996           | 150,000           | 60,480                                   | 3,152                     | 663,628   |
| Anthony F.             |   |       |              |              |                                     |                      |      |
| Dombrowik6,            | 2012   | 240,000    | 41,630            | 41,738            | 36,026                                   | -                         | 359,394   |
| Senior Vice            |   |       |              |              |                                     |                      |      |
| President,             | 2011   | 240,000    | 82,052            | 75,022            | -                                        | -                         | 397,074   |
| Chief Financial        |   |       |              |              |                                     |                      |      |
| Officer and            | 2010   | 50,769     | 78,001            | 78,002            | 50,000                                   | -                         | 256,772   |
| Secretary              |   |       |              |              |                                     |                      |      |

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| (1) | The amounts in the “Stock Awards” column reflect the aggregate grant date fair value of awards (based on the closing price of the stock on the grant dated) in accordance with accounting guidance applicable to stock based compensation. See Note 10 of the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 regarding assumptions underlying the valuation of these equity awards.  |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The amounts in the “Option Awards” column reflect the aggregate grant date fair value of options in accordance with accounting guidance applicable to stock based compensation and calculated using a Black-Sholes option pricing model. See Note 10 of the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 regarding assumptions underlying the valuation of these equity awards.  |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The amounts set forth in “All Other Compensation” for the fiscal year ended December 31, 2012 reflect Company matching 401(k) contributions.  |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Mr. Thomas resigned February 25, 2013.  |
|-----|----------------------------------------------|

| (5) | Mrs. Thomas resigned February 25, 2013.  |
|-----|-----------------------------------------------|

| (6) | Mr. Dombrowik has served as the Company’s senior vice president, chief financial officer and secretary since October 18, 2010 and was named interim chief executive officer effective February 25, 2013. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|             |       |   | Payouts Under Non-Equity Incentive Plan Awards1 |    |        |   |                                                            |   |                                                                    |   |                                          |
|------------------|------------|--------|-------------------------------------------------|---------|-------------|--------|-----------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|-----------------------------------------------|
| Name             | Grant Date |   | Target ($)                                      |    | Maximum ($) |   | All OtherStock Awards: Number of Shares of Stock orUnits2,6 (#) |   | All Other Option Awards: Number of Securities Underlying Options3,6 (#) |   | Exercise orBase Price of Option Awards4($/Sh) |   | Grant date Fair Value ofStock and Options Awards5 ($) |
| Jeffrey D.       |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |
| Thomas           | 12/20/2012 |   |                                            |    |        |   |                                                            | 31,278 |                                                                    |   |                                          |   |   |   | 140,751 |
| Former Chief     |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |
| Executive        | 12/20/2012 |   |                                            |    |        |   |                                                            |   |                                                                    |   | 88,750                                        |   |   | 4.50 |   |   | 141,113 |
| Officer and      |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |
| President        | 2/16/2012  |   |                                            | 187,500 |        |   | 375,000                                                         |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| Margaret M.      |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| Thomas           | 12/20/2012 |   |                                            |    |        |   |                                                            |   |                                                                    | 12,225 |                                          |   |   |   |   |   |   |   | 55,014 |
| Former Executive |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |
| Vice President   | 12/20/2012 |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   | 34,688 |   |   | 4.50 |   |   | 55,153 |
|             |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
|             | 2/16/2012  |   |                                            | 112,500 |        |   | 225,000                                                         |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| Anthony F.       |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| Dombrowik        | 12/20/2012 |   |                                            |    |        |   |                                                            |   |                                                                    | 9,251  |                                          |   |   |   |   |   |   |   | 41,630 |
| Senior Vice      |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| President,       |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| Chief            | 12/20/2012 |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   | 26,250 |   |   | 4.50 |   |   | 41,737 |
| Financial        |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| Officer and      |       |   |                                            |    |        |   |                                                            |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |
| Secretary        | 2/16/2012  |   |                                            | 72,000  |        |   | 144,000                                                         |   |                                                                    |   |                                          |   |   |   |   |   |   |   |   |

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| (1) | The amounts in these columns include the target and maximum amounts under the goals applicable for each Named Executive Officer under annual cash incentive plans approved by the Compensation Committee for the 2012 fiscal year. No payments are made for a goal for performance below the target levels for that goal. Please refer to the information set forth above under the heading "Compensation Discussion and Analysis - Annual Cash Incentive Awards" for the methodology and rationale behind granting non-equity incentive awards during 2012.  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Restricted stock vests 100% after four years from the date of grant.  |
|-----|----------------------------------------------------------------------------|

| (3) | The option grants vest over four years at 25% per year and expire after ten years.  |
|-----|------------------------------------------------------------------------------------------|

