-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I/KDQ1VMBBb3SGwExtiZqTm7la6ZPO17C3twGC/u/NcAQxfQF3ZCMU6nf1C3ZNVf yJ+wp82gtN803BsXq3QJEA== 0000899243-01-000091.txt : 20010123 0000899243-01-000091.hdr.sgml : 20010123 ACCESSION NUMBER: 0000899243-01-000091 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIDEWATER INC CENTRAL INDEX KEY: 0000098222 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 720487776 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06311 FILM NUMBER: 1509923 BUSINESS ADDRESS: STREET 1: 601 POYDRAS ST. STREET 2: SUITE 1900 CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5045681010 MAIL ADDRESS: STREET 1: 601 POYDRAS ST. STREET 2: SUITE 1900 CITY: NEW ORLEANS STATE: LA ZIP: 70130 FORMER COMPANY: FORMER CONFORMED NAME: TIDEWATER MARINE SERVICE INC DATE OF NAME CHANGE: 19780724 10-Q 1 0001.txt FORM 10-Q FOR PERIOD ENDED DECEMBER 31, 2000 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 - For the Quarterly Period Ended December 31, 2000 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 - For the Transition Period From _______________________________________ to _____________________________________ Commission file number 1-6311 ------ TIDEWATER INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 72-0487776 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 601 Poydras Street, Suite 1900, New Orleans, Louisiana 70130 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (504) 568-1010 ---------------------------- NOT APPLICABLE - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or of 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 _____ ----- 55,872,893 shares of Tidewater Inc. common stock $.10 par value per share were outstanding on January 12, 2001. Excluded from the calculation of shares outstanding at January 12, 2001 are 4,678,487 shares held by the Registrant's Grantor Stock Ownership Trust. Registrant has no other class of common stock outstanding. -1- PART I. FINANCIAL INFORMATION Item 1. Financial Statements -------------------- TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
- ------------------------------------------------------------------------------------------------------------------- December 31, March 31, ASSETS 2000 2000 - ------------------------------------------------------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 85,880 226,910 Trade and other receivables 161,663 149,006 Marine operating supplies 26,652 25,405 Other current assets 1,429 2,372 - ------------------------------------------------------------------------------------------------------------------ Total current assets 275,624 403,693 - ------------------------------------------------------------------------------------------------------------------ Investments in, at equity, and advances to unconsolidated companies 20,848 23,275 Properties and equipment: Vessels and related equipment 1,555,852 1,356,177 Other properties and equipment 42,420 42,474 - ------------------------------------------------------------------------------------------------------------------ 1,598,272 1,398,651 Less accumulated depreciation 861,133 842,620 - ------------------------------------------------------------------------------------------------------------------ Net properties and equipment 737,139 556,031 - ------------------------------------------------------------------------------------------------------------------ Goodwill, net 331,129 338,006 Other assets 125,716 111,331 - ------------------------------------------------------------------------------------------------------------------ Total assets $ 1,490,456 1,432,336 ================================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------------------------- Current liabilities: Accounts payable and accrued expenses 57,227 66,943 Accrued property and liability losses 7,711 4,322 Income taxes 6,031 3,572 - ------------------------------------------------------------------------------------------------------------------ Total current liabilities 70,969 74,837 - ------------------------------------------------------------------------------------------------------------------ Deferred income taxes 174,839 145,076 Accrued property and liability losses 42,039 49,549 Other liabilities and deferred credits 50,284 48,673 Stockholders' equity: Common stock of $.10 par value, 125,000,000 shares authorized, issued 60,551,380 shares at December and 60,561,892 shares at March 6,056 6,056 Other stockholders' equity 1,146,269 1,108,145 - ------------------------------------------------------------------------------------------------------------------ Total stockholders' equity 1,152,325 1,114,201 - ------------------------------------------------------------------------------------------------------------------ Total liabilities and stockholders' equity $ 1,490,456 1,432,336 ==================================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -2- TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except share and per share data)
- ------------------------------------------------------------------------------------------------------------------------- Quarter Ended Nine Months Ended December 31, December 31, ------------------------ ----------------------- 2000 1999 2000 1999 - -------------------------------------------------------------------------------------------------------------------------- Revenues: Vessel revenues $ 154,766 128,655 415,713 406,667 Other marine revenues 4,361 13,115 26,435 28,579 - -------------------------------------------------------------------------------------------------------------------------- 159,127 141,770 442,148 435,246 - -------------------------------------------------------------------------------------------------------------------------- Costs and expenses: Vessel operating costs 94,202 77,743 270,457 247,066 Costs of other marine revenues 3,170 11,821 20,479 23,610 Depreciation and amortization 19,926 19,780 58,452 63,057 General and administrative 16,592 14,934 48,869 48,527 - -------------------------------------------------------------------------------------------------------------------------- 133,890 124,278 398,257 382,260 - -------------------------------------------------------------------------------------------------------------------------- 25,237 17,492 43,891 52,986 Other income (expenses): Foreign exchange gain (loss) 82 (87) 20 116 Gain on sales of assets 2,335 2,074 22,659 11,038 Equity in net earnings of unconsolidated companies 1,479 2,583 5,514 6,469 Minority interests 112 (189) (60) (480) Interest and miscellaneous income 3,933 3,630 12,886 7,644 Interest and other debt costs (326) (160) (650) (449) - --------------------------------------------------------------------------------------------------------------------------- 7,615 7,851 40,369 24,338 - -------------------------------------------------------------------------------------------------------------------------- Earnings before income taxes 32,852 25,343 84,260 77,324 Income taxes 10,513 3,110 27,466 19,744 - -------------------------------------------------------------------------------------------------------------------------- Net earnings $ 22,339 22,233 56,794 57,580 ========================================================================================================================== Earnings per common share $ .40 .40 1.02 1.04 ========================================================================================================================== Diluted earnings per common share $ .40 .40 1.01 1.03 ========================================================================================================================== Weighted average common shares outstanding 55,770,190 55,538,001 55,686,582 55,518,963 Incremental common shares from stock options 591,772 275,781 492,317 249,401 - -------------------------------------------------------------------------------------------------------------------------- Adjusted weighted average common shares 56,361,962 55,813,782 56,178,899 55,768,364 ========================================================================================================================== Cash dividends declared per common share $ .15 .15 .45 .45 ==========================================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -3- TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
- -------------------------------------------------------------------------------------------------------------------------- Quarter Ended Nine Months Ended December 31, December 31, -------------------------- ----------------------- 2000 1999 2000 1999 - -------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities $ 33,901 32,235 91,481 164,081 - -------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Proceeds from sales of assets 3,102 7,088 45,128 60,414 Additions to properties and equipment (209,340) (8,710) (253,147) (51,149) Other (2,657) 80 (2,680) 142 - -------------------------------------------------------------------------------------------------------------------------- Net cash provided by (used in) investing activities (208,895) (1,542) (210,699) 9,407 - -------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Proceeds from issuance of common stock 1,018 55 3,281 243 Cash dividends (8,378) (8,344) (25,093) (25,024) - -------------------------------------------------------------------------------------------------------------------------- Net cash used in financing activities (7,360) (8,289) (21,812) (24,781) - -------------------------------------------------------------------------------------------------------------------------- Net change in cash and cash equivalents (182,354) 22,404 (141,030) 148,707 Cash and cash equivalents at beginning of period 268,234 136,725 226,910 10,422 - -------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 85,880 159,129 85,880 159,129 ========================================================================================================================== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 420 2 549 328 Income taxes $ 6,696 2,428 15,082 19,776 ==========================================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -4- TIDEWATER INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- (1) Interim Financial Statements The consolidated financial information for the interim periods presented herein has not been audited by independent accountants, but in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the condensed consolidated balance sheets and the condensed consolidated statements of earnings and cash flows at the dates and for the periods indicated have been made. Results of operations for interim periods are not necessarily indicative of results of operations for the respective full years. (2) Stockholders' Equity At December 31, 2000 and March 31, 2000, 4,686,107 and 4,911,445 shares, respectively, of common stock were held in a grantor stock ownership plan trust for the benefit of stock-based employee benefits programs. These shares are not included in common shares outstanding for earnings per share calculations and transactions between the company and the trust, including dividends paid on the company's common stock, are eliminated in consolidating the accounts of the trust and the company. (3) Income Taxes Income tax expense for interim periods is based on estimates of the effective tax rate for the entire fiscal year. The effective tax rate applicable to pre-tax earnings was 32% and 32.6% for the quarter and nine-month period ended December 31, 2000, respectively. The effective tax rate applicable to pre-tax earnings for the quarter and nine-month period ended December 31, 1999 was 32%, excluding a $5 million (or $.09 per share) reduction in previously provided taxes resulting from the company's settlement in the third quarter of open income tax audits which had the effect of reducing the effective tax rate for the quarter and nine-month period ended December 31, 1999 to 12.3% and 25.5%, respectively. (4) Gain on Sales of Assets Gain on sales of assets for the nine-month period ended December 31, 2000 includes $5.9 million resulting from sales of marine vessels and a $16.8 million gain resulting from the sale of the company's 40% holding in its marine joint venture, National Marine Service (NMS), for approximately $31 million during the second quarter of fiscal 2001. The after-tax effect of the gain on the sale of the company's interest in NMS was $10.9 million, or $.19 per share. (5) Vessel Fleet Acquisition On November 21, 2000 the company completed the previously announced purchase of eight vessels from The Sanko Steamship Co., Ltd. for $160 million in cash. Four of the vessels are large anchor-handling towing supply vessels and four are large North Sea-type platform supply vessels. -5- INDEPENDENT ACCOUNTANTS' REVIEW REPORT -------------------------------------- The Board of Directors and Shareholders Tidewater Inc. We have reviewed the accompanying condensed consolidated balance sheet of Tidewater Inc. and subsidiaries as of December 31, 2000, and the related condensed consolidated statements of earnings and cash flows for the three-month and nine-month periods ended December 31, 2000 and 1999. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States. We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet of Tidewater Inc. and subsidiaries as of March 31, 2000, and the related consolidated statements of earnings, stockholders' equity and cash flows for the year then ended, not presented herein, and in our report dated April 25, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 2000, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Ernst & Young LLP New Orleans, Louisiana January 15, 2001 -6- Item 2. Management's Discussion and Analysis ------------------------------------ The company provides services to the international offshore energy industry through the operation of a diversified fleet of marine service vessels. Revenues, net earnings and cash flows from operations are dependent upon the activity level of the vessel fleet which is ultimately dependent upon oil and natural gas prices which, in turn, are determined by the supply/demand relationship for oil and natural gas. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related disclosures. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the company notes that certain statements set forth in this Quarterly Report on Form 10-Q which provide other than historical information and which are forward looking, involve risks and uncertainties that may impact the company's actual results of operations. The company faces many risks and uncertainties, many of which are beyond the control of the company, including: fluctuations in oil and gas prices; changes in capital spending by customers in the energy industry for exploration, development and production; unsettled political conditions, civil unrest and governmental actions, especially in higher risk countries of operations; foreign currency controls; and environmental and labor laws. Readers should consider all of these risk factors as well as other information contained in this report. MARINE OPERATIONS - ----------------- Offshore service vessels provide a diverse range of services to the energy industry. Fleet size, utilization and vessel day rates primarily determine the amount of revenues and operating profit because operating costs and depreciation do not change proportionally when revenue changes. Operating costs principally consist of crew costs, repair and maintenance, insurance, fuel, lube oil and supplies. Fleet size and utilization are the major factors which affect crew costs. The timing and amount of repair and maintenance costs are influenced by vessel age and scheduled drydockings to satisfy safety and inspection requirements mandated by regulatory agencies. Whenever possible, vessel drydockings are done during seasonally slow periods to minimize the impact on vessel operations and are only done if economically justified, given the vessel's age and physical condition. -7- The following table compares revenues and operating costs (excluding general and administrative expense and depreciation expense) for the quarters and nine-month periods ended December 31 and for the quarter ended September 30, 2000. Vessel revenues and operating costs relate to vessels owned and operated by the company while other marine services relate to third-party activities of the company's shipyards, brokered vessels and other miscellaneous marine-related activities.
