Exhibit 10.5

 

[Compofelice]

 

NONSTATUTORY STOCK OPTION AGREEMENT

 

AGREEMENT made as of the 15th day of March, 2005, between TRICO MARINE SERVICES,
INC., a Delaware corporation (the “Company”), and JOSEPH S. COMPOFELICE
(“Director”), who is Chairman of the Board of Directors of the Company (the
“Board”).

 

To carry out the purposes of the TRICO MARINE SERVICES, INC. 2004 STOCK
INCENTIVE PLAN (the “Plan”), by affording Director the opportunity to purchase
shares of the common stock of the Company, par value $.01 per share (“Stock”),
and in consideration of the mutual agreements and other matters set forth herein
and in the Plan, the Company and Director hereby agree as follows:

 

1. Grant of Option. The Company hereby irrevocably grants to Director the right
and option (“Option”) to purchase all or any part of an aggregate of 200,000
shares of Stock on the terms and conditions set forth herein and in the Plan,
which Plan is incorporated herein by reference as a part of this Agreement.
200,000 shares of Stock subject to this Option are referred to herein as the
“Time Shares,” and the portion of this Option covering the Time Shares is
referred to herein as the “Time Option.” NONE shares of Stock subject to this
Option are referred to herein as the “Performance Shares,” and the portion of
this Option covering the Performance Shares is referred to herein as the
“Performance Option.” In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used but not
defined in this Agreement shall have the meaning attributed to such terms under
the Plan, unless the context requires otherwise. This Option shall not be
treated as an incentive stock option within the meaning of section 422(b) of the
Code.

 

2. Purchase Price. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $11.00 per share, which has been determined to
be not less than the Fair Market Value of the Stock at the date of grant of this
Option. For all purposes of this Agreement, Fair Market Value of Stock shall be
determined in accordance with the provisions of the Plan.

 

3. Exercise of Option. Subject to the provisions of Paragraph 5, the Time Option
may be exercised, by written notice to the Company at its principal executive
office addressed to the attention of its Corporate Secretary (or such other
officer or employee of the Company as the Company may designate from time to
time), at any time and from time to time after the date of grant hereof, but,
except as otherwise provided below, the Time Option shall not be exercisable for
more than a percentage of the aggregate number of Time Shares offered by the
Time Option determined by the number of full years from the date of grant hereof
to the date of such exercise, in accordance with the following schedule:

 

Number of Full Years

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   Percentage of Time Shares
That May Be Purchased

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Less than    1 year

   33 1/3%

1 year

   50%

2 years

   66 2/3%

3 years

   83 1/3%

4 or more years

   100%

 

4. Exercise of Performance Option. (a) Subject to the provisions of Paragraph 5,
the Performance Option may be exercised, by written notice to the Company at its
principal

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executive office addressed to the attention of its Corporate Secretary (or such
other officer or employee of the Company as the Company may designate from time
to time), at any time and from time to time after the date of grant hereof, but
the Performance Option shall not be exercisable for more than a percentage of
the aggregate number of Performance Shares offered by the Performance Option
determined from the following schedule based on the NONE determined under
Section 4(b):

 

NONE

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Percentage of Performance
Shares

That May Be Purchased

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(b) As soon as administratively feasible after the date upon which the Board
determines that one of the following events has occurred: NONE, the Company
shall provide notice to Optionee of such determination.

 

(c) The Performance Option shall not become exercisable for any Performance
Shares as to which the applicable performance criteria are not met within the
period or by the date prescribed for any reason, including without limitation
pursuant to Paragraph 5 hereof.

 

5. Change in Control; Effect of Termination of Board Membership; General Terms
of Exercise. Notwithstanding anything to the contrary in Paragraph 3 or
Paragraph 4 (other than Paragraph 4(c), if Director has served continuously as a
director of the Company from the date of grant hereof to the date upon which a
Change in Control (as defined below) occurs, then this Option may be exercised
in full from and after the date upon which the Change in Control occurs.
Further, this Option may be exercised only while Director remains a director of
the Company and will terminate and cease to be exercisable upon Director’s
ceasing to serve as a director of the Company, except that:

 

(a) If Director ceases to serve as a director of the Company by reason of
disability (within the meaning of section 22(e)(3) of the Code), this Option may
be exercised in full by Director (or Director’s estate or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Director) at any time during the period of
one year following such termination.

 

(b) If Director dies while serving as a director of the Company, Director’s
estate, or the person who acquires this Option by will or the laws of descent
and distribution or otherwise by reason of the death of Director, may exercise
this Option in full at any time during the period of one year following the date
of Director’s death.

