EXHIBIT 10.4.2
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ATWOOD OCEANICS, INC.
RETENTION PLAN
FOR CERTAIN SALARIED EMPLOYEES
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Effective as of January 1, 2005
This Plan will terminate automatically
as of December 31, 2005 if there is no "Effective Date"
(as defined in Plan Section 1.5) on or before that date.
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ATWOOD OCEANICS, INC.
RETENTION PLAN
FOR CERTAIN SALARIED EMPLOYEES
The Company (as defined herein) hereby adopts this Retention Plan for
Certain Salaried Employees (the "Plan"), effective as of the 1st day of January,
2005.
INTRODUCTION
The purpose of this Plan is to secure the interests of the Company's
shareholders in the event of a change of control of the Company. In such an
event, this Plan would provide an enhanced severance payment and other benefits
to encourage certain valued employees to remain employed with the Company during
that period of financial uncertainty preceding and following the change of
control. If such an event does not occur on or before December 31, 2005, this
Plan will terminate automatically, unless otherwise renewed by the Company's
Board of Directors.
ARTICLE I
DEFINITIONS
Terms defined above and initially capitalized shall have the respective
meanings so ascribed. When used in this Plan and initially capitalized, the
following words and phrases shall have the following respective meanings unless
the context clearly requires otherwise:
1.1 "Base Salary" as to any Covered Employee for any period, shall mean the
greater of the sum of such individual's monthly base salary and Bonus as of the
Termination of Employment or as of the date immediately preceding the Effective
Date, which is paid to such individual by the Company during employment for such
period, before reduction because of an election between benefits or cash
provided under a plan of the Company maintained pursuant to Section 125 or
401(k) of the Internal Revenue Code of 1986, as amended, and before reduction
for any other amounts contributed by the Company on such individual's behalf to
any other employee-benefit plan.
1.2 "Bonus" as to Covered Employee for any period, shall mean the average
of bonus payments, if any, made over the preceding three years, including any
year for which a bonus has been awarded but not paid, divided by twelve. If the
Covered Employee has not been an employee of the Company for at least three
years, then Bonus shall be calculated over the period for which the employee has
been employed with the Company.
1.3 "Company" shall mean Atwood Oceanics, Inc., a Texas corporation, or any
entity that is a successor to it in ownership of substantially all its assets
and their affiliates ("Atwood") and its direct and indirect subsidiaries.
1.4 "Covered Employee" shall mean an employee described in Article II of
the Plan.
1.5 "Effective Date" shall mean the date on or before December 31, 2005, on
which any of the following is effective:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"))
(a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of twenty percent
(20%) or more of either (i) the then outstanding shares of
common stock of Atwood or (ii) the combined voting power of the
then outstanding voting securities of Atwood entitled to vote
generally in the election of directors; provided, however,
that the following acquisitions shall not constitute a Change
of Control: (i) any acquisition directly from Atwood; (ii) any
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acquisition by Atwood; (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company; or
(b) Atwood shall sell substantially all of its assets to
another corporation which is not a wholly owned
subsidiary; or
(c) Individuals who, as of the date hereof, constitute the Board of
Atwood (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by Atwood's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent
Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption
of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board.
1.6 "Employment Year" shall mean a period which commences on the first date
of employment or any anniversary of such date and ends one year from such date.
1.7 "Good Cause" shall mean a material violation of a Company policy or
procedure applicable to employees in the same or similar job position, the
willful disregard or failure to follow the reasonable instructions of a
superior, the taking of any action, or the failure to take any action, which
results in a damage or detriment to the Company, or the conviction of an
employee of a felony involving moral turpitude.
1.8 "Health and Life Benefits" shall mean as to any employee, the
group-health and life-insurance benefits sponsored by the Company for its
full-time employees and provided to or elected by such individual as of the date
immediately preceding the Effective Date.
1.9 "Other Severance" shall have the meaning set forth in Section 2.2 of
the Plan.
1.10 "Severance Pay" shall mean the sum payable to a Covered Employee upon
Termination of Employment as set forth in Section 3.1 of the Plan.
1.11 "Term" shall mean the period commencing on the Effective Date and
ending one year after that date.
1.12 "Termination of Employment" shall mean a termination of employment
with the Company at the option of the Company for any reason, except a
termination of employment for Good Cause shall not mean a Termination of
Employment.
1.13 "Years of Continuous Service" shall mean, as to any employee, all full
or partial years during which he was employed on a full-time basis by the
Company.
ARTICLE II.
COVERED EMPLOYEES
2.1 Who is a Covered Employee. Any employee of the Company who upon the
occurrence of an Effective Date, shall be listed in Schedule 3.1 hereto, which
Schedule 3.1 shall be amended from time to time by the Company, and who has a
Termination of Employment during the Term shall be a Covered Employee and
eligible to receive the benefits described in this Plan.
