ATWOOD OCEANICS, INC. RESTRICTED STOCK AWARD AMENDED AND RESTATED AGREEMENT 2007 LONG-TERM INCENTIVE PLAN
Exhibit 10.3
ATWOOD OCEANICS, INC.
RESTRICTED STOCK AWARD
AMENDED AND RESTATED AGREEMENT
2007 LONG-TERM INCENTIVE PLAN
This is an Amended and Restated Agreement (the “Agreement”) dated the 21st day of December 2010, between ATWOOD OCEANICS, INC. (the “Company”) and Robert J. Saltiel (“Restricted Stock Award Recipient”).
Recitals:
The Company has adopted its 2007 Long-Term Incentive Plan (as amended, restated, or otherwise modified from time to time, the “Plan”) for the awarding to Participants (as defined in the Plan) shares of Common Stock of the Company as restricted stock. Pursuant to said Plan, the Compensation Committee of the Company’s Board of Directors has approved and ratified the execution of this Agreement between the Company and the Restricted Stock Award Recipient. It is understood and agreed that neither the award of restricted stock nor the execution of this Agreement shall create any right of the Recipient to remain in the employ of the Company, and that the Company retains the right to terminate such employment at will, for due cause or otherwise. Any term not defined herein shall have the meaning given in the Plan, and, if applicable, the Employment Agreement between Restricted Stock Award Recipient and the Company.
On December 15, 2009, the Restricted Stock Award Recipient and the Company entered into a Restricted Stock Award Agreement (the “Prior Award Agreement”) whereby the Company awarded 27,871 shares of restricted Common Stock, $1.00 par value of the Company (“Shares”) to the Restricted Stock Award Recipient (the “Restricted Stock Award”), subject to performance measures, goals and milestones relating to the Restricted Stock Award to be established by the Committee by December 15, 2010 (the “Performance Measures”). The Restricted Stock Award Recipient and the Company now wish to amend and restate the terms of the Prior Award Agreement to reflect the Performance Measures as
set forth on Exhibit A attached hereto which have now been determined in good faith by the Restricted Stock Award Recipient and the Committee. This Agreement hereby amends and restates the Prior Award Agreement in its entirety.
Agreement:
| 1. | The Company has awarded to the Restricted Stock Award Recipient the Restricted Stock Award of 27,871 Shares. The Restricted Stock Award has a restriction and vesting period of four (4) years (the “Restriction Period”) and is subject to achievement of the performance measures, goals and milestones (the “Performance Measures”) set forth on Exhibit A attached hereto. During the Restriction Period, the Restricted Stock Award Recipient may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of the Restricted Stock Award. At the end of the Restriction Period, the restrictions imposed by the Committee shall lapse with respect to those Shares of the Restricted Stock Award calculated as vested by the Performance Measures, and such Shares shall vest. All other Shares included in the Restricted Stock Award shall be forfeited. |
| 2. | If the Restricted Stock Award Recipient’s employment with the Company is terminated without Cause, to the extent permitted under the Plan, the Restricted Stock Award shall immediately vest; if such immediate vesting is not permitted by the Plan and applicable law, the Restricted Stock Award Recipient shall be paid the financial equivalent of the Shares of the Restricted Stock Award as of the date of termination. |
| 3. | The Restricted Stock Award is subject to acceleration of vesting and lapse of restrictions upon death, disability or Retirement as set forth in Section 10.2 of the Plan. |
