UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
Trico Marine Services, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
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No fee required.
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o
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
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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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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SEC 1913 (02-02)
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Persons who are to respond to
the collection of information
contained in this form are not
required to respond unless the
form displays a currently valid
OMB control number
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Trico Marine Services, Inc.
10001 Woodloch Forest Drive, Suite 610
The Woodlands, Texas 77380
April ___, 2010
Dear Stockholders:
On behalf of the Board of Directors, it is my pleasure to invite you to attend the 2010
annual meeting of stockholders of Trico Marine Services, Inc. on
Thursday, June 10, 2010 at ______, at ___ a.m., local time.
Details regarding admission to the meeting and the business to be conducted are more
fully described in the accompanying notice of annual meeting and proxy statement.
At this years annual meeting, you will be asked to vote on the election of directors,
the ratification of PricewaterhouseCoopers LLPs appointment as Tricos independent registered
public accounting firm, the adoption of our 2010 Long-Term Incentive Plan; an amendment to our
charter increasing the number of shares of our common stock that we can issue; and an amendment to
our charter declassifying our Board of Directors.
Your vote is important. We urge you to read this proxy statement carefully, and to vote
by proxy for your Boards nominees and in favor of the other proposals by marking, signing, dating,
and returning the enclosed proxy card in the postage-paid envelope, whether or not you plan to
attend the Annual Meeting. Instructions are on the proxy card.
The proxy statement and the accompanying proxy card are being mailed to our stockholders
on or about April ___, 2010.
Whether you plan to attend the meeting or not, I encourage you to vote promptly so your
shares will be represented at the meeting.
Thank you for your cooperation and continued support.
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Sincerely,
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Joseph S. Compofelice
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Chairman of the Board
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Trico Marine Services, Inc.
10001 Woodloch Forest Drive, Suite 610
The Woodlands, Texas 77380
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on June 10, 2010
To Our Stockholders:
The 2010 annual meeting of stockholders of Trico Marine Services, Inc. will be held on
Thursday, June 10, 2010 at _______, at
___ a.m., local time. At the annual meeting, stockholders will be asked to:
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1.
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Elect three Class III directors to hold office until our 2013 annual meeting of stockholders and
until their successors have been elected and qualified;
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2.
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Ratify the appointment of PricewaterhouseCoopers LLP, certified public accountants, as our
independent registered public accounting firm for the fiscal year ending December 31, 2010;
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3.
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Approve the adoption of the Trico Marine Services, Inc. 2010 Long-Term Incentive Plan;
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4.
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Approve an amendment to our charter increasing the number of authorized shares of our common stock;
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5.
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Approve an amendment to our charter declassifying our Board of Directors; and
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6.
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Consider any other business properly brought before the annual meeting.
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Our Board of Directors has fixed the close of business on April 16, 2010 as the record date
for the determination of stockholders entitled to notice of and to vote at the annual meeting or
any postponement or adjournment thereof. A list of stockholders will be available for examination
at the annual meeting and at our corporate office for the ten days prior to the annual meeting.
STOCKHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. IF YOU ARE UNABLE TO ATTEND,
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING REGARDLESS OF THE NUMBER OF
SHARES YOU OWN. IT IS IMPORTANT THAT YOU READ THE PROXY STATEMENT AND FOLLOW THE INSTRUCTIONS ON
YOUR PROXY CARD TO VOTE BY MAIL. THIS WILL ENSURE THAT YOUR SHARES ARE REPRESENTED.
THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE AS PROVIDED IN THE PROXY STATEMENT.
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By Order of the Board of Directors,
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Rishi A. Varma
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Corporate Secretary
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Houston, Texas
April ___, 2010
YOUR VOTE IS IMPORTANT:
If you hold your shares in registered name, please submit a proxy
FOR the three directors nominated by the Board of Directors in Proposal 1, FOR ratifying
PricewaterhouseCoopers as the Companys independent registered public accounting firm in Proposal 2,
FOR approving the Trico Marine Services, Inc. 2010 Long Term Incentive Plan in Proposal 3, FOR
increasing the Companys authorized shares in Proposal 4, and FOR declassifying the Companys Board of
Directors by amending its charter in Proposal 5 by following the instructions on your proxy card. If you hold
your shares through a bank, broker or other custodian, you will receive a voting instruction form from your
custodian. Please instruct them to vote your shares FOR the three directors
nominated by the Board of Directors in Proposal 1, FOR ratifying PricewaterhouseCoopers as the
Companys independent registered public accounting firm in Proposal 2, FOR approving the Trico Marine
Services, Inc. 2010 Long Term Incentive Plan in Proposal 3, FOR increasing the Companys authorized
shares in Proposal 4, and FOR declassifying the Companys Board of Directors by amending its charter in
Proposal 5 on the proxy card.
TABLE OF CONTENTS
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LETTER TO STOCKHOLDERS
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Trico Marine Services, Inc.
10001 Woodloch Forest Drive, Suite 610
The Woodlands, Texas 77380
April ___, 2010
PROXY STATEMENT
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of proxies by and
on behalf of the Board of Directors of Trico Marine Services, Inc. (the Company or Trico), for
use at the 2010 annual meeting of stockholders (the annual meeting) to be held on Thursday, June
10, 2010 at _______, at
___ a.m., local
time, and any postponements or adjournments thereof. We are mailing this proxy statement and proxy
card to you on or about April ___, 2010.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Q:
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WHY AM I RECEIVING THIS PROXY STATEMENT?
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A:
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Our Board of Directors (our Board) is soliciting your proxy to vote at the annual meeting because you owned shares of our common stock at the close of business on
April 16, 2010, the record date for the meeting, and are entitled to vote at the meeting. The proxy statement, along with a proxy card or a voting instruction form,
is being mailed to stockholders beginning April ___, 2010. This proxy statement contains information relating to your vote at the annual meeting. You do not need to
attend the annual meeting to vote your shares if you submit a proxy.
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Q:
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WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
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A:
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At the annual meeting, our stockholders will be asked to: (i) elect three Class III directors, (ii) ratify the appointment of PricewaterhouseCoopers LLP as our
independent registered public accounting firm for the fiscal year ending December 31, 2010, (iii) approve the Trico Marine Services, Inc. 2010 Long-Term Incentive
Plan, (iv) approve an amendment to our charter increasing the number of shares of our common stock that we are authorized to issue, (v) approve an amendment to our
charter declassifying the Board, and (vi) consider any other matter that properly comes before the meeting or any postponement(s) or adjournment(s) thereof.
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Q:
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WHEN AND WHERE WILL THE MEETING BE HELD?
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A:
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The annual meeting will be held on Thursday, June 10, 2010 at _______ at
___ a.m., local time. If you
would like to obtain directions to be able to attend the annual meeting and vote in person, you can write to our Corporate Secretary, at Trico Marine Services, Inc.,
10001 Woodloch Forest Drive, Suite 610, The Woodlands, Texas 77380 or call our Corporate Secretary at (713) 780-9926.
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Q:
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WHO IS SOLICITING MY PROXY?
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A:
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Our Board is soliciting your proxy to vote at the annual meeting. By completing and returning the proxy card or voting instruction card, you are authorizing the
proxy holders to vote your shares at the annual meeting as you have instructed them on the card.
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Q:
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HOW MANY VOTES DO I HAVE?
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A:
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You have one vote for every share of our common stock that you owned on the record date, unless (i) you are a non-U.S. citizen, (ii) you own Excess Shares (as
defined in our charter), and (iii) your shares are subject to the limitations set forth in Article SIX, Section 2 of our charter. Tricos charter grants the Company
the authority to deny voting rights to any Excess Shares held by Aliens (meaning non-U.S. citizens, including permanent
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residents who are not U.S. citizens) so
that Trico may remain eligible under the Jones Act to engage in U.S. coastwise maritime trade in the U.S. Gulf of Mexico. Excess Shares consist of shares of Trico
common stock held by Aliens to the extent such shares exceed 24.99% of the total number of outstanding shares of Trico common stock. If Excess Shares exist, the
shares that will be deemed to be Excess Shares will be those Alien-owned shares that the Board determines became so owned most recently. An Alien who holds shares
deemed Excess Shares would not be entitled to vote the Excess Shares at the annual meeting, but would be entitled to vote any shares he or she held to the extent not
deemed Excess Shares. We believe that there are no Excess Shares as of the date of this proxy statement.
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Q:
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HOW MANY VOTES CAN BE CAST BY ALL STOCKHOLDERS?
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A:
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As of the close of business on the record date, we had ___,___,___ shares of common stock outstanding (not including treasury shares, which are not entitled to vote).
Accordingly, a total of ___,___,___ votes, in the aggregate, can be cast by our stockholders because there are no Excess Shares.
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Q:
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HOW MANY SHARES MUST BE PRESENT TO HOLD THE MEETING?
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A:
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Our Bylaws provide that a majority of the issued and outstanding shares of stock entitled to vote, present in person or represented by proxy, constitutes a quorum at
a meeting of our stockholders. As of the close of business on the record date, _,___,___ shares of common stock constitute a majority of our issued and outstanding
stock entitled to vote at the meeting.
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Q:
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HOW DO YOU DETERMINE WHETHER A SHARE IS PRESENT AT THE MEETING?
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A:
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A share is present at the annual meeting if the record holder of that share either votes it in person at the meeting or has properly submitted a proxy in accordance
with this proxy statement authorizing the proxy holders to vote such share. In addition, abstentions and broker non-votes (see What is a Broker Non-Vote? below)
will be counted for purposes of determining whether a quorum is present at the meeting. If any Excess Shares subject to the limitations set forth in Article SIX
Section 2 of our charter existed, such Excess Shares would NOT be deemed present at the meeting.
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Q:
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WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER OF RECORD AND AS A BENEFICIAL OWNER?
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A:
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If your shares are registered directly in your name with our transfer agent, then you are considered, with respect to those shares, the stockholder of record. In
that case, the proxy statement and proxy card is directly mailed to you by us. If your shares are held in a stock brokerage account or by a bank, broker or other
nominee, you are considered the beneficial owner of shares held in street name. In that case, the proxy statement is forwarded to you by your broker, bank or
nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or
nominee how to vote your shares by mailing the voting instruction form included in the mailing to your custodian.
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WHAT IS A BROKER NON-VOTE?
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A:
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Under the rules that govern brokers who have record ownership of shares that they hold in street name for clients who beneficially own such shares, if a broker has
not received any voting instructions from its client within the time specified by the broker, a broker may vote such shares in its discretion on routine matters,
but may not exercise its discretion to vote such shares on non-routine matters. When a broker votes a clients shares on some but not all of the proposals
presented at the meeting, each non-routine proposal for which the broker cannot vote because it has not received a voting instruction from the client is referred to
as a broker non-vote.
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We believe that (a) Proposal 2, the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2010, and (b) Proposal 4, the approval an amendment to our charter increasing the number of authorized shares of our common stock, are the
only routine matters to be voted on by our stockholders at the 2010 Annual Meeting, and a broker will
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be permitted to vote its clients shares in the brokers
discretion absent instructions from its client on Proposals 2 and 4. With respect to each of the remaining proposals (Proposals 1, 3 and 5), a broker cannot vote
with respect to such proposal unless it receives voting instructions from the client.
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We urge you to provide instructions to your broker to ensure that your votes will be represented at the meeting and counted on these important matters. You should
vote your shares by following the instructions provided on the voting instruction card to ensure that a proxy card is
voted on your behalf.
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Q:
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WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
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A:
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The elections of Edward Hutcheson, Per Staehr and Myles Scoggins require the affirmative vote for the nominee by a majority of the votes cast with respect to such nominee
at the annual meeting. Votes cast for or against a nominee will count as votes cast, but abstentions and broker non-votes will not count as a vote cast.
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The
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ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ended December 31, 2010 (Proposal 2) and
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approval of the Companys 2010 Long-Term Incentive Plan (Proposal 3)
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each requires the affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the annual meeting.
Abstentions will be counted for determining whether a quorum is present at the meeting and will effectively count as votes against these proposals. Broker
non-votes with respect to Proposal 3 will be disregarded in determining whether the proposal has been approved by a majority of the shares of common stock present in
person or represented by proxy and entitled to vote.
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The
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amendment of the Companys charter to increase the number of authorized shares of the Companys common stock (Proposal 4) and
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amendment of the Companys charter to declassify the Board (Proposal 5)
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each requires the affirmative vote of a majority of the outstanding shares of Companys common stock. Abstentions will effectively count as votes against these
proposals. Broker non-votes with respect to Proposal 5 will effectively count as a vote against the proposal.
Q:
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WHAT WOULD HAPPEN IF STOCKHOLDERS DO NOT RATIFY THE APPOINTMENT OF PRICEWATERHOUSE LLP?
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A:
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While not required to do so, the Board submits the Audit Committees selection of the independent registered public accountants to our stockholders for ratification
as a matter of good corporate governance. In the event the stockholders do not ratify the appointment of PricewaterhouseCoopers LLP (Proposal 2) by the required
vote, the Audit Committee will consider whether it is appropriate to select another independent registered public accountant. Even if the selection is ratified, the
Audit Committee in its discretion may direct the appointment of a different independent registered public accountant at any time during the year if the Audit
Committee believes that such a change would be in the best interest of our Company and our stockholders.
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Q:
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HOW DO I VOTE?
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A:
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Voting in Person at the Meeting
. If you are a stockholder of record as of April 16, 2010 and attend the annual meeting, you may vote in person at the meeting. If
your shares are held by a broker, bank or other nominee (i.e., in street name) and you wish to vote in person at the meeting, you will need to contact your broker,
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bank or other nominee that holds your shares of record to obtain a legal proxy allowing attendance at the annual meeting.
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Voting by Proxy for Shares Registered Directly in the Name of the Stockholder
. If you hold your shares in your own name as a holder of record, you may vote your
shares by signing, dating and mailing the enclosed proxy card in the pre-paid envelope we have provided.
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Voting by Proxy for Shares Registered in Street Name
. If your shares are held in street name, you will receive instructions from your broker, bank or other nominee
which you must follow in order to have your shares of common stock voted.
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Q:
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CAN I REVOKE MY PROXY?
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A:
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If you give a proxy, you may revoke it in one of three ways:
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submit a valid new proxy card with a later date to our Corporate Secretary, Trico Marine Services,
Inc., 10001 Woodloch Forest Drive, Suite 610, The Woodlands, Texas 77380;
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notify our Corporate Secretary in writing before the annual meeting that you have revoked your
proxy; or
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vote in person at the annual meeting, in which case your previously submitted proxy will not be used.
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WHAT IF I DONT VOTE FOR A MATTER LISTED ON MY PROXY CARD?
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A:
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If you return the proxy card without indicating your vote for a director (
Proposal 1
), your shares will be voted FOR each of the
nominees listed on your card.
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If you return the proxy card without indicating your vote with respect to the ratification of the appointment of our independent
registered public accounting firm (
Proposal 2
), then your shares will be voted FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting firm.
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If you return the proxy card without indicating your vote with respect to Trico Marine Services, Inc.s 2010 Long-Term Incentive
Plan (
Proposal 3
), then your shares will be voted FOR approving the 2010 Long-Term Incentive Plan.
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If you return the proxy card without indicating your vote with respect to increasing the number of authorized shares of the
Companys common stock (
Proposal 4
), then your shares will be voted FOR such increase.
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If you return the proxy card without indicating your vote with respect to declassifying our Board of Directors by approving the
proposed amendment to the Companys charter (
Proposal 5
), then your shares will be voted FOR approving such amendment.
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Q:
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WHO PAYS FOR SOLICITING PROXIES?
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A:
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We bear the cost of preparing, assembling and mailing the notice, proxy statement and proxy card for the annual meeting. Proxies may be
solicited by mail, personal interview, telephone and other means of communication. We may also solicit by means of press releases and
advertisements in periodicals. Banks, brokerage houses and other nominees or fiduciaries will be requested to forward the soliciting
material to their principals and to obtain authorization for the execution of proxies and we will reimburse their reasonable
out-of-pocket expenses. The Company has retained Mackenzie Partners, Inc to aid in the solicitation of proxies. The anticipated fee
of such firm is $9,500 plus out-of-pocket costs and expenses. The cost of solicitation will be borne entirely by the Company.
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The Securities and Exchange Commission (the SEC) permits a single set of annual reports and proxy
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statements to be sent to any
household at which two or more stockholders reside if they appear to be members of the same family. Each stockholder continues to
receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information stockholders
receive and reduces mailing and printing expenses.
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A number of brokerage firms have instituted householding. As a result, if you hold your shares through a broker and you reside at an
address at which two or more stockholders reside, you will likely be receiving only one annual report and proxy statement unless any
stockholder at that address has given the broker contrary instructions. However, if any such beneficial stockholder residing at such an
address wishes to receive a separate annual report and/or proxy statement in the future, or if any such beneficial stockholder that
elected to continue to receive separate annual reports and/or proxy statements wishes to receive a single annual report and/or proxy
statement in the future, that stockholder should contact his broker or send a request to our Corporate Secretary at: Trico Marine
Services, Inc., 10001 Woodloch Forest Drive, Suite 610, The Woodlands, Texas 77380, telephone number (713) 780-9926. We will deliver,
promptly upon written or oral request to the Corporate Secretary, a separate copy of the 2009 annual report and this proxy statement to
a beneficial stockholder at a shared address to which a single copy of the documents was delivered.
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Q:
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COULD OTHER MATTERS BE DECIDED AT THE MEETING?
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A:
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The Board does not expect to bring any other matter before the annual meeting, and it is not aware of any other matter that may be considered at the meeting. In
addition, pursuant to our Bylaws, the time has elapsed for any stockholder to properly bring a matter before the meeting. However, if any other matter does properly
come before the meeting, the proxy holder will vote the proxies in his discretion.
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Q:
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WHAT HAPPENS IF THE MEETING IS POSTPONED OR ADJOURNED?
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A:
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Your proxy will still be good and may be voted at the postponed or adjourned meeting. If the adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the meeting. You
will still be able to change or revoke your proxy until it is voted.
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Q:
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DO I NEED TO BRING ANY DOCUMENTATION TO ATTEND THE ANNUAL MEETING?
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A:
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If you plan to attend the meeting in person, please bring proper identification and proof of ownership of your shares. If your shares are held in street name, you
will need to bring a letter from your broker stating that you owned the Companys stock on the record date or an account statement showing that you owned the
Companys stock on the record date.
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Q:
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WHEN ARE DIRECTOR NOMINATIONS AND STOCKHOLDER PROPOSALS DUE FOR THE 2011 ANNUAL MEETING?
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A:
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If you want to nominate candidates for election as director at the 2011 annual meeting, you must submit written notice of your director nomination(s) to our
Corporate Secretary at 10001 Woodloch Forest Drive, Suite 610, The Woodlands, Texas 77380. Your notice must be delivered to or mailed and received by our Corporate
Secretary on or after the close of business on February 10, 2011 and on or before the close of business on March 12, 2011 and must otherwise comply with the notice
procedures and other requirements of our bylaws. In the event that the date of the 2011 annual meeting is more than 30 days before or more than 60 days after the
anniversary of the 2010 annual meeting, your notice must be delivered to or mailed and received by our Corporate Secretary on or after the close of business on the
120
th
day prior to the date of such annual meeting and on or before the close of business on the 100
th
day prior to the date of such annual
meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, on or before the
close of business on the 10
th
day following the day on which public announcement of the date of such meeting is first made by the Company.
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If you want us to include a proposal in the Companys proxy statement and form of proxy for the 2011 annual meeting, you must submit written notice of your proposal
to our Corporate Secretary. Your notice must be
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delivered to or mailed and received by our Corporate
Secretary no later than ______ and must
otherwise comply with the notice procedures and other requirements set forth in our bylaws. We will include in our proxy statement and form of proxy only proposals
meeting the requirements of applicable SEC rules.
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If you want to present a proposal at the 2011 annual meeting but do not wish to have it included in our proxy statement and form of proxy, you must submit written
notice to our Corporate Secretary. Your notice must be delivered to or mailed and received by our Corporate Secretary on or after the close of business on February
10, 2011 and on or before the close of business on March 12, 2011 and must otherwise comply with the notice and other requirements set forth in our bylaws; provided,
however, that in the event that the date of the 2011 annual meeting is more than 30 days before or more than 60 days after the anniversary of the 2010 annual
meeting, your notice must be delivered to or mailed and received by our Corporate Secretary on or after the close of business on the 120th day prior to the date of
such annual meeting and on or before the close of business on the 100th day prior to the date of such annual meeting or, if the first public announcement of the date
of such annual meeting is less than 100 days prior to the date of such annual meeting, on or before the close of business on the 10th day following the day on which
public announcement of the date of such meeting is first made by the Company.
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If you would like a copy of our bylaws, please contact our Corporate Secretary. Failure to comply with our applicable procedures and deadlines set forth in the
Bylaws or the SEC rules may preclude your proposed director nominees and your proposal from being considered at the next annual meeting.
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Q:
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WHERE CAN I FIND THE VOTING RESULTS OF THE MEETING?
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A:
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We intend to announce preliminary voting results at the annual meeting. The voting results will also be disclosed in a current report on SEC Form 8-K within 4
business days of the end of the annual meeting.
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6
PROPOSAL ONE: ELECTION OF DIRECTORS
Our Board of Directors is currently comprised of three classes. The members of each class
serve three-year staggered terms with one class to be elected at each annual meeting. Edward C.
Hutcheson, Jr., Myles W. Scoggins and Per Staehr are currently serving terms that expire at the
2010 annual meeting of stockholders. Richard A. Bachmann and Kenneth M. Burke are currently
serving terms that expire at the 2011 annual meeting of stockholders. Joseph S. Compofelice and
Ben A. Guill are currently serving a term that expires at the 2012 annual meeting of stockholders,
except that Mr. Guill has resigned effective May 1, 2010.
Our Board has nominated Messrs. Hutcheson and Staehr and Dr. Scoggins for re-election at this
years annual meeting to serve three-year terms expiring at the annual meeting in 2013. Shares
cannot be voted for more than three nominees for the 2010 election of directors, and only one vote
per share may be cast for a given nominee.
In accordance with our bylaws, each of Messrs. Hutcheson and Staehr and Dr. Scoggins
has
submitted an irrevocable resignation that will take effect only if (i) he does not receive more
than 50% of the votes cast on his election and (ii) his resignation is accepted by our board. If
any of Messrs. Hutcheson or Staehr or Dr. Scoggins does not receive more than 50% of the votes cast on
his election, then the Board (with the resigning directors not participating), acting on the
recommendation of the Nominating and Governance Committee would determine whether to accept his
resignation. In accordance with our bylaws, in such event our Board would determine, in its sole
discretion, whether a reason exists for concluding that it is in the best interests of the Company
for the unsuccessful incumbent to remain as a director and, if not, the Board would accept that
persons resignation. If the resignation were accepted, the Nominating and Governance Committee
would promptly recommend a candidate to our Board to fill the resulting Board vacancy at the
earliest practicable date.
Unless you vote AGAINST or ABSTAIN in the election of directors, your proxy card will
be voted FOR the election of Messrs. Hutcheson and Staehr and Dr. Scoggins. Each of the nominees has
consented to be named in this proxy statement and to serve if elected. We have no reason to believe
that any of the nominees will be unwilling or unable to serve. However, if any of the nominees
should decline or be unable to serve as a director, the Board may name a substitute nominee, and
the shares represented by the enclosed proxy card will be voted for such substitute nominee to the
fullest extent permitted by applicable law, including by complying with all legal obligations that
are applicable to the solicitation of proxies for the election of such substitute nominee.
7
General Information about the Board of Directors, Directors Standing for Re-Election and Directors
Continuing in Office
The table below sets forth information about Messrs. Hutcheson, Scoggins and Staehr, the
three nominees standing for re-election to our Board of Directors at the 2010 annual meeting. The
table also includes information about our other directors whose terms will continue after the 2010
annual meeting:
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Principal Occupation, Business Experience and
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Director
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Seat Subject
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Nominees
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Age
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Directorships
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Since
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to Election
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Edward C. Hutcheson, Jr.
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64
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Since February
2000, Mr. Hutcheson
has been involved
in private
investment and
consulting
activities. He
currently serves as
a Managing Director
of Platte River
Ventures, a private
equity firm
investing in
industrial
companies. From
March 1997 until
February 2000, he
served in several
capacities,
including Chief
Operating Officer,
with a
publicly-owned
financial services
company which
merged to form
Sanders Morris
Harris Group. Mr.
Hutcheson
co-founded Crown
Castle
International Corp.
in 1994, serving as
Chief Executive
Officer or Chairman
from its inception
to March 1997. He
continues to serve
as a director of
the company. Crown
Castle, with a $10
billion market
capitalization,
owns and operates
23,000 wireless
communication sites
in the US and
Australia. From
1987 through 1993,
Mr. Hutcheson
served in senior
management roles
with Baroid
Corporation, a
publicly owned
petroleum services
company. His
assignments
included serving as
President, Chief
Operating Officer
and director of the
holding company
from 1990 through
1993. We consider
Mr. Hutcheson to be
a qualified
candidate for
service on the
Board due to his
over 33 years of
experience as an
executive or
director building
companies in a
variety of
industries,
including 23 years
experience in the
oilfield services
sector.
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1994
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2010
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Myles W. Scoggins
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62
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Dr. Scoggins has
been a Trico
director since
March 2005. In June
2006, Dr. Scoggins
was appointed
President of
Colorado School of
Mines, an
engineering and
science research
university with
strong ties to the
oil and gas
industry. Dr.
Scoggins retired in
April 2004 after a
34-year career with
Mobil Corp. and
Exxon Mobil Corp.,
where he held
senior executive
positions in the
upstream oil and
gas business. In these executive positions, Dr. Scoggins reviewed and
assessed the financial statements of these companies. From
December 1999
through April 2004
he served as
Executive Vice
President of Exxon
Mobil Production
Co. Prior to the
merger of Mobil and
Exxon in December
1999, he was
President,
International
Exploration &
Production and
Global Exploration,
and an officer and
member of the
executive committee
of Mobil Oil Corp.
Since August 2005,
Dr. Scoggins has
served as a
director of Questar
Corp., a natural
gas focused energy
company, since June
2007 as a director
of Venoco, Inc., an
oil and gas
production company,
and since March
2010 as a director
of Cobalt
International
Energy. He also
serves as director
of the Colorado Oil
and Gas Association
and a member of the
National Advisory
Council of the
United States
Department of
Energys National
Renewable Energy
Laboratory. We
consider Dr.
Scoggins to be a
qualified candidate
for service on the
Board due to his
national
prominence,
expertise and
nearly 40 years of
experience in the
oil and gas
exploration and
production
industry.
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2005
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2010
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Per Staehr
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66
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Mr. Staehr has
served as a
director of the LPA
Group Ltd., an AIM
listed manufacturer
of railway, airport
and marine
equipment, since
December 2007.
Since March 2005 he
has also served as
Chairman of the
Daniamant Group, a
Danish based
manufacturer of
IMO/SOLAS certified
safety lights for
emergency
lifejackets and
liferafts for the
marine industry;
since January 2009
as a director of
EIVA, a software
supplier to the oil
and marine
industries; and
since October 2009
as the Chairman of
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2005
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2010
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8
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Principal Occupation, Business Experience and
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Director
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Seat Subject
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Nominees
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Age
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Directorships
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Since
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to Election
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Euroferries, a
company for cross
Channel fast ferry
services. Mr.
Staehr served as
Chairman of A2SEA
A/S, the leading
European offshore
wind turbine
installation
company, from April
2001 until June
2009 when the
company was sold.
From November 1997
to June 2004, he
served as Chief
Executive Officer,
Chairman and Chief
Country
Representative of
Bombardier
Transportation UK
Ltd., a global
leader in the rail
equipment
manufacturing and
service industry.
Prior to that time,
between October
1973 and November
1997, Mr. Staehr
held senior
positions within
the Danish A/P
Moller Group
(shipping and
offshore oil),
including his
service as
President of Maersk
Contractors, an
international
offshore drilling
and contracting
company. We
consider Mr. Staehr
to be a qualified
candidate for
service on the
Board due to his
breadth of
experience in
European business
and his over 23
years of experience
in the marine and
offshore industry,
primarily in the
North Sea.
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Principal Occupation, Business Experience and
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Director
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Seat Subject
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Other Directors
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Age
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Directorships
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Since
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to Election
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Richard A. Bachmann
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64
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Mr. Bachmann is the
lead director of
the Board of
Directors and
Chairman of the
Boards Nominating
and Governance
Committee. In
February 1998, Mr.
Bachmann founded
Energy Partners,
Limited, an
independent
exploration and
production company
focused on deep
water of the Gulf
of Mexico and the
continental shelf,
and served as its
Chairman and Chief
Executive Officer
from February 1998
until March 2009.
From September 1995
to January 1997, he
served as Director,
President and Chief
Operating Officer
of The Louisiana
Land and
Exploration
Company, an
independent oil and
gas exploration
company. We
consider Mr.
Bachmann to be a
qualified candidate
for service on the
Board due to his 41
years of executive
experience in the
oil and gas
exploration
industry.
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2005
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2011
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Kenneth M. Burke
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60
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Mr. Burke retired
from Ernst & Young,
a public accounting
firm in June 2004
after a 31 year
career. During his
time at Ernst &
Young, Mr. Burke
held various
positions including
the National
Director of Energy
Services, Managing
Partner of
Assurance and
Advisory Business
Services for the
Gulf Coast area and
also served as
coordinating
Partner primarily
for energy and
oilfield service
companies. Mr.
Burke also is a
former chairman of
the AICPA Oil & Gas
Committee. He has
been a Director of
Pride
International,
Inc., a provider of
offshore drilling
and related
services worldwide,
since December
2006. Mr. Burke
also serves on the
Audit and
Compensation
Committees of the
Board of Directors
of Pride
International, Inc.
We consider Mr.
Burke to be a
qualified candidate
for service on the
Board due to his
financial and
accounting
expertise, his
experience in the
oil and gas
industry, and over
30 years of
experience in
public accounting,
including serving
as a coordinating
partner for energy
and oilfield
service companies.
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2005
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2011
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Joseph S. Compofelice
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60
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Mr. Compofelice has
served as our
Chairman of our
Board since April
27, 2004. On July
9, 2007, Mr.
Compofelice was
elected as our
Chief Executive
Officer. From March
31, 2005 through
August 31, 2005,
Mr. Compofelice
served as our
Interim Chief
Executive Officer.
Mr. Compofelice has
served as Managing
Director of Houston
Capital Advisors
LP, a boutique
financial advisory,
merger and
acquisition
investment bank
since January 2004.
He was President
and Chief Executive
Officer of Aquilex
Services Corp.
(service and
equipment provider
to the power
generation
industry) from
October 2001 to
October 2003. From
February 1998
through October
2000, Mr.
Compofelice was the
Chairman and Chief
Executive Officer
of CompX
International Inc.,
a provider of
hardware components
to the office
furniture, computer
and other
industries. From
March 1994 to May
1998, he was
director and
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2003
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2012
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9
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Principal Occupation, Business Experience and
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Director
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Seat Subject
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Other Directors
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Age
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Directorships
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Since
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to Election
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Chief
Financial Officer
at NL Industries,
Inc., Titanium
Metals Corporation
and Tremont Corp.
Prior to that Mr.
Compofelice was
President of the
Oilfield Equipment
Group of Baroid
Corporation and
President of Smith
Drilling Systems
oilfield service
entities. We
consider Mr.
Compofelice to be a
qualified candidate
for service on the
Board due to his
broad business
experience, his
over 30 years of
executive
experience in
energy and oilfield
companies, his
familiarity with
our business
operations acquired
over several years
as our Chief
Executive Officer,
and his skills and
knowledge of
financial markets
acquired in
investment banking.
