Page 251 - Aida Hovsepian Onboarding

CENTRALIZED SUPPLY CHAIN SERVICES, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2017 and 2016

NOTE 2 - DEFERRED COMPENSATION (Continued)

Awards granted for 2017, 2016, and 2015 are as follows:

Award 100%
Plan Year Grant Vesting Award
End Date Date Amount

12/31/2015 3/31/2016 1/1/2018 $ 255,957
12/31/2016 3/31/2017 1/1/2019 260,576
12/31/2017 3/31/2018 1/1/2020 260,576

The deferred compensation liability, deferred compensation expense, and payments made to participants
as of December 31, 2017 and 2016 and the years then ended is as follows:

Deferred Compensation Liability
2014 2015 2016 2017
Awards Awards Awards Awards Total

Balance January 1, 2016 $ 191,850 $ - $ - $ - $ 191,850

2016 compensation expense 242,482 109,695 - - 352,177

Balance December 31, 2016 434,332 109,695 - - 544,027

2017 payments (434,332) - - - (434,332)
2017 compensation expense - 146,262 173,717 86,859 406,838

Balance December 31, 2017 $ - $ 255,957 $ 173,717 $ 86,859 $ 516,533

The deferred compensation expense is included in fringe benefits in the statements of operations. The
related liability is recorded in accrued payroll and related liabilities in the balance sheets. The 2016 and
2017 Contribution Credit awards will be fully vested by December 31, 2018 and December 31, 2019,
respectively. The 2018 deferred compensation expense for the 2016 and 2017 Contribution Credits is
expected to be $173,717, assuming no forfeitures.

NOTE 3 - COMMITMENTS AND CONTINGENCIES

During 2013, the Company entered into a service agreement with an unrelated third party to provide a web-
based interface that allows the Company to access vendor data. The service agreement is for six years.
Under the agreement, the Company pays a monthly subscription fee. For each of the years ended
December 31, 2017 and 2016, the Company paid approximately $1,329,000 in subscription fees.

The future minimum payments under the subscription agreement are as follows:

2018 $ 1,329,000
2019 110,750

$ 1,439,750

(Continued)

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