<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the Quarterly Period Ended September 30, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the Transition Period From
to
- ---------------------------------- ----------------------------------------
Commission file number 1-6311
------
TIDEWATER INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 72-0487776
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1440 Canal Street, Suite 2100, New Orleans, Louisiana 70112
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 568-1010
---------------------------
NOT APPLICABLE
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or of such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
------- -------
62,026,097 shares of Tidewater Inc. common stock $.10 par value per share were
outstanding on October 21, 1996. Registrant has no other class of common stock
outstanding.
1
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
September 30, March 31,
ASSETS 1996 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash, including temporary cash investments $ 28,114 28,768
Marketable securities 6,188 ---
Trade and other receivables 170,907 144,472
Inventories 32,983 31,346
Other current assets 3,771 4,350
- ---------------------------------------------------------------------------------------------
Total current assets 241,963 208,936
- ---------------------------------------------------------------------------------------------
Investments in, at equity, and advances to
unconsolidated companies 19,748 35,861
Properties and equipment:
Marine equipment 1,270,637 1,210,876
Compression equipment 316,376 324,069
Other 41,967 41,240
- ---------------------------------------------------------------------------------------------
1,628,980 1,576,185
Less accumulated depreciation 926,140 916,412
- ---------------------------------------------------------------------------------------------
Net properties and equipment 702,840 659,773
Other assets 73,216 73,630
- ---------------------------------------------------------------------------------------------
$ 1,037,767 978,200
=============================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ---------------------------------------------------------------------------------------------
Current liabilities:
Current maturities of long-term debt --- 2,934
Accounts payable and accrued expenses 76,242 70,546
Accrued property and liability losses 14,347 10,844
Income taxes 5,491 1,356
- ---------------------------------------------------------------------------------------------
Total current liabilities 96,080 85,680
- ---------------------------------------------------------------------------------------------
Deferred income taxes 81,728 76,579
Accrued property and liability losses 33,009 34,206
Other liabilities and deferred credits 45,316 42,985
Stockholders' equity:
Common stock of $.10 par value; issued
62,022,356 shares at September and
61,882,695 shares at March 6,202 6,188
Additional paid-in capital 423,688 421,655
Retained earnings 363,012 322,736
Unrealized investment gain 128 ---
- ---------------------------------------------------------------------------------------------
793,030 750,579
Less:
Cumulative foreign currency translation adjustment 10,427 10,771
Deferred compensation - restricted stock 969 1,058
- ---------------------------------------------------------------------------------------------
Total stockholders' equity 781,634 738,750
- ---------------------------------------------------------------------------------------------
$ 1,037,767 978,200
=============================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
2
<PAGE> 3
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Quarter Ended Six Months Ended
September 30, September 30,
-------------- ----------------
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Marine operations $ 167,691 132,726 314,330 260,780
Compression operations 26,181 28,034 55,436 55,073
- ---------------------------------------------------------------------------------------------------------------
193,872 160,760 369,766 315,853
- ---------------------------------------------------------------------------------------------------------------
Costs and expenses:
Marine operations 96,579 79,834 187,795 161,818
Compression operations 14,625 14,870 31,513 28,777
Depreciation 20,816 20,733 40,833 41,379
General and administrative 15,823 14,241 30,898 28,755
- ---------------------------------------------------------------------------------------------------------------
147,843 129,678 291,039 260,729
- ---------------------------------------------------------------------------------------------------------------
46,029 31,082 78,727 55,124
Other income (expenses):
Foreign exchange loss (397) (29) (254) (210)
Gains on sales of assets 561 1,163 1,995 4,552
Equity in net earnings of
unconsolidated companies 1,176 1,940 2,419 3,036
Minority interests (162) (298) (340) (765)
Interest and miscellaneous income 1,345 1,218 2,256 1,882
Interest and other debt costs (121) (1,779) (534) (4,244)
- ---------------------------------------------------------------------------------------------------------------
2,402 2,215 5,542 4,251
- ---------------------------------------------------------------------------------------------------------------
Earnings before income taxes 48,431 33,297 84,269 59,375
Income taxes 15,479 10,866 26,947 19,517
- ---------------------------------------------------------------------------------------------------------------
Net earnings $ 32,952 22,431 57,322 39,858
===============================================================================================================
Primary and fully-diluted
earnings per common share: $ .53 .36 .92 .64
===============================================================================================================
Weighted average common
shares and equivalents 62,594,928 62,097,561 62,628,126 62,054,663
===============================================================================================================
Cash dividends declared
per common share $ .15 .125 .275 .225
===============================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
3
<PAGE> 4
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Quarter Ended Six Months Ended
September 30, September 30,
-------------------- -----------------------
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net cash provided by operating activities $ 43,109 41,051 88,776 83,635
- ---------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of assets 2,348 5,499 7,427 11,537
Additions to properties and equipment (19,625) (10,572) (32,451) (16,491)
Purchase of marketable securities (6,060) --- (6,060) ---
Acquisition of joint-venture interest,
net of cash acquired --- --- (3,435) ---
Dividends received from unconsolidated
companies, net of additional
investments 887 2,406 3,830 3,718
Dividends paid to minority interests (66) (73) (724) (899)
Other --- (129) --- (385)
- ---------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (22,516) (2,869) (31,413) (2,520)
- ---------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Principal payments on long-term debt (17,464) (24,173) (43,018) (65,055)
Cash dividends paid (9,302) (6,663) (17,046) (11,987)
Proceeds from issuance of common stock 317 658 2,047 1,018
Other --- 41 --- 41
- ---------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (26,449) (30,137) (58,017) (75,983)
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash,
including temporary cash investments (5,856) 8,045 (654) 5,132
Net increase in cash for Hornbeck Offshore
Services for the quarter ended 3/31/95 --- --- --- 4,980
- ---------------------------------------------------------------------------------------------------------------------
Cash, including temporary cash
investments at beginning of period 33,970 25,341 28,768 23,274
- ---------------------------------------------------------------------------------------------------------------------
Cash, including temporary cash
investments at end of period $ 28,114 33,386 28,114 33,386
=====================================================================================================================
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ 434 1,369 786 4,304
Income taxes $ 15,179 9,063 16,590 10,877
=====================================================================================================================
Supplemental noncash investing activity:
Joint-venture interest acquired:
Fair value of assets acquired $ --- --- 51,305 ---
Fair value of liabilities assumed --- --- (47,870) ---
- ---------------------------------------------------------------------------------------------------------------------
Net cash payment $ --- --- 3,435 ---
=====================================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
4
<PAGE> 5
TIDEWATER INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Interim Financial Statements
The consolidated financial information for the interim periods presented
herein has not been audited by independent accountants, but in the opinion
of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the condensed
consolidated balance sheets and the condensed consolidated statements of
earnings and cash flows at the dates and for the periods indicated have
been made. Results of operations for interim periods are not necessarily
indicative of results of operations for the respective full years.
(2) Earnings per Share Data
Primary and fully diluted earnings per share data are computed on the
weighted average number of shares and dilutive equivalent shares of common
stock (stock options and restricted stock grants) outstanding during each
period using the treasury stock method.
(3) Income Taxes
Income tax expense for interim periods is based on estimates of the
effective tax rate for the entire fiscal year. The effective tax rate was
32% for the quarter and six-month period ended September 30, 1996. For
the quarter and six-month period ended September 30, 1995 the effective
tax rate was 33%.
The Internal Revenue Service has notified the company of proposed
deficiencies resulting from the audit of the company's 1992 and 1993 tax
returns. The company is in the process of preparing its defenses against
these claims, and in management's opinion the ultimate outcome of these
matters will not have a materially adverse effect on the company's
financial position and results of operations.
(4) Acquisition of Marine Joint-Venture
During fiscal 1997's first quarter the company acquired the remaining
50.1% equity interest in 22 of 29 safety/standby vessels previously owned
and operated by joint-venture companies in the North Sea. The acquisition
was accounted for as a purchase and accordingly, the fair value of the
assets acquired and liabilities assumed and results of operations have
been included in the condensed consolidated financial statements effective
June 1, 1996.
5
<PAGE> 6
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of Tidewater Inc.:
We have reviewed the condensed consolidated balance sheet of Tidewater Inc. and
subsidiaries as of September 30, 1996 and the related condensed consolidated
statements of earnings and cash flows for the three-month and six-month periods
ended September 30, 1996 and 1995. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Tidewater Inc. as of March 31,
1996, and the related consolidated statements of earnings, stockholders'
equity, and cash flows for the year then ended (not presented herein); and in
our report dated April 29, 1996 we expressed an unqualified opinion on those
consolidated financial statements. In our opinion the information set forth in
the accompanying condensed consolidated balance sheet as of March 31, 1996 is
fairly presented, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
KPMG Peat Marwick LLP
New Orleans, Louisiana
October 18, 1996
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
The company provides services and equipment to the international energy
industry through its marine and compression divisions. Company revenues, net
earnings and cash flows from operations are dependent upon activity levels of
the marine vessel fleet and the natural gas compression rental fleet. Activity
levels for the marine vessel fleet and the natural gas compression rental fleet
are ultimately dependent upon oil and natural gas prices which, in turn, are
determined by the supply/demand relationship for oil and natural gas. The
following discussion should be read in conjunction with the unaudited condensed
consolidated financial statements and related disclosures.
MARINE DIVISION
The Marine division provides a diverse range of services and equipment to the
offshore oil and gas industry. Fleet size, utilization and vessel day rates
primarily determine the amount of revenues and operating profit because
operating costs and depreciation do not change proportionally with changes in
revenues. Operating costs consist primarily of crew costs, repair and
maintenance, insurance, fuel, lube and supplies. Fleet size and utilization
are the major factors which affect crew costs. The timing and amount of repair
and maintenance costs are influenced by vessel age and scheduled drydockings to
satisfy safety and inspection requirements mandated by regulatory agencies.
Whenever possible, vessel drydockings are done during seasonally slow periods
to minimize any impact on vessel operations and are only done if economically
justified, given the vessel's age and physical condition. The following tables
compare revenues, operating expenses (excluding general and administrative
expense and depreciation expense) and operating margins of the Marine
division's owned and operated vessel fleet for the quarters and six-month
periods ended September 30 and for the quarter ended June 30, 1996:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
------------- ----------------- --------
(in thousands) 1996 1995 1996 1995 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
United States $ 79,227 59,497 147,423 115,951 68,196
International 79,126 66,273 149,479 129,737 70,353
- ----------------------------------------------------------------------------------------------------------------
158,353 125,770 296,902 245,688 138,549
- ----------------------------------------------------------------------------------------------------------------
Expenses:
Crew costs 44,053 37,133 81,937 71,657 37,884
Repair and maintenance 22,803 19,056 49,461 41,255 26,658
Insurance 8,383 8,423 16,314 16,566 7,931
Fuel, lube and supplies 7,552 5,880 14,733 11,651 7,181
Other 5,975 4,465 10,762 9,187 4,787
- ----------------------------------------------------------------------------------------------------------------
88,766 74,957 173,207 150,316 84,441
- ----------------------------------------------------------------------------------------------------------------
Operating margins $ 69,587 50,813 123,695 95,372 54,108
================================================================================================================
Operating margin percentages 43.9% 40.4% 41.7% 38.8% 39.1%
================================================================================================================
</TABLE>
Fiscal 1997 second quarter and six-month operating margins climbed above fiscal
1996's respective amounts due to the beneficial effects of higher utilization
and average day rates for the worldwide fleet and a larger North Sea fleet
outweighing the adverse effect of higher operating expenses. Current quarter
operating margins also climbed above the prior quarter amount due to higher
utilization and average day rates for the domestic-based fleet and a full
quarter's results
7
<PAGE> 8
for the North Sea fleet being partially offset by higher operating expenses.
Greater demand and a much more favorable supply/demand relationship for
offshore marine services in the U.S. Gulf of Mexico were primarily responsible
for the increases in utilization and average day rates for the current quarter
and six-month period compared with the respective fiscal 1996 periods, and for
the current quarter compared with the prior quarter. A larger North Sea fleet
is due to fiscal 1997's first quarter acquisition of several safety/standby
vessels. Higher operating expenses for the current quarter and six-month
period compared with fiscal 1996's respective periods and for the current
quarter compared with the preceding quarter resulted primarily from increased
activity for the domestic-based fleet, the expansion of the North Sea fleet and
increased costs associated with retaining qualified vessel personnel and
attracting and training new vessel personnel. Higher operating expenses for
the quarter and six-month period ended September 30, 1996 compared with the
quarter and six-month period ended September 30, 1995 were also due to higher
repair and maintenance costs resulting from a greater number of vessel
drydockings.
