Document:

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                                                                    EXHIBIT 10.2

                              TORCH OFFSHORE, INC.
                          2001 LONG-TERM INCENTIVE PLAN

                        (ADOPTED EFFECTIVE AS OF , 2001)

         1. OBJECTIVES. This Torch Offshore, Inc. 2001 Long-Term Incentive Plan
(this "Plan") is intended as an incentive to retain and attract persons of
training, experience and ability to serve as employees, consultants and
directors of Torch Offshore, Inc., a Delaware corporation (the "Company"), to
encourage the sense of proprietorship of such persons and to stimulate the
active interest of such persons in the development and financial success of the
Company and its Subsidiaries.

         2. DEFINITIONS. As used herein, the terms set forth below shall have
the following respective meanings:

                  "ACT" means the Securities Act of 1933, as amended from time
to time.

                  "ANNUAL DIRECTOR AWARD DATE" means, for each calendar year
beginning on or after the IPO Closing Date, the first business day of the month
next following the date on which the annual meeting of the stockholders of the
Company is held in that year.

                  "AWARD" means any Option, Restricted Stock, Performance Stock
Award, Phantom Stock, Cash Award, Stock Award or Stock Appreciation Right,
whether granted singly, in combination or in tandem, granted to a Participant
pursuant to any applicable terms, conditions and limitations as the Committee
may establish in order to fulfill the objectives of this Plan.

                  "AWARD AGREEMENT" means a written agreement between the
Company and a Participant that sets forth the terms, conditions and limitations
applicable to an Award.

                  "BOARD" means the Board of Directors of the Company.

                  "CASH AWARD" means an Award payable in cash.

                  "CODE" means the United States Internal Revenue Code of 1986,
as amended from time to time.

                  "COMMITTEE" means the Compensation Committee of the Board or
such other committee of the Board as is designated by the Board to administer
this Plan.

                  "COMMON STOCK" means the common stock, par value $0.01 per
share, of the Company.

                  "COMPANY" means Torch Offshore, Inc., a Delaware corporation.

                  "DIRECTOR" means a nonemployee member of the Board.
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                  "EFFECTIVE DATE" means _________, 2001.

                  "EMPLOYEE" means an individual employed by the Company or a
Subsidiary. For purposes of this Plan, an Employee also includes a consultant
providing services to the Company or a Subsidiary.

                  "EXERCISE PRICE" means the price at which the Option Shares
may be purchased under the terms of the Award Agreement.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.

                  "FAIR MARKET VALUE" of a share of Common Stock means, as of a
particular date, (a) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date or, if there shall have been no such sale so reported on
that date, on the next succeeding date on which such a sale was so reported; (b)
if shares of Common Stock are not so listed but are quoted on the Nasdaq
National Market, the mean between the highest and lowest sales price per share
of Common Stock reported by the Nasdaq National Market on that date or, if there
shall have been no such sale so reported on that date, on the next succeeding
date on which such a sale was so reported; (c) if the Common Stock is not so
listed or quoted, the mean between the closing bid and asked price on that date
or, if there are no quotations available for such date, on the next succeeding
date on which such quotations shall be available, as reported by the Nasdaq
Stock Market or, if not reported by the Nasdaq Stock Market, by the National
Quotation Bureau Incorporated; or (d) if none of the above is applicable, then
such amount as may be determined by the Committee or the Board in such a manner
as it deems in good faith appropriate to be the fair market value per share of
Common Stock.

                  "GRANT DATE" means the date on which an Award is granted by
the Committee.

                  "IPO" shall mean the first date that: (a) the Company shall
have completed an underwritten public offering of Common Stock under the Act, as
amended, and such Common Stock is listed or quoted on a national securities
exchange or the Nasdaq National Market; or (b) the Common Stock has been
exchanged or converted for or into common stock of, or securities exchangeable
for or convertible into the common stock of, another corporation that is
registered under the Exchange Act, as amended, and securities of which are
listed or quoted on a national securities exchange or the Nasdaq National
Market.

                  "IPO CLOSING DATE" means the date on which the Company first
receives payment for the shares of Common Stock it sells in the IPO.

                  "IPO PRICE" means the initial public offering price per share
of Common Stock as set forth in the final prospectus for the IPO.

                  "ISO" means an incentive stock option within the meaning of
Code Section 422.

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                  "OPTION" means a right to purchase a particular number of
shares of Common Stock at a particular Exercise Price, subject to certain terms
and conditions as provided in this Plan and Award Agreement. An Option may be in
the form of an ISO or a nonqualified stock option within the meaning of Code
Section 83.

                  "OPTION SHARES" means the shares of Common Stock covered by a
particular Option.

                  "PARTICIPANT" means an Employee or a Director to whom an Award
has been granted under this Plan.

                  "PERFORMANCE STOCK AWARD" means an Award that is contingent on
the achievement of certain performance objectives established by the Board,
valued by reference to the Fair Market Value of the Common Stock, or increase
thereof, by reference to performance measures other than the Common Stock, or a
combination of both, over a specified period of time.

                  "PHANTOM STOCK" means a right to receive the value of a
specified number of shares of Common Stock.

