Form 10-K for Year Ending March 31, 2005

-----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, LAM6AAGI8s1FvxkPx2yRhupFBMEui7SsX31yE1/PhgCi0pEz8GxzkiNv77Ce2oqc U3y3lasY89XzSt9krSJg7g== 0001193125-05-125175.txt : 20050614 0001193125-05-125175.hdr.sgml : 20050613 20050614160011 ACCESSION NUMBER: 0001193125-05-125175 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 22 CONFORMED PERIOD OF REPORT: 20050331 FILED AS OF DATE: 20050614 DATE AS OF CHANGE: 20050614 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06311 FILM NUMBER: 05894934 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-K 1 d10k.htm FORM 10-K FOR YEAR ENDING MARCH 31, 2005 Form 10-K for Year Ending March 31, 2005

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended March 31, 2005

¨	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 incorporation or organization)		(I.R.S. Employer Identification No.)

601 Poydras Street, New Orleans, Louisiana		70130
(Address of principal executive offices)		(Zip Code)

Registrant’s Telephone Number, including area code (504) 568-1010

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered
Common Stock, par value $0.10		New York Stock Exchange, Pacific Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange, Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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 for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Act). Yes x No ¨

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of September 30, 2004, was approximately $1,845,203,244 based upon the last sales price reported for such date. Excluded from the calculation of market value are 3,487,748 shares held by the Registrant’s grantor stock ownership trust.

57,518,433 shares of Tidewater Inc. common stock $0.10 par value per share were outstanding on April 8, 2005. Excluded from the calculation of shares outstanding at April 8, 2005 are 3,199,798 shares held by the Registrant’s grantor stock ownership trust. Registrant has no other class of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for Registrant’s 2005 Annual Meeting of Stockholders are incorporated into Part III of this report.

TABLE OF CONTENTS


Part I
Item Number		Page

1 & 2.	Business and Properties	3
3.	Legal Proceedings	10
4.	Submission of Matters to a Vote of Security Holders	10
4A.	Executive Officers of the Registrant	10

Part II

5.	Market for the Registrant’s Common Stock and Related Stockholder Matters	11
6.	Selected Financial Data	11
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
7A.	Quantitative and Qualitative Disclosures About Market Risk	33
8.	Financial Statements and Supplementary Data	35
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	35
9A.	Controls and Procedures	35
9B.	Other Information	36

Part III

10.	Directors and Executive Officers of the Registrant	37
11.	Executive Compensation	37
12.	Security Ownership of Certain Beneficial Owners and Management	38
13.	Certain Relationships and Related Transactions	38
14.	Principal Accounting Fees and Services	38

Part IV

15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	39

SIGNATURES		43

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Forward-looking Information and Cautionary Statement

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the company notes that this Annual Report on Form 10-K and the information incorporated herein by reference contain certain forward-looking statements which reflect the company’s current view with respect to future events and financial performance. Any such forward-looking statements are subject to risks and uncertainties and the company’s future results of operations could differ materially from historical results or current expectations. Some of these risks are discussed in this report, and include, without limitation, fluctuations in oil and gas prices; level of fleet additions by competitors and industry overcapacity; changes in capital spending by customers in the energy industry for exploration, development and production; changing customer demands for different vessel specifications which may make some of our vessels technologically obsolete for certain customer projects or in certain markets; acts of terrorism; unsettled political conditions, war, civil unrest and governmental actions, especially in higher risk countries of operations; foreign currency fluctuations; and environmental and labor laws.

Forward-looking statements, which can generally be identified by the use of such terminology as “may,” “expect,” “anticipate,” “estimate,” “forecast,” “believe,” “think,” “could,” “will,” “continue,” “intend,” “seek,” “plan,” “should,” “would” and similar expressions contained in this report, are predictions and not guarantees of future performance or events. Any forward-looking statements are based on current industry, financial or economic information, which the company has assessed but which by its nature is dynamic and subject to rapid and possibly abrupt changes. The company’s actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. The forward-looking statements should be considered in the context of the risk factors listed above and discussed elsewhere in this Form 10-K. Investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements. Management disclaims any obligation to update or revise the forward-looking statements contained herein to reflect new information, future events or developments.

PART I

ITEMS 1 and 2.

BUSINESS AND PROPERTIES

General

Tidewater Inc. (the “company”), a Delaware corporation, provides offshore supply vessels and marine support services to the offshore energy industry through the operation of the world’s largest fleet of offshore marine service vessels. The company’s worldwide headquarters and principal executive offices are located at 601 Poydras Street, New Orleans, Louisiana 70130, and its telephone number is (504) 568-1010. The company was incorporated in 1956. Unless otherwise required by the context, the term “company” as used herein refers to Tidewater Inc. and its consolidated subsidiaries.

With a fleet of over 560 vessels, the company operates (either through its consolidated subsidiaries or joint-ventures in which it participates), and has a leading market share, in most of the world’s significant oil and gas exploration and production markets and provides services supporting all phases of offshore exploration, development and production, including: towing of and anchor handling of mobile drilling rigs and equipment; transporting supplies and personnel necessary to sustain drilling, workover and production activities; assisting in offshore construction activities; and a variety of specialized services including pipe laying, cable laying and 3-D seismic work.

Availability of Reports

The company’s Internet website address is http://www.tdw.com. The company makes available free of charge, on or through its website, its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after they are electronically filed with the Securities and Exchange Commission. Information appearing on the company’s website is not part of any report filed with the Securities and Exchange Commission.

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Business Highlights

On March 14, 2005, the company announced it had entered into a letter of intent to sell up to six of its KMAR 404 type of anchor handling towing supply vessels for a total amount of $202.0 million. The transaction calls for multiple closings throughout calendar year 2005 on five vessels as they end existing charters. The sixth vessel will be sold in 2005 if certain conditions are met. Culmination of the sale, which would result in a reported gain of approximately $80.0 million, is subject to buyer’s inspection of the vessels and securing adequate financing by April 1, 2005. At April 1, 2005, the buyer notified Tidewater that it did not satisfy one of the conditions of the sale, but still intended to continue its efforts to complete the transaction and enter into a definitive agreement at the price and terms previously agreed. Tidewater informed that buyer that it would continue discussing the sale of the six KMAR vessels on a non-exclusive basis but will also evaluate offers from third parties, should any be made.

Certain provisions of the American Jobs Creation Act of 2004 (the Act), effective for the company as of April 1, 2005, afford the company the ability to omit recording deferred tax assets or liabilities on future undistributed earnings of most non-U.S. subsidiaries and business ventures that it considers indefinitely reinvested abroad. The company currently believes this position will apply to earnings of these entities for the foreseeable future. Consistent with that belief, the company has, effective March 31, 2005, reversed all previously recorded deferred tax assets and liabilities related to timing differences, foreign tax credits, or prior undistributed earnings of these entities whose future and prior earnings are now anticipated to be indefinitely reinvested abroad. The result of this reversal of previously recorded deferred tax assets and liabilities was approximately $31.8 million and it was recorded as a reduction of income tax expense in the fourth quarter of fiscal 2005.

Prior to the April 1, 2005 effective date of the Act, the company had provided income taxes at the U.S. statutory rate on generally all profits of the company generated from both U.S. and international operations. Effective April 1, 2005 income taxes on earnings generated in the U.S. will be provided for at the U.S. statutory income tax rate and the company earnings generated from international operations which we expect to be permanently invested abroad will be provided at the tax rates of the respective countries where the profits are generated. Generally, these international tax rates are significantly less than the U.S. statutory income tax rate; therefore, the company’s consolidated effective tax rate should be significantly lower post April 1, 2005 than what the company has historically experienced. The company’s consolidated effective tax rate in the future could be more volatile as a result of changing profit levels from the various countries in which the company operates.

In late March 2004, the company concluded based on mounting extrinsic evidence that low drilling activity levels in the Gulf of Mexico due to a prolonged weakness in the domestic market could possibly persist for a period of time. In March 2004, the company’s management performed a review of the recoverability of the values of its Gulf of Mexico operating assets and recorded a non-cash asset impairment charge of $26.5 million ($17.2 million after tax, or $0.30 per share) relating to 83 older Gulf of Mexico supply vessels that had been “cold stacked” for as long as several years and were viewed as unlikely to return to active service. The impairment charge was taken to adjust the carrying value of these assets to fair value at March 31, 2004. A full discussion of the impairment of long-lived assets is disclosed in “Impairment of Long-lived Assets” section of Item 7 and Note 3 of Notes to Consolidated Financial Statements.

On July 8, 2003, the company completed the issuance and funding of $300 million of senior unsecured notes. The multiple series of notes with maturities ranging from 7 years to 12 years have an average outstanding life to maturity of 9.5 years and can be retired anytime before maturity without penalty. The average interest rate on the notes sold to private institutional investors is 4.35%. The terms of the notes limit the amount of company debt, and the company’s debt to total capitalization ratio cannot exceed 55%. The note proceeds were used to refinance a then-existing $245.0 million debt outstanding, with the balance of the proceeds used to fund capital expenditures.

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On April 1, 2003, the company paid $79.0 million in cash to ENSCO International Incorporated to purchase its 27-vessel Gulf of Mexico-based marine fleet. The mix of vessels the company acquired consists of five anchor handling towing supply vessels, six stretched 220-foot platform supply vessels and 16 supply vessels. In conjunction with this acquisition, it was agreed that, for a period of two years (expiring on April 1, 2005) and subject to satisfactory performance, the company would provide to ENSCO all of its discretionary vessel requirements in the Gulf of Mexico. The day rates charged under the arrangement were based upon predetermined pricing criteria. This original agreement expired on March 31, 2005, but a one year extension under similar terms has been agreed to. The acquisition enhances the competitive posture of the company in providing anchor handling and towing-supply services in the Gulf of Mexico.

Five years have passed since the company embarked on its aggressive deepwater new-build vessel construction and deepwater vessel acquisition program which facilitated the company’s entrance into the deepwater markets of the world. In that time, the company committed $731.4 million for the purchase or construction of 33 large deepwater vessels, of which $717.0 million has been expended through March 31, 2005. Twenty-nine of these deepwater vessels, of which 11 were acquired and 18 were newly-built, have been delivered, crewed and are working under contracts of varied terms while a thirtieth deepwater vessel is currently being modified and outfitted in preparation for a long-term contract, which will begin in August 2005. During fiscal 2002, the company initiated a replacement program for its U.S.-flagged supply boats in tandem with its deepwater vessel program. In fiscal 2004, it expanded this program to include the replacement of International-flagged towing supply vessels, and committed an additional $379.4 million, of which $347.2 million has been expended through March 31, 2005, for the construction of 24 supply vessels and the purchase of seven supply vessels. Three replacement towing supply vessels were delivered to the company during fiscal 2003, nine were delivered in fiscal 2004 and six were delivered in fiscal 2005. Scheduled delivery of the remaining six replacement vessels will begin in May 2005 with the final vessel delivered in January 2006. The six stretched platform supply vessels acquired from ENSCO on April 1, 2003 discussed above helped accelerate the company’s domestic fleet replacement program.

The company is also engaged in a crewboat expansion program that began in fiscal 2002 when the company acquired 11 existing crewboats and committed to the construction of 24 additional crewboats. Eighteen of the newly-built crewboats have been delivered to the market through fiscal 2005. The company committed $138.3 million for the acquisition or construction of these vessels, of which $126.1 million has been expended through March 31, 2005. Scheduled delivery of the remaining six vessels under construction is expected to run from May 2005 through November 2005. Eighteen of the vessels are large traditional crewboats, nine are smaller water jet craft while eight are state-of-the-art, fast, crew/supply vessels. The acquisition and construction of these vessels has allowed the company to meet its customers’ demand for crewboats. Crewboats typically maintain higher utilization rates and have lower maintenance costs than supply vessels. In addition, the crewboat market has fewer competitors as compared to the supply vessel market.

The expansion programs were initiated with the intent of strengthening the company’s leading presence in all major oil and gas producing regions of the world through the replacement of the company’s core fleet with fewer, larger and more efficient vessels. In order to avoid potential overcapacity in our markets that could be created through the addition of the vessels discussed above, the company sold, primarily to buyers who operate outside of our industry, and/or scrapped 69 vessels between April 2002 and March 2005.

To date, the company has funded all of its vessel commitment programs from current cash balances, operating cash flow, and funds provided by its $300 million senior unsecured notes and its revolving credit facility. At March 31, 2005, the company had 15 vessels under construction for a total capital commitment of $203.1 million, of which the company has already expended $147.6 million. A full discussion of each event including capital commitments and scheduled delivery dates is disclosed in the “Vessel Construction Programs and Acquisitions” and “Vessel Dispositions” section of Item 7 and Note 9 of Notes to Consolidated Financial Statements.

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Areas of Operation

The company’s fleet is deployed in the major offshore oil and gas areas of the world. The principal areas of the company’s operations include the U.S. Gulf of Mexico, the North Sea, the Persian Gulf, the Caspian Sea, and areas offshore Australia, Brazil, Egypt, India, Indonesia, Malaysia, Mexico, Trinidad, Venezuela and West Africa. The company conducts its operations through wholly-owned subsidiaries and joint ventures. Information concerning revenues and operating profit derived from domestic and international marine operations and domestic and international total marine assets for each of the fiscal years ended March 31 are summarized below:


(In thousands)	2005			2004		2003
Revenues:
Vessel operations:
United States	$	118,288		125,344		103,368
International		537,238		500,604		521,187
Other marine operations		36,624		26,682		11,268

	$	692,150		652,630		635,823

Operating profit (loss):
Vessel operations:
United States	$	2,022		(17,715	)	(15,380	)
International		95,383		96,316		138,945
Impairment of long-lived assets		(1,733	)	(26,456	)	—
Gain on sales of assets		11,977		7,075		6,162
Other marine operations		6,623		4,623		4,168

	$	114,272		63,843		133,895

Total marine assets:
United States	$	532,097		569,841		478,093
International		1,542,996		1,389,541		1,281,031

Total marine assets	$	2,075,093		1,959,382		1,759,124

Please refer to Item 7 of this report and Note 11 of Notes to Consolidated Financial Statements for further discussion of revenues, operating profit and identifiable assets.

Marine Vessel Fleet

The company’s vessels regularly and routinely move from one operating area to another, often to and from offshore operating areas of different continents. Tables comparing the average size of the company’s marine fleet by class and geographic distribution for the last three fiscal years are included in Item 7 of this report. The company discloses its vessel statistical information, such as utilization and average day rates, by vessel class. Listed below are the company’s five vessel classes along with a description of the type of vessels categorized in each class and the services the respective vessels perform.

Deepwater Vessels. This is the company’s newest class of vessels, which are often referred to as North Sea-type vessels. Included in this class are large platform supply vessels and large, high-horsepower (generally greater than 10,000 horsepower) anchor handling towing supply vessels. This vessel class is chartered to customers for use in transporting supplies and equipment from shore bases to deepwater and intermediate offshore drilling rigs, platforms and other installations. Platform supply vessels, which have large cargo handling capabilities, serve drilling and production facilities and support offshore construction and maintenance work. The anchor handling towing supply vessels are equipped for and are capable of towing drilling rigs and other marine equipment, as well as setting anchors for positioning and mooring drilling rigs.

Towing Supply and Supply Vessels. This is the company’s largest fleet class by number of vessels. Included in this class are anchor handling towing supply vessels and supply vessels with average horsepower below 10,000 BHP, and platform supply vessels that are generally less than 220 feet. The respective vessels in this class perform the same functions and services as their deepwater vessel class counterparts except they are chartered to customers for use in the intermediate and shallow waters.

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Crewboats and Utility Vessels. Crewboats and utility vessels are chartered to customers for use in transporting personnel and small quantities of supplies from shore bases to offshore drilling rigs, platforms and other installations.

Offshore Tugs. Offshore tugs tow floating drilling rigs; dock tankers; tow barges; assist pipe laying, cable laying and construction barges; and are used in a variety of other commercial towing operations, including towing barges carrying a variety of bulk cargoes and containerized cargo.

Other Vessels. The company’s vessels also include inshore tugs; inshore barges; offshore barges; and production, line-handling and various other special purpose vessels. Inshore tugs, which are operated principally within inland waters, tow drilling rigs to and from their locations, and tow barges carrying equipment and materials for use principally in inland waters for drilling and production operations. Barges are either used in conjunction with company tugs or are chartered to others.

Revenue Contribution of Main Classes of Vessels

Revenues from vessel operations were derived from the main classes of vessels in the following percentages:


	Year Ended March 31,
	2005		2004		2003
Deepwater vessels	22.3	%	20.5	%	17.5	%
Towing-supply/supply	57.7	%	57.6	%	61.6	%
Crew/utility	10.7	%	9.8	%	9.2	%
Offshore tugs	8.8	%	11.3	%	11.0	%
Other.	0.5	%	0.8	%	0.7	%

Shipyard Operations

Quality Shipyards, LLC, a wholly-owned subsidiary of the company, operates two shipyards in Houma, Louisiana, which construct, modify and repair vessels. While the shipyard performs some work for outside customers, the majority of its business relates to the construction, repair and modification of the company’s own vessels. During the last three calendar years, Quality Shipyards, LLC constructed and delivered seven platform supply vessels and is currently constructing an eighth platform supply vessel for the company. Four of the vessels were large, deepwater platform supply vessels and the remaining four are 220-foot next generation supply vessels. Three of the deepwater vessels were delivered to the market throughout calendar year 2002 while the fourth vessel was delivered in March 2003. Three of the next generation supply vessels were delivered during fiscal 2004 while the fourth vessel is expected to be delivered in fiscal 2006.

International Operations

A significant portion of the company’s operations are conducted in international countries. Revenues from international operations as a percentage of the company’s total revenues were 80%, 78% and 83% during fiscal 2005, 2004 and 2003, respectively. The company’s international marine vessel operations are vulnerable to the usual risks inherent in doing business in countries other than the United States. Such risks include political and economic instability, possible vessel seizures or nationalization of assets and other governmental actions, the ability to recruit and retain management for overseas operations, currency fluctuations and revaluations, and import/export restrictions; all of which are beyond the control of the company.

Insurance

The operation of any marine vessel involves an inherent risk of catastrophic marine disaster, adverse weather conditions, mechanical failure, collisions, and property losses to the vessel and business interruption due to political action in countries other than the United States. Any such event may result in a reduction in revenues or increased costs. The company’s vessels are insured for their estimated market value against damage or loss, including war, terrorism acts, and pollution risks. The company also carries

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workers’ compensation, maritime employer’s liability, directors and officers liability, general liability (including third party pollution) and other insurance customary in the industry.

The continued threat of terrorist activity and other acts of war, or hostility, have significantly increased the risk of political, economic and social instability in some of the geographic areas in which the company operates. It is possible that further acts of terrorism may be directed against the United States domestically or abroad and such acts of terrorism could be directed against properties and personnel of U.S.-owned companies such as ours. The resulting economic, political and social uncertainties, including the potential for future terrorist acts and war, could cause the premiums charged for our insurance coverage to increase. The company currently maintains war risk coverage on its entire fleet. To date, the company has not experienced any property losses as a result of terrorism, political instability or war.

Management believes that the company’s insurance coverage is adequate. The company has not experienced a loss in excess of insurance policy limits; however, there is no assurance that the company’s liability coverage will be adequate to cover all potential claims that may arise nor can the company guarantee that it will be able to maintain adequate insurance in the future at rates considered commercially feasible especially with the current level of uncertainty in the market.

Industry Conditions, Competition and Customers

The company’s operations are materially dependent upon the levels of activity in offshore crude oil and natural gas exploration, development and production throughout the world. Such activity levels are affected by the trends in worldwide crude oil and natural gas prices that are ultimately influenced by the supply and demand relationship for the natural resources. A discussion of current market conditions appears under “General Market Conditions and Results of Operations” in Item 7 of this report.

The principal competitive factors for the offshore vessel service industry are suitability and availability of equipment, price and quality of service. The company has numerous competitors in virtually all areas in which it operates and competition is intense. During the prolonged downturn in the Gulf of Mexico market, which began during calendar year 2001, the company made a strategic decision to attempt to maintain high day rates at the expense of lower utilization. During that time, the majority of the company’s competitors in the Gulf of Mexico elected to charge lower day rates and maintain a higher utilizations level for their vessels. Lower utilization of the company’s Gulf of Mexico supply vessel fleet resulted in the company “cold stacking” approximately 70% of its domestic supply vessel fleet. In March 2004, the company recorded a non-cash asset impairment charge of $26.5 million ($17.2 million after tax, or $0.30 per share) on 83 older supply vessels that were cold stacked as long as several years and viewed as unlikely to return to active service. A full discussion of the impairment of long-lived assets is disclosed in “Impairment of Long-lived Assets” section of Item 7 and Note 3 of Notes to Consolidated Financial Statements. Certain customers of the company own and operate vessels to service certain of their offshore activities.

The company’s diverse, mobile asset base, and the geographic distribution of its assets, enable it to respond to changes in market conditions and provide a broad range of vessel services to its customers throughout the world. Management believes that the company has a significant competitive advantage because of the size, diversity and geographic distribution of its vessel fleet, the company’s financial condition and economies of scale.

The company’s principal customers are major oil and natural gas exploration, development and production companies, foreign government-owned or controlled organizations and companies that explore and produce oil and natural gas, and companies that provide other services to the offshore energy industry. Over the last several years, consolidation of exploration, development and production companies has occurred which has, and will continue to have, an impact on the company’s global operations. Although one customer accounted for 13.2% and a second customer 10.2% of revenues during the year ended March 31, 2005, the five largest customers accounted for approximately 38.6% of its revenues. The company does not consider its operations dependent on any single customer.

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Regulatory Matters

The company is subject to various statutes and regulations governing the operation and maintenance of its vessels. Under the citizenship provisions of the Merchant Marine Act of 1920 and the Shipping Act, 1916, the company would not be permitted to engage in U.S. coastwise trade if more than 25% of the company’s outstanding stock was owned by non-U.S. citizens. The company has a dual stock certificate system to protect against non-U.S. citizens owning more than 25% of its common stock. In addition, the company’s charter provides the company with certain remedies with respect to any transfer or purported transfer of shares of the company’s common stock that would result in the ownership by non-U.S. citizens of more than 24% of its common stock. Based on information supplied to the company by its transfer agent, approximately 5.44% of the company’s outstanding common stock was owned by non-U.S. citizens as of March 31, 2005.

The company’s vessels are subject to various statutes and regulations governing their operation. The laws of the United States provide that once a vessel is registered under a flag other than the United States, it cannot thereafter engage in U.S. coastwise trade. Therefore, the company’s non-U.S. flag vessels must be operated abroad, and if the company is not able to continue to secure charters abroad for such vessels, and work would otherwise have been available for such vessels in the United States, its operations would be adversely affected. Of the total 563 vessels owned or operated by the company at March 31, 2005, 336 were registered under flags other than the United States and 227 were registered under the U.S. flag.

All of the company’s offshore vessels are subject to international safety and classification standards. U.S. flag towing supply and supply vessels are required to undergo periodic inspections and to be recertified under drydock examination at least twice every five years. Vessels registered under flags other than the United States are subject to similar regulations as governed by the laws of the applicable jurisdictions.

Seasonality

The company’s vessel fleet generally has its highest utilization rates in the warmer temperature months when the weather is more favorable for offshore exploration, development and construction work. However, business volume for the company is more dependent on oil and natural gas prices and the global supply and demand conditions for the company’s services than any seasonal variation.

Environmental Compliance

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 in all material respects with these laws and regulations in order to avoid costly accidents and related environmental damage. Compliance with existing governmental regulations that 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.

Employees

As of March 31, 2005, the company had approximately 7,150 employees worldwide. The company considers relations with its employees to be satisfactory. The company is not a party to any union contract in the United States but through several subsidiaries is a party to union agreements covering local nationals in several countries other than the United States. For the past few years, the company has been a target of a union organizing campaign for the U.S. Gulf of Mexico employees by maritime labor unions. These union organizing efforts have recently abated, although the threat has not been completely eliminated. If the Gulf employees were to unionize, the company’s flexibility in managing industry changes in the domestic market could be adversely affected.

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ITEM 3.

LEGAL PROCEEDINGS

The company is not a party to any litigation that, in the opinion of management, is likely to have a material adverse effect on the company’s financial position or results of operations.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the fourth quarter of fiscal 2005.

ITEM 4A.

EXECUTIVE OFFICERS OF THE REGISTRANT


Name	Age	Position
Dean E. Taylor	56	Chairman of the Board of Directors since 2003. Chief Executive Officer since March 2002. President since October 2001. Executive Vice President from 2000 to 2001. Senior Vice President from 1998 to 2000.

Cliffe F. Laborde	53	Executive Vice President since 2000. Senior Vice President from 1992 to 2000. General Counsel since 1992.

Stephen W. Dick	55	Executive Vice President since December 2001. Senior Vice President from 1999 to 2001. Vice President from 1990 to 1999.

J. Keith Lousteau	57	Chief Financial Officer since 2000. Executive Vice President since 2003. Senior Vice President from 2000 to 2003. Vice President from 1987 to 2000. Treasurer since 1987.

There are no family relationships between the directors or executive officers of the company. The company’s officers are elected annually by the Board of Directors and serve for one-year terms or until their successors are elected.

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PART II

ITEM 5.

MARKET FOR THE REGISTRANT’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The company’s common stock is traded on the New York Stock Exchange and the Pacific Stock Exchange under the symbol TDW. At March 31, 2005, there were approximately 1,463 record holders of the company’s common stock, based upon the record holder list maintained by the company’s stock transfer agent. The following table sets forth the high and low closing sale prices of the company’s common stock as reported on the New York Stock Exchange Composite Tape and the amount of cash dividends per share declared on Tidewater common stock for the periods indicated.


Fiscal Year	Quarter	High		Low		Dividend
2005	First	$	30.05	$	25.74	$	.15
	Second		33.50		26.90		.15
	Third		36.45		29.61		.15
	Fourth		42.84		33.39		.15

2004	First	$	34.29	$	26.46	$	.15
	Second		29.37		25.58		.15
	Third		30.87		26.02		.15
	Fourth		34.22		27.35		.15

For information regarding shares of common stock authorized for issuance under the company’s equity compensation plans see Item 12 Security Ownership of Certain Beneficial Owners and Management.

ITEM 6.

SELECTED FINANCIAL DATA

The following table sets forth a summary of selected financial data for each of the last five fiscal years. This information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements of the company included in this report.


Years Ended March 31 (In thousands, except ratio and per share amounts)	2005(2)		2004(3)	2003	2002	2001(4)
Revenues:
Vessel revenues	$	655,526	625,948	624,555	715,361	583,931
Other marine revenues		36,624	26,682	11,268	13,668	32,748

	$	692,150	652,630	635,823	729,029	616,679

Net earnings	$	101,339	41,662	88,630	136,159	86,143

Earnings per common share (1)	$	1.78	.73	1.57	2.41	1.53

Total assets	$	2,213,173	2,081,790	1,849,578	1,669,370	1,505,492

Long-term debt	$	380,000	325,000	139,000	54,000	—

Working capital	$	135,714	152,585	141,225	152,891	205,000

Current ratio		2.47	3.12	2.95	3.07	3.45

Cash dividends declared per common share	$	.60	.60	.60	.60	.60

(1)	All per share amounts were computed on a diluted basis.

(2)

In March 2005, the company recorded a tax benefit of $31.8 million ($0.56 per share) to reverse previously recorded deferred tax assets and liabilities no longer required as a result of the American Jobs Creation Act of 2004 (for a full discussion see note 4 of Notes to Consolidated Financial Statements).

(3)

In March 2004, the company recorded a non-cash asset impairment charge of $26.5 million ($17.2 million after tax, or $0.30 per share) on 83 older Gulf of Mexico supply vessels. A full discussion of the impairment of long-lived assets is disclosed in “Impairment of Long-lived Assets” section of Item 7 and Note 3 of Notes to Consolidated Financial Statements.

(4)

During fiscal 2001, the company amortized goodwill in accordance with Accounting Principles Board Opinion No. 17. The company ceased amortizing goodwill effective fiscal 2002 in accordance with Statement of Financial Accounting Standard No. 142. Goodwill amortization expense for fiscal 2001 was $9.2 million or $0.11 per share after tax. A discussion about goodwill appears in Item 7 and Note 1 of Notes to Consolidated Financial Statements.

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ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Information and Cautionary Statement

Executive Overview

The company provides services and equipment to the global 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 that is ultimately dependent upon oil and natural gas prices that, in turn, are determined by the supply/demand relationship for oil and natural gas. The following discussion should be read in conjunction with the Selected Financial Data and the Consolidated Financial Statements and related disclosures.

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significantly lower post April 1, 2005 than what the company has historically experienced. The company’s consolidated effective tax rate in the future could be more volatile as a result of changing profit levels from the various countries in which the company operates.

Fiscal 2005 domestic results of operations posted an operating profit for the first time since fiscal 2002. The company’s domestic-based operating profit increased $19.7 million from the prior fiscal year despite earning approximately 6% lower revenues during the current fiscal year due to lower domestic fleet operating costs as the domestic fleet size was reduced through vessel sales and the redeployment of vessels to international markets with better opportunities. Lower operating costs coupled with improved vessel utilization and average dayrates resulted in the increase in operating profits from the prior fiscal year.

The company’s international results of operations are primarily dependent on the demand and supply relationship for crude oil. Although the company’s fiscal 2005 international revenues increased approximately 7% as compared to fiscal 2004, it experienced a slight decline in fiscal 2005 international-based operating profit from fiscal 2004 levels reflecting an increase in vessel operating costs and depreciation expense as the number of vessels operating in the international markets increased.

Fiscal 2005 witnessed the delivery of 12 newly-constructed vessels, which consisted of seven anchor handling towing supply vessels, four crewboats and one platform supply vessel. The company also purchased three anchor handling towing supply vessels and one platform supply vessel during fiscal 2005. Two of the newly constructed anchor handlers are deepwater class vessels. The remaining newly-built anchor handlers and platform supply vessels along with the four purchased supply vessels expanded the company’s core vessel fleet. To date, the company has funded all of its vessel commitment programs from current cash balances, operating cash flow, and funds provided by its $300 million senior unsecured notes and its revolving credit facility.

Vessel Construction Programs and Acquisitions

The company currently has under construction three large anchor handling towing supply vessels that are capable of working in most deepwater markets of the world. A Chinese shipyard is constructing the vessels and scheduled deliveries have been substantially delayed. The shipbuilder has advised the company to expect, and the company expects, the three vessels to be delivered throughout the remainder of calendar year 2005. The total estimated cost for the vessels is approximately $115.6 million, which includes shipyard commitments and other incidental costs such as spare parts, management and supervision, and outfitting costs. The company has fixed cost contracts supported by performance bonds with the shipyard and does not anticipate any cost overruns related to these vessels. As of March 31, 2005, $101.2 million has been expended on the vessels.

The company is also constructing five anchor handling towing supply vessels varying in size from 6,500 brake horsepower (BHP) to 8,000 BHP. Two international shipyards are each constructing two vessels while a third international shipyard is constructing one vessel. Scheduled delivery for the five vessels will begin in May 2005, with the last vessel scheduled for delivery in November 2005. As of March 31, 2005, $40.2 million has been expended on the vessels of the total $64.1 million commitment cost.

The company is committed to the construction of one 220-foot, intermediate size supply vessel for approximately $11.3 million. The company’s shipyard, Quality Shipyard, LLC, is constructing the vessel. Although capable of working in certain deepwater markets, this vessel will replace older supply vessels. Scheduled delivery of the vessel is expected in January 2006. As of March 31, 2005, $3.0 million has been expended on this vessel.

The company is also committed to the construction of one 175-foot, state-of-the-art, fast, crew/supply boat and five water jet crewboats for an approximate total cost of $12.1 million. A U.S. shipyard is constructing the 175-foot crewboat, while a shipyard in Holland is constructing the five water jet crew boats. Scheduled delivery of the 175-foot crewboat is expected in May 2005. The five water jet crewboats are expected to be delivered between May 2005 and November 2005. As of March 31, 2005, $3.3 million has been expended on the six crewboats.

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The table below summarizes the various vessel commitments by vessel class and type as of March 31, 2005:


	U. S. Built					International Built
Vessel class and type	Number of Vessels	Total Cost Commitment		Expended Through 3/31/05		Number of Vessels	Total Cost Commitment		Expended Through 3/31/05
		(In thousands)					(In thousands)
Deepwater vessels:
Anchor handling towing supply	—		—		—	3	$	115,634	$	101,216

Replacement Fleet:
Anchor handling towing supply	—		—		—	5	$	64,084	$	40,180
Platform supply vessels	1	$	11,276	$	2,968	—		—		—

Crewboats:
Crewboats – 175-foot	1	$	6,830	$	711	—		—		—
Crewboats – Water jets	—		—		—	5	$	5,299	$	2,547

Totals	2	$	18,106	$	3,679	13	$	185,017	$	143,943

While the company does not have any other commitments for new-build vessel contracts other than what is discussed above, the company anticipates that over the next several years, it will continue its vessel building and/or new vessel acquisition program in order to replace its aging vessels. The majority of the company’s supply and towing supply vessels were constructed between 1976 and 1983. As such, most of this vessel class exceeds 20 years of age and will need to be replaced within the next several years. In addition to age, market conditions will also help determine when a vessel is no longer economically viable. The company anticipates using future operating cash flows and borrowing capacities to fund over the next few years significant capital expenditures, primarily relating to the continuing replacement of the company’s international anchor handling towing supply vessels. These vessels would replace the company’s core international fleet with fewer, larger and more efficient vessels. The company believes that adequate capital resources will be available to maintain the existing fleet and continue its vessel building and acquisition program.

During fiscal 2005, the company took delivery of two deepwater anchor handling towing supply vessels and five anchor handling towing supply vessels varying in size from 6,500 brake horsepower (BHP) to 8,000 BHP. A shipyard in China constructed the two deepwater anchor handling towing supply vessels, with a BHP in excess of 25,000, for an approximate cost of $68.6 million. The first China built deepwater vessel was delivered during the second quarter of fiscal 2005. The second deepwater anchor handler was delivered in March 2005 and is currently being modified and outfitted by a second shipyard in preparation for a long-term contract which will begin in August 2005. All five of the anchor handling towing supply vessels were built by international shipyards for an approximate total cost of $74.8 million.

The company also took delivery of one platform supply vessels, three 175-foot crewboats and one water jet crewboat during fiscal 2005 for an approximate total cost of $32.4 million. A U.S. shipyard constructed the platform supply vessel while a different U.S. shipyard built the three 175-foot state-of-the-art, fast, crew/supply boats. A shipyard in Holland built the water jet crewboat. The platform supply vessel was built in order to replace older supply vessels and is intermediate in size and technically capable of working in certain deepwater markets. Also during fiscal 2005, the company purchased three 5,500 to 6,500 BHP anchor handling towing supply vessels for approximately $39.6 million and one platform supply vessel for approximately $16.3 million.

On April 1, 2003, the company paid $79.0 million in cash to ENSCO International Incorporated to purchase its 27-vessel Gulf of Mexico-based marine fleet. The mix of vessels the company acquired consisted of five anchor handling towing supply vessels, six stretched 220-foot platform supply vessels and 16 supply vessels. In conjunction with the acquisition of the vessels, it was agreed that, for a two year period and subject to satisfactory performance, the company would provide to ENSCO all of its discretionary vessel requirements in the Gulf of Mexico. The day rates charged under the arrangement were based upon predetermined pricing criteria. This original agreement expired on March 31, 2005, but a one year extension under similar terms has been agreed to. The acquisition enhances the competitive posture of the company in providing anchor handling and towing-supply services in the Gulf of Mexico.

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During fiscal 2004, the company took delivery of two large, platform supply vessels (one constructed by a Brazilian shipyard and the other by a shipyard in the Far East). The company also took delivery of nine next generation supply vessels, ranging in size from 205-foot to 220-foot, for approximately $133.2 million. The company’s shipyard, Quality Shipyard, LLC, constructed three of the next generation supply vessels and two other U.S. shipyards constructed the remaining six vessels. Although the nine vessels are intermediate in size and are technically capable of working in certain deepwater markets they were constructed to replace older supply vessels. Also during fiscal 2004, the company purchased two 5,500 BHP anchor handling towing supply vessel for approximately $24.4 million, purchased one offshore tug for approximately $4.3 million and took delivery of three water jet crewboats that were constructed in Holland for approximately $2.7 million.

During fiscal 2003, the company took delivery of seven large platform supply vessels that were delivered to the market for an approximate total cost of $153.7 million. Three of the platform supply vessels were constructed at Quality Shipyards, LLC and were built to full Jones Act compliance. A shipyard in Singapore constructed two of the large platform supply vessels while a Norwegian shipyard and a Brazilian shipyard each constructed one large platform supply vessel. In addition, during fiscal 2003, the company took delivery of three 220-foot next generation platform supply vessels for approximately $36.8 million.

During fiscal 2003, the company constructed and delivered to the market, for an approximate total cost of $10.3 million, two of four crewboats whose construction contracts the company assumed from Crewboats, Inc., a privately held, leading independent provider of crewboat services in the Gulf of Mexico during fiscal 2002. The remaining two crewboats were delivered during the first and second quarter of fiscal 2004 for an approximate cost of $10.6 million.

Also in fiscal 2003, the company delivered to the market for an approximate total cost of $6.4 million, one of four 175-foot, state-of-the-art, fast, crew/supply boats that blend the speed of a crewboat with the capabilities of a supply vessel for an approximate total cost of $6.4 million. The remaining three 175-foot crewboats were delivered during the first half of fiscal 2004 for an approximate cost of $19.7 million. All four vessels were constructed at a U.S. shipyard that is currently constructing one additional 175-foot, fast, crew/supply boats as discussed above.

The table below summarizes the number of vessels that have been added to the company’s fleet, excluding 27 vessels purchased from ENSCO on April 1, 2003, during fiscal 2005, 2004 and 2003 by vessel class and vessel type:


	Number of vessels added
Vessel class and type	2005	2004	2003
Deepwater vessels:
Anchor handling towing supply	2	—	—
Platform supply vessels	—	2	7

Replacement Fleet:
Anchor handling towing supply	8	2	—
Platform supply vessels	2	9	3

Crew/utility:
Crewboats	4	8	3
Offshore Tugs	—	1	—

Total number of vessels added to the fleet	16	22	13

Vessel Dispositions

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informed that buyer that it would continue discussing the sale of the six KMAR vessels on a non-exclusive basis but will also evaluate offers from third parties, should any be made.

During fiscal 2004, the company sold three crewboats to one of its 49%-owned unconsolidated international joint ventures for $11.8 million. The company financed the sale of all three crewboats. Under the terms of the repayment agreement, the loan is payable in 36 equal installments, which will end in December 2006, plus interest at 90 day LIBOR plus 1.5% adjusted quarterly. The transaction resulted in a fiscal 2004 gain on sale of assets of $0.4 million and increased the investments in, at equity, and advances to unconsolidated companies’ account by $11.4 million.

The company also sold one deepwater platform supply vessel and one crewboat to the same 49%-owned unconsolidated joint venture for $18.8 million during fiscal 2003. The company financed the $16.0 million sale of the deepwater vessel, while the joint venture paid $2.8 million cash for the crewboat. The repayment agreement calls for the loan to be payable in 36 equal installments, which will end in April 2005, plus interest at 90 day LIBOR plus 1.5% adjusted quarterly. The transactions resulted in a fiscal 2003 gain on sale of assets of $1.1 million and increased the investments in, at equity, and advances to unconsolidated companies’ account by $14.9 million.

While the company has been building or acquiring new vessels during the last few years, it also has sold and/or scrapped 69 vessels between April 2002 and March 2005. The mix of vessels disposed of includes 27 towing-supply/supply vessels, 20 crew/utility vessels, 9 offshore tugs and 13 other vessels, primarily barges.

Impairment of Long-lived Assets

During fiscal 2004, numerous marine drilling rigs exited the U.S. Gulf of Mexico despite attractive domestic oil and gas commodity pricing for an extended period of time. These departures, combined with the low activity levels of traditional Gulf of Mexico operators, left the active offshore rig count at its lowest level in ten years. By late fiscal 2004, the company concluded based on mounting extrinsic evidence that low activity levels in the Gulf of Mexico could possibly persist for a period of time. Management reviewed the recoverability of the values of its Gulf of Mexico operating assets and recorded in March 2004 a non-cash asset impairment charge of $26.5 million ($17.2 million after tax, or $0.30 per share) relating to 83 older Gulf of Mexico supply vessels. As a result of the prolonged weakness in the Gulf of Mexico drilling market, the vessels were “cold stacked” for as long as several years and were viewed as unlikely to return to service. Due to the average age of the vessels (23.5 years), outdated specifications (low horsepower and cargo capacities) relative to competing equipment, significant costs to repair and return the vessels to service (average approximately $500,000 per vessel) and an anticipation of low customer demand for the vessels in the future, the company concluded it was unlikely that these vessels would ever return to active service. Based on the determination, and in accordance with Statement of Financial Accounting Standards No. 144, the asset impairment charge noted above was taken to adjust the carrying value of the assets to fair value at March 31, 2004. The fair value of the vessels was determined based upon management’s estimate of liquidation values that could be realized in sales to unrelated purchasers and included an assumption that a significant number of the vessels (as much as 50%) may have to be scrapped. Disposal of the assets may take an extended period of time due to the vessels’ outdated specifications and depressed market conditions in the Gulf of Mexico. One of the impaired vessels was sold during fiscal 2005.

In the fourth quarter of fiscal 2005, the company reviewed, for impairment purposes, all vessels that were currently “cold stacked” and recorded a non-cash impairment charge of $1.7 million ($1.1 million after tax, or $0.02 per share) to reduce the carrying amount of 10 vessels that are unlikely to return to active service.

The company has previously disclosed that it is the subject of an informal inquiry by the Securities and Exchange Commission (SEC) related to the $26.5 million impairment charge that it recorded in its fiscal year ended March 31, 2004 that was related to 83 “cold stacked” vessels that had been used in the Gulf of Mexico. The company is in discussions with the SEC in an effort to resolve the matters raised by the inquiry. At this time, the company is unable to predict the timing or ultimate outcome of these discussions.

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General Market Conditions and Results of Operations

Offshore service vessels provide a diverse range of services and equipment 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 primarily consist of crew costs; repair and maintenance; insurance; fuel, lube oil and supplies. Fleet size and utilization are the major factors that affect crew costs. The timing and amount of repair and maintenance costs are influenced by customer demands, 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 any impact on vessel operations and are only done if economically justified, given the vessel’s age and physical condition. The following table compares revenues and operating expenses (excluding general and administrative expenses and depreciation expense) for the company’s vessel fleet for the years ended March 31. 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.


(In thousands)	2005		2004	2003
Revenues (A):
Vessel revenues:
United States	$	118,288	125,344	103,368
International		537,238	500,604	521,187

		655,526	625,948	624,555
Other marine revenues		36,624	26,682	11,268

Total revenues	$	692,150	652,630	635,823

Operating costs:
Vessel operating costs:
Crew costs	$	226,653	213,687	195,404
Repair and maintenance		70,519	76,975	74,360
Insurance		18,568	20,638	20,743
Fuel, lube and supplies		40,329	38,309	31,099
Other		45,802	45,090	41,556

		401,871	394,699	363,162
Costs of other marine revenues		29,453	21,502	6,649

Total operating costs	$	431,324	416,201	369,811

(A)	For fiscal 2005, 2004 and 2003, one customer accounted for 13.2%, 12.0% and 13.0%, respectively, of revenues while a different customer accounted for 10.2% of revenue during fiscal 2005.

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Marine operating profit (loss) and other components of earnings before income taxes for the years ended March 31 consists of the following:


(In thousands)	2005			2004		2003
Vessel activity:
United States	$	2,022		(17,715	)	(15,380	)
International		95,383		96,316		138,945

		97,405		78,601		123,565
Impairment of long-lived assets		(1,733	)	(26,456	)	—
Gain on sales of assets		11,977		7,075		6,162
Other marine services		6,623		4,623		4,168

Operating profit		114,272		63,843		133,895

Other income		7,589		7,634		6,343
Corporate expenses		(15,179	)	(13,291	)	(12,116	)
Interest and other debt costs		(6,887	)	(3,683	)	(412	)

Earnings before income taxes	$	99,795		54,503		127,710

As a result of the uncertainty of a certain customer to make payment of vessel charter hire, the company has deferred the recognition of approximately $1.6 million of billings as of March 31, 2005, $3.1 million of billings as of March 31, 2004 and $5.6 million of billings as of March 31, 2003 which would otherwise have been recognized as revenue. The company will recognize the amounts as revenue as cash is collected or at such time as the uncertainty has been resolved.

Comparison of Fiscal 2005 to Fiscal 2004

The company’s domestic results of operations are primarily driven by natural gas exploration and production. Persistent weakness in the natural gas drilling market in the U.S. Gulf of Mexico continues to have a negative impact on the company’s domestic results of operations during fiscal 2005; however, prospects for growth in the offshore drilling market in the Gulf of Mexico are showing promise because of several positive developments that occurred during fiscal 2005. In August 2004, the Western Gulf of Mexico lease sale received solid bids. Bids for shallow water tracts were up and high bids for deepwater tracts increased from the previous year’s sale. The Texas State Lease Sale, which was held in January 2005, is reported to have had its best showing in six years and the independent exploration and production (E&P) companies were the dominant bidders at the Central Gulf of Mexico lease sales held in March 2005. Analysts forecast that worldwide E&P expenditures will increase in calendar year 2005 due to continuing strong demand for natural resources despite historically high crude oil prices and lofty natural gas prices. A sizeable portion of the increase in capital spending is expected to be spent in North America. Industry analysts report that many companies plan on increasing their calendar year 2005 E&P budgets on deepwater activities in the Gulf of Mexico. Offshore rig demand has been strong lately and drilling activity is likely to remain high in the coming months. The E&P companies have contracted offshore drilling rigs for longer durations than in past periods due to concerns over rig availability in the domestic market. The market for offshore support vessels tightened during fiscal 2005 as drilling operators discovered that offshore vessels currently in service are in short supply. The Gulf of Mexico supply boat market still has a significant number of vessels stacked that could resume active status, but only after significant expenditures to drydock and re-certify the vessels.

On the other hand, natural gas pricing is a critical factor in E&P companies’ development of capital spending budgets. Weather has been a major driver of natural gas pricing during calendar year 2004. The latter half of calendar 2004 witnessed natural gas inventories exceeding five-year inventory averages due to mild summer and winter weather. Disappointing storage withdrawals due to the mild weather applied downward pressure on natural gas commodity prices. At the present time, the downward pricing trend appears to have reversed as inventories for natural gas began decreasing during the first quarter of calendar year 2005. Given these opposing developments, it is difficult for management to predict how domestic-based vessel demand will be affected during the upcoming quarters but is nonetheless pleased by the developing strength in the offshore drilling market.

The company’s international results of operations for fiscal 2005 benefited from higher utilization and average day rates and an increase in the number of vessels operating internationally. The company’s international results of operations are primarily dependent on the supply and demand relationship for crude oil. Industry analysts forecast that demand for crude oil

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will likely remain strong throughout calendar year 2005 and beyond and expect future crude oil prices to remain at attractive levels due to continuing high consumer demand, a tightening of crude inventory supplies and concerns over possible supply interruptions caused by geopolitical risk in certain members of the Organization of Petroleum Exporting Countries (OPEC) countries. During fiscal 2005, analysts estimated that profitable international offshore markets were more likely to receive notable increases in exploration and production spending in 2005 due to strong demand for crude oil and higher commodity prices for the resource. Management anticipates international vessel demand to improve along with these market conditions.

Domestic-based vessel revenues decreased approximately 6%, or $7.1 million, as compared to fiscal 2004 due to a decrease in the number of vessels operating in the domestic market resulting from the redeployment of vessels to international growth areas, an increase in vessel sales (specifically crewboats and offshore tugs) and lower utilization and average day rates on the company’s offshore tugs. Revenues generated by the towing supply/supply vessel class, the company’s major income producing vessel class in the domestic market, increased approximately 5% compared to fiscal 2004 due to a 26.6% increase in utilization and a 5% increase in average day rates.

International-based vessel revenues for fiscal 2005 increased approximately 7%, or $36.6 million, as compared to fiscal 2004 due to an increase in the number of vessels operating in international markets and due to higher utilization and average day rates on the company’s deepwater class of vessels, which contributed 56% of the increase in revenue growth for fiscal 2005 as compared to fiscal 2004. The company’s towing supply/supply vessels operating in the international markets contributed 42% to fiscal 2005’s international revenue growth as compared to the previous fiscal year.

