X0306 4 2012-11-28 0 0001292653 Neutral Tandem Inc IQNT 0001426585 Monto Richard C/O NEUTRAL TANDEM 550 W. ADAMS STREET, SUITE 900 CHICAGO IL 60661 0 1 0 0 GC & Corporate Secretary Common Stock, par value $0.001 per share 2012-11-28 4 A 0 4966 0.00 A 135054 D Employee Stock Options (right to purchase) 4.14 2012-11-28 4 H 0 17500 0.00 D 2017-04-26 Common Stock 17500 0 D Employee Stock Options (right to purchase) 1.77 2012-11-28 4 P 0 17500 0.00 A 2012-11-28 2017-04-26 Common Stock 17500 17500 D In order to prevent the company's recent special one-time cash dividend from diluting the value of the reporting person's outstanding options issued pursuant to the Neutral Tandem, Inc. 2003 Stock Option and Stock Incentive Plan, the company's compensation committee discretionarily reduced the exercise price of such options, subject to the limitations of Section 409A of the Internal Revenue Code. The amendment of such options to reduce the exercise price resulted in the deemed cancelation of the "old" options and the grant of replacement options. To the extent the exercise price of such options could not be fully adjusted because of the limitations of Section 409A of the Internal Revenue Code, the company's compensation committee approved the issuance of shares of restricted stock pursuant to the Neutral Tandem, Inc. Amended and Restated 2007 Long Term Equity Incentive Plan. The effect of the exercise price adjustment and the issuance of restricted stock, taken together, is to provide the reporting person with the same economic value after the time that the company's common stock began trading ex-dividend as the reporting person had immediately prior to such time. Further, because the reporting person's original options had previously vested in their entirety, the adjusted options and newly issued restricted stock were 100% vested as of the date of the antidilutive adjustments. The reporting person's options were originally granted on April 26, 2007 and vested in four equal installments commencing on April 26, 2008. /s/ Richard L. Monto 2012-11-30