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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [x]
Filed by a party other than the registrant []
Check the appropriate box:
[X] Preliminary proxy statement
[] Definitive proxy statement
[] Definitive additional materials
[] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ATWOOD OCEANICS, INC.
(Name of Registrant as Specified in Its Charter)
ATWOOD OCEANICS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[] Fee computed on table below per Exchange Act Rules
14-a6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total Fee paid: N/A
[] Fee paid previously with preliminary materials
[] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid: N/A
(2) Form, schedule or registration statement no.: N/A
(3) Filing party: N/A
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(4) Date filed: N/A
Preliminary Copy - For the information of the Securities and
Exchange
Commission only
ATWOOD OCEANICS, INC.
15835 PARK TEN PLACE DRIVE
HOUSTON, TEXAS 77084
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Houston, Texas
January 24, 1997
To the Shareholders of
ATWOOD OCEANICS, INC.:
Notice is hereby given that, pursuant to the provisions of the
Bylaws of Atwood Oceanics, Inc., the Annual Meeting of the
Shareholders of Atwood Oceanics, Inc. will be held at the
executive offices of Atwood Oceanics, Inc., 15835 Park Ten Place
Drive, in the City of Houston, Texas 77084, at 10:00 o'clock
A.M., Houston Time, on Thursday, February 13, 1997, for the
following purposes:
1. To elect six (6) members of the Board of Directors for
the term of office specified in the accompanying Proxy
Statement.
2. To approve a proposed amendment to the Company's
Restated Articles of Incorporation to increase the
authorized common stock from 10,000,000 shares to
25,000,000 shares as described in the accompanying
Proxy Statement.
3. To approve the proposed adoption of the Atwood
Oceanics, Inc. 1996 Incentive Equity Plan as described
in the accompanying Proxy Statement.
4. To act upon a shareholder proposal.
5. To transact such other business as may properly come
before the meeting or any adjournments thereof.
Shareholders of record at the close of business on December 31,
1996 will be entitled to notice of and to vote at the Annual
Meeting.
Shareholders are cordially invited to attend the meeting in
person. Those who will not attend are requested to sign and
promptly mail the enclosed proxy for which a stamped return
envelope is provided.
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By Order of the Board of Directors
JAMES M. HOLLAND, Secretary
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ANNUAL MEETING OF SHAREHOLDERS
ATWOOD OCEANICS, INC.
_______________
PROXY STATEMENT
_______________
January 24, 1997
SECURITY HOLDERS ENTITLED TO VOTE
Holders of shares of common stock, par value $1.00 ("Common
Stock") of Atwood Oceanics, Inc., (hereinafter sometimes called
the "Company") of record at the close of business on December 31,
1996 will be entitled to vote at the Annual Meeting of
Shareholders to be held February 13, 1997 at 10:00 o'clock A.M.,
Houston Time, at the executive offices of Atwood Oceanics, Inc.,
15835 Park Ten Place Drive, Houston, Texas, 77084 and at any and
all adjournments thereof.
Shareholders who execute proxies retain the right to revoke
them at any time before they are voted. A proxy, when executed
and not so revoked, will be voted in accordance therewith. This
proxy material is first being mailed to shareholders on January
24, 1997.
PERSONS MAKING THE SOLICITATION
This proxy is solicited on behalf of the Board of Directors
of Atwood Oceanics, Inc. In addition to solicitation by mail, the
Company may request banks, brokers and other custodians, nominees
and fiduciaries to send proxy material to the beneficial owner of
stock and to secure their voting instructions, if necessary.
Further solicitation of proxies may be made by telephone,
telegram, or oral communication with some shareholders of the
Company, following the original solicitation. All such further
solicitation will be made by regular employees of the Company and
the cost will be borne by the Company.
VOTING SECURITIES
At the close of business on December 31, 1996, the time
which has been fixed by the Board of Directors as the record date
for determination of shareholders entitled to notice of and to
vote at the meeting, there were 6,710,413 shares of Common Stock
of the Company outstanding.
The election as directors of the persons nominated in this
proxy statement, as well as adoption of the 1996 Incentive Equity
Plan, and approval of the shareholder proposal, will require the
vote of the holders of a majority of the shares entitled to vote
and represented in person or by proxy at a meeting at which a
quorum is present. Approval of the amendment to the Company's
Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock will require the vote of
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holders of at least two-thirds of the outstanding shares of
Common Stock. Abstentions and broker non-votes (which result
when a broker holding shares for a beneficial owner has not
received timely voting instructions on certain matters from such
beneficial owner) are counted for purposes of determining the
presence or absence of a quorum for the transaction of business,
but will operate to prevent the election of the directors
nominated in this Proxy Statement or the approval of such other
matters as may properly come before the meeting to the same
extent as a vote withholding authority to vote for the election
of directors so nominated or a vote against such other matters.
Each share of Common Stock entitles its owner to one vote
except with respect to the election of directors. With respect to
the election of directors, each shareholder has the right to vote
in person or by proxy the number of shares registered in his name
for as many persons as there are directors to be elected, or to
cumulate such votes and give one candidate as many votes as shall
equal the number of directors to be elected multiplied by the
number of his shares, or to distribute the votes so cumulated
among as many candidates as he may desire. In the event of
cumulative voting, the candidates for directors receiving the
highest number of votes, up to the number of directors to be
elected, shall be elected.
If a shareholder desires to exercise his right to cumulate
votes for directors, the laws of the State of Texas, the State in
which the Company is incorporated, require the shareholder to
give the Secretary of the Company written notice of such
intention on or before the day preceding the meeting. Such notice
should be sent to: Atwood Oceanics, Inc., P. O. Box 218350,
Houston, Texas 77218, Attention: James M. Holland. If any
shareholder gives such notice, all shareholders have the right to
use cumulative voting at the meeting. The persons appointed by
the enclosed form of proxy are not expected to exercise the right
to cumulate votes for election of the directors named elsewhere
in this Proxy Statement, although such persons shall have
discretionary authority to do so.
PRINCIPAL SHAREHOLDERS
The following table reflects certain information known to
the Company concerning persons beneficially owning more than 5%
of the outstanding Common Stock of the Company as of December 31,
1996 (except as otherwise indicated). The information set forth
below (other than with respect to Helmerich & Payne International
Drilling Co. and Helmerich & Payne, Inc.) is based on materials
furnished to the Company in connection with Securities and
Exchange Commission filings by or on behalf of the shareholders
named below, as of various dates during the Company's fiscal year
and on information provided by CDA Equity Intelligence in reports
prepared for the Company. Unless otherwise noted, each
shareholder listed below has sole voting and dispositive power
with respect to the shares listed.
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Name and Address Shares Owned Percent
Beneficially of
Class
Helmerich & Payne Intl. Drilling Co.(1) ------- 820,124 12.22%
Utica at 21st
Tulsa, Oklahoma
Helmerich & Payne, Inc.(1)--------------------- 779,876 11.62%
Utica at 21st
Tulsa, Oklahoma
State Street Research & Management Co.(2)----- 517,100 7.71%
One Financial Center
31st Floor
Boston, Massachusetts 02111
Forstmann-Leff Associates Inc. (3)------------- 381,900 5.69%
55 East 52nd Street
New York, New York 10055
Ralph Wanger (4)------------------------------- 367,700 5.48%
Wanger Asset Management, Ltd. (4)
Wanger Asset Management, L.P. (4)
227 West Monroe
Suite 3000
Chicago, Illinois 60606
Capital Group Companies, Inc.(5)--------------- 360,000 5.36%
Capital Research and Management Company(5)
SMALLCAP World Fund, Inc.(5)
333 South Hope Street
Los Angeles, California 90071
___________________
(1) Walter H. Helmerich, III is Chairman and a director,
and Hans Helmerich, son of Walter H. Helmerich, III, is
President, Chief Executive Officer and a director,
respectively, of Helmerich & Payne, Inc. Messrs. Walter
H. Helmerich, III and Hans Helmerich, together with
other family members and the estate of W.H. Helmerich,
deceased, are controlling shareholders of Helmerich &
Payne, Inc., which with its wholly-owed subsidiary,
Helmerich & Payne International Drilling Co., owns of
record and beneficially
1,600,000 shares of Common Stock of the Company.
Messrs. Walter H. Helmerich, III and Hans Helmerich
have disclaimed beneficial ownership of the Common
Stock owned by these companies.
(2) State Street Research & Management Co. ("State Street")
acquired its initial ownership of the Company's Common
Stock in 1996 and to date has not furnished to the
Company copies of any reports filed with the Securities
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and Exchange Commission in connection with such
ownership, since such filings will not be required
until February 1997. The information on the 517,100
shares owned beneficially by State Street at December
31, 1996 was obtained from a report dated January 2,
1997 prepared by CDA Equity Intelligence for the
Company. The Company has no knowledge concerning the
voting and dispositive powers with respect to the
517,100 shares owned by State Street at December 31,
1996.
(3) FLA Asset Management, Inc. is a subsidiary of
Forstmann-Leff Associates Inc. Forstmann-Leff
Associates, Inc. has sole voting power with respect to
254,500 shares, shared voting power with respect to
5,700 shares, sole dispositive power with respect to
272,100 shares and shared dispositive power with
respect to 109,800 shares of the Company's Common
Stock. FLA Asset Management, Inc. has no sole voting or
dispositive power with respect to any shares of the
Company's Common Stock, and has shared voting power
with respect to 5,700 shares and shared dispositive
power with respect to 109,800 shares of the Company's
Common Stock. The foregoing information was obtained
from an Amendment No. 6 to Schedule 13G dated February
13, 1996 filed with the Securities and Exchange
Commission by Forstmann-Leff Associates, Inc. and FLA
Asset Management, Inc., adjusted by 64,300 shares
reported as sold by Forstmann-Leff Associates Inc.
since February 1996 in reports prepared by CDA Equity
Intelligence for the Company. It was assumed that
Forstmann-Leff Associates, Inc. had sole voting and
disposition power with respect to the 64,300 shares
sold; therefore the reported data in Amendment No. 6 to
Schedule 13G were accordingly adjusted.