Revenues, operating expenses (excluding general and administrative expense and
depreciation expense) and operating margins of brokered vessels, shipyard and
other activities for the quarters and six-month periods ended September 30 and
for the quarter ended June 30, 1996 were:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
------------- ----------------- --------
(In thousands) 1996 1995 1996 1995 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 9,338 6,956 17,428 15,092 8,090
Expenses 7,813 4,877 14,588 11,502 6,775
- ----------------------------------------------------------------------------------------------------------------
Margins $ 1,525 2,079 2,840 3,590 1,315
================================================================================================================
</TABLE>
Marine division operating profit for the quarters and six-month periods ended
September 30 and for the quarter ended June 30, 1996 consist of the following:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
------------- ----------------- --------
(In thousands) 1996 1995 1996 1995 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Owned and operated vessels:
United States $ 26,204 12,781 42,066 21,294 15,862
International 18,695 15,767 35,044 28,590 16,349
- -------------------------------------------------------------------------------------------------------------------------
44,899 28,548 77,110 49,884 32,211
Gains from asset sales 161 1,111 877 4,226 716
Brokered vessels, shipyard and other 1,278 1,824 2,396 3,180 1,118
- -------------------------------------------------------------------------------------------------------------------------
Operating profit $ 46,338 31,483 80,383 57,290 34,045
=========================================================================================================================
</TABLE>
Marine fleet utilization is determined primarily by market conditions and to a
lesser extent by drydocking requirements. Utilization of the domestic-based
fleet, which operates in U.S. waters, is primarily influenced by offshore
activity related to the exploration, development and production of natural gas
in the U.S. Gulf of Mexico; whereas, utilization of the international-based
fleet, which operates in waters other than the United States, is primarily
influenced by offshore activity related to the exploration, development and
production of oil.
Marine vessel day rates are determined by the demand created through the level
of offshore exploration, development and production spending by energy
exploration and production companies relative to the supply of offshore service
vessels. Suitability of equipment and the degree of service provided also
influence vessel day rates. The following two tables compare day-
8
<PAGE> 9
based Marine fleet utilization percentages and average day rates by vessel
class and in total for the quarters and six- month periods ended September 30
and for the quarter ended June 30, 1996:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
------------- ---------------- ---------
1996 1995 1996 1995 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UTILIZATION:
- -----------
Domestic-based fleet
--------------------
Towing-supply/supply 90.2% 85.6 90.8 86.2 91.3
Crew/utility 94.1 79.5 92.5 80.6 90.9
Offshore tugs 67.0 64.8 64.8 56.2 62.4
Other 61.9 64.8 55.1 54.6 48.8
Total 85.1% 79.9 84.3 78.5 83.6
International-based fleet
-------------------------
Towing-supply/supply 88.1% 87.9 87.8 87.3 87.5
Crew/utility 85.4 85.0 87.9 85.8 90.5
Offshore tugs 70.3 71.2 72.8 71.7 75.4
Safety/standby 78.2 --- 79.6 --- 84.4
Other 74.4 48.3 75.3 42.9 76.2
Total 82.1% 78.2 83.0 77.2 84.0
Worldwide fleet
---------------
Towing-supply/supply 89.1% 86.9 89.1 86.8 89.2
Crew/utility 90.1 81.7 90.4 82.7 90.7
Offshore tugs 68.8 68.4 69.3 64.6 69.7
Safety/standby 78.2 --- 79.6 --- 84.4
Other 71.7 51.6 70.7 45.3 69.7
Total 83.3% 79.0 83.6 77.8 83.8
================================================================================================================
AVERAGE VESSEL DAY RATES:
- ------------------------
Domestic-based fleet
---------------------
Towing-supply/supply $ 5,049 3,495 4,660 3,422 4,278
Crew/utility 1,512 1,354 1,468 1,348 1,424
Offshore tugs 5,355 4,584 5,185 4,860 4,994
Other 3,050 2,868 3,100 2,972 3,158
Total $ 4,317 3,178 4,047 3,147 3,773
International-based fleet
--------------------------
Towing-supply/supply $ 3,838 3,670 3,768 3,657 3,695
Crew/utility 1,735 1,767 1,731 1,825 1,728
Offshore tugs 2,916 2,705 2,809 2,671 2,708
Safety/standby 4,907 --- 4,975 --- 5,194
Other 662 727 690 727 719
Total $ 3,144 2,987 3,044 3,006 2,939
Worldwide fleet
---------------
Towing-supply/supply $ 4,387 3,590 4,178 3,548 3,965
Crew/utility 1,610 1,526 1,586 1,547 1,562
Offshore tugs 3,971 3,498 3,788 3,549 3,602
Safety/standby 4,907 --- 4,975 --- 5,194
Other 1,109 1,265 1,116 1,279 1,123
Total $ 3,639 3,075 3,471 3,071 3,298
================================================================================================================
</TABLE>
Additional investment in the vessel fleet for the current six-month period
totaled $25.3 million, including the purchases of two towing-supply/supply
vessels, two offshore tugs and a crewboat for $14.8 million. The remainder of
additions for the current six-month period of $10.5 million
9
<PAGE> 10
were for additions to and/or modifications of the existing vessel fleet. In
the prior quarter the remaining 50.1% equity interest in 22 of 29
safety/standby vessels, previously operated by joint-venture companies in the
North Sea, was acquired and increased the size of the international-based
fleet. In prior periods these vessels were classified as joint-venture owned.
The average size of the domestic-based fleet fell from September 1995 to
September 1996 due to vessel sales, the return of previously leased vessels to
their owners and the withdrawal of several vessels from active service in
fiscal 1997's first quarter because of age and anticipated higher repair and
maintenance costs. The following table compares the average number of vessels
by class and geographic distribution for the quarters and six- month periods
ended September 30 and for the quarter ended June 30, 1996:
<TABLE>
<CAPTION>
Quarter Six Months Quarter
Ended Ended Ended
September 30, September 30, June 30,
- ---------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Domestic-based fleet:
- --------------------
Towing-supply/supply 137 148 138 149 139
Crew/utility 42 52 42 52 43
Offshore tugs 43 42 42 43 41
Other 13 13 14 13 15
- ---------------------------------------------------------------------------------------------------------------
Total 235 255 236 257 238
- ---------------------------------------------------------------------------------------------------------------
International-based fleet:
- -------------------------
Towing-supply/supply 169 170 168 170 169
Crew/utility 36 35 36 35 35
Offshore tugs 53 52 53 50 53
Safety/standby* 26 --- 19 --- 9
Other 49 51 47 51 47
- ---------------------------------------------------------------------------------------------------------------
Total 333 308 323 306 313
- ---------------------------------------------------------------------------------------------------------------
Owned or chartered vessels
included in marine revenues 568 563 559 563 551
Vessels withdrawn from active service 22 15 23 15 24
Joint-venture owned vessels 47 76 57 76 66
- ---------------------------------------------------------------------------------------------------------------
Total 637 654 639 654 641
===============================================================================================================
Worldwide fleet:
- ---------------
Towing-supply/supply 345 355 349 356 351
Crew/utility 89 96 89 96 91
Offshore tugs 102 97 101 96 100
Safety/standby* 26 29 26 29 24
Other 75 77 74 77 75
- ---------------------------------------------------------------------------------------------------------------
Total 637 654 639 654 641
===============================================================================================================
</TABLE>
* Change in number of vessels is the result of the company's acquisition of
the remaining 50.1% interest in a North Sea joint venture effective
June 1, 1996.
COMPRESSION DIVISION
The Compression division provides natural gas compression services and
equipment for a variety of applications primarily in the energy industry.
Rental revenues are determined, for the most part, by utilization and fleet
size. Utilization is affected by natural gas storage levels and by the number
and age of producing oil and natural gas wells which, in turn, are dependent
upon the price levels of oil and natural gas. Quality of service, availability
and rental rates for equipment are also major factors which affect utilization.
Operating expenses are generally consistent from period-to- period and usually
vary in the short-term due to fluctuations in the amount of repair and
maintenance expense. Long- term growth in operating expenses will occur
primarily as a result of increased
10
<PAGE> 11
fleet size and general inflationary factors. Compression division operating
profit is primarily determined by operating margins from rental gas compression
operations. The following tables compare revenues, operating expenses
(excluding general and administrative expense and depreciation expense),
operating margins and related statistics for gas compression operations for the
quarters and six-month periods ended September 30 and for the quarter ended
June 30, 1996.
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
--------------- ---------------- --------
(In thousands, except statistics) 1996 1995 1996 1995 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Rentals $17,995 18,193 35,797 36,685 17,802
Repair, service and other 677 1,633 1,975 3,205 1,298
- ----------------------------------------------------------------------------------------------------------------
18,672 19,826 37,772 39,890 19,100
- ----------------------------------------------------------------------------------------------------------------
Expenses:
Wages and benefits 3,054 3,042 5,973 6,095 2,919
Repairs and maintenance 3,243 3,106 6,483 6,391 3,240
Other 1,953 2,082 3,956 4,130 2,003
- ----------------------------------------------------------------------------------------------------------------
8,250 8,230 16,412 16,616 8,162
- ----------------------------------------------------------------------------------------------------------------
Operating margins $10,422 11,596 21,360 23,274 10,938
================================================================================================================
Operating margin percentages 55.8% 58.5% 56.5% 58.3% 57.3%
================================================================================================================
Horsepower based statistics:
Utilization 76.3% 71.9% 75.8% 72.1% 75.5%
Average monthly rental rate $16.75 17.79 16.67 17.86 16.58
Average fleet size 468,449 473,887 470,278 474,853 472,108
================================================================================================================
</TABLE>
Compared to the corresponding quarter of fiscal 1996, fiscal 1997 second
quarter and six-month operating margins fell as a result of increased
competition which weakened rental rates and entirely offset the positive effect
of higher utilization.
The Compression division also designs, fabricates and installs engineered
compressor systems and sells related parts and equipment. The following table
compares revenues, costs of sales and sales margins for equipment and parts
sales for the quarters and six-month periods ended September 30 and for the
quarter ended June 30, 1996:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
------------- --------------- --------
(In thousands) 1996 1995 1996 1995 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $7,509 8,208 17,664 15,183 10,155
Costs of sales 6,375 6,640 15,101 12,161 8,726
- ----------------------------------------------------------------------------------------------------------------
Gross profit margins $1,134 1,568 2,563 3,022 1,429
================================================================================================================
Gross profit margin percentages 15.1% 19.1% 14.5% 19.9% 14.1%
================================================================================================================
</TABLE>
Fluctuations in the level of equipment and parts sales for the periods
presented are due to the timing of sales of engineered products. Fluctuations
in gross profit margin percentages are the result of competitive market forces.
Costs of sales consist primarily of wages and benefits and material costs
associated with the design, fabrication and installation of packaged compressor
systems.
Additional investment in the natural gas compression rental fleet for the
current year-to-date period was $7.2 million and was primarily for
modifications of existing equipment to meet
11
<PAGE> 12
customer requirements. During the first quarter of fiscal 1997 the Compression
division disposed of all of its air rental equipment which generated proceeds
of $3.5 million and a gain of $.5 million. Revenues from the rental of air
equipment for the six-month period ended September 30, 1996 were $.7 million.
Gains from sales of assets, excluding air rental equipment, for the current
quarter and six-month period were $.4 million and $.6 million, respectively.
Gains from sales of assets for the corresponding quarter and six-month period
of fiscal 1996 contributed nominally to division operating profits.
CORPORATE
Fiscal 1997 second quarter and six-month financing activities consumed less
cash compared with the respective fiscal 1996 periods due to lower principal
payments on long-term debt. Principal payments on long-term debt during the
current quarter and six-month periods were primarily for the repayment, prior
to maturity, of outstanding debt assumed in connection with the purchase of the
remaining equity in the joint-venture companies in the North Sea. Interest
expense in the quarter and six-month periods ended September 30, 1996 was lower
than the corresponding fiscal 1996 periods as a result of the fiscal 1996
fourth quarter prepayments of debt assumed in connection with the fiscal 1996
fourth quarter merger with Hornbeck Offshore Services, Inc.
General and administrative expenses for the quarters and six-month periods
ended September 30 and for the quarter ended June 30, 1996 consist of the
following:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Six Months Ended Ended
September 30, September 30, June 30,
--------------- --------------- --------
(In thousands) 1996 1995 1996 1995 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Personnel $ 9,384 8,221 18,185 16,701 8,801
Office and property 2,867 2,475 5,508 4,840 2,641
Sales and marketing 1,066 700 1,999 1,552 933
Professional services 1,357 991 2,625 2,062 1,268
Other 1,149 1,854 2,581 3,600 1,432
- ----------------------------------------------------------------------------------------------------------------
$15,823 14,241 30,898 28,755 15,075
================================================================================================================
</TABLE>
CURRENCY FLUCTUATIONS AND INFLATION
Because of its significant international operations, the company is exposed to
currency fluctuations and exchange risks. To minimize the financial impact of
these items the company attempts to contract a majority of its services in
United States dollars.
Day-to-day operating costs are generally affected by inflation. However,
because the energy services industry requires specialized goods and services,
general economic inflationary trends may not affect the company's operating
costs. The major impact on operating costs is the level of offshore
exploration, development and production spending by energy exploration and
production companies. As this spending increases, prices of goods and services
used by the oil and gas industry and the energy services industry will
increase. Future improvements in vessel day rates and compressor rental rates
may buffer the company from the inflationary effects on operating costs.
ENVIRONMENTAL MATTERS
During the ordinary course of business the company's operations are subject to
a wide variety of environmental laws and regulations. The company attempts to
comply with these laws and regulations in order to avoid costly accidents and
any related environmental damage.
12
<PAGE> 13
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
A. The Annual Meeting of Stockholders of the Company was held in New Orleans,
Louisiana on July 25, 1996.
B. Listed below are the nominees who were elected directors at the Annual
Meeting and the name of each other director whose term of office continued
after the Meeting.
