UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material under Rule 14a-12
EAGLE BULK SHIPPING INC.
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and 0-11
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Eagle Bulk Shipping Inc.
477 Madison Avenue, Suite 1405
New York, New York 10022
(212) 785-2500
April 24, 2006
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
which will be held at the offices of Seward & Kissel, LLP, One Battery Park
Plaza, New York, New York at 10:00 a.m. on Wednesday, May 24, 2006. On the
following pages you will find the formal Notice of Annual Meeting and Proxy
Statement.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted at the meeting. Accordingly, please
date, sign and return the enclosed proxy card promptly.
I hope that you will attend the meeting, and I look forward to seeing you
there.
Sincerely,
/s/ Sophocles N. Zoullas
-------------------------------
Sophocles N. Zoullas
Chairman and Chief Executive Officer
Eagle Bulk Shipping Inc.
477 Madison Avenue, Suite 1405
New York, New York 10022
(212) 785-2500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 2006
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Eagle Bulk Shipping Inc., a Marshall Islands corporation ("Eagle
Bulk Shipping" or the "Company"), will be held on Wednesday, May 24, 2006 at
10:00 a.m. (local time), at the offices of Seward & Kissel, LLP, One Battery
Park Plaza, New York, New York for the following purposes:
1. To elect two Class I Directors to the Board of Directors;
2. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending December 31, 2006;
and
3. To transact such other business as may properly come before the Annual
Meeting or at any adjournment or postponement thereof.
Shareholders of record at the close of business on April 24, 2006, are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment or
postponement thereof. A list of such shareholders will be available at the
Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting. If you
do not expect to be present at the Annual Meeting, you are requested to fill in,
date and sign the enclosed proxy and mail it promptly in the enclosed envelope
to make sure that your shares are represented at the Annual Meeting. In the
event you decide to attend the Annual Meeting in person, you may, if you desire,
revoke your proxy and vote your shares in person.
YOUR VOTE IS IMPORTANT
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
/s/ Sophocles N. Zoullas
--------------------------
Sophocles N. Zoullas
Chairman and Chief Executive Officer
New York, New York
April 24, 2006
Eagle Bulk Shipping Inc.
477 Madison Avenue, Suite 1405
New York, New York 10022
(212) 785-2500
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 2006
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This proxy statement is furnished to shareholders of Eagle Bulk Shipping
Inc. ("Eagle Bulk Shipping" or the "Company") in connection with the
solicitation of proxies, in the accompanying form, by the Board of Directors
(the "Board") of Eagle Bulk Shipping for use in voting at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at the offices of Seward &
Kissel, LLP, One Battery Park Plaza, New York, New York, on Wednesday, May 24,
2006, at 10:00 a.m., and at any adjournment or postponement thereof.
This proxy statement, and the accompanying form of proxy, are first being
mailed to shareholders on or about April 24, 2006.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Purpose of the Annual Meeting
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Shareholders. Each proposal is described in more detail in this proxy statement.
Record Date and Outstanding Shares
The Board has fixed the close of business on April 24, 2006, as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of, and to vote at, the Annual Meeting. Only shareholders of record at
the close of business on that date will be entitled to vote at the Annual
Meeting or any and all adjournments or postponements thereof. As of April 20,
2006, Eagle Bulk Shipping had issued and outstanding 33,150,000 shares of common
stock. The common stock comprises all of the Company's issued and outstanding
voting stock.
Revocability and Voting of Proxies
Any person signing a proxy in the form accompanying this proxy statement
has the power to revoke it prior to the Annual Meeting or at the Annual Meeting
prior to the vote pursuant to the proxy. A proxy may be revoked by any of the
following methods:
o by writing a letter delivered to Alan Ginsberg, Secretary of Eagle
Bulk Shipping, 477 Madison Avenue, Suite 1405, New York, NY, 10022,
stating that the proxy is revoked;
o by submitting another proxy with a later date; or
o by attending the Annual Meeting and voting in person.
Please note, however, that if a shareholder's shares are held of record by
a broker, bank or other nominee and that shareholder wishes to vote at the
Annual Meeting, the shareholder must bring to the Annual Meeting a letter from
the broker, bank or other nominee confirming that shareholder's beneficial
ownership of the shares.
Unless we receive specific instructions to the contrary or unless such
proxy is revoked, shares represented by each properly executed proxy will be
voted: (i) FOR the election of each of the nominees to the Board; (ii) FOR the
ratification of the appointment of Ernst & Young LLP as the independent auditors
of Eagle Bulk Shipping for the fiscal year ending December 31, 2006; and (iii)
with respect to any other matters that may properly come before the Annual
Meeting, at the discretion of the proxy holders. The Company does not presently
anticipate any other business will be presented for action at the Annual
Meeting.
Voting at the Annual Meeting
Each common share outstanding on the Record Date will be entitled to one
vote on each matter submitted to a vote of the shareholders, including the
election of directors. Cumulative voting by shareholders is not permitted.
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the shareholders entitled to vote at the Annual
Meeting is necessary to constitute a quorum. Abstentions and broker "non-votes"
are counted as present and entitled to vote for purposes of determining a
quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.
A plurality of the votes cast is required for the election of directors.
Abstentions and broker "non-votes" are not counted for the purpose of the
election of directors.
The affirmative vote of a majority of the common shares represented and
voted at the Annual Meeting is required for approval of Proposal Two.
Abstentions will have the same effect as a vote "against" Proposal Two, whereas
broker non-votes are not considered to have been voted on Proposal Two.
Solicitation
We will pay the costs relating to this proxy statement, the proxy and the
Annual Meeting. We may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to beneficial owners. Directors, officers and regular employees may
also solicit proxies. They will not receive any additional pay for the
solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Under the Amended and Restated Articles of Incorporation of the Company,
the Board is classified into three classes of directors. The two directors
serving in Class I have terms expiring at the 2006 Annual Meeting. The Board has
nominated the Class I directors currently serving on the Board, Sophocles N.
Zoullas and Michael B. Goldberg, for re-election to serve as Class I directors
of the Company for a three-year term until the 2009 Annual Meeting of
Shareholders of the Company and until their successors are elected and qualified
or until their earlier death, resignation, retirement, disqualification or
removal. Although management has no reason to believe that the nominees will not
be available as candidates, should such a situation arise, proxies may be voted
for the election of such other persons as the holders of the proxies may, in
their discretion, determine.
Directors are elected by a plurality of the votes cast at the Annual
Meeting, either in person or by proxy. Votes that are withheld will be excluded
entirely from the vote and will have no effect.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE ELECTION (ITEM 1 ON THE ENCLOSED PROXY CARD) OF MESSRS. ZOULLAS AND
GOLDBERG AS CLASS I DIRECTORS.
Nominee Information
The following table sets forth information regarding the nominees for
re-election as Class I Directors:
Name Age Position
---- --- --------
Sophocles N. Zoullas 40 Chairman and Chief Executive Officer
Michael B. Goldberg 59 Director
Sophocles N. Zoullas, the Company's founder and a New York native, serves
as the Company's Chief Executive Officer and Chairman of the Board. Mr. Zoullas
has been involved in the dry bulk shipping industry for 21 years with experience
in strategic, commercial and operational aspects of the business. Mr. Zoullas'
strategic and commercial experience includes ship purchase negotiations and
financing, chartering and insurance. Mr. Zoullas's operational experience
includes oversight of ship repair, maintenance and cost control. From 1989 to
February 2005, Mr. Zoullas served as an executive officer and a director of
Norland Shipping & Trading Corporation, a shipping agency in the dry bulk
shipping industry. He holds a bachelor's degree from Harvard College and an MBA
from IMD (IMEDE) in Lausanne, Switzerland. Mr. Zoullas has served on the Board
since the inception of the Company in 2005.
Michael B. Goldberg serves as a Director of the Company and is a Managing
Director at Kelso & Company, an affiliate of ours, having joined Kelso in 1991.
