Document:

tdw-ex1035_114.htm

Exhibit 10.35

TIDEWATER INC.
MANAGEMENT SHORT-TERM INCENTIVE PLAN
FOR TRANSITION PERIOD
(APRIL 1 – DECEMBER 31, 2017)

Full Plan

 

	
I.
	
PLAN OBJECTIVE

The primary objective of the Tidewater Inc. Management Short-Term Incentive Plan (the “Plan”) is to reward certain officers and key employees of Tidewater and its subsidiaries for their assistance in helping Tidewater Inc. (the “Company”) achieve its financial and operating goals during the period from April 1, 2017 through December 31, 2017 (the “Transition Period”).  The Plan links a significant element of potential variable compensation to the accomplishment of these goals.

	
II.
	
ADMINISTRATION

The Plan will be administered by the Compensation Committee (the “Committee”) of the Board of Directors of the Company.  The authority of the Committee includes, in particular, the authority to:

	
 
	
A.
	
designate participants and target award percentages;

	
 
	
B.
	
establish performance goals and metrics; 

	
 
	
C.
	
consider the achievement of the performance goals and metrics and determine whether any payment will be made under this Plan; and

	
 
	
D.
	
establish regulations for the administration of the Plan and make all determinations deemed necessary for the administration of the Plan.

The Chief Executive Officer has the authority to name additional participants after the beginning of Transition Period and establish target award percentages for such participants in connection with promotions, new hires, and the establishment of new positions within the Company.  

	
III.
	
ELIGIBILITY CRITERIA

Eligibility for participation in the Plan will be limited to officers and certain key employees who 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 by Tidewater’s Chief Executive Officer and the Committee.  The Chief Executive Officer also has the authority to name participants as described in Article II above.  

	
IV.
	
AWARD OPPORTUNITIES

On October 15, 2017, the Committee approved target incentive awards for each participant, which were memorialized in writing.  These amounts were determined based upon each eligible participant’s base salary in effect on that date multiplied by the target percent associated with his or her position within the Company, adjusted for a nine-

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month performance period.  The actual payout percentage for a given participant may increase or decrease based upon performance above or below target on each of the three separate metrics.  If a participant has a change in position during the Transition Period, that participant’s overall target percentage will be adjusted prospectively and his or her award for the full Transition Period will be calculated on a pro rata basis (based on the number of days the participant served at each position).  

	
V.
	
PERFORMANCE CRITERIA

For the Transition Period, any bonus amount earned under the Plan will be determined based upon the achievement of three metrics – one financial metric (cash flow from operations), one safety metric, and an individual performance metric.  At target performance levels, the financial metric would pay out at 50% of the target bonus and each of the other two components (safety and individual performance) would pay out at 25% of the target bonus.

At financial, safety, and individual performance levels above and below the target levels, the 50%/25%/25% relationship will change, as each of the three metrics operates independently from the others.  The bonus declared for each of the components may not exceed 1.5 times target for exceptional performance.  

	
VI.
	
DETERMINATION OF BONUS AMOUNT

The performance criteria described below will be used to determine potential annual bonus amounts.  

	
 
	
A.
	
Financial Metric.  For the Transition Period, the financial metric is cash flow from operations, with the specific targets and payout percentages for this metric as approved by the Committee on October 15, 2017 and memorialized in writing.  

	
 
	
1.
	
“Cash flow from operations” (CFFO) means net cash provided by operating activities between August 1, 2017 and December 31, 2017, derived from the Company’s consolidated statements of cash flows for the fiscal year ended December 31, 2017, subject to any adjustments required by subsection (2) below.

	
 
	
2.
	
Adjustments.  Certain pre-approved adjustments will be made in calculating CFFO.  Specifically, the calculation of CFFO will be adjusted for any of the following items as reported in the Company’s consolidated financial statements:

	
 
	
a.
	
cumulative effect of accounting changes;

	
 
	
b.
	
extraordinary, unusual, or infrequently occurring items, as those terms are defined in FASB ASC Topic 225, less the amount of related income taxes; 

	
 
	
c.
	
discontinued operations; and 

	
 
	
d.
	
the effect of any acquisitions for a twelve-month period following the date of such acquisition.

