COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments

The Company leases all of its stores, corporate offices, and distribution facilities (except the Ft. Payne, Alabama distribution center which the Company owns), and certain office equipment, store fixtures and automobiles, under operating leases expiring through 2029. The leases require fixed minimum annual rental payments plus, under the terms of certain leases, additional payments for taxes, other expenses, and additional rent based upon sales.

Store, corporate offices, and distribution facilities minimum rent, contingent rent, and sublease income are as follows:



	Fiscal Year Ended
	February 3, 2018		January 28, 2017		January 30, 2016
	(In thousands)
Minimum rentals	154,493		157,647		159,641
Additional rent based upon sales	1,924		1,367		751
Sublease income	(2,592	)	(2,275	)	(2,766	)

Future minimum annual lease payments under the Company's operating leases at February 3, 2018 were as follows:



	Minimum Operating Lease Payments
	(In thousands)
2018	$	137,557
2019	121,496
2020	100,144
2021	76,951
2022	51,819
Thereafter	71,358
Total minimum lease payments	$	559,325

Purchase Commitments

As of February 3, 2018, the Company has entered into various purchase commitments for merchandise for re-sale of approximately $127.2 million and approximately $15.0 million for equipment, construction, and other non-merchandise commitments.

Employment Agreements

The Company has an employment agreement with its President and Chief Executive Officer, which provides for severance of two times the sum of base salary plus bonus, and certain other payments and benefits following any termination without cause or for “good reason”. As of February 3, 2018, these cash severance benefits approximated $7.9 million. In the event of a change in control of the Company, certain executives will receive, in the aggregate, approximately $28.7 million of cash severance benefits should they either be terminated or voluntarily terminate their employment due to a degradation of duties as defined in their change in control agreements.

Loss Contingency for Foreign Exchange Control Penalties

During the fourth quarter of Fiscal 2016, the Company determined that one of its foreign subsidiaries had not complied with local foreign exchange control funding regulations related to offshore funding of those operations. The Company has taken steps during Fiscal 2017 to report the noncompliance to the foreign jurisdiction at issue under a voluntary disclosure program. The Company has concluded that, based on currently available information, a reasonable estimate of penalties payable by the Company arising from the matter will range between $2.2 million and $2.8 million. In making its estimates, however, the Company notes that this range is based on currently available information and involves elements of judgment and significant uncertainties, and that actual penalties may exceed the high end of the range. The Company has recorded a provision for potential penalties, arising from this matter, totaling $2.2 million in its consolidated financial statements.