<TABLE>
<CAPTION>
Nominee or Director
Continuing in Office
--------------------
<S> <C>
Robert H. Boh Nominee
Donald T. Bollinger Nominee
Larry T. Hornbeck Nominee
Hugh J. Kelly Nominee
Arthur R. Carlson Director Continuing in Office
John P. Laborde Director Continuing in Office
William C. O'Malley Director Continuing in Office
Paul W. Murrill Director Continuing in Office
Lester Pollack Director Continuing in Office
J. Hugh Roff, Jr. Director Continuing in Office
</TABLE>
C. The Company's Stockholders voted as follows with respect to the proposals
presented at the meeting:
1. Robert H. Boh was elected director with 52,234,321 votes cast for and
400,629 votes withheld;
2. Donald T. Bollinger was elected director with 51,947,559 votes cast for
and 687,391 votes withheld;
3. Larry T. Hornbeck was elected director with 51,090,870 votes cast for
and 1,554,079 votes withheld;
4. Hugh J. Kelly was elected director with 52,217,972 votes cast for and
416,978 votes withheld; and
5. The selection of KPMG Peat Marwick LLP as the Company's independent
auditors for the fiscal year ending March 31, 1997 was ratified with
52,581,949 votes cast for, 10,550 votes against and 42,451
abstentions.
13
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K
A. At page 15 of this report is the index for those exhibits required to be
filed as a part of this report.
B. The Company filed a Current Report on Form 8-K dated September 19, 1996
which disclosed its Board of Directors adopted an updated Rights Plan
designed to supersede a Rights Plan originally adopted April 1990. As with
its previously adopted Rights Plan, the new Rights Plan is intended to
protect stockholder interests in the event the company becomes the subject
of a takeover initiative that would deny the company's stockholders the
full value of their investment. The new Rights, which will be issued to
each common stockholder of record on October 1, 1996, will be exercisable
only if a person acquires, or announces a tender offer which would result
in ownership of, 15 percent or more of the company's common stock. The
board of directors will be authorized in certain circumstances to lower
this 15 percent threshold to not less than 10 percent. The initial exercise
price will be $160.00 per Right. The Rights will expire on November 1,
2006, unless redeemed or exchanged at an earlier date.
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
10.1 Change of Control Agreement dated September 30, 1996 between the Company and William C. O'Malley.
10.2 Form of Change of Control Agreement dated September 30, 1996 between the Company and four executive officers.
10.3 Form of Change of Control Agreement dated September 30, 1996 between the Company and seven officers.
11 Statement - Computation of Per Share Earnings
27 Financial Data Schedule
</TABLE>
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TIDEWATER INC.
-----------------------------------------
(Registrant)
Date: October 21, 1996 /s/ William C. O'Malley
-----------------------------------------
William C. O'Malley
Chairman of the Board, President and
Chief Executive Officer
Date: October 21, 1996 /s/ Ken C. Tamblyn
-----------------------------------------
Ken C. Tamblyn
Executive Vice President and
Chief Financial Officer
16
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
10.1 Change of Control Agreement dated September 30, 1996 between the Company and William C. O'Malley.
10.2 Form of Change of Control Agreement dated September 30, 1996 between the Company and four executive officers.
10.3 Form of Change of Control Agreement dated September 30, 1996 between the Company and seven officers.
11 Statement - Computation of Per Share Earnings
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.1
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement ("the Agreement") between Tidewater,
Inc., a Delaware corporation (the "Company"), and William C. O'Malley (the
"Employee") is dated effective as of September 30, 1996 (the "Change of Control
Agreement Date").
ARTICLE I
DEFINITIONS
1.1 AFFILIATE DEFINED. "Affiliate" or "affiliated companies"
shall mean any company controlled by, controlling, or under common control
with, the Company.
1.2 CAUSE DEFINED. "Cause" shall mean:
(a) the willful and continued failure of the
Employee to perform substantially the Employee'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 Employee by the Board of the Company which
specifically identifies the manner in which the Board believes
that the Employee has not substantially performed the
Employee's duties, or
(b) the willful engaging by the Employee in
illegal conduct or gross misconduct.
For purposes of this provision, no act or failure to act, on the part of the
Employee, shall be considered "willful" unless it is done, or omitted to be
done, by the Employee in bad faith or without reasonable belief that the
Employee'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 based upon the advice of counsel for the Company or
its Affiliates shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the Company or
its Affiliates. The cessation of employment of the Employee shall not be
deemed to be for Cause unless his action or inaction meets the foregoing
standard and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Employee and the
Employee is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Employee is
guilty of the conduct described in subparagraph (a) or (b) above, and
specifying the particulars thereof in detail.
-1-
<PAGE> 2
1.3 CHANGE OF CONTROL DEFINED. "Change of Control" shall mean:
(a) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 30% of the
outstanding shares of the Company's Common Stock, $0.10 par value per
share (the "Common Stock"); provided, however, that for purposes of
this subsection (a), the following shall not constitute a Change of
Control:
(i) any acquisition of Common Stock directly from
the Company,
(ii) any acquisition of Common Stock by the
Company,
(iii) any acquisition of Common Stock by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company, or
(iv) any acquisition of Common Stock by any
corporation pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section
1.3; or
(b) individuals who, as of the Change of Control
Agreement Date, constitute the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the
Change of Control Agreement Date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered a member of the Incumbent Board, unless such
individual's initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than the
Incumbent Board; or
(c) consummation of a reorganization, merger or
consolidation, or sale or other disposition of all of substantially
all of the assets of the Company (a "Business Combination"), in each
case, unless, following such Business Combination,
(i) all or substantially all of the individuals
and entities who were the beneficial owners of the Company's
outstanding common stock and the Company's voting securities
entitled to vote generally in the election of directors
immediately prior to such Business Combination have direct or
indirect beneficial ownership, respectively, of more than 50%
of the then outstanding shares of common stock, and more than
50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election
of directors, of the corporation resulting from such Business
Combination (which, for purposes of this paragraph (i) and
paragraphs (ii) and (iii), shall include a corporation which
as a result of such transaction controls the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries), and
-2-
<PAGE> 3
(ii) except to the extent that such ownership
existed prior to the Business Combination, no person
(excluding any corporation resulting from such Business
Combination or any employee benefit plan or related trust of
the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or
more of the then outstanding shares of common stock of the
corporation resulting from such Business Combination or 30% or
more of the combined voting power of the then outstanding
voting securities of such corporation, and
(iii) at least a majority of the members of the
board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(d) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
1.4 COMPANY DEFINED. As used in this Agreement, "Company" shall
mean the Company as defined above and any successor to or assignee of (whether
direct or indirect, by purchase, merger, consolidation or otherwise) all or
substantially all of the assets or business of the Company.
1.5 DISABILITY DEFINED. "Disability" shall mean a condition that
would entitle the Employee to receive benefits under the Company's long-term
disability insurance policy in effect at the time either because he is totally
disabled or partially disabled, as such terms are defined in the Company's
policy in effect as of the date of this Agreement or as similar terms are
defined in any successor policy. If the Company has no long-term disability
plan in effect, "Disability" shall occur if (a) the Employee is rendered
incapable because of physical or mental illness of satisfactorily discharging
his duties and responsibilities to the Company for a period of 90 consecutive
days, (b) a duly qualified physician chosen by the Company and acceptable to
the Employee or his legal representatives so certifies in writing, and (c) the
Board determines that the Employee has become disabled.
1.6 GOOD REASON DEFINED. "Good Reason" shall mean:
(a) Any failure of the Company or its Affiliates to
provide the Employee with the position, authority, duties and
responsibilities at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Change of Control.
The Employee's position, authority, duties and responsibilities after
a Change of Control shall be considered commensurate in all material
respects with Employee's position, authority, duties and
responsibilities prior to a Change of Control if after the Change of
Control Employee either holds (i) an equivalent position in the
Company or, (ii) if the Company is controlled or will after the
transaction be controlled by another company (directly or indirectly),
an equivalent position in the ultimate parent company.
-3-
<PAGE> 4
(b) The assignment to the Employee of any duties
inconsistent in any material respect with Employee's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section
3.1(b) of this Agreement, or any other action that results in a
diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith that is remedied within 10 days after
receipt of written notice thereof from the Employee to the Company;
(c) Any failure by the Company or its Affiliates to
comply with any of the provisions of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring in bad
faith that is remedied within 10 days after receipt of written notice
thereof from the Employee to the Company;
(d) The Company or its Affiliates requiring the Employee
to be based at any office or location other than as provided in
Section 3.1(b)(ii) hereof or requiring the Employee to travel on
business to a substantially greater extent than required immediately
prior to the Change of Control;
(e) Any purported termination of the Employee's
employment otherwise than as expressly permitted by this Agreement; or
(f) Any failure by the Company to comply with and satisfy
Sections 4.1(c) and (d) of this Agreement.
ARTICLE II
STATUS OF EMPLOYMENT AGREEMENT
Notwithstanding any provisions thereof, after a Change of Control,
this Agreement supersedes the agreement dated as of June 13, 1994 between the
Company and the Employee or any subsequent employment agreement between
Employee and the Company that so provides (the "Employment Agreement"), except
with respect to those provisions of the Employment Agreement that are made a
part of and specifically incorporated by reference herein. Upon a Change of
Control of the Company, as defined herein, or upon a "Change of Control of the
Company" as defined in the Employment Agreement, the Employee shall be entitled
to the benefits provided herein and not to the benefits provided therein.
ARTICLE III
CHANGE OF CONTROL BENEFIT
3.1 EMPLOYMENT TERM AND CAPACITY AFTER CHANGE OF CONTROL. (a)
This Agreement shall commence on the date hereof and continue in effect through
December 31, 1997; provided, however, that commencing on January 1, 1998 and
each January 1 thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than September 30 of the
preceding year, the Company shall have given notice that it does not wish to
extend this Agreement; provided, further, that notwithstanding any such notice
by the Company not to extend, if a Change of Control of the Company shall have
occurred during the original or extended term of this Agreement, this Agreement
shall continue in effect
-4-
<PAGE> 5
through the second anniversary of the Change of Control (such period following
a Change of Control being referred to herein as the "Employment Term"), subject
to any earlier termination of Employee's status as an employee pursuant to this
Agreement.
(b) After a Change of Control and during the Employment Term, (i)
the Employee's position (including status, offices, titles and reporting
requirements) authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Change of Control and (ii) the Employee's service shall be
performed during normal business hours at the Company's principal executive
office, at its location at the time of the Change of Control, or the location
where the Employee was employed immediately preceding the Change of Control or
any relocation of the Company's principal executive office to a location that
is not more than 35 miles from such current location. Employee's position,
authority, duties and responsibilities after a Change of Control shall not be
considered commensurate in all material respects with Employee's position,
authority, duties and responsibilities prior to a Change of Control unless
after the Change of Control Employee holds (x) an equivalent position in the
Company or, (y) if the Company is controlled or will after the transaction be
controlled by another company (directly or indirectly), an equivalent position
in the ultimate parent company.
3.2 COMPENSATION AND BENEFITS. During the Employment Term,
Employee shall be entitled to the following compensation and benefits:
(a) Base Salary. The Employee shall receive an annual
base salary ("Base Salary"), which shall be paid at a monthly rate, at
least equal to 12 times the highest monthly base salary that was paid
or is payable, including any base salary which has been earned but
deferred by the Employee, by the Company and its affiliated companies
with respect to any month in the 12-month period ending with the month
that immediately precedes the month in which the Change of Control
occurs. During the Employment Term, the Base Salary shall be reviewed
at such time as the Company undertakes a salary review of its other
executive officers, and, to the extent that salary increases are
granted to such other executive officers, the Employee shall be
granted a salary increase commensurate with his peer executives of the
Company and its affiliated companies for the year of determination.
Any increase in Base Salary shall not serve to limit or reduce any
other obligation to the Employee under this Agreement. Base Salary
shall not be reduced after any such increase and the term Base Salary
as utilized in this Agreement shall refer to Base Salary as so
increased.
(b) Annual Bonus. In addition to Base Salary, the
Employee shall be awarded, for each fiscal year ending during the
Employment Term, an annual bonus (the "Bonus") in cash in an amount at
least equal to the average of the annual bonus paid to the Employee
with respect to the three fiscal years immediately preceding the year
in which the Change of Control occurs under the Company's annual bonus
plan, or any comparable bonus under a successor plan. Each such Bonus
shall be paid no later than the end of the third month of the fiscal
year next following the fiscal year for which the Bonus is awarded,
unless the Employee shall elect to defer the receipt of such Bonus.
-5-
<PAGE> 6
(c) Fringe Benefits. The Employee shall be entitled to
fringe benefits (including, but not limited to, automobile allowance,
reimbursement for membership dues, and air travel) commensurate with
those provided to other peer employees of the Company and its
affiliated companies.
(d) Expenses. The Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Employee in accordance with the most favorable agreements, policies,
practices and procedures of the Company and its affiliated companies
in effect for the Employee at any time during the 120- day period
immediately preceding the Change of Control or, if more favorable to
the Employee, as in effect generally at any time thereafter with
respect to other peer employees of the Company and its affiliated
companies.