Other marine service revenues which consist of revenues earned on the company’s shipyard operations, brokered vessel and other marine services lines of business increased approximately 37%, or $9.9 million as compared to fiscal 2004. The company’s shipyard, Quality Shipyards, LLC generated 86% of the increase, or approximately $8.5 million as they performed more third party vessel construction, repair and refurbishments during fiscal 2005 than in the prior fiscal year.

Fiscal 2005’s U.S.-based operating profit increased approximately $19.7 million as compared to fiscal 2004 due to a decrease in vessel operating costs, specifically crew costs and fuel, lube and supplies, and a reduction in depreciation expense primarily related to 83 older domestic-based towing supply/supply vessels that were determined impaired at March 31, 2004. Depreciation expense ceased on these 83 vessels when the carrying values of the vessels were written down to estimated current fair market value. The 83 vessels were determined impaired as a result of the prolonged weakness in the Gulf of Mexico drilling market and due to the vessels’ average age (23.5 years), their outdated specifications (low horsepower and cargo capacities) relative to competing equipment, the significant costs to repair and return these vessels to service (average approximately $500,000 per vessel), the anticipation of lower customer demand for the vessels in the future, and management’s conclusion that it was unlikely that the vessels would return to active service. Based on this determination, and in accordance with Statement of Financial Accounting Standards No. 144, an asset impairment charge of $26.5 million was recorded to write down the carrying value of these assets to fair value at March 31, 2004. An impairment charge of $1.7 million was recorded in fiscal 2005 to reduce the carrying amount of 10 vessels that are unlikely to return to active service.

International-based vessel operating profit was comparable to fiscal 2004 despite higher revenues due to increases in international vessel operating costs, specifically crew costs, fuel, lube and supplies, and depreciation expense resulting from an increase in the number of vessels (including vessels moved by the company from the Gulf of Mexico) operating in the international market.

Due to the level of vessel activity experienced and to a positive safety performance on a year to date basis, marine results of operations for fiscal 2005 includes $6.7 million of net insurance premium rebates as provided for in our insurance program. The company has an opportunity to obtain additional insurance premium rebates in the future should the positive safety performance continue. The company recorded $10.5 million of premium rebates during fiscal 2004.

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Fiscal 2005’s gain on sales of assets increased approximately 69% compared to fiscal 2004 due to an increase in the number of vessels sold.

Comparison of Fiscal 2004 to Fiscal 2003

Fiscal 2004’s results of operations were lower than the previous fiscal year due to a weak U.S. Gulf of Mexico natural gas drilling market and to lower utilization in certain international markets, particularly West Africa and Southeast Asia. A prolonged weakness in the natural gas drilling market in the Gulf of Mexico continued to impact the company’s domestic results of operations. With the addition of several new-build vessels delivered to the domestic fleet during the fiscal 2004 and the additional vessels acquired from ENSCO on April 1, 2003, domestic-based vessel revenues increased from prior year levels, but utilization rates, especially for the company’s towing supply/supply vessels, remained at a depressed level. Strong natural gas commodity prices and tight inventory levels for the resource for the majority of fiscal 2004 did not stimulate gas drilling in the Gulf of Mexico market. The reasons for the continuing low level of offshore drilling and exploration activity were not fully known. Market analysts expected natural gas commodity prices would increase during calendar year 2004 due to the global economic recovery they believed was underway. Industry pundits predicted for some time that commodity prices for the resource would be sustainable at higher levels, which historically has been a positive indicator for increased drilling activity. Whether sustained higher natural gas prices resulted in increased drilling levels or demand for the company’s vessels in the Gulf of Mexico during the foreseeable future was uncertain.

Although the international offshore marine service industry overall benefited from high crude oil prices and strong worldwide consumer demand for oil, the company’s international results of operations for fiscal 2004 were negatively affected by lower utilization rates, particularly in the West African and Southeast Asian markets because of decreased drilling activity. Industry analysts forecasted that demand for crude oil would remain strong throughout calendar 2004 as a result of the global economic recovery that was underway and expected future crude oil prices to remain at highly attractive levels due to high consumer demand and a reduction in crude oil production output by the Organization of Petroleum Exporting Countries. International capital expenditures by the exploration and production companies for calendar year 2004 were estimated to increase by approximately 6% over calendar year 2003 levels.

Domestic-based vessel revenues increased approximately 21% as compared to fiscal 2003 primarily due to an increased number of company vessels operating in the domestic market resulting from the addition of several new-build vessels during fiscal 2004 and the acquisition of the ENSCO vessels on April 1, 2003. Although the company’s seven deepwater class of vessels operating in the Gulf contributed approximately 42% of the revenue growth for fiscal 2004 as compared to fiscal 2003, it is the company’s towing supply/supply vessel class that is the major income producing vessel class in the domestic market. The higher number of towing supply/supply vessels operating in the domestic market helped generate approximately 23% higher revenue in fiscal 2004 as compared to fiscal 2003. Utilization rates for the towing supply/supply vessels were comparable to fiscal 2003 utilization; however, average day rates declined approximately 3% during fiscal 2004. The company’s average day rates remained at high levels as compared to the average day rates experienced during the last industry downturn. Utilization rates in the U.S. Gulf of Mexico, however, remain at the lowest levels the company has experienced in over a decade due in part to management’s strategic decision to maintain higher average day rates at the expense of lower utilization and in part to a lower demand for vessels in the Gulf of Mexico. Due to the lack of demand at the higher day rate level, the company cold stacked 89 towing supply/supply vessels; all but one vessel required a drydock before returning to service. Faced with the realization that the low level of vessel demand could persist for some time, management reviewed the recoverability of the values of its Gulf of Mexico operating assets and determined that it was unlikely that 83 older supply vessels would ever return to active service due to the vessels’ average age, their outdated specifications relative to competing equipment and significant costs to repair and return these vessels to service and consequently recorded a non-cash asset impairment charge of $26.5 million ($17.2 million after tax, or $0.30 per share) in March 2004. A full discussion of the impairment of long-lived assets is disclosed in “Impairment of Long-lived Assets” section of Item 7 and Note 3 of Notes to Consolidated Financial Statements. Also, the company’s offshore tugs operating in the Gulf experienced a 15% increase in revenues during fiscal 2004 as compared to fiscal 2003 due to higher utilization as a result of an increase in construction activity, ocean barge towing and an increase in rig moving for ENSCO. In conjunction with the acquisition of ENSCO vessels, it was agreed

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that, for a period of two years and subject to satisfactory performance, the company would provide to ENSCO all of their discretionary vessel requirements in the Gulf of Mexico.

International-based vessel revenues declined a modest 4% as compared to fiscal 2003 due to lower utilization rates in certain international markets. Average day rates for fiscal 2004 increased for the entire international-based fleet but were insufficient to mitigate the negative effect lower utilization had on revenues.

In November of 2000 the company purchased seven deepwater vessels that were fulfilling bareboat contractual obligations at the time of purchase. Only one of the original seven bareboat contractual obligations existed by the end of fiscal 2004 as six of the original bareboat charters expired at various times during fiscal 2004. The bareboat charter agreement on the remaining vessel expired in the first quarter of fiscal 2005. In a bareboat charter agreement, the bareboat charterer leases a vessel for a pre-arranged fee and is able to market the vessel and is also responsible for providing the crew and all other operating costs related to the vessel. For the vessel that the company has under bareboat contract, only revenue and depreciation expense are recorded related to the vessel’s activity. As the company incurs no operating costs related to the vessels, the related bareboat day rates are less than comparable vessels operating under normal charter hire arrangements. For fiscal year ended March 31, 2004, the bareboat chartered deepwater vessels experienced 100% utilization and an average day rate of approximately $7,273. The international-based deepwater vessel fleet, excluding the bareboat chartered vessels discussed above, experienced approximately 75.2% utilization and an average day rate of approximately $13,055 for the fiscal year ended March 31, 2004.

Other marine service revenues increased $15.4 million, or approximately 137% as compared to fiscal 2003. The company’s shipyard, Quality Shipyards, LLC generated $9.8 million of the increase. Quality Shipyards, LLC performed more third party vessel construction, repair and refurbishments during fiscal 2004 than in the prior fiscal year. Prior to fiscal 2004, the shipyard was constructing vessels for Tidewater and did not have much excess capacity for third party construction jobs.

U.S.-based operating losses increased approximately $2.3 million as compared to fiscal 2003 due to higher depreciation expense resulting from an increase in the number of vessels operating in the domestic market and due to higher vessel operating costs, primarily crew costs (despite implementing significant cost cutting measures that resulted in the reduction of U.S. shore-based and fleet personnel during the latter part of the second quarter of fiscal 2004), repair and maintenance, and fuel, lube and supplies. Higher vessel operating costs pertained primarily to the new vessels added to the domestic fleet during fiscal 2004. Contributing to fiscal 2004 domestic operating losses was the cost associated with the cold stacked supply vessels, which contributed approximately $8.7 million of costs ($6.7 million of depreciation expense and $2.0 million of vessel operating costs) to the domestic results of operations.

International-based vessel operating profit decreased approximately 31% as compared to fiscal 2003 due to earning lower revenues resulting from reduced vessel utilization and due to higher vessel operating costs driven primarily by greater crew costs related to new vessels added to the fleet since the previous year; higher repair and maintenance costs; and due to increases in fuel, lube and supply costs resulting from furnishing the new vessels and mobilizing them to their areas of operations.

Vessel Class Statistics

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. Vessel utilization rates are calculated by dividing the number of days a vessel works during a reporting period by the number of days the vessel is available to work in the reporting period. Average day rates are calculated by dividing the revenue a vessel earns during a reporting period by the number of days the vessel worked in the reporting period. Vessel utilization and average day rates are calculated on active vessels only and, as such, do not include vessel withdrawn from active service or joint venture vessels.

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Effective April 1, 2004, the company excludes from its utilization statistics the domestic-based towing supply/supply vessels determined impaired in March 2004 as disclosed in the “Impairment of Long-lived Assets” section of Item 7 and Note 3 of Notes to Consolidated Financial Statements. Had the impaired vessels been included in the company’s utilization statistics for the quarter periods ended June 30, 2004, September 30, 2004, December 31, 2004, and March 31, 2005 domestic-based towing supply/supply utilization would have been 19.8%, 21.0%, 21.5% and 21.4%, respectively. The company’s towing supply/supply vessels utilization for the year ended March 31, 2005 would have been 20.9%. Statistical information is included on two of the impaired supply vessels as these vessels are presently fulfilling short-term charter hire agreements.

The following tables compare day-based utilization percentages and average day rates by vessel class and in total for each of the quarters in the years ended March 31:

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UTILIZATION:

Fiscal Year 2005	First		Second	Third	Fourth	Year
Domestic-based fleet:
Deepwater vessels	74.9	%	94.1	91.7	91.6	87.2
Towing-supply/supply	50.7		54.6	57.6	57.1	55.0
Crew/utility	68.1		80.3	77.1	80.0	76.0
Offshore tugs	28.6		29.3	24.6	25.1	27.1
Total	51.2	%	57.4	57.2	58.0	55.8

International-based fleet:
Deepwater vessels	72.6	%	87.9	91.8	84.8	84.5
Towing-supply/supply	68.7		68.5	72.2	70.9	70.1
Crew/utility	75.1		74.0	77.0	75.7	75.5
Offshore tugs	64.1		68.3	62.2	61.6	64.0
Other	55.5		49.4	45.4	47.3	49.4
Total	69.2	%	70.6	72.8	71.2	71.0

Worldwide fleet:
Deepwater vessels	73.1	%	89.0	91.8	85.7	84.9
Towing-supply/supply	65.0		65.7	69.3	68.3	67.1
Crew/utility	73.2		75.6	77.0	76.7	75.6
Offshore tugs	50.2		55.6	50.8	51.3	52.0
Other	55.5		49.4	45.4	47.3	49.4
Total	64.9	%	67.7	69.5	68.5	67.7

Fiscal Year 2004	First		Second	Third	Fourth	Year
Domestic-based fleet:
Deepwater vessels	68.0	%	84.3	89.1	81.6	80.8
Towing-supply/supply	24.1		20.6	21.9	19.2	21.5
Crew/utility	71.5		76.2	71.8	57.8	69.6
Offshore tugs	31.2		39.7	43.7	34.8	37.4
Total	34.2	%	34.0	34.9	29.1	33.1

International-based fleet:
Deepwater vessels	80.8	%	78.2	82.3	72.5	78.4
Towing-supply/supply	73.2		69.3	69.3	64.8	69.1
Crew/utility	78.1		69.9	74.3	73.4	73.9
Offshore tugs	66.6		63.7	69.8	59.6	64.9
Other	48.6		40.1	42.3	42.7	43.5
Total	72.5	%	67.8	70.0	65.5	68.9

Worldwide fleet:
Deepwater vessels	78.3	%	79.3	83.6	74.2	78.9
Towing-supply/supply	53.4		49.6	50.6	46.7	50.1
Crew/utility	75.9		71.9	73.5	68.9	72.5
Offshore tugs	53.3		54.7	59.9	50.3	54.6
Other	48.6		40.1	42.3	42.7	43.5
Total	58.7	%	55.8	57.8	52.8	56.3

Fiscal Year 2003	First		Second	Third	Fourth	Year
Domestic-based fleet:
Deepwater vessels	91.0	%	78.4	95.3	90.9	89.1
Towing-supply/supply	22.8		20.2	24.0	18.2	21.3
Crew/utility	66.8		66.7	78.4	71.3	70.8
Offshore tugs	24.2		21.8	45.3	23.2	28.5
Total	32.5	%	30.9	39.9	31.8	33.8

International-based fleet:
Deepwater vessels	87.3	%	89.3	87.7	85.8	87.5
Towing-supply/supply	79.9		78.1	79.3	76.4	78.5
Crew/utility	81.5		82.2	81.0	78.7	80.6
Offshore tugs	65.7		74.6	60.6	62.7	65.9
Other	56.0		55.7	50.5	51.5	53.5
Total	77.2	%	77.5	76.0	74.2	76.2

Worldwide fleet:
Deepwater vessels	87.6	%	87.8	88.8	86.6	87.7
Towing-supply/supply	59.5		57.9	60.0	56.1	58.4
Crew/utility	76.1		76.6	80.1	76.0	77.1
Offshore tugs	48.9		53.6	54.7	47.7	51.2
Other	56.0		55.7	50.5	51.5	53.5
Total	62.3	%	62.3	64.2	60.4	62.3

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AVERAGE DAY RATES:

Fiscal Year 2005	First		Second	Third	Fourth	Year
Domestic-based fleet:
Deepwater vessels	$	12,678	12,577	13,289	14,009	13,087
Towing-supply/supply		5,569	5,794	6,194	6,741	6,080
Crew/utility		3,035	3,357	3,477	3,689	3,382
Offshore tugs		7,385	7,566	7,388	9,648	7,874
Total	$	5,736	5,909	6,136	6,735	6,117

International-based fleet:
Deepwater vessels	$	12,680	11,847	12,553	13,165	12,552
Towing-supply/supply		6,050	6,202	6,288	6,561	6,279
Crew/utility		2,838	2,742	2,950	3,184	2,930
Offshore tugs		4,371	4,559	4,347	5,057	4,585
Other		1,579	1,262	1,201	1,418	1,375
Total	$	5,723	5,874	6,064	6,372	6,013

Worldwide fleet:
Deepwater vessels	$	12,680	11,959	12,648	13,279	12,636
Towing-supply/supply		5,972	6,134	6,273	6,591	6,246
Crew/utility		2,889	2,904	3,073	3,303	3,042
Offshore tugs		5,045	5,074	4,793	5,691	5,145
Other		1,579	1,262	1,201	1,418	1,375
Total	$	5,726	5,881	6,076	6,433	6,032

Fiscal Year 2004	First		Second	Third	Fourth	Year
Domestic-based fleet:
Deepwater vessels	$	13,303	12,652	12,328	13,505	12,918
Towing-supply/supply		5,469	6,124	5,763	5,901	5,800
Crew/utility		2,827	2,879	2,897	3,108	2,914
Offshore tugs		7,015	7,306	6,089	5,791	6,539
Total	$	5,354	5,786	5,553	5,913	5,640

International-based fleet:
Deepwater vessels	$	11,578	11,825	12,481	12,434	12,082
Towing-supply/supply		6,544	6,448	6,286	6,134	6,358
Crew/utility		2,945	3,135	3,040	2,927	3,010
Offshore tugs		4,318	4,737	4,590	4,326	4,496
Other		1,361	1,746	1,820	1,416	1,578
Total	$	5,904	6,011	5,937	5,750	5,902

Worldwide fleet:
Deepwater vessels	$	11,871	12,001	12,454	12,662	12,247
Towing-supply/supply		6,349	6,394	6,196	6,096	6,262
Crew/utility		2,907	3,048	2,999	2,971	2,981
Offshore tugs		4,911	5,432	5,003	4,707	5,022
Other		1,361	1,746	1,820	1,416	1,578
Total	$	5,790	5,962	5,856	5,782	5,848

Fiscal Year 2003	First		Second	Third	Fourth	Year
Domestic-based fleet:
Deepwater vessels	$	13,506	12,745	13,081	13,867	13,332
Towing-supply/supply		6,116	6,059	5,802	5,979	5,984
Crew/utility		2,734	2,665	2,567	2,602	2,638
Offshore tugs		7,485	6,415	6,355	7,532	6,839
Total	$	5,232	5,082	5,132	5,357	5,196

International-based fleet:
Deepwater vessels	$	11,540	11,446	11,406	10,887	11,308
Towing-supply/supply		6,471	6,271	6,314	6,347	6,363
Crew/utility		2,916	2,843	2,764	2,878	2,833
Offshore tugs		4,451	4,578	3,844	4,013	4,243
Other		854	907	1,052	825	912
Total	$	5,744	5,629	5,640	5,668	5,670

Worldwide fleet:
Deepwater vessels	$	11,722	11,602	11,670	11,370	11,582
Towing-supply/supply		6,423	6,245	6,243	6,306	6,314
Crew/utility		2,857	2,787	2,695	2,785	2,769
Offshore tugs		5,060	4,877	4,653	4,667	4,812
Other		854	907	1,052	825	912
Total	$	5,655	5,540	5,537	5,614	5,586

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The average age of the company’s owned or chartered vessel fleet is approximately 20.5 years. The average age of the 115 vessels that the company acquired or constructed in the last five years, some of which were discussed in the “Vessel Construction Programs and Acquisition” section, is 8.5 years. The remaining 403 vessels have an average age of 23.9 years. The following table compares the average number of vessels by class and geographic distribution during the years ended March 31 and the actual March 31, 2005 vessel count:


	Actual Vessel Count at March 31,	Average Number of Vessels During Year Ended March 31,
	2005	2005(A)	2004(A)	2003
Domestic-based fleet:
Deepwater vessels	5	6	7	4
Towing-supply/supply	48	49	126	101
Crew/utility	18	21	28	32
Offshore tugs	17	19	23	25

Total	88	95	184	162

International-based fleet:
Deepwater vessels	32	32	29	26
Towing-supply/supply	202	198	188	185
Crew/utility	64	63	62	56
Offshore tugs	41	40	38	39
Other	12	12	19	24

Total	351	345	336	330

Owned or chartered vessels included in marine revenues	439	440	520	492
Vessels withdrawn from active service	93	97	25	34
Joint-venture and other	31	31	31	29

Total	563	568	576	555

(A)

Included in the fiscal 2005 and 2004 vessel withdrawn from active service vessel count are 83 Gulf of Mexico supply vessels whose asset values where written down in March 2004. The vessels were removed from the active domestic towing supply/supply vessel count and are currently being held for sale or scrapping.

During fiscal 2005, the company purchased three anchor handling towing supply vessels and one platform supply vessel. The company also took delivery of 11 newly-constructed vessels which included six anchor handling towing supply vessels, one platform supply vessel and four crewboats. Also during fiscal 2005, the company sold seven anchor handling towing supply vessels, one platform supply vessel, three offshore tugs, 10 crewboats and two other type vessel.

During fiscal 2004, the company purchased from ENSCO International Incorporated its 27-vessel Gulf of Mexico-based marine fleet. The mix of ENSCO vessels acquired consists of one deepwater anchor handling/towing supply vessel and 26 towing-supply/supply vessels. Also during fiscal 2004, the company took delivery of two large deepwater platform supply vessels, nine platform supply vessels, two anchor handling towing supply vessels, eight crewboats and one offshore tug. Excluding the three crewboat vessels sold to one of the company’s 49%-owned unconsolidated international joint venture, the company sold and/or scrapped seven towing-supply/supply vessels, two crewboats, three offshore tugs and seven other type vessels during fiscal 2004.

During fiscal 2003, the company took delivery of seven large deepwater platform supply vessels, three 220-foot platform supply vessels, three crewboats and entered into an agreement to bareboat charter one large platform supply vessel. Excluding the two vessels sold to one of the company’s 49%-owned unconsolidated international joint venture, the company sold and/or scrapped 24 vessels during fiscal 2003. The mix of vessels disposed of includes 12 towing-supply/supply vessels, three offshore tugs, five crew/utility vessels and four other type vessels.

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General and Administrative Expenses

Consolidated general and administrative expenses for the years ended March 31 consists of the following components:


(In thousands)	2005		2004	2003
Personnel	$	42,392	39,126	38,799
Office and property		12,840	12,562	12,146
Sales and marketing		4,731	4,374	4,521
Professional service		7,378	5,545	5,420
Other		6,083	5,907	4,520

	$	73,424	67,514	65,406

General and administrative expenses for fiscal 2005 were higher compared to the amounts in fiscal 2004 and 2003 due primarily to the amortization of restricted stock granted in March 2004, costs associated with the Sarbanes-Oxley Act of 2002 and improved international business.

Liquidity, Capital Resources and Other Matters

The company’s current ratio, level of working capital and amount of cash flows from 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 crude oil and natural gas. Variations from year-to-year in these items are primarily the result of market conditions. As a result of recent vessel purchases and cash expenditures for vessel construction programs, the company’s cash balances at March 31, 2005 and 2004 and 2003 are relatively minimal. Cash from operations, in combination with the company’s senior unsecured debt and available line of credit, provide the company, in management’s opinion, with adequate resources to satisfy its current financing requirements. Continued payment of dividends, currently at $0.15 per quarter per common share, is subject to declaration by the Board of Directors.

During fiscal 2004, the company signed a $295 million revolving credit agreement which replaced a $200 million revolving credit and term loan agreement. Under the $295 million revolving credit agreement, borrowings bear interest at the company’s option, at prime or Federal Funds rates plus .5% or LIBOR rates plus margins from .75% to 1.25% based on the company’s funded debt to total capitalization ratio. The $295 million revolving credit commitment will expire on April 30, 2008. Any borrowings under the agreement are unsecured and the company pays an annual fee of .20 to .30% on the unused portion of the facility which is determined by the company’s funded debt to total capitalization ratio. At March 31, 2005, $215.0 million of the company’s then existing $295 million revolving line of credit was available for future financing needs. On May 18, 2005, the company amended its $295 million revolving line of credit agreement. The amended agreement, which expires on May 18, 2010, increased the face amount of the facility from $295 million to $300 million and includes a mechanism for increasing the amount of the facility up to $400 million. Borrowings bear interest at the company’s option, at the greater of prime or Federal Funds rates plus .5% or LIBOR rates plus margins from .50 to 1.125% based on the company’s funded debt to total capitalization ratio. The amended agreement reduced the annual fee on the unused portion of the facility to a range between .10 to .25% and modified certain financial covenants, which would allow for more flexibility in utilizing the facility. The company had $80.0 million in outstanding borrowings from the amended revolving credit agreement at May 18, 2005.

On July 8, 2003, the company issued $300 million of senior unsecured notes. The multiple series of notes with maturities ranging from 7 years to 12 years have an average outstanding life to maturity of 9.5 years and can be retired before maturity without penalty. The average interest rate on the notes sold to private institutional investors is 4.35%. The note proceeds were used to refinance a then-existing $245.0 million debt outstanding, with the balance of the proceeds used to fund capital expenditures.

Operating Activities

Net cash provided by operating activities for any fiscal year will fluctuate according to the level of business activity for the applicable year. Fiscal year 2005 net cash provided by operating activities increased from $129.0 million in fiscal 2004 to $160.1 million in fiscal 2005 as a result of higher earnings due to a better business environment than the previous fiscal year.

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Fiscal year 2004 net cash provided by operating activities was lower than fiscal 2003 due primarily to lower earnings from operations and lower accounts receivable collections.

Investing Activities

Investing activities for fiscal 2005 used $189.1 million of cash, which is net of $18.3 million of proceeds from the sale of assets. Additions to properties and equipment was comprised of approximately $29.6 million in capitalized major repair costs, $2.4 million for vessel enhancements, $120.8 million for the construction of offshore marine vessels and $54.6 million for the acquisition of four vessels. Additions to properties and equipment were lower in fiscal 2005 as compared to fiscal 2004 due to fewer vessels purchased in the current fiscal year.

Investing activities for fiscal 2004 used $285.4 million of cash, which is net of $11.5 million from proceeds from the sale of assets. Additions to properties and equipment was comprised of approximately $24.6 million in capitalized major repair costs, $0.3 million in vessel enhancements, $2.0 million in other properties and equipment purchases, $192.2 million for the construction and purchase of offshore marine vessels and $77.8 million for the purchase of 27 ENSCO vessels on April 1, 2003. Additions to properties and equipment were higher in fiscal 2004 as compared to fiscal 2003 primarily due to the purchase of 27 vessels from ENSCO and to higher capital spending on vessels under construction during fiscal 2004 as disclosed in the “Vessel Construction Programs and Acquisitions” section of Item 7.

Investing activities for fiscal 2003 used approximately $255.9 million of cash, which is net of $13.7 million of proceeds from the sale of assets. Additions to properties and equipment totaling $269.6 million was comprised of $238.3 million for the construction of offshore marine vessels, $21.6 million in capitalized major repair costs, $8.4 million in vessel enhancements, and $1.3 million in other properties and equipment purchases. Additions to properties and equipment were lower in fiscal 2003 as compared to fiscal 2002 primarily due to fewer vessel acquisitions and less capital spending on vessels under construction during fiscal 2003 as disclosed in the “Vessel Construction Programs and Acquisitions” section of Item 7.

Financing Activities

Fiscal 2005 financing activities provided $26.8 million of cash, which included $113.0 million of credit facility borrowings and $7.5 million from the issuance of common stock. This was offset primarily by repayments of debt of $58.0 million. The company also used $34.3 million of cash for the payment of common stock dividends of $.60 per share. Net borrowings were used to help finance the company’s various vessel construction programs and vessel acquisitions.

Fiscal 2004 financing activities provided $156.2 million of cash, which included $300 million of privately placed senior unsecured borrowings, a $100 million term loan placed with a group of banks primarily to finance the purchase of the ENSCO vessels, $36.0 million of borrowings from the company’s original revolving and term loan agreement and $35.0 million of borrowings from the company’s new $295 million revolving credit agreement. Borrowings were offset primarily by repayments of debt of $285.0 million, which consists of the July 2003 payoff of the $100 million term loan used to purchase the ENSCO vessels, the July 2003 payoff of $175.0 million of outstanding debt under the company’s original revolving and term loan agreement, and a $10.0 million repayment on the company’s new $295 million revolving credit agreement. The company also used $34.0 million of cash for the payment of common stock dividends of $.60 per share. Net borrowings were used to help finance the company’s various vessel construction programs and vessel acquisitions.

Fiscal 2003 financing activities provided $59.8 million of cash, which included $110.0 million of credit facility borrowings that were offset by repayment of debt of $25.0 million. The company used its credit facility borrowings to help finance the company’s various vessel construction programs and vessel acquisitions. The company also used $33.9 million of cash for the payment of common stock dividends of $.60 per share.

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Interest and Debt Costs

Interest and debt costs incurred, net of interest capitalized, for fiscal 2005, 2004 and 2003 was approximately $6.9 million, $3.7 million, and $0.4 million, respectively. Interest costs capitalized during fiscal 2005, 2004 and 2003 was approximately $10.0 million, $8.5 million, and $2.8 million, respectively. Total interest and debt costs incurred in fiscal 2005 were considerably higher than the previous two fiscal years as a result of increased debt levels. The relative-portion of interest cost capitalized during fiscal 2005 was less than prior fiscal years due to the reduced level of investments in the company’s new construction program during the current fiscal year.

Other Liquidity Matters

While the company does not have any other commitments for new-build vessel contracts other than what is discussed in the “Vessel Construction Programs and Acquisitions” section of Item 7, the company anticipates that over the next several years, it will continue its vessel building and/or new vessel acquisition program in order to replace its aging vessels. The majority of the company’s supply and towing supply vessels were constructed between 1976 and 1983. As such, most of this vessel class exceeds 20 years of age and will need to be replaced within the next several years. In addition to age, market conditions will also help determine when a vessel is no longer economically viable. The company anticipates using future operating cash flows and borrowing capacities to fund over the next few years significant capital expenditures, primarily relating to the continuing replacement of the company’s international anchor handling towing supply vessels. These vessels would replace the company’s core international fleet with fewer, larger and more efficient vessels. The company believes that adequate capital resources will be available to maintain the existing fleet and continue its vessel building program.

At the conclusion of its examination of the company’s income tax returns covering fiscal 2001 and 2002, the Internal Revenue Service (IRS) proposed changes to taxable income which, if sustained, would result in additional income tax of $12.8 million. The proposed increase in taxable income results primarily from the IRS disallowance of all claimed deductions from taxable income related to the company’s foreign sales corporation (FSC) as well as all deductions claimed under the Extraterritorial Income Exclusion (ETI). The company has filed a formal protest with the IRS seeking a reconsideration of the position taken. The company has received a final assessment of additional income tax of $1.75 million resulting from the IRS’s earlier examination of the company’s income tax returns for fiscal 1999 and 2000. Such assessment is due to the IRS disallowance of essentially all deductions related to FSC activity during this period. The company intends on challenging the disallowed FSC deduction through legal proceedings. The company also has additional ongoing examinations by state and foreign tax authorities. The company does not believe that the results of these examinations will have a material adverse affect on the company’s financial position or results of operations.

A subsidiary of the company is a participating employer in an industry-wide multi-employer retirement fund in an international area. The company has learned of the fund’s deficit that may ultimately require contributions from the participating employers throughout the industry. The contribution that may be required from the company will depend on a number of factors including a current calculation of the total fund deficit, the number of participating employers, and an allocation of the required contributions to participating employers, among others. The company has engaged the assistance of outside advisors, but is currently unable to determine the outcome of this matter and the related impact it might have on the company’s financial condition and results of operations. The company does not expect a formal demand for contribution, if any, until the end of calendar 2005.

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Contractual Obligations

The following table summarizes the company’s consolidated contractual obligations as of March 31, 2005 and the effect such obligations, inclusive of interest costs, are expected to have on the company’s liquidity and cash flows in future periods.


(In thousands)	Payments Due by Period
Contractual Obligation	Total		Less than One Year	1-3 Years	3-5 Years	More Than 5 Years
Long-Term Debt	$	483,299	13,136	26,139	106,120	337,904

Capital Leases	$	14,369	14,369	—	—	—

Operating Leases	$	7,735	2,155	2,790	1,919	871

Purchase Obligations	$	14	10	4	—	—

Vessel Construction Obligations	$	55,501	55,501	—	—	—

Total	$	560,918	85,171	28,933	108,039	338,775

Off-Balance Sheet Arrangements

The company currently does not utilize any off-balance sheet arrangements with unconsolidated entities to enhance its liquidity and capital resource positions, or for any other purpose. Any future transactions involving off-balance sheet arrangements would be analyzed and disclosed by the company’s management.

Certain Known Trends, Events, Uncertainties and Risk Factors

The company operates in a business environment that has many risks. Listed below are some of the more critical risk factors that affect the company and the offshore marine service industry and should be considered when evaluating any forward-looking statement. The effect of any one risk factor or a combination of several risk factors could materially affect the company’s results of operations and financial condition and the accuracy of any forward-looking statement made in this Form 10-K.

Oil and Gas Prices Are Highly Volatile. Commodity prices for crude oil and natural gas are highly volatile. Prices are extremely sensitive to the supply/demand relationship for the respective natural resources. High demand for crude oil and natural gas and/or low inventory levels for the resources as well as any perceptions about future supply interruptions can cause commodity prices for crude oil and natural gas to rise, while generally, low demand for natural resources and/or increases in crude oil and natural gas supplies cause commodity prices for the respective natural resources to decrease.

Factors that affect the supply of crude oil and natural gas include but are not limited to the following: the Organization of Petroleum Exporting Countries’ (OPEC) ability to control crude oil production levels and pricing, as well as, the level of production by non-OPEC countries; political and economic uncertainties; advances in exploration and development technology; worldwide demand for natural resources; and governmental restrictions placed on exploration and production of natural resources.

Changes in the Level of Capital Spending by Our Customers. The company’s principal customers are major oil and natural gas exploration, development and production companies. The company’s results of operations are highly dependent on the level of capital spending by the energy industry. The energy industry’s level of capital spending is substantially related to the demand for the resource and the prevailing commodity price of natural gas and crude oil. During periods of low commodity prices, the company’s customers generally reduce their capital spending budgets for offshore drilling, exploration and development.

Historically, strong fundamentals such as high commodity prices for natural gas and crude oil, tight inventory levels for the resources along with strong consumer demand have been positive indicators for increases in capital spending by the company’s customers. The U.S. natural gas market has experienced

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strong fundamentals during recent years; however, the positive indicators did not stimulate the company’s customers operating in the U. S. Gulf of Mexico to substantially increase their capital spending during that time.

The Offshore Marine Service Industry is Highly Competitive. The company operates in a highly competitive environment. Competitive factors include price and quality of service by vessel operators and the quality and availability of vessels. Decreases in the level of offshore drilling and development activity by the energy industry generally negatively affect the demand for the company’s vessels thereby exerting downward pressure on day rates. Extended periods of low vessel demand and/or low day rates will reduce the company’s revenues. Also, excess marine service capacity exerts downward pressure on day rates. Excess capacity can occur when newly constructed vessels enter the market and when vessels are mobilized between market areas. While the company has committed to the construction of several vessels, it has also sold and/or scrapped a significant number of vessels over the last few years. A discussion about the aging of the company’s fleet that has necessitated the company’s new vessel construction programs appears in the “Vessel Construction Programs and Acquisitions” section of Item 7.

Failure to Attract and Retain Key Management and Technical Personnel. The company’s success depends upon the continued service of its executive officers and other key management and technical personnel, particularly the company’s area managers and fleet personnel, and our ability to attract, retain, and motivate highly qualified personnel. The loss of the services of a number of the company’s executive officers, area managers, fleet personnel or other key employees, or our ability to recruit replacements for such personnel or to otherwise attract, retain and motivate highly qualified personnel could harm the company. The company currently does not carry key employee life insurance payable to the company with respect to any of its management employees.

Risks Associated with Operating Internationally. For the fiscal years ended March 31, 2005, 2004 and 2003, 80%, 78%, and 83%, respectively, of the company’s total revenues were generated by international operations. The company’s international marine vessel operations are vulnerable to the usual risks inherent in doing business in countries other than the United States. Such risks include political and economic instability, possible vessel seizures or nationalization of assets and other governmental actions, the ability to recruit and retain management of overseas operations, currency fluctuations and revaluations, and import/export restrictions; all of which are beyond the control of the company.

The continued threat of terrorist activity and other acts of war, or hostility, have significantly increased the risk of political, economic and social instability in some of the geographic areas in which the company operates. It is possible that further acts of terrorism may be directed against the United States domestically or abroad and such acts of terrorism could be directed against properties and personnel of U.S.-owned companies such as ours. To date, the company has not experienced any property losses or material adverse effects on its results of operations and financial condition as a result of terrorism, political instability or war.

At present, the company believes the risks of operating internationally to be within acceptable limits and, in view of the mobile nature of the company’s principal revenue producing assets, does not consider them to constitute a factor materially adverse to the conduct of its international marine vessel operations as a whole.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect both the recorded values of assets and liabilities at the date of the financial statements and the revenues recognized and expenses incurred during the reporting period. The company’s estimates and assumptions affect its recognition of deferred expenses, bad debts, income taxes, the carrying value of its long-lived assets and goodwill, and its provision for certain contingencies. The company evaluates the reasonableness of these estimates and assumptions continually based on a combination of historical information and other information that comes to its attention that may vary its outlook for the future. Actual results may differ from these estimates under different assumptions.

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Management suggests that the company’s Summary of Significant Accounting Policies, as described in Note 1 of Notes to Consolidated Financial Statements, be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations. The company believes the critical accounting policies that most impact the company’s consolidated financial statements are described below.

Revenue Recognition. The company’s primary source of revenue is derived from time charter contracts of its vessels on a rate per day of service basis. These time charter contracts are generally either on a term basis (average three months to two years) or on a “spot” basis. The base rate of hire for a term contract is generally a fixed rate, provided, however, that term contracts at times include escalation clauses to recover increases in specific costs. A spot contract is a short-term agreement to provide offshore marine services to a customer for a specific short-term job. Spot contract terms generally range from one day to one week. Marine vessel revenues are recognized on a daily basis throughout the contract period.

Receivables. In the normal course of business, the company extends credit to its customers on a short-term basis. The company’s principal customers are major oil and natural gas exploration, development and production companies. Although credit risks associated with our customers are considered minimal, the company routinely reviews its accounts receivable balances and makes adequate provisions for doubtful accounts.

The company self-insures potential hull damage and personal injury claims that may arise in the normal course of business. The company is exposed to insurance risks related to the company’s reinsurance contracts with various insurance entities. The reinsurance recoverable amount can vary depending on the size of a loss. The exact amount of the reinsurance recoverable is not known until all losses are settled. The company estimates the reinsurance recoverable amount it expects to receive and also estimates losses for claims that have occurred but have not been reported or not fully developed. The company also monitors its reinsurance recoverable balances regularly for possible reinsurance exposure and makes adequate provisions for doubtful reinsurance receivables. It is the company’s opinion that its accounts and reinsurance receivables have no impairment other than that for which provisions have been made.

Goodwill. The company tests goodwill impairment annually at a reporting unit level, as required, using carrying amounts as of December 31. The company considers its reporting units to be its domestic and international operations. The estimated fair value of the reporting unit is determined by discounting the projected future operating cash flows for the remaining average useful life of the assets within the reporting units by the company’s related weighted average cost of capital. Impairment is deemed to exist if the implied fair value of the reporting unit goodwill is less than the respective book value of the reporting unit goodwill, and in such case, an impairment loss would be recognized equal to the difference. There are many assumptions and estimates underlying the determination of the fair value of each reporting unit, such as, future expected utilization and average day rates for the vessels, vessel additions and attrition, operating expenses and tax rates. Although the company believes its assumptions and estimates are reasonable, deviations from the assumptions and estimates could produce a materially different result.

The company performed its annual impairment test as of December 31, 2004, and the test determined there was no goodwill impairment. At March 31, 2005, the company’s goodwill balance represented 14.9% of total assets and 22.8% of stockholders’ equity. Interim testing will be performed when events occur or circumstances indicate that the carrying amount of goodwill may be impaired. Examples of events or circumstances that might give rise to interim goodwill impairment testing include significant adverse industry or economic changes, significant business interruption due to political unrest or terrorism, unanticipated competition that has the potential to dramatically reduce the company’s earning potential, legal issues, or the loss of key personnel.

Impairment of Long-Lived Assets. The company reviews long-lived assets for impairment whenever events occur or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. In such evaluation, the estimated future undiscounted cash flows generated by an asset group are compared with the carrying amount of the asset group to determine if a write-down may be required. The company estimates cash flows based upon historical data adjusted for the company’s best estimate of future market performance that is based on industry trends. If impairment exists, the carrying

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value of the asset group is reduced to its estimated fair value. Vessels with similar operating and marketing characteristics are grouped for asset impairment testing.

Although the company believes its assumptions and estimates are reasonable, deviations from the assumptions and estimates could produce a materially different result. Management estimates may vary considerably from actual outcomes due to future adverse market conditions or poor operating results that could result in the inability to recover the current carrying value of an asset group, thereby possibly requiring an impairment charge in the future. As the company’s fleet continues to age, management closely monitors the estimates and assumptions used in the impairment analysis to properly identify evolving trends and changes in market conditions that could impact the results of the impairment evaluation. During fiscal 2005, the company refined its asset groupings to increase the number of asset groups and better reflect the composition of its fleet and the markets within which it currently operates.

In addition to the periodic review of long-lived assets for impairment when circumstances warrant, the company also performs a review of its stacked vessels every six months. This review considers items such as the vessel’s age, length of time stacked and likelihood of a return to active service, among others. The company records an impairment charge when the carrying value of a stacked vessel that is unlikely to return to active service exceeds its estimated fair value.

Income Taxes. The company determines its effective tax rate by estimating its permanent differences resulting from differing treatment of items for tax and accounting purposes. The company is periodically audited by taxing authorities in the United States and by the respective tax agencies in the countries in which we operate internationally. The tax audits generally include questions regarding the calculation of taxable income. Audit adjustments affecting permanent differences could have an impact on the company’s effective tax rate.

The carrying value of the company’s net deferred tax assets is based on that the company’s belief that it is more likely than not that it will be able to generate sufficient future taxable income in certain tax jurisdictions to utilize such deferred tax assets, based on estimates and assumptions. If these estimates and related assumptions change in the future, the company may be required to record additional valuation allowances against its deferred tax assets resulting in additional income tax expense in the company’s consolidated statement of operations. Management evaluates the realizability of the deferred tax assets quarterly and assesses the need for additional valuation allowances quarterly. While the company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event the company were to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the valuation allowance would increase income in the period such determination was made. Should the company determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Drydocking Costs. The company expenses maintenance and repair costs as incurred during the asset’s original estimated useful life (its original depreciable life). Major repair costs incurred after the original depreciable life that also has the effect of extending the useful life of the asset are capitalized and amortized over 30 months. Major vessel modifications are capitalized and amortized over the remaining life of the equipment. Vessel modifications that are performed for a specific customer contract are capitalized and amortized over the firm contract term. The majority of the company’s vessels require a drydocking inspection twice in each five year period and the company schedules these drydockings when it is anticipated that the work can be performed. The company’s net earnings can fluctuate quarter to quarter due to the timing of scheduled drydockings.

Pension and Other Postretirement Benefits. The company sponsors a defined benefit pension plan and a supplemental executive retirement plan covering eligible employees of Tidewater Inc. and participating subsidiaries. The company also sponsors a defined contribution retirement plan that covers eligible U.S. fleet personnel and eligible employees of the company hired after December 31, 1995 and a post retirement plan for qualified retired employees. Net periodic pension costs and accumulated benefit obligations are determined in accordance with Statement of Financial Accounting Standard No. 87, “Employers’ Accounting for Pensions,” using a number of assumptions including the discount rate, the rate

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of compensation increases, retirement ages, mortality rates and expected long-term return on plan assets. These assumptions have a significant impact on the amounts reported. The company’s pension cost consists of service costs, interest costs, amortization of prior service costs or benefits, expected returns on plan assets and, in part, on a market-related valuation of assets. The Company considers a number of factors in developing its pension assumptions, including an evaluation of relevant discount rates, expected long-term returns on plan assets, plan asset allocations, expected changes in wages and retirement benefits, analyses of current market conditions and input from actuaries and other consultants.

The company also provides postretirement benefits to qualified retired employees. The postretirement program provides limited health care and life insurance benefits. Costs of the program are based on actuarially determined amounts and are accrued over the period from the date of hire to the full eligibility date of employees who are expected to qualify for these benefits. This plan is not funded.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123 (Revised 2004), “Share-Based Payment” (SFAS 123R). This standard requires expensing of stock options and other share-based payments and supersedes SFAS No. 123, Accounting for Stock-Based Compensation and Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance that had allowed companies to choose between expensing stock options or showing proforma disclosure only. This standard, together with a new rule adopted by the Securities and Exchange Commission in April 2005, is effective for the company as of April 1, 2006 and will apply to all awards granted, modified, cancelled or repurchased after that date. The ultimate amount of increased compensation expense will be dependent on the number of option shares granted, their timing and vesting period and the method used to calculate the fair value of the awards, among other factors. The company is currently evaluating the expected impact that the adoption of SFAS 123R will have on its results of operations and cash flows in the future.

Effects of Inflation

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 the 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 shield 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 that 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 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk refers to the potential losses arising from changes in interest rates, foreign currency fluctuations and exchange rates, equity prices and commodity prices including the correlation among these factors and their volatility. The company is primarily exposed to interest rate risk and foreign currency fluctuations and exchange risk.

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Interest Rate Risk. Changes in interest rates may result in changes in the fair market value of the company’s financial instruments, interest income and interest expense. The company’s financial instruments that are exposed to interest rate risk are its cash equivalents and long-term borrowings. Due to the short duration and conservative nature of the cash equivalent investment portfolio, the company does not expect any material loss with respect to its investments. The book value for cash equivalents is considered to be representative of its fair value.

On May 18, 2005, the company amended its $295 million revolving line of credit agreement. The amended agreement, which expires on May 18, 2010, increased the face amount of the facility from $295 million to $300 million and includes a mechanism for increasing the amount of the facility up to $400 million. Borrowings bear interest at the company’s option, at the greater of prime or Federal Funds rates plus .5% or LIBOR rates plus margins from .50 to 1.125% based on the company’s funded debt to total capitalization ratio. The amended agreement reduced the annual fee on the unused portion of the facility to a range between .10 to .25% and modified certain financial covenants, which would allow for more flexibility in utilizing the facility.

At March 31, 2005, the company had $380.0 million of debt outstanding of which $80.0 million represents unsecured borrowings from the company’s revolving credit facility. The fair market value of borrowings under the revolving credit facility approximates the carrying value because the borrowings bear interest at variable market rates, which currently range from 2.89 to 3.97 percent. Monies were borrowed under the revolving credit facility to help finance the company’s new-build program previously disclosed. A one percentage point change in the market interest rate on the $80.0 million of borrowings from the company’s revolving credit facility at March 31, 2005 would change the company’s interest costs by $0.8 million annually. The remaining $300.0 million represents senior unsecured notes that were issued on July 8, 2003. The multiple series of notes with maturities ranging from 7 years to 12 years have an average outstanding life to maturity of 9.5 years and can be retired before maturity. The average interest rate on the notes is 4.35%. The fair value of this debt at March 31, 2005 is estimated to be approximately $285.3 million.

Foreign Exchange Risk. The company’s financial instruments that can be affected by foreign currency fluctuations and exchange risks consist primarily of cash and cash equivalents, trade receivables and trade payables denominated in currencies other than the U.S. dollar. The company periodically enters into spot and forward derivative financial instruments as a hedge against foreign currency denominated assets and liabilities and currency commitments.

Spot derivative financial instruments are short-term in nature and settle within two business days. The fair value approximates the carrying value due to the short-term nature of this instrument, and as a result, no gains or losses are recognized. Forward derivative financial instruments are generally longer-term in nature but generally do not exceed one year. The accounting for gains or losses on forward contracts is dependent on the nature of the risk being hedged and the effectiveness of the hedge. The company enters into derivative instruments only to the extent considered necessary to meet its risk management objectives and does not use derivative contracts for speculative purposes.

The company had three currency spot contracts outstanding at March 31, 2005 totaling approximately $1.0 million that settled on April 1, 2005. The company had no spot contracts outstanding at March 31, 2004 and 2003. The company had no derivative financial instruments outstanding at March 31, 2005, 2004 and 2003 that qualified as a hedge instrument. For full disclosure on the company’s derivative financial instruments see Note 10 of Notes to Consolidated Financial Statements.

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Because of its significant international operations, the company is exposed to currency fluctuations and exchange risk on all contracts in foreign currencies. The company does not hedge against any foreign currency rate fluctuations associated with foreign currency contracts that arise in the normal course of business. To minimize the financial impact of these items the company attempts to contract a majority of its services in United States dollars. The company continually monitors the currency exchange risks associated with all contracts not denominated in U.S. dollar.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item is included in Part IV of this report.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On January 20, 2004, the company dismissed its independent registered public accounting firm Ernst & Young LLP effective upon completion of its audit of the company’s consolidated financial statements for the year ended March 31, 2004. The decision to change independent auditors was made by the Audit Committee of the company’s Board of Directors and was disclosed in the company’s Form 8-K dated January 20, 2004. The company engaged Deloitte & Touche LLP as the company’s independent accountants to audit the company’s consolidated financial statements for the year ended March 31, 2005.

