Exhibit 10.2
EXECUTIVE RETENTION
AGREEMENT
This Executive Retention Agreement (the
“Agreement”) is made the 22nd day of September, 2009
(the “Effective Date”), by and between Atwood Oceanics,
Inc., a Texas corporation acting by and through its hereunto duly
authorized officer (the “Company”), and James M.
Holland (the “Executive”).
WHEREAS, the Company desires to retain the
services of the Executive in the capacity of Chief Financial
Officer, Senior Vice President and Secretary of the Company and,
after his retirement from such offices, may desire to retain his
services as an employee of the Company, all on a basis which will
provide for a continuity of management for the Company according to
the terms and conditions hereinafter set forth; and
WHEREAS, the Executive is willing to serve in
the capacity of Chief Financial Officer, Senior Vice President and
Secretary and, after his retirement from such offices and at the
request of the Company, to continue as an employee of the Company
for management continuity according to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises
and the mutual terms and conditions herein contained, the Company
and the Executive hereby agree as follows:
(a) Retention
. In consideration of the compensation and benefits
hereinafter specified, the Executive hereby agrees to be employed
with the Company in the capacity of Chief Financial Officer, Senior
Vice President and Secretary and, after retirement from such
offices and if requested by the Company, to continue as an employee
of the Company so as to provide management continuity and to
discharge his duties in such capacities. The Company
hereby employs the Executive upon the terms and conditions
hereinafter set forth.
(b) Exclusive
Services . During the term of his employment, the
Executive shall devote his full working time, ability and attention
to the business of the Company during the Term (as defined herein)
and shall not, directly or indirectly, render any services of a
business, commercial or professional nature to any other person,
corporation or organization, whether for compensation or otherwise,
without the prior knowledge and consent of the Board of Directors
of the Company (the “Board”); provided, however, that
the provisions of this Agreement shall not be construed as
preventing the Executive from investing in other non-competitive
businesses or enterprises if such investments do not require
substantial services on the part of the Executive in the affairs or
operations of any such business or enterprise so as to
significantly diminish the performance by the Executive of his
duties, functions and responsibilities under this Agreement;
provided further, however, that the provisions of this Agreement
shall not be construed as preventing the Executive from continuing
any current activities already previously disclosed to the Board or
participating in nonprofit or charitable organizations if such
activities do not require substantial services on the part of the
Executive so as to significantly diminish the performance by the
Executive of his duties, functions and responsibilities under this
Agreement.
(c) Authority and
Duties . During the Term, the Executive shall have,
with regard to the office of Secretary and Senior Vice President,
such authority and shall perform such duties, functions and
responsibilities as are specified by the Second Amended and
Restated By-laws of the Company (as amended, from time to time, the
“Bylaws”) or as further determined by the Board and,
with regard to the office of Chief Financial Officer or employment
with the Company subsequent to retirement from the offices of Chief
Financial Officer, Senior Vice President and Secretary, such
authority and duties as determined by the Board. The
Executive shall serve with the necessary power and authority
commensurate with such positions and, with regard to the offices of
Chief Executive Officer, Senior Vice President and Secretary,
consistent with the manner which the Executive has carried out the
responsibilities of such offices in the past.
(a) Initial
Term . This Agreement shall have an initial term
commencing on the Effective Date and ending at 5pm Houston time on
December 31, 2010 (the “Initial Term”); subject,
however, to earlier termination as hereinafter provided.
(b) Automatic
Extension . Unless either the Executive or the
Company gives at least ninety (90) days written notice prior to the
expiration of the Initial Term, this Agreement shall be
automatically extended an additional day so that on each and every
day after the end of the Initial Term there shall always be a
remaining term of ninety (90) days (the “Extension
Period”). Thereafter, if either the Executive or
the Company gives written notice to the other that the term of this
Agreement shall not be further so extended, the term of this
Agreement shall not further automatically extend after date of
receipt of such notice by the receiving party. The
Extension Period is subject to earlier termination as hereinafter
provided. The Initial Term and the Extension Period are
collectively referred to herein as the
“Term.”
(c) Expiration v.
Termination. “Expiration” of the Term
or words or phrases of similar import refer to the termination of
this Agreement due to passage of
time. “Termination” of this Agreement or
words or phrases of similar import refer to the termination of this
Agreement by either the Executive or the Company as described in
Section 15 hereof, but does not include providing notice of no
further automatic extension.
(d) Employment
Status . For the avoidance of doubt, the expiration
of the Term shall not, in and of itself, result in the termination
of the Executive’s employment with the Company.
