Form of Executive Option Agreement


 Exhibit 10.4 
  
 [acceleration of vesting] 
  
 NONSTATUTORY STOCK OPTION AGREEMENT 
 (Employee, Director or Consultant) 
  
 AGREEMENT made as of the      day of             , 200    , between TRICO MARINE SERVICES, INC., a
Delaware corporation (the “Company”), and                      (“Optionee”). 
  
 To carry out the purposes of the TRICO MARINE SERVICES, INC. 2004 STOCK
INCENTIVE PLAN (the “Plan”), by affording Optionee 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 Optionee hereby agree as follows: 
  
 1. Grant of Option. The Company hereby irrevocably grants to Optionee the right and option (“Option”) to purchase all or any part of an aggregate of
                     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.                      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.”
                     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; provided, however, that the terms “Cause,” “Change in Control” and “Good Reason” shall have the
meanings assigned to such terms in that certain Employment Agreement dated as of             , 200    , between Optionee and the Company (the
“Employment Agreement”). 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
$                     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 Time 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

	  	 Percentage of Time Shares
 That May Be Purchased

	 
	 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 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 Cumulative EBITDA of the Company as determined under Paragraph 4(b): 
  

			
	 Cumulative EBITDA of the Company

	  	 Percentage of Performance Shares
 That May Be Purchased


	 at least $62,000,000
	  	50%
	 at least $107,000,000
	  	100%

  
 (b)
Cumulative EBITDA as of a given date means the total EBITDA (as defined in the Disclosure Statement dated November 12, 2004 of Trico Marine Services, Inc., Trico Marine Assets, Inc., and Trico Marine Operators, Inc.) of the Company from and after
the date of grant hereof through such given date. Once Performance Shares become exercisable under Paragraph 4(a) above, such Performance Shares will remain exercisable even if the Cumulative EBITDA of the Company later decreases. 
  
 (c) The Performance Option shall not become exercisable for
any reason, including without limitation pursuant to Paragraph 5 hereof, and shall cease to be outstanding with respect to any Performance Shares as to which the applicable performance criteria are not met within thirty-six months after the date of
grant hereof, or, if earlier, by the date that Optionee ceases to be employed by the Company. Notwithstanding the foregoing, if Optionee has been continuously employed by the Company from the date of grant hereof to the date upon which a Change in
Control occurs and such Change in Control occurs within thirty-six months after the date of grant hereof, then the Performance Option may be exercised in full from and after the date upon which the Change in Control occurs. 
  
 5. Change in Control; Effect of Termination of Employment; General
Terms of Exercise. Notwithstanding anything to the contrary in Paragraph 3 or Paragraph 4 (other than Paragraph 4(c)), if Optionee has been continuously employed by the Company from the date of grant hereof to the date upon which a Change in
Control 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 Optionee remains an employee of the Company and will terminate and cease to
be exercisable upon Optionee’s termination of employment with the Company, except that: 
  
 (a) If Optionee’s employment with the Company terminates by reason of disability (within the meaning of section 22(e)(3) of the
Code), this Option may be exercised in full by Optionee (or Optionee’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 Optionee) at any time during the period
of one year following such termination. 






 (b) If Optionee dies while in the employ of the Company, Optionee’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 Optionee, may exercise this Option in full at any time during the period of one year following the date of Optionee’s death.

  
 (c) If Optionee’s employment with the
Company is terminated by the Company without Cause or Optionee voluntarily terminates such employment for Good Reason, then this Option may be exercised in full (if Optionee executes a release as provided under paragraph 4.7 of his Employment
Agreement) by Optionee at any time during the period of three months following such termination, or by Optionee’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 Optionee) during a period of one year following Optionee’s death if Optionee dies during such three month period; provided, however, that if Optionee fails to execute a release under paragraph 4.7 of his Employment Agreement, then in each
case this Option may only be exercised by Optionee as to the number of shares Optionee was entitled to purchase hereunder as of the date Optionee’s employment so terminates. 
  
 (d) If Optionee’s employment with the Company terminates for any reason other than as described in (a),
(b) or (c) above, then this Option may be exercised by Optionee at any time during the period of three months following such termination, or by Optionee’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 Optionee) during a period of one year following Optionee’s death if Optionee dies during such three month period, but in each case only as to the number of shares Optionee was entitled to
purchase hereunder as of the date Optionee’s employment so terminates. 
  
 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 Optionee 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, Optionee 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 Optionee, Optionee (or the person permitted to exercise this Option in the event of Optionee’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. 
  
 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 Optionee for
federal, state or local tax purposes, Optionee 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 Optionee (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, Optionee (or the person permitted to exercise this Option in the event of Optionee’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. 
  
 Optionee agrees that the shares of Stock which Optionee 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. Optionee 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 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. Employment Relationship. For purposes of this Agreement, Optionee shall be considered to be in the employment of the Company as long as
Optionee remains (i) an employee of, (ii) a member of the board of directors of, or (iii) a Consultant to, either the Company, an Affiliate or a corporation or a parent or subsidiary of such corporation assuming or substituting a new option for this
Option. Without limiting the scope of the preceding sentence, it is expressly provided that Optionee shall be considered to have terminated employment with the Company at the time of the termination of the “Affiliate” status under the Plan
of the entity or organization that employs Optionee or to which Optionee otherwise provides services. Any question as to whether and when there has been a termination of such employment relationship, and the cause of such termination, shall be
determined by the Committee, and its determination shall be final. 
  
 9. Surrender of Option. At any time and from time to time prior to the termination of this Option, Optionee 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. 
  
 10. 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 Optionee shall determine 







 
whether or not this Agreement provides for a deferral of compensation subject to section 409A of the Code. If the Company and Optionee determine that this
Agreement does provide for such a deferral, then Optionee 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 Optionee 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. 
  
 11. 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 Optionee. 
  
 12. 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; provided, however, that the terms of this Agreement shall
not modify and shall be subject to the terms and conditions of any employment and/or severance agreement between the Company (or an Affiliate) and the Optionee in effect as of the date a determination is to be made under this Agreement. Without
limiting the scope of the preceding sentence, except as provided therein, 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 Optionee and an authorized officer of the Company. 
  
 13. 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. 
  
 IN WITNESS
WHEREOF, the Company has caused this Agreement to be duly executed by its officer thereunto duly authorized, and Optionee has executed this Agreement, all as of the day and year first above written. 
  

			
	 TRICO MARINE SERVICES, INC.

		
	 By:
	 	  


	
	  


	 	 	Optionee