 

(c) If Director ceases to serve as a director of the Company other than by
reason of (i) his removal from the Board for Cause (as defined below) by the
shareholders of the Company or (ii) his voluntary resignation (which shall not
include a resignation of Director (1) at the request, formal or informal, of the
nominating or governance committees of the Board or a majority of the other
members of the Board that Director either resign as a member of the Board

 

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or as Chairman of the Board for a reason other than for Cause or (2) following a
reduction in the amount of Director’s monthly director fees), then this Option
may be exercised in full by Director at any time during the period of one year
following such termination, or by Director’s estate (or the person who acquires
this Option by will or the laws of descent and distribution or otherwise by
reason of the death of Director) during a period of one year following
Director’s death if Director dies during such one year period following
termination. The Board may, in its sole discretion, advise Director in writing,
prior to a voluntary resignation of Director as a director of the Company, that
such resignation will be treated for purposes of this paragraph as a removal by
the Board other than for Cause. “Cause” shall mean that Director (A) has
willfully refused without proper legal reason to perform the services and
responsibilities required of him as a director of the Company, (B) has
materially breached any material corporate policy maintained and established by
the Company that is of general applicability to the members of the Board, (C)
has willfully engaged in conduct that he knows or should know is materially
injurious to the Company or any of its affiliates, or (D) has been convicted of
a crime involving moral turpitude or any felony or has engaged in any act of
serious dishonesty which adversely affects, or reasonably could in the future
adversely affect, the value, reliability, or performance of Director in a
material manner; provided, however, that a determination that Director was
removed for Cause must be approved by at least a majority of a quorum (as
defined in the Company’s By-laws) of the other members of the Board after
Director has been given written notice by the Board of the specific reason for
such determination and an opportunity for Director, together with his counsel,
to be heard before the Board.

 

(d) If Director ceases to serve as a director of the Company for any reason
other than as described in (a), (b) or (c) above, then this Option may be
exercised by Director at any time during the period of three months following
such removal or resignation, or by Director’s estate (or the person who acquires
this Option by will or the laws of descent and distribution or otherwise by
reason of the death of Director) during a period of one year following
Director’s death if Director dies during such three month period, but in each
case only as to the number of shares Director was entitled to purchase hereunder
as of the date Director ceases to serve as a director of the Company.

 

This Option shall not be exercisable in any event after the expiration of seven
years from the date of grant hereof. The purchase price of shares as to which
this Option is exercised shall be paid in full at the time of exercise (a) in
cash (including check, bank draft or money order payable to the order of the
Company), (b) by delivering or constructively tendering to the Company shares of
Stock having a Fair Market Value equal to the purchase price (provided such
shares used for this purpose must have been held by Director for such minimum
period of time as may be established from time to time by the Committee), (c) if
the Stock is readily tradable on a national securities market, through a
“broker-assisted cashless exercise” in accordance with a Company established
policy or program for the same, or (d) any combination of the foregoing. No
fraction of a share of Stock shall be issued by the Company upon exercise of an
Option or accepted by the Company in payment of the exercise price thereof;
rather, Director shall provide a cash payment for such amount as is necessary to
effect the issuance and acceptance of only whole shares of Stock. Unless and
until a certificate or certificates representing such shares shall have been
issued by the Company to Director, Director (or the person permitted to exercise
this Option in the event of Director’s death) shall not be or have any of the
rights or privileges of a shareholder of the Company with respect to shares
acquirable upon an exercise of this Option.

 

For purposes of this Agreement, a Change in Control shall mean (a) a merger of
the Company with another entity, a consolidation involving the Company, or the
sale of all or substantially all of the assets of the Company to another entity
if, in any such case, (i) the holders of equity securities of the Company
immediately prior to such transaction or event do not beneficially own
immediately after such

 

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transaction or event equity securities of the resulting entity entitled to 50%
or more of the votes then eligible to be cast in the election of directors
generally (or comparable governing body) of the resulting entity in
substantially the same proportions that they owned the equity securities of the
Company immediately prior to such transaction or event or (ii) the persons who
were members of the Board immediately prior to such transaction or event shall
not constitute at least a majority of the board of directors of the resulting
entity immediately after such transaction or event, (b) the dissolution or
liquidation of the Company, (c) when any person or entity, including a “group”
as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 50% of the combined voting power of the outstanding
securities of, (i) if the Company has not engaged in a merger or consolidation,
the Company, or (ii) if the Company has engaged in a merger or consolidation,
the resulting entity, or (d) as a result of or in connection with a contested
election of directors, the persons who were members of the Board immediately
before such election shall cease to constitute a majority of the Board. For
purposes of the preceding sentence, (1) ”resulting entity” in the context of a
transaction or event that is a merger, consolidation or sale of all or
substantially all assets shall mean the surviving entity (or acquiring entity in
the case of an asset sale) unless the surviving entity (or acquiring entity in
the case of an asset sale) is a subsidiary of another entity and the holders of
common stock of the Company receive capital stock of such other entity in such
transaction or event, in which event the resulting entity shall be such other
entity, and (2) subsequent to the consummation of a merger or consolidation that
does not constitute a Change in Control, the term “Company” shall refer to the
resulting entity and the term “Board” shall refer to the board of directors (or
comparable governing body) of the resulting entity. Notwithstanding anything to
the contrary, a Change in Control shall not include the contemplated
reorganization of the Company that will occur on or about March 15, 2005.