(4) Wanger Asset Management, Ltd. ("WANGER LTD") is the
general partner of Wanger Asset Management, L.P
("WANGER L.P."). The information on the 367,700 shares
owned beneficially by Wanger Ltd. and Wanger L.P.
(collectively "Wanger") at December 31, 1996 was
obtained from a report dated January 2, 1997 prepared
by CDA Equity Intelligence for the Company. WANGER
initially became a 5% stockholder of the Company's
common stock in 1994; however, it appears that WANGER
has not owned 5% or more of the Company's common stock
on a continual basis since 1994. The last material
received from WANGER by the Company in connection with
Securities and Exchange Commission filings was
Amendment No. 2 to Schedule 13G dated February 8, 1995,
which indicated that Ralph Wanger, WANGER LTD and
WANGER L.P. had no sole voting or dispositive power
with respect to any shares of the Company's Common
stock, but did have shared voting and dispositive
powers.
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(5) Capital Research and Management Company and SMALLCAP
World Fund, Inc. are affiliates of The Capital Group
Companies, Inc. Capital Research and Management Company
and The Capital Group Companies, Inc. have no sole
voting power or dispositive powers, but do have sole
dispositive power with respect to 360,000 shares of the
Company's Common Stock. SMALLCAP World Fund, Inc. has
no shared voting or dispositive powers or sole
dispositive power, but does have sole voting power with
respect to 360,000 shares of the Company's Common
Stock. The foregoing information was obtained from
Schedule 13G dated February 9, 1996 filed with the
Securities and Exchange Commission by Capital Research
and Management Company, SMALLCAP World Fund, Inc. and
The Capital Group Companies, Inc.
COMMON STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the amount of Common Stock
beneficially owned as of the close of business on December 31,
1996 by each of the directors, by each of the named executive
officers, and by all directors and executive officers as a group.
Unless otherwise indicated below, each of the named persons and
members of the group has sole voting and investment power with
respect to the shares shown.
Name of Director, Shares Owned Percent
Nominees or Group Beneficially of Class
Robert W. Burgess - 0.00%
George S. Dotson - 0.00%
Walter H. Helmerich, III (1) 0.00%
Hans Helmerich (1) 0.00%
William J. Morrissey - 0.00%
John R. Irwin 16,000 (3) (2)
James M. Holland 10,092 (4) (2)
Larry P. Till 7,500 (3) (2)
Glen P. Kelley 1,875 (3) (2)
All directors and executive officers
as a group (9 persons) 35,467 (5) (2)
____________
(1) See Note (1) on page 5 for more information.
(2) Less than 1%.
(3) All of such shares may be acquired upon the exercise of
options.
(4) Includes 9,025 shares which may be acquired upon the
exercise of
options.
(5) Includes 34,400 shares which may be acquired upon the
exercise of options.
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EXECUTIVE OFFICERS
Set forth below are the executive officers of the company.
The office held, date of first election to that office and the
age of each officer as of the close of business on December 31,
1996 are indicated opposite his name.
Date of
First
Name Offices Held Election Age
John R. Irwin President and Chief March 51
Executive Officer 1993
James M. Holland Senior Vice President October 51
and Secretary 1988
Glen P. Kelley Vice President - October 48
Contracts and 1988
Administration
Larry P. Till Vice President - November 52
Operations 1992
No family relationship exists between any of the above
executive officers. All officers of the Company serve at the
pleasure of the Board of Directors and may be removed at any time
with or without cause.
Mr. Irwin joined the Company in July 1979, serving as
Operations Manager - Technical Services. He was elected Vice
President - Operations in November 1980, Executive Vice President
in October 1988, President and Chief Operating Officer in
November 1992, and President and Chief Executive Officer in March
1993.
Mr. Holland joined the Company as Accounting Manager in
April 1977. He was elected Vice President - Finance in May 1981
and Senior Vice President and Secretary in October 1988.
Mr. Kelley rejoined the Company in January 1983 as Manager
of Operations Administration. He was elected Vice President -
Contracts and Administration in October 1988.
Mr. Till joined the Company in February 1983 as General
Manager - Technical. He was elected Vice President - Technical
Services in June 1984 and Vice President - Operations in November
1992.
ITEM 1 - ELECTION OF DIRECTORS
At the meeting six (6) Directors (leaving one position
vacant) are to be elected for terms of one year each. Although
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the Company's Bylaws provide that the Board of Directors consists
of seven (7) persons, the Company has not yet identified a
suitable nominee to fill the vacancy. Accordingly, only six (6)
persons are nominated for election as directors, and shares may
not be voted for a greater number of persons than the number of
nominees named.
The persons named in the enclosed form of proxy (James M.
Holland and Larry P. Till) have advised that they will vote all
shares represented by proxies for the election of the six
nominees for Director listed below, unless authority to so vote
is withheld by the shareholder. Such persons will have the
discretion to cumulate the votes of the shares represented by
proxy, although the exercise of such discretion is not expected.
If any of the nominees listed below becomes unavailable for any
reason, the shares represented by the proxies will be voted for
the election of such person, if any, as may be designated by the
Board.
Present Served as
Position a Director
with the Continuously Term to
Nominees Company Since Extend to Age
Robert W. Burgess Director September February 55
1990 1998
George S. Dotson Director February February 56
1988 1998
Walter H. Helmerich, III Director April February 73
1970 1998
Hans Helmerich Director February February 38
1989 1998
John R. Irwin Director, November February 51
President 1989 1998
and Chief
Executive
Officer
William J. Morrissey Director November February 69
1969 1998
At all times during the previous five years, Mr. Burgess has
served as Chief Financial Officer (Senior Vice President) for
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CIGNA Investment Division, CIGNA Companies. CIGNA is a
diversified financial services company with major businesses in
insurance, health care, pensions and investments. Mr. Burgess is
not a director of any other publicly traded company.
At all times during the previous five years, Mr. Dotson has
served as Vice President - Drilling of Helmerich & Payne, Inc.
and President of Helmerich & Payne International Drilling Co.,
both located in Tulsa, Oklahoma. Helmerich & Payne, Inc. is a
diversified natural resources company with divisions engaged in
drilling, exploration, production and real estate development. He
serves as a director of Helmerich & Payne, Inc., which as a
result of its ownership of Common Stock of the Company, may be
deemed an affiliate of the company.
At all times during the previous five years, Mr. Walter H.
Helmerich, III has served as the Chairman of the Board of
Helmerich & Payne, Inc. of Tulsa, Oklahoma, which as a result of
its ownership of Common Stock of the Company, may be deemed an
affiliate of the Company. In addition, Mr. Helmerich serves as a
director of Liberty Bank & Trust Company of Oklahoma City, N.A.,
Liberty Bank & Trust Company of Tulsa, N.A., and Liberty Bancorp,
Inc. He is the father of Mr. Hans Helmerich, who is also a
director of the Company.
At all times during the previous five years, Mr. Hans
Helmerich has served as the Chief Executive Officer as well as a
director of Helmerich & Payne, Inc. of Tulsa, Oklahoma, which as
a result of its ownership of Common Stock of the Company, may be
deemed an affiliate of the Company. He is a son of Mr. Walter H.
Helmerich, III.
Mr. Irwin has been employed by the Company in various
executive capacities for the last sixteen years. Mr. Irwin is not
a director of any other publicly traded company.
Mr. Morrissey served as Director and Vice Chairman of the
Board of Marine Corporation until the end of 1987 when Marine
Corporation was acquired by Banc One Corporation, Columbus, Ohio.
Mr. Morrissey is currently retired and is not a director of any
other publicly traded company.
The Company has standing Audit, Executive and Compensation
committees. The Audit Committee members are Messrs. Dotson and
Morrissey. This Committee functions to review in general terms
the Company's accounting policies and
audit procedures and to supervise internal accounting controls.
During fiscal 1996, there was one meeting of the Audit Committee.
The Executive Committee, composed of Messrs. Dotson, Hans
Helmerich and Irwin, meets frequently, generally by telephone
conference, for review of major decisions and to act as delegated
by the Board. The Compensation Committee's members, Messrs. Hans
Helmerich, Burgess and Dotson are responsible for administration
of the Company's Stock Option Plans, and for review and approval
of all salary and bonus arrangements. During fiscal 1996, there
was two meetings of the Compensation Committee.
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There were four meetings of the Board of Directors held
during fiscal 1996, all of which were regularly scheduled
meetings. Each director attended, during the time of his
membership, at least seventy-five percent of Board and Committee
meetings.
Required Vote for Election of Directors
Election as directors of the persons nominated in this Proxy
Statement will require the vote of the holders of a majority of
the shares of Common Stock present or represented by proxy and
entitled to vote at a meeting at which a quorum is present. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION AS DIRECTORS
OF THE PERSONS NOMINATED HEREIN.
