3. Stock-Based Compensation

The Company maintains several stock-based compensation plans, which are more fully described in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. The Company included total stock-based compensation expense related to all its stock awards in various operating expense categories for the three months and nine months ended September 30, 2013 and 2012, as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(In Thousands)
Product and content development	$	536	$	658	$	1,711	$	2,134
Sales and marketing	362		574		1,179		1,987
General and administrative	767		732		1,662		2,313
Total stock-based compensation	$	1,665	$	1,964	$	4,552	$	6,434

Options

The following table represents a summary of the Company’s stock option activity under the 2009 Stock Incentive Plan and related information, without regard for estimated forfeitures, for the nine months ended September 30, 2013:



	Shares		Weighted Average Exercise Price
	(In Thousands)
Options outstanding at December 31, 2012	201		$	3.60
Options granted	150		$	12.97
Options exercised	(69	)	$	2.84
Options forfeited	(1	)	$	2.80
Options outstanding at September 30, 2013	281		$	8.79

The fair value of the options granted in the nine months ended September 30, 2013 have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:



	Nine Months Ended September 30,
	2013	2012
Expected term	3.75 years	N/A
Risk-free rate	1.40% - 1.62%	N/A
Expected volatility	37.04% - 37.12%	N/A
Dividend yield	—%	N/A

The expected term of the options granted during the three months ended September 30, 2013 was determined using the "simplified method" as prescribed by Staff Accounting Bulletin ("SAB") Topic 14D.2, which uses the midpoint between the vesting date and the end of the contractual term. The simplified method was used to determine the expected term of the options granted during the three months ended September 30, 2013, due to the extended period of time that has lapsed since the Company's last option grant, as well as differences in the contractual terms of the option awards compared to options granted in prior periods, such that our historical share option experience does not provide a reasonable basis to estimate the expected term. The risk-free interest rates are based on quoted U.S. Treasury rates for securities with maturities approximating the expected term of the options. Expected volatility is based on the historical volatility of the market price of the Company’s stock.

During the three and nine months ended September 30, 2013, the Company recorded $4,400 of compensation expense related to options. No compensation expense related to options was recorded for the three and nine months ended September 30, 2012. The weighted average grant-date fair value of options granted during the nine months ended September 30, 2013 was $3.89. No options were granted in the nine months ended September 30, 2012. No options vested during the nine months ended September 30, 2013 and 2012.

The intrinsic value of options exercised during the nine months ended September 30, 2013 was $0.7 million. There were no options exercised during the nine months ended September 30, 2012.

The following table summarizes information about options outstanding and exercisable at September 30, 2013:



	Options Outstanding				Options Exercisable
Exercise Prices	Number Outstanding as of September 30, 2013	Weighted Average Remaining Contractual Life (in Years)	Weighted Average Exercise Price		Number Exercisable as of September 30, 2013	Weighted Average Remaining Contractual Life (in Years)	Weighted Average Exercise Price
	(In Thousands)				(In Thousands)
$4.00	131	0.74	$	4.00	131	0.74	$	4.00
$12.97	150	4.98	$	12.97	—	—	$	—
	281	3.01	$	8.79	131	0.74	$	4.00

The aggregate intrinsic value of stock options outstanding and exercisable at September 30, 2013 was $1.2 million. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the quoted closing price of the Company’s common stock as of September 30, 2013.

Service-based Restricted Stock Awards

The following table summarizes the activity for awards of restricted stock with service-based vesting terms for the nine months ended September 30, 2013:



	Restricted Stock		Weighted Average Grant Date Fair Value
	(In Thousands)
Unvested as of December 31, 2012	1,539		$	9.38
Granted	1,446		$	9.68
Vested	(464	)	$	8.93
Forfeited	(255	)	$	9.46
Unvested as of September 30, 2013	2,266		$	9.66

For the nine months ended September 30, 2013 and 2012, the weighted average grant date fair value for service-based restricted stock was $9.68 and $9.27, respectively. The fair value of service-based restricted stock that vested during these periods was $4.1 million and $5.0 million, respectively. During the nine months ended September 30, 2013 and 2012, 184,776 and 206,440 shares of service-based restricted stock, respectively, were surrendered by employees to satisfy the employees' tax withholding obligations related to the vesting of the service-based stock awards. The aggregate intrinsic value of unvested service-based restricted shares as of September 30, 2013 was $29.3 million. The intrinsic value for service-based restricted shares is calculated based on the par value of the underlying shares and the quoted price of the Company’s common stock as of September 30, 2013.