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Ben A. Guill
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59
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Mr. Guill was
appointed to the
Board on February
13, 2008 and has
resigned from the
Board effective May
1, 2010. In August
2008, Mr. Guill
founded White Deer
Energy, a private
equity investment
firm and has served
as a Managing
Partner since its
founding. Until
April 2007, Mr.
Guill was President
of First Reserve
Corporation, a
corporate manager
of private
investments
focusing on the
energy and
energy-related
sectors, which he
joined in September
1998. Prior to
joining First
Reserve, Mr. Guill
was the Managing
Director and
Co-head of
Investment Banking
of Simmons &
Company
International, an
investment banking
firm specializing
in the oil service
industry. Mr.
Guill also serves
on the board of
directors of
National Oilwell
Varco, which
designs,
manufactures and
sells equipment and
components used in
oil and gas
drilling and
production
operations and
provides oilfield
services and supply
chain integration
services to the
upstream oil and
gas industry. We
consider Mr.
Guill to have been a
qualified candidate
for service on the
Board due to his
broad business
experience and over
25 years of
experience in
energy and oilfield
service companies. Mr. Guill has resigned from the Board effective
May 1, 2010.
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2008
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2012
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Director Qualifications, Skills and Board Diversity
Each of our directors and director nominees were chosen based on their extensive business as
well as relevant industry experience to help guide the Company, as demonstrated in the biographical
information set forth above. In addition, other qualifying characteristics of our directors include
integrity, honesty, commitment in time and energy, financial literacy, maturity, business judgment,
cooperativeness in working with others and their skills and experience in the context of the needs
of the Board. While the Company does not have a formal policy with regard to the consideration of
diversity in identifying director nominees, the Nominating and Governance Committee and Board
strive to nominate individuals to serve on our Board who possess a variety of complementary skills
and perspectives and share common industry experiences so that, as a group, the Board will possess
the appropriate skills, expertise and diverse perspectives to oversee the Companys businesses.
OUR BOARD OF DIRECTORS HAS NOMINATED DR. SCOGGINS AND MESSRS. HUTCHESON AND STAEHR FOR RE-ELECTION AND THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RE-ELECTION OF EACH OF DR. SCOGGINS AND MESSRS. HUTCHESON AND STAEHR, THE CLASS III NOMINEES ON THE PROXY CARD.
Board and Committee Meetings
During 2009, our Board held 38 Board and Committee meetings. Each director attended at
least 75% of the combined number of meetings of the Board and committees of which he was a member
during 2009.
10
Director Independence
Our Board has reviewed the independence of our directors using the independence standards
of The Nasdaq Stock Market LLC (Nasdaq). The Nasdaq independence definition includes a series of
objective tests, such as that the director is not an employee of the company and has not engaged in
various types of business dealings with the company. In addition, our Board has made a subjective
determination as to each independent director that no relationships exist which, in the opinion of
our Board, would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. Our Board has determined that all members of the Board other than
Mr. Compofelice are independent within the meaning of the Nasdaq listing standards currently in
effect.
In addition, the members of the Audit Committee of the Board also each qualify as
independent under special standards established by the SEC for members of audit committees, and
the Audit Committee includes at least one member who is determined by the Board to meet the
qualifications of an audit committee financial expert in accordance with SEC rules, including
that the person meets the relevant definition of an independent director. Mr. Burke is the
independent director who has been determined to be an audit committee financial expert.
Stockholders should understand that this designation is a disclosure requirement of the SEC related
to Mr. Burkes experience and understanding with respect to certain accounting and auditing
matters. The designation does not impose on Mr. Burke any duties, obligations or liability that are
greater than are generally imposed on him as a member of the Audit Committee and Board, and his
designation as an audit committee financial expert pursuant to this SEC requirement does not affect
the duties, obligations or liability of any other member of the Audit Committee or Board.
Board Leadership Structure
Our Chairman of the Board is also our Chief Executive Officer. Mr. Compofelice was already our
Chairman of the Board when our former CEO left the Company. Because of Mr. Compofelices
familiarity with the organization and his leadership role, we felt it was appropriate to appoint
him CEO at that time. The Board of Directors is of the opinion that it is in our Companys and its
stockholders best interests that Mr. Compofelice serves as both Chairman and Chief Executive
Officer. We believe this board leadership structure is the most appropriate because it provides
the Chief Executive Officer with multiple perspectives on the Company through his multiple roles.
Having one individual fill both roles allows the Chief Executive Officer to better understand and
meet the Boards priorities while enabling the Chairman to better understand the needs and
priorities of our customers and other stakeholders. We therefore believe combining the two roles
greatly enhances the decision-making processes of the Board as a whole. The combination of the
chairman and chief executive officer roles can be advantageous for a company if combined with an
appropriate set of checks and balances. These checks and balances include an independent lead
director, a majority of independent directors, regular private meetings of the independent
directors chaired by the lead director and separate Board committees (Nominating and Governance and
Nomination, Audit Committee and Compensation Committee) that all are composed exclusively of
independent directors. We have instituted all of these checks and balances. In addition, our lead
director:
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presides at all meetings of the Board at which the Chairman is not present;
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calls meetings of the independent directors and presides at executive sessions of
independent directors;
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collaborates with the Chairman in setting the Boards agenda;
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approves the agendas for, and information and data provided to, directors at executive
sessions of the independent directors;
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advises the Chairman of decisions reached, and suggestions made, at executive sessions
of independent directors;
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serves as the principal liaison between the Chairman and other members of management, and the independent directors;
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where and when appropriate (and when not already addressed by the chairperson of another
Board committee), is available to conduct exit interviews with resigning senior managers;
and
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performs such other duties as may from time to time be delegated to the lead director by
the Board.
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11
Mr. Bachmann serves as our lead director. In 2009, the independent directors held 20 meetings
chaired by the lead director. Among other topics at their meetings in 2009, the independent
directors addressed succession planning for the Chairman and Chief Executive Officer and evaluated
his performance.
Boards Role in Risk Oversight
We face a number of risks that affect our business, including credit risk, liquidity risk,
general economic risks and others. Management is responsible for the day-to-day management of risks
the Company faces, while the Board, as a whole and through its committees, has responsibility for
the oversight of risk management. Risk management plays an important
role in the Boards strategic planning. In its risk oversight role, the Board has the responsibility to
satisfy itself that the risk management processes designed and implemented by management are
adequate and functioning as designed.
Various committees of the Board help the Board with its responsibilities with respect to
risk oversight. In particular, the Audit Committee plays a large role in monitoring and assessing
our financial and organizational risks, receives reports from the management team and the firms
independent auditors regarding such risk as well as particular areas of concern, and makes periodic
reports to the Board about these items. Additionally, our Chief Financial Officer and our finance
and accounting staff are responsible for overseeing our liquidity and credit risk and communicate
with our Board and Chairman frequently in this respect. The Compensation Committee monitors and
assesses the various risks associated with compensation policies, and oversees incentives that
encourage a level of risk-taking consistent with our overall strategy.
We believe that providing for full and open communication between management and the
Board is essential for effective risk management and oversight. Our executive management is tasked
with identifying the material risks that the Company faces and implementing appropriate and
responsive risk management strategies consistent with the Companys risk profile, and meets
regularly with our other senior officers to discuss strategy and risks facing the Company. Senior
officers are available to the Board to address any questions or concerns about management of the
Companys risk and any other matters. Each of our Board committees provides regular reports to the
full Board and apprises the Board of our comprehensive risk profile and any areas of concern.
Board Committees
Our Board has, as standing committees, an Audit Committee, a Compensation Committee, a
Nominating and Governance Committee and a Strategic Committee. Our Directors are encouraged to
attend all committee meetings. The Board has affirmatively determined that each member of each of our
Audit Committee, Compensation Committee and Nominating and Governance Committee is independent
within the meaning of Nasdaq listing standards and the requirements of the SEC. Current members of
the individual committees are named below:
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Nominating and
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Audit
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Compensation
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Governance
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Strategic
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Burke*
Hutcheson
Scoggins
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Guill**
Bachmann
Staehr
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Bachmann*
Burke
Scoggins
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Compofelice*
Burke
Hutcheson
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*
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Chairman of the committee.
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**
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Mr. Guill is currently Chairman of the Compensation Committee and
has resigned from the Board effective May 1, 2010.
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The Board has adopted a written charter for each of the Audit Committee, the Compensation
Committee, the Nominating and Governance Committee and the Strategic Committee, which sets forth
each committees purposes, responsibilities and authority. The Board has also adopted Corporate
Governance Guidelines, a Proper Business Practices and Ethics Policy (which includes complaint
procedures for financial, accounting and audit matters) and a Financial Code of Ethics for Senior
Officers. These committee charters, guidelines, codes and procedures are available on our website
at
www.tricomarine.com
. You may also contact our Corporate Secretary at (713) 780-9926
12
for paper
copies free of charge. Changes to or material waivers of our Financial Code of Ethics will be
disclosed via our website at www.tricomarine.com.
Audit Committee
The Audit Committee assists the Board in its general oversight of our financial
reporting, internal controls and audit functions, and is directly responsible for the appointment,
retention, compensation and oversight of the work of our independent auditors. During 2009, the
Audit Committee was comprised of Dr. Scoggins and Messrs. Burke, Bachmann and Guill. The Audit
Committee is currently comprised of Dr. Scoggins and Messrs. Burke and Hutcheson. During 2009, the
Audit Committee held 5 meetings. Mr. Burke has been designated an audit committee financial
expert as prescribed by the SEC. Each member of the Audit Committee is independent as defined
by the Nasdaq listing standards. A copy of the Audit Committee charter is available on our website
at
www.tricomarine.com
.
Compensation Committee
The Compensation Committees responsibility primarily is to recommend for Board approval
the compensation arrangements for our Chief Executive Officer and other senior management,
including establishment of salaries and bonuses and other compensation for executive officers of
our Company; to approve any compensation plans in which officers and directors of our Company are
eligible to participate and to administer such plans, including the granting of stock options or
other benefits under any such plans; and to review significant issues that relate to changes in
benefit plans. The Compensation Committee is authorized to retain the services of independent
outside consultants to assist in its efforts. During 2009, the Compensation Committee was comprised
of Dr. Scoggins and Messrs. Guill and Hutcheson. The Compensation Committee is currently comprised
of Messrs. Guill, Bachmann and Staehr. During 2009, the Compensation Committee held 7 meetings.
Each member of the Compensation Committee is independent as defined by the Nasdaq listing
standards.
Please see Compensation Discussion and Analysis for a description of the process for
determining executive compensation.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2009, no member of the Compensation Committee was an officer or
employee or former officer or employee of the Company. No Compensation Committee member had any
relationship requiring disclosure pursuant to Item 404 of Regulation S-K promulgated by the SEC
pursuant to the Securities Exchange Act of 1934. During fiscal year 2009, none of our executive
officers served on the compensation committee (or its equivalent) or Board of another entity whose
executive officer(s) served on our Compensation Committee or Board.
Nominating and Governance Committee
The Nominating and Governance Committee assists our Board in identifying qualified
individuals to become directors, in determining the size and composition of the Board and its
committees and in overseeing the evaluation of the Board and management. It also is charged with
developing and maintaining an appropriate set of corporate governance principles for us and
generally monitoring developments in corporate governance. During 2009, the Nominating and
Governance Committee was comprised of Dr. Scoggins and Messrs. Bachmann and Staehr. The Nominating
and Governance Committee is currently comprised of Dr. Scoggins and Messrs. Bachmann and Burke.
During 2009, the Nominating and Governance Committee held 5 meetings. Each member of the
Nominating and Governance Committee is independent as defined by the Nasdaq listing standards.
The Nominating and Governance Committee identifies potential nominees for director, other
than potential nominees who are current directors standing for re-election, through business and
other contacts. The Nominating and Governance Committee may in the future also choose to retain a
professional search firm to identify potential nominees for director.
13
The Nominating and Governance Committee is currently evaluating candidates to fill the vacancy
that will be created by Mr. Guills resignation. Once the Committee has identified a candidate,
the Committee will recommend a nominee to our Board to fill this vacancy by Board action. The
person elected by the Board to fill the vacancy would serve as a director until the 2012 annual
meeting of stockholders, the remainder of the term to which Mr. Guill was elected.
The Nominating and Governance Committee recommends nominees to our Board and our Board is
ultimately responsible for proposing a slate of nominees to our stockholders for election to the
Board, using information provided by the committee. In the event that a majority of the members of
the Nominating and Governance Committee are up for re-election to the Board, our Board (with those
interested directors abstaining) will evaluate nominees and propose a slate of nominees to our
stockholders for election to the Board.
The Nominating and Governance Committee believes that nominees to our Board must meet
certain minimum qualifications, including the achievement of significant success in business or
extensive financial expertise, a commitment to representing the long-term interests of our
stockholders in the aggregate, adequate time to devote to the business of the Board, and high
ethical and moral standards.
In addition, the Nominating and Governance Committee evaluates a potential nominee in
relation to all nominees by considering whether the potential nominee meets the minimum
qualifications described above, as well as by considering the following factors:
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whether the potential nominee has experience and expertise
that is relevant to our business, including any
specialized business experience, technical expertise, or
other specialized skills, and whether the potential
nominee has knowledge regarding issues affecting us;
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whether the potential nominee has experience as a board
member of a U.S. publicly-held company with global
operations, and with regard to any prior board experience
the history, nature and overall contribution to such
board;
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whether the potential nominee is independent, whether he
or she is free of any conflict of interest or the
appearance of any conflict of interest with our best
interests and the best interests of all of our
stockholders, and whether he or she is willing and able to
represent the interests of all of our stockholders; and
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any factor affecting the ability or willingness of the
potential nominee to devote sufficient time to Board
activities and to enhance his or her understanding of our
business.
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In addition, with respect to an incumbent director whom the Nominating and Governance
Committee is considering as a potential nominee for re-election, it reviews and considers the
incumbent directors service to us during his or her term, including the number of meetings
attended, level of participation, and overall contribution to the Board. Each of the nominees for
director at the 2010 annual meeting is a current director standing for re-election.
In evaluating each prospective director nominee, the Nominating and Governance Committee
will also take into account Tricos charter which limits the number of non-U.S. citizens that may
serve as directors in the same manner as the Jones Act. The charter is designed to preserve
Tricos Jones Act eligibility. The Committee therefore evaluates prospective director nominees
citizenship in light of the citizenship of the existing directors in order to comply with Tricos
charter and the requirements of the Jones Act.
Any stockholder of record entitled to vote for the election of directors at a meeting of
stockholders may nominate candidates for election to our Board by submitting written notice of such
stockholders director nomination(s) to our
Corporate Secretary at Trico Marine Services, Inc., 10001 Woodloch Forest Drive, Suite 610, The
Woodlands, Texas 77380, provided that such stockholder is a stockholder of record at the time of
giving of the notice and complies with applicable requirements of the Companys bylaws.
The notice must be delivered to or mailed and received by our Corporate Secretary no
earlier than the close of business on the 120th day and no later than the close of business on the
90th day prior to the anniversary of the
14
preceding years annual meeting (in the case of an annual
meeting). In the case of a special meeting at which directors are to be elected (or if the annual
meeting is more than 30 days before or more than 60 days after the anniversary date of the prior
years annual meeting), then the notice must be delivered no earlier than the close of business on
the 120th day prior to the date of such meeting and no later than the close of business on the
later of the 100th day prior to the date of such meeting. If the first public announcement of the
date of such meeting is less than 100 days prior to the date of the meeting, then the notice must
be delivered no later than on or before the close of business on the 10th day following the date of
the public announcement.
Among other things, the notice must set forth:
the name, age, business and residence address of the nominee;
a description of arrangements between the stockholder proposing the nomination and the nominee
pursuant to which the nomination is made;
the name and address of any other stockholder who supports the nominee, if known;
all other information related to the nominee and associated persons required to be disclosed in a
proxy statement or other related filings for the election of directors in a contested election
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder; and
a description of compensation and other arrangements for the past 3 years between the nominating
stockholder and the nominee and associated persons. In addition, the stockholder must provide,
among other things:
his or her name and address, as they appear on our books;
the class, series and number of the Companys securities that the stockholder and the nominee
beneficially own;
any option, warrants, convertible securities, stock appreciation rights or similar rights related
to securities of the Company held by the stockholder and the nominees;
transactions by the stockholder or nominee in the securities, including, the opportunity to
profit from the value of any security, and transactions in other derivative securities related to
securities of the Company;
information about any arrangements by such stockholder and nominee related to the voting of
Company securities;
information related to any short interest, rights to dividends or interest payments,
proportionate interests in Company securities or derivative securities held through another entity,
or performance related fees with respect to the Companys securities, or other similar arrangements
by members of the stockholders and nominees family sharing the same household; and
information related to the stockholder required to be disclosed in a proxy statement or other
related filings for the election of directors in a contested election pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
The nominee will also need to include a completed and signed questionnaire related to his
or her background and qualifications. The nominee will also need to furnish a representation and
agreement that the nominee (i) is not a party to, and will not become a party to, an arrangement
related to voting that has not been disclosed or that would
conflict with his or her fiduciary duties, (ii) will not become party to any agreement related to
compensation, reimbursement or indemnification in connection with his or her service as a director
that has not been disclosed and (iii) would be in compliance with all publicly disclosed corporate
governance, conflict of interest, confidentiality and stock ownership and trading policies of the
Company.
15
The foregoing summary of the requirements for director nominations by stockholders is
qualified in its entirety by the provisions of the Companys bylaws which are available free of
charge by writing to our Corporate Secretary at Trico Marine Services, Inc., 10001 Woodloch Forest
Drive, Suite 610, The Woodlands, Texas 77380.
Stockholder nominees for the 2011 annual meeting of stockholders must be received on or
after the close of business on February 10, 2011 and on or before the close of business on March
12, 2011.
Strategic Committee
The purpose of the Strategic Committee is to serve as a catalyst as well as monitor the
development and implementation of the Companys business strategies. It works with executive and
operating management to help the Board focus on strategic issues and make recommendations to the
Board which will further the Companys strategy, including evaluating potential expansion
opportunities and monitoring the development and implementation of strategic acquisitions of
businesses, companies and assets. The Strategic Committee meets separately as needed, and during
2009 the Strategic Committee held 2 meetings in connection with the Companys strategic planning
process. Otherwise, the members of the Strategic Committee raise strategic planning matters with
the entire Board (and members of management, as appropriate) at each regularly scheduled Board
meeting.
Executive Sessions; Communications with the Board; Meeting Attendance
Our Board has adopted a policy providing that the independent directors will meet in
executive session without any management present at each regularly scheduled Board meeting, or more
frequently if necessary. The independent directors have designated Mr. Bachmann as the lead
director, who chairs the executive sessions.
Any stockholder may communicate with our Board (or with any individual director) by
sending a letter by mail addressed to c/o Corporate Secretary, Trico Marine Services, Inc., 10001
Woodloch Forest Drive, Suite 610, The Woodlands, Texas 77380. The Corporate Secretary will forward
the stockholders communication directly to the appropriate director or directors.
Separately, the Audit Committee of our Board has established procedures for (a) the
receipt, retention and treatment of complaints received by the Company regarding accounting,
internal accounting controls or auditing matters, and (b) the confidential, anonymous submission by
the Companys employees of concerns regarding questionable accounting or auditing matters.
Individuals may notify the Chairman of the Audit Committee in writing, describing in sufficient
detail the practice, event or circumstance at issue, by sending the notice to the attention of the
Chairman of the Audit Committee, c/o Trico Marine Services, Inc., 10001 Woodloch Forest Drive,
Suite 610, The Woodlands, Texas 77380, or to the Companys Designated Recipient in the manner
described on our website (
www.tricomarine.com
).
Concerns related to possible violations of our Proper Business Practices and Ethics
Policy and Financial Code of Ethics should be reported pursuant to the procedures outlined therein.
Copies of both documents are available on our website (
www.tricomarine.com
).
Guidelines adopted by our Board recommend that all directors personally attend each
annual and special meeting of our stockholders. Five of our directors attended the 2009 annual
meeting of stockholders.
Code of Ethics
We have adopted a Financial Code of Ethics (Financial Code), which satisfies the
requirements for a code of ethics under SEC rules and regulations. The Financial Code contains the
ethical principles by which the Chief Executive Officer, Chief Financial Officer (or other
principal financial officer), Chief Accounting Officer and other senior financial officers (the
Senior Officers) are expected to conduct themselves when carrying out their duties
and responsibilities. Senior Officers and the directors must also comply with our Proper Business
Practices and Ethics Policy (Ethics Policy). If any substantive amendments are made to the
Financial Code or if we grant any waiver, including any implicit waiver, from a provision of the
Financial Code, we will disclose the nature of such amendment or waiver within 4 business days on
our Internet website at
www.tricomarine.com
. Copies of the Financial Code and the Ethics
Policy are available on the investor relations page of our Internet website.
16
Director Compensation
The following table sets forth the compensation earned by our non-employee directors for
the year ended December 31, 2009:
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Change in
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pension value
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and
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Non-equity
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nonqualified
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Fees earned or
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Stock
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Option
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incentive plan
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deferred
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All other
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paid in cash
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awards
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awards
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compensation
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compensation
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compensation
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Total
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Name
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($)
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(1) ($)
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(2) (3)($)
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($)
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earnings ($)
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($)
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($)
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Kenneth M.
Burke Chair of the
Audit Committee
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75,000
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35,700
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6,808
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N/A
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117,508
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Richard A. Bachmann
Chair of the
Nominating and
Governance
Committee
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70,000
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35,700
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6,808
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N/A
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112,508
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Ben A. Guill
Chair of the
Compensation
Committee
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65,000
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35,700
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6,808
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N/A
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107,508
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Edward C.
Hutcheson, Jr.
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70,000
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35,700
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6,808
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N/A
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112,508
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Myles W. Scoggins
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65,000
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35,700
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6,808
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N/A
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107,508
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Per Staehr
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65,000
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35,700
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6,808
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N/A
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107,508
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(1)
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On May 13, 2009, each director was granted 10,000 shares of restricted stock. All of the restrictions lapsed on June 13, 2009.
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(2)
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On May 13, 2009, each director was granted options to purchase 10,000 shares of common stock. The options became exercisable
on June 13, 2009.
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(3)
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Dollar amounts represent the compensation expense recognized in 2009 with respect to outstanding award grants based on the
grant date fair value of the respective award, in accordance with accounting guidance for stock compensation. See note 14 to
the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC on March 16, 2009 for
a discussion of the assumptions made in determining these amounts. At December 31, 2009, the following numbers of shares of
our common stock held by our non-employee directors were outstanding: Mr. Burke, 40,392 shares; Mr. Bachmann, 25,392 shares;
Mr. Guill, 25,799 shares; Mr. Hutcheson, 25,392 shares; Mr. Scoggins, 25,392 shares; and Mr. Staehr, 35,392 shares.
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17
In 2009, each non-employee director received an annual cash retainer of $65,000. The chairman
of the Audit Committee received an additional annual retainer of $10,000, and the chairmen of each
of the Nominating and Governance Committee and the Compensation Committee each received an
additional annual retainer of $5,000. The Compensation Committee reviewed director cash
compensation in February and December 2009, and the cash retainer awards were left at the same
levels that have been in effect since 2007.
In addition to these cash retainers, on May 5, 2009 the non-employee directors received
10,000 shares of restricted stock and options to purchase 10,000 shares of common stock. The total
value of the equity awards took into account that director awards at peer companies was expected to
decrease significantly in 2009.
Each non-employee director had the opportunity to enroll in the Companys health insurance
program at the same cost as for employees of the Company. During 2009, none of the non-employee
directors participated in the Companys health insurance program. All directors were reimbursed
for reasonable out-of-pocket expenses incurred in attending Board and committee meetings.
A director who is also an employee receives no additional compensation for services as a
director.
EXECUTIVE OFFICERS
General
Certain information concerning our executive officers as of the date of this proxy
statement is set forth below.
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Name
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Age
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Position With Our Company
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Joseph S.
Compofelice
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60
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Chairman of the Board, President and Chief Executive Officer
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Geoff A. Jones
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53
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Senior Vice President, Chief Financial Officer and Chief Administrative Officer
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Rishi A. Varma
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37
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Senior Vice President, Chief Operations Officer, General Counsel and Corporate
Secretary
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Tomas R. Salazar
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47
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Vice President, Americas and West Africa
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D. Michael Wallace
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57
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Vice President, Business Development
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Ray Hoover
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54
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Global Director of Technical Services
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Joseph S. Compofelice
. Information concerning Mr. Compofelice is set forth in the section
above entitled Proposal 1: Election of Directors General Information about the Board of
Directors, Directors Standing for Re-Election and Directors Continuing in Office.
Geoff A. Jones
. Geoff A. Jones has served as our Senior Vice President, Chief Financial
Officer and Chief Administrative Officer since January 1, 2010. Prior to this, he had served as
Vice President and Chief Financial Officer from August 2005 to January 2010, Treasurer from
March 2005 to August 2005 and Corporate Controller and Secretary from February 2004 to March 2005.
From April 2002 to February 2004, Mr. Jones was in private consulting practice. Prior to joining
the Company, Mr. Jones had held various management and financial positions in the offshore services
industry since 1980. From December 2001 to April 2002, Mr. Jones was Controller, North America, of
Aggreko, Inc. From May 2001 to December 2001, Mr. Jones was Vice President, Finance, at Sunland
Construction, Inc., a pipeline construction company. From February 2000 to May 2001, Mr. Jones was
Corporate Controller of Petroleum Helicopters, Inc., a helicopter service company providing
aviation services to the offshore oil and gas, onshore mining, international, air medical and
technical services industries.
Rishi A. Varma
. Rishi A. Varma has served as our Senior Vice President, Chief Operations
Officer, General Counsel, Corporate Secretary and Director of Corporate Governance since January 1,
2010. Prior to this, he had served as General Counsel, Corporate Secretary and Director of
Corporate Governance from May 2005 to January 2010. In March 2007, Mr. Varma was promoted to Chief
Administrative Officer. In June 2006, Mr. Varma also became a Vice President. From February 2003
until April 2005, Mr. Varma was Securities Counsel and Director of Corporate Governance with EGL,
Inc., an international freight forwarder company. From February 2000 to
18
May 2002, Mr. Varma was an
associate in the Business and Technology group of the law firm of Brobeck, Phleger and Harrison,
L.P. From August 1997 until January 2000, Mr. Varma was an associate in the corporate department
of the law firm of Rosenman & Colin, LLP.
Tomas R. Salazar
. Tomas R. Salazar has served as our Vice President, Americas and West Africa
since January 1, 2010 and is directly responsible for our U.S., Mexico and Brazil operations.
Prior to this, he had served as Global Director of Sales and Marketing from January 2008 to January
2010. Mr. Salazar joined Trico in January 2007 as International Sales and Marketing Director.
Prior to joining Trico, Mr. Salazar served as the international sales and marketing director for
Sea Mar, a provider of marine support and transportation services, from August 2005 to July 2006
and for SeaBulk International, Inc. from June 2003 to July 2005. Prior to that, Mr. Salazar spent
over fifteen years with BP p.l.c., a finder, producer, and marketer of natural resources, in
positions ranging from Business Development Manager for Latin America to Director of Strategic
Planning.
D. Michael Wallace
. D. Michael Wallace has served as our Vice President, Business
Development since January 1, 2010. Prior to this, he had served as the Chief Executive Officer of
Eastern Marine Services Limited, our joint venture with China Oilfield Services Limited, from
December 2006 to January 2010. From November 2002 until December 2006 he served as our Vice
President, Emerging Markets and Head of Global Marketing. From January 2000 to November 2002,
Mr. Wallace was Vice President of Marine Division with ASCO US LLC, a wholesale petroleum broker.
From December 1996 to December 1999, Mr. Wallace was General Manager for Tidewater Marine, Inc., an
offshore supply vessel company, in Venezuela.
Ray Hoover
. Ray Hoover has served as our Global Director of Technical Services since August
2007. From May 2003 until August 2007, Mr. Hoover served as our Director of Operations for the
Gulf of Mexico. From May 1989 to April 2003 Mr. Hoover filled various roles (Port Engineer to
Manager of Operations) at ENSCO Marine Company, a division of ENSCO International, a U.S. based
drilling contractor. From May 1974 to May 1986 Mr. Hoover served as a field technician for service
companies maintaining marine equipment.
TRANSACTIONS WITH RELATED PERSONS
Related Persons Policies and Procedures
From time to time we may engage in transactions with related persons. Related persons
are directors, director nominees and executive officers or their immediate family members,
stockholders owning more than 5% of our common stock, or any entity in which any of the foregoing
persons is employed or is a general partner or principal or in a similar position or in which such
person has a 5% or greater beneficial ownership interest. The Audit Committee is responsible for
reviewing certain transactions with related persons including those which meet the minimum
threshold for disclosure in the proxy statement under relevant SEC rules (generally, transactions
involving amounts exceeding $120,000 in which a related person has a direct or indirect interest).
In the course of its review and approval or ratification of such a transaction, the Audit
Committee will consider various aspects of the transaction it deems appropriate, which may include:
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The nature of the related persons interest in the transaction;
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The material terms of the transaction;
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Whether such transaction might affect the independent status of a
director under Nasdaq independence standards;
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The importance of the transaction to the related person and to us; and
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Whether the transaction could impair the judgment of a director or
executive officer to act in our best interest.
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We have various processes for identifying, reporting and reviewing conflicts of
interests, including related person transactions. Our Ethics Policy provides that no director,
officer or other employee shall engage in business or conduct, or enter into agreements or
arrangements, which would give rise to actual, potential or the appearance of
19
conflicts of
interest. The Ethics Policy also provides procedures for reporting any actual or potential
conflicts of interest. In addition, we annually distribute a questionnaire to our executive
officers and directors and review the information furnished by such persons. The questionnaire
requests information regarding, among other things, certain transactions with us in which they or
their family members have an interest.
Our policies and procedures for approval or ratification or transactions with related
persons are contained in various corporate documents such as our Ethics Policy, our Corporate
Governance Practices and Policies, and in our Audit Committee charter.
Our Audit Committee will consider the facts and circumstances of proposed related person
transaction. After our Audit Committee makes a determination regarding the proposed transaction,
the decision will be conveyed to our General Counsel who will communicate the decision to the
appropriate persons at the Company. Our directors of accounts payable and accounts receivable will
produce quarterly reports of any amounts paid or payable to, or received or receivable from, any
related person, and those reports will be provided to our General Counsel to determine whether
there are any related person transactions that were not previously approved or previously
ratified under our policies and procedures. In connection with this process or otherwise, if our
management becomes aware of a related person transaction that has not been previously approved or
ratified under our policy, it will be submitted to our Audit Committee which will consider all of
the facts and circumstances and, based on that review, evaluate all options including ratification,
amendment or termination of such transaction, evaluation of our controls and procedures and other
appropriate action.
Any member of the Audit Committee who is a related person with respect to a transaction
under review does not participate in the vote relating to approval or ratification of the
transaction.
Transactions
Transactions with Kistefos AS
Stock Purchase Agreement
. On August 9, 2007, the Company entered into a stock purchase
agreement with Kistefos AS. According its most recent amendment to its Schedule 13D dated October
16, 2009, Kistefos beneficially owns approximately ____ % of the Companys outstanding common
stock.
