|   | EXHIBIT 10.2.2 |
|--------|----------------|

 

 

 

 

 

**___________________________________**

 

**ATWOOD        OCEANICS, INC.**

 

**RETENTION PLAN**

 

**FOR        CERTAIN SALARIED EMPLOYEES**

 

**___________________________________**

 

**Effective as of January 1, 2008**

 

 

 

 

**This        Plan will terminate automatically**

**as of        December 31, 2008 if there is no "Effective Date"**

**(as        defined in Plan Section 1.5) on or before that date.**

 

 

 

                 

**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, 2008.

 

**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, 2008, 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, 2008, 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 acquisition by |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

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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

 

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and 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                                                                                                                                                                                                                                                               |
|----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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 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 or 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, 2007, 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.

 

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Accordingly, if it should appear to a Covered Employee that 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 |
|--------|------------------------------------------------|

 

 

 

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