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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2015
STOCK-BASED COMPENSATION |
STOCK-BASED COMPENSATION | 23 — STOCK-BASED COMPENSATION Genco Shipping & Trading — Predecessor Company On July 12, 2005, the Company’s Board of Directors approved the Genco Shipping and Trading Limited 2005 Equity Incentive Plan (the “2005 GS&T Plan”). The aggregate number of shares of common stock that were available for award under the 2005 GS&T Plan was 2,000,000 shares. Additionally, on May 17, 2012, at the Company’s 2012 Annual Meeting of Shareholders, the Company’s shareholders approved the Genco Shipping and Trading Limited 2012 Equity Incentive Plan (the “2012 GS&T Plan”). The aggregate number of shares of common stock that were available for award under the 2012 GS&T Plan was 3,000,000 shares. Under these plans, the Company’s Board of Directors, the compensation committee, or another designated committee of the Board of Directors could grant a variety of stock-based incentive awards to employees, directors and consultants who the compensation committee (or other committee or the Board of Directors) believes are key to the Company’s success. Awards may consist of incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, nonvested stock, unrestricted stock and performance shares. Under the Plan, on the Effective Date, any unvested shares under the 2005 and 2012 GS&T Plans were deemed vested automatically and Equity Warrants were issued. Refer to “Successor Company Equity Warrant Agreement” section in Note 1 — General Information for further information. The vesting of these shares is included in the $2,403 of nonvested stock amortization expense recorded by the Predecessor Company during the period from January 1 to July 9, 2014 and is included in the table below. Under the 2005 and 2012 GS&T Plans, grants of nonvested common stock to executives and employees vested ratably on each of the four anniversaries of the determined vesting date. Grants of nonvested common stock issued under the 2005 and 2012 GS&T Plans to directors vested the earlier of the first anniversary of the grant date or the date of the next annual shareholders’ meeting, which were typically held during May. Grants of nonvested common stock issued under the 2005 and 2012 GS&T Plans to the Company’s Chairman, Peter C. Georgiopoulos, that were not granted as part of grants made to all directors, excluding the grants made on December 13, 2012, December 28, 2011 and December 21, 2010, vested ratably on each of the ten anniversaries of the vesting date. The table below summarizes the Predecessor Company’s nonvested stock awards for the period from January 1, 2013 to July 9, 2014 under the 2005 and 2012 GS&T Plans:
|  | Predecessor |
|  | Period from January 1 to July 9, |
|  | 2014 |
|  | Number of Shares |  | Weighted Average Grant Date Price |
Outstanding at January 1, 2014 - Predecessor |  | 880,465 |  | $ | 7.77 |
Granted |  | — |  | — |
Vested |  | (880,465 | ) | 7.77 |
Forfeited |  | — |  | — |
Outstanding at July 9, 2014 - Predecessor |  | — |  | $ | — |
|  | Predecessor |
|  | Year Ended December 31, |
|  | 2013 |
|  | Number of Shares |  | Weighted Average Grant Date Price |
Outstanding at January 1 - Predecessor |  | 1,108,762 |  | $ | 9.47 |
Granted |  | 200,634 |  | 1.57 |
Vested |  | (407,431 | ) | 9.46 |
Forfeited |  | (21,500 | ) | 5.53 |
Outstanding at December 31 - Predecessor |  | 880,465 |  | $ | 7.77 |
The total fair value of shares that vested under the 2005 and 2012 GS&T Plans during the period from January 1 to July 9, 2014 and during the year ended December 31, 2013 was $691 and $943, 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 period from January 1 to July 9, 2014 and for the year ended December 31, 2013, the Predecessor Company recognized nonvested stock amortization expense for the 2005 and 2012 GS&T Plans, which is included in general, administrative and management fees, as follows:
|  | Predecessor |  |  |
|  | Period from January 1 to July 9, |  | Year Ended December 31, |
|  | 2014 |  | 2013 |
General, administrative and management fees |  | $ | 2,403 |  | $ | 2,924 |
Genco Shipping & Trading — Successor Company 2014 Management Incentive Plan On the Effective Date, pursuant to the Chapter 11 Plan, the Company adopted the MIP (as defined in Note 1 — General Information). 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 year ended December 31, 2015 and the period from July 9 to December 31, 2014, the Successor Company recognized amortization expense of the fair value of these warrants, which is included in General, administrative and management fees, as follows:
|  | Successor |
|  | Year Ended December 31, |  | Period from July 9 to December 31, |
|  | 2015 |  | 2014 |
General, administrative and management fees |  | $ | 25,941 |  | $ | 13,390 |
