TIDEWATER INC. COMPANY PERFORMANCE EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN FOR FISCAL YEAR 2017

PLAN OBJECTIVE

ADMINISTRATION

designate participants and target award percentages for a particular year;

establish performance goals and metrics for a particular year;

consider the achievement of the performance goals and metrics and whether any payment will be made hereunder; 

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

approve payments to the extent performance goals and metrics have been achieved.

BASIC PLAN CONCEPT

ELIGIBILITY CRITERIA

PERFORMANCE MEASURES AND STANDARDS

AWARD OPPORTUNITIES

COMPANY PERFORMANCE CRITERIA

DETERMINATION OF BONUS AMOUNT

Financial Metrics.  For fiscal 2017, the two financial metrics are cash flow from operations and vessel operating margin percentage.  By June 29, 2016, the specific targets and payout percentages for each of these two financial metrics for the 2017 fiscal year were established by the Committee in writing or reflected in minutes of a Committee meeting.  These two metrics operate independently, and the calculation of each shall be adjusted as provided in subsection (3).  

Cash Flow From Operations.  “Cash flow from operations” means net cash provided by operating activities as reported in the Company’s consolidated statements of cash flows for the fiscal year ended March 31, 2017.  

Vessel Operating Margin Percentage.  “Vessel operating margin percentage” means the difference between vessel revenues and vessel operating expenses, divided by vessel revenue, as reported in the Company’s consolidated statements of earnings for the fiscal year ended March 31, 2017.  

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

cumulative effect of accounting changes;

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

discontinued operations; and

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

Safety Criteria.  The safety performance measurement is determined by achievement of the Company's overall established safety performance goals for the fiscal year, established in writing by the Committee or reflected in the minutes

of a Committee meeting by June 29, 2016.  Under this performance measure, potential payout is directly correlated with the Total Recordable Incident Rate (TRIR) for the current fiscal year.  “Total Recordable Incident Rate” is defined as follows: 

TERMINATION OF EMPLOYMENT

If a participant’s employment is terminated because the participant dies or if the participant 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, shall be paid a pro rata bonus for the fiscal year in which termination occurs based upon the level of satisfaction of the performance criteria in effect for such year and the percentage of salary applicable to such participant’s bonus, but applied to the actual salary amount paid to the participant for the portion of the year that the participant was employed.  Any such bonus shall be paid to the participant or, in the case of death, to the participant’s estate or heirs, at the same time as any bonuses for such fiscal year are paid to other Plan participants as provided in Article X.

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 shall be paid a pro rata bonus for the fiscal year in which termination occurs based upon the performance criteria in effect for such year and the percentage of salary applicable to such participant’s bonus.  Any such bonus shall be paid to the participant at the same time as any bonuses for such fiscal year are paid to other Plan participants as provided in Article X.

If a participant’s employment is terminated due to a voluntary resignation by the participant (other than a participant who Retires under Article IX.B.) or if the participant is involuntarily terminated by the Company for Cause, no pro rata bonus shall be paid for the fiscal year in which termination occurs, 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 performance criteria in effect for such year and the percentage of salary applicable to such participant’s bonus, but applied to the actual salary amount paid to the participant for the portion of the year that the participant was employed.  Any such bonus shall be paid to the participant at the same time as any bonuses for such fiscal year are paid to other Plan participants as provided in Article X. 

Certain Definitions.

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.

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

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

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

AWARD PAYMENTS

MISCELLANEOUS 

Nothing in this Plan shall 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 financial and safety goals shall determine the extent to which participants may receive bonuses hereunder, 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 hereunder 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.

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

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

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

The payment made hereunder are intended to comply with, or be exempt from, the requirements of Section 409A and the terms of the Plan related thereto shall be construed accordingly.  Payments hereunder that are subject to Section 409A shall 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 shall 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. 

The Company shall have the right to terminate the Plan at any time in its sole discretion.  Upon termination, the participant shall have no right to receive any amounts hereunder.  Payout of any amount subject to Section 409A shall not occur earlier than provided herein, except to the extent permitted by Section 409A.

The Company shall deduct from any payment made hereunder all applicable federal and state income and employment taxes.

Prior to any payout hereunder, the Committee shall approve management’s calculation of the amount of the payout value of the award to be paid to each participant as a result of the achieved performance goals.

The Committee shall not increase the amount payable to a participant under this Plan to an amount that is higher than the amount payable under the formula established by the Compensation Committee in accordance with the requirements of Section 162(m).  Nothing in this Plan precludes the Company from making additional payments or special awards to a participant outside of the Plan that may or may not qualify as “performance-based” compensation under Section 162(m), provided that such payment or award does not affect the qualification of any bonus paid or payable under the Plan as “performance-based” compensation.