Shake Shack 2015 Annual Report Download - page 65

Table of Contents
SSE HOLDINGS, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except unit, share, per unit and per share amounts)
NOTE 8 : LEASES
We lease the commercial space for all of our domestic company-operated Shacks, our home office space and certain equipment under various non-
cancelable lease agreements that
expire on various dates through 2031. All of our real estate leases are classified as operating leases and typically provide for fixed minimum rent or contingent rent based upon sales in
excess of specified thresholds. Many of our leases include rent escalation clauses and also require us to pay real estate taxes, common area maintenance costs and other occupancy
costs. Generally, our leases have initial terms of ranging from 10 to 20 years and typically include two five-year renewal options.
A summary of rent expense under operating lease agreements is as follows:
The rent expense above does not include common area maintenance costs, real estate taxes and other occupancy costs, which were $1,111, $758 and $545 in fiscal 2014, 2013 and
2012, respectively.
As of December 31, 2014 , future minimum lease payments under non-cancelable operating leases consisted of the following:
NOTE 9 : EMPLOYEE BENEFIT PLANS
Deferred Compensation
During fiscal 2013, we entered into an incentive bonus agreement with one of our executives, whereby the executive is entitled to receive a deferred compensation award in the amount
of $2,450, payable by us in March 2018. In fiscal 2013, we recorded $2,054 of deferred compensation expense to recognize the present value of incentive bonus liability, which is
included in other long-
term liabilities on the Consolidated Balance Sheets. The deferred compensation expense is included within general and administrative expense on the
Consolidated Statements of Income. There was no such expense in fiscal 2014. The difference between the present value of the bonus liability and the amount payable is accreted to
interest expense over the remaining term until the incentive bonus becomes payable.
Defined Contribution Plan
We maintain a defined contribution profit-
sharing plan covering all eligible employees in accordance with Section 401(k) of the Internal Revenue Code. The plan is funded by
employee and employer contributions. Employer contributions to the plan are at our discretion. Effective January 2014, we began making contributions matching a portion of
participants' contributions. We match 100% of participants' contributions for the first 3% of eligible compensation contributed and 50% of contributions made in excess of 3% of
eligible compensation up to 5% of eligible compensation. In fiscal 2014, employer contributions totaled $132. There were no employer contributions in fiscal 2013 and fiscal 2012.
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2014
2013 2012
Minimum rent
$
6,497
$
4,507
$
2,736
Deferred rent
2,830
975
839
Contingent rent
1,883
1,626
1,299
Total rent expense
$
11,210
$
7,108
$
4,874
2015
$
10,690
2016
13,152
2017
14,059
2018
14,440
2019
14,603
Thereafter
99,093
Total minimum lease payments
$
166,037