Quarter Quarter Ended Nine Months Ended Ended December 31, December 31, Sept 30, ---------------------------- ------------------- -------- (In thousands) 2000 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------- Revenues: Vessel revenues: United States $ 54,367 36,444 135,677 104,120 44,807 International 100,399 92,211 280,036 302,547 90,835 - ------------------------------------------------------------------------------------------------------------------- 154,766 128,655 415,713 406,667 135,642 Other marine revenues 4,361 13,115 26,435 28,579 10,495 - ------------------------------------------------------------------------------------------------------------------- $ 159,127 141,770 442,148 435,246 146,137 =================================================================================================================== Operating costs: Vessel operating costs: Crew costs $ 46,600 45,103 135,951 142,647 45,986 Repair and maintenance 25,719 13,819 75,797 47,215 24,190 Insurance 5,464 5,168 15,151 14,729 4,718 Fuel, lube and supplies 8,002 6,174 20,825 18,666 6,711 Other 8,417 7,479 22,733 23,809 6,699 - ------------------------------------------------------------------------------------------------------------------- 94,202 77,743 270,457 247,066 88,304 Costs of other marine revenues 3,170 11,821 20,479 23,610 8,066 - ------------------------------------------------------------------------------------------------------------------- $ 97,372 89,564 290,936 270,676 96,370 ===================================================================================================================
Marine support services are conducted worldwide with assets that are highly mobile. Revenues are principally derived from offshore service vessels, which regularly and routinely move from one operating area to another, often to and from offshore operating areas in different continents. Because of this asset mobility, revenues and long-lived assets attributable to the company's international marine operations in any one country are not "material" as that term is defined by SFAS No. 131. As a result of the uncertainty of certain customers to make payment of vessel charter hire, the company has deferred the recognition of approximately $8.8 million of billings as of December 31, 2000 ($10.7 million of billings as of March 31, 2000), which would otherwise have been recognized as revenue. The company will recognize the amounts as revenue when the uncertainty has been reduced. Oil and natural gas prices have appreciated significantly on the commodity markets during calendar year 1999 and remained strong throughout calendar year 2000. The strong price of oil and natural gas combined with severely tight inventory levels for both crude oil and natural gas continue to increase the demand for working drilling rigs and services in the U.S. Gulf of Mexico and on a global basis. Strong worldwide demand for natural resources has prompted the oil and gas exploration and production companies to increase their capital spending budgets in order to take advantage of improving industry conditions. U.S.-based vessel demand is expected to increase as market conditions and drilling rig utilization rates continue to improve and international-based vessel demand is expected to accelerate as international drilling activity recovers. -8- Marine operating profit and other components of earnings before income taxes for the quarters and nine-month periods ended December 31 and for the quarter ended September 30, 2000 consist of the following:
Quarter Quarter Ended Nine Months Ended Ended December 31, December 31, Sept 30, -------------------- --------------------- -------- (In thousands) 2000 1999 2000 1999 2000 - ---------------------------------------------------------------------------------------------------- Vessel activity: United States $ 10,125 379 5,070 381 420 International 18,090 18,617 44,865 58,297 14,559 - ---------------------------------------------------------------------------------------------------- 28,215 18,996 49,935 58,678 14,979 Gain on sales of assets 2,335 2,074 22,659 11,029 19,360 Other marine services 1,036 1,162 5,572 4,487 2,306 - ---------------------------------------------------------------------------------------------------- Operating profit 31,586 22,232 78,166 74,194 36,645 - ---------------------------------------------------------------------------------------------------- Equity in net earnings of unconsolidated companies 1,479 2,583 5,514 6,469 1,693 Interest and other debt costs (326) (160) (650) (449) (163) Corporate general and administrative (3,520) (2,481) (10,407) (8,546) (3,576) Other income 3,633 3,169 11,637 5,656 4,812 - ---------------------------------------------------------------------------------------------------- Earnings from continuing operations before income taxes $ 32,852 25,343 84,260 77,324 39,411 ====================================================================================================
U.S.-based vessel revenues for the quarter and nine-month period ended December 31, 2000 have increased by approximately 49% and 30%, respectively, as compared to the same periods in fiscal 2000 as a result of higher average day rates. Improving market conditions and vessel demand in the U.S. Gulf of Mexico has resulted in increased average day rates for the U.S.-based towing supply/supply vessels, the company's major income producing asset. As of December 31, 2000, the towing supply/supply vessels operating in the U.S. Gulf of Mexico are experiencing approximately $6,700 average day rates and 69% utilization. U.S.-based operating profit for the quarter and nine-month period ended December 31, 2000 increased significantly as compared to the same periods in fiscal 2000 primarily as a result of increases in vessel revenues offset by higher repair and maintenance costs and crew costs. Repair and maintenance costs increased as a result of costs incurred from an intense drydocking program the company initiated during the first quarter of fiscal 2001 and continued during the second and third quarters of fiscal 2001 in order to ready equipment for an expected improvement in demand for its vessels. The company initiated this drydocking program while vessel demand and average day rates in the domestic market had not fully recovered, thus sacrificing short-term profitability in anticipation of higher average day rates and vessel demand when market conditions in the U.S. Gulf of Mexico improve. By December 31, 2000 U.S.-based market conditions have improved significantly and it is expected that repair and maintenance costs in the fourth fiscal quarter will be less than the preceding quarters. Crew costs increased due to employing more vessel personnel as a result of stronger demand for the company's services in the domestic market. Competition for qualified fleet personnel has also resulted in wage increases for U.S. seamen during the current quarter. Current quarter U.S.-based revenues increased 21% as compared to the previous quarter due to higher average day rates resulting from improved market conditions and vessel demand in the U.S. Gulf of Mexico. U.S.-based operating profit increased significantly during the current quarter from the previous quarter as a result of increases in vessel revenue and a slight decrease in repair and maintenance costs, primarily due to fewer drydockings being performed during the current quarter as compared to the previous quarter. -9- International-based vessel revenues for the current quarter increased 9% from the comparative period in fiscal 2000 as a result of higher utilization and average day rates. International-based vessel revenues for the nine-month period ended December 31, 2000 decreased 7% as compared to the same period in fiscal 2000 as a result of lower average day rates and a decrease in the number of active vessels in the international-based fleet. The company sold its safety/standby vessels in July 1999, as it did not conform to the company's long-range strategies. International vessel demand has trended upwards in recent months as international exploration and production expenditures and drilling activity increase. International-based operating profit for the current quarter was slightly less than the comparative period in fiscal 2000 as increased vessel revenues were offset by higher repair and maintenance costs. International-based operating profit for the nine-month period ended December 31, 2000 decreased approximately 23% as compared to the same period in fiscal 2000 as a result of lower average day rates, a decrease in the number of active vessels in the international-based fleet and higher repair and maintenance costs. Repair and maintenance costs increased primarily due to a higher number of international-based vessel drydockings being performed. International vessel utilization rates increased during the comparative periods, but primarily as a result of withdrawing 25 older, little-used vessels from active service during the latter part of fiscal 2000 at which time they were removed from the utilization statistics. Vessel utilization rates are a function of vessel days worked and vessel days available. Current quarter international-based revenues and operating profit increased 11% and 24%, respectively, as compared to the previous quarter. Of the $3.5 million current quarter increase in international operating profit from the previous quarter, the eight Sanko Steamship Co. vessels acquired during the middle of the current quarter contributed $1.5 million. Gain on sale of assets for the nine-month period ended December 31, 2000 includes a $16.8 million gain on sale of the company's 40% holding of National Marine Service during the second quarter of fiscal 2001. Vessel utilization is determined primarily by market conditions and to a lesser extent by drydocking requirements. Vessel day rates are determined by the demand created through the level of offshore exploration, development and production spending by energy companies relative to the supply of offshore service vessels. Suitability of equipment and the degree of service provided also influence vessel day rates. The following two tables compare day-based utilization percentages and average day rates by vessel class and in total for the quarters and nine-month periods ended December 31 and for the quarter ended September 30, 2000: -10-
Quarter Quarter Ended Nine Months Ended Ended December 31, December 31, Sept 30, ---------------- ------------------ -------- 2000 1999 2000 1999 2000 - --------------------------------------------------------------------------------------------------------- UTILIZATION: - ----------- Domestic-based fleet -------------------- Towing-supply/supply 64.0% 58.7 61.8 52.7 64.2 Crew/utility 93.0 77.1 89.6 76.2 89.2 Offshore tugs 32.4 42.8 35.5 42.8 40.6 Other 11.2 44.7 21.9 55.7 23.9 Total 59.9% 57.8 59.2 54.1 61.7 International-based fleet ------------------------- Towing-supply/supply 80.5% 74.0 77.6 70.9 75.7 Crew/utility 95.3 83.3 93.6 87.7 91.5 Offshore tugs 72.8 66.3 68.9 60.7 67.3 Safety/standby -- -- -- 77.5 -- Other 49.7 48.5 46.3 49.7 47.0 Total 78.8% 71.9 75.8 70.1 74.1 Worldwide fleet --------------- Towing-supply/supply 74.3% 68.1 71.5 64.0 71.3 Crew/utility 94.5 81.2 92.2 83.8 90.7 Offshore tugs 54.2 56.3 53.7 53.1 55.0 Safety/standby -- -- -- 77.5 -- Other 41.1 47.7 41.0 51.0 42.0 Total 71.8% 66.6 69.6 64.3 69.4 ====================================================================================================== AVERAGE VESSEL DAY RATES: - ------------------------ Domestic-based fleet -------------------- Towing-supply/supply $ 6,059 3,646 4,884 3,619 4,533 Crew/utility 2,544 1,871 2,265 1,823 2,197 Offshore tugs 6,298 5,751 6,135 5,901 5,927 Other 1,434 1,188 1,451 1,262 1,643 Total $ 5,306 3,512 4,410 3,501 4,169 International-based fleet ------------------------- Towing-supply/supply $ 5,321 5,189 5,183 5,472 5,149 Crew/utility 2,244 2,188 2,242 2,204 2,246 Offshore tugs 4,226 3,827 4,089 3,905 4,224 Safety/standby -- -- -- 6,087 -- Other 1,362 1,358 1,428 1,333 1,318 Total $ 4,391 4,247 4,272 4,452 4,245 Worldwide fleet --------------- Towing-supply/supply $ 5,560 4,677 5,084 4,897 4,936 Crew/utility 2,346 2,084 2,250 2,086 2,229 Offshore tugs 4,796 4,456 4,708 4,584 4,804 Safety/standby -- -- -- 6,087 -- Other 1,366 1,322 1,430 1,316 1,357 Total $ 4,674 4,009 4,316 4,162 4,220 ======================================================================================================
-11- The following table compares the average number of vessels by class and geographic distribution for the quarters and nine-month periods ended December 31 and for the quarter ended September 30, 2000:
