Related Party Transactions
|12 Months Ended|
Dec. 31, 2016
|Related Party Transactions [Abstract]|
|Related Party Transactions||
Related Party Transactions
Effective as of October 1, 2015, Investacorp's lease with Frost Real Estate Holdings, LLC (“FREH”), an entity affiliated with the Company’s chairman of the board and principal shareholder, in an office building in Miami, Florida, was renewed and now expires in September 2020. The lease provides for aggregate payments during the five-year term of approximately $2,420 and minimum annual payments of $484. Rent expense under such lease amounted to $522, $382 and $351 in 2016, 2015 and 2014, respectively.
Ladenburg’s principal executive offices are located in the same office building in Miami, Florida, where approximately 14,050 square feet of office space is leased from FREH. Ladenburg’s lease was renewed in March 2013 and now expires in February 2018 with two optional five-year extensions. In November 2016 the lease was amended and the rentable square footage was reduced from 18,146 to 14,050. The lease provides for aggregate payments during the remaining term of approximately $575 and minimum annual payment of $493. Rent expense under such lease amounted to $706, $734 and $734 in 2016, 2015 and 2014, respectively.
The Company is a party to an agreement with Vector, where Vector has agreed to make available to the Company the services of Vector’s Executive Vice President to serve as the President and Chief Executive Officer of the Company and to provide certain other financial, tax and accounting services, including assistance with complying with Section 404 of the Sarbanes-Oxley Act of 2002 and assistance in the preparation of tax returns. Various executive officers and directors of Vector and its subsidiary New Valley serve as members of the board of directors of the Company and Vector and its subsidiaries own approximately 7.83% of the Company’s common stock at December 31, 2016. In consideration for such services, the Company agreed to pay Vector an annual management fee plus reimbursement of expenses and to indemnify Vector. The agreement is terminable by either party upon 30 days’ prior written notice. The Company paid Vector $850 in 2016, $850 in 2015 and $850 in 2014 under the agreement and pays Vector at a rate of $850 per year in 2017.
In 2015, the Company entered into a Consulting Services Agreement with Nextt Advisors Inc., a corporation owned solely by the son-in-law (the “Consultant”) of the Company’s President and Chief Executive Officer. Upon the expiration of the 2015 agreement, the Company in 2016 entered in a new Consulting Services Agreement with the Consultant. Pursuant to the agreement, the Company pays the Consultant $16 per month in connection with the Consultant’s provision of professional services to the Company. The Company paid the Consultant $186 under the agreement in 2016 and $13 in 2015.
SSN has an operating lease for office facilities with Cogdill Capital LLC, an entity in which SSN's Chief Executive Officer and Chief Financial Officer are members who own a minority percentage of such entity, which expires in March 2020. Rent expense under such lease amounted to $276 in 2016 and $268 in 2015.
The Company is a party to an agreement with Castle Brands Inc. ("Castle") under which the Company provides certain administrative, legal and financial services to Castle. The Company's President and Chief Executive Officer, who is also a director of the Company, is also the President and Chief Executive Officer and a director of Castle. Various Company directors serve as directors of Castle and the Company and Castle have the same principal shareholder. The Company received $173 and $171 under this agreement in 2016 and 2015, respectively.
See Note 12 for information regarding loan transactions involving related parties.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef