AMENDMENT TO RESTRICTED STOCK UNIT AWARD AGREEMENT UNDER THE EAGLE BULK SHIPPING INC. SECOND AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN
Exhibit 10.5
Execution Version
AMENDMENT TO
RESTRICTED STOCK UNIT AWARD AGREEMENT
UNDER THE EAGLE BULK SHIPPING INC.
SECOND AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN
This Amendment (this “Amendment”) to the Restricted Stock Unit Award Agreement, dated as of April 1, 2023 (as amended, the “Award Agreement”), by and between Eagle Bulk Shipping Inc., a Republic of the Xxxxxxxx Islands company (the “Company”), and Costa Tsoutsoplides (the “Participant”), is made effective as of December 12, 2023. Capitalized terms not defined herein have the meaning ascribed thereto in the Eagle Bulk Shipping Inc. Second Amended and Restated 2016 Equity Incentive Plan (as amended or restated from time to time, the “Plan”).
WHEREAS, the Company has granted Restricted Stock Units to the Participant pursuant to the Award Agreement and the Plan;
WHEREAS, the Company has entered into that certain Agreement and Plan of Merger, dated as of December 11, 2023 (as it may be amended, the “Merger Agreement”), by and among Star Bulk Carrier Corp. (“Merger Parent”) and Star Infinity Corp. (“Merger Sub”), pursuant to which Merger Sub will be merged with and into the Company (the “Merger”) with the Company surviving such Merger as a wholly-owned subsidiary of Merger Parent;
WHEREAS, in connection with Xxxxxx’s entry into the Merger Agreement, the Administrator has determined that it is in the best interests of the Company and its shareholders to amend the terms of the Award Agreement to provide for vesting at target with respect to the TSR Performance-Vested RSUs (as defined in the Award Agreement) upon the consummation of the Merger;
WHEREAS, pursuant to, and subject to the terms of, Section 3.1(c) of the Plan, the Administrator may amend the terms of the Award Agreement; and
WHEREAS, pursuant to the Award Agreement, no amendment or modification of the Award Agreement shall be valid unless it is in writing and signed by all parties thereto.
NOW THEREFORE, in consideration for the services rendered by the Participant to the Company and the mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Amendment to Award Agreement
| a. | Section 3(b) of the Award Agreement is hereby amended by adding the following sentence to the end thereof: |
“(b) Subject to Sections 3(c) and (d) below, 1,636 of the Restricted Stock Units (the “TSR Performance-Vested RSUs”) shall vest in three (3) substantially equal installments with the first installment vesting on certification by the Administrator of the Relative TSR Performance (as defined below), and the second and third installments vesting on each of January 2, 2025, and January 2, 2026 (each, a “TSR Vesting Date”), subject
to the Participant’s continued employment with the Company or any of its Affiliates on each TSR Vesting Date; provided, that the actual number of TSR Performance-Vested RSUs that may become vested under the foregoing schedule shall be equal to the product, rounded down to the nearest whole number, of (i) the target number of TSR Performance-Vested RSUs multiplied by (ii) the TSR Percentage determined as follows:
| Relative TSR1 |
TSR Percentage | |||
| 7th vs. Competitors |
0 | % | ||
| 6th vs. Competitors |
33 | % | ||
| 5th vs. Competitors |
67 | % | ||
| 4th vs. Competitors (Target) |
100 | % | ||
| 3rd vs. Competitors |
133 | % | ||
| 2nd vs. Competitors |
167 | % | ||
| 1st vs. Competitors (Max) |
200 | % | ||
The TSR Percentage between tiers will be determined by interpolating the Company’s performance between peers ranked immediately above and below the Company’s performance level; provided, however, that the TSR Percentage shall be capped at 100% if the Company’s absolute TSR over the performance period is negative.
