2005 Director Stock Option Agreement



 Exhibit 10.17 
  

  
 DIRECTOR STOCK OPTION AGREEMENT

  
 between 
  
 HORNBECK OFFSHORE SERVICES, INC. 
  
 and  
  

  
 Hornbeck Offshore Services, Inc. Incentive Compensation Plan 
  

			
	 Grant Number:             
	 	Date of Grant:             , 2005

  








 DIRECTOR STOCK OPTION AGREEMENT 
  
 This Director Stock Option Agreement (this “Agreement”) is made and entered into as of
                , 2005, between Hornbeck Offshore Services, Inc., a Delaware corporation (the “Company”), and
             (the “Optionee”). 
  
 W I T N E S S E T H 
  
 WHEREAS, the Company has adopted the Hornbeck Offshore Services, Inc. Incentive Compensation Plan (the “Plan”) to assist the Company in attracting and retaining key employees, non-employee Directors and consultants through the
award of stock-based incentives and other equity interests that encourage stock ownership by such employees, non-employee Directors and consultants; and 
  
 WHEREAS, the Company desires to grant this non-qualified stock option (the “Option”) to the Optionee, a non-employee Director or Advisory Director of the
Company, pursuant to the Plan. 
  
 NOW, THEREFORE, the parties hereto agree
that this Option is granted under and governed by (i) the “Terms and Conditions of Director Stock Option,” attached hereto and (ii) the terms and conditions of the Plan. 
  
 Subject to the foregoing, the Company hereby grants to the Optionee the right and option to purchase from the Company up to
             shares (the “Shares”) of the Company’s $.01 par value per share common stock (subject to adjustment pursuant to the terms and conditions of the Plan) at an
exercise price of $        per share (subject to adjustment pursuant to the terms and conditions of the Plan). 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written. 
  

			
	 HORNBECKOFFSHORE SERVICES, INC.

		
	 By: 
	 	

	 Name:
	 	 Todd M. Hornbeck


	 Title:
  
	 	 President and CEO

  

	 OPTIONEE:
  


	 Printed Name:
	 	  











 HORNBECK OFFSHORE SERVICES, INC. 
 INCENTIVE COMPENSATION PLAN 
  
 TERMS AND
CONDITIONS OF  
 DIRECTOR STOCK OPTION 
  

(For use with non-employee Directors and Advisory Directors only) 
  

The Option is granted pursuant to the Hornbeck Offshore Services, Inc. Incentive Compensation Plan (the “Plan”) and is evidenced by the Agreement
between the Company and the Optionee, of which these Terms and Conditions of Director Stock Option (the “Terms and Conditions”) are a part. Certain capitalized terms used but not otherwise defined herein are used as defined in the Glossary
included at the end of these Terms and Conditions. 
  

	SECTION 1	Option Price. The option price of the Shares is set forth on the signature page of the Agreement. 

  

	SECTION 2	Payment of Purchase Price. The purchase price of the Shares as to which the Option may be exercised shall be paid in full to the Company at the time of the exercise of the Option, or
any portion thereof, (i) in cash, (ii) in shares of Common Stock owned by the Optionee, (iii) by surrendering Shares issuable pursuant to the Option, (iv) by a combination of any of the above, or (v) by such other consideration as may be deemed
acceptable by the Committee in its sole discretion. 

  

	SECTION 3	Exercise of Option. 

  

	          3.1	Subject to the terms and conditions of the Agreement (including, without limitation, the Plan), the Optionee may exercise the Option from time to time with respect to all or any part of the
Vested Shares during the period commencing on the date the Shares to be purchased first become Vested Shares and ending on the date ten (10) years from the Date of Grant. 

