SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
_X__ Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended December 31, 1998
____ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-28316
TRICO MARINE SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 72-1252405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
250 North American Court
Houma, Louisiana 70363
(Address of principal executive offices) (zip code)
Issuer's Telephone Number: (504) 851-3833
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value per share
Preferred Stock Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes _ X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at March 19, 1999 was approximately $103,407,000.
The number of shares of the Registrant's common stock, $0.01 par value per
share, outstanding at March 19, 1999 was 20,378,416.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Trico Marine Services, Inc. ("Trico" or the "Company") hereby amends and
supplements the following items of Part III of its Annual Report on Form 10-K
for the year ended December 31, 1998 to read in their entirety as follows:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning Executive Officers is included as Item 4A
"Executive Officers of the Registrant."
The following table sets forth certain information, as of April 15, 1999,
with respect to each director of the Company.
<TABLE>
<CAPTION>
Principal Occupation
and Directorships in Director Term
Name Age Other Public Corporations Since Expiring
- --------------------- ------- --------------------------------------------- -------- --------
<S> <C> <C> <C> <C>
Thomas E. Fairley 51 President and Chief Executive Officer of the 1993 1999
Company; Director: Gulf Island Fabrication, Inc.
fabricator of offshore production platforms)
Benjamin F. Bailar 64 Dean Emeritus of the Jones Graduate School of 1994 1999
Administration at Rice University; Director: U.S.
Can Corporation, Dana Corporation (manufacturer
of auto parts) and Smith International, Inc.
(energy services product and service provider)
Ronald O. Palmer 52 Chairman of the Board 1993 2000
Garth H. Greimann 44 Managing Director of Berkshire Partners LLC 1993 2000
(private equity investment firm); Director: The
Profit Recovery Group International (provider of
accounts payable and other recovery auditing
services)
H. K. Acord 65 Oil and gas consultant. From 1993 to 1996, Mr. 1997 2001
Acord served as Executive Vice President,
Exploration and Production Division of Mobil Oil
Corporation ("Mobil"). From 1989 to 1993, he
served as a Vice President, International
Producing Operations for Mobil.
Edward C. Hutcheson, Jr. 53 Principal with HWG Capital, a subsidiary of 1994 2001
Harris, Webb & Garrison (investment banking
firm). From November 1994 to October 1996, Mr.
Hutcheson served as CEO or Chairman of the Board
of Crown Castle International Corp. ("Crown
Castle") (owner and manager of wireless
communications towers). From January 1994 to
October 1994, Mr. Hutcheson was involved in
private investment activities leading to the
creation of Crown Castle. From March 1992 to
December 1993, Mr. Hutcheson served as President
and Chief Operating Officer of Baroid Corporation
(an energy services and equipment provider);
Director: Titanium Metals Corporation (titanium
sponge and mill product producer); Pinnacle
Management & Trust Co. and Crown Castle
</TABLE>
BOARD AND COMMITTEE MEETINGS
During 1998, the Board held seven meetings. Each director of the Company
attended at least 75% of the aggregate number of meetings held during 1998 of
the Board and committees of which he was a member.
The Board has an Audit Committee and a Compensation Committee. The
Compensation Committee met two times in 1998. The Audit Committee met one time
in 1998. The Audit Committee, whose current members are Mr. Greimann and Dean
Bailar, reviews the Company's annual audit and meets with the Company's
independent public accountants to review the Company's internal controls and
financial management practices. The Compensation Committee, whose current
members are Messrs. Greimann and Hutcheson, is responsible for determining the
compensation of the Company's key employees and administering the Company's
stock incentive plans.
COMPENSATION OF DIRECTORS
Each non-employee director receives an annual fee of $12,500, plus $500
for each Board or committee meeting attended. All directors are reimbursed for
reasonable out-of-pocket expenses incurred in attending Board and committee
meetings.
Under the Company's amended 1996 Incentive Compensation Plan, each non-
employee director receives an option to purchase 2,000 shares of Common Stock
on the day following each annual meeting of stockholders while such plan
remains in effect. Each non-employee director who joins the Board also
receives options to buy 10,000 shares of Common Stock. The options become
exercisable immediately and expire ten years from the date of grant. The
exercise price of the options is the closing sales price of the Company's
Common Stock on the date of grant on the Nasdaq National Market.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and 10% stockholders to file with the
SEC reports of ownership and changes in ownership of equity securities of the
Company. During 1998, statements on Form 4 with respect to H. K. Acord, a
director of the Company, and Ronald O. Palmer, Chairman of the Board, were not
timely filed due to clerical errors.
