COMMITMENTS AND CONTINGENCIES

Leases

The Company's lease commitments are primarily for real estate, machinery and equipment, and vehicles. The significant real estate leases provide for renewal options and require the Company to pay for property taxes and all other costs associated with the leased property.

Future minimum lease payments under operating leases at December 31, 2014 are as follows (in thousands):



2015	$	6,297
2016	5,269
2017	4,690
2018	4,240
2019	3,845
Thereafter	12,899
Total minimum lease payments	$	37,240

Rent expense for operating leases was $8.6 million, $7.1 million and $5.6 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Contingent Consideration

In connection with several business acquisitions, if certain sales targets for the acquired products are achieved, the Company would pay additional cash consideration. The Company has recorded a liability for the fair value of this contingent consideration at December 31, 2014 and 2013, based on the present value of the expected future cash flows using a market participant’s weighted average cost of capital of 15.0 percent and 15.5 percent, respectively.

As required, the liability for this contingent consideration is measured at fair value quarterly, considering actual sales of the acquired products, updated sales projections, and the updated market participant weighted average cost of capital. Depending upon the weighted average costs of capital and future sales of the products which are subject to contingent consideration, the Company could record adjustments in future periods.

The following table provides a reconciliation of the Company’s contingent consideration liability for the years ended December 31:



(In thousands)	2014			2013			2012
Balance at beginning of period	$	7,414		$	11,519		$	14,561
Acquisitions	3,370			—			67
Payments	(3,739		)	(5,456		)	(4,315		)
Accretion ^(a)	1,075			1,308			1,756
Fair value adjustments ^(a)	9			43			(550		)
Balance at end of the period ^(b)	8,129			7,414			11,519
Less current portion in accrued expenses and other current liabilities	(3,622		)	(3,462		)	(5,429		)
Total long-term portion in other long-term liabilities	$	4,507		$	3,952		$	6,090


(a)	Recorded in selling, general and administrative expense in the Consolidated Statements of Income.

(b)

Amounts represent the fair value of estimated remaining payments. The total estimated remaining payments as of December 31, 2014 are $11.7 million. The liability for contingent consideration expires at various dates through September 2029. Certain of the contingent consideration arrangements are subject to a maximum payment amount, while the remaining arrangements have no maximum contingent consideration.

Litigation

In the normal course of business, the Company is subject to proceedings, lawsuits and other claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters could materially affect operating results when resolved in future periods, it is management’s opinion after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided in the Consolidated Balance Sheet as of December 31, 2014, would not be material to the Company’s financial position or annual results of operations.

Executive Succession

In connection with the Company’s executive succession and corporate relocation from White Plains, New York to Elkhart County, Indiana, the Company recorded pre-tax charges of $1.9 million and $1.5 million in 2013 and 2012, respectively, related to contractual obligations for severance and the acceleration of equity awards held by certain employees whose employment terminated as a result of the executive succession and relocation to Indiana. The liability for executive succession and severance obligations will be paid through 2015. During the third quarter of 2013, the transition and corporate office relocation were completed.