Note 10 - Stock-based Compensation and Incentive Plans

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

(10)     STOCK-BASED COMPENSATION AND INCENTIVE PLANS

As of December 31, 2023, the Tidewater Inc. 2021 Stock Incentive Plan (2021 Plan), the Tidewater Inc. 2017 Stock Incentive Plan (2017 Plan) and the GulfMark Management Incentive Plan (Legacy GLF Plan) are our three remaining active equity incentive plans and the only types of awards outstanding under either plan are restricted stock units (RSUs) and stock options that settle in shares of Tidewater common stock.

The number of shares available for future grants are as follows:

	Year Ended December 31,
	2023		2022		2021
Shares of common stock available for future grants		1,521,436		2,466,167		3,037,187

Restricted Stock Units

We have granted RSUs to key employees, including officers and non-employee directors. We have generally awarded time-based units, where each unit represents the right to receive, at the end of a vesting period, one unrestricted share of Tidewater common stock with no exercise price.

We have also awarded performance-based RSUs that measure certain performance criteria or market based criteria, where each unit represents the right to receive, at the end of a service period, between zero and two shares of Tidewater common stock, depending on the level of achievement of the performance criteria or defined market condition and the completion of the service requirement, with no exercise price based on various operating and financial metrics. The fair value of the time-based RSUs is based on the market price of our common stock on the date of grant and, in the case of performance based RSUs, on the estimated level of achievement expected to be realized. For the performance based RSUs that contain a market condition, the fair value of the awards are estimated using a lattice based Monte Carlo simulation. The restrictions on the time-based RSUs awarded to key employees lapse over a three-year period from the date of the award. The restrictions on the time-based RSUs awarded to non-employee directors lapse over a one-year period. Time-based RSUs require no goals to be achieved other than the passage of time and continued employment. The restrictions on the performance-based restricted stock units lapse if we meet specific targets as defined.

During the restricted period, the RSUs may not be transferred or encumbered, but the recipient has the right to receive dividend equivalents on the restricted stock units, and there are no voting rights until the restricted stock units vest. If dividends are declared, dividend equivalents are accrued on performance-based restricted shares and ultimately paid only if the performance criteria are achieved. RSU compensation costs are recognized on a straight-line basis over the vesting period, and are net of forfeitures.

RSUs granted to officers and employees under all the incentive plans generally have a vesting period over three years in equal installments from the date of grant, except that (i) the RSUs granted to directors vest over one year and (ii) certain RSUs granted to our officers are performance based and vest on the third anniversary of the date of grant, based on our performance as measured.

The following table sets forth a summary of our restricted stock unit activity:

	Weighted-average		Time			Weight-average
	Grant-Date		Based			Grant Date		Performance
	Fair Value		Units			Fair Value		Based Units
Non-vested balance at December 31, 2020	$	8.95		732,083		$	24.50		30,449
Granted		13.26		452,403			—		—
Vested		10.97		(406,604	)		—		—
Cancelled/forfeited		24.50		(1,769	)		—		—
Non-vested balance at December 31, 2021	$	10.37		776,113		$	24.50		30,449
Granted		14.46		448,433			12.72		126,724
Vested		10.62		(355,226	)		24.50		(15,225	)
Cancelled/forfeited		12.72		(3,000	)		24.50		(15,224	)
Non-vested balance at December 31, 2022	$	12.33		866,320		$	12.72		126,724
Granted		40.45		247,874			39.91		61,856
Vested		13.08		(393,374	)		—		—
Cancelled/forfeited		21.12		(11,827	)		—		—
Non-vested balance at December 31, 2023	$	21.58		708,993		$	21.64		188,580

Restrictions on approximately 356,000 time-based units outstanding at December 31, 2023 will lapse during fiscal 2024.

Restricted stock unit compensation expense and grant date fair value are as follows:

(In Thousands)	Year Ended December 31,
	2023		2022		2021
Grant date fair value of restricted stock units vested	$	5,407	$	3,561	$	4,460
Restricted stock unit compensation expense		10,755		6,469		5,638

As of December 31, 2023, total unrecognized RSU compensation costs totaled approximately $14.4 million, or $11.4 million net of tax, which will be recognized over a weighted average period of two years, compared to $10.0 million, or $7.9 million net of tax, at December 31, 2022 and $3.3 million, $2.6 million net of tax, at December 31, 2021. No RSU compensation costs were capitalized as part of the costs of an asset. The amount of unrecognized RSU compensation costs will be affected by any future restricted stock unit grants and by the separation of an employee who has received RSUs that are unvested as of their separation date. There were no modifications to the RSUs during the years ended December 31, 2023, 2022 and 2021. Forfeitures are recognized as an adjustment to compensation expense for all RSUs in the same period as the forfeitures occur.

Stock Options

During 2020 and 2021, Tidewater granted an aggregate of 603,756 stock options, all of which remained outstanding and 517,370 of which were exercisable as of December 31, 2023. The fair value of the options on the grant dates, as determined under the Black Scholes model, range from $3.23 per option to $3.69 per option. The weighted average exercise price of unexercised options at December 31, 2023 was $11.46, with a weighted average remaining contractual term of 6.8 years. The stock options vest ratably over a three-year period and have a life of ten years. As of December 31, 2023, there was $0.1 million of unrecognized compensation costs related to the stock options that is expected to be recognized over a weighted-average period of 0.3 years.