##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 Amendment No. 1
  þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2008
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number: 1-33402
 Trico Marine Services, Inc.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    72-1252405
(I.R.S. Employer
Identification No.)
 10001 Woodloch Forest Drive, Suite 610
The Woodlands, Texas
(Address of principal executive offices)
    
    77380
(Zip code)
 Registrants telephone number, including area code: (281) 203-5700
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
Common Stock, par value $0.01
    
    Name of Each Exchange on Which Registered
NASDAQ Global Select Market
 Securities registered pursuant to Section 12(g) of the Act:
None.
 o þ
 o þ
 o þ
 þ
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ
  þ o
  DOCUMENTS INCORPORATED BY REFERENCE: NONE




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EXPLANATORY NOTE
  2




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##### 



TRICO MARINE SERVICES, INC.
 AMENDMENT NO. 1 TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2008
 TABLE OF CONTENTS
 PagePART III
    
    
    
    
    4Item 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    4Item 11.
    
    Executive Compensation
    
    
    10Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    29Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    
    33Item 14.
    
    Principal Accountant Fees and Services
    
    
    35PART IV
    
    
    
    
    36Item 15.
    
    Exhibits and Financial Statement Schedules
    
    
    36EXHIBIT INDEX
    
    
    38EX-31.1EX-31.2EX-32
  3




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
 Directors
  Principal Occupation, Business Experience and
    
    Director
    
    Seat SubjectName
    
    Age
    
    Directorships
    
    Since
    
    to ElectionJoseph S. Compofelice
    
    
    59
    
    
    Mr. Compofelice has served as our Chairman of the Board since May 2004
and as our Chief Executive Officer since July 9, 2007. 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 (f/k/a Catalina 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 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.
    
    
    2003
    
    
    
    2009Ben A. Guill
    
    
    58
    
    
    Mr. Guill was appointed to the Board on February 13, 2008. Mr. Guill is a
private equity investor. 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. In addition, Mr. Guill is a board member
of Cheniere Energy Partners, L.P., a limited partnership formed to
develop, own and operate an LNG facility in Louisiana.
    
    
    2008
    
    
    
    2009Richard A. Bachmann
    
    
    64
    
    
    From February 1998 until March 2009, Mr. Bachmann founded and, from
February 1998 until March 2009, served as Chairman and Chief Executive
Officer of Energy Partners, Limited, an independent exploration and
production company focused on deep water of the Gulf of Mexico and the
continental shelf. 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.
    
    
    2005
    
    
    
    2011Kenneth M. Burke
    
    
    60
    
    
    Mr. Burke retired in June 2004 after a 31 year career with Ernst & Young,
a public accounting firm. 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.
    
    
    2005
    
    
    
    2011
 4




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Principal Occupation, Business Experience and
    
    Director
    
    Seat SubjectName
    
    Age
    
    Directorships
    
    Since
    
    to ElectionMyles W. Scoggins
    
    
    61
    
    
    Dr. Scoggins is the Lead Director of the Board of Directors and 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. 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, director and member of the executive committee of Mobil Oil
Corp. (a wholly-owned subsidiary of Mobil Corp.) Since August 2005 Dr.
Scoggins has served as a Director and a member of Finance and Audit
Committee and Management Performance Committee of Questar Corp., a
natural gas focused energy company and has been a director of Venoco,
Inc., a oil and gas production company, since June 2007. He also serves
as director or advisory board member for the Colorado Oil and Gas
Association (director), National Advisory Council (member) for the
Department of Energys National Renewable Energy Laboratory and the
Colorado Renewable Energy Authority (director).
    
    
    2005
    
    
    
    2010Per Staehr
    
    
    65
    
    
    Mr. Staehr has served since April 2001 as Chairman of A2SEA A/S, the
leading European offshore wind turbine installation company. From March
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 2007, 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. Since June
2004, Mr. Staehr has been a director of Arrow Light Rail Ltd., a special
purpose company formed to design, fund and build a modern light rail tram
system for Nottingham. Since December 2007, he has been a director of the
LPA Group Ltd., an AIM listed manufacturer of railway and airport
equipment and the Daniamant Group, a manufacturer of IMO/SOLAS certified
lights for emergency lifejackets and rafts. Since March 2005, Mr. Staehr
has served as Chairman of the Rail Media Group, a publishing group for
railway magazines, and since January 2005 as Chairman of Riegens Lighting
Limited, a designer and manufacturer of lighting for public industrial
and retail projects.
    
    
    2005
    
    
    
    2010
 Executive Officers
  Name
    
    Age
    
    Position With Our CompanyJoseph S. Compofelice
    
    
    59
    
    
    Chairman of the Board and Chief Executive OfficerGeoff A. Jones
    
    
    52
    
    
    Vice President and Chief Financial OfficerRishi A. Varma
    
    
    36
    
    
    Chief Administrative Officer, Vice President, General Counsel and
Corporate SecretaryTomas R. Salazar
    
    
    46
    
    
    Global Director of Sales and MarketingD. Michael Wallace
    
    
    56
    
    
    Chief Executive Officer  Eastern Marine Services LimitedRay Hoover
    
    
    53
    
    
    Global Director of Technical Services
 5




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##### Table of Contents



Joseph S. Compofelice
 Geoff A. Jones
 Rishi A. Varma
 Tomas R. Salazar
 D. Michael Wallace
 Ray Hoover
 Board and Committee Meetings
  Board Committees
  Nominating andAudit
    
    Compensation
    
    Governance
    
    StrategicBurke*
    
    Hutcheson*
    
    Scoggins*
    
    Compofelice*Bachmann
    
    Guill
    
    Bachmann
    
    BurkeGuill
    
    Scoggins
    
    Staehr
    
    HutchesonScoggins
 
 *
    
    Chairman of the committee 6




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##### Table of Contents



www.tricomarine.com www.tricomarine.com
 Audit Committee
 www.tricomarine.com
 Compensation Committee
   Nominating and Governance Committee
     7




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##### Table of Contents




    
    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;
    
    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;
    
    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
    
    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.
      
    
    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
 8




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
    
    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 Companys 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 Companys securities, or other
similar arrangements by members of the stockholders and nominees 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.
   Strategic Committee
  Executive Sessions; Communications with the Board; Meeting Attendance
    9




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www.tricomarine.com
 www.tricomarine.com
  Code of Ethics
 www.tricomarine.com
 Section 16(a) Beneficial Ownership Reporting Compliance
  
 Item 11. 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
managements expectations or estimates of results or other guidance. We caution investors not to
apply these statements to other contexts.
 Executive Summary
  
    
    To increase Mr. Compofelices annual cash incentive maximum from 150% to 200% of his
annual salary to align his compensation with peer data and to make his cash incentive
maximum proportionately consistent with our other executive officers.
    
    To provide that the compensation payable to our executives officers that is at risk
(consisting of annual and long-term incentives) would comprise the majority of each named
executive officers total package for 2008.
    
    To implement performance-based restricted stock awards for 2008 that are intended to
provide a named executive officer with a larger potential long-term incentive if share price
performance objectives are met.
 10




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
    
    To continue to target an executives 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 Companys ability to
manage its financial condition and maintain growth in subsea services worldwide
    
    To 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 Companys stock price and to ensure that the dilutive effect of such
awards satisfies guidelines established by RiskMetrics Group;
    
    To adjust several executive base salaries to a level that is closer to the market median,
after freezing most executive 2008 salaries at the 2007 level.
    
    To increase the cash annual incentive target for Mr. Varma and Mr. Jones to 60%, which
aligns their compensation with peer data.
    
    In light of the current volatile economic conditions, to grant stock options and
cash-settled appreciation rights to best align management with stockholders interests as
these awards would minimize the dilutive impact on stockholders as compared to restricted
stock and would only achieve a value if the share price improves over current values.
    
    To continue to review the Companys compensation programs, assess the extent to which any
particular compensation component may encourage executives to take unnecessary or excessive
risks and determine appropriate modifications of plans or awards to mitigate these risks.
 Overview
  Compensation Philosophy
   11




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
    
    Provide a competitive total compensation program that enables us to attract and retain
key executives;
    
    Ensure a direct relationship between our financial performance and the total compensation
received by our named executive officers by utilizing a pay for performance approach to a
majority of such compensation;
    
    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 Companys stock price and to ensure that the dilutive effect of such
awards satisfies guidelines established by RiskMetrics Group
    
    Motivate executives to make sound business decisions that improve stockholder value and
reward such decisions;
    
    Ensure the proportion between short-term and long-term compensation reflects market
trends while emphasizing at-risk, or variable, compensation as a valuable means of
supporting our strategic goals and aligning the interests of our named executive officers
with those of our stockholders; and
    
    Ensure that our total compensation program supports our business objectives and culture
by evaluating each named executive officers contributions.
  The Compensation Committee
  The Role of the Compensation Consultant  Peer Group and Compensation Surveys
 2008 Top Management Compensation Survey, 2008 Energy Industry Compensation Survey Executive Oilfield
Manufacturing and Services Industry Compensation survey
  
 
   
 *
    
    additions to the peer company group for 2008. 12




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Role of Chief Executive Officer in Establishing Compensation for Named Executive Officers
   Elements of Compensation for Named Executive Officers
    Element
    
    Purpose
    
    CharacteristicsBase Salary
    
    Compensate executives
for their level of
responsibility,
sustained individual
performance, skills,
background and
experience. Also
helps attract and
retain strong talent.
    
