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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
⌧ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2025
OR
◻ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 001-33393
GENCO SHIPPING & TRADING LIMITED
(Exact name of registrant as specified in its charter)
Republic of the Marshall Islands |
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98-0439758 |
(State or other jurisdiction of |
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(I.R.S. Employer |
299 Park Avenue, 12th Floor, New York, New York 10171
(Address of principal executive offices) (Zip Code)
(646) 443-8550
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of exchange on which registered |
Common stock, par value $0.01 per share |
GNK |
New York Stock Exchange (NYSE) |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ⌧ |
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Accelerated filer ◻ |
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Non-accelerated filer ◻ |
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Smaller reporting company ☐ |
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Emerging growth company ◻ |
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If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ⌧ No ◻
The number of shares outstanding of each of the issuer’s classes of common stock, as of May 7, 2025: Common stock, par value $0.01 per share — 42,959,464 shares.
Genco Shipping & Trading Limited
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4 |
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Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 |
4 |
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Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2025 and 2024 |
5 |
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6 |
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Condensed Consolidated Statements of Equity for the Three Months ended March 31, 2025 and 2024 |
7 |
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Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2025 and 2024 |
8 |
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9 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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42 |
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43 |
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2
Website Information
We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor section. Accordingly, investors should monitor the Investor portion of our website, in addition to following our press releases, filings with the U.S. Securities and Exchange Commission (the “SEC”), public conference calls, and webcasts. To subscribe to our e-mail alert service, please submit your e-mail address at the Investor Relations Home page of the Investor section of our website. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Genco Shipping & Trading Limited
Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024
(U.S. Dollars in thousands, except for share and per share data)
(Unaudited)
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March 31, |
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December 31, |
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2025 |
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2024 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
30,243 |
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$ |
43,690 |
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Restricted cash |
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315 |
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315 |
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Due from charterers, net of a reserve of $1,706 and $1,620, respectively |
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18,211 |
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21,376 |
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Prepaid expenses and other current assets |
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9,432 |
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10,375 |
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Inventories |
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23,337 |
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22,234 |
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Total current assets |
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81,538 |
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97,990 |
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Noncurrent assets: |
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Vessels, net of accumulated depreciation of $334,881 and $322,807, respectively |
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907,212 |
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915,022 |
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Deferred drydock, net of accumulated amortization of $34,107 and $33,610, respectively |
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36,526 |
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30,048 |
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Fixed assets, net of accumulated depreciation and amortization of $10,469 and $9,811, respectively |
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7,230 |
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7,184 |
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Operating lease right-of-use assets |
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6,024 |
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6,358 |
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Total noncurrent assets |
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956,992 |
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958,612 |
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Total assets |
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$ |
1,038,530 |
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$ |
1,056,602 |
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Liabilities and Equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
39,343 |
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$ |
34,492 |
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Deferred revenue |
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5,345 |
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4,665 |
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Current operating lease liabilities |
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907 |
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1,503 |
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Total current liabilities: |
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45,595 |
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40,660 |
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Noncurrent liabilities: |
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Long-term operating lease liabilities |
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5,616 |
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5,539 |
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Long-term debt, net of deferred financing costs of $7,332 and $7,825, respectively |
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82,668 |
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82,175 |
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Total noncurrent liabilities |
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88,284 |
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87,714 |
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Total liabilities |
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133,879 |
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128,374 |
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Commitments and contingencies (Note 15) |
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Equity: |
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Common stock, par value $0.01; 500,000,000 shares authorized; 42,959,464 and 42,757,895 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively |
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429 |
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427 |
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Additional paid-in capital |
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1,479,415 |
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1,491,032 |
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Accumulated deficit |
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(576,639) |
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(564,716) |
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Total Genco Shipping & Trading Limited shareholders’ equity |
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903,205 |
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926,743 |
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Noncontrolling interest |
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1,446 |
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1,485 |
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Total equity |
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904,651 |
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928,228 |
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Total liabilities and equity |
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$ |
1,038,530 |
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$ |
1,056,602 |
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See accompanying notes to Condensed Consolidated Financial Statements.
4
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024
(U.S. Dollars in Thousands, Except for Earnings Per Share and Share Data)
(Unaudited)
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For the Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Revenues: |
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Voyage revenues |
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$ |
71,269 |
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$ |
117,435 |
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Total revenues |
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71,269 |
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117,435 |
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Operating expenses: |
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Voyage expenses |
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27,354 |
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37,200 |
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Vessel operating expenses |
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24,916 |
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25,932 |
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Charter hire expenses |
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2,285 |
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3,510 |
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General and administrative expenses (inclusive of nonvested stock amortization expense of $1,496 and $1,382, respectively) |
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7,494 |
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7,664 |
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Technical management expenses |
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1,325 |
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1,031 |
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Depreciation and amortization |
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17,665 |
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17,223 |
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Net loss on sale of vessels |
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— |
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978 |
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Other operating expense |
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— |
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1,804 |
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Total operating expenses |
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81,039 |
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95,342 |
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Operating (loss) income |
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(9,770) |
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22,093 |
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Other (expense) income: |
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Other (expense) income |
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(13) |
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66 |
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Interest income |
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370 |
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824 |
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Interest expense |
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(2,549) |
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(4,040) |
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Other expense, net |
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(2,192) |
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(3,150) |
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Net (loss) income |
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(11,962) |
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18,943 |
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Less: Net (loss) income attributable to noncontrolling interest |
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(39) |
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145 |
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Net (loss) income attributable to Genco Shipping & Trading Limited |
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$ |
(11,923) |
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$ |
18,798 |
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Net (loss) earnings per share-basic |
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$ |
(0.28) |
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$ |
0.44 |
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Net (loss) earnings per share-diluted |
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$ |
(0.28) |
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$ |
0.43 |
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Weighted average common shares outstanding-basic |
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43,201,941 |
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42,918,248 |
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Weighted average common shares outstanding-diluted |
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43,201,941 |
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43,606,580 |
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See accompanying notes to Condensed Consolidated Financial Statements.
5
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Comprehensive (Loss) Income
For the Three Months Ended March 31, 2025 and 2024
(U.S. Dollars in Thousands)
(Unaudited)
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For the Three Months Ended |
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March 31, |
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2025 |
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2024 |
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Net (loss) income |
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$ |
(11,962) |
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$ |
18,943 |
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Other comprehensive loss |
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— |
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(527) |
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Comprehensive (loss) income |
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(11,962) |
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18,416 |
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Less: Comprehensive (loss) income attributable to noncontrolling interest |
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(39) |
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145 |
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Comprehensive (loss) income attributable to Genco Shipping & Trading Limited |
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$ |
(11,923) |
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$ |
18,271 |
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See accompanying notes to Condensed Consolidated Financial Statements.
6
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Equity
For the Three Months Ended March 31, 2025 and 2024
(U.S. Dollars in Thousands)
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Genco |
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Shipping & |
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Accumulated |
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Trading |
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Additional |
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Other |
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Limited |
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Common |
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Paid-in |
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Comprehensive |
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Accumulated |
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Shareholders' |
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Noncontrolling |
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Stock |
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Capital |
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Income |
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Deficit |
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Equity |
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Interest |
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Total Equity |
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Balance — January 1, 2025 |
|
$ |
427 |
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|
1,491,032 |
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— |
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(564,716) |
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$ |
926,743 |
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$ |
1,485 |
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$ |
928,228 |
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Net loss |
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(11,923) |
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(11,923) |
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(39) |
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(11,962) |
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Issuance of shares due to vesting of RSUs and exercise of options, net of forfeitures |
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2 |
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(2) |
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— |
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— |
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Cash dividends declared ($0.30 per share) |
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(13,111) |
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(13,111) |
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(13,111) |
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Nonvested stock amortization |
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|
1,496 |
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|
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|
1,496 |
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1,496 |
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Balance — March 31, 2025 |
|
$ |
429 |
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$ |
1,479,415 |
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$ |
— |
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$ |
(576,639) |
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$ |
903,205 |
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$ |
1,446 |
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$ |
904,651 |
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Genco |
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Shipping & |
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Accumulated |
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Trading |
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Additional |
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Other |
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Limited |
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Common |
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Paid-in |
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Comprehensive |
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Accumulated |
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Shareholders' |
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Noncontrolling |
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Stock |
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Capital |
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Income |
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Deficit |
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Equity |
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Interest |
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Total Equity |
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Balance — January 1, 2024 |
|
$ |
425 |
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$ |
1,553,421 |
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$ |
527 |
|
$ |
(641,117) |
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$ |
913,256 |
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$ |
1,390 |
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$ |
914,646 |
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Net income |
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18,798 |
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18,798 |
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|
145 |
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18,943 |
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Other comprehensive loss |
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(527) |
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(527) |
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(527) |
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Issuance of shares due to vesting of RSUs and exercise of options |
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2 |
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(2) |
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|
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|
|
— |
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— |
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Cash dividends declared ($0.41 per share) |
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(17,814) |
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(17,814) |
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(17,814) |
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Nonvested stock amortization |
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|
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1,382 |
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|
|
1,382 |
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|
1,382 |
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Balance — March 31, 2024 |
|
$ |
427 |
|
$ |
1,536,987 |
|
$ |
— |
|
$ |
(622,319) |
|
$ |
915,095 |
|
$ |
1,535 |
|
$ |
916,630 |
|
See accompanying notes to Condensed Consolidated Financial Statements.
7
Genco Shipping & Trading Limited
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024
(U.S. Dollars in Thousands)
(Unaudited)
|
|
March 31, |
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||||
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|
2025 |
|
2024 |
|
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Cash flows from operating activities: |
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(11,962) |
|
$ |
18,943 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
17,665 |
|
|
17,223 |
|
Amortization of deferred financing costs |
|
|
493 |
|
|
499 |
|
Right-of-use asset amortization |
|
|
334 |
|
|
368 |
|
Amortization of nonvested stock compensation expense |
|
|
1,496 |
|
|
1,382 |
|
Net loss on sale of vessels |
|
|
— |
|
|
978 |
|
Amortization of premium on derivatives |
|
|
— |
|
|
45 |
|
Insurance proceeds for protection and indemnity claims |
|
|
5 |
|
|
117 |
|
Insurance proceeds for loss of hire claims |
|
|
6 |
|
|
— |
|
Change in assets and liabilities: |
|
|
|
|
|
|
|
Decrease (increase) in due from charterers |
|
|
3,165 |
|
|
(4,073) |
|
Decrease in prepaid expenses and other current assets |
|
|
317 |
|
|
651 |
|
Increase in inventories |
|
|
(1,103) |
|
|
(3,889) |
|
Increase in accounts payable and accrued expenses |
|
|
3,736 |
|
|
5,831 |
|
Increase (decrease) in deferred revenue |
|
|
680 |
|
|
(3,067) |
|
Decrease in operating lease liabilities |
|
|
(519) |
|
|
(563) |
|
Deferred drydock costs incurred |
|
|
(11,411) |
|
|
(2,194) |
|
Net cash provided by operating activities |
|
|
2,902 |
|
|
32,251 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
Purchase of vessels and ballast water treatment systems, including deposits |
|
|
(2,845) |
|
|
(930) |
|
Purchase of other fixed assets |
|
|
(652) |
|
|
(240) |
|
Net proceeds from sale of vessels |
|
|
— |
|
|
18,505 |
|
Insurance proceeds for hull and machinery claims |
|
|
581 |
|
|
159 |
|
Net cash (used in) provided by investing activities |
|
|
(2,916) |
|
|
17,494 |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
Repayments on the $500 Million Revolver |
|
|
— |
|
|
(30,000) |
|
Cash dividends paid |
|
|
(13,433) |
|
|
(17,885) |
|
Payment of deferred financing costs |
|
|
— |
|
|
(38) |
|
Net cash used in financing activities |
|
|
(13,433) |
|
|
(47,923) |
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
|
(13,447) |
|
|
1,822 |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
44,005 |
|
|
46,857 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
30,558 |
|
$ |
48,679 |
|
See accompanying notes to Condensed Consolidated Financial Statements.
8
Genco Shipping & Trading Limited
(U.S. Dollars in Thousands, Except Per Share and Share Data)
Notes to Condensed Consolidated Financial Statements (unaudited)
1 – GENERAL INFORMATION
The accompanying Condensed Consolidated Financial Statements include the accounts of Genco Shipping & Trading Limited (“GS&T”) and its direct and indirect subsidiaries (collectively, the “Company”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels and operates in two reportable segments, refer to Note 3 — Segment Reporting.
As of March 31, 2025, the Company’s fleet consisted of 42 drybulk vessels, including 16 Capesize drybulk vessels, 15 Ultramax drybulk vessels and 11 Supramax drybulk vessels, with an aggregate carrying capacity of approximately 4,446,000 deadweight tons (“dwt”) and an average age of approximately 12.3 years.
During September 2021, the Company and Synergy Marine Pte. Ltd. (“Synergy”), a third party, formed a joint venture, GS Shipmanagement Pte. Ltd. (“GSSM”). GSSM is owned 50% by the Company and 50% by Synergy as of March 31, 2025 and December 31, 2024, and was formed to provide ship management services to the Company’s vessels. As of March 31, 2025 and December 31, 2024, the cumulative investments GSSM received from the Company and Synergy totaled $50 and $50, respectively, which were used for expenditures directly related to the operations of GSSM.
Management has determined that GSSM qualifies as a variable interest entity, and, when aggregating the variable interest held by the Company and Synergy, the Company is the primary beneficiary as the Company has the ability to direct the activities that most significantly impact GSSM’s economic performance. Accordingly, the Company consolidates GSSM.
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and the rules and regulations of the SEC that apply to interim financial statements, including the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the disclosures and footnotes normally included in complete consolidated financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 21, 2025 (the “2024 10-K”). The accompanying Condensed Consolidated Financial Statements include the accounts of GS&T and its direct and indirect wholly-owned subsidiaries and GSSM. All intercompany accounts and transactions have been eliminated in consolidation.
In the opinion of management of the Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and operating results have been included in the statements. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2025.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include vessel valuations, impairment of vessels, the valuation of amounts due from charterers, performance claims, residual value of vessels, useful life of vessels, the fair value of time charters acquired, performance-based restricted stock units and the fair value of derivative instruments, if any. Actual results could differ from those estimates.
9
Cash, cash equivalents and restricted cash
The Company considers highly liquid investments, such as money market funds and certificates of deposit with an original maturity of three months or less at the time of purchase to be cash equivalents. Current restricted cash includes cash that is restricted pursuant to the Company’s lease agreement. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows:
|
|
March 31, |
|
December 31, |
|
||
|
|
2025 |
|
2024 |
|
||
Cash and cash equivalents |
|
$ |
30,243 |
|
$ |
43,690 |
|
Restricted cash – current |
|
|
315 |
|
|
315 |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
|
$ |
30,558 |
|
$ |
44,005 |
|
Bunker swap and forward fuel purchase agreements
From time to time, the Company may enter into fuel hedge agreements with the objective of reducing the risk of the effect of changing fuel prices. The Company has entered into bunker swap agreements and forward fuel purchase agreements. The Company’s bunker swap agreements and forward fuel purchase agreements do not qualify for hedge accounting treatment; therefore, any unrealized or realized gains and losses are recorded in the Condensed Consolidated Statements of Operations. Derivatives are Level 2 instruments in the fair value hierarchy.
During the three months ended March 31, 2025 and 2024, the Company recorded $8 and $18 of realized gains in other (expense) income. During the three months ended March 31, 2025 and 2024, the Company recorded $6 and $160 of unrealized gains in other (expense) income, respectively.
There were no bunker swap agreements and forward fuel purchase agreements in an asset position as of March 31, 2025 and December 31, 2024. The total fair value of the bunker swap agreements and forward fuel purchase agreements in a liability position as of March 31, 2025 and December 31, 2024 is $0 and $6, respectively, and are recorded in accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets.
Voyage expense recognition
In time charters and spot market-related time charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These expenses are borne by the Company during spot market voyage charters. As such, there are significantly higher voyage expenses for spot market voyage charters as compared to time charters and spot market-related time charters. There are certain other non-specified voyage expenses, such as commissions, which are typically borne by the Company. At the inception of a time charter, the Company records the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. Additionally, the Company records lower of cost and net realizable value adjustments to re-value the bunker fuel on a quarterly basis for certain time charter agreements where the inventory is subject to gains and losses. These differences in bunkers, including any lower of cost and net realizable value adjustments, resulted in a net gain of $31 and $80 during the three months ended March 31, 2025 and 2024, respectively. Additionally, voyage expenses include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement.
Net loss on sale of vessels
During the three months ended March 31, 2024, the Company recorded a net loss of $978 related primarily to the sale of the Genco Commodus. During the three months ended March 31, 2025, the Company did not complete the sale of any vessels.
10
Refer to Note 5 — Vessel Acquisitions and Dispositions for further detail regarding the sale of this vessel.
Other operating expense
Other operating expense of $1,804 recorded during the three months ended March 31, 2024 consists of costs incremental to routine expenses that were incurred related to the Company’s 2024 annual meeting held on May 23, 2024.
3 – SEGMENT REPORTING
The Company transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk vessels. The Company’s vessels regularly move between countries in international waters, over hundreds of trade routes and, as a result, the disclosure of geographic information is impracticable. The Company owns a fleet of vessels that focuses on Capesize, Ultramax and Supramax vessels. Capesize vessels represent the Company’s major bulk vessels category while Ultramax and Supramax vessels represent the Company’s minor bulk vessel category.
The Company has determined that each of its vessels are individual operating segments. The Company determined its operating segments based on how its chief operating decision maker (CODM), John C. Wobensmith, Chief Executive Officer and President, manages the business, makes operating decisions and evaluates operating performance. The CODM reviews the operating results for the Company’s fleet and also considers certain aggregate financial data for the Company’s major bulk and minor bulk vessels. The Company’s major and minor bulk vessels have similar economic characteristics as they serve the same type of customers, have similar operations and maintenance requirements, and operate in the same regulatory environment. Based on the principles of Accounting Standards Codification (“ASC”) 280 — “Segment Reporting,” the Company believes it is meaningful and informative to aggregate its operating segments into two reportable segments for the major bulk and minor bulk fleet.
With the exception of the financial statement information below that comprises the segment profit, the CODM does not evaluate any other financial statement line items on a vessel category basis, but rather on a consolidated basis. Information about the Company’s reportable segments for the three months ended March 31, 2025 and 2024 is as follows:
11
|
|
For the three months ended March 31, 2025 |
|
|||||||
|
|
Major |
|
Minor |
|
|
|
|||
|
|
Bulk |
|
Bulk |
|
Total |
|
|||
Revenues from external customers: |
|
|
|
|
|
|
|
|
|
|
Voyage revenues |
|
$ |
31,051 |
|
$ |
40,218 |
|
$ |
71,269 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
|
13,572 |
|
|
13,782 |
|
|
27,354 |
|
Charter hire expenses |
|
|
— |
|
|
2,285 |
|
|
2,285 |
|
Other income |
|
|
— |
|
|
(8) |
|
|
(8) |
|
Net voyage revenue (1) |
|
|
17,479 |
|
|
24,159 |
|
|
41,638 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses |
|
|
10,270 |
|
|
14,646 |
|
|
24,916 |
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit |
|
$ |
7,209 |
|
$ |
9,513 |
|
$ |
16,722 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to net income: |
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
|
|
|
7,494 |
|
Technical management expenses |
|
|
|
|
|
|
|
|
1,325 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
17,665 |
|
Other expense |
|
|
|
|
|
|
|
|
21 |
|
Interest income |
|
|
|
|
|
|
|
|
(370) |
|
Interest expense |
|
|
|
|
|
|
|
|
2,549 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
$ |
(11,962) |
|
|
|
For the three months ended March 31, 2024 |
|
|||||||
|
|
Major |
|
Minor |
|
|
|
|||
|
|
Bulk |
|
Bulk |
|
Total |
|
|||
Revenues from external customers: |
|
|
|
|
|
|
|
|
|
|
Voyage revenues |
|
$ |
62,022 |
|
$ |
55,413 |
|
$ |
117,435 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
|
20,588 |
|
|
16,612 |
|
|
37,200 |
|
Charter hire expenses |
|
|
— |
|
|
3,510 |
|
|
3,510 |
|
Other income |
|
|
— |
|
|
(18) |
|
|
(18) |
|
Net voyage revenue (1) |
|
|
41,434 |
|
|
35,309 |
|
|
76,743 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses |
|
|
11,225 |
|
|
14,707 |
|
|
25,932 |
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit |
|
$ |
30,209 |
|
$ |
20,602 |
|
$ |
50,811 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to net loss: |
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
|
|
|
7,664 |
|
Technical management expenses |
|
|
|
|
|
|
|
|
1,031 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
17,223 |
|
Net loss on sale of vessels |
|
|
|
|
|
|
|
|
978 |
|
Other operating expense |
|
|
|
|
|
|
|
|
1,804 |
|
Other income |
|
|
|
|
|
|
|
|
(48) |
|
Interest income |
|
|
|
|
|
|
|
|
(824) |
|
Interest expense |
|
|
|
|
|
|
|
|
4,040 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
|
$ |
18,943 |
|
(1) Net voyage revenue is used to calculate the Time Charter Equivalent ("TCE"), which is reviewed by the CODM and is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.
12
This amount includes realized gains on fuel hedges that were recorded as part of Other (expense) income on the Condensed Consolidated Statements of Operations.
4 – CASH FLOW INFORMATION
For the three months ended March 31, 2025, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $1,721 for the Purchase of vessels and ballast water treatment systems, including deposits, and $188 for the Purchase of other fixed assets. For the three months ended March 31, 2025, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expense consisting of $1,434 for Cash dividends payable.
For the three months ended March 31, 2024, the Company had non-cash investing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expenses consisting of $961 for the Purchase of vessels and ballast water treatment systems, including deposits, $678 for the Purchase of other fixed assets and $178 for the Net proceeds from sale of vessels. For the three months ended March 31, 2024, the Company had non-cash financing activities not included in the Condensed Consolidated Statement of Cash Flows for items included in Accounts payable and accrued expense consisting of $959 for Cash dividends payable.
During the three months ended March 31, 2025 and 2024, cash paid for interest was $2,072 and $4,001, respectively, which was offset by $0 and $588 received as result of the interest rate cap agreements, respectively.
During the three months ended March 31, 2025 and 2024, any cash paid for income taxes was insignificant.
All stock options exercised during the three months ended March 31, 2025 and 2024 were cashless. Refer to Note 14 — Stock-Based Compensation for further information.
On February 18, 2025, the Company granted 267,344 restricted stock units and 145,792 performance-based restricted stock units to certain individuals. The aggregate fair value of these restricted stock units and performance-based restricted stock units was $3,970 and $2,479, respectively.
On February 21, 2024, the Company granted 168,411 restricted stock units and 99,065 performance-based restricted stock units to certain individuals. The aggregate fair value of these restricted stock units and performance-based restricted stock units was $3,060 and $2,143, respectively.
Refer to Note 14 — Stock-Based Compensation for further information regarding the aforementioned grants.
Supplemental Condensed Consolidated Cash Flow information related to leases is as follows:
|
|
For the Three Months Ended |
|||||
|
|
March 31, |
|||||
|
|
2025 |
|
2024 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
613 |
|
$ |
613 |
|
13
5 – VESSEL ACQUISITIONS AND DISPOSITIONS
Vessel Acquisitions
On October 3, 2024, the Company entered into an agreement to acquire a 2016-built, 180,000 dwt Capesize vessel that was renamed the Genco Intrepid for a purchase price of $47,500. The Genco Intrepid was delivered on October 23, 2024. The Company utilized a combination of cash on hand as well as a $20,000 draw down on the $500 Million Revolver to finance the purchase.
Vessel Dispositions
On November 14, 2023, the Company entered into an agreement to sell the Genco Commodus, a 2009-built Capesize vessel, to a third party for $19,500 less a 1.0% commission payable to a third party. The sale was completed on February 7, 2024.
Additionally, on December 21, 2023, the Company entered into agreements to sell the Genco Claudius, a 2010-built Capesize vessel, to a third party for $18,500 less a 1.0% commission payable to a third party and the Genco Maximus, a 2009-built Capesize vessel, to a third party for $18,000 less a 1.0% commission payable to a third party. On February 24, 2024, the Company terminated its agreements to sell the Genco Claudius and the Genco Maximus due to the buyers’ breach of the agreements’ terms. On March 1, 2024, the Company entered into new agreements to sell the Genco Claudius and Genco Maximus to a separate unaffiliated third-party for $24,200 less a 2.0% commission payable to a third party and $22,800 less a 2.0% commission payable to a third party, respectively. The sales of the Genco Claudius and Genco Maximus were completed on April 22, 2024 and April 2, 2024, respectively.
On May 21, 2024, the Company entered into an agreement to sell the Genco Warrior, a 2005-built Supramax vessel, to a third party for $11,950 less a 3.0% commission payable to a third party. The sale was completed on July 5, 2024.
On July 16, 2024, the Company entered into an agreement to sell the Genco Hadrian, a 2008-built Capesize vessel, to a third party for $25,000 less a 2.0% commission payable to a third party. The sale was completed in October 4, 2024.
6 – NET (LOSS) EARNINGS PER SHARE
The computation of basic net (loss) earnings per share is based on the weighted-average number of common shares outstanding during the reporting period. The computation of diluted net (loss) earnings per share assumes the vesting of nonvested stock awards and the exercise of stock options (refer to Note 14 — Stock-Based Compensation), for which the assumed proceeds upon vesting are deemed to be the amount of compensation cost attributable to future services and are not yet recognized using the treasury stock method, to the extent dilutive.
There were 286,254 stock options, 324,695 performance based restricted stock units and 626,521 restricted stock units excluded from the computation of diluted net loss per share during the three months ended March 31, 2025 because they were anti-dilutive (refer to Note 14 — Stock-Based Compensation).
14
The components of the denominator for the calculation of basic and diluted net (loss) earnings per share are as follows:
|
|
For the Three Months Ended |
|
||
|
|
March 31, |
|
||
|
|
2025 |
|
2024 |
|
|
|
|
|
|
|
Common shares outstanding, basic: |
|
|
|
|
|
Weighted-average common shares outstanding, basic |
|
43,201,941 |
|
42,918,248 |
|
|
|
|
|
|
|
Common shares outstanding, diluted: |
|
|
|
|
|
Weighted-average common shares outstanding, basic |
|
43,201,941 |
|
42,918,248 |
|
|
|
|
|
|
|
Dilutive effect of stock options |
|
— |
|
200,531 |
|
|
|
|
|
|
|
Dilutive effect of performance-based restricted stock units |
|
— |
|
162,735 |
|
|
|
|
|
|
|
Dilutive effect of restricted stock units |
|
— |
|
325,066 |
|
|
|
|
|
|
|
Weighted-average common shares outstanding, diluted |
|
43,201,941 |
|
43,606,580 |
|
7 – RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2025 and 2024, the Company did not have any related party transactions.
8 – DEBT
Long-term debt, net consists of the following:
|
|
March 31, |
|
December 31, |
|
||
|
|
2025 |
|
2024 |
|
||
Principal amount |
|
$ |
90,000 |
|
$ |
90,000 |
|
Less: Unamortized deferred financing costs |
|
|
(7,332) |
|
|
(7,825) |
|
Less: Current portion |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
Long-term debt, net |
|
$ |
82,668 |
|
$ |
82,175 |
|
$500 Million Revolver
On November 29, 2023, the Company entered into a fourth amendment to amend, extend and upsize its existing credit facility at the time. The amended structure consists of a $500 million revolving credit facility, which can be utilized to support growth of the Company’s asset base as well as general corporate purposes (the “$500 Million Revolver”). The maturity date of the $500 Million Revolver is November 29, 2028.
As of March 31, 2025, there was $323,523 availability under the $500 Million Revolver. Total debt repayments of $0 and $30,000 were made during the three months ended March 31, 2025 and 2024, respectively, under the $500 Million Revolver.
As of March 31, 2025, the Company was in compliance with all of the financial covenants under the $500 Million Revolver.