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The Committee is under no obligation to declare or pay a bonus based on the financial metric.  The declared portion of the bonus earned based on the financial metric may not exceed 1.5 times the participant’s target award for that metric.

	
 
	
B.
	
Safety Criteria.  The safety performance measurement is determined by achievement of the Company’s overall established safety performance goals for the Transition Period, as approved by this Committee in writing at its October 15, 2017 meeting.  Under this performance measure, potential payout is directly correlated with the Total Recordable Incident Rate (TRIR) for the Transition Period.  “Total Recordable Incident Rate” is defined as follows:

			
	
(Loss Time Accidents + Recordable Incidents) X
200,000 (man hours)
	
 

=
	
Total Recordable Incident Rate per
200,000 man hours of exposure

	
Total Man Hour Exposure

Non-job related deaths will not count toward the TRIR. Pro-rating will be permitted if performance falls between two levels.  The safety performance portion of the Plan operates independently from each of the two other metrics. The Committee may determine not to pay the safety portion of the bonus, because of the occurrence of one or more fatalities or for any other reason. The declared portion of the bonus earned based on safety may not exceed 1.5 times the participant’s target award for that metric.

	
 
	
C.
	
Individual Performance Criteria.  Three to five subjective or objective individual goals will be established for and communicated to each participant.  These goals will be established by the participant’s supervisor and, in the case of officers, will be approved by the Committee.  The declared portion of the bonus earned based on individual performance may not exceed 1.5 times the participant’s target award for that metric.  Each participant’s supervisor will then evaluate the participant’s overall performance, including the achievement of the individual performance goals, and determine whether the participant will receive all or a portion of the declared individual performance portion of the bonus.  The determination of any individual performance portion payable to a participant who is an officer will be subject to the Committee’s approval.  

	
VII.
	
TERMINATION OF EMPLOYMENT

	
 
	
A.
	
If a participant’s employment is terminated because the participant dies or becomes disabled, as “disability” is defined in Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (“Section 409A”), unless otherwise determined by the Committee, the participant or, in the case of death, the participant’s estate or heirs, will be paid a pro rata bonus for the Transition Period based upon the level of satisfaction of financial and safety metrics and the participant’s salary (and assuming target performance on the individual performance metric), but applied to the actual salary amount paid to the participant for the portion of the Transition Period during which he or she was employed.  Any such bonus will be paid to the participant or, in the case of death, to the participant’s estate or heirs, at the 

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same time as any bonuses for the Transition Period are paid to other Plan participants as provided in Article VIII. 

	
 
	
B.
	
If a participant’s employment is terminated because the participant Retires (as defined below) or is terminated by the Company without Cause (as defined below), and such termination constitutes a “separation from service” under Section 409A, unless otherwise determined by the Committee, the participant will be paid a pro rata bonus for the Transition Period based upon the level of satisfaction of the financial and safety metrics and the participant’s salary (and assuming target performance on the individual performance metric), but applied to the actual salary amount paid to the participant for the portion of the Transition Period during which he or she was employed.  Any such bonus will be paid to the participant at the same time as any bonuses for the Transition Period are paid to other Plan participants as provided in Article VIII.

	
 
	
C.
	
If a participant’s employment is terminated due to a voluntary resignation by the participant (other than a participant who Retires under Article VII.B.) or if the participant is involuntarily terminated by the Company for Cause, no pro rata bonus will be paid for the Transition Period, unless otherwise determined by the Committee in its discretion, in which case the pro rata bonus will not exceed the amount that would be due based upon the level of satisfaction of the financial and safety metrics and the participant’s salary (and assuming target performance on the individual performance metric), but applied to the actual salary amount paid to the participant for the portion of the Transition Period during which he or she was employed.  Any such bonus will be paid to the participant or at the same time as any bonuses for the Transition Period are paid to other Plan participants as provided in Article VIII.

	
 
	
D.
	
Certain Definitions.  

	
 
	
1.
	
A participant is deemed to have “Retired” for purposes of the Plan, if the participant’s employment terminates, other than as a result of a termination by the Company for Cause, at age 55 or later with at least ten years of service with the Company or at age 65 or later with at least five years of service with the Company.  

	
 
	
2.
	
