Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

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Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

(11)   Commitments and Contingencies

 

(a)

Operating Leases

The Company has entered into lease agreements for office space and research facilities in San Diego County, California; Melbourne, Florida; Scottsdale, Arizona; Taipei, Taiwan; Shenzhen and Jiangsu, China; and Cambridge, United Kingdom. Rent expense was $973,000, $912,000, and $805,000 for the years ended December 31, 2019, 2018, and 2017, respectively. The longest lease expires in November 2024. The Company moved into its facility in San Diego, California during the year ended December 31, 2014. The San Diego facility lease agreement included a tenant improvement allowance which provided for the landlord to pay for tenant improvements on behalf of the Company up to $515,000. Based on the terms of this landlord incentive and involvement of the Company in the construction process, the leasehold improvements purchased under the landlord incentive were determined to be property of the Company.

The future minimum lease payments required under operating leases in effect at December 31, 2019, were as follows (in thousands):

Year ending:

 

 

 

 

2020

 

$

886

 

2021

 

 

395

 

2022

 

 

104

 

2023

 

 

72

 

2024

 

 

33

 

 

 

$

1,490

 

 

In February 2020, the Company extended its office space lease agreement in San Diego though 2025 adding a total of approximately $3.2 million to be paid as follows; $1,212,000 in one to three years, $1.3 million in three to five years, and $0.6 million after five years.

 

(b)

Indemnification

In some agreements to which the Company is a party, the Company has agreed to indemnify the other party for certain matters, including, but not limited to, product liability and intellectual property. To date, there have been no known events or circumstances that have resulted in any material costs related to these indemnification provisions and no liabilities have been recorded in the accompanying financial statements.

 

(c)

Employment Agreements

On January 16, 2019, the Company entered into amended and restated employment agreements with Jacob Suen, the Company’s President, Anil Doradla, the Company’s Chief Financial Officer and Secretary, and Kevin Thill, the Company’s Senior Vice President, Engineering.

The amended and restated employment agreements provide for an indefinite term and for at-will employment. The agreements also set forth each executive’s annual base salary and target bonus opportunity and provide that each executive will be entitled to the benefits provided to employees generally.

Pursuant to the amended and restated employment agreements, severance in the aggregate amount in excess of $455,000 for termination without cause is provided.

On March 13, 2019, the Company entered into an employment agreement with James K. Sims, the Company’s Chairman and Chief Executive Officer. On August 8, 2019, the Company entered into an amended and restated employment agreement with James K. Sims to appoint Mr. Sims as Advisor to the newly appointed Chief Executive Officer. The amended and restated employment agreement provided for a term that expired on February 9, 2020, and for at-will employment. The agreement also sets forth Mr. Sim’s annual base salary and target bonus opportunity and provides that he will be entitled to the benefits provided to employees generally. Pursuant to the agreement, Mr. Sims is eligible for severance in excess of $400,000.

On August 8, 2019, the Company entered into an amendment to the amended and restated employment agreement with Jacob Suen in connection with his promotion to Chief Executive Officer of the Company. The amendment to the amended and restated employment agreement also sets forth Mr. Suen’s annual base salary.

On November 30, 2019, Anil Doradla, the Company's Chief Financial Officer resigned from his position. Following his resignation, Mr. Doradla provided consulting services to the Company for three months and his outstanding stock awards continued to vest during the term of his consulting services.

On January 13, 2020, the Company entered into an employment agreement with David B. Lyle, the Company’s Chief Financial Officer and Secretary. The agreement sets forth Mr. Lyle's base salary, target bonus, and stock awards.