Note

15.

Stock Incentive Plans

Eagle Bulk Shipping -

Predecessor

2011

Equity Incentive Plan.

November

2011,

our shareholders approved the

2011

Equity Incentive Plan (the

“2011

Plan”) for the purpose of affording an incentive to eligible persons. The

2011

Equity Incentive Plan provided 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. A compensation committee or such other committee of the Company’s board of directors administered the

2011

Plan. 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 were not subject to adjustment in the event of a stock split commenced prior to the Company’s

2011

Annual General Meeting. However, 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.

June

26,

2012,

upon the Company’s refinancing of its credit facility, the Company granted options, under the

2011

Plan, to certain members of the Company’s senior management to purchase an aggregate of

1,580,000

of the Company's common shares. The options had an exercise price of

$3.34

per share, vested in

four

equal annual installments beginning on the grant date, and expired between

five

ten

years from the date of grant. The Company has recorded non-cash compensation charges

$555,344

for the period between

January

2014

and

October

15,

2014

(Predecessor).

December

2011,

the Company granted

415,750

Restricted Stock Units ("RSUs") to members of its management and certain employees. Each RSU granted to the participant represented the right to receive

one

share of the Company's common stock as of the date of vesting, with such vesting to occur ratably over

three

years. The fair value of the non-vested restricted stock at the grant date for the period between

January

2014

and

October

15,

2014

was

$517,039.

As part of the Plan, on the Effective Date all outstanding and unvested RSUs and options have been canceled.

Eagle Bulk Shipping - Successor

2014

Management Incentive Plan

October

15,

2014,

in accordance with the Plan, the Company adopted the post-emergence Management Incentive Program (the

“2014

Plan”), which provides for the distribution of New Eagle MIP Primary Equity in the form of shares of New Eagle Common Stock, and New Eagle MIP Options, to the participating senior management and other employees of the reorganized Company with

of the New Eagle Common Stock (on a fully diluted basis) on the Effective Date, and

two

tiers of options to acquire

5.5%

of the New Eagle Common Stock (on a fully diluted basis) with different strike prices based on the equity value for the reorganized Company and a premium to the equity value, each of the foregoing to vest generally over a

four

year schedule through

25%

annual installments commencing on the

first

anniversary of the Effective Date. The New Eagle MIP Primary Equity is subject to vesting, but the holder thereof is entitled to receive all dividends paid with respect to such shares as if such New Eagle MIP Primary Equity had vested on the grant date (subject to forfeiture by the holder in the event that such grant is terminated prior to vesting unless the administrator of the

2014

Plan determines otherwise). The New Eagle MIP Options contain adjustment provisions to reflect any transaction involving shares of New Eagle Common Stock, including as a result of any dividend, recapitalization, or stock split, to prevent any diminution or enlargement of the holder’s rights under the award.

The following schedule shows the stock awards and options granted under the

2014

Plan:

	Restricted shares 1			Price on grant date		Aggregate fair value (in millions)			Vesting Terms
Granted on October 15, 2014		27,027		$	329.60	$	8.9		25% annually over four year term
Granted on December 2, 2014		18,018		$	275.60	$	5.0		25% annually over four year term
Balance outstanding as of December 31, 2014 (Successor)*		45,045		$	308.58	$	13.9
Granted on June 12, 2015		2,750		$	179.60	$	0.5		25% annually over four year term
Granted on September 29, 2015 3		16,250		$	117.40	$	1.9		100% on third anniversary date
Granted on November 13, 2015 3		5,000		$	78.40	$	0.4		100% on third anniversary date
Total Granted in 2015		24,000				$	2.8
Issued on October 15, 2015		(1,335	)
Vesting of shares - Tax		(1,098	)
Forfeited		(35,457	)			$	(11.2	)
Balance outstanding as of December 31, 2015 (Successor)*		31,155		$	174.48	$	5.5
Granted on November 7, 2016 2		131,197		$	4.24	$	0.6		100% on first anniversary date
Granted on December 15, 2016 2		50,000		$	5.90	$	0.3		100% on third anniversary date
Issued on June 12, 2016		(688	)
Cancelled on December 15, 2016 3		(21,250	)			$	(1.4	)
Forfeited during 2016		(4,741	)			$	(1.4	)
Balance outstanding as of December 31, 2016		185,673		$	19.58	$	3.6

* Adjusted to give effect for the

for

reverse stock split that became effective as of the opening of trading on

August

2016.

Amortization of all restricted shares unless otherwise stated were calculated using the graded method vesting and included in the General and administrative expenses.

Amortization of above stock awards were calculated using the cliff method of vesting and included in General and administrative expenses.

The above stock awards were cancelled and concurrently new grants under the

2016

Plan (as defined herein) were issued. Therefore, the transaction was accounted for as modification as per ASC

718

“Compensation-Stock Compensation.” The incremental compensation cost was calculated as the excess of the fair value of the replacement award over the fair value of the cancelled award at the cancellation date.