ITEM 2 - PROPOSAL TO AMEND THE COMPANY'S RESTATED ARTICLES OF
INCORPORATION TO INCREASE THE COMPANY'S AUTHORIZED
COMMON STOCK FROM 10,000,000 SHARES TO 25,000,000
SHARES
General
The Articles of Incorporation of Atwood Oceanics, Inc.
currently authorize the Company to issue up to ten million
(10,000,000) shares of Common Stock, $1 per share, and one
million (1,000,000) shares of Preferred Stock, no par value. The
Company proposes that the Articles of Incorporation be amended to
provide for twenty-five million (25,000,000) authorized shares of
Common Stock, $1 par value, and one million (1,000,000)
authorized shares of Preferred stock, no par value.
Capitalization
The Board of Directors believes that it is prudent to
increase the number of authorized shares of Common Stock to
twenty-five million (25,000,000) shares in order to provide a
reserve of shares available for issuance to meet business needs
as they arise. Like most companies, the Company has historically
maintained a substantial reserve of authorized but unissued
shares in order to avoid the time and expense of seeking
shareholder approval each time it needs to make a new issuance of
Common Stock in light of possible future activities which the
Board of Directors deem to be in the best interests of the
shareholders. Such future activities may include, without
limitation, financings, establishing strategic relationships with
corporate partners, providing equity incentives to employees,
officers or directors, or effecting stock splits or dividends.
The additional shares of Common Stock authorized may also be used
to acquire or invest in complementary businesses, or to expand
its fleet through rig acquisitions and new rig development.
Although the Company has no present obligation to issue
additional shares of Common Stock (except pursuant to employee
stock incentive plans), the Company continues to seek growth
opportunities.
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Approval of the increase in the number of authorized shares
of Common Stock would not affect the rights, privileges, and
preferences of the holders of currently outstanding Common Stock
of the Company, except for effects incidental to increasing the
number of shares of the Company's Common Stock outstanding.
If the stockholders approve the increase in the number of
authorized shares of Common Stock, the Board of Directors may
cause the issuance of additional shares of Common Stock without
further vote of the stockholders of the Company, except as
provided under Texas corporate law or under the rules of any
national securities exchange on which shares of Common Stock of
the Company are then listed. Current holders of Common Stock have
no preemptive or like rights, which means that current
stockholders do not have a prior right to purchase any new issue
of capital stock of the Company in order to maintain their
ownership interest therein. The issuance of additional shares of
Common Stock would decrease the proportionate equity interest of
the Company's current stockholders and, depending upon the price
paid for such additional shares, could result in dilution to the
Company's current stockholders.
In addition, the Board of Directors could use authorized but
unissued shares to create impediments to a takeover or a transfer
of control of the Company. Accordingly, the increase in the
number of authorized shares of Common Stock may deter a future
takeover attempt which holders of Common Stock may deem to be in
their best interest or in which holders of Common Stock may be
offered a premium for their shares over the market price. The
Board of Directors is not currently aware of any attempt to take
over or acquire the Company. While it may be deemed to have
potential anti-takeover effects, the proposed amendment to
increase the authorized Common Stock is not prompted by any
specific effort or takeover threat currently perceived by
management.
Required Vote for Approval to Increase Authorized Shares of
Common stock
Approval of the proposed Amendment to the Restated Articles
of Incorporation to increase the number of authorized shares of
Common Stock of the Company will require the affirmative vote of
the holders of at least two-thirds (2/3) of the outstanding
shares of Common Stock of the Company on the Record Date entitled
to vote on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" AMENDMENT OF THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
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ITEM 3 - PROPOSAL FOR ADOPTION OF THE ATWOOD OCEANICS, INC. 1996
INCENTIVE EQUITY PLAN
On December 5, 1996, the Board of Directors of the Company
adopted, subject to approval of the Company's stockholders, the
Atwood Oceanics, Inc. 1996 Incentive Equity Plan (the "Plan").
The principal features of the Plan are summarized below. This
summary does not purport to be a complete statement of the Plan
and is qualified in its entirety by reference to the Plan, a copy
of which is attached as an Appendix to this Proxy Statement.
Purpose
The Plan is designed to encourage employee ownership of the
Company's Common Stock and to assist the Company in attracting,
retaining and rewarding key personnel. The Plan authorizes the
Compensation Committee to grant eligible participants of the
Company and its subsidiaries and affiliates, during a period of
10 years from the date of shareholder approval of the Plan, stock
options and restricted stock awards of Common Stock.
Shares Available
The total number of shares of stock reserved and available
for distribution pursuant to stock options or restricted stock
under the Plan shall be 335,000 shares (approximately 5% of the
outstanding Common Stock of the Company), provided, however, that
not more than ten percent of such amount (or 33,500 shares) shall
be available for distribution pursuant to restricted stock under
the Plan, in each case subject to adjustment in the event of a
future stock dividend, stock split, merger, reorganization,
consolidation, recapitalization. Shares underlying the
unexercised portion of any terminated or lapsed stock option and
shares of restricted stock which have been forfeited pursuant to
applicable restrictions shall again be available for distribution
in connection with future awards pursuant to the Plan.
Administration
The Plan shall be administered by the Compensation Committee
of the Board of Directors, which shall consist solely of two or
more non-employee directors who are appointed by, and serve at
the pleasure of, the Board. The Compensation Committee shall
have the power and authority to grant to eligible employees stock
options and restricted stock as provided in the Plan, and to
determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted, based on such factors
and criteria as the Compensation Committee shall determine, in
its sole discretion. The Compensation Committee shall have the
authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall, from
time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award granted and any agreements
relating thereto; and to otherwise supervise the administration
of the Plan.
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Eligibility
Officers and key employees of the Company, its subsidiaries
and its affiliates (but excluding members of the Compensation
Committee and any person who serves only as a director) who are
responsible for or contribute to the management, growth and/or
profitability of the business of the Company, its subsidiaries or
its affiliates are eligible to be granted stock options,
restricted stock awards. All awards of stock options and
restricted stock pursuant to the Plan will be made in
consideration of the participant's contribution to the
management, growth and/or profitability of the Company and its
subsidiaries. As of December 31, 1996, the closing price on The
Nasdaq Stock Market of the Company's Common Stock was $63.50 per
share.
Stock Options
The Plan permits the granting of options that either qualify
as incentive stock options ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code") or that do
not so qualify ("Non-Qualified Stock Options"). Options granted
under the Plan shall be subject to the certain terms and
conditions set forth in the Plan and may contain such additional
terms and conditions not inconsistent with the terms of the Plan
as the Compensation Committee deems appropriate. The option
exercise price for each share of Common Stock covered by an
option shall be determined by the Compensation Committee, but
shall be not less than the fair market value of such share on the
date of grant.
The term of each option will be fixed by the Compensation
Committee, but may not exceed 10 years from the date of grant in
the case of an ISO or 10 years and one day after the date of
grant in the case of a Non-Qualified Stock Option. Options shall
become exercisable at such time or times and subject to such
terms and conditions (including, without limitation, installment
exercise provisions) as shall be determined by the Compensation
Committee, provided, however, that, absent special circumstances,
options shall not be exercisable prior to the first anniversary
date of grant. Vesting provisions limiting the exercisability of
options may be waived or accelerated at any time in whole or in
part based on such factors as the Compensation Committee may
determine.
The option exercise price must be paid by certified or bank
check or other instrument acceptable to the Compensation
Committee or, if the Compensation Committee so determines, by
delivery of shares of unrestricted Common Stock valued at fair
market value on the exercise date. Additionally, payment of the
exercise price may be made by delivery to the Company of an
executed irrevocable option exercise form together with
irrevocable instructions to a broker-dealer to sell a sufficient
portion of the shares and deliver the sale proceeds directly to
the Company in satisfaction of the exercise price.
<PAGE>
Page 16
The Compensation Committee may, in its discretion, authorize
all or a portion of any Non-Qualified Stock Options to be granted
on terms which permit transfer by the optionee to (i) the spouse,
children or grandchildren of the optionee, (ii) a trust or trusts
for the exclusive benefit of the spouse, children or
grandchildren of the optionee, or (iii) a partnership in which
the spouse, children or grandchildren of the optionee are the
only partners; provided in each case that (x) there may be no
consideration for any such transfer, (y) the stock option
agreement pursuant to which such stock options are granted must
be approved by the Compensation Committee, and must expressly
provide for transferability in a manner consistent with this
section, and (z) subsequent transfers of transferred options
shall be prohibited except those made in accordance with the
transferability provisions of the Plan or by will or by the laws
of descent and distribution. Following transfer, any such stock
options shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer.
Except as set forth in the Plan and in the applicable stock
option agreement, no stock option shall be transferable by the
optionee otherwise than by will or by laws of descent and
distribution, and all stock options shall be exercisable, during
the optionee's lifetime, only by the optionee.
If an optionee's employment by the Company or any subsidiary
or affiliate terminates by reason of death, long-term disability,
normal retirement or approved early retirement, any stock option
held by such optionee may thereafter be exercised, to the extent
it was exercisable at the time of such termination or on such
accelerated basis as the Compensation Committee may determine at
or after grant, for various periods up to three years (or such
shorter period as the Compensation Committee may specify at
grant) from the date of such termination of employment or until
the expiration of the stated term of such stock option, whichever
period is shorter. If an optionee's employment by the Company or
any subsidiary or affiliate terminates voluntarily or
involuntarily for any reason other than death, long-term
disability, normal retirement or approved early retirement, the
optionee will have three months from the date of termination to
exercise any and all stock options that are then exercisable,
except that, if the termination was for "cause" (as defined in
the Plan), any and all options shall be immediately canceled.
Restricted Stock
Shares of restricted stock may be issued either alone or in
addition to other awards granted under the Plan. The
Compensation Committee shall determine the officers and key
employees of the Company and its subsidiaries or affiliates to
whom, and the time or times at which, such grants will be made,
the number of shares to be awarded, the price (if any) to be paid
by the recipient of an award, the time or times within which such
awards may be subject to forfeiture, and all other conditions of
the awards. The Compensation Committee may condition grants of
restricted stock upon the attainment of specified performance
goals or such other factors or criteria as the Compensation
<PAGE>
Page 17
Committee may determine.