                  "PLAN" means the Torch Offshore, Inc. 2001 Long-Term Incentive
Plan, as amended from time to time.

                  "RESTRICTED STOCK" means shares of Common Stock that are
restricted or subject to forfeiture provisions.

                  "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor rule.

                  "STOCK APPRECIATION RIGHTS" or "SARS" means the right to
receive an amount in cash or Common Stock equal to the appreciation in value of
a specified number of shares of Common Stock over a particular period of time.

                  "STOCK AWARD" means an Award payable in shares of Common
Stock, which may be Restricted Stock.

                  "SUBSIDIARY" means (a) with respect to any Awards other than
ISOs, (i) in the case of a corporation, any corporation of which the Company
directly or indirectly owns shares representing 50% or more of the combined
voting power of the shares of all classes or series of capital stock of such
corporation that have the right to vote generally on matters submitted to a vote
of the stockholders of such corporation and (ii) in the case of a partnership or
other business entity not organized as a corporation, any such business entity
of which the Company directly or indirectly owns 50% or more of the voting,
capital or profits interests (whether in the form of partnership interests,
membership interests or otherwise), and (b) with respect to Awards of ISOs, any
subsidiary within the meaning of Section 424(f) of the Code.

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         3. PLAN ADMINISTRATION AND DESIGNATION OF PARTICIPANTS. All Employees
of the Company and its Subsidiaries and all Directors are eligible for Awards
under this Plan. The Committee shall select the Participants from time to time
by the grant of Awards under this Plan and, subject to the terms and conditions
of this Plan, shall determine all terms and conditions of the Awards. This Plan
shall be administered by the Committee, which shall have full and exclusive
power to interpret this Plan and to adopt such rules, regulations and guidelines
for carrying out this Plan as it may deem necessary or appropriate. The
Committee may delegate its duties hereunder to the Chief Executive Officer or
other executive officers of the Company subject to such rules and regulations as
the Committee establishes. The Committee may, in its discretion, provide for the
extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
contained in an Award Agreement, waive any restriction or other provision of
this Plan or an Award Agreement or otherwise amend or modify an Award in any
manner that is either (a) not adverse to the Participant holding the Award or
(b) consented to by such Participant.

         4. AWARD AGREEMENT. Each Award granted hereunder shall be described in
an Award Agreement, which shall be subject to the terms and conditions of this
Plan and shall be signed by the Participant and by the appropriate officer for
and on behalf of the Company.

         5. SHARES OF COMMON STOCK RESERVED FOR THIS PLAN. Subject to adjustment
as provided in Section 12 hereof, a total of 3,000,000 shares of Common Stock
shall be reserved for issuance upon the exercise or payment of Awards granted
pursuant to this Plan.

                  Notwithstanding anything herein to the contrary, no
Participant may be granted Awards consisting of Options or Stock Appreciation
Rights exercisable for more than 25% of the shares of Common Stock authorized
for Awards under this Plan, subject to adjustment as provided in Section 12
hereof. In the event of an increase in the number of shares authorized under
this Plan, the 25% limitation will apply to the number of shares authorized.

                  The Committee and the appropriate officers of the Company
shall from time to time take whatever actions are necessary to execute,
acknowledge, file and deliver any documents required to be filed with or
delivered to any governmental authority or any stock exchange or transaction
reporting system on which shares of Common Stock are listed or quoted in order
to make shares of Common Stock available for issuance pursuant to this Plan.
Awards that are forfeited or terminated or expire unexercised in such a manner
that all or some of the shares of Common Stock subject thereto are not issued to
a Participant shall immediately become available for the granting of Awards
under this Plan.

         6. AWARDS TO EMPLOYEES.

                  (a) INCENTIVE STOCK OPTIONS. Options granted to Employees
         (other than consultants) hereunder may be incentive stock options
         within the meaning of Section 422 of the Code (an "ISO"). An ISO shall
         consist of a right to purchase a specified number of shares of Common
         Stock at a price specified by the Committee in the Award Agreement or
         otherwise, which shall not be less than the Fair Market Value of the
         Common Stock on

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         the Grant Date. Any ISO granted shall expire not later than ten (10)
         years after the Grant Date, with the expiration date to be specified by
         the Committee in the Award Agreement. Any ISO granted must, in addition
         to being subject to applicable terms, conditions and limitations
         established by the Committee, comply with Section 422 of the Code.
         Pursuant to the ISO requirements of Code Section 422, notwithstanding
         anything herein to the contrary, (i) no ISO can be granted under this
         Plan on or after the tenth (10th) anniversary of the Effective Date of
         this Plan (or the fifth anniversary of the Effective Date of this Plan
         if the ISO is awarded to any person who, at the time of grant, owns
         stock representing more than 10% of the combined voting power of all
         classes of stock of the Company or any Subsidiary), (ii) no Optionee
         may be granted an ISO to the extent that, upon the grant of the ISO,
         the aggregate Fair Market Value (determined as of the date the Option
         is granted) of the Common Stock with respect to which ISOs (including
         Options hereunder) are exercisable for the first time by the Optionee
         during any calendar year (under all plans of the Company and any
         Subsidiary) would exceed $100,000, and (iii) the Exercise Price of the
         ISO may not be less than 100% of the Fair Market Value of the Common
         Stock at the time of grant (or not less than 110% of such of the Fair
         Market Value if the ISO is awarded to any person who, at the time of
         grant, owns stock representing more than 10% of the combined voting
         power of all classes of stock of the Company or any Subsidiary). All
         other terms, conditions and limitations applicable to ISOs shall be
         determined by the Committee.

