EXHIBIT 10.1
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TIDEWATER INC.
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
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Amended and Restated January 1, 2008
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TIDEWATER, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
TABLE OF
CONTENTS
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Page
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ARTICLE 1:
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PURPOSE
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1
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ARTICLE 2:
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THE PENSION
PLAN
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2
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ARTICLE 3:
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DEFINITIONS
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2
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ARTICLE 4:
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ELIGIBILITY
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3
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ARTICLE 5:
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AMOUNT OF
SUPPLEMENTAL PENSION BENEFIT FOR ELIGIBLE EMPLOYEES COVERED UNDER
THE PENSION PLAN
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4
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ARTICLE 6:
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AMOUNT OF
SUPPLEMENTAL PENSION BENEFIT FOR ELIGIBLE EMPLOYEES WHO ARE NOT
COVERED UNDER THE PENSION PLAN
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5
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ARTICLE 7:
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PAYMENT OF
SUPPLEMENTAL PENSION BENEFIT
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6
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ARTICLE 8:
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PLAN
ADMINISTRATION
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10
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ARTICLE 9:
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EMPLOYEES’ RIGHTS
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10
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ARTICLE 10:
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AMENDMENT AND
TERMINATION
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10
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ARTICLE 11:
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CHANGE OF
CONTROL
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11
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ARTICLE 12:
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NATURE OF
AGREEMENT
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14
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ARTICLE 13:
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RESTRICTIONS ON
ASSIGNMENT
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14
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ARTICLE 14:
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MISCELLANEOUS
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14
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i
TIDEWATER, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
PREAMBLE
WHEREAS, Tidewater Inc. ( “ Employer
” ) is the sponsor of the Tidewater Pension Plan
( “ Pension Plan ” ) , which is a
plan qualified under Section 401(a) of the Internal Revenue
Code of 1986 ( “ Code ” ) .
Benefits under the Pension Plan are limited by various sections of
the Code, such as Sections 401(a)(17) and 415. In order to provide
benefits to a select group of management or highly compensated
employees equal to the benefits that such employees are prevented
from receiving under the Pension Plan because of those Code
limitations, the Employer adopted a nonqualified unfunded plan
known as the Tidewater Inc. Supplemental Executive Retirement Plan
( “ Plan ” ) , effective as of
July 1, 1991. The Plan also replaces certain service lost
under the Pension Plan due to breaks in service, and enhances the
benefit calculation formula;
WHEREAS, the Plan has been amended from time to time. The
Plan was restated effective March 1, 2003 to provide a
supplemental benefit to officers who participate in the Tidewater
Retirement Plan ( “ Retirement Plan ”
) and are not eligible to participate in the Pension Plan.
The Plan was amended, effective February 1, 2007, to provide
for a lump-sum payout upon a Change of Control of the Employer, as
defined in Treasury Regulation Section 1.409A-3(i)(5), and to
change the default commencement date;
WHEREAS, each Participant’s vested accrued benefit
as of December 31, 2004 was “grandfathered” under
Code Section 409A until the Plan was materially modified on
February 1, 2007 to provide for a mandatory lump sum pay-out
of Plan benefits upon a Change of Control of the
Employer;
WHEREAS, the Plan has been in reasonable, good faith
compliance with Code Section 409A since January 1, 2005
and this document is restated to comply with Section 409A of
the Internal Revenue Code of 1986, as amended, and the regulations
and guidance issued thereunder (“Section 409A”)
effective January 1, 2008, unless an earlier effective date is
stated; and
NOW, THEREFORE,
the Plan is hereby restated to read
in its entirety as follows:
ARTICLE
1: PURPOSE
The Employer intends and desires by
the adoption of this Plan to recognize the value to the Employer of
past and present services of certain Eligible Employees and to
encourage and assure their continued service with the Employer by
making more adequate provision for their future retirement
security. The establishment of this Plan is made necessary by
certain limitations on contributions and benefits which are imposed
on the Pension Plan by the Code. The Employer also wishes to
compensate certain members of management or highly compensated
employees who may have been disadvantaged by the break in service
rules under the Pension Plan and to enhance the benefit calculation
formula. Further, in order to minimize
1
the differences in benefits among officers the
Plan includes a hypothetical Pension Plan benefit for officers who
are not eligible to participate in the Pension Plan.
