2.4.0.8113 - Disclosure - UNIT OPTIONS AND EQUITY INCENTIVE PLANtruefalsefalse1falsefalsefalseP01_01_2013To06_30_2013http://www.sec.gov/CIK0001260828duration2013-01-01T00:00:002013-06-30T00:00:001true1engy_SharebasedCompensationArrangementsByShareBasedPaymentAwardAbstractengy_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2engy_ShareBasedCompensationArrangementsByShareBasedPaymentAwardTextBlockengy_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00 <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>NOTE F – UNIT OPTIONS AND EQUITY INCENTIVE PLAN</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> The Partnership has no employees and is managed by its General Partner.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> The Partnership may issue options, warrants, rights or appreciation rights with respect to Common Units for any Partnership purpose, including to non-employees for goods and services and to acquire or extend debt, without approval of the Limited Partners. The Partnership applies the provisions of ASC 505 to account for such transactions. ASC 505 requires that such transactions be accounted for at fair value. If the fair value of the goods and services or debt related transactions are not readily measurable, the fair value of the options, warrants, rights or appreciation rights is used to account for such transactions. Central did not record any unit-based payment costs for non-employees for the three months and six months ended June 30, 2012 and 2013 under the fair-value provisions of ASC 505.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> The Partnership applies ASC 718 for options and/or Common Units granted to employees and directors of the General Partner. During the quarter ended March 31, 2006, Central adopted the provisions of ASC 718 for unit-based payments to employees using the modified prospective application transition method. Under this method, previously reported amounts should not be restated to reflect the provisions of ASC 718. ASC 718 requires measurement of all employee unit-based payment awards using a fair-value method and recording of such expense in the consolidated financial statements over the requisite service period. The fair value concepts have not changed significantly in ASC 718; however, in adopting this standard, companies must choose among alternative valuation models and amortization assumptions. After assessing alternative valuation models and amortization assumptions, Central will continue using both the Black-Scholes valuation model and straight-line amortization of compensation expense over the requisite service period for each separately vesting portion of the grant. Central will reconsider use of this model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> As described below on March 20, 2013, the Partnership agreed to issue a grant of <font style=" FONT-SIZE: 10pt">200,000</font> Common Units to an executive officer of the General Partner which will fully vest upon issuance. The Partnership recorded unit-based compensation of $<font style=" FONT-SIZE: 10pt">16,000</font> during the six months ended June 30, 2013 in connection with the issuance of the 200,000 Common Units. Central did not record any unit-based compensation for employees for the three months and six months ended June 30, 2012 under the fair-value provisions of ASC 718.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-INDENT: 0.25in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>Equity Incentive Plan</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> On March 9, 2005, the Board of Directors of the General Partner (“<u>Board</u>”) approved the 2005 Equity Incentive Plan (“<u>2005 Plan</u>”). The 2005 Plan permits the grant of common unit options, common unit appreciation rights, restricted Common Units and phantom Common Units to any person who is an employee (including to any executive officer) or consultant of Central or the General Partner or any affiliate of Central or the General Partner. The 2005 Plan provides that each outside director of the General Partner shall be granted a common unit option once each fiscal year for not more than <font style=" FONT-SIZE: 10pt">5,000</font> Common Units, in an equal amount as determined by the Board of Directors. The aggregate number of Common Units authorized for issuance as awards under the 2005 Plan is <font style=" FONT-SIZE: 10pt">750,000</font>. The 2005 Plan remains available for the grant of awards until <font style=" FONT-SIZE: 10pt">March 9, 2015</font>, or such earlier date as the Board of Directors may determine. The 2005 Plan is administered by the Compensation Committee of the Board of Directors. In addition, the Board of Directors may exercise any authority delegated to the Compensation Committee under the 2005 Plan. Under the terms of the Partnership Agreement and the then applicable rules of the NASDAQ National Market, no approval of the 2005 Plan by the Unitholders of the Partnership was required.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> On March 20, 2013, the Board of Directors of the General Partner (“<u>Board</u>”), approved the entering into an employment agreement (“<u>Agreement</u>”) with Mr. Ian T. Bothwell, Executive Vice President, Chief Financial Officer and Secretary of the General Partner and President of Regional (“<u>Executive</u>”) (see Note J– Commitments and Contingencies – Employment Agreement). Under the terms of the Agreement, the Executive was granted 200,000 Common Units of the Partnership under the 2005 Plan which vested immediately upon such grant as set forth in a separate Unit Grant Agreement between the Executive and the General Partner.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> In addition to any grants of Common Units or other securities of the Partnership as the Compensation Committee of the Board may determine from time to time pursuant to one or more of the General Partner’s benefit plans, the General Partner shall provide to the Executive one or more future grants of Common Units equal to the number of Common Units determined by dividing (1) one and one-half percent (1.5%) of the gross amount paid for each of the next one or more acquisitions completed by the Partnership and/or an affiliate of the Partnership during the term of the Agreement, which gross amount shall not exceed $100 million (each an “<u>Acquisition</u>”), by (2) the average value per Common Unit assigned to the equity portion of any consideration issued by the Partnership and/or an affiliate of the Partnership to investors in connection with each Acquisition including any provisions for adjustment to equity as offered to investors, if applicable. In the event the General Partner does not extend the Agreement after the second anniversary date thereof for any reason other than as provided in the Agreement, the Partnership shall issue to the Executive the number of Common Units determined by dividing (1) the amount calculated by multiplying three-quarters of one percent (0.75%) times the sum determined by subtracting the gross amount paid for each of the Acquisitions completed by the Partnership and/or an affiliate of the Partnership during the term of the Executive’s employment by the General Partner from $100 million by (2) the average value per Common Unit assigned to the equity portion of any consideration issued by the Partnership and/or an Affiliate of the Partnership to investors in connection with each Acquisition including any provisions for adjustment to equity as offered to investors, if applicable. The Common Units subject to issuance above will be issued pursuant to a Unit Grant Agreement, which grant will be governed by the terms and conditions of the 2005 Plan (or its successor). The right to receive the Common Units will not terminate until fully issued in the event the Executive is (a) terminated by the General Partner without Cause, (b) the Executive resigns for Good Reason, (c) a termination results from a Change in Control of the General Partner, or (d) a termination results from the Death or Disability of the Executive as more fully described in the Agreement.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 0.25in; FONT: 10pt Times New Roman, Times, Serif"> At June 30, 2013, there were no options outstanding under the 2005 Plan. At June 30, 2013, approximately <font style=" FONT-SIZE: 10pt">422,310</font> Common Units remain available for issuance under the 2005 Plan.</div> </div> falsefalsefalsenonnum:textBlockItemTypenaShare-based Compensation Arrangements by Share-based Payment Award [Text Block]No definition available.false0falseUNIT OPTIONS AND EQUITY INCENTIVE PLANUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.pennoctane.com/role/UnitOptionsAndEquityIncentivePlan12