For purposes of this Section 3(b), “TSR” means the appreciation (depreciation) between the per share beginning price and ending price of a relevant company’s common stock for the period commencing on January 1, 2023 and ending on December 31, 2023 (the “TSR Performance Period”) on an applicable securities exchange or interdealer quotation system, plus dividends paid during the TSR Performance Period; provided that the per share beginning price shall be determined using the 20-trading-day average for the averaging period of 20 trading days beginning on the first day of the TSR Performance Period, and the per share ending price shall be determined using the 20-trading-day average for the averaging period of 20 trading days ending on the final day of the TSR Performance Period; provided further, that if for any reason a company’s common stock ceases during the TSR Performance Period to be publicly traded and is no longer listed or quoted on any securities exchange or interdealer quotation system, then the averaging period for determining the per share ending price for such company’s common stock shall be the 20 trading days ending on the final trading date for that company’s common stock.”
| 1 | Relative TSR reflects relative performance compared to the following seven direct competitors: Genco Shipping, Pacific Basin Shipping, Star Bulk Carriers, Xxxxx Shipping, Golden Ocean Group, Safe Bulkers, and Pangaea Logistics Solutions. |
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| b. | The Award Agreement is hereby amended by inserting a new Section 3(c) immediately following Section 3(b): |
“(c) Notwithstanding anything herein to the contrary and except as otherwise provided in the Employment Agreement:
| (i) | In the case of a Qualifying Termination prior to the first TSR Vesting Date, the Participant shall become vested on the first TSR Vesting Date in the number of TSR Performance-Vested RSUs that otherwise would thereon become vested based on actual Relative TSR for the TSR Performance Period. |
| (ii) | In the case of a Qualifying Termination after the first TSR Vesting Date, the Participant shall become vested in the number of TSR-Vested RSUs that would otherwise have become vested on the next applicable TSR Vesting Date, if any, following such Qualifying Termination.” |
| c. | The Award Agreement is hereby amended by inserting a new Section 3(d) immediately following Section 3(c): |
“(d) (i) Notwithstanding anything herein to the contrary and except as otherwise provided in the Employment Agreement, in the case of a Change in Control prior to the first TSR Vesting Date, the Participant shall be eligible to continue to vest upon the Change in Control in TSR Performance-Vested RSUs that would be eligible to vest based on actual TSR Performance through of the date of the Change in Control, if determinable; provided that if actual TSR Performance as of the date of the Change in Control is not determinable, the Participant shall be eligible to vest in the number of TSR Performance-Vested RSUs that otherwise would have been earned assuming TSR Percentage of 100% (i.e., Target Level achievement). Earned TSR Performance-Vested RSUs would continue to vest per their normal vesting schedule (i.e., the anniversary of grant date).
(ii) Notwithstanding the foregoing, upon the consummation of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of December 11, 2023, by and among the Company, Star Bulk Carrier Corp. and Star Infinity Corp. (the “Merger”), the performance component of the TSR Performance-Vested RSUs will vest at Target (i.e., 100%), and upon and after the Merger, the Participant shall be eligible to vest in 100% of the TSR Performance-Vested RSUs in accordance with their normal time-based vesting schedule (i.e., January 2, 2025 and January 2, 2026); provided, however, that if concurrent with or following the Merger the Participant’s employment with the Company is terminated in a Qualifying Termination, then the Participant shall become fully vested upon the date of the Qualifying Termination in 100% of the TSR Performance-Vested RSUs.”
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2. Miscellaneous.
| a. | Effect on Award Agreement. Except as specifically amended by this Amendment, the Award Agreement shall remain in full force and effect and is hereby ratified and confirmed. |
| b. | Governing Law. This Amendment shall be governed by, interpreted under, and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choices of laws, of the State of New York applicable to agreements made and to be performed wholly within the State of New York. |
| c. | Headings. Headings are used solely for the convenience of the parties and shall not be deemed to be a limitation upon or descriptive of the content of any such Section. |
| d. | Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. |
| e. | Amendments. No amendment or modification hereof shall be valid unless it shall be in writing and signed by all parties hereto. |
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.
| EAGLE BULK SHIPPING INC. | ||
| By: | /s/ Xxxx Xxxxx | |
| Name: | Xxxx Xxxxx | |
| Title: | Chief Executive Officer | |
| PARTICIPANT |
| /s/ Costa Tsoutsoplides |
| Costa Tsoutsoplides |
[Signature Page to Amendment to Restricted Stock Unit Award Agreement (Tsoutsoplides)]
