Document:

EXHIBIT 10.1

ANNUAL PERFORMANCE INCENTIVE AWARD PLAN

The  following  is a  description  of the KCS Energy,  Inc.  Annual  Performance
Incentive Award Plan (the "Plan") provided pursuant to Item 601  (6)(10)(iii)(A)
of Regulation S-K, which requires a written  description of a compensatory  plan
when no formal document contains the compensation information.

The Plan is designed to reward executive  officers and company employees for the
achievement of annual performance objectives.  The annual performance objectives
are reviewed  and approved by the  Compensation  Committee  for their  potential
contribution to the creation of stockholder  value and may include such measures
as production  levels,  oil and gas reserve  additions,  finding and development
costs, lease operating expenses,  debt reduction,  profitability,  cash flow and
strategic objectives. All performance objectives are established and recommended
by the Chief Executive  Officer and Chief Operating  Officer and approved by the
Board of Directors within 90 days of the start of the calendar year.

Executive  officers are assigned  threshold,  target and maximum incentive award
opportunities  based  on the  executive's  position.  Annual  award  levels  are
reviewed   periodically   by  the   Compensation   Committee  to  ensure  market
competitiveness and adjustments may be made based on the review. Set forth below
are the current  annual  incentive  target award levels as a percentage  of base
salary for the Chief  Executive  Officer  and each of the four other most highly
compensated executive officers for 2005. The threshold award level is 50% of the
target  award  level and the  maximum  award  level is 200% of the target  award
level.

            Officer                      Target
-----------------------------------------------

James Christmas
Chairman, Chief Executive Officer          55%

William Hahne
President, Chief Operating Officer         50%

Harry Stout
Sr. VP, Marketing/Risk Management          30%

Joseph Leary
Vice President and
Chief Financial Officer                    30%

Frederick Dwyer
Vice President, Controller/Secretary       25%

Actual payments made under the Plan between  threshold and maximum are dependent
on achievement of established performance objectives. The Compensation Committee
and the Board of Directors retain discretion to award bonuses below threshold or
above the maximum award level.

In 2004, the annual  performance  objectives for the  Corporation  were based on
production  levels,  finding and  development  costs,  reserve  replacement  and
various  strategic  objectives.  For the Mid-Continent and Gulf Coast divisions,
the  performance  objectives  were  based  on  production  levels,  finding  and
development costs,  reserve  replacement,  lease operating expenses and specific
divisional strategic objectives.

In 2005, the annual performance  objectives for the Corporation will be based on
production levels, finding and development cost, reserve replacement and various
strategic  objectives.  For the  Mid-Continent  and Gulf  Coast  divisions,  the
performance   objectives  will  be  based  on  production  levels,  finding  and
development  costs,  reserve  additions,  lease operating  expenses and specific
divisional strategic objectives.

After the end of the calendar year, the  Compensation  Committee  determines the
extent to which the performance objectives were achieved and approves the amount
of the award to be paid to each executive  officer,  with its determination with
respect  to the  Chairman  and Chief  Executive  Officer  being  subject  to the
approval  of the  independent  members  of the Board of  Directors.  Payment  of
bonuses,  if any,  is normally  made in March  after the end of the  performance
period during which the bonuses were earned and after the audit of the financial
statements is complete.  Bonuses  normally will be paid in cash in a single lump
sum, subject to payroll taxes and tax withholding.EXHIBIT 10.2

SUMMARY OF EXECUTIVE COMPENSATION  ARRANGEMENTS FOR NAMED EXECUTIVE OFFICERS FOR
2005

Annual Cash Compensation
------------------------

Base Salary -

The  base  salaries  for  the  executive  officers  of  KCS  Energy,  Inc.  (the
"Corporation") are established after a review and comparison by the Compensation
Committee of the salaries  paid to executive  officers of an industry peer group
of small cap independent  oil and gas  exploration and production  companies and
published survey data. Other factors considered include individual  performance,
level of  responsibility  and the  Corporation's  overall  annual  salary budget
guidelines. Set forth below are the base salaries of the Chief Executive Officer
and each of the four other most highly compensated  executive officers and their
annual base salaries effective February 1, 2005.