ARTICLE 2: THE PENSION
PLAN
The Pension Plan, whenever referred
to in this Plan, shall mean the Tidewater Pension Plan, as amended,
as it exists as of the date any determination is made of benefits
payable under this Plan. All terms used in this Plan shall have the
meanings assigned to them under the provisions of the Pension Plan,
unless otherwise qualified by the context. Any ambiguities or gaps
in this Plan shall be resolved by reference to the Pension Plan
document.
ARTICLE
3: DEFINITIONS
3.1 “Affiliated
Companies” means (i) the Employer and (ii) all
entities with which the Employer would be considered a single
employer under Code Sections 414(b) and 414(c), provided that in
applying Code Sections 1563(a)(1), (2) and (3) for
purposes of determining whether a controlled group of corporations
exists under Code Section 414(b), the language “at least
50 percent” shall be used instead of “at least 80
percent” each place it appears in Code Sections 1563(a)(1),
(2) and (3), and in applying Treasury Regulation
Section 1.414(c)-2 for purposes of determining whether trades
or businesses (whether or not incorporated) are under common
control for purposes of Code Section 414(c), the language
“at least 50 percent” shall be used instead of
“at least 80 percent” each place it appears in Treasury
Regulation Section 1.414(c)-2. The term “Affiliated
Companies” shall be interpreted in a manner consistent with
the definition of “service recipient” contained in Code
Section 409A.
3.2 “Code” shall mean
the Internal Revenue Code of 1986 as amended and as may be amended
from time to time.
3.3 “Termination Date”
shall mean a termination of employment with the Employer and all
Affiliated Companies in such a manner as to constitute a
“separation from service” as defined under Treasury
Regulation Section 1.409A-1(h), for any reason other than
death.
Whether a termination of employment
has occurred is determined based upon facts and circumstances that
indicate that the Employer and Participant reasonably anticipated
that no further services would be performed after a certain date or
that the level of bona fide services the Participant would perform
after a certain date (whether as an employee or independent
contractor) would permanently decrease to no more than 20 percent
of the average level of bona fide services performed (whether as an
employee or independent contractor) over the immediately preceding
36-month period (or, if employed less than 36 months, such lesser
period).
An unpaid bona fide leave of absence
is disregarded in determining the average level of bona fide
services during the 36 month period (or, if employed less than 36
months, such lesser period) and a paid bona fide leave is
considered at a level equal to the level of services that the
employee would have been required to perform to receive the
compensation paid with respect to such leave.
Facts and circumstances to be
considered in making this determination include, but are not
limited to, whether the Participant continues to be treated as an
employee for other purposes
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(such as continuation of salary and
participation in employee benefit programs), whether similarly
situated employees have been treated consistently, and whether the
Participant is permitted and realistically available, to perform
services for other service recipients in the same line of
business.
A Participant is presumed to have
separated from service where the level of bona fide services
performed decreases to a level described above. A Participant will
be presumed to have not separated from service where the level of
bona fide services performed continues at a level that is 50
percent or more during the immediately preceding 36-month period
(or, if employed less than 36 months, such lesser period). No
presumption applies to a level of service that continues at more
than 20% and less than 50%. This presumption is rebuttable if a
Participant must return to employment due to business
circumstances, such as the termination of the employee’s
replacement.
A Termination Date will not occur
while the Participant is on military leave, sick leave, or other
bona fide leave of absence if the period does not exceed six
months, or if longer, so long as the Participant retains the right
to reemployment with the Employer under an applicable statute or by
contract. A leave of absence constitutes a bona fide leave of
absence only if there is a reasonable expectation that the
Participant will return to perform services for the Employer. If
the period of leave exceeds six months and the Participant does not
retain a right to reemployment under an applicable statute or by
contract, the employment relationship is deemed to terminate on the
first day immediately following such six-month period. A 29-month
period may be substituted for the six-month period for a medical
leave of absence described in Treasury Regulation
Section 1.409A-1(h)(i).