 

6. Withholding of Tax. To the extent that the exercise of this Option or the
disposition of shares of Stock acquired by exercise of this Option results in
compensation income or wages to Director for federal, state or local tax
purposes, Director shall deliver to the Company at the time of such exercise or
disposition such amount of money as the Company may require to meet its minimum
obligation under applicable tax laws or regulations. No exercise of this Option
shall be effective until Director (or the person entitled to exercise this
Option, as applicable) has made arrangements approved by the Company to satisfy
all applicable minimum tax withholding requirements of the Company.

 

7. Status of Stock. The Company intends to register for issuance under the
Securities Act of 1933, as amended (the “Act”), the shares of Stock acquirable
upon exercise of this Option, and to keep such registration effective throughout
the period this Option is exercisable. In the absence of such effective
registration or an available exemption from registration under the Act, issuance
of shares of Stock acquirable upon exercise of this Option will be delayed until
registration of such shares is effective or an exemption from registration under
the Act is available. The Company intends to use its reasonable efforts to
ensure that no such delay will occur. In the event exemption from registration
under the Act is available upon an exercise of this Option, Director (or the
person permitted to exercise this Option in the event of Director’s death or
incapacity), if requested by the Company to do so, will execute and deliver to
the Company in writing an agreement containing such provisions as the Company
may require to assure compliance with applicable securities laws.

 

Director agrees that the shares of Stock which Director may acquire by
exercising this Option will not be sold or otherwise disposed of in any manner
which would constitute a violation of any applicable federal or state securities
laws. Director also agrees that (i) the certificates representing the shares of
Stock purchased under this Option may bear such legend or legends as the
Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) the Company may refuse to register the transfer of the
shares of Stock purchased under this Option on the stock transfer records of the
Company if such proposed transfer would in the opinion of counsel satisfactory
to the Company

 

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constitute a violation of any applicable securities law, and (iii) the Company
may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the shares of Stock purchased under this Option.

 

8. Surrender of Option. At any time and from time to time prior to the
termination of this Option, Director may surrender all or a portion of this
Option to the Company for no consideration by providing written notice to the
Company at its principal executive office addressed to the attention of its
Corporate Secretary (or such other officer or employee of the Company as the
Company may designate from time to time). Such notice shall specify the number
of shares with respect to which this Option is being surrendered and, if this
Option is being surrendered with respect to less than all of the shares then
subject to this Option, then such notice shall also specify the date upon which,
or the circumstances under which, this Option became (or would become)
exercisable in accordance with Paragraph 3 or Paragraph 4 with respect to the
shares being surrendered.

 

9. Additional Agreement. Promptly following the later of the date of grant of
this Option and the publication by the Internal Revenue Service of regulations
(whether final, proposed or temporary) or other formal guidance regarding
section 409A of the Code, the Company and Director shall determine whether or
not this Agreement provides for a deferral of compensation subject to section
409A of the Code. If the Company and Director determine that this Agreement does
provide for such a deferral, then Director and the Committee shall work together
so that this Agreement may be amended by no later than December 31, 2005, in a
manner that is mutually agreeable to Director and the Committee and which will
cause this Agreement to not provide for a deferral of compensation subject to
section 409A of the Code, which amendment may include, without limitation, a
change in the purchase price set forth in Paragraph 2 above.

 

10. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Director.

 

11. Entire Agreement. Unless otherwise specifically provide herein, this
Agreement constitutes the entire agreement of the parties with regard to the
subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to
the Option granted hereby. Without limiting the scope of the preceding sentence,
all prior understandings and agreements, if any, among the parties hereto
relating to the subject matter hereof are hereby null and void and of no further
force and effect. Any modification of this Agreement shall be effective only if
it is in writing and signed by both Director and an authorized officer of the
Company.

 

12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas, without regard to conflicts of
laws principles thereof.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its officer thereunto duly authorized, and Director has executed this Agreement,
all as of the day and year first above written.

 

TRICO MARINE SERVICES, INC.

By:

 

/s/ Thomas E. Fairley

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Name:   Thomas E. Fairley Title:   President and Chief Executive Officer By:  

/s/ Joseph S. Compofelice

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Name:

  JOSEPH S. COMPOFELICE

 

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