2.2 Exclusions. Any employee who otherwise is a Covered Employee but who,
pursuant to a separate agreement signed on behalf of the Company, receives
severance or other salary continuation benefits upon a Termination of Employment
(other than payments or benefits under the Company's Executive Life Insurance
Plan) shall not be a Covered Employee under this Plan. This Plan shall be in
lieu of any plan, program, policy or practice of or contract or agreement with
the Company relating to severance of employment ("Other Severance") and any and
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all benefits of payments arising out of or relating to Other Severance shall be
fully offset against any benefits or payments due and owing hereunder.
ARTICLE III
SEVERANCE PAY AND OTHER BENEFITS
3.1 Amount of Severance Pay. The Company shall pay Severance
Pay to a Covered Employee upon a Termination of Employment
in an amount equal to the greater of (a) or (b):
(a) such individual's weekly Base Salary multiplied by such
individual's Years of Continuous Service; or
(b) a payment, depending upon the category of employee as
identified in Schedule 3.1 hereto, as follows:
Category of Employee Payment
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Houston Management A: (i) Less than 4 Years of Continuous
Service - 6 months' Base Salary; or
(ii) 4 Years but less than 8 Years
of Continuous Service - 12 months'
Base Salary; or
(iii) 8 or greater Years of
Continuous Service - 18 months' Base
Salary
Houston Management B,
Houston Technical,
Rig Management and
Other Administration: (i) Less than 4 Years of Continuous
Service - 1 month Base Salary; or
(ii) 4 Years but less than 8 Years
of Continuous Service - 4 months'
Base Salary; or
(iii) 8 Years but less than 12 Years
of Continuous Service - 8 months'
Base Salary; or
(iv) 12 or greater Years of
Continuous Service - 12 months' Base
Salary
Houston Accounting A, Houston
Accounting B and
Houston Staff: (i) Less than 4 Years of Continuous Service-
1 month Base Salary; or
(ii) 4 Years but less than 8 Years
of Continuous Service - 3 months'
Base Salary; or
(iii) 8 or greater Years of Continuous
Service - 6 months' Base Salary
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3.2 Health and Life Benefits. Upon a Termination of Employment, a Covered
Individual's Health and Life Benefits shall ------------------------ be treated
as follows:
(a) Upon a Termination of Employment and if applicable,
the Company will notify each Covered Employee of the
right to elect to continue any Company-provided
health or disability benefits, all in accordance with
and subject to the provisions of the Consolidated
Omnibus Budget Reconciliation Act ("COBRA"). The
Company shall charge the maximum allowable premium in
connection with any COBRA benefits so provided. Other
than the benefits provided under COBRA, the Company
shall have no further obligation to provide health or
disability insurance benefits to any Covered
Individual following a Termination of Employment.
(b) Upon written request by a Covered Individual within
five (5) days of a Termination of Employment, the
Company shall assign any life, salary continuation or
travel insurance plans or policies to such Covered
Individual which by their terms are so assignable,
and such Covered Individual will thenceforth become
responsible for the payment of any premiums required
to maintain said plans or policies from and after the
date of Termination of Employment; otherwise, the
Company will cease to continue such life insurance
plans or policies on behalf of any Covered Employee
effective as of the date of Termination of
Employment.
3.3 Payment for Unused Vacation. Upon a Termination of Employment, the
Company will pay a Covered Employee an amount equal to such individual's weekly
Base Salary multiplied by each full and partial week of vacation, which was
accrued but unused during the Employment Year in which occurred such
individual's Termination of Employment. For purposes of determining payment
under this Section 3.3, a full week of vacation consists of five (5) vacation
days.
ARTICLE IV
DISTRIBUTION OF CASH PAYMENTS
The Company shall pay a Covered Employee the amount to which he or she is
entitled under (as applicable) Plan Section 3.1 (relating to Severance Pay) and
Plan Section 3.3 (relating to Payment for Unused Vacation) in one lump sum
within a reasonable time, but in no event greater than ten (10) business days,
after such Covered Employee's Termination of Employment.
ARTICLE V
ADMINISTRATION OF PLAN
5.1 In General. The Plan shall be administered by Atwood, which shall be
the named fiduciary under the Plan. Atwood may delegate any of its
administrative duties, including without limitation duties with respect to the
processing, review, investigation, approval, and payment of benefits under the
Plan, to a named administrator or administrators.
5.2 Regulations. Atwood shall promulgate any rules and regulations that it
deems necessary to carry out the purposes of the Plan, or to interpret the terms
and conditions of the Plan; provided that no rule, regulation, or interpretation
shall be contrary to the provisions of the Plan. The rules, regulations, and
interpretations made by the Atwood shall, subject only to the claims procedure
outlined in Section 5.3 hereof, be final and binding on any employee or former
employee of the Company, or any successor in interest of either.
