RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2013

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

(4) RELATED PARTY TRANSACTIONS

Management Costs and Fee.  On January 6, 2005 the Partnership purchased the stock of its Managing Partner. As a result of the transaction, the Managing Partner’s operations have been included in the Partnership’s consolidated financial statements beginning with the first quarter of 2005.  The Managing Partner is entitled to receive from the Partnership on or about February 15 of each year a management fee equal to 2% of the Partnership’s operating cash flow. Because the Managing Partner is owned by the Partnership, the Managing Partner has waived all management fees to which it is entitled under the Partnership Agreement but continues to be entitled to reimbursement for its reasonable and necessary business expenses (which consist primarily of compensation costs, board of directors fees, insurance costs and office expenses). The Managing Partner is also entitled to receive an annual incentive fee of 0.5% of the aggregate fair market value of the Class A Units for the preceding calendar year, provided that net cash flow (as defined in the Partnership Agreement) for the preceding calendar year exceeds certain specified levels. No incentive fee was earned in 2013, 2012 or 2011.

Partnership Employment Contracts.  The Partnership has employment agreements with two executives.  The employment agreements provide for severance should the executives be terminated Without Cause or if they should resign for Good Reason as defined in the agreements.  The total severance which would be payable under these agreements to Scott C. Wallace, President and CEO, is the equivalent of 6 months of base pay or $125,000 and 18 months of base pay or $222,000 for Randolph H. Cabral, Senior Vice President Operations.  For further information see “Executive Compensation - Employment and Severance Agreements” in Part III, Item 11 of this Annual Report on Form 10-K.

Separation Agreement with President and Chief Executive Officer.  As a result of the separation of Mr. Dennis Simonis, prior President and CEO, on June 5, 2013, on July 18, 2013, the Managing Partner entered into a Separation Agreement with Mr. Simonis under which the Managing Partner paid Mr. Simonis $239,000 and his attorney $29,000 on January 3, 2014, in consideration of a release of all claims against the Managing Partner and its affiliates or under his employment agreement.