The company did not have any disagreements with Ernst & Young LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Ernst & Young, would have caused it to make a reference to the subject matter of the disagreements in connection with its reports.

Ernst & Young LLP’s reports on the company’s consolidated financial statements during the two-year period ended March 31, 2004, did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting principles.

ITEM 9A.

CONTROLS AND PROCEDURES

CEO and CFO Certificates

Included as exhibits to this Annual Report on Form 10-K are “Certifications” of the Chief Executive Officer and the Chief Financial Officer. The first form of certification is required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002. This section of the Form 10-K contains the information concerning the controls evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (“Exchange Act”), such as this report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules. However, any control system, no matter how well conceived and followed, can provide only reasonable, and not absolute, assurance that the objectives of the control system are met.

The company evaluated, under the supervision and with the participation of the company’s management, including the company’s Chairman of the Board, President and Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’)) as of the end of the period covered by this report. Based on that evaluation, the company’s Chairman of the Board, President and Chief Executive Officer along with the company’s Chief Financial Officer concluded that the company’s disclosure controls and procedures are effective in

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timely alerting them to material information relating to the company (including its consolidated subsidiaries) required to be disclosed in the reports the company files and submits under the Exchange Act.

Management’s Annual Report on Internal Control Over Financial Reporting

Management’s assessment of the effectiveness of the company’s internal control over financial reporting is discussed in “Management’s Report on Internal Control Over Financial Reporting” which is included in “Item 15. Exhibits and Financial Statement Schedules” to this Annual Report on Form 10-K and appears on page F-2.

Audit Report of Deloitte & Touche LLP

Our independent registered public accounting firm has issued an audit report on management’s assessment of the effectiveness of the company’s internal control over financial reporting and on the effectiveness of the company’s internal control over financial reporting. This report is also included in “Item 15. Exhibits and Financial Statement Schedules” to this Annual Report on Form 10-K and appears on page F-4.

Changes in Internal Control Over Financial Reporting

During the fourth quarter of fiscal 2005, the company further refined its asset groupings for impairment testing under SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.” The revision increases the number of asset groupings to better reflect the composition and varying capabilities of the company’s vessels and the markets within which such vessels operate. Also during the fourth quarter of fiscal 2005, the company formalized procedures for a periodic impairment review of its stacked vessels. This review is undertaken every six months and considers items such as the vessel’s age, length of time stacked and likelihood of a return to service, among others. The company records an impairment charge when the carrying value of a stacked vessel that is unlikely to return to service exceeds its estimated fair value.

There have been no other changes in the company’s internal controls over financial reporting during the period covered by this report that have materially affected or are reasonably likely to materially affect, the company’s internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

All matters required to be disclosed on Form 8-K during our fiscal 2005 fourth quarter have been previously disclosed on Form 8-K filed with the Securities and Exchange Commission.

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PART III

ITEM 10.

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning directors of the company is incorporated by reference to the section entitled “Election of Directors” of the company’s definitive proxy statement that will be filed no later than 120 days after March 31, 2005.

Information regarding executive officers of the company is set forth in Item 4A of this report.

Information regarding Section 16(a) compliance is incorporated by reference to the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” from the proxy statement.

Audit Committee Financial Expert

Information regarding the company’s Audit Committee and identification of the Audit Committee Financial Expert is incorporated by reference to the section entitled “Committees of the Board” from the proxy statement.

Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics (Code) for its directors, officers and employees. A copy of the Code can be found on the company’s website at http://www.tdw.com. The company intends to satisfy the disclosure requirements of the Securities and Exchange Commission regarding amendments to, or waivers from, the Code by posting such information on the same web site. Changes in and waivers to the Code will be posted on the company’s website within five business days and maintained for at least 12 months. A copy of the Code is also available in print to any stockholder upon written request addressed to Tidewater Inc., 601 Poydras Street, Suite 1900, New Orleans, Louisiana 70130.

ITEM 11.

EXECUTIVE COMPENSATION

Information concerning executive compensation is incorporated by reference from the proxy statement described in Item 10 of this report.

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ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning security ownership of certain beneficial owners and management is incorporated by reference from the proxy statement described in Item 10 of this report.

Equity Compensation Plan Information

The following table provides information as of March 31, 2005 about equity compensation plans of the company under which shares of common stock of the company are authorized for issuance:


Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (A)		Weighted-average exercise price of outstanding options, warrants and rights (B)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A) (C)
Equity compensation plans approved by shareholders	4,139,541		$	36.48	1,029,985	(1)
Equity compensation plans not approved by shareholders	—			—	88,025	(2)

Balance at March 31, 2005	4,139,541	(3)	$	36.48	1,118,010

(1)	Includes 1,039 shares available for grant under the company’s 1997 Stock Incentive Plan that could be issued as restricted stock and up to 300,000 shares that could be issued as restricted stock or other non-option award under the company’s 2001 Stock Incentive Plan.

(2)	All of such shares are issuable as restricted stock under the company’s Employee Restricted Stock Plan. See the description of the employee Restricted Stock Plan included in Note 8 of Notes to Consolidated Financial Statements.

(3)	If the exercise of these outstanding options and issuance of additional common shares had occurred as of March 31, 2005, these shares would represent 6.7% of the then total outstanding common shares of the company.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions is incorporated by reference from the proxy statement described in Item 10 of this report.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is incorporated by reference to the section entitled “Principal Accountant Fees and Services” in the proxy statement described in Item 10 of this report.

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PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

A.	Financial Statements and Schedules

The Consolidated Financial Statements and Schedule of the company listed on the accompanying Index to Financial Statements and Schedule (see page F-1) are filed as part of this report.

B.	Reports on Form 8-K

1.	The company’s report on Form 8-K dated January 28, 2005 reported that the company issued a press release reporting the company’s results of operations for the quarter and nine-month period ended December 31, 2004.

2.	The company’s report on Form 8-K dated March 14, 2005 reported that the company issued a press release announcing the company entered into a Letter of Intent to sell up to six of its KMAR 404 type of Anchor Handling Towing Supply vessels.

The company’s report on Form 8-K dated March 30, 2005 reported that the company’s Compensation Committee of the Board of Directors approved the fiscal 2006 year annual base salaries and long term compensation awards of the executive officers of the company. The Form 8-K dated March 30, 2005 also reported outside director compensation fees.

4.	The company’s report on Form 8-K dated March 31, 2005 reported that the company issued a press release announcing the election of Jack E. Thompson to its Board of Directors for a term expiring in July 2005 and the appointment of Paul W. Murrill as its Lead Director.

C.	Exhibits

The index below describes each exhibit filed as a part of this report. Exhibits not incorporated by reference to a prior filing are designated by an asterisk; all exhibits not so designated are incorporated herein by reference to a prior filing as indicated.

Articles of Incorporation and Bylaws


3.1		Restated Certificate of Incorporation of Tidewater Inc. (filed with the Commission as Exhibit 3(a) to the company’s quarterly report on Form 10-Q for the quarter ended September 30, 1993, File No. 1-6311).

3.2		Tidewater Inc. Bylaws (filed with the Commission as Exhibit 3.2 on Form 8-K dated June 1, 2005, File No. 1-6311).

Instruments Defining Rights of Security Holders


4.1		Restated Rights Agreement dated as of September 19, 1996 between Tidewater Inc. and The First National Bank of Boston (filed with the Commission as Exhibit 1 to Form 8-A on September 30, 1996).

Financing Agreements


10.1A		First Amendment dated May 18, 2005 to Amended and Restated Revolving Credit Agreement (filed with the Commission on Form 8-K on May 20, 2005, File No. 1-6311).

-39-


10.2		$295,000,000 Amended and Restated Revolving Credit Agreement dated as of August 15, 2003 (filed with the Commission as Exhibit 4 to the company’s quarterly report on Form 10-Q for the quarter ended September 30, 2003, File No. 1-6311).

Stock Plans


10.3*+		Tidewater Inc. Amended and Restated Tidewater Inc. 1992 Stock Option and Restricted Stock Plan (Effective November 29, 2001).

10.4+		Amended and Restated Tidewater Inc. 1997 Stock Incentive Plan dated November 21, 2002 (filed with the Commission as Exhibit 10(a) to the company’s report on Form 10-Q for the quarter ended December 31, 2002, File No. 1-6311).

10.5*+		Tidewater Inc. 2001 Stock Incentive Plan dated November 21, 2002.

10.6+		Tidewater Inc. Employee Restricted Stock Plan (filed with the Commission as Exhibit 10.2 to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2004, File No. 1-6311).

10.7*+		Form of Stock Option and Restricted Stock Agreement Under the Amended and Restated 1992 Stock Option and Restricted Stock Plan.

10.8+		Form of Restricted Stock Agreement Under the Tidewater Inc. Employee Restricted Stock Plan (filed with the Commission as Exhibit 10.3 to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2004, File No. 1-6311).

10.9+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options and Non-Qualified Stock Options Under the Tidewater Inc. 2001 Stock Incentive Plan, and the Grant of Restricted Stock Under the Tidewater Inc. 1997 Stock Incentive Plan (filed with the Commission as Exhibit 10.4 to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2004, File no. 1-6311).

10.10*+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options and Non-Qualified Stock Options Under the Tidewater Inc. 2001 Stock Incentive Plan and the Grant of Restricted Stock Under the Tidewater Inc. 1997 Stock Incentive Plan.

10.11*+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options, Non-Qualified Stock Options and Restricted Stock Under the Tidewater Inc. 2001 Stock Incentive Plan.

10.12*+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options and Non-Qualified Stock Options Under the Tidewater Inc. 2001 Stock Incentive Plan and the Grant of Restricted Stock Under the Tidewater Inc. Employee Restricted Stock Plan.

10.13*+		Form of Restricted Stock Agreement for the Grant of Restricted Stock Under the Tidewater Inc. Employee Restricted Stock Plan.

Other Incentive Plans


10.14*+		Tidewater Inc. Second Amended and Restated Supplemental Executive Retirement Plan dated March 1, 2003.

10.14A*+		Tidewater International Supplemental Executive Retirement Plan effective November 1, 2003.

10.15+		Second Amended and Restated Employees’ Supplemental Savings Plan of Tidewater Inc. dated October 1, 1999 (filed with the Commission as Exhibit 10(d) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).

-40-


10.16*+		Tidewater Inc. Executive Medical Benefit Plan dated January 1, 2000.

10.17+		Deferred Compensation Plan for Outside Directors of Tidewater Inc., effective November 21,2002 (filed with the Commission as Exhibit 10(b) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2002, File No. 1-6311).

10.18*+		Amended and Restated Non-Qualified Pension Plan for Outside Directors of Tidewater Inc. amended through May 31, 2001.

10.19*+		Tidewater Inc. Amended and Restated Management Annual Incentive Plan for Fiscal 2005.

10.19A		Tidewater Inc. Management Annual Incentive Plan for Fiscal 2006 (filed with the Commission as Exhibit 10.2 on Form 8-K dated June 1, 2005, File No. 1-6311).

10.20*+		Tidewater Inc. Executive Officer Annual Incentive Plan for Fiscal 2005.

10.20A		Tidewater Inc. Executive Officer Annual Incentive Plan for Fiscal 2006 (filed with the Commission as Exhibit 10.1 on Form 8-K dated June 1, 2005, File No. 1-6311).

10.21+		Restated Non-Qualified Deferred Compensation Plan and Trust Agreement as Restated October 1, 1999 between Tidewater Inc. and Merrill Lynch Trust Company of America (filed with the Commission as Exhibit 10(e) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).

10.22+		Second Restated Executives Supplemental Retirement Trust as Restated October 1, 1999 between Tidewater Inc. and Hibernia National Bank (filed with the Commission as Exhibit 10(j) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).

Other Compensation Arrangements


10.23*+		Summary of Compensation Arrangements With Directors.

10.24+		Summary of 2006 Executive Officers Base Salaries (filed with the Commission on Form 8-K on April 4, 2005, File No. 1-6311).

10.25+		Summary of Bonuses paid to three Executive Officers of the Company under the Tidewater Inc. 2005 Management Annual Incentive Plan, and of Bonus paid to the Company’s Chief Executive Officer under the Tidewater Inc. Executive Officer Annual Incentive Plan for fiscal year 2005 (filed with the Commission on Form 8- K on April 28, 2005, File No. 1-6311).

Change of Control Agreements


10.26+		Form of Amended and Restated Change of Control Agreement dated October 1, 1999 with three executive officers of Tidewater Inc. (filed with the Commission as Exhibit 10(c) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).

Other Exhibits


21*		Subsidiaries of the company.

23.1*		Consent of Independent Registered Accounting Firm – Deloitte & Touche LLP.

23.2*		Consent of Independent Registered Accounting Firm – Ernst & Young LLP.

-41-

Certifications


31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Filed herewith.

+	Indicates a management contract or compensatory plan or arrangement.

-42-

SIGNATURES OF REGISTRANT

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on June 14, 2005.


TIDEWATER INC. (Registrant)

By:		/s/ DEAN E. TAYLOR
		Dean E. Taylor
		Chairman of the Board of Directors, President and Chief Executive Officer

By:		/s/ J. KEITH LOUSTEAU
		J. Keith Lousteau
		Executive Vice President and Chief Financial Officer

By:		/s/ JOSEPH M. BENNETT
		Joseph M. Bennett
		Senior Vice President, Principal Accounting Officer and Chief Investor Relations Officer

SIGNATURES OF DIRECTORS

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on June 14, 2005.



/s/ DEAN E. TAYLOR				/s/ WILLIAM C. O’MALLEY
Dean E. Taylor				William C. O’Malley

/s/ ROBERT H. BOH				/s/ RICHARD A. PATTAROZZI
Robert H. Boh				Richard A. Pattarozzi

/s/ ARTHUR R. CARLSON				/s/ RICHARD T. DU MOULIN
Arthur R. Carlson				Richard T. du Moulin

/s/ JON C. MADONNA				/s/ PAUL W. MURRILL
Jon C. Madonna				Paul W. Murrill

/s/ DONALD G. RUSSELL				/s/ J. WAYNE LEONARD
Donald G. Russell				J. Wayne Leonard

/s/ JACK E. THOMPSON
Jack E. Thompson

-43-

TIDEWATER INC.

Annual Report on Form 10-K

Items 8, 15(a), and 15(c)

Index to Financial Statements and Schedule


		Page
Financial Statements

Management’s Report on Internal Control Over Financial Reporting		F-2
Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP		F-3
Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP		F-5
Report of Independent Registered Public Accounting Firm – Ernst & Young LLP		F-6
Consolidated Balance Sheets, March 31, 2005 and 2004		F-7
Consolidated Statements of Earnings, three years ended March 31, 2005		F-8
Consolidated Statements of Stockholders’ Equity, three years ended March 31, 2005		F-9
Consolidated Statements of Cash Flows, three years ended March 31, 2005		F-10
Notes to Consolidated Financial Statements		F-11

Financial Statement Schedule

II. Tidewater Inc. and Subsidiaries Valuation and Qualifying Accounts		F-30

All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or the related notes.

F-1

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)). The company’s internal control system was designed to provide reasonable assurance to the company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The company’s management assessed the effectiveness of the company’s internal control over financial reporting as of March 31, 2005. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on our assessment we believe that, as of March 31, 2005, the company’s internal control over financial reporting is effective based on those criteria.

Deloitte & Touche LLP, the company’s registered public accounting firm that audited the company’s financial statements included in this Annual Report on Form 10-K, has issued an attestation report on management’s assessment and on the effectiveness of the company’s internal control over financial reporting. The attestation report of Deloitte & Touche LLP appears on page F-3.

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Tidewater Inc.

New Orleans, Louisiana

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting that Tidewater Inc. and subsidiaries (the “company”) maintained effective internal control over financial reporting as of March 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of March 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended March 31, 2005

F-3

of the Company and our report dated June 14, 2005 expressed an unqualified opinion on those financial statements.

/s/ DELOITTE & TOUCHE LLP

New Orleans, Louisiana

June 14, 2005

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Tidewater Inc.

New Orleans, Louisiana

We have audited the accompanying consolidated balance sheet of Tidewater Inc. and subsidiaries (the “company”) as of March 31, 2005 and the related consolidated statements of earnings, stockholders’ equity and other comprehensive income (loss), and cash flows for the year then ended. Our audit also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit. The financial statements of the Company for the years ended March 31, 2004 and 2003 were audited by other auditors whose report, dated April 19, 2004, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2005, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic 2005 consolidated financial statements, taken for the year ended March 31, 2005 as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of March 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 14, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

New Orleans, Louisiana

June 14, 2005

F-5

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

Tidewater Inc.

We have audited the accompanying consolidated balance sheet of Tidewater Inc. as of March 31, 2004, and the related consolidated statements of earnings, shareholders’ equity, and cash flows for each of the two years in the period ended March 31, 2004. Our audits also included the financial statement schedule listed in the accompanying Index to Financial Statements and Schedule. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Tidewater Inc. at March 31, 2004, and the consolidated results of its operations and its cash flows for each of the two years in the period ended March 31, 2004, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Ernst & Young LLP

New Orleans, Louisiana

April 19, 2004

F-6

TIDEWATER INC.

CONSOLIDATED BALANCE SHEETS

March 31, 2005 and 2004


(In thousands)	2005		2004
ASSETS
Current assets:
Cash and cash equivalents	$	15,376	17,636
Trade and other receivables, less allowance for doubtful accounts of $7,138 in 2005 and $7,304 in 2004		169,784	165,762
Marine operating supplies		38,959	37,919
Other current assets		3,837	3,320

Total current assets		227,956	224,637

Investments in, at equity, and advances to unconsolidated companies		32,074	33,722
Properties and equipment:
Vessels and related equipment		2,362,575	2,206,566
Other properties and equipment		41,499	41,494

		2,404,074	2,248,060
Less accumulated depreciation and amortization		951,888	894,863

Net properties and equipment		1,452,186	1,353,197

Goodwill		328,754	328,754
Other assets		172,203	141,480

Total assets	$	2,213,173	2,081,790

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses		82,261	59,788
Accrued property and liability losses		9,286	9,125
Income taxes		695	3,139

Total current liabilities		92,242	72,052

Long-term debt		380,000	325,000
Deferred income taxes		184,410	198,325
Accrued property and liability losses		34,778	31,031
Other liabilities and deferred credits		79,041	89,272
Stockholders’ equity		1,442,702	1,366,110

Total liabilities and stockholders’ equity	$	2,213,173	2,081,790

See accompanying Notes to Consolidated Financial Statements.

F-7

TIDEWATER INC.

CONSOLIDATED STATEMENTS OF EARNINGS

Years Ended March 31, 2005, 2004, and 2003


(In thousands, except share and per share data)	2005			2004		2003
Revenues:
Vessel revenues	$	655,526		625,948		624,555
Other marine revenues		36,624		26,682		11,268

		692,150		652,630		635,823

Costs and expenses:
Vessel operating costs		401,871		394,699		363,162
Costs of other marine revenues		29,453		21,502		6,649
Depreciation and amortization		99,613		98,510		83,153
General and administrative		73,424		67,514		65,406
Impairment of long-lived assets		1,733		26,456		—
Gain on sales of assets		(11,979	)	(7,075	)	(6,162	)

		594,115		601,606		512,208

		98,035		51,024		123,615
Other income (expenses):
Foreign exchange loss		(327	)	(1,782	)	(2,896	)
Equity in net earnings of unconsolidated companies		6,299		6,252		5,689
Minority interests		(59	)	(204	)	(78	)
Interest and miscellaneous income		2,734		2,896		1,792
Interest and other debt costs		(6,887	)	(3,683	)	(412	)

		1,760		3,479		4,095

Earnings before income taxes		99,795		54,503		127,710
Income tax expense (benefit)		(1,544	)	12,841		39,080

Net earnings	$	101,339		41,662		88,630

Earnings per common share	$	1.78		.74		1.57

Diluted earnings per common share	$	1.78		.73		1.57

Weighted average common shares outstanding		56,854,282		56,563,328		56,413,856
Incremental common shares from stock options		213,992		125,062		188,774

Adjusted weighted average common shares		57,068,274		56,688,390		56,602,630

Cash dividends declared per common share	$	.60		.60		.60

See accompanying Notes to Consolidated Financial Statements.

F-8

TIDEWATER INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

Years Ended March 31, 2005, 2004 and 2003


(In thousands)	Common stock			Additional paid-in capital		Retained earnings		Deferred compensation- restricted stock		Accumulated other comprehensive loss		Grantor Trust Stock Ownership Program (GSOP)		Total
Balance at March 31, 2002	$	6,058		299,203		1,087,173		(1,593	)	(11,561	)	(93,462	)	1,285,818
Net earnings		—		—		88,630		—		—		—		88,630
Currency translation adjustments		—		—		—		—		1		—		1
Unrealized gains on available-for - sale securities		—		—		—		—		(337	)	—		(337	)
Supplemental Executive Retirement Plan minimum liability		—		—		—		—		(585	)	—		(585	)

Comprehensive income														87,709

Issuance of restricted stock		—		(55	)	—		—		—		—		(55	)
Exercise of stock options		—		1,588		—		—		—		7,951		9,539
Cash dividends declared		—		—		(33,880	)	—		—		—		(33,880	)
Issuance of common shares		—		804		—		—		—		1,014		1,818
Other		—		—		—		446		—		—		446

Balance at March 31, 2003	$	6,058		301,540		1,141,923		(1,147	)	(12,482	)	(84,497	)	1,351,395
Net earnings		—		—		41,662		—		—		—		41,662
Currency translation adjustments		—		—		—		—		—		—		—
Unrealized gains on available-for - sale securities		—		—		—		—		911		—		911
Supplemental Executive Retirement Plan minimum liability		—		—		—		—		(871	)	—		(871	)
Pension Plan minimum liability		—		—		—		—		(273	)	—		(273	)

Comprehensive income														41,429

Issuance of restricted stock		13		3,472		—		(3,675	)	—		25		(165	)
Exercise of stock options		(1	)	724		—		—		—		4,730		5,453
Cash dividends declared		—		—		(34,008	)	—		—		—		(34,008	)
Issuance of common shares		—		407		—		—		—		1,134		1,541
Other		—		—		—		465		—		—		465

Balance at March 31, 2004	$	6,070		306,143		1,149,577		(4,357	)	(12,715	)	(78,608	)	1,366,110
Net earnings		—		—		101,339		—		—		—		101,339
Currency translation adjustments		—		—		—		—		—		—		—
Unrealized losses on available-for - sale securities		—		—		—		—		11		—		11
Supplemental Executive Retirement Plan minimum liability		—		—		—		—		(975	)	—		(975	)
Pension Plan minimum liability		—		—		—		—		(1,016	)	—		(1,016	)

Comprehensive income														99,359

Issuance of restricted stock		2		2,911		—		(5,987	)	—		2,972		(102	)
Exercise of stock options		—		2,334		—		—		—		6,107		8,441
Cash dividends declared		—		—		(34,286	)	—		—		—		(34,286	)
Issuance of common shares		—		435		—		—		—		900		1,335
Other		—		—		—		1,845		—		—		1,845

Balance at March 31, 2005	$	6,072		311,823		1,216,630		(8,499	)	(14,695	)	(68,629	)	1,442,702

See accompanying Notes to Consolidated Financial Statements.

F-9

TIDEWATER INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended March 31, 2005, 2004 and 2003


(In thousands)	2005			2004		2003
Operating activities:
Net earnings	$	101,339		41,662		88,630
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		99,613		98,510		83,153
Provision for deferred income taxes		(33,867	)	(16,634	)	5,464
Impairment of long-lived assets		1,733		26,456		—
Gain on sales of assets		(11,979	)	(7,075	)	(6,162	)
Equity in earnings of unconsolidated companies, less dividends		1,663		4,473		1,618
Minority interests, less dividends		(86	)	(13	)	(224	)
Compensation expense - restricted stock		1,845		465		446
Tax benefit on stock compensation		823		673		1,099
Changes in assets and liabilities, net:
Trade and other receivables		(5,691	)	(4,953	)	22,058
Marine operating supplies		(1,040	)	(6,642	)	(3,206	)
Other current assets		(517	)	355		361
Accounts payable and accrued expenses		6,655		(145	)	94
Accrued property and liability losses		169		(559	)	(328	)
Other, net		(598	)	(7,524	)	8,997

Net cash provided by operating activities		160,062		129,049		202,000

Investing activities:
Proceeds from sales of assets		18,296		11,451		13,689
Additions to properties and equipment		(207,391	)	(297,515	)	(269,620	)
Other		(30	)	635		—

Net cash used in investing activities		(189,125	)	(285,429	)	(255,931	)

Financing activities:
Principal payments on debt		(58,000	)	(285,000	)	(25,000	)
Debt borrowings		113,000		471,000		110,000
Proceeds from issuance of common stock		7,474		4,590		8,695
Cash dividends		(34,286	)	(34,008	)	(33,880	)
Other		(1,385	)	(333	)	1

Net cash provided by financing activities		26,803		156,249		59,816

Net change in cash and cash equivalents		(2,260	)	(131	)	5,885
Cash and cash equivalents at beginning of year		17,636		17,767		11,882

Cash and cash equivalents at end of year	$	15,376		17,636		17,767

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	16,387		10,006		3,156
Income taxes	$	33,699		26,384		31,983

See accompanying Notes to Consolidated Financial Statements.

F-10

TIDEWATER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2005, 2004, and 2003

(1)

Summary of Significant Accounting Policies

Nature of Operations

The company provides services and equipment to the offshore energy industry through the operation of the world’s largest fleet of offshore service vessels. Revenues, net earnings and cash flows from operations are dependent upon the activity level for the vessel fleet, which is ultimately dependent upon crude oil and natural gas prices that, in turn, are determined by the supply/demand relationship for crude oil and natural gas.

Use of Estimates

The preparation of financial statements in accordance with accounting standards generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The company evaluates its estimates and assumptions on an ongoing basis based on a combination of historical information and various other assumptions that are considered reasonable under the particular circumstances. Actual results may differ from these estimates under different assumptions.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Tidewater Inc. and its subsidiaries. Significant intercompany balances and transactions are eliminated in consolidation.

Cash Equivalents

The company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Inventories

Inventories, which consist primarily of operating parts and supplies for the company’s vessels, are stated at the lower of weighted-average cost or market.

Properties and Equipment

Properties and equipment are stated at cost. Depreciation for financial reporting purposes is computed primarily on the straight-line basis beginning with the date of construction, with salvage values of 5%-10% for marine equipment, using estimated useful lives of 15 - 25 years for marine equipment (from date of construction) and 3 - 30 years for other properties and equipment.

Used equipment is depreciated in accordance with the above policy; however, no life less than six years is used for marine equipment regardless of the date constructed.

Maintenance and repairs are charged to operations as incurred during the asset’s original estimated useful life (its original depreciable life). Major repair costs incurred after the original estimated depreciable life that also have the effect of extending the useful life of the asset are capitalized and amortized over 30 months. Vessel modifications that are performed for a specific customer contract are capitalized and amortized over the firm contract term. Major modifications to equipment are capitalized and amortized over the remaining life of the equipment. The majority of the company’s vessels require

F-11

drydocking inspection twice in each five year period and the company schedules vessel drydockings when it is anticipated that the work can be performed. The company’s net earnings can fluctuate quarter to quarter due to the timing of scheduled drydockings.

Goodwill

The company follows SFAS No. 142, “Goodwill and Other Intangible Assets,” which requires goodwill to be tested annually for impairment using a fair value-based approach and does not permit amortization of goodwill as previously required by Accounting Principles Board (APB) Opinion No. 17, “Intangible Assets.” An impairment loss would be recorded if the recorded goodwill exceeds its implied fair value. Goodwill primarily relates to the fiscal 1998 acquisition of O.I.L. Ltd., a British company. At March 31, 2005, the company’s goodwill represented 14.9% of total assets and 22.8% of stockholders’ equity.

Impairment of Long-Lived Assets

The company accounts for long-lived assets in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” and reviews long-lived assets for impairment whenever events occur or changes in circumstances indicate that the carrying amount of assets may not be recoverable. In such evaluation, the estimated future undiscounted cash flows generated by an asset group are compared with the carrying amount of the asset group to determine if a write-down may be required. The company estimates cash flows based upon historical data adjusted for the company’s best estimate of future market performance that is based on industry trends. If impairment exists, the carrying value of the asset group is reduced to its estimated fair value. Vessels with similar operating and marketing characteristics are grouped for asset impairment testing.

During the fourth quarter of fiscal 2005, the company further refined its asset groupings for impairment testing under SFAS No. 144. The revision increases the number of asset groupings to better reflect the composition and varying capabilities of the company’s vessels and the markets within which such vessels operate. Also during the fourth quarter of fiscal 2005, the company formalized procedures for a periodic impairment review of its stacked vessels. This review will be undertaken every six months and will consider items such as the vessel’s age, length of time stacked and likelihood of a return to service, among others. The company records an impairment charge when the carrying value of a stacked vessel that is unlikely to return to service exceeds its estimated fair value.

Accrued Property and Liability Losses

The company’s insurance subsidiary establishes case based reserves for estimates of reported losses on direct business written, estimates received from ceding reinsurers, and reserves based on past experience of unreported losses. Such losses principally relate to the company’s marine operations and are included as a component of costs of marine operations in the Consolidated Statements of Earnings. The liability for such losses and the related reimbursement receivable from reinsurance companies are classified in the Consolidated Balance Sheets into current and noncurrent amounts based upon estimates of when the liabilities will be settled and when the receivables will be collected.

F-12

Pension and Other Postretirement Benefits

Pension costs are accounted for in accordance with the provisions of SFAS No. 87 and are funded to at least meet the minimum funding requirements as required by law. Prior service costs are amortized on the straight-line basis over the average remaining service period of employees expected to receive pension benefits. Postretirement benefits other than pensions are accounted for in accordance with SFAS No. 106. The estimated cost of postretirement benefits other than pensions are accrued during the employees’ active service period.

The company follows the disclosure provisions of SFAS No. 132, “Employers’ Disclosures about Pension and Other Postretirement Benefits,” as revised, which standardizes the disclosures for pensions and other postretirement benefit plans.

Income Taxes

Income taxes are accounted for in accordance with the provisions of SFAS No. 109. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes are not provided on undistributed earnings of certain non-U.S. subsidiaries and business ventures because the company considers those earnings to be permanently invested abroad.

Revenue Recognition

The company’s primary source of revenue is derived from time charter contracts of its vessels on a rate per day of service basis; therefore, marine vessel revenues are recognized on a daily basis throughout the contract period. These time charter contracts are generally either on a term basis (average three months to two years) or on a “spot” basis. The base rate of hire for a term contract is generally a fixed rate, provided, however, that term contracts at times include escalation clauses to recover specific additional costs. A spot contract is a short-term agreement to provide offshore marine services to a customer for a specific short-term job. Spot contract terms generally range from one day to one week. Marine vessel revenues are recognized on a daily basis throughout the contract period.

Operating Costs

Vessel operating costs are incurred on a daily basis and consist primarily of costs such as crew wages, repair and maintenance, insurance, fuel, lube oil and supplies, and other vessel expenses such as brokers commissions and crew personnel training costs. Repair and maintenance costs include both routine costs and major drydocking repair costs. Vessel operating costs are recognized as incurred on a daily basis.

Foreign Currency Translation

The U.S. dollar is the functional currency for all of the company’s existing international operations, as transactions in these operations are predominately denominated in U.S. dollars. Foreign currency exchange gains and losses are included in the Consolidated Statements of Earnings.

Earnings Per Share

Earnings per share are computed in accordance with SFAS No. 128, “Earnings Per Share,” which requires the reporting of both earnings per share and diluted earnings per share. The calculation of earnings per share is based on the weighted average number of shares outstanding and therefore

F-13

excludes any dilutive effect of stock options, while diluted earnings per share includes the dilutive effect of stock options. Per share amounts disclosed in these Notes to Consolidated Financial Statements, unless otherwise indicated, are on a diluted basis.

Concentrations of Credit Risk

Financial instruments that potentially subject the company to concentrations of credit risk consist principally of trade and other receivables. These receivables are with a variety of domestic, international and national energy companies and also include reinsurance companies for recoverable insurance losses. The company manages its exposure to risk through ongoing credit evaluations of its customers and generally does not require collateral. The company maintains an allowance for doubtful accounts for potential losses and does not believe it is generally exposed to concentrations of credit risk that are likely to have a material adverse impact on the company’s financial position, results of operations, or cash flows.

Stock-Based Compensation

The company measures compensation expense for its stock-based compensation plan using the intrinsic value recognition and measurement principles prescribed by APB No. 25, “Accounting for Stock Issued to Employees” and related interpretations. The plan is described in Note 8 of Notes to Consolidated Financial Statements. The company uses the disclosure provision of SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” which amended the disclosure provision of SFAS No. 123. The following table illustrates the effect on net earnings and earnings per share had the company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, “Accounting for Stock-Based Compensation.”


(In thousands)	2005			2004		2003
Net earnings as reported	$	101,339		41,662		88,630
Add stock-based employee compensation expense included in reported net earnings, net of related tax effect		1,185		252		310
Less total stock-based employee compensation expense, under fair value method for all awards, net of tax		(6,760	)	(6,418	)	(7,403	)

Pro forma net earnings	$	95,764		35,496		81,537

Earnings per common share:
As reported	$	1.78		.74		1.57
Pro forma	$	1.68		.63		1.45
Diluted earnings per common share:
As reported	$	1.78		.73		1.57
Pro forma	$	1.68		.63		1.44

Comprehensive Income

The Company uses SFAS No. 130, “Reporting Comprehensive Income,” which requires the reporting and display of total comprehensive income and its components in the financial statements. Total comprehensive income represents the net change in stockholders’ equity during a period from sources other than transactions with stockholders and as such, includes net earnings. For the company, accumulated other comprehensive income is comprised of the net after-tax effect of accumulated foreign currency translation adjustments, unrealized gains and losses on available-for-sale securities and derivative financial instruments, and a minimum pension liability for the company’s U.S. Defined Benefits Pension Plan and Supplemental Executive Retirement Plan.

Derivative Instruments and Hedging Activities

The company uses SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended. The company periodically utilizes derivative financial instruments to hedge against foreign

F-14

currency denominated assets and liabilities and currency commitments. These transactions are forward currency contracts that are entered into with major financial institutions. Derivative financial instruments are intended to reduce the company’s exposure to foreign currency exchange risk. The company accounts for changes in the fair value of a derivative instrument depending on the intended use of the derivative and the resulting designation, which is established at the inception of a derivative. SFAS No. 133 requires that a company formally document, at the inception of a hedge, the hedging relationship and the entity’s risk management objective and strategy for undertaking the hedge, including identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged, the method used to assess effectiveness and the method that will be used to measure hedge ineffectiveness of derivative instruments that receive hedge accounting treatment. For derivative instruments designated as foreign currency hedges, changes in fair value, to the extent the hedge is effective, are recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge effectiveness is assessed quarterly based on the total change in the derivative’s fair value.

Reclassifications

Certain previously reported amounts have been reclassified to conform to the 2005 presentation.

New Accounting Pronouncements

In May 2004, the FASB issued Staff Position No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (FSP No. 106-2), which addresses the accounting and disclosure requirements associated with the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). The Act introduced a prescription drug benefit under Medicare (Medicare Part D), as well as a nontaxable federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The company determined that its postretirement benefit plans providing prescription drug benefits are currently actuarially equivalent to Medicare Part D and has elected to recognize the effects of the Act on its postretirement benefit plans by implementing the provisions of FSP 106-2 as of January 1, 2004. The company reduced its accumulated postretirement benefit obligation (APBO) for the effect of the subsidy related to benefits attributed to prior service by approximately $4.5 million. This is reflected as an actuarial experience gain and is being amortized over current and future periods. In addition, the subsidy will reduce current period service costs and related interest costs on APBO. The estimated total effect of the subsidy reduced fiscal 2005’s annual postretirement benefit expense by approximately $1.0 million.

(2)

Investment in Unconsolidated Companies

Investments in unconsolidated affiliates, generally 50% or less owned partnerships and corporations, are accounted for by the equity method. Under the equity method, the assets and liabilities

F-15

of the unconsolidated joint venture companies are not consolidated in the company’s consolidated balance sheet.

Investments in, at equity, and advances to unconsolidated marine joint-venture companies at March 31 were as follows:


	Percentage ownership	(In thousands)
	Percentage ownership	2005		2004
Sonatide Marine Ltd. (Luanda, Angola)	49%	$	30,475	32,144
Others	20%-50%		1,599	1,578

		$	32,074	33,722

During fiscal 2004, the company sold three crewboats to Sonatide Marine Ltd. for $11.8 million. The company financed the sale of all three crewboats. Under the terms of the repayment agreement, the loan is payable in 36 equal installments, which will end in December 2006, plus interest at 90 day LIBOR plus 1.5% adjusted quarterly. The transaction resulted in a fiscal 2004 gain on sale of assets of $0.4 million and increased the investments in, at equity, and advances to unconsolidated companies’ account by $11.4 million.

During fiscal 2003, the company sold one deepwater platform supply vessel and one crewboat to Sonatide Marine Ltd. for $18.8 million. The company financed the $16.0 million sale of the deepwater vessel, while the joint venture paid $2.8 million cash for the crewboat. The repayment agreement calls for the loan to be payable in 36 equal installments, which will end in April 2005, plus interest at 90 day LIBOR plus 1.5% adjusted quarterly. The transactions resulted in a fiscal 2003 gain on sale of assets of $1.1 million and increased the investments in, at equity, and advances to unconsolidated companies’ account by $14.9 million.

As of March 31, 2005, 2004 and 2003, $13.5 million, $17.5 million, and $12.9 million, respectively, was owed the company related to these financings.

(3)

Impairment of Long-lived Assets

F-16

after tax, or $0.02 per share) to reduce the carrying amount of 10 vessels that are unlikely to return to active service.

(4)

Income Taxes

Earnings before income taxes derived from United States and international operations for the years ended March 31 are as follows:


(In thousands)	2005			2004		2003
United States	$	(4,505	)	(52,590	)	(20,648	)
International		104,301		107,093		148,358

	$	99,795		54,503		127,710

Income tax expense for the years ended March 31 consists of the following:


	U.S.
(In thousands)	Federal			State	International		Total
2005
Current	$	(3,339	)	57	35,605		32,323
Deferred		(32,066	)	—	(1,801	)	(33,867	)

	$	(35,405	)	57	33,804		(1,544	)


2004
Current	$	346		504	28,625		29,475
Deferred		(14,671	)	—	(1,963	)	(16,634	)

	$	(14,325	)	504	26,662		12,841


2003
Current	$	2,006		1,422	30,188		33,616
Deferred		9,231		—	(3,767	)	5,464

	$	11,237		1,422	26,421		39,080

The actual income tax expense for the years ended March 31, 2005, 2004, and 2003 differs from the amounts computed by applying the U.S. federal tax rate of 35% to pre-tax earnings as a result of the following:


(In thousands)	2005			2004		2003
Computed “expected” tax expense	$	34,928		19,076		44,698
Increase (reduction) resulting from:
Foreign tax credits not previously recognized		(1,801	)	(1,963	)	(3,767	)
Overaccrual of prior year taxes on certain foreign earnings		(579	)	(2,500	)	—
Utilization of net operating loss carryforwards		(4	)	(1	)	(42	)
Current foreign earnings not subject to taxation		(1,810	)	(2,100	)	(2,800	)
Expenses which are not deductible for tax purposes		124		118		115
State taxes		37		328		924
Effect of reversal of previously recorded deferred taxes on timing differences of non-U.S. subsidiaries		(31,772	)	—		—
Other, net		(667	)	(117	)	(48	)

	$	(1,544	)	12,841		39,080

The company’s fiscal 2005 effective annual tax rate was (1.55)%. This reflects a one-time adjustment to remove U.S. deferred taxes previously reflected, but relating to income now considered permanently reinvested in foreign operations. Absent this adjustment, the annual rate would have been 30.29%.

F-17

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2005 and 2004 are as follows:


(In thousand)	2005			2004
Deferred tax assets:
Financial provisions not deducted for tax purposes	$	19,145		19,256
Foreign net operating loss carryforwards		—		13,989
Domestic net operating loss carryforwards		46,601		7,668
Tax credit carryforwards		31,811		50,660
Other		667		688

Gross deferred tax assets		98,224		92,261
Less valuation allowance		—		(13,989	)

Net deferred tax assets		98,224		78,272

Deferred tax liabilities:
Depreciation and amortization		(183,359	)	(186,646	)
Other		(1,051	)	(11,679	)

Gross deferred tax liabilities		(184,410	)	(198,325	)

Net deferred tax liabilities	$	(86,186	)	(120,053	)

The fiscal 2004 valuation allowance is primarily the result of a doubt over the ultimate realization of benefits from certain foreign net operating losses. As of March 31, 2005, the remaining deferred tax assets were evaluated, and after consideration of expected future income sources, no valuation allowance was deemed necessary. The remaining balance of the deferred tax assets is expected to be realized through future operating results, the reversal of taxable temporary differences and tax planning strategies.

Certain provisions of the American Jobs Creation Act of 2004, effective for the company as of April 1, 2005, afford the company the ability to omit recording deferred tax assets or liabilities on future undistributed earnings of most non-U.S. subsidiaries and business ventures that it considers indefinitely reinvested abroad. The company currently believes this position will apply to substantially all of the earnings of these entities for the foreseeable future. Consistent with that belief, the company has, effective March 31, 2005, reversed all previously recorded U.S. deferred tax assets and liabilities related to timing differences, foreign tax credits, or prior undistributed earnings of these entities whose future and prior earnings are now anticipated to be indefinitely reinvested abroad. The result of this reversal of previously recorded U.S. deferred tax assets and liabilities was approximately $31.8 million and it was recorded as a reduction of income tax expense in the fourth quarter of fiscal 2005.

The company has not recognized a U.S. deferred tax liability associated with temporary differences related to investments in foreign subsidiaries that are essentially permanent in duration. The differences relate primarily to undistributed earnings and stock basis differences. Though the company does not anticipate repatriation of funds, a current U.S. tax liability would be recognized when the company receives those foreign funds in a taxable manner such as through receipt of dividends or sale of investments. As of March 31, 2005, the total amount for which U.S. deferred taxes have not been recognized is approximately $181.0 million. A determination of the unrecognized deferred tax liability for temporary differences related to investments in foreign subsidiaries is not practicable due to uncertainty regarding the use of foreign tax credits which would become available as a result of a transaction. The American Jobs Creation Act of 2004 provides for a special one-time tax deduction of 85% of certain foreign earnings that are repatriated in either fiscal 2005 or 2006. The company has evaluated the repatriation provision, and consistent with its decision to reinvest all future earnings of its foreign subsidiaries, has concluded that the repatriation of unremitted foreign earnings provides no benefit to the company, and has no effect on income tax expense as reported.

As of March 31, 2005, the company has net operating loss carry-forwards approximating $133.0 million that expire in 2024 and 2025 and has foreign tax credit carry-forwards approximating $31.0 million that expire in 2013 through 2015.

F-18

The company receives a tax benefit that is generated by certain employee stock benefit plan transactions. This benefit is recorded directly to additional paid-in-capital and does not reduce the company’s effective income tax rate. The tax benefit for the years ended March 31, 2005, 2004 and 2003 totaled approximately $0.8 million, $0.7 million and $1.1 million, respectively.

(5)

Long-term Debt and Revolving Credit Agreement

On August 15, 2003, the company signed a $295 million revolving credit agreement which replaced a $200 million revolving credit and term loan agreement. Under the $295 million revolving credit agreement, borrowings bear interest at the company’s option, at prime or Federal Funds rates plus .5% or LIBOR rates plus margins from .75% to 1.25% based on the company’s funded debt to total capitalization ratio. The $295 million revolving credit commitment will expire on April 30, 2008. Any borrowings under the agreement are unsecured and the company pays an annual fee of .20 to .30% on the unused portion of the facility which is determined by the company’s funded debt to total capitalization ratio. The company had $80.0 million in outstanding borrowings from the revolving credit facility at March 31, 2005. On May 18, 2005, the company amended its $295 million revolving line of credit agreement. The amended agreement, which expires on May 18, 2010, increased the face amount of the facility from $295 million to $300 million and includes a mechanism for increasing the amount of the facility up to $400 million. Borrowings bear interest at the company’s option, at the greater of prime or Federal Funds rates plus .5% or LIBOR rates plus margins from .50 to 1.125% based on the company’s funded debt to total capitalization ratio. The amended agreement reduced the annual fee on the unused portion of the facility to a range between .10 to .25% and modified certain financial covenants, which would allow for more flexibility in utilizing the facility.

On July 8, 2003, the company issued $300 million of senior unsecured notes. The multiple series of notes with maturities ranging from 7 years to 12 years have an average outstanding life to maturity of 9.5 years and can be retired before maturity without penalty. The average interest rate on the notes sold to private institutional investors is 4.35%. The terms of the notes limit the amount of company debt, and the company’s debt to total capitalization ratio cannot exceed 55%. The fair value of this debt at March 31, 2005 is estimated to be approximately $285.3 million.

Under the terms of the revolving credit agreement, the company has agreed to limitations on future levels of investments and aggregate indebtedness, and maintenance of certain debt to capitalization ratios and also debt to earnings ratios. The revolving credit agreement also limits the company’s ability to encumber its assets for the benefit of others.

Aggregate maturities of long-term debt and borrowings under the revolving credit agreement are as follows: in fiscal 2006 $0, in fiscal 2007 $0, in fiscal 2008 $0, in fiscal 2009 $80.0 million, in fiscal 2010 $0 and thereafter $300.0 million.

(6)

Employee Benefit Plans

Upon meeting various citizenship, age and service requirements, employees are eligible to participate in a defined contribution savings plan and can contribute from 2% to 75% of their base salary to an employee benefit trust. The company matches with company common stock 50% of the employee’s contribution to the plan up to a maximum of 6% of the employee’s base salary. The plan held 482,387 shares and 491,960 shares of the company’s common stock at March 31, 2005 and 2004, respectively.

F-19

Amounts charged to expense for the plan for 2005, 2004 and 2003 were $1.4 million, $1.2 million, and $1.7 million, respectively.

A defined benefit pension plan covers certain U.S. citizen employees and employees who are permanent residents of the United States. Benefits are based on years of service and employee compensation. Approximately 80% of the pension plan assets are invested in fixed income securities with the balance invested in equity securities and cash and cash equivalents. The plan does not invest in Tidewater stock. The company’s policy is to fund the plan based upon minimum funding requirements of the Employee Retirement Income Security Act of 1974. Certain benefits programs are maintained in several other countries that provide retirement income for covered employees.

The company also has a supplemental retirement plan (supplemental plan) that provides pension benefits to certain employees in excess of those allowed under the company’s tax-qualified pension plan. Assets of this non-contributory defined benefit plan are held in a Rabbi Trust, which consists of a variety of marketable securities, none of which is Tidewater stock. The Trust assets, which are included in “other assets” in the company’s Consolidated Balance Sheet, are recorded at fair value with unrealized gains or losses included in other comprehensive income. Trust assets at March 31, 2005 and 2004 were $10.6 million and $11.0 million, respectively, and the company’s obligation under the supplemental plan, which is included in “other liabilities and deferred credits” on the Consolidated Balance Sheet, amounted to $14.5 million and $12.2 million, respectively, at March 31, 2005 and 2004.

Qualified retired employees currently are covered by a program, which provides limited health care and life insurance benefits. Costs of the program are based on actuarially determined amounts and are accrued over the period from the date of hire to the full eligibility date of employees who are expected to qualify for these benefits. This plan is not funded.

