Stock Incentive Plans

3 Months Ended

Mar. 31, 2012

Stock Incentive Plans [Abstract]

Stock Incentive Plans

Note 10.  Stock Incentive Plans

2011 Equity Incentive Plan.  In November 2011, our shareholders approved the Eagle Bulk Shipping Inc. 2011 Equity Incentive Plan (the "2011 Plan") for the purpose of affording incentive compensation to persons eligible for awards under the 2011 Plan. The 2011 Plan provides for the grant of equity-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, unrestricted stock, other equity-based or equity-related awards, and/or performance compensation awards based on or relating to the Company's common shares to eligible non-employee directors, officers, employees or consultants of the Company or any of its subsidiaries. The 2011 Plan is administered by the Compensation Committee of the Company's board of directors or such other committee of the Company's board of directors that the board of directors shall designate. An aggregate of 5.9 million of the Company's common shares have been authorized for issuance under the 2011 Plan.  The shares reserved for issuance under the 2011 Plan are not subject to adjustment in the event of a reverse stock split commenced prior to the Company's 2012 Annual General Meeting of Shareholders. The 2011 Plan was approved by shareholders subject to the Company's confirmation in the proxy materials relating to the approval of the 2011 Plan that no options granted under the plan would, in the aggregate, exceed 10% of the Company's issued and outstanding shares on a fully diluted basis on the date the options first become exercisable and that any awards under the 2011 Plan would be conditioned upon the successful negotiation of the refinancing or restructuring the Company's credit facility.

2009 Equity Incentive Plan. In May 2009, our shareholders approved the Eagle Bulk Shipping Inc. 2009 Equity Incentive Plan (the "2009 Plan") for the purpose of affording incentive compensation to eligible persons. The 2009 Plan provides for the grant of equity-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, unrestricted stock, other equity-based or equity-related awards, and/or performance compensation awards based on or relating to the Company's common shares to eligible non-employee directors, officers, employees or consultants of the Company or any of its subsidiaries. The 2009 Plan is administered by the Compensation Committee of the Company's board of directors or such other committee of the Company's board of directors that the board of directors shall determine. A maximum of 4.2 million of the Company's common shares have been authorized for issuance under the 2009 Plan.

The Company granted restricted stock units ("RSUs") to members of its management which vest ratably between three to five years. As of March 31, 2012, RSUs covering a total of 2,817,834 of the Company's shares are outstanding. These RSUs also entitle the participant to receive a dividend equivalent payment on the unvested portion of the underlying shares granted under the award, each time the Company pays a dividend to the Company's shareholders. The dividend equivalent rights on the unvested RSU are forfeited upon termination of employment.The Company is amortizing to non-cash compensation expense the fair value of the non-vested restricted stock at the grant date. For the three months ended March 31, 2012 and 2011, the amortization charge was $2,082,025 and $2,219,285, respectively. The remaining expense for each of the years ending 2012, 2013, and 2014 will be $6,202,033, $3,907,678, and $535,513 respectively.

As of March 31, 2012 and December 31, 2011, options covering 1,313,483 of the Company's common shares are outstanding with exercise prices ranging from $4.34 to $21.88 per share (the market prices at dates of grants). The options granted to the Company's independent non-employee directors vested and became exercisable on the grant dates. The options granted to members of the Company's management vest and become exercisable over three years. All options expire between five to ten years from the date of grant.

The non-cash compensation expenses recorded by the Company and included in General and Administrative Expenses are as follows:

	Three Months Ended March 31,
	2012		2011
Stock Option Plans	$	-	$	517,761
Restricted Stock Grants		2,082,025		2,219,285
Total Non-cash compensation expense	$	2,082,025	$	2,737,046

As of March 31, 2012, Dividend Equivalent Rights Awards ("DERs") equivalent to 574,000 of the Company's common shares are outstanding to its independent non-employee directors and members of its management. These DERs entitle the participant to receive a dividend equivalent payment each time the Company pays a dividend to the Company's shareholders. For the three months ended March 31, 2012 and 2011, no compensation expenses were recorded.