              Officer                 2005 Base Salary
------------------------------------------------------

James Christmas
Chairman, Chief Executive Officer         $400,000

William Hahne
President, Chief Operating Officer        $312,000

Harry Stout
Sr. VP, Marketing/Risk Management         $216,000

Joseph Leary
Vice President and
Chief Financial Officer                   $190,000

Frederick Dwyer
Vice President, Controller/Secretary      $145,000

Annual Performance Incentive Awards -

Executive  officers are also  eligible to receive  annual cash bonuses under the
Corporation's Annual Performance  Incentive Award Plan. Please read Exhibit 10.1
to the  Corporation's  Form 10-Q for the  quarter  ended  March  31,  2005 for a
written description of the plan, including the performance objectives for 2005.

Long-Term Equity-Based Incentives
---------------------------------

Long-term  incentive awards for each executive  officer  generally  consist of a
grant  comprised of stock options and  restricted  stock awards.  The purpose of
these  awards  is  to  align  the  interests  of  executive  officers  with  the
Corporation's  shareholders  by directly  linking a significant  portion of each
executive's  total  compensation to the continued  growth of the Corporation and
appreciation of its common stock.

The stock  options and  restricted  stock  awards are made under the KCS Energy,
Inc.  2001  Employee  and  Director  Stock Plan (the "2001  Plan").  Please read
Exhibit (10)iii to the  Corporation's  Annual Report on Form 10-K filed on April
2, 2001 for the terms and  conditions  of the 2001  Plan.  As part of their 2005
compensation package, Messrs. Christmas,  Hahne, Stout, Leary and Dwyer received
restricted stock awards of 25,000,  16,600, 8,600, 8,600 and 3,500 respectively,
in January 2005. Also in January 2005, Messrs.  Christmas,  Hahne,  Stout, Leary
and Dwyer received stock options exercisable into 25,050,  16,500,  5,100, 4,000
and 3,500  shares of common  stock,  respectively.  The  executive  officers may
receive additional stock options in 2005 but the amount, if any, of such options
has not been determined.  Stock options  generally vest over a three-year period
in three equal annual  installments  on each  anniversary  of the grant date and
have a ten-year  term.  All options are granted with an exercise  price equal to
the fair market  value of the  Corporation's  common stock on the date of grant.
Restricted  stock  awards,  which are granted  based on the market  price of the
corporation's common stock on the date of grant generally vest three years after
the date of grant,  but in some instances are subject to accelerated  vesting if
established  performance measures are achieved.  Please read Exhibits 10.6, 10.8
and 10.9 to the Corporation's Quarterly Report on Form 10-Q filed on November 9,
2004 for the general  terms and  conditions  of the stock option and  restricted
stock awards.First Waiver and Amendment

EXHIBIT 10.2

	

FIRST WAIVER AND AMENDMENT

 

TO THE TRICO MARINE CREDIT AGREEMENT (EXIT) 

 

AND DIP CREDIT AGREEMENT

 

 

