Subsequent Events

12 Months Ended

Dec. 31, 2018

SUBSEQUENT EVENTS

On January 9, 2019, we entered into a letter agreement (the “Letter Agreement”) with Dr. Simon Raab, setting forth the terms of Dr. Raab’s retirement as our President and Chief Executive Officer and as a member of our Board of Directors. Dr. Raab will continue as our President and Chief Executive Officer and will remain on the Board of Directors until his successor is appointed. The Letter Agreement provides for the following compensation arrangements with Dr. Raab as an incentive to retain his services through the transition period:


•	Base salary - Dr. Raab’s base salary of $775,000 will continue until his retirement date.

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Short-term incentive plan - Dr. Raab will be eligible to participate in our short-term incentive plan for 2019 with a target payout of 100% of his base salary conditioned upon our achievement of the 2019 financial targets approved by our Compensation Committee. In the event Dr. Raab’s retirement occurs prior to the end of 2019, he will be eligible to receive this incentive without pro ration. The payout to Dr. Raab under our short-term incentive plan could range from 0% to 200% of his base salary depending upon our achievement of our 2019 financial targets.

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Long-term incentives - In lieu of an annual grant of stock options and in consideration for Dr. Raab’s commitment to provide transition assistance to his successor for a period of six months following his retirement date, on January 9, 2019, Dr. Raab received a grant of 24,606 restricted stock units, which will vest six months following his retirement date. In addition, all of Dr. Raab’s outstanding unvested stock options will fully vest as of his retirement date, and he will be permitted to exercise such options over the full term of each option grant.

On January 29, 2019, we entered into a Second Amendment to Amended and Restated Lease Agreement (the “Second Amendment”) with Emma Investments, LLC (“Landlord”) with respect to our facility located at 125 Technology Park, Lake Mary, Florida (the “Building”). Pursuant to the Second Amendment, we have agreed to, among other items, extend the initial term of the lease for the approximately 35,000 square feet of production, research and development, service operations and manufacturing space in the Building leased under the original Amended and Restated Lease Agreement effective October 12, 2009, from June 30, 2019 to March 31, 2025.

The Second Amendment also provides us with a tenant improvement allowance of up to $0.1 million toward the design and construction of certain tenant improvements made to the Building on a reimbursement basis subject to the satisfaction of certain conditions. If the tenant improvements are not completed by March 31, 2021, the reimbursement allowance will be deemed waived by us.