| 4. | During the Restriction Period, if any dividends or other distributions are paid in Shares, the Restricted Stock Award Recipient shall receive such additional Shares, but all such Shares shall be subject to the same restrictions as the Shares included in the Restricted Stock Award with respect to which they were paid. |
| 5. | The employment of the Restricted Stock Award Recipient, as it relates to the Restriction Period, shall be deemed to continue during any leave of absence which has been authorized by the Company Group. |
| 6. | Any adjustments to the Shares included in the Restricted Stock Award shall be made pursuant to Article IX of the Plan. |
| 7. | Subject to the provisions of the Plan, in the event of a Change of Control, the Restricted Stock Award shall be immediately vested, fully earned and exercisable, and the Restriction Period shall terminate immediately. |
| 8. | Nothing herein contained shall affect the right of the Restricted Stock Award Recipient to participate in and receive benefits under and in accordance with the then current provisions of any pension, insurance, profit sharing or other welfare plan or program of the Company Group. |
| 9. | The Restricted Stock Award Recipient shall not be entitled to any of the rights or privileges of a shareholder of the Company in respect of any Shares included in the Restricted Stock Award until a certificate or certificates representing such Shares shall have been actually issued and delivered to him. |
| 10. | The Restricted Stock Award is subject to, and the Company and Restricted Stock Award Recipient agree to be bound by, all of the terms and conditions of the Plan, except that no amendment to the Agreement shall adversely affect the Restricted Stock Award Recipient’s rights under the Agreement without his consent. A copy of the Plan in its present form is available for inspection during business hours by the Restricted Stock Award Recipient at the Company’s principal office. |
| 11. | Upon lapse of the Restriction Period and/or vesting of the Restricted Stock Award, the Company Group may be required to withhold federal or local tax with respect to the realization of compensation. Any federal or local tax withholding requirements with respect to the realization of compensation must be fully satisfied by the Restricted Stock Award Recipient upon the lapse of the Restriction Period and/or vesting by delivering to the Company, on behalf of the Company Group, cash in an amount determined by the Company Group to be sufficient to satisfy any such withholding requirement. |
| 12. | This Agreement has been executed and delivered the day and year first above written at Houston, Texas, and the interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Texas, without regard to conflicts of laws. |
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| ATWOOD OCEANICS, INC. |
| /s/ Luis A. Jimenez |
| By: Luis A. Jimenez |
| Restricted Stock Award Recipient |
| /s/ Robert J. Saltiel |
| Robert J. Saltiel |
EXHIBIT A
VESTING OF PERFORMANCE SHARES
December 10, 2010
CONSIDERATIONS
| • | Mr. Saltiel: 50% of Shares To Vest On Achievement of Stock Price Performance Measure (“SPP”) And 50% To Vest Upon Achievement of Safety Measure |
| • | Mr. Mey: 100% of Shares Will Vest Upon Achievement of SPP |
| • | 4 –Year Cumulative To Be Considered for SPP |
| • | SPP Calculation Focused On Stock Price Only And Excluding Cash Dividends |
| • | SPP Vs. Performance Peers Measured As Average Closing Price Of 9-Day Trading Range with Employment Date In The Middle Of The Range, Compared to Average Closing Price of 9-Day Trading Range with End Date Of 4-Year Performance Period In The Middle Of The Range |
| • | Make Provision For Potential Impact Of Corporate Structure Changes In Peer Companies, Mergers, Consolidations, Spin-Offs, Bankruptcy, Change In Trading Jurisdictions, Other Potential Changes In Peer Group |