Prior to joining Kelso, Mr. Goldberg spent two years as a Managing Director and
Co-head of the Mergers and Acquisitions Department at The First Boston
Corporation. From 1978 to 1987, Mr. Goldberg practiced corporate law in the
Mergers and Acquisitions Department of Skadden, Arps, Slate, Meagher & Flom LLP,
becoming a partner in 1980. Mr. Goldberg was an Associate at Cravath, Swain &
Moore from 1972 to 1977. Additionally, Mr. Goldberg is a director of Overwatch
Systems, LLC (formerly known as Federal Information Technology Systems, LLC),
Hilite International, Inc., HCI Direct, Inc. and RHI Entertainment Holdings,
LLC. Mr. Goldberg has served on the Board since the inception of the Company in
2005.
Continuing Director Information
The following table sets information regarding our directors whose terms
continue after the 2006 Annual Meeting. The terms for directors in Class II
expire at the 2007 Annual Meeting, and the terms for directors in Class III
expire at the 2008 Annual Meeting.
Name Age Class Position
---- --- ----- --------
Joseph Cianciolo 67 II Director
Michael Mitchell 68 II Director
David B. Hiley 67 II Director
Frank J. Loverro 37 III Director
Douglas P. Haensel 43 III Director
Class II Directors - Terms Expiring at the 2007 Annual Meeting
David B. Hiley serves as a Director of the Company. He has been a financial
consultant, including a financial consultant to Nortek, Inc. for more than five
years and currently serves as a director. From April 1, 1998 through March 1,
2000, Mr. Hiley served as Executive Vice President and Chief Financial Officer
of CRT Properties, Inc. (formerly Koger Equity, Inc.), a real estate investment
trust that was sold in September 2005.
Joseph M. Cianciolo serves as a Director of the Company and the Chair of
our Audit Committee. Mr. Cianciolo retired in June 1999 as the managing partner
of the Providence, Rhode Island office of KPMG LLP. At the time of his
retirement, Mr. Cianciolo had been a partner of KPMG LLP since 1970. Mr.
Cianciolo currently serves as a director of United Natural Foods Inc. and
Nortek, Inc.
Michael W. Mitchell serves as a Director of the Company. Mr. Mitchell has
been of counsel to Skadden, Arps, Meagher & Flom LLP since May 2004 and was a
member of Shapiro, Mitchell, Forman, Allen & Miller LLP from September 2002 to
May 2004. Previously, Mr. Mitchell had been counsel to the law firm Morvillo,
Abramowitz, Grand, Iason & Silberberg since November 1991.
Class III Directors - Terms Expiring at the 2008 Annual Meeting
Frank J. Loverro serves as a Director of the Company and is a Managing
Director at Kelso & Company, an affiliate of ours, having joined Kelso in 1993.
Prior to joining Kelso, Mr. Loverro worked in private equity investing with the
Clipper Group. Mr. Loverro started his career in the High Yield Finance Group at
CS First Boston. Additionally, Mr. Loverro is a director of RHI Entertainment
Holdings, LLC.
Douglas P. Haensel serves as a Director of the Company. He currently is
Executive Vice President and Chief Financial Officer of Burt's Bees, Inc. From
2001 to 2004, Mr. Haensel was President and Chief Operating Officer of 21st
Century Newspapers, Inc. He was Executive Vice President and Chief Financial
Officer at The Athlete's Foot Group, Inc. from 1999 to 2001. Additionally, Mr.
Haensel started his career at General Electric Company and held several
management positions at GE Capital.
Meetings of the Board of Directors
During the fiscal year 2005, there were six meetings of the Board. A quorum
of directors was present, either in person or telephonically, for all of the
meetings. Actions were also taken during the year by the unanimous written
consent of the Directors.
Committees of the Board of Directors
The Board of Directors has a standing Audit Committee, Compensation
Committee and Nominating Committee, the respective members and functions of
which are described below.
Audit Committee
Since December 14, 2005, the Company's Audit Committee has been comprised
of Joseph Cianciolo, Douglas P. Haensel, David B. Hiley and Frank J. Loverro.
Messrs Cianciolo, Haensel and Hiley qualify as independent under the listing
requirements of the NASDAQ National Market. Our Board has determined that Joseph
Cianciolo constitutes a "financial expert" as such term is defined by the U.S.
Securities and Exchange Commission regulations, and he has the related financing
management expertise within the meaning of NASDAQ rules & regulations. Through
its written charter, which was adopted on June 3, 2005, the Audit Committee has
been delegated the responsibility of reviewing with the independent auditors the
plans and results of the audit engagement, reviewing the adequacy, scope and
results of the internal accounting controls and procedures, reviewing the degree
of independence of the auditors, reviewing the auditor's fees and recommending
the engagement of the auditors to the full Board. The Audit Committee held two
meetings during fiscal year 2005. The report of the Audit Committee is on page
15 of this Proxy Statement. A copy of the Audit Committee Charter is included as
Appendix I to this Proxy Statement. The charter describes the nature and scope
of the responsibilities of the Audit Committee.
Compensation Committee
The Company's Compensation Committee is comprised of Frank J. Loverro,
David B. Hiley and Douglas P. Haensel, all of whom with the exception of Mr.
Loverro qualify as independent under the listing requirements of the NASDAQ
National Market. Through its written charter, approved on June 3, 2005, the
Compensation Committee administers the Company's stock option plan and other
corporate benefits programs. The Compensation Committee also reviews and
approves bonuses, stock option grants, compensation philosophy and current
competitive status, and executive officer Compensation. The Compensation
Committee held one meeting during fiscal year 2005. The report of the
Compensation Committee is on page 12 of this Proxy Statement. A copy of the
Compensation Committee Charter is included as Appendix II to this Proxy
Statement. The charter describes the nature and scope of the responsibilities of
the Compensation Committee.
Nominating Committee
Since June 3, 2005, the Company's Nominating Committee has been comprised
of Sophocles N. Zoullas, Frank J. Loverro and David B. Hiley. Through its
written charter, the Nominating Committee assists the Board in identifying
qualified individuals to become Board members, in determining the composition of
the Board and its committees, in monitoring a process to assess Board
effectiveness and in developing and implementing the Company's corporate
governance guidelines. The nominating committee has held one meeting since June
3, 2005 and is in the process of determining its policy regarding the
consideration of any director candidates recommended by security holders. A copy
of the Nominating Committee Charter is included as Appendix III to this Proxy
Statement. The charter describes the nature and scope of the responsibilities of
the Nominating Committee.
Each of the nominees for election as director at the 2006 Annual Meeting,
Messrs. Zoullas and Goldberg, are currently directors of the Company and were
recommended for re-election by the Nominating Committee.
Legal Proceedings Involving Directors, Officers or Affiliates
There are no legal proceedings ongoing as to which any director, officer or
affiliate of the Company, any owner of record or beneficially or more than five
percent of any class of voting securities of the Company, or any associate of
any such director, officer, affiliate of the Company, or security holder is a
party adverse to us or any of our subsidiaries or has a material interest
adverse to us or any of our affiliates.
Code of Ethics
Eagle Bulk Shipping's Code of Ethics, which applies to the Company's
directors, executive officers and senior employees, is available on the
Company's website at www.eagleships.com.
Communications from Shareholders
The Board has in place a process for shareholders to send communications to
the Board. Specifically, the Board will review and give appropriate attention to
communications submitted by shareholders and other interested parties, and will
respond if and as appropriate. Shareholders may send communications to the Board
by calling the Company's outside counsel, Seward & Kissel, LLP, Attn: Gary J.
Wolfe, tel.: (212) 574-1200.
Our principal offices are located at 477 Madison Avenue, Suite 1405, New
York, NY 10022 and our main telephone number is (212) 785-2500.
MANAGEMENT
Executive Officers and Other Key Personnel
The following tables set forth certain information with respect to the
executive officers (other than Sophocles N. Zoullas, for whom information is set
forth under the heading "Nominee Information" above) and other key personnel of
the Company:
Executive Officers
Name Age Position
---- --- --------
Sophocles N. Zoullas 40 Chairman and Chief Executive Officer
Alan Ginsberg 48 Chief Financial Officer
Alan S. Ginsberg serves as the Company's Chief Financial Officer and is
responsible for overseeing the Company's accounting and financial matters. Mr.