Pursuant
to the stock purchase agreement, the Company from time to time purchased shares of
its common stock from Kistefos in connection with the Companys share repurchase program. Under
the agreement, on any day that the Company purchased shares from other stockholders under the
program, the Company purchased shares from Kistefos so that, at the completion of the purchases,
Kistefos would beneficially own no less than 20% of the Companys common stock. The Companys
purchase price for the shares held by Kistefos was equal to the volume weighted average price for
all shares purchased from other stockholders on the applicable trade date.
Purchases
under the stock purchase agreement would end on the earlier of (i) the purchase of
$20 million of shares from Kistefos, (ii) the Companys announcement of the termination or
expiration of its repurchase program or (iii) the date Kistefos no longer owns shares of the
Companys common stock.
The
Companys purchase of shares from Kistefos would be suspended during any restricted
period under Regulation M promulgated by the Securities and Exchange Commission. After any
restricted period, the Companys could purchase shares from Kistefos on any trade date so long as
Kistefos would beneficially own at least the percentage of common stock that it beneficially owned
at the end of the restricted period.
The Company agreed to indemnify Kistefos and certain of its affiliates against any losses
under federal or state laws or regulations, if such losses arise out of the Companys actions in
connection with purchases under the
repurchase program, except for any losses resulting from Kistefoss willful misconduct, gross
negligence or bad faith.
Pursuant to the stock purchase agreement, the Company purchased 114,042 shares of its
common stock from Kistefos at a price per share between $29.4993 and $33.50 for an aggregate
purchase price of approximately $3.52 million. During 2009, the stock repurchase program expired
and accordingly the stock purchase agreement expired.
20
Registration Rights
. In March 2005, the Company entered into a registration rights agreement
with certain stockholders including Kistefos, pursuant to which the Company registered 2,121,600
shares of the Companys common stock held by Kistefos. Pursuant to the registration rights
agreement, the Company granted Kistefos and certain other holders of the Companys common stock
demand and piggyback registration rights with respect to the shares of common stock then held by
Kistefos and such holders. The registration rights agreement was amended pursuant to a letter
agreement dated August 24, 2007 between the Company and Kistefos, pursuant to which Kistefos
requested registration of 2,915,850 shares of Company common stock pursuant to the registration
rights agreement. The registration rights agreement will continue in effect as to Kistefos until
Kistefos no longer holds at least 10% of Tricos outstanding common stock.
No other transactions with related persons have occurred since January 1, 2009.
21
SECURITIES OWNERSHIP
Securities Ownership of Management
The following table is based on reports filed with the SEC and sets forth, as of April 1,
2010, the beneficial ownership of common stock of our directors, director nominees, each of our
executive officers named in the Summary Compensation
Table appearing on page 42 of this proxy
statement, and all directors, director nominees and executive officers as a group, as determined in
accordance with SEC rules.
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Amount
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and
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nature of
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beneficial
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ownership
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Name of Beneficial Owner
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(1)
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Percent of Class
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Joseph S. Compofelice
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367,063
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(2)(3)(4)
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1.9
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%
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Richard A. Bachmann
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32,392
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(2)
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*
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Kenneth M. Burke
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59,392
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(2)
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*
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Edward C. Hutcheson, Jr.
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28,072
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(2)
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*
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Myles W. Scoggins
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42,392
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(2)
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*
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Per Staehr
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42,392
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(2)
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*
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Ben Guill
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25,799
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(2)
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*
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Geoff Jones
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69,867
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(2)(3)
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*
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D. Michael Wallace
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41,435
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(2)(3)
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*
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Rishi A. Varma
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49,234
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(2)(3)
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*
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Tomas R. Salazar
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15,191
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(2)(3)
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*
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All directors and executive officers as a group (12 persons)
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793,792
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(5)
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4.0
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%
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*
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Less than one percent.
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(1)
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Unless otherwise indicated, the securities are held with sole voting and investment power.
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(2)
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Includes the following number of shares subject to options that are exercisable within 60
days of April 1, 2010: Mr. Compofelice, 149,733; Mr. Bachmann, 10,000; Mr. Burke, 10,000; Mr.
Hutcheson, 10,000; Mr. Scoggins, 10,000; Mr. Staehr, 10,000; Mr. Guill, 10,000; Mr. Jones,
27,342; Mr. Wallace, 16,533, Mr. Varma, 18,442; and Mr. Salazar, 3,896.
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(3)
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Includes the following number of shares subject to restrictions that lapse 100% on February
13, 2011: Mr. Compofelice 33,854, Mr. Jones 10,938; Mr. Wallace 9,844; Mr. Varma 10,938; and
Mr. Salazar 6,563. It also includes the following number of shares granted under performance
rights: Mr. Compofelice 16,674; Mr. Jones, 5,387; Mr. Wallace, 4,848; Mr. Varma, 5,387; and
Mr. Salazar, 3,232. These performance shares vest on February 13, 2011 as follows: (i) 0% if
the three-year average share price is less than $34.43, (ii) 20% if the three-year average
share price is at $34.43, and (iii) 100% if the three-year average share price is at or above
$40.54. Between 20% and 100% straight-line interpolation is used to determine vesting. In
addition, after February 13, 2009, if during any consecutive 20-day trading period the
Companys average closing share price equals or exceeds $42.53/share, all such performance
shares become immediately vested.
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(4)
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Includes 25,000 shares subject to restrictions that lapse 100% on July 9, 2010.
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(5)
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See Notes 2, 3, 4 and 5. Also includes the following securities held by Ray Hoover: 13,163
shares subject to options that are exercisable within 60 days of April 1, 2010; 3,350 shares
subject to restrictions that lapse on February 13, 2011; and 1,650 performance shares that
vest as described in Note 4.
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Securities Ownership of Certain Beneficial Owners
The following table is based solely on reports filed with the SEC and indicates the beneficial
ownership, as of April 1, 2010, of our common stock by each person known by us to beneficially own
more than 5% of our outstanding common stock as determined in accordance with SEC rules.
22
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Amount and nature
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of beneficial
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Name and Address of Beneficial Owner
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ownership
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Percent of Class
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Kistefos AS
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3,535,959
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(1)
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18.1%
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(1)
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Christen Sveaas
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(1)
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(1)
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Investcorp Investment Advisors Limited
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2,158,348
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(2)
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11.0%
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(2)
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Silverback Asset Management
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(2)
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(2)
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Elliot Bossen
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(2)
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(2)
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Investcorp Silverback Arbitrage Master Fund Limited
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1,447,872
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(2)
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7.4%
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(2)
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Whitebox Advisors, LLC
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2,071,334
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(3)
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10.6%
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(3)
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Whitebox Combined Advisors, LLC
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1,252,029
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(3)
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6.4%
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(3)
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Whitebox Combined Partners, L.P.
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(3)
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(3)
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Whitebox Multi-Strategy Fund, L.P.
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(3)
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(3)
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Whitebox Multi-Strategy Fund, Ltd.
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(3)
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(3)
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Radcliffe SPC, Ltd. for and on behalf of
the Class A Segregated Portfolio
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1,417,429
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(4)
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7.3%
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(4)
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Radcliffe Capital Management, L.P.
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(4)
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(4)
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Dimensional Fund Advisors LP
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1,394,505
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(5)
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7.1%
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(5)
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H Partners Management, LLC
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1,270,000
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(6)
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6.5%
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(6)
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Rehan Jaffer
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(6)
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(6)
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Alleghany Corporation
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1,225,000
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(7)
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6.3%
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(7)
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Alleghany Insurance Holdings LLC
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(7)
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(7)
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Alleghany Capital Partners LLC
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(7)
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(7)
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Ramius Advisors
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1,126,785
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(8)
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5.8%
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(8)
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Ramius LLC
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(8)
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(8)
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Cowen Group, Inc.
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(8)
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(8)
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RCG Holdings, LLC
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(8)
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(8)
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C4S &
Co., L.L.C.
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(8)
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(8)
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Peter A. Cohen
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(8)
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(8)
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Morgan B. Stark
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(8)
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(8)
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Thomas W. Strauss
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(8)
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(8)
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Jeffrey M. Solomon
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(8)
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(8)
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(1)
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As of October 16, 2009, based on an amendment to a Schedule 13D filed jointly by Kistefos
AS and Christen Sveaas. Based on the amendment to Schedule 13D, as the sole direct and
indirect owner of Kistefos AS, Christen Sveaas is the beneficial owner of 3,535,959 shares of
our common stock. Christen Sveaas has shared voting and dispositive power with Kistefos AS
with respect to the shares it owns due to his ownership control of Kistefos AS. The address
of the principal business office of each of Kistefos AS and Mr. Sveaas is Stranden 1, N-0250
Oslo, Norway.
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(2)
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As of February 16, 2010, based on an amendment to Schedule 13G filed jointly by Investcorp
Investment Advisors Limited (IIAL), Silverback Asset Management, LLC (SAM), Investcorp
Silverback Arbitrage Master Fund Limited and Elliot Bossen. According to the amendment to
Schedule 13G, these shares of the Companys common stock are derived from (i) Investcorp
Silverback Arbitrage Master Fund Limiteds ownership of the Companys 8.125% convertible
debentures and common stock and (ii) Investcorp Silverback Opportunistic Convertible Master
Fund Limiteds ownership of the Companys 3% and 8.125% convertible debentures. Pursuant to
the terms of the 8.125% convertible debentures, each of Navigation Master Fund Ltd and
Enterprise Master Fund Ltd has the right to convert any of the 8.125% convertible debentures
into the Companys common stock provided such fund would not beneficially own more than 9.99%
of the outstanding shares of the Companys common stock after any such exercise. According to
the amendment to Schedule 13G, IIAL serves as investment manager to and SAM serves as
sub-advisor to Investcorp Silverback Arbitrage Master Fund Limited, Investcorp Silverback
Opportunistic Convertible Master Fund Limited and certain other private investment vehicles,
and in such respective capacities each possesses shared investment and/or voting power over
the securities held by such investment vehicles. According to the Schedule 13G, both IIAL and
SAM disclaim beneficial ownership of such securities. According to the amendment to Schedule
13G, Elliot Bossen is the sole managing member of SAM, is primarily responsible for the
investment decisions of SAM and
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disclaims beneficial ownership of such securities held by SAM
or the other such private investment vehicles. The address of the principal business office
of IIAL is Investcorp Investment Advisers Limited, Investcorp House, P.O. Box 53409, Manama,
Kingdom of
Bahrain. The address of the principal business office of SAM is 1414 Raleigh Road, Suite 250,
Chapel Hill, NC 27517. The address of the principal business office of Investcorp Silverback
Arbitrage Master Fund Limited is c/o Paget-Brown Trust Company Limited, West Wind Building,
Harbour Drive, P.O. Box 1111, George Town, Grand Cayman, Cayman Islands. The address of the
principal business office of Elliot Bossen is c/o Silverback Asset Management, LLC, 1414
Raleigh Road, Suite 250, Chapel Hill, NC 27517.
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(3)
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As of December 31, 2009, based on an amendment to a Schedule 13G filed jointly filed by the
following entities (with the number of shares underlying the Senior Notes held by each entity
shown in parenthesis): Whitebox Advisors, LLC (2,071,334 shares) (WA), Whitebox Combined
Advisors, LLC (1,252,029 shares) (WCA), Whitebox Combined Partners, L.P. (1,252,029 shares)
(WCP), Whitebox Convertible Arbitrage Advisors, LLC (244,946 shares) (WCAA), Whitebox
Convertible Arbitrage Partners, L.P. (244,946 shares) (WCAP), Whitebox Concentrated
Convertible Arbitrage Fund, L.P. (244,946 shares) (WCCAFLP), Whitebox Concentrated
Convertible Arbitrage Fund, Ltd. (244,946 shares) (WCAFLTD), Whitebox Multi-Strategy Fund,
L.P. (1,252,029 shares) (WMSFLP), Whitebox Multi-Strategy Fund, Ltd. (1,252,029 shares)
(WMSFLTD), Whitebox Intermarket Advisors, LLC (316,136 shares) (WIA), Whitebox Intermarket
Partners, L.P. (316,136 shares) (WIP), Whitebox Intermarket Fund, L.P. (316,136 shares)
(WIFLP), Whitebox Intermarket Fund, Ltd. (316,136 shares) (WILTD), Pandora Select
Advisors, LLC (93,786 shares) (PSA), Pandora Select Partners, L.P. (93,786 shares) (PSP),
Pandora Select Fund, L.P. (93,786 shares) (PSFLP), Pandora Select Fund, Ltd. (93,786 shares)
(PSFLTD), HFR RVA Combined Master Trust (98,565 shares) (HFR), and IAM Mini-Fund 14
Limited (65,873 shares) (IAM). According to the Schedule 13G, all such entities hold shared
voting power and dispositive power over the shares reported as beneficially owned. The address
of the principal business office of WA, WCA, WCAA, WCCAFLTD, WCP, WMSFLTD, WIP, WIFLTD, PSP,
and PSFLTD is 3033 Excelsior Blvd., Suite 300, Minneapolis, MN 55416. The address of the
principal business office of WCAP, WCCAFLTD, WCP, WMSFLTD, WIP, WIFLTD, PSP, and PSFLTD is
Trident Chambers, P.O. Box 146, Waterfront Drive, Wickhams Cay, Road Town, Tortola, British
Virgin Islands. The address of the principal business office of HFR is HFR RVA Combined Master
Trust, 65 Front Street, Hamilton, HM 11 Bermuda. The address of the principal business office
of IAM is IAM Mini-Fund 14 Limited, Boundary Hall, Cricket Square, George Town, Grand Cayman,
KY1-1102 Cayman Islands.
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(4)
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As of December 31, 2009, based on a Schedule 13G filed jointly by Radcliffe SPC Ltd. for and
on behalf of the Class A Segregated Portfolio (Radcliffe SPC) and Radcliffe Capital
Management L.P. (Radcliffe Capital). According to the Schedules 13G, as of May 14, 2009
each of Radcliffe SPC and Radcliffe Capital beneficially owned warrants to purchase 246,000
shares of the Companys common stock and $16,400,000 principal amount of 8.125% convertible
debentures convertible into 1,171,429 shares of the Companys common stock. According to the
Schedule 13G, such persons had shared power to vote or direct the vote and the shared power to
dispose or direct the disposition with respect to shares that were reported as beneficially
owned. Radcliffe Capital serves as the investment manager of Radcliffe SPC; RGC Management
Company, LLC (RGC) is the general partner of Radcliffe Capital; and Steve Katznelson and
Gerald Stahlecker serve as the management members of RGC. Each of Radcliffe Capital, RGC, and
Messrs. Katznelson and Stahlecker disclaim beneficial ownership of the securities owned by
Radcliffe SPC. The address of the principal business office of Radcliffe SPC is c/o SEI
Investments Global Fund Services, Ltd., Styne House, Upper Hatch Street, Dublin 2 Ireland, and
the address of the principal business office of Radcliffe Capital is 50 Monument Road, Suite
300, Bala Cynwyd, PA 19004.
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(5)
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As of December 31, 2009, based on an amendment to Schedule 13G filed by Dimensional Fund
Advisors LP (Dimensional). According to the amendment to the Schedule 13G, Dimensional
furnishes investment advice to four investment companies (the Funds) registered under the
Investment Company Act of 1940, and serves as investment manager to certain other commingled
group trusts and separate accounts. According to the amendment to Schedule 13G, in its role
as investment advisor or manager, Dimensional possesses investment and/or voting power over
the securities described in this schedule that are owned by the Funds. The address of the
principal business office of Dimensional is 1299 Ocean Avenue, Santa Monica, CA 90401.
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(6)
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As of May 14, 2009, based on a Schedule 13G filed jointly by H Partners Management, LLC and
Rehan Jaffer. According to the Schedule 13G, each of H Partners Management, LLC and Mr.
Jaffer has shared voting and dispositive power over such shares. The address of the principal
business office of each of H Partners Management, LLC and Mr. Jaffer is 888 Seventh Avenue,
29
th
Floor, New York, New York 10019.
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(7)
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As of December 31, 2008, based on an amendment to a Schedule 13G filed jointly by Alleghany
Corporation (Alleghany), Alleghany Insurance Holdings LLC (AIHL), Alleghany Capital
Partners LLC (ACP), Capitol Transamerica Corporation (CATA), Employers Direct Corporation
(EDC), Platte River Insurance Company (PRC), RSUI Group, Inc. (RSUI Group), Capitol
Indemnity Corporation (CIC), Capitol Specialty Insurance Corporation (CSIC), Employers
Direct Insurance Company (EDIC) and RSUI Indemnity Company (RIC). According to the
amendment to Schedule 13G, such shares are beneficially owned directly by CIC, CSIC, EDIC, PRC
and RIC. ACP acts as an investment manager for each of CIC, CSIC, EDIC, PRC and RIC pursuant
to an investment management agreement with each such company, whereby, among other things, ACP
has been granted voting power over the shares of common stock of the issuer owned of record by
each such company. CATA owns 100% of the issued and outstanding stock of CIC and CSIC. EDC
owns 100% of the issued and outstanding stock of EDIC. RSUI Group owns 100% of the issued and
outstanding stock of RIC. AIHL owns 100% of the issued and outstanding stock of CATA, PRC and
RSUI Group, 100% of the equity interests in ACP and 98.5% of the issued and outstanding stock
of EDC. Alleghany owns 100% of the equity interests in AIHL. According to the amendment to
Schedule 13G, (i) Alleghany and AIHL have shared voting and dispositive power over all such
shares, (ii) ACP has shared and sole voting and shared dispositive power over all such shares,
(iii) CATA has shared and sole voting and shared dispositive power over 262,500 of such
shares, (iv) EDC has shared voting and dispositive power over 60,000 of such shares, (v) PRC
has shared voting and dispositive power over 37,500 of such shares, (vi) RSUI Group and RIC
have shared voting and dispositive power over 865,000 of such shares, (vii) CIC has shared
voting and dispositive power over 240,000 of such shares and (viii) CSIC has shared voting and
dispositive power over 22,500 of such shares, EDIC has shared voting and dispositive power
over 60,000 of such shares. The address of the
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24
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principal business office of (i) Alleghany, ACP
and AIHL is 7 Times Square Tower, 17th Floor, New York, NY 10036, (ii) EDC and
EDIC is 30301 Agoura Road, Agoura Hills, CA 91301, (iii) RSUI Group and RIC is 945 East Paces
Ferry Road, Atlanta, GA 30326, (iv) CSIC, CATA, PRC and CIC is 1600 Aspen Commons, Middleton,
WI 53562.
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(8)
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As of February 25, 2010, based on a Schedule 13G filed jointly by Ramius Navigation Master
Fund Ltd, Ramius Enterprise Master Fund Ltd, RCG PB, Ltd, Ramius Advisors, LLC, Ramius LLC,
Cowen Group, Inc., RCG Holdings LLC, C4S & Co., L.L.C., Peter A. Cohen, Morgan B. Stark,
Thomas W. Strauss and Jeffrey M. Solomon. According to the Schedule 13G, as of the close of
business on February 25, 2010, (i) Navigation Master Fund Ltd beneficially owned $8,676,000
aggregate principal amount of the Companys 8.125% convertible debentures, convertible into
619,714 shares of the Companys common stock, and (ii) Enterprise Master Fund beneficially
owned $7,099,000 aggregate principal amount of the 8.125% convertible debentures, convertible
into 507,071 shares of the Companys common stock. Pursuant to the terms of the 8.125%
convertible debentures, each of Navigation Master Fund Ltd and Enterprise Master Fund Ltd has
the right to convert any of the 8.125% convertible debentures into the Companys common stock
provided such fund would not beneficially own more than 9.99% of the outstanding shares of the
Companys common stock after any such exercise. According to the Schedule 13G: RCG PB, Ltd is
the sole shareholder of Navigation Master Fund Ltd.; Ramius Advisors is the investment advisor
of each of Navigation Master Fund Ltd and Enterprise Master Fund Ltd; Ramius LLC is the sole
member of Ramius Advisors; Cowen Group, Inc. is the sole member of Ramius LLC; RCG Holdings
LLC is a significant shareholder of Cowen Group, Inc.; C4S & Co., L.L.C. is the managing
member of RCG Holdings LLC; and Messrs. Cohen, Stark, Strauss and Solomon are the sole
managing members of C4S & Co., L.L.C. According to the Schedule 13G, as of the close of
business on February 25, 2010, Ramius Advisors, LLC, Ramius LLC, Cowen Group, Inc., RCG
Holdings LLC, C4S & Co., L.L.C., Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and
Jeffrey M. Solomon each has the sole power to vote or direct the vote and the sole power to
dispose or direct the disposition of all such shares. The address of the principal business
office of each of Ramius Navigation Master Fund Ltd, Ramius Enterprise Master Fund Ltd, RCG
PB, Ltd, Ramius Advisors, LLC, Ramius LLC, Cowen Group, Inc., RCG Holdings LLC, C4S & Co.,
L.L.C., Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon is c/o
Ramius LLC, 599 Lexington Avenue, 20th Floor, New York, New York 10022.
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25
COMPENSATION RISK DISCLOSURE
During 2009, we had approximately 30 employees (including the named executive officers) who
participated in our annual and long-term incentive plans. If structured improperly, compensation
plans may create certain risks for the Company, including maximizing short-term rewards at the
expense of long-run performance, pursuing individual achievement at the expense of Company
performance, focusing on performance metrics instead of the Companys actual performance itself, or
neglecting factors such as fleet safety and vessel reliability which may not contribute to
immediate financial payoffs but may be important to the Companys reputation and long-term business
prospects. In short, compensation plans may encourage inappropriate or excessive risk-taking, on
the one hand, or inadequately incentivize innovation and growth, on the other hand. We have
assessed our plans in light of such potential risks and believe that we have taken appropriate
measures to mitigate these risks. In connection with our annual incentive plan, we have taken the
following mitigating actions:
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No less than annually, but often more frequently, the board reviews and adjusts the
performance goals used in the plan to assure they provide proper incentives, but do not
encourage employees to take excessive risks to achieve goals.
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In order to avoid over-emphasizing short-term performance, we have capped the maximum award
permissible under the annual incentive plan at 2 times target. For Messrs. Varma and Jones,
who as our Chief Financial Officer and Chief Operations Officer are in especially sensitive
positions, the Compensation Committee has decided to award a portion of their annual incentive
as an equity award.
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In order to help limit overemphasis on performance metrics and guard against fraud, our
Board has adopted a policy which requires senior executives to repay any incentive award to
the extent the award was overstated or overpaid due to inaccuracies in any financial
statements resulting from an intentional or fraudulent act or omission of the executive.
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In order to limit incentives to pursue individual goals at the expense of shared goals, we
limit the percentage that individual performance criteria contributes to any employees award
under our plan to 20%; starting in 2010, even the 20% individual performance criteria is
subject to the achievement of Company wide performance objectives.
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In order to align short-run incentives with long-run performance, our awards under the plan
are granted not only on the basis of Company profitability but fleet safety and vessel
reliability as well as long term profitability through share price appreciation.
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Our Board meets throughout the year and often discusses progress in achieving performance
goals under the annual incentive plan, monitoring on an ongoing basis the relationship between
our incentive plans and actual ongoing positive results.
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In connection with our long-term incentive plan, we have taken the following mitigating actions,
all of which emphasize long-term, cumulative profitability over short-term performance:
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Our stock ownership guidelines encourage greater ownership of our stock by management and
our directors and better align their interests with our stockholders.
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Awards granted under the long term incentive plan typically
vest over a three year period.
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In 2010, our Board intends to grant cash awards linked to stock price appreciation.
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Our Boards Compensation Committee meets frequently to monitor and assesses the various risks and
incentives associated with our compensation policies. In light of the assessment described above
and in the Compensation Discussion and Analysis below, the Compensation Committee has determined
that the Companys compensation practices for employees generally, including for the approximately
20 employees participating in annual and long-term incentive plans for 2010, are appropriate and
consistent with the Companys overall strategy, do not promote unnecessary or excessive risk taking
and do not expose the Company to a reasonable likelihood of material adverse risk.
26
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following discussion and analysis contains statements regarding our and our named
executive officers performance targets and goals. These targets and goals are disclosed in the
limited context of our compensation programs and should not be understood to be statements of
managements expectations or estimates of results or other guidance. We caution investors not to
apply these statements to other contexts.
Executive Summary
The most significant compensation decisions made during 2009 were as follows:
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Reducing the value of the 2009 long term equity awards granted to the
named executive officers by more than 90% below the comparable value
of the 2008 awards in order to reflect the decline in the Companys
stock price and to ensure that the dilutive effect of such awards
satisfies guidelines established by RiskMetrics Group. See
Percentage of Base Salary Paid Based on Annual Incentive Plan
Performance Achievement for 2009 for Named Executive OfficersLong
Term Incentive.
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Recognizing the current volatile economic conditions and, as a result,
granting stock options and cash-settled appreciation rights, instead
of restricted stock grants, to best align management with
stockholders interests. These awards minimize the dilutive impact on
stockholders as compared to restricted stock and only have value if
the share price improves over current values. See Elements of
Compensation for Named Executive Officers.
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Implementing stock ownership guidelines for executives
and directors to encourage greater ownership of our
stock by management and our directors and better align
their interests with our stockholders. See Other
Important Compensation PoliciesExecutive Stock
Ownership Guidelines.
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Implementing a policy to require senior executives to repay any
incentive award that was granted based on financial statements that
later are discovered to be inaccurate resulting from an intentional or
fraudulent act or omission of the executive. See Other Important
Compensation PoliciesPolicy Regarding Clawback of Compensation.
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During the latter half of 2009 and into 2010, global economic conditions continued to weaken.
This, along with the Companys level of indebtedness, negatively impacted our business and share
performance. Our Compensation Committee has recognized the need to balance the retention of our
executive officers with the realities of our reduced performance. Our Compensation Committee
implemented policies in 2009 to address these issues and has decided to continue its approach in
2010 by:
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Continuing to target an executives cash compensation element based on
the 50th percentile of the applicable competitive market. Maintaining
a competitive level of cash compensation is critical to retaining key
executives to support the Companys ability to manage its financial
condition and maintain growth in subsea services worldwide.
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Continuing to take into account declining share performance in long
term incentive awards by tying executives total compensation to
pre-determined share price targets. The Compensation Committee
believes that this approach helped meet the Companys overall
compensation strategy in 2009 and will continue to align our
executives interests with our stockholders.
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Continuing to review the Companys compensation programs and determine
the extent to which any particular component may encourage executives
to take unnecessary or excessive risks. The Compensation Committee
will use this review to determine any appropriate modifications that
may need to be made to mitigate risks.
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27
Overview
The following Compensation Discussion and Analysis describes the material elements of
compensation for our executive officers identified in the Summary Compensation Table (our named
executive officers). The Compensation Committee is responsible for developing and overseeing our
executive compensation philosophy, strategy and framework. Their goal is to ensure that executive
compensation remains consistent with our business objectives and the interests of our stockholders.
Our executive compensation program is designed to create strong financial incentives for our
executives to maximize our operating performance and returns, and generate growth, value and
stability. The expected end result is that managements economic interests will be aligned with
those of our stockholders.
Compensation Philosophy
Our Compensation Committee believes that total executive compensation must address the
market in which we compete for executive talent. The Compensation Committee focuses on total
compensation structures reflecting the market median for base salaries and annual cash incentive
compensation in the offshore oilfield and subsea services industries. Base salaries for each of our
named executive officers are set forth in their respective employment agreements. The Compensation
Committees strategy has generally provided that a majority of total compensation is variable, at
risk and paid based on our results of operations and the growth in the value of our common stock.
Accordingly, the Compensation Committee typically links a significant portion of each named
executive officers total compensation to accomplishing specific, measurable results based on both
company and the individual executives performance. When our performance meets or exceeds
established goals and objectives, our named executive officers are paid at or more than the market
median. Alternatively, when our performance does not meet critical goals and objectives, cash
incentive and equity award payments, if any, should be less than such levels. We also annually
measure our performance against our peer group to ensure that cash incentive and/or equity award
payments are consistent with our objective of maximizing stockholder value. Consistent with this
pay for performance strategy, we do not provide any perquisites to our senior executives that are
not offered to all other employees.
In 2009, we targeted our executives cash compensation (base salary and annual cash
incentives) at the 50th percentile of the applicable competitive market (the market median),
while long-term incentives were structured based on the achievement of pre-determined value
appreciation over a three-year measuring period.
To balance the need to return key employees and minimize stockholder
dilution,
the Committee determined that the mix of stock options and
cash-settled stock appreciation rights would provide our employees
with appropriate upside potential and motivate our executive officers to work to
improve our share price.
The Compensation Committee believed that this helped to
meet the overall compensation strategy of emphasizing long-run sustained profitability over
short-run performance, and aligns our executives interests with those of our stockholders.
Based on our target annual incentives and grant date value of
long-term awards, the named executive officers total direct
compensation in 2009 ranged from the 31
st
to the 40
th
percentile of the survey data.
In order to
account for the Companys reduced share performance in 2008, the Compensation Committee determined
to make executive compensation decisions in 2009 based on the following guidelines:
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Provide a competitive total compensation program that enables us to
attract and retain key executives with the background and skills to
guide the Company through the current economic volatility;
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Ensure a direct relationship between our financial performance and the
total compensation received by our named executive officers by tying a
majority of compensation to an executives performance;
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Reduce the value of the 2009 long term equity awards granted to the
named executive officers by more than 90% below the comparable value
of the 2008 awards in order to reflect the decline in the Companys
stock price and to ensure that the dilutive effect of such awards
satisfies guidelines established by RiskMetrics Group;
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Motivate executives to make sound business decisions that improve
stockholder value and reward such decisions over the long-run by, for
example, vesting stock awards over three years;
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28
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Ensure the mix between short-term and long-term compensation paid to
the Companys executives is consistent with the compensation offered
in the market; and
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In evaluating the incentive compensation levels for each named executive officer, the
Compensation Committee reviews publicly available compensation data for executives in our peer
group, compensation surveys developed by compensation consultants, and compensation levels for each
named executive officer with respect to their levels of responsibility, accountability, performance
and decision-making authority. These criteria are more fully discussed below. In addition, the
Compensation Committee takes into account the overall share performance as a measure of stockholder
value created or lost during the applicable measurement period.
The Compensation Committee
The Compensation Committee reviews its charter annually to verify the committee is
meeting its objectives. In addition, the Compensation Committee establishes an annual calendar of
action items in order to ensure each of its chartered objectives is met. During the July 27, 2009
Compensation Committee meeting, we approved the 2009-2010 calendar of executive compensation
decisions, including: reviewing overall compensation philosophy; evaluating our appropriate peer
group; reviewing succession planning; reviewing performance objectives; reviewing base salary and
incentive targets; and reviewing compensation disclosure.
The Role of the Compensation Consultant Peer Group and Compensation Surveys
In 2009, the Compensation Committee, together with the assistance of Stone Partners, the
independent compensation consultant retained by the Compensation Committee, benchmarked named
executive officer compensation levels by comparing our executive positions to industry positions
with similar breadth and scope to ours. (The independent compensation consultant was not engaged to
provide other non-executive compensation consulting services to the Company.) The compensation
consultant considers information from compensation surveys, peer company proxy statements and the
unique circumstances of the named executive officer when determining compensation for each of the
named executive officers. During 2009, the Compensation Committee reviewed data from the Watson
Wyatt
2009 Top Management Compensation Survey,
the William M. Mercer
2009 Energy Industry
Compensation Survey
, Stone Partners 2009
Executive Oilfield Manufacturing and Services Industry
Compensation survey
, and proxy statement data from our peer group. We believe that Watson Wyatt and
Mercer-Energy are nationally known, respected sources for data. The Stone Partners survey includes
a large number of oilfield manufacturing and service companies and is in its 13th year of
publication. We consider our peer companies to be those enterprises that operate globally and
compete with us for executive talent. Currently, we view our industry peer group to consist of the
following companies:
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Bristow Group, Inc.