3.
Compensation . As compensation for his services
rendered under this Agreement, the Executive shall be entitled to
receive for his employment services the following:
(a) Base Salary
. The Executive shall be paid an annual base salary of
at least $296,000 per year, payable in equal monthly installments
during the Term, which shall be prorated for any partial employment
month. Such base salary shall be subject to increase,
but not decrease, by the Compensation and Human Resources Committee
of the Board (the “Committee”) in its sole
discretion.
(b) Bonuses
. During the Term, the Executive shall be eligible for a
bonus on the same basis as other members of senior executive
officers of the Company based upon criteria established by the
Committee. In the event that this Agreement expires
prior to completion of fiscal year 2010, the Executive shall be
entitled to receive 100% of the bonus to which he would otherwise
be eligible for full fiscal year 2010, notwithstanding the fact
that the Agreement may expire prior to the completion of fiscal
year 2010. To the extent the Executive is employed with
the Company for any portion of a fiscal year, the Committee shall
determine bonus for that portion of such fiscal year based upon the
Executive’s individual performance as well the
Company’s performance. To the extent the Executive
is not employed with the Company for any portion of a fiscal year,
the Committee shall determine bonus for that portion of such fiscal
year based only upon the Company’s
performance. Each bonus payment due under this Section
3(b) shall be made to the Executive at the same time as bonuses are
paid to other members of senior executive officers of the Company,
regardless of whether or not this Agreement expires or is otherwise
terminated prior to the payment of such bonuses.
(c) Long Term Stock
Incentives . The Executive shall be eligible to
receive awards of long term stock incentives by the Committee on
the same basis as other senior executive officers of the
Company. Such long term stock incentives shall be
governed by the terms of the stock incentive plans and the award
agreements under which they are granted. Upon the
termination of the Executive’s employment with the Company on
or after expiration of the Term, long term stock incentives, all
contributions made by the Company for the account of the Executive
to any pension, thrift or any other benefit plan, and all other
benefits or bonuses which contain vesting or exercisability
provisions or restriction periods conditioned upon or subject to
the continued employment of the Executive, shall become fully
vested and exercisable and any restriction periods shall terminate
to the extent allowed by law and the terms of any plans and
arrangements governing same and, where applicable and allowable,
the Committee shall take such action to effectuate the foregoing;
provided, however, that if any such amount, benefit, or payment
cannot become fully vested or a restriction period cannot be early
terminated pursuant to such plan or arrangement on account of
limitations imposed by law or the terms of such plan or
arrangement, the Executive shall be entitled, to the extent
permitted by law, to receive from the Company an amount in cash
payable within 30 days of the date of termination equal to the
total amount of benefits or payments which the Executive will have
to forfeit pursuant to such plan or arrangement on account of such
termination of employment; provided, however, that if at the time
of his termination of employment Executive is a “specified
employee” under Internal Revenue Code (“IRC”)
Section 409A, then payment of such amount shall be delayed until
the date six months after Executive’s termination of
employment.
(d) Additional
Compensation . The Executive shall be paid such
additional compensation and bonuses, if any, as may be determined
by the Committee from time to time, in its sole and absolute
discretion.
(a) During the Term,
in addition to the compensation to be paid to the Executive
pursuant to Section 3 hereof, the Executive shall be included and
entitled to participate in any hospital, surgical, and medical
benefit plan, any group term life insurance policy, any disability
insurance policy, any pension or profit sharing plan, or any other
fringe benefits which may be extended generally to senior executive
officers of the Company by the Board from time to
time. The Company agrees that it shall provide such
benefits to the Executive on the same basis as the Company makes
such benefits available to its senior executive officers from time
to time.
5. Reimbursement
of Expenses . Subject to such reasonable rules and
procedures as from time to time are specified by the Company or the
Board, the Company shall reimburse the Executive on a timely basis
for reasonable business expenses necessarily incurred in the
performance of his duties under this Agreement.
6. Place of
Performance . During the Term, the principal
executive offices of the Company and the principal place for
performance by the Executive of his duties, functions and
responsibilities under this Agreement shall be in the Houston,
Texas metropolitan area. However, the Executive shall be
available for travel as reasonably required by the Company on the
same terms of his employment with the Company in effect immediately
prior to the Effective Date.