Changes in plan assets and obligations during the years ended March 31, 2005 and 2004 and the funded status of the U.S. defined benefits pension plan and the supplemental plan (referred to collectively

F-20

as “Pension Benefits”) and the postretirement health care and life insurance plan (referred to as “Other Benefits”) at March 31, 2005 and 2004 were as follows:


	Pension Benefits					Other Benefits
(In thousands)	2005			2004		2005		2004
Change in benefit obligation
Benefit obligation at beginning of year	$	56,645		50,219		42,785		37,590
Service cost		696		650		1,758		1,844
Interest cost		3,354		3,346		2,347		2,435
Participant contributions		—		—		375		359
Plan amendments		—		97		—		—
Benefits paid		(2,575	)	(2,402	)	(1,320	)	(1,154	)
Actuarial (gain) loss		3,850		4,735		(4,043	)	1,711

Benefit obligation at end of year	$	61,970		56,645		41,902		42,785

Change in plan assets
Fair value of plan assets at beginning of year	$	38,423		36,425		—		—
Actual return		3,486		3,536		—		—
Employer contributions		870		864		945		795
Participant contributions		—		—		375		359
Benefits paid		(2,575	)	(2,402	)	(1,320	)	(1,154	)

Fair value of plan assets at end of year	$	40,204		38,423		—		—

Reconciliation of funded status
Fair value of plan assets	$	40,204		38,423		—		—
Benefit obligation		61,970		56,645		41,902		42,785

Funded (unfunded) status		(21,766	)	(18,222	)	(41,902	)	(42,785	)
Unrecognized actuarial loss (gain)		11,521		9,442		9,505		14,159
Unrecognized prior service cost (benefit)		254		352		417		394

Net accrued benefit cost	$	(9,991	)	(8,428	)	(31,980	)	(28,232	)

Net accrued benefit cost consists of:
Prepaid benefit cost	$	—		—		—		—
Accrued benefit liability		(18,531	)	(14,373	)	(31,980	)	(28,232	)
Intangible asset		1,055		1,523		—		—
Accumulated other comprehensive loss		7,485		4,422		—		—

Net accrued benefit cost	$	(9,991	)	(8,428	)	(31,980	)	(28,232	)

The following table provides the projected benefit obligation and accumulated benefit obligation for the pension plans:


(In thousands)	2005		2004
Projected benefit obligation	$	61,970	56,645
Accumulated benefit obligation		58,735	52,796

The following table provides information for pension plans with an accumulated benefit obligation in excess of plan assets (includes both the U.S. defined benefit pension plan and supplemental plan):


(In thousands)	2005		2004
Projected benefit obligation	$	61,970	56,645
Accumulated benefit obligation		58,735	52,796
Fair value of plan assets		40,204	38,423

F-21

Net periodic pension cost for the U.S. defined benefit pension plan and the supplemental plan for 2005, 2004 and 2003 include the following components:


(In thousands)	2005			2004		2003
Service cost	$	696		650		707
Interest cost		3,354		3,346		3,269
Expected return on plan assets		(2,559	)	(2,585	)	(2,882	)
Amortization of prior service cost		98		99		108
Recognized actuarial (gain) loss		842		639		641

Net periodic pension cost	$	2,431		2,149		1,843

Net periodic postretirement health care and life insurance costs for 2005, 2004 and 2003 include the following components:


(In thousands)	2005		2004	2003
Service cost	$	1,758	1,844	1,325
Interest cost		2,347	2,435	1,791
Other amortization and deferral		536	766	59

Net periodic postretirement benefit cost	$	4,641	5,045	3,175

The company is required to recognize a minimum liability if the U.S. defined benefits pension plan or supplemental plan has an accumulated benefit obligation in excess of plan assets. Adjustments to the minimum liability are included in other comprehensive income.


(In thousands)	2005		2004
Increase in minimum liability included in other comprehensive income	$	3,063	1,760

Assumptions used to determine net benefit obligations for the fiscal years ended March 31 were as follows:


	Pension Benefits				Other Benefits
	2005		2004		2005		2004
Discount rate	5.75	%	6.25	%	5.75	%	6.25	%
Rates of annual increase in compensation levels	3.00	%	4.00	%	N/A		N/A

Assumptions used to determine net periodic benefit costs for the fiscal years ended March 31 were as follows:


	Pension Benefits						Other Benefits
	2005		2004		2003		2005		2004		2003
Discount rate	6.25	%	6.75	%	7.25	%	6.25	%	6.75	%	7.25	%
Expected long-term rate of return on assets	6.75	%	7.25	%	8.25	%	N/A		N/A		N/A
Rates of annual increase in compensation levels	3.00	%	4.00	%	4.00	%	N/A		N/A		N/A

To develop the expected long-term rate of return on assets assumption, the company considered the current level of expected returns on various asset classes. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected return on plan assets assumption for the portfolio.

The following table provides the target and actual asset allocations for the U.S. defined benefits pension plan:


	Target		Actual as of 2005		Actual as of 2004
Equity securities	15	%	9	%	9	%
Debt securities	80	%	79	%	78	%
Other, primarily cash	5	%	12	%	13	%

Total	100	%	100	%	100	%

F-22

The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation will be 10% in 2005, gradually declining to 5% in the year 2010 and thereafter. A 1% increase in the assumed health care cost trend rates for each year would increase the accumulated postretirement benefit obligation by approximately $6.3 million at March 31, 2005 and increase the cost for the year ended March 31, 2005 by $0.7 million. A 1% decrease in the assumed health care cost trend rates for each year would decrease the accumulated postretirement benefit obligation by approximately $5.1 million at March 31, 2005 and decrease the cost for the year ended March 31, 2005 by $0.6 million.

A defined contribution retirement plan covers all eligible U.S. fleet personnel, along with all new eligible employees of the company hired after December 31, 1995. This plan is noncontributory by the employee, but the company has contributed in cash 3% of an eligible employee’s compensation to an employee benefit trust. The cost of the plan for fiscal 2005, 2004 and 2003 was $1.6 million, $1.7 million and $1.9 million, respectively. Forfeitures totaling approximately $0.2 million and $0.3 million reduced the costs of the plan for fiscal 2005 and 2004, respectively.

(7)

Other Assets, Other Liabilities and Deferred Credits and Accumulated Other Comprehensive Income

A summary of other assets at March 31 follows:


(In thousands)	2005		2004
Recoverable insurance losses	$	34,778	31,031
Deferred income tax assets		98,224	78,272
Other		39,201	32,177

	$	172,203	141,480

A summary of other liabilities and deferred credits at March 31 follows:


(In thousands)	2005		2004
Postretirement benefits liability	$	31,577	27,881
Capital lease obligation		—	14,158
Pension liability		9,991	8,428
Minority interests in net assets of subsidiaries		1,196	1,282
Deferred vessel revenues		2,071	3,775
Income taxes		13,657	13,657
Other		20,549	20,091

	$	79,041	89,272

A summary of accumulated other comprehensive income at March 31 follows:


(In thousands)	2005			2004
Currency translation adjustments	$	10,578		10,578
Unrealized gains on available-for-sale securities, net of tax of $6 in 2005 and $403 in 2004		(748	)	(737	)
Benefit plans minimum liabilities, net of tax of $1,072 in 2005 and $616 in 2004		4,865		2,874

	$	14,695		12,715

(8)

Capital Stock

The company has 125 million shares of $.10 par value common stock authorized. At March 31, 2005 and 2004, 60,718,231 shares and 60,699,438 shares, respectively, were issued. At March 31, 2005 and 2004, 3,201,352 and 3,666,694 shares, respectively, were held by the Grantor Trust Stock Ownership Program, which are not included in common shares outstanding for earnings per share calculations. At March 31, 2005 and 2004, 3,000,000 shares of no par value preferred stock were authorized and unissued.

F-23

Under the company’s stock option and restricted stock plans, the Compensation Committee of the Board of Directors has authority to grant stock options and restricted shares of the company’s stock to officers and other key employees. At March 31, 2005, 5,257,551 shares of common stock are reserved for issuance under the plans of which 1,118,010 shares are available for future grants. Stock options are granted with an exercise price equal to the stock’s fair market value at the date of grant. All outstanding stock options have ten-year terms and most of the outstanding options vest and become exercisable in equal installments over a three-year period from the grant date.

The per share weighted-average fair values of stock options granted during fiscal years 2005, 2004 and 2003 were $12.61, $9.40 and $10.51, respectively, on the dates of grant using the Black Scholes option-pricing model with the following weighted-average assumptions:


	2005		2004		2003
Risk-free interest rate	4.15	%	3.25	%	3.00	%
Expected dividend yield	1.50	%	2.00	%	2.00	%
Expected stock price volatility	36.46	%	40.68	%	47.19	%
Expected stock option life	5 years		5 years		5 years

The company applies the intrinsic value recognition and measurement principles prescribed by APB Opinion No. 25 in accounting for its plans and, accordingly, no compensation cost has been recognized for its stock options in the consolidated financial statements. The effect on the company’s net earnings had the company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123 is disclosed in Note 1 of Notes to Consolidated Financial Statements.

Stock option activity during 2005, 2004 and 2003 was as follows:


	Weighted-average Exercise Price		Number of Shares
Balance at March 31, 2002	$	36.23	4,230,121
Granted		27.85	627,500
Exercised		23.54	(370,470	)
Expired or cancelled		40.90	(156,669	)

Balance at March 31, 2003		35.93	4,330,482
Granted		28.01	377,500
Exercised		22.45	(220,641	)
Expired or cancelled		38.57	(139,668	)

Balance at March 31, 2004		35.85	4,347,673
Granted		37.55	169,722
Exercised		26.74	(284,853	)
Expired or cancelled		35.07	(93,001	)

Balance at March 31, 2005	$	36.48	4,139,541

The 4,139,541 options outstanding at March 31, 2005 fall into three general exercise-price ranges as follows:


	Exercise Price Range
	$	22.75 -$29.44	$	32.25 -$40.28	$	42.19-$59.00
Options outstanding at March 31, 2005		1,444,293		1,318,748		1,376,500
Weighted average exercise price	$	26.83	$	36.80	$	46.29
Weighted average remaining contractual life		7.0 years		6.2 years		3.8 years
Options exercisable at March 31, 2005		1,052,936		1,268,748		1,376,500
Weighted average exercise price of options exercisable at March 31, 2005	$	26.40	$	36.81	$	46.29

At March 31, 2005, 2004, and 2003, the number of options exercisable under the stock option plans was 3,698,184, 3,385,975 and 3,092,285, respectively; and the weighted average exercise price of those options was $37.36, $37.41 and $36.74, respectively.

F-24

A total of 329,998 shares of restricted common stock of the company were granted to certain key employees during fiscal years 2002 through 2005 from the company’s Employee Restricted Stock Plan and the 1997 and 2001 Stock Incentive Plans. These restricted shares vest and become freely transferable over a four-year period provided the employee remains employed by the company during the vesting period. During the restricted period, the restricted shares may not be transferred or encumbered, but the recipient has the right to vote and receive dividends on the restricted shares. The fair market value of the stock at the time of the grants totaled approximately $11.3 million and was classified in stockholders’ equity as deferred compensation – restricted stock. The deferred amount is being amortized by equal monthly charges to earnings over the respective four-year vesting periods. The Employee Restricted Stock Plan is the only equity compensation plan that has not been approved by shareholders.

The company established a Grantor Trust Stock Ownership Program on January 29, 1999 in connection with which the company entered into a trust agreement with a bank providing for the establishment of the related trust (the “trust”). The trust is designed to acquire, hold and distribute shares of the common stock of the company to provide for the payment of benefits and compensation under the company’s employee benefit plans, including its stock option plans and 401(k) plan. The trust will not increase or alter the amount of benefits or compensation that will be paid under these plans.

On January 29, 1999, the company sold at market value 5,000,000 shares (the “acquired shares”) of common stock to the trust for $107,187,500, or $21.4375 per share. In payment for the acquired shares, the trust paid $500,000 in cash and issued a promissory note payable to the company for the remaining balance. Acquired shares will be released to satisfy the company’s obligations to pay benefits under company benefit plans as the promissory note is paid down or forgiven.

For financial reporting purposes the trust is consolidated with the company. Any dividend transactions between the company and the trust are eliminated. Acquired shares held by the trust remain valued at the market price at the date of purchase and are shown as a reduction to stockholders’ equity in the company’s consolidated balance sheet. The difference between the trust share value and the fair market value on the date shares are released from the trust is included in additional paid-in capital. Common stock held in the trust is not considered outstanding in the computation of earnings per share. The trust held 3,201,352 and 3,666,694 shares of common stock at March 31, 2005 and 2004, respectively. The trustee will vote or tender shares held by the trust in accordance with the confidential instructions of participants in the company’s stock option plans and 401(k) plan.

Under a Shareholder Rights Plan, one preferred stock purchase right has been distributed as a dividend for each outstanding common share. Each right entitles the holder to purchase, under certain conditions, one one-hundredth of a share of Series A Participating Preferred Stock at an exercise price of $160, subject to adjustment. The rights will not be exercisable unless a person (as defined in the plan) acquires beneficial ownership of 15% or more of the outstanding common shares, or a person commences a tender offer or exchange offer, which upon its consummation such person would beneficially own 15% or more of the outstanding common shares. The Board of Directors are authorized in certain circumstances to lower the beneficial ownership percentage to not less than 10%.

If after the rights become exercisable a person becomes the beneficial owner of 15% or more of the outstanding common shares (except pursuant to an offer for all shares approved by the Board of Directors), each holder (other than the acquirer) will be entitled to receive, upon exercise, common shares having a market value of twice the exercise price. In addition, if the company is involved in a merger (other than a merger which follows an offer for all shares approved by the Board of Directors), major sale of assets or other business combination after a person becomes the beneficial owner of 15% or more of the outstanding common shares, each holder of a right (other than the acquirer) will be entitled to receive, upon exercise, common stock of the acquiring company having a market value of twice the exercise price.

F-25

The rights may be redeemed for $.01 per right at any time prior to ten days following the acquisition by a person of 15% or more of the outstanding common shares. The rights expire on November 1, 2006.

(9)

Commitments and Contingencies

Compensation continuation agreements exist with all of the company’s officers whereby each receives compensation and benefits in the event that their employment is terminated following certain events relating to a change in control of the company. The maximum amount of cash compensation that could be paid under the agreements, based on present salary levels, is approximately $15.1 million.

As of March 31, 2005, the company has committed to the construction of 15 vessels at a total cost of approximately $203.1 million, which includes shipyard commitments and other incidental costs. The company is committed to the construction of three large anchor handling towing supply vessels, five anchor handling towing supply vessels averaging around 6,500 to 8,000 BHP, one 220-foot intermediate size platform supply vessels, one 175-foot crewboat and five water jet vessels. Scheduled delivery for the vessels is expected to begin in May 2005 with final delivery in January 2006. As of March 31, 2005, $147.6 million has been expended on these vessels.

F-26

Various legal proceedings and claims are outstanding which arose in the ordinary course of business. In the opinion of management, the amount of ultimate liability, if any, with respect to these actions will not have a material adverse effect on the company’s financial position, results of operations, or cash flows.

(10)

Financial Instruments

The company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables and long-term debt whose book values are considered to be representative of their respective fair values. The company also periodically enters into spot and forward currency derivative financial instruments as a hedge against foreign currency denominated assets and liabilities and currency commitments.

Spot contracts are short-term in nature and settle within two business days. The fair value approximates the carrying value due to the short-term nature of this instrument, and as a result, no gains or losses are recognized. The company had three currency spot contracts outstanding at March 31, 2005 totaling approximately $1.0 million that settled on April 1, 2005. The company had no spot contracts outstanding at March 31, 2004 and 2003.

Forward currency contracts are longer-term in nature but generally do not exceed one year. The company had no derivative financial instruments outstanding at March 31, 2005, 2004 and 2003 that qualified as a hedge instrument.

F-27

(11)

Segment and Geographic Distribution of Operations

The company follows SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” but operates in only one business segment. The following table provides a comparison of revenues, operating profit, total assets, and depreciation and amortization and additions to properties and equipment for the years ended March 31. Vessel revenues and operating costs relate to vessels owned and operated by the company while other marine services relate to the activities of the company’s shipyards, brokered vessels and other miscellaneous marine-related businesses.


(In thousands)	2005			2004		2003
Marine revenues (A):
Vessel revenues:
United States	$	118,288		125,344		103,368
International (B)		537,238		500,604		521,187

		655,526		625,948		624,555
Other marine services		36,624		26,682		11,268

	$	692,150		652,630		635,823

Marine operating profit:
Vessel activity:
United States	$	2,022		(17,715	)	(15,380	)
International		95,383		96,316		138,945

		97,405		78,601		123,565
Impairment of long-lived assets		(1,733	)	(26,456	)	—
Gains on sales of assets		11,977		7,075		6,162
Other marine services		6,623		4,623		4,168

		114,272		63,843		133,895
Other income		7,589		7,634		6,343
Corporate expenses		(15,179	)	(13,291	)	(12,116	)
Interest and other debt costs		(6,887	)	(3,683	)	(412	)

Earnings before income taxes	$	99,795		54,503		127,710

Total assets:
Marine:
United States	$	532,096		569,840		477,490
International (B)		1,510,923		1,355,820		1,254,189

		2,043,019		1,925,660		1,731,679
Investments in and advances to unconsolidated Marine companies		32,074		33,722		27,445

		2,075,093		1,959,382		1,759,124
General corporate		138,080		122,408		90,454

	$	2,213,173		2,081,790		1,849,578

Depreciation and amortization:
Marine equipment operations
United States	$	21,825		32,447		5,263
International		77,149		65,408		77,201
General corporate depreciation		639		655		739

	$	99,613		98,510		83,153

Additions to properties and equipment:
Marine equipment operations
United States	$	14,752		139,910		118,097
International		192,588		157,545		151,457
General corporate		51		60		66

	$	207,391		297,515		269,620

(A)	For fiscal 2005, 2004 and 2003, one customer accounted for 13.2%, 12.0% and 13.0%, respectively, of revenues while a different customer accounted for 10.2% of revenue during fiscal 2005.

(B)

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. Equity in net assets of non-U.S. subsidiaries is $1.3 billion, $930.1 million and $876.7 million at March 31, 2005, 2004 and 2003, respectively. Other international identifiable assets include accounts receivable and other balances denominated in currencies other than the U.S. dollar, which aggregate approximately $8.8 million, $9.1 million and $8.0 million at March 31, 2005, 2004, and 2003, respectively. These amounts are subject to the usual risks of fluctuating exchange rates and government-imposed exchange controls.

F-28

(12)

Supplementary Information—Quarterly Financial Data (Unaudited)

Years Ended March 31, 2005 and 2004


(In thousands, except per share data)

2005	First		Second	Third	Fourth
Marine revenues	$	158,117	166,827	187,593	179,613

Marine operating profit	$	21,820	27,189	33,166	32,097

Net earnings	$	12,881	16,309	19,753	52,396

Earnings per share	$	.23	.29	.35	.92

Diluted earnings per share	$	.23	.29	.34	.91


2004	First		Second	Third	Fourth
Marine revenues	$	164,810	164,219	169,407	154,194

Marine operating profit (loss)	$	28,292	20,483	27,597	(12,529	)

Net earnings (loss)	$	18,044	12,254	18,327	(6,963	)

Earnings (loss) per share	$	.32	.22	.32	(.12	)

Diluted earnings (loss) per share	$	.32	.22	.32	(.12	)

Operating profit consists of revenues less operating costs and expenses, depreciation, general and administrative expenses and other income and expenses of the Marine division.

See Notes 1, 2, 3 and 4 for detailed information regarding transactions that affect fiscal 2005 and 2004 quarterly amounts. A discussion of current market conditions appears in Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations.

F-29

SCHEDULE II

TIDEWATER INC. AND SUBSIDIARIES

Valuation and Qualifying Accounts

Years Ended March 31, 2005, 2004 and 2003

(In thousands)


Column A	Column B		Column C	Column D		Column E
Description	Balance at Beginning of period		Additions at Cost	Deductions		Balance at End of Period
2005
Deducted in balance sheet from trade accounts receivables:
Allowance for doubtful accounts	$	7,304	28	194	(A)	7,138

Amortization of prepaid rent and debt issuance costs	$	2,843	2,246	2,240		2,849

2004
Deducted in balance sheet from trade accounts receivable:
Allowance for doubtful accounts	$	7,304	—	—		7,304

Amortization of prepaid rent and debt issuance costs	$	819	3,948	1,924		2,843

2003
Deducted in balance sheet from trade accounts receivables:
Allowance for doubtful accounts	$	7,944	—	640	(A)	7,304

Amortization of prepaid rent and debt issuance costs	$	5,447	1,473	6,101		819

(A)	Accounts receivable amounts considered uncollectible and removed from accounts receivable by reducing allowance for doubtful accounts.

F-30

TIDEWATER INC.

EXHIBITS FOR THE

ANNUAL REPORT ON FORM 10-K

FISCAL YEAR ENDED MARCH 31, 2005

EXHIBIT INDEX

Articles of Incorporation and Bylaws


3.1		Restated Certificate of Incorporation of Tidewater Inc. (filed with the Commission as Exhibit 3(a) to the company’s quarterly report on Form 10-Q for the quarter ended September 30, 1993, File No. 1-6311).

3.2		Tidewater Inc. Bylaws (filed with the Commission as Exhibit 3.2 on Form 8-K dated June 1, 2005, File No. 1-6311).
Instruments Defining Rights of Security Holders
4.1		Restated Rights Agreement dated as of September 19, 1996 between Tidewater Inc. and The First National Bank of Boston (filed with the Commission as Exhibit 1 to Form 8-A on September 30, 1996).
Financing Agreements
10.1A		First Amendment dated May 18, 2005 to Amended and Restated Revolving Credit Agreement (filed with the Commission on Form 8-K on May 20, 2005, File No. 1-6311).

10.2		$295,000,000 Amended and Restated Revolving Credit Agreement dated as of August 15, 2003 (filed with the Commission as Exhibit 4 to the company’s quarterly report on Form 10-Q for the quarter ended September 30, 2003, File No. 1-6311).
Stock Plans
10.3*+		Tidewater Inc. Amended and Restated Tidewater Inc. 1992 Stock Option and Restricted Stock Plan (Effective November 29, 2001).

10.4+		Amended and Restated Tidewater Inc. 1997 Stock Incentive Plan dated November 21, 2002 (filed with the Commission as Exhibit 10(a) to the company’s report on Form 10-Q for the quarter ended December 31, 2002, File No. 1-6311).

10.5*+		Tidewater Inc. 2001 Stock Incentive Plan dated November 21, 2002.

10.6+		Tidewater Inc. Employee Restricted Stock Plan (filed with the Commission as Exhibit 10.2 to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2004, File No. 1-6311).

10.7*+		Form of Stock Option and Restricted Stock Agreement Under the Amended and Restated 1992 Stock Option and Restricted Stock Plan.

10.8+		Form of Restricted Stock Agreement Under the Tidewater Inc. Employee Restricted Stock Plan (filed with the Commission as Exhibit 10.3 to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2004, File No. 1-6311).

10.9+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options and Non-Qualified Stock Options Under the Tidewater Inc. 2001 Stock Incentive Plan, and the Grant of Restricted Stock Under the Tidewater Inc. 1997 Stock Incentive Plan

- 1 -


		(filed with the Commission as Exhibit 10.4 to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2004, File no. 1-6311).

10.10*+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options and Non-Qualified Stock Options Under the Tidewater Inc. 2001 Stock Incentive Plan and the Grant of Restricted Stock Under the Tidewater Inc. 1997 Stock Incentive Plan.

10.11*+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options, Non-Qualified Stock Options and Restricted Stock Under the Tidewater Inc. 2001 Stock Incentive Plan.

10.12*+		Form of Stock Option and Restricted Stock Agreement for the Grant of Incentive Stock Options and Non-Qualified Stock Options Under the Tidewater Inc. 2001 Stock Incentive Plan and the Grant of Restricted Stock Under the Tidewater Inc. Employee Restricted Stock Plan.

10.13*+		Form of Restricted Stock Agreement for the Grant of Restricted Stock Under the Tidewater Inc. Employee Restricted Stock Plan.


Other Incentive Plans
10.14*+		Tidewater Inc. Second Amended and Restated Supplemental Executive Retirement Plan dated March 1, 2003.

10.14A*+		Tidewater International Supplemental Executive Retirement Plan effective November 1, 2003.

10.15+		Second Amended and Restated Employees’ Supplemental Savings Plan of Tidewater Inc. dated October 1, 1999 (filed with the Commission as Exhibit 10(d) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).

10.16*+		Tidewater Inc. Executive Medical Benefit Plan dated January 1, 2000.

10.17+		Deferred Compensation Plan for Outside Directors of Tidewater Inc., effective November 21,2002 (filed with the Commission as Exhibit 10(b) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 2002, File No. 1-6311).

10.18*+		Amended and Restated Non-Qualified Pension Plan for Outside Directors of Tidewater Inc. amended through May 31, 2001.

10.19*+		Tidewater Inc. Amended and Restated Management Annual Incentive Plan for Fiscal 2005.

10.19A		Tidewater Inc. Management Annual Incentive Plan for Fiscal 2006 (filed with the Commission as Exhibit 10.2 on Form 8-K dated June 1, 2005, File No. 1-6311).

10.20*+		Tidewater Inc. Executive Officer Annual Incentive Plan for Fiscal 2005.

10.20A		Tidewater Inc. Executive Officer Annual Incentive Plan for Fiscal 2006 (filed with the Commission as Exhibit 10.1 on Form 8-K dated June 1, 2005, File No. 1-6311).

10.21+		Restated Non-Qualified Deferred Compensation Plan and Trust Agreement as Restated October 1, 1999 between Tidewater Inc. and Merrill Lynch Trust Company of America (filed with the Commission as Exhibit 10(e) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).

10.22+		Second Restated Executives Supplemental Retirement Trust as Restated October 1, 1999 between Tidewater Inc. and Hibernia National Bank (filed with the Commission as Exhibit 10(j) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).

- 2 -


Other Compensation Arrangements
10.23*+		Summary of Compensation Arrangements With Directors.

10.24+		Summary of 2006 Executive Officers Base Salaries (filed with the Commission on Form 8-K on April 4, 2005, File No. 1-6311).

10.25+		Summary of Bonuses paid to three Executive Officers of the Company under the Tidewater Inc. 2005 Management Annual Incentive Plan, and of Bonus paid to the Company’s Chief Executive Officer under the Tidewater Inc. Executive Officer Annual Incentive Plan for fiscal year 2005 (filed with the Commission on Form 8- K on April 28, 2005, File No. 1-6311).
Change of Control Agreements
10.26+		Form of Amended and Restated Change of Control Agreement dated October 1, 1999 with three executive officers of Tidewater Inc. (filed with the Commission as Exhibit 10(c) to the company’s quarterly report on Form 10-Q for the quarter ended December 31, 1999, File No. 1-6311).
Other Exhibits
21*		Subsidiaries of the company.

23.1*		Consent of Independent Registered Accounting Firm – Deloitte & Touche LLP.

23.2*		Consent of Independent Registered Accounting Firm – Ernst & Young LLP.
Certifications
31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Filed herewith.

+	Indicates a management contract or compensatory plan or arrangement.

- 3 -

EX-10.3 2 dex103.htm AMENDED AND RESTATED 1992 STOCK OPTION PLAN Amended and Restated 1992 Stock Option Plan

Exhibit 10.3

AMENDED AND RESTATED

TIDEWATER INC.

1992 STOCK OPTION AND

RESTRICTED STOCK PLAN

(Effective November 29, 2001)

WHEREAS, Tidewater Inc., a Delaware corporation (the “Company”), amended and restated the Tidewater Inc. 1992 Stock Option and Restricted Stock Plan (the “Plan”) effective July 27, 2001;

WHEREAS, the Company further authorized an amendment to the Plan on September 27, 2001 to extend the post-retirement exercise period of options granted under the Plan on July 21, 1995 to non-employee directors and to allow for the extension of the post-retirement exercise period of options granted under the Plan to William C. O’Malley on March 26, 1996;

WHEREAS, the Company now wishes to further amend the Plan to allow the Board of Directors or the Compensation Committee of the Board to determine the post-termination exercise period for options granted under the Plan;

NOW, THEREFORE, pursuant to the power reserved to the Board in Section 21 of the Plan, Section 10 of the Plan entitled “Exercise of Options” and Section 11 of the Plan entitled “Automatic Grants to Non-Employee Directors” are hereby amended to read as set forth herein and, as amended, the Plan is hereby restated to reflect such amendments and to read in its entirety as follows:

1. Purpose

The purpose of the 1992 Stock Option and Restricted Stock Plan (the “Plan”) is to promote the interests of Tidewater Inc. (the “Company”) and its shareholders by attracting and retaining directors and key employees capable of furthering the future success of the Company and by providing such persons an additional incentive through stock ownership to continue and increase their efforts with respect to the Company or its subsidiaries. The Plan provides for granting such persons (a) options for the purchase of Common Shares of the Company (the “Shares”) and (b) Shares which are both restricted as to transferability and subject to a substantial risk of forfeiture (“Restricted Shares”).

2. Administration

The Plan shall be administered by a committee (the “Committee”) consisting of not less than two Directors appointed by the Board of Directors, each of whom shall (a) qualify as a “non-employee director” under Rule 16B-3 under the Securities Exchange Act of 1934, as in effect August 15, 1996 and (b) qualify as an “outside director under Section 162 (m) of the Internal Revenue Code of 1986, as amended. Unless otherwise determined by the Board or required by the Plan, the Compensation Committee of the Board of Directors shall be the Committee. Subject to the limitations and conditions hereinafter set forth, the

Committee shall have authority to grant options hereunder, to determine the number of Shares for which each option shall be granted and the option price or prices, to make awards of Restricted Shares, to determine the number of Restricted Shares to be granted, and to establish in its discretion the restrictions to which any such Restricted Shares shall be subject. The Committee shall have full power to construe and interpret the Plan, to establish and amend rules for its administration, and to establish in its discretion terms and conditions applicable to the exercise of options and the grant of Restricted Shares.

3. Shares Subject to the Plan

The Shares to be transferred or sold pursuant to the grant of Restricted Shares or the exercise of options granted under the Plan shall be authorized Shares, and may be issued Shares reacquired by the Company and held in its treasury or may be authorized but unissued Shares. Subject to adjustment as provided in Section 19 hereof, the aggregate number of Shares to be granted as Restricted Shares or to be delivered upon the exercise of options granted under the Plan shall not exceed 2,200,000 shares.

If an option expires or terminates for any reason during the term of the Plan and prior to the exercise in full of such option, or if Restricted Shares are forfeited as provided in the grant of such Shares, the number of Shares previously subject to but not delivered under such option or grant of Restricted Shares shall be available for the grant of options or Restricted Shares thereafter.

4. Eligibility

Options or Restricted Shares may be granted from time to time to key employees, including officers, of the Company and any subsidiary (“eligible, employees”), as defined in this Section 4, and options shall be granted automatically to non-employee Directors as provided in Section 11 hereof. From time to time, the Committee shall designate from such eligible employees those who will be granted options or Restricted Shares and, in connection therewith, the number of Shares to be covered by each grant of options or Restricted Shares. Persons granted options are referred to hereinafter as “optionees,” and persons granted Restricted Shares are referred to hereinafter as “grantees.” Nothing in the Plan, or in any grant of options or Restricted Shares pursuant to the Plan, shall confer on any person any right to continue in the employ of the Company or any of its subsidiaries, nor in any way interfere with the right of the Company or any of its subsidiaries to terminate the person’s employment at any time.

The term “subsidiary” shall mean any corporation now existing or hereafter organized or acquired (other than the Company) ‘in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the option, each of the corporations (including the Company) other than the last corporation in the unbroken chain owns stock possessing 40% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain; provided that, for all purposes in connection with the grant or exercise of ISOs, as defined in Section 5 below, “50%” shall be substituted for “40%” in the above definition.

PROVISIONS RELATING TO OPTIONS

5. Character of Options

It is the intent of the Plan that options granted hereunder shall be incentive stock options (“ISOs”) as such term is defined in Section 422A of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), to the extent and only to the extent that such options are so identified in writing in the stock option agreement relating thereto. All options not identified as ISOs at the time of grant are intended to be “nonqualified” or “nonstatutory” stock options which are not ISOs.

6. Stock Option Agreement

Each option granted under the Plan shall be evidenced by a stock option agreement which shall be executed by the Company and by the person to whom the option is granted and which shall identify as an ISO any option intended to be such. The agreement shall contain such terms and provisions, not inconsistent with the Plan, as shall be determined by the Committee.

7. Limitation on ISO Grants

The aggregate fair market value (determined on the date the ISO is granted) of the Shares with respect to which ISOs are exercisable for the first time by an optionee during any calendar year shall not exceed $100,000.

8. Option Exercise Price

The price per Share to be paid by the optionee on the date an option is exercised shall be not less than the fair market value of one Share on the date the option is granted, provided that if the option granted is an ISO and if the optionee, on the date of the option grant, owns (within the meaning of Section 425 (d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiary thereof, the price per Share to be paid by the optionee at the time an option is exercised shall be not less than 110W of the fair market value of one Share on the date the option is granted.

For purposes of this Plan, the term “fair market value” of a Share shall be the closing selling price thereof on the consolidated transaction reporting system for New York Stock Exchange issues on the date of reference or, if no Shares are traded on that date, the most recent date on which Shares are traded, provided that such determination of fair market value for ISOs shall comply with regulations issued by the Secretary of the Treasury for the purposes of determining fair market value of securities subject to an ISO plan under Section 422A of the Code.

9. Option Term

The period after which options granted under the Plan may not be exercised shall be determined by the Committee with respect to each option granted, but may not exceed ten years from the date on which the option is granted, subject to the third paragraph of Section 10 hereof, provided that in the case of any ISO granted to any optionee who, on the date of the option grant, owns (within the meaning of Section 425 (d) of the code) stock possessing more than 1O% of the total combined voting power of all classes of stock of the Company or any subsidiary thereof, the maximum such option period shall be five years rather than ten years.

10. Exercise of Options

The time or times at which or during which options granted under the Plan may be exercised, and any conditions pertaining to such exercise or to the vesting in the optionee of the right to exercise options, shall be determined by the Committee in its sole discretion.

No option granted under the Plan shall be assignable or otherwise transferable by the optionee, either voluntarily or involuntarily, except (a) by will, (b) by the laws of descent and distribution, (c) in the case of non-qualified stock options only, if permitted by the Committee and so provided in the stock option agreement or an amendment thereto, (i) pursuant to a domestic relations order, (ii) to family members, a family partnership or trust for the benefit of family members, or (iii) a to charitable institutions.

For employee optionees, an option shall lapse if an optionee’s employment by the Company or a subsidiary is terminated for any reason, provided that the option may thereafter be exercised, to the extent it was exercisable on the date of termination of employment, for such a period of time, not to exceed five years, as the Committee or Board shall specify. However, in no event may any option be exercised by anyone after the later of (a) the final date upon which the optionee could have exercised it had the optionee continued in the employment of the Company or its subsidiaries to such date, or (b) one year after the optionee’s death.

An option may be exercised only by a notice in writing complying in all respects with the applicable stock option agreement. Such notice may instruct the Company to deliver Shares due upon the exercise of the option to any registered broker or dealer approved by the Company (an “approved broker”) in lieu of delivery to the optionee. Such instructions shall designate the account into which the Shares are to be deposited. The optionee may tender such notice, properly executed by the optionee, together with the aforementioned delivery instructions, to an approved broker. The purchase price of the Shares as to which an option is exercised shall be paid in cash or by check, except that the Committee may, in its discretion, allow such payment to be by surrender of unrestricted Shares (at their fair market value on the date of exercise), or by a combination of cash, check and unrestricted Shares.

The obligation of the Company to deliver Shares upon such exercise shall be subject to all applicable laws, rules and regulations, and to such approvals by governmental agencies as may be deemed appropriate by the Committee, including, among others, such steps as counsel for the Company shall deem necessary or appropriate to comply with requirements of relevant securities laws. Such obligation shall also be subject to the condition that the Shares reserved for issuance upon the exercise of options granted under the Plan shall have been duly listed on any national securities exchange which then constitutes the principal trading market for the Shares.

11. Automatic Grants to Nonemployee Directors

During each year of the term of this Plan, each Director who is not then an employee of the Company or any subsidiary shall receive on the date of the annual shareholders meeting options to purchase 1,000 Shares. Each such option shall have a term of ten years and must be exercised within one year of termination of service as a Director, except that, in the event of termination of Board service as a result of retirement (at age 65 or later or after having completed five or more years of service on the Board), options granted to non-employee Directors under the Plan on the day of the 1995 and 1996 annual meetings of stockholders of the Company (and remaining outstanding on the date of this amendment to the Plan to extend the post-retirement exercise period) may be exercised within five years from the date of termination of Board service, but no later than ten years after the date of grant. Each such option shall become exercisable six months after the date of grant. The price per Share to be paid by the holder of such an option shall equal the fair market value of one Share on the date the option is granted. The purchase price of the Shares as to which such an option is exercised shall be paid only in cash or by certified or bank check. Any Director holding options granted under this Section 11 who is a member of the Committee shall not participate in any action of the Committee with respect to any claim or dispute involving such Director.

PROVISIONS RELATING TO RESTRICTED SHARES

12. Granting of Restricted Shares

The Committee may grant Restricted Shares to eligible employees at any time. In granting Restricted Shares, the Committee shall determine in its sole discretion the period or periods during which the restrictions on transferability applicable to such Shares will be in force (the “Restricted Period”). The Restricted Period may be the same for all such Shares granted at a particular time or to any one grantee or may be different with respect to different grantees or with respect to various of the Shares granted to the same grantee, all as determined by the Committee in its sole discretion.

Each grant of Restricted Shares under the Plan shall be evidenced by an

agreement which shall be executed by the Company and by the person to whom the Restricted Shares are granted. The agreement shall contain such terms and provisions, not inconsistent with the Plan, as shall be determined by the Committee.

13. Restrictions on Transferability

During the Restricted Period applicable to each grant of Restricted Shares, such Shares may not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, a grantee’s eventual right, if any, to such Shares may not be assigned or transferred except by will or by the laws of descent and distribution. The restrictions on the transferability of Restricted Shares imposed by this Section are referred to in this Plan as the “Transferability Restrictions.”

14. Determination of Vesting Restrictions

With respect to each grant of Restricted Shares, the Committee shall determine in its sole discretion the restrictions on vesting which will apply to the Shares for the Restricted Period, which restrictions, as initially determined and as they may be modified pursuant to the Plan, are referred to hereinafter as the “Vesting Restrictions.” By way of illustration but not by way of limitation, any such determination of Vesting Restrictions by the Committee may provide (a) that the grantee will not be entitled to any such Shares unless he or she is still employed by the Company or its subsidiaries at the end of the Restricted Period; (b) that the grantee will become vested in such Shares according to such schedule as the Committee may determine; (c) that the grantee will become vested in such Shares in any combination of the foregoing or under such other terms and conditions as the Committee in its sole discretion may determine; and (d) how any such Vesting Restrictions will be applied, modified or accelerated in the case of the grantee’s death, total and permanent disability (as determined by the Committee), or retirement.

15. Manner of Holding and Delivering Restricted Shares

Unless the Committee shall otherwise determine, each certificate issued for Restricted Shares granted hereunder will be registered in the name of the grantee and will be held by the Company with a stock power executed in blank by the grantee covering such Shares. The certificates for such Shares will remain in the possession of the Company until the earlier of the end of the applicable Restricted Period or, if the Committee has provided for earlier termination of the Transferability Restrictions following a grantee’s death, total and permanent disability, retirement, or earlier vesting of such Shares, such earlier termination of the Transferability Restrictions. At whichever time is applicable, the certificates representing the number of such Shares to which the grantee is then entitled will be delivered to the grantee free and clear of the Transferability Restrictions, provided that in the case of a grantee who is not entitled to receive the full number of such Shares evidenced by the certificates then being released from escrow

because of the application of the Vesting Restrictions, such certificates will be canceled, and anew certificate representing the Shares, if any, to which the grantee is entitled pursuant to the Vesting Restriction, will be issued and delivered to the grantee, free and clear of the Transferability Restrictions.

16. Transfer in the Event of Death, Disability or Retirement

Notwithstanding a grantee’s death, total and permanent disability, or retirement, the certificates for his or her Restricted Shares will remain in the possession of the Company and the Transferability Restrictions will continue to apply to such Shares unless the Committee determines otherwise. Upon the termination of the Transferability Restrictions, either upon any such determination by the Committee or at the end of the Applicable Restricted Period, as the case may be, the portion of such grantee’s Restricted Shares to which he or she is entitled, determined pursuant to his or her applicable Vesting Restrictions, will be awarded and delivered to the grantee or to the person or persons to whom the grantee’s rights, if any, to the Shares shall pass by will or by the applicable law of descent and distribution, as the case may be.

17. Limitations on obligation to Deliver Shares

The Company shall not be obligated to deliver any Restricted Shares free and clear, of the Transferability Restrictions until the Company has satisfied itself that such delivery complies with all laws and regulations by which the Company is bound. Furthermore, prior to receiving delivery of any Restricted Shares free of the Transferability Restrictions, the grantee or other person entitled to receive such Shares must pay the Company an amount equal to the taxes, if any, which the Company is required to withhold due to such delivery.

GENERAL PROVISIONS

18. Shareholder Rights.

Except for the Transferability Restrictions, a grantee of Restricted Shares shall have all the rights of a holder of the Shares, including the right to receive dividends paid on such Shares and the right to vote such Shares at meetings of shareholders of the Company. However, no optionee shall have any of the rights of a shareholder with respect to any Shares unless and until he or she has exercised his or her option with respect to such Shares and has paid the full purchase price therefor.

19. Changes in Shares

The aggregate number of Shares for which options or Restricted Shares may be granted or options exercised, the maximum number of Shares which, with respect to any one person at any time, may be subject to restrictions or subject to unexercised and outstanding options, and the number of Shares subject to each outstanding option or Restricted Share grant and option prices per share shall be

subject to appropriate adjustment for any changes in the number of outstanding Shares resulting from a merger, recapitalization, stock exchange, stock split, stock dividend, corporate division or other change in the Company’s corporate or capital structure.

20. Change of Control

(a) This Section 20 has been amended, effective October 1, 1999 (the “Amendment”) to read as provided herein. However, to the extent that (and only to the extent that) any right to which a grantee of outstanding options or restricted stock under the Plan is entitled prior to the effective date of the Amendment (whether under the Plan, related agreements, amendments thereto, or interpretations by the Compensation Committee) would be detrimentally affected by the Amendment, the Amendment shall not apply. By way of illustration, and not limitation, the following interpretations of the Compensation Committee with respect to an “Acceleration Date”, as defined in the Plan (and related agreements and amendments thereto) prior to the Amendment, remain in full force and effect: (i) the 30-day exercisability period following an Acceleration Date shall not be affected by the termination of employment of an optionee on the Acceleration Date or during such 30-day period, and (ii) all outstanding options, both non-qualified and incentive, shall be accelerated and become exercisable in full at the Acceleration Date (and to the extent, if any, required by section 422(d) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), accelerated incentive stock options shall thereby become non-qualified stock options).

(b) Notwithstanding any other provision of the Plan (or any provision of any agreement with respect to any grant hereunder), immediately prior to any Change of Control of the Company (as defined in Section 20(d) hereof), all stock options (whether non-qualified or incentive and whether granted to an employee or to a nonemployee Director) which are then outstanding hereunder shall become fully vested and exercisable and all Transferability Restrictions and Vesting Restrictions on Restricted Shares then outstanding hereunder shall automatically lapse and be deemed waived. As used in the immediately preceding sentence, “immediately prior” to the Change of Control shall mean sufficiently in advance of the Change of Control to permit the grantee to take all steps reasonably necessary (i) if an optionee, to exercise any such option fully and (ii) to deal with the Shares purchased under any such option and any formerly Restricted Shares on which restrictions have lapsed so that both types of Shares may be treated in the same manner in connection with the Change of Control as the Shares of other shareholders. To the extent, if any, required by section 422(d) of the Code, incentive stock options which become exercisable immediately prior to a Change of Control pursuant to this Section 20(b) shall thereby become non-qualified stock options. Notwithstanding any other provision of the Plan (or any provision of any agreement with respect to any grant hereunder), (i) any stock option which becomes exercisable pursuant to this Section 20(b) shall remain exercisable until the earlier of the end of the option term or the lapse

of the option, and (ii) any lapse and deemed waiver of Transferability Restrictions and Vesting Restrictions on Restricted Shares pursuant to this Section 20(b) shall be a permanent lapse and deemed waiver of such restrictions.

(c) If any corporation, person or other entity (other than the Company) makes a tender offer or exchange offer for shares of the Company’s common stock pursuant to which purchases are made (an “Offer”), then from and after the date of the first purchase of the Company’s common stock pursuant to the Offer (the “Acceleration Date”), all outstanding options shall automatically become fully exercisable and the Transferability Restrictions and Vesting Restrictions on Restricted Shares shall automatically be deemed waived by the Company, without the necessity of any action by any person, for a period of 30 calendar days following the Acceleration Date. Subject to the other provisions of this Section 20, following the expiration of the 30-day period, any options not exercised and any shares of the Company’s common stock issued hereunder not tendered or exchanged shall again be subject to the terms and conditions applicable prior to the Offer.”

(d) As used in this Section 20, “Change of Control” shall mean:

(i) the acquisition by any “Person” (as defined in Section 20(e) hereof) of “Beneficial Ownership” (as defined in Section 20(e) 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 (d)(i), the following shall not constitute a Change of Control:

(A) any acquisition (other than a “Business Combination” (as defined in Section 20(d)(iii) hereof) which constitutes a Change of Control under Section 20(d)(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 20(d)(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

(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 20(e) 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.

(e) As used in Section 20(d) 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 20(d)(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.

21. Amendment and Discontinuance

The Board of Directors may alter, suspend, or discontinue the Plan.

22. Governing Law

The Plan shall be applied and construed in accordance with and governed by the law of the State of Delaware, to the extent such law is not superseded by or inconsistent with federal law.

23. Effective Date and Duration of Plan

The Plan shall become effective only if approved by the holders of a majority of the Company’s Shares outstanding and entitled to vote at the annual meeting of stockholders and if so approved shall be effective from the date of such meeting. The term during which options and Restricted Shares may be granted under the Plan shall expire ten years after the date the Plan became effective.

24. Withholding

At any time that a participant is required to pay to the Company an amount required to be withheld under the applicable income tax laws in connection with the issuance of shares of Common Stock upon exercise of an option or upon the lapse of restrictions on shares of restricted stock, the participant may satisfy this obligation in whole or in part by electing (the “Election”) to have the Company withhold shares of Common Stock having a value up to the amount of the maximum applicable tax under federal (including FICA), state and local law; provided, however, that the Committee shall have the right to disapprove of any portion of a participant’s Election that is in excess of the amount required to be withheld under applicable income tax laws. The value of the shares to be withheld shall be based on the fair market value of the Common Stock on the date that the amount of tax to be withheld is required to be determined (the “Tax Date”).

Each Election must be made prior to the Tax Date. The Committee may disapprove of any Election as provided above or may suspend or terminate the right to make Elections. If a participant makes an election under Section 83 (b) of the Internal Revenue Code with respect to shares of restricted stock, an Election is not permitted to be made and the participant is required to pay the amount of the withholding tax liability to the Company in cash.

This Amended and Restated Plan is executed effective November 29, 2001.


TIDEWATER INC.

By:		/s/ Cliffe F. Laborde
		Cliffe F. Laborde
		Executive Vice President,
		Secretary and General Counsel

EX-10.5 3 dex105.htm 2001 STOCK INCENTIVE PLAN 2001 Stock Incentive Plan

Exhibit 10.5

TIDEWATER INC.

2001 STOCK INCENTIVE PLAN

1. Purpose. The purpose of the 2001 Stock Incentive Plan (the “Plan”) of Tidewater Inc. (“Tidewater”) is to increase shareholder value and to advance the interests of Tidewater and its subsidiaries (collectively, the “Company”) by furnishing stock-based economic incentives (the “Incentives”) designed to attract, retain and motivate key employees, officers and directors and to strengthen the mutuality of interests between such employees, officers and directors and Tidewater’s shareholders. Incentives consist of opportunities to purchase or receive shares of common stock, $.10 par value per share, of Tidewater (the “Common Stock”), on terms determined under the Plan. As used in the Plan, the term “subsidiary” means any corporation, limited liability company or other entity, of which Tidewater owns (directly or indirectly) within the meaning of Section 425(f) of the Internal Revenue Code of 1986, as amended (the “Code”), 50% or more of the total combined voting power of all classes of stock, membership interests or other equity interests issued thereby.

2. Administration.

2.1. Composition. The Plan shall be administered by the Compensation Committee of the Board of Directors of Tidewater or by a subcommittee thereof (the “Committee”). The Committee shall consist of not fewer than two members of the Board of Directors, each of whom shall (a) qualify as a “non-employee director” under Rule 16b-3 under the Securities Exchange Act of 1934 (the “1934 Act”) or any successor rule, and (b) qualify as an “outside director” under Section 162(m) of the Code.