“Cause” for purposes of this Plan will be determined in the sole discretion of the Board of Directors of the Company and will mean:

	
 
	
a.
	
the willful and continued failure of the participant to substantially perform the participant’s duties with the Company or its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the participant by the Board of Directors of the Company which specifically identifies the manner in which the Board believes that the participant has not substantially performed the participant’s duties, or

	
 
	
b.
	
the willful engaging by the participant in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise.

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For purposes of this provision, no act or failure to act, on the part of the participant, will be considered “willful” unless it is done, or omitted to be done, by the participant in bad faith or without reasonable belief that the participant’s action or omission was in the best interests of the Company or its affiliates.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of a senior officer of the Company or its affiliates or based upon the advice of counsel for the Company or its affiliates will be conclusively presumed to be done, or omitted to be done, by the participant in good faith and in the best interests of the Company or its affiliates.  

	
VIII.
	
AWARD PAYMENTS

Awards determined by the Committee to be paid under the Plan will be paid in cash no later than March 15, 2018, unless deferred by a participant under a separate benefit plan of the Company.  

	
IX.
	
MISCELLANEOUS

	
 
	
A.
	
Nothing in this Plan will confer upon a participant 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 participant’s employment relationship with the Company at any time.  Participation provides no guarantee that any bonus will be paid.  The success of the Company as measured by the achievement of the metrics will determine the extent to which participants may receive bonuses under the Plan, in the discretion of the Committee.  Participation in the Plan is not a right, but a privilege, subject to annual review by the Company.  The Company retains the right to withhold payment from any participant who violates Company policies or for any other reason.  The Company also has the right to recover any amounts paid under the Plan if (i) the amount paid was based on the achievement of financial results that were subsequently the subject of a restatement, (ii) the participant is subject to the Company’s Executive Compensation Recovery Policy; (iii) the participant engaged in intentional misconduct that caused or partially caused the need for the restatement, and (iv) the effect of the wrongdoing was to increase the amount of bonus or incentive compensation.  Any participant accepts any payment under this Plan subject to such recovery rights of the Company.  The Company may, if it chooses, effect such recovery by withholding from other amounts due to the participant by the Company.

	
 
	
B.
	
The Plan will be governed by and construed in accordance with the laws of the State of Louisiana.

	
 
	
C.
	
If any term or provision of the Plan is at any time or to any extent invalid, illegal, or unenforceable in any respect as written, the participant and the Company intend for any court construing the Plan 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 will be ignored so as to not affect any other term or provision hereof, and the remainder of the Plan, or the application of such term or provision to persons or circumstances other than 

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those as to which it is held invalid, illegal or unenforceable, will not be affected thereby and each term and provision of the Plan will be valid and enforced to the fullest extent permitted by law.

	
 
	
D.
	
The Company has no obligation to make any payments under the Plan.  Any payments made will be in the sole discretion of the Committee.  The Company will have no obligation to set aside, earmark, or invest any fund or money with which to pay bonuses under the Plan.  

	
 
	
E.
	
Any payments made under the Plan are intended to comply with, or be exempt from, the requirements of Section 409A and this Plan will be construed accordingly.  Payments under this Plan that are subject to Section 409A will not be accelerated unless permitted under Section 409A.  If a participant who is a “specified employee” of the Company is entitled to a payment under this Plan due to his or her “separation from service” (as such terms are used in Section 409A) and such payment is subject to the Section 409A six-month payment delay rule, then such payment will not be made until the earlier of (1) the first business day that is more than six months following such participant’s separation from service or (2) such participant’s death.

	
 
	
F.
	
The Company has the right to terminate the Plan at any time in its sole discretion.  Upon termination, the participant will have no right to receive any amounts under this Plan.  

	
 
	
G.
	
The Company will deduct from any payment made under the Plan all applicable federal and state income and employment taxes.

	
 
	
H.
	
Nothing in this Plan precludes the Company from making additional payments or special awards to a participant outside of the Plan.

EXECUTED this 12th day of December, 2017, with effect from October 15, 2017.

 

TIDEWATER INC.

