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Compensation and Services Agreement
 9 Months Ended
Sep. 30, 2014
Compensation and Services Agreement  
Compensation and Services Agreement

Note 10 - Compensation and Services Agreement

 

The Company agreed to pay fees of $3,300,000 and $3,465,000 in 2014 and 2015, respectively (including overhead expenses of $186,375 and $195,694 and property management fees, included in real estate expenses on the income statement, of $850,000 and $892,500 in 2014 and 2015, respectively) pursuant to the compensation and services agreement, as amended, with Majestic Property Management Corp.  Majestic Property Management Corp is wholly-owned by the Vice Chairman of the Company’s Board of Directors.

 

Effective July 1, 2014, certain employees of affiliated companies performing services pursuant to this agreement are paid directly by the Company for the time they spend performing services on the Company’s behalf.  Accordingly, the fees (including the overhead expenses and property management fees) paid pursuant to this agreement were reduced to $2,855,000 and $2,535,000 for 2014 and 2015, respectively.  At September 30, 2014, the Company recorded a receivable from Majestic Property Management Corp. for $223,000 representing amounts paid during the three months ended September 30, 2014 in excess of the reduced fee.  This receivable was applied against the fee payable for October 2014 and the balance was repaid to the Company on October 3, 2014.