  

	          3.2	 Subject to the terms and conditions of the Agreement (including, without limitation, the Plan), the Option may be exercised by giving written notice to the Company stating
that the person providing such notice elects to exercise the Option and the number of Vested Shares with respect to which the Option is being exercised. Such notice shall be signed by the person exercising the Option and shall be accompanied by the
payment required by Section 2 and any taxes payable pursuant to Subsection 3.4. The stock certificate or certificates representing the Shares as to which the Option is exercised shall be registered in the name of the Optionee (or such other person
designated by the Designated Beneficiary exercising pursuant to Section 5 hereof) and may contain a legend or legends making appropriate reference to the restrictions, if any, imposed on such Shares. If the Option is exercised pursuant to the
provisions of Section 5 hereof, the notice required hereunder shall be 











	 	 
accompanied by appropriate proof of the right of the person exercising the option to exercise the Option. 


  

	          3.3	The Optionee (or, if the Optionee has died, the Designated Beneficiary) shall have no rights as a shareholder with respect to any Shares until the issuance of a stock certificate representing
such Shares following due exercise of the Option. Except as otherwise provided in Section 9, no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights on or
with respect to Shares purchased pursuant to the Option for which the record date is prior to the date of purchase. 

  

	          3.4	The Optionee shall satisfy all federal, state, local or other taxes required to be withheld by the Company with respect to the exercise of the Option, or any part thereof, either (a) by
payment of the amount of such withholding in cash or (b) through (i) the retention by the Company of Shares out of the Shares being acquired through the exercise of the Option, (ii) the delivery of already owned shares of Common Stock or (iii) other
consideration acceptable to the Committee. 

  

	SECTION 4	Cessation of Service on the Board of Directors. 

  

	          4.1	If the Optionee ceases to serve on the Board of Directors of the Company as a member or advisory director for any reason, the Option shall terminate with respect to any Unvested Shares as of
the date such cessation of such service. If the Optionee ceases to serve on the Board of Directors of the Company as a member or advisory director for any reason other than death, Disability, or as provided in Section 4.5, with respect to Vested
Shares covered by the Option, the Optionee shall have the right, during the period ending three (3) months after such cessation of service (the “Grace Period”), to exercise the Option or any portion thereof with respect to all Shares which
were Vested Shares on the date of such cessation of service, subject to the expiration of the term of the Option as set forth in Subsection 3.1. Upon the expiration of such Grace Period, all rights to exercise the Option shall cease.


  

	          4.2	If the Optionee dies while serving on the Board of Directors of the Company, Optionee ceases to serve as a member or advisory director or if the Optionee dies within the Grace Period, with
respect to Vested Shares covered by the Option, Section 5 shall apply and Optionee’s Designated Beneficiary shall have the right, during the period ending on the day twelve (12) months after the date of the Optionee’s death, to exercise
the Option or any portion thereof with respect to all Shares which were Vested Shares on the date of death, subject to the expiration of the term of the Option as set forth in Subsection 3.1. All rights to exercise the Option shall terminate upon
the expiration of such twelve (12) month period. 

  

	          4.3	 If, as a result of Disability, the Optionee ceases to serve as a member of the Board of Directors of the Company or advisory director, with respect to Vested Shares covered
by the Option, the Optionee shall have the right, during the period ending on the day 



  

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twelve (12) months after such cessation of service, to exercise the Option or any portion thereof with respect to all Shares which were Vested Shares on the date of
such cessation of service, subject to the expiration of the term of the Option as set forth in Subsection 3.1. All of the Optionee’s rights to exercise the Option shall terminate upon the expiration of such twelve (12) month period.



  

	          4.4	In the event of a Change in Control, all Shares subject to the Option (with respect to which the Option has not previously terminated or been exercised or surrendered) shall immediately
become Vested Shares and all portions of the Option which have not previously terminated or been exercised or surrendered shall immediately become exercisable. 

  

	          4.5	If the Optionee ceases to provide service to the Board of Directors of the Company as a member or advisory director after the completion of at least 5 years of service on the Board of
Directors of the Company as a member or as an advisory director, with respect to Vested Shares covered by the Option, the Optionee shall have the right, during the period ending on the day twelve (12) months after such service has ceased, to
exercise the Option or any portion thereof with respect to all Shares which were Vested Shares on the date the Optionee ceased to provide service to the Board of Directors of the Company as a member or advisory director, subject to the expiration of
the term of the Option as set forth in Subsection 3.1. All of the Optionee’s rights to exercise the Option shall terminate upon the expiration of such twelve (12) month period. 