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Newpark Resources, Inc.
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Cal-Dive International, Inc.
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Oceaneering International, Inc. *
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Dril-Quip, Inc.
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Seacor Holdings, Inc. *
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Global Industries, Ltd.
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Superior Energy Services, Inc. *
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Gulf Island Fabrication, Inc.
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Superior Well Services, Inc.
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Gulfmark Offshore, Inc.
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Tesco Corp.
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Helix Energy Solutions Group, Inc. *
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TETRA Technologies, Inc.
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Hercules Offshore, Inc.
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Tidewater, Inc. *
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Hornbeck Offshore Services, Inc.
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*
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We do not use these larger companies in our executive compensation benchmarking but the
Compensation Committee does monitor these companies to determine general compensation trends.
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This peer group determination was based on a review made as of July and October 2009 of companies
that share certain criteria including a common industry (offshore oilfield services) and similar
levels of revenue (between $350 million and $1.1 billion), market capitalization (between
$250 million and $2.1 billion), enterprise value (between $250 million and $2 billion), and assets
(between $330 million and $2.5 billion).
Stone Partners calculated the 25th, 50th and 75th percentiles for these peer companies in
order to provide the Compensation Committee with an understanding of competitive pay practices.
Stone Partners weighted the data
29
equally and considered each element of compensation. We refer to
this information in this section as the survey data. Stone Partners also provides the
Compensation Committee with advice on equity incentive compensation trends, including the types and
value of awards being used by other public companies. In addition, Stone Partners provides
additional market data for additional employment positions from other sources, as the Compensation
Committee may request.
The Compensation Committee has used this survey data to make decisions regarding executive
compensation.
Role of Chief Executive Officer in Establishing Compensation for Named Executive Officers
Each year, our Compensation Committee directs our Chief Executive Officer to provide
recommendations regarding compensation to the Compensation Committee, including recommendations of
individual cash and equity compensation. Specifically, our CEO provides written performance
appraisal results for each named executive officer. The Compensation Committee considers these
recommendations in its evaluation of compensation for each of the named executive officers (other
than the CEO).
The Compensation Committee may modify any adjustments or awards recommended by the CEO.
The Compensation Committee also independently reviews the performance of the CEO and recommends to
the Board the appropriate cash and equity compensation for the CEO.
Elements of Compensation for Named Executive Officers
The Companys executive compensation program consists of (i) base salary, (ii) annual
cash incentives, (iii) long-term incentives, (iv) retirement benefits, (v) health and welfare
benefits, (vi) relocation benefits, and (vii) post-termination compensation provided in employment
agreements. The first three elements are considered the core direct compensation program.
We use each of these elements because we believe they provide the compensation mix
required to attract and retain talented executives, reward them for quality performance, and
motivate them to focus on both the short-term and long-term performance of the company. We believe
an adequate base salary is required to attract and retain qualified executives based on salaries
offered by other companies. Periodic salary increases and annual cash incentives provide executives
with compensation that is based on annual financial and operating results. Equity awards are used
to motivate our executives to achieve long-term results and aid long-term retention of our
executives. Compensating our executives for positive company performance in both the short-term and
the long-term serves our goal of aligning our executives compensation with the interests of our
stockholders. Consistent with this pay for performance strategy, we do not provide any benefits to
our senior executives that are not offered to all other employees. Post-termination compensation
provided in our employment agreements are commonly included in executive compensation packages
offered by our competitors, and we believe that providing them allows us to attract and retain
executive talent.
The following chart provides further details about what we pay (or offer) our executives
and why we do so:
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Element
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Purpose
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Characteristics
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Base Salary
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Compensate
executives for
their level of
responsibility,
sustained
individual
performance,
skills, background
and experience.
Also helps attract
and retain strong
talent.
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Fixed element based
on employment
agreement;
eligibility for
periodic merit
increases based on
sustained
individual
performance.
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30
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Element
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Purpose
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Characteristics
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Annual Cash Incentives
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Promote the
achievement of our
annual corporate
and business unit
financial goals, as
well as individual
goals.
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Performance-based
cash opportunity;
amount earned will
vary relative to
the targeted level
based on company,
business unit and
individual results;
financial
components are
audited by our
independent
auditors.
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Long-Term Incentive
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Promote the
achievement of our
long-term corporate
financial goals.
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Our long-term
incentive plan
allows us to award
stock options,
restricted stock,
stock appreciation
rights and
performance awards.
Amounts
earned/realized
will vary based on
stock price and/or
company
performance.
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Retirement Plan
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Provide an
appropriate level
of replacement
income upon
retirement. Also
provide an
incentive for a
long-term career
with us, which is a
key objective.
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Fixed element;
however, retirement
contributions tied
to pay will vary.
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Health and Welfare Benefits
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Facilitate the
attraction and
retention of high
caliber executives
in a competitive
labor market in
which comprehensive
medical, dental,
vision, life,
accidental death
and dismemberment,
and short and
long-term
disability plans
are common.
Provides basic
security foundation
for all employees.
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Fixed element;
however, some
employer
contributions tied
to pay will vary,
and some employer
contributions tied
to family size will
vary.
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Relocation Benefits
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Facilitate the
attraction and
retention of high
caliber executives
in a competitive
labor market in
which relocation
may be necessary
and in which
competitors cover
such expenses for
employees including
executives.
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Element only
payable if
executive relocates
at our request.
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Post- Termination
Compensation
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Facilitate the
attraction and
retention of high
caliber executives
in a competitive
labor market in
which formal
severance plans are
common.
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Contingent element;
only payable if the
executives
employment is
terminated as
specified in the
arrangements
(amount of
severance benefits
varies by level in
the organization).
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Base Salary
.
The base salaries for our named executive officers are contained in their
respective employment agreements. Our Compensation Committee and our Chief Executive Officer
(except with respect to his own base salary) reviews base salary levels every year. Each employment
agreement for our named executive officers provides that base salary may be increased. The
Compensation Committee may not decrease base salaries unless the
31
base salaries of all other
executives of the Company are similarly reduced. Base salaries are intended to provide fixed
compensation in line with the market median for each named executive officer.
Our base salary levels reflect a combination of factors, including competitive pay levels
relative to the peer group and compensation survey data, the named executive officers experience
and tenure, the named executive officers individual performance, changes in responsibility, and
our overall performance as compared to our internal operational and financial plan. The
Compensation Committee reviews salary levels annually to consider these factors and to determine
each named executive officers contributions to our long-term success.
Annual Cash Incentives
.
We adopted our Annual Incentive Plan (the Plan) in 2006 to
reward our key employees for contributions towards financial, operational and strategic goals
approved by our Board. The Plan formally establishes threshold, target and maximum levels for each
group of key employees, including the named executive officers, and goals that trigger awards under
the Plan. Our Board views earnings before interest, taxes, depreciation and amortization, or
EBITDA, as our primary short-term goal. The Compensation Committee believes that in years of
outstanding performance, cash incentives should be awarded at or near a maximum level established
for all key employees. The Compensation Committee reviews performance goals under the Plan on an
annual basis to ensure that they are designed to promote our sustained success. The Compensation
Committee has established a cap on the maximum payout under the Plan which it believes incentivizes
executives to take actions that enhance the Companys value, while mitigating the danger that
executives will take excessive or unnecessary risks.
In 2009, the performance goals were: (i) safety performance, (ii) annual EBITDA as set
forth in the Companys annual plan, and (iii) vessel reliability and delivery. In addition, each
Plan participant had individual performance goals. Performance goals are primarily based on a
financial budget approved by our Board and guidance provided to investors for the applicable
calendar year, with target goals representing the Board approved budget amounts.
We use EBITDA, a non-GAAP financial measure, as a financial metric (i) to monitor and evaluate
the performance of our business operations, (ii) to facilitate managements internal comparison of
our historical operating performance of our business operations, (iii) to facilitate managements
external comparisons of the results of our overall business to the historical operating performance
of our competitors, (iv) to analyze and evaluate financial and strategic planning decisions
regarding future operating investments and acquisitions, which may be more easily evaluated in
terms of EBITDA, (v) as a metric in the calculation of awards under the annual plan and (vi) to
plan and evaluate future operating budgets and determine appropriate levels of operating
investments. We calculate EBITDA as operating income or loss before depreciation and amortization,
impairments and penalties on early termination of contracts, gain/loss on sale of assets,
stock-based compensation and provision for doubtful accounts in respect of revenues earned in prior
periods.
Due to growth from our corporate acquisitions in 2008, the EBITDA performance target in 2009
was set quite high at $162.9 million and was weighted twice as much as compared to 2008. Despite
the deterioration of our towing and supply business, weaknesses in certain markets for our subsea
services and other factors that negatively impacted our EBITDA in 2009, our Board did not adjust
this target and management did not meet it.
In setting a high EBITDA target, our Board believed that it was appropriate to motivate
management in the wake of our acquisitions. Our Board developed these EBITDA performance targets
to establish goals for our management and not as a projection or indication of our expected
results. The EBITDA target is set solely for the purpose of internal financial planning and should
not be regarded as guidance to investors regarding our financial performance as it is not our
policy to publicly issue targets or guidance.
Our safety target in 2009 included consideration of environmental incidents, safety
plans, security incidents and operations incidents (i.e., vessel), as well as personal injuries
(recordable incident rate). We believe this reflects a high standard of safety in our Company year
over year. We set our safety performance threshold to require safety which meets or exceeds the
prior years performance. In addition, any safety bonus is forfeited if there is any vessel related
accidental death.
The individual performance component of compensation is based on individual performance
goals generally developed by our named executive officers, recommended by our CEO and ultimately
approved by the Compensation Committee. Each employees individual performance goals may include
additional financial, operational or qualitative measures and are based on the prospective business
environment considerations for the coming year.
32
For 2009, the following table describes the annual incentive levels for the named
executive officers.
Annual Incentive Plan Payout Ranges for 2009 for Named Executive Officers
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Mr.
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Compofelice-
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Mr. Varma-
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Chairman
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Chief
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of
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Mr. Jones-
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Mr. Salazar -
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Administrative
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the Board,
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Vice
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Global Director
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Mr. Wallace-
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Officer, Vice
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President and
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President
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Of Sales and
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CEO of
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President and
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Chief
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and Chief
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Marketing
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EMSL and
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General
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Executive
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Financial
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Trico Group
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Vice
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Counsel and
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Officer
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Officer
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The Americas
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President
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Secretary
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Threshold
Incentive
Compensation (% of
Base Salary)
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50
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%
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30
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%
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25
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%
|
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25
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%
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30
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%
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Target Incentive
Compensation (% of
Base Salary)
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100
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%
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60
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%
|
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50
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%
|
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50
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%
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60
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%
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Maximum Incentive
Compensation (% of
Base Salary)
|
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200
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%
|
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120
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%
|
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|
100
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%
|
|
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100
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%
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120
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%
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Annual Incentive Plan Performance Measure Weightings for 2009 for Named Executive Officers
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Mr.
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Mr.
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Mr.
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Performance Measure
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Compofelice
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Mr. Jones
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Salazar
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Wallace
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Mr. Varma
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Safety
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10
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%
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10
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%
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10
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%
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10
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%
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10
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%
|
Corporate EBITDA
|
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|
70
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%
|
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|
70
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%
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35
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%
|
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35
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%
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70
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%
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Division EBITDA
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35
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%
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35
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%
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Individual
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20
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%
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20
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%
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|
20
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%
|
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|
20
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%
|
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|
20
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%
|
Based on our target annual incentives, the named executive officers total cash compensation ranged
from the 48th to the 60th percentile of the survey data.
Long-term Incentives
.
We grant stock-based incentive awards to key employees and our
named executive officers each year. Our Compensation Committee makes these grants in the first
quarter after our year-end audit so that its determination of cash and equity awards are based on
our audited financial performance for the preceding year. We review the peer group and RiskMetrics
Group industry burn rate table compared to our 3 year burn rate. The burn rate means the number of
options granted plus the number of shares of restricted stock awarded times a multiplier
established by RiskMetrics Group, with the result divided by our weighted average common shares
outstanding for 2009. This review assures the Compensation Committee that stockholders value in our
shares does not become overly diluted. We make grants of stock options at an option price equal to
the fair market value of our
common stock on the date of grant. Accordingly, stock options only have monetary value if the
stock price appreciates above the price on the date of grant. Our stock options typically vest
over 3 years, meaning that executives may not exercise their stock options immediately but must
hold their options for a period of time prior to being able to realize value. These elements of
our stock options encourage our executives to focus on long term stock price appreciation and align
their interests with the interests of our stockholders.
The Compensation Committee may grant time-based equity awards to encourage employee
retention. Such awards require continued employment with us usually vesting ratably over 3 or
4 years. In addition, the Compensation Committee may grant performance-based restricted stock. The
stock-based incentive awards granted in 2009 included a mix of both stock options and stock
appreciation rights. We believe this mix focused our named
33
executive officers on the creation of
stockholder value over the long-term and encouraged equity ownership in the company. Given that
there were limited shares in the plan available to award, the Compensation Committee chose not to
continue the use of any restricted share awards for 2009. In 2009, we generally allocated about 1/3
of the value of long-term incentives granted to our named executive officers to stock options. We
allocated the remaining portion of the grants to stock appreciation rights. The Compensation
Committee will continue to review the nature of stock-based incentive awards annually to ensure
that awards produce sufficient incentives to create stockholder value.
The Compensation Committee approves the total awards that will be made available to our named
executive officers, as well as the size of individual grants. The amounts granted to our named
executive officers vary each year and are based on individual performance, survey data, our
performance as measured by goals established under the Plan, as well as the individual named
executive officers total compensation package. Previous awards and grants, whether vested or
unvested, do not influence the current years awards and grants; rather, award and grants are based
on an employees expected future contributions. In making awards to management, the Compensation
Committee has not taken into account wealth accumulation, that is, how much wealth an employee is
projected to accrue as a result of awards or has accrued as a result of past awards. The
Compensation Committee believes that it is appropriate to continue to compensate our executives for
their on-going individual performance and the Companys on-going performance in order to provide
incentives to our executives to perform at high levels that are competitive with companies in our
peer group. Additionally, equity awards are the most significant means of wealth accumulation for
our executives, and our share price performance in the recent past has not resulted in significant
executive wealth accumulation.
In 2009, the Compensation Committee granted all stock appreciation awards in the form of stock
options or stock appreciation rights; the Compensation Committee granted no restricted stock awards
in 2009. The Committee made this decision because the awards were intended to reward executives for
increasing the value in Tricos share price in the future.
Health and Welfare Benefits.
All full-time employees, including our named executive
officers, may participate in our health and welfare benefit programs, including medical, dental and
vision coverage, life and accidental death and dismemberment insurance and short and long-term
disability insurance. We also offer paid vacation to all of our employees including the named
executive officers.
Retirement Benefits
.
All employees with at least 6 months of continuous service are
eligible to participate in our Section 401(k) tax-qualified, defined contribution plan. The plan
enables employees to save for retirement through a tax-advantaged combination of employee and
Company matching contributions, and provides employees the opportunity to directly manage their
retirement plan assets through a variety of investment options. Employees may elect to defer up to
50% of their annual compensation on a pre-tax basis and have it contributed to the plan, subject to
certain limitations under the Internal Revenue Code. In 2009, we matched employee contributions (up
to the first 5% of his or her annual salary) with an employer contribution of $0.25 per $1.00 of
employee contributions. In 2010, we will match employee contributions at 100% up to the first 6%.
We will reduce the vesting schedule for the employer match from 6 years to 3 years in 2010. A
discretionary contribution equivalent to 6% of eligible 2009 compensation was awarded in the first
quarter of 2010.
Relocation Benefits.
We believe that employees (including executives) who are asked to
relocate in connection with employment with us should receive relocation assistance corresponding
to their position in our organization. We have found relocation assistance can play an important
role in attracting qualified new hire candidates or transferring existing employees to locations
where there is a business need. The primary benefits provided under our relocation assistance
program to our named executive officers include reasonable moving and related expenses,
closing costs related to selling and buying a home or assistance in leasing a home, and temporary
living expenses. Based on the location, additional benefits may be offered including a foreign
service premium, cost of living allowance, education for children and an automobile allowance. In
2007, we provided relocation benefits to one named executive officer as described in footnote 3 to
our Summary Compensation Table.
Post-Termination Compensation included in Employment Agreements
.
We have entered into
employment agreements with each of our named executive officers. These employment agreements
include our payment obligations to our named executive officers in the event we terminate his or
her employment or if the employee terminates employment, under specified circumstances. See the
Narrative Disclosure to Summary Compensation Table for details on the terms of these employment
agreements. In the event we terminate the employment of a
34
named executive officer for a reason
other than death, disability or Cause (as defined in each of the employment agreements-see
Terminology below) or the employee terminates for Good Reason (as defined in each of the
employment agreements-see Terminology below), the employee is entitled to the following benefits:
1.
|
|
a lump sum cash payment equal to the sum of:
|
|
a.
|
|
a multiple of base salary at the rate in effect on the date of termination;
|
|
|
b.
|
|
a multiple of the higher of:
|
|
i.
|
|
the highest annual bonus paid during the three most recent fiscal years or
|
|
|
ii.
|
|
the target bonus (as provided in the Companys annual cash incentive
plan) for the fiscal year in which his or her date of termination occurs;
and
|
|
c.
|
|
any bonus earned and accrued as of the date of termination which
relates to periods that have ended on or before such date and which
have not yet been paid by the Company; and
|
2.
|
|
health coverage for beyond his or her termination of employment until
he or she receives health plan coverage from a new employer as
outlined below.
|
The table below sets forth the salary and bonus multiples for each named executive
officer based on whether the termination is or is not in connection with, based upon or within
12 months after a Change-in-Control (as defined in Terminology below):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If involuntary termination does
|
|
|
|
|
|
|
|
|
not occur
|
|
|
|
|
|
|
|
|
in connection with, based upon
|
|
If termination occurs in connection
|
|
|
|
|
or within
|
|
with, based upon or within 12
|
|
|
|
|
12 months after a Change-in-
|
|
months
|
|
|
|
|
Control
|
|
after a Change-in-Control
|
|
|
|
|
Salary
|
|
Bonus
|
|
Salary
|
Name
|
|
Health Coverage
|
|
multiple
|
|
multiple
|
|
multiple
|
|
Bonus multiple
|
Mr. Compofelice
|
|
For 18 months after
termination, he
continues to
contribute as if an
employee then for
an additional 36
months he must make
COBRA*
contributions to
continue coverage
|
|
2X
|
|
2X
|
|
2.99X
|
|
2.99X
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Jones
|
|
For 12 months after
termination, he
continues to
contribute as if an
employee then for
an additional 18
months he must make
COBRA*
contributions to
continue coverage
|
|
1X
|
|
1X
|
|
2.99X
|
|
2.99X
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If involuntary termination does
|
|
|
|
|
|
|
|
|
not occur
|
|
|
|
|
|
|
|
|
in connection with, based upon
|
|
If termination occurs in connection
|
|
|
|
|
or within
|
|
with, based upon or within 12
|
|
|
|
|
12 months after a Change-in-
|
|
months
|
|
|
|
|
Control
|
|
after a Change-in-Control
|
|
|
|
|
Salary
|
|
Bonus
|
|
Salary
|
Name
|
|
Health Coverage
|
|
multiple
|
|
multiple
|
|
multiple
|
|
Bonus multiple
|
Mr. Salazar
|
|
For 12 months after
termination, he
continues to
contribute as if an
employee then for
an additional 18
months he must make
COBRA*
contributions to
continue coverage
|
|
0X
|
|
0X
|
|
1X
|
|
1X
|
|
|
|
|
|
If involuntary termination does
|
|
|
|
|
|
|
not occur
|
|
|
|
|
|
|
in connection with, based upon
|
|
If termination occurs in connection
|
|
|
|
|
or within
|
|
with, based upon or within 12
|
|
|
|
|
12 months after a Change-in-
|
|
months
|
|
|
|
|
Control
|
|
after a Change-in-Control
|
|
|
|
|
Salary
|
|
Bonus
|
|
Salary
|
|
|
Name
|
|
Health Coverage
|
|
multiple
|
|
multiple
|
|
multiple
|
|
Bonus multiple
|
Mr. Wallace
|
|
For 12 months
after termination,
he continues to
contribute as if an
employee then for
an additional 18
months he must make
COBRA*
contributions to
continue coverage
|
|
1X
|
|
1X
|
|
2.99X
|
|
2.99X
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Varma
|
|
For 12 months
after termination,
he continues to
contribute as if an
employee then for
an additional 18
months he must make
COBRA*
contributions to
continue coverage
|
|
1X
|
|
1X
|
|
2.99X
|
|
2.99X
|
|
|
|
*
|
|
COBRA stands for Consolidated Omnibus Reconciliation Act of 1985, as
amended. This law requires employers to offer continued health
coverage to employees at no more than 102% of the full cost of the
coverage for 18 months following termination of employment.
|
Mr. Compofelices employment agreement separates the Chairman of the Board from the Chief
Executive Officer role for the purposes of termination of employment. This means that if Mr.
Compofelice merely ceases to be Chairman of the Board but continues to be the Chief Executive
Officer of the Company, no severance benefits would be paid to him in that event.
In the event we terminate the employment of a named executive officer for a reason other
than death, disability or Cause or the employee terminates for Good Reason, and the termination
occurs in connection with, based upon or within 12 months after a Change-in-Control, all
outstanding options, restricted stock awards and other equity based
awards will become fully vested and immediately exercisable on the date of termination. The
payments due our named executive officers pursuant to the employment agreements are also subject to
gross-up adjustments if specified taxes are imposed on such payments.
The employment agreements between us and our named executive officers and the related
severance provisions are designed to meet the following objectives:
Change-in-Control
. As part of our normal course of business, we engage in discussions
with other companies about possible collaborations and/or other ways in which the companies may
work together to further our respective long-term objectives. In addition, many larger, established
companies consider companies at similar stages of
36
development to ours as potential acquisition
targets. In certain scenarios, the potential for a merger or acquisition may be in the best
interests of our stockholders. We provide severance compensation if an executives employment is
terminated following a Change-in-Control transaction to incentivize our senior executives to act in
the best interests of our stockholders, even though their employment could be terminated as a
result of the transaction.
Termination without Cause.
If we terminate the employment of an executive officer without
Cause as defined in the applicable agreement, we are obligated to continue to pay him certain
amounts. These amounts are described in greater detail in Potential Payments Upon Termination or
Change-in-Control. We believe these payments are appropriate because the terminated executive is
bound by confidentiality, nonsolicitation and non-compete provisions covering two years after
termination. We also value the certainty of having a mutually agreed to severance package in place
prior to any termination event. This provides us with more flexibility to make a change in senior
management if such a change is in our and our stockholders best interests.
Other Agreements
Outside of a Change in Control, if the named executive officers employment is terminated
by reason of disability or death, then the options granted to him under our form of Non-Statutory
Stock Option Agreement or the restricted stock granted to him under our form of Restricted Stock
Award Agreement will fully vest (and restrictions will fully lapse) and be exercisable by such
named executive officer (or the estate or the person who acquires the options/shares by will or the
laws of descent and distribution or otherwise by reason of his death (the Estate)), as
applicable, for one year following the date of termination. If we terminate a named executive
officers employment without Cause or if he terminates for Good Reason, and he executes a release,
the options granted under the Non-Statutory Option Agreement will fully vest and be exercisable by
him for three months following the date of termination or by his Estate for one year following the
date of termination if he dies during the three month period. If the named executive officer does
not execute a release, then he can only exercise the options that have vested on or prior to the
date of termination. Finally, if a named executive officers employment is terminated for any other
reason, he can exercise the options that have vested on or prior to the date of termination for
three months following the date of termination (or his Estate can exercise the vested options for
one year following the date of termination if he dies during the three month period), and his
restricted shares will be forfeited if the time or performance restrictions are not met.
Perquisites.
We believe that the core elements of executive compensation should be tied
directly or indirectly to the actual performance of the Company. As a result, we do not have a
perquisite program. We believe that this position is particularly warranted in the difficult
general business climate we face which has caused us to find ways to reduce our costs .
2009 Decisions
Base Salary.
Based on Mr. Compofelices recommendation (other than with respect to his
own salary), the Compensation Committee adjusts the named executive officers base salaries every
other year to reflect appropriate increases. Based on the recommendation of the Compensation
Committee, we made the following base salary adjustments effective January 1, 2009:
|
|
|
|
|
|
|
|
|
Name
|
|
Base salary-2008
|
|
Base salary-2009
|
Mr. Compofelice
|
|
$
|
500,000
|
|
|
$
|
600,000
|
|
Mr. Jones
|
|
$
|
250,000
|
|
|
$
|
325,000
|
|
Mr. Salazar
|
|
$
|
230,000
|
|
|
$
|
230,000
|
|
Mr. Wallace
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
Mr. Varma
|
|
$
|
250,000
|
|
|
$
|
325,000
|
|
In 2009, base salaries for our named executive officers were closer to the market median than they
were in 2008. The base salaries ranged from the 43rd to the 54th percentile of the survey data in
2009.
Annual Cash Incentives.
Effective in 2009, under the Annual Cash Incentive Plan (the
incentive plan), we established target annual incentives of 60% of annual base salary for Messrs.
Jones and Varma. The threshold annual incentive will be 30% of their annual base salary, and their
maximum annual incentive will be 120% of their annual base salary. These adjustments are in line
with the survey data.
37
On April 29, 2009, the Board amended its performance goals for 2009 to include
(i) continued safety throughout the worldwide fleet, (ii) corporate annual EBITDA based on our
annual budget plan, (iii) commitment to the vessel delivery plan, and (iv) individual performance
measured against specific goals reviewed and approved by the Board. These changes were adopted for
two primary reasons: first, to ensure that EBITDA goals more closely reflected each divisions
financial performance; and second, to emphasize the importance of vessel deliveries in 2009 for the
Company to achieve its overall EBITDA goal. For 2009, the Committee determined that division EBITDA
targets were also critical to the overall financial performance of the Company, and should be
considered in compensation decisions across the Company.
We did not achieve our corporate EBITDA performance objectives in 2009, and all but one
division missed its EBITDA performance objectives. Our named executive officers received cash
bonuses under the Plan based on their respective achievement of individual goals and our
achievement of other goals in 2009 as follows:
|
|
|
|
|
Mr. Compofelice
|
|
$
|
240,000
|
|
Mr. Jones
|
|
$
|
135,625
|
|
Mr. Salazar
|
|
$
|
39,375
|
|
Mr. Wallace
|
|
$
|
42,188
|
|
Mr. Varma
|
|
$
|
174,625
|
|
Percentage of Base Salary Paid Based on Annual Incentive Plan Performance Achievement for 2009 for
Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
|
|
|
|
|
|
Mr.
|
|
Mr.
|
|
|
Performance Measure
|
|
Compofelice
|
|
Mr. Jones
|
|
Salazar
|
|
Wallace
|
|
Mr. Varma
|
Safety
|
|
|
17.5
|
%
|
|
|
10.5
|
%
|
|
|
8.75
|
%
|
|
|
8.75
|
%
|
|
|
10.5
|
%
|
Corporate EBITDA
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Division EBITDA
|
|
|
|
|
|
|
|
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
|
Individual
|
|
|
22.5
|
%
|
|
|
31.2
|
%
|
|
|
10.0
|
%
|
|
|
10.0
|
%
|
|
|
43.2
|
%
|
Total
|
|
|
40.0
|
%
|
|
|
41.7
|
%
|
|
|
18.75
|
%
|
|
|
18.75
|
%
|
|
|
53.7
|
%
|
Long-term Incentive
.
Given the significant decline in the Companys market
capitalization, in 2009 the Committee decided not to use a percentage of comparative market data in
determining equity awards. The grant date fair value of the 2009 awards is more than 90% below the
comparable 2008 awards value. The Committee intends to review this decision in coming years and
make appropriate changes to our long-term incentive awards based on future economic and business
conditions. To balance the need to retain key employees and minimize stockholder dilution, the
Committee determined that a mix of stock options and cash-settled stock appreciation rights would
provide our employees with appropriate upside potential and motivate our executive officers to work
to improve our share price. See the Grants of Plan-Based Awards for details on the awards made in
2009. Based on our target annual incentives and grant date value of long-term awards, the named
executive officers total direct compensation ranged from the 31st to the 40th percentile of the
survey data.
Total Compensation Mix
.
Based on the decisions made during 2009, the Compensation
Committee continues to focus on tying pay to achieving performance goals. With the grant date value
of the long-term awards at their reduced level in 2009, the mix in 2009 has shifted from the prior
year. We believe Mr. Compofelice should have the most compensation at risk (estimated to be at
least 60% of total compensation), given his role as the Chief Executive Officer of the Company.
Messrs. Jones and Varma, as the Companys Chief Financial Officer and Chief Operations Officer,
respectively, should have more compensation at risk (estimated to be about 50% of their total
direct compensation) than the other named executive officers. We believe the other named executive
officers should have
about 40% of their total direct compensation at risk. As outlined by the table below, we allocate
an average of approximately 33% of total direct compensation to annual incentive pay and an average
of 13% to long-term incentive pay for the named executive officers.
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary as
|
|
Annual Incentive (Pay At Risk)
|
|
Long-Term Incentive (Pay At
|
|
|
percentage of total direct
|
|
of percentage of total direct
|
|
Risk) of percentage of total
|
Name and Position
|
|
Compensation
|
|
Compensation
|
|
direct compensation
|
Mr. Compofelice
|
|
|
41.8
|
%
|
|
|
41.8
|
%
|
|
|
16.4
|
%
|
Mr. Jones
|
|
|
52.9
|
%
|
|
|
31.7
|
%
|
|
|
15.4
|
%
|
Mr. Salazar
|
|
|
60.5
|
%
|
|
|
30.2
|
%
|
|
|
9.3
|
%
|
Mr. Wallace
|
|
|
60.5
|
%
|
|
|
30.2
|
%
|
|
|
9.3
|
%
|
Mr. Varma
|
|
|
52.9
|
%
|
|
|
31.7
|
%
|
|
|
15.4
|
%
|
2010 Decisions
Base Salary.
Based on Mr. Compofelices recommendation, the Compensation Committee
adjusts the named executive officers base salaries each year to reflect appropriate increases. At
the December 8, 2009 meeting of the Board, based on the recommendation of the Compensation
Committee, the following base salary adjustments were approved effective January 1, 2010:
|
|
|
|
|
|
|
|
|
Name
|
|
Base salary-2009
|
|
Base salary-2010
|
Mr. Jones
|
|
$
|
325,000
|
|
|
$
|
340,000
|
|
|
Mr. Salazar
|
|
$
|
230,000
|
|
|
$
|
250,000
|
|
|
Mr. Wallace
|
|
$
|
225,000
|
|
|
$
|
250,000
|
|
|
Mr. Varma
|
|
$
|
325,000
|
|
|
$
|
375,000
|
|
The increases reflect the Compensation Committees attempt to keep the salaries of our
executive officers competitive with peer companies based on the survey data. In addition, the
increases with respect to Mr. Jones reflect his increased
responsibilities in connection with his promotion to Senior Vice President
and Chief Administrative Officer (in addition to continuing as our
Chief Financial Officer); the increase with respect to Mr. Varma reflects his increased
responsibilities in connection with his promotion to Senior Vice President and Chief Operations Officer; the increase with respect
to Mr. Salazar reflects his increased responsibilities in
connection with his promotion to Vice President, Americas and West Africa;
and the increase with respect to Mr. Wallace reflects his
increased responsibilities in connection with his promotion to Vice
President, Business Development.
Annual Cash Incentives.