ITEM 11. EXECUTIVE COMPENSATION
ANNUAL COMPENSATION
The following table sets forth all cash compensation and options granted
for the three years ended December 31, 1998, to the Company's Chief Executive
Officer and each of its four most highly compensated executive officers
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------------------------- --------------------------
Other No. of Shares
Annual Underlying
Compensa- Options All Other
Name and Principal Position Year Salary Bonus sation(1) Granted Compensation
- --------------------------- ------ ---------- --------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Fairley 1998 $ 210,000 $ 35,000 $ --- 16,000 $ 1,890
President and Chief 1997 $ 210,000 $ 95,970 $ --- 12,000 $ 1,260
Executive Officer 1996 $ 150,000 $ 90,000 $ --- 20,000 $ 1,134
Ronald O. Palmer 1998 $ 210,000 $ 35,000 $ --- 16,000 $ 1,890
Chairman of the Board 1997 $ 210,000 $ 95,970 $ --- 12,000 $ 1,260
1996 $ 150,000 $ 90,000 $ --- 20,000 $ 1,134
Victor M. Perez 1998 $ 150,000 $ 25,000 $ --- 15,000 $ 1,350
Vice President, Chief 1997 $ 150,000 $ 68,550 $ --- 12,000 $ 1,104
Financial Officer and 1996 $ 135,000 $ 81,000 $ --- 20,000 $ 1,068
Treasurer
Kenneth W. Bourgeois 1998 $ 105,000 $ 20,000 $ --- 12,000 $ 945
Vice President and 1997 $ 105,000 $ 30,000 $ --- 12,000 $ 753
Controller 1996 $ 90,000 $ 34,000 $ --- 20,000 $ 728
Michael D. Cain 1998 $ 86,667 $ 15,000 $ --- 12,000 $ 780
Vice President-Marketing 1997 $ 80,000 $ 30,500 $ --- 12,000 $ 624
1996 $ 80,000 $ 24,500 $ --- 20,000 $ 485
</TABLE>
(1) Perquisites and other personal benefits paid to each Named Executive
Officer in any of the years presented did not exceed the lesser of
$50,000 or 10% of such Named Executive Officer's salary and bonus for
that year.
1998 STOCK OPTION GRANTS
The following table contains information concerning the grant of stock
options and stock appreciation rights ("SARs") to the Named Executive Officers
during 1998.
1998 STOCK OPTION GRANTS
<TABLE>
<CAPTION> Potential Realizable Value at
% of Total Assumed Annual Rates of
No. of Shares Options Stock Price Appreciate for
Underlying Granted to Option Term (2)
Options Employees Exercise Expiration ---------------------------
Name Granted (1) in 1998 Price Date 5% 10%
- ------------------ --------------- -------------- ----------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Fairley 16,000 7.6% $ 17.75 2/9/08 $178,606 $452,623
Ronald O. Palmer 16,000 7.6% $ 17.75 2/9/08 $178,606 $452,623
Victor M. Perez 15,000 7.1% $ 17.75 2/9/08 $167,443 $424,334
Kenneth W. Bourgeois 12,000 5.7% $ 17.75 2/9/08 $133,954 $339,467
Michael D. Cain 12,000 5.7% $ 17.75 2/9/08 $133,954 $339,467
</TABLE>
(1) These options became exercisable in annual 25% increments beginning on
February 9, 1999 and on each anniversary thereafter.
(2) Appreciation is calculated over the term of the options, beginning with
the fair market value on the date of grant of the options, which was
$17.75.
