Document:

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. 
  

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	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: 
  

	 	1)	Cumulative affect of accounting changes. 

  

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	 	2)	Extraordinary items, as that term is defined in Accounting Principles Board Opinion #30. 

  

	 	3)	Discontinued operations; and 

  

	 	4)	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
40th 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 40th percentile. For fiscal year 2005, the target incentive award will be paid
if the Company’s ROTC performance reaches the 60th 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. 
  

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	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. 
  

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 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. 

 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%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.

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