    Fixed element based
on employment
agreement;
eligibility for
periodic merit
increases based on
sustained individual
performance.
 13




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Element
    
    Purpose
    
    CharacteristicsAnnual Cash Incentives
    
    Promote the
achievement of our
annual corporate and
business unit
financial goals, as
well as individual
goals.
    
    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.Long-Term Incentive
    
    Promote the
achievement of our
long-term corporate
financial goals.
    
    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.Retirement Plan
    
    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.
    
    Fixed element;
however, retirement
contributions tied to
pay will vary.Health and Welfare
Benefits
    
    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.
    
    Fixed element;
however, some
employer
contributions tied to
pay will vary, and
some employer
contributions tied to
family size will
vary.Relocation Benefits
    
    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.
    
    Element only payable
if executive
relocates at our
request.Post- Termination 
Compensation
    
    Facilitate the
attraction and
retention of high
caliber executives in
a competitive labor
market in which
formal severance
plans are common.
    
    Contingent element;
only payable if the
executives
employment is
terminated as
specified in the
arrangements (amount
of severance benefits
varies by level in
the organization).
 Base Salary .
  Annual Cash Incentives .
 14




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Annual Incentive Plan Payout Ranges for 2008 for Named Executive Officers
 Mr.
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Varma-Compofelice-
    
    
    
    
    
    
    
    
    
    
    
    
    
    ChiefChairman of
    
    Mr. Jones-
    
    Mr. Salazar-
    
    
    
    
    
    Administrativethe Board,
    
    Vice
    
    Global Director
    
    Mr. Wallace-
    
    Officer, VicePresident and
    
    President
    
    Of Sales and
    
    CEO of
    
    President andChief
    
    and Chief
    
    Marketing
    
    EMSL and
    
    GeneralExecutive
    
    Financial
    
    Trico Group
    
    Vice
    
    Counsel andOfficer
    
    Officer
    
    The Americas
    
    President
    
    SecretaryThreshold Incentive Compensation (% of Base Salary)
    
    
    50
    %
    
    
    25
    %
    
    
    25
    %
    
    
    25
    %
    
    
    25
    %Target Incentive Compensation (% of Base Salary)
    
    
    100
    %
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %Maximum Incentive Compensation (% of Base Salary)
    
    
    200
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Annual Incentive Plan Performance Measure Weightings for 2008 for Named Executive Officers
 Mr.
    
    
    
    
    
    Mr.
    
    Mr.Performance Measure
    
    Compofelice
    
    Mr. Jones
    
    Salazar
    
    Wallace
    
    Mr. VarmaSafety
    
    
    20
    %
    
    
    20
    %
    
    
    20
    %
    
    
    20
    %
    
    
    20
    %Corporate EBITDA
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Return on Capital
    
    
    25
    %
    
    
    25
    %
    
    
    25
    %
    
    
    25
    %
    
    
    25
    %Individual
    
    
    20
    %
    
    
    20
    %
    
    
    20
    %
    
    
    20
    %
    
    
    20
    %
  Long-term Incentives .
 15




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================================================================================

Health and Welfare Benefits.
 Retirement Benefits .
 Relocation Benefits.
 Post-Termination Compensation included in Employment Agreements .
 1.
    
    a lump sum cash payment equal to the sum of:
 16




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##### Table of Contents



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 orii.
    
    the target bonus (as provided in the Companys 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.
  If involuntary termination doesnot occurin connection with, based upon
    
    If termination occurs in connectionor within
    
    with, based upon or within 1212 months after a Change-in-
    
    monthsControl
    
    after a Change-in-ControlSala
    
    Bonus
    
    SalaryName
    
    Health Coverage
    
    multiple
    
    multiple
    
    multiple
    
    Bonus multipleMr. 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
    
    
    
    2.99XMr. 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
    
    
    
    2.99XMr. 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
    
    
    
    1XMr. 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
    
    
    
    2.99XMr. 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
 17




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##### Table of Contents



*
    
    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.    Change-in-Control
 Termination without Cause.
 Other Agreements
  Perquisites.
 2008 Decisions
 18




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##### Table of Contents



Base Salary.
 Annual Cash Incentives.
 Mr. Compofelice
    
    $
    570,046Mr. Jones
    
    $
    142,512Mr. Salazar
    
    $
    123,510Mr. Wallace
    
    $
    128,260Mr. Varma
    
    $
    142,512
 Percentage of Base Salary Paid Based on Annual Incentive Plan Performance Achievement for 2008 for
Named Executive Officers
 Mr.
    
    
    
    
    
    Mr.
    
    Mr.Performance Measure
    
    Compofelice
    
    Mr. Jones
    
    Salazar
    
    Wallace
    
    Mr. VarmaSafety
    
    
    35.0
    %
    
    
    17.5
    %
    
    
    17.5
    %
    
    
    17.5
    %
    
    
    17.5
    %Corporate EBITDA
    
    
    18.4
    %
    
    
    9.2
    %
    
    
    9.2
    %
    
    
    9.2
    %
    
    
    9.2
    %Return on Capital
    
    
    20.5
    %
    
    
    10.3
    %
    
    
    10.3
    %
    
    
    10.3
    %
    
    
    10.3
    %Individual
    
    
    40.0
    %
    
    
    20.0
    %
    
    
    20.0
    %
    
    
    20.0
    %
    
    
    20.0
    %Total
    
    
    113.9
    %
    
    
    57.0
    %
    
    
    57.0
    %
    
    
    57.0
    %
    
    
    57.0
    %
 Long-term Incentives .
 Total Compensation Mix .
 Base Salary as
    
    Annual Incentive (Pay At Risk)
    
    Long-Term Incentive (Pay Atpercentage of total direct
    
    of percentage of total direct
    
    Risk) of percentage of totalName and Position
    
    compensation
    
    compensation
    
    direct compensationMr. Compofelice
    
    
    18.3
    %
    
    
    20.8
    %
    
    
    60.9
    %Mr. Jones
    
    
    26.8
    %
    
    
    15.3
    %
    
    
    57.9
    %Mr. Salazar
    
    
    56.4
    %
    
    
    32.2
    %
    
    
    11.4
    %Mr. Wallace
    
    
    25.9
    %
    
    
    14.8
    %
    
    
    59.3
    %Mr. Varma
    
    
    26.8
    %
    
    
    15.3
    %
    
    
    57.9
    %
 19




---



##### Table of Contents



2009 Decisions
 Base Salary.
 Name
    
    Base salary-2008
    
    Base salary-2009Mr. Compofelice
    
    $
    500,000
    
    
    $
    600,000Mr. Jones
    
    $
    250,000
    
    
    $
    325,000Mr. Salazar
    
    $
    230,000
    
    
    $
    230,000Mr. Wallace
    
    $
    225,000
    
    
    $
    225,000Mr. Varma
    
    $
    250,000
    
    
    $
    325,000
 Annual Cash Incentives.
 Long-term Incentive .
 Other Important Compensation Policies
 Policy Regarding Tax Deductibility of Compensation.
 Terminology
 Total Cash
 Total Direct Compensation
 Change-in-Control
 
    
    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.
 20




---



##### Table of Contents



Termination for Cause
 Termination for Good Reason
 
    
    a material breach by us of any provision of the employment agreement;
    
    a material diminution in the nature or scope of the executives 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 Summary
  Stock
    
    Option
    
    All Other
    
    TotalName and Principal Position
    
    Year
    
    Salary
    
    Bonus (1)
    
    Awards (2)
    
    Awards (2)
    
    Compensation (3)
    
    CompensationJoseph S. Compofelice
    
    
    2008
    
    
    $
    500,000
    
    
    $
    570,046
    
    
    $
    75,832
    
    
    $
    425,999
    
    
    $
    17,572
    
    
    $
    2,389,449Chairman and Chief Executive Officer (4)
    
    
    2007
    
    
    $
    288,524
    
    
    $
    393,637
    
    
    $
    1,959,000
    
    
    $
    772,000
    
    
    $
    14,586
    
    
    $
    3,427,7472006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Geoff A. Jones
    