<TABLE>
AGGREGATE OPTION EXERCISES DURING 1998 AND OPTION VALUES AT YEAR END
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year End Year End (1)
Acquired on Value ---------------------------- --------------------------
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---------------------------- ----------------- --------------- ---------------------------- --------------------------
<S> <C> <C> <C> <C>
Thomas E. Fairley 7,850 $ 83,788 451,540/25,000 $ 1,699,161/---
Ronald O. Palmer 55,500 $ 866,772 391,926/25,000 $ 1,462,792/---
Victor M. Perez 10,000 $ 221,890 207,890/24,000 $ 733,089/---
Kenneth W. Bourgeois --- --- 37,000/21,000 $ 55,510/---
Michael D. Cain --- --- 33,000/21,000 $ 39,650/---
</TABLE>
(1) Based on the difference between the closing sale price of Common Stock
of $4.875 on December 31, 1998, as reported by the Nasdaq National
Market and the exercise price of such options.
Change of Control Agreements
The Company has entered into agreements with certain of its executive
officers, including the Named Executive Officers, which, among other things,
provide for certain payments and benefits to the executive if his or her
employment is terminated. If the officer's employment is terminated for any
reason other than cause, defined as (i) a conviction or a plea of nolo
contendere to a felony, (ii) gross negligence in the performance of the
officer's duties, continuing after the officer's receipt of notice of such
gross negligence from the Company, (iii) a material violation of the terms of
the employment agreement or (iv) gross misconduct on the officer's part that is
injurious to the Company, he will receive one year's salary, any cash bonus
still payable from the year preceding the officer's termination and any non-
cash benefits that he received prior to termination. The officer will receive
the same severance package in the event of a change of control of the Company
that is not initiated by someone who is or has been an employee of the Company.
In the case of a change in control initiated by a present or past employee of
the Company, the officer has the option either to receive the severance package
or continue in his position with the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company served in 1998 as a director, or member
of the compensation committee, of another entity one of whose executive
officers served as a director, or on the Compensation Committee, of the
Company.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
General
The Compensation Committee, which is currently comprised of two non-employee
directors, oversees the compensation of the Company's key employees and
administers the Company's incentive compensation plans. No member of the
Compensation Committee is a former or current officer or employee of the
Company.
The compensation of the Company's executive officers is designed to attract
and retain executive talent and to align the compensation of the Company's
executives with the success of the Company. Toward that end, the Company's
executive compensation program has been structured to (i) provide a total
compensation package that is competitive with the compensation of executives
holding similar positions at comparable firms; (ii) reward individual and
overall Company performance; and (iii) link executive compensation to
achievement of the Company's long-term and short-term strategic goals.
Base Salary and Annual Incentive Compensation
Base Salary. The Compensation Committee establishes the base salaries of
the Company's key employees at levels it deems necessary to attract and retain
executive talent. Generally, base salaries for executives are reviewed
annually and, if appropriate, adjusted based on individual performance,
increases in general levels of compensation for executives at comparable firms
and the Company's overall financial results.
Annual Cash Incentive Compensation. Annual cash incentive bonuses are paid
to the Company's key employees in an effort to provide a fully competitive
compensation package, which is linked to the Company's attainment of its short-
term goals. The Board views EBITDA (earnings before interest, taxes,
depreciation and amortization) growth as the Company's primary short-term
strategic goal. In 1998, primarily as a result of the significant decrease in
day rates in the Gulf of Mexico during the second half of 1998, annual bonuses
paid to the Company's executive officers substantially decreased and were
based, in part, on the EBITDA levels generated by the Company.
Stock-Based Incentive Compensation. The purpose of the Company's stock
incentive program is to link management to stockholders by focusing on
intermediate and long-term results. In 1998, the Committee sought to
accomplish these objectives by granting stock options to certain of the
Company's key employees.
Position Regarding Compliance with Section 162(m) of the Internal Revenue
Code. Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
the deduction allowable to the Company for compensation paid to each of the
Named Executive Officers in any year to $1 million. Qualified performance-
based compensation is excluded from this deduction limitation if certain
requirements are met. Stock options granted by the Company have been
structured to qualify as performance-based. Although no executive officer of
the Company reached the deductibility cap in 1998, the Committee plans to
continue to evaluate the Company's cash and stock incentive programs as to the
advisability of future compliance with Section 162(m).
Compensation for the Chief Executive Officer
Mr. Fairley's salary remained at $210,000 in 1998. His base salary has
been established by considering various factors, including his experience and
performance and the extent to which his total compensation package is at risk
under incentive compensation programs.