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| (4) | The exercise price for grants of stock options is determined using the closing price of the Company’s Common Stock on the date of grant. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | For stock awards, represents the value of restricted stock granted based on the closing market price of the stock on the grant date. For option awards, represents the grant date fair value of options granted calculated using the Black-Scholes option pricing model. These are the same values for these equity awards used under accounting guidance applicable to stock-based compensation. The assumptions made in determining option values are disclosed in Note 10 of Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6) | Please refer to the information set forth above under the heading "Compensation Discussion and Analysis - Long-Term Incentive Compensation/Equity-Based Awards" for the methodology and rationale behind granting stock awards and options awards during 2012. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        |       | Option Awards                                                      |                                                                 | Stock Awards              |
|-------------|------------|--------------------------------------------------------------------|----------------------------------------------------------------------|---------------------------|
|        |       |                                                               |                                                                 |                      |   |   |   |   |
| Name        | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(#) | Number of Securities Underlying Unexercised OptionsUnexercisable1(#) | Option ExercisePrice2 ($) | Option ExpirationDate |   | Number of Shares orUnits of Stock That Have Not Vested3 (#) | Market Value of Shares or Units of Stock That Have Not Vested4 ($) |
| Jeffrey D.  | 11/7/2003  | 60,236                                                             | -                                                                    | $9.75                     | 11/7/13 |   |   |   |
| Thomas5     | 11/18/2004 | 101,504                                                            | -                                                                    | $16.74                    | 11/18/14 |   |   |   |
| Former      | 11/11/2005 | 85,646                                                             | -                                                                    | $26.80                    | 11/11/15 |   |   |   |
| Chief       | 11/9/2006  | 65,000                                                             | -                                                                    | $27.46                    | 11/9/16 |   |   |   |
| Executive   | 11/8/2007  | 119,000                                                            | -                                                                    | $17.11                    | 11/8/17 |   |   |   |
| Officer     | 11/13/2008 | 82,500                                                             | -                                                                    | $9.19                     | 11/13/18 |   |   |   |
| and         | 11/12/2009 | 90,750                                                             | 30,250                                                               | $12.04                    | 11/12/19 |   | 46,000 | $195,960 |
| President   | 11/10/2010 | 49,505                                                             | 49,505                                                               | $11.00                    | 11/10/20 |   | 45,455 | $193,638 |
|        | 11/9/2011  | 24,752                                                             | 74,258                                                               | $4.52                     | 11/9/21 |   | 45,455 | $193,638 |
|        | 12/20/2012 | -                                                                  | 88,750                                                               | $4.50                     | 12/20/22 |   | 31,278 | $133,244 |
| Margaret M. | 11/7/2003  | 19,592                                                             | -                                                                    | $9.75                     | 11/7/13 |   |   |   |
| Thomas5     | 11/18/2004 | 11,278                                                             | -                                                                    | $16.74                    | 11/18/14 |   |   |   |
| Former      | 11/11/2005 | 12,000                                                             | -                                                                    | $26.80                    | 11/11/15 |   |   |   |
| Executive   | 11/9/2006  | 6,000                                                              | -                                                                    | $27.46                    | 11/9/16 |   |   |   |
| Vice        | 11/8/2007  | 12,600                                                             | -                                                                    | $17.11                    | 11/8/17 |   |   |   |
| President   | 11/13/2008 | 34,100                                                             | -                                                                    | $9.19                     | 11/13/18 |   |   |   |
|        | 11/12/2009 | 27,949                                                             | 9,317                                                                | $12.04                    | 11/12/19 |   | 14,161 | $60,326 |
|        | 11/10/2010 | 14,851                                                             | 14,852                                                               | $11.00                    | 11/10/20 |   | 13,636 | $58,089 |
|        | 11/9/2011  | 7,425                                                              | 22,278                                                               | $4.52                     | 11/9/21 |   | 13,636 | $58,089 |
|        | 12/20/2012 | -                                                                  | 34,688                                                               | $4.50                     | 12/20/22 |   | 12,225 | $52,079 |
| Anthony F.  | 11/10/2010 | 7,723                                                              | 7,7236                                                               | $11.00                    | 11/10/20 |   | 7,0919 | $30,208 |
| Dombrowik   | 11/9/2011  | 11,577                                                             | 34,7337                                                              | $4.52                     | 11/9/21 |   | 18,15310 | $77,332 |
| Senior Vice | 12/20/2012 | -                                                                  | 26,2508                                                              | $4.50                     | 12/20/22 |   | 9,25111 | $39,409 |
| President   |       |                                                               |                                                                 |                      |   |   |   |   |
| Chief       |       |                                                               |                                                                 |                      |   |   |   |   |
| Financial   |       |                                                               |                                                                 |                      |   |   |   |   |
| Officer and |       |                                                               |                                                                 |                      |   |   |   |   |
| Secretary   |       |                                                               |                                                                 |                      |   |   |   |   |