2.2. Authority. The Committee shall have plenary authority to award Incentives under the Plan, to interpret the Plan, to establish any rules or regulations relating to the Plan that it determines to be appropriate, to enter into agreements with or provide notices to participants as to the terms of the Incentives (the “Incentive Agreements”) and to make any other determination that it believes necessary or advisable for the proper administration of the Plan. Its decisions in matters relating to the Plan shall be final and conclusive on the Company and participants. The Committee may delegate its authority hereunder to the extent provided in Section 3 hereof. Directors who are not also employees of the Company (“Outside Directors”) may receive awards under the Plan only as specifically provided in Section 9 hereof.

3. Eligible Participants. Key employees and officers of the Company (including officers who also serve as directors of the Company) shall become eligible to receive Incentives under the Plan when designated by the Committee. Employees may be designated individually or by groups or categories, as the Committee deems appropriate. With respect to participants not subject to Section 16 of the 1934 Act or Section 162(m) of the Code, the Committee may delegate to appropriate officers of the Company its authority to designate participants, to determine the size and type of Incentives to be received by those participants and to set and modify the terms of the Incentives; provided, however, that the per share exercise price of any options granted by an officer, rather than by the Committee, shall be equal to the Fair Market Value (as defined below). Outside Directors may participate in the Plan only as specifically provided in Section 9 hereof.


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4. Types of Incentives. Incentives may be granted under the Plan to eligible participants in the forms of (a) incentive stock options; (b) non-qualified stock options; (c) restricted stock and (d) Other Stock-Based Awards (as defined in Section 8 hereof).

5. Shares Subject to the Plan.

5.1. Number of Shares. Subject to adjustment as provided in Section 10.5, the maximum number of shares of Common Stock that may be delivered to participants and their beneficiaries under the Plan shall be 2,850,000 shares.

5.2. Share Counting. To the extent any shares of Common Stock covered by a stock option are not delivered to a participant or beneficiary because the Option is forfeited or canceled, or shares of Common Stock are not delivered because an Incentive is paid or settled in cash or used to satisfy the applicable tax withholding obligation, such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Common Stock available for delivery under this Plan. In the event that shares of Common Stock are issued as an Incentive and thereafter are forfeited or reacquired by the Company pursuant to rights reserved upon issuance thereof, such forfeited and reacquired Shares may again be issued under the Plan. If the exercise price of any stock option granted under the Plan or the applicable withholding tax obligation is satisfied by tendering shares of Common Stock to the Company (by either actual delivery or by attestation), only the number of shares of Common Stock issued net of the shares of Common Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares of Common Stock available for delivery under the Plan.

5.3. Limitations on Number of Shares. Subject to Section 10.5, the following additional limitations are imposed under the Plan:

A. The maximum number of shares of Common Stock that may be issued upon exercise of stock options intended to qualify as incentive stock options under Section 422 of the Code shall be 2,850,000 shares. Notwithstanding any other provision herein to the contrary, (i) all shares issuable under incentive stock options shall be counted against this limit and (ii) shares that are issued and are later forfeited, cancelled or reacquired by the Company, shares withheld to satisfy withholding tax obligations and shares delivered in payment of the Option price shall have no effect on this limitation.

B. The maximum number of shares of Common Stock that may be covered by Incentives granted under the Plan to any one individual during any one calendar-year period shall be 500,000.

C. The maximum number of shares of Common Stock that may be issued as restricted stock and Other Stock-Based Awards (as defined in Section 8) shall be 300,000 shares.

5.4. Type of Common Stock. Common Stock issued under the Plan may be authorized and unissued shares or issued shares held as treasury shares.

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6. Stock Options. A stock option is a right to purchase shares of Common Stock from Tidewater. Stock options granted under the Plan may be incentive stock options (as such term is defined in Section 422 of the Code) or non-qualified stock options. Any option that is designated as a non-qualified stock option shall not be treated as an incentive stock option. Each stock option granted by the Committee under this Plan shall be subject to the following terms and conditions:

6.1. Price. The exercise price per share shall be determined by the Committee, subject to adjustment under Section 10.5; provided that in no event shall the exercise price be less than the Fair Market Value of a share of Common Stock on the date of grant, except in case of a stock option granted in assumption or substitution for an outstanding award of a company acquired by the Company or with which the Company combines.

6.2. Number. The number of shares of Common Stock subject to the option shall be determined by the Committee, subject to Section 5 and subject to adjustment as provided in Section 10.5.

6.3. Duration and Time for Exercise. The term of each stock option shall be determined by the Committee. Each stock option shall become exercisable at such time or times during its term as shall be determined by the Committee. Notwithstanding the foregoing, the Committee may accelerate the exercisability of any stock option at any time, in addition to the automatic acceleration of stock options under Section 10.11.

6.4. Manner of Exercise. A stock option may be exercised, in whole or in part, by giving written notice to the Company, specifying the number of shares of Common Stock to be purchased. The exercise notice shall be accompanied by the full purchase price for such shares. The option price shall be payable in United States dollars and may be paid by (a) cash; (b) uncertified or certified check; (c) by delivery of shares of Common Stock which, unless otherwise determined by the Committee, shall have been held by the optionee for at least six months, and which shares shall be valued for this purpose at the Fair Market Value on the business day immediately preceding the date such option is exercised; or (d) in such other manner as may be authorized from time to time by the Committee.

6.5. Incentive Stock Options. Notwithstanding anything in the Plan to the contrary, the following additional provisions shall apply to the grant of stock options that are intended to qualify as incentive stock options (as such term is defined in Section 422 of the Code):

A. Any incentive stock option agreement authorized under the Plan shall contain such other provisions as the Committee shall deem advisable, but shall in all events be consistent with and contain or be deemed to contain all provisions required in order to qualify the options as incentive stock options.

B. All incentive stock options must be granted within ten years from the date on which this Plan is adopted by the Board of Directors.

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C. Unless sooner exercised, all incentive stock options shall expire no later than ten years after the date of grant.

D. No incentive stock options shall be granted to any participant who, at the time such option is granted, would own (within the meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the employer corporation or of its parent or subsidiary corporation.

E. The aggregate Fair Market Value (determined with respect to each incentive stock option as of the time such incentive stock option is granted) of the Common Stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year (under the Plan or any other plan of Tidewater or any of its subsidiaries) shall not exceed $100,000. To the extent that such limitation is exceeded, such options shall not be treated, for federal income tax purposes, as incentive stock options.

7. Restricted Stock.

7.1. Grant of Restricted Stock. The Committee may award shares of restricted stock to such officers and key employees as the Committee determines pursuant to the terms of Section 3. An award of restricted stock shall be subject to such restrictions on transfer and forfeitability provisions and such other terms and conditions, including the attainment of specified performance goals, as the Committee may determine, subject to the provisions of the Plan. To the extent restricted stock is intended to qualify as “performance-based compensation” under Section 162(m) of the Code (“Section 162(m)”), it must be granted subject to the attainment of performance goals as described in Section 7.2 below and meet the additional requirements imposed by Section 162(m).

7.2 Performance-Based Restricted Stock. To the extent that restricted stock granted under the Plan is intended to qualify as “performance-based compensation” under Section 162(m), the performance goals pursuant to which the restricted stock shall vest shall be any or a combination of the following performance measures applied to the Company, Tidewater, a division or a subsidiary: earnings per share, return on assets, an economic value added measure, shareholder return, earnings, stock price, return on equity, return on total capital, safety performance, reduction of expenses or increase in cash flow. For any performance period, such performance objectives may be measured on an absolute basis or relative to a group of peer companies selected by the Committee, relative to internal goals or relative to levels attained in prior years. If the performance-based restricted stock is intended to qualify as performance-based compensation under Section 162(m), the Committee may not waive any of the pre-established performance goal objectives, except for an automatic waiver under Section 10.10 hereof, or as may be provided by the Committee in the event of death or disability.

7.3. The Restricted Period. At the time an award of restricted stock is made, the Committee shall establish a period of time during which the transfer of the shares of restricted stock shall be restricted and after which the shares of restricted stock shall be vested (the “Restricted Period”). Except for shares of restricted stock that vest based on the attainment of performance goals, the Restricted Period shall be a minimum of three years, with incremental

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vesting of portions of the award over the three-year period permitted. If the vesting of the shares of restricted stock is based upon the attainment of performance goals, a minimum Restricted Period of one year or more is permitted, with incremental vesting of portions of the award over the one-year period permitted. Each award of restricted stock may have a different Restricted Period. The expiration of the Restricted Period shall also occur as provided under Section 10.3 and under the conditions described in Section 10.10 hereof.

7.4. Escrow. The participant receiving restricted stock shall enter into an Incentive Agreement with the Company setting forth the conditions of the grant. Certificates representing shares of restricted stock shall be registered in the name of the participant and deposited with the Company, together with a stock power endorsed in blank by the participant. Each such certificate shall bear a legend in substantially the following form:

The transferability of this certificate and the shares of Common Stock represented by it are subject to the terms and conditions (including conditions of forfeiture) contained in the Tidewater Inc. 2001 Stock Incentive Plan (the “Plan”), and an agreement entered into between the registered owner and Tidewater Inc. thereunder. Copies of the Plan and the agreement are on file at the principal office of the Company.

7.5. Dividends on Restricted Stock. Any and all cash and stock dividends paid with respect to the shares of restricted stock shall be subject to any restrictions on transfer, forfeitability provisions or reinvestment requirements as the Committee may, in its discretion, prescribe in the Incentive Agreement.

7.6. Forfeiture. In the event of the forfeiture of any shares of restricted stock under the terms provided in the Incentive Agreement (including any additional shares of restricted stock that may result from the reinvestment of cash and stock dividends, if so provided in the Incentive Agreement), such forfeited shares shall be surrendered and the certificates cancelled. The participants shall have the same rights and privileges, and be subject to the same forfeiture provisions, with respect to any additional shares received pursuant to Section 10.5 due to a recapitalization, merger or other change in capitalization.

7.7. Expiration of Restricted Period. Upon the expiration or termination of the Restricted Period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to the restricted stock shall lapse and a stock certificate for the number of shares of restricted stock with respect to which the restrictions have lapsed shall be delivered, free of all such restrictions and legends, except any that may be imposed by law, to the participant or the participant’s estate, as the case may be.

7.8. Rights as a Shareholder. Subject to the terms and conditions of the Plan and subject to any restrictions on the receipt of dividends that may be imposed in the Incentive Agreement, each participant receiving restricted stock shall have all the rights of a shareholder with respect to shares of stock during the Restricted Period, including without limitation, the right to vote any shares of Common Stock.

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8. Other Stock-Based Awards.

8.1 Grant of Other Stock-Based Awards. The Committee may grant to eligible participants “Other Stock-Based Awards,” which shall consist of awards, other than options or restricted stock provided for in Sections 6 and 7, the value of which is based in whole or in part on the value of shares of Common Stock. Other Stock-Based Awards may be awards of shares of Common Stock or may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of, or appreciation in the value of, Common Stock (including, without limitation, securities convertible or exchangeable into or exercisable for shares of Common Stock), as deemed by the Committee consistent with the purposes of this Plan. The Committee shall determine the terms and conditions of any Other Stock-Based Award (including which rights of a shareholder, if any, the recipient shall have with respect to Common Stock associated with any such award) and may provide that such award is payable in whole or in part in cash. An Other Stock-Based Award may be subject to the attainment of such specified performance goals or targets as the Committee may determine, subject to the provisions of this Plan. To the extent that an Other Stock-Based Award is intended to qualify as “performance-based compensation” under Section 162(m), it must meet the additional requirements imposed thereby.

8.2 Performance-Based Other Stock-Based Awards. Any grant of an Other Stock-Based Award that is intended to qualify as “performance-based compensation” under Section 162(m) shall be conditioned on the achievement of one or more performance goals. The performance goals pursuant to which the Other Stock-Based Award shall vest shall be any or a combination of the following measures applied to the Company, Tidewater, a subsidiary or a division: earnings per share, return on assets, an economic value added measure, shareholder return, earnings, stock price, return on equity, return on total capital, safety performance, reduction of expenses or increase in cash flow. For any performance period, such performance objectives may be measured on an absolute basis or relative to a group of peer companies selected by the Committee, relative to internal goals or relative to levels attained in prior years. For grants of Other Stock-Based Awards intended to qualify as “performance-based compensation,” the grants of Other Stock-Based Awards and the establishment of performance measures shall be made during the period required under Section 162(m).

8.3 Limitations. Other Stock-Based Awards granted under this Section 8 shall be subject to vesting periods that are equivalent in length to the Restricted Periods for restricted stock described in Section 7.3 hereof, except that the Committee may make special awards under this Section 8 with respect to an aggregate of no more than 100,000 shares of Common Stock, as adjusted under Section 10.5, which special awards shall not be subject to the minimum vesting period requirements described in Section 7.3.

9. Stock Options for Outside Directors.

9.1 Grant of Options. During the period beginning on the day following the 2001 annual meeting of stockholders and ending on the day of the 2002 annual meeting of stockholders and during each period between annual meetings thereafter, for as long as the Plan remains in effect and shares of Common Stock remain available for issuance hereunder, each Outside Director may be granted non-qualified stock options to purchase up to 5,000 shares of Common Stock, the exact number of which shall be set by the Committee.

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9.2 Exercisability of Stock Options. The stock options granted to Outside Directors under this Section 9 shall be exercisable six months after the date of grant and shall expire no later than ten years following the date of grant.

9.3 Exercise Price. The Exercise Price of the Stock Options granted to Outside Directors shall be equal to the Fair Market Value, as defined in the Plan, of a share of Common Stock on the date of grant. The Exercise Price may be paid as provided in Section 6.4 hereof.

9.4 Exercise After Termination of Board Service. In the event an Outside Director ceases to serve on the Board, the stock options granted hereunder must be exercised, to the extent otherwise exercisable at the time of termination of Board service, within one year from termination of Board service; provided, however, that

A. In the event of termination of Board service as a result of death or disability, the stock options must be exercised within two years from the date of termination of Board service; and

B. In the event of termination of Board service as a result of retirement (at age 65 or later or after having completed five or more years of service on the Board), the stock options must be exercised within five years from the date of termination of Board service;

and further provided, that no stock options may be exercised later than ten years after the date of grant.

10. General.

10.1. Duration. Subject to Section 10.9, the Plan shall remain in effect until all Incentives granted under the Plan have either been satisfied by the issuance of shares of Common Stock or otherwise or been terminated under the terms of the Plan and all restrictions imposed on shares of Common Stock in connection with their issuance under the Plan have lapsed.

10.2. Transferability. No Incentives granted hereunder may be transferred, pledged, assigned or otherwise encumbered by a participant except: (a) by will; (b) by the laws of descent and distribution; (c) pursuant to a domestic relations order, as defined in the Code, if permitted by the Committee and so provided in the Incentive Agreement or an amendment thereto; or (d) as to options only, if permitted by the Committee and so provided in the Incentive Agreement or an amendment thereto, (i) to Immediate Family Members, (ii) to a partnership in which Immediate Family Members, or entities in which Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole partners, (iii) to a limited liability company in which Immediate Family Members, or entities in which Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole members, or (iv) to a

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trust for the sole benefit of Immediate Family Members. “Immediate Family Members” shall be defined as the spouse and natural or adopted children or grandchildren of the participant and their spouses. To the extent that an incentive stock option is permitted to be transferred during the lifetime of the participant, it shall be treated thereafter as a nonqualified stock option. Any attempted assignment, transfer, pledge, hypothecation or other disposition of Incentives, or levy of attachment or similar process upon Incentives not specifically permitted herein, shall be null and void and without effect.

10.3. Effect of Termination of Employment or Death. Except as provided in Section 9.4 with respect to Outside Directors, in the event that a participant ceases to be an employee of the Company for any reason, including death, disability, early retirement or normal retirement, any Incentives may be exercised, shall vest or shall expire at such times as may be determined by the Committee and provided in the Incentive Agreement. The Committee has complete authority to modify the treatment of an Incentive in the event of termination of employment of a participant by means of an amendment to the Incentive Agreement. Consent of the participant to the modification is required only if the modification materially impairs the rights previously provided to the participant in the Incentive Agreement.

10.4. Additional Condition. Anything in this Plan to the contrary notwithstanding: (a) the Company may, if it shall determine it necessary or desirable for any reason, at the time of award of any Incentive or the issuance of any shares of Common Stock pursuant to any Incentive, require the recipient of the Incentive, as a condition to the receipt thereof or to the receipt of shares of Common Stock issued pursuant thereto, to deliver to the Company a written representation of present intention to acquire the Incentive or the shares of Common Stock issued pursuant thereto for his own account for investment and not for distribution; and (b) if at any time the Company further determines, in its sole discretion, that the listing, registration or qualification (or any updating of any such document) of any Incentive or the shares of Common Stock issuable pursuant thereto is necessary on any securities exchange or under any federal or state securities or blue sky law, or that the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with the award of any Incentive, the issuance of shares of Common Stock pursuant thereto, or the removal of any restrictions imposed on such shares, such Incentive shall not be awarded or such shares of Common Stock shall not be issued or such restrictions shall not be removed, as the case may be, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company.

10.5. Adjustment. In the event of any merger, consolidation or reorganization of the Company with any other corporation or corporations, there shall be substituted for each of the shares of Common Stock then subject to the Plan, including shares subject to restrictions, options or achievement of performance objectives, the number and kind of shares of stock, other securities or property (including cash) to which the holders of the shares of Common Stock are entitled pursuant to the transaction. In the event of any recapitalization, stock dividend, stock split, combination of shares or other similar change in the Common Stock, the number of shares of Common Stock then subject to the Plan, including shares subject to outstanding Incentives, and all limitations on share issuances imposed by Section 5.3 hereof shall be adjusted in proportion to the change in outstanding shares of Common Stock. In the event of any such adjustments, the purchase price of any option and the performance objectives of any Incentive,

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shall also be adjusted as and to the extent appropriate, in the reasonable discretion of the Committee, to provide participants with the same relative rights before and after such adjustment. No substitution or adjustment shall require the Company to issue a fractional share under the Plan and the substitution or adjustment shall be limited by deleting any fractional share.

10.6. Withholding.

A. The Company shall have the right to withhold from any payments made or stock issued under the Plan or to collect as a condition of payment, issuance or vesting, any taxes required by law to be withheld. At any time that a participant is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with the lapse of restrictions on Common Stock or the exercise of an option, the participant may, subject to disapproval by the Committee, satisfy this obligation in whole or in part by electing (the “Election”) to deliver currently owned shares of Common Stock or to have the Company withhold shares of Common Stock, in each case having a value equal to the minimum statutory amount required to be withheld under federal, state and local law. The value of the shares to be delivered or withheld shall be based on the Fair Market Value of the Common Stock on the date that the amount of tax to be withheld shall be determined (“Tax Date”).

B. Each Election must be made prior to the Tax Date. The Committee may disapprove of any Election, may suspend or terminate the right to make Elections, or may provide with respect to any Incentive that the right to make Elections shall not apply to such Incentive. If a participant makes an election under Section 83(b) of the Code with respect to shares of restricted stock, an Election to have shares withheld to satisfy withholding taxes is not permitted to be made.

10.7. No Continued Employment. No participant under the Plan shall have any right, because of his or her participation, to continue in the employ of the Company for any period of time or to any right to continue his or her present or any other rate of compensation.

10.8. Deferral Permitted. Payment of an Incentive may be deferred at the option of the participant if permitted in the Incentive Agreement.

10.9. Amendments to or Termination of the Plan. The Board may amend or discontinue this Plan at any time; provided, however, that no such amendment may:

A. without the approval of the shareholders, (i) increase, subject to adjustments permitted herein, the maximum number of shares of Common Stock that may be issued through the Plan, (ii) materially increase the benefits accruing to participants under the Plan or (iii) materially expand the classes of persons eligible to participate in this Plan, or

B. materially impair, without the consent of the recipient, an Incentive previously granted.

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10.10. Change of Control; Tender Offer or Exchange Offer.

A. Notwithstanding any other provision of the Plan (or any provision of any agreement with respect to any grant hereunder), immediately prior to any Change of Control of the Company (as defined in Section 10.10(C) hereof), all stock options (whether non-qualified or incentive and whether granted to an employee or to an Outside Director) which are then outstanding hereunder shall become fully vested and exercisable and all restrictions and limitations on shares of restricted stock or Other Stock-Based Awards then outstanding hereunder shall automatically lapse and all performance criteria and other conditions relating to the payment of Incentives shall automatically be deemed to be achieved or waived by the Company. As used in the immediately preceding sentence, ‘immediately prior’ to the Change of Control shall mean sufficiently in advance of the Change of Control to permit the grantee to take all steps reasonably necessary (i) if an optionee, to exercise any such option fully and (ii) to deal with the shares purchased or acquired under any such option or any Other Stock-Based Award and any formerly restricted shares on which restrictions have lapsed so that all types of shares may be treated in the same manner in connection with the Change of Control as the shares of Common Stock of other shareholders. To the extent, if any, required by section 422(d) of the Code, incentive stock options which become exercisable immediately prior to a Change of Control pursuant to this Section 10.10(A) shall thereby become non-qualified stock options. Notwithstanding any other provision of the Plan, including, without limitation, Section 10.10(B) hereof (or any provision of any agreement with respect to any grant hereunder), (i) any stock option which becomes exercisable pursuant to this Section 10.10(A) shall remain exercisable until the earlier of the end of the option term or the lapse of the option, and (ii) any lapse and deemed waiver of restrictions and limitations on any shares of restricted stock and any Other Stock-Based Awards pursuant to this Section 10.10(A) shall be a permanent lapse and deemed waiver of such restrictions and limitations.

B. If any corporation, person or other entity (other than the Company) makes a tender offer or exchange offer for shares of the Common Stock pursuant to which purchases are made (an “Offer”), then from and after the date of the first purchase of the Common Stock pursuant to the Offer (the “Acceleration Date”), all outstanding options shall automatically become fully exercisable, all restrictions or limitations on any Incentives shall lapse and all performance criteria and other conditions relating to the payment of Incentives shall be deemed to be achieved or waived by the Company, without the necessity of any action by any person, for a period of 30 calendar days following the Acceleration Date. Subject to the other provisions of this Section 10.10, following the expiration of the 30-day period, any options not exercised and any shares of Common Stock issued hereunder not tendered or exchanged shall again be subject to the terms and conditions applicable prior to the Offer.

C. As used in this Section 10.10, ‘Change of Control’ shall mean:

(i) the acquisition by any ‘Person’ (as defined in Section 10.10(D) hereof) of ‘Beneficial Ownership’ (as defined in Section 10.10(D) hereof) of 30% or more of the outstanding shares of the Common Stock, or 30%

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or more of the combined voting power of the Company’s then outstanding securities; provided, however, that for purposes of this subsection (C)(i), the following shall not constitute a Change of Control:

(a) any acquisition (other than a ‘Business Combination’ (as defined in Section 10.10(C)(iii) hereof) which constitutes a Change of Control under Section 10.10(C)(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 10.10(C)(iii) hereof; or

(ii) individuals who, as of the date of adoption of the Plan by the Board (the “Adoption Date”), 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 Adoption Date 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 10.10(D) hereof), and

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(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.

D. As used in Section 10.10(C) 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 (a) the power to vote, or direct the voting of, the security, and/or (b) 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 10.10(C)(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.

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10.11. Definition of Fair Market Value. Whenever “Fair Market Value” of Common Stock shall be determined for purposes of this Plan, it shall be the closing sale price on the consolidated transaction reporting system for New York Stock Exchange issues on the date of reference for a share of the Common Stock, or if no sale of the Common Stock shall have been made on that day, on the next preceding day on which there was a sale of the Common Stock.

10.12 Loans to Optionees. In the event of a Change of Control of the Company, as defined in Section 10.10, in connection with which a participant’s employment with the Company will be terminated and the participant is precluded for any reason from selling shares of Common Stock, the Company shall, in connection with the exercise of an option, if requested by the participant, extend a loan to the participant in the maximum amount of the exercise price of the options to be exercised, plus the maximum tax liability that may be incurred in connection with the option exercise. Any such loan shall be unsecured, shall be on market terms and shall be payable in full no later than thirty days after the termination of the period during which the participant is precluded from selling shares of Common Stock. Any participant to whom a loan is extended hereunder shall, if requested by the Company, agree in writing not to sell shares of Common Stock for such period as shall be requested, it being understood that the Company’s request that the participant not sell shares of Common Stock shall only be invoked to the extent necessary to preserve or recognize pooling-of-interests accounting treatment, tax-free reorganization status, or comparable corporate benefits from making such a request.

This Plan is executed effective the 21st day of November, 2001.


TIDEWATER INC.

By:		/s/ Cliffe F. Laborde
		Cliffe F. Laborde
		Executive Vice President,
		Secretary and General Counsel

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EX-10.7 4 dex107.htm FORM OF STOCK OPTION AND RESTRICTED STOCK AGREEMENT Form of Stock Option and Restricted Stock Agreement

Exhibit 10.7

STOCK OPTION AGREEMENT

Under the Tidewater 1992 Stock Option and

Restricted Stock Plan

THIS AGREEMENT is agreed to and entered into as of March 19, 1997 by and between TIDEWATER INC. (the “Company”) and (the “Optionee”).

1. Stock Option. Pursuant to the Company’s 1992 Stock Option and Restricted Stock Plan (the “Plan”) and subject to the terms and conditions of this Agreement, the Company hereby grants to Optionee the option (the “Option”) to purchase up to shares of the Company’s common stock, par value $.10 per share, to be issued upon the exercise hereof, fully paid and nonassessable. The shares granted herein are designated either “incentive stock options” or “nonqualified stock options”, pursuant to Sections 5 and 6 of the Plan.

2. Exercise of Option. The option to purchase provided in Paragraph 1 may be exercised in amounts up to the number of shares specified in Paragraph 3 below, during the time periods therein indicated by written notice delivered to the Company. Such notice shall:

State the number of shares with respect to which the option is being exercised.

Specify a date (the “Option Exercise Date”), not less than fifteen days after the date of such notice, as the date on which the shares will be taken up and payment made therefor in cash, certified or bank cashier’s check, or, within the sole discretion of the Committee described in the Plan, by the delivery of Company common stock of the same class as the class subject to option under this Agreement. (Any such shares so delivered by an Optionee in payment for the exercise of a stock option are deemed to have a value equivalent to the closing price reported on the New York Stock Exchange consolidated tape on the Option Exercise Date.)

State Optionee’s preference for the method of payment. If Optionee’s preference for payment includes the delivery of already owned stock for all or any part of the option exercised, the Committee described in the Plan shall consider Optionee’s request and notify Optionee of its determination prior to the transaction date designated in Optionee’s notice whenever possible.

If any law or regulation requires the Company to take any action with respect to the shares specified in such notice prior to delivery, then the date for the delivery of such shares against payment therefor shall be extended for the period necessary to take such action. In the event of any failure to take up and pay for the number of shares

specified in such notice on the date set forth therein, as the same may be extended as provided above, Optionee may withdraw such notice, and the option as to such shares covered by the notice shall continue as though the notice were never given or made.

3. When Exercisable. The Option hereby granted may be exercised according to the following schedule, as to the number of incentive stock option and/or nonqualified stock option shares indicated:

Date

Exercisable

Incentive Stock Option

Non-Qualified Stock

Option Shares

All amounts shall be cumulative, and Optionee may exercise the option at any time after the date indicated. In no event shall any option hereby granted be exercisable after ten years from the date of this Agreement.

4. Purchase Price. The purchase price per share shall be $43.625 for each share purchased pursuant to exercise of this Option or any part hereof.

5. Employment Condition. Except as otherwise provided in Sections 6 or 8d of the Agreement or Section 20 of the Plan, this option shall be exercisable only if the Optionee is an employee of the Company at the time of exercise. However, the Company shall not be obligated to retain the Optionee in its employ.

6. Termination of Employment or Death. In the event of Optionee’s termination of employment in any manner other than retirement or death prior to the exercise of the option hereby granted, then any unexercised option or unexercised portion thereof hereunder shall lapse. If Optionee’s employment is terminated by reason of retirement (be it early, normal or deferred retirement as those terms are understood under the Company’s Pension Plan) within the option period, any unexercised option or unexercised portion thereof may be exercised by the Optionee at any time within one year following the effective date of retirement, if otherwise exercisable by the Optionee at the date of retirement, but not thereafter. If Optionee should die while he is an employee of the Company or any subsidiary of the Company, any option or unexercised portion thereof granted to him, if otherwise exercisable by the Optionee at the date of death, may be exercised by his personal representatives, heirs or legatees (according to the disposition made by the Optionee at his death) at any time prior to the expiration of one year from the date of death of the Optionee.

7. Listing. The Company shall not be required to issue or deliver any certificate for its capital shares purchased upon the exercise of this Option prior to the admission of such shares to listing on any stock exchange on which the shares of the Company may at that time be listed. In the event of the exercise of this Option with respect to any shares subject hereto, the Company shall make prompt application for such listing.

8. Adjustments in Stock. The following rules shall apply for adjustments in stock for the Option provided in Paragraph 1:

Stock Dividends. If a dividend shall be declared upon Company Stock payable in shares of said stock, the number of shares of Company Stock subject to this Option shall be adjusted by adding to each such share the number of shares which would be distributable thereon if such share had been outstanding on the date fixed for determining the shareholders entitled to receive such stock dividend.

Reorganization. Etc. In the event that the outstanding shares of Company Stock shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, whether through reorganization, recapitalization, stock split-up, combination of shares, merger or consolidation, or otherwise, then there shall be substituted for each share of Company Stock subject to this Option the number and kind of shares of stock or other securities which would have been substituted therefor if such share had been outstanding on the date fixed for determining the shareholders entitled to receive such substituted stock or other securities.

Other Changes in Stock. In the event there shall be any changes, other than as specified in subparagraphs a. and b. of this Paragraph 8, in the number or kind of outstanding shares of Company Stock or of any stock or other securities into which such Company Stock shall be changed or for which it shall have been exchanged, then and if the Board of Directors shall in its discretion determine that such change equitably requires an adjustment in the number or kind of shares subject to this Option, such adjustments shall be made by the Board of Directors and shall be effective and binding for al purposes of the Agreement.

Acceleration. The date the Option is exercisable is subject to acceleration as provided in Section 20 of the Plan which is incorporated herein by reference. In addition to all events described in Section 20 of the Plan pursuant to which Options become exercisable in full, the Option shall be exercisable in full, whether or not otherwise exercisable, for a period of 30 calendar days from the Acceleration Date, as defined below:

The “Acceleration Date” is the date upon which there occurs an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of more than 30% of the Company’s outstanding shares of common stock (“Shares”); except

(a)

any acquisition of Shares directly from the Company,

(b)

any acquisition of Shares by the Company,

(c)

any acquisition of Shares 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 Shares by any corporation pursuant to a definitive agreement to merge or consolidate the Company with or into another corporation or to sell all or otherwise dispose of all or substantially all of the Company’s assets (a “Business Combination”), if, following such Business Combination,

(i) all or substantially all of 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 I 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 corporation resulting from such Business Combination (which, for purposes of this paragraph (i) and paragraphs (ii) and (iii), shall include a corporation which as a result of such transaction controls the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), and

(ii) except to the extent that such ownership existed prior to the Business Combination, no person (excluding any corporation resulting from such Business Combination or any employee benefit plan or related trust of the Company or such corporation resulting from such Business Combination) 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

(iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination 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.

(e)

General Adjustment Rules. No adjustment or substitution provided for in this paragraph shall require the Company to sell a fractional share under this Agreement, and the total substitution or adjustment with respect to this Agreement shall be limited by deleting any fractional share. In the case of any such substitution or adjustment, the option price per share in each such stock option agreement shall be equitably adjusted by the Company to reflect the greater or lesser number of shares of stock or other securities into which the stock subject to the Option may have been changed.

9. No Rights to Option Stock. The Optionee shall have no rights as a shareholder in respect of shares to which the Option provided in Paragraph 1 shall not have been exercised and payment made as herein provided, and he shall have no rights with respect to such shares not expressly conferred by this Agreement. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date such stock certificate is issued except as is made pursuant to Paragraph 8 above.

10. Shares Reserved. The Company shall at all times during the term of this Agreement reserve and keep available such number of its common shares as will be sufficient to satisfy the requirements of this Agreement, and the Company shall pay all fees and expenses necessarily incurred by the Company in connection with issuance of such shares.

11. Nonassignabilitv. This Option shall not be encumbered or disposed of in whole or in part. No Option shall be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, the Option shall be exercisable only by him.

12. Effect Upon Employment. This Agreement shall not prevent the Company from terminating the employment of the Optionee at any time.

13. Compliance with Securities laws. It is the intention of the Company to effect full compliance with all securities and other applicable laws in respect of the sale of shares pursuant to the exercise of Options hereunder and subsequent resales by the Optionee. The Company shall not be required to sell and deliver shares hereunder upon exercise of this Option in whole or in part until the Optionee shall have made such representations and agreed to the legending of stock certificates in a fashion as may reasonably be required by the Company’s counsel to effect compliance with all applicable securities or other laws.

14. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the successors, executors, administrators and heirs of the respective parties.

15. Inconsistent Provisions and Interpretation of Plan Provisions. The shares granted hereby are subject to the provisions of the Plan as in effect on the date hereof and as it may be amended. In the event any provision of this Agreement conflicts with a provision of the Plan, the Plan provision shall control. The Committee has confirmed that (a) the proper interpretation of the Plan is that the 30-day exercisability period

provided for therein in the event of a change of control of the Company, as described therein shall not be affected by the termination of employment of the optionee at the time of the change of control or during such 30-day period and (b) the proper interpretation of §7 of the Plan is that the Option, whether non-qualified or incentive, shall be accelerated and exercisable in full upon a change of control.

16. Force and Effect. The various provisions of this Agreement are severable in their entirety. Any determination of invalidity or unenforceability of anyone provision shall have no effect on the continuing force and effect of the remaining provisions of this Agreement.

IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first above written.


TIDEWATER INC.

By:
President and Chief Executive Officer



By:

EX-10.10 5 dex1010.htm FORM OF STOCK OPTION AND RESTRICTED STOCK AGREEMENT Form of Stock Option and Restricted Stock Agreement

Exhibit 10.10

STOCK OPTION AND RESTRICTED STOCK AGREEMENT

FOR THE GRANT OF INCENTIVE STOCK OPTIONS AND

NON-QUALIFIED STOCK OPTIONS UNDER THE

TIDEWATER INC. 2001 STOCK INCENTIVE PLAN

AND THE GRANT OF RESTRICTED STOCK UNDER THE

TIDEWATER INC. 1997 STOCK INCENTIVE PLAN

THIS AGREEMENT is entered into as of March 30, 2005, by and between Tidewater Inc., a Delaware corporation (“Tidewater”), and (the “Employee”).

WHEREAS, the Employee is a key employee of Tidewater or one of its subsidiaries and Tidewater considers it desirable and in its best interest that the Employee be given an added incentive to advance the interests of Tidewater by possessing an option to purchase shares of the common stock of Tidewater, $.10 par value per share (the “Common Stock”), in accordance with the Tidewater Inc. 2001 Stock Incentive Plan (the “2001 Plan”) and restricted shares of Common Stock in accordance with the Tidewater Inc. 1997 Stock Incentive Plan (the “1997 Plan” and, collectively with the 2001 Plan, the “Plans”). Tidewater and its subsidiaries shall be collectively referred to herein as the “Company.”

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as follows:

Stock Options

1.1 Grant of Options. Tidewater hereby grants to the Employee effective March 30, 2005 (the “Date of Grant”) the right, privilege and option to purchase shares of Common Stock (the “Option”) at an exercise price of $37.55 per share (the “Exercise Price”). The Option shall be exercisable at the times specified in Section 1.2 below. With respect to of the shares subject to the Option, the Option shall be a non-qualified stock option and with respect to of the shares subject to the Option, the Option shall be an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

1.2 Time of Exercise.

(a) Subject to the provisions of the 2001 Plan and the other provisions of this Section I, the Option shall be immediately exercisable on the Date of Grant. The Option shall terminate ten years following the Date of Grant and may terminate earlier in the event of termination of the Employee’s employment as provided below or a Change of Control of Tidewater as provided in the 2001 Plan. During Employee’s lifetime, the Option may be exercised only by the Employee or the Employee’s curator if the Employee has been interdicted.

(b) If the Employee’s employment with the Company terminates, other than as a result of death, disability or retirement, the Option may be exercised within 90 days following termination of employment, but in no event later than ten years after the Date of Grant.

(c) If the Employee’s employment with the Company is terminated because of disability within the meaning of Section 22(e)(3) of the Code or because of retirement, the Option may be exercised within two years from the date of termination of employment, but in no event later than ten years after the Date of Grant. In the case of an incentive stock option, however, the Option will not be treated as an incentive stock option for tax purposes if it is exercised later than three months following the date of termination of employment as a result of retirement or later than one year following the date of termination of employment as a result of disability.

(d) In the event of the Employee’s death, the Option may be exercised by the Employee’s estate, or by the person to whom such right devolves from him by reason of the Employee’s death, within two years from the date of death, but in no event later than ten years after the Date of Grant.

(e) Any portion of the Option that is exercisable but not exercised within the permitted time period following termination of employment provided in this Section I, shall be terminated upon expiration of such permitted time period.

1.3 Method of Exercise of Option. The Employee may exercise all or a portion of the Option by delivering to the Company a signed written notice of his intention to exercise the Option, specifying therein the number of shares to be purchased. Upon receiving such notice, and after the Company has received full payment of the Exercise Price in accordance with the Plan, the appropriate officer of the Company shall cause the transfer of title of the shares purchased to Employee on Tidewater’s stock records and cause to be issued to Employee a stock certificate for the number of shares being acquired. Employee shall not have any rights as a shareholder until the stock certificate is issued to him.

1.4 Non-Transferability. Unless permitted by the Committee in an amendment to this Agreement as provided in the 2001 Plan, the Option granted hereby may not be transferred, assigned, pledged or hypothecated in any manner, by operation of law or otherwise, other than by will or by the laws of descent and distribution and shall not be subject to execution, attachment or similar process.

II.

Restricted Stock

2.1 Grant of Restricted Stock. Tidewater hereby grants to Employee a restricted stock award effective on the Date of Grant of shares of Common Stock (the “Restricted Stock”) subject to the terms, conditions, and restrictions set forth in the 1997 Plan and in this Agreement.

2.2 Award Restrictions.

(a) The period during which the restrictions imposed on the Restricted Stock by the 1997 Plan and this Agreement are in effect is referred to herein as the “Restricted Period.” During the Restricted Period, the Employee shall be entitled to all rights of a stockholder of Tidewater, including the right to vote the shares and to receive dividends thereon; provided, however, that the Restricted Stock, the right to vote the Restricted Stock and the right to receive dividends thereon may not be sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered during the Restricted Period.

(b) The Restricted Period for the Restricted Stock shall end and the shares of Restricted Stock shall become vested and freely transferable as set forth below:

(i) With respect to 25% of the shares of Restricted Stock granted, the later of May 1, 2006, or the date on which Tidewater’s Form 10-K for the fiscal year ending March 31, 2006 is filed with the Securities and Exchange Commission (the “SEC”), provided that the Performance Threshold for the fiscal year ending March 31, 2006 has been satisfied;

(ii) With respect to 25% of the shares of Restricted Stock granted, the later of May 1, 2007, or the date on which Tidewater’s Form 10-K for the fiscal year ending March 31, 2007 is filed with the SEC, provided that the Performance Threshold for the fiscal year ending March 31, 2007 has been satisfied;

(iii) With respect to 25% of the shares of Restricted Stock granted, the later of May 1, 2008, or the date on which Tidewater’s Form 10-K for the fiscal year ending March 31, 2008 is filed with the SEC, provided that the Performance Threshold for the fiscal year ending March 31, 2008 has been satisfied; and

(iv) On March 30, 2009, with respect to any shares of Restricted Stock that remain unvested as of such date;

provided, however, that if the employment of the Employee terminates for any reason other than death or disability, any shares of Restricted Stock, with respect to which the Restricted Period has not ended as of the date of termination of employment, will be immediately forfeited.

(c) The “Performance Threshold” with respect to a given fiscal year shall be satisfied if the Return on Total Capital for that year equals or exceeds the greater of (i) 15%, or (ii) the average of the Return on Total Capital for the four years preceding such fiscal year. As used herein, “Return on Total Capital” for a given year shall be determined as follows:

earnings before interest

expenses, taxes,

depreciation and

amortization for such year

average shareholders’

equity + average long-

term debt (including

current maturities of

long-term debt)*

*	Average shareholders’ equity and average long-term debt shall be determined by adding the respective totals as of the end of each quarterly reporting period during the applicable fiscal year as shown on Tidewater’s consolidated balance sheet and dividing such sums by four.

(d) To the extent the Restricted Stock has not otherwise become fully vested and freely transferable, the Restricted Period shall end and the Restricted Stock will become fully vested and freely transferable by the Employee or his estate upon the death of the Employee or upon a determination by the Committee that the Employee has become disabled.

(e) The shares of Restricted Stock shall also become fully vested and the Restricted Period shall end in the event of a Change of Control of Tidewater as provided in the 1997 Plan. In addition, the Committee may declare the Restricted Period ended and shares of Restricted Stock fully vested at any time in its discretion.

III.

Stock Certificates

3.1 Form. The stock certificates evidencing the Restricted Stock shall be registered in the name of the Employee and shall be held by Tidewater, together with a stock power executed by the Employee in blank, during the Restricted Period in accordance with the terms of the 1997 Plan. Tidewater shall place the following legend on the stock certificates:

The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms and conditions (including conditions of forfeiture) contained in the Tidewater Inc. 1997 Stock Incentive Plan (the “Plan”) and an agreement entered into between the registered owner and Tidewater Inc. A copy of the Plan and Agreement is on file in the office of the Secretary of Tidewater Inc.

3.2 Removal of Legend. Upon termination of the Restricted Period with respect to all or a portion of the Restricted Stock, Tidewater shall cause a stock certificate without a restrictive legend covering the vested Restricted Stock to be issued in the name of the Employee or his nominee within 30 days after the end of the Restricted Period with respect to such shares. Upon receipt of such stock certificate, the Employee is free to hold or dispose of the shares represented by such certificate, subject to applicable securities laws.

IV.

Defined Terms

The definition of all capitalized terms used herein and not otherwise defined herein shall be as provided in the applicable Plan.

Withholding Taxes

At any time that the Employee is required to pay to the Company an amount required to be withheld under the applicable income tax laws in connection with the exercise of an Option or the lapse of restrictions on Restricted Stock, the Employee may, subject to the Committee’s right of disapproval, satisfy this obligation in whole or in part by electing (the “Election”) to deliver currently owned shares of Common Stock or to have the Company withhold from the distribution shares of Common Stock, in each case having a value equal to the amount required to be withheld. The value of the shares to be withheld shall be based on the Fair Market Value of the Common Stock on the date that the amount of tax to be withheld shall be determined (the “Tax Date”). Each Election must be made prior to the Tax Date. The Committee may disapprove of any Election or may suspend or terminate the right to make Elections.

VI.

No Contract of Employment Intended

Nothing in this Agreement shall confer upon the Employee any right to continue in the employment of the Company, or to interfere in any way with the right of the Company to terminate the Employee’s employment relationship with the Company at any time.

VII.

Binding Effect

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and successors.

VIII.

Amendment, Modification or Termination

The Committee may amend, modify or terminate any outstanding Option at any time prior to exercise and any Restricted Stock at any time prior to vesting in any manner not inconsistent with the terms of the applicable Plan. Notwithstanding the foregoing, no amendment, modification or termination may materially impair the rights of an Employee hereunder without the consent of the Employee.

IX.

Inconsistent Provisions

The Option granted hereby is subject to the provisions of the 2001 Plan and the Restricted Stock granted hereby is subject to the provisions of the 1997 Plan, as the Plans are in effect on the date hereof and as they may be amended. In the event any provision of this Agreement conflicts with such a provision of the applicable Plan, the Plan provision shall control. The Employee acknowledges that a copy of each Plan was distributed to the Employee and that the Employee was advised to review such Plans prior to entering into this Agreement. The Employee waives the right to claim that the provisions of the Plans are not binding upon the Employee and the Employee’s heirs, executors, administrators, legal representatives and successors.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana.

XI.

Severability

allowed by law. Any such provision that is not susceptible of such reformation shall be ignored so as to not affect any other term or provision hereof, and 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, illegal 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.

XII.

Entire Agreement; Modification

The Plans and this Agreement contain the entire agreement between the parties with respect to the subject matter contained herein and may not be modified, except as provided in the Plans, as they may be amended from time to time in the manner provided therein, or in this Agreement, as it may be amended from time to time. Any oral or written agreements, representations, warranties, written inducements, or other communications with respect to the subject matter contained herein made prior to the execution of the Agreement shall be void and ineffective for all purposes.

XIII.

Section 83(b) Election

The Employee has reviewed with the Employee’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transaction contemplated by this Agreement. The Employee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Employee understands that the Employee (and not the Company) shall be responsible for the Employee’s own tax liability that may arise as a result of the transactions contemplated by this Agreement. The Employee understands that the Employee may elect to be taxed at the time the shares of Restricted Stock are granted by filing an election under Section 83(b) of the Code with the IRS within thirty days from the Date of Grant. The Employee acknowledges that it is the Employee’s sole responsibility and not the Company’s to file timely the election under Section 83(b), even if the Employee requests the Company or its representatives to make this filing on the Employee’s behalf.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the day and year first above written.

TIDEWATER INC.

Dean E. Taylor

Chairman, President and Chief

Executive Officer

[Employee Name]

EX-10.11 6 dex1011.htm FORM OF STOCK OPTION AND RESTRICTED STOCK AGREEMENT Form of Stock Option and Restricted Stock Agreement

Exhibit 10.11

STOCK OPTION AND RESTRICTED STOCK AGREEMENT

FOR THE GRANT OF INCENTIVE STOCK OPTIONS, NON-QUALIFIED

STOCK OPTIONS AND RESTRICTED STOCK UNDER THE

TIDEWATER INC. 2001 STOCK INCENTIVE PLAN

THIS AGREEMENT is entered into as of March 30, 2005, by and between Tidewater Inc., a Delaware corporation (“Tidewater”), and (the “Employee”).

WHEREAS, the Employee is a key employee of Tidewater or one of its subsidiaries and Tidewater considers it desirable and in its best interest that the Employee be given an added incentive to advance the interests of Tidewater by possessing an option to purchase shares of the common stock of Tidewater, $.10 par value per share (the “Common Stock”) and restricted shares of Common Stock in accordance with the Tidewater Inc. 2001 Stock Incentive Plan (the “Plan”). Tidewater and its subsidiaries shall be collectively referred to herein as the “Company.”

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as follows:

Stock Options

1.2 Time of Exercise.

(a) Subject to the provisions of the Plan and the other provisions of this Section I, the Option shall be immediately exercisable on the Date of Grant. The Option shall terminate ten years following the Date of Grant and may terminate earlier in the event of termination of the Employee’s employment as provided below or a Change of Control of Tidewater as provided in the Plan. During Employee’s lifetime, the Option may be exercised only by the Employee or the Employee’s curator if the Employee has been interdicted.

event later than ten years after the Date of Grant. In the case of an incentive stock option, however, the Option will not be treated as an incentive stock option for tax purposes if it is exercised later than three months following the date of termination of employment as a result of retirement or later than one year following the date of termination of employment as a result of disability.

1.4 Non-Transferability. Unless permitted by the Committee in an amendment to this Agreement as provided in the Plan, the Option granted hereby may not be transferred, assigned, pledged or hypothecated in any manner, by operation of law or otherwise, other than by will or by the laws of descent and distribution and shall not be subject to execution, attachment or similar process.

II.

Restricted Stock

2.2 Award Restrictions.

(a) The period during which the restrictions imposed on the Restricted Stock by the Plan and this Agreement are in effect is referred to herein as the “Restricted Period.” During the Restricted Period, the Employee shall be entitled to all rights of a stockholder of Tidewater, including the right to vote the shares and to receive dividends thereon; provided, however, that the Restricted Stock, the right to vote the Restricted Stock and the right to receive dividends thereon may not be sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered during the Restricted Period.

