| (2) |
The business address of the reporting person is 415 L’Ambiance Drive, #804, Longboat Key, FL 34228. The
foregoing information was derived from a schedule 13G/A filed with the SEC on February 2, 2018. |
| (3) |
The business address of the reporting person is 1555 Peachtree Street NE, Suite 1800, Atlanta, GA 30309. The
foregoing information was derived from a Schedule 13G filed with the SEC on February 14, 2018. |
| (4) |
Beneficially owned through Alpha Merit Corporation, a wholly-owned subsidiary of Navios Holdings.
|
| B. |
Related Party Transactions |
Stock options and restricted shares
In October 2013, Navios Acquisition authorized and issued to its directors in the aggregate of 2,100,000 restricted shares of common stock and
options to purchase 1,500,000 shares of common stock having an exercise price of $3.91 per share and an expiration term of 10 years. These awards of restricted common stock and stock options are based on service conditions only and vest ratably over
a period of three years (33.33% each year). The holders of restricted stock are entitled to dividends paid on the same schedule as paid to the common stockholders of the company. The fair value of restricted stock was determined by reference to the
quoted stock price on the date of grant of $3.99 per share (or total fair value of $8.4 million).
The fair value of stock option grants
was determined with reference to the option pricing model, and principally adjusted Black-Scholes models, using historical volatility, historical dividend yield, zero forfeiture rate, risk free rate equal to
10-year U.S. treasury bond and the simplified method for determining the expected option term since the Company did not have sufficient historical exercise data upon which to have a reasonable basis to
estimate the expected option term. The fair value of stock options was calculated at $0.79 per option (or $1.2 million). Compensation expense is recognized based on a graded expense model over the vesting period of three years from the date of the
grant.
The effect of compensation expense arising from the stock based arrangements described above amounted to $0, $0.9 million and
$2.4 million for the years ended December 31, 2017, 2016 and 2015, respectively, and was reflected in general and administrative expenses on the statements of income. The recognized compensation expense for the year was presented as an
adjustment to reconcile net income to net cash provided by operating activities on the statements of cash flows.
On October 24,
2016, 2015 and 2014, 700,005, 700,001 and 699,994 shares of restricted stock, respectively, were vested.
On each of October 24,
2016, 2015 and 2014, 500,000 stock options were vested. Accordingly, there were no non-vested shares of restricted stock and no non-vested stock options outstanding as of December 31, 2017 and
December 31, 2016.
The weighted average contractual life of stock options outstanding as of December 31, 2017 was 5.8 years.
In December 2017, Navios Acquisition authorized and issued in the aggregate 1,774,915 restricted shares of common stock to its directors
and officers. These awards of restricted common stock are based on service conditions only and vest over four years, starting in December 2018.
The holders of restricted stock are entitled to dividends paid on the same schedule as paid to the stock holders of the company. The fair
value of restricted stock is determined by reference to the quoted stock price on the date of grant of $1.18 per share (or total fair value of $2.1 million).
Compensation expense is recognized based on a graded expense model over the vesting period.
The effect of compensation expense arising from the stock-based arrangements described above amounts to $0.06 million, as of
December 31, 2017, and it is reflected in general and administrative expenses on the statement of operations. The recognized compensation expense for the year is presented as adjustment to reconcile net (loss)/ income to net cash provided by
operating activities on the statements of cash flows.
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