An annual incentive bonus of $35,000 was paid to Mr. Fairley in 1998. While
the Company did not achieve the EBITDA target in its annual bonus plan for Mr.
Fairley due primarily to the substantial decrease in day rates experienced in
the Gulf of Mexico in the second half of 1998, Mr. Fairley was awarded a
$35,000 bonus in recognition of his leadership during 1998.
During 1998, Mr. Fairley received grants of stock options for 16,000 shares
of Common Stock as discussed above. Mr. Fairley's stock options were granted
on the same terms as those granted to other officers and described in this
report.
The Compensation Committee
Garth H. Greimann Edward C. Hutcheson, Jr.
PERFORMANCE GRAPH
The graph below compares the total stockholder return on the Company's
Common Stock since its initial public offering on May 16, 1996 until December
31, 1998 with the total return on the S&P 500 Index and the Company's Peer
Group Index for the same period, in each case assuming the investment of $100
on May 16, 1996 at the initial public offering price of $8.00 per share (as
adjusted to give effect to a 2 for 1 stock split effected in June, 1997) . The
Company's Peer Group Index consists of Petroleum Helicopters, Inc., Offshore
Logistics, Inc. (OLOG), Tidewater Inc. (TDW), SEACOR SMIT, Inc. (CKH) and Hvide
Marine Incorporated Class A Common Stock (HMAR). The initial public offering
of the Class A Common Stock of HMAR was on August 13, 1996.
COMPARE CUMULATIVE TOTAL RETURN
AMONG TRICO MARINE SERVICES, INC.,
S&P 500 INDEX AND PEER GROUP INDEX
[PERFORMANCE GRAPH]
ASSUMES $100 INVESTED ON MAY 16, 1996
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING DEC. 31, 1998
<TABLE>
<CAPTION>
TOTAL RETURN
---------------------------------------------------------------------------------------------
May 16, 1996 December 31, 1996 December 31, 1997 December 31,1998
-------------------- ------------------ ------------------- -----------------
<S> <C> <C> <C> <C>
Trico 100 300 367 61
S&P 500 100 112 149 192
Peer Group Index 100 114 135 65
</TABLE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 15, 1999, certain information
regarding beneficial ownership of Common Stock of (i) each director and nominee
of the Company, (ii) each of the Named Executive Officers (as defined below),
and (iii) all directors and executive officers of the Company as a group, and
(iv) the other stockholder known by the Company to be the beneficial owner of
more than 5% of the outstanding Common Stock, determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934. Unless otherwise
indicated, the securities are held with sole voting and investment power.
<TABLE>
<CAPTION>
No. of Percent
NAME OF BENEFICIAL OWNER SHARES OF CLASS
- ------------------------------ --------------- ---------------
<S> <C> <C>
Thomas E. Fairle y 496,826 (1) 2.2%
Ronald O. Palmer 476,826 (1) 2.3%
H. K. Acord 29,000 (1) *
Benjamin F. Bailar 38,000 (1)(2) *
Garth H. Greimann 25,256 (1) *
Edward C. Hutcheson, Jr. 25,000 (1) *
Victor M. Perez 218,640 (1) *
Michael D. Cain 36,000 (1) *
Kenneth W. Bourgeois 40,000 (1) *
All directors and executive
Officers as a group (12 persons) 1,385,548 (3) 6.4%
</TABLE>
* Less than one percent
(1) Includes the following number of shares subject to options that are
exercisable by June 15, 1999: Mr. Fairley, 458,540; Mr. Palmer,
408,926; Mr. Acord, 14,000; Mr. Bailar 4,000; Mr. Greimann 4,000; Mr.
Hutcheson 4,000; Mr. Perez, 218,640; Mr. Cain, 36,000; and Mr.
Bourgeois, 40,000.
(2) Shares beneficially owned by Mr. Bailar (excluding shares subject to
options that are currently exercisable) are owned by a trust of which
Mr. Bailar is the sole trustee and beneficiary.
(3) Includes 1,208,106 shares subject to options that are exercisable by
June 15, 1999 held by executive officers and directors.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on April 30, 1999.
TRICO MARINE SERVICES, INC.
By:
-------------------------------
Victor M. Perez
Chief Financial Officer