----

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Table of Contents

| (1) | Each option grant vests pro rata over four years beginning on the first anniversary of the grant date and has a ten-year term. All unvested options for Mr. Thomas and Mrs. Thomas vested on February 25, 2013 as part of their separation agreements.  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The exercise price for grants of stock options is determined using the closing price of the Company’s Common Stock on the date of grant.  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Restricted stock vests 100% after four years from the date of grant.  |
|-----|----------------------------------------------------------------------------|

| (4) | The market value of shares of restricted stock that has not vested was determined using the closing date market price of the Company’s Common Stock on December 31, 2012, $4.26 per share.  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Mr. Thomas and Mrs. Thomas resigned February 25, 2013. All of their restricted stock awards shown in the above table vested in full immediately upon their resignation. Additionally, all of their outstanding unvested options vested immediately on resignation and they will have until May 25, 2013 to exercise outstanding options.  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Vests as to approximately 3,861 shares on each of November 10, 2013 and November 10, 2014.  |
|-----|--------------------------------------------------------------------------------------------------|

| (7) | Vests as to approximately 11,578 shares on each of November 9, 2013, November 9, 2014 and November 9, 2015.  |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (8) | Vests as to approximately 6,562 shares on each of December 20, 2013, December 20, 2014, December 20, 2015 and December 20, 2016.  |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Vests 100% on November 10, 2014.  |
|-----|----------------------------------------|

| (10) | Vests 100% on November 9, 2015.  |
|------|---------------------------------------|

| (11) | Vests 100% on December 20, 2016.  |
|------|----------------------------------------|

|                                                         |   | Option Awards                           |   |   | Stock Awards                  |
|--------------------------------------------------------------|--------|-----------------------------------------|--------|--------|-------------------------------|
| Name                                                         |   | Number of Shares Acquiredon Exercise(#) |   |   | ValueRealized on Exercise ($) |   |   | Number of Shares Acquired on Vesting(#) |   |   | Value Realized on Vesting($) |
| Jeffrey D. Thomas                                            |   |                                    | -      |   |                          |   | - |   |   |   | 28,900 |   |   |   | 129,183 |
| Former Chief Executive Officer and President                 |   |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |
| Margaret M. Thomas                                           |   |                                    | -      |   |                          |   | - |   |   |   | 11,900 |   |   |   | 53,193 |
| Former Executive Vice President                              |   |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |
| Anthony F. Dombrowik                                         |   |                                    | -      |   |                          |   | - |   |   |   | - |   |   |   | - |
| Senior Vice President, Chief Financial Officer and Secretary |   |                                    |   |   |                          |   |   |   |   |   |   |   |

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Table of Contents

|                                                         | Terminationwithout “Cause”or resignationfor“Good Reason” |
|--------------------------------------------------------------|----------------------------------------------------------------------------------|
| Unpaid Bonus                                                 | 36,026                                                                           |
| Continued salary (six months)                                | 120,000                                                                          |
| Annual target bonus                                          | 72,000                                                                           |
| Medical Insurance                                            | 8,656                                                                            |
| Accelerated Vesting of Stock Options and Restricted Stock(1) | 146,949                                                                          |
| Total(2)                                                     | $383,631                                                                         |
|                                                         |                                                                             |
|                                                              |                                                                             |

|   | (1) | The stock option value is calculated by multiplying the number of unvested shares by the difference between the exercise price and the closing stock price on December 31, 2012 ($4.26). The value of restricted stock is calculated by multiplying the number of unvested shares by the closing stock price on December 31, 2012.  |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Any payments or other consideration to be received are subject to the deduction limitations and tax imposed by Sections 280G and 4999 of the Code, or to any Excise Tax. Any such payments and value of the other consideration will be reduced, or refunded, as the case may be, by the minimum amount necessary so as to avoid the application of any Excise Tax. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         | Terminationwithout “Cause”or for“Good Reason”in connection with a“Change in Control” |
|--------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
| Unpaid Bonus                                                 | 36,026                                                                                                                   |
| Continued salary (twelve months)                             | 240,000                                                                                                                  |
| Annual target bonus                                          | 72,000                                                                                                                   |
| Medical Insurance                                            | 8,656                                                                                                                    |
| Accelerated Vesting of Stock Options and Restricted Stock(1) | 146,949                                                                                                                  |
| Total(2)                                                     | $503,631                                                                                                                 |
|                                                         |                                                                                                                     |
|                                                              |                                                                                                                     |