During the restriction period, the recipient shall have,
with respect to the shares of restricted stock covered by any
award, all of the rights of a shareholder of the Company,
including the right to vote the shares, and the right to receive
any dividends, provided, however, that unless otherwise
determined by the Compensation Committee, any dividends on such
shares shall be automatically deferred and reinvested in
additional restricted stock subject to the same restrictions as
the underlying award, to the extent shares are available under
the Plan. Except as otherwise provided in the Plan and the
applicable award agreement, during the restriction period
established by the Compensation Committee, the participant shall
not be permitted to sell, transfer, pledge, assign or otherwise
encumber shares of restricted stock awarded under the Plan.
Based on service, performance and/or such other factors or
criteria as the Compensation Committee may determine, the
Compensation Committee may, however, at or after grant provide
for the lapse of such restrictions in installments and/or may
accelerate or waive such restrictions in whole or in part.
Except as otherwise provided in the Plan and the applicable
award agreement, upon termination of a participant's employment
with the Company or any subsidiary or affiliate for any reason
during the restriction period for a given award, all shares still
subject to restriction shall be forfeited by the participant,
provided, however, the Compensation Committee may provide for
waiver of the restrictions in the event of termination of
employment due to death, long-term disability, normal retirement
or approved early retirement or in the event of hardship or other
special circumstances of a participant whose employment with the
Company or any subsidiary or affiliate is involuntarily
terminated.
Change in Control Provisions
The Plan provides that in the event of a "Change in Control"
(as defined in the Plan), the Compensation Committee or the Board
may provide that (i) any or all stock options awarded under the
Plan (to the extent outstanding for a least six months) not
previously exercisable and vested shall become fully exercisable
and vested; (ii) the restrictions applicable to any or all
restricted stock awards shall lapse and such shares and awards
shall be fully vested. In addition, at any time prior to or
after a "Change in Control," the Compensation Committee may
accelerate awards and waive conditions and restrictions on any
awards to the extent it may determine to be appropriate.
Amendments and Termination
The Board may amend, alter, or discontinue the Plan at any
time, but no amendment, alteration, or discontinuation shall be
made which would impair the rights of an optionee or participant
under a stock option or restricted stock award theretofore
granted, without the optionee's or participant's consent, or
<PAGE>
Page 18
which, without the approval of the Company's stockholders, would,
except as expressly provided in the Plan, increase the total
number of shares reserved for purposes of the Plan. The
Compensation Committee may amend the terms of any stock option or
other award theretofore granted, prospectively or retroactively,
but no such amendment shall impair the rights of any holder
without the holder's consent. Subject to certain conditions, the
Board shall have the authority to amend the Plan to take into
account changes in applicable tax and securities law and
accounting rules, as well as other developments.
Federal Income Tax Consequences
The following summary is a description of the Federal income
tax consequences to the recipient and the Company of the issuance
and exercise of stock options and restricted stock granted
pursuant to the Plan. The summary is not intended to be
exhaustive and does not attempt to be a comprehensive description
of all possible tax effects.
Incentive Stock Options. The grant of an ISO will not be
treated as taxable income to the optionee for federal tax
purposes, and will not result in a deduction for the Company for
tax purposes. On exercise of an ISO, the optionee will not
recognize any taxable income, and the Company will not be
entitled to a deduction for tax purposes, although exercise of an
ISO may give rise to liability under the alternative minimum tax
provisions of the Code. Upon the sale or exchange of the shares
at least two years after the grant date of the option and one
year after the exercise date, the optionee will recognize long-
term capital in an amount equal to the excess of (i) the amount
realized upon the sale or other disposition of the purchased
shares, over (ii) the exercise price paid for such shares. If
these holding periods are not satisfied, the optionee will
recognize ordinary income (and the Company will be entitled to a
deduction for tax purposes) in an amount equal to the difference
between the exercise price and the lower of the fair market value
of the shares on the date the option was exercised, or the sale
price of such shares. A different rule for measuring ordinary
income upon such a premature disposition may apply if the
optionee is also an officer, director or 10% shareholder of the
Company. Any gain recognized by the optionee on such a premature
disposition of the shares in excess of the amount treated as
ordinary income will be characterized as capital gain.
Non-Qualified Stock Options. No income is realized by the
optionee at the time a Non-Qualified Stock Option is granted.
Upon exercise, the amount by which the fair market value of the
purchased shares on the exercise date exceeds the option price
will generally be taxable to the optionee as ordinary income and
deductible by the Company for tax purposes. Upon disposition of
the shares, appreciation or depreciation after the exercise date
is treated as a short-term or long-term capital gain or loss to
the optionee and will not result in any deduction by the Company.
Restricted Stock. In general, the recipient of a restricted
<PAGE>
Page 19
stock award will recognize ordinary income in the amount of any
cash received plus the market value of the shares on the date
when the shares are no longer subject to a substantial risk of
forfeiture (as such term is defined in the Code) less any amount
paid for the shares, and the Company will be entitled to a
deduction for tax purposes in the same amount. If the recipient
of a restricted stock award makes a timely election under Section
83(b) of the Code to have the tax liability determined at the
time of the grant rather than when the restrictions lapse, the
recipient will recognize compensation income and the Company
shall be entitled to a deduction at that time, in an amount equal
to the fair market value of the shares on the grant date.
Deductibility of Compensation. The Company anticipates that
any compensation deemed paid by the Company to its executive
officers as a result of stock options or restricted stock will
remain deductible by the Company and will either (a) not have to
be taken into account for purposes of the $1 million limitation
per covered individual on the deductibility of the compensation
paid to certain executive officers of the Company, or (b) will
not cause such limit to be exceeded.
Withholding. No later than the date as of which an amount
first becomes includible in the gross income of the optionee for
Federal income tax purposes with respect to any stock option or
other award under the Plan, the participant shall pay to the
Company, or make any arrangements satisfactory to the
Compensation Committee regarding the payment of any Federal,
state or local taxes of any kind required by law to be withheld
with respect to such amount. Unless otherwise determined by the
Company, withholding obligations may be settled with Common
Stock, including Common Stock that is part of the award that
gives rise to the withholding requirement.
Required Vote for Adoption of the Atwood Oceanics, Inc. 1996
Incentive Equity Plan
Approval of the 1996 Incentive Equity Plan requires the
affirmative vote of the holders of a majority of the shares of
Common Stock present or represented by proxy and entitled to vote
at a meeting at which a quorum is present. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION OF THE 1996 INCENTIVE
EQUITY PLAN.
ITEM 4 - SHAREHOLDER PROPOSAL
A shareholder, whose name, address and share ownership will
be furnished by the Company promptly upon request, has given
notice of its intention to introduce the following proposal at
the Annual Meeting.
<PAGE>
Page 20
Shareholder Proposal and Supporting Statement
We believe the employee and board composition of major
corporations should reflect the people in the work force and
marketplace of the 21st century if our company is going to remain
competitive. Our employees, customers and stockholders are now
made up of a greater diversity of backgrounds than ever before.
The report of the Department of Labor's 1995 bi-partisan Glass
Ceiling Commission, "Good For Business: Making Full Use of the
Nation's Human Capital," confirms diversity and inclusiveness in
the workplace has a positive impact on the bottom line. A report
of Standard and Poor 500 companies provided by Covenant Fund
revealed "...firms that succeed in shattering their own glass
ceiling racked up stock-market records that were nearly 2 1/2
times better than otherwise - comparable companies."
In 1994 the Investor Responsibility Research Center reported
inclusiveness at senior management and board levels was only 9%
of the fortune 500 companies in a comparable work force of 57%
diversity. The Glass Ceiling Commission reported that companies
are selecting from only half of the talent of our work force.
Therefore we urge our corporation to enlarge its search for
qualified board members by casting a wider net. If we are to be
prepared for the 21st century we must learn how to compete in a
growingly diverse global market place by promoting and selecting
the best
people regardless of race, gender or physical challenge. We
believe the judgements and perspectives of a diverse board would
improve the quality of corporate decision-making.
Since the board is responsible for representing shareholder
interests in corporate meetings, a growing proportion of
stockholders is now attaching value to board inclusiveness. A
1994 Investor Responsibility Research Center survey revealed 37%
of respondents cited board diversity as the influencing factor
for supporting votes.
The Teachers Insurance and Annuity Association and College
Retirement Equities Fund, the largest institutional investor in
the United States, recently issued a set of corporate governance
guidelines including a call for "diversity of directors of
experience, sex, age and race."
Roger Campbell, CEO of Sun Oil, stated in the Wall Street
Journal, August 12, 1996, "Often what a woman or minority person
can bring to the board is some perspective a company hasn't had
before--adding some modern day reality to the deliberation
process. Those perspectives are of great value, and often missing
from an all-white-male gathering. They can also be inspirational
to the company's diverse work force."
Be it resolved that shareholders request:
1. The nominating committee of the Board make a greater effort
to find qualified women and minority candidates for
nomination to the Board.
<PAGE>
Page 21
2. The Board issue a statement publicly committing the company
to a policy of board inclusiveness with a program of steps
to take and the timeline expected to move in that direction.