5.3 Claims Procedure. The Company shall determine the rights of any
employee or former employee of the Company to any benefits hereunder. Any
employee or former employee of the Company who believes that he is entitled to
receive any benefits other than as initially determined by the Company, may file
a claim in writing with Atwood's President. Atwood shall no later than ninety
(90) days after the receipt of a claim either allow or deny the claim in
writing.
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A denial of a claim, wholly or partially, shall be written in a manner
calculated to be understood by the claimant and shall include:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions on
which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(d) an explanation of the claim-review procedure.
A claimant whose claim is denied (or his duly authorized representative),
may within 30 days after receipt of denial of his claim:
(a) request a review upon written application to the Company's
personnel administrator; (b) review pertinent documents; and
(c) submit issues and comments in writing.
Atwood shall notify the claimant of its decision on review within sixty
(60) days after receipt of a request for review. Notice of the decision on
review shall be in writing.
5.4 Revocability of Company Action. Any action taken by Atwood with respect
to the rights under the Plan of any employee or former employee shall be
revocable by Atwood as to payments or distributions not yet made to such person,
and acceptance of any benefits under the Plan constitutes acceptance of and
agreement to any appropriate adjustments made by the Company in future payments
or distributions to such person to offset any excess of underpayment previously
made to him with respect to any benefits.
ARTICLE VI
AMENDMENT OR TERMINATION OF PLAN
6.1 Right to Amend or Terminate. Atwood reserves the right at any time
prior to the Effective Date, and without prior or other approval of any employee
or former employee, to change, modify, amend, or terminate the Plan. All such
changes, modifications, or amendments may be retroactive to any date up to and
including the original effective date of the Plan, and shall be retroactive to
that date unless other provision is specifically made; provided that no such
change, modification, or amendment shall adversely affect any benefit under the
Plan previously paid or provided to a Covered Employee (or his or her successor
in interest).
6.2 Automatic Termination. This Plan shall terminate automatically as of
December 31, 2005, or such other extended termination date duly adopted in
accordance with the provisions of Section 6.1 above, if there is no Effective
Date on or before that date. Termination pursuant to this Plan Section 6.2 shall
occur without any action on the part of the Company and shall be effective
without prior notice to or approval of any employee or former employee of the
Company.
ARTICLE VII
METHOD OF FUNDING
The Company shall pay benefits under the Plan from current operating funds.
No property of the Company is or shall be, by reason of this Plan, held in trust
for any employee of the Company, nor shall any person have any interest in or
any lien or prior claim upon any property of the Company by reason of the Plan
or the Company's obligations to make payments hereunder.
ARTICLE VIII
LEGAL FEES AND EXPENSES; ENFORCEMENT
It is the intent of the Company that no Covered Employee be required to
incur the expenses associated with the enforcement of his rights under this Plan
by litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to a Covered
Employee hereunder. Accordingly, if it should appear to a Covered Employee that
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the Company has failed to comply with any of its obligations under this Plan or
in the event that the Company or any other person takes any action inconsistent
with the terms of this Plan to declare this Plan void or unenforceable, or
institutes any litigation designed to deny, or to recover from, the Covered
Employee the benefits intended to be provided to such Covered Employee
hereunder, the Company irrevocably authorizes such Covered Employee from time to
time to retain counsel of his choice, at the expense of the Company as
thereafter provided, to represent such Covered Employee in connection with the
initiation or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder, or other person
affiliated with the Company in any jurisdiction. Notwithstanding any existing
prior attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to such Covered employee's entering into an
attorney-client relationship with such counsel, and in that connection the
Company and such Covered Employee agree that a confidential relationship shall
exist between such Covered Employee and such counsel. The Company shall pay and
be solely responsible for any and all attorneys' and related fees and expenses
incurred by such Covered Employee as a result of the Company's failure to
perform under this Plan or any provision thereof; or as a result of the Company
or any person contesting the validity or enforceability of this Plan or any
provision thereof.
ARTICLE IX
MISCELLANEOUS
9.1 Limitation on Rights. Participation in the Plan shall not give any
employee the right to be retained in the service of the Company or any rights to
any benefits whatsoever, except to the extent specifically set forth herein.
Unless otherwise agreed in writing, employment with the Company is "at will."
9.2 Headings. Headings of Articles and Sections in this instrument are for
convenience only, and do not constitute any part of the Plan.
9.3 Gender and Number. Unless the context clearly indicates otherwise, the
masculine gender when used in the Plan shall include the feminine, and the
singular number shall include the plural and the plural number the singular.
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EXECUTED as of the date first set forth above.
ATWOOD OCEANICS, INC.
By: /S/ John R. Irwin
Name: John R. Irwin
Title: President & Chief Executive Officer