Ginsberg has over 18 years of experience in the shipping industry and in
particular in shipping finance. From 2002 until 2005, Mr. Ginsberg was the
Director of Ship Financing for Northampton Capital Ltd., a transportation
industry financial advisory firm. From 1998 to 2002, Mr. Ginsberg was a Director
of High Yield Research at Scotia Capital (USA) Inc. and was responsible for
analysis of the shipping industry, publishing research and maintaining
relationships in the industry. From 1997 to 1998, Mr. Ginsberg was the publisher
of Marine Money International, a leading maritime publication, and between 1988
and 1996 he served as the Chief Financial Officer of The Kedma Group, a
privately held shipping company that owned and operated 17 vessels, including 14
Handymax dry bulk vessels and three tankers. Mr. Ginsberg holds a bachelor's
degree from Georgetown University. Mr. Ginsberg is a certified public accountant
and has previously worked at Coopers & Lybrand.
Executive Compensation
The following table sets forth in summary form information concerning the
compensation paid by us during the years ended December 31, 2005, to our
executive officers whose salaries and bonuses for fiscal year 2005 exceeded
$100,000 and who served as executive officers of the Company as of December 31,
2005 (the "Named Executive Officers").
Summary Compensation Table
Annual Compensation
-------------------
Fiscal
Name and Principal Position Year Salary Bonus
--------------------------- ---- ------ -----
Sophocles Zoullas, Chief Executive Offiicer 2005 $675,000 $190,000
Alan Ginsberg, Chief Financial Officer 2005 200,000 120,000
For information about the employment agreement with Mr. Zoullas, see
"--Employment Agreement and Incentive Bonus Program" below.
Option Grants for the Year Ended December 31, 2005
The Company did not grant any options to the named Executive Officers
during the fiscal year ended December 31, 2005.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
There were no options exercises during the fiscal year ended December 31,
2005.
Director Compensation
For fiscal year 2005, each of our non-employee directors and directors
not-affiliated with Kelso receive an annual fee of $40,000. The Chairman of the
Audit Committee receives an annual fee of $50,000. We do not pay director fees
either to employee directors or directors affiliated with Kelso. We reimburse
our directors for all reasonable expenses incurred by them in connection with
serving on the Board.
Employment Agreement and Incentive Bonus Program
Agreement with Mr. Zoullas
On March 1, 2005, we entered into an employment agreement within an
original term of three years with Mr. Zoullas pursuant to which Mr. Zoullas
serves as our Chief Executive Officer. Either Mr. Zoullas or we may terminate
the employment agreement for any reason on 30 days written prior notice. We may
also terminate Mr. Zoullas employment at any time for cause.
Pursuant to the employment agreement, Mr. Zoullas receives a minimum base
salary per year in the amount of $675,000. Mr. Zoullas is eligible to
participate in a performance bonus pool, for senior executives, as well as
discretionary amounts determined by the compensation committee of Eagle
Ventures. Mr. Zoullas is also entitled to participate in the benefit plans and
fringe benefits provided generally to similarly situated senior executives. The
employment agreement also provides that we will provide Mr. Zoullas with a life
insurance policy during the term of the agreement with the amount and terms
determined by mutual agreement.
Pursuant to the employment agreement, Mr. Zoullas has also been awarded a
profits interest in Eagle Ventures which is designed to allow participation in
profits realized in a sale or other exit event with respect to Eagle Ventures.
This profits interest consists of "service points" and "performance points." Mr.
Zoullas is required to receive at least 75% of the profits interests that are
awarded to senior management by the compensation committee of Eagle Ventures. In
the event Mr. Zoullas' employment is terminated (i) by the Company without cause
(as such term is defined in the employment agreement), (ii) by Mr. Zoullas for
good reason (as such term is defined in the employment agreement), or (iii) as a
result of death or disability (as such term is defined in the employment
agreement), all of the service points allocated to Mr. Zoullas will vest and
one-half of the performance points allocated to Mr. Zoullas will vest.
In the event Mr. Zoullas terminates his employment for other than good
reason, Mr. Zoullas is entitled to receive (i) his base salary earned but unpaid
up to the date of termination, (ii) reimbursement of any expenses for which he
was due reimbursement, (iii) any bonus actually earned for a completed year but
unpaid as of the date of termination, and (iv) any benefits that he is then
entitled to receive under benefit plans (collectively, (i), (ii), (iii) and (iv)
are referred to as the "Accrued Benefits").
In the event we terminate Mr. Zoullas' employment without cause, then in
addition to the Accrued Benefits, Mr. Zoullas is entitled to receive
continuation of his base salary (the "Severance Payments") for a period of one
year following the effective date of such termination, or the remaining term of
the employment agreement, whichever is longer (the "Severance Period"). In
addition, we will continue his health insurance (for Mr. Zoullas and his
dependents) during the Severance Period. Mr. Zoullas does not receive Severance
Payments in the event he materially breaches the employment agreement and such
breach is not cured within 30 days of written notice from us. We may also
terminate Mr. Zoullas' employment at any time for cause.
In the event that his employment is terminated for cause, we are only
obligated to provide Mr. Zoullas with the Accrued Benefits and the profits
interest allocated to Mr. Zoullas is forfeited. Mr. Zoullas may terminate his
employment with us at any time for good reason in which case he is entitled to
receive the Accrued Benefits and health insurance during the Severance Period.
If Mr. Zoullas dies or becomes disabled while employed by us, all of his
rights under the employment agreement terminate except that we are required to
pay Mr. Zoullas his Accrued Benefits.
2005 Stock Incentive Plan
We have adopted our 2005 Stock Incentive Plan for the purpose of affording
an incentive to eligible persons to increase their efforts on behalf of our
company and our affiliates and to promote our company's success. The 2005 Stock
Incentive Plan provides for the grant of equity-based awards, including stock
options, stock appreciation rights, restricted stock, restricted stock units,
stock bonuses, dividend equivalents and other awards based on or relating to our
common stock to eligible non-employee directors, selected officers and other
employees and independent contractors.
The plan is administered by a Committee of our board of directors (the
"Committee") which has the authority, in its sole discretion, to administer the
2005 Stock Incentive Plan and to exercise all the powers and authorities either
specifically granted to it under the plan, including, without limitation, the
authority to grant awards; to determine the persons to whom and the time or
times at which awards will be granted; to determine the type and number of
awards to be granted, the number of shares of stock or cash or other property to
which an award may relate and the terms, conditions, restrictions and
performance criteria relating to any award; to determine whether, to what
extent, and under what circumstances an award may be settled, cancelled,
forfeited, exchanged, or surrendered; to construe and interpret the plan and any
award; to prescribe, amend and rescind rules and regulations relating to the
plan; to determine the terms and provisions of award agreements; and to make all
other determinations deemed necessary or advisable for the administration of the
plan.
An aggregate of 2.6 million shares of our common stock has been authorized
for issuance under the plan.
Compensation Committee Interlocks and Insider Participation
No interlocking relationship exists between any of Eagle Bulk Shipping's
executive officers or members of the Company's Board or Compensation Committee
and any other company's executive officers, board of directors or compensation
committee.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board is comprised of two independent
directors and one non-independent director, in compliance with NASDAQ
Marketplace rules. The Compensation Committee is responsible for establishing
and administering the overall compensation policies applicable to the Company's
executive officers and determining the annual cash compensation of the Company's
senior management. The Compensation Committee is also responsible for
establishing the general policies applicable to the granting, vesting and other
terms of equity grants made to current and newly hired officers and other key
employees under the Company's stock incentive plan, and for determining the size
and terms of the individual grants made to the Company's executive officers.
Compensation Deductibility Policy
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation to certain employees in excess of $1 million. Because the Company
believes that it currently qualifies for the exemption pursuant to Section 883
of the Internal Revenue Code of 1986, as amended, pursuant to which it is not
subject to United States federal income tax on its shipping income (which
comprised substantially all of its gross revenue in 2004), it has not sought to
structure its compensation arrangements to qualify for exemption under Section
162(m).
Compensation Philosophy
The Committee believes that the Company's compensation programs should
attract and retain executives and other employees to enable the Company to
compete effectively; encourage achievement of the Company's annual and
longer-term performance objectives; and align our executives' long-term
interests with those of our shareholders. The Committee fosters and oversees the
Company's compensation programs to attain these goals.