15
Interest rates
The following table sets forth the effective interest rate associated with the interest expense for the Company’s debt facility noted above, including the cost associated with unused commitment fees, if applicable. The effective interest rate below does not include the effect of any interest rate cap agreements. The following table also includes the range of interest rates on the debt, excluding the impact of unused commitment fees and any interest rate cap agreements, if applicable:
|
|
For the Three Months Ended |
|||
|
|
March 31, |
|||
|
|
2025 |
|
2024 |
|
Effective Interest Rate |
|
9.14 |
% |
8.35 |
% |
Range of Interest Rates (excluding unused commitment fees) |
|
6.21 % to 6.24 |
% |
7.18 % to 7.21 |
% |
9 – DERIVATIVE INSTRUMENTS
The Company is exposed to interest rate risk on its floating rate debt. The Company had one $50,000 interest interest rate cap agreement outstanding to manage interest costs and the risk associated with variable interest rates which expired on March 28, 2024, therefore as of March 31, 2025, the Company no longer has any interest rate cap agreements. The interest rate cap agreement was initially designated and qualified as a cash flow hedge. The premium paid was recognized in income on a rational basis, and all changes in the fair value of the caps were deferred in Accumulated other comprehensive income (“AOCI”) and were subsequently reclassified into Interest expense in the period when the hedged interest affected earnings.
The Company recorded a $527 unrealized loss for the three months ended March 31, 2024 in AOCI. There is no remaining AOCI as of March 31, 2025 and December 31, 2024.
The Effect of Cash Flow Hedge Accounting on the Statements of Operations |
|
||||||
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, |
|
||||
|
|
2025 |
|
2024 |
|
||
|
|
Interest Expense |
|
Interest Expense |
|
||
Total amounts of income and expense line items presented in the statements of operations in which the effects of cash flow hedges are recorded |
|
$ |
— |
|
$ |
4,040 |
|
|
|
|
|
|
|
|
|
The effects of cash flow hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20: |
|
|
|
|
|
|
|
Interest contracts: |
|
|
|
|
|
|
|
Amount of loss reclassified from AOCI to income |
|
$ |
— |
|
$ |
(568) |
|
Premium excluded and recognized on an amortized basis |
|
|
— |
|
|
18 |
|
Amount of gain or (loss) reclassified from AOCI to income as a result that a forecasted transaction is no longer probable of occurring |
|
|
— |
|
|
— |
|
16
10 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values and carrying values of the Company’s financial instruments as of March 31, 2025 and December 31, 2024 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.
|
|
March 31, 2025 |
|
December 31, 2024 |
|
||||||||
|
|
Carrying |
|
|
|
|
Carrying |
|
|
|
|
||
|
|
Value |
|
Fair Value |
|
Value |
|
Fair Value |
|
||||
Cash and cash equivalents |
|
$ |
30,243 |
|
$ |
30,243 |
|
$ |
43,690 |
|
$ |
43,690 |
|
Restricted cash |
|
|
315 |
|
|
315 |
|
|
315 |
|
|
315 |
|
Principal amount of floating rate debt |
|
|
90,000 |
|
|
90,000 |
|
|
90,000 |
|
|
90,000 |
|
The carrying value of the borrowings under the $500 Million Revolver as of March 31, 2025 and December 31, 2024, which excludes the impact of deferred financing costs, approximate their fair value due to the variable interest nature thereof as this credit facility represents a floating rate loan. The carrying amounts of the Company’s other financial instruments as of March 31, 2025 and December 31, 2024 (principally Due from charterers and Accounts payable and accrued expenses) approximate fair values because of the relatively short maturity of these instruments.
ASC Subtopic 820-10, “Fair Value Measurements & Disclosures” (“ASC 820-10”), applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumption (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment. The three levels are defined as follows:
| ● | Level 1—Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment. |
| ● | Level 2—Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
| ● | Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Cash and cash equivalents and restricted cash are considered Level 1 items, as they represent liquid assets with short-term maturities. Floating rate debt is considered to be a Level 2 item, as the Company considers the estimate of rates it could obtain for similar debt or based upon transactions amongst third parties. Interest rate cap agreements, bunker swap agreements and forward fuel purchase agreements are considered to be Level 2 items. Refer to Note 9 — Derivative Instruments and Note 2 — Summary of Significant Accounting Policies, respectively, for further information. Nonrecurring fair value measurements include vessel impairment assessments completed during the interim period and at year-end as determined based on third-party quotes, which are based on various data points, including comparable sales of similar vessels, which are Level 2 inputs. There was no vessel impairment recorded during the three months ended March 31, 2025 and 2024.
The fair value determination for the operating lease right-of-use assets is based on third party quotes, which is considered a Level 2 input. Nonrecurring fair value measurements may include impairment tests of the Company’s operating lease right-of-use assets if there are indicators of impairments. During the three months ended March 31, 2025 and 2024, there were no indicators of impairment of the operating lease right-of-use assets.
The Company did not have any Level 3 financial assets or liabilities as of March 3, 2025 and December 31, 2024.
17
11 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
|
|
March 31, |
|
December 31, |
|
||
|
|
2025 |
|
2024 |
|
||
Accounts payable |
|
$ |
16,407 |
|
$ |
17,480 |
|
Accrued general and administrative expenses |
|
|
4,306 |
|
|
7,810 |
|
Accrued vessel operating expenses |
|
|
18,630 |
|
|
9,202 |
|
Total accounts payable and accrued expenses |
|
$ |
39,343 |
|
$ |
34,492 |
|
12 – VOYAGE REVENUES
Total voyage revenues include revenue earned on fixed rate time charters, spot market voyage charters and spot market-related time charters, as well as the sale of bunkers consumed during short-term time charters. For the three months ended March 31, 2025 and 2024, the Company earned $71,269 and $117,435 of voyage revenues, respectively.
Total voyage revenues recognized in the Condensed Consolidated Statements of Operations includes the following:
|
|
For the Three Months Ended |
||||
|
|
March 31, |
||||
|
|
2025 |
|
2024 |
||
Lease revenue |
|
$ |
32,336 |
|
$ |
43,182 |
Spot market voyage revenue |
|
|
38,933 |
|
|
74,253 |
Total voyage revenues |
|
$ |
71,269 |
|
$ |
117,435 |
13 – LEASES
On October 14, 2024, the Company entered into a lease agreement to extend its current lease agreement for its main office space in New York, New York which will commence on October 1, 2025 until July 31, 2036. The lease agreement is for only the space currently occupied by the Company and the portion of the current lease that is currently being sublet will still expire on September 30, 2025. There is a free base rental period until August 2027. Following the expiration of the free base rental period, the monthly base rental payments will be $70 until July 2031 and $74 thereafter. For accounting purposes, this lease agreement constitutes a lease modification and the Company revalued the lease liability and right-of-use asset on October 14, 2024.
On June 14, 2019, the Company entered into a sublease agreement for a portion of the leased space for its main office in New York, New York that commenced on July 26, 2019 and will end on September 29, 2025. There was $306 of sublease income recorded during the three months ended March 31, 2025 and 2024. Sublease income is recorded net with the total operating lease costs in General and administrative expenses in the Condensed Consolidated Statements of Operations.
The Company charters in third-party vessels and the Company is the lessee in these agreements under ASC 842, “Leases (Topic 842)” (“ASC 842”) . The Company has elected the practical expedient under ASC 842 to not recognize right-of-use assets and lease liabilities for short-term leases. During the three months ended March 31, 2025 and 2024, all charter-in agreements for third-party vessels were less than twelve months and considered short-term leases.
18
14 – STOCK-BASED COMPENSATION
2015 Equity Incentive Plan
Stock Options
The following table summarizes the stock option activity for the three months ended March 31, 2025:
|
|
|
|
Weighted |
|
Weighted |
|
|
||
|
|
Number |
|
Average |
|
Average |
|
|
||
|
|
of |
|
Exercise |
|
Fair |
|
|
||
|
|
Options |
|
Price |
|
Value |
|
|
||
Outstanding as of January 1, 2025 |
|
302,945 |
|
$ |
7.91 |
|
$ |
2.76 |
|
|
Granted |
|
— |
|
|
— |
|
|
— |
|
|
Exercised |
|
(16,691) |
|
|
8.07 |
|
|
3.76 |
|
|
Forfeited |
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of March 31, 2025 |
|
286,254 |
|
$ |
7.91 |
|
|
2.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable as of March 31, 2025 |
|
286,254 |
|
$ |
7.91 |
|
$ |
2.70 |
|
|
The following table summarizes certain information about the options outstanding as of March 31, 2025:
|
|
|
Options Outstanding and Unvested, |
|
Options Outstanding and Exercisable, |
|
||||||||||
|
|
|
March 31, 2025 |
|
March 31, 2025 |
|
||||||||||
Weighted |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Weighted |
|
|
Average |
|
|
|
Weighted |
|
Average |
|
|
|
Weighted |
|
Average |
|
|||
Exercise Price of |
|
|
|
Average |
|
Remaining |
|
|
|
Average |
|
Remaining |
|
|||
Outstanding |
|
Number of |
|
Exercise |
|
Contractual |
|
Number of |
|
Exercise |
|
Contractual |
|
|||
Options |
|
Options |
|
Price |
|
Life |
|
Options |
|
Price |
|
Life |
|
|||
$ |
7.91 |
|
— |
|
$ |
— |
|
— |
|
286,254 |
|
$ |
7.91 |
|
1.20 |
|
As of March 31, 2025 and December 31, 2024, a total of 286,254 and 302,945 stock options were outstanding, respectively.
There was no remaining unamortized stock-based compensation as of March 31, 2025.
For the three months ended March 31, 2025 and 2024, the Company recognized amortization expense of the fair value of its stock options, which is included in General and administrative expenses, as follows:
|
|
For the Three Months Ended |
|
||||
|
|
March 31, |
|
||||
|
|
2025 |
|
2024 |
|
||
General and administrative expenses |
|
$ |
— |
|
$ |
6 |
|
Restricted Stock Units
The Company has granted restricted stock units (“RSUs”) under the Company’s 2015 Equity Incentive Plan, as amended (the “2015 Plan”), to certain members of the Board of Directors and certain executives and employees of the Company, 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. As of March 31, 2025 and December 31, 2024, 1,175,377 and 980,966 shares of the Company’s common stock were outstanding in respect of the RSUs, respectively.
19
Such shares will only be issued in respect to vested RSUs issued to directors when the director’s service with the Company as a director terminates. Such shares of common stock will only be issued to executives and employees when their RSUs vest under the terms of their grant agreements and the 2015 Plan.
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. In lieu of cash dividends issued for vested and nonvested shares held by certain members of the Board of Directors, the Company will grant additional vested and nonvested RSUs, respectively, which are calculated by dividing the amount of the dividend by the closing price per share of the Company’s common stock on the dividend payment date and will have the same terms as other RSUs issued to members of the Board of Directors. The RSUs that have been issued to other individuals vest in equal installments on each of the anniversaries of the determined vesting date, over the three or five year vesting periods, as applicable.
The table below summarizes the Company’s unvested RSUs for the three months ended March 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
Number of |
|
Average Grant |
|
|
|
|
RSUs |
|
Date Price |
|
|
Outstanding as of January 1, 2025 |
|
554,686 |
|
$ |
17.65 |
|
Granted |
|
275,765 |
|
|
14.82 |
|
Vested |
|
(201,964) |
|
|
17.48 |
|
Forfeited |
|
(1,966) |
|
|
16.96 |
|
|
|
|
|
|
|
|
Outstanding as of March 31, 2025 |
|
626,521 |
|
$ |
16.46 |
|
The total fair value of the RSUs that vested during the three months ended March 31, 2025 and 2024 was $2,855 and $3,410, 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 following table summarizes certain information of the RSUs unvested and vested as of March 31, 2025:
Unvested RSUs |
|
Vested RSUs |
|
||||||||
March 31, 2025 |
|
March 31, 2025 |
|
||||||||
|
|
|
|
Weighted |
|
|
|
|
|
||
|
|
Weighted |
|
Average |
|
|
|
Weighted |
|
||
|
|
Average |
|
Remaining |
|
|
|
Average |
|
||
Number of |
|
Grant Date |
|
Contractual |
|
Number of |
|
Grant Date |
|
||
RSUs |
|
Price |
|
Life |
|
RSUs |
|
Price |
|
||
626,521 |
|
$ |
16.46 |
|
1.58 |
|
370,377 |
|
$ |
13.06 |
|
The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures. As of March 31, 2025, unrecognized compensation cost of $6,197 related to RSUs will be recognized over a weighted-average period of 1.58 years.
For the three months ended March 31, 2025 and 2024, the Company recognized nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses as follows:
|
|
For the Three Months Ended |
|
||||
|
|
March 31, |
|
||||
|
|
2025 |
|
2024 |
|
||
General and administrative expenses |
|
$ |
1,219 |
|
$ |
1,154 |
|
20
Performance-Based Restricted Stock Units
The Company has granted performance-based restricted stock units (“PRSUs”) under the 2015 Plan to certain employees of the Company, some of which are contingent upon the Company’s relative total shareholder return (“TSR”) and some of which are contingent upon the Company’s return on invested capital (“ROIC”) for a three-year performance period ending December 31, 2025, December 31, 2026 and December 31, 2027.
The TSR is calculated based on the Company’s total shareholder return compared to that of certain peer companies specified in the award agreements over the performance period and is calculated based on the change in the average daily closing stock price over a 20 trading-day period from the beginning to the end of the performance period, including reinvested dividends. The total quantity of PRSUs eligible to vest under these awards range from zero to 200% of the target based on actual relative TSR performance during the performance period. The grant date fair value of the TSR awards was estimated using a Monte Carlo simulation model. Compensation for these awards, which are subject to market conditions, is being amortized over the service period.
The grant date fair value of the ROIC awards was estimated using the closing share price of the Company’s stock on the date of grant. The total quantity of PRSUs eligible to vest under these awards range from zero to 200% of the target based on actual ROIC performance during the performance period. As such, ROIC awards are subject to performance conditions and compensation cost is recognized over the service period based on the amount of awards that the Company believes is probable that will vest. To the extent the Company’s estimate changes, the Company will recognize a cumulative catch up in subsequent reporting periods.
The table below summarizes the Company’s unvested PRSUs for the three months ended March 31, 2025:
|
|
Number of |
|
|
PRSUs |
Outstanding as of January 1, 2025 |
|
178,903 |
Granted |
|
145,792 |
Vested |
|
— |
Forfeited |
|
— |
|
|
|
Outstanding as of March 31, 2025 |
|
324,695 |
The PRSUs, if earned, will ordinarily vest during the first quarter after the three-year performance period and the recipient will receive a share of common stock for each earned PRSU. If 100% of the target metric is achieved, the recipient will earn 100% of the target amount of the PRSUs originally granted. However, based on actual performance, the number of PRSUs earned will change based on the ranges described above. As of March 31, 2025 unrecognized compensation cost of $4,055 related to PRSUs will be recognized over a weighted-average period of 1.96 years.
Significant inputs used in the estimation of the fair value of these awards outstanding as of March 31, 2025 and December 31, 2024 are as follows:
Significant Input |
|
March 31, 2025 |
|
December 31, 2024 |
|
Closing share price of our common stock |
|
$14.36 to $18.17 |
|
$14.36 to $18.17 |
|
Risk-free rate of return |
|
3.81% to 4.38% |
|
3.81% to 4.38% |
|
Expected volatility of our common stock |
|
38.99% to 54.53% |
|
48.34% to 54.53% |
|
Holding period discount |
|
0% |
|
0% |
|
Simulation term (in years) |
|
2.54 to 2.86 |
|
2.54 to 2.86 |
|
Range of target |
|
0% to 200% |
|
0% to 200% |
|
For the three months ended March 31, 2025 and 2024, the Company recognized nonvested stock amortization expense for the PRSUs, which is included in General and administrative expenses as follows:
21
|
|
For the Three Months Ended |
|
||||
|
|
March 31, |
|
||||
|
|
2025 |
|
2024 |
|
||
General and administrative expenses |
|
$ |
277 |
|
$ |
222 |
|
15 – LEGAL PROCEEDINGS
From time to time, the Company may be subject to other legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any such legal proceedings or claims that it believes will have, individually or in the aggregate, a material effect on the Company, its financial condition, results of operations or cash flows.
16 – SUBSEQUENT EVENTS
On May 7, 2025, the Company announced a regular quarterly dividend of $0.15 per share to be paid on or about May 30, 2025 to shareholders of record as of May 22, 2025. The aggregate amount of the dividend is expected to be approximately $6.6 million based on the number of shares currently outstanding, and the Company anticipates funding the dividend from cash on hand at the time the payment is to be made.
On May 5, 2025, the Board of Directors approved a $50,000 share repurchase program. Pursuant to the authorized program, the Company may repurchase up to $50,000 of its shares. This program may be suspended or discontinued at any time and does not obligate the Company to acquire any amount of common stock. The Company’s potential share repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions or in block trades, depending on market conditions and in accordance with applicable rules and regulations. The Board of Directors will periodically review the share repurchase program and may authorize adjustment of its terms and size.
22
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
This report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as “anticipate,” “budget”, “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. These forward-looking statements are based on our management’s current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) weakness or declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance, general and administrative expenses, and management expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy, including without limitation the ongoing war in Ukraine, the Israel-Hamas war, and attacks on vessels in the Red Sea; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete maintenance, repairs, and installation of equipment to comply with applicable regulations on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results are affected by weakness in market conditions and freight and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xvii) completion of documentation for vessel transactions and the performance of the terms thereof by buyers or sellers of vessels and us; (xviii) the relative cost and availability of low sulfur and high sulfur fuel, worldwide compliance with sulfur emissions regulations that took effect on January 1, 2020 and our ability to realize the economic benefits or recover the cost of the scrubbers we have installed; (xix) our financial results for the year ending December 31, 2024 and other factors relating to determination of the tax treatment of dividends we have declared; (xx) the financial results we achieve for each quarter that apply to the formula under our dividend policy, including without limitation the actual amounts earned by our vessels and the amounts of various expenses we incur, as a significant decrease in such earnings or a significant increase in such expenses may affect our ability to carry out our new value strategy; (xxi) the exercise of the discretion of our Board regarding the declaration of dividends, including without limitation the amount that our Board determines to set aside for reserves under our dividend policy; (xxii) outbreaks of disease such as the COVID-19 pandemic; (xxiii) trade conflicts and the imposition of port fees, tariffs and other import restrictions; and (xxiv) other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent reports on Form 8-K and Form 10-Q. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance, market developments, and the best interests of the Company and its shareholders. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves. As a result, the amount of dividends actually paid may vary. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The following management’s discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes included in this Form 10-Q.
23
General
We are a New York City-based drybulk ship owning company incorporated in the Marshall Islands that transports iron ore, coal, grain, bauxite, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk vessels. Our fleet currently consists of 42 drybulk vessels, including 16 Capesize, 15 Ultramax and 11 Supramax vessels, with an aggregate carrying capacity of approximately 4,446,000 deadweight tons (“dwt”) and an average age of approximately 12.4 years. We seek to deploy our vessels on time charters, spot market voyage charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers.
See pages 31 - 32 for a table of our current fleet.
Our approach towards fleet composition is to own a high-quality fleet of vessels focused on Capesize, Ultramax and Supramax vessels. Capesize vessels represent our major bulk vessel category, while Ultramax and Supramax vessels represent our minor bulk vessel category. Our major bulk vessels are primarily used to transport iron ore, coal and bauxite, while our minor bulk vessels are primarily used to transport grains, steel products and other drybulk cargoes such as cement, scrap, fertilizer, nickel ore, salt and sugar. This approach of owning ships that transport both major and minor bulk commodities provide us with exposure to a wide range of drybulk trade flows. We employ an active commercial strategy which consists of a global team located in the U.S., Denmark and Singapore. Overall, we utilize a portfolio approach to revenue generation through a combination of short-term, spot market employment, index-linked time charters as well as opportunistically booking longer term fixed-rate coverage. Our fleet deployment strategy currently is weighted towards short-term fixtures, which provides us with optionality on our sizeable fleet. However, depending on market conditions, we may seek to enter into additional longer-term time charters or contracts of affreightment. In addition to both short- and long-term time charters, we fix our vessels on spot market voyage charters as well as spot market-related time charters depending on market conditions and management’s outlook.
Our approach to capital allocation, through our comprehensive value strategy, focuses on three key factors:
| ● | Compelling quarterly dividends, |
| ● | Financial deleveraging, and |
| ● | Accretive growth of our fleet |
Since 2021, we have executed this strategy by reducing our debt by $359.2 million cumulatively through March 31, 2025 while expanding our core Capesize and Ultramax fleet. This has resulted in a debt balance of $90.0 million as of March 31, 2025, an 80% reduction from January 1, 2021 levels. These actions have enabled us to further reduce our cash flow breakeven rate positioning us to pay sizeable quarterly dividends across diverse market environments.
In addition to the $30.6 million of cash on our balance sheet as of March 31, 2025, we currently have undrawn revolver availability of $323.5 million, bringing our current total liquidity to $354.1 million.
Furthermore, including the $0.15 dividend for the first quarter of 2025, we have declared 23 consecutive dividends, which total $6.765 per share.
IMO 2023 Compliance Requirements
The International Maritime Organization (“IMO”) implemented two key measures to enhance energy efficiency in international shipping with effect from January 2023 which are as follows:
| ● | Energy Efficiency Existing Ship Index (“EEXI”): Requires vessels of 400 gross tonnage and above which were already in operation at the time the regulation entered force to meet specific minimum energy efficiency standards. |
24
| ● | Carbon Intensity Indicator (“CII”): Mandates ships of 5,000 gross tonnage and above to annually report their carbon intensity against a gradually more stringent target trajectory. Vessels receive ratings from A (best) to E (worst) and must implement corrective action plans if poorly rated. |
Revised IMO GHG Strategy
In July 2023, the IMO adopted an updated greenhouse gas strategy, setting forth the following targets:
| ● | Reduce total annual GHG emissions from shipping by at least 20%, striving for 30%, by 2030 compared to 2008 levels |
| ● | Achieve at least a 70% reduction, striving for 80%, by 2040 |
| ● | Reach net-zero GHG emissions by around 2050. |
IMO Net-Zero Framework
At its 83rd session in April 2025, the IMO’s Marine Environment Protection Committee (MEPC) approved draft regulations forming the IMO Net-Zero Framework. The measures are scheduled for formal adoption in October 2025 and entry into force in March 2027. Key components include:
| ● | A new global fuel standard for ships, establishing a phased reduction in the carbon intensity of marine fuels calculated on a “well-to-wake” basis. |
| ● | A global pricing mechanism for GHG emissions that aims to reduce the cost gap between conventional and zero or near-zero GHG emission fuels through a two-tier compliance system where vessels exceeding the gradually more stringent emission limits will pay fees into a Net-Zero Fund established by the IMO. |
These regulations are subject to change prior to formal adoption in October 2025. If the regulations are adopted in current form, any vessel consuming conventional fossil fuels would be required to transfer surplus credits from over-compliant vessels, purchase remedial credits through contributions to the Net-Zero Fund, or both to clear its compliance deficit.
Vessel Acquisitions and Sales
Acquisitions
On October 3, 2024, we entered into an agreement to acquire the Genco Intrepid, a 2016-built, 180,000 dwt Capesize vessel, for a purchase price of $47.5 million. The vessel was delivered on October 23, 2024. We drew down $20 million on our $500 Million Revolver during the fourth quarter of 2024 and utilized cash on hand to finance the purchase.
Sales
In order to opportunistically renew our fleet, we agreed to divest three older, less fuel efficient vessels with their third special survey due in 2024. During the fourth quarter of 2023, we entered into agreements to sell three of our Capesize vessels, the Genco Commodus, the Genco Claudius and the Genco Maximus. The sale of these vessels were completed on February 7, 2024, April 22, 2024 and April 2, 2024, respectively.
Additionally, on May 21, 2024, we entered into an agreement to sell the Genco Warrior, a 2005-built Supramax vessel, for $11.95 million less a 3.0% commission payable to a third-party and the sale was completed on July 5, 2024. Also, on July 16, 2024, we entered into an agreement to sell the Genco Hadrian, a 2008-built Capesize vessel, for $25.0 million less a 2.0% commission payable to a third-party and the sale was completed on October 4, 2024.
We will continue to seek opportunities to renew our fleet going forward.
25
Our Operations
Our major and minor bulk vessels have similar economic characteristics as they serve the same type of customers, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Therefore, we have determined that each of our vessels are individual operating segments. We believe it is meaningful and informative to aggregate our operating segments into two reportable segments for the major bulk and minor bulk fleet.
Our management team and key employees are responsible for the commercial and strategic management of our fleet. Commercial management includes the negotiation of charters for vessels, managing the mix of various types of charters, such as time charters, spot market voyage charters and spot market-related time charters, and monitoring the performance of our vessels under their charters. Strategic management includes locating, purchasing, financing and selling vessels. Technical management involves the day-to-day management of vessels, including performing routine maintenance, attending to vessel operations and arranging for crews and supplies. Our technical management joint venture, GS Shipmanagement Pte. Ltd. (“GSSM”), and Synergy Marine Pte. Ltd. currently provide the technical management to the vessels in our fleet and members of our New York City-based management team oversee their activities.
26
Factors Affecting Our Results of Operations
We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, chartered-in days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the three months ended March 31, 2025 and 2024 on a consolidated basis.
|
|
For the Three Months Ended |
|
|
|
|
|
|
||||
|
|
March 31, |
|
Increase |
|
|
|
|||||
|
|
2025 |
|
2024 |
|
(Decrease) |
|
% Change |
|
|||
Fleet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
Ownership days (1) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
|
1,440.0 |
|
|
1,675.4 |
|
|
(235.4) |
|
(14.1) |
% |
Panamax |
|
|
— |
|
|
— |
|
|
— |
|
— |
% |
Ultramax |
|
|
1,350.0 |
|
|
1,365.0 |
|
|
(15.0) |
|
(1.1) |
% |
Supramax |
|
|
990.0 |
|
|
1,092.0 |
|
|
(102.0) |
|
(9.3) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
3,780.0 |
|
|
4,132.4 |
|
|
(352.4) |
|
(8.5) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Chartered-in days (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
|
— |
|
|
— |
|
|
— |
|
— |
% |
Panamax |
|
|
— |
|
|
25.9 |
|
|
(25.9) |
|
(100.0) |
% |
Ultramax |
|
|
130.7 |
|
|
87.6 |
|
|
43.1 |
|
49.2 |
% |
Supramax |
|
|
142.7 |
|
|
82.3 |
|
|
60.4 |
|
73.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
273.4 |
|
|
195.8 |
|
|
77.6 |
|
39.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Available days (owned & chartered-in fleet) (3) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
|
1,338.5 |
|
|
1,618.5 |
|
|
(280.0) |
|
(17.3) |
% |
Panamax |
|
|
— |
|
|
25.9 |
|
|
(25.9) |
|
(100.0) |
% |
Ultramax |
|
|
1,442.9 |
|
|
1,410.2 |
|
|
32.7 |
|
2.3 |
% |
Supramax |
|
|
995.7 |
|
|
1,134.3 |
|
|
(138.6) |
|
(12.2) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
3,777.1 |
|
|
4,188.9 |
|
|
(411.8) |
|
(9.8) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Available days (owned fleet) (4) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
|
1,338.5 |
|
|
1,618.5 |
|
|
(280.0) |
|
(17.3) |
% |
Panamax |
|
|
— |
|
|
— |
|
|
— |
|
— |
% |
Ultramax |
|
|
1,312.2 |
|
|
1,322.6 |
|
|
(10.4) |
|
(0.8) |
% |
Supramax |
|
|
853.0 |
|
|
1,052.0 |
|
|
(199.0) |
|
(18.9) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
3,503.7 |
|
|
3,993.1 |
|
|
(489.4) |
|
(12.3) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating days (5) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
|
1,307.1 |
|
|
1,572.8 |
|
|
(265.7) |
|
(16.9) |
% |
Panamax |
|
|
— |
|
|
25.9 |
|
|
(25.9) |
|
(100.0) |
% |
Ultramax |
|
|
1,432.4 |
|
|
1,393.1 |
|
|
39.3 |
|
2.8 |
% |
Supramax |
|
|
992.4 |
|
|
1,122.7 |
|
|
(130.3) |
|
(11.6) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
3,731.9 |
|
|
4,114.5 |
|
|
(382.6) |
|
(9.3) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet utilization (6) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
|
96.3 |
% |
|
93.9 |
% |
|
2.4 |
% |
2.6 |
% |
Panamax |
|
|
— |
% |
|
100.0 |
% |
|
(100.0) |
% |
(100.0) |
% |
Ultramax |
|
|
99.1 |
% |
|
98.1 |
% |
|
1.0 |
% |
1.0 |
% |
Supramax |
|
|
98.7 |
% |
|
97.3 |
% |
|
1.4 |
% |
1.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet average |
|
|
98.0 |
% |
|
96.2 |
% |
|
1.8 |
% |
1.9 |
% |
27
|
|
For the Three Months Ended |
|
|
|
|
|
|
||||
|
|
March 31, |
|
Increase |
|
|
|
|||||
|
|
2025 |
|
2024 |
|
(Decrease) |
|
% Change |
|
|||
Average Daily Results: |
|
|
|
|
|
|
|
|
|
|
|
|
Time Charter Equivalent (7) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
$ |
13,059 |
|
$ |
25,601 |
|
$ |
(12,542) |
|
(49.0) |
% |
Panamax |
|
|
— |
|
|
— |
|
|
— |
|
— |
% |
Ultramax |
|
|
12,039 |
|
|
14,572 |
|
|
(2,533) |
|
(17.4) |
% |
Supramax |
|
|
9,804 |
|
|
15,339 |
|
|
(5,535) |
|
(36.1) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet average |
|
|
11,884 |
|
|
19,219 |
|
|
(7,335) |
|
(38.2) |
% |
Major bulk vessels |
|
|
13,059 |
|
|
25,601 |
|
|
(12,542) |
|
(49.0) |
% |
Minor bulk vessels |
|
|
11,158 |
|
|
14,871 |
|
|
(3,713) |
|
(25.0) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily vessel operating expenses (8) |
|
|
|
|
|
|
|
|
|
|
|
|
Capesize |
|
$ |
7,132 |
|
$ |
6,700 |
|
$ |
432 |
|
6.4 |
% |
Panamax |
|
|
— |
|
|
— |
|
|
— |
|
— |
% |
Ultramax |
|
|
6,046 |
|
|
5,915 |
|
|
131 |
|
2.2 |
% |
Supramax |
|
|
6,550 |
|
|
6,074 |
|
|
476 |
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet average |
|
|
6,592 |
|
|
6,275 |
|
|
317 |
|
5.1 |
% |
Definitions
In order to understand our discussion of our results of operations, it is important to understand the meaning of the following terms used in our analysis and the factors that influence our results of operations.