On February 19, 2010, the Board amended its performance goals for
2010 to include (i) improved safety throughout the worldwide fleet, (ii) annual EBIDTA in our
annual budget plan, (iii) vessel reliability, to measure any unplanned downtime resulting in lost
revenue, and (iv) individual performance as measured against specific goals reviewed and approved
by the Board. These changes were adopted to ensure that EBIDTA goals more closely reflected each
divisions financial performance. We continue to believe that division EBIDTA targets are critical
to the overall performance of the Company and should be considered in compensation decisions across
the Company. We believe that this additional financial performance measure more closely aligns the
entire worldwide management team to meet or exceed financial performance targets. We have taken no
action on annual incentives for the named executive officers in 2010.
39
Annual Incentive Plan Payout Ranges for 2010 for Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compofelice-
|
|
Mr. Jones-
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman of
|
|
SVP,
|
|
|
|
|
|
|
|
|
|
|
|
|
the Board,
|
|
Chief
|
|
|
|
|
|
|
|
|
|
Mr. Varma-
|
|
|
President and
|
|
Financial
|
|
Mr. Salazar -
|
|
|
|
|
|
SVP, Chief Operations
|
|
|
Chief
|
|
Officer and
|
|
Vice President,
|
|
Mr. Wallace-
|
|
Officer, General
|
|
|
Executive
|
|
Chief
|
|
Americas and
|
|
Vice President, Business
|
|
Counsel and
|
|
|
Officer
|
|
Administrative Officer
|
|
West Africa
|
|
Development
|
|
Corporate Secretary
|
Threshold
Incentive
Compensation (% of
Base Salary)
|
|
|
50
|
%
|
|
|
30
|
%
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
30
|
%
|
Target Incentive
Compensation (% of
Base Salary)
|
|
|
100
|
%
|
|
|
60
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
60
|
%
|
Maximum Incentive
Compensation (% of
Base Salary)
|
|
|
200
|
%
|
|
|
120
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
120
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
|
|
|
|
|
|
Mr.
|
|
Mr.
|
|
|
Performance Measure
|
|
Compofelice
|
|
Mr. Jones
|
|
Salazar
|
|
Wallace
|
|
Mr. Varma
|
Safety
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
10
|
%
|
|
|
5
|
%
|
|
|
5
|
%
|
Corporate EBITDA
|
|
|
75
|
%
|
|
|
75
|
%
|
|
|
25
|
%
|
|
|
75
|
%
|
|
|
75
|
%
|
Division EBITDA
|
|
|
|
|
|
|
|
|
|
|
40
|
%
|
|
|
|
|
|
|
|
|
Individual
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
25
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
Long-term Incentives
.
Given the significant decline in the Companys market
capitalization, the Compensation Committee has decided not to use comparative market data to
determine equity awards. The Committee intends to review this decision in coming years and make
appropriate changes in our long term incentive awards based on future economic and business
conditions. To balance the need to retain key employees and be minimize stockholder dilution, the
Committee determined that the mix of cash settled stock appreciation rights and phantom restricted
stock units would provide appropriate upside potential and motivation for executive officers to
work to improve our share price. The Committee substituted phantom restricted stock units in 2010
for stock options due to the Companys limited availability of authorized and unissued common stock
under the Companys Amended and Restated 2004 Stock Incentive Plan.
Other Important Compensation Policies
Policy Regarding Tax Deductibility of Compensation.
Section 162(m) of the Internal
Revenue Code of 1986, as amended, limits our allowable deduction for compensation paid to the Chief
Executive Officer and the other top three highest compensated executive officers in any year to
$1 million. Qualified performance-based compensation is excluded from this deduction limitation if
certain requirements are met. Stock options and performance-based restricted stock awards we have
granted have been structured to qualify as performance-based. The Compensation Committees intent
is to design compensation awards that will be deductible without limitation where doing so will
further the purposes of the Companys executive compensation program. The Compensation Committee
will, however, take into consideration the other factors described in this Compensation Discussion
and Analysis, together with Section 162(m) considerations in making executive compensation
decisions and could, in certain circumstances, approve and authorize compensation that is not fully
tax deductible. None of the compensation we paid to our named executive officers in 2009 was
subject to the deduction limitation set forth in Section 162(m).
Policy Regarding Clawback of Compensation
.
In December 2009, our Board approved a
policy which allows us to recover from a senior executive annual or long-term incentive award
overpayments. If an error or errors occurs
in any financial statement resulting from an intentional or fraudulent act or omission by any
senior executive, then the senior executives will reimburse us for any award payment made based on
the error.
Policy Regarding Tax Gross-Up Provisions
.
In December 2009, the Committee approved a
policy that no tax gross-up payment provisions will be offered in any future compensatory
arrangement with any current or prospective employee of the Company without the prior written
consent of the Board. In the Committees view,
40
granting such payments should only be considered on
a case-by-case basis when the Committee can evaluate the relative ease or difficulty of recruiting
employees without offering such payments.
Executive Stock Ownership Guidelines
.
In November 2009, our Board approved a stock
ownership policy which emphasizes the link between covered officers and the long term interest of
stockholders. Covered officers are required to accumulate shares within five years of becoming
covered by the guidelines. The following table outlines their target ownership for these
guidelines.
|
|
|
|
|
Title
|
|
Share
Value Ownership Target
|
CEO
|
|
3X base salary
|
|
Chief Administrative Officer, Chief Financial Officer
|
|
2X base salary
|
|
Other selected Officers (including all other named executive officers)
|
|
1X base salary
|
A covered officer is expected to retain 50% of the after tax proceeds in shares until he or she
meets the applicable ownership threshold. Covered officers are expected to accumulate and hold
shares held directly or indirectly and acquired under any unvested time-based restricted shares and
any vested in the money options. Covered employees cannot engage in hedging strategies with any
shares counting towards their ownership guidelines. Currently covered officers have until December
31, 2014 to be in compliance.
Director Stock Ownership Guidelines
.
In November 2009, our Board approved this policy which
emphasizes the link between non-employee directors and the long term interest of shareholders.
Non-employee directors are required to accumulate shares equal in value to at least two times the
amount of their annual cash retainer within five years of election to the Board. A non-employee
director is expected to retain 50% of the after tax proceeds in shares until he or she meets the
stock ownership threshold. Non-employee directors are expected to accumulate and hold shares held
directly or indirectly, and shares acquired under any unvested time-based restricted shares and any
vested in the money options. Non-employee directors cannot engage in hedging strategies with any
shares counting towards their ownership guidelines. Current non-employee directors have until
December 31, 2014 to be in compliance.
Terminology
Total Cash
means Base Salary plus any annual incentive, bonus or other cash payment to an
executive.
Total Direct Compensation
means Total Cash plus any equity awards made to an executive.
Change-in-Control
means
|
|
|
our merger with another entity, our consolidation or our sale of all
or substantially all of our assets to another entity where our holders
of equity securities immediately prior to the transaction do not
beneficially own immediately after the transaction equity securities
of the resulting entity entitled to 50% or more of the vote then
eligible to be cast in the election of directors of the resulting
entity;
|
|
|
|
|
our dissolution or liquidation;
|
|
|
|
|
any person or entity acquires or gains ownership or control of more
than 50% of the combined voting power of our securities; or
|
|
|
|
|
persons who were members of the Board immediately before an election
of the directors cease to constitute a majority of our Board.
|
Termination for Cause
means an executive has engaged in gross negligence or willful misconduct in
the performance of the duties required of his role, has willfully refused without proper legal
reason to perform the duties
and responsibilities of his role, has materially breached any provision in the employment agreement
or corporate policy, has willfully engaged in conduct he knows is injurious to us, has been
convicted of or pleaded no contest to, a crime involving moral turpitude or any felony or has
engaged in any act of serious dishonesty which adversely affects the executives performance.
41
Termination for Good Reason
means an executive has the right to terminate employment for any of the
following reasons within 60 days of:
|
|
|
a material breach by us of any provision of the employment agreement;
|
|
|
|
|
a material diminution in the nature or scope of the executives duties and responsibilities;
|
|
|
|
|
the assignment to the executive of duties and responsibilities that are materially
inconsistent with the position in the employment agreement;
|
|
|
|
|
any material change in the geographic location at which the executive must perform services;
|
|
|
|
|
the executive not being offered the same position at the resulting entity in connection
with a Change-in-Control; or
|
|
|
|
|
a material diminution in health and welfare, vacation or other benefits we provide
including business expenses and equity awards.
|
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and
Analysis included in this proxy statement with our management, and, based on such review and
discussions, the Compensation Committee recommended to our Board that the Compensation Discussion
and Analysis be included in this proxy statement.
The Compensation Committee
Ben A. Guill., Chairman of the Committee
Richard A. Bachman
Per Staehr
Compensation Summary
The following Summary Compensation Table sets forth the 2009, 2008 and 2007 compensation
of Joseph S. Compofelice, our principal executive officer, Geoff A. Jones, our principal financial
officer, and our three most highly compensated executive officers for the last completed fiscal
year (collectively, the named executive officers). Additional details regarding the applicable
elements of compensation in the Summary Compensation Table are provided in the footnotes following
the table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
All Other
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus (1)
|
|
Awards (2)
|
|
Awards (2)
|
|
Compensation (3)
|
|
Compensation
|
Joseph S. Compofelice
|
|
|
2009
|
|
|
$
|
600,000
|
|
|
$
|
240,000
|
|
|
$
|
799,429
|
|
|
$
|
378,280
|
|
|
$
|
18,498
|
|
|
$
|
2,036,207
|
|
Chairman and Chief Executive Officer (4)
|
|
|
2008
|
|
|
$
|
500,000
|
|
|
$
|
570,046
|
|
|
$
|
875,832
|
|
|
$
|
425,999
|
|
|
$
|
17,572
|
|
|
$
|
2,389,449
|
|
|
|
|
2007
|
|
|
$
|
288,524
|
|
|
$
|
393,637
|
|
|
$
|
1,959,000
|
|
|
$
|
772,000
|
|
|
$
|
14,586
|
|
|
$
|
3,427,747
|
|
Geoff Jones
|
|
|
2009
|
|
|
$
|
325,000
|
|
|
$
|
135,625
|
|
|
$
|
308,254
|
|
|
$
|
74,440
|
|
|
$
|
12,707
|
|
|
$
|
865,026
|
|
Senior Vice President, Chief Financial
|
|
|
2008
|
|
|
$
|
250,000
|
|
|
$
|
142,512
|
|
|
$
|
413,741
|
|
|
$
|
75,453
|
|
|
$
|
17,572
|
|
|
$
|
899,278
|
|
Officer and Chief Administrative Officer
|
|
|
2007
|
|
|
$
|
242,330
|
|
|
$
|
134,271
|
|
|
$
|
247,967
|
|
|
$
|
90,249
|
|
|
$
|
16,370
|
|
|
$
|
731,187
|
|
Rishi A. Varma
|
|
|
2009
|
|
|
$
|
325,000
|
|
|
$
|
174,625
|
|
|
$
|
246,326
|
|
|
$
|
69,702
|
|
|
$
|
16,698
|
|
|
$
|
832,351
|
|
Senior Vice President, Chief Operations
|
|
|
2008
|
|
|
$
|
250,000
|
|
|
$
|
142,512
|
|
|
$
|
326,104
|
|
|
$
|
51,982
|
|
|
$
|
17,361
|
|
|
$
|
787,959
|
|
Officer, General Counsel and
|
|
|
2007
|
|
|
$
|
242,330
|
|
|
$
|
164,271
|
|
|
$
|
247,967
|
|
|
$
|
90,249
|
|
|
$
|
20,286
|
|
|
$
|
765,103
|
|
Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Michael Wallace
|
|
|
2009
|
|
|
$
|
225,000
|
|
|
$
|
42,188
|
|
|
$
|
226,408
|
|
|
$
|
48,863
|
|
|
$
|
21,603
|
|
|
$
|
564,062
|
|
Vice President, Business
|
|
|
2008
|
|
|
$
|
304,544
|
(5)
|
|
$
|
128,260
|
|
|
$
|
274,035
|
|
|
$
|
62,888
|
|
|
$
|
254,924
|
|
|
$
|
1,024,651
|
|
|
|
|
2007
|
|
|
$
|
304,544
|
(5)
|
|
$
|
120,844
|
|
|
$
|
247,967
|
|
|
$
|
90,249
|
|
|
$
|
196,844
|
|
|
$
|
960,448
|
|
Tomas R. Salazar
|
|
|
2009
|
|
|
$
|
230,000
|
|
|
$
|
43,125
|
|
|
$
|
110,185
|
|
|
$
|
19,210
|
|
|
$
|
15,725
|
|
|
$
|
418,245
|
|
Vice President, Americas and West
Africa
|
|
|
2008
|
|
|
$
|
216,666
|
|
|
$
|
123,510
|
|
|
$
|
124,993
|
|
|
$
|
6,735
|
|
|
$
|
17,361
|
|
|
$
|
489,265
|
|
Global Director of Sales and Marketing
|
|
|
2007
|
|
|
|
164,023
|
|
|
|
67,365
|
|
|
$
|
14,487
|
|
|
$
|
5,272
|
|
|
$
|
16,361
|
|
|
$
|
267,508
|
|
42
|
|
|
(1)
|
|
For 2009 and 2008, Bonuses include payments made under the Key
Employee Retention Bonus Plan and the Annual Incentive Plan.
Payments during 2009 under the Annual Incentive Plan were as
follows: Mr. Compofelice $240,000; Mr. Jones $135,625; Mr.
Varma $174,625; Mr. Wallace $42,188; and Mr. Salazar -
$43,125. Payments during 2008 under the Annual Incentive Plan
were as follows: Mr. Compofelice $570,406; Mr. Jones
$142,512; Mr. Varma $142,512; Mr. Wallace $128,260; and
Mr. Salazar $123,510.
|
|
(2)
|
|
Dollar amounts represent the compensation expense recognized in
2009, 2008 and 2007 with respect to outstanding award grants,
whether or not granted during 2009, 2008 and 2007, in accordance
with accounting guidance for stock compensation. Option Awards
include $168,666 of expense for Mr. Compofelice. See Note 14 to
the Companys Annual Report on Form 10-K for the fiscal year
ended December 31, 2008 filed with the SEC on March 12, 2009 for
a discussion of the assumptions made in determining these
amounts.
|
|
(3)
|
|
All Other Compensation includes the aggregate value of matching
contributions to our 401(k) plan, the dollar value of life
insurance coverage and any perquisites valued in the aggregate of
$10,000 or more as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Value of
|
|
Relocation
|
|
Automobile
|
|
|
Name
|
|
Year
|
|
401(k) Plan ($)
|
|
Life Insurance ($)
|
|
Benefits ($)
|
|
Benefits ($)
|
|
Total ($)
|
Joseph S. Compofelice
|
|
|
2009
|
|
|
|
1,250
|
|
|
|
2,172
|
|
|
|
|
|
|
|
|
|
|
|
3,422
|
|
|
|
|
2008
|
|
|
|
8,250
|
|
|
|
1,664
|
|
|
|
|
|
|
|
|
|
|
|
9,914
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
2,334
|
|
|
|
|
|
|
|
|
|
|
|
2,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geoff A. Jones
|
|
|
2009
|
|
|
|
2,458
|
|
|
|
2,172
|
|
|
|
|
|
|
|
|
|
|
|
4,630
|
|
|
|
|
2008
|
|
|
|
8,250
|
|
|
|
1,664
|
|
|
|
|
|
|
|
|
|
|
|
9,914
|
|
|
|
|
2007
|
|
|
|
2,617
|
|
|
|
1,947
|
|
|
|
|
|
|
|
|
|
|
|
4,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rishi A. Varma
|
|
|
2009
|
|
|
|
2,458
|
|
|
|
2,184
|
|
|
|
|
|
|
|
|
|
|
|
4,642
|
|
|
|
|
2008
|
|
|
|
8,250
|
|
|
|
1,567
|
|
|
|
|
|
|
|
|
|
|
|
9,817
|
|
|
|
|
2007
|
|
|
|
2,405
|
|
|
|
1,947
|
|
|
|
|
|
|
|
|
|
|
|
4,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Michael Wallace
|
|
|
2009
|
|
|
|
1,480
|
|
|
|
1,644
|
|
|
|
|
|
|
|
|
|
|
|
3,124
|
|
|
|
|
2008
|
|
|
|
8,250
|
|
|
|
1,664
|
|
|
|
|
|
|
|
|
|
|
|
9,914
|
|
|
|
|
2007
|
|
|
|
2,388
|
|
|
|
1,754
|
|
|
|
38,870
|
|
|
|
25,793
|
|
|
|
68,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tomas R. Salazar
|
|
|
2009
|
|
|
|
2,023
|
|
|
|
1,682
|
|
|
|
|
|
|
|
|
|
|
|
3,705
|
|
|
|
|
2008
|
|
|
|
8,250
|
|
|
|
1,567
|
|
|
|
|
|
|
|
|
|
|
|
9,817
|
|
|
|
|
2007
|
|
|
|
8,250
|
|
|
|
1,567
|
|
|
|
|
|
|
|
|
|
|
|
9,817
|
|
Also included in 2008 and 2007 is $254,924 and $128,039, respectively, of payments
on behalf of Mr. Wallace associated with his expatriate assignment in Shanghai.
(4)
|
|
Mr. Compofelice was appointed as the Companys Chief Executive Officer
on July 9, 2007. In 2007, Mr. Compofelice received total compensation
of $124,516 as our non-executive Chairman of the Board.
|
|
(5)
|
|
Mr. Wallaces 2009, 2008 and 2007 annual salary includes a foreign
service premium of $45,000 and a cost of living adjustment of $34,544.
|
Grants of Plan-Based Awards
The following table and the footnotes thereto provide information regarding grants
of plan-based equity and non-equity awards made to the named executive officers during 2009.
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payments under
|
|
Estimated Future Payments under
|
|
All other
|
|
All other
|
|
Exercise or
|
|
Grant Date
|
|
|
Grant
|
|
non-equity incentive plan awards
|
|
equity incentive plan awards
|
|
stock
|
|
option
|
|
Base Price
|
|
FV of Stock
|
Name
|
|
Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
awards
|
|
awards
|
|
of Option
|
|
& Options
|
Joseph S. Compfelice
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,750
|
|
|
|
2.05
|
|
|
|
49,725
|
|
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,417
|
|
|
|
2.05
|
|
|
|
274,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geoff A. Jones
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,927
|
|
|
|
2.05
|
|
|
|
17,266
|
|
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,760
|
|
|
|
2.05
|
|
|
|
114,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rishi A. Varma
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,927
|
|
|
|
2.05
|
|
|
|
17,266
|
|
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,760
|
|
|
|
2.05
|
|
|
|
114,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Michael Wallace
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,031
|
|
|
|
2.05
|
|
|
|
7,172
|
|
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,656
|
|
|
|
2.05
|
|
|
|
38,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tomas R. Salazar
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,188
|
|
|
|
2.05
|
|
|
|
7,332
|
|
|
|
|
3/13/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,938
|
|
|
|
2.05
|
|
|
|
39,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
288,354
|
|
|
|
|
|
|
|
681,014
|
|
Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table
A discussion of 2009 base salaries and annual incentives is included in Compensation
Discussion and Analysis.
Fair Value Calculation:
The grant date fair value of the restricted stock granted in 2009
is based on the closing price of our common stock on the date of grant. The fair value of each
option is estimated on the date of grant using a Black-Scholes option valuation model. Volatility
is based on the historical volatility of the price of the Companys common stock. The expected
option life was an estimate determined by the Company. The risk-free interest rate is based on U.S.
Treasury issues with a term equal to the estimated life of the option.
Terms of Awards:
The restrictions on the shares of restricted stock presented in the
Grants of Plan Based Awards table lapse 100% upon the third anniversary of the grant date. The
options presented in the Grants of Plan Based Awards table vest ratably over three years beginning
on the first anniversary of the grant date.
Employment Agreements:
Our named executive officers have entered into employment
agreements with us. The initial term of the agreements is set forth in the table below. Following
the initial term, the agreements will be automatically extended on the initial expiration date, and
on the expiration date of any extended term thereafter, unless the named executive officer receives
or provides advanced written notice that no such automatic extension shall occur. This advanced
written notice must be provided or received at least 6 months, in the case of our Chief Executive
Officer, or 30 days, in the case of the other named executive officers, prior to the first day of
any such extension period. The named executive officers have agreed, during the term of the
agreement and for 12 months following termination of their employment, not to compete with our
business in any geographic market where we are conducting any business as of the date of their
termination or have conducted business during 12 months prior to termination. In addition, the
named executive officers have agreed not to make any unauthorized disclosure of any confidential
business information or trade secrets of the Company. The agreements provide for an annual base
salary of no less than the amount reflected in the table below, subject to annual review. See
Compensation Discussion and Analysis Compensation Philosophy for a discussion of how salary and
bonus are used to achieve compensation objectives. See Compensation Discussion and Analysis
Elements of Compensation for Named Executive Officers for a discussion of the provisions in the
employment agreements and see Potential Payments Upon Change-in-Control/Termination below for
additional details related to termination, change of control and related payment obligations.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Effective Date
|
|
Initial
|
|
Length of renewal
|
|
Base salary
|
Mr. Compofelice
|
|
July 23, 2008
|
|
1 year
|
|
1 year
|
|
$
|
600,000
|
|
Mr. Jones
|
|
September 1, 2005
|
|
1 year
|
|
1 year
|
|
$
|
325,000
|
|
Mr. Salazar
|
|
January 23, 2007
|
|
|
|
|
|
$
|
230,000
|
|
Mr. Wallace
|
|
January 1, 2007
|
|
1 year
|
|
1 year
|
|
$
|
225,000
|
|
Mr. Varma
|
|
July 1, 2006
|
|
1 year
|
|
1 year
|
|
$
|
325,000
|
|
44
Outstanding Equity Awards at 2009 Fiscal Year-End
The following table and the footnotes related thereto provide information regarding each
stock option and other equity-based awards outstanding as of December 31, 2009 for each executive
officer.
Outstanding Equity Awards at 2009 Fiscal Year-End:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
Awards: # of
|
|
Market or Payout
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Unearned
|
|
Value of
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Shares, Units
|
|
Unearned
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Units of
|
|
Units of
|
|
or Other
|
|
Shares, Units or
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Stock That
|
|
Stock That
|
|
Rights That
|
|
Other Rights
|
|
|
Options (#
|
|
Options (#
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Have Not
|
|
Have Not
|
|
Have Not
|
|
That Have Not
|
Name
|
|
Exercisable)
|
|
Unexercisable)
|
|
Options
|
|
Price
|
|
Date
|
|
Vested
|
|
Vested
(1)
|
|
Vested
|
|
Vested
|
Joseph S. Compfelice
|
|
|
100,150
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
3/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,334
|
|
|
|
16,666
|
(2)
|
|
|
|
|
|
|
39.18
|
|
|
|
7/9/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,750
|
|
|
|
|
|
|
|
2.05
|
|
|
|
3/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,854
|
(5)
|
|
|
267,197
|
|
|
|
16,674
|
(10)
|
|
|
75,700
|
|
Geoff A. Jones
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
3/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
27.13
|
|
|
|
3/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,467
|
|
|
|
2,233
|
(3)
|
|
|
|
|
|
|
37.01
|
|
|
|
3/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,927
|
|
|
|
|
|
|
|
2.05
|
|
|
|
3/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,638
|
(6)
|
|
|
80,077
|
|
|
|
5,387
|
(10)
|
|
|
24,457
|
|
Rishi A. Varma
|
|
|
6,100
|
|
|
|
|
|
|
|
|
|
|
|
27.13
|
|
|
|
3/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,467
|
|
|
|
2,233
|
(3)
|
|
|
|
|
|
|
37.01
|
|
|
|
3/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,927
|
|
|
|
|
|
|
|
2.05
|
|
|
|
3/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,638
|
(7)
|
|
|
80,077
|
|
|
|
5,387
|
(10)
|
|
|
24,457
|
|
D. Michael Wallace
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
11.00
|
|
|
|
3/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,500
|
|
|
|
|
|
|
|
|
|
|
|
27.13
|
|
|
|
3/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,467
|
|
|
|
2,233
|
(4)
|
|
|
|
|
|
|
37.01
|
|
|
|
3/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,031
|
|
|
|
|
|
|
|
2.05
|
|
|
|
3/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,544
|
(8)
|
|
|
75,110
|
|
|
|
4,848
|
(10)
|
|
|
22,010
|
|
Tomas R. Salazar
|
|
|
1,000
|
|
|
|
500
|
(4)
|
|
|
|
|
|
|
37.01
|
|
|
|
3/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,188
|
|
|
|
|
|
|
|
2.05
|
|
|
|
3/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,063
|
(9)
|
|
|
36,606
|
|
|
|
3,232
|
|
|
|
14,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
176,485
|
|
|
|
182,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118,737
|
|
|
|
539,067
|
|
|
|
3,232
|
|
|
|
161,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The market value of unvested restricted shares was determined by
using a stock price of $4.54, the closing price of the Companys
common stock on Nasdaq on December 31, 2009.
|
|
(2)
|
|
These option awards were granted on March 15, 2005 and vest ratably
over 4 years beginning on March 15, 2006.
|
|
(3)
|
|
These option awards were granted on March 13, 2006. The options
vest ratably over three years beginning on March 13, 2007.
|
|
(4)
|
|
These option awards were granted on March 21, 2007. The options
vest ratably over three years beginning on March 21, 2008.
|
|
(5)
|
|
On July 9, 2007, Mr. Compofelice was granted 50,000 shares of
restricted stock, of which 25,000 shares remain unvested as of
December 31, 2009. The restrictions on the unvested shares lapse on
July 9, 2010. On February 13, 2008, Mr. Compofelice was granted an
additional 33,854 shares of restricted stock. All 33,854 shares
remain unvested as of December 31, 2009. The restrictions lapse on
February 13, 2011.
|
|
(6)
|
|
On September 1, 2005, Mr. Jones was granted 15,000 shares of
restricted stock, of which all were vested as of December 31, 2009.
On March 21, 2007, Mr. Jones was granted 6,700 shares of restricted
stock, of which 6,700 shares remain unvested as of December 31, 2009.
The restrictions lapse on March 21, 2010. On February 13, 2008,
Mr. Jones was granted an additional 10,938 shares. All 10,938 shares
remain unvested as of December 31, 2009. The restrictions lapse on
February 13, 2011.
|
|
(7)
|
|
On March 21, 2007, Mr. Varma was granted 6,700 shares of restricted
stock, of which 6,700 shares remain unvested as of December 31, 2009.
The restrictions lapse on March 21, 2010. On February 13, 2008,
Mr. Varma was granted an additional 10,938 shares. All 10,938 shares
remain unvested as of December 31, 2009. The restrictions lapse on
February 13, 2011.
|
|
(8)
|
|
On March 13, 2006, Mr. Wallace was granted 3,500 shares of restricted
stock, of which all shares were vested as of December 31, 2009. On
March 21, 2007, Mr. Wallace was granted 6,700 shares of restricted
stock, of which 6,700 shares remain unvested as of December 31, 2008.
The restrictions lapse on March 21, 2010. On February 13, 2008,
Mr. Wallace was granted an additional 9,844 shares. All 9,844 shares
remain unvested as of December 31, 2009. The restrictions lapse on
February 13, 2011.
|
45
|
|
|
(9)
|
|
On March 21, 2007, Mr. Salazar was granted 1,500 shares of restricted
stock, of which 1,500 shares remain unvested as of December 31, 2009.
The restrictions lapse on March 21, 2010. On February 13, 2008,
Mr. Salazar was granted an additional 6,563 shares. All 6,563 shares
remain unvested as of December 31, 2009. The restrictions lapse on
February 13, 2011.
|
|
(10)
|
|
These performance restricted stock awards were granted February 13,
2008. See Grants of Plan-Based Awards in this Proxy Statement for
further information regarding the lapse in the forfeiture
restrictions provided that the Employee is continuously employed by
the Company from the date of the Agreement through the lapse date.
|
Option Exercises and Stock Vested in 2009
The following table provides the amount realized during 2009 by each named executive
officer upon the exercise of options and upon the vesting of restricted common stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested for 2009 Option Awards
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
Value
|
|
|
# of Shs
|
|
Realized
|
|
# of Shs
|
|
Realized
|
|
|
Acquired
|
|
Upon
|
|
Acquired on
|
|
Upon
|
Name
|
|
on Exercise
|
|
Exercise
|
|
Vesting
|
|
Vesting
|
Joseph S. Compfelice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geoff A. Jones
|
|
|
|
|
|
|
|
|
|
|
10,750
|
|
|
|
37,375
|
|
|
Rishi A. Varma
|
|
|
|
|
|
|
|
|
|
|
6,100
|
|
|
|
12,505
|
|
|
D. Michael Wallace
|
|
|
|
|
|
|
|
|
|
|
3,500
|
|
|
|
7,175
|
|
|
Tomas R. Salazar
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
20,350
|
|
|
|
57,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
3,750 shares vested on 9/1/09 and 7,000 shares vested on 3/13/09. All other shares vested on
3/13/09.
|
|
(1)
|
|
Calculated by multiplying the number of vested shares by the market price of such shares on the date of vesting.
|
Potential Payments Upon Change-in-Control/Termination
We have entered into employment agreements with each of our named executive officers that
include, among other things, payment obligations by the Company in the event employment is
terminated by the Company or the employee under specified circumstances. See Elements of
Compensation for Named Executive Officers Post-Termination Compensation included in
Employment Agreements for details about these payments. The tables below reflect the amount of
compensation that would be payable to each of the named executive officers in various scenarios
involving termination of the named executive officers employment, including following a
Change-in-Control based on these employment agreements. The amount of compensation payable to each
named officer upon voluntary termination, involuntary not-for-cause termination
(non-Change-in-Control), voluntary termination for good cause or involuntary termination following
a Change-in-Control, involuntary for cause termination, and termination in the event of death or
disability of each named officer is shown below. The amounts shown assume that the termination was
effective on December 31, 2009 and thus includes amounts earned through that time and are estimates
of the amounts which would be paid out to the officers upon their termination. The actual amounts
to be paid out can only be determined at the time of the officers separation from us. The officer
would also have available the value of exercisable options reflected in the Outstanding Equity
Awards at Fiscal Year End table. In the event of retirement, death or disability before the annual
cash (short-term incentive) is paid, the Compensation Committee has the discretion to authorize
payment (in full or on a prorated basis) of the amount the officer would have received. We have
assumed that the Compensation Committee would have authorized the payment of the full award
46
for
purposes of the tables below. The short-term disability plan pays up to 77 days. The payments are
66.67% of base salary a week up to $750 per week. The long-term disability plan pays 60% of an
executive officers salary up to $15,000 per month until Social Security retirement age or no
longer disabled. The long-term disability plan is optional and plan premiums are paid for by the
executive officer that chooses to participate. The life insurance plan pays the beneficiary an
amount equal to 3 times the applicable officers annual salary up to a maximum of $900,000.
