World Fuel Services 2002 Annual Report Download - page 34

Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements
Our significant contractual obligations, commercial commitments, and off-balance sheet arrangements are set forth
below. For additional information on any of the following and other contractual obligations, commitments, and off-balance
sheet arrangements, see Notes 3, 6 and 7 in the Notes to the Consolidated Financial Statements in Item 15 of this Form 10-K.
Letters of Credit
In the normal course of business, we are required to provide letters of credit to certain suppliers. A majority of these
letters of credit expire within one year from their issuance, and expired letters of credit are renewed as needed. As of
December 31, 2002, we had outstanding letters of credit of $14.4 million. The letters of credit were issued under our
revolving credit facility, and count against the $40.0 million limit on total borrowings under this facility. For additional
information on our revolving credit facility and letters of credit, see the discussion thereof in “Liquidity and Capital
Resources,” above.
Lease Commitments
As of December 31, 2002, our future minimum lease payments under non-cancelable operating leases for rental
properties were as follows (in thousands):
For the Year Ending December 31,
2003 1
,
382$
200
4
1
,
318
2005 1
,
132
200
6
981
2007 855
Thereafter 3,308
8,976$
In the normal course of business, we may enter into non-cancelable operating leases for office and computer equipment,
and service contracts with minimum service fee commitments for telecommunication, and computer data and document
storage. As of December 31, 2002, there were no material non-cancelable operating leases for office and computer
equipment or service contracts with minimum service fee commitments.
Surety Bonds
In the normal course of business, we are required to post bid, performance and garnishment bonds. The majority of the
surety bonds posted relate to our aviation fuel services business. As of December 31, 2002, we had approximately $9.8
million in outstanding bonds.
Purchase and Sale Commitments and Derivatives
See “Item 7A – Quantitative and Qualitative Disclosures About Market Risk,” included in this Form 10-K, for a
discussion of our purchase and sale commitments and derivatives.
Employment Agreements
In July 2002, our Board of Directors elected a new Chairman of the Board of Directors (“Chairman”) and Chief
Executive Officer (“CEO”) and appointed a new President and Chief Operating Officer (“COO”). In connection
with the executives’ promotion to their respective positions, they received increases in their base salary, grants of restricted
common stock, an extension of their employment period to July 2007, and modifications to their termination severance
benefits. In February 2003, the compensation payable under the new employment agreements was further amended. Under
their new employment agreements, our CEO and COO each receive an annual base salary of $525 thousand. Each of them
also received a grant of 25 thousand shares of restricted common stock. The restricted common stock grants for both our
CEO and COO shall vest in three equal installments in July 2005, 2006, and 2007. Effective April 1, 2002, our CEO and
COO are eligible to receive an annual bonus upon achievement of performance targets, which targets are based on diluted
earnings per share growth and certain yearly objectives, agreed upon between the executives and the Compensation
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