                  (b) NONQUALIFIED STOCK OPTIONS. Options granted to Employees
         (including consultants) may be nonqualified stock options within the
         meaning of Section 83 of the Code. A nonqualified stock option shall
         consist of a right to purchase a specified number of shares of Common
         Stock at a price specified by the Committee in the Award Agreement or
         otherwise. The expiration date of the nonqualified stock option shall
         be specified by the Committee in the Award Agreement. All other terms,
         conditions and limitations applicable to nonqualified stock options
         shall be determined by the Committee.

                  (c) PERFORMANCE STOCK AWARD. An Award may be in the form of a
         Performance Stock Award. The terms, conditions and limitations
         applicable to any Performance Stock Award shall be determined by the
         Committee.

                  (d) STOCK AWARD (INCLUDING RESTRICTED STOCK). An Award may
         consist of Common Stock or may be denominated in units of Common Stock.
         All or part of any Stock Award may be subject to conditions established
         by the Committee and set forth in the Award Agreement, which conditions
         may include, but are not limited to, continuous service with the
         Company and its Subsidiaries, achievement of specific business
         objectives, increases in specified indices, attaining specified growth
         rates and other comparable measurements of performance. Such Awards may
         be based on Fair Market Value or other specified valuations. The
         certificates evidencing shares of Common Stock issued in connection
         with a Stock Award shall contain appropriate legends and restrictions
         describing the terms and conditions of the restrictions applicable
         thereto. The terms, conditions and limitations applicable to any Stock
         Award pursuant to this Plan shall be determined by the Committee.

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                  (e) PHANTOM STOCK. An Award may be in the form of Phantom
         Stock or other bookkeeping account tied to the value of shares of
         Common Stock. The terms, conditions and limitations applicable to any
         Awards of Phantom Stock shall be determined by the Committee.

                  (f) STOCK APPRECIATION RIGHTS. An Award may be in the form of
         SARs. The terms, conditions and limitations applicable to any Awards of
         SARs shall be determined by the Committee.

                  (g) CASH AWARDS. An Award may be in the form of a Cash Award.
         The terms, conditions and limitations applicable to any Cash Awards
         shall be determined by the Committee.

         7. AWARDS TO DIRECTORS.

                  (a) IPO DIRECTOR AWARD. On the IPO Closing Date, each Director
         shall be automatically awarded a nonqualified stock option to purchase
         2,500 shares of Common Stock (the "IPO Director Award").

                  (b) ANNUAL DIRECTOR AWARD. On each Annual Director Award Date,
         each Director shall be automatically awarded a nonqualified stock
         option to purchase 1,000 shares of Common Stock (the "Annual Director
         Award").

                  (c) EXERCISE SCHEDULE.

                           (i) The IPO Director Award and the Annual Director
                  Award granted to each Director shall become 100% vested and
                  exercisable six (6) months and one (1) day from the Grant Date
                  for such Award. The Director must be in continuous service as
                  a member of the Board from the Grant Date through the date of
                  exercisability in order for the IPO Director Award or the
                  Annual Director Award to become 100% vested and exercisable.

                           (ii) The IPO Director Award and the Annual Director
                  Award granted shall become fully exercisable, irrespective of
                  the limitations set forth in clause (i) above, provided that
                  the Director has been in continuous service as a member of the
                  Board since the Grant Date for such Award, upon the occurrence
                  of (A) a Change in Control or (B) the Director's termination
                  of service due to death or Disability.

                                    For purposes of this Section 7, "Disability"
                  means the inability to perform services as a Director for a
                  period of six (6) consecutive months or for an aggregate of
                  six (6) months during any twelve (12)-month period after the
                  Grant Date by reason of any medically determinable physical or
                  mental impairment, as determined by the Committee in the
                  Committee's sole discretion.

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                  (d) TERMINATION OF AWARDS. The IPO Director Award and the
         Annual Director Award granted to each Director shall terminate and be
         of no force and effect with respect to any shares of Common Stock not
         previously purchased by the Director upon the first to occur of:

                           (i)      the tenth (10th) anniversary of the Grant
                                    Date for such Award or

                           (ii)     with respect to

                                    (A) the portion of the IPO Director Award or
                           the Annual Director Award exercisable upon
                           termination of service, the expiration of (1) ninety
                           (90) days following the Director's termination of
                           service for reasons other than due to death or
                           Disability or (2) one (1) year following the
                           Director's termination of service by reason of death
                           or Disability; and

                                    (B) the portion of the IPO Director Award or
                           the Annual Director Award not exercisable upon
                           termination of service, the date of the Director's
                           termination of service.

                  (e) EXERCISE PRICE.