 

By:/s/ Joseph M. Bennett

Joseph M. Bennett

Executive Vice President and

Chief Investor Relations Officer

 

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Exhibit 10.36

INCENTIVE AGREEMENT

FOR THE GRANT OF RESTRICTED STOCK UNITS

UNDER THE

TIDEWATER INC. 2017 STOCK INCENTIVE PLAN 

 

 

 

THIS AGREEMENT is entered into as of October 16, 2017 (the “Date of Grant”) by and between Tidewater Inc., a Delaware corporation (“Tidewater” and, together with its subsidiaries, the “Company”), and Larry T. Rigdon (the “Employee”).  Capitalized terms used, but not defined, in this Agreement have the respective meanings provided in the Tidewater Inc. 2017 Stock Incentive Plan (the “Plan”).

WHEREAS, the Employee has been appointed to serve as President and Chief Executive Officer of Tidewater on an interim basis, and Employee and Tidewater have entered into an employment agreement, dated as of the Date of Grant (the “Employment Agreement”), which provides that the Employee will receive an additional incentive in the form of time-based restricted stock units payable in common stock of Tidewater, $0.001 par value per share (the “Common Stock”), in accordance with the Plan.

NOW, THEREFORE, in consideration of these premises and the mutual promises and covenants contained in this Agreement, it is agreed by and between the parties as follows:

I.
Restricted Stock Units

1.1Restricted Stock Units.  Effective on the Date of Grant, Tidewater hereby grants to the Employee under the Plan the total number of restricted stock units (the “RSUs”) specified on the Term Sheet, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.  

1.2Award Restrictions.  The RSUs may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, whether voluntarily or involuntarily.  The Employee shall have no rights, including, but not limited to, voting and dividend rights, in the shares of Common Stock underlying the RSUs unless and until such shares are issued to the Employee, or as otherwise provided in the Plan or this Agreement. 

1.3Vesting Terms.

(a)Upon vesting under the terms and conditions of the Plan and this Agreement, each RSU represents the right to receive from Tidewater one share of Common Stock, free of any restrictions, and any amounts, securities, and property notionally credited to the Employee’s Account (as defined in Section 2.1) with respect to such RSU.  

(b)The RSUs shall vest in four equal installments on each of January 16, April 16, July 16, and October 16 of 2018, provided that, except as provided in Section 1.4, the Employee remains employed by the Company on the applicable vesting date.

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1.4Effect of Termination of Employment or Change of Control.

(a)If, prior to full vesting under Section 1.3, the Employee’s employment as President and CEO is terminated by the Company without “Cause” (as provided and defined in the Employment Agreement), then all unvested RSUs shall immediately vest on the last day of the Employee’s employment. 

(b)Except as otherwise expressly provided in this Section 1.4 or as otherwise determined by the Committee in its sole discretion, termination of employment shall result in forfeiture of all unvested RSUs.  

(c)In the event of a Change of Control as provided in the Plan, all RSUs shall immediately vest and pay out in shares of Common Stock at the closing of the Change of Control, provided that such event qualifies as a “change of control event” under Section 409A of the Code. 

II.
Dividend Equivalents and the Issuance of Shares Upon Vesting

2.1Restricted Stock Unit Account and Dividend Equivalents.  Tidewater shall maintain an account (the “Account”) on its books in the name of the Employee.  Such Account shall reflect the number of RSUs awarded to the Employee, as such number may be adjusted under the terms of the Plan and this Agreement, as well as any additional RSUs, cash, or other securities or property credited as a result of dividend equivalents, administered as follows:

(a)The Account shall be for recordkeeping purposes only, and no assets or other amounts shall be set aside from Tidewater’s general assets with respect to such Account.  

(b)If Tidewater declares a cash dividend or distributes any other securities or property to stockholders between the Date of Grant and the date the RSUs vest and pay out under this Agreement, the Employee shall be entitled to any cash that would have been received as a dividend had the Employee’s outstanding RSUs been shares of Common Stock as of the record date with respect to which such cash dividend is to paid.  Tidewater shall pay any such dividend equivalents currently to the Employee.  

(c)If dividends are declared and paid in the form of shares of Common Stock rather than cash, then the Employee’s Account will be credited with one additional RSU for each share of Common Stock that would have been received as a dividend had the Employee’s outstanding RSUs been shares of Common Stock on such date.  Such additional RSUs credited shall vest or be forfeited at the same time and on the same terms as the RSUs to which they relate.

