
<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.





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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 or all or
                 substantially all of the Company's assets either directly or
                 through one or more subsidiaries), and





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                          (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.





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                 (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





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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.





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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, 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





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         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





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                 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





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                 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.





                                      -11-
<PAGE>   12
                 (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





                                      -12-
<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





                                      -13-
