21 — STOCK-BASED COMPENSATION

Genco Shipping & Trading — Predecessor Company

Under the Plan that was approved by the Bankruptcy Court, on the Effective Date, the 880,465 unvested shares that were issued under the Genco Shipping & Trading Limited 2005 and 2012 Equity Incentive Plans (the “GS&T Plans”) were deemed vested automatically and equity warrants were issued.

There were no shares that vested under the GS&T Plans during the three months ended March 31, 2014 for the Predecessor Company.

For the three months ended March 31, 2014 the Predecessor Company recognized nonvested stock amortization expense for the GS&T Plans, which is included in General, administrative and management fees, as follows:

	Predecessor
	Three Months Ended March 31, 2014
General, administrative and management fees	$	427

Genco Shipping & Trading — Successor Company

2014 Management Incentive Plan

On the Effective Date, pursuant to the Chapter 11 Plan, the Company adopted the Genco Shipping & Trading Limited 2014 Management Incentive Plan (the “MIP”). An aggregate of 9,668,061 shares of Common Stock were available for award under the MIP, which were awarded in the form of restricted stock grants and awards of three tiers of MIP Warrants with staggered strike prices based on increasing equity values. The number of shares of common stock available under the Plan represented approximately 1.8% of the shares of post-emergence Common Stock outstanding as of the Effective Date on a fully-diluted basis. Awards under the MIP were available to eligible employees, non-employee directors and/or officers of the Company and its subsidiaries (collectively, “Eligible Individuals”). Under the MIP, a committee appointed by the Board from time to time (or, in the absence of such a committee, the Board) (in either case, the “Plan Committee”) may grant a variety of stock-based incentive awards, as the Plan Committee deems appropriate, to Eligible Individuals. The MIP Warrants are exercisable on a cashless basis and contain customary anti-dilution protection in the event of any stock split, reverse stock split, stock dividend, reclassification, dividend or other distributions (including, but not limited to, cash dividends), or business combination transaction.

On August 7, 2014, pursuant to the MIP, certain individuals were granted MIP Warrants whereby each warrant can be converted on a cashless basis for the amount in excess of the respective strike price. The MIP Warrants were issued in three tranches, which are exercisable for 2,380,664, 2,467,009, and 3,709,788 shares and have exercise prices of $25.91 (the “$25.91 Warrants”), $28.73 (the “$28.73 Warrants”) and $34.19 (the “$34.19 Warrants”), respectively. The fair value of each warrant upon emergence from bankruptcy was $7.22 for the $25.91 Warrants, $6.63 for the $28.73 Warrants and $5.63 for the $34.19 Warrants. The warrant values were based upon a calculation using the Black-Scholes-Merton option pricing formula. This model uses inputs such as the underlying price of the shares issued when the warrant is exercised, volatility, cost of capital interest rate and expected life of the instrument. The Company has determined that the warrants should be classified within Level 3 of the fair value hierarchy by evaluating each input for the Black-Scholes-Merton option pricing formula against the fair value hierarchy criteria and using the lowest level of input as the basis for the fair value classification. The Black-Scholes-Merton option pricing formula used a volatility of 43.91% (representing the six-year volatility of a peer group), a risk-free interest rate of 1.85% and a dividend rate of 0%. The aggregate fair value of these awards upon emergence from bankruptcy was $54,436. The warrants vest 33.33% on each of the first three anniversaries of the grant date, with accelerated vesting upon a change in control of the Company.

For the three months ended March 31, 2015, the Successor Company recognized amortization expense of the fair value of these warrants of $8,199, which is included in the Company’s Condensed Consolidated Statements of Operations as a component of General, administrative and management fees. Amortization of the unamortized stock-based compensation balance of $32,847 as of March 31, 2015 is expected to be expensed $17,742, $11,496, and $3,609 during the remainder of 2015 and during the years ending December 31, 2016 and 2017, respectively. The following table summarizes all the warrant activity for the three months ended March 31, 2015:

	Number of Warrants	Weighted Average Exercise Price		Weighted Average Fair Value
Outstanding at January 1, 2015 - Successor	8,557,461	$	30.31	$	6.36
Granted	—	—		—
Exercised	—	—		—
Forfeited	—	—		—

Outstanding at March 31, 2015 - Successor	8,557,461	$	30.31	$	6.36

The following table summarizes certain information about the warrants outstanding as of March 31, 2015:

		Warrants Outstanding, March 31, 2015				Warrants Exercisable, March 31, 2015
					Weighted
			Weighted		Average		Weighted
Weighted Average Exercise Price		Number of Warrants	Average Exercise Price		Remaining Contractual Life	Number of Warrants	Average Exercise Price
$	30.31	8,557,461	$	30.31	5.36	—	—

On August 6, 2014, the Successor Company’s Board of Directors approved the 2014 Equity Incentive Plan for an aggregate of 250,000,000, which included the shares issued for the Successor Company pursuant to the Plan. The nonvested stock awards granted under the 2014 MIP Plan will vest ratably on each of the three anniversaries of the determined vesting date of August 7, 2014. The table below summarizes the Successor Company’s nonvested stock awards for the three months ended March 31, 2015 which were issued under the 2014 MIP Plan:

	Number of Shares	Weighted Average Grant Date Price
Outstanding at January 1, 2015 - Successor	1,110,600	$	20.00
Granted	—	—
Vested	—	—
Forfeited	—	—

Outstanding at March 31, 2015 - Successor	1,110,600	$	20.00

There were no shares that vested under the 2014 MIP Plan during the three months ended March 31, 2015 for the Successor Company. The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.

For the three months ended March 31, 2015, the Successor Company recognized nonvested stock amortization expense for the 2014 MIP Plan restricted shares, which is included in General, administrative and management fees, as follows:

	Successor
	Three Months Ended March 31, 2015
General, administrative and management fees	$	3,345

The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures. As of March 31, 2015, unrecognized compensation cost of $13,403 related to nonvested stock will be recognized over a weighted-average period of 2.36 years.

Baltic Trading Limited

On March 13, 2014, Baltic Trading’s Board of Directors approved an amendment to the Baltic Trading Limited 2010 Equity Incentive Plan (the “Baltic Trading Plan”) that increased the aggregate number of shares of common stock available for awards from 2,000,000 to 6,000,000 shares. Additionally, on April 9, 2014, at Baltic Trading’s 2014 Annual Meeting of Shareholders, Baltic Trading’s shareholders approved the amendment to the Baltic Trading Plan.

The following table presents a summary of Baltic Trading’s nonvested stock awards for the three months ended March 31, 2015 under the Baltic Trading Plan:

	Number of Baltic Trading Common Shares	Weighted Average Grant Date Price
Outstanding at January 1, 2015	1,941,844	$	3.80
Granted	—	—
Vested	—	—
Forfeited	—	—

Outstanding at March 31, 2015	1,941,844	$	3.80

The total fair value of shares that vested under the Baltic Trading Plan during the three months ended March 31, 2015 and 2014 was $0 and $774, respectively. The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.

For the three months ended March 31, 2015 and 2014, the Successor Company and the Predecessor Company recognized nonvested stock amortization expense for the Baltic Trading Plan, which is included in General, administrative and management fees, as follows:

	Successor		Predecessor
	Three Months Ended March 31, 2015		Three Months Ended March 31, 2014
General, administrative and management fees	$	816	$	963

The Company is amortizing Baltic Trading’s grants over the applicable vesting periods, net of anticipated forfeitures. As of March 31, 2015, unrecognized compensation cost of $4,457 related to nonvested stock will be recognized over a weighted-average period of 3.03 years.