(1) Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
(2) Chartered-in days. We define chartered-in days as the aggregate number of days in a period during which we chartered-in third-party vessels.
(3) Available days (owned and chartered-in fleet). We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to familiarization upon acquisition, repairs or repairs under guarantee, vessel upgrades or special surveys. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
(4) Available days (owned fleet). We define available days for the owned fleet as available days less chartered-in days.
(5) Operating days. We define operating days as the number of our total available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
(6) Fleet utilization. We calculate fleet utilization as the number of our operating days during a period divided by the number of ownership days plus chartered-in days less drydocking days.
28
(7) Time charter equivalent. We define time charter equivalent (“TCE”) rates as our voyage revenues less voyage expenses, charter-hire expenses and realized gains or losses on fuel hedges, divided by the number of the available days of our owned fleet during the period. TCE rate is not an item recognized by U.S. GAAP (i.e., it is a non-GAAP measure). However, it is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.
|
|
Entire Fleet |
|
Major Bulk |
|
Minor Bulk |
|
|
||||||||||||
|
|
For the Three Months Ended |
|
For the Three Months Ended |
|
For the Three Months Ended |
|
|
||||||||||||
|
|
March 31, |
|
March 31, |
|
March 31, |
|
|
||||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
|
||||||
Voyage revenues (in thousands) |
|
$ |
71,269 |
|
$ |
117,435 |
|
$ |
31,051 |
|
$ |
62,022 |
|
$ |
40,218 |
|
$ |
55,413 |
|
|
Voyage expenses (in thousands) |
|
|
27,354 |
|
|
37,200 |
|
|
13,572 |
|
|
20,588 |
|
|
13,782 |
|
|
16,612 |
|
|
Charter hire expenses (in thousands) |
|
|
2,285 |
|
|
3,510 |
|
|
— |
|
|
— |
|
|
2,285 |
|
|
3,510 |
|
|
Realized gain on fuel hedges (in thousands) |
|
|
8 |
|
|
18 |
|
|
— |
|
|
— |
|
|
8 |
|
|
18 |
|
|
|
|
|
41,638 |
|
|
76,743 |
|
|
17,479 |
|
|
41,434 |
|
|
24,159 |
|
|
35,309 |
|
|
Total available days for owned fleet |
|
|
3,504 |
|
|
3,993 |
|
|
1,339 |
|
|
1,618 |
|
|
2,165 |
|
|
2,374 |
|
|
Total TCE rate |
|
$ |
11,884 |
|
$ |
19,219 |
|
$ |
13,059 |
|
$ |
25,601 |
|
$ |
11,158 |
|
$ |
14,871 |
|
|
(8) Daily vessel operating expenses. We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period.
29
Operating Data
The following tables represent the operating data for the three months ended March 31, 2025 and 2024 on a consolidated basis.
|
|
For the Three Months Ended |
|
|
|
|
|
|
||||
|
|
March 31, |
|
|
|
|
|
|
||||
|
|
2025 |
|
2024 |
|
Change |
|
% Change |
|
|||
|
|
(U.S. dollars in thousands, except for per share amounts) |
|
|||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Voyage revenues |
|
$ |
71,269 |
|
$ |
117,435 |
|
$ |
(46,166) |
|
(39.3) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
71,269 |
|
|
117,435 |
|
|
(46,166) |
|
(39.3) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
|
27,354 |
|
|
37,200 |
|
|
(9,846) |
|
(26.5) |
% |
Vessel operating expenses |
|
|
24,916 |
|
|
25,932 |
|
|
(1,016) |
|
(3.9) |
% |
Charter hire expenses |
|
|
2,285 |
|
|
3,510 |
|
|
(1,225) |
|
(34.9) |
% |
General and administrative expenses (inclusive of nonvested stock amortization expense of $1,496 and $1,382, respectively) |
|
|
7,494 |
|
|
7,664 |
|
|
(170) |
|
(2.2) |
% |
Technical management expenses |
|
|
1,325 |
|
|
1,031 |
|
|
294 |
|
28.5 |
% |
Depreciation and amortization |
|
|
17,665 |
|
|
17,223 |
|
|
442 |
|
2.6 |
% |
Net loss on sale of vessels |
|
|
— |
|
|
978 |
|
|
(978) |
|
(100.0) |
% |
Other operating expense |
|
|
— |
|
|
1,804 |
|
|
(1,804) |
|
(100.0) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
81,039 |
|
|
95,342 |
|
|
(14,303) |
|
(15.0) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
(9,770) |
|
|
22,093 |
|
|
(31,863) |
|
(144.2) |
% |
Other expense, net |
|
|
(2,192) |
|
|
(3,150) |
|
|
958 |
|
(30.4) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
|
(11,962) |
|
|
18,943 |
|
|
(30,905) |
|
(163.1) |
% |
Less: Net (loss) income attributable to noncontrolling interest |
|
|
(39) |
|
|
145 |
|
|
(184) |
|
(126.9) |
% |
Net (loss) income attributable to Genco Shipping & Trading Limited |
|
$ |
(11,923) |
|
$ |
18,798 |
|
$ |
(30,721) |
|
(163.4) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings per share - basic |
|
$ |
(0.28) |
|
$ |
0.44 |
|
$ |
(0.72) |
|
(163.6) |
% |
Net (loss) earnings per share - diluted |
|
$ |
(0.28) |
|
$ |
0.43 |
|
$ |
(0.71) |
|
(165.1) |
% |
Weighted average common shares outstanding - basic |
|
|
43,201,941 |
|
|
42,918,248 |
|
|
283,693 |
|
0.7 |
% |
Weighted average common shares outstanding - diluted |
|
|
43,201,941 |
|
|
43,606,580 |
|
|
(404,639) |
|
(0.9) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1) |
|
$ |
7,921 |
|
$ |
39,237 |
|
$ |
(31,316) |
|
(79.8) |
% |
30
| (1) | EBITDA represents net (loss) income attributable to Genco Shipping & Trading Limited plus net interest expense, taxes and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in our consolidated internal financial statements, and it is presented for review at our board meetings. We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing. EBITDA presents investors with a measure in addition to net income to evaluate our performance prior to these costs. EBITDA is a non-GAAP measure and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating performance required by U.S. GAAP. EBITDA is not a measure of liquidity or cash flows as shown in our Condensed Consolidated Statements of Cash Flows. The definition of EBITDA used here may not be comparable to that used by other companies. The following table demonstrates our calculation of EBITDA and provides a reconciliation of EBITDA to net income attributable to Genco Shipping & Trading Limited for each of the periods presented above: |
|
|
For the Three Months Ended |
|
||||
|
|
March 31, |
|
||||
|
|
2025 |
|
2024 |
|
||
Net (loss) income attributable to Genco Shipping & Trading Limited |
|
$ |
(11,923) |
|
$ |
18,798 |
|
Net interest expense |
|
|
2,179 |
|
|
3,216 |
|
Income tax expense |
|
|
— |
|
|
— |
|
Depreciation and amortization |
|
|
17,665 |
|
|
17,223 |
|
|
|
|
|
|
|
|
|
EBITDA (1) |
|
$ |
7,921 |
|
$ |
39,237 |
|
Results of Operations
The following table sets forth information about the most recent employment of the vessels in our fleet as of May 6, 2025:
|
|
Year |
|
Charter |
|
|
|
|---|---|---|---|---|---|---|---|
Vessel |
|
Built |
|
Expiration(1) |
|
Cash Daily Rate(2) |
|
|
|
|
|
|
|
|
|
Capesize Vessels |
|
|
|
|
|
|
|
Genco Augustus |
|
2007 |
|
May 2025 |
|
Voyage |
|
Genco Tiberius |
|
2007 |
|
May 2025 |
|
$23,750 |
|
Genco London |
|
2007 |
|
July 2025 |
|
Voyage |
|
Genco Titus |
|
2007 |
|
June 2025 |
|
Voyage |
|
Genco Constantine |
|
2008 |
|
June 2025 |
|
Voyage |
|
Genco Tiger |
|
2011 |
|
June 2025 |
|
Voyage |
|
Genco Lion |
|
2012 |
|
March 2026 |
|
99.5% of BCI (3) |
|
Baltic Bear |
|
2010 |
|
March 2025 |
|
Voyage |
|
Baltic Wolf |
|
2010 |
|
May 2025 |
|
Voyage |
|
Genco Resolute |
|
2015 |
|
April 2026 |
|
120% of BCI (3) |
|
Genco Endeavour |
|
2015 |
|
October 2025 |
|
$30,565 (4) |
|
Genco Defender |
|
2016 |
|
April 2026 |
|
120% of BCI (3) |
|
Genco Liberty |
|
2016 |
|
May 2025 |
|
Voyage |
|
Genco Ranger |
|
2016 |
|
June 2025 |
|
Voyage |
|
Genco Reliance |
|
2016 |
|
May 2025 |
|
Voyage |
|
Genco Intrepid |
|
2016 |
|
July 2025 |
|
Voyage |
|
|
|
|
|
|
|
|
|
Ultramax Vessels |
|
|
|
|
|
|
|
Baltic Hornet |
|
2014 |
|
May 2025 |
|
Voyage |
|
Baltic Wasp |
|
2015 |
|
May 2025 |
|
Voyage |
|
Baltic Scorpion |
|
2015 |
|
June 2025 |
|
$15,500 |
|
31
|
|
Year |
|
Charter |
|
|
|
|---|---|---|---|---|---|---|---|
Vessel |
|
Built |
|
Expiration(1) |
|
Cash Daily Rate(2) |
|
|
|
|
|
|
|
|
|
Baltic Mantis |
|
2015 |
|
June 2025 |
|
$14,750 |
|
Genco Weatherly |
|
2014 |
|
May 2025 |
|
$17,000 |
|
Genco Columbia |
|
2016 |
|
May 2025 |
|
$10,000 |
|
Genco Magic |
|
2014 |
|
May 2025 |
|
Voyage |
|
Genco Vigilant |
|
2015 |
|
May 2025 |
|
Voyage |
|
Genco Freedom |
|
2015 |
|
July 2025 |
|
$12,000 |
|
Genco Enterprise |
|
2016 |
|
June 2025 |
|
$13,750 |
|
Genco Constellation |
|
2017 |
|
June 2025 |
|
Voyage |
|
Genco Madeleine |
|
2014 |
|
June 2025 |
|
$13,600 |
|
Genco Mayflower |
|
2017 |
|
June 2025 |
|
$13,000 |
|
Genco Mary |
|
2022 |
|
June 2025 |
|
Voyage |
|
Genco Laddey |
|
2022 |
|
May 2025 |
|
Voyage |
|
|
|
|
|
|
|
|
|
Supramax Vessels |
|
|
|
|
|
|
|
Genco Predator |
|
2005 |
|
March 2025 |
|
$13,000 |
|
Genco Hunter |
|
2007 |
|
June 2025 |
|
$14,000 |
|
Genco Aquitaine |
|
2009 |
|
May 2025 |
|
Voyage |
|
Genco Ardennes |
|
2009 |
|
May 2025 |
|
Voyage |
|
Genco Auvergne |
|
2009 |
|
May 2025 |
|
$14,500 |
|
Genco Bourgogne |
|
2010 |
|
June 2025 |
|
$12,000 |
|
Genco Brittany |
|
2010 |
|
June 2025 |
|
$12,500 |
|
Genco Languedoc |
|
2010 |
|
May 2025 |
|
$5,000 |
|
Genco Picardy |
|
2005 |
|
February 2025 |
|
$17,000 |
|
Genco Pyrenees |
|
2010 |
|
May 2025 |
|
$9,500 |
|
Genco Rhone |
|
2011 |
|
June 2025 |
|
Voyage |
|
| (1) | The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of certain contracts, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire. |
| (2) | Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 5.00%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues. |
| (3) | BCI is the Baltic Capesize Index |
| (4) | Represents the annualized daily rate. |
Three months ended March 31, 2025 compared to the three months ended March 31, 2024
VOYAGE REVENUES-
For the three months ended March 31, 2025, voyage revenues decreased by $46.1 million, or 39.3%, to $71.3 million as compared to $117.4 million for the three months ended March 31, 2024. The decrease in voyage revenues was primarily due to lower rates earned by our major and minor bulk vessels as well as the operation of a smaller fleet. At the beginning of 2025, freight rates were impacted by various seasonal factors, particularly in January and February, including weather related disruptions affecting seaborne cargo availability, the frontloaded nature of the newbuilding orderbook and the timing of the Chinese New Year. These factors impacted the supply and demand balance leading to reduced freight rates relative to 2024 levels, which saw a lesser impact from drybulk seasonality primarily due to better weather conditions in key exporting regions at the time. In March 2025, the freight rate environment improved relative to earlier year levels. Several of the above temporary factors resulting in downward freight rate volatility dissipated, improving cargo flows. At the same time, the bauxite trade out of West Africa continued to exhibit firm growth support the Capesize sector. In 2025, drybulk commodity demand growth may ease relative to 2024 levels, whereas vessel supply growth is expected to remain at a similar level to 2024.
32
Various geopolitical factors continue to impact the macroeconomic environment as well as freight rates. These factors include tariffs and trade protectionism, the war in Ukraine, and Houthi attacks on commercial vessels. Such attacks have reduced drybulk vessel transits through the Suez Canal, increasing vessel sailing distances and effectively reducing vessel capacity.
The average TCE rate of our overall fleet decreased 38.2% to $11,884 a day during the first quarter of 2025 from $19,219 a day during the first quarter of 2024. The TCE for our major bulk vessels decreased by 49.0% from $25,601 a day during the first quarter of 2024 to $13,059 a day during the first quarter of 2025. This decrease was primarily a result of lower rates achieved by our Capesize vessels. The TCE for our minor bulk vessels decreased by 25.0% from $14,871 a day during the first quarter of 2024 to $11,158 a day during the first quarter of 2025 primarily a result of lower rates achieved by our Ultramax and Supramax vessels.
Total ownership days decreased from 4,132 during the first quarter of 2024 to 3,780 during the first quarter of 2025 due to the sale of four Capesize vessels and one Supramax vessel during 2024, partially offset by the delivery of one Capesize vessel during the fourth quarter of 2024. Fleet utilization increased from 96.2% during the first quarter of 2024 to 98.0% during the first quarter of 2025. From April 1, 2025 until December 31, 2025, we expect approximately 501 days of offhire related to scheduled drydockings and special surveys. Refer to “Capital Expenditures” section below for further details.
VOYAGE EXPENSES-
In time charters and spot market-related time charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. These expenses are borne by the Company during spot market voyage charters. There are certain other non-specified voyage expenses such as commissions, which are typically borne by us. Voyage expenses include port and canal charges, fuel (bunker) expenses and brokerage commissions payable to unaffiliated third parties. Port and canal charges and bunker expenses primarily increase in periods during which vessels are employed on spot market voyage charters because these expenses are for the account of the vessel owner. At the inception of a time charter, we record the difference between the cost of bunker fuel delivered by the terminating charterer and the bunker fuel sold to the new charterer as a gain or loss within voyage expenses. Voyage expenses also include the cost of bunkers consumed during short-term time charters pursuant to the terms of the time charter agreement. Additionally, we may record lower of cost and net realizable value adjustments to re-value the bunker fuel on a quarterly basis for certain time charter agreements where the inventory is subject to gains and losses. Refer to Note 2 — Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements.
Voyage expenses decreased from $37.2 million during the three months ended March 31, 2024 to $27.4 million during the three months ended March 31, 2025. The decrease was primarily due to lower voyage expenses, including lower bunker consumption, for our major bulk vessels and our Ultrabulk vessels, part of our minor bulk fleet, as these vessels were fixed on fewer spot voyages during three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
VESSEL OPERATING EXPENSES-
Vessel operating expenses decreased by $1.0 million from $25.9 million during the three months ended March 31, 2024 to $24.9 million during the three months ended March 31, 2025. This decrease was primarily due to the operation of a smaller fleet partially offset by higher repair and maintenance costs and the timing of the purchase spares.
Average daily vessel operating expenses (“DVOE”) for our fleet increased to $6,592 per vessel per day for the three months ended March 31, 2025 from $6,275 per day for the three months ended March 31, 2024. The increase in daily vessel operating expense was primarily due to higher crew costs and higher repair and maintenance and insurance costs. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.
33
Our vessel operating expenses increase to the extent our fleet expands. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for crewing, lubes, and insurance, may also cause these expenses to increase. Crew costs on our vessels could increase in the future due to higher wages as a result of the potential impact of the war in Ukraine, the Israel-Hamas war, the Houthi conflict in the Red Sea, and the imposition of tariffs among other potential macroeconomic events, are unpredictable, and the actual amount of our DVOE could be higher or lower than budgeted as a result.
The DVOE budget for the second quarter of 2025 is expected to be $6,375 per vessel per day on a fleet-wide basis. The potential impacts of various macroeconomic events, including but not limited to the war in Ukraine, the Israel-Hamas war, the Houthi conflict in the Red Sea, and the imposition of tariffs, are unpredictable, and the actual amount of our DVOE could be higher or lower than budgeted as a result.
CHARTER HIRE EXPENSES-
Charter hire expenses decreased by $1.2 million from $3.5 million during the three months ended March 31, 2024 to $2.3 million during the three months ended March 31, 2025. The decrease was primarily due to a decrease in hire rates, partially offset by an increase in chartered-in days.
GENERAL AND ADMINISTRATIVE EXPENSES-
We incur general and administrative expenses that relate to our onshore non-vessel-related activities. Our general and administrative expenses include our payroll expenses, including those relating to our executive officers, operating lease expense, legal, auditing and other professional expenses. General and administrative expenses include nonvested stock amortization expense which represent the amortization of stock-based compensation that has been issued to our Directors and employees pursuant to the 2015 Plan. Refer to Note 14 — Stock-Based Compensation in our Condensed Consolidated Financial Statements. General and administrative expenses also include legal and professional fees associated with our credit facilities, which are not capitalizable to deferred financing costs. We also incur general and administrative expenses for our overseas offices located in Singapore and Copenhagen.
General and administrative expenses decreased marginally from $7.7 million during the three months ended March 31, 2024 to $7.5 million during the three months ended March 31, 2025. This decrease was primarily due to lower legal and professional fees.
TECHNICAL MANAGEMENT EXPENSES-
Technical management expenses include the direct costs incurred by GSSM for the technical management of the vessels under its management. Technical management expenses were $1.3 million and $1.0 million during the three months ended March 31, 2025 and 2024, respectively. The variance was due to the timing of expenses during the year.
DEPRECIATION AND AMORTIZATION-
Depreciation and amortization expense increased by $0.5 million to $17.7 million during the three months ended March 31, 2025 as compared to $17.2 million during the three months ended March 31, 2024. This increase was primarily due to an increase in drydocking amortization expense for certain vessels that completed their respective drydockings during 2024.
34
NET LOSS ON SALE OF VESSELS-
During the first quarter of 2024, we recorded a net loss on sale of vessels of $1.0 million related primarily to the sale of the Genco Commodus. There were no vessels sold during the first quarter of 2025.
OTHER OPERATING EXPENSE-
Other operating expense of $1.8 million recorded during the first quarter of 2024 consists of costs incremental to routine expenses that were incurred related to our 2024 annual meeting that was held on May 23, 2024.
OTHER (EXPENSE) INCOME -
INTEREST EXPENSE –
Interest expense decreased from $4.0 million during the three months ended March 31, 2024 to $2.5 million during the three months ended March 31, 2025. Interest expense during the three months ended March 31, 2025 and 2024 consisted primarily of interest expense under our credit facility and amortization of deferred financing costs for that facility. The decrease was primarily due to lower outstanding debt during the first quarter of 2025 as compared to the first quarter of 2024, as well as lower interest rates. This decrease was partially offset by an increase in interest expense as a result of lower settlement payments received under our interest rate cap agreements due to the expiration of these agreements. There were no interest rate cap agreements during the first quarter of 2025.
INTEREST INCOME –
Interest income decreased by $0.4 million from $0.8 million during the three months ended March 31, 2024 to $0.4 million during the three months ended March 31, 2025 primarily due to lower interest income earned on our cash and cash equivalents.
NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST –
During the three months ended March 31, 2025 and 2024, net (loss) income attributable to noncontrolling interest was ($0.04) million and $0.1 million, respectively, which is associated with the net (loss) income attributable to the noncontrolling interest of GSSM.
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash flow from operations, cash on hand, equity offerings and credit facility borrowings. We currently use our funds primarily for the acquisition of vessels, fleet renewal, drydocking for our vessels, payment of dividends, debt repayments and satisfying working capital requirements as may be needed to support our business. Our ability to continue to meet our liquidity needs is subject to and will be affected by cash utilized in operations, the economic or business environment in which we operate, shipping industry conditions, the financial condition of our customers, vendors and service providers, our ability to comply with the financial and other covenants of our indebtedness, and other factors.
We believe, given our current cash holdings and undrawn revolver availability, if drybulk shipping rates do not decline significantly from current levels, our capital resources, including cash anticipated to be generated within the year, are sufficient to fund our operations for at least the next twelve months. Such resources include unrestricted cash and cash equivalents of $30.2 million as of March 31, 2025 in addition to the $323.5 million availability under the $500 Million Revolver as of March 31, 2025, which compares to a minimum liquidity requirement under our credit facility of approximately $21.0 million as of March 31, 2025. Given anticipated capital expenditures related to drydockings and fuel efficiency upgrade costs of $37.0 million and $26.5 million during the remainder of 2025 and 2026, respectively, as well as any quarterly dividend payments, we anticipate to continue to have significant cash expenditures. Refer to “Capital Expenditures” below for further details. However, if market conditions were to worsen significantly due to the U.S.-China trade dispute, the imposition of tariffs, the war in Ukraine, the Houthi conflict in the Red Sea, the Israel-Hamas war, or other causes, then our cash resources may decline to a level that may put at risk our ability to pay dividends per our capital allocation strategy or at all.
35
Going forward, given the nature of our revolving credit facility, we plan to actively manage our debt balance to reduce interest expense and may also opportunistically draw down debt to assist in funding accretive growth opportunities. As of March 31, 2025, there are no mandatory debt repayments due until we must repay $90.0 million in 2028. Nonetheless, we intend to continue to pay down debt on a voluntary basis.
As of March 31, 2025, the $500 Million Revolver contained collateral maintenance covenants that require the aggregate appraised value of collateral vessels to be at least 140% of the principal amount of the loan outstanding under such facility. If the values of our vessels were to decline as a result of the various geopolitical factors previously mentioned or otherwise, we may not satisfy this collateral maintenance requirement. If we do not satisfy the collateral maintenance requirement, we will need to post additional collateral or prepay outstanding loans to bring us back into compliance, or we will need to seek waivers, which may not be available or may be subject to conditions.
In the future, we may require capital to fund acquisitions or to improve or support our ongoing operations and debt structure, particularly in light of economic conditions resulting from the U.S.-China trade dispute, the imposition of tariffs, the war in Ukraine, the Houthi conflict in the Red Sea, the Israel-Hamas war, and the trajectory of China’s economic recovery and stimulus measures. We may from time to time seek to raise additional capital through equity or debt offerings, selling vessels or other assets, pursuing strategic opportunities, or otherwise. We may also from time to time seek to incur additional debt financing from private or public sector sources, refinance our indebtedness or obtain waivers or modifications to our credit agreements to obtain more favorable terms, enhance flexibility in conducting our business, or otherwise. We may also seek to manage our interest rate exposure through hedging transactions. We may seek to accomplish any of these independently or in conjunction with one or more of these actions. However, if market conditions are unfavorable, we may be unable to accomplish any of the foregoing on acceptable terms or at all.
As of March 31, 2025, we were in compliance with all financial covenants under the $500 Million Revolver.
Refer to Note 8 — Debt in our Condensed Consolidated Financial Statements for further details regarding the terms of the $500 Million Revolver, which information is incorporated herein by reference.
Dividends
Under our quarterly dividend policy, the amount available for quarterly dividends is to be calculated based on the following formula:
Operating cash flow
Less: Voluntary quarterly reserve
Cash flow distributable as dividends
The amount of dividends payable under the foregoing formula for each quarter of the year will be determined on a quarterly basis.
For purposes of the foregoing calculation, operating cash flow is defined as voyage revenue less voyage expenses, charter hire expenses, realized gains or losses on fuel hedges, vessel operating expenses, general and administrative expenses other than non-cash restricted stock expenses, technical management fees, and interest expense other than non-cash deferred financing costs. Anticipated uses for the voluntary quarterly reserve include, but are not limited to, vessel acquisitions, debt prepayments and repayments, and general corporate purposes. In order to set aside funds for these purposes, the voluntary reserve will be set on a quarterly basis in the discretion of our Board and is anticipated to be based on future quarterly debt repayments and interest expense.
On May 7, 2025, we announced a quarterly dividend of $0.15 per share. Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with applicable law and contractual obligations (including our credit facilities) and our Board’s determination that each declaration and payment is at that time in the best interests of the Company and its shareholders after its review of our financial performance.
36
In connection with our comprehensive value strategy, we have paid down additional indebtedness under our credit facilities.
The declaration and payment of any dividend or any stock repurchase is subject to the discretion of our Board of Directors. Our Board of Directors and management continue to closely monitor market developments together with the evaluation of our quarterly dividend policy in the current market environment. The principal business factors that our Board of Directors expects to consider when determining the timing and amount of dividend payments or stock repurchases include our earnings, financial condition, and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends or stock repurchases other than from surplus. Marshall Islands law also prohibits the declaration and payment of dividends or stock repurchases while a company is insolvent or would be rendered insolvent by the payment of such a dividend or such a stock repurchase. Heightened economic uncertainty and the potential for renewed drybulk market weakness as a result of the war in Ukraine, the Israel-Hamas war, the Houthi conflict in the Red Sea, the imposition of tariffs, and related economic conditions may result in our suspension, reduction, or termination of future quarterly dividends.
