Note 13 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 13: - COMMITMENTS AND CONTINGENCIES

Commitments

a. The Company’s headquarters is located in San Jose, California pursuant to a lease that terminates in December 2021. The Company and its subsidiaries lease certain equipment and facilities under non-cancelable operating leases. The Company has significant leased facilities in Herzliya Pituach, Israel. The lease agreement for the Israeli facilities is effective until April 2019. Starting April 2019 the Company will move to new leased facilities, which are also located in Herzliya Pituach, Israel. Those new facilities will be leased for 10 years. The Company’s subsidiaries in Scotland, Germany, China (Shanghai) and Hong-Kong have lease agreements for their facilities that terminate in 2019. The Company’s subsidiaries in India, South Korea, Japan and China (Shenzhen) have lease agreements for their facilities that terminate in 2020. The Company has operating lease agreements for its motor vehicles which terminate in 2019 through 2021.

At

December 31, 2018,

the Company is required to make the following minimum lease payments under non-cancelable operating leases for motor vehicles and facilities:

Year ended December 31,
2019	$	1,946
2020		1,581
2021		1,272
2022- and thereafter		8,433
	$	13,232

Facilities rental expenses amounted to

$2,328,

$2,308

and

$2,362

for the years ended

December 

31,

2018,

2017

and

2016,

respectively.

b. The Company participated in programs (most of which are royalty bearing grants) sponsored by the Israeli government for the support of research and development activities. Through December 31, 2018, the Company had obtained grants from the Israeli Innovation Authority (the “IIA”) (previously the Office of the Chief Scientist) for certain of the Company’s research and development projects. The Company is obligated to pay royalties to the IIA, amounting to 5% of the sales of the products and other related revenues (based on the dollar) generated from such projects, up to 100% of the grants received. The royalty payment obligations also bear interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the applicable products and in the absence of such sales, no payment is required.

c. As of December 31, 2018, the aggregate contingent liability to the IIA amounted to $10,865. The Israeli Research and Development Law provides that know-how developed under an approved research and development program may not be transferred to third parties without the approval of the IIA. Such approval is not required for the sale or export of any products resulting from such research or development. The IIA, under special circumstances, may approve the transfer of IIA-funded know-how outside Israel, in the following cases: (a) the grant recipient pays to the IIA a portion of the sale price paid in consideration for such IIA-funded know-how or in consideration for the sale of the grant recipient itself, as the case may be, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain the research and development activities of the grant recipient in Israel after the transfer); (b) the grant recipient receives know-how from a third party in exchange for its IIA-funded know-how; (c) such transfer of IIA-funded know-how arises in connection with certain types of cooperation in research and development activities; or (d) if such transfer of know-how arises in connection with a liquidation by reason of insolvency or receivership of the grant recipient.

Litigation

a. The Company is involved in certain claims arising in the normal course of business. However, the Company believes that the ultimate resolution of these matters will not have a material adverse effect on its financial position, results of operations, or cash flows.

b. From time to time, the Company may become involved in litigation relating to claims arising in the ordinary course of business activities. Also, as is typical in the semiconductor industry, the Company has been and, from time to time may be, notified of claims that it may be infringing on patents or intellectual property rights owned by third parties.