  

	SECTION 5	Effect of Death. Upon the Optionee’s death, the Optionee’s Designated Beneficiary shall have the right, subject to the provisions of Sections 3 and 4 and the other applicable
provisions of the Agreement, to exercise the Option. 

  

	SECTION 6	Vesting of Shares. 

  

	          6.1	Subject to Subsection 4.4 and Section 10, the Shares covered by the Option shall constitute “Vested Shares” in accordance with the following schedule: 

  

			
	 Date

	  	 Portion of Shares originally subject to the Option which shall
become Vested Shares on such Date


	 First Anniversary of Date of Grant
	  	One Third
	 Second Anniversary of Date of Grant
	  	One Third
	 Third Anniversary of Date of Grant
	  	One Third

  
 Notwithstanding the foregoing
schedule, if an Optionee ceases to provide service to the Board of Directors of the Company as a member or as an advisory director and as of the date the Optionee ceases such service the Optionee has completed at least 5 years of service to the
Board of Directors of the Company as a member or as an advisory director all Shares subject to the Option shall fully vest and become Vested 
  

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Shares. In addition, the Committee may deem all or any portion of the Shares to be Vested Shares whenever, in the Committee’s sole discretion, circumstances
warrant such action. 


  

	          6.2	“Unvested Shares” shall mean Shares which have not become Vested Shares in accordance with Subsections 4.4 or 6.1 or Section 10. 

  

	SECTION 7	Options Not Transferable. Neither the Option nor any of the rights and privileges thereunder may be transferred, sold, assigned, pledged, gifted or otherwise transferred in any manner
other than by will or by the laws of descent and distribution. The Option may be exercised during the Optionee’s lifetime only by the Optionee. Any attempted transfer, sale, assignment, pledge, gift or other transfer of the Option or of any
right or privilege thereunder contrary to the provisions of the Agreement, and the levy of any execution, attachment or similar process upon the Option or any right or privilege thereunder, shall be null and void and without force or effect. No
transfer of the Option by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company is furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the
Committee may deem necessary to establish the validity of the exercise or transfer and the acceptance by the transferee or transferees of the terms and conditions of the Agreement. 

  

	SECTION 8	Compliance with Securities and Other Laws. Without limiting the provisions of the Plan, the Company shall not be required to issue or deliver any certificates for Shares purchased
pursuant to the exercise of the Option prior to: (i) the obtaining of any approval from any governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable; (ii) the completion of any registration or
other qualification of such Shares under any law, ruling or regulation of any federal, state, local or other governmental body which the Committee shall, in its sole discretion, determine to be necessary or advisable; and (iii) the determination by
the Committee that the Optionee has tendered to the Company or otherwise satisfied any federal, state, local or other tax owed by the Optionee as a result of exercising the Option when the Company has a legal liability to satisfy such tax. In
addition, if Shares reserved for issuance upon the exercise of the Option shall not then be registered under the Act, the Company may, upon the exercise of the Option, require the Optionee or the Optionee’s permitted transferee to represent in
writing that the Shares being acquired are being acquired for investment and not with a view to distribution. In addition, the Company may mark any certificate evidencing the Shares with a legend restricting transfer and may issue stop transfer
orders relating to any such certificate. 

  

	SECTION 9	 Reorganization. In the event of a Reorganization, the number of Shares subject to the Option, and the exercise price applicable to such Shares, shall (to the extent
deemed appropriate by the Committee) be proportionately adjusted (as determined by the Committee in its sole discretion) to account for any increase or decrease in the 



  

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number of issued and outstanding shares of Common Stock resulting from such Reorganization. 


  

	SECTION 10	Dissolution, Liquidation and/or Corporate Transaction. 