The Compensation Committee bases its senior executive officer compensation
decisions primarily on its assessment of each executive's performance in his
area of responsibility, contributions to the Company and to improving
shareholder value. This assessment is based on a number of factors, including
the executive's performance compared to the Company's current goals and
objectives; the nature and scope of the executive's responsibilities; the
executive's contribution to the Company's current financial results; and the
executive's effectiveness in initiatives to deliver greater future value to
shareholders. In order to provide proper incentives to each executive and
appropriately reward performance, the Compensation Committee assesses the proper
balance of short- and long-term compensation as well as the form of such
compensation. The Compensation Committee also considers the compensation levels
and performance of companies that the Compensation Committee regards as
competitors or peers of the Company.
The Compensation Committee's review process in 2005 included three meetings
of the Compensation Committee and several consultations with the Company's Chief
Executive Officer and Chief Financial Officer.
The Compensation Committee's recommendations were made after due and
careful consideration and in the light of the Company's performance and the
performance of the individual executives. The Compensation Committee duly
reported its findings to the full Board, which accepted the Compensation
Committee's recommendations unanimously.
Executive Compensation
The Compensation Committee's actions regarding executive compensation for
2005 is reflected in the "Summary Compensation Table" set forth above.
As part of the review process described above, the base salary rate and
proposed 2005 awards of each executive officer was reviewed, taking into
account: (i) each officer's individual performance during 2005, including the
extraordinary services rendered in connection with the Company's initial public
offering and subsequent follow on offering; (ii) the scope and importance of the
functions the officer performed or for which the officer was responsible, (iii)
an assessment of the officer's initiative, managerial ability and overall
contributions to corporate performance, (iv) certain practices of other
companies with respect to executive officer salary and bonus levels for 2005 and
2006 based on survey data and available Securities and Exchange Commission
filing data, and (v) internal equity considerations.
The weighting given to these factors varied by position, but the
Compensation Committee intended that each executive officer's base salary and
annual bonus rates be generally competitive with the estimated current market
rates, and that the annual bonuses for 2005 properly reflect the efforts and
achievements of the Company's management team in fostering the Company's
superior performance in terms of return to shareholders relative to certain
competitors, including the efforts related to the Company's two equity offerings
and efforts relating to the Company's commencement of operations.
On December 14, the Compensation Committee approved Mr. Zoullas's salary
for fiscal 2006 of $678,500 and Mr. Ginsberg's salary for fiscal 2006 of
$245,000. Additionally, in 2005, the Compensation Committee approved Messrs.
Zoullas and Ginsberg bonuses of $190,000 and $120,000, respectively for services
to the Company during 2005.
CEO Compensation
The Compensation Committee's actions regarding Mr. Zoullas's cash
compensation for 2005 as the Company's Chief Executive Officer are reflected in
the "Summary Compensation Table" set forth above.
The Compensation Committee's review of Mr. Zoullas's compensation occurred
at the same time as the above-discussed review of the compensation of the
Company's other executive officers, and took into account the same factors and
data, together with the Compensation Committee's assessment of Mr. Zoullas's
leadership skills and impact potential; his contributions to the Company's
successes during 2005, and in particular and his success in building an
effective management team and corporate infrastructure to support the Company's
growth and public company status. After assessing Mr. Zoullas's performance for
2005, and after taking into account his existing compensation, his value and
importance to the Company, and the benefit to the Company of providing Mr.
Zoullas with long-term incentives, the Compensation Committee approved Mr.
Zoullas' salary for fiscal year 2006 of $ 678,500.
Conclusion
The Compensation Committee believes that the Company's current compensation
programs and practices strike an appropriate balance between risk and reward and
are consistent with the Company's goals to attract, retain, and incentivize its
executives and employees in both the short and long term.
Submitted by the Compensation Committee of the Board:
Frank Loverro
David Hiley, and
Douglas Haensel
Performance Graph
The following graph illustrates a comparison of the cumulative total shareholder
return (change in stock price plus reinvested dividends) of Eagle Bulk Shipping
Inc.'s common stock with the Standard and Poor's 500 Index and a "Peer Group"
consisting of Dryships, Inc., Diana Shipping Inc., Quintana Maritime Ltd., Excel
Maritime Carriers Ltd., Navios Maritime Holdings, Inc. and Genco Shipping and
Trading Limited. The comparison assumes a $100 investment on June 28, 2005. The
comparisons in the graph are required by the Securities and Exchange Commission
and are not intended to forecast or be indicative of possible future performance
of the Company's common stock. Data for the Standard and Poor's 500 Index and
the peer group assume reinvestment of dividends.
[GRAPHIC OMITTED]
6/28/2005 12/31/2005
--------- ----------
EGLE 100 117.57
S&P 500 100 103.89
Peer Group 100 82.04
REPORT OF THE AUDIT COMMITTEE
The role of the Audit Committee is to assist the Board in its oversight of
the quality and integrity of the accounting, auditing and financial reporting
practices of the Company and the independence and performance of the Company's
auditors. The Board, in its business judgment, has determined that all members
of the Audit Committee are "independent", as provided under the applicable
listing standards of the NASDAQ National Market. The Audit Committee operates
pursuant to a Charter that was adopted by the Board on June 3, 2005, a copy of
which is attached to this Proxy Statement as Appendix I. As set forth in the
Charter, the Committee's job is one of oversight. Management is responsible for
the preparation, presentation and integrity of the Company's financial
statements. Management is also responsible for maintaining appropriate
accounting and financial reporting principles and practices and internal
controls and procedures designed to assure compliance with accounting standards
and applicable laws and regulations. The independent registered public
accounting firm is responsible for auditing the annual financial statements,
expressing an opinion based on their audit as to the statements' conformity with
generally accepted accounting principles, reviewing the Company's quarterly
financial statements prior to the filing of each quarterly report on Form 10-Q
and discussing with the Committee any issues they believe should be raised with
the Committee.
The Committee met with the Company's independent registered public
accounting firm to review and discuss the overall scope and plans for the audit
of the Company's consolidated financial statements for the year ended December
31, 2005. The Committee has considered and discussed with management and the
independent registered public accounting firm (both alone and with management
present) the audited financial statements as well as the independent registered
public accounting firm's evaluation of the Company's internal controls and the
overall quality of the Company's financial reporting. Management represented to
the Committee that the Company's financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee
reviewed and discussed the financial statements with management.
The Audit Committee has also discussed with the independent registered
public accounting firm the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees, as currently in
effect. Finally, the Audit Committee has received written disclosures and the
letter from the independent registered public accounting firm required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, as currently in effect, and a formal written statement from the
independent registered public accounting firm, confirmed by management, of the
fees billed for audit services, and other non-audit services rendered by the
independent registered public accounting firm for the most recent fiscal year.
The Audit Committee has considered whether the provision of non-audit services
by the independent registered public accounting firm to the Company is
compatible with maintaining the independent registered public accounting firm's
independence and has discussed with the independent registered public accounting
firm their independence.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the field of auditing
or accounting, including in respect of auditor independence. Members of the
Audit Committee rely, without independent verification, on the information
provided to them and on the representations made by management and the
independent registered public accounting firm. Accordingly, the Audit
Committee's activities do not provide an independent basis to determine that
management has maintained appropriate internal control and procedures designed
to assure compliance with accounting standards and applicable laws and
regulations. Furthermore, the Audit Committee's considerations and discussions
referred to above do not assure that the audit of the Company's financial
statements has been carried out in accordance with generally accepted auditing
standards, that the financial statements are presented in accordance with
generally accepted accounting principles or that the Company's independent
registered public accounting firm is in fact "independent."
Based upon the Audit Committee's receipt and review of the various
materials and assurances described above and its discussions with management and
independent registered public accounting firm, and subject to the limitations on
the role and responsibilities of the Audit Committee referred to above and in
the Charter, the Committee recommended to the Board that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2005, filed with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Board:
Joseph Cianciolo
Douglas Haensel
David Hiley
Frank Loverro
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Eagle Bulk Shipping's voting common stock as of April 20, 2006 of:
o each person, group or entity known to Eagle Bulk Shipping to
beneficially own more than 5% of our stock;
o each of our directors;
o each of our Named Executive Officers; and
o all of our directors and executive officers as a group.