This FIRST WAIVER AND AMENDMENT, dated as of March 15, 2005 (this “Waiver and Amendment”), to the Credit Agreement (Exit) referred to below and the DIP Credit Agreement referred to below, by BEAR STEARNS CORPORATE LENDING INC., as administrative agent under each of the Credit Agreement and the DIP Credit Agreement (in each such capacity, the “Administrative Agent”) and as collateral agent for the Revolving Secured Parties (under and as defined in each of the Credit Agreement and the DIP Credit Agreement) (in each such capacity, the “Revolving Credit Collateral Agent”), and THE BANK OF NEW YORK, as collateral agent for the Term Secured Parties (under and as defined in each of the Credit Agreement and the DIP Credit Agreement) (in each such capacity, the “Term Loan Collateral Agent” and together with the Administrative Agent and the Revolving Credit Collateral Agent, collectively, the “Agents”), and the Lenders (as defined in each of the Credit Agreement and the DIP Credit Agreement) listed on the signature pages hereof (the “Lenders”) in favor of TRICO MARINE ASSETS, INC., a Delaware corporation (“Trico Assets”), TRICO MARINE OPERATORS, INC., a Louisiana corporation (“Trico Operators”), TRICO MARINE SERVICES, INC., a Delaware corporation (the “Company”), TRICO MARINE INTERNATIONAL, INC., a Louisiana corporation (“TMI”), TRICO MARINE INTERNATIONAL HOLDINGS B.V., a Netherlands limited company (besloten vennootschap) (“TMIH”), TRICO SUPPLY AS, a Norway limited company (“Trico Supply”), and the other Subsidiaries of the Company listed on the signature pages hereof (together with the Company, Trico Assets, Trico Operators, TMI, TMIH and Trico Supply, collectively, the “Credit Parties”).

 

RECITALS

 

A.    The Credit Parties, the Lenders and the Agents are parties to that certain DIP Credit Agreement (as defined in the Credit Agreement (defined below)) and to that certain Credit Agreement (Exit), dated as of February 21, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), the loan proceeds of which are to be used, among other things, to refinance the loans under the DIP Credit Agreement.

 

B.    The Credit Parties have requested that the Agents and the Lenders waive certain requirements of the Credit Agreement and the DIP Credit Agreement, and the Agents and the Lenders are willing to provide such waivers subject to the terms and conditions hereof.

 

In consideration of the mutual conditions and agreements set forth in the Credit Agreement and this Waiver and Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I  

 

DEFINITIONS

 

Section 1.01.   Certain Definitions. All terms used herein that are defined in the Credit Agreement and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

 

Section 1.02.   Rules of Interpretation. The rules of interpretation specified in Section 1.2 of the Credit Agreement shall be applicable to this Waiver and Amendment.

 

ARTICLE II  

 

WAIVERS AND AGREEMENTS

 

Section 2.01.   Notice of Borrowing under the Credit Agreement. The Agents and the Lenders hereby waive the provisions under Section 2.2(b) of the Credit Agreement requiring that the relevant Borrower requesting Term Loans give the Administrative Agent irrevocable notice prior to 10:00 A.M. New York City time, one Business Day prior to the Initial Funding Date; provided that the relevant Borrower will give the Administrative Agent irrevocable notice on the Initial Funding Date that is otherwise in accordance with Section 2.2(b) of the Credit Agreement, which notice may be given by e-mail from the Company to the Administrative Agent at BJCarter@Bear.com with a copy to RCunningham@JonesDay.com.

 

Section 2.02.   Local Dollar Account Limits (Section 6.18(i)). The Agents and the Lenders, in their respective capacities as Agents and Lenders under the Credit Agreement and as DIP Agents and DIP Lenders under the DIP Credit Agreement, hereby waive any Default or Event of Default under Section 6.18(i) of the Credit Agreement, and any “Default” or “Event of Default” under and as defined in the DIP Credit Agreement arising under Section 6.18(i) thereof, in each such case to the extent, and only to the extent, arising solely as a result of deposits made by a customer of the Company into a Permitted Local Dollar Account in Mexico on February 2, 2005 and March 7, 2005 in the approximate amounts of $584,000 and $261,000, respectively or under Section 5.7(a) as a result of the failure to give timely written notice thereof in accordance with the Credit Agreement or the DIP Credit Agreement. The Company represents and warrants that, as of the date of this Waiver and Amendment, the Company is in compliance with Section 6.18 of the Credit Agreement and the DIP Credit Agreement without giving effect to the waiver hereunder.