2.2Issuance of Shares of Common Stock.  As soon as practicable following the date any RSUs vest under this Agreement, but no later than 30 days after such date, the number of shares of Common Stock to which the Employee is entitled under this Agreement shall be transferred to the Employee or his or her nominee via book entry free of restrictions or, upon the Employee’s request, Tidewater shall cause a stock certificate to be issued in the name of the Employee or his or her nominee.  Upon issuance of such shares, the Employee is free to hold or 

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dispose of such shares, subject to applicable securities laws and any internal Company policy then in effect and applicable to the Employee, such as Tidewater’s Policy Statement on Insider Trading and Executive Stock Ownership Guidelines.

III.
Recovery Right of Tidewater

Tidewater has the right to recover any RSUs or shares of Common Stock issued under the Plan to the Employee, if (a) the grant, vesting, or value of such awards was based on the achievement of financial results that were subsequently the subject of a restatement; (b) the Employee is subject to Tidewater’s Executive Compensation Recovery Policy; (c) the Employee engaged in intentional misconduct that caused or partially caused the need for the restatement; and (d) the effect of the restatement was to decrease the financial results such that such grant would not have been earned or would have had a lesser value.  The Employee accepts the RSUs and shares of Common Stock subject to such recovery rights of Tidewater and in the event Tidewater exercises such rights, the Employee shall promptly return the RSUs or shares of Common Stock to Tidewater upon demand.  If the Employee no longer holds the RSUs or shares of Common Stock at the time of demand by Tidewater, the Employee shall pay to Tidewater, without interest, all cash, securities, or other assets received by the Employee upon the sale or transfer of such shares.  Tidewater may, if it chooses, effect such recovery by withholding from other amounts due to the Employee by the Company.

IV.
Withholding Taxes

Notwithstanding Section 13(b) of the Plan, if the Employee is subject to Section 16 of the 1934 Act, the Committee may not disapprove of the Employee’s right to make an Election with respect to the RSUs as provided in Section 13(a) of the Plan.  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 vesting and payout of the RSUs, unless the Employee has previously provided the Company with payment of all applicable withholding taxes, Tidewater shall withhold, from the shares of Common Stock to be issued upon the vesting of the RSUs, shares with a value equal to the maximum statutory amount required to be withheld.  As provided in the Plan, the value of the shares to be withheld shall be based on the Fair Market Value of the Common Stock on the Tax Date.

V.
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.

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.

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VII.
Amendment, Modification or Termination

The Committee may amend, modify, or terminate any RSUs 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 RSUs 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 (including the Term Sheet) 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.

X.
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.
Electronic Delivery and Execution of Documents

11.1The Company may, in its sole discretion, deliver any documents related to the Employee’s current or future participation in the Plan or any other equity compensation plan of the Company by electronic means or request Employee’s consent to the terms of an award by electronic means.  Such documents may include the plan, any grant notice, this Agreement, the plan prospectus, and any reports of Tidewater provided generally to Tidewater’s stockholders.  In addition, the Employee may deliver any grant notice or award agreement to the Company or to such third party involved in administering the applicable plan as the Company may designate 

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from time to time.  By accepting the terms of this Agreement, the Employee also hereby consents to participate in such plans and to execute agreements setting the terms of participation through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. 

11.2The Employee acknowledges that the Employee has read Section 11.1 of this Agreement and consents to the electronic delivery and electronic execution of plan documents as described in Section 11.1.  The Employee acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Employee by contacting the Company by telephone or in writing.  

XII.
Entire Agreement; Modification

The Plan and this Agreement (including the Term Sheet) constitute the entire agreement between the parties with respect to the subject matter contained herein.  This Agreement may not be modified without the approval of the Committee and the Employee, 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 this Agreement shall be void and ineffective for all purposes.

* * * * * * * * * * * * *

By clicking the “Accept” button, the Employee represents that he or she is familiar with the terms and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and provisions thereof.  The Employee has reviewed the Plan, this Agreement, and the prospectus in their entirety and fully understands all provisions of this Agreement.  The Employee agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Agreement.

 

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

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