                           (i) IPO DIRECTOR AWARD. The exercise price of the
                  Common Stock under the IPO Director Award granted to each
                  Director shall be equal to the IPO Price for such shares.

                           (ii) ANNUAL DIRECTOR AWARD. The exercise price of the
                  Common Stock under the Annual Director Award granted to each
                  Director shall be no less than the Fair Market Value of the
                  shares of Common Stock subject to such Annual Director Award
                  on the Grant Date for such Award.

                  (f) AWARD AGREEMENT. Each IPO Director Award and Annual
         Director Award granted to a Director shall be evidenced by a written
         agreement between the Company and such Director that sets forth the
         terms, conditions and limitations described above and any additional
         terms, conditions and limitations applicable to the IPO Director Award
         or the Annual Director Award. Such written agreements shall be
         consistent with the terms and conditions of this Plan.

         8. PAYMENT OF AWARDS.

                  (a) GENERAL. Payment of Awards may be made in the form of cash
         or Common Stock or combinations thereof and may include such
         restrictions as the Committee shall determine, including, in the case
         of Common Stock, restrictions on transfer and forfeiture provisions.

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                  (b) DEFERRAL. The Committee may, in its discretion, (i) permit
         selected Participants to elect to defer payments of some or all types
         of Awards in accordance with procedures established by the Committee or
         (ii) provide for the deferral of an Award in an Award Agreement or
         otherwise. Any such deferral may be in the form of installment payments
         or a future lump-sum payment. Any deferred payment, whether elected by
         the Participant or specified by the Award Agreement or by the
         Committee, may be forfeited if and to the extent that the Award
         Agreement so provides.

                  (c) DIVIDENDS AND INTEREST. Dividends or dividend equivalent
         rights may be extended to and made part of any Award denominated in
         Common Stock or units of Common Stock, subject to such terms,
         conditions and restrictions as the Committee may establish. The
         Committee may also establish rules and procedures for the crediting of
         interest on deferred cash payments and dividend equivalents for
         deferred payment denominated in Common Stock or units of Common Stock.

                  (d) SUBSTITUTION OF AWARDS. At the discretion of the
         Committee, a Participant may be offered an election to substitute an
         Award for another Award or Awards of the same or different type.

         9. STOCK OPTION EXERCISE. The price at which shares of Common Stock may
be purchased under an Option shall be paid in full at the time of exercise in
cash or, if permitted by the Committee, by means of tendering Common Stock or
surrendering all or part of that or any other Award, including Restricted Stock,
that has been held by the Participant for at least six (6) months and that is
valued at Fair Market Value on the date of exercise, or any combination thereof.
The Committee shall determine acceptable methods for tendering Common Stock or
Awards to exercise an Option as it deems appropriate. The Committee may provide
for procedures to permit the exercise or purchase of Awards by (a) loans from
the Company or (b) use of the proceeds to be received from the sale of Common
Stock issuable pursuant to an Award. Unless otherwise provided in the applicable
Award Agreement, in the event shares of Restricted Stock are tendered as
consideration for the exercise of an Option, a number of the shares issued upon
the exercise of the Option, equal to the number of shares of Restricted Stock
used as consideration therefor, shall be subject to the same restrictions as the
Restricted Stock so submitted as well as any additional restrictions that may be
imposed by the Committee.

         10. TERMINATION OF EMPLOYMENT OR SERVICE. Upon the termination of
employment or service by a Participant, any unexercised, deferred or unpaid
Awards shall be treated as provided in the specific Award Agreement evidencing
the Award or, in the case of Awards to Directors, as provided in this Plan.
Unless otherwise specifically provided in the Award Agreement, each Award
granted pursuant to this Plan that is an Option shall immediately terminate to
the extent the Option is not vested (or does not become vested as a result of
such termination of employment or service) on the date the Participant
terminates employment or service with the Company or its Subsidiaries.

         11. ASSIGNABILITY. Except as otherwise provided herein, no Award
granted under this Plan shall be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated by a Participant other than by will or the
laws of descent and distribution, and during the lifetime of a

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Participant, any Award shall be exercisable only by him, or in the case of a
Participant who is mentally incapacitated, the Award shall be exercisable by his
guardian or legal representative. The Committee may prescribe and include in
applicable Award Agreements other restrictions on transfer. Any attempted
assignment or transfer in violation of this Section 11 shall be null and void.
Upon the Participant's death, the personal representative or other person
entitled to succeed to the rights of the Participant (the "Successor
Participant") may exercise such rights. A Successor Participant must furnish
proof satisfactory to the Company of his or her right to exercise the Award
under the Participant's will or under the applicable laws of descent and
distribution.