As of April 20, 2006, a total of 33,150,000 shares of common stock were
outstanding and entitled to vote at the Annual Meeting. Each share of common
stock is entitled to one vote on matters on which common shareholders are
eligible to vote.
The amounts and percentages of common stock beneficially owned are reported
on the basis of regulations of the Securities and Exchange Commission governing
the determination of beneficial ownership of securities. Under the rules of the
Securities and Exchange Commission, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power," which includes
the power to vote or to direct the voting of that security, or "investment
power," which includes the power to dispose of or to direct the disposition of
that security. A person is also deemed to be a beneficial owner of any
securities as to which that person has a right to acquire beneficial ownership
presently or within 60 days. Under these rules, more than one person may be
deemed a beneficial owner of the same securities, and a person may be deemed to
be the beneficial owner of securities as to which that person has no economic
interest.
Ownership of Common Stock
Shares Beneficially Owned (1)(2)
Name Number Percentage
---- ------ ---------
Eagle Ventures LLC (3) 12,425,000 37.48%
Kelso Investment Associates VII, L.P. (3)(4) 10,671,271 32.19%
KEP VI, LLC (3)(4) 10,671,271 32.19%
Frank T. Nickell (3)(4)(5) 10,671,271 32.19%
Thomas R. Wall, IV (3)(4)(5) 10,671,271 32.19%
George E. Matelich (3)(4)(5) 10,671,271 32.19%
Michael B. Goldberg (3)(4)(5)(6) 10,671,271 32.19%
David I. Wahrhaftig (3)(4)(5) 10,671,271 32.19%
Frank K. Bynum, Jr. (3)(4)(5) 10,671,271 32.19%
Philip E. Berney (3)(4)(5) 10,671,271 32.19%
Frank J. Loverro (3)(4)(5)(6) 10,671,271 32.19%
James J. Connors, II (3)(4)(5) 10,671,271 32.19%
Douglas P. Haensel (6)(10) 13,333 *
David B. Hiley (6) (11) 66,603 *
Joseph Cianciolo (6)(12) 16,667 *
Michael Mitchell (6)(13) 13,333 *
Sophocles N. Zoullas (6)(7) 931,441 2.81%
Alan S. Ginsberg (8) 65,907 *
Executive Officers and Directors as a group (9) 11,778,555 35.47%
----------
* Less than 1% ownership
(1) Numbers and percentages for Eagle Ventures LLC, KIA VII, KEP VI and Messrs.
Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum, Berney, Loverro and
Connors and our executive officers and Messrs. James, Thouret and Hiley are
reflective of beneficial ownership of Eagle Ventures LLC common interests.
(2) Reflects the effect of vesting of certain performance related profits
interests in Eagle Ventures LLC granted to Messrs. Zoullas, Ginsberg,
Thouret and James upon the consummation of our initial public offering as
described in the section of this Proxy Statement entitled "Certain
Relationships and Related Party Transactions--The Eagle Ventures
Agreement." Shares subject to options that are exercisable presently or
within 60 days are considered outstanding for the purpose of determining
the percent of the class held by the holder of such option, but not for the
purpose of computing the percentage held by others.
(3) The business address for these persons is c/o Kelso & Company, L.P., 320
Park Avenue, 24th Floor, New York, NY 10022.
(4) Includes shares of common stock held by: (i) Kelso Investment Associates
VII, L.P., a Delaware limited partnership, or KIA VII, and (ii) KEP VI,
LLC, or KEP VI. KIA VII and KEP VI may be deemed to share beneficial
ownership of shares of common stock owned of record by Eagle Ventures LLC,
by virtue of their ownership interests in Eagle Ventures LLC. KIA VII and
KEP VI, due to their common control, could be deemed to beneficially own
each of the other's shares. Shares and percentages indicated represent the
upper limit of the expected ownership of our equity securities by these
persons and entities. Each of KIA VII and KEP VI disclaim such beneficial
ownership.
(5) Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum, Berney,
Loverro and Connors may be deemed to share beneficial ownership of shares
of common stock owned of record by Eagle Ventures LLC, by virtue of their
status as managing members of KEP VI and of Kelso GP VII, LLC, a Delaware
limited liability company, the principal business of which is serving as
the general partner of Kelso GP VII, L.P., a Delaware limited partnership,
the principal business of which is serving as the general partner of KIA
VII. Each of Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum,
Berney, Loverro and Connors share investment and voting power with respect
to the ownership interests owned by KIA VII and KEP VI but disclaim
beneficial ownership of such interests.
(6) Member of our board of directors.
(7) Includes 931,441 shares of common stock held of record by Eagle Ventures
LLC, by virtue of Mr. Zoullas's common ownership interest in Eagle Ventures
LLC.
(8) Includes 65,907 shares of common stock held of record by Eagle Ventures
LLC, by virtue of Mr. Ginsberg's common ownership interest in Eagle
Ventures LLC.
(9) Includes shares of common stock the beneficial ownership of which Mr.
Goldberg, and Mr. Loverro may be deemed to share, as described in footnote
5 above.
(10) The business address for Mr. Haensel is 477 Madison Avenue, Suite 1405, New
York, NY 10022. Mr. Haensel's beneficial ownership represents options to
purchase 13,333 shares of our common stock granted under the Eagle Bulk
Shipping Inc. 2005 Stock Incentive Plan, all 13,333 of which are currently
exercisable.
(11) The business address for Mr. Hiley is 63 Old Coach Road, New London, New
Hampshire 03257. Mr. Hiley's beneficial ownership includes options to
purchase 13,333 shares of our common stock granted under the Eagle Bulk
Shipping Inc. 2005 Stock Incentive Plan, all 13,333 of which are currently
exercisable. Shares beneficially owned by Mr. Hiley include 53,270 shares
of common stock held of record by Eagle Ventures LLC, by virtue of Mr.
Hiley's common ownership interest in Eagle Ventures LLC.
(12) The business address for Mr. Cianciolo is 477 Madison Avenue, Suite 1405,
New York, NY 10022. Mr. Cianciolo's beneficial ownership represents options
to purchase 16,667 shares of our common stock granted under the Eagle Bulk
Shipping Inc. 2005 Stock Incentive Plan, all 16,667 of which are currently
exercisable.
(13) The business address for Mr. Mitchell is c/o Skadden, Arps, Slate, Meagher
& Flom LLP, Four Times Square, New York, NY 10036. Mr. Mitchell's
beneficial ownership represents options to purchase 13,333 shares of our
common stock granted under the Eagle Bulk Shipping Inc. 2005 Stock
Incentive Plan, all 13,333 of which are currently exercisable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Eagle Ventures Agreement
Affiliates of Kelso & Company, certain outside investors and all of the
members of our management are parties to a limited liability company agreement
relating to the formation, ownership and management of Eagle Ventures, which
owns 12,425,000 shares of our common stock which is equivalent to 37.48% of our
common stock on a fully diluted basis. Affiliates of Kelso control Eagle
Ventures, owning approximately 85.9% of the common interests in Eagle Ventures,
and members of our management and outside investors own approximately 14.1% of
the common interests in Eagle Ventures.
Members of the Company's management have been awarded profits interests
(and in the future others having senior management and/or strategic
planning-type responsibilities may be awarded similar profits interests) in
Eagle Ventures LLC that may entitle such persons to an economic interest of up
to 16.7% on a fully diluted basis (assuming all profits interests were vested)
in any appreciation in the value of the assets of Eagle Ventures LLC (including
shares of the Company's common stock owned by Eagle Ventures LLC when sold). In
all, one-fourth of the profits interests are service-related and vest in equal
three-month installments over four years (the vesting of such service-related
profits interests is subject to continued employment with Eagle Ventures LLC or
its affiliates at the end of each such three-month period), and the remaining
profits interests are performance-related. Pursuant to an amendment to the Eagle
Ventures LLC limited liability company agreement, 44% of the performance-related
profits interests became fully vested upon the consummation of the Company's
initial public offering (or an economic interest in approximately 6.2% of the
appreciation of the assets of Eagle Ventures LLC on a fully diluted basis taking
into account the vesting of only such profits interests), and the remaining
portion of the performance-related profits interests will vest based on
affiliates of Kelso achieving certain multiples on their original indirect
investment in the Company, subject to an internal rate of return minimum.
