Memorex 2014 Annual Report Download - page 90

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in Japan regarding its unlawful interference with certain of our customer relationships. On February 18, 2015, the
Tokyo District Court rendered a decision in favor of Imation that held One-Blue's sending of warning letters to
Imation customers that threatened those customers with certain patent-related actions constituted an illegal "unfair
competition practice" and issued a permanent injunction prohibiting One-Blue from sending any such warning
letters in the future.
SpearPoint Capital Fund LP et al. v. Mark E. Lucas, et al. This shareholder derivative action was filed in
Delaware Chancery Court on February 9, 2015. It names as defendants the Company and the members of its
Board of Directors. Plaintiffs contend that the defendants paid excessive compensation to the directors. They seek
damages for breaches of fiduciary duties, waste of corporate assets and unjust enrichment. They also seek
corporate governance reforms related to the Company’s compensation practices. The Company has not yet
responded to the complaint and no trial date has been set.
Operating Leases
We incur rent expense under operating leases, which primarily relate to equipment and office space. Most long-
term leases include one or more options to renew at the then fair rental value for a period of approximately one to
three years. The following table sets forth the components of net rent expense for the years ended December 31:
2014 2013 2012
(In millions)
Minimum lease payments $ 7.8 $ 8.5 $ 6.1
Contingent rentals 1.6 3.8 6.1
Rental income (8.6) (8.4) (3.4)
Sublease income — (0.5) (0.7)
Total rental expense, net $ 0.8 $ 3.4 $ 8.1
Minimum lease payments and contingent rental expenses associated with agreements with warehouse
providers are included as a component of cost of goods sold in our Consolidated Statements of Operations. The
minimum lease payments under such arrangements were $0.8 million, $0.9 million and $0.8 million in 2014, 2013
and 2012, respectively. The contingent rental expenses under such arrangements were $1.8 million, $2.8 million
and $1.8 million in 2014, 2013 and 2012, respectively.
The following table sets forth the minimum rental payments under operating leases with non-cancelable terms
in excess of one year as of December 31, 2014:
2015 2016 2017 2018 2019 Thereafter Total
(In millions)
Minimum lease payments $ 5.0 $ 3.7 $ 2.9 $ 1.6 $ 0.6 $ 1.4 $ 15.2
Environmental Matters
Our operations are subject to a wide range of federal, state and local environmental laws. Environmental
remediation costs are accrued when a probable liability has been determined and the amount of such liability has
been reasonably estimated. These accruals are reviewed periodically as remediation and investigatory activities
proceed and are adjusted accordingly. Compliance with environmental regulations has not had a material adverse
effect on our financial results. As of December 31, 2014, we had environmental-related accruals totaling $0.2 million
recorded in other liabilities and we have minor remedial activities underway at one of our prior manufacturing
facilities. We believe that our accruals are adequate, though it is reasonably possible that the ultimate amount of
expense relating to remediation actions and compliance with applicable environmental laws could have a material
impact on our results of operations.
Copyright Levies
In many European Union (EU) member countries, the sale of recordable optical media is subject to a private
copyright levy. The levies are intended to compensate copyright holders with "fair compensation" for the harm
caused by private copies made by natural persons of protected works under the European Copyright Directive,
which became effective in 2002 (Directive). Levies are generally charged directly to the importer of the product