SEC regulations require disclosure of certain environmental matters
when a governmental authority is a party to the proceedings
and the proceedings involve potential monetary sanctions that management reasonably believes could exceed $100,000.
On July 2, 2012,
a number of California District Attorneys served the Company with
a civil complaint filed in the Alameda County Superior Court alleging certain violations
of the state’s hazardous waste regulations related to the proper disposal of various materials from the Company’s retail stores
and seeking injunctive relief,
civil penalties and certain fees and expenses.
The California District Attorneys filed an amended complaint on July 12, 2012,
and a motion for preliminary injunction on August 6, 2012.
On December 13, 2012, the Alameda County Superior Court approved a settlement between the Company
and the State of California.
The settlement requires the Company to pay penalties
and costs
and fund supplemental environmental projects in the total amount of approximately $17 million,
which was paid during fiscal 2013
and includes certain injunctive relief.