3. The Company issue a report by September 1997 at a reasonable
expense that includes a description of:
a) efforts to encourage diversified representation to our board
b) criteria for board qualification
c) the process of selecting the board candidates
d) the process of selecting the board committee members
Required Vote for Approval of the Shareholder Proposal
Approval of the shareholder proposal requires the
affirmative vote of the holders of a majority of the shares of
Common Stock present or represented by proxy and entitled to vote
at a meeting at which a quorum is present. A substantially
identical proposal presented at the 1995 Annual Meeting of
stockholders was defeated, with 5.77% of the shares present or
represented and entitled to vote at the meeting voting "for"
approval of the shareholder proposal, 92.95% voting "against"
approval, and 0.28% abstaining. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "AGAINST" APPROVAL OF THE SHAREHOLDER PROPOSAL.
EXECUTIVE COMPENSATION
In accordance with the Securities and Exchange Commission
("SEC") executive compensation disclosure requirements under Item
402 of Regulation S-K, the following compensation tables and
other compensation information are presented to enable
shareholders to better understand the compensation of the
Company's executive officers.
The Company's executive compensation program is administered
by the Compensation Committee of the Board of Directors. The
Committee is composed of three independent, nonemployee
directors. Following review and approval by the Compensation
Committee, all issues pertaining to executive compensation are
submitted to the full Board of Directors for approval.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF
ATWOOD OCEANICS, INC. (A)
To: The Board of Directors
As members of the Compensation Committee, it is our duty to
review compensation levels of Company's executive officers and
administer the Company's stock option plan.
<PAGE>
Page 22
Compensation Policies for Executive Officers
In determining the compensation of the Company's executive
officers, it is the policy of the Committee to take into account
all factors which it considers relevant to the determination,
including business conditions prevailing generally and in the
Company's industry during such year, the Company's performance in
such year in light of such conditions, and the performance of the
specific officers under consideration and the business area of
the Company for which such officer is responsible.
For fiscal year ended September 30, 1996, the compensation
program for executive officers consisted primarily of base
salary, year-end bonus, stock option grants and Company
contributions in a contributory retirement plan. The Company's
current compensation levels are within the $1 million limitation
on corporate tax deductions under Section 162(m) of the Internal
Revenue Code of 1986, as amended, and the Company intends to take
the necessary steps in subsequent years to ensure that the
Company's future compensation package will comply with such
limits on compensation deductibility.
Operating results for 1995 and 1996 continued to reflect
significant improvements over prior years. The Company has
maintained an equipment utilization rate in excess of 99 percent
over the last three fiscal years, with improving cash flows and
operating earnings. The Company's common stock price has
likewise reflected a significant increase in per share market
value over the last three years. In recognition of the
significant improvement in operating performance, the Company
awarded bonuses (ranging from $10,750 to $30,000) and granted
salary increases to each of the Company's executive officers in
December 1995 in addition to granting certain stock option awards
during fiscal 1996.
Chief Executive Officer Compensation
Mr. Irwin's compensation for fiscal year 1996 included a
bonus of $30,000, an increase of approximately 12 percent in his
annual base salary and the granting of certain stock options.
Subsequent evaluations of Mr. Irwin's compensation will be based
upon the same criteria as set forth above with respect to
officers generally.
Compensation Committee
George S. Dotson
Robert W. Burgess
December 31, 1996 Hans Helmerich
_________________________
(A) Notwithstanding SEC filings by the Company that have
incorporated or may incorporate by reference other SEC
<PAGE>
Page 23
filings (including this proxy statement) in their
entirety, the Report of the Compensation Committee
shall not be incorporated by reference into such
filings and shall not be deemed to be "filed" with the
SEC except as specifically provided otherwise or to the
extent required by Item 402 of Regulation S-K.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee of the Board of
Directors of the Company was, during the 1995-6 fiscal year, an
officer or employee of the Company or any of its subsidiaries, or
was formerly an officer of the Company or any of its subsidiaries
or had any relationships requiring disclosure by the Company
under Item 404 of Regulation S-K.
During the Company's 1995-6 fiscal year, no executive
officer of the Company served as (i) a member of the compensation
committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers
served on the Compensation Committee of the Board of Directors,
(ii) a director of another entity, one of whose executive
officers served on the Compensation Committee of the Company, or
(iii) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one
of whose executive officers served as a director of the Company.
401(k) Plan
The Company has a defined contribution plan (the "401(k)
Plan") under which any employee who has reached age 21 and
completed one year of service may contribute up to 5% of their
compensation, as defined (the basic contribution). The Company
makes a contribution to the 401(k) Plan equal to twice the basic
contribution. Employee contributions are 100% vested and
nonforfeitable. Company contributions vest 100% to each
participant beginning with the fourth year of participation. If
a participant terminates employment before becoming fully vested,
the unvested portion is credited to the Company's account and can
be used only to offset Company contribution requirements. Both
the employer and the employee contributions for certain highly
compensated employees may be limited through the operation of
nondiscrimination provision of the Internal Revenue Code of 1986,
as amended. Distributions from the 401(k) Plan are made upon
retirement, death, disability or separation from service.
Executive Agreements
The Company has entered into executive agreements
("Executive Agreements") with Messrs. Irwin, Till, Holland and
Kelley regarding employment and benefits due to such executive
officers upon a change of control. The purposes of the Executive
Agreements are (i) to assure that the Company will have the
continued dedication of the executive, notwithstanding the
<PAGE>
Page 24
possibility, threat or occurrence of a change of control, (ii) to
diminish the inevitable distraction of the executive resulting
from the uncertainties and risks created by a pending or
threatened change of control, and (iii) to provide the executive
with compensation and benefits arrangements upon a change of
control that are competitive with those of other corporations.
The operative provisions of the Executive Agreements remain
dormant until a change of control occurs. The definition for
change of control includes (a) the acquisition by any person
(other than an acquisition directly from the Company or an
acquisition by the Company or an employee benefit plan of the
Company) of beneficial ownership of 20% or more of the then
outstanding shares of Common Stock of the Company, (b) the sale
by the Company of substantially all of its assets to another
corporation which is not a wholly owned subsidiary; or (c)
individuals constituting the then incumbent board of directors
ceasing for any reason to constitute at least a majority of the
board.
The Executive Agreements specify the severance benefits due
to the executive upon termination of the executive's employment
during the employment period following a change of control of the
Company. Upon termination of employment by the executive with
good reason (as defined in the Executive Agreement) or by the
Company without cause (as defined in the Executive Agreement),
the executive becomes entitled to a lump-sum severance package
equivalent to all compensation and benefits he would have
received for the remainder of the employment period, as though no
termination occurred, as well as the immediate vesting of stock
options. Termination by the executive without good reason or by
the Company for cause operates to reduce the severance benefits
available. The term of the Executive Agreements expired on
December 31, 1996.
COMPENSATION TABLES
The SEC compensation disclosure rules require that various
compensation information be presented in various tables as set
forth below.
<PAGE>
Page 25
Summary Compensation Table
Annual Compensation
Long Term
Compen-
sation
Other (Awards)
Annual Securities All Other
Name and Principal Fiscal Compen- Underlying Compen-
Position Year Salary Bonus sation Options sation
(A)
$ $ $ (#) ($)
John R. Irwin 1996 194,550 30,000 --- 15,000 21,814
President and Chief 1995 174,150 25,000 --- --- 18,924
Executive Officer 1994 159,000 --- --- 4,000 17,318
Larry P. Till 1996 126,060 11,500 --- 3,000 14,547
Vice President - 1995 118,455 11,750 --- --- 13,888
Operations 1994 110,133 --- --- 2,700 13,056
James M. Holland 1996 120,165 12,750 --- 8,000 13,762
Senior Vice 1995 112,800 12,750 --- --- 13,323
President 1994 104,871 --- --- 2,700 12,531
Glen P. Kelley 1996 102,180 10,750 --- 8,000 11,608
Vice President - 1995 95,880 10,500 --- --- 10,648
Contracts 1994 88,863 --- --- 2,700 6,880
and
Administration
- ---------------------------
(A) The amounts shown in the "All Other Compensation" column are derived
from the following:
(i) Mr. Irwin: Annual Company contributions to the defined contribution
plan ("DCP") for 1996, 1995 and 1994 of $19,403, $17,415, and $15,900,
respectively; Company paid term life and insurance premiums ("TLIP") for
1996, 1995 and 1994 of $2,411, $1,509, and $1,418, respectively; (ii)
Mr. Till: Annual Company contribution to the DCP for 1996, 1995, and
1994 of $12,606, $11,845, and $11,013 respectively; Company paid TLIP
for 1996, 1995, and 1994 of $1,941, $2,043, and $2,043 respectively;
(iii) Mr. Holland: Annual Company contributions to the DCP for 1996,
1995, and 1994 of $12,016, $11,280, and $10,488 respectively; Company
paid TLIP for 1996, 1995, and 1994 of $1,746, $2,043, and $2,043
respectively; (iv) Mr. Kelley: Annual Company contribution to the DCP
for 1996, 1995, and 1994 of $10,218, $9,588, and $5,935 respectively;
Company paid TLIP for 1996, 1995, and 1994 $1,390, $1,060, and $945,
respectively.
<PAGE>
Page 26
Option Grants Table
Potential Realizable
Value at
Individual Grants Made in Fiscal 1996 Assumed Stock Price
Appreciation for Option
Term
Number of Percentage
Securities of Total
Underlying Options
Options Granted To
Granted Employees
(A) in Exercise Expiration
Name (#) Fiscal Year Price Date 5% ($) 10% ($)
($/Share)
Irwin 5,000 (B) 6.6% 33.25 3/6/2006 104,550 265,050
10,000 (C) 13.2% 37.94 4/3/2006 238,600 604,400
Till 3,000 (B) 4.0% 33.25 3/6/2006 62,730 159,030
Holland 3,000 (B) 4.0% 33.25 3/6/2006 62,730 159,030
5,000 (C) 6.6% 37.94 4/3/2006 119,300 302,200
Kelley 3,000 (B) 4.0% 33.25 3/6/2006 62,730 159,030
5,000 (C) 6.6% 37.94 4/3/2006 119,300 302,200
(A) The options were granted for a term of ten years, subject to earlier
termination in certain events related to termination of employment.