You are encouraged to consult your own tax advisor concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local, or foreign law from the payment of dividends on our common stock.
Cash Flows
Net cash provided by operating activities for the three months ended March 31, 2025 and 2024 was $2.9 million and $32.3 million, respectively. This decrease in cash provided by operating activities was primarily due to lower rates earned by our major and minor bulk vessels, as well as changes in working capital. Additionally, there was an increase in drydocking costs incurred during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Net cash (used in) provided by investing activities for the three months ended March 31, 2025 and 2024 was ($2.9) million and $17.5 million, respectively. This fluctuation was primarily a result of $18.5 million of proceeds from the sale of the Genco Commodus during the three months ended March 31, 2024.
Net cash used in financing activities during the three months ended March 31, 2025 and 2024 was $13.4 million and $47.9 million, respectively. The decrease is primarily due to a $30.0 million decrease in debt repayments made during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. There was also a $4.5 million decrease in the payment of dividends during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Interest Rate Swap and Cap Agreements, Forward Freight Agreements and Currency Swap Agreements
During the first quarter of 2024, our last remaining interest rate cap agreement that we used to manage interest costs and the risk associated with changing interest rates expired. Such agreements cap the borrowing rate on our variable debt to provide a hedge against the risk of rising rates. At March 31, 2025, the total notional principal amount of the interest rate cap agreements is $0.
Refer to Note 9 — Derivative instruments of our Condensed Consolidated Financial Statements for further information.
37
As part of our business strategy, we may enter into interest rate swap agreements to manage interest costs and the risk associated with changing interest rates. In determining the fair value of interest rate derivatives, we consider the creditworthiness of both the counterparty and ourselves, which has not changed significantly and has no effect on the valuation. Valuations prior to any adjustments for credit risk would be validated by comparison with counterparty valuations. Amounts would not and should not be identical due to the different modeling assumptions. Any material differences would be investigated.
As part of our business strategy, we may enter into arrangements commonly known as forward freight agreements, or FFAs, to hedge and manage our exposure to the charter market risks relating to the deployment of our vessels. Generally, these arrangements would bind us and each counterparty in the arrangement to buy or sell a specified tonnage freighting commitment “forward” at an agreed time and price and for a particular route. Upon settlement, if the contracted charter rate is less than the average of the rates (as reported by an identified index) for the specified route and period, the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate multiplied by the number of days in the specific period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. Although FFAs can be entered into for a variety of purposes, including for hedging, as an option, for trading, or for arbitrage, if we decided to enter into FFAs, our objective would be to hedge and manage market risks as part of our commercial management. It is not currently our intention to enter into FFAs to generate a stream of income independent of the revenues we derive from the operation of our fleet of vessels. If we determine to enter into FFAs, we may reduce our exposure to any declines in our results from operations due to weak market conditions or downturns, but may also limit our ability to benefit economically during periods of strong demand in the market. We have not entered into any FFAs as of March 31, 2025 and December 31, 2024.
Capital Expenditures
We make capital expenditures from time to time in connection with our vessel acquisitions. Our fleet currently consists of 42 drybulk vessels, including 16 Capesize, 15 Ultramax and 11 Supramax vessels.
As previously announced, we have implemented a fuel efficiency upgrade program for certain of our vessels in an effort to generate fuel savings and increase the future earnings potential for these vessels. The upgrades have been successfully installed during previous drydockings.
Under our comprehensive IMO 2023 compliance plan, we have installed and intend to install energy saving devices and apply high performance paint systems in order to reduce fuel consumption and emissions among other key initiatives, on select vessels. We have and plan to undertake most, if not all, of these initiatives while our vessels undergo their regularly scheduled drydocking. The future estimated expenditures are included in the table below.
In addition to acquisitions that we may undertake in future periods, we will incur additional expenditures due to special surveys and drydockings for our fleet.
We estimate our drydocking costs, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, ballast water treatment systems (“BWTS”) costs, fuel efficiency upgrades and scheduled off-hire days for our fleet through 2026 to be:
Year |
|
Estimated Drydocking |
|
Estimated BWTS |
|
Estimated Fuel Efficiency Upgrade Costs |
|
Estimated Off-hire |
|
|||
|
|
(U.S. dollars in millions) |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
April 1 - December 31, 2025 |
|
$ |
31.2 |
|
$ |
0.8 |
|
$ |
5.0 |
|
501 |
|
2026 (1) |
|
$ |
20.5 |
|
$ |
4.4 |
|
$ |
1.6 |
|
268 |
|
38
| (1) | These amounts exclude a total of $15.7 million of estimated drydocking costs and fuel efficiency upgrade costs and 238 estimated offhire days for vessels that have drydocking class deadlines during the first quarter of 2027 and may, therefore, not be drydocked until 2027. |
The costs reflected are estimates based on drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash on hand. These costs do not include drydock expense items that are reflected in vessel operating expenses.
Actual length of drydocking will vary based on the condition of the vessel, yard schedules and other factors. Higher repairs and maintenance expense during drydocking for vessels which are over 15 years old typically result in a higher number of off-hire days depending on the condition of the vessel.
During the three months ended March 31, 2025 and 2024, we incurred a total of $11.4 million and $2.2 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment.
We completed the drydocking of four of our vessels during the three months ended March 31, 2025. Additionally, the drydocking for three of our vessels began during the first quarter of 2025 and will be completed during the second quarter of 2025. We estimate that an additional 12 of our vessels will be drydocked during the remainder of 2025 and eight of our vessels will be drydocked during 2026, excluding seven vessels that have drydocking class deadlines during the first quarter of 2027.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Inflation
Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, general and administrative, and financing costs.
CRITICAL ACCOUNTING POLICIES
Except as described below, there have been no changes or updates to our critical accounting policies as disclosed in the 2024 10-K.
Vessels and Depreciation
We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation. We depreciate our drybulk vessels on a straight-line basis over their estimated useful lives, estimated to be 25 years from the date of initial delivery from the shipyard. Depreciation is based on cost less the estimated residual scrap value of $400/lightweight ton (lwt) based on the 15-year average scrap value of steel. An increase in the residual value of the vessels will decrease the annual depreciation charge over the remaining useful life of the vessels. Similarly, an increase in the useful life of a drybulk vessel would also decrease the annual depreciation charge. Comparatively, a decrease in the useful life of a drybulk vessel or in its residual value would have the effect of increasing the annual depreciation charge. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use.
The carrying value of each of our vessels does not represent the fair market value of such vessel or the amount we could obtain if we were to sell any of our vessels, which could be more or less. Under U.S. GAAP, we would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until we determine to sell that vessel or the vessel is impaired as discussed in the 2024 10-K.
39
During the three months ended March 31, 2025 and 2024, there were no impairment losses for vessel assets recorded.
Under our credit facility, we regularly submit to the lenders valuations of our vessels on an individual charter free basis in order to evidence our compliance with the collateral maintenance covenants under our credit facility. Such a valuation is not necessarily the same as the amount any vessel may bring upon sale, which may be more or less, and should not be relied upon as such. We were in compliance with the collateral maintenance covenant under our $500 Million Revolver as of March 31, 2025. We obtained valuations for all of the vessels in our fleet pursuant to the terms of the $500 Million Revolver.
We compare the carrying value of our vessels with the vessel valuations obtained for covenant compliance purposes to determine whether an indicator of impairment is present (excluding any vessels held for sale). As of March 31, 2025, eight of our Capesize vessels had carrying values that exceeded their vessel valuations, which is an indicator of impairment. As of December 31, 2024, eight of our Capesize vessels and four of our Ultramax vessels had carrying values that exceeded their vessel valuations, which is an indicator of impairment. However, based on an analysis of the anticipated undiscounted future net cash flows to be derived from each of these vessels as described in the 2024 10-K, there were no impairment losses recorded for these vessels incurred during the three months ended March 31, 2025 or the three months ended December 31, 2024.
The amount by which the carrying value at March 31, 2025 of eight of our Capesize vessels exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $1.2 million to $4.9 million per vessel, and $22.4 million on an aggregate basis for these eight vessels. Comparatively, the amount by which the carrying value at December 31, 2024 of eight of our Capesize vessels and four of our Ultramax vessels exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $0.04 million to $6.9 million per vessel, and $38.7 million on an aggregate fleet basis. The average amount by which the carrying value of these vessels exceeded the valuation of such vessels for covenant compliance purposes was $2.8 million at March 31, 2025 and $3.2 million as of December 31, 2024. However, neither such valuation nor the carrying value in the table below reflects the value of long-term time charters, if any, related to some of our vessels.
In the chart below, we list each of our vessels, the year it was built, the year we acquired it, and its carrying value as of March 31, 2025 and December 31, 2024. Vessels have been grouped according to their collateralized status as of March 31, 2025.
40
|
|
|
|
|
|
Carrying Value (U.S. |
|
||||
|
|
|
|
|
|
dollars in |
|
||||
|
|
|
|
|
|
thousands) as of |
|
||||
|
|
|
|
Year |
|
March 31, |
|
December 31, |
|
||
Vessels |
|
Year Built |
|
Acquired |
|
2025 |
|
2024 |
|
||
$500 Million Revolver |
|
|
|
|
|
|
|
|
|
|
|
Baltic Bear |
|
2010 |
|
2010 |
|
$ |
30,828 |
|
$ |
30,910 |
|
Baltic Wolf |
|
2010 |
|
2010 |
|
|
31,230 |
|
|
31,303 |
|
Genco Lion |
|
2012 |
|
2013 |
|
|
26,869 |
|
|
27,213 |
|
Genco Tiger |
|
2011 |
|
2013 |
|
|
25,500 |
|
|
25,820 |
|
Baltic Scorpion |
|
2015 |
|
2015 |
|
|
20,180 |
|
|
20,429 |
|
Baltic Mantis |
|
2015 |
|
2015 |
|
|
20,413 |
|
|
20,663 |
|
Genco Hunter |
|
2007 |
|
2007 |
|
|
7,001 |
|
|
7,112 |
|
Genco Aquitaine |
|
2009 |
|
2010 |
|
|
7,798 |
|
|
7,888 |
|
Genco Ardennes |
|
2009 |
|
2010 |
|
|
7,841 |
|
|
7,934 |
|
Genco Auvergne |
|
2009 |
|
2010 |
|
|
7,858 |
|
|
7,947 |
|
Genco Bourgogne |
|
2010 |
|
2010 |
|
|
8,419 |
|
|
8,522 |
|
Genco Brittany |
|
2010 |
|
2010 |
|
|
8,442 |
|
|
8,314 |
|
Genco Languedoc |
|
2010 |
|
2010 |
|
|
8,425 |
|
|
8,531 |
|
Genco Picardy |
|
2005 |
|
2010 |
|
|
6,302 |
|
|
6,433 |
|
Genco Pyrenees |
|
2010 |
|
2010 |
|
|
8,281 |
|
|
8,280 |
|
Genco Rhone |
|
2011 |
|
2011 |
|
|
9,259 |
|
|
9,368 |
|
Genco Constantine |
|
2008 |
|
2008 |
|
|
26,578 |
|
|
27,134 |
|
Genco Augustus |
|
2007 |
|
2007 |
|
|
24,231 |
|
|
24,793 |
|
Genco London |
|
2007 |
|
2007 |
|
|
24,839 |
|
|
25,328 |
|
Genco Titus |
|
2007 |
|
2007 |
|
|
25,383 |
|
|
25,854 |
|
Genco Tiberius |
|
2007 |
|
2007 |
|
|
24,416 |
|
|
24,598 |
|
Genco Predator |
|
2005 |
|
2007 |
|
|
6,219 |
|
|
6,351 |
|
Genco Hornet |
|
2014 |
|
2014 |
|
|
18,935 |
|
|
19,177 |
|
Genco Wasp |
|
2015 |
|
2015 |
|
|
19,179 |
|
|
19,421 |
|
Genco Endeavour |
|
2015 |
|
2018 |
|
|
37,840 |
|
|
38,324 |
|
Genco Resolute |
|
2015 |
|
2018 |
|
|
38,281 |
|
|
37,468 |
|
Genco Columbia |
|
2016 |
|
2018 |
|
|
21,211 |
|
|
21,464 |
|
Genco Weatherly |
|
2014 |
|
2018 |
|
|
17,206 |
|
|
17,427 |
|
Genco Liberty |
|
2016 |
|
2018 |
|
|
39,875 |
|
|
40,326 |
|
Genco Defender |
|
2016 |
|
2018 |
|
|
39,865 |
|
|
40,319 |
|
Genco Magic |
|
2014 |
|
2020 |
|
|
13,108 |
|
|
13,258 |
|
Genco Vigilant |
|
2015 |
|
2021 |
|
|
13,638 |
|
|
13,784 |
|
Genco Freedom |
|
2015 |
|
2021 |
|
|
14,238 |
|
|
13,881 |
|
Genco Enterprise |
|
2016 |
|
2021 |
|
|
17,985 |
|
|
18,187 |
|
Genco Madeleine |
|
2014 |
|
2021 |
|
|
19,904 |
|
|
20,162 |
|
Genco Constellation |
|
2017 |
|
2021 |
|
|
22,543 |
|
|
22,806 |
|
Genco Mayflower |
|
2017 |
|
2021 |
|
|
22,897 |
|
|
23,165 |
|
Genco Laddey |
|
2022 |
|
2022 |
|
|
27,050 |
|
|
27,305 |
|
Genco Mary |
|
2022 |
|
2022 |
|
|
27,080 |
|
|
27,335 |
|
Genco Ranger |
|
2016 |
|
2023 |
|
|
41,056 |
|
|
41,515 |
|
Genco Reliance |
|
2016 |
|
2023 |
|
|
41,007 |
|
|
41,462 |
|
Genco Intrepid |
|
2016 |
|
2024 |
|
|
48,002 |
|
|
47,511 |
|
Consolidated Total |
|
|
|
|
|
$ |
907,212 |
|
$ |
915,022 |
|
If we were to sell a vessel or hold a vessel for sale, and the carrying value of the vessel were to exceed its fair market value, net of costs to sell, we would record a loss in the amount of the difference. Refer to Note 2 — Summary of Significant Accounting Policies and Note 5 — Vessel Acquisitions and Dispositions in our Condensed Consolidated Financial Statements for information regarding the sale of vessel assets.
41
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate risk
We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on our earnings and cash flow in relation to our borrowings. During the first quarter of 2024, our last remaining interest rate cap agreement that we used to manage interest costs and the risk associated with changing interest rates expired. Refer to Note 9 — Derivative Instruments of our Condensed Consolidated Financial Statements.
Interest rate cap agreements cap the borrowing rate on our variable debt to provide a hedge against the risk of rising rates.
We are subject to market risks relating to changes in SOFR rates because we have significant amounts of floating rate debt outstanding. During the three months ended March 31, 2025 and 2024, we were subject to the following interest rates on the outstanding debt under our credit facility (refer to Note 8 — Debt in our Condensed Consolidated Financial Statements):
| ● | $500 Million Revolver |
| ● | One-month SOFR plus 1.85% until August 1, 2024 when the applicable margin was increased from 1.85% to 1.90% pursuant to the sustainability link term of the facility. |
A 1% increase in SOFR would result in an increase of $0.2 million in interest expense for the three months ended March 31, 2025.
From time to time, the Company may consider derivative financial instruments such as swaps and caps or other means to protect itself against interest rate fluctuations.
Derivative financial instruments
As part of our business strategy, we may enter into interest rate swaps or interest rate cap agreements to manage interest costs and the risk associated with changing interest rates. During the first quarter of 2024, our last remaining interest rate cap agreement that we used to manage interest costs and the risk associated with changing interest rates expired. Refer to Note 9 — Derivative Instruments of our Condensed Consolidated Financial Statements.
Our prior interest rate cap agreements were initially designated and qualified as cash flow hedges. The premium paid was recognized in income on a rational basis, and all changes in the value of the caps were deferred in AOCI and were subsequently reclassified into Interest expense in the period when the hedged interest affects earnings.
Refer to “Interest rate risk” section above for further information regarding interest rate swap agreements.
We have entered into bunker swap and forward fuel purchase agreements with the objective of reducing the risk of the effect of changing fuel prices. Our bunker swap and forward fuel purchase agreements do not qualify for hedge accounting treatment; therefore, any unrealized or realized gains or losses are recognized as other income. Refer to the “Bunker swap and forward fuel purchase agreements” section of Note 2 — Summary of Significant Accounting Policies for further information.
Currency and exchange rates risk
The majority of transactions in the international shipping industry are denominated in U.S. Dollars. Virtually all of our revenues and most of our operating costs are in U.S. Dollars. We incur certain operating expenses in currencies other than the U.S. dollar, and the foreign exchange risk associated with these operating expenses is immaterial.
42
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our Chief Executive Officer and President and our Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and President and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the 2024 10-K, which could materially affect our business, financial condition or future results.
Below is an update to the risk factor entitled, “A downturn in the global economic environment may negatively impact our business”:
Tariffs announced by the current U.S. administration and reciprocal tariffs and other retaliatory measures announced by China and governments of other countries are adversely affecting global markets and economic conditions and may adversely affect the volume of drybulk trade and global shipping demand. For example, tariffs imposed by major economies on drybulk commodities may reduce trade volumes, decreasing demand for Capesize, Ultramax, and Supramax vessels and leading to lower fleet utilization and reduced revenues. Any such reduction in fleet utilization and revenues could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.
Below is an update to the risk factor entitled, “We may have to pay U.S. tax on U.S. source income, which will reduce our net income and cash flows”:
Comments by senior U.S. administration officials have raised questions of the continuing availability of tax exemptions to the shipping industry under Section 883 of the U.S. Internal Code of 1986. The material alteration or repeal of such exemptions could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.
Additionally, on April 17, 2025, the Office of the United States Trade Representative (USTR) published a notice of action to implement port fees on Chinese-built vessels that dock at ports in the U.S., which port fees are to be effective October 14, 2025. We believe that our vessels that dock at U.S. ports will be exempt from the port fees, as such fees do not apply to drybulk vessels of 80,000 dwt or less or to vessels that arrive empty or in ballast. However, if such port fees were to apply to our vessels, it would make shipping in and out of the U.S. more expensive and may reduce the volume of our U.S. drybulk trade. In the current political and economic environment, governments in the U.S., China, and other countries may take similar or other actions that would render the use of Chinese-built vessels more costly or otherwise negatively impact drybulk trade. Any such conditions could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.
43
Below is an update to the risk factor entitled, “We are subject to regulation and liability under environmental and operational safety laws that could require significant expenditures or subject us to increased liability”:
Compliance with emerging international environmental regulations, including the International Maritime Organization’s (“IMO”) draft net-zero framework, could result in increased operational costs and may materially impact our business. The recently agreed-upon draft targeting net-zero greenhouse gas emissions across the shipping industry by 2050 is set to be formally adopted in October 2025 before entry into force in 2027. This net-zero framework would be mandatory for large ocean-going ships over 5,000 gross tonnage, and includes a new fuel standard, emissions limits and a greenhouse gas pricing mechanism among its provisions. If adopted as currently proposed, compliance with this framework may require significant investments in emissions reduction technologies, adoption of new fuel types, and the payment of charges for greenhouse gas emissions that exceed IMO targets. These costs could materially increase our operating expenses.
ITEM 5. OTHER INFORMATION
Executive Employment Agreements
On May 6, 2025, the Company entered into employment agreements with Peter Allen, Genco’s Chief Financial Officer, and Jesper Christensen, Genco’s Chief Commercial Officer, with indefinite terms. Messrs. Allen’s and Christensen’s salaries at the time of entering into their employment agreements were set at $380,000 and $410,000, respectively. Each executive’s base salary may be subject to increase, but not decrease, during the employment term. Messrs. Allen’s and Christensen’s employment agreements provide for discretionary bonuses in the Compensation Committee’s sole discretion, and Messrs. Allen and Christensen are also eligible to receive equity grants from time to time pursuant to Genco’s 2015 Equity Incentive Plan or any successor plan.
Under their respective employment agreements, both executives have agreed to protect Genco’s confidential information indefinitely after termination and not to solicit Genco’s employees for other employment for two years after termination. Each such executive has agreed not to engage in certain defined competitive activities described in his employment agreement. Each executive’s non-competition period terminates twelve months after the period of employment if he is terminated without cause or resigns for good reason. The non-competition period does not apply if Genco relocates its office more than fifty miles from its current location or from the executive’s current residence and the executive resigns within thirty days after notice of such relocation, in which case the executive does not receive severance payments. Otherwise, the non-competition period terminates eighteen months after the employment period. For purposes of their employment agreements, change of control is defined generally as the acquisition of beneficial ownership of more than 50% of the aggregate voting power of Genco by any person or group; the sale of all or substantially all of Genco’s assets within a 12-month period; any merger or similar transaction in which holders of Genco’s voting stock immediately prior to such transaction do not hold at least 50% of the voting stock of the surviving entity; or replacement of a majority of the Board of Directors (the “Board”) is a 12-month period without endorsement by a majority of the pre-replacement Board.
If either executive is terminated without cause or resigns for good reason, Genco will pay him a pro rata bonus for the year of termination (prorated for length of employment in the year of termination), plus a lump sum equal to the bonus for the year of termination plus one year’s annualized base salary, plus any bonus awarded for the year prior to termination if not previously paid. If a termination without cause or resignation for good reason occurs within two years after a change in control, the lump sum payment is doubled. In the event of termination of either executive’s employment due to his death or disability, Genco will pay him, or his estate, the amount of the bonus awarded for the prior year to the extent not previously paid. Severance bonuses are payable at target unless an amount higher than target has been determined, in which the higher amount is payable. If no target has been determined for year in which termination occurs, the prior year’s target would be used. Both executives’ severance payments under their employment agreements and their equity grant agreements are subject to an “equitable best net” provision with respect to a change in control. Each executive may elect to continue his existing medical and dental benefits under the Company’s plans in accordance with COBRA, and is entitled to reimbursement for the out of pocket cost of such continued coverage during his non-competition period unless such reimbursement would cause Genco to incur tax penalties. Further, the employment agreements amend Messrs. Allen’s and Christensen’s RSU and PRSU grant agreements such that if Messrs.
44
Allen or Christensen resigns for good reason, any unvested RSU and PRSU awards will receive the same treatment as if he were terminated without cause.
Copies of the employment agreements are attached as Exhibits 10.9 and 10.10 to this report and are incorporated herein by reference to such exhibits. The foregoing descriptions of such agreements do not purport to be complete and are qualified in their entirety by reference to such exhibits.
Rule 10b5-1 Trading Arrangements
On February 28, 2025, John C. Wobensmith, our Chief Executive Officer and President; Peter Allen, our Chief Financial Officer; Joseph Adamo, our Chief Accounting Officer, Treasurer, and Controller; and Jesper Christensen, our Chief Commercial Officer each adopted a Rule 10b5-1 sales plan (a “10b5-1 Plan”). The 10b5-1 Plans are intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and, as to Messrs. Wobensmith, Allen, and Christensen, superseded prior 10b5-1 Plans adopted by each of them in March 2024. The 10b5-1 Plans provide for the sale of a portion of the number of shares of our common stock that may be issuable in settlement of RSUs and PRSUs previously awarded to these executive officers in order to satisfy such executive officers’ related tax obligations. The maximum number of shares of our common stock that may be sold under the 10b5-1 Plans are 263,302 for Mr. Wobensmith, 89,493 for Mr. Allen, 30,567 for Mr. Adamo, and 108,687 for Mr. Christensen. Each 10b5-1 Plan terminates on the earliest of August 23, 2028, completion of the sale of the foregoing shares of common stock according to the terms of the plan, and the relevant officer’s termination of the plan.
ITEM 6. EXHIBITS
The Exhibit Index attached to this report is incorporated into this Item 6 by reference.
45
EXHIBIT INDEX
Exhibit |
|
Document |
|
|
|
|
|
3.1 |
|
Second Amended and Restated Articles of Incorporation of Genco Shipping & Trading Limited.(1) |
|
|
|
|
|
3.2 |
|
||
|
|
|
|
3.3 |
|
||
|
|
|
|
3.4 |
|
||
|
|
|
|
3.5 |
|
||
|
|
|
|
3.6 |
|
||
|
|
|
|
3.7 |
|
||
|
|
|
|
3.8 |
|
||
|
|
|
|
3.9 |
|
Amended and Restated By-Laws of Genco Shipping & Trading Limited, dated July 9, 2014.(1) |
|
|
|
|
|
3.10 |
|
Amendment to Amended and Restated By-Laws, dated June 4, 2018.(9) |
|
|
|
|
|
3.11 |
|
Second Amendment to Amended and Restated By-Laws, dated July 15, 2020.(6) |
|
|
|
|
|
3.12 |
|
Third Amendment to Amended and Restated By-laws, dated January 11, 2021.(10) |
|
|
|
|
|
3.13 |
|
Fourth Amendment to Amended and Restated By-laws, dated March 28, 2023.(11) |
|
|
|
|
|
4.1 |
|
Form of Specimen Stock Certificate of Genco Shipping & Trading Limited.(1) |
|
|
|
|
|
10.1 |
|
||
|
|
|
|
10.2 |
|
||
|
|
|
|
10.3 |
|
||
|
|
|
|
10.4 |
|
||
|
|
|
|
10.5 |
|
||
|
|
|
|
10.6 |
|
||
|
|
|
|
46
10.7 |
|
||
|
|
|
|
10.8 |
|
||
|
|
|
|
10.9 |
|
||
|
|
|
|
10.10 |
|
||
|
|
|
|
31.1 |
|
||
|
|
|
|
31.2 |
|
||
|
|
|
|
32.1 |
|
Certification of Chief Executive Officer and President pursuant to 18 U.S.C. Section 1350.(*) |
|
|
|
|
|
32.2 |
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.(*) |
|
|
|
|
|
101 |
|
The following materials from Genco Shipping & Trading Limited’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 (Unaudited), (ii) Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2025 and 2024 (Unaudited), (iv) Condensed Consolidated Statements of Equity for the three months ended March 31, 2025 and 2024 (Unaudited), (v) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited), and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).(*) |
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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(*) |
Filed with this report. |
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(1) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2014. |
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(2) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 17, 2015. |
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(3) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on April 15, 2016. |
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(4) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 7, 2016. |
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(5) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on January 4, 2017. |
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(6) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on July 15, 2020. |
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(7) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on May 31, 2021. |
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(8) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on November 15, 2016. |
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(9) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on June 5, 2018. |
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(10) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on January 11, 2021. |
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(11) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 8-K, filed with the Securities and Exchange Commission on March 31, 2023. |
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(12) |
Incorporated by reference to Genco Shipping & Trading Limited’s Report on Form 10-Q, filed with the Securities and Exchange Commission on May 3, 2023. |
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48
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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GENCO SHIPPING & TRADING LIMITED |
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DATE: May 7, 2025 |
By: |
/s/ John C. Wobensmith |
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John C. Wobensmith |
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Chief Executive Officer and President |
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(Principal Executive Officer) |
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DATE: May 7, 2025 |
By: |
/s/ Peter Allen |
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Peter Allen |
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Chief Financial Officer |
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(Principal Financial Officer) |
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49
Exhibit 10.1
Genco Shipping & Trading Limited
Restricted Stock Unit Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and John C. Wobensmith (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a)Subject to Section 4(b) and Section 6 hereof and the further provisions of this Agreement, 1/3 of the total number of Restricted Stock Units shall vest on each of the first three anniversaries of February 23, 2025, rounding down to the nearest whole Restricted Stock Unit on first two anniversaries and rounding up on the remaining anniversary (each such date, a “Vesting Date”), in each case subject to the Participant’s continued service with the Company on the applicable Vesting Date.
(b)In the event of the occurrence of a Change in Control, the Restricted Stock Units shall become vested in full on the date six months after the date of such Change in Control (to the extent not previously vested in accordance with Section 4(a), Section 6(b) or Section 6(c)), subject to the Participant’s continued service with the Company on the vesting date; provided, however, that if this award is not assumed, continued or substituted for an equivalent award by the acquirer in such Change in Control, then the Restricted Stock Units shall become vested in full upon the consummation of the Change in Control. For the purposes of this Agreement, Change in Control will have the meaning set forth in the Participant’s Employment Agreement with the Company dated as of September 21, 2007, as amended from time to time (the “Employment Agreement”), provided, however that subclauses (iv) and (v) of such definition shall not apply for purposes of this Agreement.