Quarter Quarter Ended Nine Months Ended Ended December 31, December 31, Sept 30, ------------------- --------------------- -------- 2000 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------ Domestic-based fleet: - -------------------- Towing-supply/supply 120 127 122 129 121 Crew/utility 25 26 26 26 26 Offshore tugs 32 33 32 36 33 Other 9 9 9 9 9 - ------------------------------------------------------------------------------------------------------------------ Total 186 195 189 200 189 - ------------------------------------------------------------------------------------------------------------------ International-based fleet: - ------------------------- Towing-supply/supply 199 203 196 213 195 Crew/utility 48 49 48 50 48 Offshore tugs 38 44 38 49 38 Safety/standby --- --- --- 8 --- Other 31 32 32 33 33 - ------------------------------------------------------------------------------------------------------------------ Total 316 328 314 353 314 - ------------------------------------------------------------------------------------------------------------------ Owned or chartered vessels included in marine revenues 502 523 503 553 503 Vessels held for sale 41 62 47 52 48 Joint-venture and other 27 44 37 44 34 - ------------------------------------------------------------------------------------------------------------------ Total 570 629 587 649 585 ==================================================================================================================
Included in the international-based towing-supply/supply fleet count for the current quarter are the eight vessels purchased on November 21, 2000 for $160 million in cash from The Sanko Steamship Co., Ltd. The package of vessels included four large platform supply vessels and four large anchor-handling towing supply vessels. Also included in the international-based towing- supply/supply count are two large platform supply vessels purchased during the current quarter for approximately $32.1 million. On December 15, 2000 the company sold four vessels (two offshore tugs and two crewboats) to one of its 49%-owned unconsolidated joint ventures for $17 million, of which $9 million was financed by the company. The transaction resulted in a gain on asset sale of $1 million. During the second quarter of fiscal 2001, the company sold its 40% holding in one of its unconsolidated joint venture companies resulting in a decrease in the joint venture vessel count by 24 vessels. As the sale occurred during August 2000, the average joint venture vessel count for the nine-month period ended December 31, 2000 and for the previous quarter does not reflect the total vessel reduction. The company sold all of its safety/standby vessels for approximately $40 million in an all cash transaction during the second quarter of fiscal 2000. This specialized fleet was sold because it did not conform to the company's long- range strategies. During the latter part of fiscal 2000, the company withdrew from active service, 39 older, little-used vessels. Fourteen of the vessels were withdrawn from the domestic-based fleet and 25 were withdrawn from the international-based fleet. Vessels withdrawn from active service are intended to be sold. -12- General and administrative expenses for the quarters and nine-month periods ended December 31 and for the quarter ended September 30, 2000:
Quarter Quarter Ended Nine Months Ended Ended December 31, December 31, Sept 30, ------------------- --------------------- -------- (In thousands) 2000 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------ Personnel $ 9,989 9,396 30,131 28,763 10,052 Office and property 2,690 2,576 8,172 8,227 2,758 Sales and marketing 1,094 997 3,292 3,165 1,079 Professional services 1,126 1,416 3,120 4,001 1,144 Other 1,693 549 4,154 4,371 1,304 - ---------------------------------------------------------------------------------------------------------------- $ 16,592 14,934 48,869 48,527 16,337 ================================================================================================================
LIQUIDITY, CAPITAL RESOURCES AND OTHER MATTERS - ---------------------------------------------- The company's current ratio, level of working capital and amount of cash flows from continuing operations for any year are directly related to fleet activity and vessel day rates. Fleet activity and vessel day rates are ultimately determined by the supply/demand relationship for oil and natural gas. Variations from year-to-year in these items are primarily the result of market conditions. Cash from ongoing operations in combination with available lines of credit provide the company, in management's opinion, with adequate resources to satisfy present financing requirements. At December 31, 2000, all of the company's $200 million revolving line of credit was available for future financing needs. Continued payment of dividends, currently $.15 per quarter per common share, is subject to declaration by the Board of Directors. Investing activities for the nine-months ended December 31, 2000 used $210.7 million of cash which included $45.1 million from proceeds from the sale of assets, primarily the sale of the company's 40% holding in National Marine Service for approximately $31 million during the second quarter. Sale proceeds were offset by additions to properties and equipment totaling $253.1 million comprised of approximately $11.1 million in capitalized repairs and maintenance and $240.4 million for the construction of offshore marine vessels and the acquisition of seven large platform supply vessels and four large anchor- handling towing supply vessels. Investing activities for the nine-months ended December 31, 1999 provided $9.4 million of cash that included proceeds primarily from the sale of the safety/standby fleet offset by new construction additions to property, plant and equipment. Financing activities include quarterly cash dividends of $.15 per share. During the fourth quarter of fiscal 2000 the company announced its intentions of a new-build program which would better service the needs of its customers in the deepwater markets of the world. As of January 12, 2001, the company has entered into agreements with three shipyards for the construction of 12 vessels for a total estimated cost of approximately $305 million. Seven of the vessels to be constructed are large platform supply vessels and five are large anchor-handling towing supply vessels capable of working in most deepwater markets of the world. Four of the platform supply vessels will be constructed at the company's shipyard, Quality Shipyards LLC, while the remaining eight vessels will be built at two Far East shipyards. As of January 12, 2001, $11.5 million has been expended on these 12 vessels of the estimated $305 million total commitment. Scheduled delivery of the vessels will commence in December 2001 with final delivery of the last vessel expected in January 2003. The company expects to finance the new-build program from its current cash balances, its projected cash flow and, if necessary, its revolving credit facility. In addition to the new-build program discussed above, the company has also committed to the construction of seven additional vessels for a total of approximately $40 million. These vessels -13- consist of two large platform supply vessels under construction in Norway with scheduled completion dates in April and May 2001, three small crewboats being constructed in Holland with a February 2001 delivery date and two large crewboats being built at U.S. shipyards to be delivered in April 2001 and January 2002. As of January 12, 2001, $8.5 million have been expended on these vessels. INFLATION AND CURRENCY FLUCTUATIONS - ----------------------------------- Because of its significant international operations, the company is exposed to currency fluctuations and exchange risks. To minimize the financial impact of these items the company attempts to contract a majority of its services in United States dollars. Day-to-day operating costs are generally affected by inflation. However, because the energy services industry requires specialized goods and services, general economic inflationary trends may not affect the company's operating costs. The major impact on operating costs is the level of offshore exploration, development and production spending by energy exploration and production companies. As this spending increases, prices of goods and services used by the energy industry and the energy services industry will increase. Future increases in vessel day rates may mitigate the effects on the company from the inflationary effects on operating costs. ENVIRONMENTAL MATTERS - --------------------- During the ordinary course of business the company's operations are subject to a wide variety of environmental laws and regulations. The company attempts to comply with these laws and regulations in order to avoid costly accidents and related environmental damage. Compliance with existing governmental regulations which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had, nor is expected to have, a material effect on the company. The company is proactive in establishing policies and operating procedures for safeguarding the environment against any environmentally hazardous material aboard its vessels and at shore base locations. Whenever possible, hazardous materials are maintained or transferred in confined areas to ensure containment if accidents occur. In addition the company has established operating policies that are intended to increase awareness of actions that may harm the environment. Item 3. Quantitative and Qualitative Disclosure About Market Risk --------------------------------------------------------- No change from 2000 annual report disclosure. -14- PART II. OTHER INFORMATION Item 4. Exhibits and Reports on Form 8-K -------------------------------- A. At page 17 of this report is the index for those exhibits required to be filed as a part of this report. B. The company's report on Form 8-K dated November 21, 2000 reported that the company had announced it has completed the purchase of eight vessels from The Sanko Steamship Co., Ltd. for $160 million in cash. C. The company's report on Form 8-K dated December 4, 2000 reported that: 1. The company had announced a management reorganization; and 2. Cliffe F. Laborde, Larry T. Rigdon and Dean E. Taylor have been promoted to the level of Executive Vice President reporting directly to William C. O'Malley, Chairman, President and Chief Executive Officer; and 3. Richard M. Currence, Executive Vice President and William C. Hightower, Senior Vice President will begin to transition to retirement. D. The company's report on Form 8-K dated December 18, 2000 reported that William C. O'Malley, Chairman, President and Chief Executive Officer, issued a Quarterly Report to Shareholders. -15- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TIDEWATER INC. ---------------------------------------------------- (Registrant) Date: January 17, 2001 /s/ William C. O'Malley ---------------------------------------------------- William C. O'Malley Chairman of the Board, President and Chief Executive Officer Date: January 17, 2001 /s/ J. Keith Lousteau ---------------------------------------------------- J. Keith Lousteau Senior Vice President and Chief Financial Officer Date: January 17, 2001 /s/ Joseph M. Bennett ---------------------------------------------------- Joseph M. Bennett Vice President and Corporate Controller (Principal Accounting Officer) -16- EXHIBIT INDEX Exhibit Number - ----- 10(a) Amendment No. 1 to Employment Agreement dated September 27, 2000 between Tidewater Inc. and William C. O'Malley. 10(b) Amended and Restated Change of Control Agreement dated September 27, 2000 between Tidewater and William C. O'Malley. 10(c) Amendment No. 1 dated November 28, 2000 to Tidewater 401(K) Savings Plan. 10(d) Tidewater Inc. Third Amended and Restated Supplemental Executive Retirement Plan dated November 28, 2000. 15 Letter re Unaudited Interim Financial Information 27 Financial Data Schedule -17- EX-10.(A) 2 0002.txt AMENDMENT #1 TO EMPLOYMENT AGREEMENT Exhibit 10(a) EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement") between Tidewater Inc., a Delaware corporation ("Company"), and William C. O'Malley ("Employee") is effective as of September 27, 2000 (the "Agreement Date") and supersedes the employment agreement between the Company and the Employee dated September 19, 1997. The Company and the Employee agree as follows: 1. Employment Capacity and Term. ---------------------------- (a) Capacity and Term. The Employee will serve as the President and ----------------- Chief Executive Officer of the Company for the period beginning September 27, 2000 through March 28, 2002. The period from September 27, 2000 through March 28, 2002 is referred to in this Agreement as the "Employment Term." (b) Duties. As the President and Chief Executive Officer, the ------ Employee shall perform such duties, consistent with the Employee's job title, as may be prescribed from time to time by the Board of Directors of the Company (the "Board") and shall perform such duties as are described in the Company's Bylaws. (c) Chairman. Employee has been elected a director of the Company -------- and serves as the Chairman of the Board. If the Employee hereafter ceases for any reason to be the President and Chief Executive Officer of the Company, the Employee will, if requested by the Company, resign as the Chairman of the Board and as a director of the Company. 