Twenty-five percent of such options become exercisable at each of two
years, three years, four years and five years, respectively, from the
date of grant. Subject to certain conditions, the exercise price may be
paid by delivery of already owned shares, and tax withholding
obligations related to exercise may be paid by offset of underlying
shares.
(B) These options were granted on March 7, 1996 pursuant to the Company's
1990 Stock Option Plan.
(C) These options were granted on April 4, 1996 pursuant to the Company's
1990 Stock Option Plan.
Option Exercises and Year End Value Table
<PAGE>
Page 27
Number of
Securities
Underlying
Shares Acquired Unexercised Value of Unexercised
on Exercise Value Options at In-the-Money Options
Name dur- Realized Sept. 30, 1996 at Sept. 30, 1996 (A)
ing Fiscal 1996 ($) (#) ($)
(#)
Exercisable/ Exercisable/
Unexercisable Unexercisable
Irwin --- --- 20,300/24,700 $672,807/$454,618
Till 2,000 55,000 8,100/10,475 $266,917/$283,643
Holland 1,000 14,250 11,625/15,475 $377,918/$319,905
Kelley 8,100 175,713 1,350/15,275 $ 43,204/$313,817
-------------
(A) Calculated based upon the September 30, 1996 fair market value of $45.19
per share less the share price to be paid upon exercise. There is no
guarantee that options will have the indicated value if and when
exercised.
ATWOOD OCEANICS, INC. COMMON STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS* AMONG ATWOOD OCEANICS, INC.,
THE CENTER FOR RESEARCH IN SECURITY PRICES ("CRSP") INDEX FOR THE NASDAQ STOCK
MARKET, AND THE PEER GROUP OF DRILLING COMPANIES
Index Description 9/30/91 9/30//92 9/30/93 9/30/94 9/29/95 9/30/96
ATWOOD OCEANICS, 100.0 105.6 119.4 154.2 229.9 488.9
INC.
CRSP Index for 100.0 112.1 146.8 148.0 204.4 242.4
NASDAQ
Stock Market
(U.S. Companies)
Self-Determined
Peer Group 100.0 83.8 140.0 117.5 158.0 335.7
<PAGE>
Page 28
*Assumes $1000 invested on September 30, 1991;
Total returns assumes dividend reinvested;
Fiscal year ending September 30
Constituents of the Self-Determined Peer Group:
Diamond Offshore Drilling Inc.
Ensco International Inc. Falcon Drilling Company
Global Marine Inc. Marine Drilling Co. Inc.
Noble Drilling Corp. Reading & Bates Corp.
Rowan Companies, Inc. Transocean Offshore Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten-percent shareholders are required
by the regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms
received by it, and written representations from certain
reporting persons that no reports on Form 5 were required for
those persons, the Company believes that, during the period from
October 1, 1995 through September 30, 1996, all filing
requirements applicable to its officers, directors and greater
than ten-percent beneficial owners were complied with, except
that each of Messrs. Irwin, Till, Holland and Kelley made one
late filing of a report with respect to an amendment of the terms
of certain outstanding stock options.
<PAGE>
Page 29
RELATED TRANSACTIONS
Upon being awarded a term contract in August 1994, the
Company entered into a joint venture agreement with Helmerich &
Payne, Inc. ("H&P") (which together with its wholly-owned
subsidiary, Helmerich & Payne International Drilling Co., owns
23.84% of the Company's common stock) for the design,
construction and operation of RIG-200, a new generation platform
rig. The construction of RIG-200 was completed in late 1995;
however, due to project delays in Australia unrelated to the
Company's and H&P's activities, the rig was not transported to
Australia until late 1996. The rig is scheduled to commence
drilling operations in January 1997. H&P managed the design,
construction, testing and mobilization of the rig, and the
Company managed the initial installation and will manage the
daily operations of the rig. The Company and H&P each have a
fifty percent interest in the joint venture. At September 30,
1996, the Company had invested approximately $11 million in this
project. Three of the Company's directors, namely Walter H.
Helmerich III, Hans Helmerich and George S. Dotson, are directors
and executive officers of H&P.
DIRECTORS COMPENSATION
As compensation for services as a director of the Company,
each director who is not an officer and full time employee of the
Company or any of its subsidiaries was paid in 1996 $2,500 per
meeting for attendance at regular Board meetings, and $250 per
meeting for attendance at special Board and committee meetings.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm of Arthur Andersen &
Co. was selected as auditors by the Company in 1970 and continues
to serve in this capacity. Representatives of Arthur Andersen &
Co. will be present at the shareholders' meeting, will have the
opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals by Shareholders of the Company intended to be
presented at the next Annual Meeting of the Shareholders must be
received by the Company on or before September 26, 1997 in order
to be included in the next Proxy statement and Form of Proxy
relating to that meeting.
OTHER MATTERS
Management does not intend to bring any other matters before
the meeting and has not been informed that any matters are to be
presented by others. In the event any other matters properly come
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Page 30
before the meeting, the persons named in the enclosed form of
proxy will vote the proxies in accordance with their judgment on
such matters.
If you do not contemplate attending the meeting in person,
you are respectfully requested to sign, date and return the
accompanying proxy in the enclosed, stamped envelope at your
earliest convenience.
The Company will provide, without charge, upon written
request of any shareholder, a copy of its Annual Report on Form
10K including financial statement schedules for the fiscal year
ended September 30, 1996 as filed with the Securities and
Exchange Commission. Please direct such request to James M.
Holland, Secretary, Atwood Oceanics, Inc., P. O. Box 218350,
Houston, Texas 77218.
By order of the Board of Directors
/s/ John R. Irwin, President
Houston, Texas
January 24, 1997
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FRONT SIDE OF PROXY
ATWOOD OCEANICS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS CALLED FOR
FEBRUARY 13, 1997
The undersigned, having received the Notice of Meeting and Proxy
Statement dated January 24, 1997, appoints James M. Holland and Larry P. Till
and each or either of them as proxies, with full power of substitution, to
represent the undersigned and to vote all shares of the Common Stock of Atwood
Oceanics, Inc. standing in the undersigned's name on its books on December 31,
1996 at the Annual Meeting of the Shareholders of the Company to be held
February 13, 1997, at the main offices of Atwood Oceanics, Inc., 15835 Park
Ten Place Drive, Houston, Texas 77084, 10:00 A.M., Houston Time, and any
adjournment thereof, as follows:
IF NO CONTRARY SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED WITH
AUTHORITY FOR THE ELECTION OF DIRECTORS, FOR APPROVAL OF THE PROPOSED
AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK, FOR ADOPTION OF THE ATWOOD
OCEANICS, INC. 1996 INCENTIVE EQUITY PLAN AND AGAINST THE SHAREHOLDER
PROPOSAL.
(PLEASE DATE AND SIGN ON REVERSE SIDE)
<PAGE>
Page 32
(BACK SIDE OF PROXY)
Please mark boxes in blue or black ink.
The proxies appointed herein may act by a majority of said proxies present at
the meeting (or if only one is present, by that one).
(1) ELECTION OF DIRECTORS PROPOSED BY THE COMPANY:
____FOR the nominees listed below ____WITHHOLD AUTHORITY for the nominees
listed below
NOMINEES:
ROBERT W. BURGESS WALTER H. HELMERICH, IIIWILLIAM J. MORRISSEY
GEORGE S. DOTSON HANS HELMERICH JOHN R. IRWIN
Authority to vote for any specific nominee for director may be withheld
by lining through or otherwise striking out such nominee's name.
(2) APPROVAL OF PROPOSED AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF
INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK FROM 10,000,000 SHARES
TO 25,000,000 SHARES
FOR AGAINST ABSTAIN
(3) PROPOSAL TO ADOPT THE ATWOOD OCEANICS, INC. 1996 INCENTIVE EQUITY PLAN
FOR AGAINST ABSTAIN
(4) SHAREHOLDER PROPOSAL
FOR AGAINST ABSTAIN
(5) In their discretion, upon other matters that may properly come before
the meeting.
Management knows of no other matters that may properly be, or which are
likely to be, brought before the meeting. The persons named in this proxy or
their substitutes will vote in accordance with the recommendations of
management on such matters.
_____________ ____________________________
Date Signature of Shareholder
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Page 33
____________________________
Signature of Joint Shareholder
NOTE: Please sign exactly as name
appears above. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title. If stock is held in
the name of more than one person,
each joint owner should sign.
Please note any change of address.
<PAGE>
Page 34
Appendix - Atwood Oceanics Inc. 1996 Incentive Equity Plan
ATWOOD OCEANICS, INC.
1996 INCENTIVE EQUITY PLAN
Section 1. Purpose.
The 1996 Incentive Equity Plan (the "Plan") is intended to encourage key
executives and managerial employees of Atwood Oceanics, Inc. (the "Company")
and its Subsidiaries or Affiliates to become owners of Stock of the Company in
order to increase their interest in the Company's long-term success, to
provide incentive equity opportunities which are competitive with other
similarly situated corporations and to stimulate the efforts of such employees
by giving suitable recognition for services which contribute materially to the
Company's success.