	Options* *			Exercise Price **		Expir ation		Risk free interest rate			Volatility			Dividend %			Fair Value of Options on grant date		Aggregate fair value (in millions)			Expected Term and vesting conditions
Granted on October 15, 2014		33,784		$	360.00		5		1.29	%		43	%		0	%	$	5.80	$	3.92		4.75 years and 25% vesting annually over four year term
Granted on October 15, 2014		40,540		$	505.00		5		1.29	%		43	%		0	%	$	4.12	$	3.34		4.75 years and 25% vesting annually over four year term
Granted on December 2, 2014		22,523		$	360.00		5		1.51	%		44	%		0	%	$	4.26	$	1.92		4.75 years and 25% vesting annually over four year term
Granted on December 2, 2014		27,027		$	505.00		5		1.51	%		44	%		0	%	$	2.95	$	1.60		4.75 years and 25% vesting annually over four year term
Balance outstanding as of December 31, 2014 **		123,874																	$	10.78
Granted on September 29, 2015***		16,250		$	117.40		5		1.09	%		42	%		0	%	$	38.38	$	0.63		3.75 years and 25% vesting annually over four year term
Granted on September 29, 2015***		16,250		$	260.00		5		1.09	%		42	%		0	%	$	12.32	$	0.20		3.75 years and 25% vesting annually over four year term
Granted on November 15, 2015***		5,000		$	78.40		5		1.37	%		43	%		0	%	$	26.49	$	0.10		3.75 years and 25% vesting annually over four year term
Granted on November 15, 2015***		5,000		$	260.00		5		1.37	%		43	%		0	%	$	4.05	$	0.02		3.75 years and 25% vesting annually over four year term
Forfeited in 2015		(97,507	)																$	(8.89	)
Vested in 2015		(6,591	)																$	(0.47	)
Balance outstanding as of December 31, 2015 (Successor)**		62,276																	$	2.37
Forfeited in 2016		(13,038	)																$	(0.92	)
Cancelled on December 15, 2016***		(42,500	)																$	(0.67	)
Balance outstanding as of December 31, 2016		6,738																	$	0.78

* For the purposes of determining the non-cash compensation cost for the Company's stock option plan using the fair value method of ASC

718

"Compensation-Stock Compensation,” the fair value of the New Eagle MIP Options was estimated on the date of grant using the Black-Scholes option pricing model. The volatility was calculated by comparing the Company’s share price movement since emergence from bankruptcy on

October

14,

2014

and its peers’ share price movement for the past

five

years. Amortization of above stock options for the

2014

Plan was calculated using the graded method of vesting and included in General and administrative expenses

** Adjusted to give effect for the

for

reverse stock split that became effective as of the opening of trading on

August

2016.

*** The above stock options were cancelled and concurrently new grants under the

2016

Plan was issued. Therefore, the transaction was accounted for as a modification as per ASC

718

“Compensation-Stock Compensation”. The incremental compensation cost was calculated as the excess of the fair value of the replacement award over the fair value of the cancelled award at the cancellation date.

There are

6,591

options vested but not exercised as of

December

31,

2016

and

6,738

options that are not vested but are expected to vest. The fair value of vested options is insignificant.

Non-cash expense for the above stock awards and options issued under the

2014

Plan included in general and administrative expenses is as follows:

	Successor						Predecessor

	2016		2015		October 16, 2014 To December 31, 2014		January 1, 2014 To October 15, 2014
Stock awards /Stock Option Plans	$	624,099	$	3,969,989	$	2,121,505	$	1,072,383

Total non-cash compensation expense	$	624,099	$	3,969,989	$	2,121,505	$	1,072,383

November

2016,

the Company granted

233,863

shares of restricted common stock and options to purchase

280,000

shares of the Company’s common stock in connection with the appointment to the senior management. The restricted stock and option were not granted under, but are subject to, the terms of the Company’s

2014

Plan. The details of the grant are below:

	Restricted shares *		Fair value on grant date		Aggregate fair value (in millions)		Vesting Terms
Granted on November 7, 2016		233,863	$	4.24	$	1.0	100% vesting on third anniversary date

Balance outstanding as of December 31, 2016 (Successor)*		233,863	$	4.24	$	1.0

* Amortization of the above stock awards was calculated using the cliff method of vesting and included in general and administrative expenses.

	Options*		Exercise Price		Expir ation		Risk free interest rate			Volatility			Dividend %			Fair Value of Options on grant date		Aggregate fair value (in millions)		Expected term and Vesting conditions
Granted on November 7, 2016		280,000	$	4.28		5		1.10	%		61	%		0	%	$	1.91	$	0.53	3.75 years and 25% vesting annually over four year term
Balance outstanding at December 31, 2016		280,000																$	0.53

* For the purposes of determining the non-cash compensation cost for the Company's stock option plan using the fair value method of ASC

718

October

14,

2014

and its peers’ share price movement for the past

five

years. The amortization of the above stock options was calculated using the graded method of vesting and included in general and administrative expenses.

