Papa Johns 2014 Annual Report Download - page 93

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80
17. Litigation, Commitments and Contingencies (continued)
Future gross lease costs, future expected sublease payments and net lease costs as of December 28, 2014,
are as follows (in thousands):
Future
Expected
Gross Lease Sublease Net Lease
Year Costs Payments Costs
2015 40,062$ 5,875$ 34,187$
2016 35,751 5,368 30,383
2017 30,200 5,054 25,146
2018 24,078 4,899 19,179
2019 16,929 4,673 12,256
Thereafter 38,255 26,328 11,927
Total 185,275$ 52,197$ 133,078$
As a result of assigning our interest in obligations under property leases as a condition of the
refranchising of certain restaurants, we are contingently liable for payment of approximately 20 domestic
leases. These leases have varying terms, the latest of which expires in 2019. As of December 28, 2014,
the estimated maximum amount of undiscounted payments the Company could be required to make in the
event of nonpayment by the primary lessee was $724,000. As the fair value of the guarantees is not
considered significant, no liability has been recorded.
In connection with the 2006 sale of our former Perfect Pizza operations in the United Kingdom, we
remain contingently liable for payment of 25 leases, which have varying terms with most expiring by the
end of 2015. As the initial party to the lease agreements, we are liable to the extent the primary obligor
does not satisfy its payment obligations. As of December 28, 2014, the estimated maximum amount of
undiscounted rental payments we would be required to make in the event of non-payment under these
leases is approximately $420,000.
The Company’s headquarters facility is leased under a capital lease arrangement with the City of
Jeffersontown, Kentucky in connection with the issuance of $80.2 million in Industrial Revenue Bonds.
The bonds are held 100% by the Company and, accordingly, the bond obligation and investment and
related interest income and expense are eliminated in the consolidated financial statements resulting in the
Company’s net investment cost being reported in net property and equipment.
18. Equity Compensation
We award stock options, time-based restricted stock and performance-based restricted stock units from
time to time under the Papa John’s International, Inc. 2011 Omnibus Incentive Plan and other such
agreements as may arise.
There are approximately 7.5 million shares of common stock authorized for issuance and remaining
available under the 2011 Omnibus Incentive Plan as of December 28, 2014, which includes 4.0 million
shares transferred from the Papa John’s International, Inc. 2008 Omnibus Incentive Plan. Option awards
are granted with an exercise price equal to the market price of the Company’s stock at the date of grant.
Options outstanding as of December 28, 2014 generally expire five or ten years from the date of grant and
vest over a three-year period.