Commitments and Contingencies

Cable and Satellite Affiliation Agreements

As of January 31, 2015, the Company has entered into affiliation agreements that represent approximately 1,854 cable systems along with the satellite companies DIRECTV and DISH that require each to offer the Company’s television shopping programming on a full-time basis over their systems. The terms of the affiliation agreements typically range from one to five years. During the fiscal year, certain agreements with cable, satellite or other distributors may expire. Under certain circumstances, the television operators or the Company may cancel the agreements prior to their expiration. Additionally, the Company may elect not to renew distribution agreements whose terms result in sub-standard or negative contribution margins. The affiliation agreements generally provide that the Company will pay each operator a monthly access fee and in some cases a marketing support payment based on the number of homes receiving the Company's programming. For fiscal 2014, fiscal 2013 and fiscal 2012, respectively, the Company expensed approximately $98,581,000, $92,473,000 and $110,984,000 under these affiliation agreements.

Over the past years, each of the material cable and satellite distribution agreements up for renewal has been renegotiated and renewed with no reduction to the Company’s distribution footprint. Failure to maintain the cable agreements covering a material portion of the Company’s existing cable households on acceptable financial and other terms could adversely affect future growth, sales revenues and earnings unless the Company is able to arrange for alternative means of broadly distributing its television programming. Cable operators serving a large majority of cable households offer cable programming on a digital basis. The use of digital compression technology provides cable companies with greater channel capacity. While greater channel capacity increases the opportunity for distribution and, in some cases, reduces access fees paid by us, it also may adversely impact the Company's ability to compete for television viewers to the extent it results in less desirable channel positioning for us, placement of the Company's programming in separate programming tiers, the broadcast of additional competitive channels or viewer fragmentation due to a greater number of programming alternatives.

The Company has entered into, and will continue to enter into, affiliation agreements with other television operators providing for full- or part-time carriage of the Company’s television shopping programming.

Future cable and satellite affiliation cash commitments at January 31, 2015 are as follows:




Fiscal Year	Amount

2015	$	81,626,000
2016	53,106,000
2017	41,288,000
2018	—
2019 and thereafter	—

Employment Agreements

The Company has entered into employment agreements with its on-air hosts with original terms of 12 months with auto annual renewals and its chief executive officer of the Company with an original term of 36 months. These agreements specify, among other things, the term and duties of employment, compensation and benefits, termination of employment (including for cause, which would reduce the Company’s total obligation under these agreements), severance payments and non-disclosure and non-compete restrictions. The aggregate commitment for future base compensation related to these agreements at January 31, 2015 was approximately $3,501,000.

On November 17, 2014, the Company entered into an executive employment and severance agreement with Mr. Bozek, the Company's Chief Executive Officer. Among other things, the employment agreement provides for a three-year initial term, followed by automatic one-year renewals, an initial base salary of $625,000, annual bonus stipulations, a temporary living expense allowance and participation in the Company's executive relocation program. In conjunction with the employment agreement, the Company granted Mr. Bozek an award of performance restricted stock units under the Company's 2011 Omnibus Incentive Plan with a fair value of $1.0 million. The chief executive officer’s employment agreement also provides for severance in the event of employment termination of 1.5 times the sum of his (i) base salary plus (ii) the average of the annual cash incentive plan payments made in the three fiscal years immediately preceding the fiscal year in which the termination date occurs. In the event of a change of control, as defined in the agreement, the multiplier shall be 2 times.

The Company has established guidelines regarding severance for its senior executive officers, whereby, up to 12 months of the executive's highest annual rate of base salary plus 1 times the target annual incentive bonus determined from such base salary may become payable in the event of terminations without cause under specified circumstances. Senior executive officers are also eligible for 1.5 times the executive's highest annual rate of base salary, plus 1.5 times the target annual incentive bonus determined from such base salary if, within a two-year period commencing on the date of a change in control, the senior executive is terminated without cause under specified circumstances.

Operating Lease Commitments

The Company leases certain property and equipment under non-cancelable operating lease agreements. Property and equipment covered by such operating lease agreements include offices and warehousing facilities at subsidiary locations, satellite transponder, office equipment and certain tower site locations.

Future minimum lease payments at January 31, 2015 are as follows:




Future Minimum Lease Payments:	Amount

2015	$	1,456,000
2016	793,000
2017	113,000
2018	—
2019 and thereafter	—

Total rent expense under such agreements was approximately $2,140,000 in fiscal 2014, $2,015,000 in fiscal 2013 and $1,715,000 in fiscal 2012.

Capital Lease Commitments

The Company leases certain computer equipment and software licenses under noncancelable capital leases and includes these assets in property and equipment in the accompanying consolidated balance sheets. The capitalized cost of leased assets was approximately $155,000 at January 31, 2015.

Future minimum lease payments for assets under capital leases at January 31, 2015 are as follows:



Future Minimum Lease Payments:	Amount

2015	$	55,000
2016	36,000
2017	—
2018	—
2019 and thereafter	—
Total minimum lease payments	91,000
Less: Amounts representing interest	(3,000		)
	88,000
Less: Current portion	(52,000		)
Long-term capital lease obligation	$	36,000

Retirement and Savings Plan

The Company maintains a qualified 401(k) retirement savings plan covering substantially all employees. The plan allows the Company’s employees to make voluntary contributions to the plan. The Company’s contribution, if any, is determined annually at the discretion of the board of directors. Starting in fiscal 2014, the Company elected to make matching contributions to the plan and matched $0.50 for every $1.00 contributed by eligible participants up to a maximum of 6% of eligible compensation. Company plan contributions totaling approximately $1,062,000 and $921,000 were accrued during fiscal 2014 and fiscal 2013, respectively, and were contributed to the plan in February of the following fiscal year. The Company did not make any matching contributions to the plan during fiscal 2012.