Mr. Compofelice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Not
|
|
|
|
|
|
Termination
|
|
Termination in
|
|
|
|
|
Voluntary
|
|
For Cause
|
|
For Cause
|
|
related to Change-
|
|
event of
|
|
Termination in
|
|
|
Termination on
|
|
Termination on
|
|
Termination on
|
|
in-Control on
|
|
Disability on
|
|
event of Death
|
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
on 12/31/2009
|
Compensation:
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
Severance
|
|
$
|
|
|
|
$
|
1,200,000
|
|
|
$
|
|
|
|
$
|
1,794,000
|
|
|
$
|
|
|
|
$
|
|
|
Annual Incentive
1)
|
|
$
|
|
|
|
$
|
600,000
|
|
|
$
|
|
|
|
$
|
600,000
|
|
|
$
|
|
|
|
$
|
|
|
Long-term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic Value of Unvested and Accelerated Stock Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
121,388
|
|
|
$
|
121,388
|
|
|
$
|
121,388
|
|
Intrinsic Value of Unvested and Accelerated Stock
Appreciation Rights
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
225,138
|
|
|
$
|
225,138
|
|
|
$
|
225,138
|
|
Unvested and Accelerated Performance-Based Restricted
Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
75,700
|
|
|
$
|
75,700
|
|
|
$
|
75,700
|
|
Unvested and Accelerated Time-Based Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
267,197
|
|
|
$
|
267,197
|
|
|
$
|
267,197
|
|
Benefits & Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Benefits
|
|
$
|
|
|
|
$
|
3,755
|
|
|
$
|
|
|
|
$
|
11,265
|
|
|
$
|
|
|
|
$
|
|
|
Annual Disability Income *
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
180,000
|
|
|
$
|
|
|
Life Insurance Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
900,000
|
|
Excise Tax & Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,377,223
|
|
|
$
|
|
|
|
$
|
|
|
Total
|
|
$
|
|
|
|
$
|
1,803,755
|
|
|
$
|
|
|
|
$
|
4,171,073
|
|
|
$
|
568,585
|
|
|
$
|
1,288,585
|
|
|
|
|
1)
|
|
For cases of Voluntary Termination, Involuntary Not for
Cause Termination, For Cause Termination and Termination
related to Change in Control, the 2008 annual incentive earned
may be paid to the executive based on the Boards discretion.
|
|
*
|
|
until no longer disabled or Social Security Retirement Age
|
47
Mr. Jones
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
Involuntary Not
|
|
|
|
|
|
related to
|
|
|
|
|
|
|
Voluntary
|
|
For Cause
|
|
For Cause
|
|
Change-in-
|
|
Termination in
|
|
Termination in
|
|
|
Termination on
|
|
Termination on
|
|
Termination on
|
|
Control on
|
|
event of Disability
|
|
event of Death on
|
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
on 12/31/2009
|
|
12/31/2009
|
Compensation:
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
Severance
|
|
$
|
|
|
|
$
|
325,000
|
|
|
$
|
|
|
|
$
|
971,750
|
|
|
$
|
|
|
|
$
|
|
|
Annual Incentive
1)
|
|
$
|
135,625
|
|
|
$
|
330,625
|
|
|
$
|
135,625
|
|
|
$
|
718,675
|
|
|
$
|
135,625
|
|
|
$
|
135,625
|
|
Long-term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic Value of Unvested and Accelerated Stock
Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
42,148
|
|
|
$
|
42,148
|
|
|
$
|
42,148
|
|
Intrinsic Value of Unvested and Accelerated Stock
Appreciation Rights
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
94,022
|
|
|
$
|
94,022
|
|
|
$
|
94,022
|
|
Unvested and Accelerated Performance-Based
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24,457
|
|
|
$
|
24,457
|
|
|
$
|
24,457
|
|
Unvested and Accelerated Time-Based Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
43,248
|
|
|
$
|
43,248
|
|
|
$
|
43,248
|
|
Benefits & Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Benefits
|
|
$
|
|
|
|
$
|
7,510
|
|
|
$
|
|
|
|
$
|
7,510
|
|
|
$
|
|
|
|
$
|
|
|
Annual Disability Income *
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
180,000
|
|
|
$
|
|
|
Life Insurance Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
750,000
|
|
Excise Tax & Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
527,058
|
|
|
$
|
|
|
|
$
|
|
|
Total
|
|
$
|
135,625
|
|
|
$
|
663,135
|
|
|
$
|
135,625
|
|
|
$
|
2,310,389
|
|
|
$
|
401,021
|
|
|
$
|
971,021
|
|
|
|
|
1)
|
|
For cases of Voluntary Termination, Involuntary Not for Cause
Termination, For Cause Termination and Termination related to
Change in Control, the 2008 annual incentive earned may be paid to
the executive based on the Boards discretion.
|
|
*
|
|
until no longer disabled or Social Security Retirement Age
|
Mr. Varma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Not
|
|
|
|
|
|
Termination
|
|
Termination in
|
|
|
|
|
Voluntary
|
|
For Cause
|
|
For Cause
|
|
related to Change-
|
|
event of
|
|
Termination in
|
|
|
Termination on
|
|
Termination on
|
|
Termination on
|
|
in-Control on
|
|
Disability on
|
|
event of Death
|
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
on 12/31/2009
|
Compensation:
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
Severance
|
|
$
|
|
|
|
$
|
325,000
|
|
|
$
|
|
|
|
$
|
971,750
|
|
|
$
|
|
|
|
$
|
|
|
Annual Incentive
1)
|
|
$
|
174,625
|
|
|
$
|
369,625
|
|
|
$
|
174,625
|
|
|
$
|
757,675
|
|
|
$
|
174,625
|
|
|
$
|
174,625
|
|
Long-term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic Value of Unvested and Accelerated Stock
Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
42,148
|
|
|
$
|
42,148
|
|
|
$
|
42,148
|
|
Intrinsic Value of Unvested and Accelerated Stock
Appreciation Rights
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
94,022
|
|
|
$
|
94,022
|
|
|
$
|
94,022
|
|
Unvested and Accelerated Performance-Based
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24,457
|
|
|
$
|
24,457
|
|
|
$
|
24,457
|
|
Unvested and Accelerated Time-Based Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
80,077
|
|
|
$
|
80,077
|
|
|
$
|
80,077
|
|
Benefits & Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Benefits
|
|
$
|
|
|
|
$
|
11,489
|
|
|
$
|
|
|
|
$
|
34,352
|
|
|
$
|
|
|
|
$
|
|
|
Annual Disability Income *
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
180,000
|
|
|
$
|
|
|
Life Insurance Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
750,000
|
|
Excise Tax & Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
574,235
|
|
|
$
|
|
|
|
$
|
|
|
Total
|
|
$
|
174,625
|
|
|
$
|
706,114
|
|
|
$
|
174,625
|
|
|
$
|
2,460,236
|
|
|
$
|
476,850
|
|
|
$
|
1,046,850
|
|
48
|
|
|
1)
|
|
For cases of Voluntary Termination, Involuntary Not for Cause
Termination, For Cause Termination and Termination related to
Change in Control, the 2008 annual incentive earned may be paid to
the executive based on the Boards discretion.
|
|
*
|
|
until no longer disabled or Social Security Retirement Age
|
Mr. Wallace
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Not
|
|
|
|
|
|
Termination
|
|
Termination in
|
|
|
|
|
Voluntary
|
|
For Cause
|
|
For Cause
|
|
related to Change-
|
|
event of
|
|
Termination in
|
|
|
Termination on
|
|
Termination on
|
|
Termination on
|
|
in-Control on
|
|
Disability on
|
|
event of Death on
|
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
Compensation:
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
|
$
|
225,000
|
|
Severance
|
|
$
|
|
|
|
$
|
225,000
|
|
|
$
|
|
|
|
$
|
672,750
|
|
|
$
|
|
|
|
$
|
|
|
Annual Incentive
1)
|
|
$
|
42,188
|
|
|
$
|
170,488
|
|
|
$
|
42,188
|
|
|
$
|
425,805
|
|
|
$
|
42,188
|
|
|
$
|
42,188
|
|
Long-term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic Value of Unvested and Accelerated Stock Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
17,507
|
|
|
$
|
17,507
|
|
|
$
|
17,507
|
|
Intrinsic Value of Unvested and Accelerated Stock
Appreciation Rights
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
31,513
|
|
|
$
|
31,513
|
|
|
$
|
31,513
|
|
Unvested and Accelerated Performance-Based Restricted
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
22,010
|
|
|
$
|
22,010
|
|
|
$
|
22,010
|
|
Unvested and Accelerated Time-Based Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
75,110
|
|
|
$
|
75,110
|
|
|
$
|
75,110
|
|
Benefits & Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Benefits
|
|
$
|
|
|
|
$
|
3,755
|
|
|
$
|
|
|
|
$
|
11,265
|
|
|
$
|
|
|
|
$
|
|
|
Annual Disability Income *
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
135,000
|
|
|
$
|
|
|
Life Insurance Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
675,000
|
|
Repatriation Costs
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
Excise Tax & Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Total
|
|
$
|
42,188
|
|
|
$
|
399,243
|
|
|
$
|
42,188
|
|
|
$
|
1,202,437
|
|
|
$
|
269,805
|
|
|
$
|
809,805
|
|
|
|
|
1)
|
|
For cases of Voluntary Termination, Involuntary Not for Cause
Termination, For Cause Termination and Termination related to
Change in Control, the 2008 annual incentive earned may be paid to
the executive based on the Boards discretion.
|
|
*
|
|
until no longer disabled or Social Security Retirement Age
|
49
Mr. Salazar
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Not
|
|
|
|
|
|
Termination related
|
|
Termination in
|
|
|
|
|
Voluntary
|
|
For Cause
|
|
For Cause
|
|
to Change-in-
|
|
event of
|
|
Termination in
|
|
|
Termination on
|
|
Termination on
|
|
Termination on
|
|
Control on
|
|
Disability on
|
|
event of Death
|
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
12/31/2009
|
|
on 12/31/2009
|
Compensation:
|
|
$
|
230,000
|
|
|
$
|
230,000
|
|
|
$
|
230,000
|
|
|
$
|
230,000
|
|
|
$
|
230,000
|
|
|
$
|
230,000
|
|
Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
230,000
|
|
|
$
|
|
|
|
$
|
|
|
Annual Incentive
1)
|
|
$
|
39,375
|
|
|
$
|
39,375
|
|
|
$
|
39,375
|
|
|
$
|
199,073
|
|
|
$
|
39,375
|
|
|
$
|
39,375
|
|
Long-term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic Value of Unvested and Accelerated Stock
Options
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
17,898
|
|
|
$
|
17,898
|
|
|
$
|
17,898
|
|
Intrinsic Value of Unvested and Accelerated Stock
Appreciation Rights
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
32,216
|
|
|
$
|
32,216
|
|
|
$
|
32,216
|
|
Unvested and Accelerated Performance-Based
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,673
|
|
|
$
|
14,673
|
|
|
$
|
14,673
|
|
Unvested and Accelerated Time-Based Restricted Stock
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
36,606
|
|
|
$
|
36,606
|
|
|
$
|
36,606
|
|
Benefits & Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
11,489
|
|
|
$
|
|
|
|
$
|
|
|
Annual Disability Income *
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
138,000
|
|
|
$
|
|
|
Life Insurance Benefits
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
690,000
|
|
Excise Tax & Gross-Up
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Total
|
|
$
|
39,375
|
|
|
$
|
39,375
|
|
|
$
|
39,375
|
|
|
$
|
495,066
|
|
|
$
|
231,879
|
|
|
$
|
783,879
|
|
|
|
|
1)
|
|
For cases of Voluntary Termination, Involuntary Not for Cause
Termination, For Cause Termination and Termination related to
Change in Control, the 2008 annual incentive earned may be paid to
the executive based on the Boards discretion.
|
|
*
|
|
until no longer disabled or Social Security Retirement Age
|
50
AUDIT COMMITTEE REPORT
During 2009, the Audit Committee was comprised of three members of our Board of Directors: Dr.
Scoggins and Messrs. Burke and Hutcheson.
The duties and responsibilities of the Audit Committee are set forth in the Audit Committee
Charter. The Audit Committee Charter is annually reassessed and updated as needed in accordance
with applicable rules of the SEC and Nasdaq. Each of the present members of the Audit Committee
meets the current Nasdaq independence standards and the independence standard set forth in the
Securities Exchange Act of 1934.
Earlier this year, in preparation for the filing with the SEC of the Companys annual report on
Form 10-K for the year ended December 31, 2009, the Audit Committee:
|
|
|
reviewed and discussed our audited financial statements with management and the
Companys independent auditors;
|
|
|
|
|
discussed separately with management and the Companys independent auditors the
adequacy and integrity of the Companys accounting policies and procedures and internal
accounting controls, the completeness and accuracy of the Companys financial
disclosure and the extent to which major recommendations or changes made by the
Companys independent auditors or the internal auditors have been implemented or
resolved;
|
|
|
|
|
obtained and reviewed a report by the Companys independent auditors
describing: (i) its internal quality-control procedures; (ii) any material issues
raised by: (A) its most recent internal quality-control review or peer review, or (B)
any inquiry or investigation by governmental or professional authorities respecting one
or more independent audits performed by the independent auditors, and any steps taken
to deal with any such issues; and (iii) all relationships between the independent
auditors and the Company to assess the independent auditors independence;
|
|
|
|
|
obtained and reviewed reports from the Companys independent auditors that
include (i) all critical accounting policies and practices used; (ii) all alternative
treatments of financial information within generally accepted accounting principles
(GAAP) that have been discussed with management, their ramifications and the
preferences of the Companys independent auditors; and (iii) other material written
communications between the independent auditors and management;
|
|
|
|
|
reviewed the overall scope and plans for the audit and the results of the
examination with its independent auditors;
|
|
|
|
|
reviewed all fees paid to the independent auditors and considered whether the
rendering of non-audit services is compatible with maintaining the independence of such
independent auditors. These fees are described immediately following this report;
|
|
|
|
|
discussed with the Companys independent auditors the matters required to be
discussed by the Statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company
Accounting Oversight Board in Rule 3200T; and
|
|
|
|
|
received and reviewed the written disclosures and the letter from the Companys
independent auditors required by the Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and discussed with the independent
auditors their independence from the Company.
|
Based on the review and discussions stated above, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Companys annual report on Form
10-K for the year ended December 31, 2009.
Notwithstanding the foregoing actions and the responsibilities set forth in the Audit Committee
charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that
the Companys financial statements are
51
complete and accurate and in accordance with accounting
principles generally accepted in the United States. Management is responsible for the Companys
financial reporting process including its system of internal controls, and for the preparation of
consolidated financial statements in accordance with accounting principles generally accepted in
the United States. The independent auditors are responsible for expressing an opinion on those
financial statements. The Audit Committee has relied, without independent verification, on
managements representation that the financial statements have been prepared with integrity and
objectivity and in conformity with accounting principles generally accepted in the United States
and on the representations of the independent auditors included in their report on the Companys
financial statements.
The Audit Committee meets regularly with management and the independent and internal auditors,
including private discussions with the independent auditors and the Companys internal auditors and
receives the communications described above. The Audit Committee has also established procedures
for (a) the receipt, retention and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters, and (b) the confidential, anonymous
submission by the Companys employees of concerns regarding questionable accounting or auditing
matters. However, this oversight does not provide us with an independent basis to determine that
management has maintained appropriate accounting and financial reporting principles or policies, or
appropriate internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, our considerations and discussions with
management and the independent auditors do not assure that the Companys financial statements are
presented in accordance with accounting principles generally accepted in the United States or that
the audit of the Companys financial statements has been carried out in accordance with generally
accepted auditing standards.
|
|
|
|
|
|
|
|
|
|
|
|
The Audit Committee
|
|
|
|
|
|
|
|
Kenneth M. Burke, Chairman
|
|
Edward C. Hutcheson, Jr.
|
|
Myles W. Scoggins
|
52
PROPOSAL TWO: RATIFY THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed PricewaterhouseCoopers LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2010. The stockholders are being
asked to ratify this appointment at the annual meeting. While stockholder approval of the
appointment of PricewaterhouseCoopers LLP is not required by the Companys charter or bylaws, our
Board of Directors is requesting stockholder ratification as a matter of good corporate practice.
If our stockholders do not ratify the selection of PricewaterhouseCoopers LLP by the affirmative
vote of holders of a majority of shares of common stock present in person or represented by proxy
and entitled to vote at the annual meeting, the Audit Committee will consider the stockholders
decision in making its selection for independent registered public accountants for the fiscal year
ending December 31, 2011.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the annual meeting
and will have an opportunity to make a statement if they desire to do so. They will also be
available to respond to appropriate questions from stockholders.
Independent Registered Public Accounting Firm Fees
PricewaterhouseCoopers LLP has billed us the following amounts for professional services
rendered during each of the fiscal years represented:
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
Audit Fees
(1)
|
|
$
|
3,605,809
|
|
|
$
|
2,524,485
|
|
Audit Related Fees
(2)
|
|
$
|
295,000
|
|
|
$
|
57,280
|
|
Tax Fees
(3)
|
|
$
|
55,868
|
|
|
$
|
45,678
|
|
All Other Fees
(4)
|
|
$
|
3,030
|
|
|
$
|
3,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
3,959,706
|
|
|
$
|
2,630,473
|
|
|
|
|
|
|
|
(1)
|
|
Reflects fees for services rendered for the audit of our annual financial statements for the
fiscal year indicated and reviews of the financial statements contained in our quarterly reports
on Form 10-Q for that fiscal year. Audit fees in 2009 include $303,000 related to various SEC
services, and $525,000 of statutory audits for our various foreign subsidiaries. Audit fees in
2008 include $240,000 related to various SEC services and $116,000 of statutory audits for our
various foreign subsidiaries.
|
|
(2)
|
|
Reflects fees for assurance and related services that are reasonably related to the performance
of the audit or review of our financial statements and are not reported under Audit Fees.
|
|
(3)
|
|
Reflects fees for professional services rendered for tax compliance, tax advice, and tax planning.
|
|
(4)
|
|
Reflects fees for accounting research and internal audit software licenses.
|
Pre-Approval Process
All of the services performed by PricewaterhouseCoopers LLP in 2009 were pre-approved by the
Audit Committee. Any requests for audit, audit-related, tax and other services must be submitted
to the Audit Committee for specific pre-approval. Normally, pre-approval is considered at regularly
scheduled meetings. None of the services described above were approved by the Audit Committee under
the de minimus exception provided by Rule 2-01(C)(7)(i)(C) under Regulation S-X. During the year,
the Audit Committee Chairman has the authority to pre-approve requests for services that were not
pre-approved at a regularly scheduled audit committee meeting and the Chairman will present such
pre-approval to the Audit Committee at the next regularly scheduled Audit Committee meeting.
Recommendation of the Board
The Audit Committee and the Board have unanimously determined that the ratification of
PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year
ending December 31, 2010 is advisable and in the best interests of the Company and its stockholders
and unanimously recommend that the Companys stockholders vote FOR Proposal 2.
53
PROPOSAL 3: APPROVAL OF THE TRICO MARINE SERVICES, INC.
2010 LONG-TERM INCENTIVE PLAN
General
The Trico Marine Services, Inc. 2010 Long-Term Incentive Plan (the 2010 Incentive Plan) was
approved by our Board of Directors on April 8, 2010. Our Board recommends that our stockholders
approve the 2010 Incentive Plan. The following is a summary of the material features of the 2010
Incentive Plan, which is qualified in its entirety by reference to the copy of the 2010 Incentive
Plan attached hereto as Appendix A and incorporated herein by reference in its entirety.
Summary of the 2010 Incentive Plan
The purpose of the 2010 Incentive Plan is to advance the interests of the Company and its
stockholders by providing incentives to certain employees and other key individuals who perform
services for us, including those who contribute significantly to the strategic and long-term
performance objectives and growth of the Company. The Companys Amended and Restated 2004 Stock
Incentive Plan has been in place for a number of years; however, as of April ___, 2010, only 223,583
shares remain available for issuance under that plan. Therefore, the number of authorized shares
for issuance will soon become insufficient. Adopting the 2010 Incentive Plan would allow us to
increase the total number of shares authorized for issuance as awards for employees, would allow us
to continue to claim tax deductions for certain types of employee compensation, and would implement
certain clarifying and technical changes as compared to our existing plan. The Board believes
adoption of the 2010 Incentive Plan will help us attract, motivate and retain the services of key
employees and directors and align the interests of such persons with stockholders by providing
participants in the Plan with the opportunity to share in the appreciation in value of the
Companys common stock that their efforts bring about. The 2010 Incentive Plan is more fully
described below.
The 2010 Incentive Plan is administered by the Board or, if the Board so designates, by a
committee of the Board. Our Board has designated the Boards Compensation Committee to administer
the 2010 Incentive Plan. The Compensation Committee may delegate administrative responsibilities if
so permitted by applicable law, other than with respect to executive officers who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The 2010
Incentive Plan provides for the granting of several types of awards, including stock options, stock
appreciation rights, or SARs (rights to receive, without payment to us, cash, common stock, other
property or any combination thereof, based on the increase in the value of the number of shares of
common stock specified in the award), restricted stock (an award of a number of shares of common
stock that are subject to certain restrictions, such as a requirement that the shares shall be
forfeited if the holders employment or performance of services for us terminates), performance
grants (cash, shares of common stock, other consideration such as other of our companys securities
or property or a combination thereof that is paid based on the performance of the holder, our
company, one or more of our subsidiaries, divisions or units, or any combination thereof) and other
awards deemed by the Compensation Committee to be consistent with the purposes of the 2010
Incentive Plan. Awards may be granted alone, or in conjunction with one or more other awards, as
determined by the Compensation Committee.
A maximum of 1,500,000 shares of our common stock will be authorized to be issued under the
2010 Incentive Plan in connection with the grant of awards, subject to adjustments described below.
As of April
, 2010, the market value of the common stock that may be granted under the 2010
Incentive Plan was $_,
,
. The common stock issued under the 2010 Incentive Plan may be
either newly issued shares, treasury shares, reacquired shares or any combination thereof. If our
common stock issued as restricted stock or otherwise subject to repurchase or forfeiture rights is
reacquired by us pursuant to such rights, or if any award is canceled, terminates or expires
unexercised, the common stock which would otherwise have been issuable pursuant to such awards will
be available for issuance under new awards.
Our Compensation Committee will have exclusive discretion to select the employees and other
key individuals performing services for us to whom awards will be granted; to determine the type,
size and terms of each award; to
54
modify within certain limits the terms of any award; to determine the time when awards will be
granted; to establish performance objectives; to prescribe the form of documents representing
awards under the 2010 Incentive Plan; and to make all other determinations that it deems necessary
or desirable in the interpretation and administration of the 2010 Incentive Plan. No person may
receive an award under the 2010 Incentive Plan for more than 500,000 Shares in any calendar year
(subject to adjustments for stock splits, stock dividends and similar events), or for more than
$5,000,000 in any calendar year. Our Compensation Committee will have the authority to administer
and interpret the 2010 Incentive Plan, and its decisions will be final, conclusive and binding. We
currently anticipate that approximately 20 of our employees or other key individuals will be
eligible to participate in the 2010 Incentive Plan. It is not possible to determine awards that
will be made under the 2010 Incentive Plan to any person, nor is it possible to estimate the amount
of awards that any person might have received under the 2010 Incentive Plan in the last completed
fiscal year if the plan had been in effect during that year.
Awards under the 2010 Incentive Plan
Stock Options
. A stock option, which may be a nonqualified or an incentive stock
option, is the right to purchase a specified number of shares of our common stock at a price fixed
by the Compensation Committee. The option exercise price for nonqualified options may be equal to
or greater than the fair market value of the common stock on the date of grant. In the case of
incentive stock options, the option exercise price may not be less than the fair market value of
the underlying shares of common stock on the date of grant and, with respect to incentive stock
options granted to our employees or any of our affiliates who own more than 10% of the voting power
of all classes of our stock or the stock of any of our affiliates, the option exercise price may
not be less than 110% of fair market value on the date of the grant.
Stock options will generally expire not later than 7 years or, in the case of incentive stock
options granted to employees who own more than 10% of our stock, five years, after the date on
which they are granted. Stock options become exercisable at such times and in such installments as
the Compensation Committee determines. Payment of the option exercise price must be made in full
at the time of exercise in cash, by tendering to us shares of common stock, by a combination
thereof or by any other means that the Compensation Committee deems appropriate, which may include
the surrender of rights in one or more outstanding awards.
Restricted Stock
. The 2010 Incentive Plan authorizes the grant of restricted stock on terms
and conditions established by the Compensation Committee, which may include performance conditions.
The terms and conditions will include the designation of a restriction period during which the
shares are not transferable and are subject to forfeiture.
Other Awards
. The 2010 Incentive Plan also authorizes several other types of awards.
These include SARs and performance grants.
Additional Information
Under the 2010 Incentive Plan, if any change in the outstanding shares of common stock occurs
by reason of a stock split, reverse stock split, stock dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision
or exchange of shares, any distribution to stockholders other than a normal cash dividend, or other
extraordinary or unusual event, then our Compensation Committee shall make an equitable adjustment
in the terms of any outstanding award or in the number of shares of common stock available for
awards. Upon a change in control of the Company, the Compensation Committee may provide for the
adjustment and settlement of outstanding awards as it deems appropriate and consistent with the
purpose of the 2010 Incentive Plan.
The 2010 Incentive Plan permits our Compensation Committee to determine whether it is
advisable for us or any of our affiliates to provide financing in connection with the exercise of
an award and the payment of related taxes, or to assist in obtaining financing from a bank or other
third party in this regard. Such assistance may take any form and be on such terms as our
Compensation Committee considers appropriate, which may include a direct loan, a guaranty of the
obligation to a third party or the maintenance by us or any of our affiliates of deposits with a
bank or third party.
55
Our Compensation Committee may permit payment of taxes required to be withheld with respect to
an award in any appropriate manner, which may include by the surrender to us of shares of common
stock owned by such person or that would otherwise be distributed, or have been distributed, as the
case may be, pursuant to such award. Generally, no awards under the 2010 Incentive Plan may be assigned or transferred in whole or in
part, either directly or by operation of law or otherwise (except in the event of a holders
death), although our Compensation Committee may approve transfers of awards to certain permitted
transferees as defined under the 2010 Incentive Plan.
The expenses of the 2010 Incentive Plan are borne by us. The 2010 Incentive Plan will
terminate upon the earlier of the adoption of a resolution by the Board terminating the 2010
Incentive Plan or the close of business on the tenth anniversary of the effective date, unless
extended by action of the Board for up to an additional five years for the grant of awards other
than incentive stock options. However, the Compensation Committee may not grant any award under
the 2010 Incentive Plan after the tenth anniversary of the earlier of the adoption of the 2010
Incentive Plan by the Board and the effective date.
The Board may amend the 2010 Incentive Plan at any time and from time to time. However, if
failure to obtain stockholder approval would adversely affect compliance of the 2010 Incentive Plan
with any applicable law or regulation, no amendment will be effective unless and until approved by
stockholders. In addition, the Compensation Committee may in its discretion amend the terms of any
previously granted award in any manner it deems appropriate, including acceleration of the date of
exercise of any award or payments thereunder but excluding any repricing of such award, if the
Compensation Committee could grant such amended award under the terms of the 2010 Incentive Plan at
the time of such amendment. No amendment of the 2010 Incentive Plan and, subject to limited
exceptions, no amendment to any previously granted award may adversely affect in a material manner
any right of any participant with respect to the previously granted award without such
participants written consent.
Federal Income Tax Consequences
The following is a summary of certain current federal income tax consequences to us and to an
award recipient of the issuance and exercise of options under the 2010 Incentive Plan. This
summary does not describe all federal tax consequences under the 2010 Incentive Plan, nor does it
describe state, local or foreign tax consequences.
Incentive Stock Options
. No taxable income is realized by the award recipient upon
the grant or exercise of an incentive stock option. However, the exercise of an incentive stock
option may result in alternative minimum tax liability for the award recipient. If the award
recipient does not dispose of the shares received upon exercise of an incentive stock option within
two years from the date of grant and within one year after the transfer of such shares to the award
recipient, then upon sale of such shares, any amount realized in excess of the exercise price will
be taxed to the award recipient as a long-term capital gain and any loss sustained will be a
long-term capital loss. In that case, we will not be allowed any deduction for federal income tax
purposes.
If the shares of common stock acquired upon the exercise of an incentive stock option are
disposed of prior to the expiration of the two-year or one-year holding periods described above,
generally the award recipient will realize ordinary income in the year of disposition. The
ordinary income will equal the amount of the excess (if any) of the fair market value of the shares
at exercise (or, if less, the amount realized on an arms-length sale of such shares) over the
exercise price thereof, and we will be entitled to deduct such amount. Any further gain realized
will be taxed as short-term or long-term capital gain and will not result in any deduction by us.
Special rules may apply where all or a portion of the exercise price of the incentive stock option
is paid by tendering shares of common stock.
If an incentive stock option is exercised at a time when it does not qualify for the tax
treatment described above, the option is treated as a nonqualified stock option. Generally, an
incentive stock option will not be eligible for the tax treatment described above if it is
exercised more than three months following termination of employment (one year following
termination of employment by reason of permanent and total disability), except in certain cases
where the incentive stock option is exercised after the death of an employee.
56
Nonqualified Options
. No income is realized by the award recipient at the time a
nonqualified stock option is granted under the 2010 Incentive Plan. Generally, upon exercise,
ordinary income is realized by the award recipient in an amount equal to the difference between the
option price and the fair market value of the shares on the date of exercise, and we receive a tax
deduction for the same amount. At disposition, appreciation or depreciation after the date of
exercise is treated as either short-term or long-term capital gain or loss, depending on how long
the shares have been held.
Restricted Stock
. Unless an award recipient who receives an award of restricted stock makes
an election under Section 83(b) of the Internal Revenue Code (Section 83(b) Election) as
described below, the recipient generally is not required to recognize ordinary income on the award
of restricted stock. Instead, on the date the shares vest (i.e., become transferable or no longer
subject to forfeiture), the recipient will be required to recognize ordinary income in an amount
equal to the excess, if any, of the fair market value of the shares on such date over the amount,
if any, paid for such shares. If a recipient makes a Section 83(b) Election to recognize ordinary
income on the date the shares are awarded, the amount of ordinary income required to be recognized
is an amount equal to the excess, if any, of the fair market value of the shares on the date of
award over the amount, if any, paid for such shares. In such case, the recipient will not be
required to recognize additional ordinary income when the shares vest.
In general, gain or loss from the disposition of shares of stock will be treated as capital
gain or loss, provided that the shares are held as capital assets at the time of the disposition,
and in such case such gain or loss shall be either short-term or long-term capital gain or loss,
depending on how long the shares have been held.
Vote
At the meeting, the approval of the 2010 Incentive Plan requires the affirmative vote of a
majority of the shares of common stock present in person or represented by proxy and entitled to
vote at the annual meeting.
Recommendation of the Board
The Board has unanimously determined that approval of the 2010 Incentive Plan is advisable and
in the best interests of the Company and its stockholders and unanimously recommends that the
Companys stockholders vote FOR Proposal 3.
PROPOSAL 4: APPROVAL OF THE CHARTER AMENDMENT INCREASING IN THE
AUTHORIZED SHARES OF THE COMPANYS COMMON STOCK TO 100,000,000
General
The Board of Directors has unanimously approved, subject to stockholders approval, an
amendment to the Companys Second Amended and Restated Certificate of Incorporation, as amended, to
increase the authorized number of shares of our common stock from 50,000,000 shares to 100,000,000
shares. The Board has determined that this amendment is advisable and has recommended that it be
adopted by the stockholders. A copy of the proposed charter amendment is attached to this proxy
statement as Appendix B.
Purposes and Effects of the Proposal
The proposed increase in authorized common stock has been recommended by the Board of
Directors. In 2008, the Companys stockholders approved an increase in the number of authorized
shares of common stock from 25,000,000 to 50,000,000. The Board believes that an increase in the
authorized shares will provide it with an adequate supply of authorized, unissued shares of common
stock for raising funds needed to meet anticipated debt service payments and other general
corporate needs. The increase in authorized shares would also provide the Board with the necessary
flexibility to issue common stock in connection with financings, stock splits and stock dividends,
and employee, executive and director benefits plans without the expense and delay incidental to
obtaining stockholder approval of an amendment to the charter at the time of such action.