(b) The Restricted Period for the Restricted Stock shall end and the shares of Restricted Stock shall become vested and freely transferable as set forth below:

(i) With respect to 25% of the shares of Restricted Stock granted, the llater of May 1, 2006, or the date on which Tidewater’s Form 10-K for the fiscal year ending March 31, 2006 is filed with the Securities and Exchange Commission (the “SEC”), provided that the Performance Threshold for the fiscal year ending March 31, 2006 has been satisfied;

(iv) On March 30, 2009, with respect to any shares of Restricted Stock that remain unvested as of such date;

earnings before interest

expenses, taxes,

depreciation and

amortization for such year

average shareholders’

equity + average long-

term debt (including

current maturities

of long-term debt)*

*	Average shareholders’ equity and average long-term debt shall be determined by adding the respective totals as of the end of each quarterly reporting period during the applicable fiscal year as shown on Tidewater’s consolidated balance sheet and dividing such sums by four.

(e) The shares of Restricted Stock shall also become fully vested and the Restricted Period shall end in the event of a Change of Control of Tidewater as provided in the Plan. In addition, the Committee may declare the Restricted Period ended and shares of Restricted Stock fully vested at any time in its discretion.

III.

Stock Certificates

3.1 Form. The stock certificates evidencing the Restricted Stock shall be registered in the name of the Employee and shall be held by Tidewater, together with a stock power executed by the Employee in blank, during the Restricted Period in accordance with the terms of the Plan. Tidewater shall place the following legend on the stock certificates:

The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms and conditions (including conditions of forfeiture) contained in the Tidewater Inc. 2001 Stock Incentive Plan (the “Plan”) and an agreement entered into between the registered owner and Tidewater Inc. A copy of the Plan and Agreement is on file in the office of the Secretary of Tidewater Inc.

IV.

Defined Terms

The definition of all capitalized terms used herein and not otherwise defined herein shall be as provided in the Plan.

Withholding Taxes

VI.

No Contract of Employment Intended

VII.

Binding Effect

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and successors.

VIII.

Amendment, Modification or Termination

The Committee may amend, modify or terminate any outstanding Option at any time prior to exercise and any Restricted Stock at any time prior to vesting in any manner not inconsistent with the terms of the Plan. Notwithstanding the foregoing, no amendment, modification or termination may materially impair the rights of an Employee hereunder without the consent of the Employee.

IX.

Inconsistent Provisions

The Option and Restricted Stock granted hereby are subject to the provisions of the 2001 Plan, as in effect on the date hereof and as it may be amended. In the event any provision of this Agreement conflicts with such a provision of the Plan, the Plan provision shall control. The Employee acknowledges that a copy of the Plan was distributed to the Employee and that the Employee was advised to review such Plan prior to entering into this Agreement. The Employee waives the right to claim that the provisions of the Plan are not binding upon the Employee and the Employee’s heirs, executors, administrators, legal representatives and successors.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana.

XI.

Severability

so as to not affect any other term or provision hereof, and 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, illegal 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.

XII.

Entire Agreement; Modification

The Plan and this Agreement contain the entire agreement between the parties with respect to the subject matter contained herein and may not be modified, except as provided in the Plan, as it may be amended from time to time in the manner provided therein, or in this Agreement, as it may be amended from time to time. Any oral or written agreements, representations, warranties, written inducements, or other communications with respect to the subject matter contained herein made prior to the execution of the Agreement shall be void and ineffective for all purposes.

XIII.

Section 83(b) Election

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the day and year first above written.

TIDEWATER INC.

Dean E. Taylor

Chairman, President and

Chief Executive Officer

[Employee Name]

EX-10.12 7 dex1012.htm FORM OF STOCK OPTION AND RESTRICTED STOCK AGREEMENT Form of Stock Option and Restricted Stock Agreement

Exhibit 10.12

STOCK OPTION AND RESTRICTED STOCK AGREEMENT

FOR THE GRANT OF INCENTIVE STOCK OPTIONS AND

NON-QUALIFIED STOCK OPTIONS UNDER THE

TIDEWATER INC. 2001 STOCK INCENTIVE PLAN

AND THE GRANT OF RESTRICTED STOCK UNDER THE

TIDEWATER INC. EMPLOYEE RESTRICTED STOCK PLAN

THIS AGREEMENT is entered into as of March 30, 2005, by and between Tidewater Inc., a Delaware corporation (“Tidewater”), and (the “Employee”).

WHEREAS, the Employee is a key employee of Tidewater or one of its subsidiaries and Tidewater considers it desirable and in its best interest that the Employee be given an added incentive to advance the interests of Tidewater by possessing an option to purchase shares of the common stock of Tidewater, $.10 par value per share (the “Common Stock”), in accordance with the Tidewater Inc. 2001 Stock Incentive Plan (the “2001 Plan”) and restricted shares of Common Stock in accordance with the Tidewater Inc. Employee Restricted Stock Plan (the “Employee Plan” and, collectively with the 2001 Plan, the “Plans”). Tidewater and its subsidiaries shall be collectively referred to herein as the “Company.”

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as follows:

Stock Options

1.2 Time of Exercise.

II.

Restricted Stock

2.2 Award Restrictions.

(a) The period during which the restrictions imposed on the Restricted Stock by the Employee Plan and this Agreement are in effect is referred to herein as the “Restricted Period.” During the Restricted Period, the Employee shall be entitled to all rights of a stockholder of Tidewater, including the right to vote the shares and to receive dividends thereon; provided, however, that the Restricted Stock, the right to vote the Restricted Stock and the right to receive dividends thereon may not be sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered during the Restricted Period.

(b) The Restricted Period for the Restricted Stock shall end and the shares of Restricted Stock shall become vested and freely transferable as set forth below:

(iv) On March 30, 2009, with respect to any shares of Restricted Stock that remain unvested as of such date;

provided, however, if the employment of the Employee terminates for any reason other than death or disability, any shares of Restricted Stock, with respect to which the Restricted Period has not ended as of the date of termination of employment, will be immediately forfeited.

earnings before interest

expenses, taxes,

depreciation and

amortization for such year

average shareholders’

equity + average long-

term debt (including

current maturities of

long-term debt)*

*	Average shareholders’ equity and average long-term debt shall be determined by adding the respective totals as of the end of each quarterly reporting period during the applicable fiscal year as shown on Tidewater’s consolidated balance sheet and dividing such sums by four.

(e) The shares of Restricted Stock shall also become fully vested and the Restricted Period shall end in the event of a Change of Control of Tidewater as provided in Section XIV hereof. In addition, the Committee may declare the Restricted Period ended and shares of Restricted Stock fully vested at any time in its discretion.

III.

Stock Certificates

3.1 Form. The stock certificates evidencing the Restricted Stock shall be registered in the name of the Employee and shall be held by Tidewater, together with a stock power executed by the Employee in blank, during the Restricted Period in accordance with the terms of the Employee Plan. Tidewater shall place the following legend on the stock certificates:

The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms and conditions (including conditions of forfeiture) contained in the Tidewater Inc. Employee Restricted Stock Plan (the “Plan”) and an agreement entered into between the registered owner and Tidewater Inc. A copy of the Plan and Agreement is on file in the office of the Secretary of Tidewater Inc.

IV.

Defined Terms

The definition of all capitalized terms used herein and not otherwise defined herein shall be as provided in the applicable Plan.

Withholding Taxes

VI.

No Contract of Employment Intended

VII.

Binding Effect

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and successors.

VIII.

Amendment, Modification or Termination

IX.

Inconsistent Provisions

The Option granted hereby is subject to the provisions of the 2001 Plan and the Restricted Stock granted hereby is subject to the provisions of the Employee Plan, as the Plans are in effect on the date hereof and as they may be amended. In the event any provision of this Agreement conflicts with such a provision of the applicable Plan, the Plan provision shall control. The Employee acknowledges that a copy of each Plan was distributed to the Employee and that the Employee was advised to review such Plans prior to entering into this Agreement. The Employee waives the right to claim that the provisions of the Plans are not binding upon the Employee and the Employee’s heirs, executors, administrators, legal representatives and successors.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana.

XI.

Severability

XII.

Entire Agreement; Modification

XIII.

Section 83(b) Election

XIV.

Change of Control

14.1 Change of Control; Tender Offer or Exchange Offer. The 2001 Plan provides for the acceleration of vesting of the Option upon a Change of Control, as outlined therein. The vesting of the Restricted Stock upon a Change of Control shall be as provided in this Section 14.1.

Change of Control to permit the Employee to take all steps reasonably necessary to deal with any formerly restricted shares on which restrictions have lapsed so that all types of shares may be treated in the same manner in connection with the Change of Control as the shares of Common Stock of other shareholders. Notwithstanding any other provision of the Employee Plan (or any provision of this Agreement), any lapse and deemed waiver of restrictions and limitations on any shares of Restricted Stock pursuant to this Section 14.1(a) shall be a permanent lapse and deemed waiver of such restrictions and limitations.

(b) If any corporation, person or other entity (other than the Company) makes a tender offer or exchange offer for shares of the Common Stock pursuant to which purchases are made (an “Offer”), then from and after the date of the first purchase of the Common Stock pursuant to the Offer (the “Acceleration Date”), all restrictions or limitations on Restricted Stock shall lapse and all performance criteria and other conditions relating to the Restricted Stock shall be deemed to be achieved or waived by the Company, without the necessity of any action by any person, for a period of 30 calendar days following the Acceleration Date. Subject to the other provisions of this Section 14.1, following the expiration of the 30-day period, any shares of Common Stock issued hereunder not tendered or exchanged shall again be subject to the terms and conditions applicable prior to the Offer.

(i) the acquisition by any ‘Person’ (as defined in Section 14.1(d) hereof) of ‘Beneficial Ownership’ (as defined in Section 14.1(d) hereof) of 30% or more of the outstanding shares of 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 (c)(i), the following shall not constitute a Change of Control:

(A) any acquisition (other than a ‘Business Combination’ (as defined in Section 14.1(c)(iii) hereof) which constitutes a Change of Control under Section 14.1(c)(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 14.1(c)(iii) hereof; or

(ii) individuals who, as of the Date of Grant, 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 Date of Grant 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,

(iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(d) As used in Section 14.1(c) 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 (a) the power to vote, or direct the voting of, the security, and/or (b) 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 14.1(c)(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.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the day and year first above written.

TIDEWATER INC.

Dean E. Taylor

Chairman, President and

Chief Executive Officer

[Employee Name]

EX-10.13 8 dex1013.htm FORM OF RESTRICTED STOCK AGREEMENT Form of Restricted Stock Agreement

Exhibit 10.13

RESTRICTED STOCK AGREEMENT

FOR THE GRANT OF RESTRICTED STOCK UNDER THE

TIDEWATER INC. EMPLOYEE RESTRICTED STOCK PLAN

THIS AGREEMENT is entered into as of March 30, 2005, by and between Tidewater Inc., a Delaware corporation (“Tidewater”), and (the “Employee”).

WHEREAS, the Employee is a key employee of Tidewater or one of its subsidiaries and Tidewater considers it desirable and in its best interest that the Employee be given an added incentive to advance the interests of Tidewater by possessing restricted shares of the common stock of Tidewater, $.10 par value per share (the “Common Stock”), in accordance with the Tidewater Inc. Employee Restricted Stock Plan (the “Plan”). Tidewater and its subsidiaries shall be collectively referred to herein as the “Company.”

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as follows:

Restricted Stock

1.1 Grant of Restricted Stock. Tidewater hereby grants to Employee a restricted stock award effective on the Date of Grant of shares of Common Stock (the “Restricted Stock”) subject to the terms, conditions, and restrictions set forth in the Employee Plan and in this Agreement.

1.2 Award Restrictions.

(b) The Restricted Period for the Restricted Stock shall end and the shares of Restricted Stock shall become vested and freely transferable as set forth below:

(iv) On March 30, 2009, with respect to any shares of Restricted Stock that remain unvested as of such date;

earnings before interest

expenses, taxes,

depreciation and

amortization for such year

average shareholders’

equity + average long-

term debt (including

current maturities of

long-term debt)*

*	Average shareholders’ equity and average long-term debt shall be determined by adding the respective totals as of the end of each quarterly reporting period during the applicable fiscal year as shown on Tidewater’s consolidated balance sheet and dividing such sums by four.

(e) The shares of Restricted Stock shall also become fully vested and the Restricted Period shall end in the event of a Change of Control of Tidewater as provided in Section XIII hereof. In addition, the Committee may declare the Restricted Period ended and shares of Restricted Stock fully vested at any time in its discretion.

II.

Stock Certificates

2.1 Form. The stock certificates evidencing the Restricted Stock shall be registered in the name of the Employee and shall be held by Tidewater, together with a stock power executed by the Employee in blank, during the Restricted Period in accordance with the terms of the Employee Plan. Tidewater shall place the following legend on the stock certificates:

The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms and conditions (including conditions of forfeiture) contained in the Tidewater Inc. Employee Restricted Stock Plan (the “Plan”) and an agreement entered into between the registered owner and Tidewater Inc. A copy of the Plan and Agreement is on file in the office of the Secretary of Tidewater Inc.

2.2 Removal of Legend. Upon termination of the Restricted Period with respect to all or a portion of the Restricted Stock, Tidewater shall cause a stock certificate without a restrictive legend covering the vested Restricted Stock to be issued in the name of the Employee or his nominee within 30 days after the end of the Restricted Period with respect to such shares. Upon receipt of such stock certificate, the Employee is free to hold or dispose of the shares represented by such certificate, subject to applicable securities laws.

III.

Defined Terms

The definition of all capitalized terms used herein and not otherwise defined herein shall be as provided in the Plan.

IV.

Withholding Taxes

At any time that the Employee is required to pay to the Company an amount required to be withheld under the applicable income tax laws in connection with the lapse of restrictions on Restricted Stock, the Employee may, subject to the Committee’s right of disapproval, satisfy this obligation in whole or in part by electing (the “Election”) to deliver currently owned shares of Common Stock or to have the Company withhold from the distribution shares of Common Stock, in each case having a value equal to the amount required to be withheld. The value of the shares to be withheld shall be based on the Fair Market Value of the Common Stock on the date that the amount of tax to be withheld shall be determined (the “Tax Date”). Each Election must be made prior to the Tax Date. The Committee may disapprove of any Election or may suspend or terminate the right to make Elections.

No Contract of Employment Intended

VI.

Binding Effect

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and successors.

VII.

Amendment, Modification or Termination

The Committee may amend, modify or terminate any Restricted Stock at any time prior to vesting in any manner not inconsistent with the terms of the Plan. Notwithstanding the foregoing, no amendment, modification or termination may materially impair the rights of an Employee hereunder without the consent of the Employee.

VIII.

Inconsistent Provisions

The Restricted Stock granted hereby is subject to the provisions of the Employee Plan, as the Plan is in effect on the date hereof and as it may be amended. In the event any provision of this Agreement conflicts with such a provision of the Plan, the Plan provision shall control. The Employee acknowledges that a copy of the Plan was distributed to the Employee and that the Employee was advised to review such Plan prior to entering into this Agreement. The Employee waives the right to claim that the provisions of the Plan are not binding upon the Employee and the Employee’s heirs, executors, administrators, legal representatives and successors.

IX.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana.

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, illegal or unenforceable in any respect as written, the Employee and Tidewater intend for any court construing this Agreement to modify or limit such provision so as to render it valid and enforceable to the fullest extent allowed by law. Any such provision that is not susceptible of such reformation shall be ignored so as to not affect any other term or provision hereof, and 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, illegal 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.

XI.

Entire Agreement; Modification

XII.

Section 83(b) Election

XIII.

Change of Control

13.1 Change of Control; Tender Offer or Exchange Offer. The vesting of the Restricted Stock upon a Change of Control shall be as provided in this Section 13.1.

(a) Notwithstanding any other provision of the Employee Plan (or any provision of this Agreement), immediately prior to any Change of Control of the Company (as defined in Section 13.1(c) hereof), all restrictions and limitations on Restricted Stock shall automatically lapse and all performance criteria and other conditions shall automatically be deemed to be achieved or waived by the Company. As used in the immediately preceding sentence, ‘immediately prior’ to the Change of Control shall mean sufficiently in advance of the Change of Control to permit the Employee to take all steps reasonably necessary to deal with any formerly restricted shares on which restrictions have lapsed so that all types of shares may be treated in the same manner in connection with the Change of Control as the shares of Common Stock of other shareholders. Notwithstanding any other provision of the Employee Plan (or any provision of this Agreement), any lapse and deemed waiver of restrictions and limitations on any shares of Restricted Stock pursuant to this Section 13.1(a) shall be a permanent lapse and deemed waiver of such restrictions and limitations.

(b) If any corporation, person or other entity (other than the Company) makes a tender offer or exchange offer for shares of the Common Stock pursuant to which purchases are made (an “Offer”), then from and after the date of the first purchase of the Common Stock pursuant to the Offer (the “Acceleration Date”), all restrictions or limitations on Restricted Stock shall lapse and all performance criteria and other conditions relating to the Restricted Stock shall be deemed to be achieved or waived by the Company, without the necessity of any action by any person, for a period of 30 calendar days following the Acceleration Date. Subject to the other provisions of this Section 13.1, following the expiration of the 30-day period, any shares of Common Stock issued hereunder not tendered or exchanged shall again be subject to the terms and conditions applicable prior to the Offer.

(i) the acquisition by any ‘Person’ (as defined in Section 13.1(d) hereof) of ‘Beneficial Ownership’ (as defined in Section 13.1(d) hereof) of 30% or more of the outstanding shares of 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 (c)(i), the following shall not constitute a Change of Control:

(A) any acquisition (other than a ‘Business Combination’ (as defined in Section 13.1(c)(iii) hereof) which constitutes a Change of Control under Section 13.1(c)(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 13.1(c)(iii) hereof; 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,

(iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(d) As used in Section 13.1(c) 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.

(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 13.1(c)(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.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the day and year first above written.

TIDEWATER INC.

Dean E. Taylor

Chairman, President and

Chief Executive Officer

[Employee Name]

EX-10.14 9 dex1014.htm SECOND AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN Second Amended and Restated Supplemental Executive Retirement Plan

Exhibit 10.14

TIDEWATER INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Amended and Restated March 1, 2003

TABLE OF CONTENTS


ARTICLE 1:	PURPOSE OF THE PLAN	1

ARTICLE 2:	THE PENSION PLAN	1

ARTICLE 3:	ADMINISTRATION	2

ARTICLE 4:	ELIGIBILITY	2

ARTICLE 5:	AMOUNT OF SUPPLEMENTAL PENSION BENEFIT FOR ELIGIBLE EMPLOYEES COVERED UNDER THE PENSION PLAN	3

ARTICLE 6:	AMOUNT OF SUPPLEMENTAL PENSION BENEFIT FOR ELIGIBLE EMPLOYEES WHO ARE NOT COVERED UNDER THE PENSION PLAN	4

ARTICLE 7:	PAYMENT OF SUPPLEMENTAL PENSION BENEFIT	5

ARTICLE 8:	PAYMENT ELECTION IN ANTICIPATION OF A CHANGE OF CONTROL	6

ARTICLE 9:	EMPLOYEES' RIGHTS	6

ARTICLE 10:	AMENDMENT AND DISCONTINUANCE	7

ARTICLE 11:	CHANGE OF CONTROL	7

11.1	Effect of Change of Control.	7
11.2	Definition of Change of Control	8
11.3	Other Definitions	9

ARTICLE 12:	RESTRICTIONS ON ASSIGNMENT	9

ARTICLE 13:	NATURE OF AGREEMENT	10

ARTICLE 14:	CONTINUED EMPLOYMENT	10

ARTICLE 15:	BINDING ON EMPLOYER, EMPLOYEES AND THEIR SUCCESSORS	10

ARTICLE 16:	LAWS GOVERNING	10

ARTICLE 17:	MISCELLANEOUS	11

17.1	Claims and Appeal Procedures	11
17.2	Recovery of Payments Made by Mistake	11

TIDEWATER INC.

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 restated the Plan effective November 29, 2001. The Employer restated the Plan effective March 1, 2003 to provide a supplemental benefit to officers who participate in the Tidewater Retirement Plan (“Retirement Plan”) and are not eligible to participate in the Pension Plan.

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. Further, in order to minimize the differences in benefits among officers the Plan includes a hypothetical Pension Plan benefit for officers who are not eligible to participate in the Pension Plan.

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. 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):

(a) The Employee must be a Participant in the Pension Plan or the Retirement Plan;

(b) 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 7 and 8. 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, credit an Eligible Employee with an additional period of service 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 or terminating Employee.

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

FOR ELIGIBLE EMPLOYEES COVERED UNDER THE PENSION PLAN

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, determined as a monthly single life annuity 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,

(ii) the benefit (including any Additional Monthly Benefit) determined as a monthly single life annuity which is payable to such Eligible Employee or on his behalf to his Beneficiary or Spouse under the Pension Plan.

(b) The computation in paragraph (i) 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 to take into account any change authorized by the Board of Directors or the Compensation Committee as permitted in Article 4 hereof. The computation shall also 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 17, 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 Article (except as otherwise provided in Article 6 and in a Change of Control Agreement, if any, between the Eligible Employee and the Employer).

ARTICLE 6: AMOUNT OF SUPPLEMENTAL PENSION BENEFIT FOR

ELIGIBLE EMPLOYEES WHO ARE NOT COVERED UNDER THE PENSION PLAN

Unless otherwise determined by the Board of Directors or Compensation Committee under Article 4, the amount of supplemental pension benefit shall be:

(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, determined as a monthly single life annuity under the Pension Plan, if such Eligible Employee had been eligible to participate in the Pension Plan commencing on the date hired by the Employer and determining such benefit 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,

(ii) the Eligible Employee’s hypothetical Retirement Plan benefit based on a monthly single life annuity. In determining such benefit both the Code Section 401(a)(17) compensation limit and Code Section 415 maximum benefit limit apply. The amount is determined by starting with the Eligible Employee’s actual Retirement Plan account balance as of the date he becomes an officer with increases based upon the following assumption through the payment date:

(A)

contribution of 3% of compensation, as defined in the Retirement Plan, commencing no earlier than the first month following one year of employment; such contributions are assumed made to the Retirement Plan at the end of the plan year;

(B)

contributions assumed to grow with interest at 6%, compounded annually;

(C)

in the year of termination or loss of eligibility for this Plan, the balance is assumed to grow using simple interest at 6% applied to the beginning of year balance. Additionally, a partial year contribution is assumed made at the termination date or loss of eligibility for this Plan;

(D)

the balance is assumed to increase with simple interest at 6% through the end of the year of termination (or payment date, if earlier);

(E)

the balance is assumed to increase with simple interest at 6%, compounded annually, from the end of the year of termination to the end of the year preceding payment date;

(F)

the balance is further assumed to increase with simple interest at 6% from the end of the year preceding the payment date through the payment date; and

(G)

the balance at payment date is converted to an annuity using the actuarial equivalence factors at Section 1.02 of the Pension Plan.

(b) The computation in paragraph (i) above shall be made as though the factor, 0.85%, in Section 5.01(b)(1) of the Pension Plan were 1.35%.

(d) An Eligible Employee who is not entitled to benefits under the Retirement Plan is not entitled to supplemental pension benefits under this Article (except as otherwise provided at Article 5 and in a Change of Control Agreement, if any, between the Eligible Employee and the Employer).

ARTICLE 7: PAYMENT OF SUPPLEMENTAL PENSION BENEFIT

Except as provided in Article 4, 10 or 11 or unless the Employee elects otherwise under this Article 7 or Article 8, the supplemental pension benefit under the Plan with respect to an Employee shall commence as of the first of the month following the later of termination of employment and attaining Normal Retirement Age (as defined in the Pension Plan). An Employee can elect, on a form provided by the Committee, to receive a benefit commencing prior to his Normal Retirement Age (as defined in the Pension Plan) following termination of employment and after attaining age 55 and completing 10 years of Vesting Service (as defined in the Pension Plan), but only if an election is made at least 13 months prior to the benefit commencement date. The benefit will be paid in the form of a single life annuity or, if married, in the form of a 50% joint and survivor annuity unless a different form permitted under the Pension Plan is elected, but only if the election is made at least 13 months prior to the benefit commencement date. The benefit paid earlier than Normal Retirement Age (as defined in the Pension Plan) shall be determined as if paid under the Pension Plan taking into account the early payment adjustments.

If the Employee’s spouse is surviving at the Employee’s death, the spouse will receive a 50% survivor spouse annuity. The benefit to the spouse shall commence as of the first of the month following the Employee’s death. If there is no spouse at the Employee’s death, a benefit will not be paid. However, if the Employee’s death is after benefits have commenced, the benefits will continue based upon the applicable form. Further, if the Employee continues employment past age 65 he may elect to provide a benefit for 5, 10, 15, or 20 years to a designated beneficiary. The beneficiary’s benefit is actuarially adjusted to reflect the length of the payment period. The spouse must consent to an alternate beneficiary. If (i) the beneficiary or beneficiaries, should die before such total guaranteed number of payments have been made, the remaining payments will be made to the estate of such beneficiary, or beneficiaries (or, if designated by the payee, to a secondary beneficiary or beneficiaries), or (ii) there is no surviving designated beneficiary upon the payee’s death, any remaining guaranteed payments will be made to the payee’s estate, provided that in either such event payment may be made either in an Actuarially Equivalent (as defined in the Pension Plan) single sum, payable immediately, or as a continuation of the monthly payments, as selected by the Committee.

The foregoing notwithstanding, if the total value of the benefit payable under the Plan to the Employee, the Employee’s Spouse, or designated beneficiary 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 8: 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 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 this Plan (and, if applicable, as increased under the Employee’s Change of Control Agreement) 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, or if earlier, within five business days of the date of any termination of employment that would result in payments to the Employee under the Employee’s Change of Control Agreement, 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 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 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 9: 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 or Retirement Plan; (ii) be paid from the Pension Plan or Retirement Plan; or (iii) have any effect whatsoever upon the Pension Plan or Retirement 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 9 and any other provision of the Plan (including, without limitation, Article 13), 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 10: 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 this Plan if the reduction of the benefit under this Plan is paired with a corresponding increase in the accrued benefit under the Pension Plan or Retirement Plan.

ARTICLE 11: CHANGE OF CONTROL

11.1 Effect of Change of Control.

(a) Upon a Change of Control (as defined in Section 11.2 hereof) all benefits which have accrued under the Plan shall immediately become fully vested.

(b) Additional fully vested benefits shall accrue under this Plan pursuant to an Eligible Employee’s Change of Control Agreement if after a Change of Control (as defined in Section 11.2 hereof) and during the “Employment Term”, the Company terminates the Employee’s employment other than for “Cause”, death or “Disability”, or the Employee terminates employment for “Good Reason”. Each phrase within quotes in this provision is defined in the Employee’s Change of Control Agreement.

(c) Upon or after a Change of Control, the Plan shall be deemed to have been discontinued (within the meaning of Article 10 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 applicable Pension Plan or Retirement Plan), or

(iii) if the Employer shall have established a trust as described in the last two sentences of Article 9 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.

11.2 Definition of Change of Control. As used in this Section 11, ‘Change of Control’ shall mean:

(a) the acquisition by any ‘Person’ (as defined in Section 11.3 hereof) of ‘Beneficial Ownership’ (as defined in Section 11.3 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 11.2(a), the following shall not constitute a Change of Control:

(i) any acquisition (other than a ‘Business Combination’ (as defined in Section 11.2(c) hereof) which constitutes a Change of Control under Section 11.2(c) hereof) of Common Stock directly from the Company,

(ii) any acquisition of Common Stock by the Company or its subsidiaries,

(iii) 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

(iv) any acquisition of Common Stock by any corporation pursuant to a Business Combination which does not constitute a Change of Control under Section 11.2(c) hereof; or

(b) 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

(c) 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,

(i) 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 11.3 hereof), and

(ii) 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

(iii) 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

(d) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

11.3 Other Definitions. As used in Section 11.2 hereof, the following words or terms shall have the meanings indicated:

(a) 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.

(b) 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.

(c) 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.

(d) Post-Transaction Corporation: Unless a Change of Control includes a Business Combination (as defined in Section 11.2(c) 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 12: RESTRICTIONS ON ASSIGNMENT

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 13: 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 14: 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.

ARTICLE 15: 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 16: 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 17: MISCELLANEOUS

17.1 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.

17.2 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 1st day of March, 2003.


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

EX-10.14(A) 10 dex1014a.htm SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN Supplemental Executive Retirement Plan

Exhibit 10.14A

TIDEWATER

INTERNATIONAL

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

INTERNATIONAL PENSION SERP

November 1, 2003

TABLE OF CONTENTS


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 FOR ELIGIBLE EMPLOYEES OF TIDEWATER CREWING	2

ARTICLE 6:	AMOUNT OF SUPPLEMENTAL PENSION BENEFIT FOR ELIGIBLE EMPLOYEES OF TIDEWATER NORTH SEA	3

ARTICLE 7:	PAYMENT OF SUPPLEMENTAL PENSION BENEFIT	5

ARTICLE 8:	PAYMENT ELECTION IN ANTICIPATION OF A CHANGE OF CONTROL	5

ARTICLE 9:	EMPLOYEES' RIGHTS	6

ARTICLE 10:	AMENDMENT AND DISCONTINUANCE	6

ARTICLE 11:	CHANGE OF CONTROL	7

ARTICLE 12:	GUARANTY BY THE COMPANY	9

ARTICLE 13:	RESTRICTIONS ON ASSIGNMENT	10

ARTICLE 14:	NATURE OF AGREEMENT	10

ARTICLE 15:	CONTINUED EMPLOYMENT	10

ARTICLE 16:	BINDING ON EMPLOYER, EMPLOYEES AND THEIR SUCCESSORS	11

ARTICLE 17:	LAWS GOVERNING	11

ARTICLE 18:	MISCELLANEOUS	11

TIDEWATER INTERNATIONAL PENSION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

PREAMBLE

Tidewater Crewing Limited (“Tidewater Crewing” or “Employer” with respect to Eligible Employees of Tidewater Crewing) sponsors the Tidewater Multi-National Pension Plan, a defined benefit plan for the benefit of its eligible employees who are non-U.S. citizens.

Tidewater Marine North Sea Limited (“Tidewater North Sea” or “Employer” with respect to Eligible Employees of Tidewater North Sea) funds a private executive pension plan for the benefit of its eligible employees who are UK citizens.

Tidewater Inc. (the “Company”) is the sponsor of the Tidewater Pension Plan (“Pension Plan”). The Pension Plan is qualified under Section 401(a) of the Internal Revenue Code of 1986 (“Code”). The Pension Plan is for the benefit of eligible U.S. citizens employed with Tidewater Inc. or related entities.

Tidewater Crewing and Tidewater North Sea adopt this nonqualified unfunded plan known as the Tidewater International Supplemental Executive Retirement Plan (“Plan”), effective as of November 1, 2003 in order to provide benefits to a select group of management or highly compensated employees equal to the benefits that such employees would have received if eligible for the Pension Plan determined without regard to Internal Revenue Code limitations reduced by benefits received from the Tidewater Multi-National Pension Plan or the UK private executive pension plan (such Employer plans collectively referred to herein as the “Foreign Pension Plan”).

ARTICLE 1: PURPOSE OF THE PLAN

The Employers intend and desire by the adoption of this Plan to recognize the value to the Employers 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.

ARTICLE 2: THE PENSION PLAN

ARTICLE 3: ADMINISTRATION

This Plan shall be administered by the Compensation Committee of the Tidewater Inc. Board of Directors, the Pension Plan Employee Benefits Committee, and the Board of Directors of Tidewater Inc. 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 who is employed by one of the Employers must serve as an officer of the Company (the “Eligible Employee”).

An Eligible Employee who ceases to be an Eligible Employee because of a change in his status as an officer shall have benefits under this Plan frozen as of the date he ceases to be an officer, and his benefits shall be paid as provided in Articles 7 and 8. Notwithstanding the foregoing, the Company’s Board of Directors or the Compensation Committee of the Company’s Board of Directors may, in its discretion, determine to increase benefits hereunder, credit an Eligible Employee with an additional period of service 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 or terminating Employee.

ARTICLE 5: AMOUNT OF SUPPLEMENTAL PENSION BENEFIT

FOR ELIGIBLE EMPLOYEES OF TIDEWATER CREWING

Unless otherwise determined by the Company’s Board of Directors or the Company’s 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, determined as a monthly single life annuity under the Pension Plan, if such Eligible Employee had been eligible to participate in the Pension Plan as of the date hired by the Employer, treating compensation with Company and Employer as if earned within the United States and subject to Social Security and determining such benefit 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,

(ii) the benefit which is in fact payable to such Eligible Employee or on his behalf to his Beneficiary or Spouse under the Tidewater Multi-National Pension Plan;

(b) The computation in paragraph (i) 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 to take into account any change authorized by the Company’s Board of Directors or the Company’s Compensation Committee as permitted in Article 4 hereof. The computation shall also be made as though the Employee’s service, determined under the service provisions of the Pension Plan, included the service prior to a break in service lost under such Pension 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 terms of 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 17, 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 Eligible Employee shall be computed in accordance with the foregoing, provided the Eligible Employee has met the vesting requirements of the Pension Plan, with the objective that such Eligible Employee should receive under this Plan and the Tidewater Multi-National Pension Plan the total amount which would have been payable to that Eligible Employee solely under the Pension Plan (as enriched by (b) and (c)). This provision applies even if the Eligible Employee terminates employment before becoming fully vested in the Tidewater Multi-National Pension Plan.

ARTICLE 6: AMOUNT OF SUPPLEMENTAL PENSION BENEFIT

FOR ELIGIBLE EMPLOYEES OF TIDEWATER NORTH SEA

Unless otherwise determined by the Company’s Board of Directors or Company’s Compensation Committee under Article 4, the amount of supplemental pension benefit shall be:

(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, determined as a monthly single life annuity under the Pension Plan, if such Eligible Employee had been eligible to participate in the Pension Plan as of the date hired by the Employer, treating compensation with Company and Employer as if earned within the United States and subject to Social Security, and determining such benefit 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,

(ii) the Eligible Employee’s hypothetical UK private executive pension plan (the “UK Plan”) benefit based on a monthly single life annuity. In determining such benefit both the Code Section 401(a)(17) compensation limit and Code Section 415

maximum benefit limit apply. The amount is determined by starting with the Eligible Employee’s actual UK Plan account balance attributable to contributions since employed with the Employer as of the date he becomes an officer with increases based upon the following assumption through the payment date:

(A)

contribution of 3% of compensation, as defined in the UK Plan, commencing no earlier than the first month following one year of employment; such contributions are assumed made to the UK Plan at the end of the plan year;

(B)

contributions assumed to grow with interest at 6%, compounded annually;

(C)

(D)

the balance is assumed to increase with simple interest at 6% through the end of the year of termination (or payment date, if earlier);

(E)

the balance is assumed to increase with simple interest at 6%, compounded annually, from the end of the year of termination to the end of the year preceding payment date;

(F)

the balance is further assumed to increase with simple interest at 6% from the end of the year preceding the payment date through the payment date; and

(G)

the balance at payment date is converted to an annuity using the actuarial equivalence factors at Section 1.02 of the Pension Plan.

(b) The computation in paragraph (i) above shall be made as though the factor, 0.85%, in Section 5.01(b)(1) of the Pension Plan were 1.35%.

(d) Supplemental pension benefits payable under this Plan to any Eligible Employee who is not eligible for benefits under the Pension Plan shall be computed in accordance with the foregoing, provided the Eligible Employee has met the vesting requirements

of the Pension Plan, (with the objective that the Eligible Employee should receive under this Plan and the UK Plan the total amount which would have been payable to that recipient solely under the Pension Plan (as enriched by (b) and (c)).

ARTICLE 7: PAYMENT OF SUPPLEMENTAL PENSION BENEFIT

ARTICLE 8: 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 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 this Plan (and, if applicable, as increased under the Employee’s Change of Control Agreement) 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, or if earlier, within five business days of the date of any termination of employment that would result in payments to the Employee under the Employee’s Change of Control Agreement, 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 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 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 9: EMPLOYEES’ RIGHTS

No Employee, Spouse or Beneficiary shall have greater rights under this Plan than those of general creditors of the Employer that received services of the Eligible Employee. Benefits payable under this Plan shall be a mere promise to pay in the future and shall be a general, unsecured obligation of the Employer that received services of the Eligible Employee. Notwithstanding, the benefits payable from this Plan shall be paid by the Employer of the respective Eligible Employee from its own funds. Such payments shall not (i) impose any additional obligation upon the Employer under the Pension Plan or Foreign Pension Plan; (ii) be paid from the Pension Plan or Foreign Pension Plan; or (iii) have any effect whatsoever upon the Pension Plan or Foreign Pension Plan. No Employee or his Beneficiary or Spouse shall have any title to or beneficial ownership in any assets which an Employer may use to pay benefits hereunder. Notwithstanding the foregoing provisions of this Article 9 and any other provision of the Plan (including, without limitation, Article 13), an 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 applicable Employer of the Employee in the event of its bankruptcy or insolvency. Notwithstanding any establishment of such a trust, the Employer shall remain responsible for the payment of any amounts so payable which are not so paid by such trust.

ARTICLE 10: AMENDMENT AND DISCONTINUANCE

Each 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 Company 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 this Plan if the reduction of the benefit under this Plan is paired with a corresponding increase in the accrued benefit under the Pension Plan or applicable Foreign Pension Plan.

ARTICLE 11: CHANGE OF CONTROL

11.1 Effect of Change of Control.

(a) Upon a Change of Control (as defined in Section 11.2 hereof) all benefits which have accrued under the Plan shall immediately become fully vested.

(c) Upon or after a Change of Control, the Plan shall be deemed to have been discontinued (within the meaning of Article 10 hereof) upon the first to occur of the following:

(i) the date of the Change of Control if the successor to the Company or 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,

11.2 Definition of Change of Control. As used in this Section 11, ‘Change of Control’ shall mean:

30% or more of the combined voting power of the Company’s then outstanding securities; provided, however, that for purposes of this subsection 11.2(a), the following shall not constitute a Change of Control:

(ii) any acquisition of Common Stock by the Company or its subsidiaries,

(iii) 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

(iv) any acquisition of Common Stock by any corporation pursuant to a Business Combination which does not constitute a Change of Control under Section 11.2(c) hereof; or

(d) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding any other provision hereof, a change of control of the Employer, as a result of which the Employer is no longer a subsidiary of the Company or the Employer’s assets are no longer owned by a subsidiary of the Company, does not constitute a Change of Control of the Company, as defined herein, unless such transaction forms a part of a transaction that meets the definition of a Change of Control of the Company.

11.3 Other Definitions. As used in Section 11.2 hereof, the following words or terms shall have the meanings indicated:

(a) 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.

ARTICLE 12: GUARANTY BY THE COMPANY

The Company hereby binds itself, on a joint and several basis, with each Employer for the full performance by the Employer of all obligations, and liabilities of the Employer to

Employee of every kind, character, and description whatsoever, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, liquidated or unliquidated, arising under the Plan, together with all costs of collection, including, without limitation, reasonable attorneys’ fees and court costs (the “Obligations”).

This is a continuing guaranty which may be enforced before or after proceeding against the Employer for the Obligations and shall remain in effect until the Employer has performed all of its Obligations under the Agreement and the Agreement has terminated or expired. The Company waives all pleas of discussion and division, presentment and demand for payment from the Employee, protests and notice of dishonor or default.

ARTICLE 13: 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 Company or Employer or any affiliate of the Company or 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 14: 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 that received services of the Eligible Employee, present and future, and no payment shall be made under this Plan unless the applicable 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 15: CONTINUED EMPLOYMENT

Nothing contained herein shall be construed as conferring upon any Employee the right to continue in the employ of the Employer or Company in any capacity.

ARTICLE 16: 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 17: LAWS GOVERNING

ARTICLE 18: MISCELLANEOUS

18.1 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.

18.2 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 1st day of November, 2003.


TIDEWATER CREWING LIMITED

By:		/s/ Dean E. Taylor
		Dean E. Taylor
		Director

ATTEST:

/s/ Michael L. Goldblatt

Assistant Secretary

(Corporate Seal)

EXECUTED effective this 1st day of November, 2003.


TIDEWATER MARINE NORTH SEA LIMITED

By:		/s/ Dean E. Taylor
		Dean E. Taylor
		Director

ATTEST:

/s/ Michael L. Goldblatt

Joint Secretary

(Corporate Seal)

EX-10.16 11 dex1016.htm EXECUTIVE MEDICAL BENEFIT PLAN Executive Medical Benefit Plan

Exhibit 10.16

THE TIDEWATER HEALTH CARE PLAN CERTIFICATE

FOR

ACTIVELY EMPLOYED OFFICERS OF TIDEWATER INC.

EXECUTIVE HEALTH AND DENTAL BENEFITS

PROVIDED BY

BLUE CROSS AND BLUE SHIELD OF LOUISIANA

(Incorporated as Louisiana Health Service and Indemnity Company)

This insurance coverage is being provided by Blue Cross and Blue Shield of Louisiana and Your Employer, Tidewater Inc. It is a fully-insured Benefit Plan. It is the intent of the Group and the Company to provide Benefits in accordance with the laws of the state where the Group Benefit Plan is issued, unless otherwise forbidden by the laws of the state where You live. If there is a conflict between any provision in this Certificate and the applicable state law, the state law will prevail.

This Certificate is a supplement to any other Group Employee Benefit Plan Certificate(s) previously issued to You describing this insurance coverage and is intended to provide additional Benefits for some of the Eligible Expenses incurred by You and Your family that are not payable under the other Group Employee Benefit Plan. Benefits will be paid at the Coinsurance Percentage, as shown in the Schedule of Benefits, for all Eligible Expenses.

This Certificate does not waive or alter any of the terms of the Benefit Plan. If coverage questions arise, the Benefit Plan will govern.

The Group referred to herein means Tidewater Inc. The Company referred to herein means Blue Cross and Blue Shield of Louisiana and/or another Blue Cross and Blue Shield Plan that has entered into an agreement with Blue Cross and Blue Shield of Louisiana to provide Benefits to eligible Members under the Benefit Plan. A word used in the masculine gender applies also in the feminine gender.

TABLE OF CONTENTS


		PAGE
Definitions		3

Expenses Not covered		8

Coordination of Benefits		9

Termination of Coverage		13

Continuation of Insurance Upon Death of the Employee		14

Continuation of Insurance		15

COBRA Continuation of Coverage		16

Right of Subrogation		18

General Provisions		18

ERISA Rights		26

DEFINITIONS

The following Definitions are applicable to the Benefit Plan in addition to the Definitions contained in the Group Employee Benefit Plan Certificate previously issued to You which describes the Covered Services provided under the Benefit Plan. Please refer to that document also for a full description of Definitions.

Age - The age of the Covered Person at his or her last birthday.

Benefits - The amount provided by the Company, subject to any limitation specified in the Benefit Plan, for Covered Services in accordance with the Coinsurance percentage shown in the Schedule of Benefits.

Benefits paid for Covered Services listed herein must be:

For medical care as defined under Internal Revenue Service (IRS) Section 231(d); and

Required for treatment; and

Recommended and approved by the attending Physician.

The Company will provide Benefits, at the Coinsurance percentage shown in the Schedule of Benefits, for those Covered Services shown in the Schedule of Benefits, which are not payable, in whole or in part, under the Group Employee Benefit Plan. All Eligible Expenses must be incurred after You become covered under the Plan.

The total Benefits paid will not exceed the Benefit Period Maximum Amount per family, as shown in the Schedule of Benefits. No Benefits will be paid for services, supplies, or equipment listed under the Expenses Not Covered provision, unless otherwise stated in the Benefit Plan.

Benefit Period - A calendar year, January 1 through December 31. For new Members, the initial Benefit Period begins on the Enrollment Date and ends on December 31 of the same year.

Certificate - The agreement between the Company and the Employee, including the original and/or amended Schedule of Benefits, the Employee’s individual application (if medically underwritten), and any amendments to the Certificate.

Claim - A claim is written or electronic proof, in a form acceptable to the Company, of charges for Covered Services that have been incurred by a Member during the time period the Member was insured under the Benefit Plan. The provisions in effect at the time the service or treatment is received shall govern the processing of any claim expense actually incurred as a result of the service or treatment rendered.

Company - Blue Cross and Blue Shield of Louisiana (incorporated as Louisiana Health Service & Indemnity Company), and/or another Blue Cross and Blue Shield Plan that has entered into an agreement with Blue Cross and Blue Shield of Louisiana to provide Benefits to eligible Members under the Benefit Plan.

Covered Person - A person who is eligible for coverage as an Employee or a Dependent and for which applicable premiums have been paid.

Covered Service - A service or supply specified in the Benefit Plan for which Benefits are available when rendered by a Provider. A charge for a Covered Service is considered to have been incurred on the date the service or supply was provided to the Member.

Creditable Coverage - A period of insurance coverage under an individual or group health plan (including Medicare, Medicaid, governmental and church plans) that is not followed by a Significant Break in Coverage. Creditable Coverage does not include coverage for liability, dental, vision, specified disease and/or other supplemental type benefits, unless the Member elects all lines of coverage.

Dependent - A person who is designated by an Eligible Participant may become covered or is entitled to Benefits under the Benefit Plan if he/she is one of the following:

An Eligible Participant’s spouse (if not legally separated or divorced from the Eligible Participant).

An Eligible Participant’s unwed child from birth or placement for legal adoption (but not after the child is removed from placement prior to legal adoption), until the child attains Age nineteen (19), provided the child is more than fifty percent (50%) dependent on the Eligible Participant for support and maintenance. An unwed child who is a student may be covered until Age twenty-five (25), provided such child is a Full-Time Student attending an accredited college, vocational or high school and enrolled in sufficient courses to maintain such full-time status. Proof of the child’s enrollment as a Full-Time Student must be submitted to the Company.

An Eligible Participant’s handicapped child who has attained Age nineteen (19), provided such child is:

Unwed; and

Mentally incapable or physically incapable of earning his/her own living. Proof of such incapacity must be furnished to the Company within thirty-one (31) days of his/her attainment of the limiting Age; and

Dependent upon the Eligible Participant for support and maintenance; and

A covered person on the day immediately prior to attaining the limiting Age.

An Eligible Participant’s child who is recognized under a qualified medical child support order, as determined by federal law, as having a right to receive Benefits under the Benefit Plan.

The term “child” includes:

A stepchild;

A legally adopted child;

With respect to Major Medical Benefits only, a child who has been placed in the Eligible Participant’s home for adoption;

and who is more than fifty percent (50%) dependent upon the Eligible Participant for support and maintenance.

Eligible Expense(s) - Treatment, services, and/or supplies, which must be: (1) Medically Necessary for the care or treatment of an Injury or Illness; and (2) Recommended and approved by a Physician or a Participating Provider. All Eligible Expenses must be incurred after the person becomes covered under the Benefit Plan.

Eligible Participant -

An Eligible Participant is defined as an Employee of the Group, who is a member of one of the classes of coverage described in the Classification Schedule shown in the Schedule of Benefits of the Group Employee Benefit Plan Certificate, who is an Officer of Tidewater Inc.

An Eligible Participant becomes a Covered Person when enrolled for coverage under the Benefit Plan.

No person may be covered as both an Eligible Participant and a Dependent at the same time.

Employee - An Eligible Participant who qualifies for coverage in accordance with the class as determined by the Group and described on the application for coverage.

Enrollment Date - The first day of coverage under the Benefit Plan or if there is a Waiting Period, the first day of the Waiting Period.

Full-Time Student -

A Dependent attending an accredited college, vocational or high school; and

A Dependent enrolled in sufficient courses to maintain full-time status.

Full-Time Student status will continue during school vacation if:

The Dependent was enrolled as a Full-Time Student immediately prior to the vacation; and

Intends to return as a Full-Time Student; and

Returns to school after vacation, if not prevented from doing so due to Illness or Injury.

The Company and the Group reserve the right to require proof of Full-Time Student status.

Group - Tidewater Inc., or other legal entity of Tidewater Inc., for which Blue Cross and Blue Shield of Louisiana administers the Benefit Plan.

Illness - A disorder or disease of the mind or body or a pregnancy.

Injury - Accidental bodily injury sustained by a Covered Person while he is covered under the Benefit Plan. It must be independent of sickness, disease, bodily infirmity or other causes.

Investigational - The use of any treatment, procedure, facility, equipment, drug, device or supply not accepted, as determined by the Company, as standard medical treatment of the condition being treated, or any such items requiring federal or other government agency approval not granted at the time services were rendered.

Late Enrollee - A Participant who enrolls in the Benefit Plan after the initial enrollment period and who does not make application during any special enrollment period.

