Noncash Share-based Compensation

During the three months ended September 30, 2016, the Company granted 460,000 RSUs with a market-based vesting condition and a weighted average grant-date fair value of $11.92 per share to certain executive employees. These market-based RSUs will vest if the average trailing closing price of the Company's Common Stock meets certain minimum performance hurdles for at least 105 calendar days prior to September 9, 2020, with 25% vesting at $27, an additional 25% vesting at $33, and the remaining 50% vesting at $41. The Company also granted 17,500 RSUs with a weighted average grant-date fair value of $18.50 per share. The Company did not grant any stock options or SARs during the three months ended September 30, 2016.

During the nine months ended September 30, 2016, the Company granted 1,335,142 RSUs with a weighted average grant-date fair value of $11.50 per share. The Company also granted 460,000 RSUs with a market-based vesting condition and a weighted average grant-date fair value of 11.92 per share to certain executive employees. The Company granted 152,500 MSUs with a weighted average grant-date fair value of $14.29 to certain executive employees during the nine months ended September 30, 2016. These MSUs vest on March 1, 2019 and the actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Index over the Performance Period, as defined by each award's plan documents or individual award agreements. The Company did not grant any stock options or SARs during the nine months ended September 30, 2016.

Share-based compensation expense is allocated to expense categories on the unaudited condensed consolidated statements of comprehensive income (loss). The following table summarizes share-based compensation expense included in the Company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
Share-based compensation:
Cost of revenue	$	544		$	852	$	1,720	$	2,896
Operating expenses:
Selling and marketing	(918		)	2,229		2,559		6,541
General and administrative	2,235			2,280		6,267		8,000
Research and development	1,331			1,270		3,899		3,944
Total included in operating expenses	2,648			5,779		12,725		18,485
Total share-based compensation expense	$	3,192		$	6,631	$	14,445	$	21,381

The decrease in selling and marketing noncash share-based compensation expense primarily related to the change in employment status of the Company's former Chief Operating Officer, which included a $4.1 million decrease due to forfeiture of MSUs, partially offset by a $1.8 million increase due to the acceleration of noncash share-based compensation expense related to RSUs.

In January 2016, the number of shares available for issuance increased by 900,000 to 9,968,000 under an evergreen provision in the Company's 2007 Equity Incentive Plan ("2007 Stock Plan"). As of September 30, 2016, 743,808 shares remained available for issuance under the 2007 Stock Plan.

At September 30, 2016, the Company had an estimated $39.8 million of total unrecognized compensation costs related to share-based compensation arrangements. These costs will be recognized over a weighted average period of 2.3 years.

In June 2013, the Board of Directors authorized an Employee Stock Purchase Plan ("ESPP") which provides for eligible employees to purchase shares on an after-tax basis in an amount between 1% and 10% of their annual pay: (i) on June 30 of each year at a 5% discount of the fair market value of the Company's common stock on January 1 or June 30, whichever is lower, and (ii) on December 31 of each year at a 5% discount of the fair market value of the Company's common stock on July 1 or December 31, whichever is lower. An employee may not purchase more than $5,000 in either of the six-month measurement periods described above or more than $10,000 annually. In November 2015, the Board of Directors amended the ESPP plan to increase the discount to 15% of the fair market value of the Company's common stock effective January 1, 2016. The amendment did not change the accounting treatment of the ESPP plan. During the three and nine months ended September 30, 2016, the Company issued 41,845 and 65,693 shares, respectively, under the ESPP. As of September 30, 2016, 383,310 shares remain authorized and available for issuance under the ESPP. As of September 30, 2016, the Company held approximately $0.4 million on behalf of employees for future purchases under the ESPP, and this amount was recorded in accrued liabilities in the Company's unaudited condensed consolidated balance sheet.