The

280,000

options disclosed above are not vested, but are expected to vest.

Non-cash compensation expense for the above stock awards and options included in General and administrative expenses:

	Successor						Predecessor

	For the year ended December 31, 2016		For the year ended December 31, 2015		October 16, 2014 To December 31, 2014		January 1, 2014 To October 15, 2014
Stock awards /Stock Option Plans	$	89,437	$	-	$	-	$	-

Total non-cash compensation expense	$	89,437	$	-	$	-	$	-

2016

Equity Compensation Plan

December

15,

2016,

the Company’s shareholders approved the

2016

Equity Compensation Plan (the

“2016

Plan”) and the Company registered

5,348,613

shares of common stock which

may

be issued under the

2016

Plan. The

2016

Plan replaced the

2014

Plan and no other awards will be granted under the

2014

Plan. Outstanding awards under the

2014

Plan will continue to be governed by the terms of the

2014

Plan until exercised, expired, otherwise terminated, or canceled. As of

December

31,

2016,

24,644

shares of common stock were subject to outstanding awards under the

2014

Plan. Under the terms of the

2016

Plan, awards for up to a maximum of

3,000,000

may

be granted under the

2016

Plan to any

one

employee of the Company and its subsidiaries during any

one

calendar year, and awards in the form of options and stock appreciation rights for up to a maximum of

3,000,000

may

be granted under the

2016

Plan. The total number of shares of common stock with respect to which awards

may

be granted under the

2016

Plan to any non-employee director during any

one

calendar year shall not exceed

500,000,

subject to adjustment as provided in the

2016

Plan. Any Director, officer, employee or consultant of the Company or any of its subsidiaries (including any prospective officer or employee) is eligible to be designated to participate in the

2016

Plan.

The following schedule represents outstanding stock awards and options granted under the

2016

Plan.

	Restricted shares*		Fair value on grant date		Aggregate fair value (in millions) **		Vesting Terms

Granted on December 15 , 2016**		760,056	$	5.90	$	4.40	100% on September 1, 2018
Granted on December 15, 2016**		233,869	$	5.90	$	1.38	100% on October 14, 2018
Balance outstanding as of December 31, 2016		993,925			$	5.78

*The above stock awards were issued concurrently with the cancellation of outstanding stock awards and options under the

2014

Plan. Therefore, the issuance was accounted for as a modification as per ASC

718

“Compensation-Stock Compensation.” The fair value is the incremental compensation cost, which was calculated as the excess of the fair value of the replacement award over the fair value of the cancelled award at the cancellation date. The amortization of the above stock awards was calculated using the cliff method of vesting and included in general and administrative expenses.

	Options*		Exercise Price		Expir ation		Risk free interest rate			Volatility			Dividend %			Fair Value of Options on grant date		Aggregate fair value (in millions) **		Expected Term and Vesting conditions

Granted on December 15, 2016		1,266,476	$	4.28		5		1.79	%		62	%		0	%	$	3.12	$	3.96		3.15 years and 25% vesting annually
Granted on December 15, 2016		389,695	$	4.28		5		1.79	%		62	%		0	%	$	3.14	$	1.21		3.15 years and 25% vesting annually
Balance outstanding as of December 31, 2016		1,656,171																$	5.17

*For the purposes of determining the non-cash compensation cost for the Company's stock option plan using the fair value method of ASC

718

October

14,

2014

and its peers’ share price movement for the past

five

years.

**The above stock options were issued concurrently with cancellation of outstanding stock awards and options under the

2014

Equity Incentive Plan. Therefore, the transaction was accounted for as a modification as per ASC

718

“Compensation-Stock Compensation.” The fair value is the incremental compensation cost, which was calculated as the excess of the fair value of the replacement award over the fair value of the cancelled award at the cancellation date. The amortization of the above stock options was calculated using the graded method of vesting and included in general and administrative expenses.

The above options are not vested as of

December

31,

2016

and are expected to vest.

Non-cash compensation expense for the above stock awards and options under the

2016

Plan included in General and administrative expenses:

	Successor						Predecessor

	December 31, 2016		December 31, 2015		October 16, 2014 To December 31, 2014		January 1, 2014 To October 15, 2014
Stock awards /Stock Option Plans	$	1,493,154	$	-	$	-	$	-

Total non-cash compensation expense	$	1,493,154	$	-	$	-	$	-

The future compensation to be recognized for all the grants issued for the years ending

December

31,

2017,

2018

and

2019

will be

$7,340,237,

$5,837,145

and

$787,924,

respectively.