7. Retirement
. At any time during the Term, the Board may request the
Executive to retire as the Chief Financial Officer, Senior Vice
President and Secretary of the Company. In such event,
the Executive shall retire from such offices and, at the
Company’s request, continue his employment with the Company
for the duration of the Term so as to promote management continuity
subject to the terms and conditions of this
Agreement. In the event that the Executive retires at
the Company’s request and his employment with the Company is
not continued, then this Agreement shall terminate and the
Executive shall be entitled to receive the payments and other
benefits due hereunder as if this Agreement were terminated by the
Company other than with cause as described in Section 13 of this
Agreement.
8. Consulting
Services . Subsequent to the Term, if the
Executive’s employment with the Company is terminated, the
Board may ask the Executive to become an independent consultant to
the Company on mutually agreeable terms. Before entering into any
consulting arrangement, the Company and the Board shall determine
the impact, if any, that Executive’s becoming a consultant to
the Company would have on the termination of his employment for the
purpose of determining whether such termination of employment
constituted a “separation from service” under IRC
Section 409A.
9.
Confidentiality/Trade Secrets . The Parties
acknowledge that Executive’s position with the Company is one
of trust and confidence both by reason of his position and by
reason of his access to and contact with the trade secrets and
confidential and proprietary business information of the
Company. Both during the term of Executive’s
employment by the Company and thereafter, the Parties covenant and
agree as follows:
(a) that the Company
will provide Executive access to trade secrets and confidential,
proprietary information of the Company including, but not limited
to, proprietary information concerning the Company’s
customers and suppliers and the Company’s relationship with
same, the identity of key employees and their areas of expertise,
its arrangements with customers and suppliers, its trade secrets,
and its technical data, records, compilations of information,
processes, budgets, forecasts, margins, and specifications relating
to its customers, suppliers, products and services (hereafter
“Confidential Information”);
(b) that Executive
will exercise diligence to protect and safeguard
the Confidential Information;
(c) that Executive
shall not disclose any of such Confidential Information, except as
may be required in the course of his employment; and
(d) that Executive
shall not use, directly or indirectly, for his own benefit or for
the benefit of another, any of such Confidential
Information.
All files,
records, documents, drawings, specifications, memoranda, notes, or
other documents relating to the business of the Company, whether
prepared by the Executive or otherwise coming into his possession
shall be the exclusive property of the Company and shall be
delivered to the Company and not retained by the Executive upon the
expiration of the Term or the termination of this Agreement for any
reason whatsoever; provided however, that to the extent the
Executive continues his employment with the Company, continues to
serve on the Board or provides consulting services to the Company
subsequent to expiration of the Term or the termination of this
Agreement, the Executive shall be entitled to retain such property
until the termination of such employment or service.
The Executive shall not be required to keep
confidential or restrict the use of any Confidential Information
(i) which he may be required to disclose at the express direction
of any authorized government agency, pursuant to a subpoena or
other court process, or as otherwise required by any law, rule,
regulation or order of any regulatory body, (ii) which has become
generally available to the public by means other than a breach of
this Agreement by the Executive, or (iii) as to which disclosure or
use the Board consents in writing in its sole and absolute
discretion.
10.
Non-Competition; Non-Solicitation .
(a) In consideration
of the mutual covenants contained in Section 9 herein and other
valuable consideration, the Executive covenants and agrees that
during the Term and subsequent to the termination of this Agreement
during the period that the Executive receives payments under
Section 16(c) or 16(f) of this Agreement, he shall not without the
prior written consent of the Board, in its sole discretion,
directly or indirectly, as an employee, employer, consultant,
agent, principal, partner, shareholder, corporate officer, director
or through any kind of ownership or investment (other than
ownership of securities of publicly held corporations of which the
Executive owns less than five percent (5%) of any class of
outstanding securities) or in any other representative or
individual capacity, engage in any business or render any services
to any business that is in competition with the business of the
Company or its affiliates (the Company is in engaged in the
business of international offshore drilling of exploratory and
developmental oil and gas wells and related support
services).
(b) In consideration
of the mutual covenants contained in Section 9 herein and other
valuable consideration, the Executive covenants and agrees that
during the Term and during the period expiring one year after the
later of the expiration or termination of this Agreement, he shall
not encourage, solicit or induce, any employee, manager,
supervisor, officer or director of the Company or its affiliates to
terminate his or her employment with the Company or any affiliate
of the Company; provided, however, that notwithstanding anything in
the foregoing to the contrary, this provision shall not apply to
(i) the employment or otherwise working with any such person who
contacts the Executive solely on his or her own initiative and
without direct or indirect solicitation by the Executive or (ii)
conducting g
