Wendy's 2013 Annual Report Download - page 110

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
In December of 2013, the Bakery terminated its participation in the Union Pension Fund and formally notified
the plan’s trustees of its withdrawal from the plan. The Union Pension Fund administrator has acknowledged the
withdrawal, which required Wendy’s to assume an estimated withdrawal liability of $13,500 based on the applicable
requirements of the Employee Retirement Income Security Act, as amended, and which has been included in “Cost of
sales.” The final withdrawal liability will be determined through discussions between the Bakery and the Union
Pension Fund administrator and the resolution of a charge filed with the National Labor Relations Board related to
the matter brought by the Bakery and Bakers Local No. 57, Bakery, Confectionery, Tobacco Workers & Grain
Millers International Union of America, AFL-CIO. The Bakery believes it has meritorious defenses to the charge.
The unionized employees became eligible to participate in the 401(k) Plan as of December 5, 2013.
Wendy’s Executive Plans
In conjunction with the Wendy’s merger, amounts due under supplemental executive retirement plans (the
“SERP”) were funded into a restricted account. As of January 1, 2011, participation in the SERP was frozen to new
entrants and future contributions, and existing participants’ balances only earn annual interest. The corresponding
SERP liabilities have been included in “Accrued expenses and other current liabilities” and “Other liabilities” and, in
the aggregate, were approximately $4,194 and $4,315 as of December 29, 2013 and December 30, 2012, respectively.
Pursuant to the terms of the employment agreement that was entered into with our President and Chief
Executive Officer as of September 12, 2011, the Company implemented a non-qualified, unfunded, deferred
compensation plan. The plan provides that the amount of the executive’s base salary in excess of $1,000 in a tax year
will be deferred into the plan which accrues employer funded interest. The related deferred compensation liability has
been included in “Accrued expenses and other current liabilities” and was approximately $207 and $102 as of
December 29, 2013 and December 30, 2012, respectively, including both employee contributions and employer
funded interest.
(19) Lease Commitments
The Company leases real property, leasehold interests, and office, restaurant and transportation equipment. The
Company also leases real property and leasehold interests primarily to franchisees. Some leases which relate to
Company and/or franchisee restaurant operations provide for contingent rentals based on sales volume. Certain leases
also provide for payments of other costs such as real estate taxes, insurance and common area maintenance, which are
not included in rental expense, sublease income or the future minimum rental payments and rental payments set forth
below.
Rental expense under operating leases consists of the following components:
Year Ended
2013 2012 2011
Minimum rentals ....................................... $68,445 $ 70,525 $ 70,478
Contingent rentals ...................................... 10,421 10,971 10,468
78,866 81,496 80,946
Less sublease income .................................... (16,924) (13,317) (15,084)
$ 61,942 $ 68,179 $ 65,862
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