SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2014

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE 12. SHAREHOLDERS' EQUITY

Employee Stock Purchase Plan

         In May 2004, the ESPP was approved by the shareholders. The ESPP is qualified under Section 423 of the Internal Revenue Code. The ESPP is designed to allow eligible employees to purchase shares of the Company's common stock through periodic payroll deductions. The price of the common stock purchased under the ESPP must be equal to at least 85% of the lower of the fair market value of the common stock on the commencement date of each offering period or the specified purchase date. The number of shares authorized for issuance under the ESPP as of December 31, 2014 was 2,500,000, of which 536,556 shares were available for future issuance.

         In 2014, the Company sold 177,036 shares of its common stock under the ESPP. The shares were purchased at a weighted-average purchase price of $8.68 with proceeds of approximately $1.5 million. In 2013, the Company sold 222,062 shares of its common stock under the ESPP. The shares were purchased at a weighted-average purchase price of $4.35 with proceeds of approximately $1.0 million.

Option Exercises

         Employees exercised options to purchase 1,515,023 shares of the Company's common stock with net proceeds to the Company of approximately $8.4 million during 2014. Employees exercised options to purchase 621,090 shares of the Company's common stock with net proceeds to the Company of approximately $2.8 million during 2013.

Shareholder Rights Plan

         On April 21, 2005, the Company adopted a shareholder rights plan, (Rights Plan). Under the Rights Plan, the Company distributed one preferred share purchase right for each share of common stock outstanding at the close of business on May 5, 2005. If a person or group acquires 20% or more of the Company's common stock in a transaction not pre-approved by the Company's Board of Directors, each right will entitle its holder, other than the acquirer, to buy additional shares of the Company's common stock at 50% of its market value, as defined in the Rights Plan. In addition, if an unapproved party acquires more than 20% of the Company's common stock, and the Company is later acquired by the unapproved party or in a transaction in which all shareholders are not treated alike, shareholders with unexercised rights, other than the unapproved party, will be entitled to receive upon exercise of the rights, common stock of the merger party or asset buyer with a value of twice the exercise price of the rights. Each right also becomes exercisable for one one-thousandth of a share of the Company's Series RP preferred stock at the right's then current exercise price ten days after an unapproved third party makes, or announces an intention to make, a tender offer or exchange offer that, if completed, would result in the unapproved party acquiring 20% or more of the Company's common stock. The Board of Directors may redeem the rights for a nominal amount before an event that causes the rights to become exercisable. The rights will expire on April 21, 2015.