    
    2008
    
    
    $
    250,000
    
    
    $
    142,512
    
    
    $
    413,741
    
    
    $
    75,453
    
    
    $
    17,572
    
    
    $
    899,278Vice President and Chief Financial Officer
    
    
    2007
    
    
    $
    242,330
    
    
    $
    134,271
    
    
    $
    247,967
    
    
    $
    90,249
    
    
    $
    16,370
    
    
    $
    731,1872006
    
    
    $
    215,000
    
    
    $
    174,333
    
    
    $
    135,931
    
    
    $
    46,123
    
    
    $
    7,011
    
    
    $
    578,398Rishi A. Varma
    
    
    2008
    
    
    $
    250,000
    
    
    $
    142,512
    
    
    $
    326,104
    
    
    $
    51,982
    
    
    $
    17,361
    
    
    $
    787,959Vice President, General Counsel and Secretary
    
    
    2007
    
    
    $
    242,330
    
    
    $
    164,271
    
    
    $
    247,967
    
    
    $
    90,249
    
    
    $
    20,286
    
    
    $
    765,1032006
    
    
    $
    202,500
    
    
    $
    147,675
    
    
    $
    71,872
    
    
    $
    17,555
    
    
    $
    9,817
    
    
    $
    449,419
 21




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##### Table of Contents



Stock
    
    Option
    
    All Other
    
    TotalName and Principal Position
    
    Year
    
    Salary
    
    Bonus (1)
    
    Awards (2)
    
    Awards (2)
    
    Compensation (3)
    
    CompensationD. Michael Wallace
    
    
    2008
    
    
    $
    304,544
    (5)
    
    $
    128,260
    
    
    $
    274,035
    
    
    $
    62,888
    
    
    $
    254,924
    
    
    $
    1,024,651CEO EMSL and Vice President
    
    
    2007
    
    
    $
    304,544
    (5)
    
    $
    120,844
    
    
    $
    247,967
    
    
    $
    90,249
    
    
    $
    196,844
    
    
    $
    960,4482006
    
    
    $
    215,000
    
    
    $
    165,002
    
    
    $
    83,046
    
    
    $
    36,051
    
    
    $
    20,756
    
    
    $
    519,855Tomas R. Salazar
    
    
    2008
    
    
    $
    216,666
    
    
    $
    123,510
    
    
    $
    124,993
    
    
    $
    6,735
    
    
    $
    17,361
    
    
    $
    489,265Global Director of Sales and Marketing
    
    
    2007
    
    
    
    164,023
    
    
    
    67,365
    
    
    $
    14,487
    
    
    $
    5,272
    
    
    $
    16,361
    
    
    $
    267,5082006
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    For 2008, 2007 and 2006, Bonuses include payments made under the Key Employee Retention
Bonus Plan and the Annual Incentive Plan. 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 Payments during 2007 under the Annual
Incentive Plan were as follows: Mr. Jones  $134,271; Mr. Varma  $164,271; and Mr. Wallace
 $120,844. Payments during 2006 under the Key Employee Retention Plan were as follows: Mr.
Jones  $18,750; and Mr. Wallace  $18,750. Payments during 2006 under the Annual Incentive
Plan were as follows: Mr. Jones  $155,583; Mr. Varma  $147,675; and Mr. Wallace 
$146,252.(2)
    
    Dollar amounts represent the compensation expense recognized in 2008, 2007 and 2006 with
respect to outstanding award grants, whether or not granted during 2008, 2007 and 2006, in
accordance with SFAS 123R. Option Awards include $168,666 of expense for Mr. Compofelice.
See Note 14 to the Companys 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: 401(k)
    
    Dollar Value
    
    Relocation
    
    AutomobileName
    
    Year
    
    Plan ($)
    
    of Life Insurance ($)
    
    Benefits ($)
    
    Benefits ($)
    
    Total ($)Joseph S. Compofelice
    
    
    2008
    
    
    
    8,250
    
    
    
    1,664
    
    
    
    
    
    
    
    
    
    
    
    9,9142007
    
    
    
    
    
    
    
    2,334
    
    
    
    
    
    
    
    
    
    
    
    2,334Geoff A. Jones
    
    
    2008
    
    
    
    8,250
    
    
    
    1,664
    
    
    
    
    
    
    
    
    
    
    
    9,9142007
    
    
    
    2,617
    
    
    
    1,947
    
    
    
    
    
    
    
    
    
    
    
    4,5642006
    
    
    
    8,250
    
    
    
    1,664
    
    
    
    
    
    
    
    7,011
    
    
    
    16,925Rishi A. Varma
    
    
    2008
    
    
    
    8,250
    
    
    
    1,567
    
    
    
    
    
    
    
    
    
    
    
    9,8172007
    
    
    
    2,405
    
    
    
    1,947
    
    
    
    
    
    
    
    
    
    
    
    4,3522006
    
    
    
    8,250
    
    
    
    1,567
    
    
    
    
    
    
    
    
    
    
    
    9,817D. Michael Wallace
    
    
    2008
    
    
    
    8,250
    
    
    
    1,664
    
    
    
    
    
    
    
    
    
    
    
    9,9142007
    
    
    
    2,388
    
    
    
    1,754
    
    
    
    38,870
    
    
    
    25,793
    
    
    
    68,8052006
    
    
    
    8,250
    
    
    
    1,664
    
    
    
    
    
    
    
    10,842
    
    
    
    20,756Tomas R. Salazar
    
    
    2008
    
    
    
    8,250
    
    
    
    1,567
    
    
    
    
    
    
    
    
    
    
    
    9,8172007
    
    
    
    8,250
    
    
    
    1,567
    
    
    
    
    
    
    
    
    
    
    
    9,817
  
 (4)
    
    Mr. Compofelice was appointed as the Companys Chief Executive Officer on July 9, 2007 and
was not an executive officer in 2006. In 2006, Mr. Compofelice received total compensation of
$606,142 as our Non-Executive Chairman of the Board.(5)
    
    Mr. Wallaces 2008 and 2007 annual salary includes a foreign service premium of $45,000 and a
cost of living adjustment of $34,544. 22




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##### Table of Contents



Grants of Plan-Based Awards
  All other
    
    All otherstock
    
    optionEstimated Future Payments under
    
    Estimated future payments under
    
    awards:
    
    awards:
    
    
    
    Grant datenon-equity incentive plan awards
    
    equity incentive plan awards
    
    Number of
    
    Number of
    
    Exercise or
    
    fair value ofThres-
    
    
    
    
    
    
    
    
    
    shares of
    
    Securities
    
    Base Price
    
    stock andGrant
    
    Thres-
    
    Target
    
    Maximum
    
    hold #
    
    Target
    
    Maximum
    
    stock or
    
    Underlying
    
    of Option
    
    optionsName
    
    Date (b)
    
    hold (c)
    
    (d)
    
    (e)
    
    (f) (1)
    
    # (g) (1)
    
    # (h) (1)
    
    units (i)
    
    Options (j)
    
    Awards (k)
    
    awardsMr. Compofelice (1)
    
    February 13, 2008
    
    
    
    
    
    
    
    
    3,335
    
    
    
    10,004
    
    
    
    16,674
    
    
    
    33,854
    
    
    
    
    
    
    
    1,427,560
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Jones
    
    February 13, 2008
    
    
    
    
    
    
    
    
    1,077
    
    
    
    3,232
    
    
    
    5,387
    
    
    
    10,938
    
    
    
    
    
    
    
    461,230
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr Varma
    
    February 13, 2008
    
    
    
    
    
    
    
    
    1,077
    
    
    
    3,232
    
    
    
    5,387
    
    
    
    10,938
    
    
    
    
    
    
    
    461,230
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Wallace
    
    February 13, 2008
    
    
    
    
    
    
    
    
    970
    
    
    
    2,909
    
    
    
    4,848
    
    
    
    9,844
    
    
    
    
    
    
    
    415,094
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Salazar
    
    February 13, 2008
    
    
    
    
    
    
    
    
    646
    
    
    
    1,939
    
    
    
    3,232
    
    
    
    6,563
    
    
    
    
    
    
    
    276,740
 
 (1)
    
    On February 13, 2008, each of the Named Executive Officers was granted shares of
performance-based restricted stock, which is reflected in the Estimated Future Payments Under
Equity Incentive Plan Awards column in the table above. Pursuant to the terms of the Plan and
the Stock Agreements, restrictions on the following shares shall lapse as follows (where
straight line interpolation is used to determine vesting between threshold and above
expectations): Average 3-yr Share
    
    Portion of PerformancePerformance Level
    
    Price (daily close)
    
    Shares VestedBelow Threshold
    
    Less than $34.43
    
    
    0
    %Threshold
    
    $
    34.43
    
    
    
    20
    %Above Expectations
    
    $
    40.54
    
    
    
    100
    %
  Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table
  Fair Value Calculation:
 Terms of Awards:
 Employment Agreements:
 23




---



##### Table of Contents



Name
    
    Effective Date
    
    Initial
    
    Length of renewal
    
    Base salaryMr. Compofelice
    
    July 23, 2008
    
    1 year
    
    1 year
    
    $
    600,000Mr. Jones
    
    September 1, 2005
    
    1 year
    
    1 year
    
    $
    325,000Mr. Salazar
    
    
    
    
    
    
    
    
    (1
    )Mr. Wallace
    
    January 1, 2007
    
    1 year
    
    1 year
    
    $
    225,000Mr. Varma
    
    July 1, 2006
    
    1 year
    
    1 year
    
    $
    325,000
 
 (1)
    
    On December 12, 2007, the Compensation Committee approved Mr. Salazars base salary increase
from $180,000 to $230,000 effective January 1, 2008. Outstanding Equity Awards at 2008 Fiscal Year-End
  Option Awards
    
