EXHIBIT
10.3
TIDEWATER
INC.
COMPANY
PERFORMANCE EXECUTIVE OFFICER
ANNUAL
INCENTIVE PLAN
FOR
FISCAL YEARS 2010, 2011 AND 2012
The
primary objective of the Tidewater Inc. Company Performance
Executive Officer Annual Incentive Plan (the “Executive
Incentive Plan” or the “Plan”) is to reward
Tidewater’s executive officers for their assistance in
helping Tidewater Inc. (the “Company”) achieve its
financial and operating goals for the fiscal year. The Plan links a
significant element of potential variable annual compensation to
the accomplishment of these goals.
The
Compensation Committee of the Board of Directors established the
Plan to maximize Tidewater’s deduction under
Section 162(m) of the Internal Revenue Code (“Section
162(m)”), provided that such actions are consistent with its
philosophy and in the best interest of Tidewater and its
shareholders. At the Company’s 2008 Annual Meeting of
Stockholders, the stockholders approved the material terms of the
performance goals applicable to the Plan in order to qualify
amounts paid as performance-based compensation under
Section 162(m). The provisions of this Plan document operate
in conjunction with and are subject to the material terms of the
Plan approved by the stockholders at the 2008 Annual Meeting. The
stockholders will be asked to reapprove the performance goals at
the 2013 Annual Meeting of Stockholders in accordance with the
requirements of Section 162(m). The provisions hereof are
subject to the material terms of the Plan as last approved by the
stockholders. Notwithstanding the provisions of Section 162
(m), the Compensation Committee may award compensation outside of
the Plan that is not fully tax deductible, if the Compensation
Committee determines that such award is consistent with its
philosophy and in the best interest of Tidewater and its
stockholders. Such compensation issued outside of the Plan shall
include but not be limited to the Tidewater Inc. Individual
Performance Annual Incentive Plan, which is a separate plan
providing annual awards based upon an evaluation of individual
performance.
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). If all of the members
do not so qualify, the Plan shall be administered by a 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. The authority of the Committee shall include,
in particular, authority to:
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A.
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designate
participants and target award percentages for a particular
year;
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B.
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establish
performance goals and objectives for a particular year;
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C.
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consider the
achievement of the performance goals and objectives and whether any
payment will be made hereunder;
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D.
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establish
regulations for the administration of the Plan and make all
determinations deemed necessary for the administration of the Plan;
and
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E.
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certify as to
whether performance goals have been met.
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The
Committee may use its discretion to reduce or to eliminate, but not
to increase, the bonus amount payable to a participant under the
Plan formula.
The
Plan concept focuses upon Tidewater’s performance in the
areas of economic value added (“EVA”), safety and
individual performance.
Eligibility for
participation in the Plan is limited to those executive officers
who have a potential to earn compensation in excess of $1,000,000.
The specific executive officers who will participate in the Plan
will be reviewed and determined annually by the Committee no later
than June 29 of each fiscal year. The Committee has determined
that the participants in this Plan and in the Company’s
Management Annual Incentive Plan shall constitute the
“specified employees” of the Company under
Section 409A of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder (“Section
409A”).
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V.
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PERFORMANCE
MEASURES AND STANDARDS
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The
performance goals approved by the Company’s stockholders at
the 2008 Annual Meeting of Stockholders included EVA and safety and
the Committee has designed an annual bonus program for fiscal 2010,
2011 and 2012 under which potential bonuses will be based upon
those factors.
By
June 29 of each fiscal year, the Committee will specify
potential target incentive awards for each participant. These
amounts are determined based upon each eligible participant’s
base salary in effect on June 29 of the fiscal year multiplied
by the target percent associated with the participant’s
position within the Company. This percentage increases or decreases
based upon performance above or below the target. The annual award
to a participant under this Plan may not exceed $3
million.
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VII.
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COMPANY
PERFORMANCE CRITERIA
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The
Company performance annual bonus amount will be based upon EVA
growth and safety. At target performance levels, each performance
component would generate the following:
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EVA
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50% of target
bonus
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Safety
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25% of target
bonus
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2
The
remaining 25% of the target bonus amount will be eligible for
payment under the Individual Performance Executive Office Annual
Incentive Plan. At EVA and safety levels above and below the target
levels, the 50%/25% relationship will change. The EVA bonus
declared shall not exceed five times target. The safety portion of
the bonus shall not exceed one and one-half times target for
exceptional performance.
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VIII.
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DETERMINATION
OF BONUS AMOUNT
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The
performance criteria described below will be used to determine
potential annual bonus amounts. No later than June 29 of each
fiscal year, the economic value add