Section 2. Definitions.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any entity other than the Company and its
Subsidiaries which the Board designates as an "Affiliate" for the
purposes of this Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, or a participant's
willful misconduct or dishonesty, or a participant's failure to perform
his work in accordance with reasonable standards established by the
Company, any of which is directly and materially harmful to the business
or reputation of the Company or any Subsidiary or Affiliate.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(e) "Committee" means the Committee referred to in Section 3 of the
Plan. If at any time a Committee shall not be in existence, then the
functions of the Committee specified in the Plan shall be exercised by
the Board.
(f) "Company" means Atwood Oceanics, Inc., a corporation organized
under the laws of the State of Texas, or any successor corporation.
(g) "Disability" means permanent and total disability as determined
under the Company's long-term disability program.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(i) "Fair Market Value" means, as of any given date, the closing price
of the Stock on such date as reported on the principal United States
securities exchange on which the Stock is listed, or if the Stock is not
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Page 35
so listed, the closing price as quoted on the NASDAQ National Market
System, or if the Stock is not so listed or quoted, the closing bid as
quoted on the NASDAQ over-the-counter market; provided, that if no such
prices are so reported or quoted on that date or if, in the discretion
of the Committee, another means of determining the Fair Market Value of
a share of Stock at such date is deemed necessary or advisable, the
Committee may provide for another means for determining such Fair Market
Value.
(j) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section
422 of the Code.
(k) "Non-Employee Director" shall have the meaning set forth in Rule
16b-3(b)(3) as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, or any successor definition
adopted by the Commission.
(l) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(m) "Plan" means the Atwood Oceanics, Inc. 1996 Incentive Equity Plan,
as hereafter amended from time to time.
(n) "Restriction Period" means the period of time during which shares
of Stock awarded to a participant pursuant to Section 7 remain subject
to the restrictions referred to in Section 7(b).
(o) "Restricted Stock" means an award of shares of Stock that is
subject to restrictions under Section 7.
(p) "Retirement" means retirement from active employment with the
Company or any Subsidiary or Affiliate on or after the normal retirement
date or pursuant to the early retirement provisions set forth in the
applicable pension plan of such employer.
(q) "Rule 16b-3" means such rule as promulgated and amended from time
to time by the Securities and Exchange Commission pursuant to Section
16(b) of the Exchange Act.
(r) "Stock" means the shares of Common Stock, par value $1.00 per
share, of the Company.
(s) "Stock Option" or "Option" means any option (including Incentive
Stock Options and Non-Qualified Stock Options) to purchase shares of
Stock granted pursuant to Section 6.
(t) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
In addition, the terms "Approval Date" and "Change in Control" shall have
meanings set forth in Section 8.
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Page 36
Section 3. Administration.
The Plan shall be administered by the Compensation Committee of the
Board of Directors, which shall consist solely of two or more Non-Employee
Directors who are appointed by, and serve at the pleasure of, the Board. The
Committee shall have the power and authority to grant to eligible employees
Stock Options and Restricted Stock. In particular, the Committee shall have
the authority:
(i) to select the key employees of the Company, its Subsidiaries
and Affiliates to whom Stock Options and other awards may from time to
time be granted;
(ii) to determine whether and to what extent Stock Options and
Restricted Stock are granted;
(iii) to determine the number of shares to be covered by each
such award granted;
(iv) to determine the terms and conditions, not inconsistent with
the terms hereof, of any award granted (including, but not limited to,
the share price and any restriction or limitation on, or any vesting,
acceleration or forfeiture waiver regarding, any award, based on such
factors and criteria as the Committee shall determine, in its sole
discretion); and
(v) to determine and adjust the performance goals and
measurements applicable to performance-based Restricted Stock awards to
include or exclude the impact of extraordinary or unusual items, events
or circumstances and/or to reflect change in applicable tax or
accounting rules and other developments.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of
the Plan and any award granted and any agreements relating thereto; and to
otherwise supervise the administration of the Plan. All decisions made by the
Committee pursuant to the provisions hereof shall be made in the Committee's
sole discretion and shall be final and binding on all persons.
Section 4. Eligibility.
Officers and key employees of the Company, its Subsidiaries and its
Affiliates (but excluding members of the Committee and any person who serves
only as a director) who are responsible for or contribute to the management,
growth and/or profitability of the business of the Company, its Subsidiaries
or its Affiliates are eligible to be granted Stock Options, Restricted Stock
Awards. The participants under the Plan shall be selected from time to time
by the Committee, in its sole discretion, from among those eligible.
Section 5. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution pursuant to Stock Options or Restricted Stock hereunder shall be
335,000 shares; provided, however, that not more than ten percent (10%) of
such shares shall be available for distribution pursuant to Restricted Stock
<PAGE>
Page 37
hereunder. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares.
If any shares of Stock that have been optioned cease to be subject to a
Stock Option, or if any such shares of Stock that are subject to any
Restricted Stock award granted hereunder are forfeited or any such Option or
other award otherwise terminates without a payment being made to the
participant in the form of Stock, such shares shall again be available for
distribution in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in the
aggregate number of shares reserved for issuance under the Plan, in the number
and option price of shares subject to outstanding Options granted under the
Plan, and in the number of shares subject to other outstanding awards granted
under the Plan as may be determined to be appropriate by the Board, provided
that the number of shares subject to any award shall always be a whole number.
Section 6. Stock Options.
Stock Options may be granted alone or in addition to other awards
granted under the Plan. Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve, and the provisions
of Stock Option awards need not be the same with respect to each optionee.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options; and (ii) Non-Qualified Stock Options (provided that Incentive
Stock Options may not be granted to employees of Affiliates). The Committee
may grant to any optionee Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options. To the extent that any Stock Option
does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify the Plan under Section 422 of the Code, or,
without the consent of the optionee(s) affected, to disqualify any Incentive
Stock Option under such Section 422.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions not
inconsistent with the terms of the Plan, as the Committee deems appropriate:
(a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be not less than the Fair Market
Value on the day the Option is granted.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable
more than ten years after the date such Option is granted and no Non-
Qualified Stock Option shall be exercisable more than ten years and one
day after the date such Option is granted.
(c) Exercise of Options. Options shall become exercisable at
<PAGE>
Page 38
such time or times and subject to such terms and conditions (including,
without limitation, installment exercise provisions) as shall be
determined by the Committee, provided, however, that, except as provided
in Section 6(f) or (g) (in the case of Disability) and Section 8, unless
otherwise determined by the Committee at or after grant, no Stock Option
shall be exercisable prior to the first anniversary date of the granting
of the option. If the Committee provides that any Stock Option is
exercisable only in installments, the Committee may waive such
installment exercise provisions at any time in whole or in part based on
performance and/or such other factors as the Committee may determine.
(d) Method of Exercise. Options may be exercised in whole or in
part by giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, either by certified or bank
check, or such other instrument as may be permitted in accordance with
rules or procedures adopted by the Committee.
As determined by the Committee at or after grant, payment in full
or in part may also be made by delivery to the Company of an executed
irrevocable option exercise form together with irrevocable instructions
to a broker-dealer to sell a sufficient portion of the shares and
deliver the sale proceeds directly to the Company in satisfaction of the
exercise price. As determined by the Committee at or after grant,
payment in full or in part may also be made in the form of unrestricted
Stock already owned by the optionee (based on the Fair Market Value of
the Stock on the date the Option is exercised, as determined by the
Committee).
No shares of Stock shall be transferred until full payment
therefor has been made. An optionee shall generally have the rights of
a shareholder with respect to shares subject to the Option only when the
optionee has given written notice of exercise, has paid in full for such
shares and, if requested, given the representation described in Section
11(a).
(e) Transferability of Options. The Committee may, in its
discretion, authorize all or a portion of any Non-Qualified Stock
Options to be granted on terms which permit transfer by the optionee to
(i) the spouse, children or grandchildren of the optionee, (ii) a trust
or trusts for the exclusive benefit of the spouse, children or
grandchildren of the optionee, or (iii) a partnership in which the
spouse, children or grandchildren of the optionee are the only partners;
provided in each case that (x) there may be no consideration for any
such transfer, (y) the stock option agreement pursuant to which such
Stock Options are granted must be approved by the Committee, and must
expressly provide for transferability in a manner consistent with this
section, and (z) subsequent transfers of transferred options shall be
prohibited except those made in accordance with this section or by will
or by the laws of descent and distribution. Following transfer, any
such Stock Options shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer. The
provisions with respect to termination of employment set forth in
subsections (f), (g) and (h) of this Section 6 shall continue to apply
with respect to the original optionee, in which event the Stock Options
shall be exercisable by the transferee only to the extent and for the
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Page 39
periods specified herein. The original optionee will remain subject to
withholding taxes upon exercise of any such Stock Option by the
transferee. The Company shall have no obligation whatsoever to provide
notice to any transferee of any matter, including without limitation,
early termination of a Stock Option on account of termination of
employment of the original optionee.
Except as set forth above and in the applicable stock option
agreement, no Stock Option shall be transferable by the optionee
otherwise than by will or by laws of descent and distribution, and all
Stock Options shall be exercisable, during the optionee's lifetime, only
by the optionee. At the request of an optionee, Stock purchased upon
exercise of an Option may be issued or transferred into the name of the
optionee and another person jointly with rights of survivorship.
(f) Termination by Death. Subject to Section 6(i), if an
optionee's employment by the Company or any Subsidiary or Affiliate
terminates by reason of death, any Stock Option held by such optionee
may thereafter be exercised, to the extent it was exercisable at the
time of death or on such accelerated basis as the Committee may
determine at or after grant, by the legal representative of the estate
or by the legatee of the optionee under the will of the optionee, for a
period of one year (or such other period up to three years as the
Committee may specify) from the date of death or until the expiration of
the stated term of such Stock Option, whichever period is shorter.