                  Subject to approval by the Committee in its sole discretion,
other than with respect to ISOs, all or a portion of the Awards granted to a
Participant under this Plan may be transferable by the Participant, to the
extent and only to the extent specified in such approval, to (a) the spouse,
parent, brother, sister, children or grandchildren (including adopted and
stepchildren and grandchildren) of the Participant ("Immediate Family Members"),
(b) a trust or trusts for the exclusive benefit of such Immediate Family Members
or (c) a partnership or partnerships in which such Immediate Family Members have
at least 99% of the equity, profit and loss interests; provided that the Award
Agreement pursuant to which such Awards are granted (or an amendment thereto)
must expressly provide for transferability in a manner consistent with this
Section. Subsequent transfers of transferred Awards shall be prohibited except
by will or the laws of descent and distribution, unless such transfers are made
to the original Participant or a person to whom the original Participant could
have made a transfer in the manner described herein. No transfer shall be
effective unless and until written notice of such transfer is provided to the
Committee, in the form and manner prescribed by the Committee. Following
transfer, any such Awards shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, and except as
otherwise provided herein, the term "Participant" shall be deemed to refer to
the transferee. The consequences of termination of employment shall continue to
be applied with respect to the original Participant, following which the Awards
shall be exercisable by the transferee only to the extent and for the periods
specified in this Plan and the Award Agreement.

         12. ADJUSTMENTS.

                  (a) The existence of outstanding Awards shall not affect in
         any manner the right or power of the Company or its stockholders to
         make or authorize any or all adjustments, recapitalization,
         reorganizations or other changes in the ownership of the Company or its
         business or any merger or consolidation of the Company, or any issue of
         bonds, debentures or other obligations, or the dissolution or
         liquidation of the Company, or any sale or transfer of all or any part
         of its assets or business, or any other Company act or proceeding of
         any kind, whether or not of a character similar to that of the acts or
         proceedings enumerated above.

                  (b) In the event of any Common Stock distribution or split,
         recapitalization, extraordinary distribution, merger, consolidation,
         combination or exchange of shares of Common Stock or similar change or
         upon the occurrence of any other event that the Committee, in its sole
         discretion, deems appropriate, (i) the number of shares of Common

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         Stock reserved under this Plan and covered by outstanding Awards; (ii)
         the Exercise Price in respect of such Awards; and (iii) the appropriate
         Fair Market Value and other price determinations for such Awards shall
         be adjusted as appropriate.

                  (c) In the event of a corporate merger, consolidation,
         acquisition of property or stock, separation, reorganization or
         liquidation, the Board shall be authorized (i) to issue or assume
         Awards by means of substitution of new Awards, as appropriate, for
         previously issued Awards or to assume previously issued Awards as part
         of such adjustment or (ii) to cancel Awards that are Options or SARs
         and give the Participants who are the holders of such Awards notice and
         opportunity to exercise for thirty (30) days prior to such
         cancellation.

         13. PURCHASE FOR INVESTMENT. Unless the Awards and shares of Common
Stock covered by this Plan have been registered under the Act, as amended, each
person receiving shares of Common Stock pursuant to an Award under this Plan may
be required by the Company to give a representation in writing in form and
substance satisfactory to the Company to the effect that he is acquiring such
shares for his own account for investment and not with a view to, or for sale in
connection with, the distribution of such shares or any part thereof.

         14. TAX WITHHOLDING. The Company shall have the right to deduct
applicable taxes from any Award payment and withhold, at the time of delivery or
vesting of cash or shares of Common Stock under this Plan, an appropriate amount
of cash or number of shares of Common Stock or a combination thereof for payment
of taxes required by law or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for withholding of such taxes.
The Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made.

         15. AMENDMENTS OR TERMINATION. The Company may amend, alter or
discontinue this Plan, except that no amendment or alteration that would impair
the rights of any Participant under any Award that he has been granted shall be
made without his consent, and no amendment or alteration shall be effective
prior to approval by the Company's stockholders to the extent such approval is
determined by the Board to be required by applicable laws, regulations or
exchange requirements.

         16. RESTRICTIONS. No shares of Common Stock or other form of payment
shall be issued with respect to any Award unless the Company shall be satisfied
based on the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. The Award Agreement may include
provisions for the repurchase by the Company of Common Stock acquired pursuant
to an Award and repurchase of the Participant's Option rights.

         17. UNFUNDED PLAN. Insofar as it provides for Awards of cash, Common
Stock or rights thereto, this Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants who are entitled to
cash, Common Stock or rights thereto under this

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Plan, any such accounts shall be used merely as a bookkeeping convenience. The
Company shall not be required to segregate any assets that may at any time be
represented by cash, Common Stock or rights thereto, nor shall this Plan be
construed as providing for such segregation, nor shall the Company, the Board or
the Committee be deemed to be a trustee of any cash, Common Stock or rights
thereto to be granted under this Plan. Any liability or obligation of the
Company to any Participant with respect to a grant of cash, Common Stock or
rights thereto under this Plan shall be based solely upon any contractual
obligations that may be created by this Plan and any Award Agreement, and no
such liability or obligation of the Company shall be deemed to be secured by any
pledge or other encumbrance on any property of the Company. None of the Company,
the Board or the Committee shall be required to give any security or bond for
the performance of any obligation that may be created by this Plan.

         18. INDEMNIFICATION. The Company shall indemnify and hold harmless any
member of the Board or any committee appointed by the Board to administer this
Plan and other individuals, including Employees and Directors, performing
services on behalf of the Committee, against any liability, cost or expense
arising as a result of any claim asserted by any person or entity under the laws
of any state or of the United States with respect to any action or failure to
act of such individuals taken in connection with this Plan, except claims or
liabilities arising on account of the willful misconduct or bad faith of such
Board member, committee member or individual.