    Stock AwardsEquityincentiveEquity
    
    planEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    incentive
    
    awards:incentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    plan
    
    market orplan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    awards:
    
    payoutawards:
    
    
    
    
    
    
    
    
    
    Number
    
    Market
    
    number of
    
    value ofNumber of
    
    Number of
    
    number of
    
    
    
    
    
    
    
    
    
    of shares
    
    value of
    
    unearned
    
    unearnedSecurities
    
    securities
    
    securities
    
    
    
    
    
    
    
    
    
    or units
    
    shares or
    
    shares,
    
    shares,underlying
    
    underlying
    
    underlying
    
    
    
    
    
    
    
    
    
    of stock
    
    units of
    
    units or
    
    units orunexercised
    
    unexercised
    
    unexercised
    
    Option
    
    Option
    
    that have
    
    stock that
    
    other rights
    
    other rightsoptions (#)
    
    options (#)
    
    unearned
    
    exercise
    
    expiration
    
    not
    
    have not
    
    that have
    
    that haveExercisable
    
    Unexercisable
    
    options
    
    price
    
    date
    
    vested
    
    vested
    
    not vested
    
    not vestedName
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h) (1)
    
    (i)
    
    (j) (1)Joseph S. Compofelice
    
    
    66,817
    
    
    
    33,333
    (2)
    
    
    
    
    
    $
    11.00
    
    
    March 15, 2012
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    16,667
    
    
    
    33,333
    (6)
    
    
    
    
    
    $
    39.18
    
    
    July 9, 2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,854
    (5)
    
    $
    263,077
    
    
    
    16,674
    (10)
    
    
    74,533Geoff A. Jones
    
    
    4,000
    
    
    
    4,000
    (2)
    
    
    
    
    
    $
    11.00
    
    
    March 15, 2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,667
    
    
    
    2,333
    (3)
    
    
    
    
    
    
    27.13
    
    
    March 13, 2013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,234
    
    
    
    4,466
    (4)
    
    
    
    
    
    
    37.01
    
    
    March 21, 2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,388
    (6)
    
    $
    126,894
    
    
    
    5,387
    (10)
    
    $
    24,080Rishi A. Varma
    
    
    4,067
    
    
    
    2,033
    (3)
    
    
    
    
    
    
    27.13
    
    
    March 13, 2013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,234
    
    
    
    4,466
    (4)
    
    
    
    
    
    
    37.01
    
    
    March 21, 2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,738
    (7)
    
    $
    106,109
    
    
    
    5,387
    (10)
    
    $
    24,080D. Michael Wallace
    
    
    
    
    
    
    4,000
    (2)
    
    
    
    
    
    
    11.00
    
    
    March 15, 2012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,334
    
    
    
    1,166
    (3)
    
    
    
    
    
    
    27.13
    
    
    March 13, 2013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,234
    
    
    
    4,466
    (4)
    
    
    
    
    
    
    37.01
    
    
    March 21, 2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,044
    (8)
    
    $
    89,596
    
    
    
    4,848
    (10)
    
    $
    21,671Tomas R. Salazar
    
    
    500
    
    
    
    1,500
    (4)
    
    
    
    
    
    
    37.01
    
    
    March 21, 2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,063
    (9)
    
    $
    36,042
    
    
    
    3,232
    (10)
    
    $
    14,447
 
 (1)
    
    The market value of unvested restricted shares was determined by using a stock price of
$4.47, the closing price of the Companys common stock on Nasdaq on December 31, 2008.(2)
    
    These option awards were granted on March 15, 2005. The options vest ratably over 4 years
beginning on March 15, 2006, except for Mr. Compofelices options, which vested 33% on the
date of grant with the remaining options vesting 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. 24




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##### Table of Contents



(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, 2008. The restrictions on the unvested shares
lapse on July 9, 2010. Mr. Compofelice was also awarded an option for 50,000 shares on July 9,
2007. The options vest ratably over three years beginning on July 9, 2008. 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, 2008. The restrictions lapse on February 13, 2011.(6)
    
    On September 1, 2005, Mr. Jones was granted 15,000 shares of restricted stock, of which 3,750
shares remain unvested as of December 31, 2008. Restrictions lapse in 4 equal installments
beginning on the first anniversary of the grant date. On March 13, 2006, Mr. Jones was granted
7,000 shares of restricted stock, of which 7,000 shares remain unvested as of December 31,
2008. The restrictions lapse on March 13, 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, 2008. 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, 2008. The
restrictions lapse on February 13, 2011.(7)
    
    On March 13, 2006, Mr. Varma was granted 6,100 shares of restricted stock, of which 6,100
shares remain unvested as of December 31, 2008. The restrictions lapse on March 13, 2009. 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, 2008. 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, 2008. The restrictions lapse on February 13, 2011.(8)
    
    On March 13, 2006, Mr. Wallace was granted 3,500 shares of restricted stock, of which 3,500
shares remain unvested as of December 31, 2008. The restrictions lapse on March 13, 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, 2008. The restrictions lapse on February 13, 2011.(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, 2008. 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, 2008. 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 Amendment No. 1 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 2008
  Option Exercises and Stock Vested for 2008Option Awards
    
    Stock Awards# of Shares
    
    
    
    
    
    # of sharesacquired
    
    Value realized upon
    
    acquired
    
    Value realized onName
    
    on Exercise
    
    exercise
    
    on vesting
    
    vesting (1)Joseph S. Compofelice
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Geoff A. Jones
    
    
    
    
    
    
    
    
    
    
    3,750
    
    
    
    89,063Rishi A. Varma
    
    
    
    
    
    
    
    
    
    
    1,666
    
    
    
    59,976D. Michael Wallace
    
    
    8,000
    
    
    
    222,240
    
    
    
    
    
    
    
    Tomas R. Salazar
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Calculated by multiplying the number of vested shares by the market price of such shares on
the date of vesting.(2)
    
    Based on the difference between $38.78, the closing sale price of our common stock on the
date of exercise as reported by Nasdaq, and $11.00, the exercise price of such options. 25




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##### Table of Contents



Potential Payments Upon Change-in-Control/Termination
  InvoluntaryNot For
    
    
    
    
    
    Termination
    
    TerminationVoluntary
    
    Cause
    
    For Cause
    
    related to
    
    in event of
    
    TerminationTermination
    
    Termination
    
    Termination
    
    Change-in-
    
    Disability
    
    in event ofon
    
    on
    
    on
    
    Control on
    
    On
    
    Death onMr. Compofelice
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008 *
    
    12/31/2008Compensation:
    
    $
    500,000
    
    
    $
    500,000
    
    
    $
    500,000
    
    
    $
    500,000
    
    
    $
    500,000
    
    
    $
    500,000Severance
    
    $
    
    
    
    $
    1,000,000
    
    
    $
    
    
    
    $
    1,495,000
    
    
    $
    
    
    
    $
    Annual Incentive 1)
    
    $
    525,000
    
    
    $
    1,050,000
    
    
    $
    525,000
    
    
    $
    1,050,000
    
    
    $
    525,000
    
    
    $
    525,000Long-term IncentivesIntrinsic Value of Unvested and
Accelerated Stock Options
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Unvested and Accelerated Restricted Stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    432,722.82
    
    
    $
    432,722.82
    
    
    $
    432,722.82Benefits & Perquisites:Health Benefits
    
    $
    
    
    
    $
    13,897
    
    
    $
    
    
    
    $
    13,897
    
    
    $
    
    
    
    $
    Annual Disability Income *
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    180,000
    
    
    $
    Life Insurance Benefits
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    900,000Excise Tax & Gross-Up
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    993,641
    
    
    $
    
    
    
    $
    Total
    
    $
    525,000
    
    
    $
    2,063,897
    
    
    $
    525,000
    
    
    $
    3,985,261
    
    
    $
    1,137,723
    
    
    $
    1,857,723
 
 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 Boards discretion.*
    
    until no longer disabled or Social Security Retirement Age InvoluntaryNot For
    
    
    
    
    
    TerminationCause
    
    For Cause
    
    related to
    
    Termination
    
    TerminationVoluntary
    
    Termination
    
    Termination
    
    Change-in-
    
    in event of
    
    in event ofTermination On
    
    On
    
    on
    
    Control on
    
    Disability
    
    Death onMr. Jones
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    on 12/31/2008 *
    
    12/31/2008Compensation:
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000Severance
    
    $
    
    
    
    $
    250,000
    
    
    $
    
    
    
    $
    747,500
    
    
    $
    
    
    
    $
    Annual Incentive 1)
    
    $
    131,000
    
    
    $
    174,333
    
    
    $
    
    
    
    $
    652,256
    
    
    $
    
    
    
    $
    Long-term IncentivesIntrinsic Value of Unvested
and Accelerated Stock
Options
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Unvested and
Accelerated Restricted Stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    167,737
    
    
    $
    167,737
    
    
    $
    167,737Benefits & Perquisites:
 26




---



##### Table of Contents



InvoluntaryNot For
    
    
    