(e) Incentive, Savings and Retirement Plans. The
Employee shall be entitled to participate in all incentive, savings
and retirement plans, practices, policies and programs applicable
generally to other peer employees of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Employee with incentive opportunities (measured
with respect to both regular and special incentive opportunities, to
the extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case, less
favorable than the most favorable of those provided by the Company and
its affiliated companies for the Employee under any agreements, plans,
practices, policies and programs as in effect at any time during the
120-day period immediately preceding the Change of Control, including
any agreement by the Company to provide retirement benefits not less
in amount than the retirement benefits to which the Employee would
have been entitled under the terms of any qualified defined benefit
pension plans of his immediate prior employer, or, if more favorable
to the Employee, those provided generally at any time after the Change
of Control to other peer employees of the Company and its affiliated
companies.
(f) Welfare Benefit Plans. The Employee and/or the
Employee's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs) to
the extent applicable generally to other peer employees of the Company
and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Employee with benefits,
in each case, less favorable than the most favorable of any
agreements, plans, practices, policies and programs in effect for the
Employee at any time during the 120-day period immediately preceding
the Change of Control or, if more favorable to the Employee, those
provided generally at any time after the Change of Control to other
peer employees of the Company and its affiliated companies.
(g) Office and Support Staff. The Employee shall be
entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal
-6-
<PAGE> 7
secretarial and other assistance, commensurate with those provided to
other peer employees of the Company and its affiliated companies.
(h) Vacation. The Employee shall be entitled to paid
vacation in accordance with the most favorable agreements, plans,
policies, programs and practices of the Company and its affiliated
companies as in effect for the Employee at any time during the 120-day
period immediately preceding the Change of Control or, if more
favorable to the Employee, as in effect generally at any time
thereafter with respect to other peer employees of the Company and its
affiliated companies.
(i) Indemnification. If in connection with any agreement
related to a transaction that will result in a Change of Control of
the Company, an undertaking is made to provide the Board of Directors
with rights to indemnification from the Company (or any other party to
such agreement), the Employee shall, by virtue of this Agreement, be
entitled to the same rights to indemnification as are provided to the
Board of Directors pursuant to such agreement. Otherwise, the
Employee shall be entitled to indemnification rights on terms no less
favorable to Employee than those available under the Certificate of
Incorporation, bylaws or resolutions of the Company at any time after
the change of control to other peer employees of the Company. Such
indemnification rights shall be with respect to all claims, actions,
suits or proceedings to which the Employee is or is threatened to be
made a party that arise out of or are connected to his services at any
time prior to the termination of his employment, without regard to
whether such claims, actions, suits or proceedings are made, asserted
or arise during or after the Employment Term.
(j) Directors and Officers Insurance. If in connection
with any agreement related to a transaction that will result in a
Change of Control of the Company, an undertaking is made to provide
the Board of Directors of the Company with continued coverage
following the Change of Control under one or more directors and
officers liability insurance policies, then the Employee shall, by
virtue of this Agreement, be entitled to the same rights to continued
coverage under such insurance policies as are provided to the Board of
Directors. Otherwise, the Company shall agree to cover Employee under
any of its director and officers liability insurance policies on terms
provided generally at any time after the Change of Control to other
peer employees of the Company.
3.3 OBLIGATIONS UPON TERMINATION AFTER A CHANGE OF CONTROL.
(a) Termination by Company for Reasons other than Death,
Disability or Cause or by Employee for Good Reason. If, after a
Change of Control and during the Employment Term, the Company
terminates the Employee's employment other than for Cause, death or
Disability, or the Employee terminates employment for Good Reason,
(i) the Company shall pay to the Employee in a
lump sum in cash within five business days of the date of
termination an amount equal to three times the sum of (i) the
amount of Base Salary in effect at the date of termination,
plus (ii) the greater of (x) the average of the annual bonuses
paid
-7-
<PAGE> 8
or to be paid to the Employee with respect to the immediately
preceding three fiscal years or (y) the target Bonus for which
the Employee is eligible for the 12-month period in which the
date of termination occurs, as such target bonus has been
established by the Company for such year;
(ii) for a period of thirty-six (36) months
following the date of termination of employment (the
"Continuation Period"), the Company shall at its expense
continue on behalf of the Employee and his dependents and
beneficiaries the life insurance, disability, medical, dental
and hospitalization benefits provided (x) to the Employee at
any time during the 120-day period prior to the Change in
Control or at any time thereafter or (y) to other similarly
situated executives who continue in the employ of the Company
during the Continuation Period. The coverage and benefits
(including deductibles and costs) provided in this Section
2.3(a)(ii) during the Continuation Period shall be no less
favorable to the Employee and his dependents and
beneficiaries, than the most favorable of such coverages and
benefits during any of the periods referred to in clauses (x)
or (y) above. In addition, if Employee has reached age 52 and
has completed seven years of service at the time of a Change
of Control, Employee shall automatically become vested in the
post-retirement benefits provided under the Tidewater Group
Welfare Benefits Plan (the "GWB Plan") and be entitled to
receive, following termination of employment with the Company,
all benefits that would be payable to Employee under the GWB
Plan or any successor plan of the Company or its affiliated
companies had the Employee retired from employment with the
Company or one of its affiliated companies on the later of the
third anniversary of the Change of Control or the Employee's
date of retirement (as defined in the GWB Plan) from
employment with the Company. The Company's obligation
hereunder with respect to the foregoing benefits shall be
limited to the extent that the Employee obtains any such
benefits pursuant to a subsequent employer's benefit plans, in
which case the Company may reduce the coverage of any benefits
it is required to provide the Employee hereunder as long as
the aggregate coverages and benefits of the combined benefit
plans is no less favorable to the Employee than the coverages
and benefits required to be provided hereunder. The Employee
will be eligible for coverage under the Consolidated Omnibus
Budget Reconciliation Act at the end of the Continuation
Period or earlier cessation of the Company's obligation
hereunder.
(iii) the Employee shall immediately become fully
(100%) vested in his benefit under each supplemental or excess
retirement plan of the Company in which the Employee was a
participant, including, but not limited to the Tidewater, Inc.
Supplemental Executive Retirement Plan (the "SERP"), the
Supplemental Plan and any successor plans;
(iv) the Company shall contribute to the trust
established in connection with the SERP and the Supplemental
Savings Plan (the "Trust") for the Employee's account in cash
within five business days of the date of termination of
employment an amount equal to the then present value of the
actuarial equivalent of the additional benefits, if any, to
which the Employee would be
-8-
<PAGE> 9
entitled under the Tidewater, Inc. Pension Plan, the SERP and
any other qualified defined benefit plan maintained by the
Company and covering the Employee, regardless of the vesting
requirements thereof, or any agreement between the Company and
the Employee with respect to retirement benefits that is
otherwise provided for in the Employment Agreement (such
retirement benefit agreement being made a part hereof and
specifically incorporated by reference herein), if the
Employee had continued to be employed by the Company until the
third anniversary of the Change of Control.
(v) the Company shall contribute to the
Supplemental Savings Plan trust for the Employee's account in
cash within five business days of the date of termination of
employment an amount equal to the amount of employer
contributions that would have been made on the Employees's
behalf if the Employee had continued to participate in the
Company's Savings Plan, the Company's Supplemental Savings
Plan and any other qualified or non-qualified defined
contribution plan maintained by the Company until the third
anniversary of the Change of Control. Such contribution
shall, in the case of a qualified plan, be calculated as if
the Employee were fully vested and participating to the
maximum extent permitted by such plan and, in the case of a
non-qualified plan, be calculated on the same basis as the
Employee was participating in such plans and, in all cases, be
calculated on the basis of the Employee's annual salary rate
at the time of the Change of Control.
(vi) to the extent that Employee is not fully
vested in his accrued benefits under the Pension Plan, the
Savings Plan or any other qualified plan maintained by the
Company, at the time of termination of employment, the Company
shall contribute to the Trust, within five business days of
the date of termination of employment, an amount in cash equal
to the unvested but accrued benefits under such plans as of
the date of termination of employment.
Any contributions by the Company to the Trust as provided herein shall
be distributed at such time as shall be elected by the Employee at the
time of execution of this Agreement, except that amounts relating to
services previously provided shall be distributed in accordance with
the provisions of the plans or the related participant elections to
which such contributions relate. The benefits provided in this
Section 3.3(a) shall be without regard to any amendment to any plans
made after the Change of Control but prior to Employee's date of
termination of employment, which amendment adversely affects in any
manner the computation of benefits under such plans.
(b) Death. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
reason of the Employee's death, this Agreement shall terminate without
further obligation to the Employee's legal representatives (other than
those already accrued to the Employee), other than the obligation to
make any payments due pursuant to employee benefit plans maintained by
the Company or its affiliated companies and any death benefits to
which the Employee is entitled under any Employment Agreement in
effect immediately prior to
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the Change of Control (the death benefits provided by such Employment
Agreement being made a part hereof and specifically incorporated by
reference herein).
(c) Disability. If, after a Change of Control and during
the Employment Term, the Employee's status as an employee is
terminated by reason of Employee's Disability, this Agreement shall
terminate without further obligation to the Employee (other than those
already accrued to the Employee), other than the obligation to make
any payments due pursuant to employee benefit plans maintained by the
Company or its affiliated companies and any disability benefits to
which Employee is entitled under any Employment Agreement in effect
immediately prior to the Change of Control (the disability provisions
of such Employment Agreement being made a part hereof and specifically
incorporated by reference herein).
(d) Cause. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
the Company for Cause, this Agreement shall terminate without further
obligation to the Employee other than for obligations imposed by law
and obligations imposed pursuant to any employee benefit plan
maintained by the Company or its affiliated companies.
(e) Voluntary Termination. If, after a Change of Control
and during the Employment Term, the Employee voluntarily terminates
his employment with the Company other than for Good Reason, this
Agreement shall terminate without further obligation to the Employee
other than for obligations imposed by law and obligations imposed
pursuant to any employee benefit plan maintained by the Company or its
affiliated companies.
3.4 ACCRUED OBLIGATIONS AND OTHER BENEFITS. It is the intent of
this Agreement that upon termination of employment for any reason following a
Change of Control the Employee be entitled to receive promptly, and in addition
to any other benefits specifically provided, (a) the Employee's Base Salary
through the date of termination to the extent not theretofore paid, (b) any
accrued vacation pay, to the extent not theretofore paid, and (c) any other
amounts or benefits required to be paid or provided or which the Employee is
entitled to receive under any plan, program, policy practice or agreement of
the Company.
3.5 STOCK OPTIONS AND RESTRICTED STOCK. The foregoing benefits
are intended to be in addition to the value of any options to acquire Common
Stock of the Company or restricted stock the exercisability or vesting of which
is accelerated pursuant to the terms of any stock option, incentive or other
similar plan or agreement heretofore or hereafter adopted by the Company.
3.6 CERTAIN ADDITIONAL PAYMENTS. The Employee shall be entitled
to such payments from the Company related to any excise tax as a result of the
"excess parachute payment" provisions of section 4999 of the Internal Revenue
Code of 1986, as amended (or any successor thereto), as were provided for
under any Employment Agreement in effect immediately prior to the Change of
Control (the obligations of the Company to make such payments being made a part
hereof and specifically incorporated by reference herein).
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3.7 LEGAL FEES. The Company agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which the Employee
may reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Employee or others of the validity or
enforceability of, or liability under, any provision of this Agreement
(including as a result of any contest by the Employee about the amount or
timing of any payment pursuant to this Agreement.)
3.8 SET-OFF; MITIGATION. After a Change of Control, the Company's
and its Affiliates' obligations to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company or its Affiliates may have against the
Employee or others; except that to the extent the Employee accepts other
employment in connection with which he is provided health insurance benefits,
the Company shall only be required to provide health insurance benefits to the
extent the benefits provided by the Employee's employer are less favorable than
the benefits to which he would otherwise be entitled hereunder. It is the
intent of this Agreement that in no event shall the Employee be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Employee under any of the provisions of this Agreement.
3.9 OUTPLACEMENT ASSISTANCE. Upon any termination of employment
of the Employee other than for Cause within three years following a Change of
Control, the Company shall provide to the Employee outplacement assistance by a
reputable firm specializing in such services for the period beginning with the
termination of employment and ending two years following the Change of Control.
ARTICLE IV
MISCELLANEOUS
4.1 BINDING EFFECT; SUCCESSORS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Company and any of its successors or assigns.
(b) This Agreement is personal to the Employee and shall
not be assignable by the Employee without the consent of the Company (there
being no obligation to give such consent) other than such rights or benefits as
are transferred by will or the laws of descent and distribution.
(c) The Company shall require any successor to or
assignee of (whether direct or indirect, by purchase, merger, consolidation or
otherwise) all or substantially all of the assets or businesses of the Company
(i) to assume unconditionally and expressly this Agreement and (ii) to agree to
perform or to cause to be performed all of the obligations under this Agreement
in the same manner and to the same extent as would have been required of the
Company had no assignment or succession occurred, such assumption to be set
forth in a writing reasonably satisfactory to the Employee.
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(d) The Company shall also require all entities that
control or that after the transaction will control (directly or indirectly) the
Company or any such successor or assignee to agree to cause to be performed all
of the obligations under this Agreement, such agreement to be set forth in a
writing reasonably satisfactory to the Employee.