Retention of the non-accelerated performance-related profits interests is
subject to continued employment with Eagle Ventures LLC or its affiliates.
The vesting of profits interests may be further accelerated in the future
by the compensation committee of Eagle Ventures LLC. These profits interests
will dilute only the interests of owners of Eagle Ventures LLC, and will not
dilute direct holders of the Company's common stock. However, the Company's
statement of operations reflects non-cash charges for compensation related to
the profits interests.
For the period from inception in January 26, 2005 to December 31, 2005, the
Company recorded a non-cash compensation charge of $11.7 million. Of that
charge, approximately $9.2 million relates to the portion of the
performance-related profits interests that vested upon consummation of the
Company's initial public offering. The remaining $2.5 million non-cash
compensation charge was taken as a result of the service-related and
non-accelerated performance-related profits interests. The Company is recording
compensation charges relating to the service-related profits interests over four
years. The non-accelerated performance related profits interests vest based on
affiliates of Kelso achieving certain multiples on their original investment in
the assets of Eagle Ventures LLC through the receipt of distributions from Eagle
Ventures LLC. The vesting occurs ratably upon achieving a return on investment
ranging from two times to four times the original investment. To calculate the
non-cash compensation charge that is reflected in the Company's income statement
for the non-accelerated performance-related profits interests, the Company has
assumed that these profits interests will vest four years after their issuance.
The Company is therefore recording compensation charges relating to such profits
interests over four years.
On January 28, 2006, the limited liability company agreement of Eagle
Ventures LLC was amended and restated (the "Third LLC Agreement"). This provided
for the award of additional profits interests in Eagle Ventures LLC to certain
management employees and provided for certain adjustments in the manner
distributions are made by Eagle Ventures in connection with such newly awarded
profits interests. These profits interests will dilute only the interests of
owners of Eagle Ventures LLC, and will not dilute the direct holders of the
Company's common stock.
On March 8, 2006, the Third LLC Agreement was amended and restated (the
"Fourth LLC Agreement") and is included as Exhibit 10.6 to this annual report.
Pursuant to the Fourth LLC Agreement, an adjustment was made in the schedule
governing the management members' retention of service-related profits interests
upon their termination of employment with Eagle Ventures LLC or its subsidiaries
(including the Company). In addition, under the Fourth LLC Agreement one-fourth
of the service-related profits interests granted on January 28, 2006 were
immediately vested and the remaining newly granted service-related profits
interests were made subject to a three-year retention schedule.
Registration Rights Agreement
We have entered into a registration rights agreement with Eagle Ventures
pursuant to which we granted it, and certain of its transferees, the right,
under certain circumstances and subject to certain restrictions, to require us
to register under the Securities Act shares of our common stock held by Eagle
Ventures. Under the registration rights agreement, Eagle Ventures has the right
to request us to register the sale of shares held by it on its behalf and may
require us to make available shelf registration statements permitting sales of
shares into the market from time to time over an extended period. In addition,
Eagle Ventures has the ability to exercise certain piggyback registration rights
in connection with registered offerings initiated by us. Eagle Ventures owns
12,425,000 shares entitled to these registration rights.
Loans
There are no loans made by the Company to any individual or entity.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board has selected the firm of Ernst & Young LLP as the Company's
independent registered public accounting firm to audit the financial statements
of Eagle Bulk Shipping for the fiscal year ending December 31, 2006 and
recommends that shareholders vote for ratification of this appointment. The
Company engaged Ernst & Young LLP as its independent auditors in 2005 in
anticipation of its initial public offering. Representatives of Ernst & Young
LLP are expected to be present at the Annual Meeting, will have the opportunity
to make a statement if they desire to do so and are expected to be available to
respond to appropriate questions. The affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and voting at
the Annual Meeting will be required to ratify the selection of Ernst & Young
LLP.
If the shareholders fail to ratify the selection, the Audit Committee and
the Board will reconsider its selection of auditors. Even if the selection is
ratified, the Board in its discretion may direct the appointment of different
independent registered public accounting firm at any time during the year if it
determines that such change would be in the best interests of the Company and
its shareholders.
The 2005 Audit Committee has determined that the provision of the services
covered under the headings "All Other Fees" below is compatible with maintaining
Ernst & Young LLP's independence for purposes of acting as the Company's
independent registered public accounting firm.
Fees to Independent Registered Public Accounting Firm for Fiscal 2005
The following table presents fees for professional services rendered by
Ernst & Young LLP for the audit of the Company's annual financial statements for
fiscal 2005, the first fiscal year that the Company was in existence, and fees
billed for audit-related services, tax services and all other services rendered
by Ernst & Young for fiscal 2005.
Type of Fees 2005
------------ ----
Audit Fees $587,000
Audit-Related Fees $0
Tax Fees $12,420
All Other Fees $0
Total $599,420
Audit Fees
The aggregate fees billed by Ernst & Young LLP, the member firms of Ernst &
Young LLP, and their respective affiliates (collectively, "Ernst & Young) for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2005 and for the reviews of
the financial statements included in the Company's Quarterly Reports on Form
10-Q and for services related to our initial public offering and our secondary
offering for that fiscal years were $587,000.
Audit Related Fees
There were no audit related fees billed by Ernst & Young for services
rendered to the Company for the year ended December 31, 2005.
The aggregate tax fees billed by Ernst & Young for services rendered to the
Company, for the fiscal year ended December 31, 2005 were $12,420. These fees
related to tax planning and tax compliance services.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" THE RATIFICATION (ITEM 2 OF THE ENCLOSED PROXY CARD) OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS EAGLE BULK SHIPPING'S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the 2007 Annual Meeting of
Shareholders, for inclusion in Eagle Bulk Shipping's proxy statement and form of
proxy relating to that meeting, must be received by the Company at its offices
in New York, New York, addressed to the Secretary, not later than December 20,
2006. Such proposals must comply with Eagle Bulk Shipping's By-Laws and the
requirements of Regulation 14A of the 1934 Act.
In addition, Rule 14a-4 of the 1934 Act governs Eagle Bulk Shipping's use
of its discretionary proxy voting authority with respect to a shareholder
proposal that is not addressed in the proxy statement. With respect to the
Company's 2007 Annual Meeting of Shareholders, if Eagle Bulk Shipping is not
provided notice of a shareholder proposal prior to February 20, 2007, the
Company will be allowed to use its discretionary voting authority when the
proposal is raised at the meeting, without any discussion of the matter in the
proxy statement.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the 1934 Act and the rules thereunder, the
Company's executive officers and directors and persons who own more than 10% of
a registered class of Eagle Bulk Shipping's equity securities are required to
file with the Securities and Exchange Commission reports of their ownership of,
and transactions in, the Company's common stock. Based solely on a review of
copies of such reports furnished to the Company, and written representations
that no reports were required, the Company believes that during the fiscal year
ended December 31, 2005 its executive officers and directors complied with the
Section 16(a) requirements, except that, Messrs. Zoullas and Ginsberg filed late
reports on Form 3. Four of our directors (Messrs. Cianciolo, Mitchell, Haensel
and Hiley) filed late reports on Form 4 relating to the non-qualified stock
options that were granted to each of them on March 17, 2006 under the Company's
2005 Stock Incentive Plan.
ANNUAL REPORT ON FORM 10-K
Eagle Bulk Shipping will provide without charge a copy of its Annual Report
on Form 10-K filed with the Securities and Exchange Commission on March 15, 2006
(without the exhibits attached thereto), as amended, to any person who was a
holder of the Company's common shares on the Record Date. Requests for the
Annual Report on Form 10-K should be made in writing, should state that the
requesting person held the Company's common shares on the Record Date and should
be submitted to Alan S. Ginsberg, Secretary of Eagle Bulk Shipping, at 477
Madison Avenue, Suite 1405, New York, New York 10022.