    
    
    TerminationCause
    
    For Cause
    
    related to
    
    Termination
    
    TerminationVoluntary
    
    Termination
    
    Termination
    
    Change-in-
    
    in event of
    
    in event ofTermination On
    
    On
    
    on
    
    Control on
    
    Disability
    
    Death onMr. Jones
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    on 12/31/2008 *
    
    12/31/2008Health Benefits
    
    $
    
    
    
    $
    9,265
    
    
    $
    
    
    
    $
    9,265
    
    
    $
    
    
    
    $
    Annual Disability Income *
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    150,000
    
    
    $
    Life Insurance Benefits
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    750,000Excise Tax & Gross-Up
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    488,642
    
    
    $
    
    
    
    $
    Total
    
    $
    131,000
    
    
    $
    433,598
    
    
    $
    
    
    
    $
    2,065,399
    
    
    $
    317,737
    
    
    $
    917,737
 
 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 Boards discretion.*
    
    until no longer disabled or Social Security Retirement Age InvoluntaryNot For
    
    
    
    
    
    Termination
    
    TerminationCause
    
    For Cause
    
    related to
    
    in event of
    
    TerminationVoluntary
    
    Termination
    
    Termination
    
    Change-in-
    
    Disability
    
    in event ofTermination
    
    on
    
    on
    
    Control on
    
    on
    
    Death onMr. Varma
    
    on 12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008 *
    
    12/31/2008Compensation:
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000
    
    
    $
    250,000Severance
    
    $
    
    
    
    $
    250,000
    
    
    $
    
    
    
    $
    747,500
    
    
    $
    
    
    
    $
    Annual Incentive 1)
    
    $
    131,000
    
    
    $
    295,271
    
    
    $
    131,000
    
    
    $
    622,169
    
    
    $
    131,000
    
    
    $
    131,000Long-term IncentivesIntrinsic Value of Unvested
and Accelerated Stock
Options
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Unvested and
Accelerated Restricted Stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    135,781
    
    
    $
    135,781
    
    
    $
    135,781Benefits & Perquisites:Health Benefits
    
    $
    
    
    
    $
    13,678
    
    
    $
    
    
    
    $
    13,678
    
    
    $
    
    
    
    $
    Annual Disability Income *
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    150,000
    
    
    $
    Life Insurance Benefits
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    750,000Excise Tax & Gross-Up
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    455,525
    
    
    $
    
    
    
    $
    Total
    
    $
    131,000
    
    
    $
    558,949
    
    
    $
    131,000
    
    
    $
    1,974,653
    
    
    $
    416,781
    
    
    $
    1,016,781
 
 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 Boards discretion.*
    
    until no longer disabled or Social Security Retirement Age InvoluntaryNot For
    
    
    
    
    
    Termination
    
    TerminationCause
    
    For Cause
    
    related to
    
    in event of
    
    TerminationVoluntary
    
    Termination
    
    Termination
    
    Change-in-
    
    Disability
    
    in event ofTermination
    
    on
    
    on
    
    Control on
    
    on
    
    Death onMr. Wallace
    
    on 12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008 *
    
    12/31/2008Compensation:
    
    $
    225,000
    
    
    $
    225,000
    
    
    $
    225,000
    
    
    $
    225,000
    
    
    $
    225,000
    
    
    $
    225,000Severance Annual
    
    $
    
    
    
    $
    225,000
    
    
    $
    
    
    
    $
    672,750
    
    
    $
    
    
    
    $
    Incentive 1)
    
    $
    118,000
    
    
    $
    283,002
    
    
    $
    118,000
    
    
    $
    611,356
    
    
    $
    118,000
    
    
    $
    118,000Long-term IncentivesIntrinsic Value of Unvested
and Accelerated Stock
Options
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Unvested and
Accelerated Restricted Stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    133,617
    
    
    $
    133,617
    
    
    $
    133,617Benefits & Perquisites:Health Benefits
    
    $
    
    
    
    $
    15,031
    
    
    $
    
    
    
    $
    15,031
    
    
    $
    
    
    
    $
    Annual Disability Income *
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    135,000
    
    
    $
    Life Insurance Benefits
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    675,000Repatriation Costs
    
    $
    25,000
    
    
    $
    25,000
    
    
    $
    25,000
    
    
    $
    25,000
    
    
    $
    25,000
    
    
    $
    25,000Excise Tax & Gross-Up
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    428,171
    
    
    $
    
    
    
    $
    Total
    
    $
    118,000
    
    
    $
    523,033
    
    
    $
    118,000
    
    
    $
    1,860,925
    
    
    $
    386,617
    
    
    $
    926,617
 
 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 Boards discretion.*
    
    until no longer disabled or Social Security Retirement Age 27




---



##### Table of Contents



InvoluntaryNot For
    
    
    
    
    
    Termination
    
    TerminationCause
    
    For Cause
    
    related to
    
    in event of
    
    TerminationVoluntary
    
    Termination
    
    Termination
    
    Change-in-
    
    Disability
    
    in event ofTermination
    
    on
    
    on
    
    Control on
    
    on
    
    Death onMr. Salazar
    
    on 12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008
    
    12/31/2008 *
    
    12/31/2008Compensation:
    
    $
    210,000
    
    
    $
    210,000
    
    
    $
    210,000
    
    
    $
    210,000
    
    
    $
    210,000
    
    
    $
    210,000Severance
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    210,000
    
    
    $
    
    
    
    $
    Annual Incentive 1)
    
    $
    113,000
    
    
    $
    113,000
    
    
    $
    113,000
    
    
    $
    272,698
    
    
    $
    113,000
    
    
    $
    113,000Long-term IncentivesIntrinsic Value of Unvested and
Accelerated Stock Options
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Unvested and
Accelerated Restricted Stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    50,489
    
    
    $
    50,489
    
    
    $
    50,489Benefits & Perquisites:Health Benefits
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    13,678
    
    
    $
    
    
    
    $
    Annual Disability Income *
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    126,000
    
    
    $
    Life Insurance Benefits
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    630,000Excise Tax & Gross-Up
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Total
    
    $
    113,000
    
    
    $
    113,000
    
    
    $
    113,000
    
    
    $
    546,864
    
    
    $
    289,489
    
    
    $
    793,489
 
 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 Boards discretion.*
    
    until no longer disabled or Social Security Retirement Age DIRECTOR COMPENSATION
  Change inpension valueandNon-equity
    
    nonqualifiedFees Earned or
    
    Stock
    
    Option
    
    incentive plan
    
    deferred
    
    All otherpaid in cash
    
    awards
    
    awards
    
    compensation
    
    compensation
    
    compensation
    
    TotalName
    
    ($)
    
    (1)(2) ($)
    
    (2) ($)
    
    ($)
    
    earnings ($)
    
    ($)
    
    ($)Kenneth M.
Burke Chair of the Audit Committee
    
    $
    75,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    Richard A. Bachmann
    
    
    65,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    Ben A. Guill(3)
    
    
    56,875
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    Edward C. Hutcheson, Jr.
Chair of the Compensation Committee
    
    
    70,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    Myles W.
Scoggins
Chair of the Nominating and Governance Committee
    
    
    70,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    Per Staehr
    
    
    65,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    
 
 (1)
    
    On April 29, 2008, each director was granted 2,690 shares of restricted stock. All of the
restrictions lapsed on May 29, 2008. At December 31, 2008, the following number of shares of
our common stock held by our non-employee directors were outstanding: Mr. Burke, 14,392
shares; Mr. Bachmann, 12,392 shares; Mr. Guill, 5,799 shares; Mr. Hutcheson, 8,072 shares; Mr.
Scoggins, 12,392 shares; and Mr. Staehr, 12,392 shares.(2)
    
    Dollar amounts represent the compensation expense recognized in 2008 with respect to
outstanding award grants based on the grant date fair value of the respective award, in
accordance with Statement of Financial Accounting Standards 123R, whether or not granted
during 2008. See note 14 to the Companys 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)
    
    Mr. Guill was appointed to the Board on February 13, 2008. On that date, Mr. Guill was
granted 3,109 shares of restricted stock. All of the restrictions lapsed on March 13, 2008.  28




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##### Table of Contents



Compensation Committee Interlocks and Insider Participation
  Compensation Committee Report
  The Compensation Committee
Edward C. Hutcheson, Jr., Chairman of the Committee
Ben A. Guill
Myles W. Scoggins
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 Securities Ownership of Management
  Amount andnature ofbeneficialName of Beneficial Owner
    
    ownership (1)
    
    Percent of ClassJoseph S. Compofelice
    
    
    254,147
    (2)(7)(9)
    
    
    1.5
    %Richard A. Bachmann
    
    
    12,392
    
    
    
    *Kenneth M. Burke
    
    
    14,392
    
    
    
    *Edward C. Hutcheson, Jr.
    
