10. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Operating Leases

We lease certain offices, facilities, equipment and vehicles under non-cancellable operating and capital leases expiring at various dates through 2023.

At December 31, 2017, future minimum contractual lease obligations were as follows:

Years ending December 31		Operating Leases
	2018		1,455
	2019		1,455
	2020		1,455
	2021		1,395
	2022		1,174
	Thereafter		1,663
	Total minimum lease payments	$	8,597

Rent expense for the years ended December 31, 2017 and 2016 was $1,445 and $1,440, respectively.

Letters of Credit

Certain customers could require us to issue standby letters of credit in the normal course of business to ensure performance under terms of contracts or as a form of product warranty. The beneficiary of a letter of credit could demand payment from the issuing bank for the amount of the outstanding letter of credit. We had no outstanding letters of credit at December 31, 2017 or 2016.

Employment Agreements

One of our executives is employed under an employment agreement containing severance provisions. In the event of termination of the executive’s employment for any reason, the executive will be entitled to receive all accrued, unpaid salary and vacation time through the date of termination and all benefits to which the executive is entitled or vested under the terms of all employee benefit and compensation plans, agreements and arrangements in which the executive is a participant as of the date of termination.

In addition, subject to executing a general release in favor of the Company, the executive will be entitled to receive certain severance payments in the event his employment is terminated by the Company “other than for cause” or by the executive with “good reason.” These severance payments include: (i) a lump sum in cash equal to one to three times the executive’s annual base salary; (ii) a lump sum in cash equal to one to two times the average annual bonus paid to the executive for the prior two full fiscal years preceding the date of termination; (iii) a lump sum in cash equal to a pro rata portion of the annual bonus payable for the period in which the date of termination occurs based on the actual performance under the Company’s annual incentive bonus arrangement, but no less than fifty percent of executive’s annual base salary; and (iv) if the executive’s termination occurs prior to the date that is twelve months following a change of control, then each and every share option, restricted share award and other equity-based award that is outstanding and held by the executive shall immediately vest and become exercisable.

Litigation

From time to time we are involved in legal proceedings arising from the normal course of business. As of the date of this report, we are not engaged in any material legal dispute.