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Table of Contents

|      | (1) | The stock option value is calculated by multiplying the number of unvested shares by the difference between the exercise price and the closing stock price on December 31, 2012 ($4.26). The value of restricted stock is calculated by multiplying the number of unvested shares by the closing stock price on December 31, 2012.  |
|---------------------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Any payments or other consideration to be received are subject to the deduction limitations and tax imposed by Sections 280G and 4999 of the Code, or to any Excise Tax. Any such payments and value of the other consideration will be reduced, or refunded, as the case may be, by the minimum amount necessary so as to avoid the application of any Excise Tax. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Name1               |   | Fees Earned or Paid in Cash ($) |   |   | Stock Awards2 ($) |   |   | Option Awards2 ($) |   |   | Non-EquityIncentive Plan Compensation($) |   |   | Change in Pension Value and NonqualifiedDeferred Compensation Earnings |   |   | All Other Compensation3($) |   |   | Total ($) |
|---------------------|--------|---------------------------------|--------|--------|-------------------|--------|--------|--------------------|--------|--------|------------------------------------------|--------|--------|------------------------------------------------------------------------|--------|--------|----------------------------|--------|--------|-----------|
| Daniel G. Byrne     |   |                            | 54,526 |   |              |   | 12,504 |               |   |   | 12,501                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 79,531 |
| Rafer L. Johnson4   |   |                            | 12,000 |   |              |   | -      |               |   |   | -                                        |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 12,000 |
| James M. Kalustian  |   |                            | 68,058 |   |              |   | 30,001 |               |   |   | 30,000                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 128,059 |
| Peter Kamin5        |   |                            | 18,000 |   |              |   | 12,504 |               |   |   | 12,501                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 43,005 |
| Nilofer Merchant    |   |                            | 24,000 |   |              |   | 12,504 |               |   |   | 12,501                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 49,005 |
| Lisa Rapuano6       |   |                            | 18,000 |   |              |   | 12,504 |               |   |   | 12,501                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 43,005 |
| Thomas J. Rusin     |   |                            | 44,968 |   |              |   | 12,504 |               |   |   | 12,501                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 69,973 |
| Jeffrey D. Thomas7  |   |                            | -      |   |              |   | -      |               |   |   | -                                        |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | - |
| John A. Ueberroth8  |   |                            | 45,376 |   |              |   | -      |               |   |   | -                                        |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 45,376 |
| Ricardo L. Valencia |   |                            | 72,823 |   |              |   | 12,504 |               |   |   | 12,501                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | 80,000 |   |   |   | 177,828 |
| Timothy M. Walsh    |   |                            | 24,000 |   |              |   | 12,498 |               |   |   | 12,480                                   |   |   |                                                                   | -      |   |                       |   | -      |      |   |   | - |   |   |   | 48,978 |

----

| (1) | After being appointed as the Company’s Chairman of the Board, James M. Kalustian received a $20,000 additional fee paid in cash. Each of the Company’s other non-employee directors receive an annual fee of approximately $50,000 per year, paid $24,000 in cash and approximately $25,000 in equity. Inclusive in these amounts, each of the Company’s non-employee directors receive $1,000 per Board meeting attended. Equity compensation is split between options and restricted stock grants. Pursuant to the 2009 Plan, each grant of non-qualified stock options is granted at the fair market value of the Common Stock on the date of grant, and vests in four equal annual installments commencing one year from the date of grant. Each grant of restricted stock is granted at the fair market value of the Common Stock on the date of grant and vests one year from the date of grant. Committee chairpersons receive an additional $7,000 annually. These amounts are payable in cash. Additionally, each director is compensated for special committee fees as designated by the board of directors and reimbursed for certain out-of-pocket expenses incurred in connection with attendance at Board and committee meetings.  |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | These amounts reflect the aggregate grant date fair value of the stock awards and option awards, respectively, granted during 2012 and computed in accordance with GAAP. For a description of accounting policies and the assumptions used in determining the value of the stock options and restricted stock awards, see the notes to the financial statements included in our Annual Report on Form 10-K, filed on March 11, 2013. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Director            |   | Number ofOutstanding Option Awards |   |   | Number of OutstandingStock Awards |
|---------------------|--------|------------------------------------|--------|--------|-----------------------------------|
| Daniel G. Byrne     |   |                               | 20,739 |   |                              |   | 2,447 |
| Peter H. Kamin5     |   |                               | 6,511  |   |                              |   | 2,447 |
| James M. Kalustian  |   |                               | 27,665 |   |                              |   | 5,871 |
| Nilofer Merchant    |   |                               | 9,236  |   |                              |   | 4,228 |
| Thomas J. Rusin     |   |                               | 11,890 |   |                              |   | 2,447 |
| Lisa Rapuano6       |   |                               | 6,511  |   |                              |   | 2,447 |
| Ricardo L. Valencia |   |                               | 17,572 |   |                              |   | 2,447 |
| Timothy M. Walsh    |   |                               | 5,435  |   |                              |   | 2,212 |

