Note 7 - Stockholders' Equity and Stock-based Compensation Expense

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note

7

.

Stockholders’ Equity and

Stock-based Compensation Expense

Share Repurchase Program

On

February

8,

2016,

the Company announced that its Board of Directors approved the expansion of its Stock Repurchase Program by

$10

million, under which the Company is authorized to repurchase sh

ares of its common stock. As of

December

31,

2016,

there remained an additional

$5.1

million

in the Stock Repurchase Program to use for repurchasing the Company's common stock

. On

February

13,

2017

the Company’s Board of Directors approved the expansion of its Stock Repurchase Program by an additional

$5

million.

In the

three

months ended

March

31,

2017,

the Company repurchased

140,400

shares of its common stock for approximately

$2.9

million

. As of

March

31,

2017,

there remained an additional

$7.2

million available in the Stock Repurchase Program to repurchase shares of common stock. All shares repurchased were retired and returned to authorized but unissued status.

Stock-based Compensation Expense

Stock-based compensation expense

 by department recognized during the

three

months ended

March

31,

2017

and

2016

were as follows (in thousands):

	Three Months Ended
	March 31 ,
	2017		2016
Cost of revenue	$	129	$	141
Sales and marketing		420		376
Research and development		237		180
General and administrative		609		635
Total stock-based compensation expense	$	1,395	$	1,332

Activity under the Company

’s

2004

Equity Incentive Plan, as amended, is summarized as follows:

				Options Outstanding
	Shares Available for Grant			Number of Stock Options Outstanding			Weighted- Average Exercise Price
Balance, December 31, 2016		721,657			1,116,472		$	9.56
Options granted		(52,000	)		52,000			18.18
Stock awards granted ( 1) (2)		(449,440	)		—			—
Options exercised		—			(201,686	)		8.68
Options canceled		11,352			(11,352	)		17.39
Stock awards canceled ( 1)		94,113			—			—
Balance, March 31 , 2017		325,682			955,434		$	10.12

(1) The Company has a “ fungible share” provision in its 2004 Equity Incentive Plan whereby for each full-value award (RSU/PSU) issued or canceled under the Plan requires the subtraction or add back of 2.12 shares from or to the Shares Available for Grant, respectively .

(2) Included in 'Stock awards granted' of 449,440 , was 221,540 fungible shares relating to 104,500 of PSUs granted. These PSUs mayresult in a lower number of shares of common stock that may be released on  January 1, 201 8 , based on the achievement of two performance goals at targets that were pre-determined by the Board and disclosed in a Form 8 -K on January 11 , 201 7 .

Under the

2004

Equity Incentive Plan, as amended

, the Company issued

316,203

shares of common stock during the

three

months ended

March

31,

2017

, in conjunction with stock options exercised and the vesting of RSUs and PSUs

.

As of

March

31,

2017,

there was approximately

$5.9

million of unrecognized compensation expense, net of projected forfeitures

, related to non-vested equity awards. The expense is expected to be recognized over the remaining weighted-average period of

1.80

years. The actual expense recorded in the future

may

be higher or lower based on a number of factors, including, actual forfeitures experienced and the degree of achievement of the performance goals related to the PSUs granted.