2. Term of Agreement. ----------------- Subject to Section 7A hereof, the term of this Agreement shall commence on the Agreement Date and shall continue through the last day of the Employment Term, subject to any earlier termination of Employee's status as an employee pursuant to the terms of this Agreement. Unless otherwise agreed by the parties, Employee shall retire from his position as President, Chief Executive Officer and Chairman of the Board on March 28, 2002. Subject to Section 7A hereof, following the term of this Agreement, each party shall have the right to enforce all rights, and shall be bound by all obligations, of such party that are continuing rights and obligations under the terms of this Agreement. -1- 3. Devotion to Responsibilities. ---------------------------- During the Employment Term, the Employee will devote all of his time and attention to the business of the Company, and he will not engage in or be employed by any other business activity or business, whether or not such business activity or business is for gain, profit or other pecuniary advantage; provided, however, that nothing herein contained shall prohibit the Employee from (i) serving as a member of the Board of Directors, Board of Trustees or the like of any for profit or non-profit entity, or performing services of any type for any civic or community entity, whether or not the Employee receives compensation therefor, (ii) investing his assets in such form or manner as will require no more than nominal services on the part of the Employee in the operation of the business of the entity in which such investment is made, or (iii) serving in various capacities with, and attending meetings of, industry or trade groups and associations, including without limitation the industry or trade groups and associations with which the Employee is currently involved, as long as the Employee's engaging in any activities permitted by virtue of clauses (i), (ii) and (iii) above does not materially and unreasonably interfere with the ability of the Employee to perform the services and discharge the responsibilities required of him under this Agreement. Notwithstanding clause (ii) above, during the Employment Term, the Employee may not beneficially own more than 2% of the outstanding shares of any class of equity security of a business organization required to file periodic reports with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Exchange Act") and may not beneficially own more than 5% of the outstanding shares of any class of equity security of a business organization that competes with the Company. For purposes of this paragraph, "beneficially own" shall have the same meaning ascribed to that term in Rule 13d-3 under the Exchange Act. 4. Compensation and Benefits. The Company will provide the Employee with ------------------------- the compensation and benefits described below: (a) Salary. An annual salary during the Employment Term of $700,000 ------ ("Annual Base Compensation"), payable to the Employee in equal semi-monthly installments. (b) Bonus. An annual incentive bonus, payable, if at all, only with ----- respect to services provided by the Employee during the Employment Term. The annual incentive bonus will be determined, accrued and paid in accordance with the terms of the Company's Executive Officer Annual Incentive Plan (the "Incentive Plan") that covers certain executive officers designated by the Compensation Committee of the Board (the "Committee") or any incentive or bonus compensation plan that is a successor or substitute therefor. The parties acknowledge and agree that this Section 4(b) imposes no obligation on the Company to award a bonus to the Employee. A copy of the Incentive Plan in effect for fiscal year 2001 is attached as Appendix A. (c) Stock Options. The outstanding options to purchase shares of the ------------- common stock of the Company held by Employee have the vesting terms and post- retirement exercise periods described on Appendix B hereto. Options granted to Employee by the Company in the future during the Employment Term shall vest upon retirement at age 65 or later and shall have a post-retirement exercise period of at least five years. -2- (d) Compensating Retirement Benefit. In addition to any benefits ------------------------------- payable to Employee after his retirement by virtue of his participation in the Tidewater defined benefit pension plan and Supplemental Executive Retirement Plan, the Company shall, from and after the date of the Employee's normal retirement on or after age 65 (the "Retirement Date"), pay to the Employee, from time to time, such additional amounts as are necessary to make the Employee's total retirement benefits payable after the Retirement Date (including retirement benefits provided by Employee's prior employer and benefits paid prior to the Retirement Date under the Tidewater defined benefit plan and Supplemental Executive Retirement Plan) not less in amount than the retirement benefits to which the Employee would have been entitled under the terms of any qualified and non-qualified defined benefit pension plans of his immediate prior employer, assuming that Employee's employment by his immediate prior employer had terminated on the Retirement Date. In addition to any benefits payable to Employee by virtue of his participation in the Tidewater defined benefit pension plan and Supplemental Executive Retirement Plan, in the event his employment with the Company is terminated for any reason (including his death) prior to age 65, the Company shall pay to the Employee from time to time, such additional amounts as are necessary to make the Employee's total retirement benefits payable after such termination of employment (including retirement benefits provided by Employee's prior employer and benefits paid prior to the date of termination of employment under the Tidewater defined benefit plan and Supplemental Executive Retirement Plan) not less than the amount that the Employee would have been entitled to receive under the defined benefit pension plans of his immediate prior employer, assuming that Employee's employment by his immediate prior employer had terminated on the same date his employment with the Company is terminated. In making any benefit calculation contemplated hereby, it shall be assumed that the Employee's compensation for purposes of such plans was, for periods prior to the date his employment with the Company commenced (the "Commencement Date"), his covered compensation with such prior employer and, for periods after the Commencement Date, his compensation under this Agreement or a predecessor agreement between the Company and the Employee. This compensating retirement benefit will be paid in the same manner as payments are made under the Company's Supplemental Executive Retirement Plan and will be based on calculations using the same actuarial assumptions used in the Company's defined benefit plan. The Employee has provided the Company with copies of all documents related to retirement compensation available to the Employee from the prior employer, which documents are attached hereto as Appendix C. Attached as Appendix D is the calculation of the additional amount that Employee shall be paid following retirement on or after the Retirement Date in order that his retirement benefits will be no less than the retirement benefits that he would have been entitled to receive following retirement on the Retirement Date under the terms of the qualified and non-qualified defined benefit pension plans of his immediate prior employer, which amount is subject to adjustment if and to the extent that the assumptions relied upon for such calculation (as stated in Appendix D) differ from the facts at the time of Employee's retirement. (e) Indemnification. Under its Bylaws, the Company provides, as of --------------- the Agreement Date, certain indemnification rights to its officers and directors that will be applicable to the Employee with respect to his acts and omissions in his capacity as an officer and director of the Company. The Company agrees to provide indemnification rights to the Employee identical to -3- those provided for in its Bylaws as in existence on the Agreement Date as to all suits or proceedings to which the Employee is or is threatened to be made a party that arise out of or are connected to his services during the Employment Term, without regard to whether such actions, suits or proceedings are made, asserted or arise during or after the Employment Term. (f) Other Benefits. During the Employment Term, the Employee shall -------------- be entitled to all benefits and perquisites provided to senior executive employees of the Company, including but not limited to the benefits referred to in Appendix E hereof. 5. Expenses. The Employee will be reimbursed for out-of-pocket expenses -------- incurred from time to time on behalf of the Company or any subsidiary in the performance of his duties under this Agreement, upon the presentation of such supporting invoices, documents and forms as the Company reasonably requests. 6. Termination of Employment. ------------------------- (a) Death or Disability. The Employee's status as an employee will ------------------- terminate immediately and automatically upon the Employee's death during the Employment Term. If (i) the Employee is rendered incapable because of physical or mental illness of satisfactorily discharging his duties and responsibilities under this Agreement for a period of 60 consecutive days and (ii) a duly qualified physician chosen by the Company and acceptable to the Employee or his legal representatives so certifies in writing, the Board shall have the power to determine that the Employee has become disabled. If the Board makes such a determination, the Company shall have the continuing right and option, during the period that such disability continues, and by notice given in the manner provided in Section 15, to terminate the status of Employee as an employee. Any such termination shall become effective thirty days after such notice of termination is given (the "Disability Effective Date"), unless within such thirty day period, the Employee becomes capable of rendering services of the character contemplated hereby (and a physician chosen by the Company and acceptable to the Employee or his legal representatives so certifies in writing) and the Employee in fact resumes such services. The Employee's death or the Employee's incapacity due to physical or mental illness to discharge the responsibilities assigned by this Agreement shall not constitute a breach of this Agreement by the Employee. (b) Cause. The Company may terminate the Employee's status as an ----- employee for Cause. As used herein, termination by the Company of the Employee's status as an employee for "Cause" shall mean termination as a result of (i) the willful and continuing failure by the Employee to perform the services contemplated by this Agreement (other than any such failure resulting from the Employee's disability of the type specified in Section 6(a)), (ii) the Employee's breach of or failure to comply with the covenants set forth in Sections 8, 9 or 11 of this Agreement, or (iii) the willful engaging by the Employee in gross misconduct injurious to the Company; provided that, no act, or failure to act, on the Employee's part shall be considered "willful" for purposes of this Agreement unless done, or omitted to be done, without a reasonable belief that such action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, by the Employee that is based upon authority given pursuant to a resolution duly adopted by -4- the Board or based upon the advice of counsel for the Company shall be presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. (c) Good Reason. The Employee may terminate his status as an ----------- employee for Good Reason. The termination by the Employee of his status as an employee for Good Reason shall be deemed to be a justifiable termination and shall excuse the Employee from the obligation to render services under or relating to this Agreement. As used herein, the term "Good Reason" shall mean: (i) The occurrence of any of the following during the Employment Term: (A) the assignment by the Board to the Employee of any duties or responsibilities which are inconsistent with the Employee's status, title and position as President and Chief Executive Officer of the Company; (B) any removal of the Employee from, or any failure to reappoint or reelect the Employee to, the position of President and Chief Executive Officer of the Company, except in connection with a termination by the Company of the Employee's employment for Cause or on account of disability or death of the Employee, or the termination by the Employee of his employment other than for Good Reason; (C) the Company's requiring the Employee to be based anywhere other than in New Orleans, Louisiana, except for required travel in the ordinary course of the Company's business; (ii) a reduction in the Employee's annual salary or a failure by the Company to pay to the Employee any installment of the annual salary or to pay any other amounts required to be paid under this Agreement, which failure continues for a period of ten days after written notice thereof is given by the Employee to the Company; (iii) the failure by the Company to obtain the assumption of its obligations under this Agreement by any successor or assign as contemplated in Paragraph 13 of the Agreement; (iv) any purported termination by the Company of the Employee's status as an employee which is not effected pursuant to a Notice of Termination satisfying the requirements of Paragraph 6(d) hereof, or which is not justified as a termination based on Cause; or (v) any breach of this Agreement by the Company. (d) Notice of Termination. Any purported notice of termination of --------------------- the Employee's status as an employee must be communicated in a writing delivered to the other party as provided in Paragraph 15 hereof (a notice of termination complying with this sentence is referred to in this Agreement as a "Notice of Termination"). Any such Notice of Termination that purports to terminate Employee's employment for Cause or for Good Reason shall specify the provision or -5- provisions of this Agreement relied upon by the party giving such notice and shall set forth in reasonable detail the facts and circumstances claimed by such party to provide a basis for termination of the Employee's employment under the provision(s) so indicated. (e) Date of Termination. "Date of Termination" means (i) if ------------------- Employee's employment is terminated by the Company for Cause, or by Employee for Good Reason, the date of delivery of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Employee's employment is terminated by the Company other than for Cause or disability, the Date of Termination shall be the date on which the Company notifies the Employee of such termination and (iii) if Employee's employment is terminated by reason of his death or disability, the Date of Termination shall be the date of death of Employee or the Disability Effective Date, as the case may be. 7. Obligations of the Company Upon Termination. ------------------------------------------- (a) Good Reason, Other than for Cause, Death or Disability. If (i) ------------------------------------------------------ the Company terminates the Employee's status as an employee other than for Cause, death or disability, or (ii) the Employee shall terminate his employment for Good Reason, then the Company shall pay to the Employee in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts: (A) the sum of (1) the amount of the Employee's Annual Base Compensation earned through the Date of Termination, to the extent not theretofore paid and (2) any compensation previously deferred by the Employee (together with any accrued interest on earnings thereon) and any accrued vacation pay, in each case to the extent not previously paid (the sum of the amounts described in clauses (1) and (2) being hereinafter referred to as the "Accrued Obligations"). (B) the aggregate amount of the Employee's Annual Base Compensation for the period beginning the day of the Date of Termination and continuing through the last day of the Employment Term (such amount being referred to herein as the "Non-Accrued Compensation"). (C) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Employee any other amounts required to be paid or provided or which the Employee is eligible to receive under any plan, program, policy or practice of the Company (such other amounts being referred to herein as the "Other Benefits"). (b) Death. If the Employee's status as an employee is terminated by ----- reason of the Employee's death, this Agreement shall terminate without further obligations to the Employee's legal representatives under this Agreement, other than for payment of (i) Accrued Obligations, (ii) 50% of the Non-Accrued Compensation (the "Death Cash Payment") and (iii) the timely payment or provision of Other Benefits. The sum of the Accrued Obligations and the Death Cash Payment shall be paid to the Employee's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other -6- Benefits as used in this Section 7(b) shall include, without limitation, and the Employee's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company to the estates and beneficiaries of its senior executive officers under such plans, programs, practices and policies relating to death benefits, if any, as in effect on the date of Employee's death. (c) Disability. If Employee's status as an employee is terminated by ---------- reason of Employee's disability, this Agreement will terminate without further obligation to the Employee, other than the payment of (i) Accrued Obligations, (ii) 50% of the Non-Accrued Compensation (the "Disability Cash Payment") and (iii) the timely payment or provision of Other Benefits. The sum of Accrued Obligations and the Disability Cash Payment will be paid to the Employee in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as used in this Section 7(c) shall include, and the Employee will be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company to disabled executive officers and their families in accordance with such plans, programs, practices and policies related to disability that are in effect on the Disability Effective Date. (d) Cause, Other than for Good Reason. If the Employee's status as --------------------------------- an employee shall be terminated for Cause by Employer, or voluntarily terminated by Employee other than for Good Reason, this Agreement shall terminate without further obligation to the Employee other than for (i) Accrued Obligations, which shall be paid in a lump sum in cash within 30 days of the Date of Termination, and (ii) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Employee his accrued, vested benefits under any benefit plan or program of the Company. 7A. Obligations of the Company and the Employee in the Event of a Change -------------------------------------------------------------------- of Control ---------- (a) Upon and following a Change of Control of the Company (as defined in Section 7A(b) hereof), the rights and obligations of the Employee and the Company shall not be governed by this Agreement, but shall be as provided in the Change of Control Agreement between the Employee and the Company dated effective October 1, 1999 and any amendments thereto or any subsequent change of control agreement between the Employee and the Company (including any rights or obligations in this Agreement which are specifically incorporated by reference therein). Upon the occurrence of a Change of Control, the term of the Agreement shall end, and the provisions of the Agreement (including, without limitation, the Employee's covenant not to compete) shall be null and void, and of no further force and effect, except that compensation, benefit and indemnification obligations accrued by the Company with respect to the Employee prior to the Change of Control and during the term of the Agreement shall remain valid and enforceable. (b) Change of Control. As used in this Section 7A, "Change of Control" shall mean: -7- (i) the acquisition by any "Person" (as defined in Section 7A(c) hereof) of "Beneficial Ownership" (as defined in Section 7A(c) hereof) of 30% or more of the outstanding Shares of the Company's Common Stock, $0.10 par value per share (the "Common Stock") or 30% or more of the combined voting power of the Company's then outstanding securities; provided, however, that for purposes of this subsection 7A(b)(i), the following shall not constitute a Change of Control: (A) any acquisition (other than a "Business Combination" (as defined in Section 7A(b)(iii) hereof) which constitutes a Change of Control under Section 7A(b)(iii) hereof) of Common Stock directly from the Company, (B) any acquisition of Common Stock by the Company or its subsidiaries, (C) any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition of Common Stock by any corporation pursuant to a Business Combination which does not constitute a Change of Control under Section 7A(b)(iii) hereof; or (ii) individuals who, as of the effective date of this amendment to the Agreement, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of this amendment whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual's initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or (iii) consummation of a reorganization, merger or consolidation (including a merger or consolidation of the Company or any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, immediately following such Business Combination, (A) the individuals and entities who were the Beneficial Owners of the Company's outstanding Common Stock and the Company's voting securities entitled to vote generally in the election of directors immediately prior to such Business Combination have direct or indirect Beneficial Ownership, respectively, of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Post- Transaction Corporation (as defined in Section 7A(c) hereof), and -8- (B) except to the extent that such ownership existed prior to the Business Combination, no Person (excluding the Post-Transaction Corporation and any employee benefit plan or related trust of either the Company, the Post-Transaction Corporation or any subsidiary of either corporation) Beneficially Owns, directly or indirectly, 30% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 30% or more of the combined voting power of the then outstanding voting securities of such corporation, and (C) at least a majority of the members of the board of directors of the Post-Transaction Corporation were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. (c) Other Definitions. As used in Section 7A(b) hereof, the following words or terms shall have the meanings indicated: (i) Affiliate: "Affiliate" (and variants thereof) shall mean a Person that controls, or is controlled by, or is under common control with, another specified Person, either directly or indirectly. (ii) Beneficial Owner: "Beneficial Owner" (and variants thereof), with respect to a security, shall mean a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (i) the power to vote, or direct the voting of, the security, and/or (ii) the power to dispose of, or to direct the disposition of, the security. (iii) Person: "Person" shall mean a natural person or company, and shall also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including, without limitation, a partnership or limited partnership) for the purpose of acquiring, holding, or disposing of a security, except that "Person" shall not include an underwriter temporarily holding a security pursuant to an offering of the security. (iv) Post-Transaction Corporation: Unless a Change of Control includes a Business Combination (as defined in Section 7A(b)(iii) hereof), "Post-Transaction Corporation" shall mean the Company after the Change of Control. If a Change of Control includes a Business Combination, "Post- Transaction Corporation" shall mean the corporation resulting from the Business Combination unless, as a result of such Business Combination, an ultimate parent corporation controls the Company or all or substantially all of the Company's assets either directly or indirectly, in which case, "Post-Transaction Corporation" shall mean such ultimate parent corporation." 8. Trade Secrets, Etc. The Employee shall hold in a fiduciary capacity ------------------- for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its subsidiaries or corporate affiliates and their respective businesses and operations, which -9- shall have been obtained by the Employee during the Employee's employment (whether prior to or after the Commencement Date) and which shall not have become public knowledge (other than by acts of the Employee or any of his representatives in violation of this Agreement). At the end of the Employment Term, the Employee agrees (i) not, without the prior written consent of the Company or as may be otherwise required by law or legal process, to communicate or divulge any such information, knowledge or data to any party other than the Company and (ii) to deliver promptly to the Company any confidential information, knowledge or data in his possession, whether produced by the Company or any of its subsidiaries and corporate affiliates or by the Employee, that relates to the business of the Company or any of its subsidiaries and joint ventures or any past, current or prospective activity of the Company or any of its subsidiaries and joint ventures. The Employee shall be permitted to retain copies of such data as are necessary in order to enable the Employee to assert any rights under this Agreement, provided that such data shall be used solely for such purpose. 9. Customer Lists. The Employee recognizes and acknowledges that any -------------- written list or lists of the customers of the Company or any of its subsidiaries and joint ventures ("customer lists"), as such customer lists may exist from time to time, are valuable, special and unique assets of the Company. The Employee agrees that he will not use for his own personal benefit or disclose such customer lists to any person, firm, corporation, association or other entity for any reason or purpose whatsoever. Personal and social contacts with past, present or future customers of the Company shall not be prohibited hereby. 10. Limited Covenant Not to Compete. For a period of two years commencing ------------------------------- with the expiration of the term of this Agreement, the Employee will not, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation or control of any company or other business enterprise engaged in the business of providing vessel services for the offshore oil and gas industry, within any parish of the State of Louisiana (as set forth in Appendix F), or any other jurisdiction (whether within or outside the United States), in which the Company or any of its subsidiaries or joint ventures carries on the business of vessel services for the offshore oil and gas industry, so long as the Company or any of its subsidiaries or joint ventures carries on a like line of business therein; provided, however, that nothing contained herein shall (a) prohibit the Employee from making investments in any publicly held company which do not exceed in the aggregate two percent of the equity interest of such company or (b) prohibit the Employee from continuing to hold any of the director or officer positions held by him as of the date of this Agreement that are disclosed on Appendix G hereto. 