CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The following is a description of transactions, since January 29, 2018, to which we have been a party or will be a party, in which the amount involved
exceeded or will exceed $120,000, and in which any of our executive officers or directors, or an affiliate or immediate family member thereof, or 5% shareholder of any class of our common stock, had or will have a direct or indirect material
interest, other than compensation, termination and change of control arrangements, which are described below under Executive CompensationEmployment Agreements and Director Compensation.
Leasing Arrangements
We leased 23,794 square feet for
our Innovation Center located at 100 First Street, Mt. Horeb, Wisconsin, from Schlecht Retail Ventures LLC, the sole members of which are Stephen L. Schlecht and his wife, Marianne M. Schlecht, during fiscal 2018. The lease
provided for a base monthly lease payment of $21,083. Effective December 31, 2018, we terminated this lease.
Effective April 2, 2019, we
entered into a new lease with Schlecht Retail Ventures LLC for our photo studio located at 119 S. 2nd Street, Mt. Horeb, Wisconsin. The lease provides for a base monthly rent of $4,083, with a 2% increase each year. The initial term of the lease is
for five years and began on June 1, 2019. We have the option to extend the term for up to two additional periods of five years.
We leased 9,984
square feet of office and retail space located at 108 North Franklin Street, Port Washington, Wisconsin from Schlecht Port Washington LLC, the sole members of which were Mr. and Mrs. Schlecht, until October 2019 when the property was
sold to an unaffiliated third party. The lease provided that our monthly base rent was $10,608 starting on January 1, 2014 and increased annually according to the schedule provided in the lease. The terms of our lease were obtained from an
unaffiliated third party and there were no material changes to the lease and, as such, the increases in rent were in accordance with the terms of the original lease entered into with the original lessor, an unaffiliated third party.
We leased a 7,710 square foot building and the surrounding land for our flagship store located at 100 West Main Street, Mt. Horeb, Wisconsin (the
Flagship Lease), from Schlecht Retail Ventures LLC, the sole members of which are Mr. and Mrs. Schlecht. The Flagship Lease began February 14, 2010 and was scheduled to expire on February 28, 2025. Effective
January 27, 2017, we terminated our Flagship Lease and entered into a new lease for the same 7,710 square foot building, along with the surrounding land located at 100 West Main Street, Mt. Horeb, Wisconsin and a 5,416 square foot
building, which is primarily used for office space at 102 West Main Street, Mt. Horeb, Wisconsin (the Flagship and Office Lease). The Flagship and Office Lease began on February 1, 2017 and expires on January 31,
2027, with multiple options to renew thereafter. The Flagship and Office Lease provides for initial monthly rent payments of $12,000 in years one through three, rent payments of $12,600 in years four through seven, and monthly rent payments of
$13,104 in years eight through ten.
The aggregate amount of all periodic payments due under the leases described above after our fiscal year ended
February 2, 2020 are as follows:
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Total
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Less Than 1
Year
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1-2 Years
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3-5 Years
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More than 5
Years
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119 S. 2nd Street, Mt. Horeb, WI
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$
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222,331
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$
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49,653
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$
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102,306
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$
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70,372
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Retail and Office space,
100 and 102 West Main Street, Mt. Horeb, WI
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1,076,550
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151,200
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302,400
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465,700
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157,250
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Total
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$
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1,298,881
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$
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200,853
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$
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404,706
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$
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536,072
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$
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157,250
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12