Amortization of the unamortized stock-based compensation balance of $15,105 as of December 31, 2015 is expected to be expensed $11,496 and $3,609 during the years ending December 31, 2016 and 2017, respectively. The following table summarizes all the warrant activity for the year ended December 31, 2015 and for the period from July 9, 2014 to December 31, 2014:
|  | Number of Warrants |  | Weighted Average Exercise Price |  | Weighted Average Fair Value |
Outstanding at July 9, 2014 - Successor |  | — |  | $ | — |  | $ | — |
Granted |  | 8,557,461 |  | 30.31 |  | 6.36 |
Exercisable |  | — |  | — |  | — |
Exercised |  | — |  | — |  | — |
Forfeited |  | — |  | — |  | — |
Outstanding at December 31, 2014 - Successor |  | 8,557,461 |  | $ | 30.31 |  | $ | 6.36 |
|  | 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 |  | — |  | — |  | — |
Exercisable |  | (2,852,487 | ) | 30.31 |  | 6.36 |
Exercised |  | — |  | — |  | — |
Forfeited |  | — |  | — |  | — |
Outstanding at December 31, 2015 - Successor |  | 5,704,974 |  | $ | 30.31 |  | $ | 6.36 |
The following table summarizes certain information about the warrants outstanding as of December 31, 2015:
|  | Warrants Outstanding, December 31, 2015 |  | Warrants Exercisable, December 31, 2015 |
|  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  | Weighted |  | Average |  |  |  | Weighted |  | Average |
Weighted |  |  |  | Average |  | Remaining |  |  |  | Average |  | Remaining |
Average |  | Number of |  | Exercise |  | Contractual |  | Number of |  | Exercise |  | Contractual |
Exercise Price |  | Warrants |  | Price |  | Life |  | Warrants |  | Price |  | Life |
$ | 30.31 |  | 5,704,974 |  | $ | 30.31 |  | 4.60 |  | 2,852,487 |  | $ | 30.31 |  | 4.60 |
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 year ended December 31, 2015 and the period from July 9 to December 31, 2014 that were issued under the 2014 MIP Plan:
|  | Number of Shares |  | Weighted Average Grant Date Price |
Outstanding at July 9, 2014 - Successor |  | — |  | $ | — |
Granted |  | 1,110,600 |  | 20.00 |
Vested |  | — |  | — |
Forfeited |  | — |  | — |
Outstanding at December 31, 2014 - Successor |  | 1,110,600 |  | $ | 20.00 |
|  | Number of Shares |  | Weighted Average Grant Date Price |
Outstanding at January 1, 2015 - Successor |  | 1,110,600 |  | $ | 20.00 |
Granted |  | — |  | — |
Vested |  | (370,200 | ) | 20.00 |
Forfeited |  | — |  | — |
Outstanding at December 31, 2015 - Successor |  | 740,400 |  | $ | 20.00 |
The total fair value of MIP restricted shares that vested under the 2014 MIP Plan during the year ended December 31, 2015 and the period from July 9 to December 31, 2014 for the Successor Company was $2,662 and $0, 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 year ended December 31, 2015 and the period from July 9 to December 31, 2014, 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 |
|  | Year Ended December 31, 2015 |  | Period from July 9 to December 31, 2014 |
General, administrative and management fees |  | $ | 10,585 |  | $ | 5,464 |
The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures. As of December 31, 2015, unrecognized compensation cost of $6,163 related to nonvested stock will be recognized over a weighted-average period of 1.60 years. Restricted Stock Units The Successor Company has issued restricted stock units (“RSUs”) to certain members of the Board of Directors, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests. The RSUs generally vest on the date of the Company’s annual shareholders meeting following the date of the grant. On July 13, 2015 and July 29, 2015, the Company issued 16,188 and 58,215 RSUs, respectively, to members of the Company’s Board of Directors. The 16,188 RSUs vested on July 17, 2015. As of December 31, 2015, no shares of the Company’s common stock were outstanding in respect of the RSUs. Such shares will only be issued in respect of vested RSUs when the director’s service with the Company as a director terminates. The RSUs that have been issued to certain members of the Board of Directors generally vest on the date of the annual shareholders meeting of the Company following the date of the grant. The table below summarized the Successor Company’s RSUs for the year ended December 31, 2015:
|  | Number of RSUs |  | Weighted Average Grant Date Price |
Outstanding at January 1, 2015 - Successor |  | — |  | $ | — |
Granted |  | 74,403 |  | 7.11 |
Vested |  | (16,188 | ) | 7.00 |
Forfeited |  | — |  | — |
Outstanding at December 31, 2015 - Successor |  | 58,215 |  | $ | 7.15 |
The total fair value of the RSUs that vested during the year ended December 31, 2015 for the Successor Company was $116. There were no RSUs that vested during the period from July 9 to December 31, 2014 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. On February 17, 2016, the vesting of 23,286 of outstanding RSUs were accelerated upon the resignation of two members on the Company’s Board of Directors. The following table summarizes certain information of the RSUs unvested and vested as of December 31, 2015:
Unvested RSUs December 31, 2015 |  | Vested RSUs December 31, 2015 |
|  |  |  | Weighted |  |  |  |  |
|  | Weighted |  | Average |  |  |  | Weighted |
Number of RSUs |  | Average Grant Date Price |  | Remaining Contractual Life |  | Number of RSUs |  | Average Grant Date Price |
58,215 |  | $ | 7.15 |  | 0.37 |  | 16,188 |  | $ | 7.00 |
The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures. As of December 31, 2015, unrecognized compensation cost of $193 related to RSUs will be recognized over a weighted-average period of 0.37 years. For the year ended December 31, 2015 and the period from July 9 to September 30, 2014, the Successor Company recognized nonvested stock amortization expense for the RSUs, which is included in General, administrative and management fees as follows:
|  | Successor |
|  | Year Ended December 31, 2015 |  | Period from July 9 to December 31, 2014 |
General, administrative and management fees |  | $ | 337 |  | $ | — |
Baltic Trading Limited On March 3, 2010, Baltic Trading’s Board of Directors approved the Baltic Trading Limited 2010 Equity Incentive Plan (the “Baltic Trading Plan”). On March 13, 2014, Baltic Trading’s Board of Directors approved an amendment to 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. Under the Baltic Trading Plan, Baltic Trading’s Board of Directors, the compensation committee, or another designated committee of the Board of Directors may grant a variety of stock-based incentive awards to officers, directors, and executive, managerial, administrative and professional employees of and consultants to Baltic Trading or the Company whom the compensation committee (or other committee of the Board of Directors) believes are key to Baltic Trading’s success. Awards may consist of restricted stock, restricted stock units, stock options, stock appreciation rights and other stock or cash-based awards. When the Merger was completed on July 17, 2015, the 1,941,844 nonvested shares issued under the Baltic Trading Plan vested automatically and received the same consideration in the Merger as holders of Baltic Trading’s common stock. Refer to Note 1 — General Information for further information regarding the Merger. The vesting of these shares is included in the $5,273 of expense recorded during the year ended December 31, 2015. Grants of restricted stock that were issued to Peter C. Georgiopoulos, Chairman of the Board of Baltic Trading, and John Wobensmith, President and Chief Financial Officer of Baltic Trading, made in connection with Baltic Trading’s IPO vested ratably on each of the first four anniversaries of March 15, 2010. Grants of restricted common stock to Baltic Trading’s directors made following Baltic Trading’s IPO (which exclude the foregoing grant to Mr. Georgiopoulos) vested the earlier of the first anniversary of the grant date or the date of Baltic Trading’s next annual shareholders’ meeting. Grants of restricted stock made to executives and the Chairman of the Board not in connection with the Company’s IPO vested ratably on each of the first four anniversaries of the determined vesting date. The following table presents a summary of Baltic Trading’s nonvested stock awards for the three years ended December 31, 2015 under the Baltic Trading Plan:
|  | Year Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
|  | Number of Baltic Trading Common Shares |  | Weighted Average Grant Date Price |  | Number of Baltic Trading Common Shares |  | Weighted Average Grant Date Price |  | Number of Baltic Trading Common Shares |  | Weighted Average Grant Date Price |
Outstanding at January 1 |  | 1,941,844 |  | $ | 3.80 |  | 1,381,429 |  | $ | 6.03 |  | 664,249 |  | $ | 7.70 |
Granted |  | — |  | — |  | 1,086,345 |  | 2.61 |  | 998,680 |  | 5.60 |
Vested |  | (1,941,844 | ) | 3.80 |  | (525,930 | ) | 7.21 |  | (281,500 | ) | 8.48 |
Forfeited |  | — |  | — |  | — |  | — |  | — |  | — |
Outstanding at December 31 |  | — |  | $ | — |  | 1,941,844 |  | $ | 3.80 |  | 1,381,429 |  | $ | 6.03 |
The total fair value of shares that vested under the Baltic Trading Plan during the year ended December 31, 2015 and the period from July 9 to December 31, 2014 for the Successor Company was $2,913 and $1,168, respectively. The total fair value of shares that vested under the Baltic Trading Plan during the period from January 1 to July 9, 2014 and during the year ended December 31, 2013 was $1,143 and $1,194, 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. 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 |
|  | Year |  | Period from |  |  | Period from |  | Year |
|  | Ended |  | July 9 to |  |  | January 1 to |  | Ended |
|  | December 31, |  | December 31, |  |  | July 9, |  | December 31, |
|  | 2015 |  | 2014 |  |  | 2014 |  | 2013 |
General, administrative and management fees |  | $ | 5,273 |  | $ | 1,551 |  |  | $ | 1,949 |  | $ | 1,558 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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