For the avoidance of doubt, if the preceding sentence does not apply to a termination of employment, then the provisions of Section 6 shall apply to the Participant’s termination of employment.
(a)In the event that the Participant’s Service with the Company terminates before all the Restricted Stock Units are vested for any reason other than as described in Section 4(b), Section 6(b) or Section 6(c), all unvested Restricted Stock Units, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited Restricted Stock Units. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company. For the avoidance of doubt, no resignation by the Participant as a director following termination of the Participant’s employment by the Company without cause shall be deemed a resignation by the Participant subject to this Section 6(a).
(b)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company is terminated by the Company without cause (as defined in the Plan) or by the Participant for Good Reason (as defined in the Employment Agreement), the Restricted Stock Units shall vest in full as of the date of such termination of Service.
(c)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company terminates for reason of the Participant’s death or disability (as defined in the Plan), a Pro Rata Portion of the Restricted Stock Units shall become vested as of the date such Service terminates in addition to the portion of the Restricted Stock Units which have already become vested as of such date, and all other Restricted Stock Units which are not and have not become vested, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates. For purposes hereof, “Pro Rata Portion” shall mean that number of Restricted Stock Units that would become vested on the next Vesting Date multiplied by a fraction, the denominator of which is 12 and the numerator of which is the number of completed months (measured from the day of the month of the Vesting Date to the same day of the following month) between the immediately preceding Vesting Date (or the Grant Date if there is no preceding Vesting Date) and the date of termination of Service.
(a)All vested Restricted Stock Units shall be settled within 30 days following the applicable vesting date by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested Restricted Stock Units or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the applicable date of vesting).
(b)Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least a sufficient number of such shares are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
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(c) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of Restricted Stock Units, unless and until shares of Common Stock are issued to the Participant in respect of such Restricted Stock Units.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ Peter Allen |
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Name: |
Peter Allen |
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Title: |
Chief Financial Officer |
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/s/ John C. Wobensmith |
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JOHN C. WOBENSMITH |
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5
Exhibit 10.2
Genco Shipping & Trading Limited
Restricted Stock Unit Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and Peter Allen (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a) Subject to Section 4(b) and Section 6 hereof and the further provisions of this Agreement, 1/3 of the total number of Restricted Stock Units shall vest on each of the first three anniversaries of February 23, 2025 (each such date, a “Vesting Date”), in each case subject to the Participant’s continued service with the Company on the applicable Vesting Date.
(b)In the event of the occurrence of a Change in Control, if this award is not assumed, continued or substituted for an equivalent award by the acquirer in such Change in Control, then the Restricted Stock Units shall become vested in full upon the consummation of the Change in Control.
(a)In the event that the Participant’s Service with the Company terminates before all the Restricted Stock Units are vested for any reason other than a termination by the Company without cause (as defined in the Plan), or the Participant’s death or disability (as defined in the Plan), all unvested Restricted Stock Units, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited Restricted Stock Units. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company.
(b)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company is terminated by the Company without cause (as defined in the Plan), the Restricted Stock Units shall vest in full as of the date of such termination of Service.
(c)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company terminates for reason of the Participant’s death or disability (as defined in the Plan), a Pro Rata Portion of the Restricted Stock Units shall become vested as of the date such Service terminates in addition to the portion of the Restricted Stock Units which have already become vested as of such date, and all other Restricted Stock Units which are not and have not become vested, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates. For purposes hereof, “Pro Rata Portion” shall mean that number of Restricted Stock Units that would become vested on the next Vesting Date multiplied by a fraction, the denominator of which is 12 and the numerator of which is the number of completed months (measured from the day of the month of the Vesting Date to the same day of the following month) between the immediately preceding Vesting Date (or the Grant Date if there is no preceding Vesting Date) and the date of termination of Service.
(a)All vested Restricted Stock Units shall be settled within 30 days following the applicable vesting date by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested Restricted Stock Units or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the applicable date of vesting).
(b) Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least a sufficient number of such shares are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of Restricted Stock Units, unless and until shares of Common Stock are issued to the Participant in respect of such Restricted Stock Units.
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3
(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the
4
Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations required by this Section 18 will be at the expense of the Company.
[Signature Page Follows]
5
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ John C. Wobensmith |
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Name: |
John C. Wobensmith |
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Title: |
Chief Executive Officer and President |
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/s/ Peter Allen |
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PETER ALLEN |
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6
Exhibit 10.3
Genco Shipping & Trading Limited
Restricted Stock Unit Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and Joseph Adamo (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a) Subject to Section 4(b) and Section 6 hereof and the further provisions of this Agreement, 1/3 of the total number of Restricted Stock Units shall vest on each of the first three anniversaries of February 23, 2025 (each such date, a “Vesting Date”), in each case subject to the Participant’s continued service with the Company on the applicable Vesting Date.
(b)In the event of the occurrence of a Change in Control, if this award is not assumed, continued or substituted for an equivalent award by the acquirer in such Change in Control, then the Restricted Stock Units shall become vested in full upon the consummation of the Change in Control.
(a)In the event that the Participant’s Service with the Company terminates before all the Restricted Stock Units are vested for any reason other than a termination by the Company without cause (as defined in the Plan), or the Participant’s death or disability (as defined in the Plan), all unvested Restricted Stock Units, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited Restricted Stock Units. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company.
(b)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company is terminated by the Company without cause (as defined in the Plan), the Restricted Stock Units shall vest in full as of the date of such termination of Service.
(c)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company terminates for reason of the Participant’s death or disability (as defined in the Plan), a Pro Rata Portion of the Restricted Stock Units shall become vested as of the date such Service terminates in addition to the portion of the Restricted Stock Units which have already become vested as of such date, and all other Restricted Stock Units which are not and have not become vested, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates. For purposes hereof, “Pro Rata Portion” shall mean that number of Restricted Stock Units that would become vested on the next Vesting Date multiplied by a fraction, the denominator of which is 12 and the numerator of which is the number of completed months (measured from the day of the month of the Vesting Date to the same day of the following month) between the immediately preceding Vesting Date (or the Grant Date if there is no preceding Vesting Date) and the date of termination of Service.
(a)All vested Restricted Stock Units shall be settled within 30 days following the applicable vesting date by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested Restricted Stock Units or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the applicable date of vesting).
(b) Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least a sufficient number of such shares are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of Restricted Stock Units, unless and until shares of Common Stock are issued to the Participant in respect of such Restricted Stock Units.
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(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the
4
Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations required by this Section 18 will be at the expense of the Company.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ Peter Allen |
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Name: |
Peter Allen |
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Title: |
Chief Financial Officer |
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/s/ Joseph Adamo |
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Joseph Adamo |
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6
Exhibit 10.4
Genco Shipping & Trading Limited
Restricted Stock Unit Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and Jesper Christensen (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a) Subject to Section 4(b) and Section 6 hereof and the further provisions of this Agreement, 1/3 of the total number of Restricted Stock Units shall vest on each of the first three anniversaries of February 23, 2025 (each such date, a “Vesting Date”), in each case subject to the Participant’s continued service with the Company on the applicable Vesting Date.
(b)In the event of the occurrence of a Change in Control, if this award is not assumed, continued or substituted for an equivalent award by the acquirer in such Change in Control, then the Restricted Stock Units shall become vested in full upon the consummation of the Change in Control.
(a)In the event that the Participant’s Service with the Company terminates before all the Restricted Stock Units are vested for any reason other than a termination by the Company without cause (as defined in the Plan), or the Participant’s death or disability (as defined in the Plan), all unvested Restricted Stock Units, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited Restricted Stock Units. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company.
(b)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company is terminated by the Company without cause (as defined in the Plan), the Restricted Stock Units shall vest in full as of the date of such termination of Service.
(c)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company terminates for reason of the Participant’s death or disability (as defined in the Plan), a Pro Rata Portion of the Restricted Stock Units shall become vested as of the date such Service terminates in addition to the portion of the Restricted Stock Units which have already become vested as of such date, and all other Restricted Stock Units which are not and have not become vested, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates. For purposes hereof, “Pro Rata Portion” shall mean that number of Restricted Stock Units that would become vested on the next Vesting Date multiplied by a fraction, the denominator of which is 12 and the numerator of which is the number of completed months (measured from the day of the month of the Vesting Date to the same day of the following month) between the immediately preceding Vesting Date (or the Grant Date if there is no preceding Vesting Date) and the date of termination of Service.
(a)All vested Restricted Stock Units shall be settled within 30 days following the applicable vesting date by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested Restricted Stock Units or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the applicable date of vesting).
(b) Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least a sufficient number of such shares are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of Restricted Stock Units, unless and until shares of Common Stock are issued to the Participant in respect of such Restricted Stock Units.
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(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the
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Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations required by this Section 18 will be at the expense of the Company.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ Peter Allen |
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Name: |
Peter Allen |
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Title: |
Chief Financial Officer |
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/s/ Jesper Christensen |
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JESPER CHRISTENSEN |
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6
Exhibit 10.5
Genco Shipping & Trading Limited
Performance Restricted Stock Unit Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and John C. Wobensmith (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a)The performance period for the PRSUs shall be the period beginning January 1, 2025 and ending on December 31, 2027 (or, if earlier and as otherwise provided in this Agreement, the consummation of a Change in Control) (the “Measurement Period”). Subject to the terms and conditions of this Agreement, the number of PRSUs that shall be deemed earned and vested, if any, shall be determined based on the level of achievement of the performance metrics set forth on Exhibit A (such performance metrics, the “Performance Metrics”) over the Measurement Period, with the number of PRSUs that may be earned and vested ranging from zero to 200% of the Target PRSUs. Any PRSUs (and any related Dividend Equivalents) that are determined not to be earned and vested at the end of the Measurement Period shall be forfeited and cancelled for no value without further action of the Participant or the Company. For the purposes of this Agreement, Change in Control will have the meaning set forth in the Participant’s Employment Agreement with the Company dated as of September 21, 2007, as amended from time to time (the “Employment Agreement”), provided, however that subclauses (iv) and (v) of such definition shall not apply for purposes of this Agreement.
As soon as reasonably practicable following the end of the Measurement Period, the Committee shall determine the level of achievement of the Performance Metrics and the percentage of the Target PRSUs earned pursuant to such criteria (the date of such determination, the “Determination Date”). As soon as reasonably practicable following the Determination Date (but no later than March 15th of the year following the year in which the end of the Measurement Period occurs), all earned and vested PRSUs shall be settled.
(b)In the event of the occurrence of a Change in Control during the Measurement Period where the PRSUs are not assumed or exchanged for an equivalent substitute award by the Company or its successor:
(i) |
If the Participant is employed by the Company as of the Change in Control, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Target PRSUs as of the Change in Control as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change in Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration. |
(ii) |
If the Participant’s employment with the Company terminated before the Change in Control on account of the Participant’s death or disability, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Target PRSUs if such Change in Control has been consummated pursuant to a definitive agreement in effect at the time of such termination of employment or an alternative definitive agreement entered into subsequent to such original definitive agreement and shall otherwise earn and vest in the Pro Rata Portion (pursuant to Section 6(c)) of the Target PRSUs as of the Change in Control, in each case as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change in Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration.. |
(c)In the event of the occurrence of a Change in Control during the Measurement Period where the PRSUs are assumed or exchanged for an equivalent substitute award by the Company or its successor and either (1) the Participant remains employed by the Company on the date that is six (6) months after the date of such Change in Control (the “6-Month Anniversary Date”) or (2) after the Change in Control but before the 6-Month Anniversary Date, the Participant’s Service with the Company is terminated by the Company on account of the Participant’s death or disability, then (to the extent not previously vested in accordance with Section 4(a) or Section 6(b)), (i) the 6-Month Anniversary Date shall be the last day of the Measurement Period, (ii) the Target PRSUs shall be earned and vested as of the 6-Month Anniversary Date, if the preceding clause (1) applies or as of the date of termination of the Participant’s Service if the preceding clause (2) applies, in each case as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A (iii) the Target PRSUs shall be settled within thirty days of the 6-Month Anniversary Date if the preceding clause (1) applies or within thirty days of the date of termination of the Participant’s Service if the preceding clause (2) applies and (iv) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the 6-Month Anniversary Date shall be forfeited and cancelled with no consideration.
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(a)In the event that the Participant’s Service with the Company terminates for any reason other than a termination by the Company without cause (as defined in the Plan), by the Participant for Good Reason (as defined in the Employment Agreement), or the Participant’s death or disability (as defined in the Plan) prior to the end of the Measurement Period, all unvested PRSUs, together with any Dividend Equivalents related to such PRSUs, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited PRSUs. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company. For the avoidance of doubt, no resignation by the Participant as a director following termination of the Participant’s employment by the Company without cause shall be deemed a resignation by the Participant subject to this Section 6(a).
(b)Except as provided in Sections 4(b) and 4(c) hereof, in the event that, before the end of the Measurement Period, the Participant’s Service with the Company is terminated on account of the Participant’s death or disability, a “Pro Rata Portion” of the Participant’s PRSUs shall remain outstanding during the Measurement Period and shall vest and such Pro Rata Portion shall be settled, if and to the extent the Performance Metrics are achieved, as set forth in Sections 4 and 7. For purposes hereof, “Pro Rata Portion” shall be based on a calculation where the numerator is the number of completed months that have elapsed between the first day of the Measurement Period through the date of termination of the Participant’s Service and the denominator is 36.
(c)In the event that, before the end of the Measurement Period, the Participant’s Service as an employee of the Company is terminated by the Company without cause (as defined in the Plan) or by the Participant for Good Reason (as defined in the Employment Agreement), (i) the effective date of the termination of Service shall be the last day of the Measurement Period, (ii) the Participant shall earn and vest in the Target PRSUs as of the effective date of the termination of Service as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, and (iii) the Target PRSUs shall be settled on the effective date of the termination of Service.
(a)All earned and vested PRSUs shall be settled by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested PRSUs or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the Determination Date).
(b)Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least an approximately sufficient number of such shares (in the discretion of the administrator) are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of PRSUs, unless and until shares of Common Stock are issued to the Participant in respect of such PRSUs.
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(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
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(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations required by this Section 18 will be at the expense of the Company.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ Peter Allen |
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Name: |
Peter Allen |
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Title: |
Chief Financial Officer |
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/s/ John C. Wobensmith |
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JOHN C. WOBENSMITH |
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Exhibit A
50% of the Target PRSUs vest based on Relative Total Shareholder Return (“rTSR”) and 50% of the Target PRSUs vest based on Return on Invested Capital (“ROIC”), as provided below:
Performance Metric |
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Award Weighting |
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Threshold |
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Target |
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Stretch |
rTSR |
50% |
25th Percentile |
55th Percentile |
85th Percentile |
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ROIC |
50% |
2.0% |
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4.0-5.0% |
9.0% |
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Percent of Target PRSUs Earned |
25% |
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100% |
200% |
If the level of performance achievement is between two of these identified levels of performance (i.e., between Threshold and Target or between Target and Stretch), the actual amount of the PRSUs that is earned will be “interpolated” in a linear progression between such goals.
For avoidance of doubt, failure to achieve Threshold of one Performance Metric (i.e., failure to achieve threshold for rTSR or failure to achieve threshold for ROIC) shall not result in the forfeiture of the PRSUs subject to the Performance Metric that is achieved.
For purposes of this Agreement, the following terms shall have the following meanings:
“Peer Group” shall mean Star Bulk Carriers Corp., Diana Shipping Inc., Golden Ocean Group Limited, Safe Bulkers, Inc., Pacific Basin Shipping Limited, Pangaea Logistics Solutions Ltd., Belships ASA, Seanergy Maritime Holdings Corp., Taylor Maritime Investments Limited, 2020 Bulkers Ltd. and Thoresen Thai Agencies Plc. Any members of the Peer Group that become acquired are removed from the Peer Group.
“rTSR” shall be based on share price for the Peer Group measured at the end of the Measurement Period based on a twenty (20) trading day average plus dividends paid (assumed to be reinvested) compared to the share price for the Peer Group at the start of the Measurement Period based on a twenty (20) day trading average. Any Peer Group member that enters bankruptcy, liquidation, or delisting is assumed to be -100%.
“ROIC” is an internally adjusted ratio based on Net Operating Profit After Taxes (NOPAT) / (debt + equity - cash) and is averaged for each year during the Measurement Period.
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Exhibit 10.6
Genco Shipping & Trading Limited
Performance Restricted Stock Unit Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and Peter Allen (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a)The performance period for the PRSUs shall be the period beginning January 1, 2025 and ending on December 31, 2027 (or, if earlier and as otherwise provided in this Agreement, the consummation of a Change in Control) (the “Measurement Period”). Subject to the terms and conditions of this Agreement, the number of PRSUs that shall be deemed earned and vested, if any, shall be determined based on the level of achievement of the performance metrics set forth on Exhibit A (such performance metrics, the “Performance Metrics”) over the Measurement Period, with the number of PRSUs that may be earned and vested ranging from zero to 200% of the Target PRSUs. Any PRSUs (and any related Dividend Equivalents) that are determined not to be earned and vested at the end of the Measurement Period shall be forfeited and cancelled for no value without further action of the Participant or the Company.
As soon as reasonably practicable following the end of the Measurement Period, the Committee shall determine the level of achievement of the Performance Metrics and the percentage of the Target PRSUs earned pursuant to such criteria (the date of such determination, the “Determination Date”). As soon as
reasonably practicable following the Determination Date (but no later than March 15th of the year following the year in which the end of the Measurement Period occurs), all earned and vested PRSUs shall be settled.
(b)In the event of the occurrence of a Change in Control during the Measurement Period where the PRSUs are not assumed or exchanged for an equivalent substitute award by the Company or its successor:
(i) |
If the Participant is employed by the Company as of the Change in Control, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Target PRSUs as of the Change in Control as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change of Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration. |
(ii) |
If the Participant’s employment with the Company terminated before the Change in Control by the Company on account of the Participant’s death or disability, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Pro Rata Portion (pursuant to Section 6(b)) of the Target PRSUs as of the Change in Control as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change of Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration. |
(a)In the event that the Participant’s Service with the Company terminates for any reason other than a termination by the Company without cause (as defined in the Plan), or the Participant’s death or disability (as defined in the Plan) prior to the end of the Measurement Period, all unvested PRSUs, together with any Dividend Equivalents related to such PRSUs, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited PRSUs. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company.
(b)Except as provided in Section 4(b) hereof, in the event that, before the end of the Measurement Period, the Participant’s Service with the Company is terminated on account of the Participant’s death or disability, a “Pro Rata Portion” of the Participant’s PRSUs shall remain outstanding during the Measurement Period and shall vest and such Pro Rata Portion shall be settled, if and to the extent the Performance Metrics are achieved, as set forth in Sections 4 and 7. For purposes hereof, “Pro Rata Portion” shall be based on a calculation where the numerator is the number of completed months that have elapsed between the first day of the Measurement Period through the date of termination of the Participant’s Service and the denominator is 36.
(c)In the event that, before the end of the Measurement Period, the Participant’s Service as an employee of the Company is terminated by the Company without cause (as defined in the Plan), (i) the
2
effective date of the termination of Service shall be the last day of the Measurement Period, (ii) the Participant shall earn and vest in the Target PRSUs as of the effective date of the termination of Service, (iii) the Target PRSUs shall be settled on the effective date of the termination of Service.
(a)All earned and vested PRSUs shall be settled by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested PRSUs or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the Determination Date.
(b)Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least an approximately sufficient number of such shares (in the discretion of the administrator) are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of PRSUs, unless and until shares of Common Stock are issued to the Participant in respect of such PRSUs.
3
(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero);
4
provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations required by this Section 18 will be at the expense of the Company.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ John C. Wobensmith |
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Name: |
John C. Wobensmith |
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Title: |
Chief Executive Officer and President |
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/s/ Peter Allen |
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PETER ALLEN |
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6
Exhibit A
50% of the Target PRSUs vest based on Relative Total Shareholder Return (“rTSR”) and 50% of the Target PRSUs vest based on Return on Invested Capital (“ROIC”), as provided below:
Performance Metric |
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Award Weighting |
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Threshold |
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Target |
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Stretch |
rTSR |
50% |
25th Percentile |
55th Percentile |
85th Percentile |
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ROIC |
50% |
2.0% |
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4.0-5.0% |
9.0% |
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Percent of Target PRSUs Earned |
25% |
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100% |
200% |
If the level of performance achievement is between two of these identified levels of performance (i.e., between Threshold and Target or between Target and Stretch), the actual amount of the PRSUs that is earned will be “interpolated” in a linear progression between such goals.
For avoidance of doubt, failure to achieve Threshold of one Performance Metric (i.e., failure to achieve threshold for rTSR or failure to achieve threshold for ROIC) shall not result in the forfeiture of the PRSUs subject to the Performance Metric that is achieved.
For purposes of this Agreement, the following terms shall have the following meanings:
“Peer Group” shall mean Star Bulk Carriers Corp., Diana Shipping Inc., Golden Ocean Group Limited, Safe Bulkers, Inc., Pacific Basin Shipping Limited, Pangaea Logistics Solutions Ltd., Belships ASA, Seanergy Maritime Holdings Corp., Taylor Maritime Investments Limited, 2020 Bulkers Ltd. and Thoresen Thai Agencies Plc. Any members of the Peer Group that become acquired are removed from the Peer Group.
“rTSR” shall be based on share price for the Peer Group measured at the end of the Measurement Period based on a twenty (20) trading day average plus dividends paid (assumed to be reinvested) compared to the share price for the Peer Group at the start of the Measurement Period based on a twenty (20) day trading average. Any Peer Group member that enters bankruptcy, liquidation, or delisting is assumed to be -100%.
“ROIC” is an internally adjusted ratio based on Net Operating Profit After Taxes (NOPAT) / (debt + equity - cash) and is averaged for each year during the Measurement Period.
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7
Exhibit 10.7
Genco Shipping & Trading Limited
Performance Restricted Stock Unit Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and Joseph Adamo (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a)The performance period for the PRSUs shall be the period beginning January 1, 2025 and ending on December 31, 2027 (or, if earlier and as otherwise provided in this Agreement, the consummation of a Change in Control) (the “Measurement Period”). Subject to the terms and conditions of this Agreement, the number of PRSUs that shall be deemed earned and vested, if any, shall be determined based on the level of achievement of the performance metrics set forth on Exhibit A (such performance metrics, the “Performance Metrics”) over the Measurement Period, with the number of PRSUs that may be earned and vested ranging from zero to 200% of the Target PRSUs. Any PRSUs (and any related Dividend Equivalents) that are determined not to be earned and vested at the end of the Measurement Period shall be forfeited and cancelled for no value without further action of the Participant or the Company.
As soon as reasonably practicable following the end of the Measurement Period, the Committee shall determine the level of achievement of the Performance Metrics and the percentage of the Target PRSUs earned pursuant to such criteria (the date of such determination, the “Determination Date”). As soon as
reasonably practicable following the Determination Date (but no later than March 15th of the year following the year in which the end of the Measurement Period occurs), all earned and vested PRSUs shall be settled.
(b)In the event of the occurrence of a Change in Control during the Measurement Period where the PRSUs are not assumed or exchanged for an equivalent substitute award by the Company or its successor:
(i) |
If the Participant is employed by the Company as of the Change in Control, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Target PRSUs as of the Change in Control as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change of Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration. |
(ii) |
If the Participant’s employment with the Company terminated before the Change in Control by the Company on account of the Participant’s death or disability, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Pro Rata Portion (pursuant to Section 6(b)) of the Target PRSUs as of the Change in Control as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change of Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration. |
(a)In the event that the Participant’s Service with the Company terminates for any reason other than a termination by the Company without cause (as defined in the Plan), or the Participant’s death or disability (as defined in the Plan) prior to the end of the Measurement Period, all unvested PRSUs, together with any Dividend Equivalents related to such PRSUs, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited PRSUs. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company.
(b)Except as provided in Section 4(b) hereof, in the event that, before the end of the Measurement Period, the Participant’s Service with the Company is terminated on account of the Participant’s death or disability, a “Pro Rata Portion” of the Participant’s PRSUs shall remain outstanding during the Measurement Period and shall vest and such Pro Rata Portion shall be settled, if and to the extent the Performance Metrics are achieved, as set forth in Sections 4 and 7. For purposes hereof, “Pro Rata Portion” shall be based on a calculation where the numerator is the number of completed months that have elapsed between the first day of the Measurement Period through the date of termination of the Participant’s Service and the denominator is 36.
(c)In the event that, before the end of the Measurement Period, the Participant’s Service as an employee of the Company is terminated by the Company without cause (as defined in the Plan), (i) the
2
effective date of the termination of Service shall be the last day of the Measurement Period, (ii) the Participant shall earn and vest in the Target PRSUs as of the effective date of the termination of Service, (iii) the Target PRSUs shall be settled on the effective date of the termination of Service.
(a)All earned and vested PRSUs shall be settled by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested PRSUs or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the Determination Date.
(b)Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least an approximately sufficient number of such shares (in the discretion of the administrator) are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of PRSUs, unless and until shares of Common Stock are issued to the Participant in respect of such PRSUs.
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(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero);
4
provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations required by this Section 18 will be at the expense of the Company.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ Peter Allen |
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Name: |
Peter Allen |
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Title: |
Chief Financial Officer |
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/s/ Joseph Adamo |
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Joseph Adamo |
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6
Exhibit A
50% of the Target PRSUs vest based on Relative Total Shareholder Return (“rTSR”) and 50% of the Target PRSUs vest based on Return on Invested Capital (“ROIC”), as provided below:
Performance Metric |
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Award Weighting |
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Threshold |
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Target |
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Stretch |
rTSR |
50% |
25th Percentile |
55th Percentile |
85th Percentile |
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ROIC |
50% |
2.0% |
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4.0-5.0% |
9.0% |
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Percent of Target PRSUs Earned |
25% |
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100% |
200% |
If the level of performance achievement is between two of these identified levels of performance (i.e., between Threshold and Target or between Target and Stretch), the actual amount of the PRSUs that is earned will be “interpolated” in a linear progression between such goals.
For avoidance of doubt, failure to achieve Threshold of one Performance Metric (i.e., failure to achieve threshold for rTSR or failure to achieve threshold for ROIC) shall not result in the forfeiture of the PRSUs subject to the Performance Metric that is achieved.
For purposes of this Agreement, the following terms shall have the following meanings:
“Peer Group” shall mean Star Bulk Carriers Corp., Diana Shipping Inc., Golden Ocean Group Limited, Safe Bulkers, Inc., Pacific Basin Shipping Limited, Pangaea Logistics Solutions Ltd., Belships ASA, Seanergy Maritime Holdings Corp., Taylor Maritime Investments Limited, 2020 Bulkers Ltd. and Thoresen Thai Agencies Plc. Any members of the Peer Group that become acquired are removed from the Peer Group.
“rTSR” shall be based on share price for the Peer Group measured at the end of the Measurement Period based on a twenty (20) trading day average plus dividends paid (assumed to be reinvested) compared to the share price for the Peer Group at the start of the Measurement Period based on a twenty (20) day trading average. Any Peer Group member that enters bankruptcy, liquidation, or delisting is assumed to be -100%.
“ROIC” is an internally adjusted ratio based on Net Operating Profit After Taxes (NOPAT) / (debt + equity - cash) and is averaged for each year during the Measurement Period.
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7
Exhibit 10.8
Genco Shipping & Trading Limited
Performance PRSU Grant Agreement
THIS AGREEMENT, made as of February 18, 2025, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and Jesper Christensen (the “Participant”).
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards;
WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
(a)The performance period for the PRSUs shall be the period beginning January 1, 2025 and ending on December 31, 2027 (or, if earlier and as otherwise provided in this Agreement, the consummation of a Change in Control) (the “Measurement Period”). Subject to the terms and conditions of this Agreement, the number of PRSUs that shall be deemed earned and vested, if any, shall be determined based on the level of achievement of the performance metrics set forth on Exhibit A (such performance metrics, the “Performance Metrics”) over the Measurement Period, with the number of PRSUs that may be earned and vested ranging from zero to 200% of the Target PRSUs. Any PRSUs (and any related Dividend Equivalents) that are determined not to be earned and vested at the end of the Measurement Period shall be forfeited and cancelled for no value without further action of the Participant or the Company.