| • | Graded Vesting Based on SPP Ranking Versus Peers At End Of The 4-Year Performance Period |
| • | Safety: Vesting of 50% Of Mr. Saltiel’s Shares Will Be Determined Based On Achieving TRIR Equal to or Lower than the Comparable IADC TRIR, With Each Year As Separate Measuring Period For Final Determinations of Vesting |
| • | TRIR Metric Is “Atwood At Equal Or Better Than TRIR For Combined Water Regions Where Atwood Operates” |
| • | In the Event Of Change Of Control, The Provisions Of The Agreements Entered Into With Each Executive And The Provisions Of The 2007 Long Term Incentive Plan Shall Apply |
ROB SALTIEL – 50% SPP
50% OF THE SHARES VEST UPON ACHIEVING STOCK PRICE
PERFORMANCE MEASURE (“SPP”)
| PERFORMANCE PEERS | TICKER | 4 YR CUMULATIVE SPP | RANKING | |||
| Atwood Oceanics Inc | ATW | SPPx | X | |||
| Diamond Offshore | DO | SPPa | a | |||
| Transocean | RIG | SPPb | b | |||
| Pride International | PDE | SPPc | c | |||
| Noble Drilling | NE | SPPd | d | |||
| Ensco PLC | ESV | SPPe | e | |||
| Rowan Companies | RDC | SPPf | f | |||
| Start Date of Performance Period | December 9 – 19 2009 | Average closing price of the 9 trading-day range with employment date in the middle of the range | ||||
| End Date of Performance Period | December 10 – 19 2013 | Average closing price of the 9 trading-day range with end of the 4-year performance period in the middle of the range | ||||
| Stock Price Performance = (Price at End Date - Price At Start Date) / Price At Start Date Dividend Excluded |
| If Atwood is ranked at #1, #2 or #3 of the 7 in the Peer Group = 100% of 50% of the Shares Will Vest |
| If Atwood is ranked at #4 of the 7 in the Peer Group = 50% of 50% of the Shares Will Vest |
| If Atwood is ranked at #5 or #6 of the 7 in the Peer Group = 25% of 50% of the Shares Will Vest |
| If Atwood is ranked at #7 of the 7 in the Peer Group = 0% of 50% of the Shares Will Vest
|
| SPP compares the performance results of peer companies’ shares to Atwood’s over the performance period of 4 years. SPP focuses on share price appreciation without dividends. The absolute size of the SPP will vary, but the relative position reflects the market perception of overall performance relative to the peer group. |
ROB SALTIEL – 50% SAFETY
50% OF THE SHARE VEST UPON ACHIEVING SAFETY (“TRIR”) PERFORMANCE
| TRIR Yr 1 | TRIR Yr 2 | TRIR Yr 3 | TRIR Yr 4 | |||||||||||||
| IADC | ATW | IADC | ATW | IADC | ATW | IADC | ATW | |||||||||
| 50% of the shares granted will vest at the end of the 4-Year performance period if ATW TRIR is Equal to our Lower than the comparable IADC TRIR | X1 | Y1 | X2 | Y2 | X3 | Y3 | X4 | Y4 | ||||||||
| Start Date | 10/1/2009 | 10/1/2010 | 10/1/2011 | 10/1/2012 | ||||||||||||
| End Date | 9/30/2010 | 9/30/2011 | 9/30/2012 | 9/30/2013 | ||||||||||||
| Annual Measurement | Y1 = or < than X1 | Y2 = or < than X2 | Y3 = or < than X3 | Y4 = or < than X4 | ||||||||||||
| Final Vesting Determinations Will Be Made On The Basis Of 25% of 50% Of The Shares For Each Year In The Performance Period |
| TRIR = (MTO+RWEC+LTI+FTL) multiplied by 200,000 and divided by Total Hours Worked) Will utilize TRIR metrics for combined IADC waters where Atwood rigs operate |
TRIR = Total recordable incident rate
IADC = International Association of Drilling Contractors
Incident Rate = Incidents per 200,000 man-hours worked
MTO = Medical treatment other than first aid
RWTC = Restricted work/transfer activity
LTI = Lost time from work
FTL = Fatality
MARK MEY – 100% SPP
100% OF THE SHARES VEST UPON ACHIEVING STOCK PRICE
PERFORMANCE MEASURE (“SPP”)
| PERFORMANCE PEERS | TICKER | 4 YR CUMULATIVE SPP | RANKING | |||
| Atwood Oceanics Inc | ATW | SPPx | X | |||
