Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

10. Commitments and Contingencies

Operating Leases and Subleases

We lease approximately 150,000 square feet of office and laboratory space in two buildings in South San Francisco, California, under a non-cancelable operating lease that ends in May 2020. We may extend the terms of this lease for two additional five-year periods. In addition, our Irish subsidiary leases approximately 1,000 square feet of office space in Dublin, Ireland. Future minimum lease payments under the leases, exclusive of executory costs, at December 31, 2016, are as follows:

(In thousands)
Years ending December 31:
2017	$	6,121
2018		6,305
2019		6,494
2020		2,758
Thereafter		—

Total	$	21,678

Rent expenses (net of sublease income) and sublease income associated with operating leases were as follows:

	Year Ended December 31,
(In thousands)	2016		2015		2014
Rent expense, net	$	6,865	$	6,522	$	6,616
Sublease income	$	244	$	186	$	—

Special Long-Term Retention and Incentive Cash Awards Program

In 2011, Innoviva granted special long-term retention and incentive restricted stock awards to members of senior management. The awards had dual triggers of vesting based upon the achievement of certain performance conditions over a six-year time frame from 2011 through December 31, 2016 and continued employment.

In May 2014, Innoviva's Compensation Committee approved the modification of the remaining tranches related to these awards contingent upon the Spin-Off. The modification acknowledged the Spin-Off and permitted recognition of achievement of the original performance conditions that were met prior to the Spin-Off, triggering 12-month service-based vesting for a portion of the equity awards. The share-based compensation expense of $6.9 million associated with a portion of these awards after the modification was fully recognized as of June 30, 2015.

During the fourth quarter of 2014, we determined that it was probable that the performance conditions associated with the remaining Innoviva RSAs would be achieved. In addition, the remaining RSAs outstanding are entitled to the pro rata dividend distribution made by Innoviva on June 2, 2014 of one ordinary share of Theravance Biopharma for every three and one half shares of Innoviva common stock. As a result, for the years ended December 31, 2016 and 2015, we recognized $1.0 million and $7.1 million, respectively, of the total share-based compensation expense of $9.5 million related to these remaining RSAs and pro rata dividends.

Guarantees and Indemnifications

We indemnify our officers and directors for certain events or occurrences, subject to certain limits. We believe the fair value of these indemnification agreements is minimal. Accordingly, we have not recognized any liabilities relating to these agreements as of December 31, 2016.