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<br />. <br />. <br />. <br />. <br />. <br />. <br />'. <br />. <br />. <br />. <br />. <br />. <br />Ie <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br /> <br />BERMELLO, AJA1VUL & PARTNERS, me. <br /> <br />NOTES TO FlNANCIAL STATEMENTS <br />DECEMBER 31, 2005 AJ'.,TJ) 2004 <br /> <br />NOTE 10. COMMlTAfENTSAND CONTINGENCIES (CONTIl'>lUED) <br /> <br />Operating Leases (continued) <br /> <br />Rent expense under all operating leases charged to operations totaled approximately <br />$1,472,000 and $1,310,000 at December 31,2005 and 2004, respectively. Rent expense is <br />net of sublease rental income of approximately $42,000 and $104,000 for 2005 and 2004, <br />respectively, <br /> <br />The Company subleased office space to one tenant evidenced by a lease agreement <br />executed in April 1998. The sublease expired in 2001 and is currently being rented on a <br />month-to-month basis, <br /> <br />During 2004, an affiliated foreign professional corporation authorized to do business in <br />New York was formed under the name of Bermello, Ajamil & Partners - Architects and <br />Engineers, Inc. On November 1, 2004, the affiliated entity entered into a lease agreement <br />for office premises, 111c lease term is for five years and three months, Rental payments <br />amount to $135,000 per annum. The Company is a guaraLltor of such payments, <br /> <br />Stockholders' Agreement <br /> <br />The Company and its stockholders have entered into an agreement covering, among other <br />things, the purchase of stock by the Company at a specified price in the event of the death <br />of a stockholder. <br /> <br />Profit Sharing Plan <br /> <br />During 1994, the Company established a 401 (k) profit sharing plan (the "Plan") covering <br />substa..'1tially aU employees who have completed one year of service and have reached the <br />age of twenty-one. The Plan allows eligible participants to defer a portion of their current <br />compensation and have these amounts contributed to the Plan on their behalf. <br /> <br />The Company may make dis~retionary contributions to the Plan, upon approval by the <br />board of directors, Amounts contributed by employees are fully vested when contributed, <br />Amounts contributed by the Company are vested at the end of the Plan year, if the <br />employee' has met the Plan's vesting requirement. The Company contributed $100,000 and <br />$50,000 to the Plan in 2005 and 2004, respectively, <br /> <br />-16- <br />