ARTICLE
4: ELIGIBILITY
To be eligible to participate in
this Plan, an Employee must satisfy the following conditions,
(a) and (b):
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(a)
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The Employee must be a
Participant in the Pension Plan or the Retirement Plan;
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(b)
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The Employee must serve as the
Chief Executive Officer, the President, a Vice President or the
Corporate Controller of the Employer.
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An Employee who satisfies conditions
(a) and (b) is referred to as an “Eligible
Employee.” An Eligible Employee who ceases to be an Eligible
Employee because of a change in his status as an officer under (b),
shall have benefits under this Plan frozen as of the date he ceases
to be an officer described in (b), and his benefits shall be paid
as provided in Article 7. Notwithstanding the foregoing, the Board
of Directors or the Compensation Committee of the Board of
Directors of the Employer may, in its discretion, determine to
increase benefits hereunder, credit an Eligible Employee with an
additional period of service hereunder, or change the date (but not
retroactively) on which benefits cease to accrue for an Employee or
terminating Employee. An Eligible Employee who accrues a benefit
under this Plan is referred to as a
“Participant.”
Notwithstanding anything to the
contrary, the Plan may not be amended to preclude the participation
in the Plan, on the same basis as other Eligible Employees, of the
person serving on
3
October 1, 1999 as the Chief Executive
Officer, the President, a Vice President or the Corporate
Controller of the Employer, as long as such person continues to
serve in such position or in any equivalent or higher
position.
ARTICLE 5: AMOUNT OF
SUPPLEMENTAL PENSION BENEFIT
FOR ELIGIBLE EMPLOYEES COVERED
UNDER THE PENSION PLAN
Unless otherwise determined by the
Board of Directors or Compensation Committee under Article 4, the
amount of supplemental pension benefit shall be:
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(a)
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The supplemental pension benefit
payable to an Eligible Employee or his beneficiary or Beneficiaries
under this Plan shall be the actuarial equivalent (based on the
definition of this term in Section 1.02 of the Pension Plan)
of the excess, if any, of (i) over (ii) as described
below:
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(i)
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the benefit which would have been
payable to such Eligible Employee or on his behalf to his
beneficiary or spouse, as the case may be, determined as a monthly
single life annuity under the Pension Plan (but not taking into
account any Additional Monthly Benefit payable under
Section 5.07 of the Pension Plan), if the provisions of
Pension Plan were administered without regard to either the maximum
amount of retirement income limitations of Section 415 of the
Code, or the maximum compensation limitation of
Section 401(a)(17) of the Code,
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(ii)
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the benefit (including any
Additional Monthly Benefit) determined as a monthly single life
annuity which is payable to such Eligible Employee or on his behalf
to his beneficiary or spouse under the Pension Plan.
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(b)
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The computation in paragraph
(i) above shall be made as though the factor, 0.85%, in
Section 5.01(b)(1) of the Pension Plan were 1.35%.
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(c)
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The computation in paragraph
(i) above shall be made as to take into account any change
authorized by the Board of Directors or the Compensation Committee
as permitted in Article 4 hereof. The computation shall also be
made as though the Employee’s service under the Pension Plan
included the service prior to a break in service lost under such
Plan as a result of a break in service. After an Employee becomes
an Eligible Employee, he may request the Employer to provide him
with a written statement of the number of years of service lost
under the Pension Plan. If the Eligible Employee disagrees with the
Employer’s determination, he immediately shall contest it
through the Plan’s Appeal Procedure referenced in Article 14,
below. In the absence of the Eligible Employee’s timely
request and objection, the Employer’s determination shall
become fixed.
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(d)
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Supplemental pension benefits
payable under this Plan to any recipient shall be computed in
accordance with the foregoing, with the objective
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that such recipient should
receive under this Plan and the Pension Plan the total amount which
would have been payable to that recipient solely under the Pension
Plan (as enriched by (b) and (c)), had neither
Section 415 nor Section 401(a)(17) of the Code been
applicable thereto. An Eligible Employee who is not entitled to
benefits under the Pension Plan is not entitled to supplemental
pension benefits under this Article (except as otherwise provided
in Article 6 and in a Change of Control Agreement, if any, between
the Eligible Employee and the Employer).
