Stockholders’ Equity and Stock Based Compensation — Our authorized capital stock consists of 75 million shares of common stock, par value $0.0001 per share, and 25 million shares of preferred stock, par value $0.0001 per share.

On July 25, 2016 our stockholders approved the registration of 250,000 shares of common stock with the SEC, to be issued from time to time in connection with purchases under the Spok Holdings, Inc. 2016 Employee Stock Purchase Plan ("ESPP"). We will offer shares for purchase under the ESPP during the third quarter of 2016.

Changes in Stockholders’ Equity. Changes in stockholders’ equity for the six months ended June 30, 2016 consisted of:



	(Dollars in thousands)
Balance at January 1, 2016	$	333,553
Net income for the six months ended June 30, 2016	6,895
Cash dividends declared	(5,267		)
Amortization of stock based compensation	1,368
Common stock repurchase program	(5,985		)
Other	(18		)
Balance at June 30, 2016	$	330,546

General. At June 30, 2016 and December 31, 2015, there were 20,540,617 and 20,886,261 shares of common stock outstanding, respectively, and no shares of preferred stock outstanding.

The following table summarizes the activities under the 2012 Equity Incentive Award Plan (the "2012 Equity Plan") from January 1, 2016 through June 30, 2016:



	Activity
Total equity securities available at January 1, 2016	1,483,235
Less: 2015 LTIP Restricted Stock Units ("RSUs") awarded to eligible employees, net	222,065
Less: Restricted shares of common stock ("restricted stock") awarded to non-executive members of the Board of Directors	12,010
Total equity securities available at June 30, 2016	1,249,160

2015 LTIP. On December 9, 2014, our Board of Directors adopted an LTIP (which provides for a 36 month vesting period) that included a stock component in the form of RSUs. Under this incentive program, RSUs will be granted to eligible employees annually and each annual grant will generally vest over a three year performance period. Our Board of Directors also approved that future cash dividends related to the RSUs will be set aside and paid in cash to each eligible employee when the RSUs are converted into shares of common stock. RSUs would be converted into shares of common stock on the earlier of a change in control of the Company (as defined in the 2015 LTIP) or on or after the third business day following the day that we file the Annual Report on Form 10-K with the SEC for the grant's final vesting year, but in no event later than December 31 of the year following the vesting date if the pre-established performance conditions are achieved. Any unvested RSUs awarded under the 2015 LTIP and the related cash dividends are forfeited if the participant terminates employment with the Company.

On January 2, 2015, our Board of Directors granted 254,777 RSUs with a grant date fair value of $4.4 million. On January 28, 2016 our Board of Directors issued a subsequent grant of 227,082 RSUs with a grant date fair value of $3.8 million. An additional 5,082 RSUs were granted to eligible employees who joined the Company during the six months ended June 30, 2016. Both issuances were made to eligible employees under the 2012 Equity Plan for the 2015 LTIP pursuant to a Restricted Stock Unit Agreement. Eligible employees have the opportunity to earn RSUs based upon continued employment with the Company and the achievement of performance goals established by our Board of Directors for our consolidated revenue and operating cash flows (as defined by the Company) during the period of January 1, 2015 through December 31, 2017 (“the 2015-2017 performance period”) and the period of January 1, 2016 through December 31, 2018 ("the 2016-2018 performance period") respectively. A total of $1.2 million was included in stock based compensation expense for the six months ended June 30, 2016 relating to grants issued under the 2015 LTIP.

The following table details activities with respect to RSUs issued and outstanding under the 2015 LTIP for the six months ended June 30, 2016:



	Shares		Weighted- Average Grant Date Fair Value		Total Unrecognized Compensation Cost (Dollars in thousands)		Weighted-Average Period Over Which Cost is Expected to be Recognized (In months)
Non-vested RSUs at January 1, 2016	242,468		$	17.35
Granted	232,164		16.83
Vested	—		—
Forfeited	(10,099	)	17.02
Non-vested RSUs at June 30, 2016	464,533		$	17.09	$	5,376	24

Stock Based Compensation. Compensation expense associated with RSUs and restricted stock was recognized based on the fair value of the instruments, over the instruments’ vesting period. The following table reflects the statements of income line items for stock based compensation expense for the periods stated:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
Operating Expense Category	2016		2015		2016		2015
	(Dollars in thousands)
Cost of revenue (LTIP)	$	58	$	34	$	107	$	67
Service, rental and maintenance (LTIP)	63		29		116		57
Selling and marketing (LTIP)	75		51		123		102
General and administrative (LTIP)	426		455		807		693
General and administrative (Board of Directors Restricted Stock)	108		93		215		185
Total stock based compensation expense	$	730	$	662	$	1,368	$	1,104

The increase in stock based compensation expense during the six months ended June 30, 2016, compared to the same period in 2015, was due primarily to the second RSU grant under the 2015 LTIP in January 2016. Each grant is amortized over the corresponding three year performance period beginning in the year of issuance.