OTHER MATTERS
At the date of this proxy statement, management was not aware that any
matters not referred to in this proxy statement would be presented for action at
the Annual Meeting. If any other matters should come before the Annual Meeting,
the persons named in the accompanying proxy will have discretionary authority to
vote all proxies in accordance with their best judgment, unless otherwise
restricted by law
BY ORDER OF THE BOARD OF DIRECTORS
---------------------------------
Dated: April 24, 2006
APPENDIX I
Eagle Bulk Shipping Inc.
Audit Committee Charter
This Audit Committee Charter ("Charter") has been adopted by the Board of
Directors (the "Board") of Eagle Bulk Shipping Inc. (the "Company"). The Audit
Committee of the Board (the "Committee") shall review and reassess the adequacy
of this charter annually and recommend any proposed changes to the Board for
approval.
Purpose
-------
The Committee assists the Board in its oversight of (1) the quality and
integrity of the Company's financial statements and its accounting and financial
reporting practices, (2) the Company's compliance with legal and regulatory
requirements, (3) the independent auditor's qualifications and independence and
(4) the performance of the Company's independent auditors. It may also have such
other duties as may from time to time be assigned to it by the Board and are
required by the rules and regulations of the Securities and Exchange Commission
and The NASDAQ Stock Market, Inc. ("NASDAQ").
The Committee shall maintain free and open communication (including
periodic private executive sessions) with the independent auditors and Company
management. In discharging its oversight role, the Committee shall have full
access to all Company books, records, facilities, personnel and outside
professionals. The Committee shall have the authority and shall receive
necessary funding from the Company to retain special legal, accounting or other
consultants or advisors employed by the Committee and shall obtain such advice
and assistance from such special legal, accounting or other consultants or
advisors as the Committee deems necessary. The Committee shall have sole
authority to approve related fees and retention terms. Each member of the
Committee shall be entitled to rely on (i) the integrity of those persons and
organizations within and outside the Company from which it receives information,
(ii) the accuracy of the financial and other information provided by such
persons or organizations absent actual knowledge to the contrary (which shall be
promptly reported to the Board), and (iii) representations made by management
and the independent auditors as to all audit and non-audit services provided by
the independent auditors to the Company.
Membership and Structure
------------------------
The Committee shall be comprised of at least three directors determined by
the Board to meet the director and audit committee member independence
requirements, subject to any applicable exemptions and phase-in provisions, and
the financial literacy requirements of NASDAQ. At least one member of the
Committee shall be financially sophisticated, as determined by the Board, and no
Committee member shall have participated in the preparation of the financial
statements of the Company or any of the Company's current subsidiaries at any
time during the past three years, each as required by NASDAQ listing standards.
Appointment to the Committee, including the designation of the Chair of the
Committee and the designation of any Committee members as "audit committee
financial experts", shall be made on an annual basis by the full Board. The
Chair shall be responsible for leadership of the Committee, including scheduling
and presiding over meetings, preparing agendas, making regular reports to the
Board, and maintaining regular liaison with the Chief Executive Officer, Chief
Financial Officer and the lead independent audit partner. In fulfilling its
responsibilities the Committee shall have authority to delegate its authority to
subcommittees, in each case to the extent permitted by applicable law.
Meetings of the Committee shall be held at such times and places as the
Committee shall determine, including by written consent. The Committee shall
also periodically meet with the Company's management and independent auditors
separately from the Board.
Responsibilities
----------------
The Committee's role is one of oversight. The Company's management is
responsible for the preparation, presentation and integrity of the Company's
financial statements. Management is responsible for maintaining appropriate
accounting and financial reporting principles and practices and internal
controls and procedures designed to assure compliance with accounting standards
and applicable laws and regulations. The independent auditors are responsible
for auditing the annual financial statements to be included in the Company's
Annual Report on Form 10-K and reviewing the Company's quarterly financial
statements prior to the filing of any quarterly report on Form 10-Q , and other
procedures.
The Committee and the Board recognize that management and the independent
auditors have more resources and time and more detailed knowledge and
information regarding the Company's accounting and financial reporting practices
than do Committee members; accordingly the Committee's oversight role does not
provide any expert or special assurance as to the Company's financial statements
or any certification as to the work of the independent auditors. Nor is it the
duty of the Committee to conduct investigations, to resolve disagreements, if
any, between management and the independent auditors, or to assure compliance
with laws and regulations.
Although the Board and the Committee may wish to consider other duties from
time to time, the general recurring activities of the Committee in carrying out
its oversight role are described below. The Committee shall be responsible for:
o The appointment, replacement, compensation, evaluation and oversight
of the work of the independent auditors to be retained to audit the
annual financial statements of the Company and review the quarterly
financial statements of the Company.
o Annually obtaining and reviewing the independent auditor's formal
written statement describing: the firm's internal quality-control
procedures; any material issues raised by the most recent internal
quality-control review, or peer review, of the firm, or by any inquiry
or investigation by governmental or professional authorities, within
the preceding five years respecting one or more independent audits
carried out by the firm, and any steps taken to deal with any such
issues.
o Annually obtaining from the independent auditors a formal written
statement describing all relationships between the auditors and the
Company and their independence as required by Independence Standards
Board - ISB1. The Committee shall actively engage in a dialogue with
the independent auditors with respect to any disclosed relationships
that may impact the objectivity and independence of the auditors, and
shall consider whether the independent auditors' provision of
non-audit services to the Company, if any, is compatible with the
auditors' independence.
o Reading the annual audited financial statements and quarterly
financial statements and discussing them with management and the
independent auditors. These discussions shall include consideration of
the quality of the Company's accounting principles as applied in its
financial reporting and the Company's disclosures under "Management's
Discussion and Analysis of Financial Condition and Results of
Operations." Such discussions will include particularly sensitive
accounting estimates, reserves and accruals, judgmental areas, audit
adjustments and risk exposures that may have a material impact on the
Company's financial statements and the steps management has taken to
monitor and control such exposures, and other such inquiries as the
Committee, management or the independent auditors shall deem
appropriate. Based on this process, the Committee shall make its
recommendation to the Board as to the inclusion of the Company's
audited financial statements in the Company's Annual Report on Form
10-K (or the Annual Report to Shareholders, if distributed prior to
the filing of the Form 10-K). In connection with such reviews the
Committee should ensure that the Independent Auditors have fulfilled
their responsibilities under AICPA SAS 61 "Communication with Audit
Committees."
o Preparing annually a report to be included in the Company's proxy
statement as required by the rules of the Securities and Exchange
Commission, and submitting such report to the Board for approval.
o Overseeing the relationship with the independent auditors, including
discussing with the auditors the planning and staffing of the audit
and the nature and rigor of the audit process, receiving and reading
audit reports, discussing with the auditors any problems or
difficulties the auditors may have encountered in carrying out their
responsibilities and any management letters provided by the auditors
and the Company's response to such letters, and providing the auditors
full access to the Committee and the Board to report on all
appropriate matters.
o Providing oversight of the Company's accounting and financial
reporting principles, policies, controls, procedures and practices,
and reviewing significant changes to the foregoing as suggested by the
independent auditors or management.
o Establishing procedures for the receipt, retention and treatment of
complaints from the Company's employees on accounting, internal
controls or auditing matters, as well as for confidential, anonymous
submissions by the Company's employees of concerns regarding
questionable accounting or reporting matters.
o Establishing clear hiring policies for employees or former employees
of the external auditors.
o Annually obtaining from the independent auditors a formal written
statement of the fees billed for audit and non-audit services rendered
by the independent auditors for the most recent fiscal year.
o At the Committee's discretion, discussing with management and
independent auditors earnings press releases, as well as financial
information and earnings guidance provided to analysts and rating
agencies.
o Discussing with management policies with respect to risk assessment
and risk management.
o Discussing with management and/or the Company's general counsel any
legal matters (including the status of pending litigation) that may
have a material impact on the Company's financial statements or which
might require disclosure therein, and any material reports or
inquiries from regulatory or governmental agencies.
o Regularly reporting its activities to the full Board and making such
recommendations with respect to the above and any other matters as the
Committee may deem necessary or appropriate.
o Engaging in an annual self-assessment with the goal of continuing
improvement.