(g) Termination by Reason of Disability or Retirement. Subject
to Section 6(i), if an optionee's employment by the Company or any
Subsidiary or Affiliate terminates by reason of Disability or
Retirement, any Stock Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the time
of such termination or on such accelerated basis as the Committee may
determine at or after grant, for a period of three years (or such
shorter period as the Committee may specify at grant) from the date of
such termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is shorter; provided,
however, that, if the optionee dies within such three-year period (or
such shorter period), any unexercised Stock Option held by such optionee
shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one year from the date
of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. In the event of termination of
employment by reason of Disability or Retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option shall
thereafter be treated as a Non-Qualified Stock Option.
(h) Other Termination of Employment. Unless otherwise
determined by the Committee at or after grant, if an optionee's
employment by the Company or any Subsidiary or Affiliate terminates for
any reason other than death, Disability or Retirement, the optionee will
have three months from the date of termination to exercise any and all
Stock Options that are then exercisable, except that, if the termination
was for Cause, any and all Options shall be immediately canceled.
(i) Incentive Stock Option Limitations. To the extent required
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for "incentive stock option" status under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which Incentive Stock Options granted after 1986
are exercisable for the first time by the optionee during any calendar
year under the Plan and any other stock option plan of the Company or
any Subsidiary or parent corporation (within the meaning of Section 425
of the Code) or any predecessor of any such corporation, in each case
after 1986 shall not exceed $100,000.
The Committee may provide at grant, to the extent permitted under
Section 422 of the Code, that, if (i) a participant's employment with
the Company or its Subsidiaries is terminated by reason of death,
Disability or Retirement and (ii) the portion of any Incentive Stock
Option that is otherwise exercisable during the post-termination period
specified under Section 6(f), (g) or (h), applied without regard to this
Section 6(i), is greater than the portion of such Option that is
exercisable as an "incentive stock option" during such post-termination
period under Section 422, such post-termination period shall
automatically be extended (but not beyond the original option term) to
the extent necessary to permit the optionee to exercise such Incentive
Stock Option either as an Incentive Stock Option or, if exercised after
the expiration of the applicable exercise periods under Section 422(a)
of the Code, as a Non-Qualified Stock Option. The Committee is also
authorized to provide at grant for a similar extension of the post-
termination exercise period in the event of a Change in Control.
Section 7. Awards of Restricted Stock.
(a) Administration. Shares of Restricted Stock may be issued either
alone or in addition to other awards granted under the Plan. The Committee
shall determine the officers and key employees of the Company and its
Subsidiaries or Affiliates to whom, and the time or times at which, such
grants will be made, the number of shares to be awarded, the price (if any) to
be paid by the recipient of an award, the time or times within which such
awards may be subject to forfeiture, and all other conditions of the awards.
The Committee may condition grants of Restricted Stock upon the attainment of
specified performance goals or such other factors or criteria as the Committee
may determine. The provisions of Restricted Stock awards need not be the same
with respect to each recipient.
(b) Restrictions and Conditions Applicable to Restricted Stock Awards.
Restricted Stock awards shall be subject to the following restrictions and
conditions:
(i) The consideration for issuance of shares of Restricted Stock
pursuant to the Plan shall be not less than their par value, payable in
cash or in services performed, at the discretion of the Committee.
(ii) Awards of Restricted Stock must be accepted within a period
of 60 days (or such shorter periods as the Committee may specify at
grant) after the award date, by executing a Restricted Stock Award
Agreement and paying whatever price (if any) is required under Section
7(b)(i).
The prospective recipient of a Restricted Stock award shall not
have any rights with respect to such award, unless and until such
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Page 41
recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof of the Company, and has
otherwise complied with the applicable terms and conditions of such
award.
(iii) Each participant receiving a Restricted Stock award shall
be issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such award,
substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Atwood Oceanics, Inc. 1996 Incentive Equity Plan and
an Agreement entered into between the registered owner and Atwood
Oceanics, Inc. Copies of such Plan and Agreement are on file in the
offices of Atwood Oceanics, Inc., Houston, Texas."
The Committee may require that the stock certificates evidencing
such shares be held in custody by the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any Restricted
Stock award, the participant shall have delivered a stock power,
endorsed in blank, relating to the Stock covered by such award.
(iv) Subject to the provisions of this Plan and the applicable
award agreement, during a period set by the Committee commencing with
the date of such award (the "Restriction Period"), the participant shall
not be permitted to sell, transfer, pledge, assign or otherwise encumber
shares of Restricted Stock awarded under the Plan. Based on service,
performance and/or such other factors or criteria as the Committee may
determine, the Committee may, however, at or after grant provide for the
lapse of such restrictions in installments and/or may accelerate or
waive such restrictions in whole or in part.
(v) Except as provided in this Section 7(b), the recipient shall
have, with respect to the shares of Restricted Stock covered by any
award, all of the rights of a shareholder of the Company, including the
right to vote the shares, and the right to receive any dividends,
provided, however, that unless otherwise determined by the Committee,
any dividends on such shares shall be automatically deferred and
reinvested in additional Restricted Stock subject to the same
restrictions as the underlying award, to the extent shares are available
under Section 5.
(vi) Except as otherwise provided in this Section 7(b) and in the
applicable award agreement, upon termination of a participant's
employment with the Company or any Subsidiary or Affiliate for any
reason during the Restriction Period for a given award, all shares still
subject to restriction shall be forfeited by the participant, provided,
however, the Committee may provide for waiver of the restrictions in the
event of termination of employment due to death, Disability or
Retirement.
(vii) In the event of hardship or other special circumstances of
a participant whose employment with the Company or any Subsidiary or
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Page 42
Affiliate is involuntarily terminated (other than for Cause), the
Committee may waive in whole or in part any or all remaining
restrictions with respect to any or all of the participant's Restricted
Stock, based on such factors and criteria as the Committee may deem
appropriate.
(viii) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction Period,
unrestricted certificates for such shares shall be delivered to the
participant.
Section 8. Change in Control Provisions.
(a) Impact of Event. In the event of a "Change in Control" as defined
in Section 8(b), the Committee or the Board may provide that one or more of
the following acceleration and valuation provisions shall apply:
(i) Any or all Stock Options awarded under this Plan not
previously exercisable and vested shall become fully exercisable and
vested.
(ii) The restrictions applicable to any or all Restricted Stock
awards shall lapse and such shares and awards shall be fully vested.
(b) Definition of "Change in Control." For purposes of Section 8(a),
a "Change in Control" means the happening of any of the following:
(i) A tender offer is made and consummated for the ownership of
20% or more of the outstanding voting securities of the Company;
(ii) The Company shall merge or consolidate with another
corporation and as a result of such merger or consolidation less than
80% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders
of the Company, other than affiliates (within the meaning of the
Exchange Act as in effect on the date the Plan was first approved by the
shareholders of the Company (the "Approval Date")) of any party to such
merger or consolidation, as the same shall have existed immediately
prior to such merger or consolidation;
(iii) The Company shall sell substantially all of its assets to
another corporation which is not a Subsidiary; or
(iv) A person, within the meaning of Section 3(a)(9) or of
Section 13(d)(3) (as in effect on the Approval Date) of the Exchange
Act, shall acquire 20% or more of the outstanding voting securities of
the Company (whether directly, indirectly, beneficially or of record).
For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions
of Rule 13d-3(d)(1)(i) (as in effect on the Approval Date) pursuant to the
Exchange Act.
Section 9. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
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Page 43
alteration, or discontinuation shall be made which would impair the rights of
an optionee or participant under a Stock Option or Restricted Stock award
theretofore granted, without the optionee's or participant's consent, or
which, without the approval of the Company's stockholders, would, except as
expressly provided in the Plan, increase the total number of shares reserved
for purposes of the Plan.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without the holder's consent. Subject
to the above provisions, the Board shall have the authority to amend the Plan
to take into account changes in applicable tax and securities law and
accounting rules, as well as other developments.
Section 10. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give
any such participant or optionee any rights that are greater than those of a
general creditor of the Company. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or payments hereunder consistent with the foregoing.
Section 11. General Provisions.
(a) The Committee may require each person purchasing shares pursuant
to the Plan to represent to and agree with the Company in writing that such
person is acquiring the shares without a view to distribution thereof. The
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. All certificates for
shares of Stock or other securities delivered under the Plan shall be subject
to such stock-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Company, a
Subsidiary or an Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) The adoption of the Plan shall not confer upon any employee of the
Company or any Subsidiary or Affiliate any right to continued employment with
the Company or a Subsidiary or Affiliate, as the case may be, nor shall it
interfere in any way with the right of the Company or any Subsidiary or
Affiliate to terminate the employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the optionee for Federal income tax purposes
with respect to any Stock Option or other award under the Plan, the
participant shall pay to the Company, or make any arrangements satisfactory to
the Committee regarding the payment of any Federal, state or local taxes of
any kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Company, withholding obligations may be settled
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with Stock, including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall
be conditional on such payment or arrangements, and the Company and its
Subsidiaries or Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from the payment(s) otherwise due to the
participant.
(e) The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid.
(f) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Texas.
Section 12. Effective Date of Plan.
The Plan shall be effective on the date it is approved by the
stockholders of the Company. Grants made prior to such stockholder approval
shall be contingent on such approval.
Section 13. Term of Plan.
No Stock Option or Restricted Stock shall be granted pursuant to the
Plan on or after the tenth anniversary of the effective date of the plan, but
awards granted prior to such tenth anniversary may extend beyond that date.
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