7.
Leases--(continued)
Minimum rental payments required under lease agreements, including the Corporate
Headquarters sublease and the Las Vegas Call Center lease, are as follows (dollars in thousands):
Fiscal Year
2003 . . . . . . . . . . . . . . . . . . . . . . .
$ 3,732
2004 . . . . . . . . . . . . . . . . . . . . . . .
2,677
2005 . . . . . . . . . . . . . . . . . . . . . . .
2,222
2006 . . . . . . . . . . . . . . . . . . . . . . .
652
2007 . . . . . . . . . . . . . . . . . . . . . . .
200
$ 9,483
Rent expense for fiscal 2002, 2001, and 2000 amounted to $4,969,000, $4,598,000, and
$4,536,000, respectively, which included $43,000, $12,000 and $3,000 in fiscal 2002, 2001 and
2000, respectively, for contingent rentals based upon a percentage of outlet store sales.
8. Rue de France Acquisition
As of April 1, 2000, the Company purchased the assets of Rue de France, Inc., a privately
owned catalog company based in Newport, Rhode Island. The Company paid a cash purchase
price of $2.8 million. Additionally, the Company agreed to make future payments contingent
upon Rue de France, Inc. achieving certain cumulative earnings before tax targets during the
five-year period commencing on February 27, 2000. No such payments have been required to
date. The excess of the purchase price over the fair value of the tangible net assets of
approximately $2.5 million is included in other assets, and was amortized on a straight-line basis
over 20 years. Commencing in fiscal 2003, amortization of excess purchase price will no longer
be required under FAS No. 142. Amortization in fiscal 2002 totaled $120,400. The operating
results of Rue de France have been included in the Company's consolidated results of
operations as of April 1, 2000.
9. Employee Benefit Plans
The Company maintains a profit sharing plan for the benefit of all employees who meet certain
minimum service requirements. The Company's profit sharing contribution is discretionary, as
determined by the Board of Directors. Employees fully vest in their profit sharing account
balance after seven years. The authorized profit sharing contribution for each of the fiscal years
2002, 2001, and 2000 was $500,000.
The Company's profit sharing plan includes an employee contribution and employer matching
contribution (401-k) feature. Under the 401-k feature of the plan, eligible employees may make
pre-tax contributions up to 10% of their annual compensation. Employee contributions of up to
6% of compensation are currently matched by the Company at a rate of 50%. The matching
contribution is made with Company stock. Employees are 100% vested in their pre-tax
F-15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
L I L L I A N V E R N O N