    
    8,072
    
    
    
    *Myles W. Scoggins
    
    
    12,392
    
    
    
    *Per Staehr
    
    
    12,392
    
    
    
    *Ben Guill
    
    
    5,799
    
    
    
    *Geoff Jones
    
    
    61,992
    (3)(5)(6)(7)
    
    
    *D. Michael Wallace
    
    
    44,859
    (5)(6)(7)
    
    
    *Rishi A. Varma
    
    
    41,359
    (4)(5)(6)(7)
    
    
    *Tomas R. Salazar
    
    
    11,795
    (5)(8)
    
    
    *All directors and executive officers as a group (12 persons)
    
    
    479,591
    
    
    
    2.9
    %
 
 *
    
    Less than one percent. 29




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##### Table of Contents



(1)
    
    Unless otherwise indicated, the securities are held with sole voting and investment power.(2)
    
    Mr. Compofelice shares investment power over 1,000 shares of common stock with a minors
trust. Mr. Compofelice disclaims beneficial ownership with respect to these 1,000 shares.(3)
    
    Includes 7,500 shares held by Mr. Jones and subject to restrictions that lapse in annual 25%
increments, which began on September 1, 2006.(4)
    
    Includes 3,334 shares subject to restrictions that lapse in annual 33% increments, which
began on May 2, 2006.(5)
    
    Includes the following number of shares subject to options that are exercisable: Mr.
Compofelice, 116,817; Mr. Jones, 19,467; Mr. Wallace, 11,967; Mr. Varma, 10,567; Mr. Hoover
6,234; and Mr. Salazar, 500.(6)
    
    Includes the following number of shares subject to restrictions that lapse 100% on March 21,
2010: Mr. Jones, 6,700; Mr. Wallace, 6,700 and Mr. Varma, 6,700.(7)
    
    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. Salazar, 6,563; Mr. Wallace 9,844; Mr.
Hoover 3,350; and Mr. Varma 10,938. 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.
Hoover 1,650; Mr. Salazar, 3,232; and Mr. Varma, 5,387. 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 Companys average closing share price equals or
exceeds $42.53/share, all such performance shares become immediately vested.(8)
    
    Includes 1,500 shares subject to restrictions that lapse 100% on January 2, 2011. Securities Ownership of Certain Beneficial Owners
  Amount and natureof beneficialName and Address of Beneficial Owner
    
    ownership
    
    
    Percent of ClassKistefos AS
    
    
    3,535,959
    (1)
    
    
    22.2
    %(1)Christen Sveaas
    
    
    
    (1)
    
    
    
    (1)Bay Harbour Management, L.C.
    
    
    2,404,465
    (2)
    
    
    15.1
    %(2)Highbridge International LLC
    
    
    2,085,106
    (3)
    
    
    10.36
    %(3)Highbridge Convertible Arbitrage Master Fund, L.P.
    
    
    
    (3)
    
    
    
    (3)Whitebox Advisors, LLC
    
    
    1,607,386
    (4)
    
    
    10.1
    %(4)
 Amount and natureof beneficialName and Address of Beneficial Owner
    
    ownership
    
    
    Percent of ClassAllegheny Corporation
    
    
    1,225,000
    (5)
    
    
    7.7
    %(5)Dimensional Fund Advisors LP
    
    
    1,215,886
    (6)
    
    
    7.6
    %(6)Black River Asset Management LLC
    
    
    1,017,500
    (7)
    
    
    6.4
    %(7)Portside Growth and Opportunity Fund
    
    
    964,869
    (8)
    
    
    5.7
    %(8)Capital Ventures International
    
    
    977,239
    (9)
    
    
    5.8
    %(9)
 
 (1)
    
    As of March 6, 2009, based on an amendment to a Schedule 13D filed jointly by Kistefos AS and
Christen Sveaas. 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. 30




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##### Table of Contents



(2)
    
    As of December 31, 2008, based on a Schedule 13G filed by Bay Harbour Management, L.C. (Bay
Harbour). According to the Schedule 13G, Bay Harbour has the sole power to vote or direct the
vote and the sole power to dispose or direct the disposition of all such shares and so is
deemed to beneficially own such shares. Such shares are held by certain investment funds and
managed accounts advised by Bay Harbour. Bay Harbour disclaims beneficial ownership of any of
such shares beneficially owned by the investment funds and managed accounts advised by Bay
Harbour. Ann VanDyke, a family member of a controlling person of Bay Harbour holds 5,000
shares, and Bay Harbour disclaims the existence of a group with Ms. VanDyke and such shares
are not included in the shares reported in the Schedule 13G. According to the Schedule 13G,
Steven A. Van Dyke, Douglas P. Teitelbaum and John D. Stout are the controlling principals of
Bay Harbour. The address of the principal business office of Bay Harbour is 375 Park Avenue,
20th Floor, New York, NY 10152.(3)
    
    As of December 31, 2008, based on a Schedule 13G filed jointly by Highbridge International
LLC (Highbridge International), Highbridge Convertible Arbitrage Master Fund, L.P.
(Highbridge Convertible), Highbridge Capital Management, LLC (Highbridge Capital), Glenn
Dubin (Dubin) and Henry Swieca (Swieca). According to the Schedule 13G, 1,978,723 of such
shares are issuable upon conversion of $79,980,000 principal amount of the Companys 6.50%
Senior Convertible Debentures due May 16, 2028 (the Senior Notes), and assuming a conversion
price of $40.42 per share. According to the Schedule 13G, (i) Highbridge International
beneficially owns Senior Notes convertible into 1,978,723 shares, (ii) Highbridge Convertible
beneficially owns Senior Notes convertible into 106,382 shares, (iii) each of Highbridge
Capital, Glenn Dubin and Henry Swieca may be deemed the beneficial owner of Senior Notes
convertible into 2,085,106 shares beneficially owned by Highbridge International and
Highbridge Convertible. All such persons report shared power to vote or direct the vote and
shared power to dispose or direct the disposition of such shares reported in the prior
sentence. Highbridge International and Highbridge Convertible may not convert Senior Notes
until such time as all such reporting persons would not beneficially own after any such
exercise more than 9.99% of the outstanding shares. The shares reported as issuable upon
conversion of the Senior Notes do not include any accrued and unpaid interest. The shares
reported also do not include 719,158 shares that may be issued to Highbridge International
upon conversion of $36,400,000 aggregate principal amount of 3.00% Senior Convertible
Debentures due January 12, 2027 (the 2027 Notes), upon the satisfaction of certain
conditions, which currently have not been satisfied and cannot be satisfied in the discretion
of Highbridge International within the next 60 days. Highbridge Capital is the trading manager
of Highbridge International and Highbridge Convertible. Dubin is the Chief Executive Officer
and Swieca is the Chief Investment Officer of Highbridge Capital. Highbridge Capital, Dubin
and Swieca disclaim beneficial ownership of shares held by Highbridge International and
Highbridge Convertible. The address of the principal business office of Highbridge
International and Highbridge Convertible is c/o Harmonic Fund Services, The Cayman Corporate
Centre, 4th Floor, 27 Hospital Road, Grand Cayman, Cayman Islands, British West Indies, and
the address of the principal business office of Highbridge Capital, Dubin and Swieca is c/o
Highbridge Capital, 9 West 57th Street, 27th Floor, New York, New York 10019.(4)
    
    As of December 31, 2008, based on an amendment to a Schedule 13G. The amendment to the
Schedule 13G was 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
(1,607,386 shares)(WA), Whitebox Combined Advisors, LLC (761,626 shares)(WCA) Whitebox
Combined Partners, L.P. (761,626 shares)(WCP), Whitebox Combined Fund, L.P. (761,626
shares)(WCFLP), Whitebox Combined Fund, Ltd. (761,626 shares)(WCFLTD), Whitebox
Convertible Arbitrage, LLC (308,067 shares)(WCAA), Whitebox Convertible Arbitrage Partners,
L.P. (308,067 shares)(WCAP), Whitebox Convertible Arbitrage Fund, L.P. (308,067
shares)(WCAFLP), Whitebox Convertible Arbitrage Fund, Ltd. (308,067 shares)(WCAFLTD),
Whitebox Intermarket Advisors, LLC (398,179 shares)(WIA), Whitebox Intermarket Partners,
L.P. (398,179 shares)(WIP), Whitebox Intermarket Fund, L.P. (398,179 shares)(WIFLP),
Whitebox Intermarket Fund, Ltd. (398,179 shares)(WILTD), Pandora Select Advisors, LLC
(49,480 shares)(PSA), Pandora Select Partners, L.P. (49,480 shares)(PSP), Pandora Select
Fund, L.P. (49,480 shares)(PSFLP), Pandora Select Fund, Ltd. (49,480 shares)(PSFLTD),
Whitebox Special Opportunity Advisors, LLC (24,740 shares)(WSOA), Whitebox Special
Opportunities Partners, L.P.  Series B (24,740 shares)(WSOBP), Whitebox Special
Opportunities Fund, L.P.  Series B (24,740 shares)(WSOBFLP), and Whitebox Special
Opportunities SPC Fund, Ltd.  Series B (24,740 shares)(WSOBFLTD). 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,
WIA, PSA, WSOA, WCFLP, WCAFLP, WIFLP, PSFLP and WSOBFLP is 3033 Excelsior Blvd., Suite 300,
Minneapolis, MN 55416. The address of the principal business office of WCP, WCAP, WIP, PSP,
WSOBP, WCFLTD, WCAFLTD, WIFLTD, PSFLTD and WSOBFLTD is Trident Chambers, P.O. Box 146,
Waterfront Drive, Wickhams Cay, Road Town, Tortola, British Virgin Islands.(5)
    