57
The Company has already agreed to reserve an amount of common stock issuable upon conversion
of options, warrants and other convertible securities. As of April 16, 2010, we had
,
,
shares of our common stock outstanding. There are another 19,237,950 shares of our common stock
currently issuable upon exercise or conversion of outstanding convertible securities (assuming
conversion of our convertible debentures at the initial conversion rate). These include 1,787,813
shares of our common stock that would be issuable upon exercise of outstanding stock options and
phantom stock units to purchase our common stock, and a maximum of up to 17,450,137 shares of our
common stock that may, under certain circumstances, be issued pursuant to holders of our 3% and
8.125% convertible debentures, based on the operation of a net settlement feature of such
convertible debentures.
The Company does not presently have any definitive plans, arrangements or understandings with
respect to issuing additional authorized shares of common stock. However, as disclosed more fully
in our 2009 annual report on Form 10-K, the Company has recently experienced sharply lower levels
of liquidity, and our forecasted cash and available credit capacity are not expected to be
sufficient to meet our commitments as they come due over the next twelve months. In order to
increase our liquidity to levels sufficient to meet our commitments, we are currently evaluating a
number of actions and exploring alternative methods of raising additional funds, including the
possibility of issuing additional equity securities.
When issued, any additional shares of common stock authorized by the amendment will have the
same rights and privileges as the shares of common stock currently authorized and outstanding.
Holders of common stock have no preemptive rights and, accordingly, stockholders would not have any
preferential rights to purchase any of the additional shares of common stock when such shares are
issued.
Although our board will issue common stock only when required or when the board considers such
issuance to be in the best interests of our stockholders, the issuance of additional shares of
common stock may, among other things, have a dilutive effect on the earnings per share (if any) and
on the equity and voting rights of stockholders. Furthermore, since Delaware law requires the vote
of a majority of shares of each class of stock in order to approve certain mergers and
reorganizations, the proposed amendment could permit the Board to issue shares to persons
supportive of managements position. Such persons might then be in a position to vote to prevent a
proposed business combination that is deemed unacceptable to the Board, although it may be
perceived to be desirable by some stockholders, including, potentially, a majority of stockholders.
This could provide management with a means to block any majority vote which might be necessary to
effect a business combination in accordance with applicable law, and could enhance the ability of
our directors to retain their positions. Additionally, the presence of such additional authorized
but unissued shares of common stock could discourage unsolicited business combination transactions
that might otherwise be desirable to stockholders.
The increase in the authorized shares of common stock has not, however, been proposed for an
anti-takeover-related purpose and we have no knowledge of any current efforts to obtain control of
the Company or to effect large accumulations of our common stock. This Proposal 4 is not part of
any plan by the Company to adopt a series of amendments to its charter or bylaws to make a takeover
of the Company more difficult. Moreover, we are not submitting this Proposal 4 to enable us to
block any efforts by another party to acquire a controlling interest or to seek representation on
the Board.
The Board does not intend to seek stockholder approval prior to any issuance of shares of
common stock that would become authorized by the amendment unless otherwise required by law or
regulation. Frequently, opportunities arise that require prompt action, and it is the belief of the
Board that the delay necessitated for stockholder approval of a specific issuance could be to the
detriment of the Company and its stockholders.
Our board believes that the benefits of providing it with the flexibility to issue shares
without delay for any proper business purpose outweigh the possible disadvantages discussed above,
and that it is advisable and in the best interests of stockholders to provide the advantage of
greater flexibility which will result from the amendment.
Subject to stockholder approval of Proposal 4, the first sentence of Article FOUR of the
Companys Second Amended and Restated Certificate of Incorporation, as amended, would be amended
and restated in its entirety to read as follows:
58
FOUR: Stock. The total number of shares of all classes of stock which the Corporation shall have
authority to issue is One Hundred-Five Million (105,000,000) shares, par value $.01 per share, of
which One Hundred Million (100,000,000) shall be common stock (the Common Stock) and Five Million
(5,000,000) shall be Preferred Stock (Preferred Stock).
If the proposed charter amendment as outlined in this Proposal 4 is approved by the
stockholders, the Board will cause a Certificate of Amendment reflecting the adopted amendment to
be filed with the Secretary of State of Delaware. The Certificate of Amendment will be effective
upon its filing.
If the stockholders do not adopt this Proposal, a Certificate of Amendment will not be filed
with the Secretary of State of Delaware. The Company might also be required to find alternative
means to finance its capital needs besides issuing shares of common stock, or may be unable to
pursue future acquisition opportunities. Even if other alternatives financing alternatives were
available, they might require additional indebtedness or may not be available on favorable terms.
No Appraisal Rights
No appraisal rights are available under the Delaware General Corporation Law for our
stockholders in connection with the proposal to approve the proposed charter amendment.
Vote
The affirmative vote of a majority of the outstanding shares of Companys common stock is
required for approval of the proposed amendment to the Companys Second Amended and Restated
Certificate of Incorporation, as amended, to increase the authorized shares of the Companys common
stock, par value $0.001 from 50,000,000 to 100,000,000.
Recommendation of the Board
The Board has unanimously determined that the charter amendment to increase the number of
authorized shares of the Companys common stock is advisable and in the best interests of the
Company and its stockholders and unanimously recommends that the Companys stockholders vote FOR
Proposal 4.
PROPOSAL 5: APPROVAL OF THE CHARTER AMENDMENT DECLASSIFYING THE BOARD OF
DIRECTORS
General
The Board has unanimously approved, subject to stockholders approval, an amendment (the
Declassification Amendment) to the Companys Second Amended and Restated Certificate of
Incorporation, as amended, to phase-in the declassification of our Board of Directors. The Board
has determined that the Declassification Amendment is advisable and has recommended that it be
adopted by the stockholders. A copy of the proposed charter amendment is attached to this proxy
statement as Appendix C.
Background
Currently, members of our Board are elected for staggered terms of three years. If the
Declassification Amendment were approved, commencing with the class of directors standing for
election at the Companys 2011 annual meeting of stockholders, directors would stand for election
for one year terms, expiring at the next succeeding annual meeting of stockholders. The directors
elected at the 2010 Annual Meeting, whose term will expire in 2013, and the class of directors
whose terms are due to expire in 2012, would continue to hold office until the end of the terms for
which they are elected and would stand for election for one year terms thereafter. Commencing with
the annual meeting held in 2013, all directors would stand for election for one year terms. If the
Declassification Amendment were approved and the size of the Board were increased, resulting in a
new directorship, then a person elected to fill the newly created directorship would hold office
until the next annual
59
meeting of stockholders. If a vacancy occurred on the Board as a result of the removal or
resignation of a director or some other reason, then a person elected to fill such vacancy would
serve for the remaining term of his predecessor. In all cases, each director would hold office
until his or her successor were elected and qualified or until the directors earlier resignation
or removal.
Our current classified board structure, in which directors are divided into three classes
serving staggered three-year terms, has been in place since 2004. At the Companys 2009 annual
meeting, stockholders approved a proposal to recommend declassifying the Board. The resolution
approved by stockholders stated that the declassification may be completed in a manner that does
not affect the unexpired terms of previously elected directors. In light of stockholders
recommendation, our Board met in 2009 to evaluate stockholders recommendation and determine
whether it is advisable to adopt an amendment to the Companys charter to eliminate the Boards
classification. After careful consideration, and upon the recommendation of the Nominating and
Governance Committee, our Board determined that it is appropriate to propose declassifying the
Board over a phase-in period, commencing with the 2011 annual meeting of stockholders, by adopting
the Declassification Amendment.
Subject to stockholder approval of Proposal 5, Article FIVE Section 2 of the Companys Second
Amended and Restated Certificate of Incorporation, as amended, would be amended and restated in its
entirety to read as follows:
Section 2. Election of Directors. Commencing with the annual meeting of stockholders in the
calendar year 2011, directors shall be elected to hold office until the next annual meeting of
stockholders; provided that the terms of directors elected prior to such annual meeting will not be
shortened. For the avoidance of doubt, the term of directors elected at the 2009 annual meeting of
stockholders shall expire at the annual meeting of stockholders to be held during calendar year
2012, and the term of directors elected at the 2010 annual meeting of stockholders shall expire at
the annual meeting of stockholders to be held during calendar year 2013. In all cases, each
director shall hold office until his or her successor shall have been duly elected and qualified.
In addition, the last sentence of Article FIVE Section 4 of the Companys Second Amended and
Restated Certificate of Incorporation, as amended, would be deleted, and in lieu thereof the
following sentences would be added to such Article FIVE Section 4:
A person elected to fill a newly created directorship resulting from an increase in the size of
the Board of Directors shall hold office until the next annual meeting of stockholders. A person
elected by the Board of Directors or by a vote of the stockholders to fill a vacancy occurring on
the Board of Directors for any other reason shall have the same remaining term as that of his
predecessor. In all cases, each director shall hold office until his or her successor shall have
been duly elected and qualified.
If the proposed charter amendment as outlined in this Proposal 5 is approved by the
stockholders, the Board will cause a Certificate of Amendment reflecting the adopted amendment to
be filed with the Secretary of State of Delaware. The Certificate of Amendment will be effective
upon its filing.
If the stockholders do not adopt this Proposal, a Certificate of Amendment will not be filed
with the Secretary of State of Delaware.
No Appraisal Rights
No appraisal rights are available under the Delaware General Corporation Law for our
stockholders in connection with the proposal to approve the proposed charter amendment.
Vote
The affirmative vote of a majority of the outstanding shares of Companys common stock is
required for approval of the proposed amendment to the Companys Second Amended and Restated
Certificate of Incorporation, as amended, to de-classify the Board.
60
Recommendation of the Board
The Board has unanimously determined that the charter amendment to de-classify the Board is
advisable and in the best interests of the Company and its stockholders and unanimously recommends
that the Companys stockholders vote FOR Proposal 5.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive
officers and 10% stockholders to file with the SEC reports of ownership and changes in ownership of
our equity securities. Based solely upon a review of the copies of the Form 3, 4 and 5 reports
furnished to us and certifications from our directors and executive officers, we believe that
during 2009, all of our directors, executive officers and beneficial owners of more than 10% of our
common stock complied with Section 16(a) filing requirements applicable to them.
INCORPORATION BY REFERENCE
Neither the Compensation Committee Report nor the Audit Committee Report shall be deemed
soliciting material or filed with the SEC and none of them shall be deemed incorporated by
reference into any prior or future filings made by us under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended (the Exchange Act), nor shall such reports be
subject to the liabilities of Section 18 of the Exchange Act, except, in each such case, to the
extent that we specifically incorporate such information by reference. In addition, this document
includes several website addresses. These website addresses are intended to provide inactive,
textual references only. The information on these websites is not part of this document.
By Order of the Board of Directors,
Rishi A. Varma
Corporate Secretary
Houston, Texas
April
, 2010
61
Appendix A
Trico Marine Services, Inc.
2010 Long-Term Incentive Plan
Section
1.
Purpose
.
The purpose of this Plan is to advance the interests of Trico Marine
Services and its stockholders by providing incentives to certain Eligible Persons (as defined
below) who contribute significantly to the strategic and long-term performance objectives and
growth of the Company.
Section
2.
Definitions
.
Certain capitalized terms applicable to this Plan are set forth in
Appendix A.
Section
3.
Administration
.
The Committee will administer this Plan and will have all the
powers vested in it by the terms of this Plan, such powers to include exclusive authority to select
the Eligible Persons to be granted Awards under this Plan, to determine the type, size, terms and
conditions of the Award to be made to each Eligible Person selected, to modify or waive the terms
and conditions of any Award that has been granted, to determine the time when Awards will be
granted, to establish performance objectives, to make any adjustments necessary or desirable as a
result of the granting of Awards to Eligible Persons located outside the United States and to
prescribe the form of the agreements evidencing Awards made under this Plan. Awards may, in the
discretion of the Committee, be made under this Plan in assumption of, or in substitution for,
outstanding Awards previously granted by the Company, or an entity acquired by the Company or with
which the Company combines. The number of Shares underlying such substitute Awards will be counted
against the aggregate number of Shares available for Awards under this Plan.
The Committee is authorized to interpret this Plan and the Awards granted under this Plan, to
establish, amend and rescind any rules and regulations relating to this Plan, and to make any other
determinations that it deems necessary or desirable for the administration of this Plan. The
Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan
or in any Award in the manner and to the extent the Committee deems necessary or desirable to carry
it into effect. Any decision of the Committee in the interpretation and administration of this
Plan, as described in this Plan, will lie within its sole and absolute discretion and will be
final, conclusive and binding on all parties concerned. The Committee may act only by a majority of
its members in office,
except
that the Committee may authorize any one or more of its members or
any officer of the Company to execute and deliver documents or to take any other ministerial action
on behalf of the Committee with respect to Awards made to Participants or to be made to Eligible
Persons. Notwithstanding the foregoing or any other provision of this Plan, the Committee will not
have the authority to accelerate or defer the time or schedule of any payment in a manner which is
not permitted under Code Section 409A, or to grant or amend any Award in any manner which would
result in an inclusion of any amount in gross income under Code Section 409A(a)(1).
No member of the Committee and no officer of the Company will be liable for anything done or
omitted to be done by such member or officer, by any other member of the Committee or by any
officer of the Company in connection with the performance of duties under this Plan,
except
for
such members or officers own willful misconduct or as expressly provided by law. In addition to
all other rights of indemnification and reimbursement to which a member of the Committee and an
officer of the Company may be entitled, Trico Marine Services will indemnify and hold harmless each
such member or officer who
A-1
was or is a party or is threatened to be made a party to any threatened, pending or completed
proceeding or suit in connection with the performance of duties under this Plan against expenses
(including reasonable attorneys fees), judgments, fines, liabilities, losses and amounts paid in
settlement actually and reasonably incurred by him in connection with such proceeding or suit,
except
for his own willful misconduct or as expressly provided otherwise by law. Expenses
(including reasonable attorneys fees) incurred by such a member or officer in defending any such
proceeding or suit will be paid by Trico Marine Services in advance of the final disposition of
such proceeding or suit upon receipt of a written affirmation by such member or officer of his good
faith belief that he has met the standard of conduct necessary for indemnification and a written
undertaking by or on behalf of such member or officer to repay such amount if it is ultimately
determined that he is not entitled to be indemnified by Trico Marine Services as authorized in this
Section.
Section
4.
Participation
.
Consistent with the purposes of this Plan, the Committee will have
exclusive power to select the Eligible Persons who may participate in this Plan and be granted
Awards under this Plan. Eligible Persons may be selected individually or by groups or categories,
as determined by the Committee in its discretion.
Section
5.
Awards under this Plan
.
(a)
Types of Awards
. Awards under this Plan may include, but need not be limited to, one or more
of the following types, either alone or in any combination: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Restricted Stock Units, (v) Performance Grants
and (vi) any other type of Award deemed by the Committee in its discretion to be consistent with
the purposes of this Plan (including, but not limited to, Awards of or options or similar rights
granted with respect to unbundled stock units or components of such units, and Awards to be made to
Participants who are foreign nationals or are employed or performing services outside the United
States).
(b)
Maximum Number of Shares and Other Property that May be Issued
. An aggregate of not more than
1,500,000 Shares, subject to adjustment as provided in Section 15, may be issued under this Plan
(as Restricted Stock, as Restricted Stock Units, in payment of Performance Grants, pursuant to the
exercise of Stock Options or Stock Appreciation Rights or in payment of or pursuant to the exercise
of such other Awards as the Committee, in its discretion, may determine). No Eligible Person may
receive Awards under this Plan (i) for more than 500,000 Shares in any one calendar year, subject
to adjustment as provided in Section 15, or (ii) for more than $5,000,000 in any one calendar year
(for Awards including a cash component, with any Shares, Other Trico Securities or property or
other permitted forms of payment paid in satisfaction of such Awards valued at Fair Market Value).
Shares issued pursuant to this Plan may be either authorized but unissued Shares, treasury Shares,
reacquired Shares or any combination. If any Award is canceled, terminates or expires unexercised,
then any Shares that would otherwise have been issuable pursuant to such Awards will be available
for issuance under new Awards. If any Shares issued as Restricted Stock or Restricted Stock Units,
or otherwise subject to repurchase or forfeiture rights, are reacquired by the Company pursuant to
such rights, then such Shares will be available for issuance under new Awards. Shares issuable
under any Award that are withheld for tax obligations or to make payment for any Award will be
counted against the maximum number of Shares issuable under the Plan. If any Stock Options or
Stock Appreciation Rights are settled by the issuance of Shares, then the number of Shares covered
by such Stock Options or Stock Appreciation Rights (rather than the number of Shares so issued)
will be counted against the maximum number of Shares issuable under the Plan.
A-2
(c)
Rights with Respect to Shares and Other Securities
. Except as provided in subsection 8(c)
with respect to Awards of Restricted Stock and unless otherwise determined by the Committee in its
discretion, a Participant to whom an Award is made (and any person succeeding to such a
Participants rights pursuant to this Plan) will have no rights as a stockholder with respect to
any Shares or as a holder with respect to other securities, if any, issuable pursuant to any such
Award until the date of the issuance of a book entry or stock certificate to such Participant for
such Shares or other instrument of ownership, if any. Except as provided in Section 15, no
adjustment will be made for dividends, distributions or other rights (whether ordinary or
extraordinary, and whether in cash, securities, other property or other forms of consideration, or
any combination) for which the record date is prior to the date such book entry or stock
certificate or other instrument of ownership, if any, is required to be issued based upon the date
any Award was exercised. In all events, a Participant with whom an Award agreement is made to
issue Shares in the future will have no rights as a stockholder with respect to such Shares related
to such agreement until issuance to such Participant of a book entry or stock certificate
representing such Shares.
Section 6.
Stock Options
.
The Committee may sell Purchased Options or grant other Stock
Options either alone, or in conjunction with other Awards, either at the time of grant or by
subsequent amendment;
provided
that an Incentive Stock Option may be granted only to Eligible
Persons who are employees of Trico Marine Services (or any parent or subsidiary of Trico Marine
Services) and who have other Awards only to the extent that such other Awards do not disqualify the
Incentive Stock Options status as such under the Code. Each Stock Option granted or sold under
this Plan will be evidenced by an agreement in such form as the Committee will prescribe from time
to time in accordance with this Plan and will comply with the applicable terms and conditions of
this Plan, and with such other terms and conditions, including, but not limited to, restrictions
upon the Stock Option or the Shares issuable upon exercise of such Stock Option, as the Committee,
in its discretion, may establish.
(a)
The exercise price of a Stock Option may be equal to or greater than the Fair Market Value of
the Shares subject to such Stock Option at the time the Stock Option is granted, as determined by
the Committee;
provided, however
, that in the case of an Incentive Stock Option granted to a Ten
Percent Employee, such exercise price will not be less than 110% of such Fair Market Value at the
time the Stock Option is granted.
(b)
The Committee will determine the number of Shares to be subject to each Stock Option. In the
case of a Stock Option awarded in conjunction with another Award, the number of Shares subject to
an outstanding Stock Option may be reduced on an appropriate basis to the extent that the other
Award has been exercised, paid to or otherwise received by the Participant, as determined by the
Committee.
(c)
Any Stock Option may be exercised during its term only at such time or times and in such
installments as the Committee may establish.
(d)
A Stock Option will not be exercisable:
(i)
in the case of any Incentive Stock Option granted to a Ten Percent Employee, after the
expiration of five years from the date it is granted, and, in the case of any other Stock Option,
after the expiration of seven years from the date it is granted; and
A-3
(ii)
unless payment in full is made for the Shares being acquired under such Stock Option at the
time of exercise as provided in subsection 6(h).
(e)
The Committee will determine in its discretion and specify in each agreement evidencing a
Stock Option the effect, if any, the termination of the Participants employment with or
performance of services for the Company will have on the exercisability of the Stock Option;
provided, however
, that an Incentive Stock Option will not be exercisable at a time that is beyond
the time an Incentive Stock Option may be exercised in order to qualify as such under the Code and
provided, further
, that if a Participants employment is terminated for a reason other than cause
(as defined in such Participants Award agreement or employment agreement, if any), then such
Participants right to exercise his or her Stock Options (to the extent that the Participant is
entitled to exercise on the date employment terminates) will continue until the earlier of the
option expiration date or (i) at least six (6) months from the date of termination if termination
was caused by death or disability and (ii) at least thirty (30) days from the date of termination
if termination was caused by other than death or disability.
(f)
It is the intent of Trico Marine Services that Nonqualified Stock Options granted under this
Plan not be classified as Incentive Stock Options, that the Incentive Stock Options granted under
this Plan be consistent with and contain or be deemed to contain all provisions required under
Section 422 and the other appropriate provisions of the Code and any implementing regulations (and
any successor provisions), and that any ambiguities in construction will be interpreted in order to
effectuate such intent. If a Stock Option is intended to be an Incentive Stock Option, and if for
any reason such Stock Option (or portion) fails to qualify as an Incentive Stock Option, then, to
the extent of such failure, such Stock Option (or portion) will be regarded as a Nonqualified Stock
Option granted under this Plan; provided, that, such Stock Option (or portion) otherwise complies
with this Plans requirements relating to Nonqualified Stock Options. In no event will any member
of the Committee or the Company (or its employees, officers or directors) have any liability to any
Participant (or any other person) due to the failure of a Stock Option to qualify for any reason as
an Incentive Stock Option.
(g)
A Purchased Option may contain such additional terms not inconsistent with this Plan,
including but not limited to the circumstances under which the purchase price of such Purchased
Option may be returned to the holder of the Purchased Option, as the Committee may determine in its
sole discretion.
(h)
For purposes of payments made to exercise Stock Options, such payment will be made in such
form (including, but not limited to, cash, Shares, the surrender of all or part of an Award or
another outstanding Award under this Plan or any combination) as the Committee may determine in its
discretion.
Section 7.
Stock Appreciation Rights
.
The Committee may grant Stock Appreciation Rights either
alone, or in conjunction with other Awards, either at the time of grant or by subsequent amendment.
Each Award of Stock Appreciation Rights granted under this Plan will be evidenced by an agreement
in such form as the Committee will prescribe from time to time in accordance with this Plan and
will comply with the applicable terms and conditions of this Plan, and with such other terms and
conditions, including, but not limited to, restrictions upon the Award of Stock Appreciation Rights
or the Shares issuable upon exercise of such Award, as the Committee, in its discretion, may
establish.
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(a)
The Committee will determine the number of Shares to be subject to each Award of Stock
Appreciation Rights. In the case of an Award of Stock Appreciation Rights awarded in conjunction
with another Award, the number of Shares subject to an outstanding Award of Stock Appreciation
Rights may be reduced on an appropriate basis to the extent that the other Award has been
exercised, paid to or otherwise received by the Participant, as determined by the Committee.
(b)
The Committee will determine in its discretion and specify in each agreement evidencing an
Award of Stock Appreciation Rights the effect, if any, the termination of the Participants
employment with or performance of services for the Company may have on the exercisability of the
Award of Stock Appreciation Rights.
(c)
An Award of Stock Appreciation Rights will entitle the holder to exercise such Award or to
surrender unexercised another Award (or any portion of such other Award) to Trico Marine Services
and to receive from Trico Marine Services in exchange, without payment to Trico Marine Services,
that number of Shares having an aggregate value equal to (or, in the discretion of the Committee,
less than) the excess of the Fair Market Value of one Share, at the time of such exercise, over the
exercise price, times the number of Shares subject to the Award (or portion of such Award), that is
so exercised or surrendered, as the case may be. The Committee will be entitled in its discretion
to elect to settle the obligation arising out of the exercise of a Stock Appreciation Right by the
payment of cash or Other Trico Securities or property, or other forms of payment or any
combination, as determined by the Committee, equal to the aggregate value of the Shares it would
otherwise be obligated to deliver. Any such election by the Committee will be made as soon as
practicable after the receipt by the Committee of written notice of the exercise of the Stock
Appreciation Right.
(d)
A Stock Appreciation Right may provide that it will be deemed to have been exercised at the
close of business on the business day preceding the expiration date of the Stock Appreciation Right
or of the related Stock Option (or other Award), or such other date as specified by the Committee,
if at such time such Stock Appreciation Right has a positive value. Such deemed exercise will be
settled or paid in the same manner as a regular exercise as provided in subsection 7(d) of this
Agreement.
Section 8.
Restricted Stock and Restricted Stock Units
.
The Committee may grant Awards of
Restricted Stock and Restricted Stock Units either alone, or in conjunction with other Awards,
either at the time of grant or by subsequent amendment. Each Award of Restricted Stock or
Restricted Stock Units under this Plan will be evidenced by an agreement in such form as the
Committee may prescribe from time to time in accordance with this Plan and will comply with the
applicable terms and conditions of this Section and this Plan, and with such other terms and
conditions as the Committee, in its discretion, may establish.
(a)
The Committee will determine the number of Shares to be issued to a Participant pursuant to
the Award of Restricted Stock or Restricted Stock Units, and the extent, if any, to which they will
be issued in exchange for cash, other consideration, or both.
(b)
Until the expiration of such period as the Committee will determine from the date on which the
Award is granted and subject to such other terms and conditions as the Committee in its discretion
may establish (the
Restricted Period
), a Participant to whom an Award of Restricted Stock is made
will be
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issued, but will not be entitled to the delivery of, a book entry or stock certificate
representing the Shares subject to such Award.
(c)
Unless otherwise determined by the Committee in its discretion, a Participant to whom an Award
of Restricted Stock has been made (and any person succeeding to such a participants rights
pursuant to this Plan) will have, after issuance of a certificate for the number of Shares awarded
and prior to the expiration of the Restricted Period, ownership of such Shares, including the right
to vote such Shares and to receive dividends or other distributions made or paid with respect to
such Shares (
provided
that such Shares or Other Trico Securities or property, or other forms of
consideration that the Participant may be entitled to receive with respect to such Shares as a
result of a stock split, stock dividend or any other change in the corporation or capital structure
of Trico Marine Services, will be subject to the restrictions set forth in this Plan as determined
by the Committee in its discretion), subject, however, to the options, restrictions and limitations
imposed pursuant to this Plan.
(d)
The Committee will determine in its discretion and specify in each agreement evidencing an
Award of Restricted Stock or Restricted Stock Units the effect, if any, the termination of the
Participants employment with or performance of services for the Company during the Restricted
Period will have on such Award of Restricted Stock.
(e)
The Committee may grant Awards of Dividend Equivalents to Participants in connection with
Awards of Restricted Stock Units. The Committee may provide, at the date of grant or later, that
Dividend Equivalents will be paid or distributed when accrued or will be deemed to have been
reinvested in additional Shares, or other investment vehicles as the Committee may specify;
provided that, unless otherwise determined by the Committee, Dividend Equivalents will be subject
to all conditions and restrictions of the underlying Restricted Stock Units to which they relate.
Section 9.
Performance Grants
.
The Committee may grant Awards of Performance Grants either
alone, or in conjunction with other Awards, either at the time of grant or by subsequent amendment.
The Award of a Performance Grant to a Participant will entitle him to receive a specified amount
determined by the Committee (the
Actual Value
), if the terms and conditions specified in this
Plan and in the Award are satisfied. Each Award of a Performance Grant will be subject to the
applicable terms and conditions of this Plan, and to such other terms and conditions, including but
not limited to, restrictions upon any cash, Shares, Other Trico Securities or property, or other
forms of payment, or any combination, issued with respect to the Performance Grant, as the
Committee, in its discretion, may establish, and will be embodied in an agreement in such form and
substance as is determined by the Committee.
(a)
The Committee will determine the value or range of values of a Performance Grant to be awarded
to each Participant selected for an Award and whether or not such a Performance Grant is granted in
conjunction with another Award. As determined by the Committee, the maximum value of each
Performance Grant (the
Maximum Value
) will be: (i) an amount fixed by the Committee at the time
the Award is made or subsequently amended, (ii) an amount that varies from time to time based in
whole or in part on the then current value of the Shares, Other Trico Securities or property, or
other securities or property, or any combination or (iii) an amount that is determinable from
criteria specified by the Committee. Performance Grants may be issued in different classes or
series having different names, terms and conditions. In the case of a Performance Grant awarded in
conjunction with another Award, the
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Performance Grant may be reduced on an appropriate basis to the extent that the other Award
has been exercised, paid to or otherwise received by the Participant, as determined by the
Committee.
(b)
The award period (
Award Period
) related to any Performance Grant will be a period determined
by the Committee. At the time each Award is made or within the first 90 days of any performance
period, the Committee will establish performance objectives to be attained within the Award Period
as the means of determining the Actual Value of such a Performance Grant. The performance
objectives will be based on such measure or measures of performance, which may include, but need
not be limited to, the performance of the Participant, the Company or one or more of its divisions
or units, or any combination of the foregoing, as the Committee may determine, and may be applied
on an absolute basis or be relative to industry or other indices or any combination. The Actual
Value of a Performance Grant will be equal to its Maximum Value only if the performance objectives
are attained in full, but the Committee will specify the manner in which the Actual Value of
Performance Grants will be determined if the performance objectives are met in part. Such
performance measures, the Actual Value or the Maximum Value, or any combination, may be adjusted in
any manner by the Committee in its discretion at any time and from time to time during or as soon
as practicable after the Award Period, if it determines that such performance measures, the Actual
Value or the Maximum Value, or any combination, are not appropriate under the circumstances.
(c)
The Committee will determine in its discretion and specify in each agreement evidencing a
Performance Grant the effect, if any, the termination of the Participants employment with or
performance of services for the Company during the Award Period will have on such Performance
Grant.
(d)
The Committee will determine whether the conditions of a Performance Grant have been met and,
if so, will ascertain the Actual Value of the Performance Grant. If the Performance Grant has no
Actual Value, the Award and such Performance Grant will be deemed to have been canceled and the any
associated Award, if any, may be canceled or permitted to continue in effect in accordance with its
terms. If the Performance Grant has any Actual Value and:
(i)
was not awarded in conjunction with another Award, the Committee will cause an amount equal to
the Actual Value of the Performance Grant earned by the Participant to be paid to him or his
permitted assignee or Beneficiary; or
(ii)
was awarded in conjunction with another Award, the Committee will determine, in accordance
with criteria specified by the Committee (A) to cancel the Performance Grant, in which event no
amount will be paid to the Participant or his permitted assignee or Beneficiary, and the associated
Award may be permitted to continue in effect in accordance with its terms, (B) to pay the Actual
Value of the Performance Grant to the Participant or his permitted assignee or Beneficiary as
provided below, in which event the associated Award may be canceled or (C) to pay to the
Participant or his Beneficiary, the Actual Value of only a portion of the Performance Grants, in
which event all or a portion of the associated Award may be permitted to continue in effect in
accordance with its terms or be canceled, as determined by the Committee.
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Such determination by the Committee will be made as promptly as practicable following the end
of the Award Period or upon the earlier termination of employment or performance of services, or at
such other time or times as the Committee will determine, and will be made pursuant to criteria
specified by the Committee.
(e)
Payment of any amount with respect to the Performance Grants that the Committee determines to
pay as provided above will be made by Trico Marine Services as promptly as practicable after the
end of the Award Period or at such other time or times as the Committee may determine, and may be
made in cash, Shares, Other Trico Securities or property, or other forms of payment, or any
combination or in such other manner, as determined by the Committee in its discretion.
Notwithstanding anything in this Section to the contrary, the Committee may, in its discretion,
determine and pay out the Actual Value of the Performance Grants at any time during the Award
Period.