Cash Dividends to Stockholders. The following table details our cash dividend payments made in 2016. Cash dividends paid as disclosed in the statements of cash flows for the six months ended June 30, 2016 and 2015 include previously declared cash dividends on shares of vested restricted stock issued to our non-executive directors and dividends related to vested RSUs issued to eligible employees. Cash dividends on RSUs and restricted stock have been accrued and are paid when the applicable vesting conditions are met. Accrued cash dividends on forfeited restricted stock and RSUs are also forfeited.



Declaration Date	Record Date	Payment Date	Per Share Amount		Total Payment⁽¹⁾
					(Dollars in thousands)
February 24	March 18	March 30	$	0.125	$	2,580
April 27	May 23	June 24	0.125		2,570
	Total		$	0.250	$	5,150

(1) The total payment reflects the cash dividends paid in relation to common stock and vested restricted stock.

Future Cash Dividends to Stockholders. On July 27, 2016, our Board of Directors declared a regular quarterly cash dividend of $0.125 per share of common stock with a record date of August 19, 2016, and a payment date of September 9, 2016. This cash dividend of approximately $2.6 million will be paid from available cash on hand.

Common Stock Repurchase Program. In October 2015, the Board of Directors extended the common stock repurchase program through December 31, 2016. In extending the common stock repurchase plan the Board of Directors reset the purchase authority to $10.0 million with the repurchase authority to begin the earlier of January 4, 2016 or the completion of the existing common stock repurchase program. The following table presents information with respect to purchases made by the Company during the six months ended June 30, 2016:



Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Plans or Programs⁽¹⁾	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Plans or Programs⁽¹⁾
					(Dollars in thousands)
Beginning Balance					$	10,000
January 1 through January 31, 2016	152,198	$	16.53	152,198	7,484
February 1 through February 29, 2016	101,736	17.24		101,736	5,730
March 1 through March 31, 2016	37,927	16.44		37,927	5,107
April 1 through April 30, 2016	31,468	16.40		31,468	4,591
May 1 through May 31, 2016	34,323	16.37		34,323	4,029
June 1 through June 30, 2016	—	—		—	4,029
Total	357,652	$	16.69	357,652

(1) In October 2015, the Board of Directors extended the common stock repurchase program through December 31, 2016, and reset the repurchase authority to $10.0 million as of January 4, 2016.

Additional Paid-in Capital. For the six months ended June 30, 2016, additional paid-in capital decreased by $4.5 million to $105.9 million at June 30, 2016 from $110.4 million at December 31, 2015. The decrease in the six months ended June 30, 2016 was due primarily to the repurchase of shares of common stock under the current stock repurchase program offset by the stock based compensation expense recognized for the 2015 LTIP.

Net Income per Common Share. Basic net income per common share is computed on the basis of the weighted average common shares outstanding. Diluted net income per common share is computed on the basis of the weighted average common shares outstanding plus the effect of all potentially dilutive common shares including outstanding restricted stock and RSUs, which are treated as contingently issuable shares, using the “treasury stock” method. The components of basic and diluted net income per common share were as follows for the periods stated:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2016		2015		2016		2015
	(Dollars in thousands, except share and per share amounts)
Net income	$	3,451	$	3,376	$	6,895	$	7,293
Weighted average shares of common stock outstanding	20,544,327		21,677,299		20,614,023		21,787,434
Dilutive effect of restricted stock and RSUs	160,879		58,530		217,717		56,157
Weighted average shares of common stock and common stock equivalents	20,705,206		21,735,829		20,831,740		21,843,591
Net income per common share
Basic	$	0.17	$	0.16	$	0.33	$	0.33
Diluted	$	0.17	$	0.16	$	0.33	$	0.33