4.2 NOTICES. All notices hereunder must be in writing and shall
be deemed to have been given upon receipt of delivery by: (a) hand (against a
receipt therefor), (b) certified or registered mail, postage prepaid, return
receipt requested, (c) a nationally recognized overnight courier service
(against a receipt therefor) or (d) telecopy transmission with confirmation of
receipt. All such notices must be addressed as follows:
If to the Company, to:
Tidewater, Inc.
1440 Canal Street
New Orleans, Louisiana 70112
Attn: Cliffe F. Laborde
If to the Employee, to:
William C. O'Malley
1440 Canal Street
New Orleans, Louisiana 70112
or such other address as to which any party hereto may have notified the other
in writing.
4.3 GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with and governed by the internal laws of the State of Louisiana
without regard to principles of conflict of laws.
4.4 WITHHOLDING. The Employee agrees that the Company has the
right to withhold, from the amounts payable pursuant to this Agreement, all
amounts required to be withheld under applicable income and/or employment tax
laws, or as otherwise stated in documents granting rights that are affected by
this Agreement.
4.5 AMENDMENT, WAIVER. No provision of this Agreement may be
modified, amended or waived except by an instrument in writing signed by both
parties.
4.6 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,
Employee and the Company 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
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<PAGE> 13
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.
4.7 WAIVER OF BREACH. The waiver by either party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach thereof.
4.8 REMEDIES NOT EXCLUSIVE. No remedy specified herein shall be
deemed to be such party's exclusive remedy, and accordingly, in addition to all
of the rights and remedies provided for in this Agreement, the parties shall
have all other rights and remedies provided to them by applicable law, rule or
regulation.
4.9 COMPANY'S RESERVATION OF RIGHTS. Employee acknowledges and
understands that the Employee serves at the pleasure of the Board and that the
Company has the right at any time to terminate Employee's status as an employee
of the Company, or to change or diminish his status during the Employment Term,
subject to the rights of the Employee to claim the benefits conferred by this
Agreement.
4.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have caused this
Agreement to be executed as of the Change of Control Agreement Date.
TIDEWATER, INC.
By:
-------------------------------------------
Robert H. Boh
Compensation Committee Chairman
EMPLOYEE:
----------------------------------------------
William C. O'Malley
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EXHIBIT 10.2
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement ("the Agreement") between Tidewater,
Inc., a Delaware corporation (the "Company"), and Ken C. Tamblyn (the
"Employee") is dated effective as of September 30, 1996 (the "Change of Control
Agreement Date").
ARTICLE I
DEFINITIONS
1.1 AFFILIATE DEFINED. "Affiliate" or "affiliated companies" shall
mean any company controlled by, controlling, or under common control with, the
Company.
1.2 CAUSE DEFINED. "Cause" shall mean:
(a) the willful and continued failure of the Employee
to perform substantially the Employee'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 Employee
by the Board of the Company which specifically identifies the
manner in which the Board believes that the Employee has not
substantially performed the Employee's duties, or
(b) the willful engaging by the Employee in illegal
conduct or gross misconduct.
For purposes of this provision, no act or failure to act, on the part of the
Employee, shall be considered "willful" unless it is done, or omitted to be
done, by the Employee in bad faith or without reasonable belief that the
Employee'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 based upon the advice of counsel for the Company or
its Affiliates shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the Company or
its Affiliates. The cessation of employment of the Employee shall not be
deemed to be for Cause unless his action or inaction meets the foregoing
standard and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Employee and the
Employee is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Employee is
guilty of the conduct described in subparagraph (a) or (b) above, and
specifying the particulars thereof in detail.
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1.3 CHANGE OF CONTROL DEFINED. "Change of Control" shall mean:
(a) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 30% of the outstanding
shares of the Company's Common Stock, $0.10 par value per share (the
"Common Stock"); provided, however, that for purposes of this subsection
(a), the following shall not constitute a Change of Control:
(i) any acquisition of Common Stock directly from the
Company,
(ii) any acquisition of Common Stock by the Company,
(iii) any acquisition of Common Stock by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or
(iv) any acquisition of Common Stock by any corporation
pursuant to a transaction that complies with clauses (i), (ii)
and (iii) of subsection (c) of this Section 1.3; or
(b) individuals who, as of the Change of Control Agreement
Date, constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the Change of Control
Agreement Date whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered a
member of the Incumbent Board, unless such individual's initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Incumbent Board; or
(c) consummation of a reorganization, merger or consolidation,
or sale or other disposition of all of substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination,
(i) all or substantially all of the individuals and
entities who were the beneficial owners of the Company's
outstanding common stock and the Company's voting securities
entitled to vote generally in the election of directors
immediately prior to such Business Combination have direct or
indirect beneficial ownership, respectively, of more than 50% of
the then outstanding shares of common stock, and more than 50% of
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, of the corporation resulting from such Business
Combination (which, for purposes of this paragraph (i) and
paragraphs (ii) and (iii), shall include a corporation which as a
result of such transaction controls the Company
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<PAGE> 3
or all or substantially all of the Company's assets either
directly or through one or more subsidiaries), and
(ii) except to the extent that such ownership existed
prior to the Business Combination, no person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan or related trust of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or 30% or more of the
combined voting power of the then outstanding voting securities
of such corporation, and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
1.4 COMPANY DEFINED. As used in this Agreement, "Company" shall mean
the Company as defined above and any successor to or assignee of (whether
direct or indirect, by purchase, merger, consolidation or otherwise) all or
substantially all of the assets or business of the Company.
1.5 DISABILITY DEFINED. "Disability" shall mean a condition that
would entitle the Employee to receive benefits under the Company's long-term
disability insurance policy in effect at the time either because he is totally
disabled or partially disabled, as such terms are defined in the Company's
policy in effect as of the date of this Agreement or as similar terms are
defined in any successor policy. If the Company has no long-term disability
plan in effect, "Disability" shall occur if (a) the Employee is rendered
incapable because of physical or mental illness of satisfactorily discharging
his duties and responsibilities to the Company for a period of 90 consecutive
days, (b) a duly qualified physician chosen by the Company and acceptable to
the Employee or his legal representatives so certifies in writing, and (c) the
Board determines that the Employee has become disabled.
1.6 GOOD REASON DEFINED. "Good Reason" shall mean:
(a) Any failure of the Company or its Affiliates to provide
the Employee with the position, authority, duties and responsibilities
at least commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the 120-day
period immediately preceding the Change of Control. The Employee's
position, authority, duties and responsibilities after a Change of
Control shall be considered commensurate in all material respects with
Employee's position, authority, duties and responsibilities prior to a
Change of Control if after the Change of Control Employee either holds
(i) an equivalent position in the Company or, (ii) if
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<PAGE> 4
the Company is controlled or will after the transaction be controlled by
another company (directly or indirectly), an equivalent position in the
ultimate parent company.
(b) The assignment to the Employee of any duties inconsistent
in any material respect with Employee's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3.1(b) of this Agreement, or
any other action that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith
that is remedied within 10 days after receipt of written notice thereof
from the Employee to the Company;
(c) Any failure by the Company or its Affiliates to comply
with any of the provisions of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith that is
remedied within 10 days after receipt of written notice thereof from the
Employee to the Company;
(d) The Company or its Affiliates requiring the Employee to be
based at any office or location other than as provided in Section
3.1(b)(ii) hereof or requiring the Employee to travel on business to a
substantially greater extent than required immediately prior to the
Change of Control;
(e) Any purported termination of the Employee's employment
otherwise than as expressly permitted by this Agreement; or
(f) Any failure by the Company to comply with and satisfy
Sections 4.1(c) and (d) of this Agreement.
ARTICLE II
STATUS OF CHANGE OF CONTROL AGREEMENTS
Notwithstanding any provisions thereof, this Agreement supersedes the
agreement dated October 8, 1986 between the Company and the Employee that
provided for certain severance benefits in the event of a Change of Control of
the Company, as defined therein.
ARTICLE III
CHANGE OF CONTROL BENEFIT
3.1 EMPLOYMENT TERM AND CAPACITY AFTER CHANGE OF CONTROL. (a) This
Agreement shall commence on the date hereof and continue in effect through
December 31, 1997; provided, however, that commencing on January 1, 1998 and
each January 1 thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than September 30 of the
preceding year, the Company shall have given notice that it does not wish to
extend this Agreement; provided, further, that notwithstanding any such notice
by the Company not to extend, if a Change of Control of the Company shall have
occurred during the original or extended term of this Agreement, this Agreement
shall continue in effect through the second anniversary of the Change of
Control (such period following a Change of
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<PAGE> 5
Control being referred to herein as the "Employment Term"), subject to any
earlier termination of Employee's status as an employee pursuant to this
Agreement.
(b) After a Change of Control and during the Employment Term, (i) the
Employee's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Change of Control and (ii) the Employee's service shall be
performed during normal business hours at the Company's principal executive
office, at its location at the time of the Change of Control, or the location
where the Employee was employed immediately preceding the Change of Control or
any relocation of the Company's principal executive office to a location that
is not more than 35 miles from such current location. Employee's position,
authority, duties and responsibilities after a Change of Control shall not be
considered commensurate in all material respects with Employee's position,
authority, duties and responsibilities prior to a Change of Control unless
after the Change of Control Employee holds (x) an equivalent position in the
Company or, (y) if the Company is controlled or will after the transaction be
controlled by another company (directly or indirectly), an equivalent position
in the ultimate parent company.
3.2 COMPENSATION AND BENEFITS. During the Employment Term, Employee
shall be entitled to the following compensation and benefits:
(a) Base Salary. The Employee shall receive an annual base
salary ("Base Salary"), which shall be paid at a monthly rate, at least
equal to 12 times the highest monthly base salary that was paid or is
payable, including any base salary which has been earned but deferred by
the Employee, by the Company and its affiliated companies with respect
to any month in the 12-month period ending with the month that
immediately precedes the month in which the Change of Control occurs.
During the Employment Term, the Base Salary shall be reviewed at such
time as the Company undertakes a salary review of its other executive
officers, and, to the extent that salary increases are granted to such
other executive officers, the Employee shall be granted a salary
increase commensurate with his peer executives of the Company and its
affiliates. Any increase in Base Salary shall not serve to limit or
reduce any other obligation to the Employee under this Agreement. Base
Salary shall not be reduced after any such increase and the term Base
Salary as utilized in this Agreement shall refer to Base Salary as so
increased.
(b) Annual Bonus. In addition to Base Salary, the Employee
shall be awarded, for each fiscal year ending during the Employment
Term, an annual bonus (the "Bonus") in cash in an amount at least equal
to the average of the annual bonuses paid to the Employee with respect
to the three fiscal years that immediately precede the year in which the
Change of Control occurs under the Company's annual bonus plan, or any
comparable bonus under a successor plan. Each such Bonus shall be paid
no later than the end of the third month of the fiscal year next
following the fiscal year for which the Bonus is awarded, unless the
Employee shall elect to defer the receipt of such Bonus.
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(c) Fringe Benefits. The Employee shall be entitled to fringe
benefits (including, but not limited to, automobile allowance,
reimbursement for membership dues, and air travel) commensurate with
those provided to other peer executive officers of the Company and its
affiliated companies.
(d) Expenses. The Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Employee in accordance with the most favorable agreements, policies,
practices and procedures of the Company and its affiliated companies in
effect for the Employee at any time during the 120-day period
immediately preceding the Change of Control or, if more favorable to the
Employee, as in effect generally at any time thereafter with respect to
other peer employees of the Company and its affiliated companies.
(e) Incentive, Savings and Retirement Plans. The Employee
shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally
to other peer employees of the Company and its affiliated companies, but
in no event shall such plans, practices, policies and programs provide
the Employee with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable than the most
favorable of those provided by the Company and its affiliated companies
for the Employee under any agreements, plans, practices, policies and
programs as in effect at any time during the 120-day period immediately
preceding the Change of Control or, if more favorable to the Employee,
those provided generally at any time after the Change of Control to
other peer employees of the Company and its affiliated companies.
(f) Welfare Benefit Plans. The Employee and/or the Employee's
family, as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans, practices,
policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other peer employees of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Employee with benefits, in each case, less
favorable than the most favorable of any agreements, plans, practices,
policies and programs in effect for the Employee at any time during the
120-day period immediately preceding the Change of Control or, if more
favorable to the Employee, those provided generally at any time after
the Change of Control to other peer employees of the Company and its
affiliated companies.
(g) Office and Support Staff. The Employee shall be entitled
to an office or offices of a size and with furnishings and other
appointments, and to secretarial and other assistance, commensurate with
those provided to other peer executive officers of the Company and its
affiliated companies.
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(h) Vacation. The Employee shall be entitled to paid vacation
in accordance with the most favorable agreements, plans, policies,
programs and practices of the Company and its affiliated companies as in
effect for the Employee at any time during the 120-day period
immediately preceding the Change of Control or, if more favorable to the
Employee, as in effect generally at any time thereafter with respect to
other peer employees of the Company and its affiliated companies.
(i) Indemnification. If in connection with any agreement
related to a transaction that will result in a Change of Control of the
Company, an undertaking is made to provide the Board of Directors with
rights to indemnification from the Company (or from any other party to
such agreement), the Employee shall, by virtue of this Agreement, be
entitled to the same rights to indemnification as are provided to the
Board of Directors pursuant to such agreement. Otherwise, the Employee
shall be entitled to indemnification rights on terms no less favorable
to Employee than those available under the Certificate of Incorporation,
bylaws or resolutions of the Company at any time after the Change of
Control to other peer employees of the Company. Such indemnification
rights shall be with respect to all claims, actions, suits or
proceedings to which the Employee is or is threatened to be made a party
that arise out of or are connected to his services at any time prior to
the termination of his employment, without regard to whether such
claims, actions, suits or proceedings are made, asserted or arise during
or after the Employment Term.