    As of December 31, 2008, based on an amendment to a Schedule 13G, such shares are
beneficially owned directly by Capitol Indemnity Corporation (CIC), Capitol Specialty
Insurance Company (CSIC), Employers Direct Insurance Company (EDIC), Platte River
Insurance Company (PRC) and RSUI Indemnity Company (RIC). Alleghany Capital Partners LLC 31




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##### Table of Contents



(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. Capitol Transamerica Corporation (CATA) owns 100% of the issued and outstanding stock
of CIC and CSIC. Employers Direct Corporation (EDC) owns 100% of the issued and outstanding
stock of EDIC. RSUI Group, Inc. (RSUI Group) owns 100% of the issued and outstanding stock of
RIC. Alleghany Insurance Holdings LLC (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 Corporation (Alleghany) owns 100% of the equity interests
in AIHL. According to the amendment to the Schedule 13G, (i) Allegheny 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 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.(6)
    
    As of December 31, 2008, based on an amendment to Schedule 13G filed by Dimensional Fund
Advisors LP (Dimensional). Dimensional furnishes investment advice to 4 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 the
amendment to the Schedule 13G, in its role as investment advisor or manager, Dimensional
beneficially owns and possesses sole power to vote with respect to 1,174,641 of such shares
and the sole power to dispose of 1,215,886 of such shares. The address of the principal
business office of Dimensional is Palisades West, Building One, 6300 Bee Cave Road, Austin,
Texas, 78746.(7)
    
    As of December 31, 2008, based on an amendment to Schedule 13G filed jointly by Black River
Asset Management LLC (BR Asset), Black River Commodity Fund Ltd. (BR Commodity) and Black
River Commodity Equity Value Fund Ltd. (BR Equity). According to the amendment, (i) BR Asset
beneficially owns and is deemed to have sole power to vote and dispose of all such shares,
(ii) BR Commodity beneficially owns and is deemed to have sole power to vote and dispose of
356,125 of such shares, and (iii) BR Equity beneficially owns and is deemed to have sole power
to vote and dispose of 661,375 of such shares. The address of the principal business office of
BR Asset is 12700 Whitewater Drive, Minnetonka, MN 55343. The address of the principal
business office of BR Commodity and BR Equity is P.O. Box 309, Ugland House, Grand Cayman
KY1-1104, Cayman Islands.(8)
    
    As of December 31, 2008, based on an amendment to Schedule 13G filed jointly by Portside
Growth and Opportunity Fund (Portside), Ramius LLC (Ramius), C4S & Co., L.L.C. (C4S),
Peter A. Cohen (Cohen), Morgan B. Stark (Stark), Thomas W. Strauss (Strauss) and Jeffrey
M. Solomon (Solomon). According to the amendment, such shares are issuable upon conversion
of $39,000,000 principal amount of the Senior Notes, assuming a conversion price of $40.42 per
share. According to the Schedule 13G, Portside, Ramius and C4S have sole power to vote or
direct the vote and sole power to dispose or direct the disposition of all such shares
issuable upon conversion and therefore beneficially own such shares, and Cohen, Stark, Strauss
and Solomon have shared power to vote or direct the vote and shared power to dispose or direct
the disposition of all such shares issuable upon conversion and therefore beneficially own
such shares. Portside has the right to convert the Senior Notes into shares of the Companys
common stock provided Portside would not beneficially own more than 9.99% of the outstanding
shares of the Companys common stock after any such exercise. The shares reported also do not
include 201,324 shares that may be issued to Portside upon conversion of $8,745,000 aggregate
principal amount of the 2027 Notes, upon the satisfaction of certain conditions, which
currently have not been satisfied and cannot be satisfied in the discretion of Portside within
the next 60 days. Ramius is the investment manager of Portside with the power to made
decisions respecting the disposition of the proceeds from the sale of shares of the Companys
common stock, among other things. C4S is the management member of Ramius and directs its
operations. Messrs. Cohen, Stark, Strauss and Solomon are the sole management members of C4S
and in that capacity direct its operations. Each of Ramius, C4S and Messrs. Cohen, Stark,
Strauss and Solomon may be deemed to beneficially own the $39,000,000 aggregate principal
amount of the Senior Notes owned by Portside but disclaim such beneficial ownership. The
address of the principal business office of Portside, Ramius, C4S, Cohen, Stark, Strauss and
Solomon is c/o Ramius LLC, 599 Lexington Avenue, 20th Floor, New York, New York 10022.(9)
    
    As of December 31, 2008, based on a Schedule 13G filed jointly by Capital Ventures
International (Capital Ventures) and Heights Capital Management, Inc. (Heights Capital).
According to the Schedule 13G, such shares are issuable upon conversion 32




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##### Table of Contents



of $39,500,000 principal amount of the Senior Notes and assuming a conversion price of $40.42 per
share. According to the Schedule 13G, Capital Venture and Heights Capital have shared power to
vote or direct the vote and the shared power to dispose or direct the disposition of all such
shares issuable upon conversion. Heights Capital serves as the investment advisor of Capital
Ventures and may be deemed to be the beneficial owner of all such shares owned by Capital
Ventures, but disclaims such beneficial ownership. The address of the principal business office
of Capital Ventures is One Capitol Place, P.O. Box 1787 GT, Grand Cayman, Cayman Islands, British
West Indies and the address of the principal business office of Heights Capital is 101 California
Street, Suite 3250, San Francisco, California 94111. 
 Item 13. Certain Relationships and Related Transactions and Director Independence
 Related Persons Policies and Procedures
   
    
    The nature of the related persons interest in the transaction;
    
    The material terms of the transaction;
    
    Whether such transaction might affect the independent status of a director under Nasdaq
independence standards;
    
    The importance of the transaction to the related person and to us; and
    
    Whether the transaction could impair the judgment of a director or executive officer to act
in our best interest.
     33




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##### Table of Contents



Transactions
 Transactions with Kistefos AS
 Stock Purchase Agreement
      Registration Rights.
  Director Independence
   34




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##### Table of Contents



Item 14. Principal Accountant Fees and Services
  Independent Registered Public Accounting Firm Fees
  2008
    
    
    2007Audit Fees(1)
    
    $
    2,524,485
    
    
    $
    1,395,176Audit Related Fees(2)
    
    $
    60,310
    
    
    $
    162,102Tax Fees(3)
    
    $
    45,678
    
    
    $
    24,480All Other Fees(4)
    
    $
    
    
    
    $
    $
    2,630,473
    
    
    $
    1,581,758
 
 (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 2008 include $240,000 related to
various SEC services and $116 of statutory audits for our various foreign subsidiaries. Audit
fees in 2007 include $125,000 for various SEC services, $46,000 for the re-audit related to
the purchase of our Active Subsea ASA subsidiary and $188,000 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)
    
    PricewaterhouseCoopers LLP did not perform any non-audit services for us specified in Rule
2-01(c)(4)(i)-(ix) of Regulation S-X. Pre-Approval Process
  35




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (b) Exhibits
  36




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##### Table of Contents



SIGNATURES
  Trico Marine Services, Inc.
(Registrant)By:
    /s/ Joseph S. CompofelicePresident, Chief Executive Officer and Chairmanof the Board (Principal Executive Officer)   Signature
    
    Title
    
    Date/s/ Joseph S. Compofelice

Joseph S. Compofelice
    
    President, Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
    
    May 5, 2009/s/ Geoff A. Jones

Geoff A. Jones
    
    Vice President and Chief Financial Officer
(Principal Financial Officer)
    
    May 5, 2009/s/Lisa Curtis

Lisa Curtis
    
    Chief Accounting Officer
(Principal Financial Officer)
    
    May 5, 2009/s/ Per Staehr

Per Staehr
    
    Director
    
    May 5, 2009/s/ Richard A. Bachmann

Richard A. Bachmann
    
    Director
    
    May 5, 2009/s/ Kenneth M. Burke

Kenneth M. Burke
    
    Director
    
    May 5, 2009/s/ Ben A. Guill

Ben A. Guill
    
    Director
    
    May 5, 2009/s/ Edward C. Hutcheson, Jr.

Edward C. Hutcheson, Jr.
    
