PROVISIONS OF THE TIDEWATER INC. EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

Exhibit 10.1

PROVISIONS OF THE TIDEWATER INC.

EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

FOR

FISCAL 2006

The primary objective of the Tidewater Inc. Executive Officer Annual Incentive Plan (the “Executive Incentive Plan” or the “Plan”) is to reward Tidewater’s Executive Officers for their assistance in helping the Company achieve its financial and operating goals for the fiscal year.

The Executive Incentive Plan links a significant element of variable annual compensation to the accomplishment of these goals.

The Compensation Committee of the Board of Directors established this Plan to maximize Tidewater’s deduction under Section 162(m) of the Internal Revenue Code, provided that such actions are consistent with its philosophy and in the best interest of Tidewater and its shareholders. Notwithstanding the provisions of Section 162 (m) of the Internal Revenue Code, the Committee may award compensation that is not fully tax deductible if the Company determines that such award is consistent with its philosophy and in the best interest of Tidewater and its shareholders.

The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company; provided that all of the members of the Compensation Committee qualify as outside directors under Section 162(m) of the Internal Revenue Code. If all of the members do not so qualify, the Plan shall be administered by the Special Subcommittee of the Compensation Committee, all of the members of which qualify as outside directors under Section 162(m). The term “Committee” shall be used herein to refer to the committee that is currently authorized to administer the Plan. The Committee shall have the authority to interpret the Plan, to establish rules and regulations and to make any and all determinations that it believes necessary or advisable for the proper administration of the Plan.

The Plan concept for fiscal 2006 focuses on Tidewater’s overall performance. Adjusted net income and return on total capital are the bases upon which a monetary pool is established for the participants if certain financial and operating goals are accomplished. Awards from the pool are based upon three specific criteria: (1) adjusted net income, (2) return on total capital, and (3) safety. An additional amount may be earned for exceptional safety performance.

Eligibility for participation in the Executive Incentive Plan is limited to those executive officers who have a potential to earn compensation in excess of $1,000,000. The specific positions eligible to participate in the Plan will be reviewed and determined

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annually by the Compensation Committee of the Board of Directors, but for fiscal 2006, Tidewater’s Chief Executive Officer (CEO) is the sole participant.

The performance goals under which a bonus may be paid for any fiscal year shall be any or a combination of the following: earnings per share, return on assets, an economic value added measure, shareholder return, earnings, stock price, return on equity, return on total capital, safety performance, reduction of expenses or increase in cash flow of the Company, a division of the Company or a subsidiary. For any performance period, such performance goals may be measured on an absolute basis or relative to a group of peer companies selected by the Compensation Committee, relative to internal goals or relative to levels attained in prior years.

Prior to June 30 of each fiscal year, specific corporate and, if appropriate, divisional measures and standards will be set. In addition, the appropriate weighting of each measure will also be established.

Prior to June 30 of each fiscal year, the Committee will specify target incentive awards for each eligible position. These target awards will determine the threshold and maximum incentive award amounts. These amounts are determined from each eligible participant’s base salary multiplied by the target percent associated with the participant’s position within the Company.

For fiscal year 2006, the Company has established that the CEO’s target award will be the equivalent of 120% of base salary and the maximum award will be equivalent to 225% of base salary. The threshold and maximum awards are intended to recognize the risk/reward component of the Company’s overall compensation program. The actual percentage of base salary that a participant is eligible to receive is calculated as provided on Exhibit 2. The annual award to the participant under this Plan will not exceed $2 million.