COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases office and production facilities, vehicles and data processing equipment in California under various operating leases. Approximate minimum rental payments under these non-cancelable operating leases as of June 30, 2014 are as follows for the indicated fiscal years ended June 30:

2015	$	2,010,000
2016		2,028,000
2017		1,931,000
2018		1,922,000
2019		1,900,000
Thereafter		3,217,000
Total minimum payments required	$	13,008,000

* Minimum payments have not been reduced by minimum sublease rentals for $2,021,000 due in the future under noncancelable subleases.

The following schedule shows the composition of total rental expense for all operating leases except those with terms of a month or less that were not renewed:

	Year Ended  June 30,
	2012		2013		2014
Rent Expense:	$	2,331,000	$	1,657,000	$	1,666,000
Less: Sublease rentals		(299,000)		(299,000)		(299,000)
	$	2,032,000	$	1,358,000	$	1,367,000

As of June 30, 2014, the Company leased five of its six facilities under operating leases. The operating leases expire on dates ranging from 2016 to 2021. The lease on the Company’s Media Center location contains an option to extend the primary term in five-year increments for up to 20 years at the then fair rental value. The Company subleases approximately 16,000 square feet of space at its Media Center facility to an outside party (under terms and conditions similar to the Company’s primary lease) at a rental rate of $25,000 monthly, which expires in 2021. Sublease income is included in other income in the consolidated statements of operations.

The Company’s vehicle and data processing equipment operating leases expire by 2016. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases.

  Severance Agreements

On September 30, 2003 Point.360 entered into severance agreements with its Chief Executive Officer and Chief Financial Officer which continue in effect through December 31, 2014, and are renewed automatically on an annual basis thereafter unless notice is received terminating the agreement by September 30 of the preceding year. The severance agreements contain a “Golden Parachute” provision. The Company assumed these severance agreements.

Contingencies

From time to time, the Company may become a party to other legal actions and complaints arising in the ordinary course of business, although it is not currently involved in any such material legal proceedings.