(j) Directors and Officers Insurance. If in connection with
any agreement related to a transaction that will result in a Change of
Control of the Company, an undertaking is made to provide the Board of
Directors of the Company with continued coverage following the Change of
Control under one or more directors and liability insurance policies,
then the Employee shall, by virtue of this Agreement, be entitled to the
same rights to continued coverage under such directors and officers
liability insurance policies as are provided to the Board of Directors.
Otherwise, the Company shall agree to cover Employee under any directors
and officers liability insurance policies as are provided generally at
any time after the Change of Control to other executive officers of the
Company.
3.3 OBLIGATIONS UPON TERMINATION AFTER A CHANGE OF CONTROL.
(a) Termination by Company for Reasons other than Death,
Disability or Cause or by Employee for Good Reason. If, after a Change
of Control and during the Employment Term, the Company terminates the
Employee's employment other than for Cause, death or Disability, or the
Employee terminates employment for Good Reason,
(i) the Company shall pay to the Employee in a lump sum
in cash within five business days of the date of termination an
amount equal to three times the sum of (i) the amount of Base
Salary in effect at the date of termination, plus (ii) the
greater of (x) the average of the annual bonuses paid or to be
paid to the Employee with respect to the immediately preceding
three fiscal years or (y) the target Bonus for which the Employee
is eligible for the
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12-month period in which the date of termination occurs, as such
target bonus has been established by the Company for such year;
(ii) for a period of thirty-six (36) months following
the date of termination of employment (the "Continuation
Period"), the Company shall at its expense continue on behalf of
the Employee and his dependents and beneficiaries the life
insurance, disability, medical, dental and hospitalization
benefits provided (x) to the Employee at any time during the
120-day period prior to the Change in Control or at any time
thereafter or (y) to other similarly situated executives who
continue in the employ of the Company during the Continuation
Period. The coverage and benefits (including deductibles and
costs) provided in this Section 2.3(a)(ii) during the
Continuation Period shall be no less favorable to the Employee
and his dependents and beneficiaries, than the most favorable of
such coverages and benefits during any of the periods referred to
in clauses (x) or (y) above. In addition, if Employee has
reached age 52 and has completed seven years of service at the
time of a Change of Control, Employee shall automatically become
vested in the post-retirement benefits provided under the
Tidewater Group Welfare Benefits Plan (the "GWB Plan") and be
entitled to receive, following termination of employment with the
Company, all benefits that would be payable to Employee under the
GWB Plan or any successor plan of the Company or its affiliated
companies had the Employee retired from employment with the
Company or one of its affiliated companies on the later of the
third anniversary of the Change of Control or the Employee's date
of retirement (as defined in the GWB Plan) from employment with
the Company. The Company's obligation hereunder with respect to
the foregoing benefits shall be limited to the extent that the
Employee obtains any such benefits pursuant to a subsequent
employer's benefit plans, in which case the Company may reduce
the coverage of any benefits it is required to provide the
Employee hereunder as long as the aggregate coverages and
benefits of the combined benefit plans is no less favorable to
the Employee than the coverages and benefits required to be
provided hereunder. The Employee will be eligible for coverage
under the Consolidated Omnibus Budget Reconciliation Act at the
end of the Continuation Period or earlier cessation of the
Company's obligation hereunder.
(iii) the Employee shall immediately become fully (100%)
vested in his benefit under each supplemental or excess
retirement plan of the Company in which the Employee was a
participant, including, but not limited to the Tidewater, Inc.
Supplemental Executive Retirement Plan (the "SERP") , the
Supplemental Savings Plan and any successor plans;
(iv) the Company shall contribute to the trust
established in connection with the SERP and the Supplemental
Savings Plan (the "Trust") for the Employee's account in cash
within five business days of the date of termination of
employment an amount equal to the then present value of the
actuarial equivalent of the additional benefits, if any, to which
the Employee would be entitled under the Tidewater, Inc. Pension
Plan, the SERP and any other
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<PAGE> 9
qualified or non-qualified defined benefit plan maintained by the
Company and covering the Employee, regardless of the vesting
requirements thereof, if the Employee had continued to be
employed by the Company until the third anniversary of the Change
of Control.
(v) the Company shall contribute to the Supplemental
Savings Plan trust for the Employee's account in cash within five
business days of the date of termination of employment an amount
equal to the amount of employer contributions that would have
been made on the Employees's behalf if the Employee had continued
to participate in the Company's Savings Plan, the Company's
Supplemental Savings Plan and any other qualified or
non-qualified defined contribution plan maintained by the Company
until the third anniversary of the Change of Control. Such
contribution shall, in the case of a qualified plan, be
calculated as if the Employee were fully vested and participating
to the maximum extent permitted by such plan and, in the case of
a non-qualified plan, be calculated on the same basis as the
Employee was participating in such plans and, in all cases be
calculated on the basis of the Employee's annual salary rate at
the time of the Change of Control.
(vi) to the extent that Employee is not fully vested in
his accrued benefits under the Pension Plan, the Savings Plan or
any other qualified plan maintained by the Company, at the time
of termination of employment, the Company shall contribute to the
Trust, within five business days of the date of termination of
employment, an amount in cash equal to the unvested but accrued
benefits under such plans as of the date of termination of
employment.
Any contributions by the Company to the Trust as provided herein shall
be distributed at such time as shall be elected by the Employee at the
time of execution of this Agreement, except that amounts relating to
services previously provided shall be distributed in accordance with the
provisions of the plans or the related participant elections to which
such contributions relate. The benefits provided in this Section 3.3(a)
shall be without regard to any amendment to any plans made after the
Change of Control but prior to Employee's date of termination of
employment, which amendment adversely affects in any manner the
computation of benefits under such plans.
(b) Death. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
reason of the Employee's death, this Agreement shall terminate without
further obligation to the Employee's legal representatives (other than
those already accrued to the Employee), other than the obligation to
make any payments due pursuant to employee benefit plans maintained by
the Company or its affiliated companies.
(c) Disability. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
reason of Employee's Disability, this Agreement shall terminate without
further obligation to the Employee
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(other than those already accrued to the Employee), other than the
obligation to make any payments due pursuant to employee benefit plans
maintained by the Company or its affiliated companies.
(d) Cause. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
the Company for Cause, this Agreement shall terminate without further
obligation to the Employee other than for obligations imposed by law and
obligations imposed pursuant to any employee benefit plan maintained by
the Company or its affiliated companies.
(e) Voluntary Termination. If, after a Change of Control and
during the Employment Term, the Employee voluntarily terminates his
employment with the Company other than for Good Reason, this Agreement
shall terminate without further obligation to the Employee other than
for obligations imposed by law and obligations imposed pursuant to any
employee benefit plan maintained by the Company or its affiliated
companies.
3.4 ACCRUED OBLIGATIONS AND OTHER BENEFITS. It is the intent of this
Agreement that upon termination of employment for any reason following a Change
of Control the Employee be entitled to receive promptly, and in addition to any
other benefits specifically provided, (a) the Employee's Base Salary through
the date of termination to the extent not theretofore paid, (b) any accrued
vacation pay, to the extent not theretofore paid, and (c) any other amounts or
benefits required to be paid or provided or which the Employee is entitled to
receive under any plan, program, policy practice or agreement of the Company.
3.5 STOCK OPTIONS AND RESTRICTED STOCK. The foregoing benefits are
intended to be in addition to the value of any options to acquire Common Stock
of the Company or restricted stock the exercisability or vesting of which is
accelerated pursuant to the terms of any stock option, incentive or other
similar plan heretofore or hereafter adopted by the Company.
3.6 CERTAIN ADDITIONAL PAYMENTS. Notwithstanding anything contained
in this Agreement to the contrary, if the Employee would be subject to an
excise tax by virtue of the "excess parachute payment" provisions of Section
4999 of the Internal Revenue Code of 1986, as amended (or any successor
thereto) with respect to any amounts attributable to any payment or benefit
provided under this Agreement, or any other payment or benefits provided to, or
for the benefit of Employee under any other Company plan or arrangement (the
"Payments"), and if the imposition of such excise tax could be avoided by a
reduction of the benefits payable pursuant to this Agreement, then the payments
due hereunder shall be automatically reduced by such amount as shall be
necessary to eliminate any obligation of the Employee to pay such excise tax,
provided however that if the amount by which any payments or benefits payable
pursuant to this Agreement would have to be reduced to avoid the imposition of
the excise tax would exceed the excise tax that would be payable with respect
to any "excess parachute payments"(as such term is defined in the Code), then
no such reduction of any payments hereunder shall be made.
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3.7 LEGAL FEES. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Employee or others of the validity or enforceability of, or
liability under, any provision of this Agreement (including as a result of any
contest by the Employee about the amount or timing of any payment pursuant to
this Agreement.)
3.8 SET-OFF; MITIGATION. After a Change of Control, the Company's
and its Affiliates' obligations to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company or its Affiliates may have against the
Employee or others; except that to the extent the Employee accepts other
employment in connection with which he is provided health insurance benefits,
the Company shall only be required to provide health insurance benefits to the
extent the benefits provided by the Employee's employer are less favorable than
the benefits to which he would otherwise be entitled hereunder. It is the
intent of this Agreement that in no event shall the Employee be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Employee under any of the provisions of this Agreement.
3.9 OUTPLACEMENT ASSISTANCE. Upon any termination of employment of
the Employee other than for Cause within two years following a Change of
Control, the Company shall provide to the Employee outplacement assistance by a
reputable firm specializing in such services for the period beginning with the
termination of employment and ending three years following the Change of
Control.
ARTICLE IV
MISCELLANEOUS
4.1 BINDING EFFECT; SUCCESSORS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Company and any of its successors or assigns.
(b) This Agreement is personal to the Employee and shall not
be assignable by the Employee without the consent of the Company (there being
no obligation to give such consent) other than such rights or benefits as are
transferred by will or the laws of descent and distribution.
(c) The Company shall require any successor to or assignee of
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
all or substantially all of the assets or businesses of the Company (i) to
assume unconditionally and expressly this Agreement and (ii) to agree to
perform or to cause to be performed all of the obligations under this Agreement
in the same manner and to the same extent as would have been required of the
Company had no assignment or succession occurred, such assumption to be set
forth in a writing reasonably satisfactory to the Employee.
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(d) The Company shall also require all entities that control
or that after the transaction will control (directly or indirectly) the Company
or any such successor or assignee to agree to cause to be performed all of the
obligations under this Agreement, such agreement to be set forth in a writing
reasonably satisfactory to the Employee.
4.2 NOTICES. All notices hereunder must be in writing and shall be
deemed to have been given upon receipt of delivery by: (a) hand (against a
receipt therefor), (b) certified or registered mail, postage prepaid, return
receipt requested, (c) a nationally recognized overnight courier service
(against a receipt therefor) or (d) telecopy transmission with confirmation of
receipt. All such notices must be addressed as follows:
If to the Company, to:
Tidewater, Inc.
1440 Canal Street
New Orleans, Louisiana 70112
Attn: Cliffe F. Laborde
If to the Employee, to:
Ken C. Tamblyn
Tidewater, inc.
1440 Canal Street
New Orleans, Louisiana 70112
or such other address as to which any party hereto may have notified the other
in writing.
4.3 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Louisiana
without regard to principles of conflict of laws.
4.4 WITHHOLDING. The Employee agrees that the Company has the right
to withhold, from the amounts payable pursuant to this Agreement, all amounts
required to be withheld under applicable income and/or employment tax laws, or
as otherwise stated in documents granting rights that are affected by this
Agreement.
4.5 AMENDMENT, WAIVER. No provision of this Agreement may be
modified, amended or waived except by an instrument in writing signed by both
parties.
4.6 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, Employee
and the Company 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
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<PAGE> 13
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.
4.7 WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach thereof.
4.8 REMEDIES NOT EXCLUSIVE. No remedy specified herein shall be
deemed to be such party's exclusive remedy, and accordingly, in addition to all
of the rights and remedies provided for in this Agreement, the parties shall
have all other rights and remedies provided to them by applicable law, rule or
regulation.
4.9 COMPANY'S RESERVATION OF RIGHTS. Employee acknowledges and
understands that the Employee serves at the pleasure of the Board and that the
Company has the right at any time to terminate Employee's status as an employee
of the Company, or to change or diminish his status during the Employment Term,
subject to the rights of the Employee to claim the benefits conferred by this
Agreement.
4.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have caused this
Agreement to be executed as of the Change of Control Agreement Date.
TIDEWATER, INC.
By:
------------------------------------
Robert H. Boh
Chairman, Compensation Committee
EMPLOYEE:
---------------------------------------
Ken C. Tamblyn
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EXHIBIT 10.3
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement ("the Agreement") between Tidewater,
Inc., a Delaware corporation (the "Company"), and Joseph S. Bennett (the
"Employee") is dated effective as of September 30, 1996 (the "Change of Control
Agreement Date").
