9. Stockholders’ Equity

Authorized Shares

Our Certificate of Incorporation, as amended and restated from time to time, authorizes the issuance of up to 37,000,000 shares of common stock and up to 3,000,000 shares of undesignated preferred stock.

Under the terms of our certificate of incorporation, our board of directors is authorized to issue shares of the preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Currently, we have no shares of preferred stock outstanding.

Stock Award Plans

In May 2006 we approved a 2006 Stock Option and Incentive Plan (as subsequently amended, the 2006 Plan), which became effective upon our initial public offering. In 2010 we amended the 2006 Plan to increase the aggregate pool of available shares to 3,000,000 of common stock, and in 2015 the 2006 Plan was amended to increase the aggregate pool to 5,500,000 shares. The 2006 Plan allows for granting of incentive stock options, non-qualified stock options, stock appreciation rights, RSUs, unrestricted stock awards, and deferred stock awards to our officers, employees, directors, and consultants. Incentive stock options are required to be issued at not less than fair market value at the date of the grant and generally vest over four or five years. The term of the options is determined by our Board of Directors but in no event will exceed ten years from date of grant. In connection with the adoption of the 2006 Plan, no further option grants were permitted under any previous stock option plans and any expirations, cancellations, or terminations under the previous plans are available for issuance under the 2006 Plan. We may satisfy awards upon exercise of stock options or RSUs with either newly issued shares or treasury shares. The total number of shares currently authorized for the 2006 Plan is 7,118,003 shares, of which 1,506,797 remain available for grant as of December 31, 2017.

We have computed the fair value of employee stock options using the following weighted average assumptions:


	2017			2016			2015
Dividend yield		0.7	%		1.3	%		1.4	%
Volatility		39.1	%		34.5	%		28.6	%
Risk-free interest rate		2.2	%		1.2	%		1.8	%
Weighted average expected option term (in years)		4.6			5.5			5.6
Weighted average fair value per share of options granted	$	10.37		$	4.04		$	2.80
Aggregate intrinsic value of options exercised	$	13,086,167		$	2,391,154		$	6,534,800

A summary of option activity as of December 31, 2017 and the year then ended is presented below:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)
Balance outstanding at December 31, 2016 (1)		1,979,501		$	10.25		4.10	$	29,871,569
Granted		219,413		$	32.09
Exercised (2)		(635,503	)	$	8.65			$	13,086,167
Canceled / Expired		(27,129	)	$	11.91

Balance outstanding at December 31, 2017 (3)		1,536,282		$	13.86		4.15	$	27,771,635

Vested and exercisable at December 31, 2017 (4)		403,300		$	8.59		2.83	$	9,376,622
Expected to vest at December 31, 2017		1,132,982		$	15.74		4.62

Total		1,536,282

(1)	The aggregate intrinsic value represents the difference between the exercise price and $25.34, the closing price of our stock on December 31, 2016, for all in-the-money options outstanding.

(2)	The aggregate intrinsic value of shares exercised represents the difference between the exercise price and the closing price of our stock on the date of exercise.

(3)	The aggregate intrinsic value represents the difference between the exercise price and $31.84, the closing price of our stock on December 31, 2017, for all in-the-money options outstanding.

(4)	The aggregate intrinsic value represents the difference between the exercise price and $31.84, the closing price of our stock on December 31, 2017, for all in-the-money options vested and exercisable as of that date.

Restricted Stock Units

A summary of our RSU activity is as follows:


				Weighted
				Average
				Grant Date
	Shares			Fair Value
Balance outstanding at December 31, 2016		239,282		$	11.51
Granted		67,519		$	31.59
Vested (1)		(68,992	)	$	10.09
Canceled		(21,059	)	$	12.17

Balance outstanding at December 31, 2017		216,750		$	18.10

(1)	The number of RSUs vested includes the shares that we withheld on behalf of employees to satisfy minimum statutory tax withholding requirements.

The fair values of the RSUs that vested during 2017, 2016, and 2015 were $1.9 million, $0.8 million, and $0.7 million, respectively.

We repurchase shares of our common stock in order to cover any minimum tax withholding liability associated with RSU vestings. A summary of our repurchases is as follows:


	2017		2016
Shares of common stock repurchased		27,291		21,671
Average per share repurchase price	$	28.51	$	14.33
Aggregate purchase price (in thousands)	$	778	$	311

Stock-based Compensation

The components of stock-based compensation expense included in the consolidated statements of operations are as follows:


	2017		2016		2015
	(in thousands)
Stock option awards	$	1,612	$	1,116	$	992
Restricted stock units		644		564		432

Total stock-based compensation	$	2,256	$	1,680	$	1,424

Stock-based compensation is included in our statements of operations as follows:


	2017		2016		2015
	(in thousands)
Cost of sales	$	188	$	175	$	165
Sales and marketing		403		373		284
General and administrative		1,484		983		869
Research and development		181		149		106

Total stock-based compensation	$	2,256	$	1,680	$	1,424

General and administrative stock-based compensation expense for 2017 includes a charge of $0.5 million related to a stock option modification associated with the departure of our President of International Operations.

We expect to record the unamortized portion of share-based compensation expense of $8.3 million for existing stock options and RSUs outstanding at December 31, 2017, over a weighted-average period of 4.0 years.

Stock Repurchase Plan

On July 25, 2017, our Board of Directors approved a stock repurchase program under which the Company is authorized to repurchase up to $7.5 million of its common stock through transactions on the open market, in privately negotiated purchases or otherwise. This program may be suspended or discontinued at any time, and expires on the earlier of July 25, 2018 or when the authorized aggregate $7.5 million repurchase limit is reached. To date we have not made any repurchases under this program.

Dividends

In February 2011, our Board of Directors approved a policy for the payment of quarterly cash dividends on our common stock. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by our Board of Directors on a quarterly basis. The dividend activity for the periods presented is as follows:


Record Date	Payment Date	Per Share Amount		Dividend Payment
				(in thousands)
Fiscal Year 2017
March 22, 2017	April 6, 2017	$	0.055	$	1,029
May 24, 2017	June 8, 2017	$	0.055	$	1,036
August 23, 2017	September 6, 2017	$	0.055	$	1,055
November 22, 2017	December 7, 2017	$	0.055	$	1,060

Fiscal Year 2016
March 21, 2016	April 4, 2016	$	0.045	$	825
May 25, 2016	June 8, 2016	$	0.045	$	829
August 22,2016	September 2, 2016	$	0.045	$	833
November 21, 2016	December 5, 2016	$	0.045	$	836

On February 15, 2018, our Board of Directors approved a quarterly cash dividend on our common stock of $0.07 per share payable on April 5, 2018, to stockholders of record at the close of business on March 22, 2018, which will total approximately $1.4 million in payments.