  

	        10.1	In the event of a dissolution or liquidation of the Company, the Option shall terminate as of a date to be fixed by the Committee; provided, however, that the Optionee shall be given not less
than thirty (30) days prior written notice of the termination date. Upon such notification, all Shares subject to the Option (with respect to which the Option has not previously terminated or been exercised or surrendered) shall immediately become
Vested Shares and all portions of the Option which have not previously terminated or been exercised or surrendered shall immediately become exercisable, subject to the expiration of the term of the Option as set forth in Subsection 3.1 and Section
4. Upon the termination date fixed by the Committee, the Option shall terminate as to any unexercised portion and shall be of no further effect. 

  

	        10.2	If a Corporate Transaction is consummated and immediately following the consummation of such Corporate Transaction the Persons who were holders of shares of Common Stock immediately prior to
the consummation of such Corporate Transaction do not receive any securities or other property (hereinafter collectively referred to as “Transactional Consideration”) as a result of such Corporate Transaction and substantially all of such
Persons continue to hold the shares of Common Stock held by them immediately prior to the consummation of such Corporate Transaction (in substantially the same proportions relative to each other), the Option will remain outstanding and will (subject
to the provisions of Subsection 4.4) continue in full force and effect in accordance with its terms (without any modification) following the consummation of the Corporate Transaction. 

  

	 	(a)	 	If a Corporate Transaction is consummated and immediately following the consummation of such Corporate Transaction the Persons who were holders of shares of Common Stock immediately prior to
the consummation of such Corporate Transaction do receive Transactional Consideration as a result of such Corporate Transaction or substantially all of such Persons do not continue to hold the shares of Common Stock held by them immediately prior to
the consummation of such Corporate Transaction (in substantially the same proportions relative to each other), the terms and conditions of the Option will be modified as follows: 

  

	 	(i)	 	 If the documentation pursuant to which a Corporate Transaction will be consummated provides for the assumption (by the entity issuing Transactional Consideration to the
Persons who were the holders of shares of Common Stock immediately prior to the consummation of such Corporate Transaction) of the Option without any modification or amendment (other than Permitted Modifications and the 



  

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 modifications contemplated by Subsection 4.4), the Option will remain outstanding and will continue in full force
and effect in accordance with its terms following the consummation of such Corporate Transaction (subject to such Permitted Modifications and the provisions of Subsection 4.4). 
  

	 	(ii)	 	If the documentation pursuant to which a Corporate Transaction will be consummated does not provide for the assumption by the entity issuing Transactional Consideration to the Persons who
were the holders of shares of Common Stock immediately prior to the consummation of such Corporate Transaction of the Option without any modification or amendment (other than Permitted Modifications), all vesting restrictions (performance based or
otherwise) applicable to the Option will accelerate, all Shares subject to the Option will be deemed to be Vested Shares and the Optionee may (subject to the expiration of the term of the Option as set forth in Subsection 3.1 and Section 4) exercise
the Option without regard to such vesting restrictions during the ten (10) day period immediately preceding the consummation of such Corporate Transaction. For purposes of the immediately preceding sentence, all performance based goals, if any, will
be deemed to have been satisfied in full. If the Option will not be assumed without any modification or amendment (other than Permitted Modifications and modifications resulting from the provisions of Subsection 4.4), the Company will provide the
Optionee with reasonable notice of the termination of such vesting restrictions and the impending termination of the Option. Upon the consummation of such a Corporate Transaction, the Option will automatically terminate and cease to be outstanding.


  
 Nothing contained in this Section 10 will be deemed to
extend the term of the Option or to revive any portion of the Option which has previously lapsed or been cancelled, terminated or surrendered. 
  

	SECTION 11	 Reservation of Shares. During the term of the Agreement, the Company agrees that it will at all times reserve and keep available such number of shares of Common Stock
as shall be sufficient to satisfy the requirements of the Agreement. The inability of the Company to obtain authority from any regulatory body having jurisdiction which is deemed by the Company’s counsel to be necessary to the lawful issuance
and sale of any shares of Common Stock shall relieve the Company of any liability in respect of the nonissuance or nonsale of any Common Stock as to which such requisite authority shall not have been obtained. 



