(

) EMPLOYEE BENEFIT PLANS

401

(k)

Plan

We offer a

401

(k) plan to all of our U.S. employees and provide matching contribution to those employees that participate. The matching contributions paid by us totaled

$1.0

million for the year ended

December

31,

2015.

August 2015,

we suspended the matching contribution.

Multi-employer Pension Obligation

Certain of our current and former U.K. subsidiaries are participating in a multi-employer retirement fund known as the Merchant Navy Officers Pension Fund, or MNOPF.

December

31,

2017,

the Successor had accrued

$1.2

million related to this liability, which reflects the present value of all obligations assessed on us by the fund’s trustee as of such date. This figure is the same as was accrued by the Predecessor at

November 14, 2017.

We continue to have employees who participate in the MNOPF and will as a result continue to make routine payments to the fund as those employees accrue additional benefits over time. The status of the fund is calculated by an actuarial firm every

three

years. The last assessment was completed in

March 2015

and resulted in a significantly improved funding position, mainly due to hedging the interest rate and inflation risk, to between

65%

and

80%.

The reported net deficit of the fund at

March 31, 2015

was

$7.5

million and, as a result, the MNOPF trustee did

not

propose to collect any additional deficit contributions related to the new deficit. The amount and timing of additional potential future obligations relating to underfunding depend on a number of factors, but principally on future fund performance and the underlying actuarial assumptions. Our share of the fund’s deficit is dependent on a number of factors including future actuarial valuations, asset performance, the number of participating employers, and the final method used in allocating the required contribution among participating employers. In addition, our obligation could increase if other employers

longer participated in the plan. In the Predecessor period ended

November 14, 2017

and for the years ended

December

31,

2016

and

2015,

the Predecessor made deficit contributions to the plan of

$0.4

million,

$0.4

million and

$0.4

million, respectively. In the Successor period ended

December 31, 2017

we made

additional contribution. Our contributions do

not

make up more than

five

percent of total contributions to the plan.

In addition, we participate in the Merchant Navy Ratings Pension Fund, or MNRPF, in a capacity similar to our participation in the MNOPF.

Prior to

2013,

we were

not

required to contribute to any deficit in the MNRPF. Due to a change in the plan rules, however, we were advised that we would be required to make contributions beginning in

2013.

As of

November 14, 2017,

the Predecessor had accrued

$1.8

million for this fund. The most recent actuarial valuation was completed as of

March 31, 2017

and deficit information was communicated in the

fourth

quarter of

2017.

Our share of the deficit was calculated at

$0.5

million for which we expect to receive a formal payment demand in the

third

quarter of

2018.

As of

December 31, 2017,

the amount of the MNRPF accrual recorded by the Successor was adjusted to

$0.6

million, which is a combination of the deficit mentioned above plus an estimate of further deficit amounts from

April 2017

onward.

Norwegian Pension Plans

The Norwegian benefit pension plans include approximately

144

of our employees, primarily seamen, and are defined benefit, multiple-employer plans, insured with Nordea Liv. We also instituted a defined contribution plan in

2008

for shore-based personnel that existing personnel could elect to participate in while discontinuing any further obligations in the defined benefit plan. All newly hired shore-based personnel are required to join the defined contribution plan. Benefits under the defined benefit plans are based primarily on participants’ years of credited service, wage level at age of retirement and the contribution from the Norwegian National Insurance. A

December

31,

2017,

measurement date is used for the actuarial computation of the defined benefit pension plans. The following tables provide information about changes in the benefit obligation and plan assets and the funded status of the Norwegian defined benefit pension plans (in thousands):

	Successor			Predecessor
	Period from November 15, 2017 Through December 31, 2017			Period from January 1, 2017 Through November 14, 2017			Year ended December 31, 2016
Change in Benefit Obligation
Benefit obligation at beginning of the period	$	5,443		$	5,202		$	6,394
Benefit periodic cost		33			224			319
Interest cost		18			121			144
Withdrawal		-			-			(377	)
Benefits paid		(35	)		(237	)		(289	)
Actuarial gain		(16	)		(108	)		(1,117	)
Translation adjustment		36			241			128
Benefit obligation at period end	$	5,479		$	5,443		$	5,202

	Period from November 15, 2017 Through December 31, 2017			Period from January 1, 2017 Through November 14, 2017			Year ended December 31, 2016
Change in Plan Assets
Fair value of plan assets at beginning of the period	$	5,576		$	5,486		$	5,486
Actual return on plan assets		27			181			182
Contributions		46			310			303
Withdrawal		-			-			(237	)
Settlement/curtailment		-			-			82
Benefits paid		(35	)		(237	)		(297	)
Administrative fee		(7	)		(48	)		(56	)
Actuarial loss		(55	)		(369	)		(63	)
Translation adjustment		38			253			86
Fair value of plan assets at period end	$	5,590		$	5,576		$	5,486

Funded status	$	111		$	133		$	284

mounts recognized in the balance sheet consist of (in thousands):

	Successor			Predecessor
	December 31, 2017			December 31, 2016

Deferred costs and other assets	$	429		$	474
Other liabilities		(318	)		(190	)
	$	111		$	284

	Successor			Predecessor
	Period from November 15, 2017 Through December 31, 2017			Period from January 1, 2017 Through November 14, 2017			Year Ended December 31, 2016			Year Ended December 31, 2015
Components of Net Period Benefit Cost
Service cost	$	33		$	222		$	329		$	416
Interest cost		18			120			149			169
Return on plan assets		(27	)		(180	)		(182	)		(185	)
Administrative fee		7			48			56			61
Recognized net actuarial gain		44			296			(329	)		(544	)
Net periodic benefit cost	$	75		$	506		$	23		$	(83	)

The vested benefit obligation is calculated as the actuarial present value of the vested benefits to which employees are currently entitled based on the employees

’ expected date of separation or retirement.

	Successor			Predecessor
Weighted-average assumptions	Period from November 15, 2017 Through December 31, 2017			Period from January 1, 2017 Through November 14, 2017			Year Ended December 31, 2016
Discount rate		2.4	%		2.4	%		2.6	%
Return on plan assets		4.1	%		4.1	%		3.6	%
Rate of compensation increase		2.5	%		2.5	%		2.5	%

The weighted average assumptions shown above were used for both the determination of net periodic benefit cost and the determination of benefit obligations as of the measurement date. In determining the weighted average assumptions, the overall market performance and specific historical performance of the investments of the Norwegian pension plan were reviewed. The asset allocations at the measurement date were as follows:

	Successor		Predecessor
	December 31, 2017		December 31, 2016		Level
Equity securities		11%		5%		1
Property		10%		10%		3
Money market		14%		24%		2
Held-to-Maturity bonds		27%		32%		2
Bonds		13%		7%		1
Other		25%		22%		3
All asset categories		100%		100%

The investment strategy focuses on providing a stable return on plan assets using a diversified portfolio of investments.

The projected benefit obligation and the fair value of plan assets for the Norwegian pension plan were approximately

$5.

million and

$5.6

million, respectively, as of

December 31, 2017,

and

$5.2

million and

$5.5

million, respectively, as of

December

31,

2016.

The accumulated benefit obligation was

$4.8

million and

$4.8

million as of December

31,

2017

and

2016,

respectively. We expect to contribute approximately

$0.4

million to the Norwegian pension plan in

2018.

plan assets are expected to be returned to us in

2018.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):

Year ended December 31,	Benefit Payments
2018		254
2019		254
2020		254
2021		255
2022		255
Total	$	1,272