         19. RULE 16B-3. It is intended that this Plan and any grant of an Award
made to a person subject to Section 16 of the Exchange Act meet all of the
requirements of Rule 16b-3. If any provision of this Plan or any such Awards
would disqualify this Plan or such Award under, or would otherwise not comply
with, Rule 16b-3, such provision or Award shall be construed or deemed amended
to conform to Rule 16b-3.

         20. MISCELLANEOUS. The granting of any Award shall not impose upon the
Company any obligation to maintain any Participant as an Employee or a Director
and shall not diminish the power of the Company to discharge any Participant at
any time.

         21. GOVERNING LAW. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.

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         22. EFFECTIVE DATE OF PLAN. This Plan shall be effective as of the
Effective Date, subject to the approval of this Plan by the stockholders of the
Company within twelve (12) months of the adoption of this Plan by the Board.
Unless terminated earlier by the Board, this Plan shall terminate as of the
tenth (10th) anniversary of the Effective Date and no further Awards shall be
made after such date. Termination of this Plan shall not affect Awards made
prior to the termination date.

                              Attested to by the Secretary of Torch Offshore,
                              Inc., as adopted by the Board of Directors
                              effective as of the ____ day of ___________, 2001.

                              --------------------------------------------------

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                                                                    EXHIBIT 10.3

                              TORCH OFFSHORE, INC.
                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of January
15, 2001 (the "Effective Date"), and is entered into between Torch Offshore,
Inc., a Delaware corporation (the "Corporation"), and Willie J. Bergeron, Jr., a
person of the full age of majority (the "Employee").

         1. Employment and Duties.

         (a) The Corporation agrees to employ the Employee as General Manager
Operations, or a similar capacity, as of the Effective Date for the period set
forth in paragraph 1(c) below, unless employment is terminated sooner as
provided herein.

         (b) The Employee accepts employment and agrees to devote his full time
and attention to the performance of his duties as determined, from time to time,
by the Chief Executive Officer or the Board of Directors of the Corporation.

         (c) The Employee shall continue to serve in the employ of the
Corporation until December 31, 2002 (the "Initial Term"), except as provided
herein. Upon the expiration of the Initial Term, this Agreement may be renewed
for one or more additional one-year term(s) (the "Renewal Term") with the
written consent of the parties hereto.

         2. Compensation. For all services rendered by the Employee, the
Corporation shall compensate the Employee as follows:

         (a) Annual Salary. The Corporation shall pay to the Employee, subject
to the terms and conditions set forth in this Agreement, an annual salary of
$105,000.00, and such amount shall be prorated and paid in accordance with the
Corporation's customary payroll practices.

         (b) Perquisites and Benefits. The Employee shall be entitled to receive
in the aggregate substantially the same fringe benefits and perquisites offered
by the Corporation to any of the Corporation's similarly situated employees,
including, without limitation, participation in the various employee benefit
plans or programs provided to the employees of the Corporation in general,
subject to the regular eligibility requirements with respect to each of such
benefit plans or programs.

         (c) Severance. If the Corporation terminates the employment of the
Employee for any reason other than Cause (as defined in paragraph 4(d)), then
the Corporation shall pay to the Employee severance payments of six months of
salary at his then current rate, to be paid in accordance with the Company's
standard payroll practices. The Employee expressly acknowledges and agrees that
the Employee shall not be eligible to receive from the Corporation any form of
severance pay or other form of termination benefit, except as expressly provided
in this paragraph 2(c) (other than coverage under COBRA or other form of legally
mandated benefit available after the termination of employment).

<PAGE>   2

                  Any amount(s) payable under this Agreement shall be subject to
the withholding of such income and employment taxes as may be required by law to
be withheld.

         3. Payment or Reimbursement of Expenses. Subject to compliance by the
Employee with such policies regarding expenses and expense reimbursements as may
be adopted, from time to time, by the Corporation, the Employee shall be paid or
reimbursed for reasonable expenses actually incurred in connection with the
performance of his duties hereunder and in the furtherance of the business and
affairs of the Corporation. Any such reimbursement shall be made within a
reasonable period after presentation by the Employee of an itemized account of
such expenses, accompanied by appropriate receipts satisfactory to the
Corporation. In no event shall any expense be paid or reimbursed, unless
properly accounted for to the extent necessary to substantiate the Corporation's
Federal income tax deduction under the applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder or any similar state or federal law or regulation.

         4. Termination.

         (a) This Agreement and the Corporation's obligations hereunder shall
terminate as of the conclusion of the Initial Term, unless terminated earlier
pursuant to this paragraph 4 or extended for successive one-year terms as
provided in paragraph 1(c) hereof.

         (b) Either party may terminate this Agreement by providing the other
party with written notice.

         (c) If the Employee dies or becomes totally disabled (as determined by
the Board of Directors or the Chief Executive Officer of the Corporation), this
Agreement and the Employee's rights hereunder shall automatically terminate as
of the date of such death or disability.