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ARTICLE 6: AMOUNT OF
SUPPLEMENTAL PENSION BENEFIT FOR
ELIGIBLE EMPLOYEES WHO ARE NOT
COVERED UNDER THE PENSION PLAN
Unless otherwise determined by the
Board of Directors or Compensation Committee under Article 4, the
amount of supplemental pension benefit shall be:
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(a)
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The supplemental pension benefit
payable to an Eligible Employee or his beneficiary or Beneficiaries
under this Plan shall be the actuarial equivalent (based on the
definition of this term in Section 1.02 of the Pension Plan)
of the excess, if any, of (i) over (ii) as described
below:
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(i)
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the benefit which would have been
payable to such Eligible Employee or on his behalf to his
beneficiary or spouse, as the case may be, determined as a monthly
single life annuity under the Pension Plan, if such Eligible
Employee had been eligible to participate in the Pension Plan
commencing on the date hired by the Employer and determining such
benefit without regard to either the maximum amount of retirement
income limitations of Section 415 of the Code, or the maximum
compensation limitation of Section 401(a)(17) of the
Code,
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(ii)
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the Eligible Employee’s
hypothetical Retirement Plan benefit based on a monthly single life
annuity. In determining such benefit both the Code
Section 401(a)(17) compensation limit and Code
Section 415 maximum benefit limit apply. The amount is
determined by starting with the Eligible Employee’s actual
Retirement Plan account balance as of the date he becomes an
officer with increases based upon the following assumption through
the payment date:
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(A)
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contribution of 3% of
compensation, as defined in the Retirement Plan, commencing no
earlier than the first month following one year of employment; such
contributions are assumed made to the Retirement Plan at the end of
the plan year;
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(B)
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contributions assumed to grow
with interest at 6%, compounded annually;
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(C)
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in the year of termination or
loss of eligibility for this Plan, the balance is assumed to grow
using simple interest at 6% applied to the beginning of year
balance. Additionally, a partial year contribution is assumed made
at the termination date or loss of eligibility for this
Plan;
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(D)
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the balance is assumed to
increase with simple interest at 6% through the end of the year of
termination (or payment date, if earlier);
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(E)
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the balance is assumed to
increase with simple interest at 6%, compounded annually, from the
end of the year of termination to the end of the year preceding
payment date;
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(F)
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the balance is further assumed to
increase with simple interest at 6% from the end of the year
preceding the payment date through the payment date; and
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(G)
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the balance at payment date is
converted to an annuity using the actuarial equivalence factors at
Section 1.02 of the Pension Plan.
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(b)
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The computation in paragraph
(i) above shall be made as though the factor, 0.85%, in
Section 5.01(b)(1) of the Pension Plan were 1.35%.
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(c)
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The computation in paragraph
(i) above shall be made as to take into account any change
authorized by the Board of Directors or the Compensation Committee
as permitted in Article 4 hereof. The computation shall also be
made as though the Employee’s service under the Pension Plan
included the service prior to a break in service lost under such
Plan as a result of a break in service.
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(d)
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An Eligible Employee who is not
entitled to benefits under the Retirement Plan is not entitled to
supplemental pension benefits under this Article (except as
otherwise provided at Article 5 and in a Change of Control
Agreement, if any, between the Eligible Employee and the
Employer).
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ARTICLE 7: PAYMENT OF
SUPPLEMENTAL PENSION BENEFIT
7.1 Time and Form of
Payout . Except as provided in Sections 7.3 or 7.4 or
Article 10 or unless the Participant elects otherwise under this
Section 7.1, if a Participant terminates employment
after completing 10 years of Vesting Service (as defined in
the Pension Plan), the Participant’s supplemental pension
benefit payable under the Plan (the “Plan Benefit”)
shall commence on the later of (a) the first day of the
seventh month following the Participant’s Termination Date or
(b) age 5
