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COMMITMENTS AND CONTINGENCIES
3 Months Ended
Mar. 31, 2018
COMMITMENTS AND CONTINGENCIES [Abstract]  
COMMITMENTS AND CONTINGENCIES
NOTE 9. COMMITMENTS AND CONTINGENCIES

Employment Contracts and Severance Payments

In the normal course of business, we periodically enter into employment agreements which incorporate indemnification provisions.  While the maximum amount to which we may be exposed under such agreements cannot be reasonably estimated, we maintain insurance coverage, which we believe will effectively mitigate our obligations under these indemnification provisions.  No amounts have been recorded in our financial statements with respect to any obligations under such agreements.

We have employment contracts with certain officers and key management that include provisions for potential severance payments in the event of without-cause terminations or terminations under certain circumstances after a change in control. In addition, vesting of outstanding nonvested equity grants would accelerate following a change in control.

In November 2016, we entered into an agreement settling matters with our former chief executive officer related to his separation of employment and termination from our board of directors in November 2016.  Pursuant to this agreement we paid the former executive severance of $0.3 million in 2016 and $0.4 million in 2017.  We expensed the total $0.7 million associated with the agreement in 2016.

Leases

We lease certain properties under various operating lease arrangements that expire over the next 16 years.  These leases generally provide us with the option to renew the lease at the end of the lease term.

In March 2018, we entered into a triple net lease for approximately 5,380 square feet of office space in The Woodlands, Texas.  We expect to move into the space in the second quarter of 2018.  The initial term of the lease is sixty-five months and rent is abated for the first five months.  Minimum monthly base rents total $0.1 million per year during the initial term of the lease.  We expect to recognize rent expense of $0.1 million per year for base rent, plus additional amounts for operating expenses, real estate taxes and other items.  We may extend the term of the lease for an additional five-year period at a fair market base rent, as defined in the agreement.

Litigation Costs

From time to time we are involved in litigation incidental to the conduct of our business.  These matters may relate to employment and labor claims, patent and intellectual property claims, claims of alleged non-compliance with contract provisions and claims related to alleged violations of laws and regulations.  When applicable, we record accruals for contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated.  While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in the opinion of management, individually or in the aggregate, no such lawsuits are expected to have a material effect on our financial position or results of operations.  Defense costs are expensed as incurred and are included in professional fees.