11. Certain Proprietary Rights. The Employee agrees to and hereby does -------------------------- assign to the Company all his right, title and interest in and to all inventions, business plans, work models or procedures, whether or not patentable, which are made or conceived solely or jointly by him: (a) At any time during the term of his employment by the Company, or (b) With the use of time or materials of the Company. The Employee agrees to communicate to the Company or its representatives all facts known to him concerning such matters, to sign all necessary instruments, make all necessary oaths and generally, at the Company's expense, -10- to do everything reasonably practicable (without expense to the Employee) to aid the Company in obtaining and enforcing proper legal protection for all such matters in all countries and in vesting title to such matters in the Company. At the Company's request (during or after the term of this Agreement) and expense, the Employee will promptly execute a specific assignment of title to the Company, and perform any other acts reasonably necessary to implement the foregoing assignment. 12. Injunctive Relief. In the event of a breach or threatened breach by ----------------- the Employee of the provisions of Sections 8, 9, 10 or 11 of this Agreement during or after the term of this Agreement, the Company shall be entitled to injunctive relief restraining the Employee from violation of such paragraph. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedy at law or in equity it may have in the event of breach or threatened breach of this Agreement by the Employee. 13. Binding Effect. -------------- (a) This Agreement shall be binding upon and inure to the benefit of the Company and any of its successors or assigns. (b) This Agreement is personal to the Employee and shall not be assignable by the Employee without the consent of the Company (there being no obligation to give such consent) other than such rights or benefits as are transferred by will or the laws of descent and distribution. (c) The Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the assets or businesses of the Company (i) to assume unconditionally and expressly this Agreement and (ii) to agree to perform all of the obligations under this Agreement in the same manner and to the same extent as would have been required of the Company had no assignment or succession occurred, such assumption to be set forth in a writing reasonably satisfactory to the Employee. In the event of any such assignment or succession, the term "Company" as used in this Agreement shall refer also to such successor or assign. 14. Notices. Any notice or other communication required under this ------- Agreement shall be in writing, shall be deemed to have been given and received when delivered in person, or, if mailed, shall be deemed to have been given when deposited in the United States mail, first class, registered or certified, return receipt requested, with proper postage prepaid, and shall be deemed to have been received on the third business day thereafter, and shall be addressed as follows: -11- If to the Company, addressed to: Tidewater Inc. Pan American Life Center 601 Poydras Street, Suite 1900 New Orleans, Louisiana 70130 Attn: Cliffe F. Laborde Senior Vice President and Secretary If to the Employee, addressed to: William C. O'Malley Pan American Life Center 601 Poydras Street, Suite 1900 New Orleans, Louisiana 70130 or such other address as to which any party hereto may have notified the other in writing. 15. Governing Law. This Agreement shall be governed by and interpreted in ------------- accordance with the laws of the State of Louisiana. 16. Entire Agreement. This Agreement, including Appendices A through G, ---------------- inclusive, all of which are herein incorporated by reference and made a part hereof, and the documents referred to herein, contain or refer to the entire arrangement or understanding between the Employee and the Company relating to the employment of the Employee by the Company. No provision of the Agreement, including the Appendices, may be modified or amended except by an instrument in writing signed by or for both parties hereto. 17. Severability. If any term or provision of this Agreement, or the ------------ application thereof to any person or circumstance, shall at any time or to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 18. Waiver of Breach. The waiver by either party of a breach of any ---------------- provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof. 19. Remedies Not Exclusive. No remedy specified herein shall be deemed to ---------------------- be such party's exclusive remedy, and accordingly, in addition to all of the rights and remedies provided for in this Agreement, the parties shall have all other rights and remedies provided to them by applicable law, rule or regulation. -12- 20. Beneficiaries. Whenever this Agreement provides for any payment to be ------------- made to the Employee or his estate, such payment may be made instead to such beneficiary or beneficiaries as the Employee may have designated in writing and filed with the Company. The Employee shall have the right to revoke any such designation from time to time and to redesignate any beneficiary or beneficiaries by written notice to the Company. 21. Company's Reservation of Rights. Employee acknowledges and ------------------------------- understands that the Employee serves at the pleasure of the Board and that the Company has the right at any time to terminate Employee's status as an employee of the Company, or to change or diminish his status as the Chief Executive Officer during the Employment Term, subject to the rights of the Employee to claim the benefits conferred by Section 7(a) hereof if such action constitutes a termination by the Company without Cause or a termination by the Employee for Good Reason. 22. Counterparts. This Agreement may be executed in one or more ------------ counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. TIDEWATER INC. Date of Execution: Oct. 12, 2000 By: /s/ Robert H. Boh ----------------- ------------------------------------ Name: Robert H. Boh Title: Director and Chairman of the Compensation Committee of the Board of Directors EMPLOYEE: Date of Execution: Oct. 16, 2000 /s/ William C. O'Malley ---------------- ----------------------------------------- Name: William C. O'Malley -13- EX-10.(B) 3 0003.txt AMENDED AND RESTATED CHANGE OF CONTROL Exhibit 10(b) AMENDMENT NO. 1 TO CHANGE OF CONTROL AGREEMENT The Change of Control Agreement between Tidewater Inc., a Delaware corporation (the "Company"), and William C. O'Malley (the "Employee") effective as of October 1, 1999 (the "Agreement") is hereby amended, effective as of September 27, 2000, as follows: The definition of "Employment Agreement" in Section 1.8 of the Agreement shall be amended to read as follows: 1.8 Employment Agreement. "Employment Agreement" shall mean the Employment Agreement between the Company and the Employee effective as of September 27, 2000, as amended from time to time. TIDEWATER INC. Date of Execution: Oct. 12, 2000 By: /s/ Robert H. Boh --------------------- ------------------------------ Robert H. Boh Director and Chairman of the Compensation Committee of the Board of Directors EMPLOYEE: Date of Execution: Oct. 16, 2000 /S/ William C. O'Malley --------------------- ----------------------------------- Name: William C. O'Malley EX-10.(C) 4 0004.txt AMENDMENT #1 TO TIDEWATER 401(K) SAVINGS PLAN Exhibit 10(c) AMENDMENT NUMBER ONE TO THE TIDEWATER 401(K) SAVINGS PLAN WHEREAS, Tidewater, Inc. (the "Company") is the sponsor of the Tidewater 401(k) Savings Plan (the "Plan"); WHEREAS, the Plan has been amended from time to time and most recently restated effective January 1, 1997 and executed December 21, 1999; WHEREAS, Section 13.01 of the Plan authorizes the Company to amend the Plan; WHEREAS, the Company desires to amend the Plan to change the Plan's eligibility requirements and to implement automatic compensation reduction elections for employees hired on or after January 1, 2001; NOW, THEREFORE, the Plan is hereby amended, effective January 1, 2001: I. Paragraph (a) of Section 3.01, INITIAL ELIGIBILITY, is amended and restated, to read as follows: (a) GENERAL. (1) AUTOMATIC ELIGIBILITY - Each Employee who is not excluded under Section 3.02 and who is a Fleet Officer (captain, master, mate or engineer), an Employee of Quality Shipyard, L.L.C., or classified for payroll purposes as an exempt Employee, shall be eligible to participate in the Plan on the earlier of January 1, 2001 or the first Entry Date immediately following employment, provided he is then employed by an Employer. (2) SIX MONTH WAITING PERIOD - Each Employee who is not described in Section 3.01(a)(1) or excluded under Section 3.02 shall be eligible to participate in the Plan on the first Entry Date following the date such Employee completes a period of six months from date of employment, provided he is then employed by an Employer. (3) ELIGIBILITY REQUIREMENTS PRIOR TO JANUARY 1, 2001 - Prior to January 1, 2001, each Employee not excluded under Section 3.02 was eligible to participate in the Plan on the first Entry Date following the date such Employee completed a Period of Service of one year, provided he was then employed by an Employer. II. Section 4.01 and Paragraphs (a) through (d) of Section 4.01 are amended and restated, Paragraph (e) of Section 4.01 is renumbered Paragraph (g), and new Paragraphs (e) and (f) are hereby added, which Paragraphs and Sections shall read in their entirety as follows: 4.01 SALARY DEFERRAL CONTRIBUTIONS. Each Employee who becomes eligible to participate may elect that the Employer which employs him contribute on his behalf any whole percentage of his Compensation, which is not less than 2% nor more than 15%, as he shall elect. Notwithstanding, each Employee who is employed or reemployed on or after January 1, 2001, who does not affirmatively elect to receive cash or have a specified amount which is not less than 2% nor more than 15% contributed to this Plan, his Compensation shall be automatically reduced by a percentage determined by the Committee for the applicable Plan Year and this amount is contributed to this Plan (the "Automatic Compensation Reduction Election"). Contributions shall be subject to the following rules: (a) CHANGE. A Member may change the specified percentage at any time by completing a revised election. Said change in percentage shall be made by such means as is acceptable to the Committee. If the election is made after the Employee's date of hire and before the Employee becomes eligible to participate in this Plan, such election shall be effective for the Employee's first pay period following eligibility and for subsequent pay periods (until superseded by a subsequent election). Elections filed at a later date shall be effective for the payroll period beginning in the month following the date the election is filed. 2 (b) SUSPENSION. A Member may suspend his election at any time effective for the payroll period beginning in the month following the date the election is filed. (c) SALARY REDUCTION. The amount of a Member's Compensation for a Plan Year shall be reduced by the amount of the contribution that is contributed to the Plan pursuant to his election or the Automatic Compensation Reduction Election. (d) ELECTION. All elections shall be made at the time, in the manner, and subject to the conditions specified by the Committee, which shall prescribe uniform and nondiscriminatory rules for such elections. The Employer shall pay over to the Fund all Salary Deferral Contributions as soon as is practicable (but in no event later than the 15th business day of the month following the month in which the Salary Deferrals would have otherwise been payable to the Member in cash). Contributions made by the Employer under this subsection shall be allocated to the Salary Deferral Accounts of the Members from whose Compensation the contributions were withheld, in an amount equal to the amount withheld. (e) COMPENSATION REDUCTION PERCENTAGE. The Compensation Reduction Percentage for Plan Year 2001 is six (6) percent. The Committee may reduce this percentage at any time, provided such change is applied on a nondiscriminatory basis. Further, the Committee may set a new Compensation Reduction Percentage effective as of the first of each Plan Year. (f) NOTICE. Each Employee who is employed or reemployed on or after January 1, 2001 shall receive a Notice that explains the Automatic Compensation Reduction Election and the Employee's right to elect to have no amount contributed to this Plan or to alter the amount of the Compensation Reduction Percentage, including an explanation of the procedure for exercising that right and the timing for implementation of any such election. Each Member will be notified annually of his Compensation Reduction Percentage and the Member's 3 right to change the percentage, including the procedure for exercising that right and the timing for implementation of any such election. IN WITNESS WHEREOF, and as evidence of the adoption of this Amendment to the Tidewater 401(k) Savings Plan, Tidewater, Inc. has caused its corporate seal to be affixed hereto and the same to be signed by a duly authorized officer, this 28th day of November, 2000. ATTEST: TIDEWATER, INC. /s/ Michael L. Goldblatt /s/ Cliffe F. Laborde ------------------------- ------------------------- Michael L. Goldblatt Name: Cliffe F. Laborde Assistant Secretary Title: Senior Vice President, Secretary and General Counsel (Corporate Seal) 4 EX-10.