  

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SECTION 12 General. 
  

	        12.1	No Right to Directorship. Neither the granting of the Option, the exercise of any part thereof, nor any provision of the Agreement shall confer upon or be construed as giving the
Optionee any right to remain on the Board of Directors of the Company as a member or advisory director. 

  

	        12.2	Benefit. Except as otherwise indicated herein, the Agreement shall be binding upon and shall inure to the benefit of the successors, assigns, legal representatives, heirs, legatees,
executors and administrators of the respective parties thereto. 

  

	        12.3	Modifications. The Agreement may only be altered or amended, within the limitations of the Plan and only pursuant to a written instrument signed by the Company and the Optionee.


  

	        12.4	Entire Agreement. The Agreement contains the entire agreement between the parties, and no waiver of any of the terms of the Agreement shall be valid unless signed by the party against
whom such waiver is asserted. 

  

	        12.5	Severability. Should any one or more of the provisions of the Agreement be determined to be illegal or unenforceable, all of the other provisions thereof shall be given effect
separately therefrom and shall not be affected thereby. 

  

	        12.6	Notices. Any notice or other written instrument required or permitted to be given, made or sent under the Agreement shall be in writing, signed by the party giving or making the same
and shall be sent by United States mail, registered or certified, with postage prepaid, to the addresses set forth below: 

  

			
	 If to Company:
	  	Hornbeck Offshore Services, Inc.
	 	  	 Attention: Todd M. Hornbeck

	 	  	 103 Northpark Blvd., Suite 300

	 	  	 Covington, Louisiana 70433

		
	 If to Optionee:
	  	To the latest address of record for the Optionee according to the records of the Company.

  
 Either party shall have the
right to change the place to which any such notice or other written instrument shall be sent by notice sent pursuant to this Subsection 12.6. The date of mailing of any notice or other written instrument shall be deemed to be the date of such notice
or instrument and shall be effective from such date. 
  

	        12.7	Governing Law. The Agreement will be governed by and construed in accordance with the laws of the State of Delaware (exclusive of conflicts of law principles).


  

	        12.8	Status of Option. The Option is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code. 

  
  

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 GLOSSARY 
  
 Except as otherwise defined, the following words and phrases shall have the following meanings when used in this Agreement. 
  
 “Act” shall mean the Securities Act of 1933, as amended. 
  
 “Agreement” shall mean the Director Stock Option Agreement between the
Company and Optionee, the Terms and Conditions attached thereto and the terms and conditions of the Plan. 
  
 “Change in Control” shall have the meaning set forth in the Plan. 
  

“Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 “Committee” shall have the meaning set forth in the Plan. 
  
 “Common Stock” shall mean the $.01 par value per share common stock of the Company. 
  
 “Company” shall mean Hornbeck Offshore Services, Inc., a Delaware
corporation. 
  
 “Corporate Transaction” shall have the meaning
set forth in the Plan. 
  
 “Date of Grant” shall mean the date set
forth in the first paragraph on the signature page of the Agreement. 
  
 “Disability” shall have the meaning set forth in the Plan. 
  
 “Option” shall mean the right (evidenced by the Agreement) to purchase shares of Common Stock. 
  
 “Optionee” shall have the meaning set forth on the signature page of the Agreement. 
  
 “Permitted Modifications” shall have the meaning set forth in the Plan. 
  
 “Person” shall have the meaning set forth in the Plan. 
  
 “Reorganization” shall have the meaning set forth in the Plan. 
  
 “Section” shall mean a section or subsection of the Terms and Conditions.

  
 “Shares” shall mean the shares of Common Stock subject to the
Option. 
  
 “Unvested Shares” shall have the meaning set forth in
Subsection 6.2 of the Terms and Conditions. 
  
 “Vested Shares”
shall have the meaning set forth in Subsection 6.1 of the Terms and Conditions. 
  

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