As of September 30, 2013, there was $12.8 million of total unrecognized compensation cost related to non-vested service-based restricted shares, net of estimated forfeitures, which is expected to be recognized over a weighted average period of 2.83 years. During the three months ended September 30, 2013 and 2012, the Company recorded $1.4 million and $2.0 million, respectively, of compensation expense related to service-based restricted shares. During the nine months ended September 30, 2013 and 2012, the Company recorded $4.3 million and $6.4 million, respectively, of compensation expense related to service-based restricted shares.

Performance-based Restricted Stock Awards

On September 27, 2013, the Company granted 31,250 restricted shares of common stock to its new President, pursuant to his employment agreement. Vesting of this award is based upon (1) the achievement of performance goals established by the Compensation Committee of the Board and (2) continued employment with the Company through the end of the performance period. The performance period for this award ends on December 31, 2013. The grant date fair value of this performance-based restricted stock award was $12.97, which was determined using the fair market value of the Company's stock on the grant date. During the three and nine months ended September 30, 2013, the Company incurred $0.2 million of stock-based compensation expense related to this performance-based restricted stock award. As of September 30, 2013, there was $0.2 million of total unrecognized compensation cost related to this performance-based restricted stock award, which is expected to be recognized over a period of three months. There were no performance-based restricted stock awards granted during the nine months ended September 30, 2012.

2009 Employee Stock Purchase Plan ("ESPP")

During the nine months ended September 30, 2013 and 2012, the Company issued shares of common stock under the ESPP, as follows:



Offering Period Purchase Date	Number of Shares	Purchase Price
January 31, 2012	19,823	$	7.00
July 31, 2012	20,961	$	7.19
Total 2012	40,784
January 31, 2013	20,170	$	7.11
July 31, 2013	19,048	$	8.15
Total 2013	39,218

The fair value of ESPP rights have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:



	Nine Months Ended September 30,
	2013	2012
	ESPP Rights	ESPP Rights
Expected term	6 months	6 months
Risk-free rate	0.08% - 0.11%	0.15%
Expected volatility	19.86% - 20.34%	9.00% - 29.40%
Dividend yield	—%	—%

The expected term of the ESPP rights is based on the offering period of six months. The risk-free interest rates are based on the expected term of the ESPP rights at the time of grant. Expected volatility is based on the historical volatility of the market price of the Company’s stock. The fair value for ESPP rights includes the discount from market value provided for under the ESPP.

During the three months ended September 30, 2013 and 2012, the Company recorded $22,000 and $7,000, respectively, of compensation expense related to ESPP rights. During the nine months ended September 30, 2013 and 2012, the Company recorded $59,000 and $20,000, respectively, of compensation expense related to ESPP rights. The weighted average grant-date fair value of ESPP rights arising from elections made by ESPP participants was $2.24 and $1.33 during the nine months ended September 30, 2013 and 2012, respectively. The fair value of ESPP rights that vested during the nine months ended September 30, 2013 and 2012 was $67,000 and $86,000, respectively.

The intrinsic value of outstanding ESPP rights as of September 30, 2013 was $39,000. The intrinsic value of the shares of ESPP rights is calculated as the discount from the quoted price of the Company’s common stock, as defined in the ESPP, which was available to employees as of the respective dates.

As of September 30, 2013, there was approximately $33,000 of unrecognized compensation cost related to ESPP rights, which is expected to be recognized over a period of four months.

The Company received cash from the exercise of options and ESPP rights of $0.5 million and $0.3 million for the nine months ended September 30, 2013 and 2012, respectively, for which the Company issued new shares of common stock.