ARTICLE I
DEFINITIONS
1.1 AFFILIATE DEFINED. "Affiliate" or "affiliated companies" shall
mean any company controlled by, controlling, or under common control with, the
Company.
1.2 CAUSE DEFINED. "Cause" shall mean:
(a) the willful and continued failure of the Employee
to perform substantially the Employee'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 Employee
by the Board of the Company which specifically identifies the
manner in which the Board believes that the Employee has not
substantially performed the Employee's duties, or
(b) the willful engaging by the Employee in illegal
conduct or gross misconduct.
For purposes of this provision, no act or failure to act, on the part of the
Employee, shall be considered "willful" unless it is done, or omitted to be
done, by the Employee in bad faith or without reasonable belief that the
Employee'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 based upon the advice of counsel for the Company or
its Affiliates shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the Company or
its Affiliates. The cessation of employment of the Employee shall not be
deemed to be for Cause unless his action or inaction meets the foregoing
standard and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Employee and the
Employee is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Employee is
guilty of the conduct described in subparagraph (a) or (b) above, and
specifying the particulars thereof in detail.
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<PAGE> 2
1.3 CHANGE OF CONTROL DEFINED. "Change of Control" shall mean:
(a) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 30% of the outstanding
shares of the Company's Common Stock, $0.10 par value per share (the
"Common Stock"); provided, however, that for purposes of this subsection
(a), the following shall not constitute a Change of Control:
(i) any acquisition of Common Stock directly from the
Company,
(ii) any acquisition of Common Stock by the Company,
(iii) any acquisition of Common Stock by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or
(iv) any acquisition of Common Stock by any corporation
pursuant to a transaction that complies with clauses (i), (ii)
and (iii) of subsection (c) of this Section 1.3; or
(b) individuals who, as of the Change of Control Agreement
Date, constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the Change of Control
Agreement Date whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered a
member of the Incumbent Board, unless such individual's initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Incumbent Board; or
(c) consummation of a reorganization, merger or consolidation,
or sale or other disposition of all of substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination,
(i) all or substantially all of the individuals and
entities who were the beneficial owners of the Company's
outstanding common stock and the Company's voting securities
entitled to vote generally in the election of directors
immediately prior to such Business Combination have direct or
indirect beneficial ownership, respectively, of more than 50% of
the then outstanding shares of common stock, and more than 50% of
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, of the corporation resulting from such Business
Combination (which, for purposes of this paragraph (i) and
paragraphs (ii) and (iii), shall include a corporation which as a
result of such transaction controls the Company
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<PAGE> 3
or all or substantially all of the Company's assets either
directly or through one or more subsidiaries), and
(ii) except to the extent that such ownership existed
prior to the Business Combination, no person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan or related trust of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or 30% or more of the
combined voting power of the then outstanding voting securities
of such corporation, and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
1.4 COMPANY DEFINED. As used in this Agreement, "Company" shall mean
the Company as defined above and any successor to or assignee of (whether
direct or indirect, by purchase, merger, consolidation or otherwise) all or
substantially all of the assets or business of the Company.
1.5 DISABILITY DEFINED. "Disability" shall mean a condition that
would entitle the Employee to receive benefits under the Company's long-term
disability insurance policy in effect at the time either because he is totally
disabled or partially disabled, as such terms are defined in the Company's
policy in effect as of the date of this Agreement or as similar terms are
defined in any successor policy. If the Company has no long-term disability
plan in effect, "Disability" shall occur if (a) the Employee is rendered
incapable because of physical or mental illness of satisfactorily discharging
his duties and responsibilities to the Company for a period of 90 consecutive
days, (b) a duly qualified physician chosen by the Company and acceptable to
the Employee or his legal representatives so certifies in writing, and (c) the
Board determines that the Employee has become disabled.
1.6 GOOD REASON DEFINED. "Good Reason" shall mean:
(a) Any failure of the Company or its Affiliates to provide
the Employee with the position, authority, duties and responsibilities
at least commensurate in all material respects with the most significant
of those held, exercised and assigned at any time during the 120-day
period immediately preceding the Change of Control. The Employee's
position, authority, duties and responsibilities after a Change of
Control shall be considered commensurate in all material respects with
Employee's position, authority, duties and responsibilities prior to a
Change of Control if after the Change of Control Employee either holds
(i) an equivalent position in the Company or, (ii) if
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<PAGE> 4
the Company is controlled or will after the transaction be controlled by
another company (directly or indirectly), an equivalent position in the
ultimate parent company.
(b) The assignment to the Employee of any duties inconsistent
in any material respect with Employee's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3.1(b) of this Agreement, or
any other action that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith
that is remedied within 10 days after receipt of written notice thereof
from the Employee to the Company;
(c) Any failure by the Company or its Affiliates to comply
with any of the provisions of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith that is
remedied within 10 days after receipt of written notice thereof from the
Employee to the Company;
(d) The Company or its Affiliates requiring the Employee to be
based at any office or location other than as provided in Section
3.1(b)(ii) hereof or requiring the Employee to travel on business to a
substantially greater extent than required immediately prior to the
Change of Control;
(e) Any purported termination of the Employee's employment
otherwise than as expressly permitted by this Agreement; or
(f) Any failure by the Company to comply with and satisfy
Sections 4.1(c) and (d) of this Agreement.
ARTICLE II
STATUS OF CHANGE OF CONTROL AGREEMENTS
This Agreement supersedes the agreement dated June 25, 1992 between the
Company and the Employee that provided for certain severance benefits in the
event of a Change of Control of the Company, as defined therein.
ARTICLE III
CHANGE OF CONTROL BENEFIT
3.1 EMPLOYMENT TERM AND CAPACITY AFTER CHANGE OF CONTROL. (a) This
Agreement shall commence on the date hereof and continue in effect through
December 31, 1996; provided, however, that commencing on January 1, 1997 and
each January 1 thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than September 30 of the
preceding year, the Company shall have given notice that it does not wish to
extend this Agreement; provided, further, that notwithstanding any such notice
by the Company not to extend, if a Change of Control of the Company shall have
occurred during the original or extended term of this Agreement, this Agreement
shall continue in effect through the second anniversary of the Change of
Control (such period following a Change of
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<PAGE> 5
Control being referred to herein as the "Employment Term"), subject to any
earlier termination of Employee's status as an employee pursuant to this
Agreement.
(b) After a Change of Control and during the Employment Term, (i) the
Employee's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Change of Control and (ii) the Employee's service shall be
performed during normal business hours at the Company's principal executive
office at its location at the time of the Change of Control or the location
where the Employee was employed immediately preceding the Change of Control or
any relocation of the Company's principal executive office to a location that
is not more than 35 miles from such current location. Employee's position,
authority, duties and responsibilities after a Change of Control shall not be
considered commensurate in all material respects with Employee's position,
authority, duties and responsibilities prior to a Change of Control unless
after the Change of Control Employee holds an equivalent position in the
Company.
3.2 COMPENSATION AND BENEFITS. During the Employment Term, Employee
shall be entitled to the following compensation and benefits:
(a) Base Salary. The Employee shall receive an annual base
salary ("Base Salary"), which shall be paid at a monthly rate, at least
equal to 12 times the highest monthly base salary that was paid or is
payable, including any base salary which has been earned but deferred by
the Employee, by the Company and its affiliated companies with respect
to any month in the 12-month period ending with the month that
immediately precedes the month in which the Change of Control occurs.
During the Employment Term, the Base Salary shall be reviewed at such
time as the Company undertakes a salary review of other peer employees,
and, to the extent that salary increases are granted to such other peer
employees, the Employee shall be granted a salary increase commensurate
with his peer employees of the Company and its affiliated companies for
the year of determination. Any increase in Base Salary shall not serve
to limit or reduce any other obligation to the Employee under this
Agreement. Base Salary shall not be reduced after any such increase and
the term Base Salary as utilized in this Agreement shall refer to Base
Salary as so increased.
(b) Annual Bonus. In addition to Base Salary, the Employee
shall be awarded, for each fiscal year ending during the Employment
Term, an annual bonus (the "Bonus") in cash in an amount at least equal
to the average of the annual bonuses paid to the Employee with respect
to the three fiscal years that immediately precede the year in which the
Change of Control occurs under the Company's annual bonus plan, or any
comparable bonus under a successor plan. Each such Bonus shall be paid
no later than the end of the third month of the fiscal year next
following the fiscal year for which the Bonus is awarded, unless the
Employee shall elect to defer the receipt of such Bonus.
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(c) Fringe Benefits. The Employee shall be entitled to fringe
benefits (including, but not limited to, automobile allowance,
reimbursement for membership dues, and air travel) commensurate with
those provided to other peer employees of the Company and its affiliated
companies.
(d) Expenses. The Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Employee in accordance with the most favorable agreements, policies,
practices and procedures of the Company and its affiliated companies in
effect for the Employee at any time during the 120-day period
immediately preceding the Change of Control or, if more favorable to the
Employee, as in effect generally at any time thereafter with respect to
other peer employees of the Company and its affiliated companies.
(e) Incentive, Savings and Retirement Plans. The Employee
shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally
to other peer employees of the Company and its affiliated companies, but
in no event shall such plans, practices, policies and programs provide
the Employee with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable than the most
favorable of those provided by the Company and its affiliated companies
for the Employee under any agreements, plans, practices, policies and
programs as in effect at any time during the 120-day period immediately
preceding the Change of Control or, if more favorable to the Employee,
those provided generally at any time after the Change of Control to
other peer employees of the Company and its affiliated companies.
(f) Welfare Benefit Plans. The Employee and/or the Employee's
family, as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans, practices,
policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other peer employees of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Employee with benefits, in each case, less
favorable than the most favorable of any agreements, plans, practices,
policies and programs in effect for the Employee at any time during the
120-day period immediately preceding the Change of Control or, if more
favorable to the Employee, those provided generally at any time after
the Change of Control to other peer employees of the Company and its
affiliated companies.
(g) Office and Support Staff. The Employee shall be entitled
to an office or offices of a size and with furnishings and other
appointments, and to secretarial and other assistance, commensurate with
those provided to other peer employees of the Company and its affiliated
companies.
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(h) Vacation. The Employee shall be entitled to paid vacation
in accordance with the most favorable agreements, plans, policies,
programs and practices of the Company and its affiliated companies as in
effect for the Employee at any time during the 120-day period
immediately preceding the Change of Control or, if more favorable to the
Employee, as in effect generally at any time thereafter with respect to
other peer employees of the Company and its affiliated companies.
(i) Indemnification. If in connection with any agreement
related to a transaction that will result in a Change of Control of the
Company, an undertaking is made to provide the Board of Directors with
rights to indemnification from the Company (or any other party to such
agreement), the Employee shall, by virtue of this Agreement, be entitled
to the same rights to indemnification as are provided to the Board of
Directors pursuant to such agreement. Otherwise, the Employee shall be
entitled to indemnification rights on terms no less favorable to
Employee than those available under the Certificate of Incorporation,
bylaws or resolutions of the Company at any time after the change of
control to other peer employees of the Company. Such indemnification
rights shall be with respect to all claims, actions, suits or
proceedings to which the Employee is or is threatened to be made a party
that arise out of or are connected to his services at any time prior to
the termination of his employment, without regard to whether such
claims, actions, suits or proceedings are made, asserted or arise during
or after the Employment Term.
(j) Directors and Officers Insurance. If in connection with
any agreement related to a transaction that will result in a Change of
Control of the Company, an undertaking is made to provide the Board of
Directors of the Company with continued coverage following the change of
control under one or more directors and liability insurance policies,
then the Employee shall, by virtue of this Agreement, be entitled to the
same rights to continued coverage under such directors and officers
liability insurance policies as are provided to the Board of Directors.
Otherwise, the Company shall agree to cover Employee under any directors
and liability insurance policies on terms provided generally at any time
after the Change of Control to other peer employees of the Company.
3.3 OBLIGATIONS UPON TERMINATION AFTER A CHANGE OF CONTROL.
(a) Termination by Company for Reasons other than Death,
Disability or Cause or by Employee for Good Reason. If, after a Change
of Control and during the Employment Term, the Company terminates the
Employee's employment other than for Cause, death or Disability, or the
Employee terminates employment for Good Reason, then, subject to Section
3.6 hereof,
(i) the Company shall pay to the Employee in a lump sum
in cash within five business days of the date of termination an
amount equal to two times the sum of (i) the amount of Base
Salary in effect at the date of termination, plus (ii) the
greater of (x) the average of the annual bonuses paid or to be
paid to the Employee with respect to the immediately preceding
three
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<PAGE> 8
fiscal years or (y) the target Bonus for which the Employee is
eligible for the 12-month period in which the date of termination
occurs, as such target bonus has been established by the Company
for such year;
(ii) for a period of twenty-four (24) months following
the date of termination of employment (the "Continuation
Period"), the Company shall at its expense continue on behalf of
the Employee and his dependents and beneficiaries the life
insurance, disability, medical, dental and hospitalization
benefits provided (x) to the Employee at any time during the
120-day period prior to the Change in Control or at any time
thereafter or (y) to other similarly situated executives who
continue in the employ of the Company during the Continuation
Period. The coverage and benefits (including deductibles and
costs) provided in this Section 2.3(a)(ii) during the
Continuation Period shall be no less favorable to the Employee
and his dependents and beneficiaries, than the most favorable of
such coverages and benefits during any of the periods referred to
in clauses (x) or (y) above. In addition, if Employee has
reached age 53 and has completed eight years of service at the
time of a Change of Control, Employee shall automatically become
vested in the post-retirement benefits provided under the
Tidewater Group Welfare Benefits Plan (the "GWB Plan") and be
entitled to receive, following termination of employment with the
Company, all benefits that would be payable to Employee under the
GWB Plan or any successor plan of the Company or its affiliated
companies had the Employee retired from employment with the
Company or one of its affiliated companies on the later of the
third anniversary of the Change of Control or the Employee's date
of retirement (as defined in the GWB Plan) from employment with
the Company. The Company's obligation hereunder with respect to
the foregoing benefits shall be limited to the extent that the
Employee obtains any such benefits pursuant to a subsequent
employer's benefit plans, in which case the Company may reduce
the coverage of any benefits it is required to provide the
Employee hereunder as long as the aggregate coverages and
benefits of the combined benefit plans is no less favorable to
the Employee than the coverages and benefits required to be
provided hereunder. The Employee will be eligible for coverage
under the Consolidated Omnibus Budget Reconciliation Act at the
end of the Continuation Period or earlier cessation of the
Company's obligation hereunder.