As soon as reasonably practicable following the end of the Measurement Period, the Committee shall determine the level of achievement of the Performance Metrics and the percentage of the Target PRSUs earned pursuant to such criteria (the date of such determination, the “Determination Date”). As soon as
reasonably practicable following the Determination Date (but no later than March 15th of the year following the year in which the end of the Measurement Period occurs), all earned and vested PRSUs shall be settled.
(b)In the event of the occurrence of a Change in Control during the Measurement Period where the PRSUs are not assumed or exchanged for an equivalent substitute award by the Company or its successor:
(i) |
If the Participant is employed by the Company as of the Change in Control, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Target PRSUs as of the Change in Control as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change of Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration. |
(ii) |
If the Participant’s employment with the Company terminated before the Change in Control by the Company on account of the Participant’s death or disability, then (w) the effective date of the Change in Control shall be the last day of the Measurement Period, (x) the Participant shall earn and vest in the Pro Rata Portion (pursuant to Section 6(b)) of the Target PRSUs as of the Change in Control as if the Performance Metrics had been achieved at the Target level set forth in Exhibit A, (y) such Target PRSUs shall be settled on the effective date of the Change of Control and (z) any PRSUs (and any related Dividend Equivalents) that do not become earned and vested on the Change in Control shall be forfeited and cancelled with no consideration. |
(a)In the event that the Participant’s Service with the Company terminates for any reason other than a termination by the Company without cause (as defined in the Plan), or the Participant’s death or disability (as defined in the Plan) prior to the end of the Measurement Period, all unvested PRSUs, together with any Dividend Equivalents related to such PRSUs, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited PRSUs. For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following: an employee or a director of, or a consultant to, the Company.
(b)Except as provided in Section 4(b) hereof, in the event that, before the end of the Measurement Period, the Participant’s Service with the Company is terminated on account of the Participant’s death or disability, a “Pro Rata Portion” of the Participant’s PRSUs shall remain outstanding during the Measurement Period and shall vest and such Pro Rata Portion shall be settled, if and to the extent the Performance Metrics are achieved, as set forth in Sections 4 and 7. For purposes hereof, “Pro Rata Portion” shall be based on a calculation where the numerator is the number of completed months that have elapsed between the first day of the Measurement Period through the date of termination of the Participant’s Service and the denominator is 36.
(c)In the event that, before the end of the Measurement Period, the Participant’s Service as an employee of the Company is terminated by the Company without cause (as defined in the Plan), (i) the
2
effective date of the termination of Service shall be the last day of the Measurement Period, (ii) the Participant shall earn and vest in the Target PRSUs as of the effective date of the termination of Service, (iii) the Target PRSUs shall be settled on the effective date of the termination of Service.
(a)All earned and vested PRSUs shall be settled by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested PRSUs or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the Determination Date.
(b)Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least an approximately sufficient number of such shares (in the discretion of the administrator) are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of PRSUs, unless and until shares of Common Stock are issued to the Participant in respect of such PRSUs.
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(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero);
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provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which the Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations required by this Section 18 will be at the expense of the Company.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ Peter Allen |
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Name: |
Peter Allen |
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Title: |
Chief Financial Officer |
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/s/ Jesper Christensen |
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JESPER CHRISTENSEN |
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Exhibit A
50% of the Target PRSUs vest based on Relative Total Shareholder Return (“rTSR”) and 50% of the Target PRSUs vest based on Return on Invested Capital (“ROIC”), as provided below:
Performance Metric |
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Award Weighting |
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Threshold |
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Target |
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Stretch |
rTSR |
50% |
25th Percentile |
55th Percentile |
85th Percentile |
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ROIC |
50% |
2.0% |
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4.0-5.0% |
9.0% |
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Percent of Target PRSUs Earned |
25% |
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100% |
200% |
If the level of performance achievement is between two of these identified levels of performance (i.e., between Threshold and Target or between Target and Stretch), the actual amount of the PRSUs that is earned will be “interpolated” in a linear progression between such goals.
For avoidance of doubt, failure to achieve Threshold of one Performance Metric (i.e., failure to achieve threshold for rTSR or failure to achieve threshold for ROIC) shall not result in the forfeiture of the PRSUs subject to the Performance Metric that is achieved.
For purposes of this Agreement, the following terms shall have the following meanings:
“Peer Group” shall mean Star Bulk Carriers Corp., Diana Shipping Inc., Golden Ocean Group Limited, Safe Bulkers, Inc., Pacific Basin Shipping Limited, Pangaea Logistics Solutions Ltd., Belships ASA, Seanergy Maritime Holdings Corp., Taylor Maritime Investments Limited, 2020 Bulkers Ltd. and Thoresen Thai Agencies Plc. Any members of the Peer Group that become acquired are removed from the Peer Group.
“rTSR” shall be based on share price for the Peer Group measured at the end of the Measurement Period based on a twenty (20) trading day average plus dividends paid (assumed to be reinvested) compared to the share price for the Peer Group at the start of the Measurement Period based on a twenty (20) day trading average. Any Peer Group member that enters bankruptcy, liquidation, or delisting is assumed to be -100%.
“ROIC” is an internally adjusted ratio based on Net Operating Profit After Taxes (NOPAT) / (debt + equity - cash) and is averaged for each year during the Measurement Period.
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Exhibit 10.9
GENCO SHIPPING & TRADING LIMITED
299 PARK AVENUE, 12TH FLOOR
NEW YORK, NEW YORK 10171
May 6, 2025
Mr. Peter Allen
Genco Shipping & Trading Limited
299 Park Avenue, 20th Floor
New York, NY 10171
Dear Mr. Allen:
The purpose of this letter is to set forth the agreement (this “Agreement”) with respect to the terms of your continued employment by Genco Shipping & Trading Limited. (“Genco” or the “Company”). As used in this Agreement, the term “Genco Group” means and includes the Company and each of its subsidiaries and controlled affiliates and joint ventures from time to time. It is agreed as follows:
1.Subject to the terms and conditions of this Agreement, Genco agrees to continue to employ you, and you agree to continue to be employed by Genco, effective May 6, 2025 (the “Effective Date”) until the termination of your employment on the Termination Date (as defined below in Section 5(e)). The period of time from the Effective Date through such termination is referred to herein as the “Term.”
2.During the Term, your title shall be Chief Financial Officer and/or such other titles of a senior executive nature as the Board of Directors may assign to you. You shall report to the Chief Executive Officer and President of Genco. You shall have such specific duties, responsibilities and authority (including without limitation service as an officer, director or equivalent position of any other member of the Genco Group, without additional compensation) as may be assigned to you by the Board of Directors of Genco, and in the absence of such assignment, such duties, responsibilities and authority as are customary to your position.
3.During your employment, you shall devote your full business time, attention, energy and best efforts to the business and affairs of Genco (and the members of the Genco Group to the extent requested pursuant to Section 2 above). You shall abide by all applicable policies of the Company and the Genco Group from time to time in effect known to you or provided to you electronically or in writing. You agree that you shall not engage in or be interested in any capacity in any activity that is contrary to the interest of Genco, or that is reasonably deemed by Genco to be harmful to Genco’s business interests, unless such activity is fully disclosed and approved in writing
by the Board of Directors of Genco prior to the undertaking. You may engage in charitable, educational and community affairs, including serving on the board of directors of any charitable, educational or community organization, provided that such activities do not, individually or in the aggregate, materially interfere with your performance of your duties or cause a breach of this Agreement (including without limitation Sections 12 and 13 hereof) and, if such activities pertain to the industry in which the Company does business, your engagement in such activities is approved in writing by the Board of Directors of the Company or a committee thereof or by the Chief Executive Officer.
4.(a)In consideration of your services, you shall be paid a base salary at the rate of $380,000 per annum during the Term (“Base Salary”), payable in accordance with Genco’s normal payroll practices. Your Base Salary will be reviewed from time to time when salaries of senior officers of the Genco Group are reviewed generally and may be subject to increase, but not decrease, during the Term.
(b)In addition, you shall be eligible to receive annual discretionary bonus compensation. The amount of such bonus, if any, shall be in the sole discretion of the Board of Directors of the Company, its Compensation Committee, or both and shall be reviewed from time to time when bonuses of senior officers of the Genco Group are reviewed generally. For 2025, the target amount of your bonus under Genco’s Annual Incentive Plan has been determined to be 85% of your Base Salary as set forth in Section 4(a) hereof.
(c)You shall be eligible to receive Restricted Stock and other equity grants from time to time pursuant to the Company’s 2015 Amended and Restated Equity Incentive Plan, as amended from time to time, or any successor employee stock incentive or option plan in accordance with the terms and conditions thereof, as determined in the sole discretion of the Board of Directors of the Company, its Compensation Committee, or both.
(d)You shall be entitled to four (4) weeks paid vacation per calendar year, to be taken in accordance with the Company’s vacation policies applicable to its executives. You shall also be entitled to employee benefits on the same basis as those benefits are made available to other Genco employees in comparable positions. Genco reserves the right to amend, modify, or terminate any employee benefits plans, programs, and arrangements from time to time in its sole discretion.
(e)Genco will reimburse you, in accordance with its standard policies from time to time in effect, for such reasonable and necessary out-of-pocket business expenses as may be incurred by you during your employment in the performance of your duties and responsibilities for any member of the Genco Group. You will provide documentation of such expenses as reasonably required under standard Company policies from time to time.
(f)All salary and other payments by Genco are subject to all legally required and customary withholdings and deductions.
5.(a)Genco may immediately terminate your employment for Cause (as defined herein). In such event, or if you resign (other than for Good Reason or Disability (as defined below)) or retire as an employee of Genco, the obligations of Genco shall cease immediately and you shall not be entitled to any further payments of any kind except for (i) payment of your
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accrued but unpaid Base Salary through the Termination Date (as defined below in Section 5(e)); (ii) any business expenses required to be reimbursed under Section 4(e), and (iii) other payments entitlements and benefits, if any, in accordance with the terms of any applicable plans, programs, arrangements of the Company or any affiliate (clauses (i), (ii), and (iii), together, the “Accrued Amounts”). In addition, if you resign (other than for Good Reason or Disability) under the circumstances described in Section 13(a)(ii) following relocation of your office, a Non-Competition Period (as defined below) following the period of your employment shall not apply. For purposes of this Agreement, Cause shall include:
(i)any act or failure to act by you involving fraud, material theft or embezzlement;
(ii)any act or failure to act by you that constitutes a felony or other crime involving moral turpitude, or your conviction of or plea of nolo contendere to any such crime, in each case within the meaning of applicable law;
(iii)in carrying out your duties for the Company, you engage in conduct or a failure to act that constitutes gross misconduct or gross negligence;
(iv)failure or refusal to perform or observe any of your material duties, responsibilities or obligations set forth in this Agreement or your failure to follow the directions of an officer of Genco to whom you report or of the Board of Directors;
(v)conduct that if generally known could reasonably be expected to reflect negatively on the Company’s reputation with customers, suppliers, investors or the general public or otherwise cause harm to the Company;
(vi)intentional and wrongful disclosure of confidential information of the Company;
(vii)your material breach of Company policies; or
(viii)your material breach of this Agreement.
Notwithstanding anything herein to the contrary, your employment shall not be terminated for Cause under Section 5(a)(iv), (vii), or (viii) above unless you are given notice by the Company of circumstances constituting the basis for such termination and, with respect to clauses (iv), (vii), and (viii), if such circumstances are curable, you fail to cure such circumstances within fifteen (15) days after receipt of such notice.
(b)In the event of your death, or termination of your employment by the Company due to your Disability (as defined below), the Company will pay to you (or your estate or legal representative, as the case may be), the Accrued Amounts plus the Severance Amount of any Annual Incentive Award for the year prior to the year in which the Termination Date occurs, to the extent not previously paid. In the case of Disability (as defined below), you may elect to continue your existing medical and dental benefits under the Company’s plans in accordance with and subject to the law known as COBRA. Any COBRA continuation coverage will be at your own cost.
For purposes of this Agreement:
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(x) “Annual Incentive Award” shall mean the short-term annual cash bonus earned by you for a given year, including any amounts deferred;
(y) “Disability” shall mean your inability to perform your duties and responsibilities as contemplated under this Agreement for a period of more than 120 consecutive days, or for a period aggregating more than 180 days, whether or not continuous, during any 360-day period, due to physical or mental incapacity or impairment; and
(z) “Severance Amount” shall mean, with respect to an Annual Incentive Award for a given calendar year, the greater of (1) the target amount for such Annual Incentive Award and (2) the actual amount of such Annual Incentive Award if such actual amount has been determined by the Compensation Committee or the Board of Directors of Genco as of the Termination Date. If the target amount for such Annual Incentive Award has not been determined by the Compensation Committee or the Board of Directors for a given calendar year, then the target amount so determined for the Annual Incentive Award for the immediately prior calendar year shall be used for purposes of the preceding clause (1).
(c)In the event of your resignation for Good Reason, or in the event that your employment is terminated by Genco, other than in accordance with Section 5(a) or (b), and subject to your execution and non-revocation of a general release of all claims substantially in the form attached hereto as Exhibit A (the “Release”), you shall be entitled to (i) the Accrued Amounts; (ii) the Severance Amount of any Annual Incentive Award for the year prior to the year in which the Termination Date occurs, to the extent not previously paid; (iii) a pro-rata bonus for the year in which the Termination Date occurs equal to the amount by which (x) the Severance Amount of the Annual Incentive Award for the year in which the Termination Date occurs multiplied by a fraction, the numerator of which is the number of days you were employed by the Company during the year in which the Termination Date occurs and the denominator of which is the number of days in such year exceeds (y) the value of any Annual Incentive Award granted or paid to you in respect of the year in which the Termination Date occurs; (iv) a lump sum payment equal in amount to your annualized Base Salary, as determined on the Termination Date, less all deductions and withholdings, payable within sixty (60) days of your termination date; (v) a lump sum payment equal to the Severance Amount of the Annual Incentive Award for the year in which the Termination Date occurs; and (vi) if you may elect to continue your existing medical and dental benefits under the Company’s plans in accordance with and subject to the law known as COBRA, reimbursement by Genco for the out of pocket cost of any COBRA continuation coverage to which you may become entitled during the Non-Competition Period, as defined below, and any additional period of COBRA continuation coverage will be at your own cost; provided, however, that Genco shall be not required to provide COBRA continuation coverage at no cost to you to the extent that such provision would cause Genco to incur tax penalties under Section 4980D of the Internal Revenue Code of 1986, as amended (the “Code”) or otherwise. The Release must be executed and delivered to the Company, with all periods for revocation having expired, within sixty (60) days following the Termination Date, provided that, in the event that such 60-day period spans two different calendar years, then the payments under subclauses (iii), (iv), and (v) above will not be paid to you before January 1st of the latter of such two calendar years. Failure to timely execute and return the Release or the revocation thereof shall be a waiver of your right, if any, to the benefits set forth in this Section 5(c), except for the Accrued Amounts. The Company agrees that it will promptly
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countersign the Release, and provide you with a copy of the countersigned release, upon its receipt of the Release executed by you.
(d)Your resignation shall be deemed to be for “Good Reason” if the Company: (i) materially diminishes your authority, duties or responsibilities; (ii) materially diminishes your Base Salary below $380,000 during the Term; or (iii) materially breaches this Agreement. You will give the Company written notice of your intention to terminate your employment within thirty (30) days of the occurrence of any event constituting Good Reason, and the Company shall have thirty (30) days from the receipt of such notice to cure such event. Your termination of employment on account of such event shall be effective upon expiration of the cure period unless the Company has cured the grounds for such termination.
(e)For purposes of this Agreement, “Termination Date” shall mean: (i) if your employment is terminated by Genco for Cause, the date of the notice of termination from the Company, provided that if the termination is for Cause pursuant to Section 5(a)(i), (iii), (iv), or (v) of the definition of Cause, then the Termination Date shall be the date on which the applicable cure period lapses if you have not cured; (ii) if your employment is terminated by the Company without Cause (other than for Disability) or by you without Good Reason, the date set forth in the notice of termination (which in no event shall be earlier than the date such notice is effective and, in the event of your retirement or resignation without Good Reason, shall be no earlier than 60 days following the date such notice is provided to the Company; provided, however, that the Company may accelerate the effective date of such termination to any time after you have provided notice); (iii) if your employment is terminated by reason of death, the date of death; (iv) if your employment is terminated upon Disability, 30 days after notice is given by the Company; and (v) if your employment is terminated by you for Good Reason, the date specified in your notice of termination in accordance with the last sentence of Section 5(d).
6.(a)Notwithstanding anything in this Agreement to the contrary, if (i) a Change in Control occurs after the date hereof; and (ii) upon such Change in Control or within 2 years thereafter you terminate your employment for Good Reason as defined above or the Company terminates your employment without Cause, you shall be entitled to all the payments, benefits and entitlements as of the Termination Date as set forth in Section 5(c) provided that the amounts in Sections 5(c)(iv) and (v) shall be doubled, in each case subject to the execution and non-revocation of the Release in accordance with the two penultimate sentences of Section 5(c) (and the Company will countersign the Release and provide you with a copy of the countersigned Release in accordance with the last sentence of Section 5(c)). If, following a Change in Control, the Company alters your job such that you would have “Good Reason” to resign under subclause (i) of the “Good Reason” definition above, and provided that you continue to have primarily senior management- and/or executive transition-type duties and responsibilities for the duration of such altered job, then you agree that you may not resign for Good Reason under subclause (i) as a result of such altered job during the six (6)-month period immediately following the Change in Control (the “Transition Period”). Instead, in such event, you may elect to terminate your employment with Good Reason within thirty days following the conclusion of the Transition Period, and you will become entitled to severance in accordance with this Section 6(a). During the Transition Period, you will be entitled to continue to receive your Base Salary and participate in the Company’s employee benefit plans. Nothing in this paragraph is intended to limit the Company’s right to terminate your employment with or without Cause or your right to resign with or without Good Reason following a Change in Control (other than that you may not resign pursuant to subclause (i) of the Good Reason
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definition, provided that the condition set forth in the initial sentence of this paragraph is satisfied). In addition, you agree to consider any offer of employment made to you by the Company following a Change in Control whereby you would no longer be the Chief Financial Officer of the Company or its ultimate parent (provided that such ultimate parent company is an operating or holding company and not a financial or institutional investor) following the Change in Control, but you will be under no obligation to accept any such offer and your rejection of any such offer will in no way impact your eligibility to receive severance under this Agreement.
For purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following:
(i)any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (a “Person”) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under any employee benefit plan of the Company, (C) any company or entity owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of common stock of the Company or (D) pursuant to a transaction or series of transactions in which the holders of the securities entitled to vote generally in the election of directors to the Board of Directors (the “Voting Securities”) of Genco outstanding immediately prior thereto, continue to retain or represent, directly or indirectly, (either by remaining outstanding or by being converted into Voting Securities of the surviving entity), more than 50% of the combined voting power of the Voting Securities of Genco, such surviving entity or any ultimate parent thereof outstanding immediately following such transaction or series of transactions, becomes the “beneficial owner” (within the meaning of Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding Voting Securities; or
(ii)the sale of all or substantially all of Genco’s assets in one or more related transactions within a 12-month period to any person, other than such a sale to (x) a subsidiary of Genco which does not involve a change in the equity holdings of Genco or (y) any company or entity owned, directly or indirectly, by stockholders of Genco in substantially the same proportions as their ownership of common stock of Genco; or
(iii)any merger, consolidation, reorganization or similar event of the Company or any of its subsidiaries, as a result of which the holders of the voting stock of the Company immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold at least fifty percent (50%) of the aggregate voting power of the Voting Securities; or
(iv)a majority of the members of the Board of Directors of Genco is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of Genco’s Board of Directors before the date of such appointment or election.
For the purposes of this section “Voting Securities” shall mean the securities entitled to vote generally in the election of directors to the Board of Directors of the Company.
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Further, and notwithstanding the foregoing, for each payment subject to Section 409A of the Code, a Change in Control shall be deemed to occur under this Agreement with respect to such payment only if a change in the ownership or effective control of Genco or a change in the ownership of a substantial portion of the assets of Genco shall also be deemed to have occurred under Section 409A of the Code and the regulations promulgated thereunder.
(b)Notwithstanding anything to the contrary in this Agreement, in any other agreement between you and the Company, or in any plan maintained by the Company, if there is a Section 280G Change in Control (as defined below), the following rules shall apply:
(i)Except as otherwise provided in Section 6(b)(ii) below, if it is determined in accordance with Section 6(b)(iv) below that any portion of the Contingent Compensation Payments (as defined below) that otherwise would be paid or provided to you or for your benefit in connection with the 280G Change in Control would be subject to the excise tax imposed under section 4999 of the Code or any similar state or local law (collectively, the “Excise Tax”), then such Contingent Compensation Payments shall be reduced by the smallest total amount necessary in order for no portion of such Contingent Compensation Payments to be subject to the Excise Tax.
(ii)No reduction in any of your Contingent Compensation Payments shall be made pursuant to Section 6(b)(i) above if it is determined in accordance with Section 6(b)(iv) below that the After Tax Amount of the Contingent Compensation Payments payable to you without such reduction would exceed the After Tax Amount of the reduced Contingent Compensation Payments payable to you in accordance with Section 6(b)(i) above. For purposes of the foregoing, (I) the “After Tax Amount” of the Contingent Compensation Payments, as computed with, and as computed without, the reduction provided for under Section 6(b)(i) above, means the amount of the Contingent Compensation Payments, as so computed, that you would retain after payment of all taxes (including without limitation any federal, state or local income taxes, the Excise Tax or any other excise taxes, any Medicare or other employment taxes, and any other taxes) imposed on such Contingent Compensation Payments in the year or years in which payable; and (II) the amount of such taxes shall be computed at the rates in effect under the applicable tax laws in the year in which the 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any Contingent Compensation Payment is expected to be paid following the 280G Change in Control, and in the case of any income taxes, by using the maximum combined federal, state and (if applicable) local income tax rates then in effect under such laws.
(iii)Any reduction in your Contingent Compensation Payments required to be made pursuant to Section 6(b)(i) above (the “Required Reduction”) shall be made as follows: (I) first, any such Contingent Compensation Payments that became fully vested prior to the 280G Change in Control and that pursuant to paragraph (b) of Treas. Reg. § 1.280G-1, Q/A 24, are treated as Contingent Compensation Payments solely by reason of the acceleration of their originally scheduled dates of payment shall be reduced, by cancellation of such acceleration; (II) second, any severance payments or benefits, performance-based cash or equity incentive awards, or other Contingent Compensation Payments the full amounts of which are treated as contingent on the 280G Change in Control pursuant to paragraph (a) of Treas. Reg. § 1.280G-1, Q/A 24, shall be reduced; and
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(III) third, any cash or equity incentive awards, or nonqualified deferred compensation amounts, that vest solely based on your continued service with the Company, and that pursuant to paragraph (c) of Treas. Reg. § 1.280G-1, Q/A 24, are treated as contingent on the 280G Change in Control because they become vested as a result of the 280G Change in Control, shall be reduced, first by cancellation of any acceleration of their originally scheduled dates of payment (if payment with respect to such items is not treated as automatically occurring upon the vesting of such items for purposes of section 280G of the Code) and then, if necessary, by canceling the acceleration of their vesting. In each case, the amounts of the Contingent Compensation Payments shall be reduced in the inverse order of their originally scheduled dates of payment or vesting, as applicable, cash payments will be reduced before non-cash benefits, and any Contingent Compensation Payment shall be so reduced only to the extent necessary to achieve the Required Reduction and in all cases without violating section 409A of the Code.
(iv)A determination as to whether any Excise Tax is payable with respect to your Contingent Compensation Payments and, if so, as to the amount thereof, and a determination as to whether any reduction in your Contingent Compensation Payments is required pursuant to the provisions of Sections 6(b)(i) and (ii) above, and, if so, as to the amount of the reduction so required, shall be made no later than fifteen (15) days prior to the closing of the transaction or the occurrence of the event that constitutes the 280G Change in Control, or as soon thereafter as administratively practicable. Such determinations, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent auditor (the “Auditor”) selected by the Company and reasonably acceptable to you, all of whose fees and expenses shall be borne and directly paid solely by the Company. The Auditor shall be a nationally recognized public accounting firm which has not, during the two years preceding the date of its selection, acted in any way on behalf of the Company or any other entity included in the Genco Group. The Auditor shall provide a written report of its determinations, including detailed supporting calculations, to both you and the Company and, at the same time, it shall provide you with a written opinion as to the amount of the Excise Tax that is payable by you and that you have substantial authority to report such Excise Tax on your federal income tax return, or, if no such Excise Tax is payable, a written opinion that you have substantial authority not to report any Excise Tax on your federal income tax return. The determinations made by the Auditor pursuant to this Section 6(b)(iv) shall be binding upon you and the Company. The fact that your right to payments or benefits may be reduced by reason of the limitations contained in this Section 6(b) will not limit or otherwise affect any other rights you have under this Agreement or otherwise.
(v)In the event that the Internal Revenue Service makes any claim, gives notice of any potential claim or institutes a proceeding against you asserting that any Excise Tax or additional Excise Tax is due, then you shall promptly give the Company notice of any such claim, potential claim or proceeding. The Company shall cooperate with you, and assist you, with respect to any discussions, negotiations, defenses, actions and proceedings you have with the Internal Revenue Service regarding any Excise Tax or additional Excise Tax, to the extent reasonably requested by you. Upon completion of the audit or upon a final and nonappealable settlement or other resolution, the provisions of this Section 6(b) shall be reapplied in order to properly reflect the results of such audit or resolution, as applicable.
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(vi)All fees and expenses for services in connection with the determinations and calculations contemplated by this Section 6(b), including without limitation those of your own counsel (including counsel retained by you as a result of any Internal Revenue Service claim, potential claim, or proceeding under Section 6(b)(v) above) shall be borne by the Company and shall be paid or reimbursed to you not later than December 31 of the year following the year in which the expense is incurred.
(vii)For purposes of the foregoing, the following terms will have the following respective meanings:
“280G Change in Control” means a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company, as determined in accordance with section 280G(b)(2) of the Code and the regulations promulgated thereunder.
“Contingent Compensation Payment” means any payment or benefit in the nature of compensation that is to be paid or provided to you or for your benefit in connection with a 280G Change in Control (whether under this Agreement or otherwise, including by the entity, or by any affiliate of the entity, whose acquisition of the stock of the Company or its assets constitutes the 280G Change in Control) if you are a “disqualified individual” (as defined in section 280G(c) of the Code) at the time of the 280G Change in Control, to the extent that such payment or benefit is “contingent” on the 280G Change in Control within the meaning of section 280G(b)(2)(A)(i) of the Code and the regulations promulgated thereunder, subject to taking into consideration and, as applicable, excluding those payments that are exempt from the definition of “parachute payment” under Treas. Reg. § 1.280 G1, Q/A 5 &Q/A 9. A “Contingent Compensation Payment” includes, for the avoidance of doubt, any payment or benefit that must be included in the calculation for determining whether you would be subject to the Excise Tax.
7.(a) The Company makes no representations regarding the tax implications of the compensation and benefits to be paid to you under this Agreement, including, without limitation, under Section 409A (“Section 409A”) of the Code, and applicable administrative guidance and regulations. It is intended that this Agreement will comply with Section 409A and all regulations and guidance issued thereunder to the extent this Agreement is subject thereto, and this Agreement shall be interpreted on a basis consistent with such intent. All payments under this Agreement are intended to be excluded from the requirements of Section 409A or be payable on a fixed date or schedule in accordance with Section 409A(a)(2)(iv). Notwithstanding anything in this Agreement to the contrary, in the event that you are deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i), no payments hereunder that are “deferred compensation” subject to Section 409A shall be made to you prior to the date that is six (6) months after the date of your “separation from service” (as defined in Section 409A and any Treasury Regulations promulgated thereunder) or, if earlier, your date of death. Following any applicable six (6) month delay, all such delayed payments will be paid in a single lump sum on the earliest permissible payment date. For purposes of this Agreement, with respect to payments of any amounts that are considered to be “deferred compensation” subject to Section 409A, references to “termination of employment” (and substantially similar phrases) shall be interpreted and applied in a manner that is consistent with the requirements of Section 409A. For purposes of Section 409A, your right to receive any installment payment pursuant to this Agreement will be treated as a right to receive a series of separate and distinct payments.