| (3) | Amount consists of consulting fees paid to Mr. Valencia.  |
|-----|----------------------------------------------------------------|

| (4) | Resigned from the Board of Directors effective June 2012.  |
|-----|-----------------------------------------------------------------|

| (5) | Joined the Board of Directors in June 2012.  |
|-----|---------------------------------------------------|

| (6) | Joined the Board of Directors in June 2012.  |
|-----|---------------------------------------------------|

| (7) | See “Summary Compensation Table” for disclosure related to Mr. Thomas who is a Named Executive Officer.  |
|-----|---------------------------------------------------------------------------------------------------------------------------|

| (8) | Mr. Ueberroth did not stand for reelection at the 2012 Annual meeting and ceased to be a director effective June 2012. |
|-----|------------------------------------------------------------------------------------------------------------------------|

|   | COMPENSATION COMMITTEE                                                                     |
|--------|--------------------------------------------------------------------------------------------|
|   |                                                                                       |
|   | Ricardo Lopez Valencia, ChairmanJames M. KalustianThomas J. RusinLisa O’Dell Rapuano |

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Table of Contents

| Name of Beneficial Owner                               |   | Amount and Nature of Beneficial Ownership of Common Stock(1) |      |   | Percent of Class ofCommon Stock |   |
|--------------------------------------------------------|--------|--------------------------------------------------------------|-----------|--------|---------------------------------|--------|
| Jefferson Gramm (Bandera Partners) (2)                 |   |                                                         | 2,744,989 |   |                            |   | 16.5 | % |
| FMR LLC (Fidelity Management and Research Company) (3) |   |                                                         | 1,770,356 |   |                            |   | 10.4 | % |
| Stadium Capital Management, LLC(4)                     |   |                                                         | 1,198,320 |   |                            |   | 7.1 | % |

|   |   |    |
|--------|--------|--------------|
|   |   |    |

|   | (1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or dispositive power with respect to securities. Shares of Common Stock, which are purchasable under options which are currently exercisable, or which will become exercisable no later than 60 days after April 19, 2013, are deemed outstanding for computing the percentage of the person holding such options, but are not deemed outstanding for computing the percentage of any other person. The Percent of Class of Common Stock set forth above is based upon 16,948,822 shares of Common Stock outstanding as of April 19, 2013. Except as indicated by footnote and subject to community property laws, where applicable, the persons named in the table have sole voting and dispositive power with respect to all shares of Common Stock shown as beneficially owned by them.  |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The Company is reporting this stock ownership based upon a Schedule 13D report filed on July 23, 2012 with the Securities and Exchange Commission. Bandera Partners LLC may be deemed to have the sole power to dispose of, direct the disposition of, vote or direct the vote of 2,725,193 shares of Common Stock directly owned by Bandera Master Fund L.P. As Managing Partners, Managing Directors and Portfolio Managers of Bandera Partners LLC, each of Gregory Bylinsky, Jefferson Gramm and Andrew Shpiz may be deemed to have the shared power to dispose of, direct the disposition of, vote or direct the vote of 2,725,193 shares of Common Stock directly owned by Bandera Master Fund L.P. Mr. Gramm may be deemed to have the sole power to dispose of, direct the disposition of, vote or direct the vote of 19,796 shares owned directly by him. The address of the beneficial owners is 50 Broad Street, Suite 1820, New York, New York, 10004. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The Company is reporting this stock ownership based upon a Schedule 13G/A report filed on December 12, 2011 with the Securities and Exchange Commission. The address of the beneficial owner is 82 Devonshire Street, Boston, MA 02109.  |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | The Company is reporting this stock ownership based upon a Schedule 13G/A report filed on February 14, 2013 with the Securities and Exchange Commission. Stadium Capital Management, LLC, Alexander M. Seaver and Bradley R. Kent may be deemed to share voting power and dispositive power with respect as to 1,198,320 shares of Common Stock. Stadium Capital Partners, L.P., Stadium Capital Management, LLC, Alexander M. Seaver and Bradley R. Kent may be deemed to share voting power and dispositive power with respect to 1,061,354 shares of Common Stock. The address of the beneficial owners is 199 Elm Street, New Canaan, CT 06840-5321. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Name of Beneficial Owner                              |   | Amount and Nature of Beneficial Ownership of Common Stock(1) |      | Percent of Class of CommonStock |   |
|-------------------------------------------------------|--------|--------------------------------------------------------------|-----------|---------------------------------|--------|
| Lisa O'Dell Rapuano(2)                                |   |                                                         | 1,193,074 |                            |   | 7.04 | % |
| Jeffrey D. Thomas (3)                                 |   |                                                         | 1,156,681 |                            |   | 6.47 | % |
| Margaret M. Thomas (4)                                |   |                                                         | 282,962   |                            |   | 1.65 | % |
| Peter H. Kamin (5)                                    |   |                                                         | 221,312   |                            |   | 1.31 | % |
| Anthony F. Dombrowik (6)                              |   |                                                         | 53,795    |                            |   | * |   |
| James M. Kalustian (7)                                |   |                                                         | 24,737    |                            |   | * |   |
| Daniel G. Byrne (8)                                   |   |                                                         | 23,222    |                            |   | * |   |
| Ricardo Lopez Valencia (9)                            |   |                                                         | 17,607    |                            |   | * |   |
| Thomas J. Rusin (10)                                  |   |                                                         | 9,095     |                            |   | * |   |
| Nilofer Merchant (11)                                 |   |                                                         | 6,536     |                            |   | * |   |
| Timothy M. Walsh (12)                                 |   |                                                         | 3,570     |                            |   | * |   |
| Debra Dulsky (13)                                |   |                                                         | -         |                            |   | * |   |
| All directors and Named Executive Officers as a group |   |                                                         | 2,992,591 |                            |   | 16.47 | % |
| (12 people)(14)                                       |   |                                                         |      |                            |   |   |   |