 

Section 2.03.   Permitted L/C Cash Collateral Accounts (Section 6.18(iv)). The Agents and the Lenders hereby agree that all accrued interest on amounts deposited from time to time (including interest on interest) in the Permitted L/C Cash Collateral Accounts shall not be included in determining the aggregate balance in the Permitted L/C Cash Collateral Accounts for the purposes of Section 6.18(iv) of the Credit Agreement, provided that all such accrued interest on deposit as aforesaid is transferred from each Permitted L/C Cash Collateral Account to a Blocked Account no less often than once every 32 days.

 

Section 2.04.   Minimum EBITDA Calculation (Section 6.23). The parties hereto hereby agree that Section 6.23 of the Credit Agreement is amended by adding the phrase "the four consecutive fiscal quarters ending on the last day of" immediately after the words "Specified Group Member) for" and immediately before the words "any fiscal quarter" in the fourth line thereof

 

ARTICLE III  

 

EFFECT OF WAIVERS. 

 

Except as expressly set forth herein, each waiver set forth herein shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect, the rights or remedies of (i) the Lenders or the Agents under the Credit Agreement or any other Credit Document or (ii) the DIP Lenders or the DIP Agents under the DIP Credit Agreement or any other DIP Credit Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Credit Document or the DIP Credit Agreement or any other DIP Credit Document, all of which shall continue in full force and effect. Nothing herein shall be deemed to entitle any Credit Party to a consent to, or a waiver, amendment, modification or other change of, any of the other terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Credit Document or the DIP Credit Agreement or any other DIP Credit Document, in similar or different circumstances. The waivers herein shall apply and be effective only with respect to the matters expressly covered thereby.

 

ARTICLE IV  

 

EFFECTIVE DATE. 

 

This Waiver and Amendment shall, unless an Event of Default has occurred and is continuing after giving effect to this Waiver and Amendment, become effective as of the date first written above upon delivery to the Administrative Agent by the parties hereto of duly executed counterparts of this Waiver and Amendment.

 

ARTICLE V  

 

MISCELLANEOUS.

 

Section 5.01.   Notices. Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give and serve upon any other party any communication with respect to this Waiver and Amendment, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be given in the manner and to the address, and deemed received as provided for in Section 12.2 of the Credit Agreement. All such notices and other communications shall, when mailed, telecopied, telegraphed, telexed or cabled, respectively, be effective when deposited in the mails, telecopied, delivered to the cable company or courier, respectively, addressed as aforesaid; except that notices and other communications to the Agents shall not be effective until received by such entity.

 

Section 5.02.   Counterparts. This Waiver and Amendment may be executed by one or more of the parties to this Waiver and Amendment on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Waiver and Amendment by facsimile or PDF transmission shall be effective as delivery of a manually executed counterpart hereof or thereof.

 

Section 5.03.   Severability. Any provision of this Waiver and Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 5.04.   GOVERNING LAW. THIS WAIVER AND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS WAIVER AND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW.

 

Section 5.05.   Submission To Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

 

(a)  submits for itself and its property in any legal action or proceeding relating to this Waiver and Amendment or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

 

(b)  consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)  agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at its address set forth or referenced in Section 12.2 of the Credit Agreement or at such other address of which the parties hereto shall have been notified pursuant thereto;

 

(d)  agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)  waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

Section 5.06.   WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS WAIVER AND AMENDMENT.

 

Section 5.07.   Waivers; Amendment.

 

(a)  No failure or delay of the Agents in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents hereunder, of the Agents and the Lenders under the Credit Agreement or any other Credit Document and of the DIP Agents and the DIP Lenders under the DIP Credit Agreement or any other DIP Credit Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provisions of this Waiver and Amendment or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.

 

(b)  Neither this Waiver and Amendment nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the parties hereto.

 

[Remainder of page left blank intentionally; signatures follow.]

 

	
NYI-2187610v4 

	 	 	 
	

	

IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Amendment to be executed and delivered as of the date first written above.

