SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2015

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, 2015 was 2,500,000, of which 371,882 shares were available for future issuance.

        In 2015, the Company sold 164,674 shares of its common stock under the ESPP. The shares were purchased at a weighted-average purchase price of $14.95 with proceeds of approximately $2.5 million. 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.

Option Exercises

        Employees exercised options to purchase 1,141,345 shares of the Company's common stock with net proceeds to the Company of approximately $7.9 million during 2015. 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.

Shareholder Rights Plan

        In July 2015, the Company's Board of Directors declared a dividend of one right (Right) for each outstanding share of the Company's common stock to shareholders of record at the close of business on July 23, 2015. The description and terms of the Rights are set forth in the Rights Agreement dated as of July 12, 2015 as it may from time to time be supplemented or amended between the Company and Continental Stock Transfer & Trust Company, as Rights Agent. Each Right entitles the registered holder to purchase from the Company a unit consisting of one one-hundredth of a share (a Fractional Share) of Series B Junior Participating Preferred Stock at a purchase price of $105.00 per Fractional Share, subject to adjustment. Initially, the Rights will be attached to all outstanding shares of the Company's common stock, and no separate certificates for the Rights will be distributed. The Rights will separate from the common stock and a "Distribution Date" will occur, with certain exceptions, upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an Acquiring Person) has acquired, or obtained the right to acquire, beneficial ownership of 10% or more of the outstanding shares of common stock, or (ii) 10 business days following the commencement of a tender offer or exchange offer that would result in a person's becoming an Acquiring Person. In certain circumstances, the Distribution Date may be deferred by the Company's board of directors. The Rights are not exercisable until the Distribution Date and will expire at the close of business on the date of the Company's next annual meeting of shareholders occurring after the date of the Rights Agreement, unless earlier redeemed or exchanged by the Company in accordance with the Rights Agreement.