|   |     |   |
|--------|---------------|--------|
|   |     |   |

|   |   | * | Less than 1%  |
|--------|--------|---|--------------------|

|   | (1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or dispositive power with respect to securities. Shares of Common Stock, which are purchasable under options which are currently exercisable, or which will become exercisable no later than 60 days after April 19, 2013, are deemed outstanding for computing the percentage of the person holding such options, but are not deemed outstanding for computing the percentage of any other person. The Percent of Class of Common Stock set forth above is based upon 16,948,822 shares of Common Stock outstanding as of April 19, 2013. Except as indicated by footnote and subject to community property laws, where applicable, the persons named in the table have sole voting and dispositive power with respect to all shares of Common Stock shown as beneficially owned by them. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Director. Lane Five Capital Management LP, Lane Five Capital Management, LLC and Lisa O’Dell Rapuano may be deemed to share voting power and dispositive power with respect to 1,189,000 shares of Common Stock. Lane Five Partners GP LLC, Lane Five Partners LP, Lane Five Capital Management LP, Lane Five Capital Management, LLC and Lisa O’Dell Rapuano may be deemed to share voting and dispositive power with respect to 830,537 shares of Common Stock. The address of Ms. Rapuano is 1122 Kenilworth Drive, Suite 313, Towson, MD 21204  |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Former chief executive officer and president of the Company. Includes options to purchase 921,656 shares of Common Stock issued under the 2009 Plan that expire May 25, 2013. Mr. Thomas’ address is 1525 East Westminster, Spokane, WA 99223.  |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Former executive vice president of the Company. Includes options to purchase 226,930 shares of Common Stock issued under the 2009 Plan that expire May 25, 2013. Mrs. Thomas’ address is 1525 East Westminster, Spokane, WA 99223.  |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|   | (5) | Director. Mr. Kamin has the sole power to vote or direct the vote of and to dispose or direct the disposition of the 219,685 shares of Common Stock held by the Peter H. Kamin Revocable Trust, the Peter H. Kamin Roth IRA and the Peter H. Kamin Family Foundation. Includes options to purchase 1,627 shares of Common Stock issued under the 2009 Plan. The address of Mr. Kamin is 3K Limited Partnership, 20 Custom House Street, Suite 610, Boston, Massachusetts 02110.  |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Interim chief executive officer and president, senior vice president, chief financial officer and secretary of the Company. Includes options to purchase 19,300 shares of Common Stock issued under the 2009 Plan. Mr. Dombrowik’s address is 2001 South Flint Road, Spokane, WA 99224.  |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Chairman of the Board of Directors of the Company. Includes options to purchase 13,957 shares of Common Stock issued under the 2009 Plan. Mr. Kalustian’s address is 215 Wachusett Ave., Arlington, MA 02476.  |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (8) | Director. Includes options to purchase 13,866 shares of Common Stock issued under the 2009 Plan. Mr. Byrne’s address is 2001 South Flint Road, Spokane, WA 99224.  |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (9) | Director. Includes options to purchase 10,699 shares of Common Stock issued under the 2009 Plan. Mr. Valencia’s address is 12641 S. 35th Place, Phoenix, AZ, 85044.  |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (10) | Director. Includes options to purchase 4,316 shares of Common Stock issued under the 2009 Plan. Mr. Rusin’s address is 750 E. Main Street, 8th Floor, Stamford, CT 06902.  |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (11) | Director. Includes options to purchase 2,308 shares of Common Stock issued under the 2009 Plan. Ms. Merchant’s address is 359 Johnson Avenue, Los Gatos, CA 95030.  |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (12) | Director. Includes options to purchase 1,358 shares of Common Stock issued under the 2009 Plan. Mr. Walsh’s address is 50 W. State St., Trenton, NJ 08625.  |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (13) | Director Nominee. Ms. Dulsky's address is 35 Marion Road, Westport CT 06880  |
|--------|------|-----------------------------------------------------------------------------------|

