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

shares of preferred stock outstanding.

Stock Award Plans

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. The

2006

Plan allows for the granting of an aggregate

5,500,000

shares 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

five

years. The term of the options is determined by our Board of Directors but in

event will exceed

ten

years from date of grant. In connection with the adoption of the

2006

Plan,

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

1,089,749

remain available for grant as of

December

31,

2019.

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

	2019			2018			2017
Dividend yield		0.96	%		1.20	%		0.70	%
Volatility		42.8	%		41.3	%		39.1	%
Risk-free interest rate		1.7	%		2.7	%		2.2	%
Weighted average expected option term (in years)		4.7			4.8			4.6
Weighted average fair value per share of options granted	$	12.51		$	8.28		$	10.37

A summary of option activity as of

December

31,

2019

and the year then ended is presented below:

				Weighted		Weighted Average	Aggregate
	Number			Average		Remaining	Intrinsic
	of Shares			Exercise Price		Contractual Term	Value
						(in years)
Balance outstanding at December 31, 2018 (1)		1,462,575		$	16.41	4.54	$	12,214,422

Granted		195,379		$	35.53
Exercised (2)		(509,693	)	$	9.53		$	11,488,292
Canceled / Expired		(101,167	)	$	17.90
Balance outstanding at December 31, 2019 (3)		1,047,094		$	23.19	4.31	$	13,366,595

Vested and exercisable at December 31, 2019 (4)		309,501		$	19.64	3.50	$	5,046,733
Expected to vest at December 31, 2019		737,593		$	24.68	4.65
Total		1,047,094

(

)

The aggregate intrinsic value represents the difference between the exercise price and

$23.64,

the closing price of our stock on

December

31,

2018,

for all in-the-money options outstanding.

(

)

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.

(

)

The aggregate intrinsic value represents the difference between the exercise price and

$35.95,

the closing price of our stock on

December

31,

2019,

for all in-the-money options outstanding.

(

)

The aggregate intrinsic value represents the difference between the exercise price and

$35.95,

the closing price of our stock on

December

31,

2019,

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, 2018		217,895		$	21.21

Granted		56,567		$	35.41
Vested (1)		(61,058	)	$	18.46
Canceled		(24,723	)	$	22.19

Balance outstanding at December 31, 2019		188,681		$	26.14

(

)

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

2019,

2018,

and

2017

were

$2.1

million,

$1.9

million, and

$1.9

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:

	2019		2018

Shares of common stock repurchased		20,524		21,410
Average per share repurchase price	$	33.28	$	34.62
Aggregage purchase price (in thousands)	$	683	$	741

Stock-based Compensation

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

	2019		2018		2017
	(in thousands)
Stock option awards	$	1,580	$	1,457	$	1,612
Restricted stock units		1,062		892		644

Total stock-based compensation	$	2,642	$	2,349	$	2,256

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

	2019		2018		2017
	(in thousands)
Cost of sales	$	310	$	272	$	188
Sales and marketing		544		529		403
General and administrative		1,509		1,293		1,484
Research and development		279		255		181

Total stock-based compensation	$	2,642	$	2,349	$	2,256

We expect to record the unamortized portion of share-based compensation expense of

$10.4

million for existing stock options and RSUs outstanding at

December

31,

2019,

over a weighted-average period of

3.8

years.

Stock Repurchase Plan

February 14, 2019,

our Board of Directors authorized the repurchase of up to

$10.0

million of the Company’s common stock through transactions on the open market, in privately negotiated purchases or otherwise until

February 14, 2020.

February 13, 2020

the Board extended the term of the repurchase program to

February 14, 2021.

The repurchase program

may

be suspended or discontinued at any time. To date we have

not

made any repurchases under this program.

Dividends

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 2019
March 22, 2019	April 5, 2019	$	0.085	$	1,672
May 22, 2019	June 6, 2019	$	0.085	$	1,672
August 21, 2019	September 5, 2019	$	0.085	$	1,691
November 20, 2019	December 5, 2019	$	0.085	$	1,701


Fiscal Year 2018
March 22, 2018	April 5, 2018	$	0.070	$	1,351
May 22, 2018	June 7, 2018	$	0.070	$	1,353
August 22, 2018	September 6, 2018	$	0.070	$	1,369
November 20, 2018	December 6, 2018	$	0.070	$	1,372

February

13,

2020,

our Board of Directors approved a quarterly cash dividend on our common stock of

$0.095

per share payable on

March 19, 2020

to stockholders of record at the close of business on

March

2020

which will total approximately

$1.9

million.