9. Commitments and Contingencies

Leases

The Company has operating leases for its current office, former office, and certain equipment with a term of 12 months or less. The Company is currently not a party to any finance leases.

The Company's office leases have remaining lease terms of 2 years to 8 years. As of December 31, 2019, the weighted average remaining lease term was 6.8 years and the weighted average discount rate was 6.25%.

The Company leases office space under an operating lease agreement related to the Company’s main headquarters located in New York City. This lease commenced on March 1, 2016 and expires on October 30, 2027. In connection with this lease, the Company obtained an Irrevocable Standby Letter of Credit from BHI for a sum not exceeding $1.1 million. The Company has deposited this amount with BHI as collateral for the letter of credit and recorded the amount as restricted cash in the consolidated balance sheets as of December 31, 2019 and December 31, 2018.

The Company also leases office space under an operating lease agreement at another location in New York City, representing the Company’s former corporate offices and operations facility. This lease shall expire on February 28, 2022. This office space is currently subleased to a third-party subtenant through February 27, 2022.

The aforementioned office leases require the Company to pay additional rents related to increases in certain taxes and other costs on the properties. For the years ended December 31, 2019 and 2018, total lease expense included in selling, general and administrative expenses on the Company's consolidated statements of operations was approximately $1.6 million and $1.5 million, respectively.

The Company’s total lease cost for the year ended December 31, 2019 was comprised of the following:


($ in thousands)
Operating lease cost	$	1,925
Short-term lease cost		76
Variable lease cost		105
Sublease income		(488)
Total lease cost	$	1,618

Cash paid for amounts included in the measurement of operating lease liabilities in the Current Year was $2.4 million, and cash received from subleasing was $0.3 million.

As of December 31, 2019, the maturities of lease liabilities were as follows:


($ in thousands)
2020	$	2,423
2021		2,577
2022		1,732
2023		1,552
2024		1,552
After 2024		4,398
Total lease payments		14,234
Less: Discount		2,709
Present value of lease liabilities		11,525
Current portion of lease liabilities		1,752
Non-current portion of lease liabilities	$	9,773

Employment Agreements

The Company has contracts with certain executives and key employees. The future minimum payments under these contracts are as follows:


	Employment
($ in thousands)	Contract
Year Ended December 31,	Payments
2020	$	6,624
2021		4,245
2022		3,418
Thereafter		—
Total future minimum employment contract payments	$	14,287

In addition to the employment contract payments stated above, the Company’s employment contracts with certain executives and key employees contain performance-based bonus provisions. These provisions include bonuses based on the Company achieving revenues in excess of established targets and/or on operating results.

Certain of the employment agreements contain severance and/or change in control provisions. Aggregate potential severance compensation amounted to approximately $7.8 million at December 31, 2019.

Contingent Obligation – HH Seller (Halston Heritage Earn-Out)

In connection with the February 11, 2019 purchase of the Halston Heritage Trademarks from HIP, the Company agreed to pay HIP additional consideration (the “Halston Heritage Earn-Out”) of up to an aggregate of $6.0 million, based on royalties earned through December 31, 2022 (see Note 3). The Halston Heritage Earn-Out of $0.9 million is recorded as a long-term liability as of December 31, 2019 in the accompanying consolidated balance sheets, based on the difference between the fair value of the acquired assets of the Halston Heritage Trademarks and the total consideration paid. In accordance with ASC Topic 480, the Halston Heritage Earn-Out obligation is treated as a liability in the accompanying consolidated balance sheets because of the variable number of shares payable under the agreement.