|   | (14) | Includes 1,217,644 shares of Common Stock issuable upon exercise of stock options. |
|--------|------|------------------------------------------------------------------------------------|

|                                                       |   | (a)                                                                                         |   | (b)                                                                        | (c)    |
|------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|
| Plan category                                              |   | Number of securities to be issued upon exercise of outstanding options, warrants and rights |   | Weighted-averageexercise price of outstanding options, warrants and rights |   | Number ofsecuritiesremaining availablefor future issuance under equity compensation plans (excluding securities reflectedin column (a)) |
| Equity compensation plans approved by security holders     |   | 2,324,446                                                                                   |   | 8.90                                                                       |   | 470,774 |
| Equity compensation plans not approved by security holders |   | N/A                                                                                         |   | N/A                                                                        |   | N/A |
| Total                                                      |   | 2,324,446                                                                                   |   | 8.90                                                                       |   | 470,774 |

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Table of Contents

|               |   | 2012   |    |   | 2011   |
|--------------------|--------|--------|---------|--------|--------|
| Audit Fees         |   | $      | 348,760 |   |   | $ | 335,700 |
| Audit-Related Fees |   |   | 20,000  |   |   |   | 15,500 |
| Tax Fees           |   |   | 4,000   |   |   |   | — |
| All Other Fees     |   |   | — |   |   |   | — |
| Total              |   | $      | 372,760 |   |   | $ | 351,200 |

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Table of Contents

|   |                                          |
|--------|-----------------------------------------------|
|   |                                          |
|   | /s/ Anthony F. Dombrowik                      |
|   | Anthony F. Dombrowik                          |
|   | Interim President and Chief Executive Officer |

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Table of Contents

| ExhibitNumber                                               |   | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.1                                                         |   | Amended and Restated Certificate of Incorporation of the registrant incorporated by reference to the registrant’s Registration Statement on Form 10 filed on November 15, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2                                                         |   | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the registrant incorporated by reference to the registrant’s Form 8-K filed on May 17, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.3                                                         |   | Bylaws of the registrant incorporated by reference to the registrant’s Registration Statement on Form 10 filed on November 15, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.1                                                         |   | Form of Common Stock Certificate of the registrant incorporated by reference to the registrant’s Form 10-K filed on March 9, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.1                                                        |   | 2001 Equity Participation Plan incorporated by reference to the registrant’s Registration Statement on Form 10 filed on January 7, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.2                                                        |   | Form of 2001 Equity Participation Plan Agreement incorporated by reference to the registrant’s Registration Statement on Form 10 filed on November 15, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.3                                                        |   | Form of Indemnification Agreement between the registrant and each of its executive officers and directors incorporated by reference to the registrant’s Registration Statement on Form 10 filed on January 25, 2002.                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.4                                                        |   | Commercial Lease Agreement by and between Portolese & Sample Investments and the registrant incorporated by reference to the registrant’s Form 8-K filed on January 4, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.5                                                        |   | AIA Document A101, Standard Form of Agreement between Owner and Contractor by and between the registrant and Graham Construction and Management, Inc. incorporated by reference to registrant’s Form 8-K filed on September 29, 2006.                                                                                                                                                                                                                                                                                                                                                                     |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.6                                                        |   | Employment Agreement by and between the registrant and Jeffrey D. Thomas, incorporated by reference to the registrant’s Form 8-K filed on October 3, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.7  10.8  10.9  10.10  |   | Stock Purchase Agreement by and between the registrant and Invemed Catalyst Fund, L.P. incorporated by reference to the registrant’s Form 8-K filed on January 31, 2007.  Stock Purchase Agreement incorporated by reference to the registrant’s Form 8-K filed on May 21, 2008.  Credit Agreement by and between the registrant and Wells Fargo Bank, N.A. incorporated by reference to the registrant’s Form 8-K filed on May 30, 2008.  Revolving Line of Credit Note incorporated by reference to the registrant’s Form 8-K filed May 30, 2008.  |
| 10.11                                                       |   | 2009 Equity Participation Plan incorporated by reference to the registrant’s Definitive Proxy Statement on Form 14A filed on April 6, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.12                                                       |   | Severance Agreement by and between the registrant and Margaret M. Thomas incorporated by reference to the registrant’s Form 10-K filed March 11, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                               |

