SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2015

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE 10.  SHAREHOLDERS’ EQUITY

Option Exercises

For the three and nine months ended September 30, 2015, employees exercised options to purchase 304,308 and 1,089,032 shares of the Company’s common stock, respectively, with net proceeds to the Company of approximately $1.9 million and $7.5 million, respectively. For the three and nine months ended September 30, 2014, employees exercised options to purchase 279,544 and 1,248,117 shares of the Company’s common stock, respectively, with net proceeds to the Company of approximately $1.7 million and $6.5 million, respectively.

Common Stock

On May 12, 2015, the shareholders of the Company approved a proposed amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock by 100,000,000 shares, from 100,000,000 shares to 200,000,000 shares.

Amended and Restated Bylaws

On July 12, 2015, the Company’s board of directors adopted and approved an amendment and restatement to the Company’s Bylaws (the Amended Bylaws).  The Amended Bylaws, among other things, provide for the establishment of a measurement record date for purposes of ascertaining shareholders eligible to call for a special meeting of shareholders and establish certain other procedures relating to the calling of a special meeting of shareholders.  The Amended Bylaws also supplement the advanced notice requirements and procedures for the submission by shareholders of nominations for the board of directors and of other proposals to be presented at shareholder meetings, and provide that the exclusive forum for any shareholder to bring any: (i) derivative action, (ii) claim asserting a breach of fiduciary duty, (iii) action under the California Corporations Code or the Company’s organizational documents or (iv) other action relating to the internal affairs of the Company, shall in each case be the Santa Clara County Superior Court within the State of California or, if no state court located within the State of California has jurisdiction, the federal district court for the Northern District of California.  The Amended Bylaws also make certain other ministerial changes.

In addition on July 12, 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 a Rights Agreement dated as of July 12, 2015 as it may from time to time be supplemented or amended (the Rights Agreement) 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.