(D) 5 0005.txt THIRD AMENDED AND RESTATED RETIREMENT PLAN EXHIBIT 10(d) TIDEWATER THIRD AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN PENSION SERP November 28, 2000 TIDEWATER INC. THIRD AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE OF CONTENTS PREAMBLE............................................................ 1 ARTICLE 1: PURPOSE OF THE PLAN.................................... 1 ARTICLE 2: THE PENSION PLAN....................................... 1 ARTICLE 3: ADMINISTRATION......................................... 1 ARTICLE 4: ELIGIBILITY............................................ 2 ARTICLE 5: AMOUNT OF SUPPLEMENTAL PENSION BENEFIT................. 2 ARTICLE 6: PAYMENT OF SUPPLEMENTAL PENSION BENEFIT................ 3 ARTICLE 6A. PAYMENT ELECTION IN ANTICIPATION OF A CHANGE OF CONTROL........................................... 3 ARTICLE 7: EMPLOYEES' RIGHTS...................................... 4 ARTICLE 8: AMENDMENT AND DISCONTINUANCE........................... 4 ARTICLE 8A: CHANGE OF CONTROL...................................... 5 ARTICLE 9: RESTRICTIONS ON ASSIGNMENT............................. 7 ARTICLE 10: NATURE OF AGREEMENT.................................... 7 ARTICLE 11: CONTINUED EMPLOYMENT................................... 7 ARTICLE 12: BINDING ON EMPLOYER, EMPLOYEES AND THEIR SUCCESSORS.... 8 ARTICLE 13: LAWS GOVERNING......................................... 8 ARTICLE 14: MISCELLANEOUS.......................................... 8 TIDEWATER INC. THIRD AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN PREAMBLE Tidewater Inc. ("Employer") is the sponsor of the Tidewater Pension Plan ("Pension Plan"), which is a plan qualified under Section 401(a) of the Internal Revenue Code of 1986 ("Code"). Benefits under the Pension Plan are limited by various sections of the Code, such as Sections 401(a)(17) and 415. In order to provide benefits to a select group of management or highly compensated employees equal to the benefits that such employees are prevented from receiving under the Pension Plan because of those Code limitations, the Employer adopted a nonqualified unfunded plan known as the Tidewater Inc. Supplemental Executive Retirement Plan ("Plan"), effective as of July 1, 1991. The Plan also replaces certain service lost under the Pension Plan due to breaks in service, and enhances the benefit calculation formula. The Employer amended and restated the Plan effective January 1, 1993, further amended the Plan effective January 1, 1994, adopted two amendments and amended and restated the Plan effective October 1, 1999, further amended the Plan effective November 28, 2000 and hereby restates the Plan effective November 28, 2000, as set forth below. ARTICLE 1: PURPOSE OF THE PLAN The Employer intends and desires by the adoption of this Plan to recognize the value to the Employer of past and present services of certain Eligible Employees and to encourage and assure their continued service with the Employer by making more adequate provision for their future retirement security. The establishment of this Plan is made necessary by certain limitations on contributions and benefits which are imposed on the Pension Plan by the Code. The Employer also wishes to compensate certain members of management or highly compensated employees who may have been disadvantaged by the break in service rules under the Pension Plan and to enhance the benefit calculation formula. ARTICLE 2: THE PENSION PLAN The Pension Plan, whenever referred to in this Plan, shall mean the Tidewater Pension Plan, as amended, as it exists as of the date any determination is made of benefits payable under this Plan. All terms used in this Plan shall have the meanings assigned to them under the provisions of the Pension Plan, unless otherwise qualified by the context. Since this Plan is intended to supplement the Pension Plan, any ambiguities or gaps in this Plan shall be resolved by reference to the Pension Plan document. ARTICLE 3: ADMINISTRATION This Plan shall be administered by the Compensation Committee of Employer's Board of Directors, the Employee Benefits Committee, and the Board of Directors of the Employer, which shall administer this Plan in a manner consistent with their duties of administration of the Pension Plan. Each of these governing bodies shall have full power and authority to interpret, construe and administer this Plan in accordance with their respective duties under the Pension Plan, and a governing body's interpretations and constructions hereof and actions hereunder, including the timing, form, amount or recipient of any payment to be made hereunder, within the scope of its authority, shall be binding and conclusive on all persons for all purposes. No member of a governing body shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan, unless attributable to his own willful misconduct or lack of good faith. Each administrator shall be fully indemnified as provided in the Pension Plan. A member of a governing body shall not participate in any action or determination regarding his own benefits hereunder. ARTICLE 4: ELIGIBILITY To be eligible to participate in this Plan, an Employee must satisfy the following conditions, (a) and (b): 1. The Employee must be a Participant in the Pension Plan; 2. The Employee must serve as the Chief Executive Officer, the President, a Vice President or the Corporate Controller of the Employer. An Employee who satisfies conditions (a) and (b) is referred to as an "Eligible Employee." An Eligible Employee who ceases to be an Eligible Employee because of a change in his status as an officer under (b), shall have benefits under this Plan frozen as of the date he ceases to be an officer described in (b), and his benefits shall be paid as provided in Articles 6 and 6A. Notwithstanding the foregoing, the Board of Directors or the Compensation Committee of the Board of Directors of the Employer may, in its discretion, determine to increase benefits hereunder, accelerate the time or times of payment of benefits hereunder or change the date (but not retroactively) on which benefits cease to accrue, for an Employee who is age 55 or older and for whom a significant change in the terms of employment has occurred. Notwithstanding anything to the contrary, the Plan may not be amended to preclude the participation in the Plan, on the same basis as other Eligible Employees, of the person serving on October 1, 1999 as the Chief Executive Officer, the President, a Vice President or the Corporate Controller of the Employer, as long as such person continues to serve in such position or in any equivalent or higher position. ARTICLE 5: AMOUNT OF SUPPLEMENTAL PENSION BENEFIT Unless otherwise determined by the Board of Directors or Compensation Committee under Article 4, the amount of supplemental pension benefit shall be: (a) The supplemental pension benefit payable to an Eligible Employee or his Beneficiary or Beneficiaries under this Plan shall be the actuarial equivalent (based on the definition of this term in Section 1.02 of the Pension Plan) of the excess, if any, of (i) over (ii) as described below: (i) the benefit which would have been payable to such Eligible Employee or on his behalf to his Beneficiary or Spouse, as the case may be, under the Pension Plan (but not taking into account any Additional Monthly Benefit payable under Section 5.07 of the Pension Plan), if the provisions of Pension Plan were administered without regard to either the maximum amount of retirement income limitations of Section 415 of the Code, or the maximum compensation limitation of Section 401(a)(17) of the Code, 2 (ii) the benefit (including any Additional Monthly Benefit) which is in fact payable to such Eligible Employee or on his behalf to his Beneficiary or Spouse under the Pension Plan. (b) The computation in paragraph (a) above shall be made as though the factor, 0.85%, in Section 5.01(b)(1) of the Pension Plan were 1.35%. (c) The computation in paragraph (i) above shall be made as though the Employee's service under the Pension Plan included the service prior to a break in service lost under such Plan as a result of a break in service. After an Employee becomes an Eligible Employee, he may request the Employer to provide him with a written statement of the number of years of service lost under the Pension Plan. If the Eligible Employee disagrees with the Employer's determination, he immediately shall contest it through the Plan's Appeal Procedure referenced in Article 14, below. In the absence of the Eligible Employee's timely request and objection, the Employer's determination shall become fixed. (d) Supplemental pension benefits payable under this Plan to any recipient shall be computed in accordance with the foregoing, with the objective that such recipient should receive under this Plan and the Pension Plan the total amount which would have been payable to that recipient solely under the Pension Plan (as enriched by (b) and (c)), had neither Section 415 nor Section 401(a)(17) of the Code been applicable thereto. An Eligible Employee who is not entitled to benefits under the Pension Plan is not entitled to supplemental pension benefits under this Plan. ARTICLE 6: PAYMENT OF SUPPLEMENTAL PENSION BENEFIT Except as provided in Article 4, 8 or 8A or unless the Employee elects otherwise under this Article 6 or Article 6A, the supplemental pension benefit under the Plan with respect to an Employee shall commence at the same time and be paid in the same form and to the same recipient as the benefit with respect to the Employee that is payable under the Pension Plan. An Employee can elect, on a form provided by the Committee, to receive a benefit commencing at an earlier date following termination of employment and after reaching age 55, but only if the election is made at least 13 months prior to the benefit commencement date. The earlier benefit can be paid in any form permitted under the Pension Plan. The benefit paid earlier than the benefit under the Pension Plan shall be determined as if the Pension Plan benefit were being paid at the same time and in the same form as the benefit under the Plan. The foregoing notwithstanding, if the total value of the benefit payable under the Plan to the Employee or the Employee's Spouse upon the Employee's termination of employment (by retirement, death or otherwise) is less than $10,000, the recipient shall receive an immediate lump sum benefit. ARTICLE 6A. PAYMENT ELECTION IN ANTICIPATION OF A CHANGE OF CONTROL An Employee or a former Employee who has not yet satisfied the requirements to begin to receive payment of benefits under the Plan can also elect at any time prior to a Change of Control, in a form and manner reasonably satisfactory to the Company, to have the supplemental pension benefit that becomes payable under the Plan to such Employee or former Employee following a Change of Control paid in cash in the form of a lump sum as of the date payments to the Employee would otherwise commence under the terms of the Plan, without 3 regard to the form of payment provisions otherwise provided in the Plan and any payment or distribution elections applicable to the payment of the Employee's or former Employee's benefit in the absence of a Change of Control. A former Employee who has satisfied the requirements to begin to receive the payment of benefits under the Plan, whether or not payments have commenced, can also elect at any time prior to a Change of Control, in a form and manner reasonably satisfactory to the Company, to have the full value of the remaining supplemental pension benefits payable to such former Employee paid in a lump sum in cash within five business days of the Change of Control, without regard to the form of payment provisions otherwise provided in the Plan and any payment or distribution elections applicable to the payment of the former Employee's benefit in the absence of a Change of Control. The determination of the lump sum amount shall be made using the same assumptions as are used in the Pension Plan to determine the amount of a lump sum benefit. ARTICLE 7: EMPLOYEES' RIGHTS No Employee, Spouse or Beneficiary shall have greater rights under this Plan than those of general creditors of the Employer. Benefits payable under this Plan shall be a mere promise to pay in the future and shall be general, unsecured obligations of the Employer, to be paid by the Employer from its own funds. Such payments shall not (i) impose any additional obligation upon the Employer under the Pension Plan; (ii) be paid from the Pension Plan; or (iii) have any effect whatsoever upon the Pension Plan. No Employee or his Beneficiary or Spouse shall have any title to