Stock Compensation

In December 2007, the Company's stockholders approved the 2007 Equity Incentive Plan (“2007 Plan”). The 2007 Plan replaced the Company's 1998 Stock Plan (the “1998 Plan”) and the 1999 Director Option Plan (the “Directors' Plan”), collectively referred to as the “Equity Plans.” The Equity Plans will continue to govern awards previously granted under each respective plan. At September 30, 2014, 125,209 shares of common stock were available for issuance under the 2007 Plan.

Options granted under the 2007 Plan must be issued at a price equal to at least the fair market value of the Company’s common stock on the date of grant. All vested stock options under the 2007 Plan may be exercised at the earlier of within 10 years of the date of grant or within 90 days of termination of employment, or such other time as may be provided in the stock option agreement, and vest as determined by the Board of Directors. The Company’s policy is to issue new shares upon exercise of options or vesting of Restricted Stock Units ("RSUs") under the 2007 Plan.

Stock Options

The following table summarizes option activities from December 31, 2013 through September 30, 2014:



	Number of Shares		Weighted-Average Exercise Price per Share	Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2013	133,578		$17.57
Granted	82,072		$11.54
Exercised	(725	)	$11.00
Canceled	(8,250	)	$16.22
Outstanding as of September 30, 2014	206,675		$15.26	7.9	$1
Vested or expected to vest at September 30, 2014	177,684		$15.73	7.7	$1
Exercisable at September 30, 2014	94,960		$17.84	6.2	$1

The total intrinsic value of options exercised for the three and nine months ended September 30, 2014 and September 30, 2013 was insignificant for all periods. The weighted average grant date fair value for the three and nine months ended September 30, 2014 was $4.05 and $4.07 respectively. The weighted average grant date fair value for the three and nine months ended September 30, 2013 was $6.50 and $6.06, respectively. The total cash received from stock options exercised was insignificant for the three and nine months ended September 30, 2014. The total cash received from stock options exercised was insignificant and $0.3 million for the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2014 and September 30, 2013, no tax benefit was realized from exercised options.

The fair value of the option grants has been calculated on the date of grant using the Black-Scholes option pricing model. The expected life was based on historical settlement patterns. Expected volatility was based on historical implied volatility in the Company’s stock. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The following table summarizes the weighted-average assumptions for stock options granted:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Expected life (years)	3.31	3.00	3.30	3.00
Risk-free interest rate	1.0%	0.8%	1.0%	0.5%
Volatility	49%	58%	49%	59%
Dividend yield	—	—	—	—

Restricted Stock

RSUs granted to employees typically vest over a three year period. RSUs granted to non-employee directors typically vest on the same day of the grant and represent compensation for serving on the Company's Board of Directors. The following table summarizes restricted stock activities from December 31, 2013 through September 30, 2014:



	Number of Shares		Weighted-Average Grant-Date Fair Value
Outstanding as of December 31, 2013	94,771		$17.91
Granted	120,978		$13.22
Restricted Stock Release	(98,755	)	$17.24
Canceled	(6,432	)	$15.61
Outstanding as of September 30, 2014	110,562		$13.51

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense as recorded in the Consolidated Statements of Operations (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenue	$	45	$	19	$	85	$	(101	)

Sales and marketing	24		19		67		(49		)
Technology and design	56		42		166		135
General and administrative	65		209		927		1,768
Included in operating expenses	145		270		1,160		1,854

Total stock-based compensation expense	$	190	$	289	$	1,245	$	1,753

The stock-based compensation expense is net of insignificant amounts capitalized to internal-use software for the three and nine months ended September 30, 2014.

As of September 30, 2014, total compensation cost not yet recognized and the weighted-average remaining term is as follows ($ in thousands):

Expense not yet
recognized

Weighted-Average Remaining Term (in years)

Stock Options

Restricted Stock Units