(f)
The performance measures established by the Committee with respect to Performance Grants
to Participants subject to Section 162(m) must be based upon (i) the price of a Share, (ii)
earnings per share, (iii) market share, (iv) sales, (v) net income (before or after taxes), (vi)
cash flow return on investment, (vii) earnings before or after interest, taxes, depreciation,
and/or amortization, (viii) economic value added, (ix) return on stockholders equity, (x) total
stockholders return, (xi) other financial measures used by Trico in its public reports (in each of
clauses (ii) through (xi) above, such measures can be for Trico or for any business unit of the
Company designated by the Committee), or (xii) a combination of any of the foregoing. The
Committee, in its sole discretion, may provide for an adjustable Performance Award value based upon
the level of achievement of performance measures. The performance measures may be absolute,
relative to one or more other companies, or relative to one or more indexes.
Section 10.
Deferral of Compensation
.
The Committee may determine that an Award will be made in
conjunction with the deferral of the Participants salary, bonus or other compensation, or any
combination, and whether or not such deferred amounts may be (i) forfeited to Trico Marine Services
or to other Participants or any combination, under certain circumstances (which may include, but
need not be limited to, certain types of termination of employment or performance of services for
the Company); (ii) subject to increase or decrease in value based upon the attainment of or failure
to attain, respectively, certain performance measures; and/or;(iii) credited with income
equivalents (which may include, but need not be limited to, interest, dividends or other rates of
return) until the date or dates of payment of the Award, if any. Notwithstanding the foregoing or
any other provision of this Plan, any deferral of compensation under this Section 10 must comply
with the provisions of Code Section 409A, and no deferral of compensation under this Section 10
which would result in an inclusion of any amount in gross income under Code Section 409A(a)(1) is
permitted.
Section 11.
Deferred Payment of Awards
.
The Committee may specify that the payment of all or
any portion of cash, Shares, Other Trico Securities or property, or any other form of payment, or
any combination, under an Award will be deferred until a later date. Deferrals will be for such
periods or until the occurrence of such events, and upon such terms, as the Committee may determine
in its discretion, provided however, that any such deferral will comply with the requirements of
Code Section 409A. Deferred payments of Awards may be made by undertaking to make payment in the
future based upon the performance of certain investment equivalents (which may include, but need
not be limited to, government securities, Shares, other securities, property or consideration, or
any combination), together with such additional amounts of income equivalents (which may be
compounded and may include, but need not be
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limited to, interest, dividends or other rates of return or any combination) as may accrue
until the date or dates of payment, such investment equivalents and such additional amounts of
income equivalents to be determined by the Committee in its discretion.
Section 12.
Transferability of Awards
.
A Participants rights and interest under this Plan or
any Award may not be assigned or transferred, hypothecated or encumbered in whole or in part either
directly or by operation of law or otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner;
provided, however,
the
Committee may permit such transfer to a Permitted Transferee; and
provided, further
, that, unless
otherwise permitted by the Code, any Incentive Stock Option granted pursuant to this Plan will not
be transferable other than by will, by the laws of descent and distribution, and will be
exercisable during the Participants lifetime only by Participant or by such Permitted Transferee.
Section 13.
Amendment or Substitution of Awards under this Plan
.
(a)
The terms of any outstanding Award under this Plan may be amended or modified from time to
time by the Committee in its discretion in any manner that it deems appropriate (including, but not
limited to, acceleration of the date of exercise of any Award and/or payments under such Award) if
the Committee could grant such amended or modified Award under the terms of this Plan at the time
of such amendment or modification;
provided
that:
(i)
no such amendment or modification will adversely affect in a material manner any right of
a Participant under the Award without such Participants written consent, unless the Committee
determines in its discretion that significant changes have occurred or are about to occur in the
Participants position, duties or responsibilities, or in economic, legislative, regulatory, tax,
accounting or cost/benefit conditions that are determined by the Committee in its discretion to
have or to be expected to have a substantial effect on the performance of the Company, or any
affiliate, division or department, on this Plan or on any Award under this Plan;
(ii)
the Committee will not have the authority to accelerate or defer the time or schedule of
any payment in a manner which is not permitted under Code Section 409A, or to grant or amend any
Award in any manner which would result in an inclusion of any amount in gross income under Code
Section 409A(a)(1); and
(iii)
other than in connection with any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, rights offering, split-up,
split-off, spin-off, combination, subdivision or exchange of shares, or other extraordinary or
unusual event, the terms of outstanding Awards be not amended to reduce the applicable exercise
price without stockholder approval.
(b)
The Committee may, in its discretion, permit holders of Awards under this Plan to
surrender outstanding Awards in order to exercise or realize the rights under other Awards, or in
exchange for the grant of new Awards, or require holders of Awards to surrender outstanding Awards
as a condition precedent to the grant of new Awards under this Plan;
provided
that, other than in
connection with any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, rights offering, split-up, split-off, spin-off, combination,
subdivision or exchange of shares, or other extraordinary or unusual event, Awards may not be
exchanged without stockholder approval for (i) cash in an amount that is greater than the
in-the-money value of the Award or (ii) other Awards with
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exercise prices that are less than the exercise price of the original Award,
Section 14.
Termination of a Participant
.
For all purposes under this Plan, the Committee will
determine whether a Participant has terminated employment with, or the performance of services for,
the Company,
provided, however
, an absence or leave approved by the Company, to the extent
permitted by applicable provisions of the Code, will not be considered an interruption of
employment or performance of services for any purpose under this Plan.
Section 15.
Dilution and Other Adjustments
.
If any change in the outstanding Shares of the
Company occurs by reason of any stock split, reverse stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization,
combination, subdivision or exchange of Shares, any distribution to stockholders other than a
normal cash dividend, or other extraordinary or unusual event, the Committee will make such
adjustment in: (i) the aggregate number of Shares that may be delivered under the Plan as described
in Section 5(b) and the individual Award maximums under Section 5(b); (ii) the number and exercise
price of outstanding Stock Options and outstanding Stock Appreciation Rights; (iii) the number of
outstanding Restricted Stock Units; and (iv) the number of Shares subject to any other Awards
granted under the Plan (provided that the number of Shares of subject to Awards will always be a
whole number), in each case as may be determined to be appropriate by the Committee, and such
adjustments will be final, conclusive and binding for all purposes of the Plan. The Committee may
also provide for the adjustment and settlement of outstanding Awards as it deems appropriate and
consistent with the Plans purpose in the event of a change in control of Trico Marine Services,
and such adjustments or settlements will be final, conclusive and binding for all purposes of the
Plan.
Section 16.
Designation of Beneficiary by Participant
.
A Participant may name a beneficiary to
receive any payment to which such Participant may be entitled with respect to any Award under this
Plan in the event of death, on a written form to be provided by and filed with the Committee, and
in a manner determined by the Committee in its discretion (a
Beneficiary
). The Committee reserves
the right to review and approve Beneficiary designations. A Participant may change his Beneficiary
from time to time in the same manner, unless such Participant has made an irrevocable designation.
Any designation of a Beneficiary under this Plan (to the extent it is valid and enforceable under
applicable law) will be controlling over any other disposition, testamentary or otherwise, as
determined by the Committee in its discretion. If no designated Beneficiary survives the
Participant and is living on the date on which any amount becomes payable to such a Participants
Beneficiary, such payment will be made to the legal representatives of the Participants estate,
and the term
Beneficiary
as used in this Plan will be deemed to include such person or persons.
If any questions as to the legal right of any Beneficiary to receive a distribution under this Plan
arise, the Committee in its discretion may determine that the amount in question be paid to the
legal representatives of the estate of the Participant, in which event the Company, the Board, the
Committee, the Designated Administrator (if any), and their members will have no further liability
to anyone with respect to such amount.
Section 17.
Financial Assistance
.
If the Committee determines that such action is advisable,
the Company may assist any Participant in obtaining financing from the Company (or under any
program of the Company approved pursuant to applicable law), or from a bank or other third party,
on such terms as are determined by the Committee, and in such amount as is required to accomplish
the purposes of this Plan, including, but not limited to, to permit the exercise of an Award, the
participation in an Award, and/or the payment of any taxes with respect to such Award. Such
assistance may take any form that the Committee deems appropriate, including, but not limited to, a
direct loan from the Company, a guarantee of the
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obligation by the Company or the maintenance by the Company of deposits with such bank or
third party.
Section 18.
Miscellaneous Provisions
.
(a)
Any proceeds from Awards will constitute general funds of Trico Marine Services.
(b)
Except as otherwise determined by the Committee, no fractional Shares may be delivered under
an Award, but in lieu of fractions a cash or other adjustment may be made as determined by the
Committee in its discretion.
(c)
No Eligible Person or other person will have any claim or right to be granted an Award under
this Plan. Determinations made by the Committee under this Plan need not be uniform and may be made
selectively among Eligible Persons under this Plan, whether or not such Eligible Persons are
similarly situated. Neither this Plan nor any action taken under this Plan will be construed as
giving any Eligible Person any right to continue to be employed by or perform services for the
Company, and the right to terminate the employment of or performance of services by Eligible
Persons at any time and for any reason is specifically reserved to the Company.
(d)
No Participant or other person will have any right with respect to this Plan, the Shares
reserved for issuance under this Plan or in any Award, contingent or otherwise, until written
evidence of the Award will have been delivered to the recipient and all the terms, conditions and
provisions of this Plan and the Award applicable to such recipient (and each person claiming under
or through him) have been met.
(e)
No Shares, Other Trico Securities, other securities or property or other forms of payment will
be issued with respect to any Award unless counsel for Trico Marine Services is satisfied that such
issuance will be in compliance with applicable law and any applicable rules of any stock exchange
or other market quotation system on which Shares are listed.
(f)
It is the intent of Trico Marine Services that this Plan comply in all respects with any
applicable provisions of Rule 16b-3 and Section 162(m) with respect to Awards granted to executive
officers of Trico Marine Services, that any ambiguities or inconsistencies in construction of this
Plan be interpreted to give effect to such intention and that if any provision of this Plan is
found not to be in compliance with any applicable provisions of Rule 16b-3 or Section 162(m), such
provision will be deemed null and void with respect to Awards granted to executive officers of the
Company to the extent required to permit such Awards to comply with Rule 16b-3 and Section 162(m).
It is also the intent of Trico Marine Services that this Plan comply in all respects with the
provisions of the Code providing favorable treatment to Incentive Stock Options, that any
ambiguities or inconsistencies in construction of this Plan be interpreted to give effect to such
intention and that if any provision of this Plan is found not to be in compliance with the
Incentive Stock Option provisions of the Code, such provision will be deemed null and void with
respect to Incentive Stock Options granted to employees of Trico Marine Services (or any parent or
subsidiary of Trico Marine Services) to the extent required to permit such Incentive Stock Options
to receive favorable treatment under the Code.
It is the intent of Trico Marine Services that this Plan comply in all respects with any
applicable provisions of Code Section 409A with respect to Awards granted under this plan and any
amendment or revision of such Awards, that any ambiguities or inconsistencies in construction of
this Plan be interpreted to give effect to such intention and that if any provision of this Plan is
found not to be in compliance with
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any applicable provisions of Code Section 409A such Plan provision will be deemed null and
void to the extent required to permit such Awards to comply with any applicable provisions of Code
Section 409A. Specifically, the Committee will not have the authority to accelerate or defer the
time or schedule of any payment in a manner which is not permitted under Code Section 409A or the
regulations issued thereunder, or to grant or amend any Award in any manner which would result in
an inclusion of any amount in gross income under Code Section 409A(a)(1).
(g)
The Company will have the right to deduct from any payment made under this Plan any federal,
state, local or foreign income or other taxes required by law to be withheld with respect to such
payment. It will be a condition to any obligation of Trico Marine Services to issue Shares, Other
Trico Securities or property, other securities or property, or other forms of payment, or any
combination, upon exercise, settlement or payment of any Award under this Plan, that the
Participant (or any Beneficiary or person entitled to act) pay to Trico Marine Services, upon its
demand, such amount as may be required by the Company for the purpose of satisfying any liability
to withhold federal, state, local or foreign income or other taxes. If the amount requested is not
paid, Trico Marine Services may refuse to issue Shares, Other Trico Securities or property, other
securities or property, or other forms of payment, or any combination. Notwithstanding anything in
this Plan to the contrary, the Committee may, in its discretion, permit a Participant (or any
Beneficiary or person entitled to act) to elect to pay a portion or all of the amount requested by
the Company for such taxes with respect to such Award, at such time and in such manner as the
Committee deems to be appropriate (including, but not limited to, by authorizing Trico Marine
Services to withhold, or agreeing to surrender to Trico Marine Services on or about the date such
tax liability is determinable, Shares, Other Trico Securities or property, other securities or
property, or other forms of payment, or any combination, owned by such person or a portion of such
forms of payment that would otherwise be distributed, or have been distributed, as the case may be,
pursuant to such Award to such person, having a Fair Market Value equal to the amount of such
taxes).
(h)
The expenses of this Plan will be borne by Trico Marine Services;
provided, however
, Trico
Marine Services may recover from a Participant or his Beneficiary, heirs or assigns any and all
damages, fees, expenses and costs incurred by the Company arising out of any actions taken by a
Participant in breach of this Plan or any agreement evidencing such Participants Award.
(i)
This Plan will be unfunded. The Company will not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment of any Award under
this Plan, and rights to the payment of Awards will be no greater than the rights of the Companys
general creditors.
(j)
By accepting any Award or other benefit under this Plan, each Participant and each person
claiming under or through such Participant will be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, any action taken under this Plan by the Company,
the Board, the Committee or the Designated Administrator (if applicable).
(k)
The appropriate officers of the Company will cause to be filed any reports, returns or
other information regarding Awards or Shares issued pursuant to this Plan as may be required by
applicable law and any applicable rules of any stock exchange or other market quotation system on
which Shares are listed.
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(l)
The validity, construction, interpretation, administration and effect of this Plan, and of
its rules and regulations, and rights relating to this Plan and to Awards granted under this Plan,
will be governed by the substantive laws, but not the choice of law rules, of the State of
Delaware.
(m)
Records of the Company will be conclusive for all purposes under this Plan or any Award,
unless determined by the Committee to be incorrect.
(n)
If any provision of this Plan or any Award is held to be illegal or invalid for any
reason, the illegality or invalidity will not affect the remaining provisions of this Plan or any
Award, but such provision will be fully severable, and this Plan or Award, as applicable, will be
construed and enforced as if the illegal or invalid provision had never been included in this Plan
or Award, as applicable.
(o)
The terms of this Plan will govern all Awards under this Plan and in no event will the
Committee have the power to grant any Award under this Plan that is contrary to any of the
provisions of this Plan.
(p)
For purposes of interpretation of this Plan, the masculine pronoun includes the feminine
and the singular includes the plural wherever appropriate.
Section 19.
Plan Amendment or Suspension
.
This Plan may be amended or suspended in whole or in
part at any time from time to time by the Board. No amendment of this Plan will adversely affect in
a material manner any right of any Participant with respect to any Award previously granted without
such Participants written consent, except as permitted under Section 13.
Section 20.
Plan Termination
.
This Plan will terminate upon the earlier of the following dates
or events to occur:
(a)
the adoption of a resolution of the Board terminating this Plan; or
(b)
the close of business on the tenth anniversary of the Effective Date;
provided, however
, that
the Board may, prior to such date, extend the term of this Plan for an additional period of up to
five years for the grant of Awards other than Incentive Stock Options. No termination of this Plan
will materially alter or impair any of the rights or obligations of any Participant, without such
Participants consent, under any Award previously granted under this Plan,
except
that subsequent
to termination of this Plan, the Committee may make amendments or modifications permitted under
Section 13. Notwithstanding anything in this Plan to the contrary, the Committee will not grant
any Award pursuant to this Plan after the tenth anniversary of the earlier to occur of (i) the date
this Plan is adopted by the Board and (ii) the Effective Date.
Section 21.
Effective Date
.
This Plan will be effective, and Awards may be granted under this
Plan, on or after the Effective Date.
A-13
APPENDIX A
The following terms will have the meaning indicated:
Actual Value
has the meaning set forth in Section 9.
Award
will mean an award of rights to an Eligible Person under this Plan.
Award Period
has the meaning set forth in subsection 9(b).
Beneficiary
has the meaning set forth in Section 16.
Board
will mean the board of directors of Trico Marine Services.
Change of Control
includes each of the following: (i) any merger, consolidation or business
combination in which the stockholders of Trico Marine Services immediately prior to the merger,
consolidation or business combination do not own at least a majority of the outstanding equity
interests of the surviving parent entity; (ii) the sale of all or substantially all of Trico Marine
Services assets; (iii) the acquisition of beneficial ownership or control of (including, without
limitation, power to vote) a majority of the outstanding shares of voting stock of Trico Marine
Services by any person or entity (including a group as defined by or under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended); (iv) the dissolution or liquidation of Trico
Marine Services; (v) a contested election of directors, as a result of which or in connection with
which the persons who were directors of Trico Marine Services before such election or their
nominees cease to constitute a majority of the Board of Directors of Trico Marine Services; or (vi)
the consummation of any substantially similar event specified by the Board of Directors of Trico
Marine Services.
Code
will mean the Internal Revenue Code of 1986, as it now exists or may be amended from
time to time, and the rules and regulations promulgated thereunder, as they may exist or may be
amended from time to time.
Code Section 409A
will mean Section 409A of the Code, any rules or regulations promulgated
thereunder, as they may exist or may be amended from time to time, and any successor to such
section.
Committee
will mean the person or persons responsible for administering this Plan. The Board
will constitute the Committee until the Board appoints a Board Committee, after which time the
Board Committee will constitute the Committee, provided, however, that at any time the Board may
designate itself as the Committee or designate itself to administer certain of the Committees
authority under this Plan, including administering certain Awards under this Plan, subject to
satisfying the requirements of Rule 16b-3 and Section 162(m), if applicable. The Board or the Board
Committee may designate a Designated Administrator to constitute the Committee or to administer
certain of the Committees authority under this Plan, including administering certain Awards under
this Plan, subject to the right of the Board or the Board Committee, as applicable, to revoke such
designation at any time and to make such designation on such terms and conditions as it may
determine in its discretion. For purposes of this definition, the
Board
A-14
Committee
will mean a committee of the Board designated by the Board to administer this Plan.
Except as otherwise determined by the Board, the Board Committee (i) will be comprised of not fewer
than two directors, (ii) will meet any applicable requirements under Rule 16b-3, including any
requirement that the Board Committee consist of nonemployee directors (as defined in Rule 16b-3),
(iii) will meet any applicable requirements under Section 162(m), including any requirement that
the Board Committee consist of outside directors (as defined in Treasury Regulation
§1.162-27(e)(3)(i) or any successor regulation), and (iv) will meet any applicable requirements of
any stock exchange or other market quotation system on which Shares are listed. For purposes of
this definition, the
Designated Administrator
will mean one or more persons designated by the
Board or a Board Committee to act as a Designated Administrator pursuant to this Plan. Except as
otherwise determined by the Board, a Designated Administrator will only be appointed if Rule 16b-3
and Section 162(m) permits such appointment and the exercise of any authority without adversely
affecting the ability of Awards to officers of Trico Marine Services to comply with the conditions
for Rule 16b-3 or Section 162(m). The resolutions of the Board or Board Committee designating the
authority of the Designated Administrator will (i) specify the total number of Shares subject to
Awards that may be granted pursuant to this Plan by the Designated Administrator, (ii) may not
authorize the Designated Administrator to designate him or herself as the recipient of any Awards
pursuant to this Plan and (iii) will otherwise comply with the requirements of applicable law.
Company
will mean Trico Marine Services and any subsidiary or affiliate of Trico Marine
Services.
Dividend Equivalents
will mean an Award of cash or other Awards with a Fair Market Value
equal to the dividends which would have been paid on the Shares underlying an outstanding Award of
Restricted Stock Units had such Shares been outstanding.
Effective Date
will mean the date this plan is adopted by stockholders of Trico Marine
Services.
Eligible Person(s)
will mean those persons who are full or part-time employees of the
Company or other individuals who perform services for the Company, including, without limitation,
directors who are not employees of the Company and consultants and advisors who perform services
for the Company.
Exchange Act
will mean the Securities Exchange Act of 1934, as it now exists or may be
amended from time to time, and the rules promulgated thereunder, as they may exist or may be
amended from time to time.
Fair Market Value
will mean such value rounded up to the nearest cent as determined by the
Committee by reasonable application of a reasonable valuation method in accordance with applicable
law, including Code Section 409A.
Incentive Stock Option
will mean a Stock Option that is an incentive stock option as defined
in Section 422 of the Code. Incentive Stock Options are subject, in part, to the terms, conditions
and restrictions described in Section 6.
Maximum Value
has the meaning set forth in subsection 9(a).
A-15
Nonqualified Stock Option
will mean a Stock Option that is not an incentive stock option as
defined in Section 422 of the Code. Nonqualified Stock Options are subject, in part, to the terms,
conditions and restrictions described in Section 6.
Other Trico Securities
will mean Trico Marine Services securities (which may include, but
need not be limited to, unbundled stock units or components of such units, debentures, preferred
stock, warrants, securities convertible into Shares or other property) other than Shares.
Participant
will mean an Eligible Person to whom an Award has been granted under this Plan.
Performance Grant
will mean an Award subject, in part, to the terms, conditions and
restrictions described in Section 9, pursuant to which the recipient may become entitled to receive
cash, Shares, Other Trico Securities or property, or other forms of payment, or any combination, as
determined by the Committee.
Permitted Transferee
means, except as otherwise determined by the Committee, (i) any person
defined as an employee in the Instructions to Registration Statement Form S-8 promulgated by the
Securities and Exchange Commission, as such Form may be amended from time to time, which persons
include, as of the date of adoption of this Plan, executors, administrators or beneficiaries of the
estates of deceased Participants, guardians or members of a committee for incompetent former
Participants, or similar persons duly authorized by law to administer the estate or assets of
former Participants, (ii) Participants family members who acquire Awards from the Participant
other than for value, through a gift or a domestic relations order, and (iii) any trust established
for the benefit of any person described in clause (i) above. For purposes of this definition,
family member
includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the
Participants household (other than a tenant or employee), a trust in which these persons have more
than fifty percent of the beneficial interest, a foundation in which these persons (or the
Participant) control the management of assets, and any other entity in which these persons (or the
Participant) own more than fifty percent of the voting interests. For purposes of this definition,
neither (i) a transfer under a domestic relations order in settlement of marital property rights;
nor (ii) a transfer to an entity in which more than fifty percent of the voting interests are owned
by family members (or the Participant) in exchange for an interest in that entity is considered a
transfer for
value
.
Plan
will mean this Trico Marine Services, Inc. 2010 Long-Term Incentive Plan.
Purchased Option
will mean a Stock Option that is sold to an Eligible Person at a price
determined by the Committee. Purchased Options are subject, in part, to the terms, conditions and
restrictions described in Section 6.
A-16
Restricted Period
has the meaning set forth in subsection 8(b).
Restricted Stock
will mean an Award of Shares that is issued subject, in part, to the terms,
conditions and restrictions described in Section 8.
Restricted Stock Units
will mean an Award of a right to receive Shares that is issued
subject, in part, to the terms, conditions and restrictions described in Section 8.
Rule 16b-3
will mean Rule 16b-3 promulgated by the Securities and Exchange Commission under
the Exchange Act and any successor rule.
Section 162(m)
will mean §162(m) of the Code, any rules or regulations promulgated
thereunder, as they may exist or may be amended from time to time, or any successor to such
section.
Shares
will mean shares of common stock, par value $.01 per share, of Trico Marine Services
and stock of any other class into which such shares may be changed.
Stock Appreciation Right
will mean an Award of a right to receive (without payment to Trico
Marine Services) cash, Shares, Other Trico Securities or property, or other forms of payment, or
any combination, as determined by the Committee, based on the increase in the value of the number
of Shares specified in the Stock Appreciation Right. Stock Appreciation Rights are subject, in
part, to the terms, conditions and restrictions described in Section 7.
Stock Option
will mean an Award of a right to purchase Shares. The term Stock Option will
include Nonqualified Stock Options, Incentive Stock Options and Purchased Options.
Ten Percent Employee
will mean an employee of the Company who owns stock representing more
than ten percent of the voting power of all classes of stock of Trico Marine Services or any parent
or subsidiary of Trico Marine Services.
Treasury Regulation
will mean a final, proposed or temporary regulation of the Department of
Treasury under the Code and any successor regulation.
Trico
Marine Services
will mean Trico Marine Services, Inc., a Delaware corporation
A-17
Appendix B
AMENDMENT TO SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED
The first sentence of Article FOUR of the Companys Second Amended and Restated Certificate of
Incorporation, as amended, shall be amended and restated in its entirety to read as follows:
FOUR:
Stock
. The total number of shares of all classes of stock which the Corporation
shall have authority to issue is One Hundred-Five Million (105,000,000) shares, par value $.01 per
share, of which One Hundred Million (100,000,000) shall be common stock (the Common Stock) and
Five Million (5,000,000) shall be Preferred Stock (the Preferred Stock).
B-1
Appendix C
AMENDMENT TO SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED
Article FIVE Section 2 of the Companys Second Amended and Restated Certificate of
Incorporation, as amended, shall be amended and restated in its entirety to read as follows:
Section 2.
Election of Directors
. Commencing with the annual meeting of stockholders
in the calendar year 2011, directors shall be elected to hold office until the next annual meeting
of stockholders; provided that the terms of directors elected prior to such annual meeting will not
be shortened. For the avoidance of doubt, the term of directors elected at the 2009 annual meeting
of stockholders shall expire at the annual meeting of stockholders to be held during calendar year
2012, and the term of directors elected at the 2010 annual meeting of stockholders shall expire at
the annual meeting of stockholders to be held during calendar year 2013. In all cases, each
director shall hold office until his or her successor shall have been duly elected and qualified.
The last sentence of Article FIVE Section 4 of the Companys Second Amended and Restated
Certificate of Incorporation, as amended, shall be deleted, and in lieu thereof the following
sentences shall be added to such Article FIVE Section 4:
A person elected to fill a newly created directorship resulting from an increase in the size
of the Board of Directors shall hold office until the next annual meeting of stockholders. A
person elected by the Board of Directors or by a vote of the stockholders to fill a vacancy
occurring on the Board of Directors for any other reason shall have the same remaining term as that
of his predecessor. In all cases, each director shall hold office until his or her successor shall
have been duly elected and qualified.
C-1
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED IN PROPOSAL 1 BELOW, FOR THE
RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS FOR THE YEAR ENDED DECEMBER 31,
2010 IN PROPOSAL 2, FOR APPROVING THE TRICO MARINE SERVICES, INC. 2010 LONG-TERM INCENTIVE PLAN IN
PROPOSAL 3, FOR INCREASING THE COMPANYS AUTHORIZED SHARES IN PROPOSAL 4, AND FOR DECLASSIFYING THE
COMPANYS BOARD OF DIRECTORS BY AMENDING ITS CHARTER IN PROPOSAL 5.
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Mark Here for
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Address Change or
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Comments
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SEE REVERSE SIDE
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1.
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Election of Directors
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FOR all nominees
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AGAINST
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ABSTAIN
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listed below (except as marked
to the contrary below)
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with respect to all nominees
listed below
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with respect to all nominees
Listed below
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INSTRUCTIONS:
To vote against any nominee, strike a line through the nominees name listed below.
01 Edward C. Hutcheson, Jr.
02 Myles W. Scoggins
03 Per Staehr
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2.
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Ratification of the appointment of Pricewaterhouse Coopers, LLP,
certified public accountants, as the Companys independent registered
public accounting firm for the fiscal year ending December 31, 2010
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ABSTAIN
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3.
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Approve the Trico Marine Services, Inc. 2010 Long-Term Incentive
Plan
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AGAINST
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ABSTAIN
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4.
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Approve an amendment to the Companys charter to increase the total
number of authorized shares of the Companys common stock from
50,000,000 shares to 100,000,000 shares
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FOR
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AGAINST
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5.
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Approve an amendment to the Companys charter to declassify the
Companys Board of Directors.
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AGAINST
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ABSTAIN
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The proxyholders (or their substitutes) may vote in their discretion, to transact such other
business as may properly come before the meeting and any adjournments or postponements thereof
including to vote for the election of such substitute nominee(s) for director as such proxies may
select in the event that any nominee(s) named above become unable to serve.
C-2
Please mark this box ONLY if stock owned of record or beneficially by you is owned or
controlled by persons who are not U.S. citizens.
A person is not a U.S. citizen if such person
(including an individual, a partnership, a corporation, a limited liability company or an
association) is (1) any foreign government or representative thereof; (2) any corporation, the
chief executive officer by any title or chairman of the board of directors of which is not a
U.S. citizen, or of which more than a minority of the number of its directors necessary to
constitute a quorum are not U.S. citizens; (3) any corporation organized under the laws of any
foreign government; (4) any corporation of which 25% or greater interest is Owned Beneficially
or of record, or may be voted by, one or more persons who are not U.S. citizens, or which by
any other means whatsoever is controlled by or in which control is permitted to be exercised
by one or more persons who are not U.S. citizens; (5) any partnership, limited liability
company, or association which is controlled by one or more persons who are not U.S. citizens;
or (6) any person (including an individual, partnership, corporation, limited liability
company or association) who acts as representative of or fiduciary for any person described in
clauses (1) through (5) above.
£
Date:
, 2010
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Additional Signature, if held jointly
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED
FOR
EACH OF THE THREE DIRECTOR
NOMINEES NAMED IN PROPOSAL 1 ABOVE,
FOR
THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDED DECEMBER 31, 2010 IN
PROPOSAL 2 ABOVE,
FOR
APPROVING THE TRICO MARINE SERVICES, INC. LONG-TERM INCENTIVE PLAN IN
PROPOSAL 3 ABOVE,
FOR
FOR INCREASING THE COMPANYS AUTHORIZED SHARES IN PROPOSAL 4 ABOVE, AND
FOR
DECLASSIFYING THE COMPANYS BOARD OF DIRECTORS BY AMENDING ITS CHARTER IN PROPOSAL 5 ABOVE. THE
PROXY HOLDERS NAMED ABOVE (OR THEIR SUBSTITUTES) WILL VOTE IN THEIR DISCRETION ON ANY OTHER MATTER
THAT MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING:
The
proxy statement and annual report for the year ended December 31, 2009 are available at
investor.tricomarine.com/sec.cfm
.
FOLD AND DETACH HERE
Submit Your Proxy by Mail
Mark, sign and date
your proxy card and
return it in the enclosed
postage-paid envelope.
TRICO MARINE SERVICES, INC.
10001 WOODLOCH FOREST DRIVE, SUITE 610
THE WOODLANDS, TEXAS 77380
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF TRICO MARINE SERVICES, INC.
The undersigned does hereby nominate, constitute and appoint Rishi A. Varma and Geoff A. Jones, and
each of them, as true and lawful proxies, agents and attorneys of the undersigned, with full power
of substitution, and hereby authorizes either of them to represent and to vote, in the manner
provided below, all shares of common stock of Trico Marine Services, Inc. that the undersigned
would be entitled to vote if personally present at the annual meeting of stockholders to be held on
June 10, 2010, or any postponement(s) or adjournment(s) thereof, with all of the powers which would
be possessed by the undersigned if personally present. By executing this proxy, the undersigned (i)
hereby revokes any previously executed proxy with respect to all proposals and (ii) hereby
acknowledges receipt from the Company, prior to the execution of this proxy, of the notice of
Annual Meeting and the accompanying proxy statement.
(Continued and to be marked, dated and signed, on the other side)
Address Change/Comments (Mark the corresponding box on the reverse side)
FOLD AND DETACH HERE
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