Medically Necessary (or “Medical Necessity”) - Those services, treatments, procedures, equipment, drugs, devices, items or supplies furnished by a covered Provider that are required to identify or treat a Member’s Illness or Injury, and which are determined by the Company to be covered under the Benefit Plan in that they are:

consistent with symptoms, diagnosis and treatment of the Member’s condition, Illness, or Injury; and

consistent with standards of good medical practice; and

not primarily for the personal comfort or convenience of the Member, his or her family, or the Provider; and

the most appropriate supply or level of care which can safely be provided to the Member. When applied to the care of an Inpatient, it further means that the Member’s medical symptoms or condition require continuous twenty-four (24) hour a day Physician and nursing intervention and that the services cannot be safely provided to the Member as an Outpatient.

The fact that a Physician or other Provider prescribes, orders, recommends or approves a service or supply, or that a court orders a service or supply to be rendered, does not make it Medically Necessary.

Member - An Eligible Participant or an enrolled Dependent.

Open Enrollment Period - Unless specified in the Schedule of Benefits, the Open Enrollment Period means the one (1) month period prior to the beginning of each Plan Year.

Physician - A Doctor of Medicine or a Doctor of Osteopathy legally qualified and licensed to practice medicine and practicing within the scope of his or her license at the time and place service is rendered.

Provider - A Hospital, Allied Health Facility, Physician, or Allied Health Professional, licensed where required, performing within the scope of license, and approved by the Company.

Participating Provider - A Provider that has a Provider Agreement with the Blue Cross and Blue Shield Plan pertaining to payment for Covered Services rendered to a Member.

Nonparticipating Provider - A Provider that does not have a Provider Agreement with the Blue Cross and Blue Shield Plan pertaining to payment for Covered Services rendered to a Member.

Reimbursement Percentage - The percentage of Eligible Expenses, which are payable under the Benefit Plan, as shown in the Schedule of Benefits.

Significant Break in Coverage - A period of sixty-three (63) or more days without Creditable Coverage. Periods of no coverage during a Waiting Period shall not be taken into account for purposes of determining whether a Significant Break in Coverage has occurred.

Special Enrollee - - An Eligible Participant who is entitled to and who requests Special Enrollment (as described in the Schedule of Eligibility section of the Group Employee Benefit Plan Certificate) within thirty-one (31) days of losing other health coverage or for a newly acquired Dependent within thirty-one (31) days of marriage, birth, adoption, or placement of adoption.

Waiting Period - The period that must pass before an individual is eligible to be covered for Benefits under the Benefit Plan. If an individual enrolls as a Late Enrollee or as a Special Enrollee, any period before such Late or Special Enrollment is not a Waiting Period.

You/Your - The Employee who is covered under the Benefit Plan.

EXPENSES NOT COVERED

The following Limitations and/or Exclusions are applicable to the Benefit Plan in addition to the Limitations and Exclusions contained in the Group Employee Benefit Plan Certificate previously issued to You which describes the Covered Services provided under the Benefit Plan. Please refer to that document also for a full description of Limitations and/or Exclusions.

Benefits will not be provided for the following:

1.	Services, treatments, procedures, equipment, drugs, devices, items or supplies that are not Medically Necessary for an Illness or Injury and are not consistent as a medical deduction under Internal Revenue Service (IRS) Section 213(a).

2.	Services covered in whole or in part by Workers’ Compensation laws, the Jones Act, and/or services rendered as a result of occupational disease or Injury.

3.	Any Injury or Illness arising out of the commission of, or attempt to commit, an assault, battery, felony or act of aggression, insurrection, rebellion, or participation in a riot.

4.	Services or expenses for which the Member has no obligation to pay, or for which no charge would be made if the Member had no health insurance coverage.

5.	Services or supplies rendered or furnished before the Member’s Enrollment Date or after the Member’s termination date. Benefits are not available for charges for services or supplies rendered or furnished during an Admission in progress on the Member’s Enrollment Date.

6.	Charges for care or services furnished by any agency or program funded by federal, state, or local government. This exclusion does not apply to Medicaid or where prohibited by law.

7.	Any Injury or Illness occurred while serving as a member of the Armed Forces.

8.	Any charges for services which are not related to and consistent with the treatment of any Injury or Illness of the Covered Person.

9.	Charges for medical care, services, or supplies which are not furnished or prescribed by a Physician, including non-prescription (over-the-counter) drugs.

10.	Services or supplies which are Investigational in nature, or for experimental treatment or procedures, or research purposes, or when not a generally recognized accepted medical practice.

11.	Any charges for outpatient food, food supplements or vitamins.

12	Any charges for services or supplies which are cosmetic in nature and are not as a result of a previous Illness or Injury.

COORDINATION OF BENEFITS

1.	Applicability

This Coordination of Benefits (“COB”) section applies to This Plan when the Member has health care coverage under more than one plan. “Plan” and “This Plan” are defined below.

If this COB section applies, the Order of Benefit Determination Rules should be looked at first. Those rules determine whether the benefits of This Plan are determined before or after those of another plan. The benefits of This Plan:

(1)

will not be reduced when, under the Order of Benefit Determination Rules, This Plan determines its benefits before another plan.

(2)

may be reduced when under the Order of Benefit Determination Rules, another plan determines its benefits first. That reduction is described in Paragraph 4 of this COB section.

2.	Definitions (Applicable only to this Section of the Benefit Plan)

“Plan” means any group or blanket health plan which provides benefits for services, supplies, or equipment for hospital, surgical, medical, or dental care, including, but not limited to coverage under:

•

insurance policies, non-profit health service plans, health maintenance organizations, subscriber contracts, self-insured, pre-payment, automobile, or homeowners medical payments plans;

•

government programs, including compulsory no-fault automobile insurance, unless an applicable law forbids coordinating benefits with this type of program;

•

labor-management trusteed plans, union welfare plans, employer organization plans, employee benefit organization plans, and professional association plans;

•

any other employee welfare benefit plan as defined in the Employee Retirement Income Security Act of 1974, as amended;

•

Medicare as permitted by federal law;

•

group-type plans or policies which can be obtained only because of employment with or membership in a particular organization, corporation, or other business entity.

This does not include school accident insurance, Medicaid, hospital daily indemnity plans, specified diseases only policies, or limited occurrence policies which provide only for intensive care or coronary care in the hospital.

Each plan or other arrangement for coverage is a separate plan. If an arrangement has two parts and COB rules apply only to one of the two, each of the parts is a separate plan.

“This Plan” means the part of the Group’s Benefit Plan and any amendments/endorsements thereto that provides benefits for health care expenses.

“Primary Plan”/”Secondary Plan.” The Order of Benefit Determination Rules state whether This Plan is a Primary Plan or Secondary Plan as to another plan covering the person.

When This Plan is a Primary Plan, its benefits are determined before those of the other plan and without considering the other plan’s benefits.

When This Plan is a Secondary Plan, its benefits are determined after those of the other plan and may be reduced because of the other plan’s benefits.

When there are more than two plans covering the person, This Plan may be a Primary Plan as to one or more other plans, and may be a Secondary Plan as to a different plan or plans.

“Allowable Expense” means a necessary, reasonable, and customary item of expense for health care, when the item of expense is covered at least in part by one or more plans covering the person for whom the claim is made.

When a plan provides benefits in the form of services, the reasonable cash value of each service rendered will be considered both an Allowable Expense and a benefit paid.

When benefits are reduced under a Primary Plan because a covered person does not comply with the Primary Plan’s provisions, the amount of such reduction will not be considered an Allowable Expense. Examples of such provisions are those related to second surgical opinions, pre-certification of admissions or services, and preferred provider arrangements.

“Claim Determination Period” means that part of the Benefit Period during which a person covered by This Plan is eligible to receive benefits under the provisions of This Plan.

3.	Order of Benefit Determination Rules

When there is a basis for a claim under This Plan and another plan, This Plan is a Secondary Plan which has its benefits determined after those of the other plan, unless:

(1)

the other plan has rules coordinating its benefits with those of This Plan; and,

(2)

both those rules and This Plan’s rules, in subparagraph (b.) below, require that This Plan’s benefits be determined before those of the other plan.

This Plan determines its order of benefits using the first of the following rules which applies:

(1)

Non-dependent/Dependent: The benefits of the plan which covers the person as an employee, member or subscriber (that is, other than as a dependent) are determined before those of the plan which covers the person as a dependent; except that if the person is also a Medicare beneficiary, and as a result of the rule established by Title XVIII of the Social Security Act and implementing regulations, Medicare is

(a) Secondary to the plan covering the person as a Dependent, and

(b) Primary to the plan covering the person as other than a Dependent (e.g., a retired employee), then the benefits of the plan covering the person as a Dependent are determined before those of the plan covering that person as other than a Dependent.

(2)

Dependent Child/Parents Not Separated or Divorced: Except as stated in subparagraph b.(3) below, when This Plan and another plan cover the same child as a Dependent of different persons, called “parents”:

(a)

the benefits of the plan of the parent whose birthday falls earlier in the Benefit Period are determined before those of the plan of the parent whose birthday falls later in the Benefit Period; but

(b)

if both parents have the same birthday, the benefits of the plan which covered one parent longer are determined before those of the plan which covered the other parent for a shorter period of time.

However, if the other plan does not have the rule described in (a) immediately above, but instead has a rule based upon the gender of the parent, and if, as a result, the plans do not agree on the order of benefits, the rule in the other plan will determine the order of benefits.

(3)

Dependent Child/Separated or Divorced Parents: If two or more plans cover a person who is a Dependent child of divorced or separated parents, benefits for the child are determined in this order:

(a)

first, the plan of the parent with custody of the child;

(b)

then, the plan of the spouse of the parent with custody of the child;

(c)

finally, the plan of the parent not having custody of the child.

However, if the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child, and the entity obligated to pay or provide the benefits of the plan of that parent has actual knowledge of those terms, the benefits of that plan are determined first. The plan of the other parent shall be the Secondary Plan.

This paragraph does not apply when any benefits are actually paid or provided before the entity has that actual knowledge.

(4)

Joint Custody: If the specific terms of a court decree state that the parents will share joint custody, without stating that one of the parents is responsible for the health care expenses of the child, the plans covering the child will follow the order of benefit determination rules outlined in Paragraph 3.b.(2).

(5)

Active/Inactive Employee: The benefits of a plan which covers a person as an employee who is not terminated, laid off, or retired (or as that employee’s dependent) are determined before those of a plan which covers that person as a terminated, laid off or retired employee (or as that employee’s dependent). If the other plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this rule is ignored.

(6)

Continuation Coverage: If a person whose coverage is provided under a right of continuation pursuant to federal or state law also is covered under another plan, the following will be the order of benefit determination:

(a)

First, the benefits of a plan covering the person as an employee, member or subscriber (or as that person’s Dependent);

(b)

Second, the benefits under the continuation coverage.

If the other plan does not have the rule described above, and if, as a result, the plans do not agree on the order of benefits, this rule is ignored.

(7)

Longer/Shorter Length of Coverage: If none of the above rules determines the order of benefits, the benefits of the plan which covered an employee, member or subscriber longer are determined before those of the plan which covered that person for the shorter time.

4.	Effect on the Benefits of This Plan

This Paragraph (4.) applies when, in accordance with Paragraph (3.), “Order of Benefit Determination Rules,” This Plan is a Secondary Plan as to one or more other plans. In that event, the benefits of This Plan may be reduced, as described in this paragraph. Such other plan or plans are referred to as “the other plans” in (b.) immediately below.

Reduction in This Plan’s Benefits

The benefits of This Plan will be reduced when the sum of:

(1)

the benefits that would be payable for the Allowable Expenses under This Plan in the absence of this COB section, and

(2)

the benefits that would be payable for the Allowable Expenses under the other plans in the absence of provisions with a purpose like that of this COB section, whether or not claims are made,

would be more than those Allowable Expenses in a Claim Determination Period. In that case, the benefits of This Plan will be reduced so that they and the benefits payable under the other plans do not total more than those Allowable Expenses.

When the benefits of This Plan are reduced as described above, each benefit is reduced in proportion. It is then charged against any applicable benefit limit of This Plan.

5.	Right to Receive and Release Needed Information

Certain facts are needed to apply these COB rules. The Company has the right to decide which facts it needs. It may get needed facts from or give them to any other organization or person. The Company need not tell, or get the consent of, any person to do this. Each person claiming benefits under This Plan must give the Company any facts it needs to pay the claim.

6.	Facility of Payment

A payment made under another plan may include an amount which should have been paid under This Plan. The Company may pay that amount to the organization which made that payment. That amount will then be treated as though it were a benefit paid under This Plan. To the extent such payments are made, they

discharge the Company and the Group from further liability. The term “payment made” includes providing benefits in the form of services, in which case the payment made will be deemed to be the reasonable cash value of any benefits provided in the form of services.

7.	Right of Recovery

If the amount of the payments made by the Company and the Group is more than it should have paid under this COB section, it may recover the excess. It may get such recovery or payment from one or more of:

The persons it has paid or for whom it has paid;

Insurance companies; or

Other organizations.

The “amount of the payments made” includes the reasonable cash value of any benefits provided in the form of services.

If the excess amount is not received when requested, any benefits due under This Plan will be reduced by the amount to be recovered until such amount has been satisfied.

TERMINATION OF COVERAGE

1.	The Member’s coverage may be terminated for fraud or material misrepresentations in connection with application for coverage or claim for Benefits.

Unless COBRA Continuation of Coverage is available and selected as provided in the Benefit Plan, a Member’s coverage terminates as provided below:

In the event an Employee ceases to be eligible for coverage under the Group, the coverage of such Employee and all of his/her Dependents automatically, and without notice, terminates at midnight on the date the Employee ceases to be covered.

The coverage of the Employee’s spouse will terminate automatically and without notice at midnight on the date upon which the entry of a final decree of divorce or other legal termination of marriage is made.

The coverage of a child as a Member will terminate automatically and without notice at midnight upon the date the child ceases to be an Eligible Dependent.

Upon the death of an Employee, the coverage of all of his/her surviving Dependents will terminate automatically and without notice at midnight on the date of the Employee’s death. However, a covered surviving spouse and Dependents may be eligible to continue coverage under the Continuation of Insurance Upon Death of the Employee provision set forth below.

2.	In the event the Group cancels the Benefit Plan, such cancellation or termination alone will operate to terminate all rights of the Member to Benefits under the terms of the Benefit Plan as of the effective date of such cancellation or termination.

3.	In the event of termination, if the Eligible Participant or Dependent is a bed patient in a Hospital on the date of termination, all Benefits will terminate as described in a., b., c., and d. above.

4.	Except as otherwise provided in the Benefit Plan, no Benefits are available to a Member for Covered Services rendered after the date of termination of a Member’s coverage.

CONTINUATION OF INSURANCE

UPON DEATH OF THE EMPLOYEE

If eligibility for group coverage ceases as a result of the death of the Employee, a surviving spouse covered as a Dependent who is fifty (50) years of age or older, will be provided continuous coverage under the Benefit Plan for a period of ninety (90) days from the date of the Employee’s death. Continued coverage will also be provided for the deceased Employee’s Dependent children, if covered prior to the Employee’s death.

Within the ninety (90) day period, the surviving spouse will be given the option to further continue that same coverage (on a premium paying basis) without a physical exam.

If the continuation of coverage option is not chosen, Benefits will cease at the end of the ninety (90) day period. If the continuation of coverage option is chosen within the ninety (90) day period, coverage will continue without interruption and premium is due from the surviving spouse from the last date for which premium has been paid. Such premium will not exceed the premium assessed for each Employee by class of coverage under the group contract.

The Group will be responsible for notifying the spouse of the right to continue and for billing and collection of premium.

However, if the Company has been furnished with the home address of the surviving spouse at the time of death and has been notified by the Group in a manner acceptable to the Company of the death of the Employee, the Company will notify the surviving spouse of the right to continue.

Coverage continued on a premium paying basis terminates on the earliest of

•

the date premium is due and is not paid on a timely basis; or

•

the date the surviving spouse or a Dependent child becomes eligible for Medicare; or

•

the date the surviving spouse or a Dependent child becomes eligible to participate in another group health plan; or

•

the date the surviving spouse remarries or dies; or

•

the date the group Benefit Plan ends; or

•

the date a Dependent child is no longer eligible.

CONTINUATION OF INSURANCE

An Employee whose coverage under the Benefit Plan ends because of termination of active employment or termination of membership in the eligible class or classes under the Benefit Plan may be entitled to continue the coverage under the Benefit Plan for himself and his eligible Dependents who were covered on the date the coverage ended until the earliest of the following dates:

•

Twelve (12) calendar months from the date the Employee’s coverage ended; or

•

The date ending the period for which the Employee last paid any required premium contribution; or

•

The date the Employee becomes eligible for similar group coverage; or

•

The date the Benefit Plan ends; or

•

The date the Employee legally resides outside the Company’s service area.

Continuation of coverage for an Employee and his Dependents is not available if:

•

The Employee was not continuously covered under the Benefit Plan for three (3) consecutive months immediately preceding the date his coverage ended; or

•

The Employee becomes eligible for other group coverage within thirty-one (31) days after coverage under the Benefit Plan ends; or

•

The Employee’s coverage under the Benefit Plan terminated due to fraud; or

•

The Employee’s coverage under the Benefit Plan terminated due to his failure to pay his required contribution to premium; or

•

The Employee is eligible for continuation of coverage under COBRA.

The Employee must notify the Group in writing of his election to continue this group health coverage and must pay any required contribution to the Group no later than the date on which coverage under the Benefit Plan would otherwise end. A form providing notification of the Employee’s election to continue his coverage is available from the Group.

COBRA CONTINUATION OF COVERAGE

In accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), and any amendments thereto, certain covered Employees and Dependents who would otherwise lose coverage as a result of a Qualifying Event, will have the option of continuation of that coverage without evidence of insurability.

These Employees and Dependents (“Qualified Beneficiaries”) are those who are covered under the Benefit Plan on the day before a Qualifying Event occurs. In addition, a child who is born or placed for adoption with the covered Employee during a period of COBRA coverage will be eligible to become a Qualified Beneficiary if

notification of such birth or adoption is made within thirty (30) days of birth or adoption. A “Qualifying Event” is any of the following events:

•

Termination of employment of an Employee for reasons other than gross misconduct;

•

Loss of eligibility by an Employee due to a reduction in the number of work hours of the Employee;

•

Death of an Employee;

•

Divorce or legal separation of an Employee;

•

The covered Employee becomes entitled to Medicare benefits resulting in the loss of coverage for Dependents;

•

A Dependent child ceases to be an Eligible Dependent under the terms of the Benefit Plan; or

•

The Group’s Title 11 Bankruptcy proceeding which commences on or after July 1, 1986, but only with respect to covered Employees who retired from the Group at any time.

The Qualified Beneficiary must notify the Group if the Qualifying Event is a divorce or legal separation or if a Dependent child loses eligibility for coverage, within sixty (60) days of the occurrence of the Qualifying Event. The Group will advise a Qualified Beneficiary of his rights under COBRA upon the occurrence of any other Qualifying Event and following notice or occurrence of a Qualifying Event when such notice is required to be given by the beneficiary.

The Member may be required to pay the applicable premium for continued coverage plus an amount to cover administrative expenses.

The option to elect continuation will be offered during a period which:

•

begins no later than the date on which the Member otherwise would lose coverage under the group health plan (the termination date); and

•

ends no earlier than sixty (60) days after the termination date or if notice is given, sixty (60) days after the Member is notified of his or her right to continue coverage, whichever is later.

If continuation of coverage is elected, the Qualified Beneficiary then has forty-five (45) days within which to make the first premium payment.

Continuation of coverage begins on the termination date and ends no later than the earliest of:

•

eighteen (18) months after the termination date in the case of termination of employment or reduction in work hours. If a second Qualifying Event occurs during this eighteen (18) month period, the eighteen (18) month period will be extended to thirty-six (36) months;

NOTE: The eighteen (18) months may be extended to twenty-nine (29) months for a Qualified Beneficiary who is determined to be disabled (as determined by the Social Security Administration) at the time employment was terminated, becomes disabled during the first sixty (60) days of COBRA coverage, or eligibility ceased because work hours were reduced. The Qualified Beneficiary must notify

the Group of the disability determination within eighteen (18) months of the termination date and no later than sixty (60) days after the date of the Social Security Administration determination. The Qualified Beneficiary must also notify the Group within thirty (30) days of any final determination that the Qualified Beneficiary is no longer disabled. In this case, coverage will end no later than the first day of the month that begins more than thirty (30) days after a final determination that the Qualified Beneficiary is no longer disabled (as determined under the Social Security Act); or

•

thirty-six (36) months after the date of termination due to any other Qualifying Event; or

•

with respect to Dependent children, the date the Dependent children no longer meet the definition of Eligible Dependent; or

•

the date the Group ceases to maintain any group health plan; or

•

the date coverage ceases because of non-payment of required premiums; or

•

the date the Employee or Dependent becomes covered under another group health plan and benefits under that plan are not excluded or limited with respect to a Pre-Existing Condition; or

•

the date the Qualified Beneficiary becomes entitled to Medicare. Where the Qualifying Event is entitlement of an Employee to Medicare, the period of coverage for Dependents shall not terminate earlier than thirty-six (36) months from the date the Employee becomes entitled to Medicare.

NOTE: Special rules apply for the duration of coverage under COBRA for certain retirees and their Dependents who lose coverage as a result of an employer’s bankruptcy which is a “Qualifying Event.” In this event, affected retirees and surviving spouses of deceased retirees may elect lifetime coverage as of the date of the bankruptcy proceeding. Spouses and Dependent children of retirees may continue COBRA coverage until the retiree’s death. When the retiree dies, the surviving spouse and any Dependent children may elect and pay for an additional thirty-six (36) months of coverage from the date of the retiree’s death. In all cases, these Qualified Beneficiaries must pay for the coverage elected. COBRA coverage under these circumstances will terminate if the employer ceases to provide any group health plan to any employees, or if the Qualified Beneficiaries fail to pay the required premiums or become covered under another employer’s group health plan.

RIGHT OF SUBROGATION

To the extent that Benefits for Covered Services are provided or paid under the Benefit Plan, the Company and the Group will be subrogated and will succeed to the right of the Member for the recovery of the amount paid under the Benefit Plan against any person, organization or other carrier except where such carrier provides Benefits directly to a Member who is its insured. The acceptance of such Benefits hereunder will constitute such subrogation.

The Member will reimburse the Company (on behalf of the Group) all amounts recovered by suit, settlement, or otherwise, from any third party or his insurer to the extent of the Benefits provided or paid under the Benefit Plan. The right of reimbursement to the Company and the Group exists to the extent allowed by law

even if the payment received by the Member is for, or is described as for, his damages other than health care expenses and/or dental care expenses, or if the Member recovering the money is a minor. All costs (including attorney fees) incurred by the Member in exercising any such right of recovery will be the responsibility of the Member. Any amount paid by the Company (on behalf of the Group) for which any third party or insurer is responsible will not be reduced by the amount of the Member’s costs.

The Member will take such action, furnish such information and assistance, and execute such papers as the Company or the Group may require to facilitate enforcement of its rights, and will take no action prejudicing the rights and interest of the Company and the Group under the Benefit Plan. Nothing contained in this provision will be deemed to change, modify or vary the terms of the Coordination of Benefits section of the Benefit Plan.

GENERAL PROVISIONS

A.	The Benefit Plan

Except as specifically provided herein, the Benefit Plan will not make the Company liable or responsible for any duty or obligation which is imposed on the Group by federal or state law or regulations. To the extent that the Benefit Plan may be an employee welfare benefit plan as defined in the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, The Group will be the administrator of such employee welfare benefit plan and will be solely responsible for meeting any obligations imposed by law or regulation on the administrator of the plan, except those specifically undertaken by the Company herein.

The Company will not be liable for or on account of any fault, act, omission, negligence, misfeasance, malfeasance or malpractice on the part of any Hospital, other institution, or agent or Employee thereof, or on the part of any Physician, Allied Provider, nurse, technician or other person participating in or with the care or treatment of a Member.

B.	Benefit Plan Changes

The Company and the Group reserves the right to modify the terms of the Benefit Plan upon not less than thirty (30) days notice to the Member. No change or waiver of any Benefit Plan provision will be effective until approved by the Company’s and/or the Group’s chief executive officer or other officer who is authorized to make such changes.

C.	Identification Cards and Certificates or Booklets

The Company will issue identification cards and certificates or booklets which describe the Benefit Plan’s Benefits and the procedures for obtaining Benefits. In the event of a conflict between the Benefit Plan and the certificates or booklets, the terms of the Benefit Plan will prevail.

D.	Benefits to Which Members are Entitled

The liability of the Company and the Group is limited to the Benefits specified in the Benefit Plan.

Benefits for Covered Services specified in the Benefit Plan will be provided only for services and supplies rendered on and after the Member’s Enrollment Date by a Provider specified in the Benefit Plan and regularly included in such Provider’s charges.

E.	Filing of Claims

A claim is a written or electronic proof of charges for Covered Services that have been incurred by a Member during the time period the Member was insured under the Benefit Plan. Benefits will not be due under the Benefit Plan unless a claim in a form acceptable to the Company is filed with the Company within ninety (90) days from the date services are rendered. The claim must then be filed as soon as possible, but not more than eighteen (18) months after the claim is incurred. Benefits will be denied for claims filed any later than eighteen (18) months from the date of service. The claim must contain the data necessary for the Company to determine Benefits. A claim will be considered incurred on the date services or supplies are provided. Benefit Plan provisions in effect at the time the service or treatment is received shall govern the processing of any claim expense actually incurred as a result of the service or treatment rendered.

When filing claims for Prescription Drugs, Members must use the Prescription Drug Claim Form. The Prescription Drug Claim Form, or an attachment acceptable to the Company, must be completed and signed by the dispensing pharmacist. The claim form should then be sent to the Company.

F.	Review of Claims Denied in Whole or in Part

A Member has sixty (60) days, from the date of receipt of notification of the Company’s action on his or her claim, to request a review of any Benefits denied in whole or in part. To request a review, the Member must write to Blue Cross and Blue Shield of Louisiana, NASCO Dedicated Unit, Post Office Box 98029, Baton Rouge, LA 70898-9029, stating the issue to be reviewed and attaching pertinent medical records or other information that the Member offers in support of his or her claims. A copy should also be filed with the Manager of Employee Benefits of Tidewater Inc., 1440 Canal Street, New Orleans, LA 70112. The Member may also request a description of any pertinent records that the Company relied on in making its original decision to deny the claim in whole or in part.

A disposition of the claim will not be deemed final until such time as a written decision is rendered. The decision will be rendered within sixty (60) days after the request for review is received, unless medical records are requested from a Provider. In such case the decision will be rendered no later than one hundred twenty (120) days after the request for review is received. The Company has full discretionary authority to determine eligibility for Benefits and/or to construe the terms of the Benefit Plan. The Member will receive a written decision stating the specific reasons for the final decision with specific references to pertinent Benefit Plan provisions.

G.	Time Limit for Legal Action

No lawsuit may be filed:

•

any earlier than the first sixty (60) days after notice of claim has been given; or

•

any later than eighteen (18) months after the date services are rendered.

H.	Release of Information

Each Member receiving care under the Benefit Plan authorizes and directs any Provider to furnish to the Company, upon its request, all information, records, copies of records or testimony relating to attendance, diagnosis, examination, or treatment. Such authorization and compliance by each Provider affected will be a

condition precedent to rights to Benefits to each Member hereunder, and no Benefits will be provided in any case where such authorization is not given full effect. The Company will hold such information, records, or copies of records, as confidential except where in its discretion the same should be disclosed.

I.	Applicable Law

The Benefit Plan will be governed and construed in accordance with the laws and regulations of the State of Louisiana except when preempted by federal law.

J.	Payment of Benefits

Direct Payment to Member

All Benefits payable under the Benefit Plan and any amendment hereto are personal to the Member and are not assignable in whole or in part by the Member. The Company has the right to make payment to a Hospital, Physician, or other Provider (instead of to the Member) for Covered Services which they provide while there is in effect between the Company and any such Hospital, Physician, or other Provider an agreement calling for the Company to make payment directly to them. In the absence of such an agreement for direct payment, the Company will pay to the Member and only the Member those Benefits called for herein and the Company will not recognize a Member’s attempted assignment to, or direction to pay, another, except as required by law.

The Company reserves the right to select Hospitals, Physicians, and other Providers with which it will make agreements for direct payment for Covered Services rendered to Members, based on criteria which include the Company’s need in the locality, Utilization Management practices of the Hospital, Physician, or other Provider, quality of services, and the like.

K.	Member/Provider Relationship

The choice of a Provider is solely the Member’s.

Neither the Company nor the Group renders Covered Services, but only makes payment for Covered Services received by Members. Neither the Group nor the Company is liable for any act or omission of any Provider. The Company nor the Group has no responsibility for a Provider’s failure or refusal to render Covered Services to a Member.

The use or non-use of an adjective such as Participating, Key, Nonparticipating and Non-Key in referring to any Provider is not a statement as to the ability of the Provider.

L.	The Benefit Plan and Medicare

For employers having twenty (20) or more active Employees, federal law and regulations require that each active Employee Age sixty-five (65) or older, and each active Employee’s spouse Age sixty-five (65) or older, may elect to have coverage under the Benefit Plan or under Medicare.

Where such Employee or spouse elects coverage under the Benefit Plan, it will be the primary payor of Benefits with the Medicare program the secondary payor.

For an active Employee Age sixty-five (65) or older or for a spouse Age sixty-five (65) or older of an active Employee who elects to have Medicare as the primary payor, the Benefit Plan will be considered as the secondary payor.

Under federal law, if an active Employee under Age sixty-five (65) or an active Employee’s Dependent under Age sixty-five (65) is covered under a group Benefit Plan of an employer with one hundred (100) or more Employees and also has coverage under the Medicare program by reason of Social Security disability, the group Benefit Plan is the primary payor and Medicare is the secondary payor.

For persons under Age sixty-five (65) who are covered under the Benefit Plan and who also have coverage under the Medicare program by reason of end-stage renal disease, or if the Member is determined to be disabled and has coverage under the Medicare program, the Medicare program will be the primary payor and the Benefit Plan the secondary payor, except that during the first eighteen (18) month period that such persons are eligible for Medicare benefits by reason of end-stage renal disease or disability, the Benefit Plan will be the primary payor and Medicare the secondary payor.

When the Benefit Plan is the primary payor, it will provide regular Benefits for Covered Services. When the Benefit Plan is the secondary payor, it will provide Benefits not to exceed the difference between actual charges for services and the amount paid by Medicare (or the difference between the Medicare approved charge and the amount Medicare paid if assignment is accepted by the Physician).

M.	Notice

Any notice required under the Benefit Plan must be in writing. Notice to the Group or to the Company will be sent to the address stated in the application for group coverage. Required notices given will be considered delivered when deposited in the United States Mail, postage prepaid, addressed to the Member at the address as it appears on the records of the Company, or to the Group at the address as it appears on the records of the Company. The Group, the Company, or a Member may, by written notice, indicate a new address for giving notice.

N.	Job-Related Injury or Illness

The Group must report to the appropriate governmental agency any job-related Injury or Illness of an Employee where so required under the provisions of any legislation of any governmental unit. The Benefit Plan excludes Benefits for any services covered in whole or in part by Workers’ Compensation laws and/or rendered as a result of occupational disease or Injury. In the event Benefits are initially extended and a compensation carrier or employer makes any type settlement with the Employee, with any person entitled to receive settlement where the Employee dies, or if the Employee’s Injury or Illness is found to be compensable under law, the Employee must reimburse the Company and the Group for Benefits extended or direct the compensation carrier to make such reimbursement. The Company and the Group will be entitled to such reimbursement even if the settlement does not mention or excludes payment for health care expenses.

O.	Right of Recovery

Whenever any payment for Covered Services has been made in an amount that exceeds the maximum Benefits available for such services under the Benefit Plan, or whenever payment has been made in error for non-Covered Services, the Company will have the right to recover such payment from the Member or, if applicable, the Provider. As an alternative, the Company reserves the right to deduct from any pending claim for payment under the Benefit Plan any amounts the Member or Provider owes.

P.	Coverage in a Department of Veterans Affairs or Military Hospital

In any case in which a veteran is furnished care or services by the Department of Veterans Affairs for a non-service-connected disability, the United States will have the right to recover or collect the reasonable cost of such care or services to the extent the veteran would be eligible for Benefits for such care or services if the care or services had not been furnished by a department or agency of the United States. The amount that the United States may recover will be reduced by the appropriate Deductible and Coinsurance amount.

The United States will have the right to collect the reasonable cost of health care services incurred by the United States on behalf of a military retiree or a military Dependent through a facility of the United States military to the extent that the retiree or Dependent would be eligible to receive reimbursement or indemnification if the retiree or Dependent were to incur such cost on his or her own behalf. The amount the United States may recover will be reduced by the appropriate Deductible and Coinsurance amount.

Q.	Liability of Plan Affiliates

The Group, on behalf of itself and its participants, hereby expressly acknowledges its understanding that the Company is an independent corporation operating under a license from the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield Plans, the “Association” permitting the Company to use the Blue Cross and Blue Shield Service Marks in the State of Louisiana, and that the Company is not contracting as the agent of the Association. The Group, on behalf of itself and its participants, further acknowledges and agrees that it has not entered into another agreement based upon representations by any person other than the Company and that no person, entity, or organization other than the Company shall be held accountable or liable to the Group for any of the Company’s obligations to the Group. This paragraph shall not create any additional obligations whatsoever on the part of the Company other than those obligations created under other provisions of this agreement.

R.	Certificates of Creditable Coverage

The Company shall provide, without charge to Employees and/or Dependents who are or who were covered under the Benefit Plan, a written certification of their coverage under the Benefit Plan (Certificate of Creditable Coverage) under the following circumstances:

The Company will automatically issue a Certificate of Creditable Coverage to:

An individual who is a Qualified Beneficiary entitled to elect COBRA Continuation coverage.

An individual ceasing to be covered under the Benefit Plan.

An individual who is a Qualified Beneficiary and has elected COBRA continuation coverage that has ended.

A Certificate of Creditable Coverage will be given by the Company to an individual, at any time, upon request, for a period of up to twenty-four (24) months after coverage under the Benefit Plan ceases.

SUMMARY PLAN DESCRIPTION INFORMATION


Name of Plan:		The Tidewater Executive Health and Dental Benefit Plan For Actively Employed Officers of Tidewater Inc.

Name and Address of		Tidewater Inc.
Plan Sponsor:		1440 Canal Street
		Suite 2100
		New Orleans, Louisiana 70112
		Telephone: 1-504-568-1010 (1-800-678-8433)

Employer Identification Number (EIN):		72-0487776

Plan Number (PN):		501

Type of Plan:		Group Major Medical and Group Dental Benefit Plan

Type of Administration:		The Plan(s medical and dental Benefits are administered, on behalf of the Plan Administrator, by Blue Cross and Blue Shield of Louisiana, pursuant to the terms of the Administration Services Agreement and the terms and conditions of the Benefit Plan.

Name and Address of		Tidewater Inc.
Plan Administrator:		1440 Canal Street
		Suite 2100
		New Orleans, Louisiana 70112
		Telephone: 1-504-568-1010 (1-800-678-8433)

Agent for Service of		Tidewater Inc.
Legal Process:		1440 Canal Street
		Suite 2100
		New Orleans, Louisiana 70112
		Telephone: 1-504-568-1010 (1-800-678-8433)

Plan Year:		The financial records of the Plan are kept on a Plan Year basis. The Plan Year ends on each December 31.

Plan Details:		The eligibility requirements, termination provisions and a description of the circumstances which may result in disqualification, ineligibility, denial, or loss of any benefits are described in the Benefit Plan.

Future of the Plan:		Although the Plan Sponsor expects and intends to continue the Benefit Plan indefinitely, the Board of Directors of Tidewater Inc. reserves the right to modify, amend, suspend, or terminate the Benefit Plan at any time.


Source of Contributions and Funding:		The cost of all coverage is paid in full by the Plan Sponsor.

Department of Labor:		If You have any questions about Your rights under the Employee Retirement Income Security Act of 1974 (ERISA), You should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in Your telephone directory, or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, DC 20210.

ERISA RIGHTS

As a Participant in the Plan You are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (“ERISA”). ERISA provides that all Plan Participants shall be entitled to:

•

examine, without charge, at the Administrator’s office all Plan documents, insurance contracts and copies of all documents filed by the Plan with the U. S. Department of Labor, such as detailed annual reports and this SPD;

•

obtain copies of all Plan documents and other Plan information upon written request to the Administrator, who may make a reasonable charge for the copies;

•

receive a summary of the Plan’s annual financial report. The Administrator is required by law to annually furnish each Participant with a copy of this summary annual report.

In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. These people, called “fiduciaries” of the Plan, have a duty to act prudently and in the interest of You and other Plan Participants and beneficiaries. No one, including the Group or any other person, may fire You or otherwise discriminate against You in any way to prevent You from obtaining a Plan benefit or exercising Your rights under ERISA. If Your claim for a Plan benefit is denied in whole or in part, You must receive a written explanation of the reason for the denial. You have the right to have the Plan’s Administrator review and reconsider Your claim.

Under ERISA, there are steps You can take to enforce the above rights. For instance, if You request materials from the Plan and do not receive them within thirty (30) days, You may file suit in a federal court. In such a case, the court may require the Administrator to provide the materials and pay You up to one hundred dollars ($100.00) a day until You receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If You have a claim for benefits which is denied or ignored, in whole or in part, You may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if You are discriminated against for asserting Your rights, You may seek assistance from the U.S. Department of Labor, or You may file suit in a federal court. The court will decide who should pay court costs and legal fees. If You are successful the court may order the person You have sued to pay these costs and fees. If You lose, the court may order You to pay these costs and fees; if, for example, it finds Your claim is frivolous. If You have any questions about Your Plan, You should contact the Administrator. If You have any questions about this statement or about Your rights under ERISA, You should contact the Administrator or the nearest Area Office of the U.S. Labor-Management Services Administration, Department of Labor.

AMENDMENT TO THE

MANAGED HEALTH CARE EXECUTIVE MEDICAL BENEFIT PLAN CERTIFICATE OF

TIDEWATER INC. (“Group”)

This Amendment is issued to the Member and is effective on the date as shown on the Group’s Benefit Plan Amendment. All of the provisions, definitions, procedures, conditions, limitations, and exclusions of the Benefit Plan are applicable to this Amendment, unless they conflict with the provisions of this Amendment. If the provisions of the Benefit Plan or other Amendment or Endorsement heretofore issued conflict with those of this Amendment, the provisions of this Amendment will prevail.

HEALTH, DENTAL AND SHORT TERM DISABILITY SCHEDULE OF BENEFITS

The section entitled “Prescription Drugs” is hereby amended to read as follows:

Prescription Drugs (Benefits provided only through Participating Pharmacies)


Deductible Amount		None

Copayment Amount (per prescription)

Generic Drugs		$10.00

Brand Drugs if Generic Drugs available		$20.00 + Cost Difference for Brand

Brand Drugs if Generic Drugs not available		$20.00

Retail dispensing increments and Copayment for Generic and/or Brand Drugs:


34 day supply -		1 Copayment
68 day supply -		2 Copayments
102 day supply -		3 Copayments

Special Note:

Contraceptive drugs are excluded unless determined to be Medically Necessary and pre-authorization is obtained by calling the telephone number shown on the Member I.D. Card.

Weight reduction prescriptions are excluded unless determined to be Medically Necessary and pre-authorization is obtained by calling the telephone number shown on the Member I.D. Card.

The Copayment includes applicable sales tax.

All other provisions remain unchanged.

Blue Cross and Blue Shield of Louisiana, incorporated as Louisiana Health Service & Indemnity Company (referred to as the “Company”), provides administrative claims payment services only for the Group and does not assume any financial risk or obligation with respect to claims liability.

40XX0958 5/99

EXECUTIVE MEDICAL BENEFIT PLAN CERTIFICATE

HEALTH AND DENTAL SCHEDULE OF BENEFITS


GROUP NAME		GROUP NUMBER
Tidewater Inc.		48347 and Departments


GROUP’S BENEFIT PLAN DATE	GROUP’S BENEFIT PLAN AMENDED DATE	GROUP’S ANNIVERSARY DATE
January 1, 1998	January 1, 2001	January 1st

Benefit Period Maximum Amount (Per Family):		$7,500.00

DEDUCTIBLES and OUT-OF-POCKET MAXIMUMS


Individual Benefit Period Deductible		Not Applicable

Family Benefit Period Aggregate Deductible Maximum		Not Applicable

Individual Out-of-Pocket Maximum (Excludes Deductible)		Not Applicable

Family Out-of-Pocket Aggregate Maximum (Excludes Deductible)		Not Applicable

EXECUTIVE MEDICAL PLAN BENEFIT DESIGN


	Coinsurance Group	Coinsurance Member
Hospital

Inpatient Hospital Copayment	Not Applicable	Not Applicable

Inpatient Hospital Admission (Includes all Inpatient Services)	100%	0%

Emergency Treatment	100%	0%

Surgical and Medical Services Physician’s Office Visit and Consultations (Excludes Surgery)	100%	0%

Physician Surgical Services (Inpatient or Outpatient)	100%	0%

40XX0842 R 01/01


Assistant Surgeon Services	100%	0%

Anesthesia Services	100%	0%

Second Surgical Opinion (Optional)	100%	0%

Chiropractor Visits	100%	0%

Outpatient Diagnostic X-Ray	100%	0%

Preventive or Wellness Care	100%	0%

Pregnancy Care

Maternity Delivery (Prenatal and Postnatal Care)	100%	0%

Other Covered Services, Supplies, or Equipment Ambulance Services	100%	0%

Durable Medical Equipment, Prosthetics and Orthotics	100%	0%

Ambulatory Surgical Center (Outpatient Facility Charge)	100%	0%

TMJ Disorders (Limited to non-surgical services each Benefit Period - Facility and Professional services combined)	100%	0%

Outpatient Private Duty Nursing Services	100%	0%

Outpatient Speech, Physical, Occupational and Cardiac Therapy	100%	0%

Dental Services/Accidental Injury to Sound Natural Teeth (Dental and Medical Providers)	100%	0%

Attention Deficit/Hyperactivity Disorders	100%	0%


Mental Disorders

Inpatient Services Maximum (30 Days per Benefit Period)	100%	0%

Outpatient Services Maximum (20 Visits per Benefit Period)	100%	0%

Alcohol & Drug Abuse

Inpatient Services Maximum (30 Days per Benefit Period and Two confinements per Lifetime)	100%	0%

Outpatient Services Maximum (20 Visits per Benefit Period)	100%	0%

Prescription Drugs
Generic Drugs or Brand Drugs	100%	0%

Pre-Authorization is required for the following drugs and may be requested by calling: 1-800-973-7705.

•

Dexadrine (age nineteen (19) and over)

•

Adderall (age nineteen (19) and over)

•

Growth Hormones

•

Oral Contraceptives

•

Anorexiants

•

Prescription Vitamins and/or Minerals

THE FOLLOWING BENEFITS MUST BE AUTHORIZED

BY INDIVIDUAL CASE MANAGEMENT


Special Benefits	Coinsurance Group	Coinsurance Member
Skilled Nursing Facility Services	100%	0%
(Limited to 100 Days per Benefit Period)

Home Health Care Services	100%	0%
(Limited to 40 Visits per Benefit Period)

Hospice Care Services	100%	0%
(Limited to $5,000 Lifetime Maximum)

BENEFITS FOR THE FOLLOWING ARE AVAILABLE

ONLY IF A WRITTEN PRE-AUTHORIZATION IS OBTAINED

BY INDIVIDUAL CASE MANAGEMENT

Organ and Tissue

Transplant Benefits

Coinsurance
Group

Coinsurance
Member

(All Covered Services Subject to

the overall Lifetime Maximum)

100%

DENTAL CARE BENEFITS

(Provider Network not applicable)


BENEFIT PERIOD DEDUCTIBLE:

Type I		Not Applicable

Type II and III

Per Participant		Not Applicable

Per Family (Aggregate)		Not Applicable

Type IV		Not Applicable

BENEFIT PERIOD MAXIMUM:

Type I, II, and III		Not Applicable

TYPE IV ORTHODONTIC SERVICES:

Lifetime Maximum		Not Applicable

		Group /Member

ALLOWABLE CHARGE PAYMENT PERCENTAGES:

Type I (Preventive) Dental Expenses		100% / 0%

Type II (Basic) Dental Expenses		100% / 0%

Type III (Major) Dental Expenses		100% / 0%

Type IV (Orthodontic) Dental Expenses		100% / 0%

ELIGIBILITY ENROLLMENT AND WAITING PERIOD

Active Employees who are Officers of Tidewater Inc. - An initial Employee, performing all of the main duties of his or her job with the Group and working a minimum of thirty (30) hours per week and who is not part-time or temporary, will be eligible for coverage on the Benefit Plan date. A subsequent Employee, hired or promoted after the Benefit Plan date, will be eligible for coverage on the date of employment or promotion.

Coverage for an Active Employee will become effective on the date such Employee is eligible, provided he or she is Actively at Work on the effective date. If the Employee is not Actively at work on the effective date, coverage will become effective on the date the Employee returns to Active Work.

Dependents of Employees who are Officers of Tidewater Inc. - A Dependent of an Active Employee, who is eligible for coverage under the Plan and who is not already covered as an Employee under the Plan and for whom the Employee has made a written request for coverage, will be eligible:

•

On the date the Employee qualifies for coverage, if he or she has one (1) or more Dependents at that time; or

•

On the date the Employee acquires a first Dependent, if such Employee has no Dependents on the date the Employee becomes eligible for coverage.

Coverage for a Dependent of an Active Employee will become effective on the date such Dependent qualifies for Dependent coverage. Coverage for a Dependent who is Hospital confined on the effective date will become effective on the day after such Dependent is discharged from the Hospital.

Former Plan Participants with extended Benefits under COBRA - A former Employee who was an Officer of Tidewater Inc. and all covered Dependents will be eligible for coverage on the date following the loss of coverage due to a Qualifying Event.

Coverage will become effective on the date established by the Company, pending timely application and receipt of applicable premium payments by the Company.

TERMINATION OF MEDICAL AND DENTAL COVERAGES

Medical and dental coverages for the Subscriber will end on the earliest of:

The date upon which membership as an Eligible Participant ceases; or

The date upon which employment with the Group ceases; or

The date upon which the Subscriber or the Group ceases premium payments for this coverage; or

The date upon which the Plan ceases; or

The date upon which the Subscriber is pensioned or retired, unless the Subscriber, otherwise, qualifies for retiree medical benefits.

Medical and dental coverages for the Dependent will end on the earliest of:

The date upon which the Subscriber is no longer an Eligible Participant; or

The date upon which the Dependent ceases to be an eligible Dependent; or

The date upon which all Dependent coverage under the Plan is cancelled.

CHANGE IN AMOUNTS OF BENEFITS

Any change in the amount of Benefits due to a change in Your class will be effective on the date of the change, provided:

You are Actively at Work; and

You make any required premium payment for the change to become effective.

If You are not Actively at Work, such change will become effective on the first day on which You return to work. If You or the Group does not make the required premium payment within thirty-one (31) days of the change, any increased Benefits will not become effective until You give proof of good health satisfactory to the Company. Such increased Benefits will become effective on the date established by the Group and the Company.

Changes in amounts of Benefits due to an amendment to the Plan will become effective:

For You:

On the amendment date if You are Actively at Work performing the normal duties of Your job for a full work day:

While physically present at Your normal place of employment; or

At some other place of business that the Group requires You to go.

For Your Dependent (if applicable):

On the amendment date if the Dependent is not confined to a Hospital; or

On the day after the Dependent is released from a Hospital, if the Dependent is Hospital confined on the amendment date.

Payments will be based upon the Benefits in effect at the time the Covered Service is rendered.

EX-10.18 12 dex1018.htm AMENDED AND RESTATED NON-QUALIFIED PENSION PLAN FOR OUTSIDE DIRECTORS Amended and Restated Non-Qualified Pension Plan for Outside Directors

Exhibit 10.18

AMENDED AND RESTATED

NON-QUALIFIED PENSION PLAN

FOR

OUTSIDE DIRECTORS

OF TIDEWATER INC.