 

 

 

TRICO MARINE ASSETS, INC.

as a Borrower and a Guarantor

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

 

TRICO MARINE OPERATORS, INC.

as a Borrower and a Guarantor

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

 

 

TRICO MARINE SERVICES, INC.

as a Guarantor

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

 

	 
	 	 	 
	

	 

 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

TRICO MARINE INTERNATIONAL, INC.

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

:    

 

TRICO MARINE INTERNATIONAL HOLDINGS B.V.

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

TRICO SUPPLY AS

 

By:    _____/s/ Trevor Turbidy_________

 

Name:    Trevor Turbidy

 

Title:    

 

 

 

TRICO SERVICOS MARITIMOS LTDA.

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

	 
	 	 	 
	

	 

 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

SERVICOS DE APOYO MARITIMO DE MEXICO, S. DE R.L. DE C.V.

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

COASTAL INLAND MARINE SERVICES LTD.

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

TRICO MARINE INTERNATIONAL, LTD.

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

	 
	 	 	 
	

	 

 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

TRICO SUPPLY (UK) LIMITED

 

By:    _____/s/ Thomas E. Fairley_________

 

Name:    Thomas E. Fairley

 

Title:    

 

 

ALBYN MARINE LIMITED

 

 

By:    ______/s/ A.J.R. May__________

 

Name:    A.J.R. May

 

Title:    

 

	  
	 	 	 
	

	 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

BEAR STEARNS CORPORATE LENDING INC.

as Administrative Agent and Revolving Credit Collateral Agent

 

By:______/s/ Victor Bulzacchelli__________

Name: Victor Bulzacchelli

Title: Vice President

BEAR STEARNS CORPORATE LENDING INC.

as Lender

 

By:______/s/ Victor Bulzacchelli__________

Name: Victor Bulzacchelli

Title: Vice President

	 
	 	 	 
	

	 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

THE BANK OF NEW YORK

as Term Loan Collateral Agent

 

By:______________

Name: 

Title: 

	 
	 	 	 
	

	 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT 

GREAT AMERICAN INSURANCE COMPANY

By: AMERICAN MONEY MANAGEMENT CORP.,

 

as Portfolio Manager

By:_____________

Name: 

Title: 

GREAT AMERICAN LIFE INSURANCE COMPANY

By: AMERICAN MONEY MANAGEMENT CORP.,

 

	 		as Portfolio Manager

 

 

By:______________

Name: 

Title:

	 
	 	 	 
	

	 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

TRS CALLISTO LLC

By:______________

Name: 

Title: 

	 
	 	 	 
	

	 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

MARINER LDC

By: MARINER INVESTMENT GROUP, INC.,

as Investment Advisor

By:    _/s/ Charles R. Howe, II_____________

Name:    Charles R. Howe, II

Title:    President

MARINER LDC

By: MARINER INVESTMENT GROUP, INC.,

	 		as Investment Advisor

By:    _/s/ Charles R. Howe, II_____________

Name:    Charles R. Howe, II

Title:    President

CASPIAN CAPITAL PARTNERS, L.P.

By: MARINER INVESTMENT GROUP, INC.,

as Investment Advisor

By:    _/s/ Charles R. Howe, II_____________

Name:    Charles R. Howe, II

Title:    President

	 
	 	 	 
	

	 

 

COUNTERPART SIGNATURE PAGE TOTHE SECOND AMENDMENT

 

CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

By: HIGHLAND CAPITAL MANAGEMENT, L.P., as Authorized Representatives of the Board

By:    ____________________________________

 

Name:    

 

Title:

 

 

	 
	 	 	 
	

	 

COUNTERPART SIGNATURE PAGE TO THE SECOND AMENDMENT

PUTNAM INVESTMENT MANAGEMENT, LLC, 

on behalf of

Putnam High Yield Trust

Putnam High Yield Advantage Fund

Putnam Diversified Income Trust

By:    ____________________________________

 

Name:    

 

Title:

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