    Director
    
    May 5, 2009/s/ Myles W. Scoggins

Myles W. Scoggins
    
    Director
    
    May 5, 2009
 37




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##### Table of Contents



TRICO MARINE SERVICES, INC.
 EXHIBIT INDEX
 2.1
    
    Joint Prepackaged Plan of Reorganization of the Company, Trico
Marine Assets, Inc. and Trico Marine Operators, Inc. under Chapter
11 of the United States Bankruptcy Code (incorporated by reference
to Exhibit 99.2 to our Current Report on Form 8-K dated November 12,
2004).2.2
    
    Plan Support Agreement, as amended, dated September 8, 2004
(incorporated by reference to Exhibit 99.3 to our Current Report on
Form 8-K dated November 15, 2004).3.1
    
    Second Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to our Current Report on
Form 8-K dated March 16, 2005).3.2
    
    Certificate of Designation of Series A Junior Participating
Preferred Stock of Trico Marine Services, Inc. (incorporated by
reference to Exhibit 3.1 to our Current Report on Form 8-K dated
April 9, 2007).3.3
    
    Certificate of Elimination of Series A Junior Participating
Preferred Stock of Trico Marine Services, Inc. (incorporated by
reference to Exhibit 3.1 to our Current Report on Form 8-K dated
April 24, 2008).3.4
    
    Eighth Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.1 to our Current Report on Form 8-K dated December 9,
2008).4.1
    
    Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to our Annual Report on Form 10-K dated March 15, 2005).4.2
    
    Registration Rights Agreement, dated as of March 15, 2005, by and
among Trico Marine Services, Inc. and the Holders named therein
(incorporated by reference to Exhibit 4.1 to our Current Report on
Form 8-K dated March 16, 2005).4.3
    
    Warrant Agreement, dated March 15, 2005 (incorporated by reference
to Exhibit 4.2 to our Current Report on Form 8-K dated March 16,
2005).4.4
    
    Form of Series A Warrant (incorporated by reference to Exhibit 4.3
to our Current Report on Form 8-K/A dated March 21, 2005).4.5
    
    Indenture of Trico Marine Services, Inc. and Wells Fargo Bank,
National Association, as Trustee, dated February 7, 2007
(incorporated by reference to Exhibit 10.18 to our Annual Report on
Form 10-K dated March 1, 2007).4.6
    
    Registration Rights Agreement, by and among Trico Marine Services,
Inc. and the Initial Purchasers, dated February 7, 2007
(incorporated by reference to Exhibit 10.19 to our Annual Report on
Form 10-K dated March 1, 2007).4.7
    
    Securities Purchase Agreement, dated as of May 14, 2008, by and
among Trico Marine Services, Inc. and the investors named therein
(incorporated by reference to Exhibit 4.1 to our Current Report on
Form 8-K dated May 14, 2008).4.8
    
    Indenture of Trico Marine Services, Inc. and Wells Fargo Bank,
National Association, as Trustee, dated May 16, 2008 (incorporated
by reference to Exhibit 4.2 to our Current Report on Form 8-K/A
dated May 14, 2008).4.9
    
    Form of Registration Rights Agreement, dated May 16, 2008, among
Trico Marine Services, Inc. and the purchasers named therein
(incorporated by reference to Exhibit 4.3 to our Current Report on
Form 8-K dated May 14, 2008).4.10
    
    Phantom Stock Units Agreement, dated May 22, 2008, between Trico
Marine Services, Inc. and West Supply IV AS (incorporated by
reference to Exhibit 10.3 to our Current Report on Form 8-K/A dated
May 22, 2008).4.11
    
    Registration Rights Agreement, dated May 22, 2008, between Trico
Marine Services, Inc. and West Supply IV AS (incorporated by
reference to Exhibit 10.4 to our Current Report on Form 8-K/A dated
May 22, 2008).4.12
    
    Form of Phantom Stock Units Agreement, dated May 15, 2008, by and
between Trico Marine Services, Inc. and certain members of
management (and their controlled entities) of DeepOcean
(incorporated by reference to Exhibit 10.2 to our Current Report on
Form 8-K dated May 14, 2008).10.1
    
    Credit Agreement dated April 24, 2008, by and among Trico Supply AS,
Trico Subsea Holding AS, Trico Subsea AS, Nordea Bank Finland PLC,
New York Branch, as Administrative Agent, Book Runner and Joint Lead
Arranger, Nordea Bank Norge ASA, Grand Cayman Branch and various
lenders party thereto from time to time (incorporated by reference
to Exhibit 10.1 to our Current Report on Form 8-K dated April 24,
2008).10.2
    
    First Amendment to Credit Agreement, dated as of June 24, 2008, to
the Credit Agreement dated as of April 24, 2008 (incorporated by
reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q dated
November 7, 2008).10.3
    
    Second Amendment to Credit Agreement, dated November 3, 2008, to the
Credit Agreement dated as of April 24, 2008 (incorporated by
reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q dated
November 7, 2008).
 38




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##### Table of Contents



10.4
    
    Third Amendment to Credit Agreement, dated as of December 12, 2008,
to the Credit Agreement, dated as of April 24, 2008 (incorporated by
reference to Exhibit 10.2 to our Current Report on Form 8-K dated
December 12, 2008).10.5
    
    Fourth Amendment to Credit Agreement, dated as of March 10, 2009, to
the Credit Agreement, dated as of April 24, 2008(1).10.6
    
    Credit Agreement, dated as of May 14, 2008, among Trico Supply AS,
Trico Subsea Holding AS, Trico Subsea AS, Trico Shipping AS, the
lenders party thereto from time to time, and Nordea Bank Finland
PLC, New York Branch, as Administrative Agent and as Collateral
Agent (incorporated by reference to Exhibit 10.4 to our Current
Report on Form 8-K dated May 14, 2008).10.7
    
    First Amendment to Credit Agreement, dated November 3, 2008, to the
Credit Agreement dated as of May 14, 2008 (incorporated by reference
to Exhibit 10.7 to our Quarterly Report on Form 10-Q dated November
7, 2008).10.8
    
    Second Amendment to Credit Agreement, dated as of December 12, 2008,
to the Credit Agreement dated as of May 14, 2008 (incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K dated
December 12, 2008).10.9
    
    Third Amendment to Credit Agreement, dated as of March 10, 2009, to
the Credit Agreement, dated as of May 14, 2008(1).10.10
    
    Amended and Restated Credit Agreement, dated as of August 29, 2008,
among Trico Marine Services Inc., Trico Marine Assets Inc., and
Trico Marine Operators, Inc., the Lenders party thereto from time to
time, and Nordea Bank Finland PLC, New York Branch, as
Administrative Agent and Lead Arranger for the Lenders (incorporated
by reference to Exhibit 10.8 to our Quarterly Report on Form 10-Q
dated November 7, 2008).10.11
    
    First Amendment to Credit Agreement, dated as of March 10, 2009, to
the Amended and Restated Credit Agreement, dated as of August 29,
2008(1).10.12
    
    NOK 260,000,000 Credit Facility, entered into on May 28, 2008,
between Trico Shipping AS, as Borrower, and Carnegie Investment Bank
AB Norway Branch, as Lender (incorporated by reference to Exhibit
10.1 to our Current Report on Form 8-K dated May 28, 2008).10.13
    
    Pledge of Shares, entered into on May 28, 2008, between Trico
Shipping AS, as Pledgor, and Carnegie Investment Bank AB Norway
Branch, as Pledgeee (incorporated by reference to Exhibit 10.2 to
our Current Report on Form 8-K dated May 28, 2008).10.14
    
    NOK 1,005,000 Facility Agreement, dated June 5, 2007, by and between
DeepOcean ASA, as borrower and Sparebank 1 SR Bank, as Lender and
Agent (incorporated by reference to Exhibit 10.7 to our Quarterly
Report on Form 10-Q dated August 8, 2008).10.15
    
    NOK 350,000,000 Loan Agreement, dated December 21, 2007, by and
between DeepOcean Shipping AS and Sparebank 1 SR Bank, as Lender and
Agent (incorporated by reference to Exhibit 10.8 to our Quarterly
Report on Form 10-Q dated August 8, 2008).10.16
    
    Credit Facility Agreement, dated November 19, 2007, by and among
DeepOcean Shipping AS, Deep Ocean ASA, Nordea Bank Norge ASA as
Agent and Arranger, and the Financial Institutions listed therein as
Banks(1).10.17
    
    First Amendment to Credit Facility Agreement, dated December 30,
2008, to the Credit Facility Agreement, dated November 19, 2007(1).10.18
    
    Second Amendment to Credit Facility Agreement, dated March 6, 2009,
to the Credit Facility Agreement, dated November 19, 2007(1).31.1
    
    Certification of Chief Executive Officer pursuant to Rules 13a-14(a)
and 15d-14(a) of the Securities Exchange Ac, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rules
13a-14(a) and 15d-14(a) of the Securities Exchange Ac, as amended.32
    
    Certification of Chief Executive Officer and Chief Financial Officer
under Section 906 of the Sarbanes Oxley Act of 2002, 18 U.S.C. §
1350(2).
 
 (1)
    
    Incorporated by reference to the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC on
March 12, 2009.(2)
    
    These certifications are being furnished solely to accompany this
annual report pursuant to 18 U.S.C. § 1350, and are not being filed
for purposes of Section 18 of the Securities Exchange Act of 1934
and are not to be incorporated by reference into any filing of Trico
Marine Services, Inc., whether made before or after the date hereof,
regardless of any general incorporation language in such filing. 39