or beneficial ownership in any assets which the Employer may use to pay benefits hereunder. Notwithstanding the foregoing provisions of this Article 7 and any other provision of the Plan (including, without limitation, Article 10), the Employer may, in its discretion, establish a trust to pay amounts becoming payable pursuant to the Plan, which trust shall be subject to the claims of the general creditors of the Employer in the event of its bankruptcy or insolvency. Notwithstanding any establishment of such a trust, the Company shall remain responsible for the payment of any amounts so payable which are not so paid by such trust. ARTICLE 8: AMENDMENT AND DISCONTINUANCE The Employer expects to continue this Plan indefinitely but, except as otherwise provided, reserves the right to amend or discontinue it if, in its sole judgment, such a change is deemed necessary or desirable. However, if the Employer should amend or discontinue this Plan, the Employer shall continue to be liable to pay all benefits accrued under this Plan (determined on the basis of each Employee's presumed termination of employment as of the date of such amendment or discontinuance), as of the date of such action. Such accrued benefits shall be calculated pursuant to the provisions of the Plan immediately prior to any such amendment or discontinuance. Upon a discontinuance, all benefits shall be 100% vested, and a lump sum equal to the actuarial present value of each Employee's unpaid accrued benefit under this Plan shall be distributed to the Employee (or his Beneficiary or Spouse), and the Employer shall have no further obligation under this Plan. Such lump sum distributions shall be distributed within the thirty (30) days immediately following such discontinuance. No amendment shall be deemed to cause a reduction in an Employee's accrued benefit under the Plan if the reduction of the benefit under this Plan is paired with a corresponding increase in the accrued benefit under the Pension Plan. 4 ARTICLE 8A: CHANGE OF CONTROL 8A.01 Effect of Change of Control. Upon a Change of Control (as defined in Section 8A.02 hereof) all benefits which have accrued under the Plan shall immediately become fully vested. Upon or after a Change of Control, the Plan shall be deemed to have been discontinued (within the meaning of Article 8 hereof) upon the first to occur of the following: (i) the date of the Change of Control if the successor to the Employer shall have failed to assume the obligations under the Plan prior to or upon such Change of Control, either by express agreement or by operation of law, (ii) the date of any amendment to the Plan which reduces or adversely affects either the benefit accrued with respect to any Employee or the future benefit accrual of any Employee (unless paired with a corresponding increase in the benefit paid under the Pension Plan), or (iii) if the Employer shall have established a trust as described in the last two sentences of Article 7 hereof, any failure of the Employer (or the successor to the Employer) to make in a timely fashion any contribution to the trust with respect to benefits accrued under the Plan which may be required by the terms of such trust. 8A.02 Definition of Change of Control. As used in this Section 8A, 'Change of Control' shall mean: (i) the acquisition by any 'Person' (as defined in Section 8A.03 hereof) of 'Beneficial Ownership' (as defined in Section 8A.03 hereof) of 30% or more of the outstanding Shares of the Company's Common Stock, $0.10 par value per share (the 'Common Stock') or 30% or more of the combined voting power of the Company's then outstanding securities; provided, however, that for purposes of this subsection 8A.02(i), the following shall not constitute a Change of Control: (A) any acquisition (other than a 'Business Combination' (as defined in Section 8A.02(iii) hereof) which constitutes a Change of Control under Section 8A.02(iii) hereof) of Common Stock directly from the Company, (B) any acquisition of Common Stock by the Company or its subsidiaries, (C) any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition of Common Stock by any corporation pursuant to a Business Combination which does not constitute a Change of Control under Section 8A.02(iii) hereof; or (ii) individuals who, as of the effective date of the Amendment, constitute the Board (the 'Incumbent Board') cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Amendment whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual's initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or 5 (iii) consummation of a reorganization, merger or consolidation (including a merger or consolidation of the Company or any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a 'Business Combination'), in each case, unless, immediately following such Business Combination, (A) the individuals and entities who were the Beneficial Owners of the Company's outstanding Common Stock and the Company's voting securities entitled to vote generally in the election of directors immediately prior to such Business Combination have direct or indirect Beneficial Ownership, respectively, of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Post-Transaction Corporation (as defined in Section 8A.03 hereof), and (B) except to the extent that such ownership existed prior to the Business Combination, no Person (excluding the Post-Transaction Corporation and any employee benefit plan or related trust of either the Company, the Post-Transaction Corporation or any subsidiary of either corporation) Beneficially Owns, directly or indirectly, 30% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 30% or more of the combined voting power of the then outstanding voting securities of such corporation, and (C) at least a majority of the members of the board of directors of the Post-Transaction Corporation were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 8A.03 Other Definitions. As used in Section 8A.02 hereof, the following words or terms shall have the meanings indicated: (i) Affiliate: 'Affiliate' (and variants thereof) shall mean a Person that controls, or is controlled by, or is under common control with, another specified Person, either directly or indirectly. (ii) Beneficial Owner: 'Beneficial Owner' (and variants thereof), with respect to a security, shall mean a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (i) the power to vote, or direct the voting of, the security, and/or (ii) the power to dispose of, or to direct the disposition of, the security. (iii) Person: 'Person' shall mean a natural person or company, and shall also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including, without limitation, a partnership or limited partnership) for the purpose of acquiring, holding, or disposing of a security, except that 'Person' shall not 6 include an underwriter temporarily holding a security pursuant to an offering of the security. (iv) Post-Transaction Corporation: Unless a Change of Control includes a Business Combination (as defined in Section 8A.02(iii) hereof), 'Post- Transaction Corporation' shall mean the Company after the Change of Control. If a Change of Control includes a Business Combination, 'Post- Transaction Corporation' shall mean the corporation resulting from the Business Combination unless, as a result of such Business Combination, an ultimate parent corporation controls the Company or all or substantially all of the Company's assets either directly or indirectly, in which case, 'Post-Transaction Corporation' shall mean such ultimate parent corporation. ARTICLE 9: RESTRICTIONS ON ASSIGNMENT The interest of an Employee or his Beneficiary or Spouse may not be sold, transferred, assigned, or encumbered in any manner, either voluntarily or involuntarily, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be null and void; neither shall the benefits hereunder be liable for or subject to the debts, contracts, liabilities, engagement, or torts of any person to whom such benefits or funds are payable, nor shall they be subject to garnishment attachment, or other legal or equitable process nor shall they be an asset in bankruptcy, except that no amount shall be payable hereunder until and unless any and all amounts representing debts or other obligations owed to the Employer or any affiliate of the Employer by the Employee with respect to whom such amount would otherwise be payable shall have been fully paid and satisfied. The interest of any Employee, Beneficiary or Spouse shall be held subject to the maximum restraint on alienation permitted or required by applicable Louisiana law. ARTICLE 10: NATURE OF AGREEMENT Eligible Employees and their Beneficiaries by virtue of participating under this Plan have only an unsecured right to receive benefits from their Employer as a general creditor of the Employer. The Plan constitutes a mere promise to make payments in the future. The adoption of the Plan and any setting aside of amounts by the Employer with which to discharge its obligations hereunder shall not be deemed to create a trust for the benefit of Eligible Employees or their Beneficiaries; except as provided in any trust document, legal and equitable title to any funds so set aside shall remain in the Employer, and any recipient of benefits hereunder shall have no security or other interest in such funds. Any and all funds so set aside shall remain subject to the claims of the general creditors of the Employer, present and future, and no payment shall be made under this Plan unless the Employer is then solvent. This provision shall not require the Employer to set aside any funds, but the Employer may set aside such funds if it chooses to do so. ARTICLE 11: CONTINUED EMPLOYMENT Nothing contained herein shall be construed as conferring upon any Employee the right to continue in the employ of the Employer in any capacity. 7 ARTICLE 12: BINDING ON EMPLOYER, EMPLOYEES AND THEIR SUCCESSORS This Plan shall be binding upon and inure to the benefit of the Employer, its successors and assigns and each Eligible Employee and his heirs, executors, administrators and legal representatives. ARTICLE 13: LAWS GOVERNING This Plan shall be construed in accordance with and governed by the laws of the State of Louisiana, except to the extent that the Plan is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). It is the Employer's intent that the Plan shall be exempt from ERISA's provisions, to the maximum extent permitted by law. To the extent that the Plan is an excess benefit plan (as defined in Section 3(36) of ERISA), it shall be exempt from coverage entirely, as provided in ERISA Section 4(b)(5). The Plan is intended to be unfunded for federal income tax purposes and for purposes of title I of ERISA and intended to provide deferred compensation only for a select group of management or highly compensated employees and shall be exempt from Parts 2, 3, and 4 of ERISA, pursuant to Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA. ARTICLE 14: MISCELLANEOUS 14.1 Claims and Appeal Procedures. All disputes over benefits allegedly due under this Plan shall be resolved through the procedures for making claims, and appealing from denials of claims, that are set forth in the Summary Plan Description of the Pension Plan. 14.2 Recovery of Payments Made by Mistake. Notwithstanding anything to the contrary, an Eligible Employee or other person receiving amounts from the Plan is entitled only to those benefits provided by the Plan and promptly shall return any payment, or portion thereof, made by mistake of fact or law. The Committee may offset the future benefits of any recipient who refuses to return an erroneous payment, in addition to pursuing any other remedies provided by law. EXECUTED effective this 28th day of November, 2000. TIDEWATER INC. By: /s/ J. Keith Lousteau --------------------------------- J. Keith Lousteau Senior Vice President, Chief Financial Officer and Treasurer ATTEST: By: /s/ Michael L. Goldblatt ---------------------------- Michael L. Goldblatt Assistant Secretary 8 EX-15 6 0006.txt LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION EXHIBIT 15 The Board of Directors and Shareholders Tidewater Inc. We are aware of the incorporation by reference in the Registration Statements (Forms S-8 No. 33-63094, No. 33-38240, No. 333-32729 and No. 333-47687) of Tidewater Inc. of our report dated January 15, 2001 relating to the unaudited condensed consolidated interim financial statements of Tidewater Inc. that are included in its Form 10-Q for the quarter ended December 31, 2000. Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part of the registration statements prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. Ernst & Young LLP New Orleans, Louisiana January 15, 2001 EX-27 7 0007.txt FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the condensed consolidated balance sheets and the condensed consolidated statements of earnings at the date and for the period indicated and is qualified in its entirety by reference to such financial statements. All amounts shown are in thousands of dollars, except per share data. 9-MOS MAR-31-2001 APR-01-2000 DEC-31-2000 85,880 0 169,919 8,256 26,652 275,624 1,598,272 861,133 1,490,456 70,969 0 0 0 6,056 1,146,269 1,490,456 442,148 442,148 398,257 398,257 0 0 650 84,250 27,466 56,794 0 0 0 56,794 1.02 1.01
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