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(b) You shall have no duty to mitigate the amounts payable to you in the event of the termination of your employment under Sections 5 and 6 or any other amounts, benefits or entitlements payable to you hereunder or otherwise, and such amounts, benefits and entitlements shall not be subject to reduction, offset or repayment for any compensation received by you from employment in any capacity or other source following the termination of your employment with Genco or on account of any claim the Company or any member of the Genco Group may have against you.
8.Within fifteen (15) days after the effective date of a merger, consolidation, sale or similar transaction, Genco shall obtain in writing from any successor entity an assumption in writing of Genco’s obligation to perform this Agreement.
9.You represent and warrant as follows:
(a)You are not in breach of any agreement requiring you to preserve the confidentiality of any information, client lists, trade secrets or other confidential information or any agreement not to compete or interfere with any prior employer, and that neither the execution of this letter nor the performance by you of your obligations hereunder will conflict with, result in a breach of, or constitute a default under, any agreement to which you are a party or to which you may be subject;
(b)You have not taken and will not take any confidential information from any prior employer and will not use any such information in performing your obligations hereunder, but instead will rely on your generalized knowledge and skill in performing your services hereunder; and
(c)You are not the subject of any investigation by any prior employer; and you are not a party in any litigation or arbitration proceeding related in any way to your current or prior employment.
10.The Company represents and warrants that as of the date hereof (i) the execution, delivery and performance of this Agreement by the Company has been fully and validly authorized by all necessary corporate action, (ii) the officer signing this Agreement on behalf of the Company is duly authorized to do so, (iii) the execution, delivery and performance of this Agreement does not violate any applicable law, regulation, order, judgment or decree or any agreement, plan or corporate governance document to which the Company is a party or by which it is bound and (iv) upon execution and delivery of this Agreement by the parties, it shall be a valid and binding obligation of the Company enforceable against it in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.
11.All notices and consents required or permitted hereunder will be given in writing. Notices shall be given by personal delivery; by express delivery via any reputable express courier service; or by registered or certified mail, return receipt requested, postage prepaid, in each case addressed to the parties at the respective addresses set forth above or at such other address as may be designated in writing by either party to the other in the manner set forth herein. Notices which are delivered personally, or by courier as aforesaid, will be effective on the date of delivery.
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Notices delivered by mail will be deemed effectively given upon the fifth calendar day subsequent to the postmark date thereof.
12.(a)The Genco Group owns and has developed and compiled, and will own, develop and compile, certain techniques, information, and materials tangible or intangible, relating to itself, its customers, suppliers and others, which are secret, proprietary and confidential, and which have great value to its business (referred to in this Agreement, collectively, as “Confidential Information”). Confidential Information shall not in any event include information which (i) was generally known or generally available to the public or within the relevant trade or industry prior to its disclosure to you or (ii) becomes generally known or generally available to the public or within the relevant trade or industry subsequent to disclosure to you other than due to your breach of your obligations. Confidential Information includes, but is not limited to, information contained in manuals, documents, computer programs, compilations of technical, financial, legal or other data, specifications, designs, business or marketing plans, forecasts, financial information, work in progress, and other technical or business information.
(b)You acknowledge and agree that in the performance of your duties hereunder the Genco Group will from time to time disclose to you and entrust you with, and you will create, Confidential Information. You also acknowledge and agree that the unauthorized disclosure of Confidential Information obtained or created by you during your employment, among other things, may be prejudicial to the interests of the Genco Group’s interests and an improper disclosure of trade secrets. Unless Genco otherwise consents, you agree that during the Term hereunder and thereafter you shall not, except as otherwise provided herein, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any corporation, partnership, individual or other third party, other than in the ordinary course of your employment, any Confidential Information.
(c)Upon termination of your employment, you shall not retain or take with you any Confidential Information in a Tangible Form (defined below), and you shall as promptly as possible deliver to Genco any Confidential Information in a Tangible Form that you then control, as well as all other Genco Group property, including equipment, documents or other things, that was issued to you or otherwise received or obtained during your employment with Genco that you then control. “Tangible Form” includes information or materials in written or graphic form, on a computer disk or other medium, or otherwise stored in or available through electronic or other form. Anything herein to the contrary notwithstanding, you shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to, photographs, personal correspondence, personal diaries, personal calendars and Rolodexes, personal files and phone books, (ii) information showing your compensation or relating to reimbursement of expenses, (iii) information that you reasonably believe may be needed for tax purposes and (iv) copies of plans, programs relating to your employment, or termination thereof, with Genco, provided that you shall provide Genco with a list and, to the extent related to the Genco Group’s business, copies of the foregoing upon request (in which event Genco will keep your confidential personal information confidential in accordance with its customary business practice).
(d)Notwithstanding any other provision of this Agreement, you hereby are hereby notified in accordance with the Defend Trade Secrets Act of 2016 that you will not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state or local government official, either
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directly or indirectly, or to an attorney, in each case solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. You are further notified that if you file a lawsuit for retaliation by any member of the Genco Group for reporting a suspected violation of law, you may disclose the trade secrets of any such member of the Genco Group to your attorney and use the trade secret information in the court proceeding if you file any document containing the trade secret under seal and do not disclose the trade secret except pursuant to court order.
(e)Nothing in this Agreement or in any policy of any member of the Genco Group prohibits you from reporting possible violations of U.S. federal, state or local law or regulation to, or discussing any such possible violations with, any governmental agency or entity or self-regulatory organization, including, without limitation, by initiating communications directly with, responding to any inquiry from, or providing testimony before any U.S. federal, state or local regulatory authority or agency or self-regulatory organization, including, without limitation, the Securities and Exchange Commission, the Occupational Safety and Health Administration, the New York State Attorney General, or any law enforcement agency, or making any other disclosures that are protected by the whistleblower provisions of any U.S. federal, state, or local law or regulation. Similarly, nothing in this Agreement or in any policy of any member of the Genco Group is intended to limit in any way your right or ability to file a charge or claim of discrimination with the United States Equal Employment Opportunity Commission (the “EEOC”), the National Labor Relations Board, the New York State Division on Human Rights, the New York City Commission on Human Rights, or comparable state or local agencies. These agencies have the authority to carry out their statutory duties by investigating the charge, issuing a determination, or taking any other action authorized under the statutes such agencies enforce. You retain the right to communicate with the EEOC and comparable state or local agencies, and such communication can be initiated by you or in response to a communication from any such agency and is not limited by any obligation contained in this Agreement. You also may make confidential disclosures to an attorney retained by you.
(f)The provisions of this Section 12 shall survive the termination of the Term.
13.As part of the consideration for the compensation and benefits paid to you under this Agreement; and to protect the confidential and proprietary information that will be disclosed and entrusted to you, the business goodwill of the Genco Group that exists and will be developed, and the business opportunities that will be disclosed or entrusted to you by the Genco Group; and as an additional incentive for Genco to enter into this Agreement, the parties agree as follows:
(a)During the period of your employment and the duration of the Non-Competition Period (as defined below), if any, you agree that you will not, directly or indirectly, have any interest in, manage, operate or be employed in any capacity by any person, firm, corporation, partnership or business (whether as an employee, director, officer, partner, investor, advisor, consultant or otherwise) that engages in the leasing, sale, or chartering of any ocean going drybulk vessels unless all such vessels are subject to the restrictions of the Jones Act (also known as the Merchant Marine Act of 1920). For purposes of this Agreement, “Non-Competition Period” shall (i) mean twelve (12) months after the period of your employment if you resign for Good Reason or your employment is terminated by Genco other than in accordance with Section 5(a) or Section 5(b), (ii) not apply if Genco relocates your office more than 50 miles from its current location in the borough of Manhattan in New York, New York (unless your relocated office is within 50 miles of your current residence located at 11 Keith Lane, Newtown, PA 18940) and you elect to resign pursuant to Section 5(a) within thirty (30) days of the earlier of written notice from Genco of such relocation and the actual relocation, or (iii) mean (18) months after the period of your employment otherwise.
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(b)During the period of your employment, and for two years thereafter, you agree not to:
(i)with respect to deals or transactions under consideration at the time you leave the employ of Genco, solicit, induce or encourage any existing or potential customer or counterparty of the Genco Group to forego the proposed deal or transaction or to consummate the deal or transaction instead with another firm, company, business, partnership or enterprise, whether you are employed by that entity or not;
(ii)solicit, or induce or encourage any customer of the Genco Group which accounted for more than 5% of its revenues during the preceding fiscal year to cease doing business with the Genco Group or reduce the amount of business it does with the Genco Group;
(iii)hire, solicit, recruit, induce, procure or attempt to hire, solicit, recruit, induce or procure, directly or indirectly, any person who is an employee of the Genco Group or who was such an employee at any time during the final year of your employment;
(iv)assist in hiring any such person by any other individual, sole proprietorship, firm, company, business, partnership, or other enterprise; or
(v)encourage any such person to terminate his or her employment, without the express prior written consent of Genco.
(c)You acknowledge that the foregoing limitations are reasonable under the circumstances and you represent that your fulfillment of the obligations set forth in this Section shall not cause you any substantial economic hardship or render you unemployable within the applicable industry.
(d)The provisions of this Section 13 shall survive the termination of the Term.
14.You acknowledge that the Company would sustain irreparable injury in the event of a violation by you of any of the provisions of Sections 12 or 13 hereof, and by reason thereof you consent and agree that if you violate any of the provisions of said Sections 12 or 13, in addition to any other remedies available, the Company shall be entitled to a decree specifically enforcing such provisions, and shall be entitled to a temporary and permanent injunction restraining you from committing or continuing any such violation, from any arbitrator duly appointed in accordance with
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the terms of this Agreement or any court of competent jurisdiction, without the necessity of proving actual damages, posting any bond, or seeking arbitration in any forum.
15.Subject to your other personal and business commitments and to the extent not inconsistent with your legal position, you agree that both during and after your employment you shall, at the request of the Company, render all reasonable and lawful assistance and perform all reasonable and lawful acts that the Company considers necessary or advisable in connection with any litigation, investigation, proceeding, claim or dispute involving the Company or any director, officer, employee, shareholder, agent, representative, consultant, client or vendor of the Company (“Claims”) to the extent such Claim arose during your employment and relates to the Company. The Company agrees to reimburse you for your reasonable out-of-pocket expenses (including reasonable travel expenses and attorneys’ fees if you obtain an opinion from legal counsel that there is a conflict of interest between you and the Company such that you require separate representation).
16.Certain provisions of certain equity award agreements between you and the Company are hereby amended as follows:
(a)Section 4(b) of your Restricted Stock Unit Grant Agreements dated as of February 23, 2022, December 23, 2022, April 14, 2023, June 16, 2023; Section 6(a) of your Restricted Stock Unit Granted Agreements dated as of February 21, 2024 and February 18, 2025; Section 4(b)(ii) of your Performance PRSU Grant Agreements dated as of April 14, 2023 and June 16, 2023; and Section 6(a) of your Performance PRSU Grant Agreements dated as of February 21, 2024 and February 18, 2025 are amended by inserting the words “or by the Participant for Good Reason (as defined in the Participant’s Employment Agreement with the Company dated as of May 6, 2025, amended from time to time (the ‘Employment Agreement’)” immediately after the words “by the Company without cause (as defined in the Plan)”.
(b)Sections 6(a) and 6(b) of your Restricted Stock Unit Grant Agreements dated as of February 23, 2022, December 23, 2022, April 14, 2023, June 16, 2023; Section 6(b) of your Restricted Stock Unit Grant Agreements dated as of February 21, 2024 and February 18, 2025; Sections 4(c), 6(a), and 6(b) of your Performance PRSU Grant Agreements dated as of April 14, 2023, June 16, 2023; and Section 6(c) of your Performance PRSU Grant Agreements dated as of February 21, 2024 and February 18, 2025 are amended by inserting the words “or by the Participant for Good Reason (as defined in the Employment Agreement)” immediately after the words “by the Company without cause (as defined in the Plan)”.
Except as expressly amended hereby, the foregoing equity award agreements remain in full force and effect.
17.This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. If any dispute should arise concerning this Agreement, the interpretation of the terms of the Agreement or otherwise relating in any way to the terms and conditions of your employment or its termination, including any claim of statutory discrimination, the parties agree to submit the dispute to arbitration at JAMS, or its successor, to be conducted in New York, New York, before a single arbitrator in accordance with the JAMS Employment Arbitration Rules & Procedures, except that in the event of any controversy relating to any violation or alleged violation of any provision of Section 12 or 13 hereof, the
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Company in its sole discretion shall be entitled to seek injunctive relief from a court of competent jurisdiction in accordance with Section 14 hereof without any requirement to seek arbitration for such injunction. Any award of the arbitrators shall be final and binding, subject only to such right of review as may be provided under applicable law. The parties hereto agree that any arbitral award may be enforced against the parties to an arbitration proceeding or their assets wherever they may be found. You and the Company each consent to the personal jurisdiction of the state and federal courts sitting in and for the City, County, and State of New York for purposes of enforcing any arbitral award and agree not to interpose any objection for improper venue in any such court.
18.No failure by either party at any time to give notice of any breach by the other party, or to require compliance with any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar provision or condition at the time or at any prior or subsequent time. Any waiver to be effective must be in writing and be signed by the party against whom it is being enforced.
19.Upon the expiration of the Term, the respective rights and obligations of the parties shall survive such expiration pursuant to the express terms of this Agreement and to the extent necessary to carry out the intentions of the parties as embodied in such rights and obligations. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder or until terminated by the consent of both parties.
20.Each of the covenants and agreements set forth in this Agreement are separate and independent covenants, each of which has been separately bargained for and the parties hereto intend that the provisions of each such covenant shall be enforced to the fullest extent permissible. Should the whole or any part or provision of any such separate covenant be held or declared invalid by a court of competent jurisdiction, such invalidity shall not in any way affect the validity of any other such covenant or of any part or provision of the same covenant not also held or declared invalid. If any covenant shall be found to be invalid by a court of competent jurisdiction but would be valid if some part thereof were deleted or the period or area of application reduced, then such covenant shall apply with such minimum modification as may be necessary to make it valid and effective.
21.You agree to keep this Agreement confidential and not to disclose its terms to any third parties unless required to do so by law or regulation, without the prior written consent of Genco. You may, however, disclose the details of your employment and compensation arrangements to your immediate family and to your tax, accounting and legal advisors, provided that you receive their assurance in advance that they will not disclose those matters to any third party. Nothing in this Agreement, however, shall preclude you from disclosing to potential subsequent employers the existence of this Agreement and the restrictions set forth in Sections 12 or 13 hereof.
22.This Agreement and all rights and obligations hereunder shall be binding upon and shall inure to the benefit of your heirs, executors, representatives and administrators and any successors in interest which may acquire or succeed to all or substantially all of the business and assets of Genco by any means or its assigns. In that regard, you understand that this Agreement may subsequently be assigned by Genco without your prior consent. Because of the personal nature of the services to be rendered by you, you may not assign, transfer, pledge, or hypothecate your rights or obligations under this Agreement without the prior written consent of Genco, except that your rights to compensation and benefits may be transferred by will, operation of law, in accordance
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with applicable law or any applicable plan, policy, program or agreement of the Company or any other member of the Genco Group. In the event of your death or a judicial determination of your incompetence, the compensation, entitlements and benefits due you under this Agreement or otherwise shall be paid to your estate or legal representative or your designated beneficiary or beneficiaries.
23.This Agreement contains the entire understanding between the parties on the subjects covered herein and supersedes all prior agreements, arrangements and understandings, whether written or oral. You represent that you have not relied on any statements, oral or written, not contained in this Agreement. This Agreement may not be amended or otherwise changed orally, but only in a writing signed by both parties.
24.This Agreement may be signed in separate counterparts, both of which together shall constitute an original instrument. The parties agree to accept a signed facsimile counterpart of this Agreement as a fully binding original.
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Please indicate your acceptance of this Agreement by signing and returning a copy of this letter to the undersigned.
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Very truly yours, |
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GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ John C. Wobensmith |
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John C. Wobensmith |
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Chief Executive Officer and President |
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ACCEPTED AND AGREED TO: |
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/s/ Peter Allen |
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PETER ALLEN |
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Date: |
May 6, 2025 |
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Exhibit 10.10
GENCO SHIPPING & TRADING LIMITED
299 PARK AVENUE, 12TH FLOOR
NEW YORK, NEW YORK 10171
May 6, 2025
Mr. Jesper Christensen
Genco Shipping & Trading Limited
299 Park Avenue, 20th Floor
New York, NY 10171
Dear Mr. Christensen:
The purpose of this letter is to set forth the agreement (this “Agreement”) with respect to the terms of your continued employment by Genco Shipping & Trading Limited. (“Genco” or the “Company”). As used in this Agreement, the term “Genco Group” means and includes the Company and each of its subsidiaries and controlled affiliates and joint ventures from time to time. It is agreed as follows:
1.Subject to the terms and conditions of this Agreement, Genco agrees to continue to employ you, and you agree to continue to be employed by Genco, effective May 6, 2025 (the “Effective Date”) until the termination of your employment on the Termination Date (as defined below in Section 5(e)). The period of time from the Effective Date through such termination is referred to herein as the “Term.”
2.During the Term, your title shall be Chief Commercial Officer and/or such other titles of a senior executive nature as the Board of Directors may assign to you. You shall report to the Chief Executive Officer and President of Genco. You shall have such specific duties, responsibilities and authority (including without limitation service as an officer, director or equivalent position of any other member of the Genco Group, without additional compensation) as may be assigned to you by the Board of Directors of Genco, and in the absence of such assignment, such duties, responsibilities and authority as are customary to your position.
3.During your employment, you shall devote your full business time, attention, energy and best efforts to the business and affairs of Genco (and the members of the Genco Group to the extent requested pursuant to Section 2 above). You shall abide by all applicable policies of the Company and the Genco Group from time to time in effect known to you or provided to you electronically or in writing. You agree that you shall not engage in or be interested in any capacity in any activity that is contrary to the interest of Genco, or that is reasonably deemed by Genco to be harmful to Genco’s business interests, unless such activity is fully disclosed and approved in writing
by the Board of Directors of Genco prior to the undertaking. You may engage in charitable, educational and community affairs, including serving on the board of directors of any charitable, educational or community organization, provided that such activities do not, individually or in the aggregate, materially interfere with your performance of your duties or cause a breach of this Agreement (including without limitation Sections 12 and 13 hereof) and, if such activities pertain to the industry in which the Company does business, your engagement in such activities is approved in writing by the Board of Directors of the Company or a committee thereof or by the Chief Executive Officer.
4.(a)In consideration of your services, you shall be paid a base salary at the rate of $410,000 per annum during the Term (“Base Salary”), payable in accordance with Genco’s normal payroll practices. Your Base Salary will be reviewed from time to time when salaries of senior officers of the Genco Group are reviewed generally and may be subject to increase, but not decrease, during the Term.
(b)In addition, you shall be eligible to receive annual discretionary bonus compensation. The amount of such bonus, if any, shall be in the sole discretion of the Board of Directors of the Company, its Compensation Committee, or both and shall be reviewed from time to time when bonuses of senior officers of the Genco Group are reviewed generally. For 2025, the target amount of your bonus under Genco’s Annual Incentive Plan has been determined to be 85% of your Base Salary as set forth in Section 4(a) hereof.
(c)You shall be eligible to receive Restricted Stock and other equity grants from time to time pursuant to the Company’s 2015 Amended and Restated Equity Incentive Plan, as amended from time to time, or any successor employee stock incentive or option plan in accordance with the terms and conditions thereof, as determined in the sole discretion of the Board of Directors of the Company, its Compensation Committee, or both.
(d)You shall be entitled to four (4) weeks paid vacation per calendar year, to be taken in accordance with the Company’s vacation policies applicable to its executives. You shall also be entitled to employee benefits on the same basis as those benefits are made available to other Genco employees in comparable positions. Genco reserves the right to amend, modify, or terminate any employee benefits plans, programs, and arrangements from time to time in its sole discretion.
(e)Genco will reimburse you, in accordance with its standard policies from time to time in effect, for such reasonable and necessary out-of-pocket business expenses as may be incurred by you during your employment in the performance of your duties and responsibilities for any member of the Genco Group. You will provide documentation of such expenses as reasonably required under standard Company policies from time to time.
(f)All salary and other payments by Genco are subject to all legally required and customary withholdings and deductions.
5.(a)Genco may immediately terminate your employment for Cause (as defined herein). In such event, or if you resign (other than for Good Reason or Disability (as defined below)) or retire as an employee of Genco, the obligations of Genco shall cease immediately and you shall not be entitled to any further payments of any kind except for (i) payment of your
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accrued but unpaid Base Salary through the Termination Date (as defined below in Section 5(e)); (ii) any business expenses required to be reimbursed under Section 4(e), and (iii) other payments entitlements and benefits, if any, in accordance with the terms of any applicable plans, programs, arrangements of the Company or any affiliate (clauses (i), (ii), and (iii), together, the “Accrued Amounts”). In addition, if you resign (other than for Good Reason or Disability) under the circumstances described in Section 13(a)(ii) following relocation of your office, a Non-Competition Period (as defined below) following the period of your employment shall not apply. For purposes of this Agreement, Cause shall include:
(i)any act or failure to act by you involving fraud, material theft or embezzlement;
(ii)any act or failure to act by you that constitutes a felony or other crime involving moral turpitude, or your conviction of or plea of nolo contendere to any such crime, in each case within the meaning of applicable law;
(iii)in carrying out your duties for the Company, you engage in conduct or a failure to act that constitutes gross misconduct or gross negligence;
(iv)failure or refusal to perform or observe any of your material duties, responsibilities or obligations set forth in this Agreement or your failure to follow the directions of an officer of Genco to whom you report or of the Board of Directors;
(v)conduct that if generally known could reasonably be expected to reflect negatively on the Company’s reputation with customers, suppliers, investors or the general public or otherwise cause harm to the Company;
(vi)intentional and wrongful disclosure of confidential information of the Company;
(vii)your material breach of Company policies; or
(viii)your material breach of this Agreement.
Notwithstanding anything herein to the contrary, your employment shall not be terminated for Cause under Section 5(a)(iv), (vii), or (viii) above unless you are given notice by the Company of circumstances constituting the basis for such termination and, with respect to clauses (iv), (vii), and (viii), if such circumstances are curable, you fail to cure such circumstances within fifteen (15) days after receipt of such notice.
(b)In the event of your death, or termination of your employment by the Company due to your Disability (as defined below), the Company will pay to you (or your estate or legal representative, as the case may be), the Accrued Amounts plus the Severance Amount of any Annual Incentive Award for the year prior to the year in which the Termination Date occurs, to the extent not previously paid. In the case of Disability (as defined below), you may elect to continue your existing medical and dental benefits under the Company’s plans in accordance with and subject to the law known as COBRA. Any COBRA continuation coverage will be at your own cost.
For purposes of this Agreement:
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(x) “Annual Incentive Award” shall mean the short-term annual cash bonus earned by you for a given year, including any amounts deferred;
(y) “Disability” shall mean your inability to perform your duties and responsibilities as contemplated under this Agreement for a period of more than 120 consecutive days, or for a period aggregating more than 180 days, whether or not continuous, during any 360-day period, due to physical or mental incapacity or impairment; and
(z) “Severance Amount” shall mean, with respect to an Annual Incentive Award for a given calendar year, the greater of (1) the target amount for such Annual Incentive Award and (2) the actual amount of such Annual Incentive Award if such actual amount has been determined by the Compensation Committee or the Board of Directors of Genco as of the Termination Date. If the target amount for such Annual Incentive Award has not been determined by the Compensation Committee or the Board of Directors for a given calendar year, then the target amount so determined for the Annual Incentive Award for the immediately prior calendar year shall be used for purposes of the preceding clause (1).
(c)In the event of your resignation for Good Reason, or in the event that your employment is terminated by Genco, other than in accordance with Section 5(a) or (b), and subject to your execution and non-revocation of a general release of all claims substantially in the form attached hereto as Exhibit A (the “Release”), you shall be entitled to (i) the Accrued Amounts; (ii) the Severance Amount of any Annual Incentive Award for the year prior to the year in which the Termination Date occurs, to the extent not previously paid; (iii) a pro-rata bonus for the year in which the Termination Date occurs equal to the amount by which (x) the Severance Amount of the Annual Incentive Award for the year in which the Termination Date occurs multiplied by a fraction, the numerator of which is the number of days you were employed by the Company during the year in which the Termination Date occurs and the denominator of which is the number of days in such year exceeds (y) the value of any Annual Incentive Award granted or paid to you in respect of the year in which the Termination Date occurs; (iv) a lump sum payment equal in amount to your annualized Base Salary, as determined on the Termination Date, less all deductions and withholdings, payable within sixty (60) days of your termination date; (v) a lump sum payment equal to the Severance Amount of the Annual Incentive Award for the year in which the Termination Date occurs; and (vi) if you may elect to continue your existing medical and dental benefits under the Company’s plans in accordance with and subject to the law known as COBRA, reimbursement by Genco for the out of pocket cost of any COBRA continuation coverage to which you may become entitled during the Non-Competition Period, as defined below, and any additional period of COBRA continuation coverage will be at your own cost; provided, however, that Genco shall be not required to provide COBRA continuation coverage at no cost to you to the extent that such provision would cause Genco to incur tax penalties under Section 4980D of the Internal Revenue Code of 1986, as amended (the “Code”) or otherwise. The Release must be executed and delivered to the Company, with all periods for revocation having expired, within sixty (60) days following the Termination Date, provided that, in the event that such 60-day period spans two different calendar years, then the payments under subclauses (iii), (iv), and (v) above will not be paid to you before January 1st of the latter of such two calendar years. Failure to timely execute and return the Release or the revocation thereof shall be a waiver of your right, if any, to the benefits set forth in this Section 5(c), except for the Accrued Amounts. The Company agrees that it will promptly
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countersign the Release, and provide you with a copy of the countersigned release, upon its receipt of the Release executed by you.
(d)Your resignation shall be deemed to be for “Good Reason” if the Company: (i) materially diminishes your authority, duties or responsibilities; (ii) materially diminishes your Base Salary below $410,000 during the Term; or (iii) materially breaches this Agreement. You will give the Company written notice of your intention to terminate your employment within thirty (30) days of the occurrence of any event constituting Good Reason, and the Company shall have thirty (30) days from the receipt of such notice to cure such event. Your termination of employment on account of such event shall be effective upon expiration of the cure period unless the Company has cured the grounds for such termination.
(e)For purposes of this Agreement, “Termination Date” shall mean: (i) if your employment is terminated by Genco for Cause, the date of the notice of termination from the Company, provided that if the termination is for Cause pursuant to Section 5(a)(i), (iii), (iv), or (v) of the definition of Cause, then the Termination Date shall be the date on which the applicable cure period lapses if you have not cured; (ii) if your employment is terminated by the Company without Cause (other than for Disability) or by you without Good Reason, the date set forth in the notice of termination (which in no event shall be earlier than the date such notice is effective and, in the event of your retirement or resignation without Good Reason, shall be no earlier than 60 days following the date such notice is provided to the Company; provided, however, that the Company may accelerate the effective date of such termination to any time after you have provided notice); (iii) if your employment is terminated by reason of death, the date of death; (iv) if your employment is terminated upon Disability, 30 days after notice is given by the Company; and (v) if your employment is terminated by you for Good Reason, the date specified in your notice of termination in accordance with the last sentence of Section 5(d).