         (d) The Corporation may terminate this Agreement and the Employee's
rights hereunder at any time for Cause, which shall mean (i) conviction of the
Employee by a court of competent jurisdiction of any felony or a crime involving
moral turpitude; (ii) the Employee's knowing failure or refusal to follow
reasonable instructions of the Board of Directors or reasonable policies,
standards and regulations of the Corporation; (iii) the Employee's continued
failure or refusal to faithfully and diligently perform the usual, customary
duties of his employment with the Corporation; (iv) the Employee's continuously
conducting himself in an unprofessional, unethical, immoral or fraudulent
manner; or (v) the Employee's conduct discredits the Corporation or is
detrimental to the reputation, character and standing of the Corporation; or
(vi) breach of the provisions of paragraphs 5 or 6 hereof.

         5. Covenant Not to Compete. During the term of the Employee's
employment with the Corporation or for a period of six (6) months following any
termination of the Employee's employment by the Corporation, the Employee agrees
that, with respect to the parishes within the State of Louisiana and the
counties within the States of Texas, Alabama, Florida, and Mississippi set forth
on Schedule A attached hereto, including the territorial waters of the United
States located offshore of such areas, each of which the Employee stipulates and
agrees that the

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Corporation carries on or intends to carry on a like business, the Employee
shall not, directly or indirectly, for his own benefit or to the detriment of
the Corporation or its affiliates:

         (a) Own, manage, operate, control, or participate in the ownership,
management, operation, or control of a business (however structured) that
carries on or engages in any manner (excluding stock in a publicly held
corporation), in the Pipelay and Subsea Construction Business. For this purpose,
the term "Pipelay and Subsea Construction Business" shall refer to the
installation, laying, and/or burying of transmission lines, trunk lines, and
flowlines, laying of all rigid, flexible, reeled, or coiled tubing and
installing, laying, and/or burying of control, power umbilicals and subsea
communication or power cables, and pipeline tie-ins, pipeline burial, riser
installation and survey, inspection, maintenance, and repair services in
connection with oil and gas pipelines;

         (b) Perform any services similar to the primary services he performed
while employed by the Corporation or any of its subsidiaries or affiliates for
any person, partnership, corporation, association, group, or other entity
engaged in the Pipelay and Subsea Construction Business (as defined above),
whether as an employee, independent contractor, or otherwise; or

         (c) Solicit customers or employees of the Corporation or any of its
subsidiaries or affiliates for any purpose or in any manner detrimental to the
Corporation or it business or operations.

                  The parties hereto agree that each of the foregoing
prohibitions is intended to constitute a separate restriction. Accordingly,
should any such prohibition be declared invalid or unenforceable, such
prohibition shall be deemed severable from and shall not affect the remainder
thereof. The parties further agree that the foregoing restrictions are
reasonable in both time and scope.

                  Because of the difficulty of measuring economic loss to the
Corporation as a result of a breach of any of the foregoing prohibitions, and
because of the immediate and irreparable damage that could be caused to the
Corporation for which it would have no other adequate remedy, the Employee
agrees that the foregoing prohibitions may be enforced by the Corporation, in
the event of breach by him, by injunctions, restraining orders, and orders of
specific performance issued by a court of competent jurisdiction. The Employee
further agrees to waive any requirement for the Corporation's securing or
posting of any bond in connection with such remedies.

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<PAGE>   4

         6. Confidential Information.

         (a) The Employee agrees not to disclose, either while employed by the
Corporation or any of its subsidiaries or affiliates or at any time thereafter,
to any person not employed by the Corporation or not engaged by the Corporation
to render services to the Corporation, any confidential information of the
Corporation or its subsidiaries or affiliates learned by the Employee during the
course of his employment by the Corporation. This paragraph 6 shall not preclude
the Employee from the use or disclosure of information known generally to the
public or of information not considered confidential by persons engaged in the
business conducted by the Corporation or from disclosure required by law or
court order. The Employee further agrees that, upon the expiration or
termination of this Agreement for any reason, he will not take with him, without
the prior written consent of the Corporation, any document, magnetic or other
storage media, or any other books, records, files, or confidential or
proprietary information of the Corporation or any of its subsidiaries or
affiliates.

         (b) All written materials, records, and documents made by the Employee
or in the possession of the Employee during or after the term of this Agreement
concerning the business or affairs of the Corporation or any of its subsidiaries
or affiliates, or other items or property held by or for the Employee, but owned
or used by the Corporation or its subsidiaries or affiliates, shall be the sole
property of the Corporation or such subsidiary or affiliate, as the case may be,
and, upon the expiration or termination of the term of this Agreement or upon
the request of the Corporation or such subsidiary or affiliate, the Employee
shall promptly deliver all of such materials, records, documents, or other items
or property that are then in his possession.

         7. Notices. All notices, requests, demands, and other communications
provided for by this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person or mailed by United States certified
mail, return receipt required, postage prepaid, addressed as follows:

                  If to the Employee:            If to the Corporation:

                  Willie J. Bergeron, Jr.        Torch Offshore, Inc.
                  924 Eagle Drive                401 Whitney Avenue, Suite 400
                  Houma, Louisiana 70364         Gretna, Louisiana 70056
                                                 Attention: Lyle Stockstill, CEO

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

         8. Governing Law. The provisions of this Agreement shall be construed
in accordance with the substantive local law of the State of Louisiana, without
consideration of the conflicts of law provisions thereof.