(iii) the Employee shall immediately become fully (100%)
vested in his benefit under each supplemental or excess
retirement plan of the Company in which the Employee was a
participant, including, but not limited to the Tidewater, Inc.
Supplemental Executive Retirement Plan (the "SERP") , the
Supplemental Savings Plan and any successor plans;
(iv) the Company shall contribute to the trust
established in connection with the SERP and the Supplemental
Savings Plan (the "Trust") for the Employee's account in cash
within five business days of the date of termination of
employment an amount equal to the then present value of the
actuarial equivalent of the additional benefits, if any, to which
the Employee would be
-8-
<PAGE> 9
entitled under the Tidewater, Inc. Pension Plan, the SERP and any
other qualified or non-qualified defined benefit plan maintained
by the Company and covering the Employee, regardless of the
vesting requirements thereof, if the Employee had continued to be
employed by the Company until the second anniversary of the
Change of Control.
(v) the Company shall contribute to the Supplemental
Savings Plan trust for the Employee's account in cash within five
business days of the date of termination of employment an amount
equal to the amount of employer contributions that would have
been made on the Employees's behalf if the Employee had continued
to participate in the Company's Savings Plan, the Company's
Supplemental Savings Plan and any other qualified or
non-qualified defined contribution plan maintained by the Company
until the second anniversary of the Change of Control. Such
contribution shall, in the case of a qualified plan, be
calculated as if the Employee were participating to the maximum
extent permitted by such plan and, in the case of a non-qualified
plan, be calculated on the same basis as the Employee was
participating in such plans and, in all cases be calculated on
the basis of the Employee's annual salary rate at the time of the
Change of Control.
(vi) to the extent that Employee is not fully vested in
his accrued benefits under the Pension Plan, the Savings Plan or
any other qualified plan maintained by the Company, at the time
of termination of employment, the Company shall contribute to the
Trust, within five business days of the date of termination of
employment, an amount in cash equal to the unvested but accrued
benefits under such plans as of the date of termination of
employment.
Any contributions by the Company to the Trust as provided herein shall
be distributed at such time as shall be elected by the Employee at the
time of execution of this Agreement, except that amounts relating to
services previously provided shall be distributed in accordance with the
provisions of the plans or the related participant elections to which
such contributions relate. The benefits provided in this Section 3.3(a)
shall be without regard to any amendment to any plans made after the
Change of Control but prior to Employee's date of termination of
employment, which amendment adversely affects in any manner the
computation of benefits under such plans.
(b) Death. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
reason of the Employee's death, this Agreement shall terminate without
further obligation to the Employee's legal representatives (other than
those already accrued to the Employee), other than the obligation to
make any payments due pursuant to employee benefit plans maintained by
the Company or its affiliated companies.
(c) Disability. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
reason of Employee's
-9-
<PAGE> 10
Disability, this Agreement shall terminate without further obligation to
the Employee (other than those already accrued to the Employee), other
than the obligation to make any payments due pursuant to employee
benefit plans maintained by the Company or its affiliated companies.
(d) Cause. If, after a Change of Control and during the
Employment Term, the Employee's status as an employee is terminated by
the Company for Cause, this Agreement shall terminate without further
obligation to the Employee other than for obligations imposed by law and
obligations imposed pursuant to any employee benefit plan maintained by
the Company or its affiliated companies.
(e) Voluntary Termination. If, after a Change of Control and
during the Employment Term, the Employee voluntarily terminates his
employment with the Company other than for Good Reason, this Agreement
shall terminate without further obligation to the Employee other than
for obligations imposed by law and obligations imposed pursuant to any
employee benefit plan maintained by the Company or its affiliated
companies.
3.4 ACCRUED OBLIGATIONS AND OTHER BENEFITS. It is the intent of this
Agreement that upon termination of employment for any reason following a Change
of Control the Employee be entitled to receive promptly, and in addition to any
other benefits specifically provided, (a) the Employee's Base Salary through
the date of termination to the extent not theretofore paid, (b) any accrued
vacation pay, to the extent not theretofore paid, and (c) any other amounts or
benefits required to be paid or provided or which the Employee is entitled to
receive under any plan, program, policy practice or agreement of the Company.
3.5 STOCK OPTIONS AND RESTRICTED STOCK. The foregoing benefits are
intended to be in addition to the value of any options to acquire Common Stock
of the Company or restricted stock the exercisability or vesting of which is
accelerated pursuant to the terms of any stock option, incentive or other
similar plan heretofore or hereafter adopted by the Company.
3.6 LIMITATION ON PAYMENTS. Notwithstanding anything contained in
this Agreement to the contrary, to the extent that any payment or benefit
provided under this Agreement and benefits provided to, or for the benefit of,
the Employee under any other Company plan or arrangement or any agreement with
the Company, [any person whose actions result in a change in control of the
Company] or any person affiliated with the Company or such person (such
payments or benefits are collectively referred to as the "Payments") would not
be deductible (in whole or in part) as a result of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), the Payments shall be reduced
(but not below zero) until no portion of the Payments is not deductible by the
Company as a result of Section 280G of the Code (such reduced amount is
hereinafter referred to as the "Limited Payment Amount"). Unless the Employee
shall have given prior written notice specifying a different order to the
Company to effectuate the Limited Payment Amount, the Company shall reduce or
eliminate the Payments, by first reducing or eliminating those payments or
benefits that are not payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order
-10-
<PAGE> 11
beginning with payments or benefits which are to be paid the farthest in time
from the Determination (as hereinafter defined). Any notice given by the
Employee pursuant to the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement governing the Employee's
rights and entitlements to any benefits or compensation. A determination as to
whether the Payments shall be reduced to the Limited Payment Amount pursuant to
the Plan and the amount of such Limited Payment Amount shall be made by the
Company's auditors that served as the Company's independent auditors 120 days
preceding the Change of Control (the "Auditors") at the Company's expense. The
Auditors shall provide their determination (the "Determination"), together with
detailed supporting calculations and documentation to the Company and the
Employee.
3.7 LEGAL FEES. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Employee or others of the validity or enforceability of, or
liability under, any provision of this Agreement (including as a result of any
contest by the Employee about the amount or timing of any payment pursuant to
this Agreement.)
3.8 SET-OFF; MITIGATION. After a Change of Control, the Company's
and its Affiliates' obligations to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company or its Affiliates may have against the
Employee or others; except that to the extent the Employee accepts other
employment in connection with which he is provided health insurance benefits,
the Company shall only be required to provide health insurance benefits to the
extent the benefits provided by the Employee's employer are less favorable than
the benefits to which he would otherwise be entitled hereunder. It is the
intent of this Agreement that in no event shall the Employee be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Employee under any of the provisions of this Agreement.
3.9 OUTPLACEMENT ASSISTANCE. Upon any termination of employment of
the Employee other than for Cause within three years following a Change of
Control, the Company shall provide to the Employee outplacement assistance by a
reputable firm specializing in such services for the period beginning with the
termination of employment and ending two years following the Change of Control.
ARTICLE IV
MISCELLANEOUS
4.1 BINDING EFFECT; SUCCESSORS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Company and any of its successors or assigns.
(b) This Agreement is personal to the Employee and shall not
be assignable by the Employee without the consent of the Company (there being
no obligation to give such
-11-
<PAGE> 12
consent) other than such rights or benefits as are transferred by will or the
laws of descent and distribution.
(c) The Company shall require any successor to or assignee of
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
all or substantially all of the assets or businesses of the Company (i) to
assume unconditionally and expressly this Agreement and (ii) to agree to
perform or to cause to be performed all of the obligations under this Agreement
in the same manner and to the same extent as would have been required of the
Company had no assignment or succession occurred, such assumption to be set
forth in a writing reasonably satisfactory to the Employee.
(d) The Company shall also require all entities that control
or that after the transaction will control (directly or indirectly) the Company
or any such successor or assignee to agree to cause to be performed all of the
obligations under this Agreement, such agreement to be set forth in a writing
reasonably satisfactory to the Employee.
4.2 NOTICES. All notices hereunder must be in writing and shall be
deemed to have been given upon receipt of delivery by: (a) hand (against a
receipt therefor), (b) certified or registered mail, postage prepaid, return
receipt requested, (c) a nationally recognized overnight courier service
(against a receipt therefor) or (d) telecopy transmission with confirmation of
receipt. All such notices must be addressed as follows:
If to the Company, to:
Tidewater, Inc.
1440 Canal Street
New Orleans, Louisiana 70112
Attn: Cliffe F. Laborde
If to the Employee, to:
Joseph S. Bennett
Tidewater Inc.
1440 Canal Street
New Orleans, Louisiana 70112
or such other address as to which any party hereto may have notified the other
in writing.
4.3 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Louisiana
without regard to principles of conflict of laws.
4.4 WITHHOLDING. The Employee agrees that the Company has the right
to withhold, from the amounts payable pursuant to this Agreement, all amounts
required to be withheld
-12-
<PAGE> 13
under applicable income and/or employment tax laws, or as otherwise stated in
documents granting rights that are affected by this Agreement.
4.5 AMENDMENT, WAIVER. No provision of this Agreement may be
modified, amended or waived except by an instrument in writing signed by both
parties.
4.6 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, Employee
and the Company 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.
4.7 WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach thereof.
4.8 REMEDIES NOT EXCLUSIVE. No remedy specified herein shall be
deemed to be such party's exclusive remedy, and accordingly, in addition to all
of the rights and remedies provided for in this Agreement, the parties shall
have all other rights and remedies provided to them by applicable law, rule or
regulation.
4.9 COMPANY'S RESERVATION OF RIGHTS. Employee acknowledges and
understands that the Employee serves at the pleasure of the Board and that the
Company has the right at any time to terminate Employee's status as an employee
of the Company, or to change or diminish his status during the Employment Term,
subject to the rights of the Employee to claim the benefits conferred by this
Agreement.
4.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
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<PAGE> 14
IN WITNESS WHEREOF, the Company and the Employee have caused this
Agreement to be executed as of the Change of Control Agreement Date.
TIDEWATER, INC.
By:
------------------------------------------
William C. O'Malley
Chairman of the Board, President
and Chief Executive Officer
EMPLOYEE:
---------------------------------------------
Joseph S. Bennett
-14-
<PAGE> 1
EXHIBIT 11
TIDEWATER INC.
COMPUTATION OF EARNINGS AND SHARES USED IN ARRIVING AT
PRIMARY AND FULLY-DILUTED EARNINGS PER SHARE FOR THE
QUARTER AND SIX-MONTH PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
September 30, 1996 September 30, 1996
------------------ ------------------
<S> <C> <C>
Net earnings (in thousands) $ 32,952 $ 57,322
============ ==============
Computation of weighted
average number of shares
outstanding:
- -------------------------------
Issued: 62,022,356 shares
Weighted average shares
outstanding 62,013,762 61,979,502
Plus incremental shares
applicable to stock
options 581,166 648,624
------------ --------------
Weighted average common
shares and equivalents 62,594,928 62,628,126
============ ==============
Primary and fully diluted
earnings per common share $ .53 $ .92
============ ==============
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheet and the condensed consolidated statements
of earnings at the date and for the period indicated and is qualified in its
entirety by reference to such financial statements. All amounts shown are in
thousands of dollars, except per share data.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 28,114
<SECURITIES> 6,188
<RECEIVABLES> 178,901
<ALLOWANCES> 7,994
<INVENTORY> 32,983
<CURRENT-ASSETS> 241,963
<PP&E> 1,628,980
<DEPRECIATION> 926,140
<TOTAL-ASSETS> 1,037,767
<CURRENT-LIABILITIES> 96,080
<BONDS> 0
0
0
<COMMON> 6,202
<OTHER-SE> 775,432
<TOTAL-LIABILITY-AND-EQUITY> 1,037,767
<SALES> 369,766
<TOTAL-REVENUES> 369,766
<CGS> 291,039
<TOTAL-COSTS> 291,039
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 534
<INCOME-PRETAX> 84,269
<INCOME-TAX> 26,947
<INCOME-CONTINUING> 57,322
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,322
<EPS-PRIMARY> .92
<EPS-DILUTED> .92
</TABLE>