ARTICLE I - INTRODUCTION

ARTICLE II - DEFINITIONS

2.1		Definitions

ARTICLE III - PENSION BENEFITS

3.1		Eligibility
3.2		Time and Duration of Pension
3.3		Suspension of Pension Benefits
3.4		Deferred Compensation Plan
3.5		Amount of Pension
3.6		Forfeiture of Benefits
3.7		Payment of Benefits
3.8		Death of Participant

ARTICLE IV - NON-ASSIGNABILITY OF INTERESTS

4.1		Non-Assignability of Interests

ARTICLE V - ADMINISTRATION

5.1		No Funding Obligation
5.2		Applicable Law
5.3		Administration and Interpretation
5.4		Amendment
5.5		Termination
5.6		Change of Control

Amended through

May 31, 2001

AMENDED AND RESTATED

NON-QUALIFIED PENSION PLAN

FOR

OUTSIDE DIRECTORS

TIDEWATER INC.

WHEREAS, Tidewater Inc., a Delaware corporation (the “Company”) maintains the Non-Qualified Pension Plan for Outside Directors of Tidewater Inc. (the “Plan”), the provisions of which are at present expressed in a plan document effective March 22, 1990 and amendment thereto effective October 1, 1999; and

WHEREAS, the Board of Directors has authorized the restatement of the Plan, as amended;

NOW THEREFORE, the Plan is hereby restated to read in its entirety as follows:

ARTICLE I

INTRODUCTION

This Plan is established by Tidewater Inc. as a non-qualified pension plan for the exclusive benefit of Outside Directors who are or have been members of the Board of Directors of the Company and who retire from (or otherwise cease to render service for) the Board of Directors of the Company at any time on or after April 1, 1990.

The Plan shall be maintained according to the terms of this document, as it may be amended from time to time. The Board of Directors of the Company shall have the sole authority to amend the Plan and to resolve any dispute with respect to the interpretation and administration of the Plan. The Plan shall be administered and interpreted by the Plan Administrator, as provided in Section 5.3 hereof.

ARTICLE II

DEFINITIONS

2.1 Definitions. When used in this document, the following words and phrases shall have the meaning assigned to them, unless the context clearly indicates otherwise:

(a)

Affiliated Company means a direct or indirect subsidiary of Tidewater Inc.

(b)

The Company means Tidewater Inc., a Delaware corporation which maintains its principal offices in New Orleans, Louisiana.

(c)

Board of Directors means the Board of Directors of Tidewater Inc.

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(d)

Compensation Committee means the Compensation Committee of the Board of Directors or its delegate.

(e)

Cost of Borrowed Funds means the prime rate (at the time of reference) established by Whitney National Bank or 10% per annum, whichever is lower.

(f)

Death Benefit means the benefit provided by Section 3.8 hereof.

(g)

Emeritus Director means a person who (at the time of reference) is serving as Director Emeritus of the Company.

(h)

Outside Director means a person who (at the time of reference) served or is serving as a director on the Board of Directors and who, at such time, was or is not an employee of the Company or any Affiliated Company.

(i)

Participant means an Outside Director who has satisfied the eligibility requirements of Section 3.1 hereof.

(j)

Pension means the benefit determined according to Article III hereof.

(k)

Plan means the Non-Qualified Pension Plan for Outside Directors of Tidewater Inc., as set forth in this document and as amended by the Board of Directors from time to time.

(l)

Years of Service as a Director means the number of years not including partial years, (at the time of reference) that a Participant served on the Board of Directors, provided however, that solely those periods of service as a non-employee director (and not periods of service when such director was concurrently employed by the Company or any Affiliated Company) shall be counted for purposes of eligibility and benefit accrual under the Plan.

ARTICLE III

PENSION BENEFITS

3.1 Eligibility. A Director shall become a Participant upon (a) having served as an Outside Director of the Company for five or more years or (b) having attained the age of 65. Additionally, notwithstanding any other provision of the Plan, any Outside Director who is serving immediately prior to a Change of Control who is not a Participant, but who would have become a Participant had such service continued through the second anniversary of the Change of Control and had it been credited under the Plan for purposes of both the service

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requirements and the age requirements for participation (but not for purposes of determining the duration of the pension), shall become a Participant upon the occurrence of the Change of Control.

3.2 Time and Duration of Pension. A Participant shall be entitled to a pension commencing on the first business day of the calendar quarter next following the Participant’s retirement from, or other cessation of service to, the Board of Directors after five (or more) years of Service as an Outside Director or after having attained the age of 65. A Participant who was a member of the Board of Directors on May 31, 2001 will receive the annual Pension for a term equal to the Participant’s Years of Service as a Director. A Participant who joins the Board of Directors after May 31, 2001 will receive the annual Pension for a term equal to the Participant’s Years of Service as a Director, but not to exceed five years.

3.3 Suspension of Pension Benefits. The payment of Pension benefits under this Plan shall not be suspended when a Participant is serving as an Emeritus Director of the Company. The payment of Pension benefits under this Plan shall be suspended throughout any period when the Participant is serving as an Outside Director on the Board of Directors. Subsequent to any such period of benefit suspension for service on the Board of Directors such Participant’s Pension benefit under this Plan shall be recalculated with reference to all service as an Outside Director, including the directors’ retainer earned and the years of service accrued during such period of benefit suspension, and the Participant’s Pension benefit shall be paid or resumed at the newly calculated higher rate.

3.4 Deferred Compensation Plan. Nothing in this Plan shall affect eligibility for or benefits under the Deferred Compensation Plan for Outside Directors of Tidewater Inc.

3.5 Amount of Pension. A Participant’s Pension, as defined in Section 3.2, shall be an annual amount equal to the annual director’s retainer (exclusive of meeting fees or committee chairmen’s retainers) which is prevailing at the time the Participant retires from (or otherwise ceases to serve on) the Board of Directors. Notwithstanding the foregoing provisions of this Section 3.5, if a Participant retires from (or otherwise ceases to serve on) the Board of Directors upon or after the occurrence of a Change of Control (as defined in Section 5.6 hereof), the Participant’s Pension shall be an annual amount equal to the greater of (i) the annual director’s retainer (exclusive of meeting fees or committee chairmen’s retainers) which is prevailing at the time of such retirement or cessation of service or (ii) the annual director’s retainer (exclusive of meeting fees or committee chairmen’s retainers) which is prevailing immediately prior to the occurrence of a Change of Control. Further, notwithstanding the provisions of Section 3.3 hereof, in the event of such a retirement or cessation which follows a period of benefit suspension described in such Section, the rate of the Participant’s Pension shall be determined in accordance with the immediately preceding sentence, while the duration of the Pension shall be determined in accordance with Section 3.3.

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3.6 Forfeiture of Benefits. All benefits not yet paid for which an Outside Director would be otherwise eligible under this Plan shall be forfeited in the event that the Board of Directors determines that any of the following circumstances has occurred:

(a)

The Outside Director has engaged in knowing and willful misconduct in connection with his or her service as a director; or

(b)

The Outside Director, without the consent of the Board of Directors or any Operating Company Board, at any time during or after his or her period of service as an Outside Director, is employed by, becomes associated with, renders service (as a director or otherwise) to, or owns an interest (other than as a shareholder with a nonsubstantial interest) in, any business which is competitive with, or which controls a business which is competitive with the Company or any Affiliated Company.

3.7 Payment of Benefits. Unless an election is made for a lump sum payment under Section 5.6 hereof, the Pension shall be paid as a series of quarterly payments to the Participant. The quarterly payments shall commence on the date provided in Section 3.2 (or Section 3.3, as the case may be) and shall continue on the first business day of each calendar quarter thereafter for the duration of the Pension as provided in Section 3.2 hereof (or Section 3.3, as the case may be). It shall be a condition to the payment of the Pension to a Participant that for the duration of the Pension that the Participant remain available for consultation with the Company.

3.8 Death of Participant. If a Participant dies prior to payment of all of the Participant’s Pension, a Death Benefit shall be paid to the beneficiaries designated by him (or, if no designation is made, then to his estate). The amount of the Death Benefit shall be the remaining Pension benefit that would have been paid to the Participant had he lived, discounted by the Company’s then prevailing Cost of Borrowed Funds on the date of the Participant’s death. Any beneficiary designation, or change in the beneficiary designation shall be made in writing by completing and furnishing to the Plan Administrator a Beneficiary Designation form in the form attached hereto as Exhibit I. The last Beneficiary Designation Form received by the Plan Administrator shall be controlling over any testamentary or purported disposition by the participant, provided that no designation, or change of designation thereof shall be effective unless received by the Plan Administrator prior the death of the Participant.

ARTICLE IV

NON-ASSIGNABILITY OF INTERESTS

4.1 Non-Assignability of Interests. The interests herein and the right to receive benefits hereunder may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or

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subjected to any charge or legal process, and if any attempt is made to do so, or a Participant becomes bankrupt, the interests under the Plan of the person affected may be terminated by the Board of Directors, which, in its sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such person or make any other disposition of such interests as it deems appropriate.

ARTICLE V

ADMINISTRATION

5.1 No Funding Obligation. The obligation of the Company to pay any benefits under this Plan shall be unfunded and unsecured and any payments under this Plan shall be made from the Company’s general assets.

5.2 Applicable Law. This Plan shall be construed and enforced in accordance with the laws of the State of Louisiana.

5.3 Administration and Interpretation. The Company’s Director of Employee Relations (the “Plan Administrator”) shall have the authority and responsibility to administer and interpret this Plan. Benefits due and owing to an Outside Director under the Plan shall be paid when due without any requirement that a claim for benefits be filed. However, Outside Directors who have not received the benefits to which they feel entitled may file a written claim with the Plan Administrator, who shall act on the claim within thirty days. The Plan Administrator’s action on any such claim may be appealed by the claimant to the Company’s Board of Directors. Notwithstanding the immediately preceding sentence, no amendment of the Plan made upon or after the occurrence of a Change of Control shall affect detrimentally the rights or benefit under the Plan of any Participant (including any Outside Director who becomes a Participant upon a Change of Control and including any Participant who has retired from (or otherwise ceased to serve on) the Board of Directors).

5.4 Amendment. The Board of Directors may from time to time amend this Plan or any provision herein.

5.5 Termination. The Company has established this Plan with the intention and expectation that the Plan will continue in force. However, the Company reserves the right to terminate the Plan at any time for any reason.

5.6 Change of Control.

(a) Distribution following a Change of Control. Notwithstanding any other provision of the Plan, a Participant may elect at any time prior to a Change of Control, in a form and manner reasonably satisfactory to the Company, to receive upon the Participant’s retirement from, or other cessation of service to, the Board of Directors following or simultaneous with a Change of Control, the present value of any Pension accrued by a Participant (including any Outside Director who becomes a

-5-

Participant upon a Change of Control and including any Participant who has retired from (or otherwise ceased to serve on) the Board of Directors) under the Plan, but not yet paid, shall be distributed to the Participant immediately in a lump sum, calculated by using the Company’s then prevailing Cost of Borrowed Funds for the discount rate.

(b) Definition of Change of Control. As used in this Section 5.6, ‘Change of Control’ shall mean:

(i) the acquisition by any ‘Person’ (as defined in Section 5.6(c) hereof) of ‘Beneficial Ownership’ (as defined in Section 5.6(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 5.6(b)(i), the following shall not constitute a Change of Control:

(A) any acquisition (other than a ‘Business Combination’ (as defined in Section 5.6(b)(iii) hereof) which constitutes a Change of Control under Section 5.6(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 5.6(b)(iii) hereof; or

(ii) individuals who, as of the effective date of this amendment to the Plan, 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 to the Plan 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

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(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,

(iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(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.

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(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.

(iv) Post-Transaction Corporation: Unless a Change of Control includes a Business Combination (as defined in Section 5.6(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.

Executed effective the 31st day of May, 2001.


Tidewater Inc.

By:		/s/ Cliffe F. Laborde
		Cliffe F. Laborde
		Executive Vice President,
		Secretary and General Counsel

Attest:


By:		/s/ Michael L. Goldblatt
		Michael L. Goldblatt
		Assistant Secretary

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EX-10.19 13 dex1019.htm AMENDED AND RESTATED MANAGEMENT ANNUAL INCENTIVE PLAN Amended and Restated Management Annual Incentive Plan

Exhibit 10.19

SUMMARY PROVISIONS

OF THE

AMENDED AND RESTATED

TIDEWATER INC.

MANAGEMENT ANNUAL INCENTIVE PLAN

(MAIP)

WHEREAS, Tidewater, Inc., a Delaware corporation (the “Company”), desires to amend the Tidewater Inc. Management Annual Incentive Plan (the “MAIP”) for fiscal year 2005 to allow payment of bonus awards at the time that the Company publicly releases its annual earnings.

NOW, THEREFORE, pursuant to the power provided to the Compensation Committee of the Board of Directors under Article X of the MAIP, Article VII of the MAIP is hereby amended to read as set forth herein and, as so amended, the MAIP is hereby restated in its entirety as follows:

I.	PLAN OBJECTIVE

The primary objective of the Management Annual Incentive Plan (MAIP) is to assist in achieving specific business and financial goals conducive to the organization’s success which the Company believes can best be accomplished by providing cash incentives to key Tidewater employees.

The MAIP helps prioritize and focus efforts on the accomplishment of financial goals and other corporate objectives established each year through the annual planning and budgeting process. This is achieved by linking a significant element of annual compensation to the accomplishments of selected goals. At target performance levels, the MAIP provides incentive compensation opportunities which, in conjunction with base salary, will yield competitive total compensation levels.

II.	BASIC PLAN CONCEPT

The plan concept focuses primarily on the performance of Tidewater overall. The MAIP is comprised of two divisions which will enable the Company to better measure performance results of eligible participants by specific areas of responsibility. The two divisions are as follows:

•

Administrative

•

Marine

Overall corporate performance is considered each year along with certain divisional and individual performance measures specific to each division’s operations and functions. Regardless of corporate performance, however, the Compensation Committee of the Board of Directors may at its discretion

establish a funding pool of up to 50% of the target awards for all participants in order to allow awards for outstanding individual contributions even if the Company does not achieve threshold performance on plan performance measures within a year.

III.	ELIGIBILITY CRITERIA

Eligibility for participation in the MAIP will be limited to officers and certain key employees that directly impact the Company’s financial performance and who do not participate in another Company bonus plan. The specific positions eligible to participate in the plan will be reviewed and determined annually by Tidewater’s Chief Executive Officer and the Compensation Committee of the Board of Directors.

IV.	AWARD OPPORTUNITIES

Prior to the beginning of each fiscal year, Tidewater will specify target incentive awards for each eligible position. Prior to the beginning of each fiscal year, Tidewater will determine the total pool target, threshold and maximum incentive award amounts. These amounts are determined from each eligible participant’s base salary times the target percent associated with the participant’s position within the Company. The actual target percent is determined based upon the employee’s relevant position within the Company and the measurable amount of direct influence on the Company’s financial performance. Base target percents by position are as follows:


	Base Target %
A. Administrative

Executive Vice President	95	%
Executive Vice President, CFO & Treasurer	95	%
Vice President & Principal Accounting Officer	70	%
Corporate Controller	50	%
Director - Corporate Taxation	30	%

B. Marine

Senior Vice President	80	%
Vice President – Operational Areas	70	%
Regional Manager	62.5	%
Area Manager (A)	55	%
Director - Health, Safety, and Environmental Management	55	%
Vice President – International Sales	55	%
Vice President – Technical Services and Engineering	55	%
Area Manager (B)	45	%
Regional Finance Director (BF)	40	%
Vice President – Domestic Sales	45	%
Area Manager (C)	35	%
Regional Finance Director (CF)	30	%
Manager – Domestic Sales	27.5	%
Manager – International Sales	27.5	%

V.	PERFORMANCE MEASURES AND STANDARDS

Prior to the start of each fiscal year, specific corporate and divisional measures and standards will be established. In addition, the appropriate weighing to each measurement will also be established.

PERFORMANCE MEASURES

Except as provided in Section II of this MAIP, before any individual incentive amount can be awarded, the Company must first achieve minimum (threshold) performance in at least one of two Company performance measures. For fiscal year 2005, Company performance measures are:

Adjusted Net Income vs. Budget –Under this test, net income as compared with budgeted net income, adjusted for selected charges/credits of an unusual nature which would not be subject to normal budgeting procedures, is used. The net income test is a measurement test comparing actual results against budgeted results for the year.

Note: The Company’s adjusted net income must be at least 50% of the budgeted net income, in order for the minimum (threshold) award to be paid.

For fiscal year 2005, this performance measurement will carry a weight of 66.67%.

In order to have the incentive pay program not inhibit good management/business decisions, certain adjustments to net income should be made in determining if the net income test has been met. Such adjustments should be objectively determinable to avoid the appearance of impropriety. Accordingly, the following items as reported in the corporation’s consolidated statement of earnings should be added to or subtracted from net income as reported in order to determine net income for purposes of the incentive pay plan:

Cumulative effect of accounting changes;

Extraordinary items;

Discontinued operations; and

Unusual or infrequently occurring items (less the amount of related income taxes) as that term is used in Accounting Principles Board Opinion No. 30.

NOTE: For purposes of calculating achievement of this performance measure, budgeted net income shall be divided by the average number of common shares outstanding for the year as contemplated by the budget. Likewise, the amount of Adjusted Net Income shall be divided by the average number of common shares outstanding during the year. For purposes of making both of these Earnings Per Share calculations, common stock equivalents shall not be considered in determining the average number of common shares outstanding.

Return of Total Capital (ROTC) – Under this performance measurement, the Company must attain at least the 40^th percentile when compared to the Peer Group (see Exhibit 1) on Return of Total Capital (ROTC). ROTC is defined as:

Earnings Before Interest Expenses, Taxes,

Depreciation and Amortization (EBITDA)

Average Shareholders Equity + Average Long-Term Debt

(including current maturities of Long-Term Debt)

NOTE: Average shareholders’ equity and average long-term debt shall be determined by summing the respective totals as of the end of each interim quarterly reporting period during the fiscal year as shown on the Company’s consolidated balance sheet and dividing such sums by the number of interim reporting periods.

The standard for the ROTC performance measure will be established by considering Tidewater’s performance against the Peer Group of companies (see Exhibit 2). When determining peer group performance ranking, pro-rating is not permitted below the 40^th percentile.

For fiscal year 2005, this performance measurement will carry a weight of 33.33%.

STANDARDS FOR EACH DIVISION

Although overall Company performance determines the maximum funding of the pool, each participant, within each division, will have specific standards established for the accomplishment of certain

Company and individual performance measures. These criteria will be established annually, prior to the beginning of each fiscal year, and will be used to determine the amount of the incentive award that each participant will be eligible to receive. The amount of bonus actually awarded to the participant depends upon his (her) achievement of the Company and individual performance criteria. For Fiscal Year 2005, the performance measures for each division are as follows:

Administrative

Return on Total Capital – As defined above, this measurement will carry a weight of 25% of the individual’s total award.

Adjusted Net Income –As defined above, this measurement will carry a weight of 25% of the individual’s total award.

Individual Performance – This measurement is determined on a subjective basis and will carry a weight of 25% of the individual’s total award.

Safety Performance – This measurement is determined by achievement of the Company’s overall established safety performance goals for the fiscal year. The safety performance measurement will carry a weight of 25% of the individual’s total award.

Marine

Safety Measurement – This measurement will be considered in four parts.

First, each area will be given a specific goal to achieve during the fiscal year with respect to safety performance as it relates to Total Recordable Incident Rates. Each area will be graded on how well it performs toward achieving the assigned goals. Total Recordable Incident Rate will be defined as follows:

Loss Time Accidents


Plus		Recordable incidents

Multiplied by		200,000 (manhours)

Divided by		Total manhour exposure

Equals		Total Recordable Incident Rate per 200,000 manhours of exposure

Attached as Exhibit 3, are the Safety Total Recordable Incident Rate goals for Fiscal 2005.

The second component of this measurement is related to property damage. For fiscal 2005, property damage performance will be measured by applying a subjective review of overall property damage results for the fiscal year. Only property damage above the $100,000 per occurrence deductible will be included for measurement purposes. Property damage claims will be adjusted to include only Hull (excluding machinery), Marine Liability and Pollution claims. In other words, preventable property damage claims. This type of information will form the basic parameters that will be reviewed and considered for fiscal 2005 results.

The third component of this measurement is related to pollution incidents. For fiscal 2005, any pollution incident must be reported to the Insurance and Claims Department. The number and severity of pollution incidents will be measured by applying a subjective review of overall pollution incidents for the fiscal year. The Safety Director will provide quarterly updates on the reported incidents.

Fourth, each area is evaluated on its own overall safety performance, taking into consideration such things as number of deaths and/or disabilities within an area, Lost Time Accidents, incident ratios, nature of accidents, preventable accidents etc. Non-job related deaths will not count as an LTA.

Note: Within this weighing (1, 2, 3 & 4 above), personnel safety will comprise 60%, property damage 10%, pollution incidents 5%, and overall safety performance 25%.

Notwithstanding the above, no allocation under this measurement is provided unless the Company achieves its overall established safety performance goals for the fiscal year. The safety measurement will carry a weight of 33.33% of the individual’s total award.

(Note: How well each area demonstrates its commitment to Tidewater’s safety program overall will be part of the individual performance measurement.)

Pre-tax Earnings Test – Under this test, pre-tax earnings, as defined, as compared with a budgeted pre-tax earnings goal, will be used to determine a component of the individual’s incentive pay. The pre-tax earnings test will be an operating area specific test, adjusted for an allocation of corporate and marine overhead (as defined), and carry a weight of 33.33% of the individual’s total award. This test will not be considered achieved if the operating area does not provide a positive actual pre-tax earnings amount, even though the area may meet its budgeted pre-tax earnings goal. Pre-tax earnings for this purpose will be defined as follows:

Area Revenues from all operating activities as reported in the corporation’s consolidated income statement.


Minus		Area Operating Costs and Expenses, as reported in the corporation’s consolidated income statement.

Minus		Area General and Administrative Expenses as reported in the corporation’s consolidated income statement.

Plus/Minus		Area Other Income/Expenses, including gains/losses on asset sales, other income, equity in joint venture earnings, minority interests in less than 100% owned consolidated subsidiaries, interest income, depreciation and amortization expense and foreign exchange gains/losses as reported in the corporations consolidated income statement.

Minus		Area Capitalized Repair and Maintenance Costs.

Minus		An allocation, based upon the insured value of vessels in the Area versus the total insured value of the company’s marine fleet, of corporate overhead expenses (G&A costs, depreciation expense and other expenses), marine overhead costs (G&A costs, depreciation expense, inventory adjustment and other


		expenses), costs of vessels withdrawn from service and held for sale, net cost of Pental Insurance and interest and debt cost as these items are reported in the corporation’s consolidated income statement.

Equals		Pre-tax earnings, as defined.

In order to have the incentive pay program not inhibit good management/business decisions, certain adjustments to pre-tax earnings should be made in determining if the net income test has been met. Such adjustments should be objectively determinable to avoid the appearance of impropriety. Accordingly, the following items as reported in the corporation’s consolidated statement of earnings should be added to or subtracted from net income as reported in order to determine net income for purposes of the incentive pay plan:

Cumulative effect of accounting changes;

Extraordinary items;

Discounted operations; and

Unusual or infrequently occurring items (less the amount of related income taxes) as that term is used in Accounting Principles Board Opinion No. 30.

The Pre-tax Earnings Test component will be replaced with a more relevant test for those participants identified below who do not have direct operating area responsibilities.

Director—Health, Safety, and Environmental Management

Manager—Domestic Sales

Manager—International Sales

Manager—Special Vessel Services

President/ General Manager – Quality Shipyards

Vice President – Domestic Sales

Vice President—International Sales

Vice-President—Technical Services & Engineering

These tests will encompass up to five objective criteria that have been approved by the immediate supervisor specific for that fiscal year. (See Exhibit 4).

Individual Performance – Individual performance is determined annually and is based upon a subjective evaluation by the participant’s manager(s) and encompasses the overall performance of the individual for the fiscal year.

Individual performance will also include an evaluation of each area’s commitment to Tidewater’s safety program overall. This measurement will carry a weight of 33.34% of the individual’s total award.

Included as part of the individual performance measure may be an area specific test. This test may be optional by area and would consist of zero to two specific criteria relevant to a given area. Each participant will be advised of any specific test for that fiscal year. Some examples would be the percent improvement in receivables over a period of time, delinquent receivables collected, revenue enhancement achieved over a period of time, utilization, or other such criteria as deemed appropriate. When an area specific test is utilized, the particular measurement will be weighted as part of the individual performance weight.

VI.	AWARD CALCULATIONS

Development of Incentive Funding Pool

The actual amount of the incentive pool to be awarded depends upon the attainment of specified corporate performance measures as set forth in Section V-A. Each corporate measurement will operate independently of one another in creating the funding pool for annual incentive awards. Thus, the Company could achieve above threshold on one performance measure and below threshold on another performance measure and still have funds available in the annual incentive pool.

Exhibit 2, attached, provides a matrix example of how the size of the incentive funding pool would be calculated at different levels of corporate performance.

The Matrix also shows:

•

The percentage of aggregate target incentives paid for all plan participants; and

•

The total amount of money allocated to the incentive funding pool for fiscal 2005.

•

The greater emphasis for fiscal year 2005 is placed upon the Adjusted net Income performance measures. As such, the payouts under that measurement are more than twice that of the ROTC component.

Individual Awards.

The incentive funding pool is allocated to individual plan participants by the performance measures set forth in Section V-B.

Each division will also be looked at independently of one another; therefore, it is possible for a Division to receive individual awards for meeting performance criteria and not the other if it does not reach its performance criteria. However, the overall corporate performance measures must be positive before consideration of any incentive awards.

The size of each divisional incentive pool is based upon the number of eligible participants in each division. For example, if the Company meets target goals, each participant’s annual base salary is multiplied by the participant’s target percent amount. All target amounts are then added together to produce the total pool for that division. Each divisional pool would be adjusted based upon the actual results of the overall corporate performance measurements.

VII.	AWARD PAYMENTS

Awards will be payable in cash, as soon as administratively possible following the time that the Company’s earnings for the fiscal year are released to the public.

VIII.

TRANSFERS

In the event that a participant transfers from one position to another during the course of the year, his/her award for the year will be calculated on a pro-rata basis according to the proportion of time spent in each position during the year.

IX.	RETIREMENTS AND TERMINATIONS

To receive an award under the MAIP, the participant must be actively employed on the last day of the performance cycle. At the discretion of the Chief Executive Officer and with the approval of the Compensation Committee of the Board of Directors, a participant who separates from service prior to the end of the performance cycle may be granted an award. The amount of the award, if any, will be based in part upon the length of time employed during the performance cycle.

X	PLAN ADMINISTRATION, MODIFICATION, AND ADJUSTMENT

The MAIP will be administered by Tidewater’s Chief Executive Officer, who may delegate certain elements of program administration to the Chief Financial Officer and the Director of Employee Benefits. Actual performance goals, standards, and award determinations will be approved by the Compensation Committee of the Board of Directors.

Exhibit 1

TIDEWATER INC.

Peer Group List

For Return on Total Capital Performance Objective

Fiscal Year 2005

The following list of companies represents the Industry Peer Group for the fiscal year.

COMPANY NAME

BJ Services

Baker Hughes

Cal Dive International

Cooper Cameron

Diamond Offshore Drilling Inc.

ENSCO International

Global Industries Ltd.

GlobalSantaFe Corporation

Gulfmark Offshore Inc.

Haliburton Company

Helmerich & Payne

Input/Output Inc.

Nabors Industries

Noble Corporation

Parker Drilling

Rowan Companies

Schlumberger Ltd.

Seacor Smit Inc.

Smith International Inc.

TETRA Technologies

Tidewater Inc.

Transocean Sedco Forex

Trico Marine Services Inc.

Weatherford International

The above Peer Group list will be updated at the beginning of each fiscal year. The effect of mergers and acquisitions within the peer group for purposes of excluding any given company in the year will also be considered.

EX-10.20 14 dex1020.htm EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN Executive Officer Annual Incentive Plan

Exhibit 10.20

PROVISIONS OF THE TIDEWATER INC.

EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

I.	PLAN OBJECTIVE

The primary objective of the Tidewater Inc. Executive Officer Annual Incentive Plan (Executive Incentive Plan) is to reward Tidewater’s Executive Officers for their assistance in helping the Company achieve its financial and operating goals for the fiscal year.

The Executive Incentive Plan links a significant element of variable annual compensation to the accomplishment of these goals.

The Compensation Committee of the Board of Directors established this Plan to maximize Tidewater’s deduction under Section 162 of the Internal Revenue Code, provided that such actions are consistent with its philosophy and in the best interest of Tidewater and its shareholders. Notwithstanding the provisions of Section 162 (m) of the Internal Revenue Code, the Committee may award compensation that is not fully tax deductible if the Company determines that such award is consistent with its philosophy and in the best interest of Tidewater and its shareholders.

II.

ADMINISTRATION

The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company; provided that all of the members of the Compensation Committee qualify as outside directors under Section 162(m) of the Internal Revenue Code. If all of the members do not so qualify, the Plan shall be administered by the Special Subcommittee of the Compensation Committee, all of the members of which qualify as outside directors under Section 162(m). The term “Committee” shall be used herein to refer to the committee that is currently authorized to administer the Plan.

III.

BASIC PLAN CONCEPT

The Plan concept for fiscal 2005 focuses primarily on Tidewater’s overall performance and is comprised of three specific criteria: (1) adjusted net income, (2) return of total capital, and (3) safety. These criteria are the bases upon which a monetary pool is established for the participants if certain financial and operating goals are accomplished.

IV.

ELIGIBILITY CRITERIA

Eligibility for participation in the Executive Incentive Plan is limited to those executive officers who have a potential to earn compensation in excess of $1,000,000. The specific positions eligible to participate in the Plan will be reviewed and determined annually by the Compensation Committee of the Board of Directors, but for fiscal 2005, Tidewater’s Chief Executive Officer (CEO) is the sole eligible participant.

V.	AWARD OPPORTUNITIES

Prior to June 30 of each fiscal year, Tidewater will specify target incentive awards for each eligible position. These target awards will determine the threshold and maximum incentive award amounts. These amounts are determined from each eligible participant’s base salary multiplied by the target percent associated with the participant’s position within the Company. For fiscal year 2005, the Company has established that the CEO’s target award will be the equivalent of 120% of base salary, and the maximum award will be equivalent to 227% of base salary. The threshold and maximum awards are intended to recognize the risk/reward component of the Company’s overall compensation program. The annual award to the participant under this Plan will not exceed $2 million.

VI.

PERFORMANCE MEASURES AND STANDARDS

The performance goals under which a bonus may be paid shall be any or a combination of the following: earnings per share, return on assets, an economic value added measure, shareholder return, earnings, stock price, return on equity, return on total capital, safety performance, reduction of expenses or increase in cash flow of the Company, a division of the Company or a subsidiary. For any performance period, such performance goals may be measured on an absolute basis or relative to a group of peer companies selected by the Compensation Committee, relative to internal goals or relative to levels attained in prior years.

Prior to the beginning of each fiscal year, specific corporate and divisional measures and standards will be set. In addition, the appropriate weighing of each measure will also be established.

Before any individual incentive amount can be awarded, Tidewater must first achieve minimum (threshold) performance in at least one of the three Company performance measures.

The performance measures for fiscal 2005 are as follows:

(1) Adjusted Net Income (ANI) versus Budget – Under this test, net income as compared with budgeted net income, adjusted as specified below, is used. This test compares actual results against budgeted results for the year. Under this performance measurement, the Company’s ANI must be at least 50% of the budgeted net income, for a minimum (threshold) award to be paid. For fiscal year 2005, the target incentive award will be paid if the Company’s adjusted net income reaches at least 95% of budget. Prorating will be permitted. (Exhibit 2 illustrates this test). This measurement carries a weight of 65% of the participant’s total award.

To encourage good management/business decisions, certain adjustments to net income will be made in determining if the net income test has been met. Accordingly, the following items reported in the Company’s consolidated statement of earnings will be added to or subtracted from net income as reported in order to determine net income for purposes of the Plan:

Cumulative affect of accounting changes.

Extraordinary items, as that term is defined in Accounting Principles Board Opinion #30.

Discontinued operations; and

Unusual or infrequently occurring items (less the amount of related income taxes), as that term is used in Accounting Principles Board Opinion #30.

Note: For purposes of calculating achievement of this performance measure, budgeted net income shall be divided by the average number of common shares outstanding for the year as contemplated by the budget. Likewise, the amount of adjusted net income shall be divided by the average number of common shares outstanding during the year. When calculating these earnings per share calculations, common stock equivalent shall not be considered in determining the average number of common shares outstanding.

(2) Return of Total Capital (ROTC) – Under this performance measurement, the Company must attain at least a 40^th percentile where compared to the Peer Group (See Exhibit 1) on ROTC. ROTC is defined as:

Earnings Before Interest Expense, Taxes,

Depreciation and Amortization (EBITDA)

Average Shareholders Equity + Average Long-Term Debt

(including current maturities of Long-Term Debt)

This measurement carries a weight of 20% of the participant’s total award.

Note: Average shareholders equity and average long-term debt shall be determining by summing the respective totals as of the end of each interim quarterly reporting period during the fiscal year and shown on the Company’s consolidated balance sheet and dividing such sums by the number of interim reporting periods.

The standard for the ROTC performance measure will be established by considering Tidewater’s performance against the Peer Group of companies (See Exhibit 1). When determining peer group performance ranking, pro-rating is not permitted below the 40^th percentile. For fiscal year 2005, the target incentive award will be paid if the Company’s ROTC performance reaches the 60^th percentile versus the Peer Group.

(3) Safety Performance – This measurement is determined by achievement of the Company’s overall established safety performance goals for the fiscal year (See Exhibit 2). Under this performance measure, payout is directly correlated with the maximum allowable LTA’s for the current fiscal year. For fiscal year 2005, it has been determined that there will be no payout if 25 or more LTA’s occur during the fiscal year. Five (5) or less LTA’s for fiscal year 2005 will yield a 150% award, which is the maximum payout allowed under this measurement. For this measurement, non-job related deaths will not count as an LTA. The safety performance measurement carries a weight of 15% of the individual’s total award.

VII.

AWARD CALCULATIONS

The actual amount of the incentive award depends upon the attainment of Company performance in each of the three criteria. Each measurement operates independently of the other in determining the award due for the fiscal year. Thus, the Company could achieve above threshold on one performance measure and below threshold on another performance measure and still have funds available in the pool. Exhibit 2 illustrates the threshold and maximum payouts for each component of the Plan. The Compensation Committee has discretion to decrease but not increase the amount of the bonus paid to a participant from the amount that would be payable under the pre-established formula for the applicable fiscal year.

VIII.

AWARD PAYMENTS

Awards will be paid in cash.

Exhibit 1

TIDEWATER INC.

Peer Group List

For Return on Total Capital Performance Objective

Fiscal Year 2005

The following list of companies represents the Industry Peer Group for the fiscal year.

COMPANY NAME

BJ Services

Baker Hughes

Cal Dive International

Cooper Cameron

Diamond Offshore Drilling Inc.

ENSCO International

Global Industries Ltd.

GlobalSantaFe Corporation

Gulfmark Offshore Inc.

Haliburton Company

Helmerich & Payne

Input/Output Inc.

Nabors Industries

Noble Corporation

Parker Drilling

Rowan Companies

Schlumberger Ltd.

Seacor Smit Inc.

Smith International Inc.

TETRA Technologies

Tidewater Inc.

Transocean Sedco Forex

Trico Marine Services Inc.

Weatherford International

Exhibit 2

TIDEWATER INC.

EXECUTIVE 2005 ANNUAL INCENTIVE POOL AWARDS MATRIX


Adjusted Net Income					ROTC Portion of Pool					Safety Performance
% Improvement in Adj. Net Income Income Over Budget	Funding Pool From Adjusted Net Income				Tidewater ROTC Relative to Peer Companies	Incentive Funding Pool From ROTC Objective				LTAs	Incentive Funding Pool From LTA Objective
150%	769,860	210	%		90th %tile	169,200	150	%		5	126,900	150	%
145%	733,200	200	%		87	163,560	145	%		6	122,670	145	%
140%	696,540	190	%		84	157,920	140	%		7	118,440	140	%
135%	659,880	180	%		81	152,280	135	%		8	114,210	135	%
130%	623,220	170	%		78	146,640	130	%		9	109,980	130	%
125%	586,560	160	%		75	141,000	125	%		10	105,750	125	%
120%	549,900	150	%		72	135,360	120	%		11	101,520	120	%
115%	513,240	140	%		69	129,720	115	%		12	97,290	115	%
110%	476,580	130	%		66	124,080	110	%		13	93,060	110	%
105%	439,920	120	%		63	118,440	105	%		14	88,830	105	%
100%	403,260	110	%	+	60th%tile	112,800	100	%	+	15	84,600	100	%
95%	366,600	100	%		58	107,160	95	%		16	76,140	90	%
90%	339,105	93	%		56	101,520	90	%		17	67,680	80	%
85%	311,610	85	%		54	95,880	85	%		18	59,220	70	%
80%	284,115	78	%		52	90,240	80	%		19	50,760	60	%
75%	256,620	70	%		50	84,600	75	%		20	42,300	50	%
70%	229,125	63	%		48	78,960	70	%		21	33,840	40	%
65%	201,630	55	%		46	73,320	65	%		22	25,380	30	%
60%	174,135	48	%		44	67,680	60	%		23	16,920	20	%
55%	146,640	40	%		42	62,040	55	%		24	8,460	10	%
50%	119,145	33	%		40th%tile	56,400	50	%		25 or more	0	0	%
<50%	0	0	%		<40th%tile	0	0	%
	Weight 65%					Weight 20%					Weight 15%

EX-10.23 15 dex1023.htm SUMMARY OF 2006 EXECUTIVE OFFICERS BASE SALARIES Summary of 2006 Executive Officers Base Salaries

Exhibit 10.23 Director Compensation

The Company’s outside directors currently receive an annual retainer of $30,000 and a fee of $2,000 for attendance at each board meeting. Beginning October 1, 2005, the annual retainer paid to the Company’s outside directors will be increased from $30,000 to $40,000. However, annual pension benefits under the Company’s Non-Qualified Pension Plan for Outside Directors will continue to be calculated as if the annual retainer remained at $30,000 per year.

The chairman of each board committee receives an additional annual retainer of $5,000, and each committee member, including the chairman, receives a fee of $1,500 for attendance at each committee meeting. The Company’s lead director receives an additional annual retainer of $10,000. Directors also receive reimbursement for all reasonable expenses incurred in attending meetings.

The Company’s outside directors are also entitled to receive an annual grant of options to purchase up to 5,000 shares of the Company’s common stock, the exact number to be set each year by the Compensation Committee.

EX-21 16 dex21.htm SUBSIDIARIES OF THE COMPANY Subsidiaries of the company

EXHIBIT 21

LIST OF SUBSIDIARIES


NAME	STATE OR JURISDICTION OF INCORPORATION	PERCENTAGE OF VOTING SECURITIES OWNED
Al Wasl Marine LLC.	Dubai	49	%
Antilles Marine Service Limited	Trinidad & Tobago	50	%
Candies Tidewater Joint Venture, L.L.C.	Louisiana	50	%
Compania Marítima de Magallanes Limitada	Chile	100	%
Divetide Limited	Thailand	49	%
Equipo Mara, C.A.	Venezuela	19.9	%
Equipo Zulia, C.A.	Venezuela	100	%
Fairway Personnel Services Limited	England	100	%
Four Star Marine, Inc.	Louisiana	49	%
Gulf Fleet Abu Dhabi	Abu Dhabi	49	%
Gulf Fleet Middle East Limited	Cayman Islands	100	%
Gulf Fleet Middle East, Inc.	Panama	100	%
Gulf Fleet N.V.	Netherlands Antilles	100	%
Gulf Fleet Supply Vessels, L.L.C.	Louisiana	100	%
Hilliard Oil & Gas, Inc.	Nevada	100	%
Hornbeck Shipping Limited	Isle of Man	100	%
Hornbeck Support Ships Limited	Isle of Man	100	%
Jackson Marine Limited	Cayman Islands	100	%
Jackson Marine, L.L.C.	Louisiana	100	%
Jackson Marine, S.A.	Panama	100	%
Java Boat Corporation	Louisiana	100	%
Lamnalco-Tidewater Marine Service Limited	Vanuatu	50	%
Logistica Mexicana del Caribe, S. de R.L. de C.V.	Mexico	100	%
Mare Alta do Brasil Navegacao Ltda.	Brazil	100	%
Mashhor Marine Sdn. Bhd.	Brunei	70	%
Nautica Saltamar, S.A. DE C.V. Niugini Offshore Services Joint Venture (unincorporated)	Mexico New Guinea	49 50	% %
O.I.L. (Nigeria) Limited	Nigeria	82.1	%
Offshore Pacific Pty. Ltd.	Vanuatu	100	%
OSA do Brasil Representações Ltda.	Brazil	100	%
Pacific Tidewater Pty. Ltd.	Australia	100	%
Pan Marine do Brasil Ltda.	Brazil	100	%
Pan Marine International, Inc.	Cayman Islands	100	%
Pental Insurance Co. Ltd.	Bermuda	100	%
Point Marine, L.L.C.	Louisiana	100	%
Provident Marine Ltd.	Turks & Caicos	50	%
PT. Tidewater Operators Indonesia	Indonesia	95	%
Quality Shipyards, L.L.C. .	Louisiana	100	%
Remolcadores y Gabarras Remigasa, S.A.	Venezuela	19.9	%
Rem-Tide AS	Norway	50	%
S.O.P., Inc.	Louisiana	100	%
Sakhalin Holding, L.L.C.	Russia	100	%
Sakhalin Offshore Marine, L.L.C.	Russia	100	%
Seafarer Boat Corporation	Louisiana	100	%


NAME	STATE OR JURISDICTION OF INCORPORATION	PERCENTAGE OF VOTING SECURITIES OWNED
Servicios de Abastecimientos Mexicanos, S. de R.L. de C.V.	Mexico	100	%
Servicios Marítimos del Carmen, S.A. de C.V.	Mexico	100	%
Servicios Marítimos Ves, S. de R.L. de C.V.	Mexico	100	%
Servicios y Representaciónes Marítimas Mexicanas, S.A. de C.V.	Mexico	100	%
Solo Fleet Sdn. Bhd.	Malaysia	100	%
Solo Fleet Two Sdn. Bhd.	Malaysia	100	%
Solo Support Sdn. Bhd.	Malaysia	100	%
Sonatide Marine Services, Ltd.	Cayman Islands	49	%
Sonatide Marine, Ltd.	Cayman Islands	49	%
Southern Ocean Services Pte. Ltd.	Singapore	100	%
T. Benetee L.L.C.	Louisiana	100	%
Thabet and O.I.L. Co. Ltd.	Yemen	30	%
Tidewater (India) Private Limited	India	100	%
Tidewater Assets Limited	Cayman Islands	100	%
Tidewater Australia Pte. Ltd.	Australia	100	%
Tidewater Caribe, C.A.	Venezuela	100	%
Tidewater Crewing Limited	Cayman Islands	100	%
Tidewater Foreign Sales Corporation	Barbados	100	%
Tidewater Hulls Limited	Cayman Islands	100	%
Tidewater Marine Alaska, Inc.	Alaska	100	%
Tidewater Marine Australia Pty Ltd.	Australia	100	%
Tidewater Marine Indonesia Limited	Vanuatu	80	%
Tidewater Marine International Pte. Ltd.	Singapore	100	%
Tidewater Marine International, Inc.	Panama	100	%
Tidewater Marine Kazakhstan, L.L.P.	Kazakhstan	100	%
Tidewater Marine North Sea Limited	England	100	%
Tidewater Marine Sakhalin, L.L.C.	Louisiana	100	%
Tidewater Marine Service (M) Sdn. Bhd.	Malaysia	49	%
Tidewater Marine Service (Malaysia) Sdn. Bhd.	Malaysia	100	%
Tidewater Marine Service, C.A. (SEMARCA)	Venezuela	100	%
Tidewater Marine Service, L.L.C.	Louisiana	100	%
Tidewater Marine Vanuatu Limited	Vanuatu	100	%
Tidewater Marine West Indies Limited	Bahama Islands	100	%
Tidewater Marine Western, Inc.	Texas	100	%
Tidewater Marine, L.L.C.	Louisiana	100	%
Tidewater Maritime Limited	Cayman Islands	100	%
Tidewater Offshore (GP-1984), Inc.	Delaware	100	%
Tidewater Offshore Sdn Bhd	Malaysia	49	%
Tidewater Phoenix Nigeria Limited	Nigeria	40	%
Tidewater Properties Limited	Cayman Islands	100	%
Tidewater Ships Limited	Cayman Islands	100	%
Tidewater Vessels Limited	Cayman Islands	100	%
Tidex Nigeria Limited	Nigeria	60	%
Tidex/OTS Nigeria Limited (unincorporated)	Nigeria	50	%
TT Boat Corporation	Louisiana	100	%
Twenty Grand (Brazil), L.L.C.	Louisiana	100	%
Twenty Grand Marine Service, L.L.C.	Louisiana	100	%
Twenty Grand Offshore, Inc.	Louisiana	100	%
VTG Supply Boat Liberia Inc.	Liberia	100	%
Zapata Gulf Marine International Limited	Vanuatu	100	%


NAME	STATE OR JURISDICTION OF INCORPORATION	PERCENTAGE OF VOTING SECURITIES OWNED
Zapata Gulf Marine L.L.C.	Louisiana	100	%
Zapata Gulf Marine Operators, L.L.C.	Louisiana	100	%
Zapata Gulf Pacific, L.L.C.	Louisiana	100	%
Zapata Marine Service (Nigeria) Limited	Nigeria	100	%
Zapata Serviços Marítimos Ltda.	Brazil	100	%

EX-23.1 17 dex231.htm CONSENT OF DELOITTE & TOUCHE LLP Consent of Deloitte & Touche LLP

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Tidewater Inc.’s (the “company”) Registration Statement No. 333-32729, No. 333-47687 and No. 333-66054 on Form S-8 of our reports dated June 14, 2005, relating to the consolidated financial statements and financial statement schedule of Tidewater Inc. and management’s report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of the Company for the year ended March 31, 2005.

/s/ DELOITTE & TOUCHE LLP

New Orleans, Louisiana

June 14, 2005

EX-23.2 18 dex232.htm CONSENT OF ERNST & YOUNG LLP Consent of Ernst & Young LLP

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 333-32729, No. 333-47687 and No. 333-66054) of Tidewater Inc. of our report dated April 19, 2004, with respect to the 2003 and 2004 consolidated financial statements and schedule of Tidewater Inc. included in the Annual Report (Form 10-K) for the year ended March 31, 2005.

/s/ Ernst & Young LLP

New Orleans, Louisiana

June 14, 2005

EX-31.1 19 dex311.htm SECTION 302 CERTIFICATION OF CEO Section 302 Certification of CEO

EXHIBIT 31.1

CEO CIVIL CERTIFICATION

I, Dean E. Taylor, certify that:

1.	I have reviewed this annual report on Form 10-K of Tidewater Incorporated;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: June 14, 2005				/s/ DEAN E. TAYLOR
				Dean E. Taylor
				Chairman of the Board, President and Chief Executive Officer

EX-31.2 20 dex312.htm SECTION 302 CERTIFICATION OF CFO Section 302 Certification of CFO

EXHIBIT 31.2

CFO CIVIL CERTIFICATION

I, J. Keith Lousteau, certify that:

1.	I have reviewed this annual report on Form 10-K of Tidewater Incorporated;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: June 14, 2005				/s/ J. KEITH LOUSTEAU
				J. Keith Lousteau
				Executive Vice President and Chief Financial Officer

EX-32.1 21 dex321.htm SECTION 906 CERTIFICATION OF CEO Section 906 Certification of CEO

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, who is the Chief Executive Officer of the Company, certifies that, to my knowledge, the Form 10-K for the year ended March 31, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by such report.


Date: June 14, 2005				/s/ DEAN E. TAYLOR
				Dean E. Taylor
				Chairman of the Board, President and Chief Executive Officer

EX-32.2 22 dex322.htm SECTION 906 CERTIFICATION OF CFO Section 906 Certification of CFO

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, who is the Chief Financial Officer of the Company, certifies that, to my knowledge, the Form 10-K for the year ended March 31, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by such report.


Date: June 14, 2005				/s/ J. KEITH LOUSTEAU
				J. Keith Lousteau
				Executive Vice President and Chief Financial Officer

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