         9. Successors. This Agreement shall be assignable by the Corporation,
with the prior written consent of the Employee. The Employee's obligation to
provide services hereunder, being personal to the Employee, may not be assigned
by the Employee.

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<PAGE>   5

         10. Remedies. Each party acknowledges that the other party will have no
adequate remedy at law if the first party violates certain of the terms of this
Agreement, including but not limited to paragraphs 5 and 6, and that the other
party shall have the right, to the extent permitted by applicable law, in
addition to any other rights or remedies it may have, to obtain from any court
of competent jurisdiction, injunctive relief to restrain any breach or
threatened breach hereof or otherwise to specifically enforce the provisions
hereof.

         11. Waiver. No waiver of any obligation, right, or remedy under this
Agreement shall be effective, unless such waiver is made in writing, specifying
the terms of this Agreement subject to waiver and executed by the party to be
charged with such waiver. A waiver by either party of any of his or its rights
or remedies hereunder on any occasion shall not be a bar to the exercise of the
same right or remedy on any subsequent occasion or of the exercise of any other
right or remedy at any time.

         12. Release. Notwithstanding anything in this Agreement to the
contrary, the Employee shall not be entitled to receive any severance payment
pursuant to paragraph 2(c) of this Agreement unless the Employee has executed
(and not revoked) a general release of all claims the Employee may have against
the Corporation and/or its subsidiaries and affiliates with respect to
employment under this Agreement, in a form of such release reasonably acceptable
to the Corporation.

         13. Integration and Amendments. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any prior agreement or understanding, whether
written or oral, relating to such subject matter. No modification or amendment
to this Agreement shall be effective or binding unless in writing, specifying
such modification or amendment, executed by both of the parties hereto.

         14. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the construction or interpretation
of this Agreement.

         15. Severability. Should any section, provision, or portion of this
Agreement be declared invalid or unenforceable in any jurisdiction, then such
section, provision, or portion shall be deemed to be (a) severable from this
Agreement as to such jurisdiction (but not elsewhere) and shall not affect the
remainder hereof and (b) amended to the extent, and only to the extent,
necessary to permit such section, provision, or portion, as the case may be, to
be valid and enforceable in such jurisdiction (but not elsewhere).

         16. Survival of Certain Provisions. The rights and obligations of the
Employee under paragraphs 5 and 6 hereof shall survive the expiration or
termination of this Agreement.

         17. Dispute Resolutions. Except with respect to injunctive relief as
provided in paragraphs 5 and 10, neither party shall institute a proceeding in
any court or administrative agency to resolve a dispute between the parties
before that party has sought to resolve the dispute through direct negotiation
with the other party. If the dispute is not resolved within two weeks after a
demand for direct negotiation, the parties shall attempt to resolve the dispute
through

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mediation. If the parties do not promptly agree on a mediator, the parties shall
request the Louisiana State Bar Association to appoint a mediator in the state
of Louisiana who is qualified as a mediator under the Louisiana Mediation Act,
as amended from time to time. If the mediator is unable to facilitate a
settlement of the dispute within a reasonable period of time, as determined by
the mediator, the mediator shall issue a written statement to the parties to
that effect and any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Gretna, Louisiana in accordance
with the employment dispute resolution arbitration rules of the American
Arbitration Association then in effect. The arbitrators shall have the authority
to order back-pay, severance compensation, vesting of options (or cash
compensation in lieu of vesting of options), reimbursement of costs and
expenses, including those incurred to enforce this Agreement, including
reasonable attorneys' fees, and interest thereon. A decision by a majority of
the arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction.

         THIS AGREEMENT was executed in multiple counterparts, each of which
shall be deemed an original, as of the dates set forth below, but to be
effective as of the Effective Date.

EMPLOYEE:                              TORCH OFFSHORE, INC.

/s/ Willie J. Bergeron, Jr.            By: /s/ Lyle Stockstill
----------------------------------        --------------------------------------
Willie J. Bergeron, Jr.
                                       Title: President & CEO
                                             -----------------------------------

Date:1-15-2001                         Date: 1-15-2001
     -----------------------------          ------------------------------------

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Schedule A - Counties and Parishes in which Competition is Prohibited

<TABLE>
<S>      <C>                                <C>                        <C>
I.       TEXAS

         Jefferson                          Chambers                   Harris
         Galveston                          Brazoria
         Calhoun                            Aransas
         Nueces                             Cameron

II.      LOUISIANA

         Cameron                            Vermilion                  Lafayette
         Iberia                             St. Mary                   Orleans
         Terrebonne                         Lafourche
         Jefferson                          Plaquemines

III.     MISSISSIPPI

         Hancock                            Harrison
         Jackson

IV.      ALABAMA

         Mobile

V.       FLORIDA

         Escambia                           Santa Rosa
         Pinnellas                          Hillsborough
         Manatee                            Brevard
</TABLE>

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