APPENDIX II
Eagle Bulk Shipping Inc.
Compensation Committee Charter
This Compensation Committee Charter ("Charter") has been adopted by the
Board of Directors (the "Board") of Eagle Bulk Shipping Inc. (the "Company").
The Compensation Committee of the Board (the "Committee") shall review and
reassess the adequacy of this charter annually and recommend any proposed
changes to the Board for approval.
Purpose
-------
The Committee shall carry out the Board's responsibilities relating to
compensation of the Company's executive officers and provide such other guidance
with respect to compensation matters as the Committee deems appropriate. It may
also have such other duties as may from time to time be assigned to it by the
Board and are required by the rules and regulations of the Securities and
Exchange Commission and The NASDAQ Stock Market, Inc. ("NASDAQ").
Committee Membership
--------------------
The Committee shall be comprised of at least two directors determined by
the Board to meet the director independence requirements of NASDAQ, subject to
any applicable exemptions and phase-in provisions under NASDAQ rules. The Board
shall select the members of the Committee and its chairman at the Annual Meeting
of the Board, and the Board shall have the power at any time to change the
membership of the Committee.
Meetings
--------
The Committee shall meet as often as it deems necessary. The Committee may
request any officer or employee of the Company to attend meetings of the
Committee or to meet with members of, or consultants to, the Committee. Members
of the Committee may participate in meetings of the Committee by telephone
conference call. The Committee may act by unanimous written consent in lieu of a
meeting. Pursuant to NASDAQ rules, the Chief Executive Officer shall not be
present during voting or deliberations relating to his compensation.
Committee Authority and Responsibilities
----------------------------------------
The Committee shall have sole authority to retain and terminate (i)
compensation consultants and (ii) any other advisors whom the Committee believes
are necessary to assist it in carrying out its duties. The Committee shall have
sole authority to approve such consultants' and advisors' fees and other
retention terms.
The Committee shall report regularly to the Board summarizing any
significant issues considered by the Committee and any action it has taken.
The principal duties and responsibilities of the Committee are as follows:
1. Make recommendations to the Board as to the Company's general
compensation philosophy.
2. Review and approve those corporate goals and objectives established by
the Board that are relevant to the compensation of the Company's Chief
Executive Officer (the "CEO"), evaluate the performance of the CEO in
light of those goals and objectives, and determine and approve the
CEO's compensation based on this evaluation.
3. Determine the annual compensation, including benefits and perquisites
of all executive officers of the Company, and report such
determinations and actions to the Board.
4. Review and approve employment agreements, severance agreements, change
of control agreements and other similar agreements relating to
executive officers.
5. Undertake any other duties and responsibilities relating to
compensation matters that the Board may delegate to the Committee.
6. Undertake such other responsibilities, as the Committee deems
appropriate for it to carry out its purpose under this Charter.
APPENDIX III
Eagle Bulk Shipping Inc.
Nominating Committee Charter
This Nomination Committee Charter ("Charter") has been adopted by the Board
of Directors (the "Board") of Eagle Bulk Shipping Inc. (the "Company"). The
Nomination Committee of the Board (the "Committee") shall review and reassess
the adequacy of this charter annually and recommend any proposed changes to the
Board for approval.
Purpose
-------
The Committee shall identify, evaluate and make recommendations to the
Board concerning individuals for selections as director nominees for the next
annual meeting of stockholders or to otherwise fill Board vacancies. It may also
have such other duties as may from time to time be assigned to it by the Board
and are required by the rules and regulations of the Securities and Exchange
Commission and The NASDAQ Stock Market, Inc. ("NASDAQ").
Committee Membership
--------------------
The Committee shall be comprised of at least two directors determined by
the Board to meet the director independence requirements of NASDAQ, subject to
any applicable exemptions and phase-in provisions under NASDAQ rules. The Board
shall select the members of the Committee and its chairman at the Annual Meeting
of the Board and the Board shall have the power at any time to change the
membership of the Committee.
Meetings
--------
The Committee shall meet as often as it deems necessary. The Committee may
request any officer or employee of the Company to attend meetings of the
Committee or to meet with members of, or consultants to, the Committee. Members
of the Committee may participate in meetings of the Committee by means of a
telephone conference. The Committee may act by unanimous written consent in lieu
of a meeting.
Committee Authority and Responsibilities
----------------------------------------
The Committee shall have sole authority to retain and terminate any
advisors whom the Committee believes are necessary to assist it in carrying out
its duties, including search firms to identify director candidates. The
Committee shall have sole authority to approve such advisors' fees and other
retention terms.
The Committee shall report regularly to the Board summarizing any
significant issues considered by the Committee and any action it has taken.
The principal duties and responsibilities of the Committee are as follows:
1. Identify and evaluate individuals qualified to become Board members,
and propose to the Board nominees for election to the Board.
2. Consider nominees duly recommended by stockholders for election to the
Board; provided that any such recommendations must be submitted in
accordance with the procedures set forth in the Company's Bylaws, the
recommending stockholder's status as a stockholder has been verified,
and the submission otherwise complies with any other stockholder
nomination procedures set forth from time to time by the Board.
3. Recommend individuals to be elected by the Board to fill any Board
vacancies.
4. Review periodically the director independence standards under NASDAQ
rules and the rules of the SEC, evaluate annually each director's
independence status under such standards and report the results of
such evaluation to the Board.
5. Undertake any other duties and responsibilities relating to the
nomination process that the Board may delegate to the Committee.
6. Undertake such other responsibilities as the Committee deems
appropriate for it to carry out its purpose under this charter.
25083 0003 655864
[_] Mark this box with an X
if you have made changes
to your name or address
details above.
Annual Meeting Proxy Card
A. Election of Directors
1. The Board of Directors recommends a vote
"FOR" the listed nominees.
For Withhold
01 - Sophocles N. Zoullas [_] [_]
02 - Michael B. Goldberg [_] [_]
B. Ratificaion of Appointment of Independent Auditors
2. The Board of Directors unanimously recommends a
vote "FOR" the following proposal.
2. The Board has selected the firm of For Against Abstain
Ernst & Young LLP as the Company's [_] [_] [_]
independent registered public
accounting firm to audit the
financial statements of Eagle Bulk
Shipping for the fiscal year ending
December 31, 2006 and recommends
that shareholders vote for
ratification of this appointment.
C. Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
NOTE: Please sign your name(s) EXACTLY as your name(s) appear(s) on this
proxy. All joint holders must sign. When signing as attorney, trustee, executor,
administrator, guardian or corporate officer, please provide your FULL title.
Signature 1 - Signature 2 - Date (mm/dd/yy)
------------------------- ------------------------- -----------------
Proxy - Eagle Bulk Shipping Inc.
477 Madison Avenue, Suite 1405
New York, New York 10022
(212) 785-2500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 2006
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Eagle Bulk Shipping Inc., a Marshall Islands corporation ("Eagle
Bulk Shipping" or the "Company"), will be held on Wednesday, May 24, 2006 at
10:00 a.m. (local time), at the offices of Seward & Kissel, LLP, One Battery
Park Plaza, New York, New York for the following purposes:
1. To elect two Class I Directors to the Board of Directors;
2. To ratify the appointment of Ernst & Young LLP as the independent auditors
of the Company for the fiscal year ending December 31, 2006; and
3. To transact such other business as may properly come before the Annual
Meeting or at any adjournment or postponement thereof.
Shareholders of record at the close of business on April 24, 2006, are entitled
to notice of, and to vote at, the Annual Meeting or any adjournment or
postponement thereof. A list of such shareholders will be available at the
Annual Meeting.
All shareholders are cordially invited to attend the Annual Meeting. If you do
not expect to be present at the Annual Meeting, you are requested to fill in,
date and sign the enclosed proxy and mail it promptly in the enclosed envelope
to make sure that your shares are represented at the Annual Meeting. In the
event you decide to attend the Annual Meeting in person, you may, if you desire,
revoke your proxy and vote your shares in person.
YOUR VOTE IS IMPORTANT
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.