13. LONG-TERM INCENTIVE PLANS

2014 Long-Term Incentive Plan

During the year ended December 31, 2014, the General Partner’s Board of Directors (the “Board”) and the Partnership’s unitholders approved a 2014 Long-Term Incentive Plan (“2014 LTIP”). The Compensation, Nominating and Governance, and Compliance Committee of the Board (the “Compensation Committee”) administers the 2014 LTIP. The 2014 LTIP permits the grant of awards, which may be in the form of phantom units, restricted units, unit appreciation rights (“UAR”), or unit options, including performance factors for each, covering an aggregate of 1,500,000 common units, a number that the Board may increase by up to 100,000 common units per year. At June 30, 2016, the estimated number of common units to be issued upon vesting and exercise of outstanding rights under this plan, assuming the satisfaction of the maximum conditions for performance factors, was 110,090. A cumulative number of 14,455 common units have been issued, leaving 1,375,455 common units available for future grants under the plan, assuming no increases by the Board.

Phantom Unit Awards

Phantom units represent rights to receive a common unit or an amount of cash, or a combination of either, based upon the value of a common unit. Phantom units become payable, in cash or common units, at the Partnership’s election, upon the separation of directors and executives from service or upon the occurrence of certain other events specified in the underlying agreements. Phantom units are subject to terms and conditions determined by the Compensation Committee. In tandem with phantom unit grants, the compensation committee may grant distribution equivalent rights (“DERs”), which are the right to receive an amount in cash or common units equal to the cash distributions made by the Partnership with respect to common unit during the period that the underlying phantom unit is outstanding. All phantom units outstanding under the 2014 LTIP at June 30, 2016 contain tandem DERs.

The following table sets forth the 2014 LTIP phantom unit award activity for the three and six months ended June 30, 2016 and 2015, respectively:


	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Outstanding, beginning of period		105,167		4,241		102,661		2,189
Granted (1)		4,923		2,040		7,429		4,092

Outstanding, end of period (2)		110,090		6,281		110,090		6,281

(1)

The weighted-average grant date fair value for the unit awards on the date of grant was $23.95 and $29.52 for three months ended June 30, 2016 and 2015, respectively, and $24.60 and $29.11 for six months ended June 30, 2016 and 2015, respectively. The intrinsic value of vested unit awards was $0.1 million for both the three months ended June 30, 2016 and 2015 and $0.2 million and $0.1 million for the six months ended June 30, 2016 and 2015, respectively.

(2)	Based on the closing price of the common units on June 30, 2016, the estimated intrinsic value of the outstanding unit awards was $2.8 million at June 30, 2016.

2004 Long-Term Incentive Plan

The Compensation Committee administers the Partnership’s 2004 Long-Term Incentive Plan (“2004 LTIP”). The 2004 LTIP permitted the grant of awards, which may be in the form of phantom units, restricted units, or unit appreciation rights (“UAR”). At June 30, 2016, the estimated number of common units to be issued upon vesting and exercise of outstanding rights under this plan was 194,820, based upon the closing price of our common units at June 30, 2016. A cumulative number of 626,188 common units have been issued under the 2004 LTIP. There were no awards available for grant under the 2004 LTIP at June 30, 2016 because the plan expired in 2014.

Phantom Unit Awards

Phantom units were credited to participants’ mandatory deferred compensation accounts in connection with DERs accruing on phantom units received under the 2004 LTIP. These DERs continue to accrue until the underlying securities are issued. The following table sets forth the 2004 LTIP activity related to DERs credited as phantom units to the participant’s accounts for the three and six months ended June 30, 2016 and 2015, respectively:


	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Outstanding, beginning of period		188,948		172,793		184,457		169,122
Granted (1)		5,137		3,556		9,628		7,227

Outstanding, end of period (2)		194,085		176,349		194,085		176,349

(1)

The weighted-average fair value for the phantom units credited was $23.52 and $30.04 for the three months ended June 30, 2016 and 2015, respectively, and $24.80 and $29.02 for the six months ended June 30, 2016 and 2015, respectively. The intrinsic value of vested phantom unit awards was $0.1 million for both the three months ended June 30, 2016 and 2015 and $0.2 million for both the six months ended June 30, 2016 and 2015.

(2)	Based on the closing price of the common units on June 30, 2016, the estimated intrinsic value of the outstanding unit awards was $4.9 million at June 30, 2016.

Total compensation expense for phantom units credited under both the 2004 and 2014 plans was approximately $0.2 million for the three months ended June 30, 2016 and 2015, and $0.4 million and $0.5 million for the six months ended June 30, 2016 and 2015, respectively.

Unit Appreciation Rights Awards

UAR awards represent a right to receive an amount equal to the closing price of the Partnership’s common units on the date preceding the exercise date less the exercise price of the UARs, to the extent the closing price of the Partnership’s common units on the date preceding the exercise date is in excess of the exercise price. This amount is then divided by the closing price of the Partnership’s common units on the date preceding the exercise date to determine the number of common units to be issued to the participant. UAR awards granted through June 30, 2016 have a five-year contractual term beginning on the grant date and vest ratably over a period of 48 months beginning on the grant date. Of the UARs outstanding at June 30, 2016, 16,302 UARs will vest within the following twelve months. The following table sets forth the UAR award activity for the three and six months ended June 30, 2016 and 2015, respectively:


	Three months ended June 30,					Six months ended June 30,
	2016		2015			2016		2015
Outstanding, beginning of period		66,793		112,346			66,793		123,000
Exercised		—		(19,595	)		—		(30,249	)
Forfeited		—		(5,730	)		—		(5,730	)

Outstanding, end of period (1)		66,793		87,021			66,793		87,021

Exercisable, end of period		44,968		41,383			44,968		41,383

(1)	Based on the closing price of the common units on June 30, 2016, the estimated intrinsic value of the outstanding unit awards was $0.1 million at June 30, 2016. The weighted average remaining contractual life for outstanding UAR awards at June 30, 2016 was 2.1 years.

At June 30, 2016, the Partnership had approximately $0.1 million of unrecognized compensation expense related to unvested UAR awards that will be recognized through the year ended December 31, 2018. The Partnership recognized total compensation expense for UAR awards of less than $0.1 million for the three and six months ended June 30, 2016 and 2015. The Partnership issued 3,416 common units for the three months ended June 30, 2015 and 4,564 common units for the six months ended June 30, 2015 due to exercised UAR awards. There were no UAR exercises during the three and six months ended June 30, 2016.