Stock Incentive Plans

2014 Management Incentive Plan

On October 15, 2014, in accordance with the Plan of Reorganization, the Company adopted the post-emergence Management Incentive Program (the “2014 Plan”), which provided 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 2% 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.

During 2018, 1,432 restricted stock awards vested and 83 restricted stock awards were forfeited. There were 50,625 unvested restricted stock awards outstanding with an average share price on grant date of $5.90 as of December 31, 2018. The restricted stock awards are expected to vest fully during 2019. The amortization of these restricted shares was calculated using the cliff method of vesting and included in general and administrative expenses in the consolidated statement of operations for the years ended December 31, 2018, 2017 and 2016.

During 2017, 133,452 restricted stock awards vested and there were 52,140 restricted stock awards outstanding with an average share price on grant date of $42.19 as of December 31, 2017.

As of December 31, 2018, there were 12,875 options vested but unexercised with exercise prices ranging from $360 to $505 and there were no unvested MIP options. The fair value of the vested options is insignificant.

There were 9,960 options vested but not exercised as of December 31, 2017 and 2,915 options that were not vested but were expected to vest. The fair value of vested options is insignificant.

On November 7, 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 of a new member to the senior management team. 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
Unvested restricted stock outstanding as of December 31, 2018 and 2017	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**		Weighted Average Exercise Price		Expiration( years)	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	%	—	%	$	1.91	$	0.53		3.75 years and 25% vesting annually over four year term
Vested during 2017	(70,000	)												$	(0.13	)
Unvested options outstanding as of December 31, 2017	210,000		$	4.28								$	1.91	$	0.40
Vested during 2018	(70,000	)												$	(0.13	)
Unvested options outstanding as of December 31, 2018	140,000		$	4.28								$	1.91	$	0.27

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

There are 140,000 options vested but not exercised and 140,000 unvested options, all of which are expected to vest as of December 31, 2018. The vested but not exercised options expire at various dates beginning November 2022 until November 2023 at an exercise price of $4.28 per share.

There were 70,000 options vested but not exercised as of December 31, 2017 and 210,000 options expected to vest.

2016 Equity Compensation Plan

On 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. Under the terms of the 2016 Plan, awards for up to a maximum of 3,000,000 shares 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 shares 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 Company withheld shares related to restricted stock awards that vested in 2018 at the fair market value equivalent to the maximum statutory withholding obligation, and remitted that amount in cash to the appropriate taxation authorities.

The following schedule represents outstanding stock awards and options granted under the 2016 Plan as of December 31, 2018.



	Restricted shares		Weighted Average 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
Unvested restricted stock outstanding as of December 31, 2016	993,925		5.90		5.78
Issued on March 1, 2017	429,750		5.47		2.35			33% vesting annually over three year term
Issued on June 1, 2017	18,000		4.64		0.08			100% vesting on third anniversary date
Forfeited during 2017	(10,750	)	5.47		$	(0.06	)
Unvested restricted stock outstanding as of December 31, 2017	1,430,925		5.70		8.15
Issued on January 4, 2018	948,500		4.71		4.47			33% vesting annually over three year term
Issued on January 10, 2018	30,000		4.81		0.10
Vested on January 10, 2018	(30,000	)	4.81		(0.10		)
Net shares vested on March 1, 2018	(90,711	)	5.47		(0.50		)
Vested on September 1, 2018	(408,143	)	5.90		(2.41		)
Vested on October 14, 2018	(130,164	)	5.90		(0.77		)
Forfeitures and cancellations due to settlement of tax liability on vested shares during 2018	(537,942	)	5.81		(3.13		)
Unvested restricted stock outstanding as of December 31, 2018	1,212,465		$	4.79	$	5.81

*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 graded method of vesting and included in general and administrative expenses.



	Options*		Weighted AverageExercise Price		Expiration (years)	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	%	—	%	$	3.12	$	3.96		3.15 years and 25% vesting annually
Granted on December 15, 2016 **	389,695		$	4.28	5	1.79	%	62	%	—	%	$	3.14	$	1.21		3.15 years and 25% vesting annually
Unvested options outstanding as of December 31, 2016	1,656,171		$	4.28										$	5.17
Issued on March 1, 2017	337,000		$	5.56	5	1.72	%	63.5	%	—	%	$	2.60	$	0.90		3.75 years and 25% vesting annually over four year term
Issued on June 1, 2017	18,000		$	4.71	5	1.56	%	64.7	%	—	%	$	2.23	$	0.04		3.75 years and 25% vesting annually over four year term
Vested during 2017	(828,085	)	$	4.28								$	3.12	$	(2.60	)
Forfeitures during 2017	(3,000	)	$	5.56								$	2.60	$	(0.08	)
Unvested options outstanding as of December 31, 2017	1,180,086		$	4.65								$	2.91	$	3.43
Vested and unexercised during 2018	(525,501	)	$	4.55								$	3.01	$	(1.60	)
Forfeitures during 2018	(1,875	)	$	5.56								$	2.60	$	(0.05	)
Exercised during 2018	(875	)	$	5.56								$	2.60	$	(0.03	)
Unvested options outstanding as of December 31, 2018	651,835		$	4.72										$	3.01

*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.

**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 included in general and administrative expenses.

There are 1,353,586 options vested but not exercised as of December 31, 2018 and 651,835 options expected to vest. The Company issues new shares upon exercise of any vested options. The vested but not exercised options expire at various dates beginning September 2022 until October 2023 at exercise prices ranging between $4.28 to $5.56 per share.

There were 828,085 options vested but not exercised as of December 31, 2017 and 1,180,086 options expected to vest.

The stock-based compensation expense for the above stock awards and options under the 2016 Plan and 2014 Plan included in General and administrative expenses:



	For the Years Ended
	December 31, 2018		December 31, 2017		December 31, 2016
Stock awards /stock option plans	$	9,207,480	$	8,738,615	$	2,206,690

Total stock-based compensation expense	$	9,207,480	$	8,738,615	$	2,206,690

The future compensation to be recognized for all the grants issued for the years ending December 31, 2019, 2020 and 2021 is estimated to be $4.7 million, $1.7 million and $0.5 million, respectively.