6.(a)Notwithstanding anything in this Agreement to the contrary, if (i) a Change in Control occurs after the date hereof; and (ii) upon such Change in Control or within 2 years thereafter you terminate your employment for Good Reason as defined above or the Company terminates your employment without Cause, you shall be entitled to all the payments, benefits and entitlements as of the Termination Date as set forth in Section 5(c) provided that the amounts in Sections 5(c)(iv) and (v) shall be doubled, in each case subject to the execution and non-revocation of the Release in accordance with the two penultimate sentences of Section 5(c) (and the Company will countersign the Release and provide you with a copy of the countersigned Release in accordance with the last sentence of Section 5(c)). If, following a Change in Control, the Company alters your job such that you would have “Good Reason” to resign under subclause (i) of the “Good Reason” definition above, and provided that you continue to have primarily senior management- and/or executive transition-type duties and responsibilities for the duration of such altered job, then you agree that you may not resign for Good Reason under subclause (i) as a result of such altered job during the six (6)-month period immediately following the Change in Control (the “Transition Period”). Instead, in such event, you may elect to terminate your employment with Good Reason within thirty days following the conclusion of the Transition Period, and you will become entitled to severance in accordance with this Section 6(a). During the Transition Period, you will be entitled to continue to receive your Base Salary and participate in the Company’s employee benefit plans. Nothing in this paragraph is intended to limit the Company’s right to terminate your employment with or without Cause or your right to resign with or without Good Reason following a Change in Control (other than that you may not resign pursuant to subclause (i) of the Good Reason
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definition, provided that the condition set forth in the initial sentence of this paragraph is satisfied). In addition, you agree to consider any offer of employment made to you by the Company following a Change in Control whereby you would no longer be the Chief Commercial Officer of the Company or its ultimate parent (provided that such ultimate parent company is an operating or holding company and not a financial or institutional investor) following the Change in Control, but you will be under no obligation to accept any such offer and your rejection of any such offer will in no way impact your eligibility to receive severance under this Agreement.
For purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following:
(i)any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (a “Person”) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under any employee benefit plan of the Company, (C) any company or entity owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of common stock of the Company or (D) pursuant to a transaction or series of transactions in which the holders of the securities entitled to vote generally in the election of directors to the Board of Directors (the “Voting Securities”) of Genco outstanding immediately prior thereto, continue to retain or represent, directly or indirectly, (either by remaining outstanding or by being converted into Voting Securities of the surviving entity), more than 50% of the combined voting power of the Voting Securities of Genco, such surviving entity or any ultimate parent thereof outstanding immediately following such transaction or series of transactions, becomes the “beneficial owner” (within the meaning of Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding Voting Securities; or
(ii)the sale of all or substantially all of Genco’s assets in one or more related transactions within a 12-month period to any person, other than such a sale to (x) a subsidiary of Genco which does not involve a change in the equity holdings of Genco or (y) any company or entity owned, directly or indirectly, by stockholders of Genco in substantially the same proportions as their ownership of common stock of Genco; or
(iii)any merger, consolidation, reorganization or similar event of the Company or any of its subsidiaries, as a result of which the holders of the voting stock of the Company immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold at least fifty percent (50%) of the aggregate voting power of the Voting Securities; or
(iv)a majority of the members of the Board of Directors of Genco is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of Genco’s Board of Directors before the date of such appointment or election.
For the purposes of this section “Voting Securities” shall mean the securities entitled to vote generally in the election of directors to the Board of Directors of the Company.
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Further, and notwithstanding the foregoing, for each payment subject to Section 409A of the Code, a Change in Control shall be deemed to occur under this Agreement with respect to such payment only if a change in the ownership or effective control of Genco or a change in the ownership of a substantial portion of the assets of Genco shall also be deemed to have occurred under Section 409A of the Code and the regulations promulgated thereunder.
(b)Notwithstanding anything to the contrary in this Agreement, in any other agreement between you and the Company, or in any plan maintained by the Company, if there is a Section 280G Change in Control (as defined below), the following rules shall apply:
(i)Except as otherwise provided in Section 6(b)(ii) below, if it is determined in accordance with Section 6(b)(iv) below that any portion of the Contingent Compensation Payments (as defined below) that otherwise would be paid or provided to you or for your benefit in connection with the 280G Change in Control would be subject to the excise tax imposed under section 4999 of the Code or any similar state or local law (collectively, the “Excise Tax”), then such Contingent Compensation Payments shall be reduced by the smallest total amount necessary in order for no portion of such Contingent Compensation Payments to be subject to the Excise Tax.
(ii)No reduction in any of your Contingent Compensation Payments shall be made pursuant to Section 6(b)(i) above if it is determined in accordance with Section 6(b)(iv) below that the After Tax Amount of the Contingent Compensation Payments payable to you without such reduction would exceed the After Tax Amount of the reduced Contingent Compensation Payments payable to you in accordance with Section 6(b)(i) above. For purposes of the foregoing, (I) the “After Tax Amount” of the Contingent Compensation Payments, as computed with, and as computed without, the reduction provided for under Section 6(b)(i) above, means the amount of the Contingent Compensation Payments, as so computed, that you would retain after payment of all taxes (including without limitation any federal, state or local income taxes, the Excise Tax or any other excise taxes, any Medicare or other employment taxes, and any other taxes) imposed on such Contingent Compensation Payments in the year or years in which payable; and (II) the amount of such taxes shall be computed at the rates in effect under the applicable tax laws in the year in which the 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any Contingent Compensation Payment is expected to be paid following the 280G Change in Control, and in the case of any income taxes, by using the maximum combined federal, state and (if applicable) local income tax rates then in effect under such laws.
(iii)Any reduction in your Contingent Compensation Payments required to be made pursuant to Section 6(b)(i) above (the “Required Reduction”) shall be made as follows: (I) first, any such Contingent Compensation Payments that became fully vested prior to the 280G Change in Control and that pursuant to paragraph (b) of Treas. Reg. § 1.280G-1, Q/A 24, are treated as Contingent Compensation Payments solely by reason of the acceleration of their originally scheduled dates of payment shall be reduced, by cancellation of such acceleration; (II) second, any severance payments or benefits, performance-based cash or equity incentive awards, or other Contingent Compensation Payments the full amounts of which are treated as contingent on the 280G Change in Control pursuant to paragraph (a) of Treas. Reg. § 1.280G-1, Q/A 24, shall be reduced; and
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(III) third, any cash or equity incentive awards, or nonqualified deferred compensation amounts, that vest solely based on your continued service with the Company, and that pursuant to paragraph (c) of Treas. Reg. § 1.280G-1, Q/A 24, are treated as contingent on the 280G Change in Control because they become vested as a result of the 280G Change in Control, shall be reduced, first by cancellation of any acceleration of their originally scheduled dates of payment (if payment with respect to such items is not treated as automatically occurring upon the vesting of such items for purposes of section 280G of the Code) and then, if necessary, by canceling the acceleration of their vesting. In each case, the amounts of the Contingent Compensation Payments shall be reduced in the inverse order of their originally scheduled dates of payment or vesting, as applicable, cash payments will be reduced before non-cash benefits, and any Contingent Compensation Payment shall be so reduced only to the extent necessary to achieve the Required Reduction and in all cases without violating section 409A of the Code.
(iv)A determination as to whether any Excise Tax is payable with respect to your Contingent Compensation Payments and, if so, as to the amount thereof, and a determination as to whether any reduction in your Contingent Compensation Payments is required pursuant to the provisions of Sections 6(b)(i) and (ii) above, and, if so, as to the amount of the reduction so required, shall be made no later than fifteen (15) days prior to the closing of the transaction or the occurrence of the event that constitutes the 280G Change in Control, or as soon thereafter as administratively practicable. Such determinations, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent auditor (the “Auditor”) selected by the Company and reasonably acceptable to you, all of whose fees and expenses shall be borne and directly paid solely by the Company. The Auditor shall be a nationally recognized public accounting firm which has not, during the two years preceding the date of its selection, acted in any way on behalf of the Company or any other entity included in the Genco Group. The Auditor shall provide a written report of its determinations, including detailed supporting calculations, to both you and the Company and, at the same time, it shall provide you with a written opinion as to the amount of the Excise Tax that is payable by you and that you have substantial authority to report such Excise Tax on your federal income tax return, or, if no such Excise Tax is payable, a written opinion that you have substantial authority not to report any Excise Tax on your federal income tax return. The determinations made by the Auditor pursuant to this Section 6(b)(iv) shall be binding upon you and the Company. The fact that your right to payments or benefits may be reduced by reason of the limitations contained in this Section 6(b) will not limit or otherwise affect any other rights you have under this Agreement or otherwise.
(v)In the event that the Internal Revenue Service makes any claim, gives notice of any potential claim or institutes a proceeding against you asserting that any Excise Tax or additional Excise Tax is due, then you shall promptly give the Company notice of any such claim, potential claim or proceeding. The Company shall cooperate with you, and assist you, with respect to any discussions, negotiations, defenses, actions and proceedings you have with the Internal Revenue Service regarding any Excise Tax or additional Excise Tax, to the extent reasonably requested by you. Upon completion of the audit or upon a final and nonappealable settlement or other resolution, the provisions of this Section 6(b) shall be reapplied in order to properly reflect the results of such audit or resolution, as applicable.
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(vi)All fees and expenses for services in connection with the determinations and calculations contemplated by this Section 6(b), including without limitation those of your own counsel (including counsel retained by you as a result of any Internal Revenue Service claim, potential claim, or proceeding under Section 6(b)(v) above) shall be borne by the Company and shall be paid or reimbursed to you not later than December 31 of the year following the year in which the expense is incurred.
(vii)For purposes of the foregoing, the following terms will have the following respective meanings:
“280G Change in Control” means a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company, as determined in accordance with section 280G(b)(2) of the Code and the regulations promulgated thereunder.
“Contingent Compensation Payment” means any payment or benefit in the nature of compensation that is to be paid or provided to you or for your benefit in connection with a 280G Change in Control (whether under this Agreement or otherwise, including by the entity, or by any affiliate of the entity, whose acquisition of the stock of the Company or its assets constitutes the 280G Change in Control) if you are a “disqualified individual” (as defined in section 280G(c) of the Code) at the time of the 280G Change in Control, to the extent that such payment or benefit is “contingent” on the 280G Change in Control within the meaning of section 280G(b)(2)(A)(i) of the Code and the regulations promulgated thereunder, subject to taking into consideration and, as applicable, excluding those payments that are exempt from the definition of “parachute payment” under Treas. Reg. § 1.280 G1, Q/A 5 &Q/A 9. A “Contingent Compensation Payment” includes, for the avoidance of doubt, any payment or benefit that must be included in the calculation for determining whether you would be subject to the Excise Tax.
7.(a) The Company makes no representations regarding the tax implications of the compensation and benefits to be paid to you under this Agreement, including, without limitation, under Section 409A (“Section 409A”) of the Code, and applicable administrative guidance and regulations. It is intended that this Agreement will comply with Section 409A and all regulations and guidance issued thereunder to the extent this Agreement is subject thereto, and this Agreement shall be interpreted on a basis consistent with such intent. All payments under this Agreement are intended to be excluded from the requirements of Section 409A or be payable on a fixed date or schedule in accordance with Section 409A(a)(2)(iv). Notwithstanding anything in this Agreement to the contrary, in the event that you are deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i), no payments hereunder that are “deferred compensation” subject to Section 409A shall be made to you prior to the date that is six (6) months after the date of your “separation from service” (as defined in Section 409A and any Treasury Regulations promulgated thereunder) or, if earlier, your date of death. Following any applicable six (6) month delay, all such delayed payments will be paid in a single lump sum on the earliest permissible payment date. For purposes of this Agreement, with respect to payments of any amounts that are considered to be “deferred compensation” subject to Section 409A, references to “termination of employment” (and substantially similar phrases) shall be interpreted and applied in a manner that is consistent with the requirements of Section 409A. For purposes of Section 409A, your right to receive any installment payment pursuant to this Agreement will be treated as a right to receive a series of separate and distinct payments.
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(b) You shall have no duty to mitigate the amounts payable to you in the event of the termination of your employment under Sections 5 and 6 or any other amounts, benefits or entitlements payable to you hereunder or otherwise, and such amounts, benefits and entitlements shall not be subject to reduction, offset or repayment for any compensation received by you from employment in any capacity or other source following the termination of your employment with Genco or on account of any claim the Company or any member of the Genco Group may have against you.
8.Within fifteen (15) days after the effective date of a merger, consolidation, sale or similar transaction, Genco shall obtain in writing from any successor entity an assumption in writing of Genco’s obligation to perform this Agreement.
9.You represent and warrant as follows:
(a)You are not in breach of any agreement requiring you to preserve the confidentiality of any information, client lists, trade secrets or other confidential information or any agreement not to compete or interfere with any prior employer, and that neither the execution of this letter nor the performance by you of your obligations hereunder will conflict with, result in a breach of, or constitute a default under, any agreement to which you are a party or to which you may be subject;
(b)You have not taken and will not take any confidential information from any prior employer and will not use any such information in performing your obligations hereunder, but instead will rely on your generalized knowledge and skill in performing your services hereunder; and
(c)You are not the subject of any investigation by any prior employer; and you are not a party in any litigation or arbitration proceeding related in any way to your current or prior employment.
10.The Company represents and warrants that as of the date hereof (i) the execution, delivery and performance of this Agreement by the Company has been fully and validly authorized by all necessary corporate action, (ii) the officer signing this Agreement on behalf of the Company is duly authorized to do so, (iii) the execution, delivery and performance of this Agreement does not violate any applicable law, regulation, order, judgment or decree or any agreement, plan or corporate governance document to which the Company is a party or by which it is bound and (iv) upon execution and delivery of this Agreement by the parties, it shall be a valid and binding obligation of the Company enforceable against it in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.
11.All notices and consents required or permitted hereunder will be given in writing. Notices shall be given by personal delivery; by express delivery via any reputable express courier service; or by registered or certified mail, return receipt requested, postage prepaid, in each case addressed to the parties at the respective addresses set forth above or at such other address as may be designated in writing by either party to the other in the manner set forth herein. Notices which are delivered personally, or by courier as aforesaid, will be effective on the date of delivery.
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Notices delivered by mail will be deemed effectively given upon the fifth calendar day subsequent to the postmark date thereof.
12.(a)The Genco Group owns and has developed and compiled, and will own, develop and compile, certain techniques, information, and materials tangible or intangible, relating to itself, its customers, suppliers and others, which are secret, proprietary and confidential, and which have great value to its business (referred to in this Agreement, collectively, as “Confidential Information”). Confidential Information shall not in any event include information which (i) was generally known or generally available to the public or within the relevant trade or industry prior to its disclosure to you or (ii) becomes generally known or generally available to the public or within the relevant trade or industry subsequent to disclosure to you other than due to your breach of your obligations. Confidential Information includes, but is not limited to, information contained in manuals, documents, computer programs, compilations of technical, financial, legal or other data, specifications, designs, business or marketing plans, forecasts, financial information, work in progress, and other technical or business information.
(b)You acknowledge and agree that in the performance of your duties hereunder the Genco Group will from time to time disclose to you and entrust you with, and you will create, Confidential Information. You also acknowledge and agree that the unauthorized disclosure of Confidential Information obtained or created by you during your employment, among other things, may be prejudicial to the interests of the Genco Group’s interests and an improper disclosure of trade secrets. Unless Genco otherwise consents, you agree that during the Term hereunder and thereafter you shall not, except as otherwise provided herein, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any corporation, partnership, individual or other third party, other than in the ordinary course of your employment, any Confidential Information.
(c)Upon termination of your employment, you shall not retain or take with you any Confidential Information in a Tangible Form (defined below), and you shall as promptly as possible deliver to Genco any Confidential Information in a Tangible Form that you then control, as well as all other Genco Group property, including equipment, documents or other things, that was issued to you or otherwise received or obtained during your employment with Genco that you then control. “Tangible Form” includes information or materials in written or graphic form, on a computer disk or other medium, or otherwise stored in or available through electronic or other form. Anything herein to the contrary notwithstanding, you shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to, photographs, personal correspondence, personal diaries, personal calendars and Rolodexes, personal files and phone books, (ii) information showing your compensation or relating to reimbursement of expenses, (iii) information that you reasonably believe may be needed for tax purposes and (iv) copies of plans, programs relating to your employment, or termination thereof, with Genco, provided that you shall provide Genco with a list and, to the extent related to the Genco Group’s business, copies of the foregoing upon request (in which event Genco will keep your confidential personal information confidential in accordance with its customary business practice).
(d)Notwithstanding any other provision of this Agreement, you hereby are hereby notified in accordance with the Defend Trade Secrets Act of 2016 that you will not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state or local government official, either
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directly or indirectly, or to an attorney, in each case solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. You are further notified that if you file a lawsuit for retaliation by any member of the Genco Group for reporting a suspected violation of law, you may disclose the trade secrets of any such member of the Genco Group to your attorney and use the trade secret information in the court proceeding if you file any document containing the trade secret under seal and do not disclose the trade secret except pursuant to court order.
(e)Nothing in this Agreement or in any policy of any member of the Genco Group prohibits you from reporting possible violations of U.S. federal, state or local law or regulation to, or discussing any such possible violations with, any governmental agency or entity or self-regulatory organization, including, without limitation, by initiating communications directly with, responding to any inquiry from, or providing testimony before any U.S. federal, state or local regulatory authority or agency or self-regulatory organization, including, without limitation, the Securities and Exchange Commission, the Occupational Safety and Health Administration, the New York State Attorney General, or any law enforcement agency, or making any other disclosures that are protected by the whistleblower provisions of any U.S. federal, state, or local law or regulation. Similarly, nothing in this Agreement or in any policy of any member of the Genco Group is intended to limit in any way your right or ability to file a charge or claim of discrimination with the United States Equal Employment Opportunity Commission (the “EEOC”), the National Labor Relations Board, the New York State Division on Human Rights, the New York City Commission on Human Rights, or comparable state or local agencies. These agencies have the authority to carry out their statutory duties by investigating the charge, issuing a determination, or taking any other action authorized under the statutes such agencies enforce. You retain the right to communicate with the EEOC and comparable state or local agencies, and such communication can be initiated by you or in response to a communication from any such agency and is not limited by any obligation contained in this Agreement. You also may make confidential disclosures to an attorney retained by you.
(f)The provisions of this Section 12 shall survive the termination of the Term.
13.As part of the consideration for the compensation and benefits paid to you under this Agreement; and to protect the confidential and proprietary information that will be disclosed and entrusted to you, the business goodwill of the Genco Group that exists and will be developed, and the business opportunities that will be disclosed or entrusted to you by the Genco Group; and as an additional incentive for Genco to enter into this Agreement, the parties agree as follows:
(a)During the period of your employment and the duration of the Non-Competition Period (as defined below), if any, you agree that you will not, directly or indirectly, have any interest in, manage, operate or be employed in any capacity by any person, firm, corporation, partnership or business (whether as an employee, director, officer, partner, investor, advisor, consultant or otherwise) that engages in the leasing, sale, or chartering of any ocean going drybulk vessels unless all such vessels are subject to the restrictions of the Jones Act (also known as the Merchant Marine Act of 1920). For purposes of this Agreement, “Non-Competition Period” shall (i) mean twelve (12) months after the period of your employment if you resign for Good Reason or your employment is terminated by Genco other than in accordance with Section 5(a) or Section 5(b), (ii) not apply if Genco relocates your office more than 50 miles from its current location in the borough of Manhattan in New York, New York (unless your relocated office is within 50 miles of your current residence located at 25 Indian Harbor Drive, Unit 12, Greenwich, CT 06830) and you elect to resign pursuant to Section 5(a) within thirty (30) days of the earlier of written notice from Genco of such relocation and the actual relocation, or (iii) mean (18) months after the period of your employment otherwise.
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(b)During the period of your employment, and for two years thereafter, you agree not to:
(i)with respect to deals or transactions under consideration at the time you leave the employ of Genco, solicit, induce or encourage any existing or potential customer or counterparty of the Genco Group to forego the proposed deal or transaction or to consummate the deal or transaction instead with another firm, company, business, partnership or enterprise, whether you are employed by that entity or not;
(ii)solicit, or induce or encourage any customer of the Genco Group which accounted for more than 5% of its revenues during the preceding fiscal year to cease doing business with the Genco Group or reduce the amount of business it does with the Genco Group;
(iii)hire, solicit, recruit, induce, procure or attempt to hire, solicit, recruit, induce or procure, directly or indirectly, any person who is an employee of the Genco Group or who was such an employee at any time during the final year of your employment;
(iv)assist in hiring any such person by any other individual, sole proprietorship, firm, company, business, partnership, or other enterprise; or
(v)encourage any such person to terminate his or her employment, without the express prior written consent of Genco.
(c)You acknowledge that the foregoing limitations are reasonable under the circumstances and you represent that your fulfillment of the obligations set forth in this Section shall not cause you any substantial economic hardship or render you unemployable within the applicable industry.
(d)The provisions of this Section 13 shall survive the termination of the Term.
14.You acknowledge that the Company would sustain irreparable injury in the event of a violation by you of any of the provisions of Sections 12 or 13 hereof, and by reason thereof you consent and agree that if you violate any of the provisions of said Sections 12 or 13, in addition to any other remedies available, the Company shall be entitled to a decree specifically enforcing such provisions, and shall be entitled to a temporary and permanent injunction restraining you from committing or continuing any such violation, from any arbitrator duly appointed in accordance with
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the terms of this Agreement or any court of competent jurisdiction, without the necessity of proving actual damages, posting any bond, or seeking arbitration in any forum.
15.Subject to your other personal and business commitments and to the extent not inconsistent with your legal position, you agree that both during and after your employment you shall, at the request of the Company, render all reasonable and lawful assistance and perform all reasonable and lawful acts that the Company considers necessary or advisable in connection with any litigation, investigation, proceeding, claim or dispute involving the Company or any director, officer, employee, shareholder, agent, representative, consultant, client or vendor of the Company (“Claims”) to the extent such Claim arose during your employment and relates to the Company. The Company agrees to reimburse you for your reasonable out-of-pocket expenses (including reasonable travel expenses and attorneys’ fees if you obtain an opinion from legal counsel that there is a conflict of interest between you and the Company such that you require separate representation).
16.Certain provisions of certain equity award agreements between you and the Company are hereby amended as follows:
(a)Section 4(b) of your Restricted Stock Unit Grant Agreements dated as of February 23, 2022, December 23, 2022, and April 14, 2023; Section 6(a) of your Restricted Stock Unit Granted Agreements dated as of February 21, 2024 and February 18, 2025; Section 4(b)(ii) of your Performance PRSU Grant Agreement dated as of April 14, 2023; and Section 6(a) of your Performance PRSU Grant Agreements dated as of February 21, 2024 and February 18, 2025 are amended by inserting the words “or by the Participant for Good Reason (as defined in the Participant’s Employment Agreement with the Company dated as of May 6, 2025, amended from time to time (the ‘Employment Agreement’)” immediately after the words “by the Company without cause (as defined in the Plan)”.
(b)Sections 6(a) and 6(b) of your Restricted Stock Unit Grant Agreements dated as of February 23, 2022, December 23, 2022, and April 14, 2023; Section 6(b) of your Restricted Stock Unit Grant Agreements dated as of February 21, 2024 and February 18, 2025; Sections 4(c), 6(a), and 6(b) of your Performance PRSU Grant Agreement dated as of April 14, 2023; and Section 6(c) of your Performance PRSU Grant Agreements dated as of February 21, 2024 and February 18, 2025 are amended by inserting the words “or by the Participant for Good Reason (as defined in the Employment Agreement)” immediately after the words “by the Company without cause (as defined in the Plan)”.
Except as expressly amended hereby, the foregoing equity award agreements remain in full force and effect.
17.This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. If any dispute should arise concerning this Agreement, the interpretation of the terms of the Agreement or otherwise relating in any way to the terms and conditions of your employment or its termination, including any claim of statutory discrimination, the parties agree to submit the dispute to arbitration at JAMS, or its successor, to be conducted in New York, New York, before a single arbitrator in accordance with the JAMS Employment Arbitration Rules & Procedures, except that in the event of any controversy relating to any violation or alleged violation of any provision of Section 12 or 13 hereof, the
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Company in its sole discretion shall be entitled to seek injunctive relief from a court of competent jurisdiction in accordance with Section 14 hereof without any requirement to seek arbitration for such injunction. Any award of the arbitrators shall be final and binding, subject only to such right of review as may be provided under applicable law. The parties hereto agree that any arbitral award may be enforced against the parties to an arbitration proceeding or their assets wherever they may be found. You and the Company each consent to the personal jurisdiction of the state and federal courts sitting in and for the City, County, and State of New York for purposes of enforcing any arbitral award and agree not to interpose any objection for improper venue in any such court.
18.No failure by either party at any time to give notice of any breach by the other party, or to require compliance with any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar provision or condition at the time or at any prior or subsequent time. Any waiver to be effective must be in writing and be signed by the party against whom it is being enforced.
19.Upon the expiration of the Term, the respective rights and obligations of the parties shall survive such expiration pursuant to the express terms of this Agreement and to the extent necessary to carry out the intentions of the parties as embodied in such rights and obligations. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder or until terminated by the consent of both parties.
20.Each of the covenants and agreements set forth in this Agreement are separate and independent covenants, each of which has been separately bargained for and the parties hereto intend that the provisions of each such covenant shall be enforced to the fullest extent permissible. Should the whole or any part or provision of any such separate covenant be held or declared invalid by a court of competent jurisdiction, such invalidity shall not in any way affect the validity of any other such covenant or of any part or provision of the same covenant not also held or declared invalid. If any covenant shall be found to be invalid by a court of competent jurisdiction but would be valid if some part thereof were deleted or the period or area of application reduced, then such covenant shall apply with such minimum modification as may be necessary to make it valid and effective.
21.You agree to keep this Agreement confidential and not to disclose its terms to any third parties unless required to do so by law or regulation, without the prior written consent of Genco. You may, however, disclose the details of your employment and compensation arrangements to your immediate family and to your tax, accounting and legal advisors, provided that you receive their assurance in advance that they will not disclose those matters to any third party. Nothing in this Agreement, however, shall preclude you from disclosing to potential subsequent employers the existence of this Agreement and the restrictions set forth in Sections 12 or 13 hereof.
22.This Agreement and all rights and obligations hereunder shall be binding upon and shall inure to the benefit of your heirs, executors, representatives and administrators and any successors in interest which may acquire or succeed to all or substantially all of the business and assets of Genco by any means or its assigns. In that regard, you understand that this Agreement may subsequently be assigned by Genco without your prior consent. Because of the personal nature of the services to be rendered by you, you may not assign, transfer, pledge, or hypothecate your rights or obligations under this Agreement without the prior written consent of Genco, except that your rights to compensation and benefits may be transferred by will, operation of law, in accordance
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with applicable law or any applicable plan, policy, program or agreement of the Company or any other member of the Genco Group. In the event of your death or a judicial determination of your incompetence, the compensation, entitlements and benefits due you under this Agreement or otherwise shall be paid to your estate or legal representative or your designated beneficiary or beneficiaries.
23.This Agreement contains the entire understanding between the parties on the subjects covered herein and supersedes all prior agreements, arrangements and understandings, whether written or oral. You represent that you have not relied on any statements, oral or written, not contained in this Agreement. This Agreement may not be amended or otherwise changed orally, but only in a writing signed by both parties.
24.This Agreement may be signed in separate counterparts, both of which together shall constitute an original instrument. The parties agree to accept a signed facsimile counterpart of this Agreement as a fully binding original.
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Please indicate your acceptance of this Agreement by signing and returning a copy of this letter to the undersigned.
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Very truly yours, |
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GENCO SHIPPING & TRADING LIMITED |
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By: |
/s/ John C. Wobensmith |
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John C. Wobensmith |
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Chief Executive Officer and President |
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ACCEPTED AND AGREED TO: |
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/s/ Jesper Christensen |
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JESPER CHRISTENSEN |
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Date: |
May 6, 2025 |
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Exhibit 31.1
CERTIFICATION
I, John C. Wobensmith, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 of Genco Shipping & Trading Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ John C. Wobensmith |
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Name: John C. Wobensmith |
Date: May 7, 2025 |
Title: Chief Executive Officer and President |
Exhibit 31.2
CERTIFICATION
I, Peter Allen, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 of Genco Shipping & Trading Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Peter Allen |
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Name: Peter Allen |
Date: May 7, 2025 |
Title: Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and President of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 7, 2025 |
/s/ John C. Wobensmith |
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Name: John C. Wobensmith |
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Title: Chief Executive Officer and President |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with Genco Shipping & Trading Limited’s (the “Company”) quarterly report on Form 10-Q for the quarter ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 7, 2025 |
/s/ Peter Allen |
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Name: Peter Allen |
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Title: Chief Financial Officer |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.