| 10.14       |   | Second Amendment to Credit Agreement by and between the registrant and Wells Fargo Bank, National Association incorporated by reference to the registrant’s Form 8-K filed April 25, 2012.        |
|-------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  10.15 |   |  First Modification to Promissory Note by and between the registrant and Wells Fargo Bank, National Association incorporated by reference to the registrant’s Form 8-K filed April 25, 2012. |

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Table of Contents

| 10.16  |   | Cooperation Agreement by and among the registrant, Lane Five Partners LP, Lane Five Capital Management LP, Lane Five Capital Management, LLC, Lane Five Partners GP LLC, Lisa O’Dell Rapuano, 3K Limited Partnership, and Peter H. Kamin incorporated by reference to the registrant’s Form 8-K filed May 8, 2012.                 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.17  |   | Amendment to Cooperation Agreement by and among the registrant, Lane Five Partners LP, Lane Five Capital Management LP, Lane Five Capital Management, LLC, Lane Five Partners GP LLC, Lisa O’Dell Rapuano, 3K Limited Partnership, and Peter H. Kamin incorporated by reference to the registrant’s Form 8-K filed July 10, 2012.  |
| 10.18  |   | Separation Agreement and Release by and between the registrant and Jeffrey D. Thomas incorporated by reference to the registrant’s Form 10-K filed February 25, 2013.                                                                                                                                                                    |
| 10.19  |   | Separation Agreement and Release by and between the registrant and Margaret Thomas incorporated by reference to the registrant’s Form 10-K filed February 25, 2013.                                                                                                                                                                      |
| 10.20  |   | General Contract between People to People International and International Ambassador Programs, Inc. incorporated by reference to the registrant’s Form 10-K filed March 11, 2013.+                                                                                                                                                       |
| 10.21  |   | Consent to Assignment Agreement by and among People to People International, International Ambassador Programs, Inc., Ambassadors International, Inc. and Ambassador Programs incorporated by reference to the registrant’s Form 10-K filed March 11, 2013.                                                                              |
| 10.22  |   | Amendment to General Contracts by and among People to People International, Ambassadors International, Inc. and Ambassador Programs, Inc. incorporated by reference to the registrant’s Form 10-K filed March 11, 2013.                                                                                                                  |
| 10.23  |   | Letter dated February 13, 2001, by Ambassadors International, Inc. to People to People International incorporated by reference to the registrant’s Form 10-K filed March 11, 2013.                                                                                                                                                       |
| 10.24  |   | Letter dated August 8, 2006, by the registrant to People to People International incorporated by reference to the registrant’s Form 10-K filed March 11, 2013.                                                                                                                                                                           |
| 10.25  |   | Letter dated December 9, 2009, by the registrant to People to People International incorporated by reference to the registrant’s Form 10-K filed March 11, 2013.                                                                                                                                                                         |
| 14.1   |   | Code of Ethics incorporated by reference to the registrant’s Definitive Proxy Statement on Form 14A filed on April 13, 2010.                                                                                                                                                                                                             |
| 21.1   |   | List of subsidiaries of the registrant as of December 31, 2012.**                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                |
| 23.1   |   | Consent of BDO USA, LLP, Independent Registered Public Accounting Firm.**                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                |
| 31.1   |   | Certification by Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(a) or Rule 15(d)-14(a).*                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                |
| 32.1   |   | Certification by the Chief Executive Officer and Chief Financial Officer as required by Rule 13a-14(b) or 15(d)-14(b) and Section 1350 of Chapter 63 of Title 13 of the United  States Code (18 U.S.C. §1350).*                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                |

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