TIDEWATER INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended March 31, 2010, 2009, and 2008  Phantom Stock Plan  F-29 The Compensation Committee of the Board of Directors approved the creation of the Phantom Stock Plan in  September 2006 to provide additional incentive compensation to certain key employees who are not officers  of the company. The plan awards stock units to participants who have the right to receive the value of a  share of common stock in cash from the company. Participants have no voting or other rights as a  shareholder with respect to any common stock as a result of participation in the phantom stock plan. The  phantom shares generally have a three or four-year vesting period from the grant date of the award  provided the employee remains employed by the company during the vesting period. Participants receive  dividend equivalents at the same rate as dividends on the company’s common stock. The compensation expense related to restricted stock totaled $5.1 million, $7.8 million and $7.1 million  during fiscal 2010, 2009 and 2008, respectively. No restricted stock compensation costs were capitalized as  part of the cost of an asset. As of March 31, 2010, total unrecognized restricted stock compensation costs  amounted to $15.0 million, or $10.1 million net of tax. The amount of unrecognized restricted stock  compensation will be affected by any future restricted stock grants and by the separation of an employee  from the company who has received restricted stock grants that are unvested as of their separation date.  There were no modifications to the restricted stock awards during fiscal 2010.  The total grant date fair value of restricted stock vested during fiscal 2010, 2009 and 2008 was $8.3 million,  $8.2 million and $6.2 million, respectively. Also, restrictions on approximately 43,464 time-based shares and  54,128 performance-based shares outstanding at March 31, 2010 would lapse during fiscal 2011 should  performance-based targets be achieved.  The following table sets forth a summary of restricted stock activity of the company for fiscal 2010, 2009 and  2008: Weighted-average Time Performance Grant-Date Based Based Fair Value  Shares  Shares  Non-vested balance at March 31, 2007  $  50.38  96,095  385,987  Granted 58.32 --- 100,652 Vested 45.47 (59,177) (76,241) Cancelled/forfeited 53.30 (5,450) (25,620) Non-vested balance at March 31, 2008  53.67  31,468  384,778  Granted 34.89 112,248 62,767 Vested 48.96 (13,527) (153,274) Cancelled/forfeited 54.23 (4,436) (1,500) Non-vested balance at March 31, 2009  47.69  125,753  292,771 Granted 45.75 75,722 37,861 Vested 52.53 (40,833) (116,950) Cancelled/forfeited 56.51 (204) (797) Non-vested balance at March 31, 2010  $  45.03  160,438  212,885