| Diamond Offshore | DO | SPPa | a | |||
| Transocean | RIG | SPPb | b | |||
| Pride International | PDE | SPPc | c | |||
| Noble Drilling | NE | SPPd | d | |||
| Ensco PLC | ESV | SPPe | e | |||
| Rowan Companies | RDC | SPPf | f | |||
| Start Date of Performance Period | August 5 - 17 2010 | Average closing price of the 9 trading-day range with employment date in the middle | ||||
| End Date of Performance Period | August 5 - 14 2014 | Average closing price of the 9 trading-day range with end of the 4-year performance period in the middle | ||||
| Stock Price Performance = (Price at End Date - Price At Start Date) / Price At Start Date Dividend Excluded |
| If Atwood is ranked at #1, #2 or #3 of the 7 in the Peer Group = 100% of the Shares Will Vest |
| If Atwood is ranked at #4 of the 7 in the Peer Group = 50% of the Shares Will Vest |
| If Atwood is ranked at #5 or #6 of the 7 in the Peer Group = 25% of the Shares Will Vest |
| If Atwood is ranked at #7 of the 7 in the Peer Group = 0% of the Shares Will Vest
|
| SPP compares the performance results of peer companies’ shares to Atwood’s over the performance period of 4 years. SPP focuses on share price appreciation without dividends. The absolute size of the SPP will vary, but the relative position reflects the market perception of overall performance relative to the peer group. |
STOCK PRICE BASELINE
ROB SALTIEL
| Date | RIG | ATW | PDE | RDC | NE | ESV | DO | |||||||||||||||||||||
| 12/09/2009 | $ | 80.16 | $ | 34.29 | $ | 31.73 | $ | 23.21 | $ | 40.29 | $ | 41.39 | $ | 96.03 | ||||||||||||||
| 12/10/2009 | $ | 80.70 | $ | 34.96 | $ | 32.14 | $ | 23.41 | $ | 40.50 | $ | 41.77 | $ | 96.50 | ||||||||||||||
| 12/11/2009 | $ | 80.27 | $ | 34.38 | $ | 31.64 | $ | 23.18 | $ | 40.40 | $ | 41.67 | $ | 96.09 | ||||||||||||||
| 12/14/2009 | $ | 81.38 | $ | 34.92 | $ | 32.16 | $ | 23.80 | $ | 41.01 | $ | 43.05 | $ | 97.14 | ||||||||||||||
| 12/15/2009 | $ | 83.36 | $ | 35.88 | $ | 32.13 | $ | 24.05 | $ | 41.48 | $ | 43.32 | $ | 98.18 | ||||||||||||||
| 12/16/2009 | $ | 84.17 | $ | 36.42 | $ | 32.72 | $ | 24.21 | $ | 42.08 | $ | 42.50 | $ | 99.74 | ||||||||||||||
| 12/17/2009 | $ | 82.83 | $ | 35.67 | $ | 32.24 | $ | 23.94 | $ | 40.99 | $ | 41.72 | $ | 98.50 | ||||||||||||||
| 12/18/2009 | $ | 82.59 | $ | 35.90 | $ | 32.50 | $ | 23.84 | $ | 41.09 | $ | 41.82 | $ | 98.11 | ||||||||||||||
| 12/19/2009 | $ | 83.69 | $ | 36.14 | $ | 32.59 | $ | 23.92 | $ | 41.55 | $ | 42.20 | $ | 99.57 | ||||||||||||||
| $ | 82.13 | $ | 35.40 | $ | 32.21 | $ | 23.73 | $ | 41.04 | $ | 42.16 | $ | 97.76 | |||||||||||||||
MARK MEY
| Date | RIG | ATW | PDE | RDC | NE | ESV | DO | |||||||||||||||||||||
| 8/05/2010 | $ | 57.93 | $ | 28.14 | $ | 25.88 | $ | 27.20 | $ | 34.52 | $ | 45.03 | $ | 67.49 | ||||||||||||||
| 8/06/2010 | $ | 57.11 | $ | 27.80 | $ | 25.94 | $ | 27.08 | $ | 34.43 | $ | 45.12 | $ | 66.43 | ||||||||||||||
| 8/09/2010 | $ | 56.82 | $ | 27.66 | $ | 25.49 | $ | 27.15 | $ | 33.92 | $ | 45.41 | $ | 65.65 | ||||||||||||||
| 8/10/2010 | $ | 56.46 | $ | 27.20 | $ | 25.25 | $ | 26.96 | $ | 33.75 | $ | 45.59 | $ | 64.83 | ||||||||||||||
| 8/11/2010 | $ | 54.16 | $ | 25.71 | $ | 24.00 | $ | 25.74 | $ | 32.66 | $ | 43.74 | $ | 62.26 | ||||||||||||||
| 8/12/2010 | $ | 53.89 | $ | 25.15 | $ | 23.54 | $ | 25.53 | $ | 32.55 | $ | 43.49 | $ | 61.02 | ||||||||||||||
| 8/13/2010 | $ | 54.15 | $ | 25.08 | $ | 23.44 | $ | 25.76 | $ | 32.60 | $ | 43.71 | $ | 60.51 | ||||||||||||||
| 8/16/2010 | $ | 53.71 | $ | 25.16 | $ | 23.97 | $ | 26.59 | $ | 32.55 | $ | 43.80 | $ | 61.37 | ||||||||||||||
| 8/17/2010 | $ | 54.53 | $ | 25.80 | $ | 24.25 | $ | 26.49 | $ | 33.31 | $ | 44.22 | $ | 62.19 | ||||||||||||||
| $ | 55.42 | $ | 26.41 | $ | 24.64 | $ | 26.50 | $ | 33.37 | $ | 44.46 | $ | 63.53 | |||||||||||||||
